ob focus point

1

Employee involvement (engagement) in decision-making embraces issues of productivity, performance, product quality and customer service. These issues demand that employees demonstrate the three aspects of effective participation in decision making.

They must be mentally active so that they can creatively attack the relevant issue. Their engagement in decision making should satisfy their intrinsic needs (higher-order) and suppress any social loading. The striving aspect in participation is in itself a motivating device and is a second dimension of participation (intrinsic motivation). And third, employees should be willing to make personal contributions to the firm.

When the organisation’s social system meets the employee’s belonging needs and the technical work system presents him or her with challenging and meaningful work, the employee is motivated to contribute. This motive can be improved through delegation of authority to employees or their SDTs. The third dimension involves shifting managers from sources of authority to sources of support.

Employees must view empowerment and participation as a central feature of their work and not as an intrusion. If they work in SDTs they must receive the cross training to tackle any problems in their team’s work. In the responsive (Y)firm, team members must also receive training in team problem-solving as it relates to product and service quality and continuous improvement.

Neither managers nor employees should feel that empowerment and participation are simply management attempts to cut costs by making SDTs do more work. It is inevitable that various interest groups, for example trade unions, may view employee empowerment with some fear of its consequences; but once the company has embarked on empowerment there will not be an opportunity to return to the status quo, and managers should anticipate and deal with various forms of resistance to change

2

The satisfaction facets are: pay, working conditions, colleagues and supervisors, career prospects and the intrinsic parts of the job itself. Levels of satisfaction fluctuate depending on individual and organisational factors. Individual factors are years of service and employee expectations. As individuals grow older their job satisfaction rises although it can dip as retirement nears. There is also a dip at the beginning of a career because the novice expects too much from his first job. Added job experience and familiarity with the firm's culture cause his initial job dissatisfaction to vanish. Expectations about career progression may also affect job satisfaction. If pre-work information about career prospects obtained from personal and official  sources raises expectations beyond those an employer can deliver, then he will be dissatisfied. Worries about economic security also reduces employees’ job satisfaction.

There are a number of organisational determinants which affect employees’ job satisfaction. For example, if supervisors use employee engagement in decision making, this may improve employees’ satisfaction; but there are situations where this style of management may not be appropriate. By applying the diagnostic questions of the Vroom–Yetton–Jago normative model, managers can select the appropriate level of employee participation in decision-making for most situations.

Another organisational determinant is the improvement of individual workers’ jobs to make them more meaningful. Few would deny that having the opportunity to do interesting and creative work and being given achievable goals to aim for are important causes of job satisfaction. However, such programmes may undermine competitive advantage because they are too expensive to implement and they often preserve a slow and unwieldy chain of command. For this reason, firms  may delayer and use SDTs. These innovations increase training costs which decline

with time because administrative overhead falls through downsizing.

Extrinsic rewards such as pay rises, promotion, recognition, status and job security operate

differently than intrinsic rewards, such as feelings of competence and pride in the quality of workmanship. The use of a variety of rewards and how employees react to them is governed by employees’ equity comparisons. All workers are highly sensitive to both procedural and distributive justice in reward administration. Employees can react to reward administration by being benevolents, equity-sensitives or entitleds.

The job satisfaction experienced by many employees has been affected by firms that downsize. Many of these dissatisfied workers think they will lose their livelihoods. Delayering, outsourcing, and offshoring of jobs also threaten employees’ job satisfaction and their organizational commitment. However complex job satisfaction is, managers need to monitor it because it reflects   

the firm's resilience and adaptiveness. Job satisfaction measurement methods are indirect in nature because satisfaction can only be inferred; it is both intangible and personal. The methods include observation of employee behaviour, exploratory interviews with employees and questionnaires. A widely used measuring procedure is the Job Description Index which measures variables such as the design of current job, pay, promotion opportunities, interpersonal relationships and supervisory style.

3

In order to survive, firms must adapt and change. These changes may be good or bad but the way they are introduced is crucial, especially for the profitability  of the company and the morale of the work-force. Change may occur in response to either external or internal threats or both. To meet the challenge of externally induced change, firms may follow several courses of action. First, they may change their goals and strategies. They could offer a new product or service or target new markets. Second, they may introduce new technology along with downsizing to

lower costs and work redundancy. Finally, the firm may shift from a functional to a product-design structure. This change strategy may include decentralisation.

When the cause of change is triggered by internal forces such as low productivity, high absenteeism, high labour turnover and increased grievance and discipline problems, firms adopt employee-focused change strategies. These may include redesigning jobs to include more variety, autonomy, feedback, significance and social interaction. The firm may alter its recruitment policies to attract new talent or it may retrain existing workers to improve the skill mix of its work-force. The firm might alter its PA and reward systems to encourage new employee behaviours.

Companies which learn how to quickly change their cultures are likely to survive and prosper. However, there are three conditions which must be fulfilled in order for a culture change programme to work. First, employees must be dissatisfied  with the status quo. Second, top management must have a vision for the future which will guide the redesign process and give the work-force a sense of purpose and direction. Third, the process of change has to be well managed in order to exploit the potential of the other two conditions.

Successful planned change has several characteristics. It is often focused on a whole unit. The ‘knock-on’ effect of changes to a subunit can be counter-productive if its other parts are affected in ways which were not foreseen. It is also based on behavioural science knowledge. Change managers (and change agents) have to be aware of how the content, pace and extent of changes will affect and be affected by the behaviour of employees. Finally, the change requires its primary goal to be the improvement of the firm’s business model.

Lewin has suggested that the planned change should follows a predictable sequence of events. These are unfreezing, changing and refreezing. Unfreezing occurs when people realise that the firm’s current systems do not achieve strategic goals. Often the CEO decides the time is right for a change. This is a top-down approach and it needs to involve the work-force in the change. However, sometimes the push for change comes from employees (perhaps it was uncovered during a regular employee attitude survey). Once unfreezing occurs, action plans are developed to move the firm and its work-force towards a new competitive business model.

Refreezing occurs when the change is fully functional and it is here that the company needs to review the whole process.

4

Individuals join groups: (a) as a means of satisfying social or affiliation needs to belong to something or share in something; (b) as a means of working with others who have a record of problem-solving success in group activities; and (c) as a means to satisfy important personal needs such as anxiety reduction, affirmation of values, beliefs and attitudes and economic security.

Most people find it easier to define themselves in terms of their group affiliations. Therefore, in conversations they describe themselves by referring to group properties its socio-economic status, objectives, gender and racial make-up.

Cohesive, SDTs exhibit solidarity, a high degree of interaction among members, strongly developed norms that support team goals and decision-making processes, well-liked and admired leaders and conformity. Cohesive groups have energetic, highly motivated and committed members who have a lower incidence of absenteeism. Members of cohesive groups are satisfied and they willingly help each other.

Cohesive teams are not necessarily productive. Their productivity varies to the extent that the team accepts or rejects the firm’s goals. If group norms and organisational goals are compatible, then cohesiveness generally aids performance and competitive advantage. If they are incompatible, then the opposite occurs.

Incohesive groups tend to have negative qualities, including indifferent members

who are unable to achieve goals and lack of dynamism. Members of these groups

also exhibit lateness and absenteeism.

To make team cohesiveness a component of competitive advantage, managers have to start with the basics. First, teams should have members whose personal characteristics match team task demands. Training should support the formation and use of SDTs by the organisation. Second, managers should consider the size of SDTs and how it can create interpersonal conflict, slow decision-making and make task coordination difficult (all process losses). Some of these problems can be solved through the use of training and advanced communications systems that provide timely quality and productivity information to teams.

Third, managers who set clear goals are going to capitalise on this important source of team motivation and cohesiveness. Related to this idea is the creation of an external threat which can be used as motivational tool. The manager should be careful to ensure that symptoms of groupthink do not occur in the team however. Finally, conducting 360-degree PA and using team-based incentives will make team cohesiveness a pillar to improved

competitive advantage.

5

First, these corporate arrangements have flourished in Japan because of a supportive government industrial policy that protects the domestic market with high entry barriers and very high prices for Japanese consumers. This practice has fuelled keiretsu profits which they then plough into global expansion. All of this progress was made possible by Japanese consumers who paid very high prices and saved large amounts of their incomes (and subsidised low corporate interest rates).

Current global economic forces (the rise of India, China and other Asian tigers) are weakening the competitiveness (and profitability) of the keiretsu and putting downward pressure on their profit margins. Domestically, Japanese consumers are awakening to the joys of price comparison shopping and retailer discounts. An extremely strong yen has also forced the keiretsu to build production facilities in America and Europe to avoid the erosion of profits that occur if the keiretsu are forced to repatriate them in yen. A side-effect of building production facilities on

foreign soil is that the keiretsu are forced into direct rivalry in markets where their

competitors are strong and cultural barriers must be overcome.

Declines in keiretsu profit margins pressure long-standing traditions such as employment

for life and friendly supplier relations. Japanese workers and managers are, for the first time, experiencing the effects of lay-off-induced economic insecurity.

They have to become more self-sufficient and many are starting their own firms. Suppliers to the keiretsu are responding to their squeezed (and dismal) profit margins by becoming more entrepreneurial (finding new customers, developing new products, forming strategic alliances with foreign firms and improving service offerings).

These forces are transforming the Japanese economy and its private sector. In the short run, there will be more business failures and higher unemployment. Both of these outcomes will trigger more government spending on social programmes and economic development. Japanese consumers will become more price-conscious and they will come to expect discounts and wider product selection. In the long run, the economy will become more competitive and Japanese consumers will enjoy a rise in their purchasing power and a wider selection of domestic and foreign-made goods.

6

There are a number of predictable outcomes that would affect Ulie and her fellow, senior planners. They would experience an immediate decline in job satisfaction because they would realise that providing excellent service to their existing clients is now less important than finding new ones. Veterans’ satisfaction with intrinsic and extrinsic rewards would taper off and serious damage would be done to their previously high levels of organisational commitment. Equity theory predicts that senior planners like Ulie would be extremely dissatisfied under the CEO’s policy. They would continue to value their skills and deep knowledge of clients’ preferences

while the CEO would favour the sales gains made by new planners who attracted

new clients. The gulf would only widen!

The unbalanced equity situation could trigger an exodus of senior planners if the firm hit a slow sales period and had to offer an attractive retirement package to reduce its high fixed costs. The senior planners are already smarting from the CEO’s age discrimination. If he had to reduce labour costs, these employees would jump at even a modest severance packages and their knowledge of client needs would vanish. This could seriously undermine the loyalty of long-term clients and the firm would lose an important component of its competitive advantage.

7

These employees may not be promotion oriented because they believe that promotions, pay raises, and desirable assignments are based on luck and being in the right place at the right time. They may also believe that promotions and other rewards are based on favouritism and not performance. They would be less compelled to argue strongly for their points of view in the face of opposition. They may quickly respond positively to any announcement that affects them in a favourable way.

Finally, they may blame themselves if a project or a task fails.

A supervisor can influence an employee’s locus of control by (a) raising work rewards; (b) adding job challenge; (c) clarifying the relationship between job performance and job satisfaction; and (d) delegating authority and basing rewards on goal accomplishment.