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  1. 1. Employee Relations and Managing Change ‘Any modern enterprise having a fear to change never survives today!’ Presented By: Mrs. Preeti Sarda, Asst.Prof, MCGCBM
  2. 2. According to Compact Oxford English Dictionary: Change can be defined in many ways: make or become different, move from one to another or move from one situation or system to another. Manage, on the other hand is defined as: be in charge of, supervise/administer/regulate and succeed despite difficulties. Various fields of thought exist on change management but the consensus seems to be that change management refers to three significant areas –, 1. Organization 2. People (an organized approach to change in human beings, teams, groups, organizations and societies) and 3. Engineering (a process in systems engineering) Engineers focus on the former while psychologists focus on the human aspect of change.
  3. 3. CHANGE MANAGEMENT Change Management is a systematic activity to prepare an organization for and implement ongoing environmental changes in a business operation. Change Management is about innovative strategies and speedy activities to deal with variable and sudden changes. In addition, the current definition of Change Management can contain individual change management models to address the people side of change. Generally, change management can address the large part of a business operation from planning to controlling; i.e. organization and governance structure, product development, customer satisfaction etc.
  4. 4. Successful Change Management not only improves the governance structure which needs to be changed, but also raises productivity up to the maximum level by modifying and complementing the existing organization system. Through these processes, the customer satisfaction can be done with a good image and benefit of a business enterprise. Change Management is not only applicable to the organizational structure, but also reliable to in and outside factors of the organization such as maintaining a competitive business strategy and developing a nice product. There are several Management Innovation programs to deal with change for any modern company, such as: 6-Sigma, TQM (Total Quality Management), TPM (Total Productive Maintenance), ERP (Enterprise Resource Planning), etc.
  5. 5. Eight Steps of Change Process by John P. Kotter Harvard Business School Professor John P. Kotter is very well-known in the field of Change and Leadership. There is hardly anyone who can address Change Management better than John Kotter since he published 'The New Rules' in 1995. John Kotter has been engaged in Change Management procedure of over a hundred companies. From Ford Motor Company to Landmark Communications, he has lots of enterprise lists as his clients and customers. Through many business cases and experiences, he has a conclusion that there will be enough time to get Change Management done. In one of his publications, The Heart of Change (2002), he introduced eight steps of effective large scale change effort. When you open the book, you can find out the statement as follows; “People change what they do less because they are given analysis that shifts their thinking than because they are shown a truth that influences their feelings.” John Kotter, 2002, p.1 Apparently, there is no perfect man or woman who can free from the mistakes in Change Management. Thus, we need to take into the consideration the eight step change procedure.
  6. 6. 1. Increase Urgency 2. Build the Guiding Team 3. Get the Vision 4. Communicate for Buy In 5. Empower Action 6. Create Short-Term Wins 7. Don't Let Up 8. Make Change Stick Through each of the eight steps, you can find out his way to accomplish a change behavior
  7. 7. The main concept is 'SEE,' 'FEEL,' and 'CHANGE.' The detailed explanation is described in the figure below;
  8. 8. Case Study – Learning Elementary School Case (Haddad, 2002, pg.2) Background - A school district, keen to use technology as the medium of instruction, planned to equip a newly constructed elementary school (which will be referred by the pseudonym “Learning”) with state of-the- art computer equipments. In order to implement the plan before start of classes, the superintendent of the school district and the principle of the school bypassed the technology-curriculum committee and teacher’s union and decided to buy 180 laptops which can be arranged on 36 mobile carts that could be wheeled easily to classrooms as required. They chose the equipments based on their experience at a conference which both attended. Their plan was that the new laptops and mobile carts would meet the need for an additional computer laboratory and more than one class can have computer access at the same time.
  9. 9. Problem – This well-intentioned but top-down decision turned out to be quite disastrous and unproductive. The laptops were purchased without wireless cards and attaching wires to each of the machine generated tripping hazards. The machines lacked floppy disk drives and as a result students needed to save their work to the network rather than to disk. This prevented them from doing additional work on class assignments and projects at home. The resolution of the laptop screens were poor and the Learning school authority received numerous complaints from students about frequent breakdowns of the newly purchased equipment. This incident also had a long time effect – students were fast losing confidence in computers. Many teachers complained that a second computer laboratory would have been more beneficial and they quietly protested against the decision by staying away deliberately from the laptops. Later, the school authority decided to add wireless cards in the laptops and this increased the budget assigned for the purpose. Breakdowns continued to occur and were costly to afford after the warranty period was over.
  10. 10. Analysis – The decision to buy the laptops was made in haste. A decision supported by the committee would have been more fruitful and hassle-free. Most importantly, teachers and students were not included in the decision and as a result the equipment did not meet their needs as desired. Training of using the new equipment was not taken into consideration, therefore, teacher and student would easily lose confidence and reluctant to use it when breakdown occurs. As the machine breakdown occurs so frequently, contractors should be contacted as soon as possible to solve the problems or replace the laptops within the warranty period.
  11. 11. Iceberg Model of Change Management The Wilfried Kruger Change Management Iceberg depicts dealing with barriers in change management. Kruger believes that managers usually focus on issue management. This includes cost, quality and time, which is the tip of the iceberg and above the water’s surface. But there are two more important dimensions in change management and implementation management that are below the surface. These are the management of perceptions and beliefs, and of powers and politics management. The iceberg model also highlights the people involved in change management.
  12. 12. Opponents are generally negative towards change and provide the heaviest resistance in change efforts. Controlling or changing these people is achievable through effective management of role-perceptions and beliefs. Promoters are generally positive towards change and will provide the support you need in change efforts. Hidden Opponents are generally negative towards change and will provide resistance, but will act “positive” towards change. Identifying these people and changing their standpoint through effective management of role-perceptions and beliefs is necessary to avoid having your efforts undermined. Potential Promoters are generally positive towards change, but are hesitant towards fully supporting the change. Reassuring these people through more support and providing evidence of the benefits of change will help make them promoters. Moreover, this model emphasizes that issue management is very superficial in that it can only reach the acceptance level below the surface. Kruger believes true that change management comes from both the interpersonal and behavioral dimension and the normative and cultural dimension. Furthermore, change management is exposed to politics management and to the management of perceptions and beliefs.
  13. 13. Greiner’s model The stages of Greiner‟s model are grounded on elements that are specific to successful changes, so that we will not describe them in detail now. Here are the 6 stages: 1. Pressure upon leaders 2. Intervention and redirection 3. Diagnosis and acceptance of problems 4. Innovation and finding new solutions 5. Experimenting and testing the solutions 6. Stabilizing the new situation by getting positive results
  14. 14. MANAGING CHANGE To manage change effectively you need to: 1) Communicate and Consult: • develop an internal communications strategy to put across your key messages • talk to your internal and external customers directly through targeted communications • involve everyone in making decisions through effective and timely consultation to: – improve your employees’ understanding of the need for change and gain their commitment – identify and address employees’ concerns – tap into the knowledge and creativity of your staff.
  15. 15. 2) Know your legal duties: particularly around issues such as: • contracts of employment • redundancies • lay-offs • flexible working • the Information and Consultation of Employees regulations (ICE). 3) Understand the emotional journey: that every individual goes through when faced with change – from hearing the news right through to coming to terms with the after effects. This journey, as described by JM Fisher, typically involves feeling: • anxiety – can I cope? • happiness – at last something is going to change! • fear – what impact will the change have on me? • threat – the problem is bigger than I thought • guilt – are the past failings down to me? • disillusionment – this is not for me so I’m leaving • acceptance – maybe things won’t be so bad • excitement – I’m looking forward to the challenge.
  16. 16. 4) Demonstrate strong leadership, especially in a difficult economic climate, by: • creating a vision for the future • linking individual and teams goals to organizational targets • setting an example • walking the floor and being seen • creating an organizational culture based on openness and trust. 5) Engage with employees to: • get the best out of them in terms of performance • cement their commitment to the organization • help line managers trigger positive discretionary behavior 6) Use problem-solving techniques such as: • Force Field Analysis • SWOT Analysis • Cause And Effect Analysis • Root Cause Analysis • Brainstorming • Teambuilding
  17. 17. TECHNOLOGICAL CHANGES  Technology is defined as the sum of knowledge of the means and methods of producing goods and services.  Technology is an instrument of development. Affects various aspects of economic and social life.  There is an important relationship between investment and technological change which runs in both directions  Investment can form the basis of improvements in technology while improved technology which brings about new ways of producing goods will lead to greater investment.
  18. 18. Technological change  Introduction of new products  Change in methods and organization of production  Changes in the quality of resources and products  New ways of distributing the products and new ways of storing and disseminating information
  19. 19. Types of Technological Changes Scientific Management Change in location of plants Shift in product demand Change in machinery Automation
  20. 20. Rationalization & Automation Rationalization implies a basic change in the structure and control of industrial activities. Its techniques can be applied to methods, material and men. In Automation, technology itself controls the operations.The machine provides data from its operations and feeds it back to its own controls which governs the production process.
  21. 21. Impact of Technological Changes  Employment issues- business alliances, E-recruitment, Jobs become Intellectual  Management strategy- Corporate restructuring, Planning for change well in advance, Participation of employees  Trade Union response- Fear of losing jobs, Fear of losing comfort in an organisation
  22. 22. Limits to Technological Change Technological change has effects on:  The economy and  The environment  High levels of unemployment  The exhaustion of natural resources.
  23. 23. Employee Relations  Maintaining healthy employee relations in an organization is a pre- requisite for organizational success.  Strong employee relations are required for high productivity and human satisfaction.  Employee relations generally deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario.  Strong employee relation depends upon healthy and safe work environment, cent percent involvement and commitment of all employees, incentives for employee motivation, and effective communication system in the organization.  Healthy employee relations lead to more efficient, motivated and productive employees which further lead to increase in sales level.  Good employee relation signifies that employees should feel positive about their identity, their job as well as about being a part of such a great organization.
  24. 24. Instances of such circumstances are as follows- •When the employees do not behave as per accepted norms of behaviour, it is known as employee indiscipline. Absenteeism, change in employee’s behaviour, slow performance and grievances are all forms of employee indiscipline. Thus, when the employees fail to meet management expectations in terms of standard performance and behaviour, it is referred to as indiscipline. In such cases, it must be ensured by the management that steps should be taken so that employee’s behaviour is in conformity with the managerial expectations. •Similarly, the employees also expect from the management to provide them a safe working environment, fair treatment, proper incentives, participation in decisions, and needs satisfaction. The failure on part of management to meet these expectations is termed as employee grievance.
  25. 25. •When the employees fail to meet their own expectations whether in terms of personal goals, career goals, performance, self-respect, etc it is referred to as employee stress. Excessive workload, insufficient workload, peer pressure, excessive/unreasonable use of authority by the management, lack of promotional opportunities, nature of job, etc all again lead to employee stress. All the above mentioned organizational factors influencing employees relation must be carefully tackled. An optimistic approach to strengthen disciplinary culture rooted on shared norms of employees should be adopted. An effective grievance redressal system should be there. Stress management strategies should be followed in the organization.
  26. 26. Improving Employee Relations Employee relations must be strengthened in an organization. To do so, following points must be taken care of:- 1. Employee has expectation of fair and just treatment by the management. Thus, management must treat all employees as individuals and must treat them in a fair manner. Employee favoritism should be avoided. 2. Do not make the employees’ job monotonous. Keep it interesting. Make it more challenging. This can be done by assigning employees greater responsibilities or indulging them in training programmes. 3. Maintain a continuous interaction with the employees. Keep them updated about company’s policies, procedures and decisions. Keep the employees well-informed. Informed employees will make sound decisions and will remain motivated and productive. Also, they will feel as a member of organizational family in this manner.
  27. 27. 4.Employees must be rewarded and appreciated for a well-done job or for achieving/over-meeting their targets. This will boost them and they will work together as a team. 5.Encourage employee feedback. This feedback will make the employers aware of the concerns of employees, and their views about “you” as an employer. 6.Give the employees competitive salary. They should be fairly paid for their talents, skills and competencies. 7.Be friendly but not over-friendly with the employees. Build a good rapport with the employee. The employee should feel comfortable with the manager/supervisor rather than feeling scared.
  28. 28. Strategies to Improve Employee Relations For the organization to perform better it is important that the employees are comfortable with each other, share a good rapport and work in close coordination towards a common objective.  People feel responsible and motivated to do good work and enjoy their work rather than taking it as a burden. It is important that the management promotes healthy employee relations at workplace to extract the best out of each individual. Competition is essential but it should not promote negativity or any kind of enmity among the employees.
  29. 29. Let us go through some steps and strategies for a healthy employee relationship in the organization. Involve your team members: They should feel important and indispensable for the organization. An individual must be assigned responsibilities according to their interests and responsibilities. Don’t impose work on them. Let them willingly accept challenges. They must enjoy whatever they do otherwise they would end up fighting with their superiors and fellow workers. Encourage individuals to share their work with each other: This way people tend to talk with each other more, discuss things among themselves and thus the comfort level increases. Let them work together and take decisions on their own. A team leader should intervene only in extreme cases of conflicts and severe misunderstandings.
  30. 30. Assign them targets and ask all your team members to contribute equally and achieve the target within the desired time frame. Motivate them to work in groups. This way employees have no other choice than to trust their fellow workers and take each other’s help as well. An employee must have the liberty to express his ideas and all of them should sit together to decide on something which would be beneficial to all. One should try his level best that all the employees must have their lunch together at the same time. Half an hour to forty five minutes must be dedicated to lunch and one should not discuss work during lunch time. There are other topics as well. Discuss movies, sports, shopping or any other thing under the sun. There will be no harm if the employees go out together once in a while for get together, picnics or shopping. Ask them to bring their family members as well.
  31. 31. Encourage effective communication among the team members. It has been observed that poor communication leads to confusions and misunderstandings. The communication has to be precise and relevant. One should not play with words and be very specific about his expectations from his fellow workers as well as the organization. If you are not very happy with your colleague’s proposal, don’t keep things to yourself. Voice your opinion and do express your displeasure. It will definitely prevent a conflict among employees later and improve the relations among them. Be straightforward. Don’t pretend things just to please your boss. If you find anything unacceptable, discuss with your superior but in a polite way. Written modes of communication must be promoted among the employees for better transparency. Verbal communication is not as reliable as written communication. The agendas, minutes of the meeting, important issues must be circulated among all through emails. Make sure that all the related employees are in the loop. Don’t communicate individually with any of the employees as the other one might feel neglected and left out.
  32. 32. Morning meeting is another effective way to improve the relation among the employees. Let everyone come together on a common platform and discuss whatever issues they have. The meetings must not be too formal. Allow the team members to bring their cups of coffee. Start your day with a positive mind. Greet everyone with a warm smile. Exchange greetings and compliments. If any of your team member is not in a pleasant mood, do take the initiative and ask what is wrong with him. Try your level best to provide him a solution. Organize birthday parties, Christmas parties, New Year parties etc. at the workplace. These small initiatives actually go a long way in strengthening the bond among the employees. Ask all of them to decorate the office, their work stations and make all the necessary arrangements themselves. You will actually be surprised to find out that everyone would be ready with some thing or the other. Employees would actually take the initiative and organize things on their own. Let them enjoy with each other and have fun.
  33. 33. Praise the individual if he has done something exceptionally well. Reward him suitably. The names of the top performers must be displayed on the notice boards for others to draw inspiration from them. Encourage everyone to perform well to live up to the expectations of the superiors as well as the management. A healthy relation among employees promotes a positive ambience at the work place and employees feel happy and satisfied at work. They look forward to going to office daily and also work hard to realize their team’s as well as organization’s goals.
  34. 34. Downsizing  Downsizing or layoffs is the term used to refer to the practice of firing employees for various reasons in organizations.  These reasons can range from poor performance by the employees, the poor performance of the organizations in economic downturns that necessitates laying off employees to save costs, and for disciplinary reasons.  There are other reasons as well which include the shuttering or the closing of the organization.  Downsizing is a painful process for both the employees and the organization and more for the former. Therefore, the Human Resources Function must handle downsizing with utmost care and caution and with sensitivity.
  35. 35. Payment of Compensation For instance, when laying off employees, it is usually the case that the organization pays severance packages and some additional pay to compensate the employee for the sudden event or occurrence of losing his or her job. Of course, when employees are laid off for disciplinary reasons, there is usually no severance pay since the employee has violated the code of conduct and hence, is not liable for any compensation. Having said that, it must also be noted that the law mandates payment of compensation in the other forms of downsizing. However, the reality is that very few companies follow the law because in gloomy economic conditions, even the government which is eager to please the businesses does not really enforce the laws.
  36. 36. Policies and Procedures to Handle Downsizing In addition, when the employee is informed that he or she is going to be laid off, most organizations have set policies and procedures to handle such occurrences. It is usually the case that the employee is called to a meeting with his or her immediate manager and the HR manager along with additional people depending on the rank and the role of the employee. This meeting is usually tricky for both the employee and the other attendees since breaking bad news is painful as well as traumatic for the employee. Downsizings must be Handled with Care Downsizings have to be handled with utmost sensitivity wherein the reasons for the layoffs are explained clearly and the employee is given a sympathetic hearing. Moreover, the organization must also take into account the fact that the employee can sue the company if the reasons are not convincing enough.
  37. 37. Lack of Communication might Lead to Good Employees Leaving as Well Downsizing can also lead to exceptional employees leaving the company in case the organization does not handle the process well.  It is the fact that if layoffs are being announced or there are rumors circulating about them, many employees start to feel jittery and begin looking out for other jobs. If the organization does not handle layoffs properly, it is at the risk of losing even those who are not likely to be downsized. This is because these employees who are good performers would decide that they would anyway get jobs elsewhere and instead of sticking around in an organization that is on the verge of economic debilitation, they might as well move jobs. Therefore, any organization that is planning to downsize must approach the same in a calculated and careful manner.
  38. 38. Downsizing due to Poor Performance of the Employee(s) Downsizing related to poor performance of the employees, it must be mentioned that unless they are given sufficient notice that they have to pull up their socks and ramp up their performance, the organization might not have sufficient grounds for laying them off. All organizations have something called a performance improvement plan wherein the employees whose performance is suspect are told about the same and their performance put on watch. During this period, they are monitored by their immediate managers along with the HR manager and if they do not improve even after the mandatory watch period is over, they are then let go with the reasons for the same being stated clearly and in writing.
  39. 39. Organizations have to be Humane but Firm Downsizing is very painful to the employees since their source of livelihood is being taken away from them. Especially in these gloomy economic times when everyone wants job security and assured income, downsizing can be extremely traumatic to the employees. Therefore, it is indeed the case that a humane approach must be adopted so that the employees do not feel that they have been treated unfairly. Having said that, no organization exists for charity and hence, they too need to be firm on when to downsize and whom to downsize. These are complex challenges that need creative and humane approaches and this is where the personality of the HR manager comes into question since he or she must be responsible and balance the competing needs of the employee and the organization.
  40. 40. Change Management During Downsizing  Downsizing introduces many challenges and changes into an organization. Those employees who remain may have feelings of unease, anger or discomfort due to the experience. It is natural for employees to feel uncomfortable, offended or afraid. After all, not only will many people miss their co-workers who are now gone, but they may also fear that another round of downsizing could be coming in the future and they may worry that they might be next. These concerns can lead to high levels of stress, increased conflict between team members and even employees leaving the organization to look for opportunities elsewhere.
  41. 41. Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to: 1) Evaluate the overall impact of downsizing: •The total cost of downsizing—including both financial and non-financial costs—must be taken into account. •Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the appropriate manpower to accelerate out of the downturn. • Investing in areas customers care about—while competitors are cutting back—helps position the company to take or sustain the lead once conditions improve. •The value created from downsizing should exceed the cost of lower employee morale and potential damage to the company's reputation.
  42. 42. 2) Develop a smooth downsizing process: •It is crucial that managers invest aggressively in upfront planning for the job cuts. • A company typically forms a committee to determine the appropriate level of downsizing and creates a process that takes into account the best interests of the company and the shareholders. •Other important activities are training managers to conduct layoffs and assisting former employees in their job searches.
  43. 43. Companies use Downsizing to: 1. Reduce cost 2. Right size resources relative to market demand 3. Signal that the company is taking proactive steps to adjust to changing business needs 4. Take advantage of cost synergies after a merger 5. Release the least-productive resources
  44. 44. 7 Key Factors for Successful Change Management •Businesses change – it’s the nature of a competitive marketplace. •Regardless of the industry in which an organisation operates, at some point it will likely have to undergo some level of change in order to position itself as a market leader. •Change management in business can be a complicated issue. •Major adjustments to the way in which a business operates or provides its products and services must be carefully managed. •There are several different ways to manage change in the workplace – but here are just a few key tips that the experts would recommend if you’re looking to lead your business through a change process.
  45. 45. 1) Plan: Before undertaking any change, a business needs to have a clear and valid reason and mission for the change process. Make sure any undertaking, no matter its size or impact, is realistic, measureable and achievable – there is no use in creating a difficult situation if there is no significant gain to be made for the organization or its stakeholders. Start with the end in mind – make plans according to your overall goals, and ensure that all staff are also able to see exactly where an organization is heading throughout a change process. A solid direction makes employees more likely to accept and embrace changes.
  46. 46. 2) Communicate: The most important factor in changing anything within a business, small or large, is to communicate the change, and its many factors, to the key stakeholders within the organization – staff, first and foremost, but also outside stakeholders like shareholders and consumers. There is no perfect or fool-proof way to communicate change within a business setting. But there are a few rules to remember, such as: Keep it simple – avoid using unnecessary jargon and buzz phrases. Make it clear to staff and stakeholders what it is that will change in their day-to-day involvement with the business. Be open and prompt – if announcements are delayed, the likelihood of incorrect rumors or leaks rises. Ensure that all staff are able to access information from a reliable and valid source. Monitor quantity vs. quality – the old adage “you can’t communicate too much” is often found in business, but it’s important to ensure that whatever is communicated to staff is substantial and of interest to the audience. Insignificant information is just likely to frustrate an organisation’s employees and stakeholders. Open communication channels – ensure that all stakeholders have several avenues where they can ask questions, voice concerns or make recommendations. Make the leadership team available and present.
  47. 47. 3) Integrate: If it’s possible for the change program of your business to be adjusted, then open up your plans for consultation with your stakeholder group. The staff of an organisation are the people who work with a particular product, or encounter customers, or provide services – whatever the case may be for your organisation. Because they have direct experience, they are likely to have valuable information and suggestions to offer to a proposed change. If the change in an organisation is related to a merger or acquisition, or something equally beyond the control of a manager, then it is best to ensure that staff and stakeholders do not feel excluded from the change process.
  48. 48. 4) Motivate: One of the biggest challenges with change management processes comes in the form of motivation. How are you meant to motivate staff when there are major changes occurring within an organization? Unfortunately, some changes are not necessarily beneficial – in tough economic changes, occurrences like mergers and downsizing can create an unmotivated environment in some businesses. Ensure that your organization finds a way to connect with its staff and provide motivation for staff to continue working and contributing to the business. 5) Be Confident: Staff are often guilty of reverting to old ways throughout a change process – both effective and ineffective. A change process needs to be organisation wide, so have faith in the changes being implemented and show your trust by limiting opportunities for staff to revert to their old habits. If your organisation is changing a procedure, then ensure that the new procedure is followed closely. If your business is implementing a new computer system, ensure that there is minimal access to the previous system. If your company is changing attitudes across the organisation, create a system that can catch any instances of old attitudes.
  49. 49. 6) Manage the Workload: Change can bring an increased workload in many organizations, especially if there are changes to technology or company procedure. As a manager in a change situation, be mindful that if you are changing the way in which your staff operate or produce work, they may be less efficient than they previously were – simply because they are most likely learning new habits again. Change can be a lengthy process, so ensure that people are supported – expect delays and deficiencies as employees learn.
  50. 50. 7) Evaluate: As a manager or executive throughout a change management situation, it’s crucial that the organization, its passage through the change program, and the wider organization's reactions to that change program are evaluated at every feasible opportunity. Measure KPIs, ask for feedback from staff and make any required revisions to the original plans – changes should be flexible where necessary to protect the business, its staff, and its brand. Evaluation can occur in many different ways, and at many different stages – choose whichever evaluation tools work effectively for your business and situation.