Mountain West Health Plan Case Analysis

PROBLEM STATEMENT

a. FACTS OF THE CASE:

Mountain West Health Plans, Inc. – Denver-based health insurance company Martin Quinn – Senior Vice-President for Service and Operations Evelyn Gustafson – Former and retired Director of Mountain West Customer Service Department. Her motto “always put yourself in the subscriber’s shoes”. In her time, there were only 10% turnover rates in the department compared to the typical 25% to 45% rate for customer service representative. She firmly resisted all attempts to increase efficiency and lower cost in the department where salaries accounted for close to 70% of the budget.

Erik Rasmussen – newly hired Director of Customer Service, the replacement of Ms. Evelyn. He is a young man in his late twenties with a shiny new bachelor’s degree in business administration. The management tasked him to bring down the cost on the department. Under Mr. Erick, the company, for the first time measured the representatives’ performance and used software that generated automated work schedules based on historical information and projected need.

To uphold the morale of the employees and to reduce turnover rate from 30% to 10%.

ANALYSIS OF CAUSES

A. Analyzing the leadership and management style of Ms. Evelyn and Mr. Erik, including their strengths and weakness, and their source of influence:

MS. EVELYN GUSTAFSON
MR. ERIK RASMUSSEN
Behavioral Approach
People Oriented – attention to people
Task Oriented – attention to task
Leadership Grid
Country Club Management – Thoughtful attention to the needs of people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work tempo Authority-Compliance Management – Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree. Strength

Consideration and motivation of the needs of her subordinates, a happy work environment as a result of her good interpersonal relationship. Valued the interest and personal development of her subordinates. Focus on productivity and efficiency in the accomplishment of organizational goals. Weakness

Uncontrolled cost in her department result of excessive flexibility and too much focus on employees’ personal concern. Inability to analyze the internal culture, less concern of his subordinates’ personal development, interest and needs. Source of influence

Legitimate power – authority granted from a formal management position in the organization. Reward power – stems from the authority to bestow reward on other people. Referent power – comes from an individual’s personal characteristics that command others’ identification, respect and admiration. Legitimate power and Coercive power – refers to authority to punish or recommend, and the opposite of reward power. Leadership of Ms. Evelyn – She is focus on people, highly concerned on the needs and interest of her people. She believes that when people are happy, contented and comfortable they will work hard to accomplish the organization goals. She sees that it is easy to gain the support of people, when its leaders fosters respect and fair treatment, considers their needs and interest, and shows trust in them. Source of influence – From the authority of being a manager, she has access on giving rewards e.g., flexible scheduling, frequent breaks, offering plenty of trainings opportunities. She used this to gain influence on her people.

Leadership of Mr. Erik – He is more concerned on the accomplishment of goals rather than people. He believes that employee’s needs plays secondary to the need of effective and efficient work places. His type of leadership views that “employees are only tools in accomplishing task”. Source of influence – from the legitimate power given to him by management, he ensure to get things done, and with the achievement he got support from the top management.

B. It is also important to note the Style of Followership of the subordinates of these bosses, to further analyze the existing concern of the department. The employees in the customer service department could be describe as: a. Dependent uncritical thinker – does not consider possibilities beyond what he or she is told, does not contribute to the cultivation of the organization, and accepts the supervisor’s ideas without thinking.

DEVELOPMENT AND SELECTION OF ALTERNATIVES (ADVANTAGES AND DISADVANTAGES)

ALTERNATIVES
ADVANTAGES
DISADVANTAGES

To recommend Mr. Erik to a particular leadership training that would develop his leadership skills. He will be more effective leader as he develops an interactive leadership style. Measurement is reduction of turnover rate in his department. It would somehow take time, as leadership style cannot be acquired overnight.

To give Mr. Erik another task to accomplish: to promote strategies that would increase efficiency and effectiveness of his people and at the same time minimize turnover rate. Being a task oriented leader, Mr. Erik will ensure that he will accomplish this task, which will make him realize that he would attain it by being concern on the interest and needs of his people. If Mr. Erik will take it another way around, he might insist on his authority to accomplish the new task.

Job Enrichment – giving employees control on the resources in performing their tasks, give them elbow room on how they will accomplish their task, give them opportunity to grow, and give them a set period to accomplish it. Employees would have greater sense of responsibility with their involvement and commitment on the task. Increase motivation

Contributes high morale
Low turnover
High performance
Management may lose control on employees

RECOMMENDATIONS/CONCLUSION:

Recommending combination of alternative 1 and alternative number 3 – Job Enrichment, this alternative would be more effective, than the existing statistical standards that emphasized speed, recording the customer service calls, using of software to generate automated work schedules. This will promote high morale, as you will be considering people big part and contributor in the accomplishment of task and not as a “tool” only. While at the same time, Mr. Erik undergoing a leadership training to enhance his people skills, being young, he is more focus on promoting himself as achiever. It is but typical to young professional, but as he goes along, he will start to develop his leadership style with balanced skills on both people and task.

WORKPLACE APPLICATION

In my company, I observed different styles of leadership. The most prominent in my heart, is the leadership style of my immediate boss. She is woman, her immediate subordinates are both male, I agree on the women rated higher almost in all aspect in leadership ability as shown in Gender differences in leadership behaviors.

I also described her as follows with the following situations that she exhibits as a leader:

Servant Leader – she fosters selflessness to serve both people and organization. Her personal vision “to have one million employees”, she even gave away to her people some precious personal things e.g., cellphone, bags, shoes, clothes.

Authentic Leader – she demonstrate high level of passion and commitment, leads with her heart, have compassion for others, have the courage to make difficult decision, she loves to be surrounded by good people and contribute to their growth. She is never after on any merit or credit, she preferred it be given to her people. She always treats trainings and development of her people as investment. She sends me here as full scholar.