International Organizational Consultant - Case Study Example

Norge Portugal: A Case Study Introduction Norge Portugal, headquartered in Lisbon, is a fairly new company that is being established nine years ago with the aim to provide, install and maintain sophisticated equipments to textile manufacturers in Portugal. The subsidiary believed in providing ‘total service to the customers’ to its small but very profitable customer base, thereby providing excellent reputation to the company. The firm has a small employee size of 57 employees with well-etched departments that looks after specific job functions such as sales, service and maintenance, customer control and administration. The company had a very traditional manner of working that focused on being more as a ‘family’ rather than an organization. Thus, when Joao Silva, the administrative director with the organization, joined the company he decided to make several changes in the HR policies to provide a structured and organized character to the firm. Although, his efforts were noble and aimed at creating a revenue- and performance-driven organization, the lack of insight into the employee behavior and its effect on the customers were mostly ignored which might result into problems and issues in the future. This paper therefore, would focus on some of the major issues that the organization may face due to the changes in HR policies and provide recommendations to rectify them. Case study analysis: Main issues After joining the organization, Silva undertook many HR related changes to regularize the HR practices and policies within the organization. He started with stabilizing the pay and benefits system in the company during his first year and creating organization chart and written descriptions along with evaluating the jobs in the later years. He considered himself to be man of action and pragmatic, who had an analytical mind and an orientation toward results. He asked managers and supervisors to document the job roles and asked them to submit by the deadline or they would face pay cut. Despite complaints everyone submitted the documents on time. This might have been the first seeding of the dissent in the organization, where so far employees were given the authority to work as per their convenience and provided team support. They were not threatened with pay cuts for not meeting with deadlines. Such a step would have created disagreements with the management and the first step towards considering the management as anarchic that did not believe in empowering its employees (Garavan 2007). This was a key point that the climate survey later revealed. Silva also undertook a thorough job evaluation process and found that there were too many job grades and suggested to reduce them and make fewer distinctions between jobs. The management took this decision on its own without involving the employees. The ‘family’ culture of the company was breached by Silva, who undertook the decision along with the management on its own without consulting the employees or the managers. Traditionally, the employees were comfortable with the present grading system but Silva’s decision to change the system without their consent or feedback and imposing the decision on the employees would have resulted in widespread disapproval and de-motivation within the company (Wright & Kehoe 2008). Being a practical person, Silva stated that each of the employees should be looked as an investment and therefore should provide appropriate ROI as well. He therefore introduced the policy of pay-for-performance, wherein employees with good performance level were provided with increased pay package. He also provided a structured salary system with an organized method of increasing the salary and giving bonuses to the employees based on performance during their annual review. He also created policies to fire non-performing people from the organization, perceived as a very complex and messy affair in Portugal. Implementation of such a system clearly created inequitable pay system within the organization, which was also highlighted during the climate survey (Buchen 2007). Silva also created a complex results evaluation system so that the actual performance of the employees could be measured and remunerations could be provided as per their performance levels. Numbers such as sales figures, profit margins etc became important elements of this system. This system helped Silva to identify the number of products or services sold by an employee as well as keep track of the number of hours spent by each technician to do certain jobs. However, such a step was perceived as micro management and seen as interference on the part of the management to look into every detail of the job done by the employees. The employee thought that they were not being empowered by the organization to take their own decisions (Chang & Kleiner 2002). Also, figures became more important than traditional drivers such as customer satisfaction and maintaining the reputation of the company. This also changed the inherent characteristic of the company from being a customer-driven company to a profit-driven one. Such a shift would hurt the profit margins in the near future as a satisfied customer ensures repeat business, which a number-driven firm might not be able to deliver (Afiouni 2007). Silva also wanted to get a sense of the prevailing remunerations in other Portuguese companies and therefore purchased two pay market surveys. However, both the surveys may not have been appropriate in context to Norge Portugal. The first one only provided salary data as per various functions in different companies in Portugal without giving industry specifications. Thus, comparisons between data from companies in the same industry could not be drawn. The second survey data presented industry wise and firm wise data as per certain job-evaluation method. Although, Silva used this data using the job evaluation system of Norge Portugal, it should be kept in mind that the evaluation method of the survey and that of Norge would have been distinct from each other and might not give comparable figures. Thus, the policies initiated by Silva to make the company more organized an professional may have major issues, which were late confirmed through the climate survey conducted to understand the perception of the employees about the company post the changes. Identification of IHRM issues As per the climate survey conducted to understand the employee perception within Norge Portugal, around 60% respondents said they were satisfied with their current job. Only 45% employees were clear about the mission and objectives of the company. Around 60% employees thought that the organization structure supports getting information, making decisions and getting the work done, rather than interfering with their work. Only around 30% believed that employees in different parts of the organization work together, support each other and do not duplicate activities. A whopping 80% thought that the mission and objectives of the company are lofty and challenging. Around 45% respondents were of the view that the managers were supportive of the employees and helped in getting the work done. Only 30% people thought that the remuneration provided by the organization is internally equitable, competitive with other organizations and supportive of individual and team performance. Almost 80% employees stated that the organization has a unique identity and accept and support the identity. Around 45% feels that the employees are empowered enough to take their own decisions to get a job done. Worryingly, only 30% believes that the HR policies and practices of the organization are supporting to get the work done, as per the employee needs and appropriate to prepare the organization for the future. Thus, the survey indicated a mixed sentiment among the employees. Although, they were appreciative of the unique identity of the company and were mostly satisfied with their current job, there were many HR issues that were plaguing the company. For instance, 70% people did not believe in the HR policies, which is a worrying figure. Further, majority of the people believed that there is a clear lack of synergy between the teams within the organization and that the company does not provide them with competitive and equitable remunerations. Such high dissatisfaction level is dangerous for a small subsidiary like Norge Portugal as it may lead to high attrition rate and thereby loosing of key people (Ramlall 2006). For instance, Nuno Abrantes, the customer controller is perceived to be underpaid despite being bright and a very good performing employee. However, the management is shortsighted about his remuneration as it believes that Abrantes would not get similar job in Portugal. The management is not very good at perceiving the fact that along with job satisfaction, it is important to provide competitive remuneration and benefits to retain and motivate people (Ramlall 2006). The employees also disagreed about the missions and objectives of the company and most were not clear about them and many thought they were lofty and challenging to achieve. If the employees are not in sync with the mission and vision of the company, they would become disinterested and detached from the management and central goals of the company soon. This would lead to attrition and employee turnover (Wei 2006). Further, most employees believed that the management were interfering with their work and were not supportive enough to empower them to take their own decisions. Therefore, there is a clear dissidence among the employees regarding the company and HR policies and objectives and the organization needs to rectify the gap areas in order to retain the key talents and motivate the workforce (Ismail & Long 2009). Recommendations The survey has indicated various issues and problems plaguing the company. However, these issues can be addressed if the company undertakes timely action and implements the following suggestions: Providing clear company mission and objectives: The organization is going through a flux with the management imposing various number-driven initiatives which has shifted the focus of the company from being customer-centric organization to being a profit-driven one. However, the employees are not aware of such a shift as they are confused about the company goals. Thus, the management should create a new vision and mission statement and circulate among the employees, and help them in imbibing the changed vision in their daily work responsibilities (Ismail & Long 2009). Providing coherence within the organization: Traditionally the teams believed in working together to solve an issue, which might not have been an ideal situation as the resources were not utilized optimally. However, with the shift in focus on individual performance, most people feel stressed and believe that there is duplication in their efforts. Although, it is important to focus on the individual performances, the management should also encourage team efforts and recognize such activities as well. Further, inter- and intra-team interactions should be encouraged both at formal and informal levels to create coherence within the firm (Cook 2009). Empowering the employees: The management should empower the employees to take their own decision and be responsible for their actions rather than micro-managing them. This would translate into employees trusting their managers better and perceiving them to be supportive of their work (Lengnick-Hall et al 2009). Giving competitive remunerations: Although, Silva hauled the remuneration policies by introducing pay-for-performance and employee evaluation system based on the data provided by the market survey data, these data were not sufficient or appropriate for an organization such as Norge Portugal. Therefore, the management should again look at the remuneration policies and create a performance matrix that is less complex and also includes customer feedback and satisfaction levels rather than just profit and sales margins. This would ensure retaining key talents within the organization as well as increasing the motivation level (Lengnick-Hall et al 2009). Taking suggestions and feedbacks from employees: The employees should be involved in the key decision making processes and their suggestions and feedbacks should be incorporated before making any HR policies or practices. This would help in creating policies that are as per the needs of the employees and increasing job satisfaction and employee motivation (Lengnick-Hall et al 2009). Preserving the unique identify of the company: As the majority of the employees believed in the unique identity of the organization, it is therefore recommended that the company should preserve this identity and focus on creating a ‘family’ rather than a mechanized firm. This would help in retaining the people as well as the customers, together with increasing the reputation of the firm (Härtel et al. 2006). 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