Jana Lakshmi Financial Services

Q1) Should JFS have changed its loan-officer compensation plan to the one
proposed by HR? Why or why not? What changes would you make to the proposed
plan, and why? What elements would you retain from the existing plan?

Ans: Yes, JFS should have changed its loan-officer compensation plan to the one
proposed by HR. The proposed plan according to us is: Introducing sliding target
compensation structure along with introducing Cost of living allowance.

This is because, since at junior levels the focus of the employees is growth and impact,
whereas at senior level they focus on building a legacy. This proposed plan aligned with
the desired positioning and the strategy of JFS. The Cost of living allowance according to
the tiers decided would help the officers stay motivated working in expensive living
conditions.

The change we propose is to introduce a fixed bonus for the employees, as this will
motivate them and the attrition will be reduced.

We would like to retain the cah and non-cash elements as it is from the existing
compensation plan. This is because, a combination of the existing plan and that of the
proposed change can help achieve the vision of Radhakrishnan.

Q4. What should JFS have done to decrease its loan officer attrition rate?

Ans: For the attrition rate to reduce, it is essential that the intrinsic motivation of Loan
officers be intact and they have high spirit their all courses of work. This can be achieved
through:

1. The organization should work to increase effective satisfaction of Loan officers by

providing them with clearly stated expected outcomes and goals.
2. The organization to work into creating an environment where the genuine concerns of
Loan officers will be addressed and worked upon (internal grievance redressal)
3. Creation of a feeling of pride about the organization can prove to be an essential
factor for the inspiration of staff members
4. One internal step would be to hire the right people with right skillset and relevant
experience. This would reduce the cognitive dissonance of what they were expecting
as a job.
5. Creating an attractive overall compensation plan would work wonders for improving
motivation
6. Providing Loan officers with certain intangible advantages such as job security, or
insurance plans or employee benefit plans would help.
7. Implementing better and wholesome training and development programs can also help
to a great extent.