KHL: Consulting for Managing Sales Force Attrition (A)

Abstract

Kalpak Healthcare Limited (KHL), a large pharmaceutical company in the southern part of India, once faced severe sales force turnover in its Life Branded Medications SBU, popularly called the Branded SBU (B-SBU). It became an issue of highest concern to the top management of KHL; so they appointed a team of consultants from a premier management school in the region to study the issue and recommend possible solutions and strategies. Over a period of 6 months, the consultants conducted extensive research—studying internal company records, analysing the industry and external environment, gathering qualitative data through in-depth interviews (DIs) and focus group discussions (FGDs) among KHL employees and executing a division-wide quantitative survey labelled as Manpower Mood Meter (M³) among the field executives—and finally came up with recommendations.

The case is organized as two independent, successive ones—A and B. Case (A) describes the consultants’ engagement with KHL and ends with them pondering over the types of analyses to be done with the huge volume of data they had collected. Case (B) details the kinds of analyses they actually do and the inferences they draw. The set of recommendations the consultants finally make to the KHL top management is given in the epilogue of the teaching note. The critical value of this case lies in its ability to open up the students’ minds to the dynamic interplay of multiple factors—individual, managerial, organizational, industrial-contextual and historical—that holistically affect a phenomenon like ‘attrition’ in organizations. This could perhaps also be one of those rare cases that makes use of the principles of System Dynamics in a real, applied and combined context of marketing and human resource (HR) management.

Keywords

Sales force attrition retention strategies sales organization system dynamics vicious cycle management/HR consulting pharmaceutical industry Herzberg’s hygiene-motivator theory

Discussion/Assignment Questions

If you are one of the consultants, Dr Aurora and Dr Shenoy, in this case, what all analyses would you consider doing with the gathered data, which will help you to systematically develop a reliable and pragmatic set of recommendations for the top management of KHL?

Grounded in your answer to Q. 1 as above:

How severe, in your assessment, is the attrition problem at KHL?

How important do you think is the aspect of sales force motivation for marketing success?

Analyse the current level of motivation of the sales force at KHL.

Critically evaluate the M³ tool developed and as used by the Consultants.

How would you structure the factors causing attrition in KHL: statically and dynamically?

Case (A)

New Year 2005 was just around the corner. Aurora and Shenoy, both faculty members from a leading management institute in South India, realized that they were at a critical juncture in their consulting assignment titled Project Zero-D for the Branded Strategic Business Unit (B-SBU) of Kalpak Healthcare Limited (KHL), a large pharmaceutical company in the region (see Table 1 for a brief note on KHL and its context). ‘We have quite a bit of data on our hands now: qualitative and quantitative’, noted Aurora, the leader of the team. ‘It looks somewhat complex. What we do now will be crucial’; he continued, ‘it could open us to some real problems that this company is facing’. ‘And, we just got less than a month to do that’, observed Shenoy in a cautionary tone.

Table 1.

A Brief Note on Kalpak Healthcare Ltd. and Its Context

Kalpak Healthcare Limited (KHL) was started by two entrepreneurs as Kalpak Medicals in the early 1960s with an initial investment of ₹0.1 million.⁷ It crossed ₹750 million in sales by early 1980s and had grown to become a nationally known company in the production and marketing of drugs and medicines. Towards the turn of the century, the partners separated and formed two new, independent companies, one of which was KHL. Severe rivalry between the new companies soon followed. Both the founders also took it as a personal challenge to outsmart their twin rival and to emerge on top of the other in industry rankings. Although they did not rank as high as they wanted, KHL was still growing and expanding—operating multi-nationally with over 300 drug formulations spanning all major therapeutic groups in human and animal health care. KHL often prided in its ability to maintain the strategic lead by the timely launch of new and advanced drug formulations.

Concurrently, a brief perusal of the contemporary context reveals that, at the turn of the millennium, the Indian pharmaceutical industry, like its global companions, was also in a state of transition. Rising health-care awareness among patients particularly with the growing use of the internet, intense competition, escalating costs of R&D and important issues of intellectual property rights, most of which were new to the industry, was influential in shaping its future. With product patenting becoming the norm from 2005 and a number of brands falling under the ‘aging’ category, the trend was also towards consolidation of a highly fragmented industry.⁸ Severe price competition and constant governmental monitoring and price control, alongside an abundance of generics owing to higher margins and proliferation of counterfeits of most of the established brands, were other characteristics of this market. Tracking counterfeit products was difficult and impeded brand-building processes and de-motivated the field sales force. Towards the end of 1990s, a new problem also began to haunt pharmaceutical firms—the traditional charm and appeal that young college graduates usually associated with the job of a medical representative (MR) was sharply declining; they were increasingly opting for jobs in emerging industries such as business process outsourcing (BPOs), IT-enabled services (ITES), telecommunications, media, financial services, hospitality and tourism.

Source: Prepared by Case Authors from various sources and consultants’ Report.

Over the past 5 months, as consultants to KHL, Aurora and Shenoy had conducted an extensive study on the issue of sales force attrition in B-SBU—perusing company records, analysing the industry, doing depth interviews of KHL employees and executing a division-wide survey labelled ‘Manpower Mood Meter’ (M³)—to finally arrive at this stage. With 42 per cent of B-SBU field sales force (base 1194) and 71 per cent of its sales managers (SMs) (base 37) less than a year old at KHL, Aurora and Shenoy had realized that sales force attrition was among the most severe problems troubling KHL’s top management and felt that it also held the clue to tackling some of the other adverse happenings there.

KHL: The Company Structure

KHL pursued several business interests, each organized to function as a SBU. Towards the end of 2004, there were five SBUs: Life Branded Medications, Generics, Chemicals/Bulk Drugs, Biotechnology and Phytochemistry (natural/herbal medicines). Headed by a president who reported to the managing director, each SBU functioned as an independent profit centre (see Figure 1). Life Branded Medications SBU was popularly called Branded SBU (B-SBU) within KHL to distinguish it from Generics SBU.

For marketing purposes, B-SBU was further organized into three divisions: La Palma, Pierce and Ingaro, and each division handled management and sales for their group of products. The sales function in each division mainly had three levels: sales manager (SM), assistant branch manager (ABM) and field officer (FO) or medical representative (MR). Figure 2 depicts the organizational structure of marketing and sales of La Palma division in March 2004. Pierce and Ingaro divisions had similar structures. A fourth division called Graciosa developed the strategic marketing initiatives for B-SBU. Consisting of a team of professionals, it looked after sales and marketing training, sales administration (termed ‘Aeries’), sales and marketing strategy development and medical advisory services for marketing (see Figure 3 for its structure).

Figure 1.

Source: Developed by Case Authors.

Figure 2.

Source: Consultants’ Report.

Figure 3.

Source: Consultants’ Report.

Project Zero-D

As part of the top management’s pursuit of the company’s mission of attaining a significant position globally in chosen markets, products and services, KHL took a strategic decision at the highest level to invest in a chosen set of its products to build them into megabrands.¹ While megabrands (or blockbusters) were already a global trend in marketing, it suddenly became very important for Indian pharmaceutical firms to move in similar lines owing to product patent issues.² Realizing the enormity of the task at hand and the extent of intellectual effort needed to conceptualize the operationalization of their megabrand aspiration, in May 2004, KHL decided to hire a team of consultants from a premier management institute in the region for helping them develop the strategic processes and programme implementation ideas in this regard.

The consulting team consisted of two faculty members, Aurora and Shenoy (henceforth referred to as ‘consultants’), along with a full-time project assistant who took care of the secretarial, data collection and other support needs. Both had PhDs—Aurora was a marketing specialist and Shenoy a behavioural scientist. Both consultants believed strongly in scientific methods of problem-solving and had prior consulting experience. They had also conducted training programmes for the sales force of other pharmaceutical companies. KHL top management believed that such a background of the consultants would enable them to understand the KHL context and the pharmaceutical industry scenario faster and better.

Consultants soon recognized that the quality of field sales force was the critical drag in surging forward on the megabrand road for KHL, its annual manpower turnover ranging between 30 and 40 per cent over the past 3 years. Further, the turnover was higher among senior sales executives and in the marketing teams at the corporate office, something that inadvertently turned out to be a morale buster for front-line field staff and area managers. Since the issue of turnover had been of high concern for the top management of KHL even otherwise, they decided that the consultants would address it first. Project Zero-D (an acronym for Zero Defection)³ was thus born.

The Consultants’ Work

In the first week of June 2004, the B-SBU chief briefed the consultants on the attrition problem at KHL and defined the scope of their project.⁴ Consultants also interacted with the HR head and his team to gather their views on the attrition problem. Following these meetings, the consultants defined Project Zero-D as a comprehensive approach and set of activities involving situation and problem analysis, strategy formulation and process-exercises, aimed at developing implementable action programmes to reduce attrition and build loyalty among employees in the marketing and sales functions of KHL. In addition to using the data already available at KHL, they also planned to collect primary data through quantitative and qualitative approaches, with thrust on the latter, to gain deeper insights into the root causes of the problem and to generate alternative strategies for possible solutions.

In June–July 2004 they conducted three focus group discussions (FGDs), one each with the HR team, divisional heads and SMs, and followed this with six in-depth interviews (DIs) of selected executives. They also collected extensive internal data from the HR department on sales force staffing and turnover. Table 2 details the staffing in each of the four divisions of B-SBU from 2001 to 2004, and Table 3 gives company data on attrition of sales personnel during 2001–2003.

Table 2.

Staffing in the Four Divisions of B-SBU (2001–2004, each as on 31 December)

Division	Designation	Staff Strength
Division	Designation	2001	2002	2003	2004
Pierce	Field Officer	587	479	476	476
	Asst. Branch Manager	127	100	93	93
	Sales Manager/Regional Br. Manager	29	27	15	15
	Diabetology—Sales Manager	0	0	3	2
	Business Development Officer	17	17	23	23
	Zonal Office Staff	26	7	7	0
	Head Of Dept (HOD) Staff	2	1	1	1
	HOD	2	1	1	1
	Product Management Team	9	12	12	12
	Sales Administration Manager	1	1	1	0
	Sales Administration Staff	9	0	4	0
	Management Trainees	0	0	0	4
	Total	809	645	636	627
La Palma	Field Officer	359	320	300	326
	Asst. Branch Manager	72	62	61	60
	Sales Manager	20	18	10	12
	T.B. TASK—Sales Manager	0	0	4	0
	Zonal Office Staff	11	4	4	0
	HOD Staff	1	1	1	1
	HOD	1	1	1	1
	Product Management Team	5	6	10	10
	Sales Administration Manager	1	1	1	0
	Sales Administration Staff	4	3	3	0
	Management Trainees	0	0	0	2
	Total	474	416	395	412
Ingaro	Field Officer	250	200	200	200
	Asst. Branch Manager	57	42	42	42
	Sales Manager	12	12	8	8
	Zonal Office Staff	5	2	2	0
	HOD Staff	1	1	1	1
	HOD	1	1	1	1
	Product Management Team	5	4	6	6
	Sales Administration Manager	1	1	1	0
	Sales Administration Staff	3	2	2	0
	Management Trainees	0	0	0	2
	Total	335	265	263	260
Graciosa	SBU Head	1	1	1	1
	SBU Head Office Staff	2	1	2	3
	National Sales Development	1	0	1	1
	Medical	7	6	6	5
	Bus. Strategy/New Product Dev.	4	2	2	2
	Training	2	2	5	4
	Aeries (Sales Admin.)	0	0	1	23
	Market Research/E-Marketing	5	2	2	2
	Total	22	14	20	41
Grand Total		1640	1340	1314	1340

Source: Consultants’ Report.

Table 3.

Attrition Levels at KHL (2001–2003, each as on 31 Dec)

Designation/Level	Staff Strength	Planned Attrition	Unplanned Attrition	Total Attrition
	2001
Field Officer	1198	133	260	393
Asst. Branch Manager	256	29	56	85
Sales Manager/Regional Branch Manager	61	19	10	29
Head Office/Regional Office	129	64	19	83
Total	1644	245	345	590
	2002
Field Officer	999	55	220	275
Asst. Branch Manager	221	35	42	77
Sales Manager/Regional Branch Manager	57	20	7	27
Head Office/Regional Office	64	7	18	25
Total	1341	117	287	404
	2003
Field Officer	999	93	274	367
Asst. Branch Manager	196	26	64	90
Sales Manager/Regional Branch Manager	40	14	13	27
Head Office/Regional Office	78	10	24	34
Total	1313	143	375	518

Source: Consultants’ Report.

Consultants sensed that the problem of attrition in KHL was a complex affair, complicated by the characteristics of the context and its practices and in particular by the policy of planned attrition followed by the company. The HR head said the following to the consultants:

We regularly ask under-performers to leave the company. It is part of our policy and takes place almost as sales figures arrive for every month. We call it planned attrition. It is different from unplanned attrition which is voluntary turnover; an employee leaving the company on her/his own.

Investigation into the practice of planned attrition led the consultants to narrow down to a cyclical path of influence, which they called the vicious cycle of attrition, comprising elements such as fear/anxiety, job insecurity, unplanned attrition, high-performance pressure, poor performance, increased workload, low self-esteem, unrealistic sales targets and so on.

Micro-dynamics of Attrition at KHL: Sales Pressure

To further decode the attrition dynamics at KHL, Consultants analysed the per cent (%) attrition of field executives (FOs, ABMs, zonal managers and SMs) in the three divisions with a factor that they called ‘sales pressure’. They defined sales pressure felt by an executive during month ‘n’ as the per cent difference between actual sales achieved in month ‘n−1’ and the budgeted sales in month ‘n’ in his zone⁵ and wanted to know if the targets set for the sales force were achievable and how difficult they were from month to month. Consultants had hypothesized that primary sales targets set for field executives were unrealistic in most cases, causing poor performance, and resulted in planned and/or unplanned attrition. The wider the gap between actual sales and budgeted targets, the higher the pressure on the executive. Figure 4 depicts the analysis by consultants of attrition and sales pressure for thirty months (from January 2001 to July 2003), and Figure 5 shows the comparative analysis of two geographic zones with high and low attrition levels.

Figure 4.

Source: Consultant’s Report.

Figure 5.

Source: Consultant’s Report.

Consultants then gathered data on attrition across Indian industries in general (Table 4) and in competing firms in the pharmaceutical industry in particular (Table 5). They also compiled intelligence on comparative pay packets (Table 6) and sales administration systems of KHL’s competitors (Table 7). Further, they talked to four experts, largely industry association presidents and consultants, on the overall status of the industry and on its current and emerging trends and concerns.

Table 4.

Comparative Data on Attrition across Industries

Sl. No.	Industry	Attrition Rate (%)
1	BPO	24.5
2	Retail	23.7
3	Leasing	22.3
4	Pharmaceuticals	16
5	Chemical	7.4
6	Engineering	6.5

Source: Consultants’ Report (Data from Hewitt Associates Survey of 573 Companies in 24 Sectors).

Table 5.

Comparative Data on Attrition across Pharmaceutical Companies

Sl. No.	Company	Type/ Ownership	Attrition Rate
Sl. No.	Company	Type/ Ownership	Total	Marketing Department
1	Company X	Indian Public	18%	26%
2	Company Y	Indian Public	16%	22%
3	Company Z	Indian Private	15%	17%
4	Company W	MNC	11%	16%
5	Company V	MNC	10%	15%
6	KHL	Indian Private	24%	35%

Source: Consultants’ Report (Data from private sources, company names not disclosed).

Table 6.

Comparative Data on Compensation across Pharma Companies^α

	ABM Level
	KHL	Company X	Company Y
Salary	159K p.a. Medical(14K)	190K p.a. + LTA Medical (18K)	270K p.a. + LTA
Daily Allowances	155 HQ; 155 Ex HQ^β 300 Outstation	175 HQ; 225 Ex HQ 300 Outstation	250 HQ; 275 Ex HQ 350 Outstation
	Company Z	Company W	Company V
Salary	250K p.a. + LTA/ Med	220K p.a.	240K p.a.
Daily Allowances	NA	225 HQ; 250 Ex HQ 300 Outstation	Similar to Company Y
FO Level
	KHL	Company X	Company Y
Salary	92K p.a. Medical(14K)	140K p.a. + LTA Medical (18K)	210K p.a. + LTA
Daily Allowances	70 HQ; 80 Ex HQ 110 Outstation	95 HQ; 135 Ex HQ 180 Outstation	130 HQ; 180 Ex HQ 250 Outstation
	Company Z	Company W	Company V
Salary	120K p.a. + LTA/ Med	102K p.a.	150K p.a.
Daily Allowances	100 HQ; 120 Ex HQ 150 Outstation	100 HQ; 120 Ex HQ 140 Outstation	225 HQ; 250 Ex HQ 300 Outstation
Incentives
KHL		Most Other Pharmaceutical Companies of Interest
Incentive on 100% achievement in a cycle given only if minimum of 90% obtained in next cycle		No such rider for incentive calculations
Expiry/breakage/returned goods deducted at double the original value of those goods		Actual amount or maximum 1.5 times the value of returned/expiry/breakage deducted

Source: Consultants’ Report.

Notes: ^α All figures in ₹ For reasonable comparisons: USD1 = ₹45 in 2005 and ₹68 in Jan 2017.

^β HQ = Head Quarters, LTA = Leave Travel Allowance.

Table 7.

Sales Administration Systems Comparison

Reporting Norms
KHL	Most Other Pharmaceutical Companies of Interest
Any daily report delayed for more than 10 days, allowance for that day is deducted	No deductions usually. Pfizer allows 10 days delay for two reports/month; then deduction.
No reminders for delayed reports	Immediate reminder for delay in report
At ABM level, daily report is must	At ABM level, weekly reports
At ABM level, 225 calls a month is must	No monthly call binding. Daily minimum is must
Role of ABMs
KHL	Most Other Pharmaceutical Companies of Interest
Target achievement	Target achievement through sub-ordinates
Feedback from FO and Pass on to HO	Can take initiative for development programme
No authority for non-routine developmental initiative	Approval of seniors/HO not needed for deciding on any Bus. Dev. activity with responsibility for it
No decision can be taken for benefit of business. Proposal can be made only through SM	Decision like which doctors to sponsor/how to direct promotion materials can be taken

Source: Consultants’ Report.

Interim Presentation

Armed with a good deal of data and analysis and the understanding gained from them, and as envisaged in their original consulting proposal, the consultants made an interim presentation for the HR and marketing teams of B-SBU towards the end of October 2004. It enabled both sides to reach an initial agreement on an overall analysis of the problem, and to plan for subsequent phases of the study, involving a quantitative survey (labelled ‘Manpower Mood Meter’—M³) and qualitative research.

Manpower Mood Meter (M³)

Based on familiarity acquired and understanding developed with the KHL context, consultants used a specific tool, which they called Manpower Mood Meter (M³), to gauge employees’ feelings about and orientation towards their job and the organization and to assess what they felt about their role in and future prospects at KHL. M³ investigated nine aspects or dimensions: company leadership, corporate culture, communications, career development, self-role in the job, recognition rewards, working conditions, immediate supervisor and compensation. See Table 8 for the dimensions and the set of items/statements that assessed each of them.

Consultants first tested M³ with a small sample of fifteen FOs in a pilot study and received seven responses, which confirmed to them that the tool could generate useful data. Following this, during November 2004, they administered M³ in all three divisions of B-SBU and at all levels from SMs to trainee field officers (TFOs) and received seventy-nine responses. Table 8 also contains consultants’ first level of analysis of data obtained through M³ (i.e., item mean scores).

Table 8.

Manpower Mood Meter (Dimensions and Items with Mean Scores)

Item No.	Parameter (Measurement Item)	Mean Score	Item No.	Parameter (Measurement Item)	Mean Score
1. Company’s Leadership
a.	Clear road map for growth	4.03	f.	Encouragement of Innovativeness	3.76
b.	Clear path for employees’ advancement	3.88	g.	Strong Brand Image	4.11
c.	No Favouritism	3.76	h.	People Aspire to work for	4.44
d.	Flexible & Supportive Rules & Regulations	2.19	i.	Effective strategies	3.37
e.	Professional approach	3.23
Total Company’s Leadership: Mean 3.64
2. Corporate Culture
a.	Quality-top priority	4.85	g.	No stress at month end	2.50
b.	Decisions around Employee’s ‘good’	3.77	h.	Flexibility and supportive decisions at the top	2.58
c.	Encouragement of initiative	3.65	i.	empathy in decisions	2.91
d.	Enough Job Excitement	2.28	j.	Politics kept at minimum	3.45
e.	Fairness in personnel matters	3.72	k.	Leadership which can build confidence in others	2.97
f.	Realistic targets & sense of achievement	2.37
Total Company’s Culture: Mean 3.19
3. Communications
a.	I can trust what my superiors say	3.69	c.	Employees’ feedback valued	4.08
b.	Healthy comm. across depts.	4.14	d.	Proper handling of grievances	3.41
Total Communications: Mean 3.83
4. Career Development
a.	Opportunities to learn and grow	4.25	e.	Fairness in Appraisal	3.42
b.	Opportunities for greater Responsibilities	4.22	f.	Sufficient initial training	3.68
c.	Adequate use of skills & abilities	4.33	g.	Ongoing training	3.41
d.	Adequate career Development Opportunities	3.56
Total Career Development: Mean 3.84
5. Self-Role/Job
a.	Challenging & Interesting	4.62	c.	Enough authority	3.32
b.	Defined and Clear	4.47	d.	Alignment in my job and company goals	4.37
Total Self Role/Job: Mean 4.19
6. Recognition & Rewards
a.	Fair rewards	3.58	c.	Fair compensation	3.29
b.	Proper promotions	3.19	d.	Motivating incentives	3.04
Total Recognition & Rewards: Mean 3.27
7. Working Condition
a.	Job Security	2.87	e.	Work-life balance possible	3.94
b.	Supportive Physical working conditions	3.89	f.	Mgmt. listen to Employees’ problems	2.82
c.	Realistic deadlines/ targets	3.34	g.	No loss of self-esteem due to non achievement of targets	2.31
d.	No undue deductions from salary	2.95
Total Working Conditions: Mean 3.16
8. Immediate Supervisor
a.	Fair and respectful treatment	4.15	c.	Frequent appreciation from superiors	3.49
b.	Good handling of all work issues	3.85	d.	Enough support in achieving targets	3.45
Total Immediate Supervisor: Mean 3.73
9. Compensation
a.	Overall satisfaction	3.44	d.	Conveyance allowances	2.82
b.	Personal vacation	3.41	e.	Retirement benefits	3.26
c.	Medical benefits	3.41	f.	Reimbursement of expenses	3.27
Total Compensation: Mean 3.27
Scale used: Likert Type, 1–very low to 5–very high

Source: Consultants’ Report.

Alongside the M³ study, consultants also attempted to identify key reasons that made people leave KHL. Based on DIs of a select group of managers and others at the head office and company records of exit interviews, they listed twelve possible reasons and asked the field staff of the B-SBU Sales Team⁶ to tick every factor which they felt had influenced them to leave their previous job and to separately tick every factor which they felt was prevailing in the KHL context as well that would possibly influence them to leave the current job if they so choose (Table 9 summarizes the findings). Consultants further noticed that an ‘Organizational Climate Survey’, independently conducted by KHL’s own HR Department in 2004 among the FOs and ABMs to examine employee satisfaction on various company practices, could be useful for comparative analysis and validation of their findings and inferences (see Table 10).

Table 9.

Key Reasons for Leaving Job

Item No.	Reason/Factor	Frequency of Responses (n = 79)
Item No.	Reason/Factor	Previous Job	Current Job at KHL
1	Lack of recognition or rewards	21	20
2	Unrealistic and unattainable target	13	18
3	High work/target pressure	13	16
4	Unsatisfactory compensation and other benefits	28	14
5	For better prospects somewhere else	25	14
6	Lack of training and development at work	27	13
7	Less chances of career advancement	35	11
8	Unfavourable corporate culture	18	11
9	Relocation of work place	11	9
10	Dissatisfaction with the work and working condition	25	8
11	Family and other personal problems	10	8
12	Lack of leadership and planning by the company	21	7

Source: Consultants’ Report.

Table 10.

Organizational Climate Survey 2004 by KHL HR Department

Sl. No.	Item/Theme	Division: Pierce			Division: La Palma			Division: Ingaro
Sl. No.	Item/Theme	FO	ABM	Total	FO	ABM	Total	FO	ABM	Total
1	Training	3.241	3.341	3.291	3.182	3.052	3.117	3.411	3.095	3.253
2	Support	3.009	2.805	2.907	2.795	3.052	2.924	2.937	2.905	2.921
3	HR support	3.054	3.266	3.16	3.294	3.156	3.225	2.906	3.286	3.096
4	Work environment	3.061	2.963	3.012	2.797	3.044	2.921	2.987	2.714	2.851
5	Role clarity	3.636	3.634	3.635	3.374	3.672	3.523	3.561	3.500	3.531
6	Communication	3.242	3.262	3.252	3.193	3.422	3.308	3.281	3.500	3.391
7	Performance appraisal	3.091	3.122	3.107	3.171	3.292	3.232	3.089	3.143	3.116
8	Association	3.752	3.78	3.766	3.634	3.688	3.661	3.633	3.619	3.626
9	Compensation	2.902	2.724	2.813	3.044	2.844	2.944	2.865	2.714	2.790
10	Career development	3.435	3.285	3.36	3.260	3.385	3.323	3.289	3.286	3.288
11	Recognition	3.22	3.012	3.116	3.248	3.328	3.288	3.026	3.179	3.103
Scale used: 1–5 Likert Type, from ‘1–Very Low/Very Bad’ to ‘5–Very High/Very Good’.

Source: Consultants’ Report.

Qualitative Field Study: Depth Interviews and FGDs

Realizing that they were near to the end of their exploration and eager to dig deeper into the attrition problem, the consultants stepped into the last phase of their study. Following the interim presentation, they had to identify ‘Zones of Interest’ for qualitative data collection from the field staff on the basis of performance and attrition levels, such as ‘high attrition-low sales pressure’, ‘high attrition-high sales pressure’, and so on. The B-SBU marketing team suggested six zones spanning Western, South-central and Northern India and the consultants agreed to this choice. In the second and third weeks of December 2004, they conducted a total of six FGDs and thirty-two DIs with the field force in these zones. Table 11 gives a large set of comments from the extensive qualitative data thus gathered. Many of these comments clearly indicated to the consultants the impact that attrition had on KHL personnel themselves and on their relationships with the customers. They also brought up typical sales force concerns such as HO-field relations, sales organization and decision-making, marketing strategy, marketing service support, call/ reporting norms including issues on newly introduced sales force automation system, compensation, allowances and training.

Table 11.

Illustrative Set of Comments from Qualitative Field Study

(Insertions within [] are by case authors for enhancing clarity of understanding for a reader)
1.	Kalpak image is good, but we are not able to provide the service.
2.	Doctors tell us: ‘In Kalpak, it’s like ayaram, gayaram [come and go culture]. Be regular and I would write your drug’.
3.	After joining, first time when I met the stockist, he asked: ‘How long are you going to stay in this company?’
4.	Stockists don’t have confidence in us. Chemists also don’t respect us.
5.	In job market people think that in Kalpak, there is always a shortage of people and nobody is ready to join them.
6.	‘You have come and are trying to push, but after six months you would also go away’, stockists say this all the time.
7.	If a new MR [Medical Representative] meets the doc and introduces himself as ‘I have just joined Kalpak’, the doc asks quickly – ‘For how many days?’
8.	Doctors, even today respect Kalpak name, but they are tired of seeing new faces.
9.	Every fresh person has a new list of doctors. Inconsistency of service is very high because of instability of field staff.
10.	Because of SM, who is 18 years in Kalpak, we are all here in Kalpak. Good culture of old Kalpak is maintained by the SM.
11.	We are not able to settle down as we have had 6 different GMs in last 8 years. They all have different strategies.
12.	Team leader is very important. I am working because of Mr Gunakaran [Team Leader].
13.	Job insecurity – threat kills creativity and drive.
14.	Company should have faith in us. There should be at least 3 months’ time to settle down.
15.	Even our bosses and big bosses are not certain about their jobs. They suggest strategy and then say: ‘If I am here next month, we would see how it is working!’
16.	Even if you have successful achievement track record, but for some reasons have not achieved targets for one or two months, you are sacked!
17.	I can convince my highest level field boss, but HO [Head Office] just doesn’t listen. They ask for resignation only!
18.	Nobody thinks that he would grow in the company. If survival is a big question, how can he think of being promoted?
19.	Even in KLL [twin sister of KHL], there are ups and downs, but people are not removed just like that. Last 3 months, in Chandigarh, KLL is not doing well but nobody is removed. Here, ‘Thank you very much’ shake hand is very common.
20.	Even if I am 18–26 years old in the company, for non-achievement of targets of 2–3 months, I can be removed.
21.	[The Chairman] comes every month and removes a couple of people in SM meeting.
22.	Removing people is a performance criteria here. If my team can’t make the target, I have to show my performance by removing some people. In Chandigarh, you can’t remove Reps because of unions, but I have removed 4 Med. Reps. very diplomatically.
23.	Nobody is working ‘Dil Se’ [i.e., From the Heart]
24.	Any letter we receive from HO [Head Office], our heartbeats go up.
25.	Kalpak is sales focused, target chasing and not system and strategy oriented.
26.	Unwanted stock is being dumped into the market. 65 days’ stock for 20 days’ STR [Stock Turnover Ratio].
27.	Very high return (expiry/ breakage) of goods from stockists as the goods were just dumped.
28.	In one month, if targets are achieved, Reps have to maintain the same growth later, else negative growth is reported. Hence people don’t achieve very high figures as they doubt the sustenance of such achievement.
29.	Kalpak management is impatient. The focus is diverted from prescription to sales.
30.	There’s a huge gap between demand and sales targets. In Jaipur, our team contributed part of our own salary to subsidize the sales to a distributor in order to achieve targets of next month. Part of our salary would go but our Jobs would be saved that month.
31.	False sales. False achievements. False base for target setting.
32.	There should be secondary sales targets and not primary.
33.	Sales Reps deliberately keep sales low as this would increase their sales goal for next month.
34.	No hard motivators like good salary/incentives; nor soft motivators like appreciation letters. In Kalpak, there is no ‘morale boosting’, Dr. Reddy’s [a competitor] does it very well.
35.	Kalpak management is impatient; if survival is a problem, how can one think creatively?
36.	People who have come from outside have better package compared to existing employees.
37.	Outstation allowance is just ₹135/-, even a small town lodge costs 80 per night.
38.	They ask for CST bill [indicating Central Sales Tax number] even for bouquets!
39.	Festival gifts, parties, birthday cards, festival bonus – nothing is given. Rep ki shaadi mein to kuchch dena chaahiye. [Something has to be given at least for the wedding of a Med. Rep.]
40.	ABMs are given ₹0.75/Km conveyance allowance, while boys are given ₹1.50! In Himachal [one of the Indian States], even bus costs more than ₹0.75.
41.	Kalpak’s rank in compensation: FO level: 20–25, ABM level: Above 30, SM: Under 10.
42.	There is Communication gap between HO [Head Office] and Customers. Doctors do not receive gifts, prizes.
43.	In a year old campaign of diabetologists, gifts were promised. Nothing has happened so far.
44.	If you haven’t made targets, you don’t get samples!! How can then one improve performance.
45.	Samples provided are in proportion to sale made in the past. It’s a chicken and egg situation.
46.	A doctor asked for literature and told me to ‘come with literature, else don’t come’. For past 3 months I couldn’t meet him as I haven’t got the literature from HO [Head Office].
47.	Chandra hospital story. Empty packs of eye drops due to QC problems. It’s alright. The hospital gave 3 chances, nobody came from HO. No communications from HO. KHL is now blacklisted.
48.	FO [Field Officer] kits are very substandard. Look at it. Handle has come out; I only know how I am carrying it around.
49.	For Singapore trip, doctors were suggested by HO and not by field people.
50.	A cardiologist sponsored several times by HO, haven’t prescribed Kalpak. Doctor selection for sponsorship, gifts should be based on field inputs.
51.	Staff in the hospitals demands small, small gifts and we can’t give them as even SM doesn’t have authority.
52.	Targets are not an issue, support & centralization is. Area managers don’t have any authority.
53.	Gross lack of trust/ faith and autonomy to field staff.
54.	In last 4.5 years, I have made 40–50k investment from my own pocket to build relationships with customers.
55.	Torrent, Nicholas [competitors] doubled the field force in Mumbai to improve the reminder rate, which is poor for us because of 248-doctor-coverage norm. [95% coverage norm]
56.	There should be ‘core doctors’ concept, where about 50 doctors decided by the Rep are met twice. We are not able to meet doctors again because of 95% doctor coverage norm.
57.	I took a leave specifically for filling reports but system didn’t work.
58.	Online reports of the boys are not accessed by SM/ABM, how can the boys be guided?
59.	A new person, who doesn’t have understanding of doctors, how can one terminate him- who is just 2 months old- for not having covered 95% market?
60.	Number of doctors for each Rep should be reduced to 150. Focus on specific products to specific doctors.
61.	List of doctors should not be more than 170–180. With 250, we can meet only once and call quality is poor. In Delhi small companies are doing well as Reps meet the doctor 20 times.
62.	Aeries [sales admin wing] only believes in cutting salaries [for not adhering to call norms].
63.	Every year 1–2 months’ salary is gone [for not adhering to call norms].
64.	In my previous company, selection of a filed person, country manager used to be involved. A letter was sent to even the parents reassuring them so they also motivate their son to perform.
65.	Recruitment of trainable people is required.
66.	Induction training should be longer.
67.	Periodic training is not available.
68.	Due to haphazard recruitment, time for training isn’t there. Training is given to new boys after 3–4 months. Boys are not confident and can’t respond to simple queries as they aren’t trained.
69.	After 4 months of joining, training is given. People have not seen the company. After I saw the company, I developed confidence in the company and the brands.
70.	2 week’s training at HO is good but it happens after 3–4 months after joining.
71.	MR job is quite monotonous and job enrichment can be done through giving other jobs like preparing retail/doctor audit reports, market survey, etc.
72.	Letter of appreciation is not given for good work.
73.	As an ABM, I do not know the incentive policy. SM [Sales Manager] has joined after I have joined. Who do I ask?
74.	In other companies, administrators move in the field to explain the reporting system. Even where they don’t come, old people teach new people but yahan to har koi naya hai [here everyone is new].
75.	Older products are known. Newer products – poor response.
76.	Distribution is slow. Doctors are saying products are not available at chemists.
77.	Rolon [KHL Brand] campaign is superb. The best I have seen so far. Basol, Rolon [KHL Brands] kind of campaigns not there for many new products.
78.	Anti TB is a 9 month therapy. Government is now giving it free. Now that’s a big blow to our market. Where are the new big products with the company for making up the targets?
79.	Product launches are very casual. Products are not available and PMT (Product Management Team) don’t have any clue.
80.	Rasol Eye drop [KHL Brand] - Empty packs: QC problems.
81.	Earlier, there were good campaigns – ‘Fight to Kill’, ‘Race the Bull’, etc. Not anymore.

Source: Abridged/Selected Portions from the Consultants’ Report.

Analysis and Recommendations

Aurora and Shenoy felt that they were now in possession of rich and adequate data for analysis. However, they also felt a little overwhelmed by the complexities which the data seemed to present in terms of the qualitative and quantitative options they needed to consider so that their analysis could yield recommendations that the KHL top management would feel worthy of consideration for implementation. With just ‘less than a month’ to do that, their attention, hence, immediately turned towards data analysis and interpretation.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this case.

Funding

The authors received no financial support for the research, authorship and/or publication of this case.

KHL: Consulting for Managing Sales Force Attrition (A)

Abstract

Keywords

Discussion/Assignment Questions

Case (A)

KHL: The Company Structure

Project Zero-D

The Consultants’ Work

Micro-dynamics of Attrition at KHL: Sales Pressure

Interim Presentation

Manpower Mood Meter (M3)

Qualitative Field Study: Depth Interviews and FGDs

Analysis and Recommendations

Declaration of Conflicting Interests

Funding

Footnotes

Notes

Manpower Mood Meter (M³)