UNIT 23

Managing Change
We have been witnessing changes in every sphere of activity politics, games, technology, business, economics, religion, and so on. Our lifestyles have also changed significantly over the years. Changes have positive as well as negative effects. In a workplace too several changes take place. Certain changes may be favourable to employees and therefore may get their support. On the other hand, the employees may find certain changes unfavourable or unnecessary and so the may oppose. This chapter focuses attention on Managing Changes in the workplace.

Change-Meaning
Change, with reference to work environment, means any alternation that requires the people doing work to make certain adjustments. For example, if an organisation, where the office work is manually done, decides to introduce computers the employees will have to learn to handle computers. Similarly, if the management decides to change the working hours the employees will have to accordingly adjust their household routine.

Definition of Change
Tom Duening has defined the term Change as follows: Change is any alteration occurring in the work environment that affects the ways in which the employees must act. These changes may be planned or unplanned, catastrophic or evolutionary, positive or negative, strong or weak, slow or repaid, and stimulated either internally or externally.

Factors influencing Change

The various factors influencing change may be grouped under: I. II. Internal Factors and External Factors.

Internal Factors
The internal factors necessitating change include, among others, the following: (i) (ii) (iii) (iv) (v) (vi) Policy decisions Attitudes of employees Availability of funds Escalating costs Level of efficiency Trade union demands

These have been explained below.

Policy Decisions
The administrators may make certain policy decisions the implementation of which would bring about changes. Such policy decisions may be in respect of any of following matters: 1. Recruitment of candidates for jobs 2. Provision of training 3. Employee promotion 4. Employee transfer 5. Evaluation of performance 6. Payment of remuneration 7. Provision of incentives 8. Social security schemes like pension, provident fund etc. 9. Retirement of employees 10. Termination of service Attitudes of Employee The attitudes of the employees of an organisation in general may prompt the management to make certain changes. For example, if the job attitude of the employees is favourable and the employees work with a sense of commitment, the management may be encouraged to come with certain employee welfare measures as follows: 1. Increase in pay 2. Provision of suitable incentives 3. Provision of better working conditions and so on.

In the same manner, if the employees are eager to enrich their job knowledge, the management may come forward to provide suitable training and also acquire better machines, tools and equipment. If, on the other hand, the employees are shirking duties and indifferent, the management will be forced to adopt certain punitive measure as follows: 1. Issuing written warnings 2. Wage cut 3. Imposing fine or penalty 4. Demotion 5. Suspension 6. Discharge or dismissal

Availability of Funds
Another internal factor prompting is the availability of funds. If the financial position of the owners is very sound, they may be encouraged to offer more fringe benefits to the employees as mentioned below: 1. Bonus 2. Medical facilities 3. Free education for the children of the employees 4. Leave travel concession 5. Rent free accommodation etc. The sound financial position of the owners may also induce them to indulge in diversification activities. The business may, for example, plan to

introduce a new product. Such diversification activities may generate additional employment opportunities. If, on the other hand, the fund position of the company is very poor, it may not be able to pay its employees even regular wages. It may be sometimes forced to eliminate certain jobs. As a result, some employees may even lose their jobs. Lack of funds may not allow undertaking of welfare schemes for the employees. The working conditions too cannot be improved.

Escalating Costs
If costs are rising, the business may be compelled to adopt certain austerity measures. In includes, among others, the following: 1. Wage cut 2. Cut in administrative overhead 3. Cut in selling and distributing overhead As a result of these austerity measures, the employees may have to forego certain benefits. Level of Efficiency Yet another factor influencing change is the efficiency level of the employees. If the employees are efficient the employer may reward them suitably. To motivate the employees certain monetary and non-monetary awards may be offered to them. If, on the other hand, the employees are inefficient the employer will be compelled to take disciplinary action against them in the form of demotion, increment cut suspension and so on.

Trade Union Demands

In many establishments trade unions play a crucial role in the decisions of the administrators. The employer cannot thrust certain decisions on the employees. The trade union may have to be involved in respect of certain sensitive issues as stated below: 1. Pay cut 2. Increasing the hours of work 3. Changing the working hours 4. Increasing the quantum of work 5. To bring about technological changes and so on.

External Factors
The external factors influencing change include, among others, the following: (i) (ii) (iii) (iv) (v) (vi) (vii) Government Regulations Technological advancement Economic conditions Changes in Law Competitive pressure Trade association influence Changes in buyer preference

Government Regulations
The government is empowered to frame rules and regulations in order to regulate business activities. There were instances where private business establishments were taken by the government. Similarly the Government may entrust the management of some of the undertakings, under its control right now, to certain private businessmen. Any such change brought about by the Government will certainly alter the status of the employees working in these organisations. The government is also empowered to order the closure of any industrial organization. Changes taking place owing to government regulation include, among others, the following: 1. Take-over 2. Privatisation 3. Closure 4. Licensing 5. Delicensing 6. Wage revision 7. Requirement of the employees 8. Restriction on imports 9. Restriction on exports

Technological Advancement
Advancement in science and technology is sure to bring about changes in work methods. Computers are used even in small offices that made use of

the conventional typewriters once. Salesmen, these days are provided with cell phones. Most organisations make use of the Internet and E-mail facilities. All these changes are the outcome of technological breakthrough.

Economic Conditions
Economic conditions do not remain stable always. Changes in economic conditions too bring about changes in the work pattern and working conditions. For example, when the demand for a particular produce less. The decision to curtail output. In turn, will lead to such adverse conditions as idle plant capacity, surplus labour and so on, similarly, when demand exceeds supply the enterprise may take steps to step up production. This calls for additional manpower, capital and so on. Demand, supply, price level, inflation etc., are the various economic factors that necessitate changes.

Changes in Law
Various laws have been enacted in India to protect the working class. The changes made in any of the following Acts may bring about changes in the work environment and conditions: 1. The factories Act 2. The Workmens compensation Act 3. The Minimum Wages Act 4. The payment of Wages Act 5. The Industrial Dispute Act

6. The employees State Insurance Act 7. The Trade Union Act 8. The Maternity Benefit Act and so on.

Competitive Pressure
No business organisation can afford to ignore the threat posed by competitors. Owing to competitive pressure, an organisation, often, has to make frequent changes in its marketing strategies to survive and to stay ahead. These include, among others, the following: 1. Product alternation 2. Product diversification 3. Product elimination 4. Creation of brand loyalty 5. Innovation in packing 6. Price changes 7. Discounts and other inducements 8. More allocation for media advertisements 9. Employment of more sales force 10. Appointment of more dealers and distributors and so on.

Trade Association Influence

A trade association is an association of persons belonging to the same trade. Such an association is formed to safeguard the interests of the traders engaged in a particular line of business. For example, there may be an association of textile mill owners, sugar mill owners and so on. The decision

made by a particular trade association is binding on all its members. The decision if usually made in respect of any of the following matters: 1. Payment of remuneration to different classes of employees 2. The service conditions of the employees 3. Social security benefits to be provided to employees 4. Working hours of employees 5. Holidays 6. Leave benefits to be given to employees 7. The price to be charged for the product and services 8. Collective representation of grievances to the Government and so on.

Changes in buyer preference

The ultimate aim of any business is to create customer, satisfy him and also retain him. All the activities of an organisation are directed towards the attainment of this specific objective. The preferences of the buyers can be known through market surveys. An organisation that has failed to fulfil the needs of the buyers may have to effect the following changes in order to satisfy them: 1. Better quality products 2. Courteous service 3. Reasonable price 4. Avoidance of misleading and deceptive advertisements 5. Use of up-to-date technology 6. Best after-sale service and so on.

The various factors influencing change have been discussed in detail above. The change, whether initiated by an internal factor or an external factor, does have its impact on the employees of an organisation. The simple logic is that employees may welcome a change if it is beneficial to them and may resist it if it is detrimental to their interests.

Resistance to Change
We shall now focus our attention on why employees resist change. Change, though inevitable and a continuous process, is resisted by the employees in view of the following reasons: 1. Threat to job security Employees, particularly those in Government services, who have job security, may resist any proposal that poses a threat to job security. One of the main reasons why the Government employees in India oppose the privatisation move of the Government is the possible threat to job security. 2. Fear of losing job Certain changes, if allowed to take place, may also result in the employee losing his job in the near further. In the past, the proposal to computerise operations in most organisations was opposed by employees mainly due to the fear of losing job. 3. Fear of monetary loss whenever there is a proposal to effect pays cut, employees resist it. Such an austerity may be necessary in view of the poor financial position of an organisation. The main reason for resistance by the employees not the immediate pay loss but the possible future monetary loss if scope is given for pays cut now.

4. Increase in work burden The fear of a possible increase in work burden is yet another reason for employee resistance. When certain vacancies remain unfilled for a very long time, employees show their protest to the attitude of the employer. The main reason for the protest is that gradually additional responsibilities may be given t the existing employees, as there is shortage of manpower in the organisation. 5. Bad precedents Certain changes are resisted by the employees on the ground that these may set bad precedents. For example, if the seniority or the merit of an employee is totally ignored in the matter of promotion, the employees may collectively show their displeasure. 6. Fear of transfer in certain cases, an employee may resist change for fear of transfer. For example, it certain categories of jobs the promotion given to an employee also may lead to his transfer to some other place. Such an employee, therefore, may not be willing to accept the promotion offer, as he must be prepared for a transfer. 7. Fear of demotion When there is a proposal to increase the minimum qualification and skill requirement for a job, such a change may not be accepted by employees. This is because of the fear that either they must update their qualification and skill or face demotion in the near further. 8. Loss of promotion opportunities The decision to eliminate certain posts or positions may not be accepted by the employees on the

ground that it may deprive them of promotion opportunities in further. 9. Loss of leave benefits Any proposal by which the existing leave benefits enjoyed by the employees are reduced or withdrawn is sure to get resistance. 10. Loss of social security benefits Often, we hear such decisions as withdrawal of pension and other retirement benefits of employees particularly the Government employees. Such changes will obviously be resisted by the employees. 11. Lack of scope for collective bargaining Any decision to abolish trade unions of employees is sure to be resisted by the employees as it deprives them of the benefit of collective bargaining. 12. Boredom and monotony Any change that makes the employees job boring and monotonous will be opposed. 13. Early retirement The proposal to reduce the retirement age of employees is also not favoured by the employees as it deprives them of several years of earnings.

Possible Benefits of Resistance

Resisting change is not always bad. In some cases, resistance may provide certain benefits too as stated below: 1. Management does not gain upperhand If the employees accept whatever the management says, it will enable the management to gain upperhand. Such a position will provide scope for the management to

exploit the working class. It is, therefore, necessary that the employees show their resistance to any useless proposal by the management. 2. The proposal may be reconsidered When employees show resistance to a certain proposal, the management may reconsider the same. On a review of the proposal the management itself may find certain flaws later and drop the plan. Resistance, thus, prevents certain worthless proposals from getting implemented. 3. The existing system may be quite good Often certain changes are proposed for the sake of change and without any real benefit. Such changes should be opposed so that the existing system, which is quite good, is not disturbed. 4. Certain anti-labour measures may be prevented If the employees are silent spectators, it will give scope for the management to come out with a number of anti-labour measures. It is for this reason that employees may have to show their resistance at times. 5. Employees are able to be assertive By showing their protest to certain unwanted and useless proposals by the management the employees are able to be assertive. They are in a position to show their strength.

Changes not generally Resisted by Employees

The employees, generally, do not oppose any change that:

1. Does not disturb the status quo When the proposed change, although does not guarantee additional benefits, does not disturb the

existing status pattern in the organisation, the employees may not show their protest. 2. Gives them additional monetary benefits If a certain change contemplated can give the employees more monetary benefits without much physical or mental exertion, they may not show resistance. 3. Gives them greater authority When the authority given to the employees is increased, they will be able to make the best use of the resources available in the enterprise money, materials and machines. 4. Provides greater freedom to act If some change made in the organisation can prove autonomy or greater freedom to the employee to act, they may welcome such a move. 5. Provides greater career advancement opportunities Any proposal by which the employees get greater promotion opportunities is certainly beneficial to them and, therefore, will get their support. 6. Provides scope for self-development If the change contemplated by the management can provide scope for an employee to enrich his qualifications and skills, there is no reason why he should oppose it. 7. Simplifies the task performed The shift from manual operation to computerization of all kinds of office work has certainly simplified the work done in our offices. Any such work simplification plan gets the support of employees. 8. Gives them the benefit of collective bargaining In a workplace, when an individual employee has any grievance, he may not be able to

represent the same in his personal capacity. He needs the support of a union of employees. Any proposal to recognize the role of trade union that gives the employee the benefits of collective bargaining is quite welcome. 9. Does not provide scope for clash of interests If a change proposed by the management does not give scope for unnecessary conflicts in the workplace, the employees may support it. 10. Recognises the dignity labour Any proposal that respects, recognises and rewards the labour exerted by the workmen will get their support. The proposal shall not undermine labour.

Changes not favoured by managers

It is not employees resist changes. Managers too resist certain changes. Such changes are: 1. Wide span Any decision to place more subordinates under a manager than what he is capable of handling will sure be resisted by him. 2. Narrow span If, on the other hand, it is proposed to place a very few subordinates under an executive, such a proposal will also be not favoured by him as his potentials are not fully untilised. 3. Arrogant nature of certain employees Efficiency and arrogance often go together. Certain employees who are very efficient may also be arrogant. If such employees are placed under a manager who is not capable of handling them, he is sure to resist it. 4. To limit authority Any proposal by which the existing authority of a manager is reduced will be resisted by him as it makes him ineffective.

5. Greater responsibility If the manager is given additional responsibility he may not be prepared to accept it unless it gives him commensurate benefits.

Overcoming resistance to Change (Managing Change)

Changes, as mentioned already, are unavoidable. An organisation cannot be a dynamic one if it if not prepared to implement certain changes. The success of human resource management, therefore, lies in the capacity of the manager to implement changes without facing resistance from employees. The following steps mat be taken in this regard: 1. Securing the participation of employees Any changes affecting the interests of the employees must be explained to them first. The management must explain its position to the employees and also seek their views on the proposal. It must consider favorably any worthwhile suggestion from the employees. 2. Involving the trade union When it is not possible for the management to discuss the change with individual employees, it may invite the trade union officials for talks. The change proposed may be discussed in detail in the meeting with the union officials. The management may consider any reasonable suggestion from the side of the employees. 3. Planning the change The employees must have prior knowledge of the change that is to be implemented. For example, if the management

wants to change the working hours and has also got the consent of the employees, it must take the necessary steps for the successful implementation of the proposal. It must inform everyone about the date from which the proposed change is to be effected. A change should be implemented overnight and without prior notice. Everything must be done in a planned manner. 4. Sharing the benefits of the change with the employees The management must come forward to share the benefits of any change with the employees. If a change is contemplated keeping in mind the interest of the management alone, the employees are sure to resist it. For example, if the management wants its employees to work overtime to complete an important task within a stipulated time, it must also come forward to reward the employees suitably for such overtime work. 5. Protecting the interests of the employees The management should not contemplate a change that is detrimental to the interests of its existing employees. In this context it may be stated here that any change having an adverse effect on the employees pay, service conditions, retirement benefits etc., must not be thought of. 6. Ensuring the interests of the employees When a change in the service conditions is proposed, the employees would expect the status quo to continue. Even if management cannot announce certain new benefits, the existing benefits at least must not be withdrawn. 7. Introduction of change in a phased manner Certain changes can be introduced only in a phased manner. For examples, if the

management wants to introduce computerization in all departments, it can only be done in a phased manner. This is because, the employees in the different departments need to be trained to handle computers. Such a task cannot be accomplished overnight. The employees need to be given sufficient time to undergo the necessary training. 8. Proper motivation of employees It is not enough if the employees are merely informed of the change proposed to be made. They need to be properly motivated to accept and work for the success of the new proposal. For example, if the management wants to increase the weekly target of the employees, it must induce them by telling them what direct and indirect benefits they would receive monetary as well as non-monetary out of the proposal. 9. Provision of suitable training facilities If the management is contemplating a change in the method or technique of work such a change can be possible only if the employees are given proper training. The management itself must make suitable arrangements to train its employees. If in-company training is not possible, the employees must be sent to a training centre that has the necessary facilities. 10. Introduce changes that are mutually beneficial A change that is beneficial to the management alone may not get the employees support. There must be something for the employees also in any proposal. In other words, the change proposed to be made must be mutually beneficial.

11. Any change must be logical There must be a valid reason for any change. The management must be in a position to convince the employees of the need for the change.