Resistance: Addressing the Personal Compact Andrew Neang IMT 581

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1 Resistance: Addressing the Personal Compact Andrew Neang IMT 581

2 Problem Managers continually fail to understand how to address the escalating effects change has on individuals within their organization. According to professor and director of the Change Program for international managers at the International Institute for Management Development Paul Strebel, he attributes resistance to the violation of "personal compacts" (formal, psychological, and social) that management has with their employees. The mutual obligations and commitments between employees and organization are not defined in context to the proposed change. In essence, the change initiative doesn t generate any feelings of enthusiasm, acceptance and overall commitment for it among employees (Strebel, 1996). The difference in perspective of change between managers and employees is a major root cause as to why so many change initiatives fail by violates employees personal compact (Bolognese, 2008). For many employees, change is not accepted easily due to its disruptive and intrusive nature. Employees are taken out of a place that they know and are comfortable with and forced into something new (Prosci, 2008). The negative emotions that accompany change leads to resistance among employees since they anticipate hardships and struggles will be present. In contrast to top-level managers, change is viewed as opportunity to strengthen the business, to take on new professional challenges and risks, and to advance their careers (Strebel, 1996). By not carefully taking into account the perspective of change among employees, personal compacts are not being clearly defined in manner that motivates employees to buy into the organizational change which leads to overall failure.

3 What is a personal compact? A personal compact refers to the formal, psychological, and social dimension aspects of the relationship between the organization and employees. It is the mutual obligations and commitments that is stated and implied between both sides (Strebel, 1996). The three dimensions of a personal compact are defined below: Formal: Addresses an employee basic tasks and performance requirements as defined by company documents such as job descriptions, employment contracts, and performance agreements. (Bolognese, 2008). Managers in turn provide the necessary resources for an employee to perform their tasks. Psychological: Addresses elements such as trust, loyalty and dependence between employee and employer. The foundation of an employee's personal commitment to individual and company objectives is built through these elements Social: Addresses employees' perceptions about the culture of the organization which tie to the values of the mission statement (Brown, 2007). Why address personal compacts? Failure to address personal compacts can have significant financial consequences on the projects and on-going change efforts. Every new change destabilizes the relationship between organization and employee which is why the revision of personal compacts is necessary. Change creates a shift in organizational dynamics (social, formal and psychological) that can be extremely uncomfortable for employees and lead to overall resistance (Brown, 2007). Some of costs of resistance include project delays, objectives missed, productivity decline, absenteeism, and loss of valued employees (Prosci, 2008).

4 Below are two cases in which the successful revision of personal compacts ensures that change initiatives could be successfully implement. Employees in both cases were able to determine their responsibilities, their level of commitment to their work, and the company s value (Strebel, 1996) Phillips During the 1980s Philips started to have trouble in getting new products to market in a timely manner especially with the rise of competitors like Sony and Panasonic. The pace and quality of product development along with high manufacturing costs only added to the company s woes. Prior to the changes in the competitive environment, Philips was prosperous but built a riskadverse culture. Managers were discouraged from operating beyond the boundaries of their responsibilities. People the organization focused on job security more than anything else and were not trying to address the challenges that the organization faced. In 1990, Jan Timmer took over as CEO and immediately initiated the revision of personal compacts. In order to break down employees personal compacts which favored maintaining the company s current status he used shock treatment by handing out a press release that stated the company was going bankrupt and that everyone had to contribute to help revive the company. He established new personal compacts that focused on personal commitment, binding agreements, and standards for measuring performance. This is sharp contrast to the previous culture in which individuals focused on themselves and were not pushed to work towards the greater good of the company. The overall efforts resulted in the firm achieving strong financial performance throughout the early 1990s (Strebel, 1996)

5 Unicef CIO Andrew Spatz faced immense resistance as he attempted to move IT from an afterthought to central stage with the organization. Efforts included creating a centralized IT function, replace legacy systems, establish communication infrastructure to support fund-raisers in various European countries all of which with a limited budget. In order to shift employees mindset to considering IT as a business enabler, Spatz communicated often with people throughout the organization to explain how each IT project would affects Unicef s overall progress. This helped energize employees into being enthusiastic about the change efforts. Furthermore, allowed people to provide feedback to his strategy for change which help win buy-in and get resources for the change efforts (Goldberg, 2003) Recommendations Making sure that employees understand their personal compact with that of the organization is a vital step in ensuring that there is commitment for the proposed change initiative. Addressing the following dimensions of a personal compact along with several other key points is absolutely necessary to minimize the chances of resistance from occurring among employees. Help employees answer the following questions of each personal compact dimension to build commitment for change Formal o What am I supposed to do for the organization? o What help will I get to do the job? o How and when will my performance be evaluated, and what form will the feedback take? o What will I be paid, and how will pay relate to my performance evaluation? (Strebel, 1996) Psychological o How hard will I really have to work?

6 o What recognition, financial reward, or other personal satisfaction will I get for my efforts? o Are the rewards worth it? (Strebel, 1996) Social o Are my values similar to those of others in the organization? o What are the real rules that determine who gets what in this company? (Strebel, 1996) Commitment Starts at the Top Leadership team must be the guiding force and show a unified commitment for the proposed change. This will help send a clear message as to the importance of this change initiative for the organization. Involve People in the Change Process Actively listen to them and be prepared to incorporate their ideas and suggestions. Communicate Clearly Be clear about the reason for the change and the anticipated outcomes. Employees will want to know how the change directly affects them and where they belong in this change. Remove Uncertainty and Threats Be honest and direct. Respond to questions, concerns and rumours immediately. If people are left to assume certain affects a change will bring it will most likely be for the worst. Provide Training and Support Be empathetic and provide the necessary support to alleviate the fear and anxieties that may be created by the change.

7 Provide Rewards and Recognition Providing compensation or some form of recognition to individuals that contributed to the success of the change efforts. People have a psychological need to wanting get some kind of return for the efforts they contribute Evaluate the Change Process Examine the success of the implementation at planned intervals to gauge success over time and make corrections for unanticipated consequences (Brown, 2007). Concluding Remarks Revising personal compacts must be considered as a vital process to change management. Each change initiatives changes the relationship between employees and the organization. Redefining each dimension (Formal, Psychological, and Social) are necessary for employees to understand the goals of the organization and what role they can play in creating change. Failure to establish such a relationship will only lead to resistance which is costly for the organization.

8 Works Cited Bolognese, A. F. (2008). Employee Resistance to Organizational Change. Retrieved from Newfoundations: Brown, C. (2007). Strategies For Overcoming Resistance To Organizational Change. Retrieved from EzineArticles.com: Change&id= Dean, M. (2009). Strategy clinic: How do I overcome resistance to change? Retrieved from computerweekly.com: Goldberg, M. (2008). Lessons from Unicef's CIO. Retrieved from CIO.com: Prosci. (2008). Neutralizing change threats in the new year: Resistance to change. Retrieved from Change-Management: Strebel, P. (1996). Why Do Employees Resist Change? Harvard Business Review, 1-6.

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