Reference no: EM133126773

CASE STUDY: ANCOL CORP

Paul Sims was delighted when Ancol Corp. offered him the job of manager at its Lexington, Kentucky plant. Sims was happy enough managing a small metal stamping plant with another company, but the invitation to apply to the plant manager job at one of the leading metal fabrication companies was irresistible. Although the Lexington plant was the smallest of Ancol's 15 operations, the plant manager position was a valuable first step in a promising career.

One of Sims's first observations at Ancol's Lexington plant was that relations between employees and management were strained. Taking a page from a recent executive seminar that he attended on building trust in the workplace, Sims ordered the removal of all time clocks from the plant. Instead, the plant would assume that employees had put in their full shift. This symbolic gesture, he believed, would establish a new level of credibility and strengthen relations between management and employees at the site.

Initially, the 250 production employees at the Lexington plant appreciated their new freedom. They felt respected and saw this gesture as a sign of positive change from the new plant manager. Two months later, however, problems started to appear. A few people began showing up late, leaving early, or take extended lunch breaks. Although this represented only about five percent of the employees, others found the situation unfair. Moreover, the increased absenteeism levels were beginning to have a noticeable effect on plant productivity. The problem had to be managed.

Sims asked supervisors to observe and record when the employees came or went and to discuss attendance problems with those abusing their privileges. But the supervisors had no previous experience with keeping attendance and many lacked the necessary interpersonal skills to discuss the matter with subordinates. Employees resented the reprimands, so relations with supervisors deteriorated. The additional responsibility of keeping track of attendance also made it difficult for supervisors to complete their other responsibilities. After just a few months, Ancol found it necessary to add another supervisor position and reduce the number of employees assigned to each supervisor.

But the problems did not end there. Without time clocks, the payroll department could not deduct pay for the amount of time that employees were late. Instead, a letter of reprimand was placed in the employee's personnel file. However, this required yet more time and additional skills from the supervisors. Employees did not want these letters to become a permanent record, so they filed grievances with their labor union. The number of grievances doubled over six months, which required even more time for both union officials and supervisors to handle these disputes.

Nine months after removing the time clocks, Paul Sims met with union officials, who agreed that it would be better to put the time clocks back in. Employee-management relations had deteriorated below the level when Sims had started. Supervisors were overworked. Productivity had dropped due to poorer attendance records and increased administrative workloads.

A couple of months after the time clocks were put back in place, Sims attended an operations meeting at Ancol's headquarters in Cincinnati. During lunch, Sims described the time clock incident to Liam Jackson, Ancol's plant manager in Portland, Oregon. Jackson looked surprised, then chuckled. He explained that the previous manager at his plant had done something like that with similar consequences six or seven years ago. The manager had left some time ago, but Jackson heard about the earlier time clock incident from a supervisor during his retirement party two months ago.

1. Discuss the consequences of the time clock removal on Ancol's effectiveness as an organization.

2. Examine any two of the perspectives of organizational effectiveness.

3. Describe the changes that should occur to minimize the likelihood of these problems in the future.

4. What recommendations do you have for Paul to improve the relationship between employees and management?