The main reason behind all this is man made error where the manager did not want to lose his incentives and inturn created this chain of events that led to the whole confusion.
The solutions that I suggest are: 1. Fix incentives based on collection targets along with revenue targets. Ex: For meeting X revenue target and Y% of collection the manager is eligibile for A amount of incentive. This can be also modified in another way where in the managers incentive is directly linked to his collection amount where he will be eligible for x% from the collection as incentive. This can be made the main parameter for all future appraisals and promotions as well. So here you are linking a managers performane to his meeting revenue as well as collection targets. 2. Fix a minimum collection and revenue target that a manager has to achieve every week. This also will be taken into account for all future appraisals and promotions. If the manager is not performing then penalize him for his performance by issuing verbal and written warnings in teh iniital stages and then deducting percentage of salary for underperformance. 3. Include a minimum qualification for the employees and have a 1or 2 day induction cum training program to the new joiners which will educate them about the whole process and what can happen in case of malpractice. At the end issue a certificate stating that the person has undergone training and aware of the whole process which is duly signed by the manager as this can be used as legal evidence in case of malpractice. 4. This whole business is money and even a rupee matters. There should not be a minimum outstanding amount. All outstandings need to be recovered. Targets can be fixed on this as well. Ex: Outstanding of 1 week minimum time to recover is by X date. This also should be linked to the managers performance. 5. As we saw in this problem that it was only 0.2% who had done this malpractice. so there is no point in penalizing the rest by heavy interest rates but a nominal interest rate has to be fixed for all late payments. Ex: Even a slab system can be worked for this where in x days = A% as interest, y days = B% intrerest etc., Dealing with Remisers should be done once duly signed by the client where in in this case the client will be held responsible if the remiser is found as a defaulter which can result in late payment charges and legal action. Being a manager is all about taing responsibility for his actions and at the same time a system has to be devised keeping in mind the manager is made responsible if he is not. This is my view of the solution. Thanks!
