© 2003 Prentice Hall, Inc.8-1

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Chapter 8

Managing Strategic Organizational Renewal

© 2003 Prentice Hall, Inc.8-2

Chapter 8 Outline

HR’S role in organizational change Managing organizational change and

development What to change

Strategic change Cultural change Structural change Changes in people, attitudes, and skills Technological change

Leading change: Lewin’s process

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Chapter 8 Outline

Managing organizational change and development A ten-step change process Using organizational development

Human process applicationsTechnostructural interventionsHuman resource management applicationsStrategic applications

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Chapter 8 Outline

Instituting total quality management programs What is quality? Total quality management programs HR’s role in quality management

High-performance insight HR and Six Sigma HR and Baldrige awards HR and ISO 9000

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Chapter 8 Outline

Creating team-based organizations The nature of self-directed teams and worker

empowerment How HR helps to build productive teams

High-performance insightStrategic HR

HR and employee involvement programs

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Chapter 8 Outline

HR and business process reengineering What is business process reengineering? HR’s role in reengineering processes

Building teamsRedesigning compensationRedesigning the work itselfMoving from controlled to empowered jobs

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Chapter 8 Outline

Flexible work arrangements Flextime and compressed workweeks

Conditions for successCompressed workweeksResearch insight

Other flexible work arrangements HR.Net

Summary

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After Studying This Chapter You Should Be Able To:

Explain and illustrate the steps in the change process

Reduce employee resistance to change Describe the basic process for managing

organizational change & development Give specific examples of HR’s role in

total quality management programs

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After Studying This Chapter You Should Be Able To:

Show how companies use HR methods to create team-based organizations

Discuss the critical role of HR in business process reengineering

More effectively implement an organizational change

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Strategic Overview

Select, train, and organize employees Previously focused on the training and

management development methods Concepts and skills you need to more

successfully implement organizational changes

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Managing Change – What Do We Change?

Strategic change – a company’s strategy, mission and vision

Cultural change – a company’s shared values and aims

Structural change – reorganization Developmental change – people’s

attitudes and skills Technological change – work methods

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Cultural Change

Five ways to achieve cultural changesMake it clear to employees what you pay attention to,

measure, & control

React appropriately to critical incidents & organizational crises

Deliberately role-model, teach & coach the values you want to emphasize

Communicate priorities by how you allocate rewards & status

HR procedures & criteria consistent with values you hold

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Technological Change

Technology is a powerful engine of change Creates change by modifying the work methods

organizations use to do tasks Results in reengineering work process Must apply HR methods:

Teamwork New job descriptions Boosting skill & knowledge levels More flexible work arrangements

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Lewin’s Process Leading Change

3 steps Unfreezing Moving Refreezing

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Ten-step Change Process

Urgency

Mobilizecommitment

Create a guiding coalition

Develop a shared vision

Communicatethat vision

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Ten-step Change Process

Help makethe change

Generateshort-term wins

Consolidategains

Anchor new waysin culture

Monitor progress& adjust vision

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An Example of ChangePECO Energy

Visioning event List five critical processes Town hall meetings with all HR groups Resulted in changes to five processes Organizational design event Implementation

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Using OrganizationalDevelopment

Organizational development is a special approach to organizational change in which the employees themselves formulate the change that’s required and implement it, often with the assistance of a trained consultant

Definition

Definition

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Four DistinguishingCharacteristics of OD

1. Action research

2. Behavioral science knowledge

3. Attitudes, values and beliefs

4. Changes organization in a direction

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Four Types of OD Applications

Human process applications Technostructural interventions Human resource management

applications Strategic applications

OD interventions& organizational levels

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Human Process Applications

Aim first at improving human relations skills

Provide insights and skills required to better analyze behaviors

A facilitator uses survey research to solve problems & plan action

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Human Process Applications

Sensitivity, laboratory, or T-group training are used minimally today

Team building can improve effectiveness

Confrontation meetings resolve misconceptions

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Using OD to Increase Productivity

Technostructural interventions HR management applications use action

research Strategic applications harmonize

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TotalQualityManagement

Total quality management (TQM) is a type of program aimed at maximizing customer satisfaction through continuous improvements

Zero defects

Continuousimprovement

6

Kaizen

Definition

Definition

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Total Quality Management Programs

Quality is the totality of features & characteristics of a product or service that bear on its ability to satisfy given needs

Quality measures how well a product or services meets a customers needs

ISO 9000 provides written quality standards to which products must comply

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HR’s Role in Quality Management - Insight

Friendly phone staff is key to customer service at Lands’ end

Result of extensive screening & training Must love to talk All aspects of phone etiquette trained Results in fast, friendly service

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6 & Baldrige Awards

6 Sigma aims for 3.4 defects per million processes

To achieve this can be intense but very rewarding

Baldrige awards determined by a board of quality experts in 7 areas

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Creating Team Based Organizations

82% of U.S. Companies use teams to perform some tasks

Self-directed teams have several distinguishing characteristics: Perform naturally interdependent tasks Use consensus decision making Team’s members perform enriched jobs Teams are also highly trained Employers empower the teams & individual

members

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Entrepreneurs + HR - Empowerment

Time Vision finds employee empowerment works well in cases that directly involve employees

Team investigates which retirement vehicle to use & has responsibility to switch to it

Finds empowerment requires right employee and correct training

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How to Build Productive Teams

Establish demanding performance standards Select members for attitudes and skills Train leaders to “coach,” not “boss” Use positive feedback Select those who like teamwork Train, train, and train some more Cross-train for flexibility

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Insight – Product Improvement Teams

Need to beproactive

Identify & correct problems

Roadmaps guideprogress

Achieve continuousimprovement

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Strategic HR – Signicast Uses a Team Approach

Employeesuggestions

Implementideas

Validate withemployees

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Employee Involvement Programs

An employee involvement program, a team activity, is any formal program that lets employees participate in formulating important work decisions or in supervising their own work activities

Managers rank them as great productivity boosters

Definition

Definition

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How to Create a Culture of Involvement & Participation

Educate all regarding business plans Devote resources to build the

necessary HR systems Involve unions as partners Involve in designing and

implementing new systems Train in new technologies

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How to Create a Culture of Involvement & Participation

Promote employees’ continuous communication

Involve employees in assessing effects of new technology

Use telecommunications

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Extending Decision Making Abroad

Prior to extending the work team approach abroad focus on these goals: Build trust Be aware of cultural differences Create blended strategies

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Business Process Reengineering (BPR)

“The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed.” … Quote by experts Michael hammer & James Champy

“Why do we do what we do?”

Why do we do it the way we do?”

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Steps in BPR

Several jobs combined into 1

Workers makemore decisions

Reduce checks, controls to boost

efficiency

“Case manager”approach

Check out

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HR’s Role in Reengineering Process

Help build commitment Promote team building Redesign compensation Redesign the work itself Create empowered jobs

Visit

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Flexible Work Arrangements

Organizational renewal does not require massive change

Flextime allows workers to build their day around core midday hours

Compressed workweeks offer longer workdays but fewer of them

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% employees on flextime13%

19%

34%

34%

Manual laborAdministrativeSalespeopleExecutive

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How to Make Flextime Successful

Use supervisory indoctrination programs Most successful with clerical,

professional, & managerial jobs Most flexible programs are successful Use a project director A pilot program may be needed

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Discussion – How Effective Are Flexible Work Programs?

What do you think? Do flextime and compressed scheduling

help or hurt workers? What about a 12- hour shift that Dupont

tried at its plants in Texas? Can you think of any other flexible work

options?

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More Flexibility

Job sharing – two or more people share a single full time job

Work sharing – a temporary group work-hour reduction during economic slowdowns

Work from home or telecommuting – using the internet to “phone in” your work

© 2003 Prentice Hall, Inc.8-45

Telecommuting

You can’t be a hermit when you telecommute

Its all about staying connected & in touch by using PC’s & laptops, text pagers, cell phones, e-mail, voice & fax messages, & PDA’s

© 2003 Prentice Hall, Inc.8-46

Summary of Chapter 8

Managers lead by changing strategy, culture, structure, tasks, technologies, or attitudes

Use a ten-step process for organizational change

We saw a number of OD applications to promote change

© 2003 Prentice Hall, Inc.8-47

Summary of Chapter 8

Quality is key to success – use TQM to achieve it

Teamwork or super-teams boost productivity

Reengineering results in fundamental changes

The most flexible work arrangements provide the greatest benefit