OD Powerpoint

Final Presentation Notes

Slide 1 (2-5 minutes)

KTI lost revenue and market share over the past 3 years. Sales of tape storage units are down 35%. KTI believes it needs to reduce human capital by 25% per year while maintaining the current level of production. Jan Ricter, Vice President of Human Resources for Keller Technology Inc. and the Consulting Group are key players. Jan has asked our consulting group to determine the right mix of human capital reduction and RIF strategies for KTI. Our job as consultants is to recommend a downsizing mix that Jan can use to execute the RIF.

5 elements of an effective proposal?

Goals of Proposed Effort- The goal is to make sure the Human Capital Reduction effort process goes smoothly. We need to determine the right mix of human capital reduction strategies. We also need to develop a plan to offset the negative effects caused by the reduction.

Recommended Action Plan- We need to collect preliminary data to determine what is causing the symptoms listed above. (Company records/interview key members)

Specifications of Responsibilities

Strategy for Achieving the Desired State

Fees, terms, and conditions

Mutual expectations are the outcomes of the services that the OD is going to provide to the organization stated by the client. The client further states what to expect from consultant and processes used to pursue the goals of the proposal. Encouraging clients to state what they expect in form of personal accomplishments, working relationships and outcomes facilitates the development an ideal contract.

In any project, there are various client issues which must be handled with care for the goals of the project to be achieved. One of the client issues is usually the fear of losing control of the organization to OD practitioners. The other issue is the client being exposed and vulnerable as he has allowed OD practitioners to have access to organization’s confidential information. Therefore, these issues need to be sorted before the OD practitioner can begin working on the project.

Slide 2

The presented problem is a symptom. Something is causing KTI to lose revenue. Something is causing sales of tape storage to be down.

Slide 3

Job performance is work-related activities that are expected of an employee and how well the employee performs those activities. Job performance can be measured by looking at quality and quantity of work. Each department measures performance differently. Job performance can be evaluated weekly, monthly, quarterly, or annually; depending on the work setting. Performance can be evaluated by using performance appraisals. A performance appraisal is a human resource system designed to provide feedback to an individual or group about its performance and its developmental opportunities. The performance appraisal process can be linked to a reward system. There is also a process called performance management that involves goal setting, performance appraisal, and reward systems that guide, develop, reinforce, and control employee behavior toward desired organizational outcomes.

Performance is relevant to the case. Performance will need to be measured in both locations: San Jose and Austin. Each division will also need to be measured. The divisions include skilled labor, unskilled labor, engineering and R&D, and professional labor. By looking at the data, it’s easy to see that the Austin location is excelling in most areas. By evaluating Austin’s performance, it might give us an idea of what is going wrong at the San Jose location.

Performance can be linked to the group level diagnostic model. The San Jose location has been struggling in general, but the Engineers and R&D sector is struggling the most. The turnover rate in the engineering and R&D department is especially high, while the team cohesiveness is high. The actual engineers are not the problem; the group is working well together. Recent changes in management is the root of the department’s failure.

The employees are not happy and it is showing in their performance. It is clear performance is suffering because this year Tape Store revenue is $88,000,000 which is down 35% from last year. Last year, tape storage revenue was $118,800,000. Attached Storage increased by 25% - this could be due to the hand-picked team that was chosen to work on this project. The employees picked are happier with their jobs. We know that job performance is suffering, so we need to develop ways to see why it is suffering. We can look at managerial standards, motivation, commitment, and job satisfaction. In order to restore the company to high performance, we need to determine what is causing low job satisfaction and high turnover rate in order for sales to exceed what they were in 2015.

Absenteeism can often tell you about what design components aren’t good for groups and individuals. It can also give you a clue into group composition and job satisfaction. Low job satisfaction can often lead to a higher absentee rate. Absenteeism is a symptom of a deeper issue within the company which needs to be evaluated. We need to measure this at KTI by keeping records of all worker absences so that we can see if there are specific groups / areas that are experiencing more or less absences than others or if it is evenly spread throughout the company. Also we need to measure if it is higher or lower now than in past years by looking at the records. We can also look at the different sites and job titles and see if the absenteeism coordinates with the “job satisfaction” and “intent to turnover” figures we were given as well. Also, I think it would benefit us to survey or talk to those with higher absences to see if we can get more of a picture of what’s causing the absences. Is it just personal issues or health? Or does it have to do with team structure or functioning? Group composition? Getting feedback would help us figure out where our focus needs to be. And also in the future, excessive absenteeism could be part of the criteria if they did end up having to do any RIF, as they stated they needed to decrease the workforce but keep the same level of production.

Job Satisfaction

Job satisfaction is highly relevant to this case and it is evident that job satisfaction is a clear issue with KTI. Upper management may not understand this, but job satisfaction is vital for a company to keep its best employees; pay and incentives can only go so far. Employees spend 40+ hours per week at their job and want to be employed where they feel generally happy. While job satisfaction may be measured trough “anonymous surveys”, it will be more accurately measured through observation in areas such as turnover rates, absenteeism, and job performance. Turnover rate is a great indicator of poor job satisfaction. Turnover is inevitable – employees will leave for personal reasons, higher pay at a new company, geographical moves, and retirement. However, if turnover rate is abnormally high, then it is safe to say job satisfaction needs improvement. With the data the company has collected, a direct correlation is seen between low job satisfaction and high intention to turnover. As mentioned above, absenteeism also indicates low job satisfaction. If a person is unhappy with his or her work, then there will be lack of personal drive to go to a job for which they have no passion for. A happy, satisfied employee will put time, care, and effort into their work. If job performance – specifically in areas measured in quality and quantity – is below company standards, low job satisfaction could be a factor. There are multiple issues within KTI that might be causing poor job satisfaction.

Currently, the sales department employees 50 salespeople, 12 of which are new hires to sell the attached storage unit. These 12 new hires have been given the opportunity to earn a 20% premium in their commission that the 38 tenured employees do not receive. While this is great news for the newly hires, the veterans of the company aren’t happy. It is insulting to be a long-time employee and watch a new hire receive a reward you have not been offered. KTI needs to start treating the employees better. KTI takes care of the upper management without putting much care into anything else.

Personal Development

Personal development is poor at the organization because only senior level managers are allowed opportunities to transfer. The lower level employees were not given the increase in salaries or opportunity to move in to a new location. This is a discriminatory personal development. Additionally, there are no opportunities for the unskilled workforce to improve their skills meaning that they will remain underpaid and with no opportunity for career progression in the organization. This is likely to cause a high level of dissatisfaction among the unskilled labor force. If an employee has no opportunity to develop, then he or she will find employment elsewhere.

Alignment

KTI is also having an alignment issue. Typically, the company is known for having a very employee friendly culture. They offer several different compensation packages such as private pension plans, benefit, and retirement plans where they contribute 10% of employee’s gross pay go to the retirement plan yearly. Some of the packages are funded 100% by KTI and cost employees nothing. Part-time workers also have the opportunity to use these packages. The CEO has said “KTI is successful only because we have the most talented, well-trained, and rewarded employees in the industry.” They have been able to avoid unionization in the past due to how well they treat their employees.

They are now considering reducing human capital by 25% and in the past year talk of unionization has risen. They only offered certain employees the opportunity to move to Austin, while also giving them a raise and a stipend for the move. They hired an unqualified manager instead of trying to hire internally. In Austin, the Engineering and R&D sector is getting higher pay than the San Jose location. The company says that value their employees, but they are planning to lay off many employees and have not given their employees equal opportunities. They have allowed department heads to pick and choose who will move to Austin and get a raise.

Team Management

Team management is becoming a crucial part of employee management (Edmondson, 2012). It not only makes tasks and problem solving easier, but also it affords employees an opportunity to learn from one another and create a bond that drives performance. As indicated from the data, team cohesion is high among all groups of employees except for the unskilled groups. However, the data indicates that teams are part of everyday leadership in the organization.

3 parts of long term success –

1. One aspect of long term success is the knowledge behind performing organizational development is transferred to the organization.

2. A second aspect of long term success is the organization becomes a high involvement organization long term

3. We want them to be an innovative and successful company who’s profits have turned around and are prosperous