Strategic Management And Change Management

Published Date: 02 Nov 2017

Introduction

The aim of this report is to propose a suitable solution for a safe closure of Saltash factory. Various approaches were made and solution was formed. This solution involves resolving any problems, ensuring smooth management operations, within 12 months, until the final run-down, and maintaining timely production schedules and quality standards.

Evaluating the Solution

Number of Solutions Approached

Various approaches were made for handling the factory closure. These approaches and their discussion are shown below.

Performance Management and Rewarding Practices

It is common practice in many organizations to show huge commitment towards their reward practice schemes as they serve to be very essential motivators in order to improve their overall performance to achieve organizational goals. (Zaherawati Zakaria, 2011). Performance management is required to review which employees are efficient.

Advantages:

Carrying out reward schemes and incentives increases their motivation and long-term commitment towards company and their overall performance in their work. (IncentivePrograms, 2012) It reduces employee dissatisfaction and encourages team work within employees. (Practices, 2012)

Disadvantage:

In a profit-making company, large differences in incentives between employees having similar roles may decrease the overall employee satisfaction and may decrease employee’s satisfaction and lower their commitment towards the company. (http://smallbusiness.chron.com/, 2012)

Psychological Counseling

After the closure announcement, many employees may undergo personal and work-related difficulties. Their main aim is to assist employees and tackling these issues in a confidential and supportive manner. These are dealt by evaluating each employee’s strategies in handling them and provide them advice. This process increases employee’s effectiveness. (http://www.pgagroup.com, 2013)

Advantages:

Tackling such issues makes employees feel supported and valued within the company and motivates them to understand the situation to use their full potential in their work therefore increasing the individual’s overall performance. (http://www.pgagroup.com, 2013)

Disadvantages:

They are expensive as they are usually outsourced. (McDonough, 2011) In many cases, the expert may not be very skillful in providing helpful information and may affect employees’ effectiveness towards their tasks. (Mayhew, The_Disadvantages_of_Employee_Assistance_Programs, 2011)

Training

Once a senior employee voluntarily leaves the company, his/her position may then be filled by a junior employee. This process involves training well-performed junior employees, by senior employees, for supervising the responsibilities of the previous employee until the closure.

Advantages:

Training these maintains factory operations once the previous employee leaves. Plus, this creates more career paths for the employees, making them highly motivated and appreciating the company’s values.

Disadvantages:

Training the employees can be costly as the employer needs to pay extra bonuses to trainers for their time. The trainer may not provide sufficient time for training the employees and may result in employees not having vital knowledge for their jobs.

Hiring Closure Experts:

These are experts who have substantial knowledge and experience in managing company closures. Their support and training may result in smooth factory closure.

Advantages:

They can provide support and training will aid managers and staff through the closure.

Disadvantages:

The experts may not be very skilful and they are expensive.

Career Counseling:

Career counseling involves aiding employees, who are not retiring, to look for jobs. This process involves evaluating employees and providing them employment search services. They also consider retaining well-performed junior staff to the organization. Career agencies can also be hired to aid in job search.

Advantages:

There will be not pressure on the employee to look for another job and the employees will appreciate the company’s support and will be motivated to work.

Disadvantages:

Since career agencies are career experts, hiring them may be quite expensive.

Partly Outsourcing some Production

The employer can partly transfer some of the factory’s production to those factories when production is running behind schedule. Employees may go through lot of stress when they are over-loaded with work or facing personal or work-related issues. In order to maintain quality standards, this process is quite essential for maintaining production schedules.

Advantages:

During these stressful periods, reducing responsibilities on the employees can make them handle the responsibilities more efficiently and smoothly therefore meeting production deadlines.

Disadvantages:

The employees must provide specifications for the products and its manufacturing process. They may not provide sufficient amount of time in training and discussing the specifications to the workers of the other factory.

Main Solution

All the approaches described in this section were used for the main solution for carrying out the factory closure. The rewards scheme is necessity for motivating employees. Different types of rewards and attractive incentives should be announced during initial stage of the factory closure, this will keep workers motivated and simultaneously keep the production running. Performance management should be carried out during the first six months of the factory closure process in order to identify the performers and non-performers. Senior employees may retire during separation policy and be replaced by trained juniors. Hiring closure experts and counseling services is vital for the employees as they may become emotional after the closure announcement. Closure experts will aid site-manager to determine safe closure. As most of the experienced and skillful staff are laid off, operations may slow down thus it is better to outsource some production to sister factories during those stressful periods.

Risks involved with the Solution

Expensive counseling services provided by outsourced professional experts may not be successful in tackling employee’s personal issues may lead employees may become less confidant of the service and may risk staff becoming de motivated and may risk their effectiveness.

Differences in incentives among employees carrying out similar roles may lower some employee’s morale and reduce their overall performance and may lead to employees feeling that the company is being unfair and would lower their motivation to carry out their tasks.

Trainers not providing adequate amount of time to young employees and result in employees picking up wrong habits and may affect the management of production.

The risk of outsourcing the production to other factories is that employees may be quite occupied and may not provide time to train and discuss the specifications of the product, or the number of absent employees has increase, may lead to finished products not meeting the desired quality standards and specifications. .

Change Management Aspects

The main aim of change management is to provide systematic approach for dealing with change in environment and to achieve the key business priorities, from an employee’s and business’s point of views. These changes must be planned and implemented in order to reduce damage in company. (change management, 2010)

Forming a Leadership Team:

It is essential to appoint various site-managers as leaders. This team involves people from different departments, with essential skills and good commitment towards the company. During these stressful periods, employees turn to them for support. Therefore it is important that they must have strong commitment in order to adapt to the change during the initial stages in order to manage the employees successfully. (change management, 2010) Once the team is formed, they need to plan and implement various strategies until the final rundown for every department in the factory, in order to achieve company goals. This may affect all employees and prove to be quite challenging for them. (Change Management Activities, 2010)

Be honest and Over-communicate

Employees may become very emotional and prove to be very difficult for managers who manage them. It is essential to assist all employees to view the change in a very constructive manner. Employees may question their senior employees about the necessity of the change and how they will be affected. These questions must be answered. Therefore regular communication between leaders and employees must be carried out visibly and very frequently in group meetings, presentations and also one-to-one meetings. Employees’ input and feedback are essential to make leaders understand how the change will affect them and what minor improvements to the strategies making it more adaptable for the employees. (Change Management Activities, 2010) Plus, The site-managers must be honest to their employees and explain to them and make them understand their objectives and goals and how they can achieve them and how the reward will be provided depending on their performance.

Monitor Performance

Enabling performance measurement and surveys on staff needs to be carried out to monitor and record employees’ behavioral and performance in terms of both quality and productivity if the change management is undergoing in smooth process.

Be prepared for any unexpected scenario

The strategies made for the change may not go smoothly according to what was planned. It is the responsibility of the leader to make sure to maintain the operations and solve any issues affecting change.

Detailed Project Plan

The planning is divided into 2 phase, however there are some process which takes place in 2 stages.

Gantt Chart for the Project Plan

Stage 1: June 2009 – January 2010

Meeting with Organization’s Senior Managers: (June 1 – June 15)

Prior to the factory closure announcement, a senior manager meeting should be held. The reason for the meeting is to discuss the closure and to ensure that the Saltash factory managers and the organization’s senior managers reach the same conclusion.

Closure Announcement: (June 15)

The closure is announced to all the employees. Employees may undergo emotional turmoil and may have many questions concerning the closure. During this period, the factory managers must be very supportive and increase communication with them.

Allocating on-site managers as leaders: (June 20 – August 15)

During this period, all the site-managers from each department are then allocated as a leadership team for the factory. Their task is to implement the strategies for change and monitor employee’s performance.

Going Public: (June 30)

To avoid ruining the company’s image to their customers and clients, it is essential to make the closure public, as this will make the public feel that the closure is not due to company making losses.

Employee Counseling: (June 30 – August 30)

Since employees may be in state of shock after the closure announcement. It is therefore essential to begin this service as soon as possible after the closure announcement.

Performance Management: (June 15- February 1)

Performance of all employees must be monitored and recorded, including the members of the leadership team, to assess their performance in terms of quality and productivity.

Reward Schemes provided: (July 10 – September 15)

In order to make the employees more motivated and interested to work, reward schemes should be offered to them such as incentives, promotions, salaries increase or redeployment to other facility in the organization.

Reward Schemes provided:

Bonus

Well-performed employees who has met production schedules. The bonus must not be made very large to avoid any employee dissatisfaction.

Salary Increase

If the profits are increasing, instead of increasing bonuses for some, salary should be increased for all staff.

Retirees Plan

Provide severance package for retirees. There are two types of retirees’ packages (for leaving Feb 2010 and June 2010). A higher severance package must be offered to staff staying until the closure.

Retainment

Well-performed employees who seek career in the organization may be redeployed and promoted to other facility.

Hiring Closure Experts for each departments: (August 30 – April 1)

Hiring closure experts to monitor and train the site managers in managing and organizing their employees in each department. In order to ensure smooth closure process, it is vital for them to be almost till the final rundown.

Career Counseling: (30 September –20 November)

This process is required to search for employment for the employees. This will ease the tension for the employees to search for employment.

Training employees for higher positions: (December 1 – January 31)

The employees who leave or retire by February end, must train junior employees as they would be replacing these senior staff once they leave.

Stage 2: January 2010 – June 2010

Separation policies: (February 1)

Since the factory is going through closure, the separation policies are made compulsory and are implemented on this day. This allows seniors to train the junior employees.

Milestone: (January 1 - February 1)

This milestone period is used to review the progress of the change management solution of previous stage and is compared to the plan. Reviewing the performance of all employees and the production may provide managers what is to be expected from stage 2.

Outsourcing some production to sister factories: (February 1 – May 31)

Outsourcing some production will reduce the pressure on the employees and site-managers. Since most of the skilful and experienced staff will be retired, it may be quite essential to transfer some productions to another factory if required.

Final Factory Closure: (May 31)

Expected completion for project.

Sources of Cost

During the closure of factory, money must be spent on following in order to have successful change management.

Hiring Closure Experts:

Fees for training and supporting site-managers

Provision of office space

Psychological Counseling:

Fees for providing services and supporting employees

Training Staff:

Fees for training junior staff.

Career Counseling:

Fees for searching employment for employees

Outsourcing some production:

Fees for training the staffs of other factory

Logistics such as transportation

Tangible Benefits