IntroductionIn order for a company to survive, it must go through changes. It must continue to evolve in order to flourish in an ever changing environment. This report will evaluate the recent changed in the commission structural change for the estate agency, ABC Ltd, and more specifically, the effect this has on the payroll department. The focus will cover 3 areas. Firstly, the impact of management style on the department, what style of management is used and how this could perhaps be improved. This report will also discuss the most relevant theories in relation to the experience of the payroll department. The second point will discuss the management of change, what internal and external factors are most material for ABC Ltd and once again, any theories that may be significant.
The final focal point will be performance management and how this is carried out within the company.The payroll department within ABC Ltd is relatively small, consisting of the Head of Payroll (HoP), a Senior Payroll Assistant (SPA) and a Payroll Assistant (PA). This gives both advantages and disadvantages. The benefits of working in such a small and close knit team include the ability to recognise individual personalities and differences. Thereby tailoring the work load to suit each member of the team. Conversely, there is also the assumption that each member of the team will take on a certain amount of accountability and responsibility. Although some individuals may strive for this, it is not to everyones satisfaction, as will be discussed later in the report.Impact of Management StyleThe structure of ABC limited is hierarchical, with orders being filtered down from on high.
This does not give the employees who are most impacted by the change the opportunity to give their view point before the change is finalised and ready to be put in place. A change in commission structure does not necessarily have an effect on the payroll team in respect of their pay. It does however have a major effect on the work processes. The vast majority of work done by the payroll team is affected by the change and this change must be implemented in a very small amount of time before the new banking year begins. During the recent structure change, the amendments were implemented as it had been before, the HoP took on the work with little or no delegation to the SPA or PA. This is suggestive of the traits seen by a manager in opposition to a leader, such as the need to control, have high efficiency and focus on results.
This however led to the HoP working long hours of overtime. This also caused the employees to feel that they were not to be trusted in the implementation of the change, and were solely being instructed. If the HoP had taken on the approach of becoming a leader, the work could have been delegated. This would have decreased the amount of extra work put upon the HoP and increased confidence in the other members of the payroll team.It is then the HoP responsibility to pass this knowledge onto the other members of payroll.
It could be recommended to make a champion for change. This would provide the HoP with more time to focus elsewhere. Furthermore, a member of the payroll team may be more willing to take on the change when it comes from a fellow member of the team. This can reduce the stress imposed on them by the change.It is imperative that the HoP recognises that the members of the payroll team are individuals with differences in aspects such as personality, attitude, learning styles and background. “Effective organisational performance demands an understanding of and a response to, diversity” and a “work climate tha respects individual difference” (Mullins, 2007). In this situation is has been obvious that the members of the team need to be treated as individuals.
The SPA tends towards McGregor’s Theory Y, and would suit this style of management. However, the HoP and style of management used during the transitional period lean towards Theory X. Person Y would like to be more involved in the processing of the change. This would lead to increased motivation and possibly more effective ways of making the change, as “Theory Y states that employees actually become more productive when more trust and responsibility is delegated to them” (Mohamed & Nor, 2013, pp.717). By excluding this employee from assisting with management of change within the payroll department, this would lead to the individual feeling that there is a lack of trust in that individual. Furthermore, this could lead to the SPA not pushing forward ideas that could be beneficial to the organisation as a whole. Therefore despite possibly having the knowledge and intelligence to be beneficial to the company during the period of change, the SPA may not have the willingness or confidence to push forward their ideas.
This therefore argues that Traits Theory, as the person who on the surface appears to lack the obvious traits of a leader, for example charisma and self confidence, may be the one who would step forward when leadership is needed. Be it in the shape of delegating tasks, making decisions, or communicating with other departments.Conversely, the PA in the payroll team would tend more towards the Theory X, and flourishers when being led and directed. This individual would take no insult at having no input into the processing of the change.
Despite Theory X being considered as a negative way of dealing with employees (Mohamed & Nor, 2013, pp.717), this could merely indicate that the HoP must treat the two individuals within the payroll team very differently when training for the organisational change. It would be beneficial for the HoP to spend more time with the PA as this individual may need more one on one time and training then the SPA. Change ManagementThe organisational change faced by ABC Ltd is driven by both internal and external factors. The extenal factors can be found in some aspects of PESTLE analysis:? Economy – Change is dependent upon the success of the company at any given time. In a time of economic success ABC Ltd would implement changes that would be beneficial to both the company as a whiole and for the individual employee.
Thereby encouraging them to work harder towards financial goals and possibly ensuring their loyalty to the company.? Legal – The commission structue must take into account the National MInimum Wage. ABC Ltd has ensured that the legalities of the change have been considered throughout the process and the company has not fallen outside of the law.The company must also take into account the internal factors of employee turnover. There is the possibility that employees may leave the company to work for competitors who are offering better rates of pay, hours or position. Therefore, ABC Ltd much ensure that the change is balanced between keeping the employees motiivated and loyal, and ensuring that the company continues to thrive.Successfully implementing changeFor a successful implementation of change, it would be advisable to follow K Lewin’s Model of Change.
This can be found below and each stage will be discussed in relation to ABC Ltd’s period of change and how well the model has been replicated in the business. Figure 1: Lewin’s 3 Stage Change Model (Mulholland, 2017)Unfreeze – The aforementioned internal and external drivers of change will determine that a change in commission structure is needed. The current economical climate within the estate management industry has led to the decision to decrease the standard commission percentage. This has been weighed against the possibility that a decreased percentage may lead to employees moving to competitors. Furthermore, the need for change had meticulously been discussed and studied by the directors before the final decision to implement the change had been finalised. Firstly however, before the change can begin to take place, “restraining forces such as personal defences, group norms or organisational culture” must be unfrozen (Weick & Quinn, 1999).
ABC Ltd recognise that a change is necessary however this must be communicated throughout the company and may lead to uncertainty. This would allow them time to recognise and manage any doubts or concerns that materialise as a result of the plan to make the change. Unfortunately, although ABC Ltd is strong in recognising that a restructure of commission is necessary, the company fails in communicating this to the appropriate staff in a timely manner. The information was provided to the payroll department with instruction that this should be implemented almost immediately. This did not allow time for the change to be processed at both an individual level, and a departmental level. Leading to the majority of the discussions and meetings taking place solely with the HoP, and the other members of the department feeling demotivated and excluded.
Change – Once the decision had been finalised, this should be filtered throughout the company to practically apply the change. It would be expected at this point that time had been taken to communicate and train all members of staff in the effects of the change at both an individual level and a company wide level. “The aim should always be to link the management of individual performance to the goals of the organisation’, (Zain & Leonard, 1996). Due to the lack of time and communication aforementioned, it was observed that each departmental manager used their own initiative regarding how to implement the change needed from their perspective, The major resulting issue was that the management of change became segmented. Thus, leading to frustration, as the individuals that were at the heart of the change phase were not provided with the information needed or received incorrect information. This does not fit in with a successful implementation of change which should be a process of “effective communications and empowering people to embrace new ways of working” (Poell, Rocco & Roth, 2015).Refreeze – Once the structural change has been implemented, as seen in Lewin’s model, it must be refrozen to once again become the norm. This stage can only take place once the change has been accepted by all those involved, as can be seen in the Kubler Ross Change Curve (Fig.
2). At any point in which the members of staff involved in the change have not reached the stage of acceptance, the change cannot be completely successful. In order to reach full acceptance, the management could provide further empathy and emotional support to the staff involved. Thereby providing a smooth transition through the change process. ABC Ltd could benefit from both providing formal training for the employees involved in implementing the process, and providing clearer information to the end user and how they will be affected. Currently, any information provided to the SPA and PA is incidental. This can be extremely detrimental and time consuming to the payroll process.
Although the change is in the process of being refrozen, it may be that not all members of the payroll team have reached the Acceptance stage of the Kubler Ross Change Curve. It was noted that after the change there was an increase in errors on the payroll, due to a lack of basic understanding. This would lead to increased amount of time consumed in rectifying errors, and increased costs to the company. Figure 2: The Kubler Ross Change Curve (Shaw, 2015)Performance ManagementLet it be noted that Lewin’s Model of Change does not simply stop once the change has been implemented.
On the contrary, there should be “continuous evaluation of the success of the implementation stage” (Thomson, 2002) to ensure the standard of performance stays high. Performance Management can be Standards Orientated of Excellence Orientated (Zain & Leonard, 1996). A manager who’s focus is on maintaining high standards can be known as a Transactional Leader, who is most likely to “enforce disciplinarian actions..
. formulate & implement policies and motivate superior performance through a systems of rewards and incentives”(MSG Experts, 2017). Conversely, performance can be managed through Transformational Leadership.
These individuals manage by setting an example, motivation and creating a vision. The payroll department constantly strive to maintain a high level of accuracy. Despite some aspects of transformational leadership within the team, for example, the members of the team are often encouraged to take on further learning, performance is generally managed in a tranl cippsactional way. The reason for this could arguably be the dominatingly quantitative nature of payroll. Performance management can be implemented in a number of ways including, KPI, appraisals and goal setting.
The payroll department of ABC Ltd use Benchmarking to ensure that levels of accuracy stay high. CIPP measures the quality of a payroll service using the following 4 key measures:1. Accuracy, timeliness and completeness – evaluation of the effectiveness of end to end HR/payroll processes2. Compliance with statutory filing/payment deadlines3.
Data security/confidentiality 4. Value for money(CIPP, 2017)ABC Ltd use the CIPP Benchmarking to measure their performance against an industry standard. This allows them to continually maintain a high standard which would be expected of the company management, end user and any third parties which have an interest in the company. Currently, this feature is used sporadically to monitor the level of accuracy within the department. However, this could allow the department to maintain an element of control over performance during the company change in commission structure. It may be possible to further use benchmarking to a fuller potential by setting a standard of accuracy from the point of the company change. Should these levels drop below a this standard, it may be indicative of various shortcomings within the department.
For example, a lack of understanding and the need for further training, or possibly a negative attitude towards the change and a lack of ‘Acceptance’.ConclusionTo conclude, it was successfully recognised, using both internal and external factors, that an adjustment to ABC Ltd’s commission structure was necessary. This has been somewhat successfully implemented from a payroll point of view. This can be argued as all changes that needed to be made were enforced correctly and within the time frame. This is arguably of the utmost importance as the primary objectives of a payroll department are timeliness and accuracy. This success can be based on the following points. It had been recognised that within the payroll department there are individuals who have to be managed differently amid times of change. The payroll department also make limited use of benchmarking.
Thereby allowing for recognition of any shortcomings within the department, exactly where these fall, and therefore how they can be improved upon. However, as the economy is ever changing, there will no doubt be further changes to make in the future. Therefore, the porocess could be improved upon using the following recommendations.
RecommendationsDespite a relatively successful transition during the period of change, there are some recomendations that could be made in order to enhance the process for the payroll department:1. Time – Increase the amount of time available to the department allowing preparation and the essential training needed to have full understanding of the change at hand.2. Communication – Both inter-departmental and within the department would allow for collective decision making and therefore mutual satisfsaction.3.
Training – Provide professional training on the subject would for complete understanding of what is to be expected of each member of the team.4. Delegation – Create a ‘Champion for Change’. This person will have in depth knowledge of the subject which can then be passed onto other members of the team, other departments and the end user.
5. Benchmarking – Make further use of this tool to enable constant monitoring of performance levels throughout and after the period of change.