Janalakshmi Financial Services' HR Dilemma

Janalakshmi Financial Services (JFS), an Indian microfinance institution, had grown rapidly by providing financial products to its main customer base, the urban poor. However, the company was facing several challenges. JFS's productivity was declining, and it was experiencing a high and above-market-average attrition rate in its sale force-i.e., the loan officers. In addition, the division of duties for origination and collection by the two types of salespeople-customer-relations executives for sales (CRES) and for collection (CREC)-was perceived as a problem for the company's social mission of serving the urban poor, as the salesperson-customer relationship had become transactional. Because the primary form of customer contact was through the loan officers, JFS needed to find a solution for improving the existing sales compensation system in order to establish a performance-focused culture and to lower the employee attrition rate. In addition, it wanted to explore the possibility of streamlining the duties of JFS's sales staff to eliminate any overlapping duties between the two different types of loan officers (CRES and CREC), and sought to align employees with the firm's values and social mission of serving the urban poor. The case study illustrates the challenges that organizations face when constructing a new compensation system to achieve multiple outcomes. Although the case focuses on salespeople, it relates to general employees and, thus, can be used in courses in general management or HR policies. Also, because of its industry-specific contents (micro finance), the case can be used in courses related to financial inclusion in developing countries.

• Employee incentives
• Compensation and benefits
• Marketing
• Microfinance
• Sales team management
• Sales management