International Journal of Human Resource Management & Research (IJHRMR) ISSN 2249-6874 Vol 2 Issue 2 June 2012 63-74

TJPRC Pvt. Ltd.,

ORGANIZATION CHANGE ON HUMAN RESOURCE DEVELOPMENT AND ORGANIZATIONAL PERFORMANCE: FROM MALAYSIA PERSPECTIVES
1

KAHIROL MOHD SALLEH & 2NOR LISA SULAIMAN

1,2

School of Education, Colorado State University, U.S.A

ABSTRACT
This paper reviews what organization changes are required for better human resource development, especially in organizations in Malaysia. In order to gain a better understanding about the issue, this paper focuses the discussion on comparing and contrasting the organization change model based on the Burke-Litwin Model of Organizational Performance and Change from the United States of America, and applied in Malaysian organizations. This paper examines the challenge in adopting change models that are perceived as important in Malaysian organizations. The critical review is based on the Burke-Litwin Model as an assessment tool. This paper identifies the challenge Malaysia is facing in improving the human resource development process. Moreover, organizations change has become themajorsuccess factor in enhancing performance in organizations. To develop change and better performances, a few change models can be applied as a framework model in order to evaluate the skills and competencies of human resources. Oneof the factors that are proposed as a change agent to gauge improvement in organizations and produce the skills and competencies in carrying out tasks related to future human resources development include(1) consulting process and (2) transformational factors. However, organizations strive for performance needs to overcome challenges in organization environments, working climate, and culture to stimulate organization improvement. This paper contributes by advancing knowledge of human resources development, to a better understanding between organizational performance and change within the context of the Malaysian organizations. Additionally, this paper will give some insight to human resource experts in order to shape better training and development programs within organization. By examining the organization cultureand performance we conclude with suggested modification of the Burke-Litwin Model for use in Malaysia.

KEYWORDS: Organizational performance, Human resource development, Organization

change, Burke-Litwin Model

INTRODUCTION
In Malaysia, the organizational structure and hierarchy are undergoing changes as a result of technological advancement andshifting industrial trends. Human resource practices have become an important issue in Malaysian organizations because of the needsof the changing workforce andthe development process of workers.Aghazadeh (2003) argued that human resources must rethink and reconfigure the human resource function and become committed to the outcome of organizational

Kahirol Mohd Salleh & Nor Lisa Sulaiman

64

performance. Therefore, organization changes, consultation processes, and workers competencies have been responsive to the need for better human resource developmentprocesses. As organizations develop, trained workers become important to the realization of organization goals. Thus, organization change and worker competencies become major providers of the organizations improvement. To ensure the organizations have competent workers, new skill sets in various areas need to be developed. It is vital that the Malaysian workforce is equipped and enhanced with the required knowledge and skills to be competitive and succeed in a knowledge-based economy (Sail & Alavi, 2010). In order to ensure human resource development contributes to organizational performance, it will be necessary to create change in the organizations and also create a system that is flexible, and has a higher rate of participation from all concerned parties including workers and management.The demands for knowledge and skills are difficult to predict.Some skills become obsolete, and while emerging skills are demanded by employers. Garavan, Costine, and Heraty (1995) argued that new technology, quality, competitiveness, internationalization, fixable and responsive, and supply of resources are some of the important factors that relate to change in organizations, especially human resource development. In contrast, Aghazadeh (2003) remarksthat human resources should focus on globalization, profitability through growth, technology, intellectual capital, and change as a challenge. Thus, the flexibility of the organization becomes principal and the workers must be capable of quickly adapting to the changing demands the workforce markets need if they are to remain relevant. Additionally, flexibility can be achieved through responsivenessand value adding to the organizations, as values such as organization culture can easily be changed or developed in accordance with the perceived needs (Aghazadeh, 2003). This paper discusses the linking between change in organizations and the consulting processes, which support and inform the challenges facing Malaysian human resource development, especially within organizations. The human resource development process can only be properly addressed on the basis of a thorough understanding of the changes needed. Savolainen (2000b) remarked that change typically requires collaboration between management and workers; a major organizational change forms productive ground for examining the process and practices of human resource development. Consequently, this paper discusses the function of training and development processes and how those processes relateto with the human resource function. Marques (2007) argued that once the decision has been madeworkers need to be further trained in their area of specialization, human resources should guide the process in the most suitable way. Thus, employers agreedthat the training and development process plays an important role in updating knowledge and skill sets for the workers, but how organizational change can contribute to this expectation is still in question. According to Berge,Verneil, Berge, Davis, and Smith (2002) the increased need for improved performance requires more efficient ways to identify, recruit, measure, and improve the training and education of the workforce. Change and learning reinforce each other, new knowledge is attained through learning, and learning generates change thatcan again lead to learning (Savolainen, 2000). There are different ways to see these organizational changes influencing positive human resource development in the Malaysian system. One way to see how these changes are put into action is by looking through the lens of organizational change. Using the Burke-Litwin Model, this paper will examine the challenge facing Malaysian organizations especially in

65

Organization Change on Human Resource Development and Organizational Performance: From Malaysia Perspectives

human resource development in implementing changes in organizations through the Burke-Litwin Model.

BACKGROUND
Organizations do not usually experience change by accident. The need for change is based on evidence and research of organization change and development. Human resource practitionersoften see the organizations change parallel to that organizations development. According to Cummings and Worley (2005) organization development and organization change both address the effective implementation of planned change, however organization development is primarily concerned with managing change in such a way that knowledge and skills are transferred to build the organizations capability to achieve goals. In contrast, organization changes are intended to result in better performance of the organization. Cummings and Worley (2005) remarked that organization change is a broader concept than organization development. They claimed organization change is more broadly focused and can apply to any kind of change, including technical and managerial innovations, organization decline, or the evolution of the system overtime. In addition it is also important to diagnose organization change through the lens of human resource development practitioners. Hence, human resource issuesremain unclear within change implementation in organizations. McLagan (1989) defined human resource development as an integrated use of training and development, organization development, and career development to improve individual, group, and organizational effectiveness. While Cummings and Worley (2005) agree that workplace performance is the defining paradigm for human resource development and they encourage learning as a defining paradigm for the field. Human resource development improves performance through the integrated use of three major practice areas: (1) training and development, (2) career development, and (3) organization development. This means that the workers need to develop an ability to transfer their knowledge and skills from one situation to another (Trim, 2003). Therefore, the workers or individuals need to develop an ability to transfer what they have learned from one situation to another situation. Furthermore, human resource development also focuses on training and development. As seen in many cases in Malaysian organizations, training and development focus on progress of the individual, primarily through planned learning experiences. In the past, formal training programs comprised the majority of human resource development activities and the terms training and human resource development were often used synonymously. At present, human resource development has evolved to a broader focus on improving workplace performance by developing human resources. Human resource development is moving away from a process identity, which defined the field by a single intervention tool and delivery mechanism for training, to an outcome identity employing a broad tool kit of performance enhancing interventions and strategies. Formal training is declining in importance as human resource development is pressured to respond to the new workplace with more effective and efficient tools. Thus, human resourcesare one of the important factors that should be considered in change that involves organizations.

THE CHALLENGE OF ORGANIZATION CHANGE

Kahirol Mohd Salleh & Nor Lisa Sulaiman

66

Systematic and continuous changes in organizations are important in developing and improving working lives and developing human resources quality workers. Stavrou-Costea (2004) points out that the increasing rates of change as well as the global and competitive market environments have led to new challenges for both organizations and individuals. Change process should begin with a broad base, which facilitates articulation within the training programs and the world of work. Thus,training and development programs in organizations should prepare the workers for lifelong learning by developing the necessary tools that can helps them navigate the change process. Heilmann (2007) argues that organizational change requires continuous training of knowledge and skills. To meet the increasing need of skillful workers in organizations, it is desirable to establish and strengthen the training programs in which any worker can receive knowledge development and training at any time. At present, the organizations have realized that they must have better trained workers if they are to survive. The challenges of working in a global, information, and service economy will require continual education and training everywhere (McLagan & Bedrick, 1983).To change the organization paradigm from a traditional approach to a better approach, organizations have to transform from transactional and become more of a transformational type of organization.

TRANSACTIONAL TO TRANSFORMATIONAL DIMENSION IN ORGANIZATIONS

According to Burke (2008) there are two types of organizations, known as transactional and transformational. In a transactional organization, the structures are more departmental and independent, as workersresolve for their own works. Burke (2008) claims that transactional represents organizational dimensions and activities that are more day-to-day operations and more incremental in making change. This situation has created competition among the departments and workers have difficulties working as a whole organization. In contrast, transformational organizationsfocus on ways of improving organization performance and adapting to changing conditions. The concept of transformational change is more about interaction and process, with the interaction including all relationships of individuals and groups while the process involves people, tasks, jobs, and structure. A transformation requires the immediate attention of all organizational members, whereas a continuous improvement action may require the attention of only a certain segment of the organization population or a phased involvement of all organizational members over time (Burke, 2008).In order to meet the global challenge, organizations should consider change. To better understanddifferences in the processes of transactional and transformational change it is helpful to view them from the lens of the consultation process. There are six critical transformational roles and levels of credibility in a consulting process as shown in Figure 1. The six roles includes (1) Political navigator, (2) Change champion, (3) Organizational architect, (4) Strategist, and (5) Performance Engineer, and (6)Relationship builder. The six transformational roles fall into five main categories: (1) high credibility, (2) leadership roles, (3) professional roles, (4) partnership role, and (5) low credibility. Each of these roles contributes to an organizations change and performance.

67

Organization Change on Human Resource Development and Organizational Performance: From Malaysia Perspectives

Organizational change must start with transformational roles that address the business and process level. Once there is a plan of action, the elements of implementation and worker involvement need to be addressed. These levels will cover all the management decisions and involve the vital element of establishing relationships throughout the organization

High Credibility

Leadership Roles

Political Change Navigator Champion

Professional Roles Organizational Architect Strategist Performance Engineer

Partnership Roles Low Credibility

Relationship Builder

Transactional Roles

Figure-1: SixCritical Transformational Roles and Levels of Credibility (Gilley & Gilley, 2003, p. 103) Improvement and performance is often the primary goal of change. Organizations go through the consultation process to develop a perspective on how to achieve their desired improvements and to understand what to change. In order for change to take place, there must be players who play each of the critical roles.Each of the roles in the transformational process affects and impacts an organizations change. In the consultation process the primary role of dominance and influence in the hierarchy of transformation roles for organization is the role of political navigator. The political navigator links all of the professional and leadership roles, uniting the organizational architect, strategist, and performance engineer roles with the change champion. Because the political navigator is a unifying position which crosses so many of the internal boundaries of an organization, a successful political navigator can influence and benefit the whole organization and improve the organization tremendously.

Kahirol Mohd Salleh & Nor Lisa Sulaiman

68

The Strategist is most engaged in the planning stage of the consultation process. Their impact is the key to effective strategic planning. Their role centers around how to implement an effective

improvement plan to effect for thebenefit the organization. When organizations employ strategies to develop a common purpose for their employees, the results are improved and enhanced communications through improved organizational culture and performance (Gilley & Gilley, 2003). As a leader in development planning, the strategist plays the most important role in laying out the plan that the organization will follow to successful change within the organization. According to Caruth,Middlebrook, and Rachel(1995), in order to overcome resistance to change, an organizations leaders must model that change. The leader must create the proper attitude, flooding the organization with communications about change and he or she must set an example of the kind of open communication they expect form the employees by soliciting opinions from employees on all levels. As the organizational change is implemented the political navigator will ensure that all the departments work together smoothly to the best possible results. According to Butcher and Clarke (1999), the same elements that function in the political world of government apply to the organizational lives of corporations. Well-intentioned views, which are in opposition to one another, are an asset not a liability. Butcher and Clarke (1999) refer to the idea that there are a limited number of organizations starting to deliver this type of management development which recognizes the management of political behavior as fundamental to organizational life, not a dirty issue to be avoided.Based on the roles for each transformation used in a consulting process such as strategist, political navigator, and the change champion, top management can evaluate every section or department in organization with its own advantage to the process of organizational change. In order to better understand the concept of transformational and transactional dimensions in organization change context, it is important also to view them from the perspective of the Burke-Litwin Model. The Model is divided into two factors, the top half is the transformational factor and the bottom half is the transactional factor. Burke (2008) stresses that the key to understanding change, according to this model, is to compare the top half with the bottom half.

BURKE-LITWIN MODEL OF ORGANIZATIONAL PERFORMANCE

An organization is dynamic, never static, and the model must represent this reality (Burke, 2008). Thus, the Burke-Litwin Modelis suitable for organization change because it is dynamic and feedback oriented rather than input-process-output types of models. Di Pofi (2002) recognized that the Burke-Litwin Model is comprehensive, covering important organizational functions including the external environment and its impact on internal operations, and provides a foundation for management to understand and implement the process. It also explains the relationship between transactional and transformational dimensions. Organizational performance and change are influenced by transactional and transformational roles. Whether the organizations are education providers or business oriented, organizationshould consider the roles played by the transactional and transformational.Burke (2008), divides the roles or factors in organizations in two, which are transactional factors consisting of Management Practices, Structure, System, Work Climate, Task Requirement, Motivation, and Individual

69

Organization Change on Human Resource Development and Organizational Performance: From Malaysia Perspectives

Needs and Values. The transformational factors are External Environment, Mission and Strategy, Leadership and Organization Cultureas shown in Figure 2. Referring to the Burk-Litwin Model in Figure 2, it is clear that the objective of change in organizations is to boost performance and make change. In order to successfully execute change, all parties, including individuals, groups, and management have to understand the function of these twelve boxes that represent organization relationship. The need to work together in teams, at all levels of the organization including cross functionally is vital to organizational survival (Almaraz, 1994). Knowing that the organization operates in open system conditions, it is essentialto see the effect of external environments. It is important for the organization management to understand the top half of the model. The top half representing external environment, mission and strategy, leadership, and culture are referring to transformational factors. Based on the model, the key to change is most likely dependent on the organization leadership. Organization transformation requires a change leader who personally identifies with the change that is needed (Burke, 2008). The bottom half of the boxes are referring to transactional factors. The transactional factor in an organization does not give more impact and influence to the organization because the job task. The transactional factor concerns more of the day-to-day operations of the organization (Burke, 2008). To improve the organization, the transformational factor should be considered. This factor will influence many things in the organization such as External Environment, Mission and Strategy, Leadership or Organization Culture.

Kahirol Mohd Salleh & Nor Lisa Sulaiman

70

External Environment Transformation Mission and Strategy Management Practices Structure Transactional Work UnitClimate Leadership Organization Culture

System

Motivation Task Requirements & Individual Skills/ Abilities Individual Needs & Values

Individual & Organization Performance

Figure-2: Organization performance and change relationship (Burke, 2008, p. 187)

CHANGE IN MALAYSIAN ORGANIZATION

In Malaysian cases, the most influential factor that should be considered in organizations is the culture. There is a unique management culture in Malaysia resulting from the influence of different countries that either occupied Malaysia, such as Britain and Japan, or from countries that conducted business in Malaysia, such as India and China (Abdul Rahman & Mohamed Ali, 2006). The culture is influencing the practices of the Malaysian style of management, which is reflected in the structure of the Malaysian society in which the elders are the most respected members. Ahmad (2005) captured the issue surrounding a hierarchical society simply as authority is not usually questioned or challenged (p. 29). This respect for experience and time served carries over into the management of educational organizations and all kinds of businesses. The leader is given respect by subordinates on the basis of a cultural respect for hierarchy and life experience. This strong value of respect on the part of individuals in subordinate positions can lead to the abuse of power on the part of those in leadership roles. The current management structures are transactional; employees are required to do their day-to-day work without the investment of thinking about or implementing ways to improve. Not all organization changes lead to improvement, just as transactional change is not always good and does not always produce a significantly better organization (Burke, 2008).

71

Organization Change on Human Resource Development and Organizational Performance: From Malaysia Perspectives

To improve on human resource development, the conventional type of organization should change and become more transformational. It will require a lot of effort to implement but if it succeeds the impact will produce better workers in the job market. The organizations need to change its nature from one that primarily builds limited numbers of discrete skills to one that develops a stronger foundation of the knowledge necessary for flexibility and adaptability is key (Dyrenfurth, 2000).In order to successfully adopt any change model into Malaysian organizations, it is important to consider the two most influential factors. One, the future development of a change model needs to consider the diversity in organizations. Secondly, it is important to consider the perspective of the change model from

Malaysian organization culture and organization performance. Once management knows how to deal with both of these factors, it will be easier to apply competency models into the organization.

ORGANIZATIONSCULTURE
As mentioned earlier, in Malaysian organizations the most influential factor that should be considered while dealing with adopting a change model is the organizations culture. The organizations culture influences the practices of the workers, which are reflected in the structure of Malaysian society. The structures in which the elders are the most respected members apply to real organizations as well. Malaysian organizations style has been long known to be a hierarchical structure. In order to apply any change from outside, such as the Burke-Litwin Model, one should considerer the organizations culture. To be competitive organizations must change and follow a path driven by human skill and competencies. The organizations culture should also be to educate and train the workers at a foundational level. By doing this from the foundation level, it is easier for the organization to apply change. It also ensures that workers will be prepared in terms of attitude and knowledge in order to become competent. Organizational performances are being scaled and evaluated by the time performance, cost performance, and quality performances occur (Toni & Tonchia, 1996; 2001). In contrast, Cummings and Worley (2005) related organizational performance with managing individual and group performance. In the perspective of change, the organizations performance is an integrated process in managing individual and group performance to effectively use time and costs to increase work quality. Thus, workers competencies are vital to an organizations performance because most of the organizations need to reduce costs and time by cutting the training costs for new workers. Therefore, workers with similar which have a variety ofcompetencies needed by organizations are the most likely to be hired. To produce good human resources, especially in organizations, the training and development process shouldstart from top to bottom. In alignment with this objective, organizations should transform from conventional training and development methods to become more business minded. Organizational change means that training and development methodsshould focus on the competencies needed and follow a specific model toward the future. In doing so, the futureemployeesare more likelyto have the skill set required and competency needed to become more productive workers. The competencies are a decision tool that describes the key capabilities for performing a specific job in a way that management should be able to understand and teach (McLagan, 1996).The change model proposed by BurkeLitwinModel consists of different criteria of assessment for individual and organizational performance.

Kahirol Mohd Salleh & Nor Lisa Sulaiman

72

Burke (2003) suggests that to be more complete, the model should include group or work unit to the description in assess the organization performance.

CONCLUSIONS
Improving human resource development, especially in the Malaysian organizational context is a very difficult task. Those implementing changes should consider the external environment and the culture differences as barriers. The organization needs to include culture as a key integrated portion in the change process. After Once the culture blends with the organization then improvements can gradually occur. In order to successfully change the organization, management needs to use its influence and commit to change. Additionally, transformational change is required if organizational improvement is to occur.

REFERENCES
1. Abdul Rahman, R., & Mohamed Ali, F. H. (2006). Board, audit committee, culture and earnings management: Malaysian evidence. Managerial Auditing Journal, 21(7), 783-804.

2.

Ahmad, K. (2005). Malaysian Management Styles: Policy Practice, and Human Resource. London, UK: Asean Academic Press.

3.

Aghazadeh, S. (2003). The future of human resource management. Work Study, 52(4), 201207.doi:10.1108/00438020310479045

4.

Almaraz, J. (1994). Quality management and the process of change. Journal of Organizational Change Management, 7(2), 6-14.doi:10.1108/09534819410056096

5.

Berge, Z., Verneil, M., Berge, N., Davis, L., & Smith, D. (2003). The increasing scope of training and development competency. Benchmarking: An International Journal, 9(1), 4361.doi:10.1108/14635770210418579

6.

Butcher, D., & Clarke M. (1995). Organizational politics: The missing discipline of management? Industrial and Commercial Training, 31(1). 9-

12.doi:10.1108/00197859910253100 Burke, W.W. (2008). Organization change: Theory and practice (2nd ed.).Thousand Oaks, California: Sage Publications Inc.

7.

8.

Caruth, D., Middlebrook, B.,& Rachel, F. (1995). Overcoming Resistance to Change. SAM Advanced management Journal, 50(3),23-7.

73

Organization Change on Human Resource Development and Organizational Performance: From Malaysia Perspectives

9.

Cummings, T. G., & Worley, C. G. (2005). Organization development and change (8thed.). Mason, Ohio: South-Western Publishing.

10. Di Pofi, J. A. D. (2002). Organizational diagnostics: Integrating qualitative and quantitative methodology. Journal of Organizational Change Management, 15(2), 156-168.

doi:10.1108/09534810210423053

11. Dyrenfurth, M. (2000). Trends in industrial skill competency demands as evidenced by business and industry. (ERIC Document Reproduction Service No. ED463403) Retrieved from ERIC database.

12. Garavan, T. N., Costine, P., & Heraty, N. (1995). The emergence of strategic human resource development. Journal of European Industrial Training, 19(10), 4-

10.doi:10.1108/03090599510095816 13. Giley, J.W & Gilley, A.M (2003). Strategically Integrated HRD (2nd ed.). Cambridge, MA: Perseus Publishing.

14. Heilmann, P. (2007). High level competence: a tool for coping with organizational change. Journal of European Industrial Training, 31(9), 727-741. doi:10.1108/03090590710846684

15. Marques, J. (2007). HR in all its glory. Human Resource Management International Digest, 15(5), 3-6.doi:10.1108/09670730710762799

16. McLagan, P.A (1989). Model for HRD practice: The models. Washington,DC: American Society for Training and Development.

17. McLagan, P.A. (1996). Great ideas revisited: Competency models, creating the future of HRD. Training and Development, 50(1), 60-65.

18. McLagan, P.A., & Bedrick, D. (1983). Models for excellence: The results of the ASTD training and development competency study. Training and Development Journal, 37(6), 10-12,14,16-20.

19. Sail, R.M. & Alavi, K. (2010). Social skills and social values training for future k-workers. Journal of European Industrial Training, 34(3), 226-258.doi:10.1108/03090591011031737

20. Savolainen, T. (2000). How organizations promote and avoid learning; Development of positive and negative learning cycles. Journal of Workplace Learning, 12(5), 195-

204.doi:10.1108/13665620010336198

Kahirol Mohd Salleh & Nor Lisa Sulaiman

74

21. Savolainen, T. (2000b). Towards a new workplace culture: Development strategies for employer-employee relations. Journal of Workplace Learning, 12(8), 318-

326.doi:10.1108/13665620010355566

22. Stavrou-Costea, E. (2004). The challenges of human resource management towards organizational effectiveness: A comparative study in Southern EU. Journal of European Industrial Training, 29(2), 112-134.doi:10.1108/03090590510585082

23. Toni, A. D., & Tonchia, S. (1996). Lean organization, management by process and performance measurement. International Journal of Operations and Production Management, 16(2), 221236.doi:10.1108/01443579610109947

24. Toni, A. D., & Tonchia, S. (2001). Performance measurement systems: models, characteristics and measures. International Journal of Operations and Production Management, 21(1/2), 4670.doi:10.1108/01443570110358459

25. Trim, P.R.J. (2003). Human resource management development and strategic management enhanced by simulation exercises.Journal of Management Development, 23(4), 399413.doi:10.1108/02621710410529820