Generation and Evaluation of a Range of Alternative Solutions - Essay Example

Generation and Evaluation of a Range of Alternative Solutions 1.Executive Summary This case refers to a situation faced by Emerson Ross & Partners whereby the organization is showing increasingly symptoms of employee dissatisfaction. These symptoms include a high level of employee turnover (40%) which can be said to be highest in the industry. Other symptoms include disgruntled employees, employees not willing to stay back and work and thriving of informal means of communication including rumors, gossip and grapevine. As the consultant of Emerson Ross & Partners, we have come to the conclusion that quite a few problems plague the company including nepotism, closed door communication and break down of communication linkages, high employee turnover and an attempt to establish the same corporate culture and maintain it in all the offices in all the regions and centralized decision making. Tackling all of these problems at once would be difficult, so a step by step process is recommended in which three major problems are addressed: motivation, decision making and communication. The reasons why other seemingly critical problems like nepotism, employee turnover, and extension of organization culture are not addressed are because they are an aftermath of lack of motivation and breakdown of communication. In the end, we have provided recommendations and action plans for Emerson & Ross to follow in order to achieve significant results. The recommendations are primarily focused on employee involvement programs .The recommendations take note that different factors motivate different humans and for this purpose extrinsic motivation and intrinsic motivation measures are provided separately. 2. Problem Identification and Analysis Nepotism:- As it is mentioned in the case, the first problem came into being when Emerson, Ross & Partners after remarkable success decided to expand and get on board more partners. There was a need to fill up six positions. The division of these positions was such that four out of six positions went to outsiders. These included two positions which went to the wives of Peter Emerson and Andrew Ross, who were both professionals but not from the design field. Two positions were aimed at building an in house facility rather than outsourcing and company’s long standing designers were taken on board. Only two positions were awarded to employees from with in the company. At this juncture, the employees would have been evaluating chances of their own promotions. People who deserved these positions must have felt “ripped off” of something that they deserved. Employees beneath them would have experienced exasperation in the form that if positions above us are not empty, what are our chances of growth? The two positions that were retained within the family, made the employees think that the company is using “nepotism”. Based on a survey study, Margaret Y. Padgett, in her article, “Keeping it all in the family: does nepotism in the hiring process really benefit the beneficiary? Deduces the following: Hiring based on nepotism will be believed as less fair than merit based hiring Sub –ordinates feeling that their boss has been hired as a result of nepotism, would view him less competent and effective. Subordinates who believe their supervisor was hired because of nepotism will have lower job satisfaction, lower organizational commitment and less work motivation than subordinates Closed Door communication with the Employees: Australian Journal of Management, in a special issue in 2002, published an interesting study “you didn’t hear it from us but ….towards an understanding of rumor and gossip in organizations” by Grant Michelson & V. Suchitra Moly. The study shows how in the absence of open door formal communication, informal networks thrive and destructive gossip and grapevine find existence. The impact of this is that it serves to increase the level of uncertainty which lead to dissatisfaction and eventually employee turnover. There are two instances of this that can be seen from the case, the first is when a legal matter is settled outside the office and employees are not taken into confidence and all the information they have is through newspapers. The second instance is when the partners are thinking of making Daniel Ho the head of Singapore operations. Daniel Ho,is not informed and all the information he has is the “hype” and “grapevine”. Employee Turnover: A study published in the Academy of Management Journal conducted by Peter J. Home and Angelo J. Kinicki, proves that job dissatisfaction eventually leads to higher employee turnover. The various factors that this report examines are: 1. Job avoidance, unhappy employees who miss work or attend late are more apt to depart. Job avoidance occurs after dissatisfaction has started. 2. Inter role conflict, when work and nonworking role demands collide especially in instances like late sittings at work which impact family life 3. Employment conditions, lucrative conditions lead to greater employee satisfaction. However, this may also include the interaction with peers and colleagues, if the relationships are stressed, the work environment can be seen to be negative. At Emerson Ross & Partners, it can be seen that Factors 1 & 2 job avoidance and inter role conflict are the primary factors behind a high rate of employee turnover. Workplace culture to be implemented at other Regions Another problem can be seen to stem from the fact that the partners want to imitate the exact organizational culture and environment in the new offices at Sydney and Brisbane. Here I would like to mention that even though these three cities are the major cities of Australia, the cultural differences are always present and work environment is different form one city to another. A good example of this could be seen from the various blogs comparing Sydney V’s Melbourne and Brisbane Vs Melbourne. In one of the blog posts, it is mentioned how interacting with women of Melbourne is different from a first time contact with working women of Brisbane and what appeals to the women from these two different cultures. Likewise, the wining, dining and nightlife of these cities are also different. Considering this, the question arises, is it advisable to implement the same organizational culture and maintain it that is being maintained at the Melbourne office. Will this success formula work for all offices worth in Australia and in future, the Asian markets? Centralized Decision Making “Centralization is the degree to which decision-making is concentrated in top management's hands”. In this era, excessive centralization is not being preferred because it leads to a lower motivation level amongst employees. “Decentralized organizations have fewer levels of management with wide spans of control giving employees more freedom of action. All other things being equal, a wide span of control is more efficient because it requires fewer managers”. At Emerson, Ross and Partners, it can be seen that all the decisions are centralized even at offices in other regions. This has led to the unit leaders in those regions to question themselves whether they are even needed since all the decisions are coming from the Melbourne office. Moreover, strategic decisions are also being taken at the Melbourne office with out taking the concerned office into confidence. This one- way decision making is putting the other partners in a defensive and aggressive mood where by they feel they are in effective in their roles and crippled by excessive surveillance. 3. Statement of Major Problems Employee Motivation: It can be seen from the above analysis that Emerson, Ross and Partners are facing quite a few problems. However, the root cause of all problems is the deteriorating motivation levels in the employees. This is infact the reason behind a high rate of employee turnover, grapevine and job dissatisfaction. Centralized Decision Making: Emerson Ross and Partners has grown in the past few years and expansion requires that the span of control should be widened and a higher level of authority should be given to managers and heads of the unit so that they have sufficient authority to fulfill the requirements of their role. Excessive autocratic control over decision making leads to dissatisfaction at the leadership levels in the organization and managers and unit heads feel frustrated. Communication: At Emerson Ross & Partners it can be seen that communication links are failing many times. Apparently it seems that both the partners are difficult and believe only in one- way communication. As a result, the employees are dissatisfied and think that the employers are only concerned about their work being done and not about the employees. 4. Generation and Evaluation of a Range of Alternative Solutions I. Motivation: Even though there are many ways to increase the motivation levels of employees including building satisfaction, genuine appreciation, recognition, inspiration, and compensation. In case of Emerson, Ross & Partners, the most effective ways to increase motivation levels extrinsically through compensation in form of rewards and motivating intrinsically through recognition. Intrinsic Motivation: This can be carried out by appreciating extra effort made by an employee including giving awards for attendance records, making it a point of celebration when any unit achieves their production target or sending cards through email on employees’ birthdays. The advantage of this is that it is relatively in expensive. However, the disadvantage in this is that someone needs to take out time and effort in a very busy workplace, to make it worthwhile. Such activities can not be carried out unless the corporate culture is such that it encourages it. Extrinsic Motivation: This can include raises, performance bonuses, commissions, profit sharing, or any number of "extra benefits" like, automobiles, vacations, or other tangible items purchased and used as rewards. The greatest advantage with this is that it reduces employee turnover not only by increasing work satisfaction but also by raising the pay package of the employee above industry level. The disadvantage of this is that the salary cost to the firm increases. It adds to the fixed costs of the firm. II. Centralized Decision Making: In case of Emerson Ross and Partner, the authority and span of control is concentrated in the hands of Andrew and Ross. For higher level of performance it is required that authority and a certain level of autonomy should be given to the regional offices in Sydney and Brisbane. The greatest advantage of this would be that partners at the decision making level would feel more involved. They would not feel “crippled”. The day to day operations would become more effective and efficient with less time taking procedures. The approvals being sought would be of more strategic nature and fewer in numbers. Moreover, the founding partners would have more time to spare to think strategically rather than be bogged down by routine day to day functions. The disadvantage of shifting authority is that effectiveness of the partners would become less. The second thing that can be done is that if there is a level of dis-trust that the founding partners have for the current managers or prospective managers’ within the organization, they should hire some new managers from out side the organization and shift the authority to them. The shifting of power is necessary in order for the firm to grow. The disadvantage with this strategy is the time and resources taken to train a new manager. Also, it would have a negative impact on the existing employees. III. Communication: Formal Communication in Emerson & Ross has broken down and now is one –sided top to bottom communication. The solution for this could be by increasing higher formal communication in forms of memos, coming from bottom to top with issues, memos, coming from top to bottom informing the employees of whatever issues of strategic nature are being faced by the organization, an in house magazine which will contain articles by the employees as well as messages by the founding partners. This magazine would not only encourage communication but would also provide management the feedback on hat employees think is necessary Also, it would serve as a means to communicated directly with the employees. It can also be a way to recognize employees by including some words of appreciation for higher performing employees. The disadvantage of this would be that excessive two –way communication increases the chances of sub ordinates asking their superiors for undue favors like promotion. 5. Recommendations Considering the above, the following are actions are recommended for Emerson, Ross and Partners: i. Awards for attendance records ii. Letter of appreciation issued if some designer comes up with an exceptional design. An Annual Employees’ celebration organized once a year, preferably after the appraisals, to recognize the efforts of the employees. iii. Birthday Bingo Plan, An e card, sent out by the department head to the employees on their birthdays with a personal note on it. Also, the employees should be given the right to take off from work on their birthday. iv. Performance Bonuses and Cash Rewards are crucial in raising the performance levels of extrinsically motivated employees. v. Fuel Coupons can be issued to the employees who managed to secure new business for the company. vi. Section or Departmental meetings can be conducted to announce that even though the partners Andrew and Ross would be available for matters of crucial importance however, the departmental heads are their to solve any operational problems. Employees should feel free to contact their departmental heads for any problems. This along with allowing greater decision making space will widen the span of control. vii. If in case, new managers are hired the same announcement should be made at their orientation and they should be introduced to the rest of the employees in the capacity of a boss with a greater level of authority. viii. Communication should be enhanced by holding weekly, departmental meetings on work status, updates and any other problems that the employees might be facing. ix. An in-house magazine should be taken out with contributions from the employees. The magazine should include major strategic level announcements, messages from the management, their outlook in future, any other issues facing the organization and important news regarding employees including mention of high performance employees. x. An open door policy at the departmental level should be taken up whereby the employees should be able to contact their manager easily regarding any problems or issues that they might have. 6. Implementation: Action Plans Strategy Head of project Time Frame Cost Motivation Awards for attendance Records Departmental Heads, Partners Immediately after Performance Appraisal, on an annual basis, preferably in August, which is the beginning of the new financial year of the company The cost of Plaque maximum ten people. Cost of One plaque = US $ 50 For ten people it should be US $ 500 Annual Employee Celebration Day The Founding partners Ross & Andrew Immediatelyafter performance appraisal at the beginning of the new financial year. It should be like a new financial years resolution to motivate employees to perform in the upcoming year The cost of this annual day would be= Auditorium(venue) rental= US $ 5,000 for a full day Event Manager Fees US $ 2000 Total cost $ 25,000 Birthday Bingo Plan The HR Manager All the year, the Hr manager would intimate one his staff to keep record of every employee’s birthdays. A birthday alert to be sent to the concerned employees manager. The manager would then send the e card on the birthday of the employee to wish him As such no tangible costs, the over time wages of the Hr staff who are looking after this additional responsibility US $ 100 for a month of extra work in compiling employees birth date data Performance bonuses & Cash rewards The HR Manager, The Departmental Head, The founding Partners Andrew & Ross Annual Employee Celebration Day in August The cost of these would be the amount of cash rewards being given out. This can be a percentage of the contribution that these employees have made to the organization for example if a sales person has brought business worth Us $ 100, 000, 10% US $ 10000 can be given to him as a cash reward. Fuel Coupons Finance Head in collaboration with departmental heads All year round This should be provided to high performing employees. The advantage in this is the providing 120 liters of fuel to any employee lowers their cost of living thus increasing the package size, the cost of this is price of petrol per litre multiplied by 120litres. This is a high value incentive, thus should be provided only to one employee every month. Communication Magazine Marketing Department Monthly basis The cost of this is the publication and printing cost US $ 5000 per month. The rest of the recommendations like orientation meetings and open door communication strategy do not require any monetary investment. 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