Monday, December 1, 2014

Organizational Development

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine December 2014 edition.

Akhil Vikas International is a top fast-moving consumer goods (FMCG) category company in India. It has quite a few well-known branded products which offer beauty, health and wellness solutions. It also keeps several popular brands of home care products, food and beverages.

The company considers product differentiation as its main and successful marketing strategy. To achieve product differentiation, it adopts the TQM approach production process. Though the total strength of its work-force is 12,100, it enjoyed fairly good industrial relations so far. The unique HR policies and practices of the company were largely responsible for the cordial relationship between the superiors and the subordinates. There was a clear demarcation of duties and responsibilities between the supervisors and the workers, and this prevented possible conflicts and strains in the relationships.

However, the situation changed dramatically in the recent period after the company went in for the modernization of its plant. As part of its modernization programme, it recruited a big chunk of knowledge workers recently to operate high tech machines. These workers were assigned to supervisors in different production units after undergoing orientation. Contrary to expectations, the management observed some unease in the relationship between the supervisors and the newly appointed subordinates. There were frequent complaints of ill-treatment from the subordinates and of disrespect from the supervisors. Consequently, tension began to build between these two groups in the organization, leading to declining employee morale, quality levels and performance efficiency.

The management of Akhil Vikas was vexed over the development in the organization and decided to utilize the services of IDEA - an external OD agency to resolve the issues of the organization. The IDEA team, in coordination with the HR department, conducted an OD survey to identify the cause of the frequent disputes between the supervisors and the subordinates. At the end of the survey, the team identified assertive and independent behaviour of the newly appointed high-tech workers as the cause of the disputes. The supervisors apparently perceived a direct challenge to their authority from these subordinates. Thus, there was clear distrust between the supervisors and the new subordinates. However, these very supervisors maintained normal and cordial relationships with the older subordinates.

The external experts attributed the crisis to the absence of any training for the supervisors in team-building and leadership. They also found the orientation and socialization provided to the new employees as grossly inadequate. Finally, the HR department, in collaboration with the IDEA team, organized a series of training programmes for the supervisors on topics like interpersonal skill training, emotional intelligence, team building, cross-cultural understanding, motivation, personality-type training and conflict management. The HR department also increased the duration of the orientation programme for the new employees by making it more extensive and relevant. The management is now fairly optimistic about the outcome of its efforts.

Questions for discussions & solutions

1. According to you, who is to be blamed for the problems of Akhil Vikas International?

  • Akhil Vikas International is a top Indian FMCG Company having a workforce of over 12000. The company follows TQM production process, it’s unique HR practices like clearly defined job responsibilities enabled cordial relations between supervisors and subordinates.
  • The company recently modernized its plant operations and recruited new age knowledge workers to operate the machines. However problems started brewing between the old supervisors and the newly recruited workers inspite of the latter having undergone induction training and orientation. All of this ultimately adversely affected the company’s performance and productivity.
  • The problems for Akhil Vikas International started right from the time the company decided to modernize its plant operations. These were signs of changes to come in the company which is the most difficult thing to deal with. Then came recruitment of new workers to run the machines. Usually in any organization when one is used to a certain style of working and is set and then suddenly somebody new comes into the system, it becomes difficult for the existing person to accept the new one. Reasons could be perceived job insecurity, someone new in the system having more knowledge, doing things in a new, better way, etc…
  • The culture at the company seemed to be that supervisors expected the subordinates to do as per their instructions whereas they felt that since they had far better knowledge than them, they knew what to do & how to do it. There seemed to be a conflict of interest.
  • It is the management of the company who is to be blamed for this scenario and not the HR dept. since it will only carry out the duties as instructed by the management.  However the onus is also on the HR dept. to advise company management on the right thing to be done. Training should have been given separately to the supervisors also on the changes taking place and new people coming in the system. The supervisors should have been sensitized and trained to handle them. New sets of duties & responsibilities could have been spelt out. An outbound team – building training programme at the outset that includes both the supervisors and subordinates could have helped ease the relationships.

2. How do you assess the efficiency of the human resource department in carrying out the OD intervention programs in general?
  • Management of the company perplexed by the situation in the company hired IDEA – an external OD agency to resolve the issue. The agency in co-ordination with HR dept. carried out a survey and identified various causes like lack of leadership and team-building skills with the supervisors, independent working style and assertive behavior of the workers and also process related issues like inadequate coverage during the training programme of the newly recruited workers.
  • The solution to this issue was that the extensive training programs were carried for both supervisors and the workers in order to bring them all together. However this is a classic example of just-in-case training identified as a solution to a problem. Training should be linked to work requirements. Hence if the results of the survey identified leadership and team building for the supervisors, the same should have been part of the annual training calendar for them so that it is reinforced on the job regularly.
  • Although the management of the company is fairly optimistic about the outcome of its efforts, the HR dept. needs to collect feedback on the appropriateness of the training. It should systematically evaluate training effectiveness on the job, collect performance data on individuals and groups trained at all levels to assess the impact of the training and periodically report to management.
  • Supervisory support for the use of training on the job could be tracked and used to improve future training content, training delivery and instructional effectiveness. The failure to evaluate and improve the effectiveness of training will make it difficult to optimize individual or company-wide performance. Ineffective or inefficient training and education waste resources directly (cost of training as observed in this case analysis here - various trainings as a result of OD Intervention Survey) and indirectly (cost of lost opportunity and productivity while the workers and supervisors are receiving the training).
  • Lastly, the HR dept. should periodically (e.g. once in 6 months) assess its employee engagement via various formal and informal methods. Failure to consider employee engagement and satisfaction data such as absenteeism, grievances, etc…may prevent a problem from being identified and corrected. Having already identified a problem and taken measures to correct it, the HR dept. should now ensure that it does not recur again i.e. take Corrective Action by way of employee engagement and satisfaction surveys. 

3. What will be the possible outcome of the joint efforts of the HR department and IDEA in terms of organizational development and change management? 
The possible outcome of the joint efforts of HR Dept. and IDEA – external organizational development (OD) agency could be as follows:
  • Create a supportive work environment between the supervisors and the workers (subordinates).             An environment of mutual trust and work stability will be in place.
  • The employees will be more personally engaged, and demonstrate high energy in discharging their daily functions as a consequence of the training programs and OD interventions
  • There will be feeling of being valued by supervisors and involvement by the subordinates.
  • Improvement in knowledge, skills and abilities, everyone will work for their general betterment and the company as a whole.

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