Restructuring for Organizational Efficiency

This assignment analyzes a proposed restructuring plan for JKL Corporation. It examines the rationale for redundancies, outlines a revised pay structure to attract and retain talent, and discusses strategies for managing underperforming employees. The document also addresses communication strategies and severance packages for impacted employees.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
Name of the student:
Name of the University:
Author note:

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Table of contents
Introduction......................................................................................................................................2
Restructuring organization...............................................................................................................2
Factors to be considered while restructuring JKL’s finance department:.......................................3
Milkovich pay model:......................................................................................................................3
Conclusion:......................................................................................................................................6
References:......................................................................................................................................7

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Introduction:
The case study mentions the issue of remuneration and performance management.
Bronwyn being a loyal employee in an organization named JKL Corporation discovers that her
base pay was equal to her colleague who has lesser experience than her. Bronwyn’s manager,
Wayne had told that her output was lesser than that of her colleagues due to which her pay was
less. However, she wanted a rise in her pay and also wanted a 10 years guarantee of employment
at JKL Corporation. On the contrary, the company aimed at keeping the labor costs as minimum
as possible. The department in which Brown used to work had been underperforming since a
long time due to which the management had decided to restructure the department (that is the
finance department) within the coming few years. This change might results in the redundancy of
Browns job role.
Restructuring organization:
The restructuring of any department has always been a tedious task due to the changes
that occur in the job profiles and the organizational structure (Cummings & Worley, 2014). The
changes are often not accepted by the human resources of an organization and leads to
grievances and conflicts. Therefore, there is a requirement of a proper HR management strategy
so that the conflicts within an organization can be avoided without affecting the efficiency of the
organization (Robichaud & Cooren, 2013). In the case of JKL Corporation, restructuring finance
department had become necessary because it was adding up to the costs of the company by
underperforming.

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Factors to be considered while restructuring JKL’s finance department:
There are several factors that are to be taken into consideration before restructuring an
organization. Firstly, the skills, abilities, knowledge and performance of the employees must be
evaluated in order to identify the employees who are an asset to the company and those who
have become a liability of the company (Rogers & Wolf, 2017) Secondly, the employees who
turn out to be a liability for the company must be provided constant feedback on their
performance. Thirdly, proper communication must be maintained with the underperforming
employees and their viewpoints must be heard (Katzenbach & Smith, 2015). Another way of
managing the underperforming employees is calling meetings with the organizational employees
to discuss the issues. Efficient utilization of Balanced scorecard method can be used to provide
evidence of poor performance to the underperforming employees and asking them on how they
would improve their performance (Blacklidge et al., 2015). In the case of Bronwyn, Milkovich
Pay shall be used in order to manage the underperforming employees. This shall include internal
alignment policies, competitiveness policies, contribution policies and management policies.
Milkovich pay model:
The internal alignment policy shall use the techniques of work analysis, description and
evaluation that would show the efficiency of the employees in terms of performance quality and
usefulness to the organization (Abraham, 2017). The competitiveness policy shall involve the
techniques of market definition and service policy lines according to which the pay structure
shall be revised. The contribution policy shall determine the pay for performance that is the
incentives and the rewards and recognitions that the employees shall get. The management
policy shall involve the techniques of evaluating the performance of the employees that is
whether they are cost-effective to the organization or not. Bronwyn shall not be given any hike in

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her salary because she has remained unproductive for the organization and has been
underperforming since a long time (Park & Sturman, 2016).
Figure: Milkovich Pay Model
(Source: Marasi & Bennett, 2016)
Internal alignment and external competitiveness are the most important pay model
policies that shall be considered. The internal alignment shall help in knowing the ways the job
role and the skills are related to each other and the ways in which they are important in achieving
the objectives of the organisation (Jung & Yoon, 2015). External competitiveness shall be very
important in knowing the payments made by the competitors for the similar job roles. The
external competitiveness shall help in knowing the methods of payment and the other payment
details such as incentives basic pay et cetera used by the competitive organisations. Therefore,
the external competitiveness shall help in determining the pay system within the organisation.
The external competitiveness shall be used to determine the amount of skills required to

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accomplish a task and the payments that must be made to the employees to keep them motivated.
Internal alignment refers to comparing the job and skill levels within an organisation. The skills
and abilities of the employees within an organisation shall be compared with each other.
Therefore, the skills and abilities of the employees within JKL Corporation shall be compared
and evaluated to decide which employees shall be given up a pay hike and which job roles shall
be made redundant. Since the finance department has been underperforming since a long time
therefore, it would be suitable to evaluate the performance of the employees working in the
finance department and retaining only those who have been performing well while making the
other job roles redundant. This shall involve making the job of Bronwyn redundant for which she
shall be shown her balanced scorecard that would clearly indicate her poor performance and the
reason of her termination (Marasi & Bennett, 2016).
Association factors additionally have vital influence of the deciding remuneration in
inward arrangement. In the first place, system of any pay strategy must have an arrangement
with association’s objectives and mission to ensure that any remuneration that given to labourers
is paid back when the specialists satisfies objectives and mission of association they work for.
Innovation is the utilization and information of instruments, strategies, artworks, frameworks or
techniques for association keeping in mind the end goal to tackle an issue. At that point, human
capital alludes to the supply of skills, information and identity qualities exemplified in the
capacity to perform work to deliver financial value. Further the HR arrangements are the
instruments that manage risks by remaining fully informed regarding current patterns in work
principles and enactment (Anuar, Ismail & Abdin, 2014). The arrangements must be expressed in
legitimate way to guarantee that organization’s vision and the human asset helping the
organization to accomplish it or work towards it are at all levels profited and in the meantime not

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digressed from their principle objective. Only those employees shall have of 'vocation advance's
to guarantee that representative can give the best efficiency towards association. At long last
when all association factors have been resolved, the association shall ascertain the cost to beyond
any doubt that is past the monetary allowance to remain in operation of the organization. In
inside structure is alludes exhibit of pay rates for various work or aptitudes inside a solitary
association.
Conclusion:
The quantity of levels, the differentials in pay between the levels, and the criteria used to
decide those distinctions portray the structure (Daft, 2015). Bronwyn shall be explained the
reason for the redundancy of her post and shall be given a lump sum amount for being a loyal
employee for twenty long years but she shall be informed that the company would no longer bear
her costs. The company shall restructure its pay structure and shall ensure that the employees are
paid adequate wages and salaries that shall be kept higher than the competitors in order to retain
talented and skilled employees and reduce the rate of turnover. More number of employees shall
be hired in the departments that help the company in improving its profits while the finance
department shall be kept small with limited number of employees who have been performing
well in the past. The underperforming employees shall be terminated and the company shall
provide proper explanation and justification for their termination. The company shall also pay a
lump sum amount to those terminated employees who have been a part of JKL Corporation for
more than ten years in order to reduce their grievances.

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References:
Abraham, M. (2017). Pay Formalization Revisited: Considering the Effects of Manager Gender
and Discretion on Closing the Gender Wage Gap. Academy of Management
Journal, 60(1), 29-54.
Anuar, A., Ismail, A., & Abdin, F. (2014). Administrator’s role in performance pay system as a
determinant of job satisfaction. Sains Humanika, 2(2).
Blacklidge, L., Ellinger, P., Peterson, P., Stanton, J., & Vogle, D. (2015). Restructuring for the
Competitive Edge. Laboratory Medicine, 27(5), 309-312.
Cummings, T. G., & Worley, C. G. (2014). Organization development and change. Cengage
learning.
Daft, R. L. (2015). Organization theory and design. Cengage learning.
Jung, H. S., & Yoon, H. H. (2015). Understanding pay satisfaction: The impacts of pay
satisfaction on employees’ job engagement and withdrawal in deluxe hotel. International
Journal of Hospitality Management, 48, 22-26.
Katzenbach, J. R., & Smith, D. K. (2015). The wisdom of teams: Creating the high-performance
organization. Harvard Business Review Press.
Marasi, S., & Bennett, R. J. (2016). Pay communication: Where do we go from here?. Human
Resource Management Review, 26(1), 50-58.
Park, S., & Sturman, M. C. (2016). Evaluating Form and Functionality of Pay‐for‐Performance
Plans: The Relative Incentive and Sorting Effects of Merit Pay, Bonuses, and Long‐Term
Incentives. Human Resource Management, 55(4), 697-719.

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Robichaud, D., & Cooren, F. (Eds.). (2013). Organization and organizing: Materiality, agency
and discourse. Routledge.
Rogers, E., & Wolf, D. (2017). Organization Restructuring and Leadership Development.