Whether the Capital One Model is Empowering - Term Paper Example

Using theory, criticise the ideas proposed, with reference to the impact upon motivation and say whether the Capital One model is “empowering”. Introduction The volatile economy of the present world has compelled organizations and business entrepreneurs to review their business strategies and organizational structure. The recent past witnessed the collapse of many business tycoons and organizations. The few companies those survived the global financial crisis have gained the attention of the entire world. ‘Capital One’ is the best among those outstanding performers. The recent crisis reminded all companies and organizations about the significance of designing strategies for dealing with the future. The organizations which hold conventional strategies and structures are always found more vulnerable to peril during such kind of recession. So in order to face crisis, the ‘built-to-change principles’ would be applicable to a certain extent. According to this proposal, “the only way for the organizations to change rapidly enough is to design them so that they can adjust their strategic intents, structures and human capital deployments as a matter of routine that means starting with a new set of core principles about what an organization should look like.” (Lawler & Worley 2009). Some important factors The time and energy spend by many organizations for designing strategies seems to be very less than that of the successful companies. Major part of their attention is being paid to dealing with the present issues. There are various factors that determine the success or failure of an organization such as the structure of the organization, how the individuals are deployed in various posts, reward system, and the scope of interaction between the managers and the employees. If the communication is not effective in a firm it would adversely affect the production, supply, customer feedback and the relationship between the members of the organization. to make the communication effective, group activities, structural changes and healthy interactions are important. Team work is the essential factor in every organization. Besides the structural planning human resource management is another significant area that would empower the productivity and stability of an organization. Business industrialists and organizations have implemented various motivational theories on this regard. Motivational theories and built-to-change proposal In 1943 Abraham Maslow introduced a theory known as Maslow’s hierarchy of needs theory according to which human beings are motivated by their unsatisfied needs. ‘The theory believes, the general needs physiological (safety, love and esteem) have to be fulfilled before a person becomes motivated to satisfy the future needs. The individual moves toward growth and finally attains ‘self actualization’. Therefore according to him, for ample workforce motivation, management has to identify the active needs motivation of the employees. So the fundamental needs or physiological needs must be satisfied before moving to advanced stage needs. A satisfied need no longer motivate the individual instead the next higher need takes its place’. (Byrnes, 2003, p.54). Built-to-change organizations are found little concerned about any of these needs of the individuals. They always prefer the candidates who have ‘change oriented carrier path.’ The appraisal based on the result and performance, and the rewards in the form of bonuses are not sufficient to motivate the workers. The system would not motivate individuals to attain self actualization. Managers often find difficulty with integrating the whole staff members in order to accomplish the intended mission. The individuals’ goals may be at variance influenced by their culture, job, age, economic status, character formation and the reward they gain from their organization. The individuals working under the same roof can not be assumed as the individuals with the similar goals. Scheduling the reward system is a highly significant responsibility of a management. When a company designs its rewards or incentives every member of the organization must be measured to obtain the profit of the arrangement. As the goals divers the individuals’ expectations about rewards for the performance also might be different. The motivating factor for every individual may not be the same. “Those seeking money as the number one priority will be attracted to jobs where performance and reward are closely linked and performance is paid for in money preferably cash in the hand. Those who rank relationship highly will be attracted to jobs where relating with people is a major part of the work. ” (Hunt, 1992). The experiments carried out by Mayo Roethligsberger (1939) also have proven the significant role of motivation in human resource management. According to his findings, “workers are not solely concerned with economic needs and material comfort. Moreover they are likely to be more responsive to the influence of colleagues than to attempts of management to control them by material incentives.”(Tyson &York A., 2000). The working conditions and other environmental factors have great influence on labors. The interpersonal relationship and healthy interaction could motivate expected individual behaviors. Yet the built-to-change concept would cause uneasiness or uncertainty in the minds of workers. In accordance with the theory of Mayo, “If management styles produce a threatened, frustrated, alienated workforce worker group will tend to form, with their own norms and strategies design to counter the goals of management” (Tyson & York, p.13); the so called built-to-change proposal seems to be one of such styles. According to the Motivation- Hygiene Theory (Two Factor Theory) proposed by Frederic Herzberg (1959) a job should have enough challenges to make use of the full ability of the individual. In other words high potential candidates must be given more challenging tasks if necessary by replacing the employee with one who has a lower level of skill. The theory explains that there are two distinct human needs that every individual wants to fulfill. Among them the first psychological needs require money (food, shelter) and the other psychological needs that can be fulfilled only by activities that cause one’s growth.(Miner B., 2007 pp.47,48). In contrast, the Capital One model is not concerned about the psychological needs of the workers; and moreover it is cruel enough to replace the labors with new candidates who have the required skills. The proposed employment strategy would empower the company and on the other hand it would eventually plunge the labors in to adversity. The need of new strategies and structure The renewal of business strategies and organizational structure is an unavoidable action demanded by the present economic scenario. The organizational structure should be well designed for easy change at any unexpected difficulty. The flat organizational structure that is being followed by Capital One would be a better model to align the entire members more effectively. Furthermore, it enables organizations to give and collect information rotationally. Under this system the managerial functions of an organization will be rather easy and moreover the workforce would become more expendible. As Lawler and Worley say “not only it is dangerous to wait a year or two to revise business strategies, it is also unrealistic to think about maintaining some magical sustainable competitive advantage.”(The Rebirth of Change) However the Capital One model approach toward the employees’ retention is highly suspicious for its leaving the individuals at a high risk of termination. The Capital One policy only intends to achieve business stability rather than labor retention and therefore, “some individuals may end up with outdated skills and may no longer be employable by the organization.”(Lawler & Worley) This hire and fire tendency has its own far reaching adverse effects on the labor force as a whole, and it would hardly provide the company with an expendible labor group. The labors presumably lose their commitment and faith in the organization they are working with, because the further contribution of a worker is highly influenced by the reward derived from his present efforts. Obviously, recruiting the right person at the right job is the most important thing because the efficient workforce is the asset of any company. If the career does not match with the individual’s profile the organization will fail to satisfy the individual and vice versa. So the criterion for each career needs to be well defined and the profile of the candidate must be scrutinized. (Hunt, p.39) People with high aptitude and serious concerns toward their career are obviously expected in modern organizations. But what kind of assurance a company with built-to-change strategy can offer its employees in return? The sort of job people do also affects the priorities of their goals. Certain patterns of goals most likely push people in to certain jobs. While they are rewarded only with money the intrinsic motivation of working in a harmonious team is eliminated in many jobs. Jobs offering recognition attract and strengthen those goals. Capital One follows a process in assigning the goals where individuals agree with their boss. This method seems to be yielding because it helps the individuals to get their goals well interpreted. The expected behaviours and new concepts The traditional style of pyramidal structure and conventional business strategies are being reconsidered by many of the organizations today. A modern organization with sophisticated, multi functional features can not be easily led to the anticipated goal by a single person. Therefore individuals who abide with the code of conduct of the organizations ought to be the expected behaviors. Such group of workers would reduce the work load and empower the organization because many organizations confront with problems created by dissatisfied and disobedient labors. Dedicated individuals who pursue their goals also must be identified and appreciated as expected behavior because they are the expendible element of any organization. Obtaining and retaining an efficient labor force is the main managerial challenge that every organization is facing today. In contrast, the term ‘travel light’ proposed by the built-to-change concept is a threat to individuals’ retention in organizations. Instead of providing the employees with extensive development, seeking for new individuals and experts is all against the motivational theories and business ethics. Motivation and rewards are the two factors that determine whether an individual would continue in the same job or not. It is the sole responsibility of the management to empower the whole workforce with appropriate rewards and other motivational strategies. Evidently those who maintain anticipated standards in their performance or gain great achievements should be rewarded proportionally. According to the motivational theories ‘the performance of a person is determined by the motivation and the motivation comes from rewards’ (Hunt); whereas motivation under built-to-change policy is created by a feeling of job insecurity. While working in an organization the individuals have to adjust with many different people having different objectives and mindset. The employees who cooperate with collogues have to be encouraged because they have a significant role in bridging the gap between the employees as well as between the employees and the company. There are situations when the expectations of the individuals and the objectives of organizations differ. According to Hunt “the moment an individual seeks employment in an organization is the moment a compromise begins.” (Hunt, Chapter 2, p.39). It means while we gain something from an employment we have to give up something of our own and if the loss is higher than the gain the employee has to quit the job. In other words only when the reward is higher than the loss the effective motivation occurs. If so the only inadequacy to the effective performance is the poor rewards the organizations propose. Usually the reward devise is influenced by the managers’ performance assessment. There are certain factors which disturb performance-reward equation. For instance, how the manager estimates the potentiality of an individual is an important factor. In this context the quality of leadership and organizational structure are highly significant. In accordance with the built- to-change view “leadership is an organizational capacity in which the chief executives are in a unique position to sense change and help companies to adjust to environmental and market place shifts.”(Lawler & Worley) So in order to ensure the expendibility of manpower in organization, the team that designs the incentives and reward strategy must consider different individual perspectives and all possible motivating factors that would eventually contribute to the accomplishment of the desired goal of the organization. The rapid changes taking in to account an organization can include experts from inside or outside sources to design the appropriate reward system. There should be an identical code of conduct for all individuals to motivate compliance and to discourage disruptive behaviors. Better integration, professional understanding and fellowship also must be regarded. These are the initial actions or strategies that motivational theories acknowledge. Capital One model versus intrinsic motivation Intrinsic reward must be another area which is little considered by the built-to-change proposal. According to this, individuals’ employment depends on their willingness to accept the changes and learn new skills. It means Capital One model is targeting specific individual groups that align with its business goals. The trend has its own pros and corns. These companies need to review their human capital management and reward strategies through the perspectives of motivational theories and ethics. In fact they are to include all different types of incentives which would attract, motivate and retain (Rumpel & Medcof 2006) the desired individual behaviors to empower the organization. Capital One model can not be appreciated for its paucity of motivational strategies. It focuses exceedingly on the strategies that can adapt to changing environment. Sharing business information with staff, keeping employees close to the external environment, and frequent goal setting reviews are some of the positive features of the built-to-change concept. However, in the long run the Capital One model might not be empowering. Bibliography Byrnes J. W. 2003, Management and the Arts, illustrated edn. 3, Elsevier. P 54. Hunt J. W., (1992) Managing People at Work: A Manager’s Guide to Behavior in Organizations, 3rd edn, illustrated. Mc Graw-Hill, pp. 29-44 Lawler &Worley, 2009, The rebirth of change, People Management Magazine; 29 Jan 2009 Miner,2007 Organizational Behavior 4: From Theory to Practice.Illustrated, M.E.Sharpe, pp.47, 48 Rumpel, Steven, Medcof & John W 2006, Total Rewards: Good Fit for Tech Workers, Industrial Research Institute, Inc, pp. 27-35 Tyson & York, 2003, Essentials of HRM, illustrated edn.4, Elsevier p.13 Read More