Involvement = Power X Information X Rewards X Knowledge High-Involvement Organizations .

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Involvement = Power X Information X Rewards X Knowledge

High-Involvement Organizations

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Overview

• Key Components of High-Involvement Organizations

• History/Evolution of Management & Organizational Change

• Components of High-Involvement Organizations; how they’ve evolved, how they are currently manifested

• Process of implementation • Case studies highlighting real-world implementation• Cultural influences on High-Involvement

Organizations• Current trends and the future of HIOs

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Hallmarks of High-Involvement Organizations

• Based on Edward Lawler’s model• Challenge the structures and values of

traditional organizations• Employees are given the right mix of power,

information, rewards and knowledge• Encourage employee commitment to the

success of the organization• Employee oriented approach versus control

oriented approach to management

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Evolution of the High Involvement Approach – A

Timeline• End of 19th century – Introduction of Classical Organizational Theory, development of Bureacracy

• 1910 – 1920 – Scientific Management; Taylor

• 1920s – 1930s – Hawthorne studies; Mayo, Introduction of Behavioral Organizational Theory, Human Relations Movement

• 1950s – 1960s - Human Resources Movement; Open Systems Theory, Introduction of Contingency Theory

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– Criticism of the Traditional Model begins– Initial Experimentation

• 1970s – National debate regarding bureaucratic organizations

• 1980s– Concern about U.S. economic well-being

• 1990s – today– Advocacy to broaden the scope of high-involvement

management to encompass the entire organization

Evolution of the High Involvement Approach – A

Timeline

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High-Involvement Organizations: Organizational

Democracy• Definition of workplace/organizational

democracy (Cheney)

• Participation is a necessary condition of democracy

• Employee participation is largely a function of power, information, rewards and knowledge

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Key Features of High-Involvement Organizations

P.I.R.K.

• Power

• Information

• Rewards

• Knowledge

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Power

• Power to act and make decisions about the work in all its aspects

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Information

• Information about processes, quality, customer feedback, events and business results

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Rewards

• Rewards tied to business results and growth in capability and contribution

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Knowledge

• Knowledge of the work, the business, and the total work system

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Relationship Between the Four Elements

• POWER w/o knowledge, info. & rewards = poor decisions

• INFORMATION & KNOWLEDGE w/o power = frustration

• REWARDS w/o power, knowledge & info. = frustration & lack of motivation

• INFO., KNOWLEDGE & POWER w/o rewards = danger– nothing will ensure people will exercise their power in ways that will

contribute to organizational effectiveness

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COMPONENTSOF

HIGH-INVOLVEMENT ORGANIZATIONS

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Implementation of HIO

No universally accepted approach Implementation is specific to the

organization’s situationGuided by an explicit statement of values

that members in an organization supportGuided by participative nature

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Organizational Structure

• Flat• Lean • Mini Enterprise-oriented• Team-based • Participative structure

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Job Design

• Individually enriched

• Self-managing teams

• Psychological needs of employees

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Information System

• Open

• Inclusive

• Tied to jobs

• Decentralized; team-based

• Participative in setting goals & standards

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Career System

• Tracks & counseling available

• Train individuals to manage careers

• Encourage horizontal moves

• Open job posting

• Provide feedback

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Selection

• Realistic job preview

• Team-based interviews

• Involve people from the potential work area

• Promote growth

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Training

• Heavy commitment

• Peer training

• Economic education

• Interpersonal skills

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Reward System

• Open

• Skill-based pay

• Gain sharing, profit sharing & ownership

• Flexible benefits

• All salaried workforce • Egalitarian perks

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Personnel Policies

• Stability of employment • Participatively established through

representative group

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Physical Layout

• Around organizational structure • Egalitarian • Safe and pleasant work environment• Transparent and open

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The Power of Participation

Why should organizations initiate high involvement strategies?

employee involvement increased motivation & commitment

higher levels of + higher levels of employee motivation employee commitment

= IMPROVED ORGANIZATIONAL PERFORMANCE(Directly impacts the BOTTOM LINE)

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Organizational Structure

Job Design

Information System

Career System

Selection

Training

Reward System

Personnel Policies

Physical Layout

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Case Study

Chevron

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Case Study

• Mini Enterprise-oriented company

• Four business groups:– Chevron Corporation– Chevron Chemical Corporation– Chevron Information Technology Company– Chevron Shipping Company

• 34,000 employees

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Chevron Corporation

• Parent Organization to other three

• Operations in 90 countries

• Involvment in such things as:– Exploration and production– Transportation– Refining and retail marketing– Chemical manufacturing and sales

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Chevron’s Breakdowns

• Chevron Chemical Company - 5,000 employees– Supply of petroleum-based commodity and specialty

chemicals to businesses

• Chevron Information Technology – 1,300 employees– Internal operating company, delivers global IT

infrastructure and differentiated custom IT solutions to Chevron businesses

• Chevron Shipping Company – 1,900 employees worldwide

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The Dilemma

• Chevron was looking for a way to quickly bring about large-scale change due to:– Global competitive pressures– Falling crude oil prices

• How can a large, multi-national company implement large-scale change, quickly?

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The Answer

Chevron needed to directly involve their employees in the change through a process

called “Direct Participation”

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Direct Participation

• A high-involvement approach to achieving change in a short time-frame

• Roots in the work of Fred Emery & Marvin Weisbord’s Search/Future Search Conferences

• The process centers itself around large-scale conferences

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Direct Participation

• The overall idea is to get a representative sample of the major stakeholders in the organization together in one place

• The stakeholders work together to come up with solutions to company problems, collectively

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How it Works – Senior Management

• Decide on issues to be discussed & set boundaries for what can be changed

• Communicate that the process is vital must be taken seriously– Personal telephone calls– Face-to-face discussions– Personalized invitations to conference

• Be present at the conference and participate as equals

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How it Works – The Planning Team

Responsible for:• Framing Issues

– Make necessary information available– Develop and distribute contextual materials

– Keep the process focused during the conference– Work to channel the discussions

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How it Works – The Planning Team

Responsible for:• Selecting Participants

– Ensure that all aspects of organizational diversity are represented

• Designing Tools and Conference Activities

– Develops templates that participants use to capture outputs in a specific, detailed and consistent format

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How it Works - Technology

• Interactive Polling– Give participants graphically intensive

information– Allow facilitators to follow the progress of the

conference– Allow facilitators to recognize when a decision

could inadvertently have an adverse impact on a given minority

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Design Features• Organizational Structure

– Mini Enterprise-oriented– Team-based– Participative council or structure *

• Information System– Open *– Participatively set goals and standards *

• Personnel Policies– Participatively established through representative

group *

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Where is PIRK?

• Where do you think PIRK has been applied to Chevron’s system?

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Outcomes

• Chevron Shipping Co.– Purpose: identify $5 million in annual

employee-related cost savings– Participants: 150 mariners & shore staff– Outcome: 13 recommendations that would cut

$1.9 million in costs, another $3.4 million in cost-saving ideas were identified

– The group found savings that management could not have known about and avoided adverse impact on the Asian officers

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Outcomes• Chevron Chemical

– Purpose: Performance Systems Redesign– Participants: 180 employees, customers &

suppliers– Outcome: Specific recommendations for

enhancing job selection, career development, performance management and recognition systems

– let to 20% increase in employee commitment & 50% improvement in satisfaction

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Outcomes

• Chevron Corp.– Purpose: Develop a system to promote

diversity & to measure diversity achievements– Participants: 200 employees– Outcome: 15 strategies; key metrics including

numerical targets for women & minorities for leadership roles, diversity plans that are part of all leaders’ performance evaluations, & improvement in employee survey

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Outcomes

• Chevron Information Technology– Purpose: New strategy to ensure the

continued delivery of value-added services– Participants: 100 employees, as well as

customers– Results: 6 action items; mentoring program

and strategy communication– Participants signed up to participate in

ongoing groups after the conference

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World Class Quality Talent of workforce Quality

(Rao et al.,1999)

Workforce empowerment World Quality

Human Resource Development

Employee Participation, Commitment, Empowerment& Involvement

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The Model Base(Bennett, 1999)Influences on Work Attitudes

Cultural Values and Beliefs (east)

Situational Practices and Characteristics (west)

Work Attitudes

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The Culture Model(Hofstede, 1980)

Individualism/Collectivism

Power Distance

Uncertainty Avoidance

Masculinity/Femininity

Culturally influenced dispositional characteristics of a nation serve as guides to organizational behavior

Individualistic: Reward and Power (USA, Britain)Collectivistic: Knowledge and Commitment (China, India)

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Individualism Scores (Hofstede, 1997)

0

10

20

30

40

50

60

70

80

90

100

Japan India Britain USA

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Power Distance Scores (Hofstede, 1997)

0

10

20

30

40

50

60

70

80

Japan India Britain USA

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The External Environment of Newly Industrialized Countries

• Move from centrally planned to market driven economy

• Open to global competition• Large internal markets • Growing middle class with high purchasing

power• Increase in volume exports to the west

CHINAINDIA

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!Contradiction!CollectivisticCollectivistic: Lack of high involvement: Lack of high involvement

[INDIA, CHINA -- close-knit teams, participation]

IndividualisticIndividualistic: Prevalence of high involvement: Prevalence of high involvement[USA, BRITAIN -- independent, lack of participation]

Individualists working collectively

Working independently despite her collectivistic society

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The IdeaCollectivism = High Power Distance = Low involvementIndividualism = Low Power Distance = High involvement

Collectivism = Deep-rooted Culture Influence reflected as High Power Distance = Low involvement

Individualism = Current Situation Influence reflected as Low Power Distance= High involvement

Collectivists are on their way to achieving high quality without high employee involvement and participation through their current

trends in organizational operations...

The current trend within developing nations is focused on leadership and increased national reward systems

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The Expert System Trend• An Expert System is a computer software

package that provides the computer with the art of decision making similar to human beings.

• The Quality Circle Expert System was needed to combat the failure of quality circles, lack of employee participation in management decisions, and to maintain the power distance within collectivist cultures.

• Emerging trend in Indian manufacturing firms.

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Functioning of Expert Systems

1. Present Status ModuleKnowledge of benefits and

shortcomings of the present global status of various quality circle programs initiated

2. Action Plan ModuleUser interacts by enquiring

about feasibility of undertaking essential activities in the firm

3. Planning for Implementation Module

QCES elicits information from user and gives detailed report on probable success

4. Diagnosis ModuleDiagnoses causes of failure

of quality circle programs in the firm after partial of full implementation

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Current and Future Trends

• Organizations have been slow to implement employee involvement principles– Internal resistance– Uncertainty about to implement– Lack of systems support

• Little empirical data to support the assertion of the efficacy of high-involvement organizational to produce greater qualitative and quantitative outcomes

• Further research necessary

Involvement = Power X Information X Rewards X Knowledge High-Involvement Organizations .

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