CASE STUDY – NISSAN LOOKING AT RETRENCHMENTS
COMPULSORY ASSIGNMENT 01
(Closing date 23 May 2018)
Unique number: 708719
Total Number of Words in Assignment 3477
Total Mark for Assignment
How would you go about preparing the Nissan organisation for change?
The low response and acceptance of enhanced voluntary severance packages are a clear indication that the older employees at Nissan SA do not have a proper understanding of the business challenge and the advantages of what the voluntary process could have added to their life. Inadequate communication, lack of understanding of the business challenges and resistance to change could be the underlying factors that led to the low response. For this reason I believe effective communication at all levels with all employees on what is the business challenges are as well as what process the management will follow to effectively deal with the proposed retrenchment / change required for Nissan SA will lead to older employees accepting the severance package deal.
Following a structured approach, explaining, bringing understanding of all elements in respect of the business challenge and need to change would effectively prepare Nissan employees for the change. The change management process as outlined in Cummings, T. G., & Worley, C. G. (2009) Chapter 2 & 10: Leading and Managing Change will be followed.
Motivating the reasons for change (Be completely honest – share business challenges & proposal for the way forward)
Nissan South Africa’s production operations dropped significantly and to sustain the organisation Nissan need to increase levels of efficiency similar to those of global plants.
To achieve this, Nissan Motor of Japan funded a workforce rejuvenation plan to support productivity transformation at Rosslyn Plant.
Various productivity measurements indicate that speed and alertness deteriorate with age in the case of people working on assembly lines.
The plan is to retrench 468 older employers, and replace them with 448 younger workers, who were expected to be more productive.
The rejuvenation process will be over a period, with those affected being offered enhanced severance packages and also staying on to train the new recruits.
Nissan would offer those affected the opportunity to start small companies (to serve either the community or Nissan itself) as suppliers.
Enhanced severance packages require two thirds participation.
If no one is interested in severance packages Nissan will implement retrenchment on last in first out principle. Enhanced severance packages will not be available.
Creating clear vision for Nissan and those affected.
Listen, involve everyone, and be open to learn to possible ideas as to how to increase efficiency, productivity at the Rosslyn plant.
Share process of change, timelines, expectations, and make support structures, training and employee assistance, communication structures available to all during this change process.
Management of change during transition
Nissan Management to provide behavioural consultant to assistance with change management. Expert will assist to alleviate fears and resistance to change.
Nissan leadership together with employees to roadmap change activities.
Do commitment planning, who is affected, what is the expected change, whose support is required, how do we influence change.
Provide continuous support, direction via employee change management structures.
Nissan leadership to Lead and drive change management activities in Nissan.
Open, honest communication at all times.
Sustaining Momentum during Change
Nissan leadership to provide resources for change
Develop new competencies and skills for new recruits
Reinforce higher productivity levels (desired behaviours)
Support and create opportunities for sustainability to those who will be eligible for severance packages.
Communicate and Support all the time.
With above process I am confident all employees will work together in securing sustainable operations at Nissan and sustainable solution for the older workers taking the severance package option.
Question 1 Mark Link Kurt Lewin’s model to the change process which needs to take place in this organisation and explain how the consultant should manage the process.
According to Lewin the key to resolving social conflict is to facilitate planned change through learning thereby enabling individuals to understand and restructure their perceptions of the world around them. Lewin’s unifying theme of his work indicates that the group to which the individual belongs determines the individuals’ perceptions, feelings and actions.
Lewin’s approach to planned change comprises of four elements: Field theory, Group Dynamics, Action research and the 3 step model of change.
Field Theory – approach to understanding group behaviour by mapping out the totality and complexity of the field in which behaviour takes place. In line with Lewin’s theory the consultant should view the present situation at Nissan as being maintained by certain conditions or forces. Group behaviour determines how the individuals interact and make decisions. This behaviour impacts and affects group structures and individual behaviour. Consultant need to research and study individual behaviour as a function of the group environment. Lewin states Changes in behaviour stem from changes, be they small or large within the forces of the field. Consultant need to understand the forces resisting change, restraining change and what is forces for change and driving the change in the business. Determine whether driving forces are exceeding restraining forces to facilitate change capability. If not exceeding ways must be find to drive change in the business. Determine internal and external forces driving change. Shifting the equilibrium, bring the factors for and against change to equilibrium.
Force field Analysis should be conducted by the consultant, reduce the intensity of the restraining forces, increase the intensity of the driving forces, bringing it to equilibrium, better choice according to Lewin reduce power and influence of factors that’s against change. People can be uncooperative if change is forced on them. Lewin believed that a field was in a continuous state of adaptation, which is the quasi-stationary equilibrium and that change and constancy are relative concepts, group life is never without change, merely differences in the amount and type of change exist.
Group Dynamics are behaviours of team members within a group. It is critical to understand the group, how they make decision, how they respond to change and how the group interact within the environments and other groups. The importance of the group in shaping the behaviour of its members should never be under estimated. According to Lewin Group dynamics focus on group behaviour, rather than that of individuals, should be the main focus of change. In the case of Nissan Lewin’s theory indicates that it is critical that the consultant focus on the behaviours of the group, concentrating as to how to change and influence the group behaviour rather than the behaviour of individuals. The individual in isolation is constrained by the group pressures to conform. Lewin further advise that the focus of change should be directed at group level and should concentrate on factors such as group norms, roles, interactions and socialisation processes to create disequilibrium and change.
Action Research: Lewin’s process indicates action research is a two pronged process whereby research leads to action, and action leads to evaluation and further action. This theory stress that change can only successfully be achieved by helping individuals to reflect on and gain new insights into the totality of their situation. During this phase it is critical that the consultant focus on the group to individuals belongs, and group dynamics to understand why members behave in the way they do when subjected to change forces. Action research stresses for change to be effective it must be a participative and collaborative process which involves all those concerned. According to Lewin action research proceeds in a spiral of steps each of which is composed of a circle of planning, action and fact finding about the results of the action. Lewin’s view that one cannot understand an organisation without trying to change it. Consultant need to ensure research of individuals in the groups, actively planning and learning of groups behaviours concerned, when then can successfully feed change behaviour and bring about change.
Lewin believed that a successful change project involved three steps:
Lewin’s Change Model
Unfreezing: Lewin indicates, human behaviour is based on a quasi-stationary equilibrium supported by a complex field of forces. According to Lewin’s process before old behaviour can be discarded and new behaviour successfully adopted, the equilibrium needs to be destabilized (unfrozen).
Consultant must create the right environment to ensure readiness for change.
Consultant should actively focus on reducing forces that maintains the status quo. What behviours drive the current inefficiencies at Nissan, highlight the impact based on research. Via the business case and attractive severance packages convince older employees to accept packages and facilitate process of change to bring in the younger employees. Accepting that current situation cannot continue should the group want to be sustainable at Nissan or in their personal capacity. Unfreezing the status quo by identifying gaps between the current status and the desired end status. Team members can then be motivated to engage in change activities as outlined in question 1.
Moving: Creates motivation to learn but not necessarily control or predict the direction. Consultant should actively focus on driving activities and behaviours to the desired state away from status quo. It is necessary to take into account all the forces at work, identify and evaluate all available options. Action research based learning approach enables groups and individuals to move to a more desirable and acceptable set of behaviours. Creating new vision, new behaviours, values, and attitudes through changes in Nissan structures and processes. Higher production levels, thru younger, trained and competent staff, sustaining Nissan as a business whilst the outgoing older team members have the necessary support to sustain themselves beyond working for Nissan. Refreezing: this process seeks to stabilise the group at a new quasi-stationary equilibrium in order to ensure that the new behaviours are relatively safe from regression. Consultant must facilitate process of driving new behaviours, ensure that new behaviours to some degree, congruent with the rest of the behaviour, personality and environment of the learner. If not in equilibrium it might just lead to disconfirmation. Lewin indicates at organisational level refreezing often requires changes to the organisational culture, norms, policies and practices. The new state ie retrenching older staff and employing younger teams to increase productivity and efficiency at the Rosslyn plant. This can only be done by the use of available support structures to reinforce the new desired end state via new work culture, rewards and structures. Consultant to manage the change process by stabilising group at Nissan as a group activity, unless group norms and routines are also transformed, changes to individual behaviour will not be sustained.
Question 2 Mark Describe ways of reducing employee resistance to change.
According to Oxtoby, McGuiness & Morgan (2002) in the published European management Journal on Developing Organisational Change Capability the successful implementation of change in organisation is described in a Listen-Interpret-Translate-Transfer (LITT) process used to build trust and create organisational change model or change capability.
Process requires personal involvement from internal manager or consultant to: Listen- using semi-structured personal interviews to what experienced employees say about change in Nissan. Interpret and understand what key team members say on their understanding and knowledge around change processes. Translate the information gathered during interviews into a model of change management using categories that would identify with the employees in the organisation. Transfer utilising the model built with acquired information into an active frame work to use to improve change processes in the organisation.
Share the compelling business need, provide information in advance, share and bring understanding to all affected by the proposed change, reasons for change, the nature, timing and effects on personnel. Be open and honest, share challenges, concerns, and constraints.
Involve all employees and create commitment among all involved. Encouraging participation, being part of process, built trust, create environment for input, brainstorming ideas to build a sustainable organisation. Employees will not resist change if they are involved in the change process and given opportunity to ask questions and bring ideas to the table. Appoint change agents to processes. Employees will be more supportive. Provide counselling and allow for negotiation for those who will be affected.
Setting clear goals and measuring processesoutline goals and measurement processes that are set and fully aligned to the underlying business need. Provide details on when what will happen, how, why it will happen and clearly outline the involvement of employees. The process should clearly define how continuous business improvement will be effected to sustain the organisation.
Establish leadership and build trust with a team of key playersBuild trust, maintain good leader member exchange, create vision that is widely understood and inspirational throughout the company. Provide resources with right skills and personality’s direct teams. Demonstrate ability to motivate, have passion, consistently and transparently practise what you preach in order to overcome barriers change.
Networking, implementing Improvements: discovery of preferred learning methods, knowledge creation and unlearning of status quo. Implement changes thru continuous learning.
Progress feedback, measurement against set goals: at regular intervals measure progress, recognise and reward change agents, those driving change and meeting timelines.
Record best practices: record changes, best practices and business improvement.
Support employees, empathy and care – provide counselling to those affected, build trust, share experiences, care for employees, be consistent in approach.
According to S Furst, D Cable, 2008 Journal, Managerial influence tactics can successfully be used to reduce employee resistance.
Managers can use distinct behaviours to reduce employee resistance ie: hard and soft tactics.
Hard tactics – Sanctions, where management threaten and punish employees for non-compliance through disciplinary or withholding rewards. Sanctions yield compliance as the employees recognise the managers authority and power to confer punishment and withhold rewards. Legitimisation where managers explain that change is needed in line with the organisation policies and procedures and therefore employees should comply. This process establishes credibility for the intended change program.
Soft tactics – ingratiation where management provide praise for employee efforts during the change management program, openly acknowledge and reward. Consultation where managers ask employees to provide suggestions and assistance during the change management process.
These tactics can assist with reducing resistance to the change program.
Question 3 Mark Give reasons why individuals and organisations resist change and explain how Nissan should manage this resistance.
Reasons why individuals and organisations resist change
Poorly communicated change The absence of proper two way communication will lead to grapevine rumours that will fuel resistance to change. Employees are left to their own understanding and reasons for change, this might not be true, but it could fuel resistance. Employees feel left out and not important.
Shock, disillusionment and the fear of the unknownThe less employees know about the intended change and the subsequent impact on them, the more fearful they will become.
The fear of job security
Poor timing and lack of competence change unexpected and employees might question their ability to survive in the outside market.
Lack of a well-established support system – Undue resistance can occur because changes are introduced in an insensitive manner or at an awkward time.
Peer PressureEmployees will resist change to protect the interests of a group.
Explain how Nissan should manage this resistance.
Communicate the change, effectively and timeously
Open and honest communication with all staff, face to face, informs them of the change prior to implementation. Communication is a great way to reduce the fear of the unknown in terms of career advancements and job security. Early communication will also help win the hearts, minds and loyalty of the employees. Tell teams about the efficiencies at Nissan and the impact on the sustainability of Nissan SA.
Involve employees in the change program
No change program should be implemented without taking employees along. Involve them, listen to their concerns, ideas and incorporate good ideas into change program. Involving employees will lead to employees taking ownership of the change program. Taking inputs give an indication that you are willing to include them, they are responsible and it will reduce the fear of the unknown and reduce resistance. Employees might even come up with better ideas other than forced retrenchments to improve quality, productivity and efficiency at the plant.
Negotiate with employees
Enlisting support and negotiating with employees will include employees who might feel the program is imposed on them. Management can promise some rewards or benefits in exchange for compliance to the change program. Discuss details of proposed layoffs, ask for proposals and negotiate terms, throw in additional rewards, such as funds to establish business if the older employees will train new employees to secure sustainability of Nissan. Indicate possibility of providing services to Nissan post the severance package and plant rejuvenation.
Introduce well-established support system
Show empathy, knowing change is a stressful experience that creates uncertainty about tomorrow and the future. Change can also threaten an employee’s self-esteem. Most employees will experience some level of stress after the implementation of change effort. Work hand in hand with the Behavioural consultant to introduce a change management program that will help all the employees cope with the new changes in the company. Provide support during change process and beyond after older employees left the organisation.
Provide appropriate resources
Most employees are always unprepared to handle the change. Provide equipment, resources and training programs that will help them to adapt to and excel in the already changing environment. Create a trusting employee-orientation by being loyal to and honest with the employees. This will earn Nissan trust from employees and help build a strong relationship so that in the event of change, they will find it easy to the new developments. Extent support program and resources to the affected team members, cementing the intent to sustain the organisation and its employees.
Provide continuous feedback and support
Open and honest communication on progress throughout the change process will reduce resistance to change. Create an employee oriented environment where transparency, trust and productivity thrive. Recognise and award change agents.
Question 4 Mark
1. Why did you assign this mark to your assignment answer? Which sections or factors do you think you have covered the best and which need improvement?Preparing organisation for change is a key element to ensuring success, for this reason I have covered and marked the question more than any other question. I covered very well section on preparing of Nissan for change, the reducing of employee resistance to change, reason for employee and organisational resistance and how Nissan should manage the change in detail. Linking Kurt Lewin change process requires improvement.2. Which of the prescribed and/or recommended sources did you find most
useful?Furst, S. A., & Cable, D. M. (2008). Employee Resistance to Organizational Change: Managerial Influence Tactics and Leader-Member Exchange. Journal of Applied Psychology, 93(2), 453–462.
Oxtoby, B., Mcguiness, T., & Morgan, R. (2002). Developing organisational change apability. European Management Journal,20(3), 310–320.
3. Did you use additional sources? If so, describe or name these sources.NO
4. How much time did you spend on the assignment?2 months
5. How relevant are the sources provided for this paper in terms of the realities of, for example, personnel psychology in the South African work context?Sources are very relevant to South African work context
6. Which competencies, areas of knowledge, skills and other qualities did you need to complete this assignment?Managerial competencies, leadership skills, computer literacy, knowledge of organisational change, employee behaviour in working environment.
7. Did completing this assignment and consulting the relevant sources contribute to your competencies as a human resources practitioner? If so, name a few competencies that you think need further development.Yes, it broaden my thinking and approach to introducing change in working environment. Brought about better understanding as to why people resist change.
8. Are the assessment criteria an adequate framework for evaluating your assignment? If not, what criteria should be added?
Not Applicable, no criteria to be added.
9. Which elements of the course learning material and your learning experience would you like to improve? How?
Not Applicable, no learning experience to be improved.
Research Library utilised
Luthans, F. (2011).
Organizational Behaviour: An Evidence -Based Approach(12thed.). Chapter 3.Prescribed articles:
Cummings, T. G., & Worley, C. G. (2009). Chapter 2: The Nature of Planned Change.
Cummings, T. G., & Worley, C. G. (2009). Chapter 10: Leading and Managing Change.
Robbins, S. P., & Judge, T. A. (2009). Chapter 20: Organizational Change and Stress Management.
Furst, S. A., & Cable, D. M. (2008). Employee Resistance to Organizational Change: Managerial Influence Tactics and Leader
Member Exchange. Journal of Applied Psychology, 93(2), 453–462.
Oxtoby, B., Mcguiness, T., & Morgan, R. (2002). Developing organisational change apability.
European Management Journal,20(3), 310–320.
Pasmore, W. A., & Fagans, M. R. (1992). Participation, individual development and organisational change: a review and synthesis. Journal of Management 18(2), 375–397.
Worren, N. A. M., Ruddle, K., & Moore, K. (1999). From organizational development to change management: the emergence of a new profession. The Journal of Applied behavioural Science,35(3), 273–286.