Definition of Industrial Restructuring

Dear learners, we have seen in the previous units about performance management, how it is effected through Organisational structure, workplace and motivation and morale. In this unit, we are going to look with another topic called “Industrial restructuring”, which helps in redefining the performance of an organisation.

Industrial Restructuring

Business and economic environment is constantly changing and changing rapidly. The quantum and the quality of the impact is so high, that sometimes the structure of the industry becomes out of date, if the organisation and the industry is not taking turn towards restructuring. The responses of the industries to these sea changes are often path breaking innovations like

Industrial restructuring

Outsourcing

Globalisation

Empowering

Merging and collaborating etc.

However, our interest here is mainly about industrial restructuring. Global interest in industrial restructuring is growing in a fast pace. Restructuring is focused on the underperforming industries to achieve break through result in terms of major gain in process, product and performance and eliminating irrelevant cost by identifying redundant, poorly planned and ineffective activities.

Scope of Industrial Restructuring

Industrial Restructuring is targeted to improve the overall performance of an organisation. It is supposed to

Improve financial performance

Enhance the customer satisfaction

Reduce production and operation cost

Improve quality of products

Improve HR performance

Improve employee participation in management

Reflective Restructuring

Industrial Restructuring is undertaken to adapt to the changes in the economic environment. Industrial Restructuring is a striking feature of the economic landscape. However, the patterns of Restructuring vary from one country to another and across sectors. It cannot be generalised that, Restructuring has been taken to as a solution by many countries yet. Downsizing, outsourcing and layoffs are still part of the traditional response to the fragile economic climate prevailing in many developed as well as under developed countries.

But it is a welcoming change that, in recent times, a lot of creative and innovative approaches of HR practices like training breaks, flexi work schedules, job-sharing, sabbaticals, working from home are all part of the new restructure work practices, successfully implemented and practiced in many industries all over the world. These practices are called as ‘reflective Restructuring’. Whatever the approach, Restructuring represents an attempt at managing and anticipating change, simultaneously tackling issues of economic, social and environmental significance. We have discussed these practices in detail in Unit III, Under Contemporary Thinking on Employment Practices.

Business process Reengineering

BPR is proposed by Michel hammer and Champy. BPR is defined as “in order to take a leap to improve the cost, quality, service, speed and other operational foundation of the modern enterprise, enterprises should take fundamental rethinking and radical reform in business process.

The important aspects of BPR process are

The vision and objectives to be developed to suit the new necessities emerged out of the changing environment. It may be like insufficient resourcing of raw materials, customer relocation to other brands, higher attrition rates etc. According to the change to be introduced, the development of vision and objectives are developed

Without knowing the existing process and operations of a company, the change cannot be introduced, as it would be disastrous. Hence, the study on the existing process will help in understanding the path to introduce to reengineering process

As the destination is decided, and the process that is existent in the organisation is known, now a new design to bridge the both ends can be developed

Any introduction of new process, may be reengineering or restructuring would be difficult to apply on a whole. Hence, it is best advised that, before interventions, change levers to be identified and it would be easier with the levers to pull it through.

Now, the next step is to introduce the new process with the identified levers to change.

Next step is to make the reengineering process fully operational.

Now, evaluate the implemented process, collect the feedback, find the flaws and once again go for new developments in the process, keeping in mind the problem areas and finding solutions for them.

Business restructuring rejuvenate people. A new improved change in process flow boosts the confidence of the people, by infusing growth and change as part of the working culture. Wondering how? Imagine your school or college days. When you return to school on the first day of your new academic year, after summer vacation, what do you happily expect? A new class room. In your home, a small change like changing the direction of your sitting room sofas creates a new interest. In the same dosa your mother makes, she adds up colourful carrots one day, the result – she feels rejuvenated by the change in the process and you feel happy for the new product.

Approaches to restructuring process

Industrial Restructuring would be a success if the following postulates are adhered to:

Approaching a complex situation without under laying the internal competence

Calling for the right competence and radical thinking skills to handle the situation

Adding up weightage and giving importance to strategic innovations brought by the competence called in for.

With organisational commitment creating an strategy momentum through these value innovations

The organisational commitment will bring the expected advancement inside-out and the mission will be accomplished

As we speak of restructuring and the changes that would follow the process, it is to be understood that it needs a lot of motivation, attitude, knowledge, creativity and strategies to implement the restructuring process.

The management has the responsibility of effectively communicating the development programmes through meetings, discussions, seminars or by any other method, which will make the road smoother for this uphill task. Restructuring the workshop floor and changing the technology and machines in the floor can be achieved overnight. But, the individual employees see the restructuring through different glasses. The reaction to change is different and unpredictable. The examples may be – denial, acceptance, shock, etc. Employees may resist for restructuring due to three major reasons:

when they are comfortable with the present structure and process of the organization

When they are left in dark about the reasons of restructuring

When they don't have confidence on the organisation's abilities and viabilities of successfully achieving the restructuring and the desired output.

To overcome these problems, the Top management should gain commitment o the need for Restructuring. As a first step, the modifications in the vision statement should be clear and target oriented. For example – cost reduction, customer satisfaction, enhanced productivity, resource utilisation etc. The active participation of the top level management and the middle level management will bring in an overall cooperation from the employees. Then with the help of a positive work culture the restructuring will be possible.

In short the restructuring would be effective if

Driven by the top management

Employees treated with respect and empathy

Vision clearly created and communicated

Restructuring designed with a holistic approach

Reward systems and Employee Productivity

Dear learners, you have gone through the rewards and their importance in HRM in your previous semester, and I hope you would have been duly rewarded with marks for that in your exams. Rewards and recognitions are essential for appreciating the employee's work and inspiring them for continuous good performance. Again taking the example of exams, a word of appreciation or a promise of reward like a new mobile or new computer for good performance from parents will certainly do magic to a child to read more carefully and enthusiastically.

That’s why we say, recognition for our efforts inspires us to even higher level of achievement. Rewarding and recognising does a lot more to people and their performance than any other management activity. Hence, now we are going to look into the system of rewards in an organisation and the impact of reward system on employee productivity and performance.

Reward System

Dear learners, we have already discussed this under another dimension of “strategy based performance management systems – reward Based” in Unit III. Now, let us see here the other dimension of it – Reward System of the Organisation and how it effects performance.

Every organisation needs a good reward system to keep the employees believe in good work. A good reward system should necessarily see to the four major areas:

Compensation

Benefits and perquisites

Recognition

Appreciation

The combination of the above said four rewards would be an elixir to the motivation problems in an organisation. Most often the HR managers strictly adhere to the rules of reward system, measuring the productivity to compensate the employee. Missing of one or more elements like recognition or appreciation, which are very rarely used, leads to a poor reward system.

A good reward system should be able to see the two sides of an employee essentially-

Performance and

Behaviour