HUMAN RESOURCE
MANAGEMENT
LECTURE 5
What is
structuring in
organizations?
STRUCTURING IN ORGANIZATIONS
• Organizational structuring is
defined as the sum total of the
ways in which an organization
divides and coordinates its labor
into distinct tasks.
Restructuring and reengineering in
organizations
• Restructuring the firm consists of
altering its decision-making, operating
divisions, and management culture.
• Reengineering entails changing the
procedures by which the work is
accomplished and products delivered.
RESTRUCTURING
The restructuring is a process of making a major change in
organization structure that often involves reducing
management levels and possibly changing components of
the organization through divestiture and/or acquisition, as
well as shrinking the size of the work force. Restructuring
deals with the structure of organization and is usually
associated with cultural change. The first stage is to
conduct an economic model of the processes of the
organization, to give a detailed view of where and how
value is created, and to ensure that resources can be
provided to different parts of the organization as and when
required.
Next is the alignment of the physical infrastructure of
the organization, and then redesign of the work
architecture or processes of the organization. It is also
necessary to achieve market focus, invent new
businesses and change the rules of competition
through technology. The task is also to create a
reward structure to provide a powerful motivating
force and then to build individual learning - the
encouragement for individuals to acquire the new
skills necessary for the success of the transformed
company. The final stage is to develop the
organization which will be able to adopt constantly to
changing circumstances.
Primary Spheres of Restructuring
The following can be considered as primary spheres of
a company restructuring:
• financial (a financial and ownership company
structure);
• property (a property company structure);
• production (it concerns both produced products
and provided services, and used production facilities
or technologies, but also an organization of a
production process);
• sales and purchases (oriented both on inputs and
outputs of the organization);
• organization (organization company structure
defining function roles and relations in
• business processes);
• information (information systems in a complex
concept);
• personnel (human resources – volume, structure,
quality).
RE-ENGINEERING
The traditional definition of reengineering claims that
an enterprise reengineering represents a “vital rethinking and radical reconstruction (redesign) of
enterprise processes so that dramatically
improvement can be obtained in terms of critical
measures of efficiency such as: costs, quality, service
and speed”.
Reengineering focuses on remodeling enterprise
processes that are thus straightened – it strives for
eliminating all useless duplicate activities, uniting the
activities and innovating the ineffective ones.
The essential types of reengineering according to
Ivanov, are transformation, integration and
rationalization.
Transformation represents deep rethinking of a
company mission, strategy and enterprising, it is often
interconnected with external conditions and concerns
the whole company structure - in terms of property,
finance, supply, production, sales and partners.
Integration then means reviewing, design of new
company visions and ideologies, leads to a new
company architecture, focuses primarily on company
processes – emphasizing integration effects in
structures, working methods, positions, functions,
discreet company processes or a social system.
Rationalization or redesign represents simplification of
processes or parts of company structures, tends to the
process of a quality improvement as there is nothing
radically changed and in fact it preserves “status
quo“.
Reengineering has earned a
bad reputation. Why?
Reengineering has earned a bad reputation because such
projects have often resulted in massive layoffs.
This reputation is not all together warranted. Companies have
often downsized under the banner of reengineering.
Further, reengineering has not always lived up to its expectations.
The main reasons seem to be that:
• Reengineering assumes that the factor that limits
organization's performance is the ineffectiveness of its
processes (which may or may not be true) and offers no
means of validating that assumption
• Reengineering assumes the need to start the process of
performance improvement with a "clean slate", i.e. totally
disregard the status quo
• According to Eliyahu M. Goldratt (and his theory of
constraints) reengineering does not provide an effective way
to focus improvement efforts on the organization's constraint.
Organizational
Performance
Organizational performance comprises the actual
output or results of an organization as measured
against its intended outputs (or goals and objectives).
(According to Richard et al. (2009)
Organizational performance involves the recurring
activities to establish organizational goals, monitor
progress toward the goals, and make adjustments to
achieve those goals more effectively and efficiently.
(Carter McNamara, MBA, PhD, Authenticity
Consulting, LLC.)
Which factors affect
organizational performance?
• Part of an organization’s
performance are the
employees performance.
What are the factors affecting
the employees performance?
Factors affecting
employee performance
Job Fit
Employees must be qualified to perform a job in order to
meet expectations. The best fit for a job is identified by skills,
knowledge and attitude towards the work. If an employee
is in the wrong job for any of these reasons, results will suffer.
Technical Training
Employees can bring skills to a position but there are likely
to be internal, company- or industry-specific activities that
will require additional training. If a process requires a new
software package it's unrealistic to expect employees to
just figure it out; they should receive adequate training.
Clear Goals and Expectations
When everyone understands the targets and expected
outcomes, it is easier to take steps to get there and
measure performance along the way. Organizations
without clear goals are more likely to spend time on tasks
that do not impact results.
Tools and Equipment
Just as a driver needs a vehicle in operating condition,
employees must have the tools and equipment necessary
for their specific jobs. This includes physical tools, supplies,
software and information. Outdated equipment, or none
at all, has a detrimental affect on the bottom line.
Morale and Company Culture
Morale and company culture are both difficult to
define but employees will be able to report when they
are poor or positive. Poor morale exists when there is
significant whining, complaining and people just don't
want to come to work. On the positive end, the
workplace is energized by a sense of purpose and
teams that genuinely want to work together.
Motivation
To get the best performance from employees, there
needs to be some sort of motivation beyond the
weekly paycheck. Motivation can come in the form of
financial incentives, the opportunity to get involved in
company projects, a career path that leads to
management and direct involvement from
management into the daily tasks. Effective motivation
can create a productive work force, but a lack of
motivating factors can leave employees searching for
reasons to give their maximum effort.
Commitment
Employees that feel as though the company has made a
commitment to employee success tend to perform better,
according to Personnel Systems Associates. Commitment
means offering a competitive rate of pay and benefits
package, offering assistance in paying for employee's
higher education costs, developing a regular training
schedule that keeps employees updated on company
changes and gives pertinent information for employees to
do their jobs and upgrading equipment to make sure that
employees have the most efficient technology available to
do their work. Commitment shown by the company is
returned in the form of commitment from employees.
Employee Evaluations
An effective employee evaluation is an interactive
process where the manager gives his input on the
employee's performance, and the employee gets the
chance to point out what she has learned throughout
the year. Managers create a plan along with the
employee for the coming year on how the employee
can develop and improve their performance.
Comprehensive employee evaluations are important
to the ongoing performance of employees.
What is organizational
culture?
Organizational Culture
Organizational culture is the workplace
environment formulated from the interaction
of the employees in the workplace.
Organizational culture is defined by all of the
life experiences, strengths, weaknesses,
education, upbringing, and so forth of the
employees.
While executive leaders play a large role in
defining organizational culture by their actions
and leadership, all employees contribute to
the organizational culture.
Organizational culture is the personality of the
organization. Culture is comprised of the
assumptions, values, norms and tangible signs
(artifacts) of organization members and their
behaviors. Members of an organization soon
come to sense the particular culture of an
organization. Culture is one of those terms
that's difficult to express distinctly, but
everyone knows it when they sense it.
For example, the culture of a large, for-profit
corporation is quite different than that of a hospital
which is quite different than that of a university. You
can tell the culture of an organization by looking at
the arrangement of furniture, what they brag about,
what members wear, etc. -- similar to what you can
use to get a feeling about someone's personality.
Changing the culture of an
organization
How can we change it?
There are four primary ways to influence the culture of
an organization.
• Emphasize what’s important. This includes widely
communicating goals of the organization, posting
the mission statement on the wall, talking about
accomplishments and repeating what you want to
see in the workplace.
• Reward employees whose behaviors reflect what’s
important.
• Discourage behaviors that don’t reflect what’s
important. There is no need to punish or cause
prolonged discomfort. Rather, you want to dissuade
the employee from continuing unwanted behaviors
by giving them constructive feedback, verbal
warnings, written warnings, or firing them.
• Model the behaviors that you want to see in the
workplace. This is perhaps the most powerful way to
influence behaviors in the workplace. For example,
if you want to see more teamwork among your
employees, then involve yourself in teams more
often.
What is organizational
change?
Organizational Change
Organizational change occurs when a
company makes a transition from its current
state to some desired future state. Managing
organizational change is the process of
planning and implementing change in
organizations in such a way as to minimize
employee resistance and cost to the
organization while simultaneously maximizing
the effectiveness of the change effort.
TECHNIQUES FOR MANAGING CHANGE
EFFECTIVELY
Managing change effectively requires moving the
organization from its current state to a future desired
state at minimal cost to the organization. Key steps in
that process are:
• Understanding the current state of the organization.
This involves identifying problems the company
faces, assigning a level of importance to each one,
and assessing the kinds of changes needed to solve
the problems.
• Competently envisioning and laying out the desired
future state of the organization. This involves
picturing the ideal situation for the company after
the change is implemented, conveying this vision
clearly to everyone involved in the change effort,
and designing a means of transition to the new
state. An important part of the transition should be
maintaining some sort of stability; some things—such
as the company's overall mission or key personnel—
should remain constant in the midst of turmoil to
help reduce people's anxiety.
• Implementing the change in an orderly manner. This
involves managing the transition effectively. It might
be helpful to draw up a plan, allocate resources,
and appoint a key person to take charge of the
change process. The company's leaders should try
to generate enthusiasm for the change by sharing
their goals and vision and acting as role models. In
some cases, it may be useful to try for small victories
first in order to pave the way for later successes.