Discipline Strategies For Collection Agencies

Advice For
In-House
Debt Collection

Dis­ci­pline Strate­gies For Col­lec­tion Agencies

By Dean Kaplan

Good man­age­ment skills help col­lec­tion agen­cies and com­pa­nies in gen­eral to stay com­pet­i­tive and suc­cess­ful. The term “man­age­ment skills” is a broad cat­e­gory which includes moti­vat­ing as well as dis­ci­plin­ing when nec­es­sary. This is the sec­ond of five arti­cles deal­ing with how excel­lent man­age­ment skills lead to increased suc­cess for agen­cies and credit depart­ments. Being able to dis­ci­pline in a pos­i­tive and effec­tive way is very impor­tant for col­lec­tion agen­cies, espe­cially when you are deal­ing with a pro­duc­tive debt col­lec­tor who you want to keep on the pay­roll. Some­times, even really good debt col­lec­tors make bad deci­sions, so being able to dis­ci­pline while redi­rect­ing is essential.

Dis­ci­plin­ing is the art of han­dling peo­ple who are fail­ing to do their job or are behav­ing in an unusual, neg­a­tive man­ner. The bet­ter you know your employ­ees, the bet­ter able you will be to pro­vide con­struc­tive dis­ci­pline and guid­ance. Each indi­vid­ual will require a dif­fer­ent dis­ci­pline. Some debt col­lec­tors will require a firm hand, while oth­ers will need only the small­est nudge to get back on track. Agen­cies are in a good posi­tion to quickly iden­tify dis­ci­pline issues because often the col­lec­tors are in a large open area, giv­ing man­agers easy access to observ­ing behav­ior. It is crit­i­cal for man­age­ment to be aware of how col­lec­tors are com­mu­ni­cat­ing with clients, debtors and each other. Col­lect­ing is a very communication-driven job. Prob­lems need to be han­dled quickly and effi­ciently in order to main­tain good rela­tion­ships inter­nally and externally.

You needn't apply bar­baric dis­ci­pli­nary meth­ods in your col­lec­tion agency. Here are some tips for estab­lish­ing a system

Here are some sug­ges­tions for how to deal with dis­ci­pline situations:

• As soon as a neg­a­tive sit­u­a­tion has been iden­ti­fied, the man­ager and debt col­lec­tor should stop and dis­cuss the inci­dent. It is very impor­tant to take action as soon as pos­si­ble because the inci­dent will be fresh in everyone’s mind.
• Another rea­son to deal with the issue right away is because wait­ing or hop­ing that things will change on their own usu­ally only makes things get worse.
• Have the dis­cus­sion in pri­vate. Try to keep other peo­ple in the sur­round­ing area from know­ing what is going on. It is the manager’s job to try to shield the employee from gos­sip and nosy co-workers.
• Be very care­ful not to embar­rass the employee. When an employee is embar­rassed, this only causes defen­sive­ness and doesn’t help get the col­lec­tor back on track.
• Lis­ten care­fully to what the col­lec­tor has to say and try to have a friendly, sup­port­ive atti­tude. Don’t jump to con­clu­sions.
• Take time to think about what the employee said and weigh all the facts before deter­min­ing the dis­ci­pline.
• Do not keep bring­ing up the sit­u­a­tion again and again. Once the con­ver­sa­tion has taken place, deter­mine the dis­ci­pline and take action. Don’t argue with the employee.
• At all times, con­trol your emo­tions. Do not react if the col­lec­tor loses con­trol. Try to lis­ten care­fully and calmly. Hope­fully, your calm­ness will lead the con­ver­sa­tion back to rea­son­able­ness.
• Once you have deliv­ered the dis­ci­pline, attempt to explain to the col­lec­tor the seri­ous­ness of the sit­u­a­tion. Explain as clearly as pos­si­ble what changes are expected in atti­tude and action. If the debt col­lec­tor truly under­stands the changes that are expected, the change is more likely to occur.
• Ask the col­lec­tor to explain back to you exactly what is expected of him or her. Try to ascer­tain if the employee feels he or she is being fairly treated. The chances of a suc­cess­ful dis­ci­pline out­come go up sig­nif­i­cantly if the col­lec­tor feels the dis­ci­pline is fair.
• Ask the col­lec­tor to make a com­mit­ment to mak­ing the spec­i­fied improve­ments and develop a time­line which both the man­ager and the debt col­lec­tor agree to.
• At a pre­de­ter­mined date, have a follow-up con­ver­sa­tion. Hope­fully, this will pro­vide the man­ager an oppor­tu­nity to give the employee pos­i­tive feedback.

Agen­cies, like any oper­at­ing busi­ness, must occa­sion­ally dis­ci­pline employ­ees. Man­agers who can sup­port and dis­ci­pline employ­ees before sit­u­a­tions get out of hand have a much greater suc­cess rate. Use these tips to help dis­ci­pline when nec­es­sary. Click here if you missed the first arti­cle in this series Moti­va­tion Is A Key To Suc­cess For Col­lec­tion Agen­cies. Click here if you are ready to con­tinue to the third arti­cle in the series Han­dling Per­son­al­ity Prob­lems at Col­lec­tion Agen­cies, which will be posted 2/7/2012.

The Kaplan Group is a bou­tique col­lec­tion agency spe­cial­iz­ing in large (over $10,000) debt col­lec­tions due from busi­nesses. Founded in 1991, the com­pany has a stel­lar rep­u­ta­tion (A+ rat­ing with the Bet­ter Busi­ness Bureau) and is rec­og­nized as one of the lead­ing col­lec­tion agen­cies for results on large and com­plex mat­ters.

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