Organizational Change and Human Resource Management - Essay Example

ORGANIZATIONAL CHANGE AND HUMAN RESOURCE MANAGEMENT 28 SEPTEMBER 2008 PRINCIPLES OF MANAGEMENT ORGANIZATIONAL CHANGE AND HUMAN RESOURCE MANAGEMENT Introduction In today’s constantly developing world, where globalization is the new economic trend, organizational changes are inevitable. The success or failure of an organization depends on its success or failure in responding to and managing change (Mann 2007). Change management can be viewed from two standpoints. One is that of the change manager and the other is that of the employees undergoing the organizational change (Holland 2007). Both views have to be carefully considered to make the change effective and successful. The goal of the change management is to see that the change is brought about effectively in the proposed time and within the planned budget. This calls for envisioning the future of the organization, to make clear the rationale behind the change and to draw the necessary plans for alterations. Employee dissatisfaction and resistance to change People issues are inevitable during organizational change. “New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and people will be uncertain and will resist” (Booz Allen Hamilton Inc. 2004, p.1). The employee dissatisfaction and resistance stems from several reasons, some natural, some personal, and some acquired from peer and social circles. An individual’s personal predisposition to change could also be deeply rooted in how he/she has been brought up and what he/she has been taught as a child as regards handling changing situations. The four most common reasons people in an organization resist change are: “a desire not to lose something of value, a misunderstanding of the change and its implications, a belief that the change does not make sense for the organization, and a low tolerance for change” (Kotter & Schlesinger 1988, p. 666). Tackling resistance Employee and manager resistance to change, lack of incentives or motivation to change, skepticism or uncertainty with regard to change, and lack of a compelling reason or urge to change are some of the obstacles that managements face in general in bringing about organizational change. In the given case of the reorganization of Maersk Line, a feeling of insecurity and uncertainty is inevitable among the employees, especially with the planned elimination of layers of middle management in order to cut costs. It is the purpose of the change management to ensure that “the workers are ready, willing and able to operate the changed organization” (Holland 2007). Hence, success at an overall and complete transformation of the organization requires, besides strategy, a deep understanding of the human side of the organization inclusive of the culture, values and behaviors of the people of the organization who have to undergo change to bring about the planned outcome (Booz Allen Hamilton Inc. 2004, p.1). Culture and tradition are aspects that are difficult to overcome and slow to change. This is an area that should be addressed very thoroughly, tactfully and delicately. A baseline has to be drawn to effect this, taking into account the present values, beliefs, behaviors and perceptions, and planning and targeting the desired changes. Education, communication and interaction One reason that the employees fear that they will lose something of value, which is quite natural in a company like Maersk Line, which is the world’s largest shipping line and where most of the employees most probably have been enjoying security and satisfaction in their positions, is that the employees focus on their own best interests rather “than that of the total organization” (Kotter & Schlesinger 1988, p. 666). A suitable strategy in this context would be to educate and inform the employees of the benefits that the change would bring about for the organization and thereby for the employees. The education process can take the form of one-on-one discussions or presentations addressing groups. In Maersk Line, where the employees had been working in a particular work culture, mode and setting for many years, a sudden realization that things have changed overnight from what they have been to a situation where they feel their problems and views may not be given due consideration, could naturally provoke resistance from their side. The solution to tackling this problem could be to allow the employees to voice their views and problems and take part in the process of change. When the employees feel that their needs and demands will be met by the management, the transformation of the organization will be accepted by them with less amount of resistance. Moreover, it could also be in the best interest of the company to know what would be and what would not be beneficial for the company from the employees’ standpoint which, possibly, could be more accurate than the management’s in some aspects. Employees prefer honest admissions and disclosures to roundabout sugar-coated explanations, informations and advices (Goman 2006). It is especially true where employees are unsure of the future of their jobs in the organization, their remuneration, future opportunities, status in the organization, their new relations as regards new bosses and subordinates, their own abilities and skills for the new situation, etc. To put in a nutshell, the employees would like to know first and foremost what is in it (the organizational change) for them. Participation and involvement One of the major reasons that would create worker dissatisfaction in a large company like Maersk Line would be worker alienation. The worker may feel that his role is meaningless and insignificant, and his position dispensable in the large system. It is essential that this feeling among the employees is reduced in order to reduce, if not break down, the natural and spontaneous resistance of the employees to change. One method that could be adopted toward achieving this goal would be to break down the large organizational structure into smaller groups or teams. In a large organization like Maersk Line, there will be a large number of employees holding several levels of key positions. In such a setting, the employees will have access to a large amount of information that is relevant for the proposed organizational change. In such situations, the employees will also have considerable power to resist. Participation of the employees in designing the change will not only break down their resistance but also help the management in successfully implementing the change. Thus, participation and involvement of employees is of great importance in a context where the employees can provide data relevant for the change and where change initiators lack sufficient information to design the change (Kotter & Schlesinger, n.d.). Resistance from the side of the employees need not always be considered negative. Resistance has its positive aspects as well. “Resistance may be your friend to implement the correct change” (Vyas 2006). Understanding the actual reasons behind the resistance of the employees can be beneficial for the company in that it helps get a handle over the whole situation as well as a new insight into the problems of change. By involving the employees, the management can get together the talents, skills, energies and knowledge of the employees, which will help the company in the long run to successfully complete its change and achieve its new objectives and goals. Participation of the employees in the change process is essential for smooth and successful organizational change. This requires timely communication of advice that is motivating, unambiguous and accurate. It is not enough if the management just communicates information and rests assured that the recipients have understood the issue, but the management should “practice targeted over-communication” (Booz Allen Hamilton Inc. 2004, p.4). Communication should be timely, organized, coordinated, regular and personal. Communication should move both ways, to and from the employees, soliciting their response, thoughts and feedback. Facilitation, support and good relations A reason for low tolerance towards change by the employees, in addition to their natural inherent inclination to resist change, could be that an “organizational change can inadvertently require people to change too much, too quickly” (Kotter & Schlesinger 1988, p. 669). This could be a reflection of their fear that they will not be able to learn the new skills, maintain the new relationships, achieve the new goals, etc. that the change may entail. As part of the organizational change that Maersk Line proposes to undergo, the company’s global structure is planned to be reduced from 14 regions to 11, and these regions are expected to perform satisfactorily at the desired levels and deliver goods in the changed circumstances. Such a situation is no doubt going to create a fear of the unknown among the workers of Maersk Line. According to the plans of change management, the company proposes to provide services that are faster as well as more reliable and responsive, at reduced costs. This means that the company’s workforce will have to perform with a high rate of efficiency and competence. The company’s bureaucracy must have fallen into a mode of inertness with the company growing out of proportion and falling into a kind of probable sluggishness due to its sheer size. This could also evoke some misgivings in the minds of the employees. Other reasons for low tolerance can be peer pressure and sometimes the attitude of the superiors in the organization. It is of utmost importance for the employees to know that the management has trust and confidence in them. Success cannot be longstanding when it is built in a climate of mistrust between the managers and the employees. Problems and difficulties faced by fellow-workers can also put employees under severe peer pressure. Another form of peer pressure is when the employees find it imperative to stick together to fight for their individual needs. If the organization is really large, which the Maersk Line is, more are the chances for these kinds of hurdles to spring up throughout the change process. The most logical and natural solution to overcome these hurdles would be the maintenance of good relationship between the change makers and the resistors. This would give an opportunity to boost the confidence and gain the trust of the resistors. The change management can help the employees overcome and eradicate the fear of the unknown, like their fear of whether they will be able to competently tackle their new responsibilities of work, by providing them with skills training so that they actually raise themselves by way of efficiency and proficiency to handle the new situation. Professional counseling and emotional support for the employees that is ongoing till the organizational change is successfully completed will not only help the management overcome the employees’ fear of the unknown but equip themselves with a good team of employees who are highly skilled and informed and educated enough to make the organizational shift to a new beginning, thereby taking the organization to new and desired heights. According to Kotter and Schlesinger (n.d.), “no other approach works as well with adjustment problems.” In addition to gaining the trust of employees and improving communication with them, the management should let the employees know what is not going to change in the organization, which would give them some comfort that there is “something from the past that they can hold on to” (Reddy, n.d.) Negotiation, agreement, and motivation Organizational change is bound to bring about with it, especially in a large organization like the Maersk Line, a lot of changes, shifts, and shuffling in the positions and responsibilities of the employees. In these situations, a group of employees will inevitably have to give up or lose out and they may also have significant power to resist (Kotter & Schlesinger, n.d.). This will naturally evoke unrest and dissatisfaction in the employees. Where the employees have significant power to resist, such situations can create considerable problems to the management in effecting the change. Such problems can be overcome by compensating the employees for the losses and inconveniences that they might suffer by way of incentives, perks or special privileges. This is one of the easiest and the most effective ways of defusing, if not avoiding altogether, major resistance from the employees. Manipulation and coercion This is an approach that can have some adverse side effects. The advantages of this strategy are that this can be much quicker and much less expensive than all other solutions. The major disadvantage is that this will evoke a far greater resistance from the employees in the future if they come to know or if they feel that they have been manipulated. Coercion is another approach that can quickly and effectively break down employee resistance, but it can create resentment in the employees towards the management leading to the management’s loss of their trust and goodwill. Coercion is usually carried out by threatening the employees with loss of their jobs altogether or denial of promotion opportunities if they resist complying with the changes proposed by the change initiators. Another method by which the change managers can ensure that the employees comply with the changes is by actually transferring the employees to new positions or places. They may also be dismissed from the organization altogether. Besides that of the employees, this approach can evoke the resentment of the society and the public at large. Instances have been many where the media as well as the public have got involved in debates and discussions surrounding such issues. This might put at risk the company’s hard-earned goodwill and public image. Prepare for the unexpected However well the management may plan, devise, organize and coordinate the plans and strategies for change, the change initiators have to be always prepared for the unexpected – the unexpected reactions and responses of the people affected by the change. Anticipated opposition that the management had been well prepared for may not happen while new resistance and reactions may crop up during the process of effecting the organizational change. The management needs to constantly reassess the impact of change efforts and “make adjustments to maintain momentum and drive results” (Booz Allen Hamilton Inc. 2004, p.6). Conclusion Employee resistance is a very critical and sensitive issue that has to be very tactfully dealt with in every organization that is undergoing change. This has been identified as a major factor that has contributed to the failure of many an organization’s change plans. Though resistance is mostly seen as a deterrent and employees who resist as hurdles in the progressive movement towards organizational change, employee resistance has a very useful and extremely positive role to play in organizational change (Bolognese 2002). Positive criticism and debates can lead to productive brainstorming that can produce logical, rational, practicable and more favorable options and solutions for overcoming the hurdles in the process of organizational change. This gives the change initiators the opportunity to select and pick the most suitable options thereby reducing the magnitude of the resistance from the employees. The major problems related to change management that Maersk Line, which is the world’s largest shipping line, would be anticipating should be in the area of human resources which is only natural for any company, but more for Maersk due to its sheer size and its proposed size-cutting in the personnel department. According to Fred Nickols (2006), the skills most needed in the area of change management are “those that typically fall under the heading of communication or interpersonal skills. To be effective, we must be able to listen and listen actively, to restate, to reflect, to clarify without interrogating, to draw out the speaker, to lead or channel a discussion, to plant ideas, and to develop them……… More important, we have to learn to see things through the eyes of these other inhabitants of the organizational world.” Moreover, however well the management may have planned the change, it has to always be prepared for the unexpected. References Bolognese, AF 2002, Employee resistance to organizational change, viewed 25 September 2008, http://www.newfoundations.com/OrgTheory/Bolognese721.html Booz Allen Hamilton Inc. 2004, Ten Guiding Principles of Change Management, viewed 21 September 2008, http://portals.wi.wur.nl/files/docs/ppme/extfile.bah.com_livelink_livelink_138137_func.p df Goman, CK 2006, ‘The leader as a change agent: 10 questions to ask before leading change’, in Sumati Reddy (ed), Change management: People perspectives, The Icfai University Press, Hyderabad, pp.49-60. Holland, D 2007, Engineering Organizational Change, viewed 19 September 2008, http://bita.hdinc.com/en/art/?2 Kotter, JP & Schlesinger, LA 1988, “Choosing strategies for change”, in HJ Leavitt, LR Pondy & DM Boje (eds), Readings in managerial psychology, University of Chicago Press, pp. 665-679, viewed 23 September 2008, http://books.google.co.in/books?hl=en&lr=&id=iCAFsu6zdjUC&oi=fnd&pg=PA665&d q=organizational+change+resistance&ots=YDmp0sL8lx&sig=QPbxBqfIWLOSQ6gjiFM A1pzkLUk#PPA668,M1 Kotter, JP & Schlesinger, LA, n.d., Choosing strategies for change, viewed 24 September 2008, http://sharif.edu/~maleki/change%20management/student/Choosing%20Strategies%20fo r%20Change.ppt#8 Mann, T 2007, Organizational Change, viewed 19 September 2008, http://www.associatedcontent.com/article/192329/organizational_change.html Nickols, F 2006, Change management 101: A primer, viewed 24 September 2008, http://home.att.net/~nickols/change.htm Reddy, S, n.d., ‘Managing resistance to change: A three-pronged approach’, in Sumati Reddy (ed), Change management: People perspectives, The Icfai University Press, Hyderabad, pp.66-75. Vyas, R 2006, ‘Change management: It has no substitutes’, in Sumati Reddy (ed), Change management: People perspectives, The Icfai University Press, Hyderabad, pp.17-25. Read More