22013 Lanesra Human Resource Consultancy Limited Report. NAME: Newskool Grooves 28th March Kirt Lee Bapitiste Marcia Caruth Vernessa Duncan 3/28/2013 Donell Herbert Meridith Nicome 3 Table of Contents Company Profile .................................................................................................................................... 4 Introduction ............................................................................................................................................ 5 Organizational Structure and Boundaryless Organizations .................................................................... 6 Organizational Culture ........................................................................................................................... 8 Human Resources ............................................................................................................................... 10 Section I ........................................................................................................................................... 10 Section II .......................................................................................................................................... 12 Section III ......................................................................................................................................... 13 Organizational Socialization ................................................................................................................. 18 Recommendations ............................................................................................................................... 19 Conclusions ......................................................................................................................................... 20 4 Company Profile Lanesra HR Consulting Services help leading organizations around the world confront complex business challenges head-on. Our experts provide solutions for organizations in: HEALTH AND BENEFITS We help health benefit plan sponsors better manage spend, maintain the integrity of their core offerings, meet the needs of their varied employee populations and manage the plan’s impact on business performance and financial results. GLOBAL BENEFITS With the largest, wholly-owned network of worldwide offices, we coordinate and deploy truly global benefit packages that drive centralized benefits efficiency and locally manage the vital tactical issues that impact regional benefit design. RETIREMENT Our retirement consultants and actuaries balance the potential and risks of retirement benefit programs; manage adverse outcomes through financial, fiduciary, and operational risk management; and better enable employers to help their workforce prepare for retirement. COMPENSATION We help clients balance employee and shareholder interests, achieve business objectives, and attract and retain key employees using market compensation and executive reward strategies. TALENT AND ORGANIZATION We offer talent solutions that help you manage the recruitment, selection, engagement and potential of critical talent, executives and next-generation leaders while minimizing the retention and compliance risk of a global workforce. COMMUNICATION We use a proven strategic planning process and award-winning communication design to engage, educate and empower targeted audiences to take the actions and change the behaviors that will benefit them as individuals and improve organizational productivity. 5 Introduction Lanesra HR Consulting Services was approached by Gerd Finger founder and CEO of Newskool Grooves. Gerd was running into some management issues and sought counsel from us from an Organizational Behavioural1 standpoint, with expectations that the imparted knowledge can aid him in increasing his organization’s effectiveness. The main areas addressed would include Organizational Structure and Boundaryless Organizations, Organizational Culture, Human Resources and Organizational Socialization. Boundaryless Organization is organizations that are not defined or limited by horizontal, vertical, or external boundaries imposed by a predetermined structure. They share many of the characteristics of flat organizations2, with a strong emphasis on teams.(Plunkett, Allen and Attner) These organizations typically use modern forms of communications, such as, email, phone, and other virtual methods rather than more traditional face-to-face communication. The freedom to telecommute with international employees removes geographical barriers to productivity and allows for schedule flexibility. By organizing expert employees in groups and giving them decision-making authority, these companies can change quickly to meet needs and function efficiently in an ill-defined hierarchy. It is important to note that our era has seen an increase in the pace of change. Adherents to boundarylessness propose that speed, flexibility, integration, and innovation have replaced size, role clarity, specialization, and control as the primary dimensions along which companies must use to measure themselves. (Falk) With this in mind we fully understood the direction Gerd wishes to take Newskool Grooves and subsequently expressed to Gerd that Newskool Grooves has taken on a modern from of organizational structure and thus managing it in a traditional sense or creating and implementing ad-hoc management practices that run the business might be detrimental and not in his best interest. In laymen terms, the old practices simply won’t apply in particular scenarios or circumstances, as well as, simply creating new practices for an unknown situation isn’t sensible. But however, altering old practices and creating new practices based on organizational theories and proven research would serve his best interest. Our report informed, indentified and addressed issues Gerd believed was essential and we also included a couple of our own recommendations based on our many observations and interactions with Gerd and his staff. 1 Organizational Behaviour is a field of study that investigates the impact that individuals, groups, and structure have on behaviour within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness.(Robbins) 2 Flat Structures are organizations with few layers, often with large numbers of employees reporting to a single manager.(Carpenter, Bauer and Erdogan) 6 Organizational Structure and Boundaryless Organizations As stated in the Introduction a Boundaryless Organization are organizations that are not defined or limited by horizontal, vertical, or external boundaries imposed by a predetermined structure. They share many of the characteristics of flat organizations3, with a strong emphasis on teams.(Plunkett, Allen and Attner) The term ‘Boundaryless Organization’ was first coined by General Electronics’ Chief Execut ive Officer Jack Welch he stated that an organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment can be referred to as an Boundaryless Organization.(Ashkenas et al.) (Falk) indicated that term Boundaryless isn’t to be taken literally. Further stating that a Boundaryless organization isn’t some amorphous organization existing with any real structure governing how it operates, but rather an organization that has learnt how to permeate the four traditional boundary types (vertical, horizontal, external and geographical) as a means of better serving its customers and capitalizing on good ideas. Many organizations have evolved into a modernized organizational structure and thus adopted the Boundaryless approach as a method of sustaining profitability and relevance. Some main examples of these Boundaryless organizations include Strategic Alliance, Modular, Virtual and Network Organization. Based on what we (HR Firm) have observed, the structure Newskool Grooves seems to have implemented is a Network Organization. (Cadden, Leuder and Knowledge) stated a network organization4 is one in which companies outsource their major business functions in order to focus more on what they are in business to do. Some benefits of this structure include:i. ii. iii. iv. By being a network structure and by extension Boundaryless Newskool Grooves can boast of being lean and streamlined. Overhead is reduced and operating efficiency is increased thus helping Newskool in being costcompetitive. New non-traditional roles relating to coordinating business processes are created from this structure. And of course the ability to employ outsourcing strategies and contract out specialized business functions. 3 Flat Structures are organizations with few layers, often with large numbers of employees reporting to a single manager.(Carpenter, Bauer and Erdogan) 4 Network Structure uses information technologies to link with networks of outside suppliers and service contractors. (Schermerhorn) 7 Some downfalls of this structure include:i. ii. iii. Based on the complexity of Newskool’s structure coordinating and managing said structure can become quite problematic. The strong interdependency between departments could be its Achilles heel, that is, if one part of the network fails or breaks down the entire system fails. No strong sense of loyalty towards the company would be maintained due to outsourcing. For example, if the programmers in Kiev are offered better compensation elsewhere Newskool stands to lose valued personnel. (Falk) recognized that organizations that break down the four boundaries will be faster, more flexible, better able to marshal their resources into products and services (this is the integrative dimension), and therefore better able to generate, harness, and capitalize on new business ideas. 8 Organizational Culture Culture is an aspect of every organization which helps define the norms and types of behaviour that is acceptable and must be incorporated to maintain a particular standard. Culture affects and influences how people behave, think, and communicate. Different cultures have different expectations, norms and values which affects the way in which they may interpret information. Newskools’ organisational culture is decentralized, and it is expected that cultural issues will arise due to its dynamic work force. To be an effective organisation that crosses international boundaries a proper knowledge of cultural issues is important, some of which we will discuss. Communication Barriers: Communication is a major issue in diverse cultures within an organisation, and may result in negative outcomes. One of the major issues faced is the interpretation of semantic (words that mean different things to different people), word connotations and tone differences. With an increase in communication via social networks we can see how this may influence or assist in the breakdown of communication between international boundaries. Communication barriers may also occur among a diverse work group where there is a lack of understanding and interpretation of cultural differences. Decision Making: Some cultures have different decision making styles which are dependent on their values and beliefs; this can lead to misunderstanding, slow decision making, failure to make a decision or failure to implement a decision made. Some cultures for example characterized by two main cultures Eastern and Western; Western cultures which is associated with quick impulsive, decisions and actions while the Eastern is slower, more comprehensive and contemplative. Ethical Choices and Conflict Resolution: Considerations are to made to cultural difference when dealing with ethics and conflict resolution, because it contributes to the way a person thinks or acts. Conflict is sometimes as a result of a lack of communication and this can how ever be reversed by establishing effective communication based on mutual cultural understanding. Ethical behaviours are sometimes influenced public culture, by work environment and organisational factors, where employee’s ethics are not compatible with the organizations; again the implementation of programs to improve employees’ awareness of the different cultures they interact with will play an integral role in curbing this issue. Group Cohesion: The cohesiveness of work groups with respect to culture has its advantages as well its disadvantages. As mentioned before culture plays an important part in the way we think, if there are differences in views, goals and interpretation within a group it is more than likely that desired outcome will be not in unison. Cohesiveness with in a group can only be strengthening through an understanding of the organisation culture. 9 Job Satisfaction: Workplace satisfaction and behaviour is sometimes affected by the different cultures that may exist both ethnically and organizationally. Due to cultural influence employees view authority differently, some culture prefers structure and others are comfortable making decision on their own. This can be seen in European countries where structure is of importance, where as the United States, are not as satisfied with structure in an organization. A negative corporate culture as well can affect an employee's job satisfaction, where there is no comfort, no rewards or considerations or the impacts that certain decision may have on the an employee's welfare. Socially the individual culture of an employee may also cause dissatisfaction when it is in conflict with the organizations. Understanding the employees social culture for example religion and values can assist in the resolving this issue. Looking at Newskool from a holistic point of view where their diverse culture is one of decentralization, we can see how certain functions that an employee may perform may be in conflict with their culture. Again different culture interpret the same scenario differently and understanding the diverse culture in which an organization plants its self and defining its culture as well to its employees, is of great importance in the development of an organization. 10 Human Resources Section I Gerd wishes to achieve a high level of creativity and independence within Newskools' work environment, thus determining workforce satisfaction, an important variable would be to make selections based on an individual's motivational level and personality types in accordance to each area of the company,. By making reference to Holland's Theory of Personality and Congruent Occupation we can properly select the most suitable persons to be satisfied within each area of the organisation. The table below are the respective types: Table of Holland's Theory of Personality and Congruent Occupation 11 Figure 1 Although Holland’s Theory of Personality and Congruent Occupation may assist in finding the different types of people that may be satisfied in each area of the company, considering the factors that make a particular job satisfying is another issue that needs to be addressed. Based on Hackman and Oldham’s Job Satisfaction Theory there are five (5) components that measures job satisfaction and leads to three (3) psychological states as illustrated in the figure below: Employees need to feel a sense of accomplishment and purpose, by breaking monotonous functions and redesigning jobs, by implementing job enrichment programs and possible job rotation this can be achieved. 12 Section II Human resources focus on activities relating to employees. The activities include recruiting, hiring of new employees and training of existing employees. Newskool Grooves hires employees who are creative, and who will try to make the next thing happen, at the end Gerd makes the final decision or selection of employees placing great emphasis on independent work styles. Once you properly designed your selection system, you would develop competent employees who will match their proposed job specification in the organization. Start with the initial selection: this is basic information applicants submit and it decides whether they meet the basic qualifications for the job. Then move on to the substantial selection: This would involve performance – stimulation tests which would determine whether employees can do the job successfully. To determine job successfulness: do work sample tests which will accurately assess an applicant’s ability to perform his job functions. Based on the Big Five Traits, the most suitable personalities would be that of persons: Open to experience: You can hire employees who are creative, curious and artistically sensitive, since it would allow workers to adapt to changes that are ever occurring in the organization especially when you want to remain ahead of your competitors. Conscientious: Describes employees who are responsible, dependable, persistent and organized. You want that person who is driven to performance without them having to bother you. You want to build trust with employees. Agreeableness: You have to have cooperation among all workers from supervisors to regular employees. You want when employees called from Berlin to Los Angeles you want someone who can make a decision or agreement without having to wait for board members. You want when they call you (Gerd) you can come to some agreement without them, having to start any project all over again. When it can be agreed upon and move on 13 Section III Each of Newskool Grooves offices has its own unique identity and unearthing the perfect way to evaluate performances of individuals in each office or department may be seen as a challenging task. Firstly we would have to understand what is ‘performance measures’ and its relevancy before we understand why each office needs its own personalised performance measure. Performance Measures are quantitative or qualitative ways to characterize and define performance. They provide a tool for organizations to manage progress toward achieving predetermined goals, defining key indicators of organizational performance and Customer satisfaction. (Technology) As we’ve seen by the organizational structure and culture of Newskool Grooves, determining a fitting performance measure would definitely have to be based on each functional silo of the organization. Berlin, Kiev and Los Angeles offices all perform differing duties/functions and evaluating their performances would logically be based on their specific contribution towards the company’s end product. Now that we understand what are performance measures, we are left with the question of this is done? Performance is measured by a system called performance appraisals. Performance appraisals is a formal, structured system of measuring and evaluating an employee’s job related behaviour and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organisation and society all benefit. (Schuler) The marketing department of Newskool Grooves is based in Los Angeles, United States of America; the basic function of any marketing department is interacting with a company’s external customers and thus ultimately generating revenue/sales for said company. It is a well known fact that marketing as a functional silo of any organization interacts with a majority of stakeholders associated with said organization, in this case it’s a fact that Newskool Grooves’ marketing team/department interacts with top-level management, members of other departments (Kiev and Berlin offices) as well as external customers (people purchasing Newskool Grooves’ plethora of products). Holding this in mind we can determine that best performance appraisal method for measuring the performance of the marketing team would definitely be a 360 0 evaluation system. The 360° evaluation, in effect, analyzes individuals’ performance from all sides—from their supervisor’s viewpoint, from their subordinates’ viewpoint, from customers’ viewpoint (if applicable), from their peers’ viewpoint, and using their own self-evaluation. Obviously, the 360° evaluation would give us the most accurate, best possible analysis of individuals and their performance within the company.(Lussier and Hendon) 14 This method of evaluation comes with its own set of drawbacks and commendations. These were described by (Randhawa) in the table below: ADVANTAGES DISADVANTAGES Figure 2 - 360 Feedback Model 0 The Kiev, Ukraine office is the second major functional silo of Newskool Grooves’ operations, here is where coding work is outsourced to highly skilled programmers. Keeping in mind the issue the programmers had with the Boundaryless structure deciding on the best possible performance measure was a bit straightforward. Programmers requested clearly defined objectives and in order to carry out their work effectively and efficiently, they wish to produce what is asked of them, the creativity aspect arises in figuring out how to accomplish said task rather than thinking out of the box to come up with new innovative ideas, which ideally should be the Berlin headquarters responsibility. Hence, the Management by Objectives (MBO) method is the most appropriate option. MBO method is a process in which managers and employees jointly set objectives for the employees, periodically evaluate performance, and reward according to the results. Although it is a three-step process, no standard form is used with MBO, so it is a method.(Lussier and Hendon) The MBO method has 15 improved the shortcomings of most traditional forms of performance appraising, created by Peter F. Drucker in 1954 the MBO method shifted the traditional appraisal methodology from participative topdown approach to a participative joint approach, that is, no longer would an subordinates’ performance be judged by a superior, but rather collaborative effort where both subordinate and superior set measurable goals and periodical review the progress made. (Randhawa) The major steps involved in the Management by Objectives method are as follows: Step I. Set individual objectives and plans Step II. Give feedback and evaluate performance Step III. Reward according to performance. It is important to note that in Step I is a crucial step and setting up of objectives/plans/goals should be done using the SMART technique (Specific, Measurable, Attainable, Relevant, and Time-based). Below is a diagram illustrating the full cycle of the MBO method. The programmers’ evaluation wouldn’t just be done using MBO method but also Graphic Rating Scale 5 (GRS) as well. Using the combination of both methods would prove highly beneficial to Newskool and their team of programmers, they stand to gain development benefits from the MBO method and evaluative from the GRS. In simple terms, programming is a highly structured task, where there are clearly written rules that govern how it’s done, therefore, the quality of a programmers work could be judged based on the quality of code they produce hence the need for GRS, on the other hand Gerd wants to promote creatively and out of the box thinking and using MBO method would initiate the programmers thinking introspectively thus fostering qualities Gerd cherishes. 5 The graphic rating scale form is a performance appraisal checklist on which a manager simply rates performance on a continuum such as excellent, good, average, fair, and poor. The continuum often includes a numerical scale, for example from 1 (lowest performance level) to 5 (highest performance level).(Lussier and Hendon) 16 5-Step MBO Process Performance Appraisals Measurement Methods and Forms 17 The headquarters of the multinational company Newskool Grooves is located in Berlin, Germany, the brain, the nerve center, the pulse, the place where the magic happens. These are the words used to describe the company’s headquarters, here is where new products are developed and the organizational strategy is established, you can go on to say that decisions made here dictate or determine the direction the company would be eventually heading. Measuring the performance of employees within the headquarters would be of utmost importance to Gerd and by extension Newskool Grooves. We can infer from observing the structure of the Berlin office that employees work in project teams developing new innovative and organizational strategies, because of this close-knit teamwork environment a Peer-Reviews appraisal system suits the given scenario/situation, as well as MBO method described above based on the developmental culture Gerd wishes to achieve within Newskool. (Kane and Lawler) described Peer-Reviews as the process of having team members rate each other on a given set of performance or personal characteristics against a set of rating scales. A major strength of using peers to appraise performance is that they work closely with the evaluated employee and probably have an undistorted perspective on typical performance, especially in team assignments. Some strengths and weaknesses or Peer-Reviews are as follows: STRENGTHS Team members know each others’ performance better than anyone and can, therefore, evaluate performance more accurately. Peer pressure is a powerful motivator for team members. Members who recognize that peers within the team will be evaluating their work show increased commitment and productivity. Peer review involves numerous opinions and is not dependent on one individual. WEAKNESSES Team members who are close will be reluctant to critique each other. Team members who aren’t as close would exaggerate complaints of other team members. If team members interact infrequently a proper assessment can’t be made. 18 Organizational Socialization Establishing a Socialization Program the will assist in maximizing employees creativity and independence. Socialization is the process whereby employees adapt to an organisation's culture. The implementation of socialization programs assist in improving the general satisfaction amongst worker, it influences a higher level of creativity, and independence. Based on Newskools Boundaryless organization and its ability to continuously re-invent itself to increase productivity and maintain its competitiveness, the establishing of socialization programs will assist the employees in maintaining these standards. In order to develop an effective socialization program the company must first assess the following: Whether or not the employees have an understanding of the organisations culture. By determining this factor, the company can implement a socialization program that will accurately portray the organisations culture . Analyzing the diverse work environment. This assist in implementing a program that improves communication. Perform a Work Sample Test. By obtaining a better understanding of the employees’ efficiency and deficiencies with respect to their job specifications a program can be implemented to provide and improve training and job compatibility. Citizenship Behaviour. Is there a high level of commitment to the organisation and what can be done to improve the lack of, for example, implementation of incentives? Based on the function of each department, the expectations or output of each is different, for instance the Kiev office in Ukraine writes code that produces programs based on what the Berlin office decides on implementing. The creativity level necessary for executing such tasks will mostly rely on how they execute their requests rather than developing new products, which is the responsibility of the Berlin office to begin with. Thus, it isn't necessary for creativity levels to be equal across all departments of the organisation. Creativity is necessary for the marketing team as well as the headquarters, because this is where new products are developed and where the direction of the company is directed. 19 Recommendations To effectively promote the changes necessary for improvement in the organisation we recommend the following. Communication: implement programs that will create clearer communication channels by. i. ii. iii. iv. Assessing the communication levels within the your organisation Mix or change the way in which communication is done, sometimes direct communication can prove to be effective Don't assume that your team knows what is being communicated ask for feedback or spell it out Ensure that clear job descriptions are defined and encourage feedback or status reports. Cultural Issues: i. Improve cultural awareness, by filling any gaps in knowledge that the company itself may have, and educate employees on the organizational culture in which the company operates and individual cultures that they may associate with. Encourage cultural expressions by observing holidays and practices. ii. Motivation: i. ii. iii. Develop attainable goals and create incentives Promote and encourage independent thinking and implementing reward systems. Analyse job satisfaction and improve them, by brainstorming with employee in making their work environment comfortable. Most of the problems seen within this report will take time to mend, but by tackling issues with an open mind, performing research and implementing practices that will be beneficial to the employees by extension the organisation, these problems can be resoloved. 20 Conclusions The goal of any organisation regardless of its organisational structure is to be the best or, a notch above the rest. This is not always as easy as it seems and reaching that goal can prove to be a futile effort, especially when dealing with an organisation that has crossed international boundaries and consist of diverse cultures. Based on our report it can be seen, that the understanding of an organisations culture, behaviour, and its human efficacy and effectiveness is important in determining, the negatives and positives within the organisation. The role of an organisation isn't always to create, develop or manufacture a product, but to also be sensitive to its employee’s needs and wants and creating clear communication channels. By using this report to find solutions and implementing them, this company will be able to excel leaps and bounds into an organisational equilibrium of satisfaction results and success. 21 References Ashkenas, R., et al. The Boundaryless Organization: Breaking the Chains of Organizational Structure . John Wiley & Sons, 2002. Print. Carpenter, M.A., T. Bauer, and B. Erdogan. Principles of Management 1.1. Flat World Knowledge, 2010. Print. Falk, S.D. Organizational Evolution in a 'Boundaryless' Organization. Massachusetts Institute of Technology, Sloan School of Management, Management of Technology Program, 2001. Print. Plunkett, W.R., G.S. Allen, and R.F. Attner. Management: Meeting and Exceeding Customer Expectations. Cengage Learning, 2011. Print. Robbins, S.P., D.A. DeCenzo, and R. Stuart-Kotze. 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