Frontier National Bank is passing through times of declining profitability and low liquidity. The current morale of the employees is down which in turn is affecting the bank’s performance. To get out of the current situation and expand in other regions a core team has to be formulated to increase the performance.

Three options are available to the FNB

1) Formulate a team out of current employees.

2) Recruit a core team from Chicago Bank.

3) Recruit a core team of professionals with proven capabilities.

All the above options are analyzed on the basis of the following options

a) Ambition.

b) Employees Morale.

c) Risk.

d) Group Dynamics.

After evaluation, the options the third option of recruiting a team of professionals with proven capabilities seems to the best one.

Situation Analysis

The current atmosphere at Frontier National Bank (FNB) shows a lack of Vision, Direction and Motivation which results in making the employees dispirited and demoralized. Over a period of time, the working environment within the organization has become excessively conventional and unimaginative resulting in regular falls in market share and profitability.

If the current environment prevails then the organization will lose its credibility and reputation which it gained over a period of time with sheer hard work and dedication. Moreover, FNB steadily lost its position and now is third in terms of assets and sixth in terms of profitability. Conservativeness continued business with traditional customers and a large workforce substantially helped for this situation to arise.

To come out of this situation the company needs a plan through which FNB can regain its lost glory and can make the organization among the best known in the world.

Three different options are available to form a team.

• Formation of the team out of FNB’s human resources.
• Recruiting a core team from Chicago Bank.
• Recruiting a core team of professionals with proven capabilities

While the first option wouldn’t have affected the present liquidation, only a sense of direction and feel of motivation among the employees would have done the job but it would have been time-consuming.

On the other hand, in the second option success of the bank with a new top team is clearly evident but it would put a strain on the liquidity.

In the last option, even though the quality of the employees in the team would be good, the cost would be substantially less thus not affecting the capital structure.

Now, there is a dilemma which of the three options should be taken for making a team.

A detailed analysis of what decision should be taken is given in the following pages.

Problem Statement

A decision as to which of the three options should be taken for FNB’s turnaround considering the weak financial position.

Criteria for Evaluation

Ambition: This consideration is important as ambition within an employee is required for his/her own performance as well as the performance of the organization as a whole.

Employee Morale: This criterion assumes importance as the morale of the employees is directly related to their productivity.

Risk: The importance of this criterion arises from the fact that risk involved in all three options differs, in response to situations.

Group Dynamics: The importance of this criterion arises from the fact that integration between the core team and employees of the organization varies with respect to the various options.

Options Available

Following are the alternatives to be considered:

• Formation of the team out of FNB’s human resources.
• Recruiting a core team from Chicago Bank.
• Recruiting a core team of professionals with proven capabilities.

Evaluation of Options

The three options have been evaluated on the basis of the criteria mentioned above.

Formation of the team out of FNB’s Human Resources

• Ambition: Employees at FNB lacked ambition and vision within them. They lacked the drive to achieve something. The absence of vision within them led to a lack of individual and banks performance.
• Employee Morale: The morale of the employees at FNB was down as they lacked vision and direction. Selling them the vision would encourage the employees to persevere more and demand more from them, which in turn with performance-based pay and with the support of the CEO would boost the morale.
• Risk: Improving individual and banks performance through motivation can sometimes become ineffective when the vision cannot be sold to them. The risk involved here is the consumption of time which went into selling but in the idea, in the end, the idea turned futile.
• Group Dynamics: As the group members are chosen within the bank's human resources, the dynamics between the core team and employees would be smooth as the employees had a good relationship with the core team.

Recruiting a core team from Chicago Bank

• Ambition: Hiring of employees from Chicago Bank would benefit FNB, as it wanted people who are highly ambitious. Pursuing their ambitions through turnaround from the international business foray of the bank would increase their performance as well as market acceptability plus increasing banks' performance as a whole.
• Employee Morale: Morale of the employees is not only dependant on pursuing their ambitions but also on perks etc.etc. In this case, employees are getting a good salary but not perks and other benefits for their dedication towards a job which in the long run might turn to be a disadvantage.
• Risk: Hiring employees from Chicago Bank has a certain amount of risk associated with it. The liquidity of the bank is already low, employees with greater capability command a higher price which would reduce the profitability more. Moreover, there are chances of ego getting clashed between the core team and current employees on various decisions, which would affect the bank’s performance.
• Group Dynamics: As the core team is joining from Chicago Bank there can be uncertainty in the minds of current employees that the decisions would not be in favor of them, which may lead to issues like improper team integration, conflict of interest and insecurity.

Recruiting a core team of professionals with proven capabilities

• Ambitions: People, who had previously proven themselves with regards to performance, are generally more ambitious and are always on the lookout for an opportunity to prove them. Here, it was a great opportunity for these employees to fulfill their ambitions through the international banking foray FNB and to rise up in the corporate ladder.
• Employee Morale: A position of command, the challenge of transforming FNB, greater market acceptability in near future along with perks and other advantages gives a boost to the morale of the employees to perform and generate quick results.
• Risk: In this situation, the risk associated with hiring employees is quit less as ego problems between the core team and employees would be negligible, cost-wise too it would be less and moreover, the returns they would generate would be quick in nature.
• Group Dynamics: As the core team comprises professionals with proven capabilities and competencies there would be no insecurity in the minds of the employees. As the core team is competent the dynamics between the employees and the core team would be effective which would increase the working standard of the organization.

Recommendation

After, analyzing the above three options, the option of choosing a core team of professionals with proven capabilities seems to be a win-win strategy for both current employees and FNB, as its scores high on all the parameters of evaluation.

Action Plan

• Contact a recruiting firm and ask for a team of professionals with proven capabilities and competencies.
• Shortlist the candidates
• Send them calls for interview
• Recruit the deserving

Contingency Plan

If the present plan fails to deliver as per expectation further modifications can be made with respect to salary structure and performance-based layoffs of the employees.