Introduction:
To survive adversity while moving forward, companies must consistently adapt to the ever changing macro-environmental conditions in order to continue in the future. The macro-environmental KiwiSheepSkin has responded to their adversity by applying a performance pay system. The objective of this assignment is to identify the three suitable change management models that will help KiwiSheepSkin implement the performance pay system, along with identify where barriers/challenges to this system will occur. The key here is recognising the differences in cultural values when implementing these specific models. Using Hofstede’s country culture comparison tool, I will identify dimensions of national culture and how the specific management models will interact with these cultural values in each country.
Have a look at comment for additional reasons for a push to change
Previously the key organisational strategies of KiwiSheepSkin were developed by a central group of six senior managers at the Te Awamutu headquarters.
https://www.hofstede-insights.com/what-we-do/
https://books.google.co.nz/books?id=Cayp_Um4O9gC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
New Zealand:
KiwiSheepSkin is beginning to implement its performance pay system within it’s New Zealand branches as this is where the headquarters, “the Barn” in Te Awamutu and the SheepSkate HQ in Auckland, are. Management has already noticed resistance towards change from the Te Awamutu company veterans when launching the Auckland headquarters so there will be some expected resistance when moving to the performance pay system. In order to best handle and address this resistance I suggest using Lewin’s Change Management Model, as this model is typically used when employees are not happy with changes, and these changes therefore encounter resistance.
Justification of model:
When looking at Hofstede’s cultural analysis of New Zealand we acknowledge Power Distance, Individualism and Long Term Orientation as three important dimensions which justify why Lewin’s Change Management model is best suited for implementing management change in this country.
New Zealand’s low score of 22 in Power Distance, depicts a struggle between New Zealand employees and a hierarchical order. Compared to other countries, New Zealand typically has a much smaller employee average, because of this smaller scale of business there are less organizational structures which makes employees naturally feel more involved with the vision of the organization. According to the New Zealand Ministry of Business, Innovation & Employment, “Status, rank and hierarchies are much less important in Kiwi workplaces than elsewhere. Managers are respected by the staff, but they are seen as one of the team”. Based on this data and involvement mindset, we understand employees rejection towards typical company hierarchy and instead expect an open and informal dialogue between themselves and management when it comes to company information and consulting for new initiatives. Acknowledging those needs justifies Lewin’s Change Management model as the Unfreeze Stage stresses the importance of clear communication between business and employee when implementing management change. Hofstede’s analysis also shows a high score of individualism which portrays the typical New Zealand employee as independent with an employers having an expectation of self-reliance for their employees. Again this factor shows a barrier towards hierarchical structure.
Applying Lewin’s Change Model:
Step one: Unfreezing.
At this stage it is important that we are acknowledging the change focus, and are clearly communicating with all stakeholders, especially employees, regarding this change. When unfreezing, KiwiSheepSkin should be holding staff conversations and briefings which establish the reasons behind the move to a performance pay system. By honestly communicating with the employees that the company is facing adversity with retaining existing levels of revenue, the company invites employee understanding and highlights the crucialness of the change. When employees understand the need for change they will be more likely to accept it. By holding staff conversations KiwiSheepSkin will also be inviting constructive feedback from employees at all levels, by doing so they increase a feeling of involvement among staff in the change which will help staff feel more comfortable letting go of old work customs and norms.
Step two: Changing
This stage is also known as the “move stage” as this is when you implement the change. When KiwiSheepSkin introduces the performance pay system it is important that this is established relatively quickly after the unfreezing stage is complete. If the process is long and drawn out, employees will be less inclined to take the change seriously and may revert to old behaviors. Consistently having staff conversations will continue the sense of change and will keep that open dialogue between employee and management. Here KiwiSheepSkin should be setting achievable goals for employees as well as encouraging employees to ask for support if need be, and to bring forth any issues they may be facing with this change that management can address.
Step three: Refreezing.
In this last stage KiwiSheepSkin aim is to stabilize the change to avoid employees reverting back to old behaviours. Staff conversations should still continue, however the focus of these conversations should now be about the successes brought about by implementing the pay performance system, such as increased productivity. Other arrangements, such as interim employee evaluations, which monitor performance, make improvements (when necessary), and celebrate achieved goals are crucial. Once the employees understand that the performance pay system has been solidified within the business they will align their behaviour with the new situation and acknowledge it’s benefits.
Barriers and Recommendations:
First Barrier: Resistance from Veterans.
As previously seen when implementing change within the New Zealand branches, the Te Awamutu veterans were unhappy with the shift in power from Te Awamutu to Auckland. This resistance to change is expected as New Zealand has scored lowly in terms of long term orientation, making it a normative country who has respect for traditions. Because of this respect for tradition, veterans may feel some resentment towards the changes and will wish to revert back to the old pay system.
Recommendations:
According to the Lewin model, honest and clear communication is important in the unfreezing stage. KiwiSheepSkin management should be able to speak directly to their veterans in a way that addresses the resistance and welcomes feedback and suggestions in the implementation of this change. If they are still sensing an unwillingness to change from such veterans during the moving stage, pinpoint the pain points the veterans are experiencing, and employee trainers who can teach and encourage the benefits of the new performance pay system. Finally, lay off any individuals who are still resisting the change, even after the supportive arrangements. It is important in the Refreezing stage that there are no encouragements for employees to backslide to old norms.
Second Barrier: Institutional Power
According to an analysis of factors affecting resistance to change, the resistance factor institutional power can be affected by the autonomy of its departments. As previously stated due to our smaller population size, New Zealand businesses typically have a less structured organization than that of the rest of the world and according to Hofstede as we have a more individualist culture it may be hard to persuade individual interests to that of a performance based pay system.
Recommendation:
In order for KiwiSheepSkin to avoid any individual interests from undermining the change to performance pay systems they need to be careful to be very clear when explaining their vision at the Unfreezing stage. By establishing staff conversations at the Unfreezing change to clearly communicate the company vision, this should hopefully begin to align individual interests to the company vision. Establishing involvement in the staff conversations along with monitoring performances and celebrating successes in the Change and Refreezing stage is the best course of action for KiwiSheepSkin to persuade individual interests.
Japan:
Justification of model: Japan is the next country KiwiSheepSkin is looking to implement it’s performanced based pay as it’s market is recognised as the most trendy in the world. Looking at Hofstede’s Cultural evaluation of Japan we acknowledge the following statistics, Japan’s Power Distance dimension score is 54, this recognises Japan as a society that respects hierarchy. It also has scored very highly in it’s Masculinity dimension, which portrays Japan with a competitive culture within business. Problematic dimensions towards change is the high scores of Uncertainty Avoidance. Countries with high levels of Uncertainty Avoidance make change hard to implement as they have legislations and regulations specifically in place to lower uncertainty. Avoiding uncertainty also affects employees attitude towards change meaning that change incurs a loss of security within workers.
Applying Kotter’s Eight Steps Change Model:
Step one: Increase urgency.
As Japan is a country with high scores of Uncertainty Avoidance, change needs to be seen as a necessary step in order for the company to succeed. Creating urgency through honest dialogue of the adversity within the market, and highlighting convincing reasons why implementing performance pay will be the correct solution will help motivate change.
Step two: Build the guiding team.
As Japan respects hierarchy within businesses receiving visible support from key people within the business will influence employees at lower levels to accept the pay performance initiative. Acquiring a team of influential leaders within the organization who are willingly to publicly encourage pay performance will be a necessary step for KiwiSheepSkin.
Step three: Get the vision right.
Linking the movement to pay performance to an overall vision of success and being able to clearly communicate this vision will guide employee mindset. By creating a vision of increased productivity and attaching the movement of pay performance to this vision, employees will be more inclined to understand the change.
Step four: Communicate the Buy in.
To root the vision firmly within your company values, the key is communicating frequently and effectively. At this stage KiwiSheepSkin should encourage their guide team to hold company wide briefings so they can address any employee concerns regarding the change. Having the guide team able to effortlessly communicate the same vision of productivity to your employees will give the movement to pay performance credibility.
Step five: Empower Action.
Input structures that encourage the change, remove obstacles that undermine it. KiwiSheepSkin need to distinguish leaders whose main role will be to promote change, these leaders will need to input structures that monitor performance and praise success. Any resistance to change at this point needs to be addressed, training sessions carried out to help those struggling. Any further resistance from structures or employees that undermine change and can not be resolved need to be removed.
Step six: Create Short-Term Wins.
Creating short term, easily achievable interim targets will help KiwiSheepSkin celebrate success. If employees can visibly see an achievement of goals this will contribute to a feeling of success towards implementing the change which will motivate employees to contribute to the overall vision. Implementing a bonus system for reaching certain targets is a good way KiwiSheepSkin can boost productivity.
Step seven: Do Not Let Up.
Building on change is important to continue momentum, Kotter explains that declaring victory too soon is a “terrible mistake.”Until performance pay is seen as a necessary step to achieving productivity, and this vision of increased overall productivity has been reached KiwiSheepSkin should continue to monitor and set new targets with employees. Recognition that this step may take years, and preparing the resources to continue these monitoring structures is the key to success.
Step eight: Make Change Stick.
Solidifying performance pay necessity within corporate culture is important in making the initiative stick. Kotter advises to highlight specifics of the change that has contributed to an improved outcome. KiwiSheepSkin can do this by recognising any change in employee behaviour that has welcomed the performance pay initiative and clearly show employees how this behaviour has contributed to productivity. Preparing the next generation of employees is als important in regards to shaping company culture, KiwiSheepSkin should create legacies for their guide group, recognising them as foundations of positive change, and making sure any future employees understand the company vision of productivity.
Barriers and Recommendations:
First Barrier: Ontological Insecurity.
Individuals are continuously seeking some kind of “psychological security”, any loss of this security can produce a resistance towards the change, in this case performance pay. As Japan has a high Uncertainty Avoidance dimension, the sheer concept of not knowing what your pay may entail may create a sense of loss in security and illusions of difficulty. Emotional responses to this uncertainty may override rationality in employees and in turn, create resistance to performance based pay.
Recommendation: Use the guide group to alter mindsets.
With a high Power Distance dimension score we can see that Japanese companies respect hierarchy. By acknowledging the key influencers within these hierarchies and enlisting them as a guide group will be imperative to success. If this guide group understands the necessity of the pay performance initiative and has the opportunity to hold company conversation to clearly communicate the initiative, and its importance this should start to instill a sense of rationality. Company conversation also gives the guide group opportunity to address any feelings of uncertainty, this proactive approach to change sets a narrative for the employees that this change will be a positive one. Carefully selecting the key influencers, for this guide group will give the group and the initiative credibility.
Second barrier: Declaring Victory too soon.
According to Hofstede’s Japan analysis, change in Japan is slow due to it’s high score in Power distance which requires decisions to be approved at each hierarchical layers, coupled with it’s high Uncertainty Avoidance dimension which requires a lot of time invested in analysing risks before any implementations of projects. If there is no understanding that these changes require a large investment of time and resources, management may be tempted to declare victory once the pay performance initiative is simply implemented. To do so would be a huge mistake and could cause the initiative to regress within a matter of years.
Recommendation:
Maintenance of the performance pay system and embedding the vision of increased productivity into the company culture is an important key for success. KiwiSheepSkin should avoid dismantling any programs that were structured to achieve change at the signs of early achievements. Keeping on employees whose focus is to monitor and see through the original goal of overall productivity through performance based pay will continue to drive momentum until all employees, new or veteran, accept performance based pay as the new tradition.
France:
Review of France culture dimensions:
France has the highest score of Power Distance and Individualism of the three countries, Hofstede’s analysis advise this is strange due to the notion that countries who normally accept inequality among society, are less likely to have a higher degree of independence. Hofstede explains that though French employees express respect to their bosses formally, once unsupervised they may do the opposite of what was asked in accordance to what they determine is the better course of action. The threat of strikes as response to a rejection of power is more likely than a formal rejection, with France being the second highest European country whose workers strike the most. France also scores high on Uncertainty Avoidance, and according to Hofstede, have a need to acquire all relevant information before negotiations. Finally Frances high score in Long Term Orientation which portrays a practical society, with the propensity to adapt to new traditions when conditions change.
Justification of model:
Prosci’s ADKAR model is self described as “goal orientated” which aims to conduct individuals who in turn will conduct organizational change. This model has a individualistic approach with heavy focus on personalising an employees motivation to change. The mixture of high scores in Individualism and Uncertainty Avoidance scores in France are the reason this model of change management is ideal as we KiwiSheepSkin needs to inspire the want to change within the individual, with this model supporting them with the structure to reach those goals.
Application of model:
Awareness: KiwiSheepSkin needs to explain the adversity faced in the marketplace and the need to move to a performance pay system. Keeping France’s high score of Power Distance in mind, the best way to spread this organizational message would be through a formal meeting at which senior leaders will inform the employees.
Desire: Create a desire to move towards a pay performance system, by having a direct manager who understands the employees day-to-day tasks explain the benefits of pay performance. By having one-on-one personal conversations with managers who understand their employees mindset can pinpoint root causes of any resistance, who can then make adjustments to overcome causes, and can encourage employee personal motivation.
Knowledge: Making sure the previous steps have been achieved, KiwiSheepSkin needs to be confident their employees know how to succeed in a pay performance system. Pay performance training should be introduced at this time with trainers who understand how to apply it to specific job roles.
Ability: Once the employee knows how to succeed they need to be able to implement this knowledge. Interactive on-going coaching which lets employees practice new skills that will help them succeed in a performance based pay system should be conducted within the branch.
Reinforcement: To avoid regress to old habits, reinforcement structures such as monthly, direct management assessments are useful. Managers should be checking to see whether any previous steps need to be revisited, and recognition of positive changes is a necessity.
First barrier: Desire to change.
France’s high score of Individualism could cause a resistance to the desire to change, as the employee may believe they know best.
Recommendation: Ensure you set awareness.
Ensuring that you have effectively explained the conditions that have made performance pay a necessity within KiwiSheepSkin will be the only way to create personal desire. ADKAR has acknowledged itself as a “sequential and cumulative” system, before you are able to move forward you must complete the previous step. The importance of management communicating this change within a formal setting is important to establishing credibility in France.
Second barrier: Unwillingness to openly communicate resistance.
Coupling the high score of Individualism with a high score of Power Distance, the employee may not even formally acknowledge any resistance to the change until it is at an extreme level of dissatisfaction.
Recommendation: Proactive direct management communication.
At the Desire stage direct managers need to be proactive, and try to specifically reiterate the importance of pay performance within KiwiSheepSkin in a way that is specific to the employee. Because of the acknowledgement of hierarchical formalities, it is best that the manager come up with a number of suggestions of possible motivation initiatives and gives the employee an option of choosing one they prefer, that way the hierarchy is still maintained while the employee still feels a contribution.
Conclusion: