Abstract
The following study is dedicated to conceptualizing the change at Simmons corporation, working within the bedding industry. Firstly, the issues, faced by the company, are addressed. They can be mostly attributed to structural and financial difficulties. Then, the scope of the proposed change is addressed. Special attention is paid to explaining the rationale for the proposed design of change and justifying it with the results of scientific works. Thereafter the implementation processes are highlighted. Finally, the evaluation procedures and methodology are considered. It is expected that the proposed change significantly improves performance of Simmons via trust-building and enhancing employee commitment.
Managing people assessment: what should Eitel do?
The issue
Financial crisis of 2007-2008 was recognized as the most dangerous since the Great Depression of the 1930s (Havemann, 2009) Crisis-related challenges led to the need for change in many companies, including Simmons, a major manufacturer of mattresses and related products. Having taken over as CEO of Simmons in 2000 Mr. Eitel introduced a number of important reforms in the company (e.g., investment into the new mattress product, reorganization of the firm’s structure). Moreover, Mr.Eitel conceptualized the Great game of Life HR development program to facilitate employees’ growth and help them make better choices in their lives.
Following the change in structuring and managing the company’s plants, Mr. Eitel implemented GGOL at the Charlotte Plant and reached significant success. However, in the light of 2007-2008 crisis and related need to save costs, further implementation of the GGOL is threatened. It is to be decided whether to preserve the GGOL, despite its high costs, or focus on saving costs. The importance of the above choice can hardly be overestimated, because people constitute a major asset of organizations under the knowledge-based economy (Awadh&Saad, 2013, p.169). Attracting and retaining top talents represents a top challenge for modern companies that will doubtlessly preserve even following the 2007/2008 crisis (Meer, 2013) (Hitch, 2012).
Identifying change
Established in the second half of the 19th century, Simmons has a long history, especially with regard to the bedding industry. In the beginning of the new millennium the company faced a range of challenges related to the coordination of the operation of different plants. The issue lied in the fact that employees, working for different plants, did not operate as a single team. Instead, plants looked like independent organizations that tended to compete with one another. To eliminate the above issue, Mr. Eitel reshaped the structure of plants to establish a centralized accountability system. However, it was to remember that structure is not a single thing that may bring divergent plants and branches of a company under single umbrella. According to the literature review by Mehta, Bhakar & Sinha (2010), employee commitment and loyalty to organization are to great extent driven by the practical implementation of a company’s values and organizational culture. Moreover, as it was discussed by Lencioni (2002), mutual trust and readiness to a constructive conflict constitute crucial prerequisites for successful teamwork (p.81).
In view of the above, Mr. Eital came up with the idea of the GGOL. The scope of this life-changing program, targeting both the different levels of company’s management and employees includes cooperation on cultural change, training on change-related efforts, as well as the development of Critical Core Life Competencies for individual employees at Simmons. Moreover, the GGOL provides for encouraging employees to participate in designing change that is critical for its further success, according to Beer&Nohira (2010).
Having been applied at an individual plant in Charlotte, the program proved to facilitate the company’s organizational culture, promote trust among employees and lead to rapid performance improvements. Such result can be considered predictable, given that a strong link between employees’ commitment, loyalty and their performance rates is proved by multiple empirical studies (Brown et al, 2011) (Gibb, 2011, p.3) (Yee, Yeung& Cheng, 2010, pp.112-113). According to the theoretical investigation by Beer&Nohria (2000), the HR development shall also significantly enhance organizational capabilities.
Despite the challenges, caused by the financial crisis, it is suggested sustaining the operation of the GGOL program and gradually spreading it to all the plants of the Simmons corporation. However, it is recommended to reconsider the design of the GGOL program from the standpoint of cost-effectiveness to adjust it to the crisis-related pressures. Such solution is justified by a range of factors, stemming from existing issues within the organization and steps that were already made by Eitel to cope with them. Firstly, profound knowledge and skills of employees represent a crucial asset of a company, given ever intensifying competition between companies and the pressures of knowledge-based economy. It is rather hard for companies to prevent employee turnover and retain talents. That is why, effective human resources development strategy is required not to lose talented employees and attract new ones.
Secondly, it is not to be forgotten that employee commitment and loyalty are tightly linked to performance rates. So, HR development shall be considered not only as a means of bringing employees together, but one of the necessary tools, required to facilitate effective operation of all the Simmons plants and continually increase revenue rates through improved performance.
The third crucial argument in favour of sustaining GGOL is that the program already proved to be effective at one of the company’s plants and led to an increase in revenue. Moreover, it is envisaged to reconsider the program in a way that it becomes more cost-effective. A new cost-effective GGOL is to be perceived as a tool of uniting employees around common goals, improving performance and countering global financial issues.
Implementation plan
It is suggested that the further implementation of the GGOL program includes several stages. In most general terms, they can be addressed as the program’s reconsideration, testing the new design of the program at several plants and its evaluation, extrapolation of the new program design to other plants, running the program at various plants and overall analysis of results.
The reconsideration of the program has two major aims. First of all, the analysis of Charlotte experience of the GGOL program implementation can help the management of Simmons distinguish the drawbacks of the program design and eliminate them. Moreover, such analysis will be of use for elaborating on the ways to reduce the costs of running the GGOL program. The reconsideration phase is expected to last no more than three months.
Following the reconsideration phase and the creation of the improved design of the program it is suggested to run the program at several other plants to see an extent to which it can improve the plants’ performance. In this regard, special emphasis needs to be put on intermediary and final evaluation of the program’s impact. The timeframe for the implementation of this phase of the plan is to be limited to nine months.
It is expected that in a year following the relaunching of the improved GGOL program the leadership of the company and its investors will be able to decide whether it is possible to start running the GGOL program at all the plants of Simmons. In case the improved GGOL program continues demonstrating significant potential for successful change and trust-building at Simmons, it is envisaged to spread it around the plants gradually. The planned timeframe for the conceptualization of the program’s extrapolation is two months. Then, nine months are required to conduct the program at different plants of Simmons.
The last phase of the implementation plan will deal with the overall analysis of the GGOL program’s impact and elaborating suggestions for its further development and adaptation for the daily operation of the plants. The last phase of the plan is to take not more than 3 months.
Thus, it is planned that two years and two months will be required to implement a massive cultural change at Simmons. Major obstacles to such change may deal with the lack of the program’s impact at further plants, financial difficulties, as well as shareholders’ skepticism as regards the need to invest into the implementation of the GGOL program, despite negative economic trends.
Evaluation
Continual multi-method evaluation forms a cornerstone of successfully implementing HR development programs (Hughes&Byrd, 2015, p.4)
The aim of the implementation plan is to spread successful experience of the GGOL program at Charlotte among all the plants of Simmons to improve trust in teams, employee loyalty and, therefore, performance rates. As it can be traced across the implementation plan for the change at Simmons, at least three profound evaluation processes are required to implement the envisaged change by spreading the application of the GGOL program to all the plants of Simmons.
Firstly, it is suggested to conduct an evaluation of the GGOL impact at Charlotte plant and take steps to reconsider the existing design of the program in two major ways. A substantial reconsideration is to deal with improving the scope of the program. Secondly, the organization of the program is to be reviewed in order to reduce the costs of its running, so that the idea becomes more attractive for the company’s investors.
The second evaluation phase deals with testing the new program at several new locations. The major aim of such evaluation will deal with deciding whether to spread the program further and (if an answer to the first question is affirmative), how to improve its operation before spreading to the new locations. Following the program’s application at new locations, a final evaluation is envisaged.
It is expected that the evaluation of the GGOL’s impact would be based on two sources of information. First of all, employee opinions will be considered. Secondly, objective data about the change will be taken into account (e.g., the revenue rates).
References
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Beer, M., Nohria, N., 2000. Cracking the code of change. Harvard Business Review, 78, pp. 133ß141
Brown, S., McHardy, J., McNabb, R. and Taylor, K., 2011. Workplace performance, worker commitment and loyalty. Institute for the Study of Labour. Available at: < http://ftp.iza.org/dp5447.pdf> [Accessed 13 May 2016]
Havemann, J., 2009. The financial crisis of 2008: year in review 2008. [online] Encyclopedia Britannica. Available at: < http://www.britannica.com/topic/Financial-Crisis-of-2008-The-1484264> [Accessed 13 May 2016]
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Hughes, C., Byrd, M., 2015. Managing human resource development programs: current issues and evolving trends. London: Palgrave McMillan
Hitch, C., 2012. How to build trust in an organization? [online] UNC. Available at: < https://www.kenan-flagler.unc.edu/executive-development/custom-programs/~/media/827B6E285F2141C49D407DF7E5F5A1C4.ashx> [Accessed 13 May 2016]
Lencioni, P., 2002. The five dysfunctions of a team. San Francisco: Jossey Bass
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Mehta, S., Singh, T., Bhakar, S., Sinha, B., 2010. Employee loyalty towards organization. A study of Academician. International Journal of Business, Management and Economics Research, 1(1), pp.98-108
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