As a new member of the board of directors for a local bank, Jack Nelson was being introduced to all employees in the home office. When he was introduced to Ruth Johnson, he was curious about her work and asked her what her machine did. Johnson replied that she really did not know what the machine was called or what it did. She explained that she had only been working there for two months. She did, however, know precisely how to operate the machine. According to her supervisor, she was an excellent employee.
At one of the branch offices, the supervisor in charge spoke to Nelson inferentially, telling him that “something was wrong,” but she did not know what. For one thing, she explained, employee turnover was too high, and no sooner had one employee been put on the job than another one resigned. With customers to see and loans to be made, she continued, she had little time to work with the new employees as they came and went. All branch supervisors hired their own employees without communication with the head office or other branches. When an opening developed, the supervisor tried to find a suitable employee to replace the worker who had quit.
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After touring the 22 branches and finding similar problems in many of them, Nelson wondered what the home office should do or what action he should take. The bank was generally regarded as a well-run institution that had grown from 27 to 191 employees during the past eight years. The more he thought about the matter, the more puzzled Nelson became.