Question

Dash Riprock is a cost analyst with Safe Insurance Company. Safe is applying standards to its claims payment operation. Claims payments is a repetitive operation that could be evaluated with standards. Dash used time and motion studies to identify an ideal standard of 36 claims processed per hour. The claims processing department manager, Henry, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Henry and Dash were unable to agree, so they decided to discuss this matter openly at a joint meeting with the vice president (VP) of operations, who would arbitrate a final decision. Prior to the meeting, Dash wrote the following memo to the VP:

As you know, Henry and I are scheduled to meet with you to discuss our disagreement with respect to the appropriate standards for the claims processing department. I have conducted time and motion studies and have determined that the ideal standard is 36 claims processed per hour. Henry argues that 30 claims processed per hour would be more appropriate. I believe he is trying to 'pad' the budget with some slack. I'm not sure what he is trying to get away with, but I believe a tight standard will drive efficiency up in his area. I hope you will agree when we meet with you next week.

Discuss the professionalism of the memo to the vice president. Is this deemed appropriate, why or why not? Should this have been worked out between the two employees? Between Dash and Henry, which side are you on? Support your thoughts and reasoning. How does ethics play a role in this situation? What about the discrepancy in the number of claims (30 versus 36)? Is there a problem there also?

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Answer 1

As it was decided that the issue would be jointly discussed at the meeting with the vice president, Dash should not have preempted his position by sending a memo in advance to the vice president. Not only does he try to strengthen his stance through the memo, he also casts aspersion on the reputation and integrity of Henry, his colleague and the claims processing department manager by bringing in the 'slack' angle. After all, as the claims processing department manager, Henry should be knowing the ground realities when he says that the standard should be 30 claims processed per hour. It seems that the memo is aimed at influencing the VP so that the decision goes in Dash's favor.

Yes, this should have been worked out between the two colleagues taking all the factors into consideration.

Between Dash and Henry, I would be on Henry's side. Dash's standard of processing 36 claims per hour is the technical standard based on time and motion studies. It would be achievable by robots. But for humans working in the department, 36 claims per hour may not be a realistic standard, as humans feel tired after a while, they need a break etc. Henry is possibly speaking from a realistic and practical point of view, based on historical experience.

There is a possibility that setting a standard of 36 would not only reduce the quality and meticulousness of the work, but also may lead to employee attrition in the claims processing department.