MIE 435

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					Background Abstract

   Calwest Mortgage Company excelled at providing mortgaged backed loans to individuals who
were unlikely to qualify for a loan at many other institutions. The firm enjoyed enormous
growth in the mid-nineties by adjusting product services as needed to meet consumer demand.
Calwest's primary source of revenue was generated by is salesforce whose skill created a core
competency for the firm.
   Calwest had a policy of internal promotion; for instance, successful account executives were
likely candidates for promotion to a branch management position. In one such case, conflict
arose between newly minted branch manager, Henry Starks, and a subordinate account
executive, Sal Khan. An investigation conducted by Human Resource Manager, Stephanie
Lawson, Calwest HR Representative Joe Underwood, and Regional Manger Michael Griffin,
revealed many unsettling issues at the Manhattan Beach Branch under Henry's supervision.
After careful examination of the facts and interview responses given by employees, the panel
identified seven key problems.

Issues at Calwest Mortgage Company

      The first issue identified was physical abuse. Only one employee verified that Henry had
       actually been physically abusive, but others thought that he was capable.
      The second issue recognized was mental abuse. Interviewees stated that Henry screamed,
       yelled, and even cursed at his associates. Some associates did agree that he yelled when
       he was angry, but they also said that he could be fun and congenial when he was happy.
      The third issue identified was micromanagement. Henry was known to constantly watch
       over and criticize his associates’ actions. For example, Henry set up more than six
       impromptu meetings with Sal during one day for status updates. Many agreed Henry
       micromanaged, but not all were willing to say it was hindersome to their work.
      The fourth issue was intimidation and retaliation by Henry. Henry came across as
       intimidating and threatening if for instance associates suggested they were going to speak
       with Human Resources or upper management. He also pressured some associates into
       altering their written testimonies during a previous investigation.
      The fifth issue identified was there being a lack of written performance issues. For
       example, with all the issues associated with Henry, not once had he received any written
      The sixth issue was race discrimination. Henry tried to use being an African American
       manager to his advantage by making others in the company believe he would file a race
       discrimination suit against the company if he was looked negatively upon.
      The seventh issue identified was that Henry tape recorded his conversations with his
       associates without their knowledge or consent. His questionable business practices were
       seen to be potentially damaging to the company’s reputation (Case Study).


      Ultimately, the aforementioned seven issues can be traced back to staffing deficiencies at
Calwest Mortgage Company. While internal promotion can be beneficial to an organization as a
method of employee motivation, there are drawbacks as well. Promoting from the external
environment promotes diversity of thought, innovation, and can breathe new life into a firm in
the form of fresh perspectives, personalities, and expanding networks. Issues that arrived at the
Manhattan Beach Branch prior to that complaint which sparked the investigation may not have
been given the opportunity to fester if Calwest utilized a more balanced applicant pool. In
addition, the criterion which form the basis for the promotion of an account executive to a branch
manager are not necessarily the best indicators of motivational fit or performance. In other
words, while an individual may excel in sales, this particular skill is not a reliable indicator of
managerial performance. Factors such as interpersonal communication, previous demonstration
of ethical behavior, demonstration of respect toward colleagues, among other things, also need to
be considered before a promotional decision should be made.


         First, we recommend the company terminate Henry’s employment, then recruit and staff
for this open position effectively. Once the pressing liability of Henry's employment has been
resolved, Calwest will be free to tackle the core problem by utilizing a training and orientation
program for new managers and establishing clear selection criteria . This will not only fix the
identified issues, but will also help reinstate employees’ confidence in Calwest Mortgage
Company. Our two-step recommendation is detailed below.

1) Terminating Henry's Employment

        It is evident that Calwest Mortgage branch manager, Henry Starks, is the cause of several
of the issues facing the company. His inappropriate behavior towards employees has led them to
transfer to other office locations or quit their jobs increasing the turnover rate to 80 percent.
Henry’s treatment of employees went against the company’s policy of no retaliation and created
an atmosphere of constant tension and inability of employees to work to their fullest potential.
Although Henry’s mortgage experience increased several associates’ salaries, recently employee
performance was under par. Two employees have already been terminated due to low
performance policies and if the work environment doesn’t change it is inevitable that more
firings will occur in the near future.
        To alleviate problems within the company we suggest that branch manager Henry Starks
be terminated. A recent survey conducted by The Conference Board showed that the decline in
job satisfaction can be greatly attributed to managerial quality. This factor causes employees to
become less interested in their job, increases negative employee behavior, and creates feelings of
decreased job security (The Conference Board). Firing branch manager Henry Starks will allow
these issues to subside and establish a more productive and profitable work environment. By
letting Henry go from the company employee moral will increase because micromanagement
will become less of an issue. Employees will no longer be required to attend several meetings
throughout the day allowing them to give more attention to their duties to increase profits.
Relieving Henry of his job will also solve the problem of intimidation and retaliation within the
workplace. While it is noted that employee motivation can be increased through disciplinary
guidelines, instilling fear in fellow coworkers does not create an environment pertinent for
personal growth (Armstrong 462). Employees will feel better about reporting problems to the
corporate HR office and following proper procedures without fear from their angry branch
manager. Also, the improper tape recording of employees within the company will be ended
with Henry’s dismissal. Most importantly employees will no longer experience physical and
mental abuse that they faced previously. The goal is that by firing Henry it will create a positive
environment where employees can reach their sales potential in a safe and functional workplace.

Should we also mention something about Henry as a liability to the company if he
continues down this path? i.e. opening Calwest to harassment lawsuits, discrimination, etc.


        Through our analysis of the case we have decided that the corporate office needs to have
more training programs in place that focus around management skills and techniques not just sell
techniques. Currently Calwest Mortgage Company offers new managers a one week training
session at the corporate offices. A vast majority of that training time is spent on how to sell loan
packages. There is only one brief hour long session that focuses on different management
techniques. All other management techniques or skills are to be learned on the job or through an
area manager. However, the area manager has not gone through any additional training than the
new manager. Since a majority or the new managers are promoted through the ranks of sales
associates most new managers lack all experience in the management area. While analyzing the
seven key issues laid out in the case we found that many of them tied back into the lack of
human resource and management training.
        We are suggesting the corporate offices adopt a new strategy for training and preparing
their new managers for the workplace. We have found classes and seminars being offered by the
American Management Association that will help facilitate the professional development of the
new managers. In the case the new manager, Henry, has been having trouble managing his
branch. Henry displays many bad management characteristics such as: mental abuse, physical
abuse, micromanagement, and intimidation and retaliation. Through classes and seminars
offered at the American Management Association we can train all new managers correctly.
 Classes such as: How to successful manage people, How to communicate with diplomacy, tact
and credibility, and management skills for new managers. These classes and seminars are
offered in three different formats which are in a classroom, online, or in person. The costs
associate with each method is different.
        In the Management Skills for New Managers class the new managers will benefits in
many different ways. They will have a deeper understanding of their roles and responsibilities,
improved communication, adapt their leadership styles to different individuals, and increase
productivity and motivation.
        In the How to Communicate with Diplomacy, Tact, and Credibility class the new
managers will benefit in numerous ways. Communication techniques are critical in the day-to-
day management of a company. The new managers will learn how to communicate efficiently
and tactfully with clients, bosses, and employees alike. They will learn how to respond in a
professional manner even when they are not in their comfort zone. The new managers will gain
insight on how to gain cooperation and respect by using communication skills effectively.
        With the Successful Managing People class new managers will learn how to motivate and
direct employees. Skills and techniques will be taught that demonstrate how to adjust their
management techniques to meet different situations. Delegation is an important part of become a
manager, you must be able to apply different delegating techniques for any given situation. The
class will also teach new managers how to turn poor performers into team players.
         All of the classes mentioned above can be taken online. This will benefit the managers
who can take these classes online during work hours and be paid to take them. This will gain
manager buy in because they are being compensated to acquire additional knowledge, skills, and
abilities. A new system will need to be created in order to monitor the progress of the new
managers who take these classes. Seminar training instead
         It is our belief that the cost of the classes themselves will be paid for with a return on the
investment. The average cost to hire an employee is $6,000 and the average cost to fire an
employee is $9,000. The classes themselves do not cost over $6,000. If you take for example
the Manhattan Beach office in the case there had been two managers before Henry took over that
didn’t make the cut in terms of performance and during Henry’s time as manager two employees
were fired for performance reason, two quit, and five transferred to different branches. Turnover
reached 80% in the branch compared to 56% company wide rate. There is a tremendous
turnover cost because of poor management and training.

Here is an outline of the class’s length and costs:
1.   Management Skills for New Managers - 3 Days - $1,995
2.   How to Communicate With Diplomacy, Tact, and Credibility - 2 Days - $1,795
3.   Successful Managing People – 4 Days - $1,995


         In the past two years, the Manhattan Beach branch has employed three different
managers, all of which failed to meet the standards held for the position. Although Calwest
Mortgage has a policy of promoting from within, we have decided that an outside hire would be
best in this situation. Previously, promotions were solely based on performance, which lead to
good sales and poor leadership. Besides the one hour human resource session in the week-long
training provided, further management knowledge was taught by area managers who did not
receive any more training than the branch managers did. Due to this problem, we have provided
a recruitment and training plan that will reduce the chance of turnover for this branch in the
future. For our primary recruitment plan we will be posting a job advertisement on, Inc refers to itself as “the largest network of niche career
communities.” The website is a one-stop shop for all of your recruitment needs, whether you are
searching for a new job or looking to fill an open position. When you post a job with it appears in relevant job search results across their network of over 15,000 general,
industry-specific, specialty and local job search sites (media page). This network has 20 million
page views/month, 25 million email contacts, 370,000 new candidates/month, 6.2 million total
resumes, and 4.8 million job views/month. There is a corporate special for posting an ad which
costs $395 and includes one post for 60 days, and a one week resume searching tool. Their job
postings also include filtering and distribution options, selection of up to 2 industries and 7
categories, candidate alerts and an applicant tracking system. The posting will include an
advertisement, job description and contact information for the applicants (See appendix A). We
want to ensure that we are reaching a very diverse and universal group of qualified
professionals. Including an advertisement in will not only reach applicants in the
Manhattan Beach area, this website is connected to networks around the country which allows
for a tremendous opportunity to find the prime amount of eligible applicants.
Add sources

Armstrong, Michael. A handbook of human resource management practice. Sterling:
Kogan Page Limited, 2003.

The Conference Board. "U.S. Job Satisfaction at Lowest Level in Two Decades ." 5
January 2010. The Conference Board: Trusted Insights for Business Worldwide.
10 March 2010 <http://www.conference>.

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