Target Recovery Case Study
The Recovery Operations team at Target had spent years working together without clear direction regarding expectations and quality standards. Recovery Operations is made up of 13 Recovery Specialists, 6 Sr. Recovery specialist’s, 6 Agency Relationship Coordinators, and 2 team leads. The recovery specialists handle the day to day communication and vendor billing for 22 agencies and law firms who collect balances owed on Target’s behalf. The agency relationship coordinators oversee the agencies and law firms to monitor adherence to Target Brand, federal and state guidelines and market share of collection dollars placed. Each relationship manager and recovery specialist is assigned to a number of firms to work with on an on-going basis. The leadership
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structure has changed from the Recovery Specialists reporting to the Agency Relationship Coordinator to reporting to one of two team leads, the specific responsibility is overseeing team member workload and department communication.
When team members don’t have a clear idea of what is expected of them the probability of mistakes taking place increases. When clear expectations are provided the team knows what to expect when they walk into the workplace, the team understands how they are all working together to accomplish the business goals. Even though the team was completing daily work tasks without direction, team members need clear expectations because many mistakes were being made and the team was not aware of how these mistakes were impacting the Recovery Operations workflow.
As part of the review of the leadership styles needed to accomplish the goal of introducing a quality program to the Recovery Operations department at Target three styles of leadership were examined. The largest style used was the Transformative style. By transforming the team from individuals completing daily tasks to a team that works
together to accomplish goals all team members will be made aware of how their contributions affect the whole. Northouse defines Transformational leadership as “a process whereby a person engages with others and creates a connection that raises the level of motivation and morality in the the leader and the follower” (p. 186). This project demonstrates leadership by using techniques of the Transformational Leadership model. The quality coach in this project is not aiming to only accomplish the goal of team members accurately completing work. The quality coach was interested in engaging the team in a deeper understanding of how individual work affects the Recovery Operations department as a whole. If the individuals better understand how his/her work ties in with others the group as a whole will succeed in making improvements in daily work. The second goal was to give the team clearly communicated guidance on expectations and goals. This was accomplished by using the Path-Goal Theory, Northouse states, “Leadership also motivates when it makes the path to the goal clear and easy to travel through coaching and direction, removing obstacles and roadblocks to attaining the goal, and making the work itself more personally satisfying: (p. 138) The third goal, used the Situational Approach to tailor the message to the individual team members while still maintaining a consistent message. The Situational Approach as briefly defined by Northouse states “leaders match their style to the competence and commitment of the subordinates” (p. 99).
Team members in the Recovery Operations department at Target Financial Services need clear expectations and guidelines in order to increase compliance and team unity. In the past the team has had no measurable goals to show achievement. Performance reviews were based on the team leads perception of team member performance, or a trait based approach. Team members who made one time mistakes were viewed by the leadership team as having more errors than team members who made multiple smaller errors. As an example, a team member who did not correctly calculate legal costs for a large vendor’s daily bill was viewed as less compliant than a team member who had invoice number typos on a 3 time weekly basis.
A quantitative approach was used to answer the question, will the recovery operations team members increase their compliance if provided with clear processes and expectations. A deductive approach was used for this project. If the team members are provided with clear, consistent guidelines then error rates will decrease. The team members needed three job functions placed in a quality control program. The largest team member task is vendor billing, or payment to Target’s third party vendors who collect on charged off credit card accounts. Team members review invoices submitted by the vendors for payment, including ensuring vendor percentage calculations are correct, along with verifying the money the vendor collects is properly sent through a bank wire and posted to the debtor’s account. The second task is processing debtor settlements. A settlement is a debtor agreement to pay a reduced portion of owed debt in return for having the remainder of the debt forgiven. The vendor must send an Excel spreadsheet to Target containing the information needed to complete the remainder of debt write off. Target has 30 days from the date of the last payment to complete the write off and report the account as settled. The team member must review every account to make certain all accounts are processed correctly and on time. If the settlement is not written off in 30 days, Target is out of compliance with federal banking guidelines. The third task is organizing and mailing debtor statements to the vendor for inclusion as evidence or exhibits in debtor law suits.
A quality review overview was set up to review quality for only those team members who were perceived by management to make errors. The overview was conducted on all billing invoices submitted by team members who performed to low quality standards, and a random sample of vendor bills was completed for all remaining team members. The spot checks were recorded in an Excel spreadsheet and tracked by team member name, date, invoice number and specific details regarding the error. Many team members were discovered to be making small errors on a consistent basis. When another large error was discovered in the account settlement write off process, the quality spot checks were expanded across multiple job functions. The settlement error discovered occurred when one team member assumed a systematic process was occurring without physically checking the work. The system issues were not taking place over the course of three months resulting in thousands of account balances to not be written off appropriately. The third task under review was the vendor media process. Media includes debtor statements and affidavits mailed via UPS to the law firm. Statements and affidavits are used as exhibits in lawsuits when a debtor is sued for collection purposes. When the media is sent to an incorrect firm it creates a delay in the legal process, as well as exposing Target to data security concerns.
structure has changed from the Recovery Specialists reporting to the Agency Relationship Coordinator to reporting to one of two team leads, the specific responsibility is overseeing team member workload and department communication.
When team members don’t have a clear idea of what is expected of them the probability of mistakes taking place increases. When clear expectations are provided the team knows what to expect when they walk into the workplace, the team understands how they are all working together to accomplish the business goals. Even though the team was completing daily work tasks without direction, team members need clear expectations because many mistakes were being made and the team was not aware of how these mistakes were impacting the Recovery Operations workflow.
As part of the review of the leadership styles needed to accomplish the goal of introducing a quality program to the Recovery Operations department at Target three styles of leadership were examined. The largest style used was the Transformative style. By transforming the team from individuals completing daily tasks to a team that works
together to accomplish goals all team members will be made aware of how their contributions affect the whole. Northouse defines Transformational leadership as “a process whereby a person engages with others and creates a connection that raises the level of motivation and morality in the the leader and the follower” (p. 186). This project demonstrates leadership by using techniques of the Transformational Leadership model. The quality coach in this project is not aiming to only accomplish the goal of team members accurately completing work. The quality coach was interested in engaging the team in a deeper understanding of how individual work affects the Recovery Operations department as a whole. If the individuals better understand how his/her work ties in with others the group as a whole will succeed in making improvements in daily work. The second goal was to give the team clearly communicated guidance on expectations and goals. This was accomplished by using the Path-Goal Theory, Northouse states, “Leadership also motivates when it makes the path to the goal clear and easy to travel through coaching and direction, removing obstacles and roadblocks to attaining the goal, and making the work itself more personally satisfying: (p. 138) The third goal, used the Situational Approach to tailor the message to the individual team members while still maintaining a consistent message. The Situational Approach as briefly defined by Northouse states “leaders match their style to the competence and commitment of the subordinates” (p. 99).
Team members in the Recovery Operations department at Target Financial Services need clear expectations and guidelines in order to increase compliance and team unity. In the past the team has had no measurable goals to show achievement. Performance reviews were based on the team leads perception of team member performance, or a trait based approach. Team members who made one time mistakes were viewed by the leadership team as having more errors than team members who made multiple smaller errors. As an example, a team member who did not correctly calculate legal costs for a large vendor’s daily bill was viewed as less compliant than a team member who had invoice number typos on a 3 time weekly basis.
A quantitative approach was used to answer the question, will the recovery operations team members increase their compliance if provided with clear processes and expectations. A deductive approach was used for this project. If the team members are provided with clear, consistent guidelines then error rates will decrease. The team members needed three job functions placed in a quality control program. The largest team member task is vendor billing, or payment to Target’s third party vendors who collect on charged off credit card accounts. Team members review invoices submitted by the vendors for payment, including ensuring vendor percentage calculations are correct, along with verifying the money the vendor collects is properly sent through a bank wire and posted to the debtor’s account. The second task is processing debtor settlements. A settlement is a debtor agreement to pay a reduced portion of owed debt in return for having the remainder of the debt forgiven. The vendor must send an Excel spreadsheet to Target containing the information needed to complete the remainder of debt write off. Target has 30 days from the date of the last payment to complete the write off and report the account as settled. The team member must review every account to make certain all accounts are processed correctly and on time. If the settlement is not written off in 30 days, Target is out of compliance with federal banking guidelines. The third task is organizing and mailing debtor statements to the vendor for inclusion as evidence or exhibits in debtor law suits.
A quality review overview was set up to review quality for only those team members who were perceived by management to make errors. The overview was conducted on all billing invoices submitted by team members who performed to low quality standards, and a random sample of vendor bills was completed for all remaining team members. The spot checks were recorded in an Excel spreadsheet and tracked by team member name, date, invoice number and specific details regarding the error. Many team members were discovered to be making small errors on a consistent basis. When another large error was discovered in the account settlement write off process, the quality spot checks were expanded across multiple job functions. The settlement error discovered occurred when one team member assumed a systematic process was occurring without physically checking the work. The system issues were not taking place over the course of three months resulting in thousands of account balances to not be written off appropriately. The third task under review was the vendor media process. Media includes debtor statements and affidavits mailed via UPS to the law firm. Statements and affidavits are used as exhibits in lawsuits when a debtor is sued for collection purposes. When the media is sent to an incorrect firm it creates a delay in the legal process, as well as exposing Target to data security concerns.