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High-Involvement Organizations

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Presentation on theme: "High-Involvement Organizations"— Presentation transcript:

1 High-Involvement Organizations
High-Involvement Organizations

2 Overview Key Components of High-Involvement Organizations
Overview Key Components of High-Involvement Organizations History/Evolution of Management & Organizational Change Components of High-Involvement Organizations; how they’ve evolved, how they are currently manifested Process of implementation Case studies highlighting real-world implementation Cultural influences on High-Involvement Organizations Current trends and the future of HIOs

3 Hallmarks of High-Involvement Organizations
Hallmarks of High-Involvement Organizations Based on Edward Lawler’s model Challenge the structures and values of traditional organizations Employees are given the right mix of power, information, rewards and knowledge Encourage employee commitment to the success of the organization Employee oriented approach versus control oriented approach to management An approach to management that encourages employee commitment to the success of the organization Employees at all levels of the organization are given the right mix of information, knowledge, power, and rewards so that they can influence and be rewarded for organizational performance

4 Evolution of the High Involvement Approach – A Timeline
Evolution of the High Involvement Approach – A Timeline End of 19th century – Introduction of Classical Organizational Theory, development of Bureacracy 1910 – 1920 – Scientific Management; Taylor 1920s – 1930s – Hawthorne studies; Mayo, Introduction of Behavioral Organizational Theory, Human Relations Movement 1950s – 1960s - Human Resources Movement; Open Systems Theory, Introduction of Contingency Theory Classical Theory – Max Weber & Fayol Human Relations – Mayo * McGregor Contingency - Woodward

5 Evolution of the High Involvement Approach – A Timeline
Evolution of the High Involvement Approach – A Timeline Criticism of the Traditional Model begins Initial Experimentation 1970s National debate regarding bureaucratic organizations 1980s Concern about U.S. economic well-being 1990s – today Advocacy to broaden the scope of high-involvement management to encompass the entire organization

6 High-Involvement Organizations: Organizational Democracy
High-Involvement Organizations: Organizational Democracy Definition of workplace/organizational democracy (Cheney) Participation is a necessary condition of democracy Employee participation is largely a function of power, information, rewards and knowledge According to Cheney, one of the greatest ironies of the modern world is that the principles of democracy are rarely applied to the workplace. Extending democracy to the workplace involves the realization of our standards for a democratic society Definition of workplace democracy: “a system of governance which truly values individual goals and feelings as well as typical organization objectives (effectiveness, efficiency) which actively fosters the connection between those two sets of concerns by encouraging individual contributions to important organizational choices, and which allows for the ongoing modification of the organization’s activities and policies by the group”. (Cheney, 1995). The degree to which an organization is “democratic” is determined by the level of employee involvement/participation, which is a function of P.I.R.K. -- therefore, HIOs bridge the gap between our society’s democratic values, and common workplace practices.

7 Key Features of High-Involvement Organizations
Key Features of High-Involvement Organizations P.I.R.K. Power Information Rewards Knowledge

8 Power Power to act and make decisions about the work in all its aspects

9 Information Information about processes, quality, customer feedback, events and business results

10 Rewards Rewards tied to business results and growth in capability and contribution

11 Knowledge Knowledge of the work, the business, and the total work system

12 Relationship Between the Four Elements
Relationship Between the Four Elements POWER w/o knowledge, info. & rewards = poor decisions INFORMATION & KNOWLEDGE w/o power = frustration REWARDS w/o power, knowledge & info. = frustration & lack of motivation INFO., KNOWLEDGE & POWER w/o rewards = danger nothing will ensure people will exercise their power in ways that will contribute to organizational effectiveness

13 COMPONENTS OF HIGH-INVOLVEMENT
COMPONENTS OF HIGH-INVOLVEMENT ORGANIZATIONS

14 Implementation of HIO No universally accepted approach
Implementation of HIO No universally accepted approach Implementation is specific to the organization’s situation Guided by an explicit statement of values that members in an organization support Guided by participative nature

15 Organizational Structure
Organizational Structure Flat Lean Mini Enterprise-oriented Team-based Participative structure

16 Job Design Individually enriched Self-managing teams
Job Design Individually enriched Self-managing teams Psychological needs of employees

17 Information System Open Inclusive Tied to jobs
Information System Open Inclusive Tied to jobs Decentralized; team-based Participative in setting goals & standards

18 Career System Tracks & counseling available
Career System Tracks & counseling available Train individuals to manage careers Encourage horizontal moves Open job posting Provide feedback

19 Selection Realistic job preview Team-based interviews
Selection Realistic job preview Team-based interviews Involve people from the potential work area Promote growth

20 Training Heavy commitment Peer training Economic education
Training Heavy commitment Peer training Economic education Interpersonal skills

21 Reward System Open Skill-based pay
Reward System Open Skill-based pay Gain sharing, profit sharing & ownership Flexible benefits All salaried workforce Egalitarian perks

22 Personnel Policies Stability of employment
Personnel Policies Stability of employment Participatively established through representative group

23 Physical Layout Around organizational structure Egalitarian
Physical Layout Around organizational structure Egalitarian Safe and pleasant work environment Transparent and open

24 ORGANIZATIONAL PERFORMANCE
The Power of Participation Why should organizations initiate high involvement strategies? employee involvement increased motivation & commitment higher levels of higher levels of employee motivation employee commitment = IMPROVED ORGANIZATIONAL PERFORMANCE (Directly impacts the BOTTOM LINE)

25 Organizational Structure
Selection Career System Reward System Information System Organizational Structure Personnel Policies Training Job Design Physical Layout

26 Case Study Chevron

27 Case Study Mini Enterprise-oriented company Four business groups:
Case Study Mini Enterprise-oriented company Four business groups: Chevron Corporation Chevron Chemical Corporation Chevron Information Technology Company Chevron Shipping Company 34,000 employees

28 Chevron Corporation Parent Organization to other three
Chevron Corporation Parent Organization to other three Operations in 90 countries Involvment in such things as: Exploration and production Transportation Refining and retail marketing Chemical manufacturing and sales

29 Chevron’s Breakdowns Chevron Chemical Company - 5,000 employees
Chevron’s Breakdowns Chevron Chemical Company - 5,000 employees Supply of petroleum-based commodity and specialty chemicals to businesses Chevron Information Technology – 1,300 employees Internal operating company, delivers global IT infrastructure and differentiated custom IT solutions to Chevron businesses Chevron Shipping Company – 1,900 employees worldwide

30 The Dilemma Chevron was looking for a way to quickly bring about large-scale change due to: Global competitive pressures Falling crude oil prices How can a large, multi-national company implement large-scale change, quickly?

31 The Answer Chevron needed to directly involve their employees in the change through a process called “Direct Participation”

32 Direct Participation A high-involvement approach to achieving change in a short time-frame Roots in the work of Fred Emery & Marvin Weisbord’s Search/Future Search Conferences The process centers itself around large-scale conferences

33 Direct Participation The overall idea is to get a representative sample of the major stakeholders in the organization together in one place The stakeholders work together to come up with solutions to company problems, collectively

34 How it Works – Senior Management
How it Works – Senior Management Decide on issues to be discussed & set boundaries for what can be changed Communicate that the process is vital must be taken seriously Personal telephone calls Face-to-face discussions Personalized invitations to conference Be present at the conference and participate as equals

35 How it Works – The Planning Team
How it Works – The Planning Team Responsible for: Framing Issues Make necessary information available Develop and distribute contextual materials Keep the process focused during the conference Work to channel the discussions

36 How it Works – The Planning Team
How it Works – The Planning Team Responsible for: Selecting Participants Ensure that all aspects of organizational diversity are represented Designing Tools and Conference Activities Develops templates that participants use to capture outputs in a specific, detailed and consistent format

37 How it Works - Technology
How it Works - Technology Interactive Polling Give participants graphically intensive information Allow facilitators to follow the progress of the conference Allow facilitators to recognize when a decision could inadvertently have an adverse impact on a given minority

38 Design Features Organizational Structure Information System
Design Features Organizational Structure Mini Enterprise-oriented Team-based Participative council or structure * Information System Open * Participatively set goals and standards * Personnel Policies Participatively established through representative group *

39 Where is PIRK? Where do you think PIRK has been applied to Chevron’s system?

40 Outcomes Chevron Shipping Co.
Outcomes Chevron Shipping Co. Purpose: identify $5 million in annual employee-related cost savings Participants: 150 mariners & shore staff Outcome: 13 recommendations that would cut $1.9 million in costs, another $3.4 million in cost-saving ideas were identified The group found savings that management could not have known about and avoided adverse impact on the Asian officers Wanted to cut spousal travel, b/c kept and management endorsed – increased trust & goodwill in organization

41 Outcomes Chevron Chemical Purpose: Performance Systems Redesign
Outcomes Chevron Chemical Purpose: Performance Systems Redesign Participants: 180 employees, customers & suppliers Outcome: Specific recommendations for enhancing job selection, career development, performance management and recognition systems let to 20% increase in employee commitment & 50% improvement in satisfaction

42 Outcomes Chevron Corp. Purpose: Develop a system to promote diversity & to measure diversity achievements Participants: 200 employees Outcome: 15 strategies; key metrics including numerical targets for women & minorities for leadership roles, diversity plans that are part of all leaders’ performance evaluations, & improvement in employee survey

43 Outcomes Chevron Information Technology
Outcomes Chevron Information Technology Purpose: New strategy to ensure the continued delivery of value-added services Participants: 100 employees, as well as customers Results: 6 action items; mentoring program and strategy communication Participants signed up to participate in ongoing groups after the conference CITC had developed this strategy and restructured it in response to competitive pressures in the fast-changing IT field, but confusion and mistrust were threatening the strategy’s execution. The conference also addressed some historical and gender and race discrimination issues This mentoring program is still used today in Chevron Texaco

44 Employee Participation, Commitment, Empowerment
World Class Quality Talent of workforce Quality (Rao et al.,1999) Workforce empowerment World Quality Human Resource Development Employee Participation, Commitment, Empowerment & Involvement

45 The Model Base (Bennett, 1999)
The Model Base (Bennett, 1999) Influences on Work Attitudes Cultural Values and Beliefs (east) Situational Practices and Characteristics (west) Work Attitudes

46 The Culture Model (Hofstede, 1980)
The Culture Model (Hofstede, 1980) Culturally influenced dispositional characteristics of a nation serve as guides to organizational behavior Uncertainty Avoidance Individualism/Collectivism Masculinity/Femininity Power Distance Individualistic: Reward and Power (USA, Britain) Collectivistic: Knowledge and Commitment (China, India)

47 Individualism Scores (Hofstede, 1997)
Individualism Scores (Hofstede, 1997)

48 Power Distance Scores (Hofstede, 1997)
Power Distance Scores (Hofstede, 1997)

49 The External Environment of Newly Industrialized Countries
The External Environment of Newly Industrialized Countries Move from centrally planned to market driven economy Open to global competition Large internal markets Growing middle class with high purchasing power Increase in volume exports to the west CHINA INDIA

50 !Contradiction! Collectivistic: Lack of high involvement
!Contradiction! Collectivistic: Lack of high involvement [INDIA, CHINA -- close-knit teams, participation] Individualistic: Prevalence of high involvement [USA, BRITAIN -- independent, lack of participation] Individualists working collectively Working independently despite her collectivistic society

51 The Idea Collectivism = High Power Distance = Low involvement
The Idea Collectivism = High Power Distance = Low involvement Individualism = Low Power Distance = High involvement Collectivism = Deep-rooted Culture Influence reflected as High Power Distance = Low involvement Individualism = Current Situation Influence reflected as Low Power Distance= High involvement Collectivists are on their way to achieving high quality without high employee involvement and participation through their current trends in organizational operations... The current trend within developing nations is focused on leadership and increased national reward systems

52 The Expert System Trend
The Expert System Trend An Expert System is a computer software package that provides the computer with the art of decision making similar to human beings. The Quality Circle Expert System was needed to combat the failure of quality circles, lack of employee participation in management decisions, and to maintain the power distance within collectivist cultures. Emerging trend in Indian manufacturing firms.

53 Functioning of Expert Systems
Functioning of Expert Systems 1. Present Status Module Knowledge of benefits and shortcomings of the present global status of various quality circle programs initiated 2. Action Plan Module User interacts by enquiring about feasibility of undertaking essential activities in the firm 3. Planning for Implementation Module QCES elicits information from user and gives detailed report on probable success 4. Diagnosis Module Diagnoses causes of failure of quality circle programs in the firm after partial of full implementation

54 Current and Future Trends
Current and Future Trends Organizations have been slow to implement employee involvement principles Internal resistance Uncertainty about to implement Lack of systems support Little empirical data to support the assertion of the efficacy of high-involvement organizational to produce greater qualitative and quantitative outcomes Further research necessary Despite the attractiveness of the concept of employee involvement, most of today’s organizations are NOT managed in this way. Why? For a long time (up until the 1980s) managers never questioned or considered changing the status quo because it was familiar. “If it ain’t broken, don’t fix it” attitude. When the concept of high-involvement was introduced, and some organizations attempted to apply it, they experienced some internal resistance to this change. In many cases, management was reluctant to give up special privileges, status, power, etc. In addition, there may have been resistance from lower level employees who were cynical about the change. A lack of support systems makes the HIO change effort even more difficult. Often managers attempt to build HIOs within traditional organizations. While this can be successful, in the absence of overall systems support, high-involvement work units are fragile and can be eliminated all together by new management. Many executives/managers are still uncertain about how to implement HIOs, or simply do not think they have access to the necessary resources to implement such a drastic change.


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