Introduction

          Banksia is a medium-sized hospital operating in rural locations providing community, acute and aged-care services. Banksia health care service has grown from one to many hospitals since its inception in 1990s. Lately, the organization is under scrutiny for not performing optimally and involving itself in avoidable industrial disputations. After many independent investigations, it was established that the organization’s HR policies and procedures were not upgraded to accommodate the requirements of the organization’s growth. Though some changes were introduced in the structure of the organization, they did not seem to bring about any positive reinforcement. The following sections discuss the problems and challenges of Banksia at length and analyze them in the light of contemporary HRM theories and practices. Some viable solutions to improve the current predicament are suggested at the end of the analysis of this case study.

HR Challenges at Banksia- Critical Analysis

            Banksia faced various challenges concerning operational efficiency, HRM, organizational strategy and practices and internal communication. There were some issues with conflict of authority and differences of opinions amongst the senior management also. The business value of HR approaches has always been under scrutiny by the senior management in many organizations (Gardner, McGranahan & Wolf. 2011). The problems are summarized below with a detailed analysis of the situation.

• The organization clearly lacked long-term strategic plans, which directly affected the operational efficiency. Public sector organizations mostly are prone to issues relating to ambiguity about objectives and frequent changes in government policies and procedures. This also is responsible for the impersonalized organizational structure, which is turn, is largely responsible for the lack of operational effectiveness. Banksia was backed by government funding and hence was responsible for providing community service unlike private hospitals that largely pursued commercial motives. It also operated in an uncertain political environment with limited resources and was constantly subjected to rigid statutory regulations and legislations. In spite of having a mission to pursue, the organization lacked well-designed strategy due to the ineffective leadership. Banksia faced a phenomenal challenge of dealing with a management that had a stereotypical view of operational effectiveness and overlooked the importance of innovation and change as imperative to survival in competitive environment.
• The absence of a formal HR department and inefficient HRM was the most critical challenge for Banksia Healthcare Service. The experienced CEO handled most of the HR related operations and delegated certain HR duties to clerical staff. The organization was in dire need of a specialized approach towards the HR related issues such as HRM policies and procedures, industrial relations and internal communications. The importance of HRM can be gauged from the definition of HRM as stated by Bratton and Gold (2007),

                        ” HRM is a strategic approach to managing employment relations that emphasizes that leveraging peoples’ capabilities is critical to achieving competitive advantage, this       being   achieved through a distinctive set of integrated employment policies, programmes        and practices”.

            Banksia failed to adhere to these parameters on many levels. Designing HR policies and    practices needs dedicated and in depth knowledge about the subject which the       personnel at the organization did not posses.

• Organizational strategy is vital to achieve the desired mission as it gives a direction to various functions of the organization and synchronizes their efforts towards a common goal. An expanding organization can be completely out of control for the lack of an explicit organizational strategy. In context of public sector organization, Lynch (2006) suggests that though some form of business strategy is essential for all organizations, it becomes crucial in public sector companies, as profit making is not the only objective. Hence, strategy needs to reflect the values of the organization and take into account internal and external factors influencing the organization.
• Internal communication- Since there were no precise HR strategies and policies, most of the operational rules were interpreted as per the understanding of the senior management. When such strategies percolated down the organizational hierarchy, it was again loosely interpreted by the employees creating a lot of scope for mismanagement and operational errors. Since senior management was reactive to the external environment, the decisions were mostly ad-hoc and frequently changed, it made the situation very critical. Identifying and managing change in the organization in an integral responsibility of HRM. Effective change management proactively prepares the organization by formulating strategies to tackle the situation.
• Senior management- All important responsibilities of HR were handled by the senior management who were held conflicting opinions on most of the critical issues. For example, the administrative functions were handled by a payroll officer. Administration of a large service organization requires a detailed planning and analysis for smooth functioning of departments. At Banksia, this responsibility was highly underappreciated and handled impromptu by the management. For an organization undergoing restructuring, it becomes extremely important to have jobs roles allocated according to the skill set of the personnel. It also needs constant monitoring and coaching in lead effectively in the direction of individual and organizational goals.

                        Human Resource Management is based on the premise that organizations perform better when their HR is managed with relevant policies and practices. Contemporary organizations with large and complex structures have realized the importance of a dedicated HRM that synchronizes the efforts of human resources throughout the organization towards a commonly accepted business mission.

Recommendations for Banksia

            Operational ineffectiveness and below average performance had been taken into account by the management at Banksia. A strategic restructuring of the organization was done to synergize the outputs. However, it lacked direction and control. Withers, Williamson and Reddington (2010) argue that when organizational structure changes, work processes will also change which means that organizational boundaries between different roles will need appropriate consideration to integrate work. Various aspects of communication processes, cross-organizational work groups, reporting and governance will need specific consideration.

            The management at Banksia had designed a plan to recover the organization from certain issues leading to low performance levels. A few changes, as stated below, are recommended for creating an effective strategic plan and its reaping maximum benefits for the organization.

• Developing HRM as a strategic function- Banksia Health Service should immediately acknowledge HRM as a strategic function and create a human resources department to delegate all the related responsibilities to specialized and trained HR personnel. Senyucel (2009) defines strategy as plan of actions designed by the senior management to achieve a favorable position in the competitive environment. HRM strategy leverages the human resources to achieve the management objectives.  As advised by Bloisis (2007), HR at Banksia will manage the following issues :

*                    Current State of the workforce – Employees at Banksia are divided in opinions and interpretations about the organization strategies and work processes. HR should develop a specific work plan, percolate it throughout the organization and ensure that the workforce sticks to the plan.

*                    Internal strengths and weaknesses – The HR department should identify the internal strengths and allocate job roles for optimum utilization of those strengths. It should also investigate the internal weaknesses and invest in training and development of the personnel as required. The strategic plan should be designed such that it considers limitations of the workforce and harnesses strengths of the maximum.

*                    External opportunities and threats – Banksia had a reactive approach to external environment, which has led the organization to a number of industrial disputes. The HRM policies were mostly adapted from other organizations, which lacked relevance to the organizations needs.  When organizations work in a volatile environment like that of Banksia, the HR strategies need constant review and updating to maintain a clear competitive advantage.

*                    The path – Once Banksia devices customized HR strategies, it should design a workflow with appropriate resources allocated strategically. HRM also has to ensure that it is clearly understood by the employees at all levels. Constant review will ensure that corrective measures are taken well in time in case of any discrepancies.

• Restructuring organizational hierarchy – Banksia was controlled by a team of senior managers who took ad-hoc decisions in response to the changing external and internal environment. There was no uniformity in responsibilities or operational activities. This led to many conflicts in the work place and had severe implications with respect to mandatory regulations and external environment.

            The management at Banksia should consider every employee’s skill set and allocate job responsibilities accordingly. HR department along with the senior management should align organizational objectives and processes with employees’ needs and strengths in an organized way.

• Developing sound organizational culture – Organizational culture is the inherent framework that define the behavioral norms, values, attitudes and expectations at workplace. It gives a sense of belongingness to the employees and makes them feel connected to each other. While the attitude of the senior management in important for facilitating the culture at workplace, HRM also plays a significant role to design a high performance corporate culture. In fact, the multilevel integration of organizational culture with societal values, management values and expectations and individual values is vital to operational efficiency and organization’s overall performance.

Impact of communication on Organizational Change

            In spite of having a workforce of 500 employees and experienced senior management, Banksia lacked synergy in efforts. Since there was no formal line of communication, the HR policies and practices devised by the senior management were not interpreted uniformly across the hierarchy. The employees at Banksia unanimously felt the need for an HR department that could facilitate upward, downward and lateral communication across the organization.

            Whenever an organization undergoes change in management or structure, the most common reactions to this change are resistance, ownership and uncertainty (Miller, 2012). These reactions cannot be completely eradicated but their ill effects can be mitigated to large extent by an effective communication about the change in the organization. The method, time or amount of communication may vary according to the management’s decisions and organization structure but the importance of communication cannot be underestimated. There are numerous approaches to communication strategies in case of planned or unplanned organizational change. Classical and systems management theories are developed on the presumption to control the behavior and reactions of the workforce for avoiding disruptions during or after organizational change.

            Planned organizational changes are in response to new challenges or in anticipation to prepare for future threats or opportunities. Irrespective of the reason, the underlying principle for change is improvement. Communicating this principle to the employees can augment the overall process and reduce the resistance from most quarters. Impact of effective communication on organizational change can be summarized in the points given below:

• Increase in employee involvement- In contemporary businesses, only employee compliance cannot fetch the desired results of organizational performance. Employee involvement and the acceptance are vital to have a consistent individual performance. Effective communication about the need for change and change process ensures that the employees understand the organizational objective for change and accept them as inevitable and beneficial.
• Reduce external and internal resistance- In absence of communication about the change plan, it can be perceived as unfavorable by the workforce leading to resistance from the employees. Employee resistance can have disrupting effects on the operational efficiency and employee morale. Lack of communication can have huge negative effects on the employees as they are not in the planning process and may perceive change as imposed. Need for change and change plan needs to be communicated to the external stakeholders to avoid resistance or negative publicity.
• Provides direction in new environment- Organizational changes leads to some operational and managerial changes. There can be basic changes such as change in job roles or some complicated changes in compensation or reporting structure. Detailed communication about change provides a direction to the employees to understand and adjust to these changes.
• Reviewing and rectifying the process- Effective upward and downward communication helps in reviewing the execution of change plan and facilitates rectification wherever necessary. Communicating with the employees in the initial stages of change increases the chances of response from the workforce in the later stages.

Ideal Communication Plan to manage change

            Change is a global phenomenon. Change can happen in organizational structure, work processes, management, technology or people. While some changes may be unplanned and forced due to unavoidable or uncontrollable circumstances such as natural calamities or regulations, some changes may be planned to accommodate predictable changes in external environment. Any change in organization needs strategic planning to reduce allied risks and losses. An ideal change management plan should take into consideration all the factors affecting this change and its implications on the organization as a whole. Communicating change to employees across the organization is a very significant part of the whole change management plan. The most effective communication about the upcoming change can be identified by the following characteristics:

• An effective communication about change should start well in advance and should give ample time to employees to understand and adjust to the change. Lesser time to understand the changes will lead to misunderstandings and operational errors.
• Usually, an effective communication flows from top to bottom. The senior management should gradually percolate the changing strategies and processes towards the lower hierarchy. This gives out a message that the change is accepted uniformly across the organization.
• The mode of communication should be accessible to all employees. There can be multiple attempts at communication so that it reaches all employees. Emails, notice boards, newsletters etc are effective in large organizations. Department managers, however, should be addressed through personal meetings to clarify any doubts about the changes because they will have to communicate the changes further down the line.
• An ideal communication plan can be characterized by its tone. It should clearly communication that change in inevitable but for betterment of the organization. It should sound of conviction to the employees that change is important for survival and growth of the organization.
• Effective communication plan should prepare the employees for the upcoming challenges and resultant benefits. It should communicate that the organization will equip the employees to face the challenges and that they should be intimidated by them. The communication should also mention the benefits that change will bring to encourage involvement amongst the workforce.
• Later stages of change should include upward communication to determine the effectiveness of the changes in processes. This feedback needs to be taken into account to take corrective measures.

Duties of HR Manager at Banksia 

            Analysis of the situation at Banksia has led to an inference that the organization needs dedicated and specialized services of HR department and a HR manager. Traditionally, HR manager performs duties related to recruitment, training and development, payroll and some administrative jobs. However, in situations such as expansion or organizational change, HR personnel perform lot more complex and critical functions. HR manager can also work as an internal consultant who serves as a change agent, educator, and facilitator working within the organization to resolve HR issues and implement solutions (Trotter, 2008).

            “In order to establish the next generation HR function, the HR leader must see transformation of the function as a personal mission and the most important means of contribution to business success. The leader must be willing to challenge the status quo, move administrative work out of the hands of Business Partners and CEOs, and functionally change the nature of many roles within HR. The leader must also identify the people capabilities necessary for success and be willing to build or acquire those capabilities missing in the current HR population. The role of change agent is a difficult one, but it is absolutely essential to the successful transformation of the HR function” (Mercer, 2010).

At Banksia, the senior management was not completely convinced for creating an independent HR department or employing a dedicated HR manager. This was largely because of ambiguity about the responsibilities of HR manager. The importance of HRM for organizational performance and operational efficiency can be emphasized by identifying the duties of HR manager.

• Designing and implementing HR policies at Banksia – Absence of HR policies was a critical issue at Banksia as it was directly affecting operational efficiency and organizational performance. HR manager should be responsible to developing a set of HR policies that will form a cognitive framework for the organization. He should ensure its implementation and address all issues related to interpretation of those policies.
• Aligning work processes- Restructuring at Banksia needs aligning work processes according to the new process flow. HR manager should be responsible to identify the skill sets of individuals and align them to the respective job roles.
• Training and development- HR manager should be responsible for identifying training needs in various departments and ensuring that the effective training is imparted to the employees at frequent intervals. Training and development is extremely important for maintaining high standards of individual performance in healthcare organizations.
• Recruitment, transfers and separation- HR manager should identify the need to create new jobs or the need of a new employee for an existing job and recruit eligible personnel for those jobs. Due to restructuring and realigning of jobs at the organization, HR manager should be made responsible to execute interdepartmental transfers on requests from department heads. In case of an employee deciding to separate from the organization, HR manager should counsel the employee and take feedback about his experience at work.
• Proactive management of industrial relations- HR manager should be accountable for identifying changes in the external environment and take precautionary measures to prevent damage to the organization and avoid industrial disruptions.
• Manage statutory compliances at Banksia – As stated while analyzing the problems of Banksia, it was highly accountable to the government and legislative bodies due to the funding from the government. HR manager should ensure that all mandatory regulations are adhered to at Banksia and it remains a complaint organizations at all times.
• Designing a line of communication in the organization- Banksia lacked a formal line of communication, which created many problems throughout the company. HR manager should not only create a formal communication line at Banksia, but also propagate the use of this communication among st the employees. Thus, keeping in constant touch with the employees will help the management determine the efficiency of work processes at all levels of hierarchy.

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