Problem statement
Zenefits is a recently founded company which provides cloud-based SaaS to companies who require human resource management, while focusing on health insurance services. In the light of a promising outlook for the company, Zenefits disappointed when “… it booked $80 million in revenue in 2015… [missing] the $100 million goal Conrad had announced” (Kinicki & Fugate,2018 p.585). Due to the company’s unexpected exponential growth, Zenefits faced many turbulent obstacles. The immediate growth “… resulted in the hiring of people with ‘little’ experience with software sales in a highly regulated industry….”. In addition, Zenefits’ change of focus from small businesses to large-staffed companies created an issue for its software to “keep up” thus leading to the recruitment of inexperienced employees to fill the void of the software failures (Kinicki & Fugate,2018 p.585). Lastly, Zenefits culture for alcohol-use became a problem to the extent it started to question the companies level of professionalism. With David Sacks as the CEO, he must counteract “… low employee morale, decreased business valuations, and a bloated cost structure” (Kinicki & Fugate,2018 p.586).
Concepts from the book related to the problem
There are two concepts that are related to the problem such as Organizational Culture and Organizational Culture Change.
Organizational culture is “the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments” (Kinicki & Fugate,2018 p.547). An organization’s culture depends on a common conception which is learned over time. Also, it affects individuals’ behavior thus affecting the outcome at all levels (Kinicki & Fugate,2018 p.547). In Zenefits’ case, under Conrad’s “regime,” the culture was set as a lazy and alcoholic environment where employees would get together to do “shots of alcohol when someone signed a new client” (Kinicki & Fugate,2018 p.585).
Culture change is the modification of shared ideals in an organization which align with the vision and strategic plans of the organization. Culture change is displayed in the case of Zenefits growing problems when “the board [of Zenefits] asked Conrad to resign…” because of his affiliations with unethical matters and lack of responsibility in managing a responsible organizational culture. With David Sacks as the new CEO of Zenefits, his “… first actions was to cut back on the party atmosphere… and install some hierarchy” (Kinicki & Fugate,2018 p.586). Also, with instilling a new culture change, Sacks is tasked with a challenge of dealing with other challenging matters.
The most ideal person to face these tasks would be CEO of Zenefits, David Sacks.
In the case of tackling one of the many problems, these alternatives are for boosting employee morale.
Identification and evaluation of alternatives
Alternative 1:
The CEO of Zenefits, David Sacks, could hold an open forum about issues that can be challenged by groups. The purpose for the open forums would be to give employees permission to commit to the culture change. This movement holds two advantageous outcomes.
• It would encourage employees to interact with other employees to contribute and solve the organization’s biggest problems. Letting groups of employees help solve organizational problems would help create a sense of significance and initiative amongst groups.
• Holding open forums for employees would also initiate an effective communication channel between top-level personnel and employees allowing for everyone to create a sense of welcoming and appreciativeness.
While this action would offer pleasant advantages, it also comes with a few negative outcomes
• While allowing employees to form groups to solve issues is beneficial, if handled with a lack of guidelines, groups can create cliques causing other employees to feel discomforted thus lowering employee morale.
• Also, if not handled correctly, forums encouraging for employee feedback could allow employees to take advantage of that opportunity to take command of the communication channels thus creating the risk of employees rallying together to counteract against top-level executives.
Alternative 2:
David Sacks could also implement or reinvent a pre-existing method of employee engagement exercises encouraging employees to participate in workshops that they are experienced in. Implement employee engagement exercises would bring about the following advantages:
• Employee engagement exercises would help employees feel motivated and self-driven when given the chance to engage in exercises that are of their liking. As well as, allowing employees to participate in significant events would create a sense of encouragement for providing beneficial work in the near-future.
• These exercises could also inspire creativity amongst employees. Allowing participation of diverse groups of employees to work and brainstorm together can deliver creative results and increase employee morale.
Employee engagement exercises also come with some disadvantages.
• If limits are not established in the beginning, allowing employees to be engaged could be misconstrued; thus giving them the idea that it is acceptable to participate in top policy discussions. Doing so, would revel top-level policies to the entire organization.
• Security could be at a great risk when allowing valuable data to be shared amongst a cluster of employees within an organization. Information could be leaked throughout the organization, as well as, consuming an organization’s time and money.
Alternative 3:
Sacks could develop a clear understating on how promotion tracks work within the organization. The following are the advantages for promotion tracks.
• Letting employees clearly know that there are chances for promotions within the organization could entice and influence many employees to increase their work productivity, thus allowing employees to be satisfied knowing there are chances to be promoted.
• Also, employees understanding that the organization is compliant of promotions then they are willing to stick with the organization for a long-term; encouraging employee loyalty towards the organization.
There could also be disadvantages for creating promotion tracks.
• Promotion tracks could create unnecessary competition amongst employees who are competing for a similar position. When the moment comes to promote an employee for a certain position, it can create feelings of dissatisfaction with the organization.
• Promoting an employee from the bottom to the top can create a void in another spot. This creates an unnecessary disturbance for executives who are in charge of recruitment, as well as, shaking up many employees’ jobs who follow down the hierarchy.
Conclusions and recommendations:
In conclusion, we would recommend the second alternative, which is to implement or reinvent a pre-existing method of employee engagement exercises to increase employee morale in the organization. The reason for selecting this as the most ideal alternative is due to the existence of low employee morale, therefore allowing employees to engage in certain exercises that are well-suited with their skill set will encourage job satisfaction and employee participation. To combat any security concerns, top-level executives must keep top-level policies and information a secret and not let employees participate in executive-level decisions.