MGMT 9340- Organizational Development and Change

Checking the news today I came across a handful of articles relating to lawsuits being brought against companies for unfair treatment in the work place, ranging from harassment to gender discrimination. Electronics maker Toshiba is under fire and facing a class action lawsuit over its pay practices and treatment of women, the Intrepid Museum Foundation is facing a lawsuit from a former employee who claims a supervisor was committing acts that amount to “hazing” and was discriminating based on race.

Toshiba is no stranger to class action lawsuits, though they are generally dealing with them from the consumer side, the same goes with the Intrepid Museum, who faced lawsuits over losing photographs, but as far as I can tell no harassment suits. In cases like this you wonder if this is a systemic problem, as it seems to be in Toshiba, with women making about 80% of what men make in similar positions, and the claim that women are passed over for promotion in favor of less-qualified men, or if it’s the case of “one bad apple” creating a negative atmosphere within a department as it seems to be in the Intrepid case.

Whatever the reason for discrimination or harassment, clearly it needs to be stopped, and while a lawsuit is effective in terms of rewarding damages to the complainants, is it really going to create the change needed within the organizations? Chances are that it will not, unless the companies can also be forced to look at their practices, instead of just making settlements and paying off those people who bring these lawsuits. Toshiba needs to go over hiring and promotion policies, as well as payment, not only to bring it to “fair” levels, but to ensure that they are complaint with employment law. The Intrepid Museum Foundation needs to look at its hiring practices as well, and determine if it wants to keep hiring people like the manager who is harassing his subordinates.

We all deserve to work in workplaces where we get equal pay for equal work and where we are not discriminated against based on the color of our skin, our gender, or any other characteristic. What we deserve, and what we are legally told we should be receiving is not always what we actually end up with, and we must find a way to make this change. Lawsuits and bringing attention to these problems are the first step, but where do we go from here?

References: “Toshiba’s U.S. Unit Faces $100 Million Gender-Discrimination Suit” Chad Bray. The Wall Street Journal. February 1, 2011.

“Harass Suit Hits Intrepid” Erica Orden. The Wall Street Journal. January 29, 2011.

I recently asked Mike Pulliam, Sr. HR Specialist for Carhartt Inc. the questions, “What do you feel is the most pressing current issue in Human Resources/ Human Resource management, why, and what is a possible solution to this problem?” I wasn’t too surprised when one of his answers had a lot ot do with Organizational Development and change. Here is his response:

“In the days when Human Resources was called Personnel, Human Resources did not have a strategic position within many organizations. Human Resources professionals were the high paid administrative assistants to industry. Most organizations did not recognize or act upon how Human Resource initiatives can positively affect the bottom line and the
productivity of the organization. Many times Human Resources simply considered a cost and not a business partner.

Over the past 15 years or so there has been a major shift in most organizations focusing on Key areas within the Human Resource function allowing Human Resource Professionals/leaders to have a seat at the table where the decisions are made. The main areas of focus, depending on industry are Human Capital, Compensation and Benefits, Change Management and Organizational Design. Human Resource initiates affect the bottom line in a variety of ways.

Human Capital is the management of talent within an organization. It deals with professional development, succession planning, strategic recruitment efforts and retaining your high performing employees. All affect the bottom line in one way or another. One example to think about could be to start with strategic recruitment efforts matched with an effective training and development plan partnered with succession planning. This allows the organization to show each employee their value and how the company plans on developing and using them to get the job done at the end of the day. This increased communication, productivity and morale. Lessens retention issues and also empowers employees to work harder with a purpose. High productivity, high level of talent, low retention translates to less bodies and more production, less layers of management and a stronger clear organizational design. All affects the bottom line and how effective
organizations can adjust/adapt to industry changes.

The economic state recently has really put an emphasis on the human capital, Change management and organizational design areas as more companies attempt to work and grow with less. I touched on Human Capital so let’s take a look a Change Management. Organizations that are not changing or adapting are likely not competitive in today’s market. Unfortunately with a lot of change, come issues. People inherently feel change is more of a negative aspect. It has become more important for Human Resources to coach leaders and in turn those leaders coach their employees how to deal with change. Simple ways to positively affect Change is strong communication and planning upfront. Communication what the change is, the purpose and timeline, who will be involved and what the desired outcome will be up front generally creates a strong buy in.

Most organizations struggle with effective planning and communication, two areas
more Human Resources should be considered subject matter experts in. In my organization we are implementing SAP which will change most of the processes within the organization. It is forcing us to rethink the way we do business. Do it this way versus the way you have for 10 years. This will also unfortunately displace a few people because of the skill sets that will be needed after SAP is implemented. But the company is trying to avoid as much hardship as possible by properly planning for change and managing it throughout the process. Human Resources are the guide. We have set up a communications team, set up training sessions to attempt to bring those who will be directly affected up to speed.
We have subject matter expert’s onsite to help with the implementation that teaches our current employee base. We identified process heads from all areas of our organization and have them strictly working on the new processes and collaborating with each other. That way we don’t loose our culture, keep our style even with changes. The organization
has office meetings and news letters communicating all the changes and shares deadlines with the entire organization. These are just some of the steps we have taken to properly manage the change.

This, in my opinion is a pressing issue simply because of the impact Human Resources can have on an organizations performance. We have a strategic business opportunity that we are making apparent.”

I’d like to sincerely thank Mike Pulliam of Carhartt, Inc. for taking the time to answer my questions, and his detailed response. I will respond to his answers and add some comments of my own in the next post on this blog, so stay tuned!

The article “Business: Overstretched, Schumpeter” in the May 22, 2010 issue of the Economist, examines the issue of employees being overworked, with employees “job footprint” increasing by at least 1/3 since the beginning of the recession. The article also explored some survey data that showed that nearly 60% of employees in a recent survey are “considering or actively looking for a new job.” The article went on to suggest some methods of retention, with symbolic rewards, “empowerment,” and measuring achievement by results instead of by hours worked.

This article had interesting data but did not really examine in detail what caused these employees to leave. Looking at a second article from a scholarly source, “Job Attitudes as Predictor of Employee Turnover among Stayers and Leavers/Hoppers” in the Journal of Management Research, authors Shahnawaz and Jafri explore the “relationship between job attitudes and employee turnover” in two types of employee: Stayers, and Leavers, in New Dehli. While they are of the belief that the recent recession has caused turnover to stop being a major issue, they do point out some interesting ideas on employee satisfaction and its relation to turnover.

Their study shows that there is a strong correlation to employee attitudes such as job satisfaction and organizational commitment and the likelihood that an employee would be a “leaver” or a “stayer.” Those employees who expressed a greater level of satisfaction with their work were more likely to stay, while those who found less value or were not committed to the organization, or felt the organization was not committed to them, were more likely to become “leavers”.

This data backs up Schumpeter’s assumptions regarding ways to make employees want to stay. By making employees feel wanted, and satisfied with their work, they will be more likely to stay with a company, even as the economy grows again. Employee retention may not seem like a huge problem now, as so many people are out of work, but as the economy expands again, each business will need to work to retain their “high performing” employees, and with 60% of them thinking of leaving already, it is time to start putting in to effect policies that make them want to stay such as work-sharing or teamwork as a way to even out the job load and setting high performers in charge of distributing tasks, giving them the ability those which they would like, and enhancing their job satisfaction and organizational commitment.

References:

Implementing a change in an organization, be it administrative, technical or cultural is often met with resistance. When change is implemented there may be a drop in levels of commitment and performance, and employees are likely to resist change that seems to be handed down from above, with no regard to their input or ideas. By not engaging employees in the changes they will have to work with, it is almost guaranteeing failure on some level.

This article gives some approaches to managing change within an organization through collaboration including “providing a change framework and managing the process; and creating the capacity for change through development of individual and organizational capabilities.” It goes on to list behaviors and practices that “attract, generate edge and tension, contain, and create movement.”

The article then uses models of change from GE and Readers Digest to further the point, pointing out GE’s Leadership, Innovation and Growth (LIG) program which includes a four-day program that helped leaders change their roles and behaviors to achieve their overall objectives, which created a collaborative framework for change versus Readers Digest’s chief executive Mary Berner’s approach to change through complete control, which, while positively affecting revenue, has negatively affected her employees.

I feel that though the Reader’s Digest approach seems to be working in the short term, GE’s model has lead to higher growth, removal of barriers, and a happier workforce which feels their needs and concerns are being addressed. I feel that the article could have supplied more numbers on GE’s success, to contrast with Readers Digest, but the article does suggest that the model has worked well for GE and leads me to feel that a collaborative effort is best for implementing positive changes within an organization.

One principle of human behavior that I feel connects with this article and is important to effectively manage HR issues is Maslow’s Hierarchy of Needs. This states that each person has five basic needs: Physiological; Safety; Love, Affection and Belongingness; Esteem and; Self-Actualization. This principle has come up in many psychology classes, as well as my organizational development classes.

By realizing that people have these needs, an organization can figure out how to fill them, and help ensure well rounded employees. Physiological and Safety needs are often addressed simply by having gainful employment, an open company culture which values teamwork and creates a positive work atmosphere takes the third level, and esteem and self-actualization can be realized through doing meaningful work, being respected for their ideas and contributions, and respecting others in turn.

Employing GE’s framework of collaborative change management helps to keep meeting their employee’s needs, especially during the instability of change. By letting employees know that they have the support that they need, that their ideas are being listened to, and that they are valued for their contributions, an employer can minimize discomfort during a period of change and maximize employee satisfaction and productivity within the new framework.

Reference: The way to manage change; GE’s team based approach. Human Resource Management International Digest. Bradford: 2009. Vol. 17, Iss. 3; pg. 16