human resources management unit 23

7/30/2019 Human Resources Management UNIT 23

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UNIT 23

Managing Change

We have been witnessing changes in every sphere of activity politics,

games, technology, business, economics, religion, and so on. Our lifestyles

have also changed significantly over the years. Changes have positive as well

as negative effects.

In a workplace too several changes take place. Certain changes may be

favourable to employees and therefore may get their support. On the other

hand, the employees may find certain changes unfavourable or unnecessary

and so the may oppose.

This chapter focuses attention on Managing Changes in the

workplace.

Change-Meaning

Change, with reference to work environment, means any alternation

that requires the people doing work to make certain adjustments. For

example, if an organisation, where the office work is manually done, decides

to introduce computers the employees will have to learn to handle

computers. Similarly, if the management decides to change the working

hours the employees will have to accordingly adjust their household routine.


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Definition of Change

Tom Duening has defined the term Change as follows:

Change is any alteration occurring in the work environment that

affects the ways in which the employees must act. These changes may be

planned or unplanned, catastrophic or evolutionary, positive or negative,

strong or weak, slow or repaid, and stimulated either internally or

externally.

Factors influencing Change

The various factors influencing change may be grouped under:

I. Internal Factors andII. External Factors.

Internal Factors

The internal factors necessitating change include, among others, the

following:

(i) Policy decisions(ii) Attitudes of employees(iii) Availability of funds(iv) Escalating costs(v) Level of efficiency(vi) Trade union demandsThese have been explained below.


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Policy Decisions

The administrators may make certain policy decisions the

implementation of which would bring about changes. Such policy decisionsmay be in respect of any of following matters:

1. Recruitment of candidates for jobs2. Provision of training3. Employee promotion4. Employee transfer5. Evaluation of performance6. Payment of remuneration7. Provision of incentives8. Social security schemes like pension, provident fund etc.9. Retirement of employees10.Termination of service

Attitudes of Employee

The attitudes of the employees of an organisation in general may

prompt the management to make certain changes. For example, if the job

attitude of the employees is favourable and the employees work with a sense

of commitment, the management may be encouraged to come with certain

employee welfare measures as follows:

1. Increase in pay2. Provision of suitable incentives3. Provision of better working conditions and so on.


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In the same manner, if the employees are eager to enrich their job

knowledge, the management may come forward to provide suitable

training and also acquire better machines, tools and equipment.

If, on the other hand, the employees are shirking duties and indifferent, the

management will be forced to adopt certain punitive measure as follows:

1. Issuing written warnings2.Wage cut

3. Imposing fine or penalty4. Demotion5. Suspension6. Discharge or dismissal

Availability of Funds

Another internal factor prompting is the availability of funds. If the

financial position of the owners is very sound, they may be encouraged to

offer more fringe benefits to the employees as mentioned below:

1. Bonus2. Medical facilities

3. Free education for the children of the employees4. Leave travel concession5. Rent free accommodation etc.The sound financial position of the owners may also induce them to

indulge in diversification activities. The business may, for example, plan to


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introduce a new product. Such diversification activities may generate

additional employment opportunities.

If, on the other hand, the fund position of the company is very poor, it

may not be able to pay its employees even regular wages. It may be

sometimes forced to eliminate certain jobs. As a result, some employees may

even lose their jobs. Lack of funds may not allow undertaking of welfare

schemes for the employees. The working conditions too cannot be improved.

Escalating Costs

If costs are rising, the business may be compelled to adopt certain

austerity measures. In includes, among others, the following:

1. Wage cut2. Cut in administrative overhead

3. Cut in selling and distributing overheadAs a result of these austerity measures, the employees may have to forego

certain benefits.

Level of Efficiency

Yet another factor influencing change is the efficiency level of the

employees. If the employees are efficient the employer may reward them

suitably. To motivate the employees certain monetary and non-monetary

awards may be offered to them. If, on the other hand, the employees are

inefficient the employer will be compelled to take disciplinary action against

them in the form of demotion, increment cut suspension and so on.


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Trade Union Demands

In many establishments trade unions play a crucial role in the

decisions of the administrators. The employer cannot thrust certaindecisions on the employees. The trade union may have to be involved in

respect of certain sensitive issues as stated below:

1. Pay cut2. Increasing the hours of work

3. Changing the working hours4. Increasing the quantum of work5. To bring about technological changes and so on.

External Factors

The external factors influencing change include, among others, the

following:

(i) Government Regulations(ii) Technological advancement(iii) Economic conditions(iv) Changes in Law(v) Competitive pressure(vi) Trade association influence(vii) Changes in buyer preference


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Government Regulations

The government is empowered to frame rules and regulations in order

to regulate business activities. There were instances where private businessestablishments were taken by the government. Similarly the Government

may entrust the management of some of the undertakings, under its control

right now, to certain private businessmen. Any such change brought about

by the Government will certainly alter the status of the employees working

in these organisations.

The government is also empowered to order the closure of any industrial

organization. Changes taking place owing to government regulation include,

among others, the following:

1. Take-over2. Privatisation

3. Closure4. Licensing5. Delicensing6.Wage revision7. Requirement of the employees8. Restriction on imports9. Restriction on exports

Technological Advancement

Advancement in science and technology is sure to bring about changes

in work methods. Computers are used even in small offices that made use of


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the conventional typewriters once. Salesmen, these days are provided with

cell phones. Most organisations make use of the Internet and E-mail

facilities. All these changes are the outcome of technological breakthrough.

Economic Conditions

Economic conditions do not remain stable always. Changes in

economic conditions too bring about changes in the work pattern and

working conditions. For example, when the demand for a particular produce

less. The decision to curtail output. In turn, will lead to such adverse

conditions as idle plant capacity, surplus labour and so on, similarly, when

demand exceeds supply the enterprise may take steps to step up production.

This calls for additional manpower, capital and so on.

Demand, supply, price level, inflation etc., are the various economic factors

that necessitate changes.

Changes in Law

Various laws have been enacted in India to protect the working class.

The changes made in any of the following Acts may bring about changes in

the work environment and conditions:

1. The factories Act2. The Workmens compensation Act

3. The Minimum Wages Act4. The payment of Wages Act5. The Industrial Dispute Act


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6. The employees State Insurance Act7. The Trade Union Act8. The Maternity Benefit Act and so on.

Competitive Pressure

No business organisation can afford to ignore the threat posed by

competitors. Owing to competitive pressure, an organisation, often, has to

make frequent changes in its marketing strategies to survive and to stay

ahead. These include, among others, the following:

1. Product alternation2. Product diversification

3. Product elimination4. Creation of brand loyalty5. Innovation in packing6. Price changes7. Discounts and other inducements8. More allocation for media advertisements9. Employment of more sales force10.Appointment of more dealers and distributors and so on.

Trade Association Influence

A trade association is an association of persons belonging to the same

trade. Such an association is formed to safeguard the interests of the traders

engaged in a particular line of business. For example, there may be an

association of textile mill owners, sugar mill owners and so on. The decision


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made by a particular trade association is binding on all its members. The

decision if usually made in respect of any of the following matters:

1. Payment of remuneration to different classes of employees2. The service conditions of the employees

3. Social security benefits to be provided to employees4.Working hours of employees5. Holidays6. Leave benefits to be given to employees7. The price to be charged for the product and services8. Collective representation of grievances to the Government and so on.

Changes in buyer preference

The ultimate aim of any business is to create customer, satisfy him and

also retain him. All the activities of an organisation are directed towards the

attainment of this specific objective. The preferences of the buyers can be

known through market surveys. An organisation that has failed to fulfil the

needs of the buyers may have to effect the following changes in order to

satisfy them:

1. Better quality products2. Courteous service

3. Reasonable price4.Avoidance of misleading and deceptive advertisements5. Use of up-to-date technology6. Best after-sale service and so on.


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The various factors influencing change have been discussed in detail

above. The change, whether initiated by an internal factor or an external

factor, does have its impact on the employees of an organisation. The

simple logic is that employees may welcome a change if it is

beneficial to them and may resist it if it is detrimental to their

interests.

Resistance to Change

We shall now focus our attention on why employees resist change.

Change, though inevitable and a continuous process, is resisted by the

employees in view of the following reasons:

1. Threat to job security Employees, particularly those inGovernment services, who have job security, may resist any

proposal that poses a threat to job security. One of the main reasons

why the Government employees in India oppose the privatisation

move of the Government is the possible threat to job security.

2. Fear of losing job Certain changes, if allowed to take place, mayalso result in the employee losing his job in the near further. In the

past, the proposal to computerise operations in most organisations

was opposed by employees mainly due to the fear of losing job.

3. Fear of monetary loss whenever there is a proposal to effect payscut, employees resist it. Such an austerity may be necessary in view

of the poor financial position of an organisation. The main reason

for resistance by the employees not the immediate pay loss but the

possible future monetary loss if scope is given for pays cut now.


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4. Increase in work burden The fear of a possible increase in workburden is yet another reason for employee resistance. When certain

vacancies remain unfilled for a very long time, employees show

their protest to the attitude of the employer. The main reason for

the protest is that gradually additional responsibilities may be given

t the existing employees, as there is shortage of manpower in the

organisation.

5. Bad precedents Certain changes are resisted by the employees onthe ground that these may set bad precedents. For example, if the

seniority or the merit of an employee is totally ignored in the

matter of promotion, the employees may collectively show their

displeasure.

6. Fear of transferin certain cases, an employee may resist changefor fear of transfer. For example, it certain categories of jobs the

promotion given to an employee also may lead to his transfer to

some other place. Such an employee, therefore, may not be willing

to accept the promotion offer, as he must be prepared for a transfer.

7. Fear of demotion When there is a proposal to increase theminimum qualification and skill requirement for a job, such a

change may not be accepted by employees. This is because of the

fear that either they must update their qualification and skill or face

demotion in the near further.

8. Loss of promotion opportunities The decision to eliminate certainposts or positions may not be accepted by the employees on the


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ground that it may deprive them of promotion opportunities in

further.

9. Loss of leave benefits Any proposal by which the existing leavebenefits enjoyed by the employees are reduced or withdrawn is sure

to get resistance.

10.Loss of social security benefits Often, we hear such decisions aswithdrawal of pension and other retirement benefits of employees

particularly the Government employees. Such changes will

obviously be resisted by the employees.

11.Lack of scope for collective bargaining Any decision to abolishtrade unions of employees is sure to be resisted by the employees as

it deprives them of the benefit of collective bargaining.

12.Boredom and monotony Any change that makes the employeesjob boring and monotonous will be opposed.

13.Early retirement The proposal to reduce the retirement age ofemployees is also not favoured by the employees as it deprives them

of several years of earnings.

Possible Benefits of Resistance

Resisting change is not always bad. In some cases, resistance may

provide certain benefits too as stated below:

1. Management does not gain upperhand If the employees acceptwhatever the management says, it will enable the management to gain

upperhand. Such a position will provide scope for the management to


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exploit the working class. It is, therefore, necessary that the employees

show their resistance to any useless proposal by the management.

2. The proposal may be reconsidered When employees showresistance to a certain proposal, the management may reconsider the

same. On a review of the proposal the management itself may find

certain flaws later and drop the plan. Resistance, thus, prevents certain

worthless proposals from getting implemented.

3. The existing system may be quite good Often certain changes areproposed for the sake of change and without any real benefit. Such

changes should be opposed so that the existing system, which is quite

good, is not disturbed.

4. Certain anti-labour measures may be prevented If the employeesare silent spectators, it will give scope for the management to come out

with a number of anti-labour measures. It is for this reason that

employees may have to show their resistance at times.

5. Employees are able to be assertive By showing their protest tocertain unwanted and useless proposals by the management the

employees are able to be assertive. They are in a position to show their

strength.

Changes not generally Resisted by Employees

The employees, generally, do not oppose any change that:

1. Does not disturb the status quo When the proposed change,although does not guarantee additional benefits, does not disturb the


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existing status pattern in the organisation, the employees may not

show their protest.

2. Gives them additional monetary benefits If a certain changecontemplated can give the employees more monetary benefits

without much physical or mental exertion, they may not show

resistance.

3. Gives them greater authorityWhen the authority given to theemployees is increased, they will be able to make the best use of the

resources available in the enterprise money, materials and

machines.

4. Provides greater freedom to act If some change made in theorganisation can prove autonomy or greater freedom to the employee

to act, they may welcome such a move.

5. Provides greater career advancement opportunities Anyproposal by which the employees get greater promotion opportunities

is certainly beneficial to them and, therefore, will get their support.

6. Provides scope for self-development If the change contemplatedby the management can provide scope for an employee to enrich his

qualifications and skills, there is no reason why he should oppose it.

7. Simplifies the task performed The shift from manual operation tocomputerization of all kinds of office work has certainly simplified the

work done in our offices. Any such work simplification plan gets the

support of employees.

8. Gives them the benefit of collective bargaining In a workplace,when an individual employee has any grievance, he may not be able to


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represent the same in his personal capacity. He needs the support of a

union of employees. Any proposal to recognize the role of trade union

that gives the employee the benefits of collective bargaining is quite

welcome.

9. Does not provide scope for clash of interests If a changeproposed by the management does not give scope for unnecessary

conflicts in the workplace, the employees may support it.

10. Recognises the dignity labour Any proposal that respects,recognises and rewards the labour exerted by the workmen will get

their support. The proposal shall not undermine labour.

Changes not favoured by managers

It is not employees resist changes. Managers too resist certain changes.

Such changes are:

1.Wide span Any decision to place more subordinates under a managerthan what he is capable of handling will sure be resisted by him.

2. Narrow span If, on the other hand, it is proposed to place a very fewsubordinates under an executive, such a proposal will also be not

favoured by him as his potentials are not fully untilised.

3.Arrogant nature of certain employees Efficiency and arrogance oftengo together. Certain employees who are very efficient may also bearrogant. If such employees are placed under a manager who is not

capable of handling them, he is sure to resist it.

4. To limit authority Any proposal by which the existing authority of amanager is reduced will be resisted by him as it makes him ineffective.


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5. Greater responsibility If the manager is given additionalresponsibility he may not be prepared to accept it unless it gives him

commensurate benefits.

Overcoming resistance to Change

(Managing Change)

Changes, as mentionedalready,are unavoidable. An organisation

cannot be a dynamic one if it if not prepared to implement certain changes.

The success of human resource management, therefore, lies in the capacity

of the manager to implement changes without facing resistance from

employees. The following steps mat be taken in this regard:

1. Securing the participation of employees Any changes affectingthe interests of the employees must be explained to them first. The

management must explain its position to the employees and also seek

their views on the proposal. It must consider favorably any worthwhile

suggestion from the employees.

2. Involving the trade union When it is not possible for themanagement to discuss the change with individual employees, it may

invite the trade union officials for talks. The change proposed may be

discussed in detail in the meeting with the union officials. The

management may consider any reasonable suggestion from the side of

the employees.

3. Planning the change The employees must have prior knowledge ofthe change that is to be implemented. For example, if the management


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wants to change the working hours and has also got the consent of the

employees, it must take the necessary steps for the successful

implementation of the proposal. It must inform everyone about the

date from which the proposed change is to be effected. A change

should be implemented overnight and without prior notice. Everything

must be done in a planned manner.

4. Sharing the benefits of the change with the employees Themanagement must come forward to share the benefits of any change

with the employees. If a change is contemplated keeping in mind the

interest of the management alone, the employees are sure to resist it.

For example, if the management wants its employees to work overtime

to complete an important task within a stipulated time, it must also

come forward to reward the employees suitably for such overtime

work.

5. Protecting the interests of the employees The managementshould not contemplate a change that is detrimental to the interests of

its existing employees. In this context it may be stated here that any

change having an adverse effect on the employees pay, service

conditions, retirement benefits etc., must not be thought of.

6. Ensuring the interests of the employees When a change in theservice conditions is proposed, the employees would expect the status

quo to continue. Even if management cannot announce certain new

benefits, the existing benefits at least must not be withdrawn.

7. Introduction of change in a phased manner Certain changes canbe introduced only in a phased manner. For examples, if the


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management wants to introduce computerization in all departments,

it can only be done in a phased manner. This is because, the employees

in the different departments need to be trained to handle computers.

Such a task cannot be accomplished overnight. The employees need to

be given sufficient time to undergo the necessary training.

8. Proper motivation of employees It is not enough if the employeesare merely informed of the change proposed to be made. They need to

be properly motivated to accept and work for the success of the new

proposal. For example, if the management wants to increase the

weekly target of the employees, it must induce them by telling them

what direct and indirect benefits they would receive monetary as well

as non-monetary out of the proposal.

9. Provision of suitable training facilities If the management iscontemplating a change in the method or technique of work such a

change can be possible only if the employees are given proper training.

The management itself must make suitable arrangements to train its

employees. If in-company training is not possible, the employees must

be sent to a training centre that has the necessary facilities.

10.Introduce changes that are mutually beneficial A change that isbeneficial to the management alone may not get the employees

support. There must be something for the employees also in any

proposal. In other words, the change proposed to be made must be

mutually beneficial.


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11.Any change must be logical There must be a valid reason for anychange. The management must be in a position to convince the

employees of the need for the change.

human resources management unit 23

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