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India Knowledge@Wharton | Why office romances are hard to manage

India Knowledge@Wharton | Why office romances are hard to manage
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First Published: Sun, Apr 29 2007. 11 47 PM IST
Updated: Sun, Apr 29 2007. 11 47 PM IST
The British television sitcom, The Office, confirms with satire what recent studies have demonstrated with numbers: Romances shape office life and human resource departments don’t have much to say about it. But given the potential fallout of workplace relationships, companies retreat on this issue at their own risk, suggest several experts. “There is a feeling of resignation among HR people. Mostly they close their eyes and hope for the best,” says Deborah Keary, director of human resources at the Alexandria, Va.-based Society for Human Resource Management.
In a 2005 study conducted by the society and the Wall Street Journal’s CareerJournal.com, 40% of employees surveyed said they had had an office romance at some point in their careers—a finding replicated by three other recent surveys conducted by private companies.
While these statistics might raise some eyebrows, the overarching frequency of office romance should not come as a surprise, says Keary. “The workplace is the new neighbourhood. People spend an enormous amount of time in the office, and if romance is going to happen, it will happen there,” she says.
While these relationships might be distracting for the individuals involved as well as for those around them, Wharton management professor Jennifer Mueller says that if the couple remains “well integrated” and is not perceived as being exclusivist, the relationship may not be a problem.
To promote the integration of the couple, the team leader can assign the pair to separate tasks within the team, Mueller notes. “That will also help if they break up, because they will have other ties to sustain them. Like anything that happens in a team, (the situation) needs to be managed.”
Beneficiaries of loyalty schemes
Since American Airlines pioneered its frequent flyer programme 26 years ago, airline loyalty programmes have blossomed into a unique and thriving industry, in part by teaming up with hotels, rental car companies and credit cards. These days, dozens of retailers are tied into the programmes with their own frequent buyer schemes.
But while the programmes are getting bigger, they don’t always provide a big payout for retailers. For the most part, the partnerships have become a defensive measure as more retailers develop competing programmes, according to experts. “The programmes are growing, but they are not necessarily successful,” says Wharton marketing professor Xavier Dreze. Setting them up “is now just an added cost of doing business, not a true loyalty programme. The retailer does not have loyalty from the customer; the airline has it”.
Dreze, who has written extensively about retail loyalty programmes, says he is now developing new research methods to explore the importance of rewards as recurring goals. He points out that successful loyalty programmes need to carefully develop their award system to keep consumers eager to select a new goal and to earn new points after they achieve a reward. His research suggests that once people experience a rewards redemption, they are even more likely to work harder to do what it takes to cash in again. “Unless you work at it, you don’t know how likely you are to be successful. But once you succeed, you think, ‘Hey, I enjoy this. Let’s do it again’.”
Dreze warns that loyalty programmes must carefully weigh the “price” of their rewards. A free trip every two or three years is not enough to keep a consumer engaged with the programme. “That’s the problem with the small flyer. They never get to the point where they get the reward. That’s where all the partners can come in,” says Dreze. “The reward needs to come often enough so that there is reinforcement. At the same time, it can’t be too close. Then it wouldn’t be meaningful.”
Out of stock? Blame the payroll
Attention, shoppers: Did you find everything you were looking for? Retail customers who answer “yes” to this question might very well represent the Holy Grail to retail operators, who want to increase their sales with only a modest increase in costs or, in some cases, by merely reallocating staff within a store at no extra cost. Impossible? Not according to a new study on retail store execution by Wharton operations and information management professors Marshall L. Fisher and Serguei Netessine, and Wharton doctoral student Jayanth Krishnan.
Using proprietary data collected over 17 months from a large retail operation with more than 500 stores, the researchers determined that sales and customer satisfaction are not driven merely by a customer’s ability to find products on the shelf. Instead, “customer perceived in-stock”—a metric the Wharton experts use to describe the number of customers who answer “yes” to that all-important “Did you find everything?” question—is driven not only by actual in-stock, but by how well the customers rate employee knowledge about the store and the products they are looking to purchase.
In short, customers get less satisfaction from their shopping experience when stores have too few employees and, more importantly, when stores lack employees who are knowledgeable about what’s in the store. After analysing the results of the study, the researchers suggest that a “modest reallocation of the payroll budget among stores” in this particular chain could yield a 2-3% increase in sales without increasing cost.
But what surprised them the most was the potential financial return if the unnamed retailer were to make even a modest investment in hiring more staff. According to the study, “Increasing associate payroll by $1 at a given store is associated with a sales lift of anywhere from $4 to $28, depending on the current level of payroll relative to store sales. The implication of this finding on retail performance is quite dramatic.”
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First Published: Sun, Apr 29 2007. 11 47 PM IST
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