Limitations of Human Resource Planning

Human resource planning is said to consist of three clear steps:

● Forecasting future people needs (demand forecasting). 

● Forecasting the future availability of people (supply forecasting). 

● Drawing up plans to match supply to demand.

But as Casson (1978) pointed out, this conventional wisdom represents human resource planning as an ‘all-embracing, policy-making activity producing, on a rolling basis, precise forecasts using technically sophisticated and highly integrated planning systems’. He suggests that it is better regarded as, first, a regular monitoring activity, through which human resource stocks and flows and their relationship to business needs can be better understood, assessed and controlled, problems highlighted and a base established from which to respond to unforeseen events; and second, an investigatory activity by which the human resource implications of particular problems and change situations can be explored and the effects of alternative policies and actions investigated.

He points out that the spurious precision of quantified staffing level plans ‘has little value when reconciled with the complex and frequently changing nature of manpower, the business and the external environment’. The typical concept of human resource planning as a matter of forecasting the long term demand and supply of people fails because the ability to make these estimates must be severely limited by the difficulty of predicting the influence of external events. There is a risk, in the words of Heller (1972), that ‘Sensible anticipation gets converted into foolish numbers, and their validity depends on large, loose assumptions.’ 

Human resource planning today is more likely to concentrate on what skills will be needed in the future, and may do no more than provide a broad indication of the numbers required in the longer term, although in some circumstances it might involve making short term forecasts when it is possible to predict activity levels and skills requirements with a reasonable degree of accuracy. Such predictions will often be based on broad scenarios rather than on specific supply and demand forecasts.

Hard and Soft Human Resource Planning

A distinction can be made between ‘hard’ and ‘soft’ human resource planning. The former is based on quantitative analysis in order to ensure that the right number of the right sort of people are available when needed. Soft human resource planning is concerned with ensuring the availability of people with the right type of attitudes and motivation who are committed to the organization and engaged in their work, and behave accordingly. It is based on assessments of the requirement for these qualities, and measurements of the extent to which they exist, by the use of staff surveys, the analysis of the outcomes of performance management reviews and opinions generated by focus groups.

These assessments and analyses can result in plans for improving the work environment, providing opportunities to develop skills and careers and adopting a ‘total reward’ approach which focuses on non-financial ‘relational’ rewards as well as the financial ‘transactional’ rewards. They can also lead to the creation of a high commitment management strategy which incorporates such approaches as creating functional flexibility, designing jobs to provide intrinsic motivation, emphasizing team working, de-emphasizing hierarchies and status differentials, increasing employment security, rewarding people on the basis of organizational performance, and enacting organization-specific values and a culture that bind the organization together and give it focus. As described by Marchington and Wilkinson (1996), soft human resource planning ‘is more explicitly focused on creating and shaping the culture of the organization so that there is a clear integration between corporate goals and employee values, beliefs and behaviours’. But as they point out, the soft version becomes virtually synonymous with the whole subject of human resource management.

THE ROLE OF HUMAN RESOURCE PLANNING

Definition

Human resource planning determines the human resources required by the organization to achieve its strategic goals. As defined by Bulla and Scott (1994) it is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements’. Human resource planning is based on the belief that people are an organization’s most important strategic resource. It is generally concerned with matching resources to business needs in the longer term, although it will sometimes address shorter term requirements. It addresses human resource needs both in quantitative and qualitative terms, which means answering two basic questions: first, how many people, and second, what sort of people? Human resource planning also looks at broader issues relating to the ways in which people are employed and developed in order to improve organizational effectiveness. It can therefore play an important part in strategic human resource management.

Human resource planning and business planning 

Conceptually, human resource planning should be an integral part of business planning. The strategic planning process should define projected changes in the scale and types of activities carried out by the organization. It should identify the core competences the organization needs to achieve its goals and therefore its skill requirements. But there are often limitations to the extent to which such plans are made, and indeed the clarity of the plans, and these may restrict the feasibility of developing integrated human resource plans that flow from them. 

In so far as there are articulated strategic business plans, human resource planning interprets them in terms of people requirements. But it may influence the business strategy by drawing attention to ways in which people could be developed and deployed more effectively to further the achievement of business goals as well as focusing on any problems that might have to be resolved in order to ensure that the people required will be available and will be capable of making the necessary contribution. As Quinn Mills (1983) indicates, human resource planning is ‘a decisionmaking process that combines three important activities: (1) identifying and acquiring the right number of people with the proper skills, (2) motivating them to achieve high performance, and (3) creating interactive links between business objectives and people-planning activities’. In situations where a clear business strategy does not exist, human resource planning may have to rely more on making broad assumptions about the need for people in the future, based on some form of scenario planning. Alternatively, the planning process could focus on specific areas of activity within the organization where it is possible to forecast likely future people requirements in terms of numbers and skills; for example, scientists in a product development division.

Integrating Business and Resourcing Strategies

The philosophy behind the HRM approach to resourcing is that it is people who implement the strategic plan. As Quinn Mills (1983) has put it, the process is one of ‘planning with people in mind’.

The integration of business and resourcing strategies is based on an understanding of the direction in which the organization is going and of the resulting human resource needs in terms of:

● numbers required in relation to projected activity levels; 

● skills required on the basis of technological and product/market developments and strategies to enhance quality or reduce costs; 

● the impact of organizational restructuring as a result of rationalization, decentralization, delayering, mergers, product or market development, or the introduction of new technology – for example, cellular manufacturing; 

● plans for changing the culture of the organization in such areas as ability to deliver, performance standards, quality, customer service, team working and flexibility which indicate the need for people with different attitudes, beliefs and personal characteristics.

These factors will be strongly influenced by the type of business strategies adopted by the organization and the sort of business it is in. These may be expressed in such terms as the Boston Consulting Group’s classification of businesses as wild cat, star, cash cow or dog; or Miles and Snow’s (1978) typology of defender, prospector and analyser organizations. 

Resourcing strategies exist to provide the people and skills required to support the business strategy, but they should also contribute to the formulation of that strategy. HR directors have an obligation to point out to their colleagues the human resource opportunities and constraints that will affect the achievement of strategic plans. In mergers or acquisitions, for example, the ability of management within the company to handle the new situation and the quality of management in the new business will be important considerations.

PEOPLE RESOURCING AND HRM

HRM is fundamentally about matching human resources to the strategic and operational needs of the organization and ensuring the full utilization of those resources. It is concerned not only with obtaining and keeping the number and quality of staff required but also with selecting and promoting people who ‘fit’the culture and the strategic requirements of the organization.

HRM places more emphasis than traditional personnel management on finding people whose attitudes and behaviour are likely to be congruent with what management believes to be appropriate and conducive to success. In the words of Townley (1989), organizations are concentrating more on ‘the attitudinal and behavioural characteristics of employees’. This tendency has its dangers. Innovative and adaptive organizations need non-conformists, even mavericks, who can ‘buck the system’. If managers recruit people ‘in their own image’there is the risk of staffing the organization with conformist clones and of perpetuating a dysfunctional culture – one that may have been successful in the past but is no longer appropriate (nothing fails like success).


The HRM approach to resourcing therefore emphasizes that matching resources to organizational requirements does not simply mean maintaining the status quo and perpetuating a moribund culture. It can and often does mean radical changes in thinking about the competencies required in the future to achieve sustainable growth and to achieve cultural change. 

DEVELOPMENT AND CHANGE PROCESSES

Team building

Team-building activities aim to improve and develop the effectiveness of a group of people who work (permanently or temporarily) together. This improvement may be defined in terms of outputs, for example the speed and quality of the decisions and actions produced by the team. It may also be defined in more nebulous terms, such as the quality of relationships or greater cooperation. The activities in team-building programmes can.


● increase awareness of the social processes that take place within teams;


● develop the interactive or interpersonal skills that enable individuals to function effectively as team members;


● increase the overall effectiveness with which teams operate in the organization.


To be effective, team-building programmes should be directly relevant to the responsibilities of the participants and be seen as relevant by all participants. They need to support business objectives, fit in with practical working arrangements and reflect the values the organization wishes to promote. Approaches such as action learning, group dynamics, group exercises, interactive skills training, interactive video, roleplaying and simulation can be used. Team-building training is often based on either Belbin or Margerison and McCann classifications of team roles as listed in Chapter 20.


Outdoor learning (outdoor-based development) is another good method of providing team-building training. It can offer a closer approximation to reality than other forms of training. Participants tend to behave more normally and, paradoxically, it is precisely because the tasks are unrelated to work activities and are relatively simple that they highlight the processes involved in teamwork and provide a good basis for identifying how these processes can be improved.

Transformation through Leadership

Transformation programmes are led from the top within the organization. They do not rely on an external ‘change agent’ as did traditional OD interventions, although specialist external advice might be obtained on aspects of the transformation such as strategic planning, reorganization or developing new reward processes.

The prerequisite for a successful programme is the presence of a transformational leader who, as defined by Burns (1978), motivates others to strive for higher-order goals rather than merely short-term interest. Transformational leaders go beyond dealing with day-to-day management problems; they commit people to action and focus on the development of new levels of awareness of where the futur lies, and commitment to achieving that future. Burns contrasts transformational leaders with transactional leaders who operate by building up a network of interpersonal transactions in a stable situation and who enlist compliance rather than commitment through the reward system and the exercise of authority and power. Transactional leaders may be good at dealing with here-and-now problems but they will not provide the vision required to transform the future.


Managing the transition


The transition from where the organization is to where the organization wants to be is the critical part of a transformation programme. It is during the transition period of getting from here to there that change takes place. Transition management starts from a definition of the future state and a diagnosis of the present state. It is then necessary to define what has to be done to achieve the transformation. This means deciding on the new processes, systems, procedures, structures, products and markets to be developed. Having defined these, the work can be programmed and the resources required (people, money, equipment and time) can be defined. The plan for managing the transition should include provisions for involving people in the process and for communicating to them about what is happening, why it is happening and how it will affect them. Clearly the aims are to get as many people as possible committed to the change.

ORGANIZATIONAL TRANSFORMATION

Defined


Transformation, according to Webster’s Dictionary, is: ’A change in the shape, structure, nature of something‘. Organizational transformation is the process of ensuring that an organization can develop and implement major change programmes that will ensure that it responds strategically to new demands and continues to function effectively in the dynamic environment in which it operates. Organizational transformation activities may involve radical changes to the structure, culture and processes of the organization – the way it looks at the world. This may be in response to competitive pressures, mergers, acquisitions, investments, disinvestments, changes in technology, product lines, markets, cost reduction exercises and decisions to downsize or outsource work. Transformational change may be forced on an organization by investors or government decisions. It may be initiated by a new chief executive and top management team with a remit to ‘turn round’ the business.

Transformational change means that significant and far-reaching developments are planned and implemented in corporate structures and organization-wide processes. The change is neither incremental (bit by bit) nor transactional (concerned solely with systems and procedures). Transactional change, according to Pascale (1990), is merely concerned with the alteration of ways in which the organization does business and people interact with one another on a day-to-day basis, and ‘is effective when what you want is more of what you’ve already got’. He advocates a ‘discontinuous improvement in capability’ and this he describes as transformation.


The distinction between organizational transformation and organization development


Organizational transformation programmes are business-led. They focus on what needs to be done to ensure that the business performs more effectively in adding value, especially for its owners, and achieving competitive advantage. They will be concerned with building strategic capability and improving the ways in which the business reaches its goals. This means considering what needs to be done to ensure that people work and interact well, but they are not dominated by the concepts of behavioural science, as was the case in traditional OD interventions.

Beer, Eisenstat and Spector

Michael Beer (1990) and his colleagues suggested in a seminal Harvard Business Review article, ‘Why change programs don’t produce change’, that most such programmes are guided by a theory of change that is fundamentally flawed. This theory states that changes in attitudes lead to changes in behaviour. ‘According to this model, change is like a conversion experience. Once people “get religion”, changes in their behaviour will surely follow.’ They believe that this theory gets the change process exactly backwards.


In fact, individual behaviour is powerfully shaped by the organizational roles people play. The most effective way to change behaviour, therefore, is to put people into a new organizational context, which imposes new roles, responsibilities and relationships on them. This creates a situation that in a sense ’forces‘ new attitudes and behaviour on people.


They prescribe six steps to effective change, which concentrate on what they call ‘task alignment’ – reorganizing employees’ roles, responsibilities and relationships to solve specific business problems in small units where goals and tasks can be clearly defined. The aim of following the overlapping steps is to build a self-reinforcing cycle of commitment, coordination and competence. The steps are.


1. Mobilize commitment to change through the joint analysis of problems.


2. Develop a shared vision of how to organize and manage to achieve goals such as competitiveness.


3. Foster consensus for the new vision, competence to enact it, and cohesion to move it along.


4. Spread revitalization to all departments without pushing it from the top – don’t force the issue, let each department find its own way to the new organization.


5. Institutionalize revitalization through formal policies, systems and structures. 6. Monitor and adjust strategies in response to problems in the revitalization process.

Thurley

● Directive – the imposition of change in crisis situations or when other methods have failed. This is done by the exercise of managerial power without consultation.


● Bargained – this approach recognizes that power is shared between the employer and the employed and that change requires negotiation, compromise and agreement before being implemented.


● ‘Hearts and minds’ – an all-embracing thrust to change the attitudes, values and beliefs of the whole workforce. This ‘normative’ approach (ie one that starts from a definition of what management thinks is right or ‘normal’) seeks ‘commitment’ and ‘shared vision’ but does not necessarily include involvement or participation.


● Analytical – a theoretical approach to the change process using models of change such as those described above. It proceeds sequentially from the analysis and diagnosis of the situation, through the setting of objectives, the design of the change process, the evaluation of the results and, finally, the determination of the objectives for the next stage in the change process. This is the rational and logical approach much favoured by consultants – external and internal. But change seldom proceeds as smoothly as this model would suggest. Emotions, power politics and external pressures mean that the rational approach, although it might be the right way to start, is difficult to sustain.


● Action-based – this recognizes that the way managers behave in practice bears little resemblance to the analytical, theoretical model. The distinction between managerial thought and managerial action blurs in practice to the point of invisibility. What managers think is what they do. Real life therefore often results in a ‘ready, aim, fire’ approach to change management. This typical approach to change starts with a broad belief that some sort of problem exists, although it may not be well defined. The identification of possible solutions, often on a trial and error basis, leads to a clarification of the nature of the problem and a shared understanding of a possible optimal solution, or at least a framework within which solutions can be discovered.

Overcoming Resistance to Change

Resistance to change can be difficult to overcome even when it is not detrimental to those concerned. But the attempt must be made. The first step is to analyse the potential impact of change by considering how it will affect people in their jobs. The analysis should indicate which aspects of the proposed change may be supported generally or by specified individuals and which aspects may be resisted. So far as possible, the potentially hostile or negative reactions of people should be identified, taking into account all the possible reasons for resisting change listed above. It is necessary to try to understand the likely feelings and fears of those affected so that unnecessary worries can be relieved and, as far as possible, ambiguities can be resolved. In making this analysis, the individual introducing the change, who is sometimes called the ‘change agent’, should recognize that new ideas are likely to be suspect and should make ample provision for the discussion of reactions to proposals to ensure complete understanding of them.

Involvement in the change process gives people the chance to raise and resolve their concerns and make suggestions about the form of the change and how it should be introduced. The aim is to get ‘ownership’ – a feeling amongst people that the change is something that they are happy to live with because they have been involved in its planning and introduction – it has become their change.


Communications about the proposed change should be carefully prepared and worded so that unnecessary fears are allayed. All the available channels as described in Chapter 54 should be used, but face-to-face communications direct from managers to individuals or through a team briefing system are best.

Why People Resist Change

People resist change because it is seen as a threat to familiar patterns of behaviour as well as to status and financial rewards. Joan Woodward (1968) made this point clearly.


When we talk about resistance to change we tend to imply that management is always rational in changing its direction, and that employees are stupid, emotional or irrational in not responding in the way they should. But if an individual is going to be worse off, explicitly or implicitly, when the proposed changes have been made, any resistance is entirely rational in terms of his own best interest. The interests of the organization and the individual do not always coincide.


Specifically, the main reasons for resisting change are as follows:


● The shock of the new – people are suspicious of anything which they perceive will upset their established routines, methods of working or conditions of employment. They do not want to lose the security of what is familiar to them. They may not believe statements by management that the change is for their benefit as well as that of the organization; sometimes with good reason. They may feel that management has ulterior motives and, sometimes, the louder the protestations of managements, the less they will be believed.


● Economic fears – loss of money, threats to job security.


● Inconvenience – the change will make life more difficult.


● Uncertainty – change can be worrying because of uncertainty about its likely impact.


● Symbolic fears – a small change that may affect some treasured symbol, such as a separate office or a reserved parking space, may symbolize big ones, especially when employees are uncertain about how extensive the programme of change will be.


● Threat to interpersonal relationships – anything that disrupts the customary social relationships and standards of the group will be resisted.


● Threat to status or skill – the change is perceived as reducing the status of individuals or as de-skilling them.


● Competence fears – concern about the ability to cope with new demands or to acquire new skills.


Operational change


Operational change Operational change relates to new systems, procedures, structures or technology which will have an immediate effect on working arrangements within a part of the organization. But their impact on people can be more significant than broader strategic change and they have to be handled just as carefully.

Strategic change

Strategic change is concerned with organizational transformation as described in the last section of this chapter. It deals with broad, long-term and organization-wide issues. It is about moving to a future state, which has been defined generally in terms of strategic vision and scope. It will cover the purpose and mission of the organization, its corporate philosophy on such matters as growth, quality, innovation and values concerning people, the customer needs served and the technologies employed. This overall definition leads to specifications of competitive positioning and strategic goals for achieving and maintaining competitive advantage and for product-market development. These goals are supported by policies concerning marketing, sales, manufacturing, product and process development, finance and human resource management.

Strategic change takes place within the context of the external competitive, economic and social environment, and the organization’s internal resources, capabilities, culture, structure and systems. Its successful implementation requires thorough analysis and understanding of these factors in the formulation and planning stages. The ultimate achievement of sustainable competitive advantage relies on the qualities defined by Pettigrew and Whipp (1991), namely: ‘The capacity of the firm to identify and understand the competitive forces in play and how they change over time, linked to the competence of a business to mobilize and manage the resources necessary for the chosen competitive response through time.’


Strategic change, however, should not be treated simplistically as a linear process of getting from A to B which can be planned and executed as a logical sequence of events. Pettigrew and Whipp (1991) issued the following warning based on their research into competitiveness and managing change in the motor, financial services, insurance and publishing industries:


The process by which strategic changes are made seldom moves directly through neat, successive stages of analysis, choice and implementation. Changes in the firm’s environment persistently threaten the course and logic of strategic changes: dilemma abounds… We conclude that one of the defining features of the process, in so far as management action is concerned, is ambiguity; seldom is there an easily isolated logic to strategic change. Instead, that process may derive its motive force from an amalgam of economic, personal and political imperatives. Their introduction through time requires that those responsible for managing that process make continual assessments, repeated choices and multiple adjustments.

CHANGE MANAGEMENT

Conceptually, the change process starts with an awareness of the need for change. An analysis of this situation and the factors that have created it leads to a diagnosis of their distinctive characteristics and an indication of the direction in which action needs to be taken. Possible courses of action can then be identified and evaluated and a choice made of the preferred action.

It is then necessary to decide how to get from here to there. Managing change during this transition state is a critical phase in the change process. It is here that the problems of introducing change emerge and have to be managed. These problems can include resistance to change, low stability, high levels of stress, misdirected energy, conflict and loss of momentum. Hence the need to do everything possible to anticipate reactions and likely impediments to the introduction of change.


The installation stage can also be painful. When planning change there is a tendency for people to think that it will be an entirely logical and linear process of going from A to B. It is not like that at all. As described by Pettigrew and Whipp (1991), the implementation of change is an ‘iterative, cumulative and reformulationin-use process’.


To manage change, it is first necessary to understand the types of change and why people resist change. It is important to bear in mind that while those wanting change need to be constant about ends, they have to be flexible about means. This requires them to come to an understanding of the various models of change that have been developed. In the light of an understanding of these models they will be better equipped to make use of the guidelines for change set out at the end of this section.

Use of OD

The decline of traditional OD, as described above, has been partly caused by disenchantment with the jargon used by consultants and the unfulfilled expectations of significant improvements in organizational effectiveness. There was also a reaction in the hard-nosed 1980s against the perceived softness of the messages preached by the behavioural scientists. Managements in the later 1980s and 1990s wanted more specific prescriptions which would impact on processes they believed to be important as means of improving performance, such as total quality management, business process re-engineering and performance management. The need to manage change to processes, systems or culture was still recognized as long as it was results driven, rather than activity centred. Team-building activities in the new process-based organizations were also regarded favourably as long as they were directed towards measurable improvements in the shorter term. It was also recognized that organizations were often compelled to transform themselves in the face of massive challenges and external pressures, and traditional OD approaches would not make a sufficient or speedy impact. A survey of the views of chief executives about organizational development, (IPD, 1999a) found that a large proportion of them are expecting greater team contributions, more sophisticated people management practices and processes for managing knowledge. As the IPD commented, ‘HR has a pivotal role in developing the behaviours and culture to support the delivery of these strategies.’ 

Characteristics of the Traditional Approach to OD

OD concentrated on how things are done as well as what they do. It was a form of applied behavioural science that was concerned with system-wide change. The organization was considered as a total system and the emphasis was on the interrelationships, interactions and interdependencies of different aspects of how systems operate as they transform inputs and outputs and use feedback mechanisms for self-regulation. OD practitioners talked about ‘the client system’ – meaning that they were dealing with the total organizational system.


OD as originally conceived was based upon the following assumptions and values:


● Most individuals are driven by the need for personal growth and development as long as their environment is both supportive and challenging.


● The work team, especially at the informal level, has great significance for feelings of satisfaction and the dynamics of such teams have a powerful effect on the behaviour of their members.


● OD programmes aimed to improve the quality of working life of all members of the organization.


● Organizations can be more effective if they learn to diagnose their own strengths and weaknesses.


● But managers often do not know what is wrong and need special help in diagnosing problems, although the outside ‘process consultant’ ensures that decision making remains in the hands of the client.


The three main features of OD programmes were:


● They were managed, or at least strongly supported, from the top but often made use of third parties or ‘change agents’ to diagnose problems and to manage change by various kinds of planned activity or ‘intervention’.


● The plans for organization development were based upon a systematic analysis and diagnosis of the circumstances of the organization and the changes and problems affecting it.


● They used behavioural science knowledge and aimed to improve the way the organization copes in times of change through such processes as interaction, communications, participation, planning and conflict.


The activities that may be incorporated in a traditional OD programme are summarized below.


● Action research. This is an approach developed by Lewin (1947) which takes the form of systematically collecting data from people about process issues and feeds it back in order to identify problems and their likely causes so that action can be taken cooperatively by the people involved to deal with the problem. The essential elements of action research are data collection, diagnosis, feedback, action planning, action and evaluation.


● Survey feedback. This is a variety of action research in which data are systematically collected about the system and then fed back to groups to analyse and interpret as the basis for preparing action plans. The techniques of survey feedback include the use of attitude surveys and workshops to feed back results and discuss implications.


● Interventions. The term ‘intervention’ in OD refers to core structured activities involving clients and consultants. The activities can take the form of action research, survey feedback or any of those mentioned below.


● Process consultation. As described by Schein (1969), this involves helping clients to generate and analyse information that they can understand and, following a thorough diagnosis, act upon. The information will relate to organizational processes such as inter-group relations, interpersonal relations and communications. The job of the process consultant was defined by Schein as being to ‘help the organization to solve its own problems by making it aware of organizational processes, of the consequences of these processes, and of the mechanisms by which they can be changed’.


● Team-building interventions as discussed later in this chapter. These deal with permanent work teams or those set up to deal with projects or to solve particular problems. Interventions are directed towards the analysis of the effectiveness of team processes such as problem solving, decision making and interpersonal relationships, a diagnosis and discussion of the issues and joint consideration of the actions required to improve effectiveness.


● Inter-group conflict interventions. As developed by Blake et al (1964), these aim to improve inter-group relations by getting groups to share their perceptions of one another and to analyse what they have learned about themselves and the other group. The groups involved meet each other to share what they have learnt, to agree on the issues to be resolved and the actions required.


● Personal interventions. These include sensitivity training laboratories (T-groups), transactional analysis and, more recently, neuro-linguistic programming (NLP). Another approach is behaviour modelling, which is based on Bandura’s (1977) social learning theory. This states that for people to engage successfully in a behaviour they 1) must perceive a link between the behaviour and certain outcomes, 2) must desire those outcomes (this is termed ‘positive valence’), and 3) must believe they can do it (termed ‘self-efficacy’). Behaviour-modelling training involves getting a group to identify the problem and develop and practise the skills required by looking at DVDs showing what skills can be applied, role playing, practising the use of skills on the job and discussing how well they have been applied.

New Approaches to Improving Organizational Effectiveness

During the 1980s and 1990s the focus shifted from OD as a behavioural science concept to a number of other approaches. Some of these, such as organizational transformation, are not entirely dissimilar to OD. Others, such as team building, change management and culture change or management, are built on some of the basic ideas developed by writers on organization development and OD practitioners. Yet other approaches, such as total quality management, continuous improvement, business process re-engineering and performance management, could be described as holistic processes that attempt to improve overall organizational effectiveness from a particular perspective. The tendency now is to rely more on specific interventions such as performance management, team pay or total quality management, than on all-embracing but somewhat nebulous OD programmes which were often owned by the HR department and its consultants, and not by line management.


OD – the glory years


The later 1960s and the 1970s were the days when behavioural science reigned and OD was seen, at least by behavioural scientists, as the answer to the problem of improving organizational effectiveness. Comprehensive programmes using the various approaches described below were introduced in a number of American businesses such as General Motors and Corning Glass and a few UK companies such as ICI. US research quoted by French and Bell (1990) found that positive impacts were made in between 70 and 80 per cent of the cases studied.


OD in decline


Doubt about the validity of OD as a concept was first expressed in the 1970s. Kahn (1974) wrote that: ‘It is not a concept, at least not in the scientific sense of the word: it is not precisely defined; it is not reducible to specific, uniform, observable behaviour.’


A typical criticism of OD was made later by McLean (1981) who wrote that: ‘There seems to be a growing awareness of the inappropriateness of some of the fundamental values, stances, models and prescriptions inherited from the 1960s. Writers are facing up to the naivete of early beliefs and theories in what might be termed a climate of sobriety and new realism.’

ORGANIZATION DEVELOPMENT

A planned systematic process in which applied behavioural science principles and practices are introduced into an ongoing organization towards the goals of effecting organizational improvement, greater organizational competence, and greater organizational effectiveness. The focus is on organizations and their improvement or, to put it another way, total systems change. The orientation is on action – achieving desired results as a result of planned activities.

The classic and ambitious approach to OD was described by Bennis (1960) as follows: ‘Organization development (OD) is a response to change, a complex educational strategy intended to change the beliefs, attitudes, values, and structure of organizations so that they can better adapt to new technologies, markets, and challenges, and the dizzying rate of change itself.’


Origins of OD


The origin of OD can be traced to the work of Kurt Lewin (1947, 1951), who developed the concept of group dynamics (the phrase was first coined in 1939). Group dynamics is concerned with the ways in which groups evolve and how people in groups behave and interact. Lewin founded the Research Centre for Group Dynamics in 1945 and out of this emerged the process of ‘T-group’ or sensitivity training, in which participants in an unstructured group learn from their own interaction and the evolving dynamics of the group. T-group laboratory training became one of the fundamental OD processes. Lewin also pioneered action research approaches.


The formative years of OD


During the 1950s and 1960s behavioural scientists such as Argyris, Beckhard, Bennis, Blake, McGregor, Schein, Shepart and Tannenbaum developed the concepts and approaches that together represented ‘OD’. They defined the scope, purpose and philosophy of OD, methods of conducting OD ‘interventions’, approaches to ‘process consulting’ and methodologies such as action research and survey feedback.

WHAT IS ORGANIZATIONAL DEVELOPMENT

Organizational development is concerned with the planning and implementation of programmes designed to enhance the effectiveness with which an organization functions and responds to change. Overall, the aim is to adopt a planned and coherent approach to improving organizational effectiveness. An effective organization can be defined broadly as one that achieves its purpose by meeting the wants and needs of its stakeholders, matching its resources to opportunities, adapting flexibly to environmental changes and creating a culture that promotes commitment, creativity, shared values and mutual trust.

Organizational development is concerned with process, not structure or systems – with the way things are done rather than what is done. Process refers to the ways in which people act and interact. It is about the roles they play on a continuing basis to deal with events and situations involving other people and to adapt to changing circumstances.


Organizational development is an all-embracing term for the approaches described in this chapter to changing processes, culture and behaviour in the organization. The changes may take place within the framework of an overall programme of organization development (OD). Within this programme, or taking place as separate activities, one or more of the following approaches may be used.

ROLE DEVELOPMENT

Job design as described above takes place when a new job is created or an existing job is substantially changed, often following a reorganization. But the part people play in carrying out their jobs – their roles – can evolve over time as people grow into them and grow with them, and as incremental changes take place in the scope of the work and the degree to which individuals are free to act (their autonomy). Roles will be developed as people develop in them, responding to opportunities and changing demands, acquiring new skills and developing competencies.

Role development is a continuous process which takes place in the context of day to day work, and it is therefore a matter between managers and the members of their teams. It involves agreeing definitions of key results areas and competency requirements as they evolve. When these change – as they probably will in all except the most routine jobs – it is desirable to achieve mutual understanding of new expectations. The forces should be on role flexibility – giving people the chance to develop their roles by making better and extended use of their skills and capabilities.


The process of understanding how roles are developing and agreeing the implications can take place within the framework of performance management as described in Part VII, where the performance agreement, which is updated regularly, spells out the outcomes (key result areas) and the competency requirements. It is necessary to ensure that managers, team leaders and employees generally acquire the skills necessary to define roles within the performance management framework, taking into account the principles of job design set out earlier in this chapter. Ways in which role profiles can be set out are described in Chapter 13.