Unethical behavior detection and performance of salesmen in organizations

Transcription

1 Unethical behavior detection and performance of salesmen in organizations

2 Dr Helena Cooper-Thomas

3 1. Introduction 2. Theory 3. Case study 1 and 2 4. Results 5. Conclusion

4 Effective vs. ethical sale controversy What does "unethical" really mean? Why salespeople behave unethically? Consequences: Legal risk, bad reputation and client dropout How organizations protect themselves against unethical behaviors of salespeople? "Virtue has never been as respectable as money" (Mark Twain) 4

5 5

6 Perceived Detection of unethical behaviour decision making process Actual Behavior Unethical Ethical Detected as unethical Undetected as unethical Hit Miss False alarm Correct rejection Examples False alarm: Terminating sales representatives basing solely on client complaint. Miss: Ignoring unethical episodes of top performing sales representatives (SR). 6

7 A. None of behaviors are unethical B. All behaviors are unethical C. Some behaviors are unethical (optimal) P E R F O R M A N C E Positive behaviour A C Neutral behaviour Negative behaviour SCOPE OF UNETHICAL BEHAVIORS B 7

8 Accurate risk management "we need to detect all potential risky behavior and consider it as unethical" (Compliance Director) Do we? 8

9 H1: Widening the scope of unethical behaviors will be associated with a decrease in financial performance of salespeople H2: Widening the scope of unethical behaviors will be associated with decreased satisfaction in salespeople 9

10 Global insurance company 1400 salespeople 21 participants interviewed: 10 top performers and 11 random Checked performance and satisfaction of SR Problem (Q3 of 2011) one of SR stole an equivalent of $ NZD in cash premium Solution (from ) company implemented a policy which considered taking premium in cash as forbidden/unethical behavior 10

11 I N B I L I O N S P L N Performance: total premium Performance: top bln PLN 550, , , , , , Q1 Q2 Q3 250, ,000 Jan Feb Mar Apr May Jun Satisfaction Strongly unsatisfied Unsatisfied Doesn't mater Satisfied Strongly satisfied Source: Company public data. Period Q Q

12 Worldwide Bank with over branches in Poland 800 Customer Advisors Problem: One SR couple working together for the bank, defrauded 180 clients. Solution: Bank implemented an immediate reporting policy. All reports must be filed no later than two hours after credit contracts have been signed. 12

13 Banks have procedures and security features, which in most cases prevent cooperation with those aimed at making external fraud, there is much bigger problem of internal fraud of sales and customer service staff which is often difficult to quickly identify and effectively counter" (Polish financial blogger) 13

14 4,800 4,700 4,600 4,500 4,400 4,300 4,200 4,100 Performance: no. of contracts May Jun Jul Aug Sep Oct Reporting time (min/day) May Jun Jul Aug Sep Oct Source: Company public data. May Oct

15 Increasing the scope of unethical behaviors may negatively impact performance Signal Detection Theory framework can be useful in detection of unethical behavior Risk management should be balanced between safety and effective, and flexible work environment Changes in organizations require adequate training of SRs 15

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