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Organisational capability

The restructure at Marks & Spencer’s will also see some of the HR people move into three new directorates. Employment standards, headed up by interim executive Claire Cutler, is responsible for overhauling the company’s rulebooks and needs little explanation. Organisational capability and design, led by Naomi Stanford, is more intriguing. One of the messages to come out of the Gratton workshop was that M&S had little internal strategic capability.

Dependent on external consultants for new ideas, Marks and Spencer was inward-looking most of the time, with a dangerous tendency to adopt whatever current fad was being touted by the consultants (Rana & Crabb, 2002). Th...

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...ese three managers, together with the heads of HR based in key business areas, Feltham and Sandra Cart, the head of shared services, are the bulk of the HR leadership team that has been steering the change programme since last summer.

A line manager, Marcus Powell, was drafted in to co-ordinate the change process. Each of them ncluding the HR director spends three days a month working in a store to make sure that they stay firmly in touch with the reality on the shopfloor. Like Marks & Spencer’s undergoing change, TESCO had to identify and agree workforce needs and interview all employees. These interviews covered the employees’ performances throughout the year and enabled managers to discuss with them their career aspirations and prospects (Parrish, 2003).

To prepare for this new and valuable role, all managers were trained to make best use of individual coaching sessions, a process similar to some of the staff appraisal schemes found in Marks & Spencer’s. For such meetings to be successful they must be open and honest, with assurances made to staff that they are not intended to be disciplinary. TESCO has a positive interest in individuals and their career development. This may be seen across the whole organisation and not just in terms of pay – it is company policy and is not left to individuals in the system to ensure that it works.

For example, six out of ten board directors, all four regional directors, 27 retail directors and nine out of ten store board directors at TESCO have come through the ranks. In 2001, 800 workers were promoted to managerial positions within the organisation (Parrish, 2003). Like TESCO, one of the biggest changes at M&S has been on the reward front. A senior bonus scheme, which used to apply to the top 50 or 60 executives, has been extended to around 1,000 managers (Rana & Crabb, 2002). This is partly based on profit. Staff are also eligible for sales-related bonuses, with four bonus periods each year.

This has proved to be a major driver of performance now that local managers have been given greater discretion over the awarding of bonuses. Powell tells the story of six staff in Pudsey who, finding themselves a few thousand pounds short of their sales target with only a day left, took a van-load of merchandise and set up a gift shop in Yorkshire Water’s head office to make up the difference (Rana & Crabb, 2002). Although this was bending even the new, more-relaxed rules, it’s indicative of the improvement in motivation and morale. A new bonus scheme, based on sales attendance, has made a significant difference.

For example, absenteeism in the food hall of the M&S store at the Metro Centre in Gateshead has fallen from 4. 5 per cent to 1 per cent since the scheme was introduced. These initiatives are backed up by hard numbers. Since November 2000, M&S has been sending regular staff attitude surveys to all its 60,000 employees (Rana & Crabb, 2002). The results are published throughout the company. In addition, M&S has started measuring its performance against other organisations. It is learning from British Gas and Nationwide leaders in the field of benchmarking as well as developing its own systems.

Unlike the other three organizations, the evolution of HR in the Inland Revenue needs to be seen against the background of major changes that have been taking place in the way that it is managed and organized, which are linked to central government policy of introducing ‘New Public Management’ (Ferlie et al. , 1996). This consisted of a number of elements across the public sector – a drive for efficiency, downsizing and decentralization, the introduction of general management and internal markets and concern with quality and the customer (Currie & Procter, 2003).

Within the Inland Revenue, New Public Management manifested itself, first, in government cutting budgets, particularly through reductions in staff costs, while simultaneously attempting to increase the quality and quantity of service output. Attempts to negotiate this contradiction help explain the origins and intent of many of the managerial initiatives, such as teamworking (Currie & Procter, 2003), that have emerged over the past twenty years in the civil service (Fisher, 2000).

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