Caution: re-engineering in progress

HR Magazine, June, 1994 by Rose McElrath-Slade

A process that is more complex than quality initiatives of the past, re-engineering needs the talents of the best employees to avoid these eight pitfalls.

Over the past few years, U.S. business has gone through numerous organizational changes attempting to remain competitive. With restructuring, reorganizing, downsizing, rightsizing, quality improvement programming and many other changes, the message is to basically do more with less while maintaining some level of efficiency.

So you might think that initiating a re-engineering effort is much of the same. Nothing could be further from the truth. Take a moment to think of the changes you have implemented or have been part of in the past two years. In 99 percent of the cases, if not all, the changes have happened within the same management, cultural, performance and process schemes that previously existed. In short, you are still basically performing business as usual, within the same process framework. This approach is fine if you only need to make minor adjustments to reach corporate objectives or goals. You would not use a sledgehammer to put a nail in a wall to hang a picture.

So what is re-engineering, and how does it affect an organization's human resource functions? Re-engineering is by far the most misused business model in corporate America today. It requires us to re-evaluate and, in most cases, abandon the very organizational and operational principles and procedures we have depended on for years. People are by nature creatures of habit and naturally resistant to change. This resistance to change at all levels of the organization, along with a tendency to narrowly define the scope of the task, are two of the primary causes re-engineering efforts fail to achieve long-term, bottom-line results.

Successful organizations have been able to overcome this trend by providing strong and continuous leadership from senior management; total commitment of key resources for planning, development, implementing and testing; and effective communications at all levels of the organization.

HR AN INTEGRAL PART

Human resources must be an integral part of any effort. If an organization or business center expects to re-invent itself, then its personnel needs and services must also change. This re-invented business center becomes a new customer for HR to service.

The first challenge is to understand the effects of new processes on the various required skill sets. As tasks are integrated, requirements for new multidimensional and multi-faceted positions will be created. This will also increase the level of required experience, training, interpersonal skills and problem-solving skills. There will be trade-offs whether to retrain or replace current employees.

Managers and senior executives will have to devote extra time as motivators, facilitators and leaders. Their primary focus no longer will be on supervisory tasks but on coaching core teams, enhancing and supporting the process. Many decisions will be made within empowered core groups or by front-line employees as a result of redefining management authority.

MEASURING RESULTS

Compensation and performance measurements will shift from activity to results. Tasks that are fractionalized have no quantifiable value. Only the finished product or service has true value that can be measured. In this performance-driven scheme, current performance is not necessarily an indicator of future performance. Therefore, in a re-engineering environment, base salaries tend to stay flat except for adjustments for inflation. The emphasis for rewarding outstanding performance becomes an enhanced bonus structure.

However, compensation programs must ensure that they support the process redesign by providing a compensation program that rewards the highest levels of productivity while still being able to respond to competitive pressures. HR must keep employees informed and gain their insight. Remember, the compensation plan is an indicating factor of the organization's resolve to embed this change and to reward participants.

As HR management supports this redesign effort, you may begin to fundamentally rethink human resource processes and ask yourself, "Is there a better way?" I strongly recommend that before you invest in a new or upgraded human resource information system, you evaluate your current processes. Technology may not be the answer if the process is broken.

PITFALLS OF RE-ENGINEERING

As important as it is to understand how to re-engineer, it is vital to understand how to avoid the traps--to be able to see the red flashing lights. Here are some key pitfalls you want to avoid:

1 Poor sealer management involvement and support.

Recent studies show that there is a direct correlation between meeting expected bottom-line results and senior management involvement. Commitment through actions such as changing organizational culture and ensuring active support of middle management and front-line staff is invaluable to a successful implementation. Quarterly progress reports will not do. The success or failure of this effort rests in the resolve of senior leadership.