Topic: MKD Green Clean Ltd.

Order Description Introduction and the purpose of the report (5%) Your introduction should clarify the purpose of your report, how it is organized and the key issues your team will address in the report. The introduction may be written addressing the Owner and executive team of MKD Green Clean Ltd. Problem Identification (30%) This section should include the identification and explanation of specific problems, challenges or issues facing MKD Green Clean Ltd. Your discussion should explain the problem/issue, describe why it is a concern for the organization, and identify the stakeholders affected. Your report should identify at least five major problems with the current management of human resources at MKD Green Clean Ltd. Defend your problem statements using both facts given in the case, and relevant course concepts from at least 5 different chapters of the textbook. the textbook is Dessler, G., Chhinzer, N. & Cole, N. 2014. Human Resources Management in Canada, Canadian 12th Edition, Pearson Toronto. 1 MKD Green Clean Ltd. Rosie Joseph started MKD Clean in 1988. Rosie and her husband, Aman, moved to Toronto ten years earlier with their three young children Michael, Kara and Denise. Aman was an aircraft mechanic at Pearson Airport and, when the children were of school age, Rosie began cleaning houses part-time to start to save money for the children’s education. When times were tough and days were long, Rosie would often say to herself, “I’m doing this for my babies, Michael, Kara and Denise.” Hence she named the company MKD Clean after her three children. Rosie began MKD clean as primarily a residential maid service, cleaning the homes of friends and neighbours. Rosie’s domestic abilities were surpassed by her business acumen; she was smart, efficient and very astute at spotting opportunities for profit. Within a few short years, Rosie expanded MKD beyond the residential cleaning market to include small commercial establishments. Rosie purchased a few vans, some industrial cleaning equipment and rented a small office/storage space in the GTA. By 1995 Rosie employed 10 full-time cleaners, 15 part-time cleaners, 1 receptionist and 1 bookkeeper. MKD Clean was also registered as a corporation becoming MKD Clean Ltd. Over the next 15 years, MKD Clean Ltd. continued to grow, acquiring larger clients and employing more staff. MKD moved their offices to the downtown core where they would be in closer proximity to their numerous corporate clients. The business had shifted entirely away from residential housekeeping towards industrial office cleaning. In 2003, picking up on consumer trends towards increased environmental conscientiousness; MKD Clean Ltd. changed their name to MKD Green Clean Ltd. MKD had always used only biodegradable, plant-based products and as such decided to emphasize this fact and use it to differentiate the company from its competitors. By 2013 MKD Green Clean Ltd. had over 150 full and part-time employees and served a number of clients across Southern Ontario. Rosie had hoped that her children would take over the business once they had completed their education, however, not one of the three children had interest in this very lucrative cleaning company. Rosie, looking forward to a well-deserved retirement and spending time with her family, sold to business to the son of a long-time friend and neighbour. Kevin Singh bought MKD Green Clean in the fall of 2013. His mother, Mrs. Singh was a neighbour of Rosie and Aman and at times even worked part-time cleaning houses with Rosie in the early years of the business. Although Rosie did not know Kevin very well, she was confident that he would understand the culture of the business, her commitment to ethical treatment of employees and concern for the environment. Kevin was an MBA graduate with nearly 10 years experience in upper management with a large fast food chain. Despite the fact that he had little knowledge of commercial cleaning, Rosie believed that his management experience and enthusiasm made him well suited to run the company. Two years into running MKD Green Clean, Kevin has his sights set on growing the company nationally and eventually internationally through franchising. Kevin believes 2 that the MKD Green Clean brand is strong and well recognized throughout Southern Ontario and as such the company is well positioned for potential franchisees to take the brand into other provinces and countries. Kevin acknowledges that MKD, like almost any company, has a few issues that need to be addressed, however, he believes these to be minor concerns that are common to most organizations. Nonetheless, he has decided to hire a Director of Operations, Cindy Woo, to take a more in-depth look at each of the districts in MKD before proceeding to the next phase of the expansion plans. Kevin’s priority is to increase profits by aggressive cost cutting and new revenue generation, as high profits will support MKD’s franchising plans. In her first few weeks as Director of Operations, Cindy met with Kevin at length to become familiar with the company and discuss plans for expansion. Kevin gave Cindy a detailed history of the company and explained the organization’s structure. The administration of the organization was divided into four departments: Marketing; Sales and Customer Relations; Accounting and Finance; and, now, Operations. MKD has contracted an outside provider to administer payroll and other employee benefits. Most of what Kevin refers to as ‘personnel management’ (hiring, training, scheduling, etc.) is done by the district manager. MKD employs 211 full and part-time general and expert cleaners. There are no formal qualifications to be a general cleaner at MKD; however, expert cleaners must be able to lift a minimum of 45 lbs. since they are responsible for operating the steam cleaners, and have a valid drivers licence. To start, general cleaners are paid the provincial minimum wage, while expert cleaners are paid $16/hr. All employees receive a 2% raise every 4 years. Of the 211 cleaners currently employed at MKD, 75 are expert cleaners, all fulltime employees, most of whom are male due to the lifting requirements of the position. Of the remaining 136 general cleaners, 80% are female. A large proportion of the general cleaners are also part-time, young workers as the shifts for cleaners are scheduled after business hours from 6:00 pm – 2:00 am to allow the staff to clean when the clients’ offices are closed. In one of the their meetings, Kevin remarked that, in addition to raising profits, his biggest concerns are low employee morale and high turnover. Kevin is sceptical as to whether anything can be done to address these issues, as in large part he believes that it is simply due to the nature of the job, working night shifts and the fact that many of the part-time cleaners. Part-time cleaners at MKD are most often young people, many of whom are students, working at MKD as a temporary stopgap to a different career. Coming from the fast food industry, Kevin is not alarmed by high turnover, yet he is very aware of how costly it is for organizations to have to frequently replace staff. In an effort to boost morale, Kevin tried to implement an incentive plan, whereby employees would receive various small rewards ($50 cash bonuses, gift cards, etc.) if they received positive reviews from an online survey sent to MKD’s clients (the companies who hire MKD to clean their offices and workplaces). These client satisfaction surveys were intended to be completed quarterly and it was hoped they would serve as an important communication tool between MKD and its clients. The response rate from the survey was very low, therefore Kevin simply decided to abandon the idea and no bonuses were awarded. When employees asked about the results of the survey and the subsequent bonuses, they were simply told, “That idea didn’t really work out.” 3 Following her meetings with Kevin, Cindy began to review the monthly reports from each of the district managers. District Monthly Reports (DMRs) are the primary method of communication between Kevin and the various districts within MKD. Head office administrative staff reviews the reports, which contain information about staff, schedules, budgets and disciplinary actions, and notify Kevin of anything ‘out of the ordinary.’ After speaking with some of the admin personnel responsible for reviewing the reports, Cindy learned that as long as districts operated within the budget, the reports were simply filed away with little additional attention. Regional managers who reported coming in underbudget for the month were rewarded with a cash bonus of $1000.00. Cindy noticed that a number of districts were consistently coming in under budget. After looking at the expense reports and contacting the various District Managers (DMs), Cindy noticed some common trends. A number of locations were substituting biodegradable plant-based cleaners with less expensive synthetic chemical cleaners. One of the DMs commented that the ‘Green’ in MKD was in name only, nowhere was it specified in client contracts that the company would use only plant-based cleaners. Another unusual point Cindy noticed in a number of DMRs was the fact that staff recorded working more hours than they were paid. One of the DMs explained that this was a result of employees having to re-do poor work. MKD guarantees client satisfaction and as such it is company policy that if cleaning is not up to standard (as determined by random spotchecks by the DM or complaints received by the client) that employees will re-do the work without pay. MKD management believes that this policy provides an incentive for employees to ‘get it right’ the first time. Cindy found it odd that the ‘do-overs’ were most often found among experienced cleaners, most of whom are responsible for carpet cleaning/floor buffing and in worksites with the largest number of staff on each shift. Looking at the organizational chart (see attached) Cindy found it strange that there was such a difference in the number of staff per site in each region. She learned that MKD has a formula based on the number of square footage of a job site. This is how clients are billed and how DMs determine the number of cleaners to assign to each shift. One every shift there must be at least one expert cleaner and on average between 2-5 additional cleaners depending on the size of the site needing to be cleaned. Given the concerns over low morale and the number of hours spent redoing work, Cindy was also somewhat surprised that there were relatively few write-ups about individual employees in the DMRs. There was only one incident report, which detailed a complaint of sexual harassment made by one of the cleaners at one of the Downtown Core 2 job sites. The report detailed an incident where the CEO of one of MKDs largest clients, who often worked late into the night at his office, made inappropriate sexual remarks and suggestions to one of the female cleaners. The cleaner informed her DM of the behaviour and the DM spoke to the CEO. The CEO responded that he was merely joking and would try to ‘cleanup his sense of humour for the ladies.’ According to the employee who made the complaint, the CEO’s behaviour did not improve. When other cleaners at the job site were questioned about their experiences with the CEO, they also confirmed that his behaviour and remarks frequently made them uncomfortable as well. Fearing a confrontation with 4 the CEO would cost MKD a large client, the DM simply substituted an all-male cleaning crew in the work site and the file was closed. The employee who initially made the complaint has since left MKD. Although there were no other instances of harassment reported in the DMRs, given the nature of the work, particularly the fact that cleaners work through the night, often isolated from fellow crew members; Cindy thought it wise to speak to some of the cleaners directly about these issues. These conversations revealed that a number of cleaners had experienced various forms of harassment from their DMs in the form of unwanted remarks, innuendos and propositions of a sexual nature. When asked why these situations were not reported, the response was commonly that there was no one to whom the issues could be reported since the DM is the one who deals with all concerns that arise in the job site. Cindy also asked the DMs about the kind of training MKD offers new employees. Overwhelmingly, the response among DMs to this question was one of surprise. One DM even remarked that, “Training? How hard is it to clean some offices and restrooms?” The company provides new hires with a half-day information and paperwork session in which they complete employment contracts, learn company protocol and watch a 40-minute WHIMS video as required by law. New hires then spend the next two weeks shadowing an experienced employee at the job site. This two-week period is unpaid, as MKD uses this opportunity to ‘test’ if the employee is capable of performing the work competently and efficiently. If new employees ‘pass the test’ they receive a $300 ‘bonus’ and begin receiving their regular pay. Kevin and the MKD management believe that the $300 along with the promise of a permanent job provides a good incentive for employees to take the training period seriously. Cindy has accumulated quite a bit of information about MKD in the short time that she has been Director of Operations. Kevin is expecting to meet with Cindy in the coming weeks to review her recommendations for areas that need to be addressed as MKD prepares to launch its expansion plans. Cindy has the sense that Kevin is expecting her to report on various cost cutting and revenue generation strategies. However, Cindy has uncovered some larger, more pressing issues that MKD must address that likely relate to the company’s recent trends in turnover and low morale. Cindy has enlisted the help of a consulting firm to assist her in preparing a report and detailing recommendations to be presented to Kevin. 5 MKD Green Clean Ltd. Organizational Chart Kevin Singh Owner/President Mark McClure Director of Marketing Jason Fong Director of Sales & Customer relations Harpreet Sandu Director of Finance & Accounting Cindy Woo Director of Operations York Region Toronto East Toronto Midtown Downtown Core 1 Mississauga Downtown Core 2 Toronto West 10 sites 20 Staff 12 sites 30 Staff 15 sites 30 Staff 18 sites 50 Staff 20 sites 50 Staff 10 sites 17 Staff 8 sites 14 Staff Note: Arrows represent the typical direction and flow of information within the organization.