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.

Luckily, this type of punishment isn't necessary

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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