Professional Documents
Culture Documents
&
Technology
Final Project
Course:
CHANGE MANAGEMENT
Instructor:
Project:
To Analyze the Structural
Change in PEL
Group: # 03
Group Leader:
Rabail Gul ID # 063832-123
Group Members:
Submission Date:
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ACKNOWLEDMENT
First of all, our gratitude to All-Mighty ALLAH who gave us the energy,
the motivation and the wisdom to accomplish this project.
Secondly we would like to thank our Resource Person Mr.Aamir Aleem Rana,
who gave us an opportunity to explore, and polish our skills. At this stage, it
was a great learning opportunity for us to understand and analyze an ongoing
change program for a well known company Pakistan Elecktron Limited (PEL).
Lastly we (all the group members) would like to thank each other for
our help and expensive time put into this project. Furthermore we thank each
other for cooperating with each other in the completion of this project.
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Table of contents
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EXECUTIVE SUMMARY
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was based on a proactive approach to change the organization as a
professional one from the Seth type organization, so PEL had enough time to
respond towards the upcoming challenges in future.
There were many difficulties which PEL had to face while implementing
this change program . Convincing the employees of PEL for the need of
change was much harder but they had many resources to help make change.
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PROJECT INTRODUCTION:
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the advancement and development of the electrical engineering sector in
Pakistan.
Though it is a very old company but its human resource department was
introduced in 2005. HR department since its inception is under a constant
change and its role is still not properly defined in PEL. In today’s dynamic
competitive environment no organization can afford to stand still. PEL in 2005
realized problems in their existing system. After one year of discussion top
management decided to change the way HR department operates. Initially it
was Industrial Relation & Administration they decided to segregate HR from
IRA as a separate department. In November 2006 an HR professional were
hired to carry out this task.
PEL needed change in order to bring value to the organization and to have a
sustainable competitive advantage and this could only be achieved through
HR department.
The purpose of this report is to assess and analyze the external and internal
forces, goals, and implications associated with this change program at PEL.
This would also enable us to assess our understanding to analyze change
programs in future.
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HISTORY AND BUSINESS NEED:
PEL right from its inception stage has undergone a lot of change and
faced challenges. To begin with in 1948, the Saigols migrated from Calcutta
and initiated their business in Lyallpur (later named to as Faisalabad), the
textile city of Pakistan, under the banner of Kohinoor Industries Limited.
Later in 1978, the Saigol Group of Companies purchased major shares of Pak
Elektron Limited (PEL). At that juncture, the company was only manufacturing
transformers and switchgears. With the Saigols in management, PEL started
expanding its product range by entering into Air Conditioner manufacturing.
Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in
Pakistan.
The overall business needs are to provide quality products and
services to the complete satisfaction of their customers and maximize returns
for all stakeholders through optimal use of resources. There other needs were
to improve, bring value to the organization, and have good governance,
promoting corporate values and a safe working environment.
Business need in this change program is personal development of their
Human Resource to meet future challenges, they wanted to take their
employees out of operational activities and bring them into strategic activities.
PEL required an HR department to effectively handle its huge workforce
(more than 6000 employees). The need or the driving force behind PEL
existence can be seen in their mission statement.
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PEL mission statement is in line with the change initiatives that the top
management is undertaking.
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KURT LEWIN’S MODEL
UNFREEZING:
To unfreeze the status quo, management made the employees realize
that how important this change would be for them, how HR department can
work for their betterment and development. They were made to realize that
there is a need to revise the policies for their own and organizational
betterment. They were made conscious that it is difficult for IRA to work for
both executive and labor issues, so there should be a new department
working separately.
In this process top management involved the head of departments to make
this effort more strong because they were quite familiar with the benefits of
this change. In other words we can say it was easy for them to buy in this
change.
MOVING:
The management used some techniques like training and stories to
motivate the employees to make them buy in the change “JTE”. Seminars and
meetings were conducted to realize the importance of HR department and its
functioning.
REFREEZING:
After the successful implementation of HR department, the policies and
rules made by this department with the approval of Top management are
being embedded.
Change program at PEL is a continuous on going process. The
decomposition of change into a simplistic three-step process was proposed
by Lewin. Lewins pointed out that each of these three phases of change is
subject to its own issues and problems (Mc Whinney, 1992) which an
organization will have to face. PEL as an organization also had to face these
problems to tackle this problem they made new policies and rules and
regulation for employees and embed these policies on them 2
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YIN AND YANG OF CHANGE
• Better communications
• Performance measurement
• Profitability
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CHANGE KALEIDOSCPE
End Result
Transformation Realignment
Evolution
Incremental Adaptation
PEL
Current Path 2
Nature
Reconstruction
Big Bang Revolution
PEL
Initial Path 1
PEL has approached two change paths in its change program. Initially the
management adopted reconstructions as they intervened in the structure of
the PEL by introducing the HR department and then bringing change in their
employee’s behaviour and organizational culture by making operational efforts
of HR functions. PEL’s change program follows a change path which has a
shift from reconstruction to evolution. Thus two change paths are identified in
PEL’s change program:
1. Reconstruction of HR department
2. Evolution in creating HR practices with embedding cultural
changes
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1. Initial Path
Reconstruction
The Nature of Change: Initially the change was big bang as in the result of
the Journey towards Excellence, the management introduce the HR
department and the functionality changed from IR department towards the
functions of Human Resource management.
The End Result of change: the objective of big bang intervention was
realignment of the business practices as it was being operated under IR
department, as a result of this realignment, HR department started operating
independently with 4 subunits as shown below.
HR Department
PM OD T&D R&S
2. Current Path
Evolution
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organizational growth. As all the functions of HR start performing effectively, it
shall boost up the performance of the each employee in PEL.
CHANGE STYLE:
CHANGE TARGET:
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CHANGE LEVERS:
Following are the change levers and interventions used by PEL change team.
(see figure A & B, appendix)
Stories:
To ensure a positive approach of employees towards the structural
change in PEL, Top management made use of stories about the best
practices performed by their competitors and other multinational companies.
The Managing Director Murad Sehgal used this approach to convey his vision
to the top management. He shared success stories of foreign companies to
convince them for the introduction of HR department.
Symbols:
Following symbols were adopted and their implementation
emphasised:
Performance appraisal
Continuous learning through training (1000 of hours of training in April 2008)
A new, eye-catching HR department
Parking allocation for Executives
Slogan (journey to excellence)
Training & Development Culture
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Control system:
Hr department have made a web based portal for employees to set
there goal so that there work can be evaluated on the basis of these goals.
They preserved the ISO certification. They have improves their supervision
form old systems. The performance appraisals of the employees are available
on the web based portal, and nothing is hidden from the employees.
Power Structure:
Before the implementation of policies made by HR department, they
were approved by the MD and GMs. They have the authority to approve or
disapprove the policy.
Organizational structure:
This structural change at PEL has brought a new department in being,
which is HR department. Formerly there was IRA department which was
performing the duties of HR department. But this structural change has
separated the IRA and HR department to perform there duties independently.
CHANGE ROLES:
Perhaps the most challenging task in a change program is defining roles and
responsibilities and selecting right people for the right job. A change program
can be managed through a number of different ways. The primary change
agent roles in PEL are listed below
• Leadership:
Mr. Haroon A. Khan and Mr. Murad Saigol gave success to the change
program a key pivotal figure. Their leadership style was quite supportive
and co-operative. This made others involved in the program to know the
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change very closely and felt the need of it. Hence it was seen that there
was a single leadership role, as the MD, with local leaders or change
champions in the HR department. Mr. Waqar, the new HR head, took the
responsibility and started to appoint efficient people for PEL.
• External Facilitation:
Mr. Zafar was appointed as the consultant to help look for the loop holes
that will come to implement the change. The consultant was not trained, he
was given a time to understand the organization. This made him play a
pivotal role in the change process.
• Functional delegation:
Change responsibility in PEL case was assigned to HR department. It was
further strengthened by hiring additional competent employees.
TIME:
Significant organizational changes often begin slowly, are
4
incrementally implemented (Stuart M. Klein, 1996). In 2005 PEL
executives realized that there is a need of a Human Resource department
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which will help them in making the workforce efficient. The executives also
thought of appointing right employee for the appropriate job. The
organization did not want to have a rapid change or a turnaround but
wanted to adopt a proactive approach towards implementing the change.
PEL realized that in order to have a competitive edge towards the rivals,
development of the product and services is must. So they initiated a
change program to have the workforce change their attitudes towards their
work by giving efficient output. This would give the company an advantage
in terms of products that they manufacture. To know the time for the
change to occur the organization is also trying to give training to their
employees.
SCOPE:
The Scope of structural change at PEL, with respect to the physical
spread of this change, is at all the executive level staff of PEL. There are
almost 600 to 700 Executive employees.
PRESERVATION:
PEL believes in preservation of its skilled labour. In PEL case all resources
that contributed to organization competitive advantage were retained. There
was no downsizing- it was right sizing, identifying the right person for the right
position. In order to avoid alienating the employees a collaborative or
educative style was adopted by the HR department.
DIVERSITY:
“Diversity refers to any attribute that happens to be salient to an
individual that makes him/her perceive that he/she is different from another
individual (Williams and O’Reilly, 1997). PEL is a huge organization in terms
of human capital they have. Employees at PEL come from different
backgrounds and cultures and managing this diverse work force is an up hill
task. Rather than being reactive and waiting for a “diversity crisis” to take
place before a change is made (i.e. Coca-Cola, Denny’s, Publix, and Texaco
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settlements) an organization like PEL should be proactive in handling
Diversity” 5.
The organization has 6500 – 7500 employees that are from different
national cultures. The employees or the managers that are currently present
there are heterogeneous because of different subcultures or different national
cultures. They are not as such discriminated from each other but due to our
national and Islamic culture; they are discriminated. The discrimination does
not occur from the top management but from the employees working together
in same department at a same level or lower level.
CAPABILITY:
There are three levels of capability: individual, managerial and
organizatinal.
CAPACITY:
The PEL’s capacity is measured in terms of three resources: financial,
time & staff.
Financial Resources:
PEL has wide capacity in terms of financial resources as PEL’s annual
sales for the year 2007 were 13 billion Rupees and net income or profit was
582 million Rupees and the reserves of capital in 2007 were as 69 million
rupees. PEL’s extensive training program for the awareness of change is also
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costing them a lot but due to financial capacity PEL is investing heavily on
trainings to inculcate the HR practices and to enhance their employee’s skills
level.
Time Resource:
As PEL’s change program was based on a proactive approach to
change the organization as a professional one from the Seth type
organization, so PEL had enough time to respond towards the coming
challenges in future.
Staff:
The only constraint in staff resources for PEL was the number of
mangers involved in this change program. The change vision was
communicated from the top management and there were few managers to
take up the responsibility and implement this change program. Initially this
problem was very severe but now after 3 years of this change program PEL
has developed a team of 11-12 highly educated professionals.
READINESS
PEL’s Readiness for the change program was headed under two issues one
is the awareness of the need of change and the other is the commitment
towards the change program.
Awareness:
As it was a top to bottom approach towards change program so the
awareness was high at the top level. The top management had to develop the
means to communicate this change vision to the lower level to increase the
awareness of the need of the change. As a result, knowledge sharing practice
came into being.
Commitment:
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As different means were used to increase awareness including in
house and out door trainings and with the increasing awareness of the need
of the change the commitment level was also increased.
POWER:
The top management of PEL is very supportive and participative in the
implementation of the change. The power hence lies at the top management.
The stake holders that can or could be influenced by the change are:
As the main strategies are approved from the top management and then
implemented, employees are totally satisfied with what they are getting. The
compensation and loan policies are revised to make the workforce benefit out
of it. The power is used positively as 3 bonuses are given to each and every
employee whether his or her performance is excellent or fair.
The change paths (initial and the current) from reconstruction to the
evolution stage are been influenced positively by the power users at the top.
No resistance is seen in the evolution in creating HR practices with
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embedding cultural changes. The powerful individuals are trying not to stop
this ongoing change but to facilitate it some manner.
Favor
3 1
ATTITUDE 5 2
Neutral
6
4
Against
INFLUENCE
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Stake Holder Analysis for Power & Influence
High 5
1
2
POWER
3
6
Medium
Low
INFLUENCE
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TRANSITION STAGE OF PEL:
(See figure C, Appendix)
Stage 1: Mobilization
In this stage PEL introduced a new department as HR department in
2005, at the individual level it was shocking and employees did not accepted
new structures and responsibilities, initially the employees thought that it will
not help them in performing their daily tasks and activities. From the
organizational perspective PEL was in the state of mobilizing its employees
and with the interventions of change into the structure they were preparing
their employees for the future state. PEL tried to reduce the shock of the
transition by giving its employees the sense that they are not changing IR
department’s responsibility rather they are sharing the responsibilities of IR &
administration department.
Stage 2: Moving
After intervention of HR department PEL started giving its employees
awareness about the out comes and value of HR department through training
and indoor sessions and started trying to get buy in of the employees. The HR
department initially implemented the new revised system of performance
appraisal within the HR department and then gradually in other departments.
This helped the employees to gain the understanding of the benefits of
change. Organization’s perspective in transition stage was more concern with
the shift in the move of this transition stage for implementing change and
getting into the desired future stage.
Stage 3: Sustaining
Now in the year 2008 PEL is trying to sustain this transition stage by
embedding these changes in the organizations culture and behaviours of the
employees and the system of the organization. PEL is doing this sustaining
action by promoting the healthy results of the performance measurement and
new policies which are in the favour of the employees. They are integrating
these changes with the daily activities and promoting the effective learning for
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the sake of successful change efforts. This process will be continuing until the
proper functionality of HR department is achieved.
BARRIERS TO CHANGE:
The IR dept. was previously looking after all the employees that are
above 7000 in numbers. When an employee was ignored, he would become
dissatisfied. Hence the change champions thought that there should be a
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separate dept. for managerial level employees. This was achieved through
questioning the employees about the change and then challenging of the
status quo. New hiring was done because the vision of the structural HR
change was to have a workforce which will have different skill sets. Symbolic
changes were also taken to make the employees realize that the change was
happening. It was made compulsory that the employees at the managerial
level will dress neatly and like professionals. This gave an image to the
employees that the behaviors of the employees were also changing.
The only strategy that they acquired was to have a totally new HR
department and in it totally new people. Various communication and training
interventions were also used to educate people as to why change is needed,
what changes are needed and to provide them with the skills they need to
make change happen. The executives of PEL realized that genuine change
requires considerable investment in mobilizing the workforce. By providing
extensive training to the employees others thought that they also have to
change. Hence it was an intensive personal development intervention aimed
at altering the employees’ attitudes to their situation. In PEL as there is a lot of
time to make the things change, the top management is trying to educate and
train their employees. The ultimate goal is to change the behavior of the
employees towards their personal establishment and the betterment of the
organization.
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Resource department broadly and dramatically. Without motivation, people
won’t help and the effort goes nowhere.
There was a little resistance at the lower level but overall the
employees wanted the change to be implemented. The senior employees in
the company didn’t become defensive. PEL’s managements mandate was to
minimize risk and to keep the current system operating. The HR head was a
newly appointed person as the previous head had left after 5 – 6 months of
implementing the change. The head of the HR dept. was a key. Convincing
the employees of PEL for the need of change was much harder but they had
many resources to help make change.
Basically in PEL change was urgent because the employees at many levels
were dissatisfied with their current job descriptions and compensations. PEL
really wanted its employees to be satisfied and remain competitive in the
industry; hence it implemented the change through great coordination at all
levels. The change urgency level was known to every employee at PEL and
the HR department came into being by the positive attitudes and behaviors of
the employees towards the change.
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Change Process Model for PEL
High Performance
PEL’s Future
Desire Position
In 2015
PEL’s Current
PEL without HR
Position in 2008
department HR Intervention
in 2005
From
1956-1990
Time
Reconstruction
Transformation &
Acceptance of HR
Resistance for
HR department Slow Acceptance of
Low
HR department
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Stage 2: Resistance against HR Department
Mr. Murad Seghal had a desire to introduce HR Department as it as the need
of the hour. With his continued efforts and a positive vision HR department
came into being in 2005. because of the HR department the supervisors and
employees started resisting against it and did not accepted its functions and
procedures.
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Stage 5: Prospect functionality of HR department
In future PEL is prospecting that the company will be long ahead of where it is
today. learning and knowledge sharing culture will be develop in the
organization. Full and optimal functionality is expected from the HR
department. They need 6 to 7 years to complete their HR department change.
It is expected that by the year 2015 the HR department will be fully operating
with its all functions in all departments which would definitely increase the
performance level and help the company to grow.
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PERSONAL LEARNING:
This project has helped us learn how to work in a group with so many
diverse people who are strangers. Initially it was very difficult to adjust but
though we are students of Change Management we accepted the change
easily and it did not created any issues for us to adjust within the group. We
have learnt how to deal with people, it has also strengthened our decision
making power. It has also helped us to act patiently.
This project helped us to study the possible intricacy in a cultural and
structural change program. This study has facilitated us to realize how
important the middle management and employees are in any organization and
change program especially. This whole study will help us in our career and
also in any change program at the organization, where we would work.
This project helps us how to work in group dynamics and to get the
best output from diverse ideas of the group members and also work on the
lines in future I am able to design and implement a change program.
ORGANIZATIONAL LEARNING:
This project will help PEL Top management to review the whole change
program JTE.
The Analysis performed in this project will give a clear depiction to the
management how this project can effect PEL’s stakeholders. In this project we
have analyzed the soft side of structural change program at PEL. Our project
will help them to access and analyze the goals and implication association
with a structural change program in PEL and also help them to examining a
new employee development and assessment program. It might help them to
boost up their energy in achieving their goal of change program. As we have
implemented the Change Kaleidoscope in our Project it might help them to
evaluate their structural change program
REFLECTIVE THOUGHTS:
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understanding about change management; it has further motivated us to learn
more about change. Our knowledge was limited but now after taking this
course and analyzing a change program in depth has increased our
knowledge.
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RECOMMENDATIONS:
CONCLUSION:
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REFERENCES:
1. D E Hussey, HOW TO MANAGE ORGANISATIONAL CHANGE
2. DEATH VALLEY OF CHANGE.
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APPENDIX:
FIGURE A:
OLD CULTURAL WEB FOR PEL
Symbols
Stories
OLD
OLD Slogan: Lets make
Seth Culture image things better
Lifetime No car parking
Employment reservation for MD
Stories of Segal Casual / formal
family dressing
Reference based
hiring Organization
Structure
OLD
Paradigm Roles &
Routines & Rituals OLD responsibilities were
OLD Static/Stable not clear
3 Bounces per year Lifetime Functional /
No performance Employment operational
Management No learning Culture 2 SBU’s
Board Meetings No Professionalism Separate Blocks
No training & Production oriented No HR Department
Development
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Figure B
NEW CULTURAL WEB FOR PEL
Symbols
NEW
Stories Slogan: We change
your life
NEW Parking Reservation
Professional image with executive
Developed system names and car
Proper recruiting number
Activities are Office interiors/ color
chanallized schemes
Professional suited
Organization
Paradigm
Structure
NEW NEW
Routines & Rituals No lifetime Hierarchies
employment 3 SBU’s
New HR Department
Performance Based Performance
Management Redefining job
Online Performance responsibilities
Appraisal Dynamic / Growth
Training & Knowledge sharing
Development Continuous learning
Professionalism Power Structure
Control Systems
Customer Focus
NEW
NEW Proper Reporting
IS & IT Improved Lines
ISO certified Chain of command
Improved Job descriptions are
Supervision revised
Open result of Reporting line
performance changing
management & Decentralized
Software installation HR portal
Online Performance
appraisal
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Figure C
Transition Stage of PEL
Individual Path
Organizational Path
Mobilize Move Sustain
Integration-making it
part of their activities
Denial-changing
Search for
structures
meaning-learn
from new system
Awareness
Incompetence- Testing-start
handling of implementing
System system (P.A)
Shock-HR Acceptance-realizing
Dept the value of HR dept
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