Chapter one

1. INTRODUCTION 1.1. Background of the study

In todays competitive market-led economy, the existence of an organization depends on its ability to compete and win the market share. The reactionary way of doing business is being replaced by a more pragmatic way of business management. In order to effectively compete and win the market share, organizations have two fundamental option to follow; one is capitalizing on internal capabilities and strengths and the other one is capitalizing on external opportunities (Michael porter,1998) . Of the two options, the first one is reliable (since the external environment is filled with the uncertainties). Even though these are different mechanisms of capitalizing on the internal, to be a truly world class organization, the company needs to work as a team and all the functional areas of the business needed to be properly integrated, with each understanding the importance of cross functional process. Customers, competition, and change have created a new world for business, such that organization designed to operate in one environment are inadequately equipped to operate well in another. Customers today are characterized by relentless demands in quality, service and price by their disloyalty. Therefore, to meet their challenge, organizations are working towards an era of process management and this is one of the reasons why BPR implementation is considered as a decisive mechanism of enhancing business performance. In this study, the needs for radical improvement and the use of BPR in bringing about their change is not under question, but how BPR is implemented and the role and considerations of human resources in the process will be assessed A recent study, considered by Hugh Wilmot, Judge institution of management, university of Cambridge, found that the marginalization and trivialization of human dimension from expositions of BPR is remarkable. Making the transition from function centered to process oriented organizing practices
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necessarily depends upon the human resources who act, and are needed by BPR. Therefore, in this study, the implementation of BPR in Gulele Sub City will be assessed. The study will be conducted by taking fifty randomly selected participants from Gulele sub city. The target populations for the study will be all of the permanent workers employed in Gulele sub city. The participants will be selectd by a probabilistic sampling method
1.2. Statements of the problem This study will fill the literature gap by critically assessing the practical BPR implementation in Gulele sub city In order to come up with the finding on the issue, the following specific question will be answered throughout the research: In Gulele sub city case, what effects did the BPR implementation program had on the human resource If there were any resistance to change, what remedies the organization used to address the problem How the BPR is related to human resource issues, such as employee motivation, turnover and succession planning What was the role of the human resource department in the BPR implementation program How was the BPR program is perceived by the employees of the organization Do you think BPR is important for your organization

1.3. Objective of the research 1.4.1. General objective The study generally tries to see the BPR implementation in Gulele sub cit 1.4.2. Specific objectives Assessing how BPR implementation is conducted in relation to the human resource Assessing if there were any resistance to change, and if there were, the remedies used to address the problem
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 Assessing how the BPR address human resource issues Assessing what the role of human resource department was in the BPR implementation program Assessing the benefits of BPR implementation in the organization Assessing the problems of BPR in the organization Assessing what the employees attitude is towards BPR implementation program 1.4. Significance of the study Beyond its academic purpose, the study will help the sub city to understand its implementation of BPR It will also help the organization to see how the process implementing BPR is being undertaken Moreover it will help in providing the stepping stone for further study in BPR 1.5. The scope of the study . The study focuses on the assessment of BPR in Gulele Sub city 1.7. Limitation of the study The research will face the following limitations: Shortage of time Shortage of money Lack of willingness of the respondents

CHAPTER TWO LITERATURE REVIEW

1.1.

Defining BPR Several authors have provided their own interpretation of the changes being applied to organizations, for example Davenport and Short (1990) have described BPR as the analysis and described BPR as the analysis and design of work flows and process within and between organizations. Hammer and Champ (1993) have promoted the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in radical, contemporary measures of performance, such as cost, quality, service, and speed. Other authors such as Lawler (1993) have focused on the rethinking, restructuring and streaming of the business structure, processes, methods of working, management systems and external relationships through which is created and delivered. Petrozzo and Stepper (1994) on the other hand, believe that BPR involves concurrent redesign of processes, organizations, and their supporting information systems to achieve radical improvement in time, cost, quality, and customers regard for the companys products and service. While Lowenthal (1994) describes the fundamental rethinking and redesign of operating processes and organizational structure, the focus is on the organizations core competencies, to achieve semantic improvements in the organizational performance, as BPRs essential components. Although the definition by Davenport and Short (1990) is much narrower, their description of the concept is as reaching. In practice, both TQM and BPR have focused on the definition and operation of business processes to produce products and services within a defined business scope. However, neither TQM and BPR have focused on strategic business direction setting or planning, but of course these may be necessary components in achieving this vision. Also each methodology, in its own right, does not have the intention or the capability of reinventing business or industry. More importantly only one of these definitions refers to information system. It can thus be a said that BPR is not necessarily dependent on IT solutions. There is general agreement that IT can be a powerful enabler, with the radical improvements sought more a function of organizational process redesign, rather than IT implementation where there in solution, it is in both the interpretation and the scope of the organizational change cocept. Hammer (1990) referred to business process reengineering, while Davenport and Short (1990) to business process design. However, there are still many other authors with variations on these terms, all referring to changes large and small. Put into strategic context, BPR becomes a means of aligning work with customer requirements in an interactive way, in order to achieve long-term corporate activities achieve this. Senge (1990): Deming (1993) advocate a systems

outlook involving customers, suppliers and the future. Gulden and Reck (1991) support this view by showing that the secrets to designing a process lie not so much in intimately understanding the way it is performed today, but rather thinking about how to reshape it for tomorrow.
1.2. Objectives of BPR Deming (1993); Senge (1990) have written about the importance of systems thinking in understanding work flow, business processes, and the impact of feedback. In any system, events will occur that have an effect elsewhere in the system, and possibly on the event itself. In order to have a full understanding of the effects of what is being done, it is necessary

1.3. Importance of BPR

Business process reengineering is a major innovation changing the way organizations conduct their business. Such changes are often necessary for profitability or even survival BPR is employed when major IT project such as ERP are undertaken. Reengineering involves changes in structure organizational culture and process. Many concepts of BPR changes organizational structure. Team based organization, mass customization: empowerment and telecommuting are some of the examples. The support system in any organization plays important role in BPR. ES, DSS allows business to be conducted in different locations, provides flexibility in manufacturing permits quicker delivery to customers and supports rapid paperless transactions among suppliers, manufacturers and retailers. Expert systems can enable organizational changes by providing expertise to non experts. It is difficult to carry out BPR calculations using ordinary programs like spreadsheets etc. Experts make use of applications with simulations tools for BPR. Reengineering is basically done to achieve cost reduction, increase in quality, and improvement in speed and service. BPR enable a company to become more competitive in the market. Employees work in team comprising of managers and engineers to develop a product. This leads to the information of interdisciplinary teams which can better than mere functional teams. The coordination becomes easier and faster results can be achieved. The entire business process of developing a product gets a dimension. This has led to reengineering of many old functional processes in organization. 2.5. Organization Theory and BPR Manganelli and Klein(1994,78) defined reengineering as the rapid and radical redesign of strategic value added business process and the system, policies and organizational structure that support them to optimize the work flows and productivity in an organization. Similarly, Hammer and champy (1993) define reengineering as the fundamental rethinking and redesign of business processes to achieve dramatic improvement in critical, contemporary measures of performance, such as cost,
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quality, service and speed. These definition highlight that BPR is, first, a tool for restructuring organizations by redesigning the business processes by redesigning the business process and second that BPR should serve the value adding purpose of organizations by creating a structure that is effective, efficient, and flexible. In this connection it is necessary to identify which school of management theory, BPR is associated with, and as to explain the concepts of efficiency, effectiveness and flexibility that are widely discussed in many literatures of organization theory. 2.6. Evolution of BPR in the Ethiopian Public sector The feseral civil service agency, the former personnel agency was established in the early 1960s to administer the staffing of the civil service. This bureaucratic system was too archaic and non responsive to the technological and social changes that took place for decades after its establishment. It had constrained by structural problems, inefficiency, mission ineffectiveness, and corruption. Right after the downfall of the military Government in1991, an agenda for the transformation of the civil service was initiated by the transitional Government as part of the economic reforms and structural adjustment programs. As an important first step to reform the civil service, the government set up additional task force in 1994. The task force identified the key problems of the civil service and recommended the CSRP to build a fair responsible, ethical, and transparent civil service that promotes accelerated and sustained economic development and good governance. The task force identified five components (sub program) within CSRP. These are top management system, human resource management, service delivery, expenditure management and control and ethics. During the implementation of the CSRP between 1996 and 2001, the reform was constrained by absence of well developed organizational structure, lack of competent personnel and public sector managers, lack of participation by key stakeholders, attitudinal problems and absence of strong institutional framework (Paulos, 2001). Congnizant of these problems, the Ethiopian government sponsored different management tools such as customer service delivery, strategic planning and management, and resulted-based performance management with the aim of enhancing the human resource capacities of the public sector organizations. Even though the former MoCB redefined the objectives of the CSRP in June 2003 (Getachew and Common) and introduced such initiatives, the implementation of the reform has been constrained by the red tape bureaucratic structures. To address these problems, the Government began introducing BPR in 2004 as a strategic tool to reinvigorate the reform by changing the systems and restructuring its policy implementing agencies so that can be mission implementation in the Ethiopian
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public sector passed through two phases. The first one was between 2004 and 2006 while the second was since July 2006.

In the first phase, BPR was carried out reengineer functions or departments of some public organizations. Success stories associated with the first attempt to reengineer departments include that of the former MotI. This ministry managed to reduce the cycle time for issuing a business license from an average of 8 days to 39 minutes and the time to register a business from an average of 2 days to 34 minutes (Getachew and Common, 2007). Encouraged by such results and being cognizant of the limitations of the approach of implementating BPR in the first phase, the government embarked upon the second phase of BPR on a wider scale to reengineer the whole organization rather than its departments and functions. The current state of condition that exists in relation to BPR and HRM is that, BPR implementation has continued in its trivialization and marginalization of the human resources. BPR implementation involves five stages of organizational transformation model (Venkatraman, N., 1994, Sloan management review,35), these stages are; automation, horizontal integration, BPR, network redesign, and organizational scope redefinition. There is no mention of HR involvement and consideration with this regard. 2.7. BPR and HRM In their model of HRM, beer et al. (1984) see job design broadening employee responsibilities and resulting in substantial improvements in all four Cs, commitment, competence, cost effectiveness, and congruence. Thus, the design of organizational structures and the way work is performed are critical features of the HRM model. As Guest (1990) points out, the HRM model is underpinned by the need to reconfigure organizational structures as the rhetoric is essentially anti bureaucratic. Guest further emphasizes the concomitant change in job design. HRM takes as its starting point the view that organizations should be designed on the basis of the assumptions inherent in McGregors (1960) theory Y As we mentioned previously in chapter 2, the new buzz word for the redesign of organizational structures and work processes is re-engineering. Much of the rational for reengineering has been developed initially in a USA context, then generalized across North America and European economies. Hammer and Champy (1993) form us that re-engineering is necessary because the world is a different place. To respond more rapidly to global changes, to make organizations compete more aggressively in
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global markets, to have a workforce that is more flexible and attuned to the needs of customers, senior managers have fundamentally to restructure business processes. Reengineering should be understood in the context of the debate on postmodernist thinking for organizations (Hassard and parker, 1993). In terms of organizational design and analysis, postmodernism is linked to and underpinned by a portfolio of theories including flexible specialization, disorganized capitalism and postFeudalism (Thompson, 1993). To this family of theories we can add re-engineering, running parallel with debates on postmodernist organizational structure has been a renaissance of interest among academics in the field of technological change and job design. However, when academic observers refers to a degradation of work or the enrichment of work. What theoretical perspectives are the authors employing? Work can be studied from two broad academic perspectives; psychological and sociological. A sociological perspective of work is concerned with the broader contextual and structural factors affecting people experience of work. An important theme for sociologists is that of the division of labour, which refers to the way in which people in society can specialize in doing particular types of workers. At the level of the organization, the internal division of labor is a basis of efficiency and control of workers. At society level, the division labor has produced the occupational structure of professional, clerical, skilled and unskilled manual occupations. Another important topic in the sociology work is that of work-based inequalitities and , within this, the social division of labor, which shows that contemporary society, allocates particular work to men and women (Littler and Salaman, 1984; Thompson, 1989). The psychological study of people at work attempts to understand individual behavior, and there is a large body of literature covering the academic field of organizational behavior, concerned with managerial problem s of motivation, job satisfaction, work stress, job design, and any other factor relevant to working conditions that could impede efficient work performance. An early theory of individual work behavior attempted to explain the nature of motivation in terms of the types of needs that people experience (Maslow, 1954). Subsequent theoretical contributions from behavioral scientists, such as McGregors Theory X and Y (1960). Herzbergs motivation-hygiene theory (1966), and Vrooms expectancy motivation theory (1964), have practical implications for the way organization controllers design work structures and rewards. More recently, a model has been put forward that links core characteristics of work and the critical psychological processes acting on individuals and their immediate work groups (Hackman and Oldham, 1980)

2.8. The Nature of work 8

Work refers to physical and mental activity that is carried out at a particular place and time. According to instruction, in return for money. This definition draws attention to some central features of work. First, the notion of physical and mental obviously suggests that the activities of a construction worker or computer systems analyst are deemed to be work. Second, the tendency for the activity to be away from our home and at set time periods of the day or night, place and time, locates work within a social context. Third, the social context also includes the social relations under which the activity is performed. When a mother or father cooks the dinner for the family, the actual content of the activity is similar to that performed by a cook employed by a hospital to prepare meals for patients. But the social relations in which the activity occurs are quite distinct. The hospital cook has more in common with factory or office workers because their activities are governed by rules and regulation- instructions from the employer or the employers agent. Clearly then, it is not the nature of the activity that determines whether it is considered work, but rather the social relations in which the activity is embedded (Pahl,1988). Fourth, in return for physical effort or mental application, figure, and loss of personal autonomy, the worker receives a mix of rewards, including money, status, and intrinsic satisfaction. Watson (1986) refers to this mix of inputs (physical and mental activities and so on) and outputs (rewards) as the implicit contract between the employer and employee. Although this definition helps us to identify key features of the employment relationship, it is too narrow and restrictive. First, there are all the activities, both physical and mental, that do not bring in money. Such activities can be exhilarating or exhausting: they may involve voluntary work for the citizens advice bureau or may involve the most demanding work outside paid employment, child care. Again, the same activitiesadvising people on their legal rights and being paid for it or being employed in a nursery- would all count as work because of the social relations and the monetary reward. Second, it is clear that the rewards, satisfaction and hazards of work are distributed highly unequally. Contemporary society rewards employees according to the kind of people they are and the kind of work they do. Historically, women receive less money than men in similar work. Work can also be dangerous and unhealthy, but the hazards are not distributed evenly. Despite the publicity surrounding managerial stress, the realities of the distribution of work-related hazards show that they are most prevalent among manual workers. Furthermore, it has been argued that this unequal distribution of workrelated accidents represents the systematic outcome of values and economic pressures (Littler and Salaman, 1984). There is no doubt that the nature and experience of work is changing. The 1998 WERS study, for example, reported that in around 25 percent of workplaces surveyed, most employees in the largest occupational group are trained to be adaptable (Culley et al.1998,p.9). As part of the wider process of globalization and the implementation of new managerial strategies, there is an ongoing shift of paid work into the service sector, an increase in information technology, and increasing numbers of women being drawn into the waged labor force. Contemporary forms of waged work, particularly in the less developed industrialized economies, are dependent on the integration between work and family (Moore, 1995). The nature of work affects human resource management activities. For example, the pay an employee receives is related to social attitudes and traditions rather than the actual content of the activity; pay determination requires an understanding of the social division of labor, and gender divisions of labor in particular (Pahl, 9

1988). Management decides how the tasks are divided into various jobs, and how they related to other tasks and other jobs, contingent upon different modes of production And technology. Decisions are also made about control systems, the ratio of supervised, the training of workers, and the nature of the reward system. Thus HRM is both affected by and profoundly affects an individuals experience of work. Clearly, the way work is designed impacts both on the effectiveness of the organization and the experience and motivation of the individual and work group. It is the process of job design that we now consider. 2.9. Job Design The need to harness human resources in innovatory way to give organizations a competitive advantage has focused attention on the question of design. It is defined as: the process of combining tasks and responsibilities to form complete jobs and the relationships of job in the organization. 2.9.1. Job design and the HRM cycle Job design is related very closely to key elements of the HRM cycle, selection, development, and rewards. Job design basic to the selection function. Clearly, a company that produces small-batch, high value added products using skilled manual labor will have different recruitment and selection priorities from an organization that specializes in large- batch production using dedicated machines operated by unskilled operators. Job design also affects the HR development. Specifically, any change to work patterns will require some form of systematic training. If an organization chooses either to fragment or combine tasks, alternative reward system may have to be designed. For example, a pay for-output system may be obstacle flexibility. 2.9.2. Human Resource and Organization Capacity Human resource: since the important elements of organizations are people, it is important to assess the effect of BPR on motivation of employees. Different scholars have reflected that motivation of employees can be influenced by the type of incentives offered to employees in the form of salary, promotion, training benefits (Terry and Franklin, 1991). In addition, the working conditions and the design of a job affect the degree of interest that an employee has towards his job. We have discussed that specialization of jobs increases horizontal differentiation. To alleviate the disparaging effect of too much specialization and motivation, human resource experts have introduced the following major techniques of job design: I. II. III. Job rotation is rotating an employee between specialized tasks. This help to create a generalist employee as proposed in BPR. Job enlargement is increasing the scope or the varities of job. This is a means to do end-toend work as claimed in BPR. Job enrichment is the process of combining vertical activities to provide the worker with more autonomy, responsibility and accountability. This also addresses the issue of empowering employees to make work related decisions. There are many reason why people resist BPR program and changes that accompany thereof. Hammer M. in his eminent book beyond reengineering, has determined four

10

questions that people ask when faced with organizational restructuring and radical business process redesigns. The questions are; Will I succeed in this new world of work? How and how much will I be paid? What title will have? What sort of future can I expect? When we sum up this four questions, the bottom line is whats in it for me?. Its been said that every great idea eventually degenerates into hard work. Similarly, every great concept ultimately succeeds or tails in the arena of self interest. It is with such personal questions, rather than abstract ones: that most people are intensely concerned. 2.9.3. Hammering The Human Resource The marginalization and trivialization of the human dimension from exposition of BPR is remarkable even by the standards of leading proponents of TQM.

Taking the transition from function centered to process oriented organizing practices necessarily depends the human resources who enact, and are enacted by, BPR. Given the focus upon business processes , it is incredible how little attention is given by BPR to the human dimensions of organization shortcoming is symptomatic of the way BPRs c lams and prescriptions for change are even more extracted from the practical realities of organizing and managing people than earlier recipes for approving business performance, such as Excellence and TQM. Little consideration is given to the issue of how BPRs (universal) remedies are to be reconciled with ( particular) conditions in which its prescriptions are to be applied. When example unequivocal success stories. Indeed , virtually the only comment made by Hammer on the human dimension of BPR is that its demands upon employees are entirely congruent with an education (trans! Disciplined) workforce that no longer requires close supervision. What methods are used to produce this workforce remain a mystery the population in general is simply deemed to be capable of assuming responsibility, cherish their Autonomy and expect to have a say in how the business is run. Consider he situation of the case manager at MDL. Assuming that the tasks which they performed were driven by menus, it is difficult to reconcile the lightly reutilized design of their work with Assuming responsibility. If employees do indeed cherish their autonomy, it would be interesting to discover how MBL retained these case manager Finally, it would be instructive to know what say they had in running the
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are given. These

are presented as

business For Exampled. What involvement can they expect to have in any future reengineering process that might further intensify their work or eliminate their positions? Champions of BPR, like Taylor again, are willing to acknowledge that the radical changes envisaged by BPR may encounter some resistance. But they also assume that this resistance can be dissolved by BPR may encounter some resistance. But they also assume that this resistance can be dissolved by effective leadership and commitment from top management . Hammer, for example, acknowledges that the disruption and confusion generated by reengineering can make it unpopular, though he is equal confident that any opposition can be effectively surmounted by top-level managers. The commitment of managers as champions of BPR is deemed to be sufficient to enlist those who would prefer the status so, despite and admission that the strain of implementing a reengineering plan can hardly be prserstimated Hammer is sure that employees can be convinced of its virtues: or to put this more directly. Where major job losses are involved, he is confident that strong leadership[can persuade deficient turkeys to vote for Christmas. In a recent Harvard Business Review article that reviews the experienced of BPR in 100 companies, with detailed consideration to its application in 20 companies , a rather less sanguine conclusion is reached once again, it assumed that strand leadership from management is necessary if BPR projects are not be sabotaged by the psychological and political disruptions that accompany such radical change However, there is greater

appreciation both of the depth of the this resistance and the scale of resources and length of time required to accomplish radical organizational transformation; all the old support systems will become obsolete- from IT systems to employee skills The new infrastructure should include programs like comprehensive training and skill development plans that require years, not merely months, for success; performance- measurement systems that track how well the organization is meeting its targets and how employees should be rewarded based on those objectives; communication programs that help employees, understand how and why their behavior must change . here thee is some awareness of how employees , not just processes, must be reengineered or debugged if they are to run effectively in the systems. However, there remains the assumption that employees, including managers , ate infinitely malleable: that the parallel development of HRM systems
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and strong leadership will dissolve resistance and that the new systems will not themselves generate new problem and resistances. What such assessments and proscriptions omit or ,at best marginalize is an appreciation of BPRs major implication for Job losses and further intensification/ degradation of the quality of working life for employees at all levels which does not further intensification/degradation of the quality of working life for employees at all levels. Which does not mean that some features of the changes envisaged by process reengineering will not be welcomed? For example, despite the increased reutilization and depersonalization of their work, case managers at MBL / see above) may approve of the removal of supervisors or prefer the reduced fragmentation of tasks. But even those who, on balance, endorse such changes are also likely to have reservations about its implications for their future job security. They may also recognize and resent the extent to which the pace and accuracy of their work can now be continuously monitored. Albeit indirectly by information systems. Hammer himself acknowledges that the reengineering of business processes has numerous implications for how businesses are managed . For example, he notes that the interdiction of the new process of handling applicants at MBL necessitated some major changes; MBL had to develop a culture in which people doing work are perceived as more important than those supervising work career paths, recruitment and training programs, promotion policies these and many other management systems are being revised to support the new process design However despite the realization that new business processes an have knick- on effects up on the management of human resources the implementation of changes necessary to support the new processes is presented as wholly un problematical. Indeed there seems to be an assumption of an elective affinity between empowered employees, sophisticated systems of actual Potential surveillance and strong and some might say demagogical, leadership impost entrepreneurial organizations, as exemplified by TJ Rogers, CEO at US chip producer Cypress Semiconductor since 1983. Rogers has advocated the empowering techniques of networking and team working But he also tunes an it based monitoring system that allows him to peer down in to the bowels of the organization and target the performance of individual employees. Even sympathetic commentators have described his managerial style
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so called

as idiosyncratic and military. Because employees are not infinitely malleable, passive commodities who are indifferent to how they ate managed, accomplishing the full and effective implementation of BPR is likely to prove more difficult than is contemplated by its advocates faith in the persuasive powers of senior management. Where employee cooperation with the implementation of BPR is achieved under duress, it is likely that its impact will be sustained only by the same old coercive methods condemned by the new prophets of business management Given the challenge BPR can present to established orders. Processes and identities. Attentiveness to the insights of HRM would seem to be pertinent However, this would require the prophets of BPR to acknowledged the shortcomings of their town specialist training. Work cooperatively and openly with other function, and there by re-assess the value as well as the plausibility of their prescriptions. 2.9.4 Considering Employees How then should human friendly re-engineering proceed? Forest, everyone in the organizing must understanding the imperative for change. Such enlightenment may require the honest appraisal of unpalatable facts In ODIs recent work with a Scandinavian manufacturing company, data compiled on its existing date of improvement in key product variables repealed, when extrapolated forward, a future time when its competitors would lead in terms of product quality, market share and financial performance. That information was spread widely through the organization in a series of confidential seminars. Meeting and one to on brie fingers. As a result employees throughout the organization fully accepted the consequences of not changing . At that point they accepted the need for change . Acceptance depends not only on information but on the employees belief that their leaders are making rational, not ridiculous decisions. Indeed, if the decision-making process is so transparent that given the same information employees would act similarly, there will be little resistance. It is the opaqueness of decision making, particularly when act similarly. There will be little resistance it is the opaqueness of decision making particularly when act similarly there will be little resistance it is the opaqueness of decision making, particularly when redundancy is involved, which leads people to distrust and then resist change. When Federals Express closed its European
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operation, the transparency with the closures was conducted ensured very low levels of worker sabotage during the final week.

In a 1993 Harvard Business Review study, of The six re engineering projects that achieved significant success, top executives pent between one fifth and three firths of their time on the project . But employee

participation at all levels in the organization is similarly vital. Employees must be invited to participate in. and even challenge parts of the redesign process For like redesigning an engine with the motor running and rebuilding it while the car powers down the motorway, re engineering a working organization is trough.

Key Aspects Maintaining an operations smooth running during the transition from one organizational form to another depends on close attention to five key aspects of the human side of change 1. Make haste slowly. Careful planning of a BPR project and securing senior team alignment to those plans is essential. Budget more time for planning than is considered necessary. Japanese companies spend more time planning than their. Western counterparts, and boast considerably less resistance to change initiatives once implementation begins. In the West, failure to plan adequately and secure commitment to change thwarts progress once re engineering has begun.

2. Over communicate. People must have the opportunity to become comfortable with what re engineering will mean to them Communication of the project must be a two way process where employees have an opportunity to challenge and ask questions. Channels must be devised whereby information and the opportunity to question will cascade down through organizational levels. This may require a
15

sequence of large scale communication events. In addition to opportunities for one to one discussion. Senior managers will be required to spend a major part of their of their time talking directly to employees about the need for change , expected results and the plan for change. This direct communication is often underdone because managers are loathing undertaking what can be a boring and repetitive task. In the privatization of the Italian bank Credito Italiano, 16,000 employees required briefing to enable them to answer not only their own questions about the change but also those of customers and potential shareholders. In addition to a series of videos and workbooks which explained the privatization process, focus groups were organized. Out of these, 120 key questions arose which both employees and customers were most likely to ask. As a result, employees learned not only the answers to their most pressing questions but were also prepared for those of the public . A vital part of communication is that managers are prepared to talk openly about all aspects of change. Fundancy is often ignored due to fear of provoking resistance to the whole groups. Incliuding the unions are asked to

programme However, all constant

participate as partners in the change process then support for change. Which will leave remaining jobs more secure, Can be gained 3. Establish a cadre of change matters. In any organization, there are people willing and able to pick up new ways of working quicker than their colleagues. They must be enlisted and given a greater role in the change project. Their purpose is to ensure the spread of the change ethos throughout the organization when heavy power generation equipment makers ABB Zamech established a joint venture in Poland massive change was necessary to turn the company from a command based to customer focused system ABB identified a group of 15 to 20 committed employees who became quality champions and underwent two weeks of intensive training in change management techniques. So successful has been this group of change masters, that an ongoing program to train similarly high potential staff is currently underway

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4. Pilot change :- As no plan is ever executed perfectly, it is important to learn from pilot projects Scoring some quick wins also helps give people the courage and incentive to follow the project through white it is vital that pilot project succeed. Success should not be rigged. Theses projects should be viewed learning opportunities when mistakes can be made early and on a small, manageable scale .

5. Create feedback loops: Implementation must be flexible enough to allow input from those massive redundancies.

2.9.5. Conceptual framework

Several empirical studies have been conducted in relation to BPR. Some of them focused on the critical success factors in a particular sector or organization. Based on a study in two lraninan companies. ( Abdolvand , Albadvi , and Ferdowsi, 2008 ) reveals that collaborative working environment, top management. Commitment change management systems ( new reward systeris. Performance measurement. Employee motivation, and training and development) and use of 11 are the positive indicators for BPR success Resistances to change that emanated from middle management fear of losing authority. Employees fear of losing job, skepticism about project results, are found out to have negative role ( Ahmed Francis and Zairi , 2007) have found similar results when they assessed BPR implementation in the private higher education organizations in Malaysia Business process reengineering is implemented to bring about a radical change and improve processes and this will lead to the creation of a more flexible and responsive business process which will finally yield a greater customer satisfaction The desired process improvement can be attained by the combination of an integrated it and HR systems The effects of BPR in the human sick of an organization can be seen from the HR perspectives employee motivation employ turnover and succession planning . The researcher believes that since HRM is a very broad discipline it is very difficult to see the
17

BPRs effect on and every function of this discipline therefore taking some of the functions which are most vulnerable to BPR is considered as a wise choice Therefore based on the reviewed literate the researcher has developed a conceptual framework for assessing the effects of BPR implementation programs on the human side of the organization ( fig . 1) Based on this framework . the research has identified assessment issues that would guide the development of data collection instruments and tram the data presentation discussions and analysis

BPR

Process Improve meat

Flexibility

Greater Customer Satisfaction

Responsiveness

Integrated it systems 18

Integrate HR systems

Employee motivation

Turnover

Succession planning

CHAPTER THREE RESEARCH METHODOLOGY This section represents and discusses the methodological issues that are implemented in undertaking this research. 3.1. Research Design The main purpose of this study is to assess BPR in the case of Gulele sub city and come up with some sort of conclusion and recommendation. And for this reason, a descriptive research design is implemented because it is believe that it helps to fulfill the objectives of the work. 3.2. Population under study The population of the study consist the managers and supervisors. The size of the target population is 55 (thirty supervisors and one general managers) from randomly selected employees. 3.3. Data Source Primary data: primary data is collected from the participants through questionnaire and interview. 19

3.4. Data Collection Data for the study is collected through questionnaire and interview Questionnaire is vital instrument to be used in the study. The researcher used to collect data from five selected supervisors and managers. Totally the researcher selected 30 supervisors and the middle and lower level managers from the sub city. Interview is used as qualitative method of data collection. Basically, this instrument is used to get information from Gulele HR manager. Generally the above mentioned data collection instruments are appropriate to the topic understudy and they are also important to conduct the research by using survey method. After subjects are identified and informed, the next step will be distributing or using instruments to get the appropriate information which helps to the final result of the research while this process instruments may also important thing or reduce unwanted thing in the method of reconsidering, shaping or reshaping as soon as possible.

After this, the collected data will be organized in a way that data will be organized in a way that data analysis will be easier.

3.5. METHOD OF DATA ANALYSIs This is the process next to data collection which comprises of two stages: Data organization and method of statistical application. After collecting of data is finished, the step which follows will be organizing of the already collected data This stage is known as refinement. The stage holds activities like rejecting inappropriately filled questionnaires and those which might not be full up by respondents. Then after, information (which will be found through close ended and open ended questions) will be tanned so as to make it comfortable to use tables and graphs, if there is a need.

After the information is well organized and results are put appropriately, the step discussion and interpretation will follow. This, of course, through the method of data analysis called qualitative and descriptive.

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CHAPTER FOUR DATA ANALYSIS, PRESNTATION AND SUMMARY

This chapter analysis, present and summary the data obtained from primary sources. The primary data were obtained from questionnaire to collect the necessary information in order to answer the research questions. The questionnaires were distributed for 30 employees found in Gulele Sub city. All questionnaires were filled out and returned. This chapter is organized in two sections. The first section will discuss about data analysis and presentation of the data from questionnaires and interview. The second section will discuss about the final part of the research that is summary, conclusion and recommendation part. Therefore, the chapter is organized in the same way the measurement questions in the questionnaire are organized. 4.1. Data Analysis and presentation 4.1.1. Biographical detail of the respondents Table 4.1. Gender of respondents Sex Male 21 No 20

Female Total

10 30

The above table depicts that the majority of the respondents, that is 20 (66.7%) are male and the rest, 10 (33.3%) are female. Table 4.2. Age category of the respondents Age 18-25 26-40 41-55 56&above Total No 5 19 4 2 30

The above table shows that the age distribution of the respondents. 63.3% of the respondents are within the age of 26-40, 16.7% are within the range of 18-25, 13.3% of the respondents are within the range of 41-55, and 6.7% are within the age range of 56 & above.

Table 4.3. Educational qualification of the respondents Educational level No 10th complete 12th complete Diploma 11 BA/BSC 17 Masters and above 2 Total 30 The preceding table shows that the majority of the respondents, that is 17 (56.7%) are first degree holders, 11 (36.7%) Diploma holders, 2 (6.7%) have Masters and above.

4.1.2.Descriptive Statistics 3. All respondents answered 0-10 years Table 4.4. BPRs objective attainment Question answer Do you think that the BPR has met yes its objective No 22

Count 7 10

I dont know Total

13 30

As it is shown in the table most of the respondents are not sure whether the BPR has met its objective or not. Around 33.3 % said that it didnt meet the desired objectives, and 23.3% think that BPR has met its objective. Therefore, this implies that there is lack of clarity among the respondents about the desired objectives of BPR. The other question forwarded to the respondents was regarding the considerations given by the BPR to the human resources. And the result is shown below; answer Count Do you think that the BPR Yes 10 implementation program gives No 15 due consideration to the human I dont know 5 resources Total 30 Table 4.5. Considerations given by BPR to the HRs The above table shows that, the majority of the respondents, that is 15(50%). Think that BPR doesnt give due considerations to the HR. 10 (33.3%) think that it gives the consideration and the rest are not sure. Therefore, it is possible to say that the majority of the respondents think that the BPR doesnt give due considerations to the human resources. With regards to the presentation during BPR implementation, the respondents answered as follows; answer Yes No count 28 2 30

Were you presented at the time of the BPR implementation Total

Table 4.6. Presentation during BPR implementation The above table show that the majority of the respondents, around 93.3% were present during BPR implemented, and the rest were not presented. With regards to affected by the BPR implementation, the respondents answered as follows; Answer Count Positively 5 Negatively 23 28

How were you affected by BPR implementation Total

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Table 4.7. Feeling about BPR implementation The above table shows that the majority of the respondents, around 82.1% had negative feeling. The rest accepted the implementation of BPR positively. With regards to the managements commitment in creating awareness about the BPR program, the respondents answered as follows; Answer count % The management has Strongly Agree 0 0% made employees aware of Agree 0 0% the change process at each Neutral 0 0% stage of the study Disagree 16 53.3% Strongly Disagree Total 14 30 46.7% 100%

Table 4.8. Managements commitment in creating awareness about BPR The above table shows that, all of the respondents are not convinced that the management has made employees aware of the change process at each stage of BPR study. One of the reasons for resistance to change is considered to be employees fear of job security. With regard, the answers forwarded by the respondents are follows; Count 0 0 3 5 22 30 % 0% 0% 10% 16.7% 73.3% 100%

I was very frustrated and suspicious of my job security because of BPR Total

Strongly Agree Agree Neutral Disagree Strongly Disagree

Table 4.9 BPR and Job Security The above table shows that, most of the respondents, 73.3% were not suspicious about BPR in fear of their job security, 16.7% also disagree with this statement, and 10% are neutral. This shows that the majority of the respondents were not frustrated or suspicious of the BPR in fear of their job security. There were evident sign that the work environment was much better than the former working environment. The answers forwarded by the respondents are as follows; count 2 % 6.7

The current 24

Strongly Agree

improvement in the working environment is the result of BPR

Agree Neutral Disagree Strongly Disagree

14 3 3 8 30

46.7 10 10 26.6 100

Table 4.10 BPR and the working environment The above shows that most of the respondents (46.7%) are convinced that the improvements are the result of BPR, 6.7% of the respondents strongly agree with this statements, 10% are neutral, 10% are disagree. Therefore, it can be said that the majority of the respondents think that the improvements in the working environment are the result of BPR. With regard to employee motivation and its relationship with BPR the respondents answered as follow; Answer Strongly Agree Agree Neutral Disagree Strongly Disagree Count 9 14 3 3 1 30 % 30 46.7 10 10 3.3 100

I have enough involvement in decisions that affect my work

Total Table 4.11 involvement in decision making

The above table shows that most of the respondents believe that 46.7% are decision that affects their job. And 30% strongly agree with the statement. Therefore, this implies that the employees are involved in the decisions that affect their jobs. With regard to the question concerning performance evaluations, the respondents answered as follows; Answer Feel that my job performance is fairly evaluated Strongly Agree Agree Neutral Disagree Strongly Disagree count % 5 8 9 4 4 30 Table 4.12 Performance evaluation 25 16.7 26.7 30 13.3 13.3 100

As shown in the above table, most of the employees are not sure whether their job is evaluated fairly or not. 26.7% feel that their job is evaluated fairly, and 16.7% strongly feel that their job is evaluated fairly. Therefore, this implies that the employees perception towards their job evaluation is good, because the majority 30% feel that their job evaluatation is fair. With regard to the freedom given to the employees in order to come up with new and better way of doing things, the respondents answered as follow; Answer Strongly agree Agree Neutral Disagree Strongly Disagree count 1 20 8 1 0 30 % 3.3 66.7 26.7 3.3 0 100

I am encouraged and motivated to come up with new and better way of doing things

Table 4.13 freedom to come up with new and better way of doing things As shown in the above table, most of the respondents 66.7% agree that they have adequate agree of freedom to come up with new ways of doing things, 26.7% of the respondents are neutral to this statement, and 3.3% of the respondents strongly agree with this statement. Therefore, it is possible to say that the organization encourages and motivates its employees to come up with new better way of doing things. Generally the relationship between employee motivation and BPR has strong relationship. BPR and succession planning The findings related to this aspect are presented as follows; Answer Strongly Agree Agree Neutral Disagree Strongly Disagree count 4 3 10 8 5 30 % 13.3 10 33.3 26.7 16.7 100

Failure in succession planning is caused by the neglect of employee retention

Total Table 4.14 succession planning and HR retention

As shown in the above table, 26.7% of the respondents disagree with the statement failure pn succession planning is caused by neglecting of employee retention,33.3% are neutral, 26

10% agree, 13.3% strongly agree, and 16.7% of the respondents think that failure in succession planning is caused by neglect of employee retention. With regard to labor supply and succession planning, the respondents answered as follows; Answer Strongly agree Agree Neutral Disagree Strongly Disagree Count 5 6 7 9 3 30 % 16.7 20 23.3 30 10 100

The organization gives emphasizes on external labor supply for the succession planning

Total Table 4.15 Labor supply and succession planning

As shown in the above table, the majority of respondents, 30% disagree that the organization depends on external labor for succession planning. Around 20% of the respondents agree with this statement, and the rest are neutral. With regard to the availability of information regarding the career ladder within the organization, the respondents answered as follows; Answer Strongly Agree Agree Neutral Disagree Strongly Disagree Count 0 1 3 9 17 30 % 0 3.3 10 30 56.7 100

Employees are well aware of the career ladder within the organization

Total

Table 4.16 Awareness of the career ladder within the organization As shown in the above table, most of the respondents 56.7% strongly disagree with the statement employees are well aware of the career ladder within the organization, 30% of the respondents also disagree , 10% are neutral and only 3.3% agree with the statement. Therefore, it is possible to say that the majority of the respondents are not aware of their career ladder within the organization. Generally there is no significant relationship between succession planning and BPR. BPR and Employee Turnover In many cases, employee turnover is seen as a sign of some problem within the organization. In order to assess this, the researcher asked the following questions 27

Effective business management that recognizes employees as important partners reduces employees turnover

Answer Strongly agree Agree Neutral Disagree Strongly Disagree

Count 10 7 7 4 2 30

% 33.3 23.3 23.3 13.4 6.7 100

Total Table 4.17 effective management and turnover

As illustrated in the above table, most of the respondents, 33.3% strongly agree that effective business management that recognizes employees as important partners reduces employee turnover, 23.3% of the respondents also agree with this statement, 23.3% are neutral, while the rest disagree with this statement. Therefore, it is possible to say that the employees see recognition as important factor for employee turnover.

Absence of employee involvement and considerations in the organization leads to high employee turnover, even if employees are highly paid Total

Answer Strongly Agree Agree Neutral Disagree Strongly Disagree

Count 14 8 4 2 2 30

% 46.7 26.7 13.2 6.7 6.7 100

Table 4.18 Employee involvement and turnover As shown in the above table, most of the respondents 46.7%, strongly agree that absence of employee involvement and consideration leads to high employee turnover, 26.7% also agree with this statement, 13.2% are neutral, and the rest of the respondents disagree with this statement. Therefore, it is possible to say that the employees consider lack of employee involvement as an important factor that leads to turnover, and consider compensation as a secondary factor. Answer Strongly Agree Agree Neutral Disagree Strongly count 4 6 7 5 8 % 13.3 20 23.3 16.7 26.7

The current working environment is one of the reasons for employee turnover

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Disagree Total 30 100

Table 4.19 Working environments and employee turnover As it is illustrated in the above table, most of the respondents, 26.7% strongly disagree that the current working environment is one of the reasons for employee turnover, 16.7% also disagree with this statement, 23.3% are neutral, and the rest agree that the current working environment is one of the reason for employee turnover. Therefore, it is possible to say that the majority of the respondents think that the current working environment is conducive. Generally the above results show that there is negative relationship between employee turnover and BPR but the relationship is statistically insignificant.

4.3 Analysis of qualitative data

In order to strengthen the qualitative data gather from the employees and gain another perspective on the matter at hand, an interview was also conducted with the sub city HRD expert about the issues r related BPR and HRM. The finding are presented as follows; The first question posed to the respondent was regarding the role that the HR department played in BPR study and implementation. According to the respondent, the HR division played an important role in the BPR implementation and design. There were different/many meeting conducted by this division in order to create awareness, about the BPR to the employees. The respondent also added that many literature gives emphasis that the HR is neglected in BPR program. But Gulele sub city took this into account and prepared itself for any resistance and took remedial action beforehand. HR is one wing of the BPR study and implementation., the respondent concluded. With regard to the question posed about the effects of BPR on the Human resources, the respondent said that, as such there is no negative effect imposed by BPR on the human resources. According to the respondent, the BPR raises a fundamental question as to how to effectively use the HRs. The other question posed to the respondent was regarding the relationship between succession planning and BPR. According to the respondent, even though there is failure in the organizations succession planning system, BPR is not the cause of the failure. He also added that, in any change management system be it BPR or not, there are things that need to be considered seriously and the failure comes as a result of technical problems not the BPR.

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With regard to employee turnover and BPR, the respondent said that, there is high rate of employee turnover on those areas that require skill but this is not due to the BPR. With regard to employee motivation, the respondent said that there is no direct link between employee motivation and BPR. The employees are more motivated than before BPR implemented, the respondent said. Finally when asked about the overall relationship between BPR and HRM, the respondent said that, it is known that will lead to commitment, and the lack of known how that was prevalent among the employees during the initial phases of BPR somehow discouraged the employees and affected their level of commitment to the organizations change process. The respondent also added that BPR gives attention and consideration to the human resources but it focuses more on how to effectively use the human resources in order to attain the overall objectives of the organization, after all when the organization benefits the employee will also take his part, there is no one layed off because of the BPR.

4.2. SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATION 4.2.1. Summary The general aim of reengineering project is the attainment of flexibility and responsiveness and thereby attracts and retains more customers than their rivals. But the ultimate goal of the reengineering projects might be subject to failure due to many reasons. Of these reasons, the attention and considerations given to the human resources is vital. A recent study conducted by Hugh Willmott, found that the marginalization and trivialization of human dimensions from expositions of BPR is remarkable. But making the transition from function-oriented to process oriented organizing practices necessarily depends on the human resources who enact and are enacted by BPR. The general objective of this study is to assess BPR in the case of Gulele sub city. For this reason, questionnaires were distributed to the organizations employees and structured interview was conducted with the organization HRD. As a result, the data analysis revealed that: Change resistance was relatively severe among middle-level management in the organization. According to the respondent, resistances emanated from the fear and belief that: o BPR eliminates control and increase o BPR replaces the old staff by young ones o Technology reduces the importance of labor o BPR will be unsuccessful The organization used education/awareness creation/, as the main instrument to handle change resistance. 30

 Around 33.3% of the respondents said that the BPR didnt meet the desired objectives and 23.3% think that the BPR has met its objective Around 50% of the respondents think that the BPR doesnt give due considerations to the HR. Around 33.3% think that it gives due consideration All of the respondents are not convinced that the management has made employees aware of the change at each stage of the BPR study 73.3% of the respondents were not suspicious about BPR in fear of their job security. 16.7% also disagree with this statement. 46.7% of the respondents are convinced that the improvements are the result of the BPR 46.7% of the respondents said that they are involved in decision that affects their job Most of the employees are not sure whether their job is evaluated fairly or not. 26.7% feel that their job is evaluated fairly, and 16.7% strongly feel that their job is evaluated fairly 66.7% of the respondents agree that they have adequate degree of freedom to come up with new ways of doing things BPR is strongly related with employees motivation, and there is no significant relationship between succession planning and BPR 26.7% of the respondents disagree with the statement failure in succession planning is caused by the neglect of employee retention. Around 30% of the respondents disagree that the organization depends on external labor for succession planning 56.7% of the respondents strongly disagree with the statement employees are well aware of the career ladder within the organization. There is no significant relationship between succession planning and BPR 33.3% of the respondents strongly agree that effective business management that recognize employees as important partners reduce employee turnover 46.7% of the respondents strongly agree that absence of employee involvement and consideration leads to high employee turnover Around 26.7% of the respondents strongly disagree that the current working environment is one of the reasons for employee turnover There is a negative relationship between employee turnover and BPR but the relationship is statistically insignificant

4.2.2. Conclusion This research attempted to assess the relationship between employee motivation, succession planning, and employee turnover and BPR. The finding of this study revealed that the organization employees are moderately satisfied with their job. These conditions tell us there is a strong and positive relation between BPR and employee motivation. Therefore, we can conclude that the motivation of employees is directly related to the improvement brought about the BPR.

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In addition to this, in order to address the specific objectives of this study, assessment was made to find out if BPR is related to succession planning. And the result revealed that, even though there is failure in succession planning system of the organization, but according to the interview conducted with the HRD and the responses gathered from employees regarding this matter, the failure in succession planning did not come because of the BPR. The organization depends on internal labor for succession planning. There is no significant relationship between BPR and succession planning. With regards to employee turnover and BPR the study reveals that effective business management that recognizes employees as important partners reduces employee turnover. It also shows that the current working environment is not a reason for employee turnover. There is negative relationship between BPR and employee turnover. This means the BPR implementation is the less will be employee turnover. To sum up, the study shows that there were resistances to change at the time of the BPR implementation, and this resistance was relatively severe among middle level management. In order to alleviate this problem the sub city gave different training for the concerned bodies.

4.2.3. Recommendation Based on the finding of this study, the following possible recommendations are given: The organization should implement its strategic HRD program promptly in order to increase the motivation and belongingness of employees Job evaluation and performance appraisal system should be transparent because there is a dominant perception among the employees that there performance is not evaluated fairly Since there is a strong and positive relationship between BPR and employee motivation the BPR should be properly implemented in order to enhance the motivation of employees The organization should work based on its knowledge retention program because dependence on the external labor supply for succession planning is caused by lack of knowledge employees within the organization The career ladder within the organization should be clearly put The organization should work towards lateral promotional schemes Building the existing employees should be given due consideration in order to minimize the dependency of the external labor for the organization succession planning.

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QUESTIONNARIE Research Topic: An Assessment of BPR in the case of Gulele Sub city Dear Respondent, This study is being conducted on the above mentioned topic for academic purpose; therefore, you are kindly requested to give your answers to the questions that follow. Please note that the strictest confidentiality is assured (by way of making it anonymous) with respect to answers given as facts, which are needed for academic purposes. Thank you in advance for your cooperation. Part One: Biographic details 1. Sex Male 2. Age 18-25 26-40 41-55 56and above

Female

3. Education Qualification 10th complete 12th complete Diploma BA/BSC Masters and above 33

Part Two: Research related question 4. How many years has it been since the BPR implemented in your organization 0-10 11-20 21-30 31-40 41 and above

5. Do you think that the BPR has met its objective Yes No I dont know

6. Do you think that the BPR implementation program gives due consideration to the human Resources? Yes No I dont know

7. Were you presented at the time of the BPR implementation? Yes No

8. If your answer to the above question is yes, how were you affected by the BPR implementation? positively Negatively

Please answer or rate the following questions by circling your response 1 Strongly Disagree 2 Disagree 3 Neutral 4 Agree 5 Strongly Agree

Business process Reengineering The management has made employees aware of the change process at each stage of the implementation The current improvements in the working environment are the result of BPR I was frustrated, and suspicious of my job security because of BPR 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5

Employee Motivation My job performance is fairly evaluated Have enough involvement in the decisions that affect my work Encouraged and motivated to come up with new and better ways of doing things 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5

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Succession Planning Failure in succession planning is caused by the neglect of employee attention The organization emphasizes on external labor supply for the succession planning Are well aware of the career ladder within the 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5

Turnover Business management that recognizes employees as partners reduces employees turnover Of employee involvement and considerations in the leads to high employee turnover, even if employees are At working environment is one of the reason for employee turnover Thank you! 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5

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