Case Study On JTT Insurance Corporation | Forces Pushing For Change

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PART I: Read the following case study carefully and analyze it byanswering the three Questions for Discussion in anintegrated essayformat.(50 points)Please read the following case carefully and write anintegrated essay(no less than 3pages inlength)basedsolelyon the information provided in the case.You should not discuss thisassignment with anyone - group collaboration isnotpermitted.JTT Insurance Corporation provides automobile insurance throughout the southeasternUnited States. Las year a new president was brought in by JTT’s Board of Directors to improvethe company’s competitiveness and customer service. After spending several months assessingthe situation, the new president introduced a strategic plan to improve JTT’s competitiveposition. He also replaced three vice presidents. Don Linker was hired as vice president ofclaims, JTT’s largest division with over 1500 employees, 50 claims managers and 5 regionaldirectors.Don immediately met with all claims managers and directors and visited employees atJTT’s 50 claims centers. As an outsider, this was a formidable task, but his strong interpersonalskills and uncanny ability to remember names and ideas helped him through the process.Through these visits and discussions, Don discovered that the claims division had been managedin a rather authoritarian, top-down manner. He could also see that morale was extremely lowand employee-management relations were guarded. High workloads and isolation (claimsadjusters work in tiny cubicles) were two other common complaints. Several managersacknowledged that the high turnover among claims adjusters was partly due to these conditions.Following discussions with JTT’s president, Don decided to make morale andsupervisory leadership his top priority. He initiated a divisional newsletter with a tear-offfeedback form for employees to register their comments. He announced an open-door policy inwhich any claims division employee could speak to him directly and confidentially withoutgoing for their his/her immediate supervisor. Don also fought organizational barriers to initiate aflextime program so that employees could design work schedules around their needs. Thisprogram later became a model for other areas of JTT.One of Don’s most pronounced symbols of change was the “Claims Management Credo”outlining the philosophy that every claims manager would follow. At his first meeting with thecomplete claims management team, Don presented a list of what he thought were importantphilosophies and actions of effective managers. The management group was asked to select andprioritize items from this list. They were told that the resulting list would be the division’smanagement philosophy and that all managers would be held accountable for abiding by itsprinciples. Most claims managers were uneasy about this process, but they also understood that
the organization was under competitive pressure and that Don was using this exercise todemonstrate his leadership.The claims managers developed a list of 10 items, such as encouraging teamwork,fostering a trusting work environment, setting clear and reasonable goals, and so on. The listwas circulated to senior management in the organization for their comment and approval andsent back to all claims managers for their endorsement. Once this was done, a copy of the finaldocument was sent to every claims division employee. Don also announced plans to follow upwith an annual survey to evaluate each claims manager’s performance. This worried themanagers-but most of them believed that the credo exercise was a result of Don’s initialenthusiasm and that he would be too busy to introduce the survey after settling into the job.One year after the credo had been distributed, Don announced that the first annual surveywould be conducted. All claims employees were to complete the survey and return itconfidentially to an outside consultant who would compile results for each claims centermanager. The survey asked the extent to which the manager had lived up to each of the 10 itemsin the credo. Each form also provided space for employee comments.Claims center managers were surprised that the survey Don had promised a year agowould be conducted, but they were even more worried about Don’s statement that the resultswould be shared with employees. What “results” would employees see? Who would distributethese results? What happens if a manager receives poor ratings from her/his subordinates?“We’ll work out the details later,” said Don in response to these questions. “Even if the surveyresults aren’t great, the information will give us a good baseline for next year’s survey.”The claims division survey had a high employee response rate. In some centers, everysingle employee completed and returned the form. Each report showed the claims centermanager’s average score for each of the 10 items and how many employees rated the manager ateach level of the five-point scale. The reports also included every comment made by employeesat that center.No one was prepared for the results of that first survey. Most managers receivedmoderate or poor ratings on the 10 items. Very few managers averaged above 3.0 (out of a totalof 5) on more than a couple of items. This suggested that, at best, employees were ambivalentabout whether their claims center manager had embraced the 10 management philosophy items.The comments were even more devastating than the ratings. Comments ranged from mildlydisappointed to extremely critical of their claims manager. Employees also described their long-standing frustration with JTT, high workloads and isolated working conditions. Several peoplebluntly stated that they were skeptical about the changes that Don had promised. “We’ve heardthese promises before, but now we’ve lost faith,” wrote one claims adjuster.The survey results were sent to each claims manager, the regional director and employeesat the claims center. Don instructed managers to discuss the survey data and comments withtheir regional manager and directly with employees. The claims center managers, who thoughtemployees received only their managers’ average scores, were shocked to learn that the reportsalso included individual comments made by employees. Some managers went to their regional
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