ORGANIZATIONAL

DEVELOPMENT
Organizational Development (OD)
• The process of improving organizational performance by
making organization-wide rather than individual changes
Managing Change
• Sacred Cow Hunt (by Kriegel and Brandt) – first step
toward organizational change, in which employees look for
practices and policies that waste time and are
counterproductive
• The Paper Cow – unnecessary paperwork that cost
organization’s money to prepare, distribute, and read
• The Meeting Cow – unnecessary meetings held by the
organization that waste time, money, and output
• The Speed Cow – unnecessary deadlines that cause
employees to work at a faster than optimal pace,
resulting in decreased quality, increased stress, and
increased health problems
Employee Acceptance of Change (Lewin, 1958)
• 1. Unfreezing Stage – the organization must convince the
employees and the other stakeholders that the current
state of affairs is unacceptable and that change is
unnecessary
• 2. Moving Stage – the organization take steps (e.g.
training, new work processes) to move the organization to
the desired state
• 3. Refreezing Stage – the organization develops ways to
keep the new changes in place, such as formalizing a new
policy and rewarding employees for behaving in a manner
consistent with the new change
Five Stages of Employee Reactions Towards Change
(Carnall, 2008)
• 1. Denial Stage – employees deny that any changes will
take place, convince themselves that the old way is
working, and creates reasons why the proposed changes
will not work
• 2. Defense Stage – when employee begin to believe that
a change will occur, they become defensive and try to
justify their positions and ways of doing things.
• 3. Discarding Stage – employees begin to realize that
change in inevitable; the organization is going to change
and employees are going to change as well; employees
discard the old ways and start to accept the change as the
new reality
• 4. Adaptation Stage – employees begin to make
adjustments in the way they perform. They test the new
system, and learn how it functions
• 5. Internalization Stage – employees become immersed
in the new culture and comfortable with the new system
and have accepted their new coworkers and work
environment
Important Factors
• 1. Type of change – evolutionary vs. revolutionary change
• Two Types of Change (Burke, 2011)
• Evolutionary Change – the continual process of upgrading or
improving processes; a vast majority of changes fall into this type
• Example: Change form Microsoft XP to Vista
• Revolutionary Change – a “real jolt to the system” that drastically
changes the way things are done; this type of change is more
difficult
• Ex. Developing a new product-line requiring a new skills set,
complete change of organizational structure
• 2. Reason behind the change – employees are least
likely to accept change if they don’t understand or were not
told the reasons behind the change
• 3. Person making the change – workers are more
positive about change when:
• Source of change is within the organization rather than an external
source
• Leader proposing the change I well-liked, respected, and with a
history of success
• 4. Person being changed – there are differences in the
way people instigate or react to change
• Types of People During Change
• Change agent – a person who enjoys change and
makes changes for the sake of it
• Motto: “If it ain’t broke, break it.”
• Change analyst – a person who is not afraid of change
but makes changed only when there is a compelling
reason to do so
• Motto: “If it ain’t broke, leave it alone; if it’s broken, fix
it.”
• Receptive changer – a person who is willing to change
• Motto: “If it’s broke, I’ll help fix it.”
• Reluctant changer – a person who will initially resist
change but will eventually get along with it
• Motto: “Are you sure it’s broken?”
• Change resister – a person who hates change and will
do anything to keep change from occurring
Implementing Change
• 1. Creating an atmosphere for change
• Creating dissatisfaction with the current system/status
quo (e.g. conduct a survey to determine employee
satisfaction)
• Share the survey results to the employees
• Work hard to reduce the fear of change among
employees (e.g. provide emotional support, provide a
safety net that allows them to make mistakes during the
transition period, describe the benefits of change)
Implementing Change (continued)
• 2. Communicating details
• Employees are most responsive to change when they are
kept well-informed
• Employees must be involved in all aspects of the change,
from its initiation to final implementation (except when there is
a need for secrecy like during a merger)
• 3. Time Frame
• Most successful organizational changes occur in a timely
fashion
• It is advised that organizations should not remain in a
“change mode” for longer than two years
• 4. Training Needs
• After a major change has been made, it is often necessary to
train employees
Organizational Culture
• The shared values, beliefs, and traditions that exist among
individuals in an organization
• Often referred to as corporate culture/climate
• An important consideration during organizational change
• It establishes workplace norms (what’s right or wrong) and
defines the roles and expectations that employees and
management have of each other
• Have a subculture (e.g. each department in the
organization has a subculture)
• Most changes in an organization require changes n the
culture and subculture
Changing Organizational Culture
• The change process includes holding on to the successful
elements of the present culture and adding new elements
that are important (Laabs, 1996)
• Steps:
• 1. Assessing the desired culture and comparing it with the
existing one to determine what needs to be changed
• 2. Creating dissatisfaction with the current culture to create
support for the new one
• 3. Maintaining the new culture
Step 1. Assessing the New Culture
• a. Needs Assessment – current culture must be analyzed
and compared with the desired culture to determine what
might need to change
• b. Determining Executive Direction – management must
analyze the needs assessment to determine the
decisions/actions that will reinforce the culture and assess
the feasibility of certain changes
• Ex. Wants a true “empowering” culture but managers are unwilling
to share their decision-making authority
• c. Implementation Considerations – how will the new
culture be implemented? (e.g. creation of committees or
will management execute the changes)
• d. Training – New skill, new philosophy to which
employees must be trained (e.g. empowerment culture –
what does it mean? How is it carried out?)
• e. Evaluation of New Culture – an evaluation mechanism
must be established to review the new culture
Step 2. Creating Dissatisfaction with Existing Culture

• Distribute attitude surveys

• Explain to the employees the future impact of “doing
business as usual” (e.g. show the financial performance of
the company, technological trends)
• Involve the employees during the change; those who are
involved are more likely committee to it
• A successful cultural transformation requires commitment
from all levels of the organization.
Step 3. Maintaining the New Culture
• If the new culture is expected to last, there must be:
• new reward systems for employees who cooperate with the new system
(this is imperative)
• Change in selection methods (future employees must be selected on the
basis of how well they epitomize the new culture must happen
• Socialization process of new employees must reinforce the new culture
• Organizational socialization - the process whereby new
employees learn the behaviors and attitudes they need to be
successful in an organization
• Rituals – procedures in which employee participate to become “one of the
gang” (e.g. annual awards, banquets, company picnics for a more “caring”
organization)
• Symbols – organizational behaviors or practices that convey message to
employees (e.g. establi (e.g. establishment of on-site wellness center)
Empowerment
• Empowering employees to participate in and make decisions
• Factors in Making the Decision to Empower:
• 1. Importance of decision quality – whether one decision will
be better than another
• 2. Leader knowledge of the problem area – extent to which
the leaders have sufficient information to make the decision
alone
• 3. Structure of the problem – extent to which a leader knows
what information is needed and how it can be obtained
• 4. Importance of decision acceptance – degree to which it is
important that the decision be accepted by others
• 5. Probability of decision acceptance – determine
subordinate acceptance of the decision
• 6. Subordinate trust and motivation – extent to which
subordinates are motivated to achieve the organizational
goals and thus can be trusted to make decisions that will
help the organization
• 7. Probability of subordinate conflict – the amount of
conflict that is likely among the subordinates when various
solutions to the problem are considered
Levels of Employee Input and Control
(from lowest to highest)
• 1. Following – employees have no real control over their jobs.
They are given instructions about what to do, when to do it, and
how it should be done
• Ex. A worker whose output is checked by quality control
• 2. Ownership of Own Product – employees are still told what
to do but are solely responsible for the quality of their output
• Ex. A secretary types the report the way it was given by her boss but
ensures she makes no typographical errors
• This level remove the “redundant system”
• Redundant system (by Rick Jacobs) – with this system,
every person’s work is checked by another person. One of
its drawbacks is that employee satisfaction, motivation, and
performance are often lessened when others check our
works.
• 3. Advisory – employees are asked to provide feedback,
suggestions, and input into a variety of organizational
concerns since the employees often have the best
knowledge about their jobs.
• There is no guarantee that an organization will follow the advice
given by the employees; the only guarantee is that they will consider
his advice.
• 4. Shared/Participative/Team – employee has an equal
vote in making decisions.
• An employee is allowed to make a decision at a group level
• Employee must know how to decide and must take responsibility for
the decisions
• 5. Absolute – an employee has sole responsibility for
making decisions and is responsible for the outcomes of
decisions (may be reprimanded or fired)
• No group consensus, no supervisory approval
Empowerment Chart
• A chart made for each employee that shows what level of
input the employee has for each task (makes use of the
levels of employee input)
Consequences of Empowerment
• Increased job satisfaction for employees
• Increased responsibility can lead to higher skill levels
which result in higher pay, increased job security, and
increased potential to find other employment
• Downside: increased responsibility leas to increased
stress; power to make decision lead to the risk of making
bad ones, causing denial of promotion or being fired.
Flexible Work Arrangements
• A popular OD intervention
• Different strategies:
• Strategy 1: Full-time Work, Flexible Hours
• Strategy 2: Compressed Workweeks
• Strategy 3: Reduced Working Hours
• Strategy 4: Working from Home
Strategies
• Full-time work, flexible hours
• Flextime – a work schedule that allows employees to
choose their own work hours
• Components of Flextime
• Bandwidth – the total number of hours available for work each day.
• Core hours –are those that everyone must work and typically
consist of the hours during which an organization is busiest with its
outside contacts
• Flexible hours – are those that remain in the bandwidth (after
excluding core hours) and in which the employee has a choice of
working.
• Flextime schedules
• Gliding time – employees can choose their own hours
without any advance notice or scheduling. Employees
can come and go as they please as long as they work 8
hours a day and 40 hours a week
• Flexitour – employees have flexibility in scheduling but
must schedule their work hours at least a week in
advance.
• Modified Flexitour – employees have flexibility in
scheduling but must schedule their work hours a day in
advance
• Compressed Workweeks – work schedules in which 40
hours are worked in less than the traditional 5-day
workweek
• Reducing Work Hours
• Peak-time Pay – certain employees are encouraged to work only part
time but are paid at a higher hourly rate for those hours than those who
work full time. Thus, an employee will make more per hour than her full-
time counterpart, although she will make less money per day
• Casual Work – a scheduling practice in which employees work on an
irregular or “as needed” basis
• Job Sharing – a work schedule in which two employees share one job
by splitting the work hours.
• Working from Home
• Telecommuting – working at home rather than at the office by
communicating with managers and coworkers via phone, computer etc.
Downsizing
• Decrease in the size of the workforce
• Result when an organization restructures
• Economics is not always the major driving force to
downsizing
Reducing the Impact of Downsizing
• 1. Temporary Employees or “Temps” - hired through a
temporary employment agency. Temps are not considered
employees of the company and thus have no expectation
of a future with the company
• 2. Outsourcing - process of having organizational
functions performed by an outside vendor rather than an
employee in the organization
• 3. Encourage employees to change careers and help them
learn the skills
• 4. Offer early retirement packages
• 5. Ask employees to take pay cuts or defer salary
increases
• When measures to reduce the impact of downsizing are
not enough, lay off becomes necessary
• Criteria: seniority, performance, salary level, and
organizational need
• 1. Layoff Announcement – best done in person;
employees need answers to their questions regarding the
layoff
• 2. Outplacement Programs – typically include emotional
counseling, financial counseling, career assessment and
guidance, and job search training
Stages that employees go through after layoff

• Denial Stage – an employee deny that a layoff

will occur
• Anger Stage – an employee becomes angry at
the organization
• Fear Stage – employee worry about how they will
survive financially
• Acceptance Stage – employee accepts that
layoffs will occur and are ready to take steps to
secure their future
Effects of Downsizing
• Victims – employees who lose their jobs due to
downsizing or layoff; they experience health,
emotional and social problems
• Survivors – employees who retain their jobs
following the downsizing; they experience
psychological trauma