The Impact of Flexibility on Organisational Performance - Essay Example

Today, with increasing competition sustaining business has become tough. To grow, business needs to be flexible. There are many situations which are external affects the policies business follow. This is time when business needs to alter its policies. They have to be flexible and accommodate all the changes. Flexibility leads to “improved employee engagement, job retention, job satisfaction, employee wee being, customer retention, developing new products and anything that can add to the bottom line”. (Friedman, 2007) Every business which has considered this has been successful. Flexibility is thus “a way to define how and when work gets done and career gets organised to improve the overall workplace effectiveness”. (Friedman, 2007) This helps companies to develop their future. People are content with the job. They feel part of the company. Their satisfaction level is high. This motivates them. As a result profits grow. This is when a business is able to change. Flexibility is used for products and process. “Product flexibility is the ability to produce multiple products with minimum wastage and is generally to improve the manufacturing process”. (McLean, 2008) This helps customer to get new products. This also helps the employees. They are better satisfied. “Process flexibility makes organisation to be more innovative and responsive to customers”. (McLean, 2008) This sees the customer angle. It satisfies them. It makes them loyal. They are committed to the company. This reduces cost for the company. It thus helps the company to grow. When we look at the flexibility chart shown below “it helps to show how a balance between cost and flexibility is achieved” (McLean, 2008) Flexibility makes organisation fall into one of the above boxes. It depends upon the strategy they dwell upon. Some here are cost effective, some are product effective. This all helps to have employee flexibility. Research in this field also shows important results. A research shows that “flexibility is a requirement in this competitive world and is achieved by building dynamic capabilities, maintaining multiple options, and supporting horizontal communication and teamwork among employees”. (Charles & Peter, 2002) For this organization follows a two tier system. They look at operational structure and loosely held layer. This helps to achieve flexibility. Another research conducted shows that “flexibility has increased profits for large firms by programs such as tele working, flexitime and compressed work weeks which results in decreased overtime, few unscheduled absence, increased productivity and efficient process”. (Carlson & Leah, 2005) This has increased revenues. It has also improved the diversity in workplace. Companies are making full use of this. They are banking on it for future. Companies devise strategies keeping this in mind. Another research shows that “business gain due to work place diversity but it is not easy to balance flexibility and business demands”. (Carlson, 2005) This is what is affecting many businesses. They are finding it difficult to match. It has resulted in competitors taking over. Companies are left in a dicey situation. Deciding on the benefit and cost is making it difficult to get a balance. Flexibility plays a huge role in success. This helps to increase profitability. Performance of the business improves. This adds to shareholder value. It thus acts as a tool for success. Flexibility helps to improve organisation performance in following ways Attract talent: Flexibility creates good environment. People want to work with the company. This makes the company get good work force. It is important because the resource is scarce. It is seen by the fact that “US department of Labour has shown that work force is increasing by 1% annually”. (McLean, 2008) To attract them it is important to have a good environment. This is created when there is flexibility. Retain Employees: Retention of employee is important. This is because “Turnover is expensive and to get the same talent is difficult so companies are being flexible and using tools like stock options and training”. (McLean, 2008) It is helping to improve work life. This leads to satisfaction. This has been because been flexible has helped to take different routes. Raise moral and job satisfaction: Having flexibility raises moral. When organisation has flexible work hours it helps. It is more fruitful when it matches to the employees wishes. This makes them feel that they are part of the company. This makes them committed. It raises the morale. They are more contented. This results in better performance. Improves Productivity: Having different ways to produce improves productivity. Employees are on their feet. They have to face the new methods. “This brings best out of them as absenteeism reduces and employees turn for jobs”. (McLean, 2008) This meets the target. Cost falls. Thus helping to grow. Reduces stress and burnouts: This reduces productivity. Employees who are burned out leave the job. They look for new ventures. A study shows that “workers who used their work life and flexibility programs were more committed than those who didn’t use those”. (McLean, 2008) This helps to reduce stress. People want to work. This helps in getting good results. Lower Turnover Cost: Being flexible reduces the turnover cost. Employees want to work with the company. They are happy. This result is less employees moving out. An example shows that “Ernst & Young saved $17 million in turnover related cost in 1997 due to flexible work environment and culture which helped to satisfy both the organisational and self goals”. (Burud & Tumolo, 2004) Apart from this it improves relations. Employees had developed a relation with outside world. It helps to capitalise on them. It helps to gain better project. Thus making organisations grow. Low Health Care Cost: Flexibility reduces cost. “Employees are less depressed and stressed out and this is due to flexible human culture”. (Burud & Tumulo, 2004) Studies shows that this cost are huge for companies. They are finding it tough to bring it down. This is because they are not flexible. Being flexible helps. Reduces real estate related facilities cost: This costs falls due to flexibility. “Employees being able to telecommute and work remotely help to increase valuation as cost falls”. (Burud & Tumulo, 2004) For example “AT&T avoided $10 million in office space cost over 5 years and also saved $80 million by closing offices as employees were less distracted working in homes than at offices”. (Burud & Tumulo, 2004) Thus it helped to increase profits. Flexibility worked as a tool. Reduce Labour Cost: Flexibility reduces the cost per piece. Companies are able to extract more profits. “A flexible human strategy reduces labour cost for the same output, increases profitability and reduces wastes”. (Burud & Tumulo, 2004) This is because mistakes are low. The concentration is high. It results in less loss of working time. More products are generated. These results to increase profits. For example “Merck reduced overtime in the payroll by 50% by expanding use of flexible work arrangements”. (Burud & Tumulo, 2004) Improves quality: Flexibility also improves quality. Customers get better products. Dissatisfied customers reduces. They become loyal. This helps to spread word of mouth. More customers look for products. Thus resulting in improved sales. This has been due to employee attitude and mistakes. “Employees when satisfied have an attitude of development and the mistakes committed by them are low”. (Burud & Tumulo, 2004) This results in better service. Customers want this. Thus it helps to grow. Reduces Legal Cost: This cost also falls. Apart from the cost it affects the reputation. Being flexible checks it. “A flexible human capital strategy reduces the cost of gender discrimination and by having strategies for part time work, time off during the career cycle and flexible work hours reduces cost”. (Martin, 2009) There are many laws for it. Following this helps to fulfil this. Government agencies also feel happy. They know the company compiles to it. There has been many situation were companies had to pay millions for not following it. Thus, we see that flexibility helps. It helps to improve performance. “Employees who are talented and have flexible schedule are more committed and come with superior service thus minimising overhead expenses”. (Burud & Tumulo, 2004) It helps to create human earning. It creates future assets. Being flexible helps to improve earning as “companies who recognise the importance of it value the needs of the employees which enable the company to grow in terms of profits and revenues and sustain that for a long period of time”. (Burud & Tumulo, 2004) This helps the company to use it as long term measure. To get advantage and being ready flexibility is must. Flexibility helps the company to improve its value. The most important is shareholder value. “Flexibility helps organisation to gain advantage of profits and doing things for the society which overall adds to shareholders value”. (Burud & Tumulo, 2004) The shareholders return improves. They become long term investors. Thus we see that flexibility acts as a tool. It helps organisation to improve performance. They are able to get a higher return. It thus helps the organisation to grow. References Burud S & Tumulo M, 2004, “The impact of flexibility on organisational performance”, Davies Black Publishing Carlson, 2005, “Firms balance workplace flexibility and business demand”, High Beam research, Employee Benefit News Carlson & Leah, 2005, “Flexibility proves profitable for large firms”, Employee benefit news Charles S & Peter S, 2002, “Organisational flexibility for a changing world”, Leadership & Organisational Development Journal, Volume 23, Issue 3, MCB UP Ltd Friedman D, 2007, “Workplace flexibility: a guide to companies”, US Chamber of Commerce Martin H, 2009, “helping your organisation expands and grows”, Westpac Group, Australia McLean D, 2008, “Understanding business process flexibility”, Business Process Integrity, BPM Solutions Read More