Assignment 1 (50%) You are the head of human resources in a medium-sized manufacturing company.

You have a new chief executive and she has a reputation for restructuring and cutting surplus management posts. She mentions to you that some organisations are undergoing a transformation in HR to maximise efficiency and effectiveness. She asks you to outline what this means in general, what it would mean for the organisation, and how it might achieve both cost cutting and increased effectiveness. How do you respond? The assignment must be in Report format word limit 2000 words (excluding Bibliography and Appendices).

TABLE OF CONTENTS
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Executive SummaryIntroductionChapter 1- Benefits of Restructuring for the Company Chapter 2- Restructuring benefits for Employees RecommendationBibliography-

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Executive SummaryRestructuring a company has multiple outcomes for an organization (employers point of view) and the workforce (employee point of view). While most of the outcomes go in

favor of the organization, only the key personnel is able to understand the vital importance and need of having an organization restructured. Call it a merger possibility, acquisition opportunity, slit off of department, downsizing or rightsizing and even system restructuring of how work is done. Each comes under the category of change management. And the eventual result that any change or restructure plan focuses on is increased productivity, profitability, customer loyalty and goodwill.

As per studies conducted by many famous psychologists and managerial leaders, one such study conducted for understanding change management is done by Lewin, explained categorically in the Lewins Model consisting of 3 processes - unfreeze, change and refreeze. The practical analysis done in detail with the organizational point of view later on in the report, the purpose is to show a crux of what steps would be needed in the restructuring process.

Moving on the employees point of view, it needs high level of motivation, readiness to accept change and open heartedness to let go the prior comfortable zone of how work used to be done. The major issue that most organizations have to bear with is, resistance to change and poor cooperation level with the employers. This hinders the overall pace of achievement of a change that is being planned, hampering the eventual result such as increased productivity and sales. This issue shall be discussed in detail too.

The eventual crux of this report is to give a positive go ahead for planning and implementing restructuring and change management policies and procedures, as this is the call and need of time to survive as the fittest in the competitive world of business.

IntroductionBeginning with the most important element at hand, the ever increasing competition literally takes away chunks of the target audience and sales. This leads to lower chances of productivity and boost in business. Nevertheless, restructuring is one of the key actions that can be taken in order to achieve desired results from the business. The

following can be some of the best restructuring areas that can be given little attention and effective wholesome results can be derived-

1) Downsizing Staff- Being over sized in staff means giving away more stipends and earning lesser through each employee. It would reduce costs and increase profitability. 2) Building new teams- Shuffling around the employees with the view of increasing productivity and managing talent and skills better can be an integral move. 3) Outsourcing certain activities- There are certain jobs that can be done by third parties or consultancies, hiring employees for that purpose basically means adding on to the costs. Outsourcing is an excellent way of managing resources in a better manner. 4) Motivating employees- As a matter of fact, no restructuring program or plan of action can surface as a successful one until and unless the staff or employees are not motivated and dedicated for it 100%.

Based on the above few connotations, backed with theories and applied researched, it can be concluded that restructuring in the right manner brings about desired results. Change management and restructuring has become an excellent technique of boosting and refreshing the business, however, successful implementation and right execution is still an art that only few manager and leaders are able to excel in.

The financial performance of the company relies heavily on the systems followed by employees. At times a dire need of sitting back and taking in view what the overall picture is and how it can be made better comes up. This hour calls for unique solutions,

considering the strengths and weaknesses of the organization and restructuring as a solution.

Chapter 1- Benefits of Restructuring for the Company

Restructuring often acts as the ultimate solution for many rising changes and demands in an organization or company. Considering the fast paced working module and how each day sees a new reflective practice that minimizes time input and maximizes the output makes it all the more necessary to stay updated. Now for any company to actually excel in competitive situations, it is an absolute call of time to buckle up and bring the following benefits to an organization by restructuring-

Cost effectivenessOutsourcing is one of the best work practices that have started taking place. It is due to the rising single handed consultancies that outsourcing has become possible and a tight

measure and strict follow up of cost reduction can be done. By outsourcing, the company enjoys its job being done at the hands of specialists. Moreover, it even indicates the simplicity of pouring out needs of the company, rest everything is done and presented by the consultancy. The fee might seem high, but when the actual operational costs of an entire department are assessed, it actually proves to be more competitive. Outsourcing also means downsizing. This may comes as a shock to the employees, but it would even mean that employees would become more serious and dedicated to the work at hand.

Higher level of staff engagementDownsizing literally means holding a magnifying glass, selecting those employees who are of relatively lesser importance for the organization and getting the employees list more structured. This act of restructuring also determines and makes it inevitable for the employees to increase engagement level in the organization. As the need to be more active, productive and efficient to survive would become apparent, there will hardly be any chances of seeing employees performing below average level.

Increased quality, sales and profitabilityRestructuring is basically a magical tool for employers. The only aspect of restructuring is to execute it properly, as easy as it sounds, the eventual carrying out of the whole process can prove to be quite difficult. As the change has to be brought about in human resources, which is not a machine that can be reset, it has to be done very carefully in

order to avoid harm to the overall process. Once executed with excellence, the results would mean higher sales, profitability and increased quality.

Lewin Model of Restructuring suggests a three step modelUnfreeze- Change- Refreeze

If it is explained in a management model, then for bringing in change while restructuring, the manager must break through the current style of working and make the team receptive to change. Bring in an environment, such as a indoor training schedule that needs employees to be motivated and prepared to learn new things and adopt them. This stage is the Unfreeze stage. Then introduce the new concept or working style, the main element of how restructuring is going to take place. This the process of Change. Make it worthy of being accepted by inculcating exercises, dummy acts, sample reports and results and motivate via expected growth of company and consequent increase in

pay rate. Once the change process has been well received and employees are ready to take it forward, then freeze. The step of freeze means simply fixing the overall working pattern and asking employees to continue with it only.

By following the Lewin Model of Change (Kurt Zadek Lewin September 9, 1890 February 12, 1947) exceptional results can be derived and restructuring can be done more effectively.

Chapter 2- Restructuring benefits for Employees

It is completely false when employees accuse upper management for following restructuring plans and claim that it is done solely in the interest of the organization. Restructuring actually leads to positive implications and results for employees too. Here is a small brush up of John P. Kotters 8 step mode that is adopted for change and restructuring by team leaders and employees and then the eventual benefits are outlined.

Steps

to

Change John P. Kotter

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In order to restructure, there are steps that have to be taken on micro as well as macro level. By following the above 8 quoted steps, it is highly probable that it would be received with more positivity and will deduce desired results.

The benefits that employees get by restructuring include-

Greater Focus in Direction and PlansThe direction with which organizational plans are formulated and executed become more apparent and success oriented. With restructuring policies and procedures, it is highly possible that a few factors that were previously not given enough importance or were undermined with the advent of other outdated practices become apparent in a better way.

Profitability means higher chances of bonus and additional salaryIf the company is doing well, there are hardly any chances that the employees will not get to benefit from the productivity increase. The higher level of profitability also means that chances of increased salaries, benefits, bonus, non monetary packages would also increase.

Sleeker and time effective management practices-

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A larger workforce means greater looking after and time consumed and taking back reports from people. Also at times, decentralization means less coherence in tasks. With a tighter, more polished and smaller team, the cohesion increases and the performance level also increases. The team leaders have fewer people to look after hence the quality of work performed also sees a positive rise.

Restructuring means refinancing opportunitiesRestructuring revises the overall policies, work practices and procedures. It may even indicate closure of certain non-profitable projects and re-investment of the finance imbursed on new projects. If some employees and managers look out for opportunities of getting new challenges and projects, when a restructuring takes place, it is the best time to shine out and deliver as per employers expectations.

Often times restructuring can be daunting enough for employees to adopt and then ask teammates to follow too. By following Maslows Hierarchy of Motivation (Abraham Lincoln, Theory of Human Motivation, 1943) employees can tap the level where they are

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on the hierarchy and then motivate accordingly to take the restructuring plan positively.

Image courtesy- (Nigel Fenwick, Forrester, 2010)

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RecommendationIt would be a wise decision to opt for restructuring, may it be in the form of new employee induction, reduction, merger or split up, whatever it takes for an organization to increase its productivity levels, must be done. With an exception of reduced costs and refreshed plans and policies, restructuring offers an opportunity to build an organization from scratch and take an intensive and micro viewpoint of how operations, systems and working methods can be enhanced.

However, in the quest of bringing in positive change, as mentioned earlier, an effective execution of the restructuring plan is essential. When a new plan is devised, to ensure its proper execution managers must integrate all steps and keep a hawks eye on the progress and movement of the plan of action. There are no two roads when restructuring takes place, as Lewins Model says the last step is Re -freeze, the procedure of un-freezing again with short time interval can prove to be harmful for employees dedication and motivation levels.

With applying a few motivational tools, figuring out whether employees are in need of financial incentives or non financial incentives, one must be able to figure out the best way of finalizing and incorporating restructuring plans. As at the end of the day, increased sales, profitability, loyalty, efficiency would come to the organization with the advent of restructuring plans. It has also been recorded that the engagement level of employees with the organization increases as they see a more active, indulged and working upper management. The overall team work spirit and objective of bringing in positive change follows the hierarchy of top to bottom, with restructuring employees
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would get the automatic signal of getting down the work boots and bringing results up to stay on board.

Restructuring is a sure tool for bringing success to competition stricken and fast evolving businesses that need to stay at the forefront by reducing costs and increasing profitability. There are absolutely no chances of survival in the ever-changing global markets by staying stagnant and unimprovised at these times.

Bibliography-

Kotters 8 Steps of Change Management- www.kotterinternational.com

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Kurt

Lewin

Change

Model-

http://www.mindtools.com/pages/article/newPPM_94.htm

Maslows

Hierarchy

of

Needs

AND

Image-

http://blogs.forrester.com/nigel_fenwick/10-03-12secret_successful_social_communities_4_social_needs

http://www.ask.com/question/advantages-of-organizational-restructuring

http://www.dol.gov/ebsa/publications/benefit0.htm

http://www.brighthub.com/office/human-resources/articles/122660.aspx

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