Reference no: EM133685999

Problem

Terell is a senior manager at an insurance company. He has been with the company for 15 years and oversees 4 regional managers who in turn oversee approximately 8 to 12 account executives. The account executives are responsible for selling group life insurance policies to corporations and then servicing those accounts. It is of great importance that the account executives not only make the sale, but also provide excellent follow-up service to the clients once the sale has been made. If the clients are not happy with the level of service provided, they can easily go elsewhere and buy their employees' life insurance policies with a competing insurance company.

Terell is reviewing the performance appraisals conducted by his 5 regional managers on all their account executives. Terell has noticed that the performance ratings tend to cluster into three basic groups: Outstanding (exceeds expectations), Average (the employee is performing adequately), and Below Average (the employee is not performing adequately). Terell notices that the "outstanding" account executives have 20% higher sales volume than the "average" employees and their repeat client business is 30% higher. In contrast, the "below average" employees have 25% lower sales volume and 25% lower client repeat business than "average" employees.

In addition to differences in results, Terell notices that the manager's ratings of the behaviors of the "below average" employees are problematic and include things like "employee gave client incorrect information about insurance policies," "employee did not return client's calls in a timely manner," and "employee used inappropriate language during a client sales pitch meeting."

Terell has been given a budget of $30,000 to provide employee training and development to his 4 regional managers and 36 account executives during the next year. Typically this budget is larger, but with the bad economy, Terell must make do with less. He has some tough decisions about how to use this money.

Task

A. How do you think Terell should use the money?

B. Should all employees receive an equal amount of the budgeted training and development money? Or should more money be spent on certain employees? If so, specify the allocations and your rationale behind these allocations.

C. Is there anything that Terell could do with the "below average" performers rather than investing more money to develop them into better account executives?

D. Are there any non-monetary things Terell might do to train and develop his employees? Explain.