Haya Water - Leadership Vision and Commitment - Case Study Example

ASSIGNMENT 1: HAYA WATER Name Institution Professor Course Date Assignment 1: Haya Water Background Information Haya Water is a government owned company. The organization has been in existence since 2002 with the objective of building and operating the wastewater infrastructure in Muscat, the capital of Sultanate of Oman. In the current state, the company is executing a US$ 3 billion infrastructure projects inclusive of building or construction of wastewater networks, treatment plants, and treated effluent reuse networks. The organization operates in the utilities industry (Baawain, Sana, Al-Yahyai, & Al-Sabti, 2012). It provides employment opportunities to close to 500 employees. Haya Water is facing strategic problem with reference to employee retention. The company focused on abandoning the leadership team that drove the institution from 2002 to 2012. The organization focused on adoption of a new plan for the new era with another management and leadership team from 2013. Since this time, the institution has been experiencing unhealthy stability under the influence of reduction in the motivation of the employees in pursuit of competitive advantage and organizational goals, as well as targets. Low motivation and lack of morale among the employees led to high turnover ratio resulting from the eventual dissatisfaction of the workforce. The purpose of this report is to discuss the soft problem with reference to high turnover ratio, which has 9 percent implications of the stability of the organization because of the conflicts among the leadership team. In order to achieve this objective, the report will concentrate on the case of Haya Water, which is a company specialized in wastewater and recycling reused water (Baawain, Sana, Al-Yahyai, & Al-Sabti, 2012). In addition, the report will link the essence of outsourcing with the weak management and leadership team prior to incorporation of appropriate recommendations. Analysis of the Situation From a business expert perspective, staff turnover is one of the essential areas to keep an eye on during the financial period. Turnover refers to the percentage of the company’s workforce, which voluntarily quits during the financial year. The goal of an organization should be to have low staff turnover to facilitate maintenance of consistency in the workplace while developing employees that are more skilled. High turnover relates to the dissatisfaction of the employees with the employment position. Some specific reasons of high turnover in diverse business entities include poor working conditions, long working hours, low pay or wages, insufficient benefits, and negative atmosphere with reference to the authority figures. In adverse cases, business entities do not help much that they have high staff turnover ratio during the financial period. For instance, business organizations that tend to hire seasonally will obviously experience or encounter high turnover because of the tendency of the seasonal employees not to come back the following year to work on the seasonal contract. Moreover, entities that outsource might suffer from high turnover ratio whenever such individuals and service providers become too busy with other contractual obligations. In the case of Haya Water, outsourcing has been the major source of high turnover ratio while seeking to achieve the goals and targets at the end of the financial year. This is because of the poor management of the employees. In most cases, a bad boss can make any employee miserable. The tendency of the immediate supervisor or managers to create uncomfortable work environment might make even the fully or completely committed employees to consider leaving the institution in pursuit of quality working atmospheres (Butler & Callahan, 2014). According to diverse business experts, employees tend to leave voluntarily because of the relationship between the workforce and the managers. Another element of high turnover ratio with reference to the case of Haya Water is the feeling of being bored among the workers. In most cases, workers need to feel the motivation and challenge to facilitate their forward movement in terms of professional growth and development. It is essential for the employers to take substantial time to meet with the employees while exercise proactive strategies in discussing career and succession plans. Lack of motivation or challenge in relation to professional growth and development might lead to high turnover ratio in the organization seeking to address demands and needs of the business entity. Furthermore, certain employees tend to gain motivation from higher pay. From this perspective, lack of high pay for the employees will always contribute to high turnover ratio, thus ineffectiveness and inefficiency in handling the demands and expectations of the business entity in the market and industry of transaction (Butler & Callahan, 2014). Similarly, lack of employee engagement might contribute to increase in the turnover ratio, which is a strategic problem limiting the ability of the business entities in pursuit of competitive advantage in the market of transaction. Proper engagement of the employees is vital in the provision of satisfaction to employer and worker, job satisfaction, effort beyond minimum requirement, and increased understanding of the link between one’s job and organization’s mission, as well as vision and values. It is crucial for the engagement of the leadership of the organization under the influence of proactive approach to employee relations while making sure that managers execute their duties and obligations appropriately and effectively. Outsourcing vs. Management/Leadership Outsourcing is one of the most powerful tools in strategic management with the ability to enable business entities to cut costs, improve organizational performance, and refocus the core of the business. Nevertheless, outsourcing initiatives tend to fall short of management’s expectations. There are diverse mistakes managers or leaders make in the course of reducing costs, improving performance, and enhancing operations of the core business under the influence of outsourcing (Butler & Callahan, 2014). One of the critical issues or mistakes is the tendency of outsourcing activities that should not be outsourced. In addition, management tends to select the wrong vendor in the process of outsourcing. Moreover, managers also make mistakes through developing poor contracts while overlooking personnel issues. It might also be a problem for the business entity in case they lose control over the outsourced activity. It is also critical for the business entity to concentrate on the assessment of the hidden costs of outsourcing with the intention of increasing effectiveness and efficiency in the provision of quality services while exploiting outsourcing techniques. Business entities might fail to have an effective exit strategy with reference to vendor switch and reintegration of an outsourced activity. Outsourcing failures are rarely reported because firms are reluctant towards their publication (Kitcher, McCarthy, Turner, & Ridgway, 2013). Outsourcing refers to the turning over all or part of the organizational activity to an outside vendor. In the services industry, outsourcing focused on provision of basic support activities with the intention of restructuring firms in bad financial shape. In the modern context, outsourcing pervades the management of diverse business entities in the global aspect or under the influence of globalization. In Haya Waters, management of the institution focused on utilization of outsourcing with the purpose of reducing costs while improving performance. Haya Water sought to outsource because of diverse reasons. Prior to illustration of the linkage between outsourcing and ineffective management, it is critical to focus on the reasons to outsource with reference to this business entity. One of the major reasons for outsourcing in this context is the essence of flexibility. With uncertainty in the modern global economy, business entities need the ability to expand or downsize in the quickest time possible (Gilley & Rasheed, 2000). Outsourcing enables business organizations to eliminate or minimize risk, thus allowing the corporations to adapt more quickly to the rising and slowing demand trends. In addition, Haya Water sought to outsource because of the need for effectiveness, efficiency, and stability in handling demands and expectations of the customers in the market and industry of transaction. Haya Water focused on freeing up internal resources while realizing appropriate and quality risk management in the operations in Oman. Outsourcing was also vital in the improvement of services and products while enabling the organization to experience tax breaks, as well as lower regulatory costs in pursuing targets and goals at the end of the fiscal period. Outsourcing is vital in the minimization of the wages while enabling business entities to focus on the core business (Robbins & Judge, 2012). This is through utilization of the freed time to focus on the core business processes for increased profitability while reducing costs of operations. Outsourcing contributes to poor working conditions for the natives or the existing employees within the firm. This is one of the onsets of increased turnover ratio among the employees at the end of the fiscal period. One of the major issues of outsourcing in this organization is the loss of critical talent or poor knowledge transfer (Cialdini, Petrova, Goldstein, & Team, 2012). Outsourcing contributes to the negative management of the institution through creation of uncertainty for the existing employees and contractors offering services to the client entity. The level of uncertainty from outsourcing might cause employees to look elsewhere for employment, thus leaving either before or during implementation of the outsourcing (Dewettinck & van Ameijde, 2011). The eventual outcome of the implication is reduction for work executed by business entity in pursuit of goals and targets with reference to competitive advantage. Moreover, some of the employees engage in the transfer of knowledge to the service provider during the course of implementation. Motivational theories and models are essential in understanding the causes, as well as implications of employee turnover and retention. Employee motivation theories facilitate creation of the models in the course of understanding what individuals need to push their performance at various workplaces. From this perspective, effective and efficient employee motivation has the opportunity to increase the productivity, as well as loyalty of the workers in pursuit of sustainable growth and development in the market and industry of operation. On the other hand, failure to integrate these motivational theories into place might lead to increased rate of employee turnover, which might be detrimental to the growth and development of the business entity. Management by Objectives One of the critical theories and models in the course of understanding the issue of employee turnover is the aspect of management by objectives (MBO). The theory focuses on defining various objectives for each employee prior to comparing and directing his or her performance against the set objectives. The approach focuses on increasing organizational performance within the industry through aligning goals and subordinate objectives throughout the organisation. From an ideal perspective, employees have the tendency of obtaining strong input to identify their various objectives and time lines for completion. It is appropriate for the managers to avoid the issue of ‘the activity trap’, which relates to the tendency of getting so involved in their day-to-day activities to the extent that they forget their main purpose or objective. It is the obligation for all managers of the firm or business entity to participate in the strategic planning process with the intention of improving the implementation of the plan. Similarly, it is the duty for the managers to adopt and implement various performance systems with the intention of enabling the organization to stay on the right track. The theory exists on five critical principles. In the first instance, it is appropriate to consider cascading of the organisational objectives, as well as goals. Secondly, there is specific objective for the employees in the course of achieving the goals and targets at the end of the fiscal period. Similarly, the theory focuses on the integration of participative decision-making, as well as utilisation of explicit time or period in pursuit of sustainable competitive advantage within the market and industry of transaction. Finally, the theory focuses on utilisation of the performance evaluation and the eventual feedback in relation to the contribution of the employees in pursuit of competitive advantage (Medina, 2012). These objectives must relate to the SMART (specific, measurable, achievable, realistic, and time-related) concept, thus enabling the organisations to achieve various goals and targets at the end of the strategic period. Managers following this management theory or philosophy focus on incorporating employees in the decision-making process. Failure to implement the MBO effectively and efficiently can force business entities and companies to lose their brightest, as well as most self-motivated employees. It is essential to note that all employees truly care to set work-related goals for their transactions; rather they focus on the utilisation of the autocratic settings in the delivery of quality services and products in accordance with the demands and expectations of the consumers. From this illustration, it is essential to note that the most innovative, as well as internally driven workers will be more likely to leave a job, which provides little, as well as no opportunity for the strategic input. Management practitioners note that MBO theory is essential in improving employee motivation, as well as commitment, thus the presence of appropriate communication between management and employees (Cao et al., 2013). Nevertheless, critics note that the theory emphasizes on setting of goals in the course of pursuing objectives, rather than utilisation of the systematic plan to achieve the goals and targets at the end of the strategic period. Theory X and Theory Y Theory X and Theory Y are two distinct sets of assumptions, which managers tend to have in relation to their employees. Theory X works on various assumptions such as the fact that most people dislike work, thus will avoid it to the extent possible. From this perspective, it is ideal to coerce, control, and threat people with punishment constantly with the intention of executing the work of interest. Similarly, the theory assumes that people have little or no ambition, thus the preference to avoid responsibility, but choose security as the most important element. On the other hand, theory Y notes that physical, as well as mental efforts are natural and most people find work to be a source of satisfaction in accordance with the work environment. Under the influence of personal motivation, such people have the tendency of exercising self-control, self-direction, ingenuity, and creativity towards accomplishment of collective, as well as personal goals. In the course of achieving these goals, these people seek responsibility while learning to accept their duties and obligations in pursuit of sustainable competitive advantage within the market and industry of operation (Khan, 2014). From the above illustrations, management, which believes in the theory-X assumptions or principles, has the tendency of creating ‘stick-and-carrot’ based firms under the influence of restrictive discipline, as well as pervasive controls. On the other hand, managers focusing on the implementation of the principles of theory-Y have the tendency of creating trust-based companies under the assistance of the empowered employees in pursuit of sustainable growth and development, thus increasing competitiveness of the firms. It is critical to note that neither theory-x nor theory-y is inherently better than the other is. The ideal or appropriate theory depends on the work environment, as well as the type of employees aiming at enabling the organisation to achieve various goals and targets in the market of transaction (Chu, 2010). Application of wrong theory in the workplace can disappoint, aggravate, and confuse employees, thus generating the issue of increased employee turnover. For instance, employees who perceive self-motivation and autonomous decision-making as significant and crucial will not likely stick around in the work environment associated with the strict supervision, thus the concept of employee turnover. It is the obligation of the employees to adopt and implement appropriate strategies in the course of increasing profitability and performance among the employees, thus creation of appropriate environment to limit employee turnover. Expectancy Theory According to expectancy theory, employees have the tendency of putting forth an amount of work, as well as commitment equal to what they expect to obtain or receive in return for the services rendered. From this perspective, behaviour tends to result from the conscious choices among alternatives or options whose purpose it is to maximise pleasure while minimising pain. It is essential to note that the performance of the employees relate to various individual factors such as personality, skills, experience, knowledge, and abilities. The theory notes that employees might gain substantial motivation regardless of the presence of diverse goals and targets (Cao et al., 2013). In this context, there is a positive correlation between efforts and performance of the employees. Moreover, favourable performance is vital in generating desirable reward, thus the need for the managers to understand that the desire to satisfy the need is vital in motivating the employees. Failure to reward the efforts of the employees through appropriate workplace environment and ideal compensation might lead to increased employee turnover. Hierarchy of Needs According to Maslow’s hierarchy of needs theory, there are five progressive categories in relation to employees’ needs. These theories start from the basic physical needs while progressing up to the needs in relation to personal growth and career development. It is essential for the employer to meet each of the levels of the needs concerning employees with the intention of enhancing their commitment to the achievement of the workplace goals and targets. On the other hand, failure of the employer to meet such needs might create lack of fulfilment in relation to the professional life of the employee. In such contexts, the relevant employee might decide to fulfil such needs on their own or embark on another approach to seek a new employer with the intention of enjoying improved opportunities. This relates to the concept of the increased employee turnover. It is the obligation of the management to adopt and implement appropriate mechanisms, which are essential in ensuring that employees satisfy their needs to improve their performance in pursuit of sustainable growth and development. Recommendations The organization should focus on the implementation of diverse actions in the course of overcoming the negative implications of outsourcing, as well as the overall issues concerning high turnover ratio. Leadership Vision and Commitment Business entities and management should have substantive information concerning outsourcing with the reference to designing new processes while assigning necessary resources, as well as importance of the operations. Outsourcing operators should hold substantial one-on-one discussions with the management leaders during the pre-contract stage. It is critical for the senior management, leadership, and supervisors to paint appropriate vision and commitment to appropriate level of management with the intention of achieving the target and goals at the end of the fiscal period (Butler & Callahan, 2014). From this perspective, it is essential to note that outsourcing does not abdicate responsibility for results or outcome. Staff Effectiveness and Efficiency The approach is critical in understanding of the contract by the employees to facilitate increased engagement. The purpose of this recommendation is to enable Haya Water to enhance the future effectiveness, continuity, and mutual understanding while negotiating inclusive of the responsibility of the provider for future delivery. Outsourcing tends to necessitate modification to some roles while creating new ones within the organization of operation. Strategic hiring or contracting of the external staff with substantive experience will enable the institution to complement its operations while adding depth to the management. All employees and contractors are crucial towards the achievement of success in relation to implementation of outsourcing (Butler & Callahan, 2014). The approach will be vital in operating as retention strategies to motivate and challenge employees. Outsourcing clients should obtain the service provider’s opinion while jointly developing approaches, which will be essential in limiting employee turnover both prior to and during the implementation of the approach. This element of change will enable Haya Water to improve effectiveness and efficiency in handling the demands and expectations of the employees. Organizational and Procedural Alignment The client (Haya Water) and the service provider should design critical operational processes and decision rights prior to the implementation of the outsourcing process with the intention of enhancing effectiveness and efficiency. This approach will be vital in the utilization of the existing teams, rather than destruction of the teams on annual basis contributing to increased cases of turnover ratio among employees. From this perspective, this level of change is essential in ensuring that Haya Water initiates and completes the organizational design for the overall retained organization. The approach is valuable in the inclusion of the business case for utilization of effective and efficient management, as well as leadership and the essence of outsourcing to reduce costs of operation while increasing the level of performance (Schmitt, Borzillo, & Probst, 2012). Similarly, the institution should focus on the development and implementation of the retention policies. These policies should vary from reliance on communication and trust to bonuses paid to all or a subset of the staff in relation to their continued employment, as well as the achievement of diverse goals and transfer of knowledge. The retention policies should be essential in addressing both employees and contractors. This is because of the tendency to develop such policies in a manner that should align them with the outsourcing strategies with the obligation of retaining employees in their positions prior to implementation of any aspect of operation. Governance Readiness Governance is one of the critical factors affecting the rate of turnover among employees at the end of the fiscal period. The client and the service provider should focus on the development and integration of a single accountability in either one individual or department in relation to the implementation of outsourcing strategy in the market and industry of engagement. This should relate to the operations of the defined process for the individuals in the course of submitting requests for the interpretation of the contracts, resolving of the issues, and effective communications to correct implementation process. The purpose of governance or leadership in the case of Haya Water should relate to the creation or development of quality environment, which is appropriate for the improvement of operations by the employees (Hoque, 2013). The approach should enable business entity to prioritize its objectives while enhancing effectiveness and efficiency in the service delivery in accordance with the demands and expectations of the customers in the market and industry of operation. Haya Water should consider engaging the service provider during the pre-contract period with the intention of offering visibility in relation to the demand while determining the joint plan to facilitate addressing of the issue in the course of implementation of the strategy. The management and leadership of the institution should focus on the development and defining of the ways to retain employees in pursuit of quality outcome and competitive advantage against major competitors in the market and industry of interest. Change Acceptance and Adoption In this context, it is critical for the organization to design and deliver a comprehensive communication program to all stakeholders experiencing the implications of substantial changes in the management and leadership of the organization. These communication strategies should enable the employees to answer questions about their operations and involvement in pursuit of competitive advantage and the overall goals and targets at the end of the fiscal period. In the first instance, there is need for the communication strategies to target different levels of employees and contractors. In addition, the strategies should be individualized with the intention of exploiting the essence of one-on-one communications and forums to facilitate personalization of the messages and feedback loop. Communication strategies should be continuous, as well as consistent with reference to the demands and expectations of the employees and other relevant stakeholders in pursuit of organizational goals and targets (Swider, Boswell, & Zimmerman, 2011). Moreover, there is need for the business entity to develop and integrate appropriate education and training to all stakeholders experiencing the change in leadership. This relates to training of the employees on the new roles and scope of operation to enable Haya Water to enhance its performance while reducing the cost of operations within the market of operation. Joint training and development programs should be effective in the promotion of mutual understanding and motivation of the employees to offer quality services in accordance with the demands of the customers in different markets. List of References Gilley, K. M., & Rasheed, A. 2000, “Making more by doing less: an analysis of outsourcing and its effects on firm performance.” Journal of management, 26(4), 763-790. Kitcher, B., McCarthy, I. P., Turner, S., & Ridgway, K. 2013, “Understanding the effects of outsourcing: unpacking the total factor productivity variable.” Production Planning & Control, 24(4-5), 308-317. Butler, M. G., & Callahan, C. M. 2014. “Human resource outsourcing: Market and operating performance effects of administrative HR functions.” Journal of Business Research, 67(2), 218-224. Robbins, S. P., & Judge, T. A. 2012. Organizational Behavior 15th Edition. prentice Hall. Cialdini, R. B., Petrova, P. K., Goldstein, N. J., & Team, L. Y. 2012. The hidden costs of organizational dishonesty. Image. Dewettinck, K., & van Ameijde, M. 2011, “Linking leadership empowerment behaviour to employee attitudes and behavioural intentions: Testing the mediating role of psychological empowerment.” Personnel Review, 40(3), 284-305. Swider, B. W., Boswell, W. R., & Zimmerman, R. D. 2011, “Examining the job search– turnover relationship: The role of embeddedness, job satisfaction, and available alternatives.” Journal of applied psychology, 96(2), 432. Schmitt, A., Borzillo, S., & Probst, G. 2012, “Don’t let knowledge walk away: Knowledge retention during employee downsizing.” Management Learning, 43(1), 53-74. Hoque, K. 2013. Human resource management in the hotel industry: Strategy, innovation and performance. Routledge. Baawain, M. S., Sana, A., Al-Yahyai, R., & Al-Sabti, A. 2012, “Sustainable and Beneficial Options for Reusing Treated Wastewater in Muscat, Oman.” In Annual Conference- Canadian Society for Civil Engineering (Vol. 2, pp. 871-880). Cao, H., Jiang, J., Oh, L. B., Li, H., Liao, X., & Chen, Z. 2013. A Maslow's hierarchy of needs analysis of social networking services continuance. Journal of Service Management, 24(2), 170-190. Chu, Y. C. 2010. Structural investigation of the relationship between working satisfaction and employee turnover. Khan, S. A. 2014. The factors affecting employee turnover in an organization: The case of Overseas Pakistanis foundation. African Journal of Business Management, 8(1), 25- 34. Medina, E. 2012. Job Satisfaction and Employee Turnover Intention: What does Organizational Culture Have to Do with It? Read More