Bachelor of Business
Assessment Brief: Students are required to complete the questions at the end of the Case Study. Use a Question and Answer format.
Instructions Provide detailed responses to the questions below. Consider the theory / key concepts which have been covered during your studies so far e.g. contemporary developments, performance management and appraisals, diversity and work life balance. Include academically reliable sources which integrate with key concepts and demonstrate evidence of further reading and research on the key topics.
Changes at Oz Industries
Carmelita Conti had worked as personnel and administration manager for the manufacturing division of Oz Industries for 22 years. The company’s recent heavy financial losses had brought major changes in personnel to its board and senior management. Many of Carmelita’s former colleagues had ‘resigned’, taken early retirement or been made redundant. All had been replaced by new hires. Three weeks after the appointment of Meg O’Brien, vice president people and culture, Carmelita is called to her new boss’s office. Meg tells Carmelita that her position is secure and that she is being given the new title of manager human resources for the manufacturing division. Carmelita is also told that she will no longer be responsible for payroll as the company’s new accounting policy requires that payroll and HR be separated. Carmelita will now report administratively to Peter Gomez vicepresident of manufacturing, and functionally to Meg.
Carmelita accepts the rationale for the change but soon becomes frustrated with head office reporting requirements and policy changes. In particular, Carmelita feels upset when some HR and administrative programs that she had introduced were replaced by head office initiatives.
Although consulted by Meg and Peter, Carmelita increasingly senses that she isn’t fitting in. Everyone is under pressure to lower costs and meet new performance targets. More and more emphasis is being given to performance achievement. Younger academically qualified employees with potential begin to be promoted over those with more seniority. Long-time employees begin to complain that the company is not the same and their experience no longer valued. The old family culture is dying.
Carmelita herself resents the changes and the unrelenting focus on profits and performance. She argues that the new performance appraisal program with its emphasis on goal setting and individual accountability is not suitable for Oz Industries. Meg replies bluntly that to survive, Oz Industries has to change the new performance program is part of the change process. Carmelita reluctantly accepts the decision but her disenchantment increases. She begins to question Meg and Peter over minor issues and openly expresses her frustrations and criticisms of management with other long serving colleagues.
Two months later, a reorganisation is announced. Carmelita’s position (together with those of several other long term employees) is declared redundant. Adapted from: Stone, R (2017) Human Resource Management, 9 th ed, John Wiley & Sons, Ltd, Milton, QLD.
1. Identify the changes at Oz Industries and determine the reasons for the new direction. 2. Describe the issues which contributed to Carmelita’s resignation. What are the possible repercussions for the organisation. 3. What ethical and HR issues may arise to challenge the proposed changes? 4. How will the changes impact on current employees? 5. Based on the topics you have studied, explain how the restructure could have been better managed: a. What additional initiatives could be proposed in order to avoid resignations and redundancies. b. How would these benefit the organisation.
HRM101 Introduction to HR and Leadership
Changes can be mainly observed in Oz Industries in terms of existing personnel plan involving the board and senior management position, which essentially caused led the organisation to redundant many of its employees while forcing others to resign or take early retirement. The particular move allowed Oz to hire new recruits while specialising on the employment of young and fresh talents with adequate education and skills to perform in line with the revised goals and objectives of the organisation. Concerning the study of Al-Shuaibi, Zain & Kassim (2016), talent-driven innovation, increase in economic conditions and international trade, higher complications of financial and taxation systems, and cost and availability of labours and materials have a combined effect to increase competitiveness in the global manufacturing industry, causing Oz to encounter performance-related challenges and incur heavy financial losses recently. Such a situation had the business to go for changes in initiatives and approaches.
As determined from the case of changes at Oz Industries, after another new reorganisation process announced and introduced by the company, the position of Carmelita Conti along with other long-term employees was declared redundant. Carmelita, who was working as a personnel and administration manager in the manufacturing division of Oz Industries for the past 22 years, was not happy with her new job roles and requirements as the human resource manager for the manufacturing division. Apart from restricting her involvement in the payroll process, the new office initiatives replaced HR and administrative programs that Carmelita was aware of. Soon it created frustration while increasing disenchantment for Carmelita to criticise every step of senior management along with other long-serving colleagues more often than ever. Such issues had contributed to the resignation of Carmelita from the particular job position of the organisation.
Departure of a highly experienced employee, i.e. Carmelita with more than 22 years of experience in the manufacturing division, is a significant loss for Oz Industries, especially due to its overemphasis on standard performance. Redundancy of a highly talented and experienced employee is a firm blow to the manufacturing workforce, given the stringent competition in the contemporary industry and difficulty in finding and retaining capable talents from the market (Wombacher & Felfe, 2017). The organisation, therefore, have to pay the costs related to loss of productivity from departure, cost of finding a suitable replacement and a substantial halt in productivity, as the new employee will need required time to perform at the same level.
Both ethical and HR issues are present as part of the new change initiative introduced by Oz Industries after suffering from a major financial loss. From the ethical perspective, the value of highly experienced, capable employees must be recognised to sanction promotion over the new members, who are much younger and needs professional experience to fulfil the duties and responsibilities attached with a senior job position (Davidson, 2015). The particular policy is important to strike a favourable ethical balance at the workplace while encouraging the long-serving members, as well as younger talents to demonstrate an increased commitment to individual roles and functions. In case of Oz, such a balance is affected negatively by the new initiatives, which provides an unrelenting focus on profits and performance while overlooking satisfaction and wellbeing of employees.
The new HR policies as part of the change initiatives solely emphasise on performance enhancement to prioritise goal setting and individual accountability while introducing new performance appraisal program. The new changes, which do not value experience of its long-term employees, are not effective enough, as it will subsequently increase employee resentment to raise employee turnover in the organisation (Dickmann, Brewster & Sparrow, 2016). The HR department, as a result, may face the new issue of managing and controlling increasing cost of employment and talent management. Additionally, the HR culture of not providing any heed to employee concerns cannot go a long way to assist the organisation in achieving its long-term goals and objectives.
A change initiative, which does not prioritise its senior employees while providing sole focus on profitability and performance, may create deep frustration among employees, which in turn, will lead them to adopt a rebellious attitude to hamper smooth flow of works (Rosenbaum, More & Steane, 2018). A similar situation can be observed in the case of Oz Industries, which introduced sudden changes in organisational positions and responsibilities attached to each job title. Unplanned and non-sustainable changes act as a major driver causing senior or existing employees to lose confidence about their capabilities while criticising senior management about different events at the workplace.
a. Managing Organisation Restructuring:
In order to respond to the financial downturn and facilitate gradual recovery, restricting the internal structure of the organisation comes as a concrete policy for the leaders. However, concerning the work of Cooper & Baird (2015), such a restructure must be aligned with the core organisational strategy while removing any complexity by specifically focusing on developing a proper design for personnel plans, eradicating complications from leadership roles and minimising the use of matrices. Additionally, the new restructuring process must have a significant impact on HR policies and guidelines to provide increased attention on employee motivation, performance management, promotions and recognition in different hierarchies of the organisation. Such an initiative could have helped Oz Industries to prevent resignations and redundancies of key talents considerably.
b. Benefits to the Organisation:
Impact of the planned approach to organisational restructuring would create promising benefits for Oz Industries, as a highly inclusive and ethically balanced workforce could be created to achieve performance targets and profitability objectives of the organisation in a performance-intensive industry. While a highly diversified workforce with mutual trust and respect for one another is the key to achieve success of personnel management, suitable distribution of roles and responsibilities without emphasising on complexities would help long-serving members to perform efficiently and flawlessly.