--- Page 1 --- Similarity Report PAPER NAME INDU1106- Management Practice 1 - Cas e study Jung Vu.docx AUTHOR fv fvf WORD COUNT 2717 Words CHARACTER COUNT 16433 Characters PAGE COUNT 7 Pages FILE SIZE 23.4KB SUBMISSION DATE Jul 18, 2024 10:30 AM GMT+7 REPORT DATE Jul 18, 2024 10:30 AM GMT+7 4% Overall Similarity The combined total of all matches, including overlapping sources, for each database. 2% Internet database 0% Publications database Crossref database Crossref Posted Content database 4% Submitted Works database Excluded from Similarity Report Bibliographic material Quoted material Cited material Summary --- Page 2 --- Part 1 (1000 words): a. Discuss how the main principles of goal -setting theory have helped increase employee performance (400 words) Locke and Latham''''s (1990) Goal -Setting Theory is one of the most influential theories in work motivation. The theory points out that setting specific, clear and challenging goals will drive effort, guide action and lead to higher employee performance (Locke & Latham, 2002). The main principles of the theory include: (1) Goals must be specific and clear, (2) Goals must be challenging but still achievable, (3) Employees need to participate in and commit to the goal, (4) Regular feedback is needed on goal progress (Locke & Latham, 2006). In the case of Wells Fargo, it can be seen that this bank applied some principles of goa l- setting theory in its performance management system. Specifically, the Independent Director''''s report shows that Wells Fargo set very clear and ambitious business goals for each branch, department, position and employee. These goals were turned into sales targets, product quantity, revenue by day/month/quarter. Goals were pushed from higher levels down to lower levels and became an important standard for evaluating performance and determining rewards and punishments for employees. In some ways, this approa ch aligns with the specific and challenging goal principle of goal -setting theory. However, the application of goal -setting theory at Wells Fargo revealed many problems. First, the overly high business targets put suffocating pressure on employees. The rep ort indicates that in some areas, direct managers even threatened to fire or punish employees for not meeting goals. This pressure unintentionally pushed employees to commit fraud, open fake accounts, and misleadingly sell products to reach quotas. Second, the business goals only focused on quantity instead of customer service quality. Rather than carefully advising customers, many employees tried to skirt the rules and pressure customers to buy unsuitable products just to meet targets. Loose internal contr ols also enabled widespread violations of professional ethics. In terms of work performance, although employees could exceed business goals, the ethical and legal consequences were very serious. The fake account scandal greatly damaged Wells Fargo''''s reputa tion and finances. The bank had to pay fines and compensation up to $1.7 billion. This shows that real performance is not just about achieving goals but must also align with ethics and bring long -term benefits to the organization (Gong et al., 2013). Looki ng from an overall perspective it is readily apparent that the improper application of goal-setting theory created abnormal work pressure, leading to unethical behaviors and reduced true performance in the case of Wells Fargo. It can be seen that this theo ry still has some limitations when applied in practice. To create healthy motivation, in addition to setting challenging goals, there need to be clear ethical standards, strict sanctions, as well as a balance between pressure and employee ability. 2 2 4 7 8 --- Page 3 --- b. Criti cize goal -setting theory by discussing how it may be ineffective in the Wells Fargo case and propose another motivation theory to address its shortcomings (600 words) Although Locke and Latham''''s (1990) Goal -Setting Theory has been widely applied in organiz ations to motivate employees and increase performance, in the case of Wells Fargo, this theory revealed many limitations. The overly high, unrealistic business goals that Wells Fargo set for employees unintentionally created suffocating work pressure. The investigation report shows that at many branches, managers frequently threatened to fire or punish employees for not meeting targets. Some employees shared that they constantly feared losing their jobs if they didn''''t achieve the goals (Tayan, 2019). The co nsequence of assigning unachievable goals pushed employees to unethical actions like opening fake accounts, deceptively selling products, and even misusing customer personal information to generate fake sales. Loose internal controls along with a reward sy stem based only on quantity enabled widespread fraud. As a result, millions of fake accounts were created, seriously impacting customer rights and trust, causing heavy damage to Wells Fargo''''s reputation and finances (Corkery, 2020). It can be seen that jus t setting high goals without considering feasibility, lacking control measures and ethical standards will bring negative results. On the other hand, Wells Fargo''''s narrow focus on quantitative targets while neglecting service quality also shows a one -sided perspective in applying goal -setting theory. Customer service quality, satisfaction and trust are the truly important criteria that determine an organization''''s long -term success. However, the way goals were assigned and employee performance was evaluated s olely based on business metrics led them to fixate on reaching sales at all costs, deceiving and coercing customers. This completely goes against the goal of building good customer relationships and the organization''''s long -term interests (Egan, 2017). To address the limitations of goal -setting theory, Wells Fargo could consider applying other motivation theories like Victor Vroom''''s Expectancy Theory or Herzberg''''s Two -Factor Theory. According to Expectancy Theory, employee motivation is influenced by three f actors: (1) Belief in ability to complete the work, (2) Expectancy that completing the work will achieve desired results, (3) Attractiveness of rewards upon achieving results (Lunenburg, 2011). Applying this to Wells Fargo, leaders should set more realisti c, feasible goals; provide adequate tools, resources and support for employees to believe in their ability to reach goals; closely link goal achievement with valuable rewards both tangible and intangible. Additionally, the bank needs to establish broader p erformance evaluation criteria, not just focusing on quantitative financial metrics but also valuing qualitative factors like service quality, customer satisfaction, and adherence to professional ethics. Furthermore, based on the Two -Factor Theory, Wells F argo should pay attention to improving "hygiene" factors like working conditions, company policies, relationships with superiors and colleagues, as well as "motivation" factors like recognition, development opportunities and job responsibilities to create sustainable motivation for employees (Herzberg, 1 5 6
Trang 1Similarity Report
PAPER NAME
INDU1106- Management Practice 1 - Cas
e study Jung Vu.docx
AUTHOR
fv fvf
WORD COUNT
2717 Words
CHARACTER COUNT
16433 Characters PAGE COUNT
7 Pages
FILE SIZE 23.4KB SUBMISSION DATE
Jul 18, 2024 10:30 AM GMT+7
REPORT DATE Jul 18, 2024 10:30 AM GMT+7
4% Overall Similarity
The combined total of all matches, including overlapping sources, for each database
4% Submitted Works database
Excluded from Similarity Report
Cited material
Summary
Trang 2Part 1 (1000 words):
a Discuss how the main principles of goal-setting theory have helped increase employee performance (400 words)
Locke and Latham's (1990) Goal-Setting Theory is one of the most influential theories in work motivation The theory points out that setting specific, clear and challenging goals will drive effort, guide action and lead to higher employee performance (Locke & Latham, 2002) The main principles of the theory include: (1) Goals must be specific and clear, (2) Goals must be challenging but still achievable, (3) Employees need to participate in and commit to the goal, (4) Regular feedback is needed on goal progress (Locke & Latham, 2006)
In the case of Wells Fargo, it can be seen that this bank applied some principles of goal-setting theory in its performance management system Specifically, the Independent Director's report shows that Wells Fargo set very clear and ambitious business goals for each branch, department, position and employee These goals were turned into sales targets, product quantity, revenue by day/month/quarter Goals were pushed from higher levels down to lower levels and became an important standard for evaluating performance and determining rewards and punishments for employees In some ways, this approach aligns with the specific and challenging goal principle of goal-setting theory
However, the application of goal-setting theory at Wells Fargo revealed many problems First, the overly high business targets put suffocating pressure on employees The report indicates that in some areas, direct managers even threatened to fire or punish employees for not meeting goals This pressure unintentionally pushed employees to commit fraud, open fake accounts, and misleadingly sell products to reach quotas Second, the business goals only focused on quantity instead of customer service quality Rather than carefully advising customers, many employees tried to skirt the rules and pressure customers to buy unsuitable products just to meet targets Loose internal controls also enabled widespread violations of professional ethics
In terms of work performance, although employees could exceed business goals, the ethical and legal consequences were very serious The fake account scandal greatly damaged Wells Fargo's reputation and finances The bank had to pay fines and compensation up to $1.7 billion This shows that real performance is not just about achieving goals but must also align with ethics and bring long-term benefits to the organization (Gong et al., 2013)
Looking from an overall perspective it is readily apparent that the improper application of goal-setting theory created abnormal work pressure, leading to unethical behaviors and reduced true performance in the case of Wells Fargo It can be seen that this theory still has some limitations when applied in practice To create healthy motivation, in addition to setting challenging goals, there need to be clear ethical standards, strict sanctions, as well as a balance between pressure and employee ability
2
2
4
7
8
Trang 3b Criticize goal-setting theory by discussing how it may be ineffective in the Wells Fargo case and propose another motivation theory to address its shortcomings (600 words)
Although Locke and Latham's (1990) Goal-Setting Theory has been widely applied in organizations to motivate employees and increase performance, in the case of Wells Fargo, this theory revealed many limitations The overly high, unrealistic business goals that Wells Fargo set for employees unintentionally created suffocating work pressure The investigation report shows that at many branches, managers frequently threatened to fire or punish employees for not meeting targets Some employees shared that they constantly feared losing their jobs if they didn't achieve the goals (Tayan, 2019)
The consequence of assigning unachievable goals pushed employees to unethical actions like opening fake accounts, deceptively selling products, and even misusing customer personal information to generate fake sales Loose internal controls along with a reward system based only
on quantity enabled widespread fraud As a result, millions of fake accounts were created, seriously impacting customer rights and trust, causing heavy damage to Wells Fargo's reputation and finances (Corkery, 2020) It can be seen that just setting high goals without considering feasibility, lacking control measures and ethical standards will bring negative results
On the other hand, Wells Fargo's narrow focus on quantitative targets while neglecting service quality also shows a one-sided perspective in applying goal-setting theory Customer service quality, satisfaction and trust are the truly important criteria that determine an organization's long-term success However, the way goals were assigned and employee performance was evaluated solely based on business metrics led them to fixate on reaching sales
at all costs, deceiving and coercing customers This completely goes against the goal of building good customer relationships and the organization's long-term interests (Egan, 2017)
To address the limitations of goal-setting theory, Wells Fargo could consider applying other motivation theories like Victor Vroom's Expectancy Theory or Herzberg's Two-Factor Theory According to Expectancy Theory, employee motivation is influenced by three factors: (1) Belief
in ability to complete the work, (2) Expectancy that completing the work will achieve desired results, (3) Attractiveness of rewards upon achieving results (Lunenburg, 2011) Applying this to Wells Fargo, leaders should set more realistic, feasible goals; provide adequate tools, resources and support for employees to believe in their ability to reach goals; closely link goal achievement with valuable rewards both tangible and intangible Additionally, the bank needs to establish broader performance evaluation criteria, not just focusing on quantitative financial metrics but also valuing qualitative factors like service quality, customer satisfaction, and adherence to professional ethics
Furthermore, based on the Two-Factor Theory, Wells Fargo should pay attention to improving "hygiene" factors like working conditions, company policies, relationships with superiors and colleagues, as well as "motivation" factors like recognition, development opportunities and job responsibilities to create sustainable motivation for employees (Herzberg,
1
5
6
Trang 42003) Research shows that employees with good "hygiene" factors and high satisfaction with
"motivation" factors are more likely to maintain high performance and long-term commitment to the organization (Yusoff et al., 2013) In Wells Fargo's context, the bank needs to revise policies to avoid putting excessive pressure on employees, improve the work environment so people feel safe and respect each other, and create many opportunities for employees to demonstrate competence, contribute ideas and develop their careers
Part 2 (1000 words): Describe how to adjust Wells Fargo's effective management system
to eliminate fraudulent behavior
a Performance evaluation/review process
The employee performance evaluation process at Wells Fargo has revealed many weaknesses One of the biggest problems is that the evaluation focuses too much on quantitative metrics such as the number of products sold and new accounts opened, while ignoring qualitative criteria related to service quality and customer satisfaction Using any tactic—including dishonesty and fraud - this one-sided approach has inadvertently driven staff workers to meet sales targets Concurrent with this, research by Samnani and Singh (2014) show how overstretching individual performance may affect staff cooperation and support as well as create unhealthy competition undermining team spirit
On the other hand, Wells Fargo's current evaluation mechanism likewise lacks transparency and impartiality The evaluation is largely centered on the subjective comments of direct supervisors as staff workers have few means to self-assess or seek opinions from colleagues and clients Studies by Cappelli and Conyon (2018) show that an objective and fair assessment process devoid of these elements may cause employee unhappiness and loss of motivation Moreover, focusing only on results without considering the work process, efforts at development, or increase
of employee competency restricts and narrows the evaluation process
If Wells Fargo wants to improve the performance evaluation system, it has to change its approach to be more balanced and varied Apart from focusing just on commercial indicators, the bank should integrate elements connected with service quality, ethical compliance, and customer satisfaction to the evaluation scale (Aguinis, 2019) This encourages employees to give the long-term interests and fundamental values of the business first priority rather than merely considering their own gain Including various stakeholders such as colleagues, customers, and staff members themselves in the evaluation process helps to promote objectivity, openness, and acceptance by the evaluatee (DeNisi & Murphy, 2017)
Another important shift Wells Fargo has to do is from periodic to continuous review, thus combining summative evaluation with frequent comments Timely and constructive feedback may allow staff workers to instantly adjust their working methods, identify areas of strength and weakness, According to research by Schleicher et al (2018), regular review and feedback with regard to job performance and employee engagement indicate a positive correlation Finally, Wells
1
Trang 5Fargo has to integrate results of assessments with decisions on training, career advancement, and development This motivates employees to keep developing themselves, keep learning, and help the business more actively
Wells Fargo needs to focus on combining quantitative and qualitative criteria to ensure objectivity and transparency and so build an effective performance assessment system, thereby shifting the emphasis from pure evaluation to a combination of evaluation and feedback to promote employee development By means of a comprehensive and fair evaluation system, employees will
be more driven to work hard and exhibit long-term commitment to the business
b Reward system
Wells Fargo's reward system prior to the account fraud scandal showed many unreasonable points and ethical risks The reward mechanism only focuses on financial aspects such as sales, number of products sold, without regard to service quality, customer satisfaction or regulatory compliance This creates pressure and incentives for employees to use any means to achieve goals, leading to fraud and forcing customers to buy unsuitable products Thus, Wells Fargo made the mistake of unilaterally using only financial indicators as reward criteria, while ignoring ethical factors and organizational culture
Niven and Healy's (2016) research shows that companies that only emphasize short-term results often create extreme pressure on employees, leading to many ethical consequences such as fraud and violation of customer rights To remedy this situation, Wells Fargo needs to adjust the reward system in a more multidimensional and balanced direction Instead of just relying on sales metrics, the bank should include non-financial factors such as service quality, customer satisfaction, and ethical and regulatory compliance in the measurement scale (Garbers & Konradt, 2014) In addition to spot bonuses for individuals with good short-term business performance, there should be long-term reward policies for employees who demonstrate commitment, dedication, and sustainable contributions to the organization's development This will help shift employees' mindset from focusing only on immediate benefits to caring more about core values and responsibility to the community
Kuvaas et al.'s (2016) research also points out that not only financial rewards, but non-financial forms of recognition such as recognition of achievements, development opportunities, and work-life balance also have a positive impact on employee performance and engagement Therefore, Wells Fargo needs to diversify its forms of reward, combining financial and non-financial rewards to meet the diverse needs of individuals The reward policy also needs to be flexible for each labor group based on the specifics of position, seniority, and contribution because one-size-fits-all rewards make it difficult to motivate all employees (Milkovich et al., 2011)
Another important thing is that Wells Fargo must build an ethical culture as the foundation for its reward policy Business results must go hand in hand with integrity, transparency, and a sense of responsibility Employees who violate ethics and professional standards, no matter how
9
Trang 6high their sales are, cannot be rewarded Conversely, adherence to core values must become an important and mandatory evaluation criterion for recognition This requires Wells Fargo leaders to change their mindset and strongly communicate top-down messages about the organization's ethical standards to encourage employees to change their work behavior
Thus, through analysis, it can be seen that adjusting the reward system in a balanced, multidimensional, fair direction, while being closely linked to the organization's ethical values and culture will create sustainable work motivation for Wells Fargo employees, thereby restoring customer and social trust after the fraud scandal This will be the foundation to help Wells Fargo recover, regain reputation, and develop healthily in the long term
c Disciplinary process
One of the weaknesses of Wells Fargo's disciplinary process before the scandal was the arbitrary and inconsistent handling of violations Although Wells Fargo had policies and rules on professional ethics, their application lacked consistency across departments and levels of management While some workers were either cautioned or mildly reprimanded for similar actions, others were sacked right away upon infraction This inequity undermined corporate discipline and bred irritation According to study by Patel et al (2016), a clear, fair, and consistent disciplinary procedure is a major determinant of compliance and a means of reducing misbehavior
in companies
Furthermore restricting the efficacy of Wells Fargo's disciplinary system is an excessive concentration on penalties and fines combined with minimal attention on teaching and prevention According to reports, few policies were in place to stop fraud or misbehavior from starting in the first place; staff were mostly punished after they had done it Punishing by itself without combining
it with advocacy and ethical standards training as well as arming staff members with tools to enable them to make wise judgments would cause recidivism According to Treviño and Nelson (2017),
a comprehensive ethics and compliance program needs to integrate communication, awareness-raising training, and disciplinary enforcement to create positive behavior change
To overcome the above limitations, Wells Fargo needs to establish a clear, transparent, and consistently applied disciplinary process throughout the system Each type of violation needs to have specific evaluation criteria for severity and corresponding handling directions At the same time, it is necessary to publicize the process and consequences of each misconduct so that employees are aware of and comply with them This requires determination from senior leadership
in communicating and enforcing a common standard of professional ethics, avoiding the situation
of cover-up, favoritism, or arbitrary application in each place
Next, discipline needs to go hand in hand with efforts to improve employees' ethical decision-making capacity through regular advocacy and training It is necessary to clearly disseminate the values and ethical standards that Wells Fargo expects, guide how to identify and respond to ethical challenges that may be encountered In addition, a whistleblowing and
3
Trang 7whistleblower protection mechanism also needs to be established to encourage employees to speak
up against wrongdoing, rather than waiting until things go too far before dealing with them (Miethe
& Rothschild, 1994)
Finally, Wells Fargo should apply the "just culture" model in discipline, prioritizing system improvement over individual blame This means that if violations stem from oversight, work pressure, or loopholes in processes, the organization needs to acknowledge and correct those root causes, rather than just disciplining the employees involved This approach helps build trust, promote continuous learning, and improve the quality of operations in the long run (Boysen, 2013)
Looking from an overall perspective, it is readily apparent that building an effective disciplinary process requires Wells Fargo to balance clarity and consistency with flexibility and consideration of circumstances Beside appropriate sanctions, there need to be orientation education and a culture of fairness to both deter violations and encourage making the right decisions If implemented well, the disciplinary process will become a powerful tool to promote compliance, fundamentally change behavior, and prevent similar scandals in the future at Wells Fargo
References
1 Corkery, M (2020) Wells Fargo pays $3 billion to settle fake accounts case The New York Times https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html
2 Egan, M (2017) Wells Fargo scandal: Elizabeth Warren wants answers CNN Money
https://money.cnn.com/2017/08/16/investing/wells-fargo-scandal-elizabeth-warren/index.html
3 Gong, Y., Wang, M., Huang, J.-C., & Cheung, S Y (2013) Toward a goal orientation-based feedback-seeking typology: Implications for employee performance outcomes Journal of Management, 43(4), 1234-1260 https://doi.org/10.1177/0149206314551797
4 Herzberg, F (2003) One more time: How do you motivate employees? Harvard Business Review, 81(1), 87-96
5 Locke, E A., & Latham, G P (1990) A theory of goal setting & task performance Prentice Hall
6 Locke, E A., & Latham, G P (2002) Building a practically useful theory of goal setting and task motivation: A 35-year odyssey American Psychologist, 57(9), 705-717 https://doi.org/10.1037//0003-066x.57.9.705
7 Locke, E A., & Latham, G P (2006) New directions in goal-setting theory Current Directions
in Psychological Science, 15(5), 265-268 https://doi.org/10.1111/j.1467-8721.2006.00449.x
8 Lunenburg, F C (2011) Expectancy theory of motivation: Motivating by altering expectations International Journal of Management, Business, and Administration, 15(1), 1-6
9 Tayan, B (2019) The Wells Fargo cross-selling scandal Stanford Closer Look Series https://www.gsb.stanford.edu/sites/default/files/publication-pdf/cgri-closer-look-62-wells-fargo-cross-selling-scandal.pdf
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Trang 810 Yusoff, W F W., Kian, T S., & Idris, M T M (2013) Herzberg's two factors theory on work motivation: Does its work for today's environment Global Journal of Commerce and Management, 2(5), 18-22
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