2. Case Overview
Client is a ~200 employee services firm in an industry
with excellent growth potential
Industry trends in their service business lines are upwards
and expected to continue growing in the next 3 years
Management perceived that high turnover, employee lack
of commitment and low motivation was preventing them
from capitalizing on the high
earnings potential and
current uptrends in their
business lines
MECInternational
3. Objective
The objective of the engagement was to determine
typical industry turnover rates as a benchmark
Determine specific drivers for employee turnover
Suggest approaches to
increase employee
motivation and
commitment
Minimize employee
turnover
MECInternational
5. Results:
Industry turnover rates for the region were found to be
16.5%. Organization’s turnover rates were 34.6%
Organizational mapping results pointed at 7 important
factors to conform the scorecard focus of the engagement:
1. Job Design
2. Performance Expectations
3. Management Organization
4. Reward Policies
5. Communications and Open Door Policies
6. Employee – Manager Relationship
7. Overall Company’s Philosophy
MECInternational
6. Baseline Scores
The baseline evaluation gave the following results:
Job Design:
Individual attention limited to performing individual
job
Specific job description
Fragmented work and fragmented thinking
Specific tasks assigned
Accountability focused on individual
MECInternational
7. Baseline Scores
Performance Expectations
Fixed job definition
Measured standards to define minimum performance
Desirable stability
Management Organization
Layered structure from top down
Coordination and control rely on rules and procedures
Emphasis on positional authority
MECInternational
8. Baseline Scores
Reward Policies
Status symbols distributed to reinforce hierarchy (VP’s)
Individual pay geared to job evaluation
Concentration in hourly payroll
Communications & Open Door Policies
Employee opinions allowed on relatively narrow agenda
Employee sees risks associated with expressing
opinions openly
Business data concealed
MECInternational
9. Baseline Scores
Employee – Manager relationship
Business information distributed on strictly “need to
know” basis
Overall Company Philosophy
Management philosophy emphasizes management
prerogatives and obligations to shareholders
MECInternational
10. Recommended KPIs
We recommended the following changes to address
senior management concerns for each KPI
Job Design:
Individual responsibility should be extended upstream
and downstream to improve team performance
Job descriptions should emphasize each department
and division as a whole performance unit
Individual accountability should emphasize combined
thinking and overlap individual responsibilities
MECInternational
11. Recommended KPIs
Performance Expectations
Flexible definition of duties, contingent on changing
conditions
Emphasis placed on higher “stretch” objectives
Dynamic & market oriented
Management Organization
Restructure into flat/semi-flat organization structure
with mutual influence systems
Coordination and control based on shared goals, values
and traditions
Emphasis on problem-solving, relevant information
and expertise
MECInternational
12. Recommended KPIs
Reward Policies
Minimize pay differences among similarly skilled
personnel
Create performance related rewards to create equity
and reinforce department/division achievements
Communications & Open Door Policies
Encourage employee participation on all department
and division issues and concerns
Institute transparency policies, share business and
financial performance information
Encourage participation in company policy decision
making
MECInternational
13. Recommended KPIs
Employee – Manager relationship
Encourage managers to conduct joint planning and
problem solving meetings
Institute at all possible shared and/or combined
definition of roles
Overall Company Philosophy
Recommended to Senior Management to include
importance of stakeholders, and not focus only on
shareholder interests
MECInternational
14. Implementation Results
With our help, senior management implemented most
recommendations.
KPIs were utilized to track and document progress
KPIs were also utilized to adjust strategic and tactical
initiatives
Employee turnover 6 months after rollout was reported at
20.0%
Employee turnover 1 year after rollout was reported at
14.2%
Financial KPIs also showed increases (Net Profit Margin
increased 4%; Avg Growth Rate increased 9% over TTMs)
MECInternational
