The study examines managing change and employees performance in the electricity generating, transmitting and distributing sector of Power Holding Company of Nigeria. The objective was to ascertain how change can bring about employees performance. The study use secondary data to discover that communication, employee’s participation, raining and development have significant relationship with performance. Based on the findings and conclusion, it was therefore recommended that Power Holding Company of Nigeria should involve employees in their managing change process to a positive result.
MANAGING CHANGE AND EMPLOYEE’S PERFORMANCE IN THE ELECTRICITY GENERATING, TRANSMITTING, AND DISTRIBUTING SECTOR IN RIVER STATE:
A STUDY OF POWER HOLDING COMPANY OF NIGERIA (PHCN) PORT-HARCOURT, BRANCH
BEING A SEMINAR PAPER PRESENTED TO
THE DEPARTMENT OF BUSINESS MANAGEMENT
FACULTY OF MANAGEMENT SCIENCES
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MS.c DEGREE IN BUSINESS MANAGEMENT
TABLE OF CONTENTS
CHAPTER ONE: 1INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the Problem 3
1.3 Objective of the Study 3
1.4 Significance of the Study.
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Academic/Empirical Review 5
2.2 Theoretical Framework 7
2.3 Other Issue 9
2.3.1 How to Introduce Change 10
3.1 Discussion on how stated Objectives can be met. 13
3.2 Discussion on Gaps Presented in the Review Literature 14
3.3 Discussion on the Theoretical Framework 14
Business organization operates in a dynamic environment which implies change. Change is inevitable in any organization in other to remain competitive. In the ever shifting world of business, change is inevitable and can come in different forms. Change can involve virtually any aspect of an organization. It could take the form of technological change, changes in products and services, work schedules, machinery, organization design, people themselves and so on. Change can emanate from within a business due to strategy changes, economic changes and executive changes. The basic reason that organizations make change is that something relevant to the organization either has change or is going to change, therefore organization has little choice but to change. Managing change effectively enables managers to stay ahead of competitors’ sets new standards and to embrace change in order to survive. The primary reason for the problems that organizations often face is the failure to anticipate and respond properly to changing circumstances. An organization has to introduce change if it is to remain effective, and the employees should be intimated with the relevance of change, the benefits, the organization and staff stands to gain. It is in achieving the organization goals that the individual goals are achieved. The change process can easily be assimilated if the skill manager will be meticulous about good communication. When people are uncertain about the change they are experiencing, poor communication allows fear to grow and send the wrong signals. Today’s business environment requires companies to undergo changes almost constantly if they are to remain competitive; the power holding company of Nigeria (PHCN) has gone through changes in order to perform better to boost industrial development. The history of electricity development in Nigeria can be traced back to the 19th century when the first generating power plant was installed in the city of Lagos in 1989. Subsequently the colonial government established Electricity Corporation of Nigeria (ECN) with ECN ordinance No.15 of 1950. In 1st of April 1972, the Electricity Corporation of Nigeria and Niger Dam authority were merged.
The Federal Military Government in 1972 harmonized the power sector and called it National Electric Power Authority (NEPA) and in 1st July, 2010, the NEPA name changed to power holding company of Nigeria. PHCN has three unit (Power generation, transmission and distribution. The landmark changes till date was meant to strengthen this sector for efficiency. The sector has faced a lot of challenges especially on the areas of energy generation, transmission and distribution. The energy sector of Nigeria economy has be strategizing towards better performance but often time, meet with employees resistance to change. The public sector (power sector) of Nigeria economy faces challenges resulting from globalization, innovation competitions and others. The need for change that will bring efficiency and improvement in this sector has been exclusive due to resistance and other issues.
The Power Holding Company of Nigeria faces a lot challenges today which includes how to generate, transmit and distribute electricity. Epileptic power supply has been the order of the day, plus increasing power outage which makes domestic and industrial consumers loose confident in Power Holding Company of Nigeria, therefore, this has led to the use of generating sets, firewood as an alternative source of power supply with its attendant health hazard. The government with her huge financial investment in the power sector is yet to achieve the desire efficiency in the power generating, transmitting and distribution. Today, the introduction of meter reading the card which is for check and balances is not yet discernable and worst still, the privatization policy of the federal government to strengthen the sector for improve performance has been hampered by employees resistance to change.
1.3 Objective of the Study
The broad objective of the study is to ascertain how change can bring employees performance in the power Holding Company of Nigeria.
The specific objectives of this study are;
1. To examine the causes of employees resistance to change.
2. To ascertain if employee participation in the change process will promote employee’s commitment to organizational change of Power Holding Company of Nigeria.
1.4 Significance of the Study.
This work will be of immense contribution to the understanding of the concept of change and its influence on performance of Power Holden Company of Nigeria.
It will equally be of help to management as well as employees of PHCN to discover the techniques and strategies required to effectively initiate change that will gain several acceptances from employees. Furthermore, the study will also assist organizations to have opinions of their employees before introducing any major changes so as to build confidence of such employees on the management of firms or organizations. Finally, the study will provide a background for future studies.
The chapter will present the review of some related Literature with reference to the concept of change, theoretical framework and other issues.
Change is making things different. It also implies moving from the status quo Ile (2010), Stated that change means something new, it means to move from one place to another. It means alteration; it is the exchange of one thing to another. It means passing from one form, phase, place or state to another. Change is inescapable part of social and organization life. The effect can be studied over different time scales, from weeks to hundred of years and they can be studied at different level, it can as well be studied in terms of its effects at the individual group, organization, society national and international level. Chukwuanu (2009) studied managing change in the Nigeria work environment in selected manufacturing companies in Delta State. The objective was to determine how manufacturing companies manage change in their work environment. A survey of 180 respondents showed that there was significant relation between employees involvement in planning/ implementation of change. The paper recommends that manufacturing organization should adopt the use of communication, employees participation and training in change management process. Nwaogu (2011) conducted a study on change management and corporate performance of oil servicing firms in Nigeria. A survey of 10 oil servicing company was carried in Port Harcourt with 350 respondents that showed that effective change and assimilation process have significant relationship with growth and profitability, the paper recommend that employees’ welfare should be put into consideration wherever management is handling the pressure generated from the institution of change. Nwachukwu (2000) posits that change is inevitable in any organization and any organization that fails to recognize the inevitability of change is doomed to failure. Organizational change is the term used to describe the transformation process that a company goes through in response to strategic re-orientation, restructure, change in management, merger or acquisition or the development of new goals and ob objectives for the company. Hendry (2004) stated that the realignment of resources and the redeployment of capital can bring many challenges during the transformation process and organizational change management seeks to address this by adopting best practice standards to assist with integration of new company vision. Machiavelli cited in Baridam (1993) stated that “there is nothing more difficult to carry out, normore doubtful of success, nor more dangerous to handle, than to initiate a new order of things, for the reformer has enemies in all those who profit by old order, this lukewarness arising partly from fear of their adversaries, who have the laws in their favour and partly from the incredibility of mankind, Nwibere and Emecheta (2009) posited that to desire change is easy but to initiate and implement change is difficult. In view of this, the management of every organization increasingly planned change to cope with the changes that revolving around technology, social, political, economic and even the competitive environment. Robbins (1989) Stipulates that planned change has two specific goals that it sets out to achieve; it seeks to change employee negative perceptions about change and it seeks to improve the ability of the organization to adapt to changes in its environment.
Change theories are based on the best ways to bring new ideas to any an organization with least resistance from employees in other to achieve improved performance. Some of these theories are summarized as follows:
Kurt Lewin’s Classic Three-step Model.
A programme of planned change and improved performance developed by Kurt Lewin involves the management of the three-phase-process of behavior modification.
Unfreezing Changing Refreezing.
Unfreezing is the changing efforts to overcome the pressure of both individual resistance and group conformity. It is reducing those forces, which maintain behavior in its present form, recognition of the need to occur.
changing to a new state is the development of new attitudes or behaviour and the implementation of the change.
Refreezing the new change to make it permanents the stabilizing of a change intervention by balancing driving and restraining forces.
John Kotter’s Change Model
Jonh Kotter identified eight (8) steps that are useful in order to manage change successfully. They are explained as follows;
Establish a sense of urgency: this is to help people to see the need for change and also convinced them of the importance, so that they can go the same direction
Creating the guiding coalition: this is to assemble a group with enough power to lead the change effort and encourage the group to work as a team.
Developing a change vision: this is to create a vision to help direct the change effort and develop strategies for achieving them
Communicating the vision for buy in: this is making sure that many understand and accept the vision and strategy.
Empowering broad-based Action: at this stage, the obstacle to change is removed change system or structures that seriously undermine the vision and encourage risk taking and traditional idea, activities and action.
Generating short-term wins: plans for achievement that can easily be made visible, follow-through with those achievements and reorganize and reward employees who are involved.
Never letting up: use increase credibility to change system, structures, and policies that don’t fit the vision, also hire, promote and develop employees who can implement the vision and finally reinvigorate the process with new project, themes and change levels.
Incorporating changes into culture: articulate the connection between the new behaviour and organization success and develop the means to ensure leadership development and succession
Institutionalize new approaches: These steps are based on a solid foundation of communication, empowerment and focus. There should be monitoring feedback and intervention for the period after the change has occurred so that people do not slip into old habit.
Forces of change
Robbinson (1989) outlined the forces of change as follows;
The nature of workforce: Every organization is trying to adjust to a multicultural environment there are increase in professional and many more entrant with inadequate skill.
Technology: technology is changing jobs and organization. Technology has brought about computer and automation, total quality management are all the technological change.
Economic shock: the changes in the world market like interest rate fluctuation and foreign currency fluctuation has become one of the forces of change.
Competition: this arises from global competition for market share mergers and acquisition, and growth of specialty retailers are all forces of change.
Social trends: they have been tremendous increase in college attendance delayed marriages by young people and increase in divorce rate are also considered as forces of change.
World politics: the collapse of the Soviet Union, US. Inversion of Iran and US terrorist are all forces of change associated to world politics
Change is not introduced regularly; it comes when the need for change is necessary. The following conditions are undertaken before introducing change.
Robbins (2001) asserted that communications, change and development, empathic consideration, employee participation, timing, changes and development should be gradual and given positive reinforcement.
Communications: before any change and development is undertaken, it must be communicated to all and solicit and emphasize the need for change to employees and other stakeholders.
The Change and Development: the change must be useful and the advantages should outweigh the disadvantages else the inconveniences are not justified.
Empathic Consideration: management considers the employees by listening to their complaint with sympathy as this helps to relax anxiety which comes from uncertainty.
Employee Participation: when a manager involves employees in planning changes, he is obtaining their commitment and indirectly ensuring the survival or success of the planned change.
Timing: the timing of the introduction of any change influences its success or failure. It should be introduced when people are mentally prepared to accommodate changes example when a new executive comes on board.
Changes should be Gradual: management should apply gradual measures in bringing changes. The tendency of initiating frequent changes and expect employees to adopt may not be acceptable and meets with resistance.
Positive Reinforcement: a new process requires special effort on the part of employees, they need strong encouragement and special recognition which will help them to sustain their effort during this hard time. Management will accomplish a desired change if they recognize human limitations and try to deal with them. Every effort must be made to relax anxiety which is characteristics of change.
2.3.2 Relationship between change and performance.
Change means to make or to become different, exchange or to substitute an original thing for an entirely different one. It is any deviation from the normal situation or event.
A designed change in any sector will definitely improve the performance of the organization because of new method, new technology and development and training will be a part of the systems. To achieve this appropriate apparatus of change process should be used get the desired result.
Planned change represents intentional attempts to improve the operational effectiveness of the organization that transforms to high performance. The objectives of change efforts are to modifying the behavioural patterns of members of the organization and to improve the ability of the organization to cope with changes in the environment. In this regard, change and performance are directly related.
2.3.3 Factors that can Create High Performance in PHCN.
Several studies has been carried out or change management and how it can effectively bring out efficiency in an organization.
Robbins (1989) Postulation provides better ways sectors like PHCN could be sustained high performance. The organization needs turn-around strategy that for it to provide adequate services that boost industrialization and economic revolution of the country.
The change process should be used to absorb the fear of unknown, seek for better training and development. Programme for employees, provision of welfare package and a well designed retirement and pension programme. The employees should be well informed on the benefit of change to individuals and organization and also make them to know that privatization is the only way to improve their performance and learn new skill and acquire better condition of service. The employee should involve in change programme to ensure their inputs are jointly considered. This provides a feeling of belongingness.
In the public sectors of the economy, the employees often resistance change due to the fear of being short changed by the process of transformation.
The discussion in this section will attempt to examine how the stated objectives can be met, discussion on the reviewed literature and the limitations of the theoretical framework.
The first objective would have been met, had this being an empirical research, the paper made use of structured questionnaire that were administrated to employees of power holding company of Nigeria in Moscow road, Diobu and Trans-Amadi District offices in Port Harcourt. The data collected were analysed to elicit the objective of this study. Therefore, it was observed that the causes of employees’ resistance to change are as follows: Economic factors (Decrease in Salary), job security (Redundancy, lay off and Retirement), Implication on personal plan (plans, projects & family Responsibilities), previous experience and threat to interpersonal relations among others.
The second objective would have as well been met, had this being an empirical research, the paper made use of questionnaire that were administered on employees of the power holding company of Nigeria in three district, Moscow road, Diobu, and Trans-Amadi in port Harcourt .
The data collected were analysed to obtain the objective of the study. It was observed that certain factors will bring our employees commitment to organizational change. Some of this factors are communication, education and enlightenment on the inherent advantages in the change and what they stand to gain. These will restore confidence in the change process and as well make employees to be more committed. The employee should be involved in the introduction/implementation of phases of the change effort. In so doing, employees will feel a sense of belonging as they were a part of decision making. To elicit commitment of employees to change, organization should employ different motivational factors that are different from the old ones to really assure them of the benefit of the new order.
The reviewed literatures in this study did a good work in managing change and employee performance in organization. The researches were a stand point for future studies.
However, the literature reviewed did not provide for necessary ways upon which the employees of the organization would be trained to align with the new change, for example the Ebonyi State Government on its effort to position her employees to technology changes, has trained their workers to be computer literate. Organizational changes will be beneficial on the following; improved work quality and morale, enhanced collaboration and communication, higher retention for employees and better customer service.
The change theories used dealt on the process to achieve organization change which was used to draw ideas on the public sector. The John Kotter’s eight (8) steps that need to be taken in order to manage change successfully were based on solid foundation of communication and empowerment. It actually provides a direction to manage successfully.
The Kurt Lewin’s model on performance of the three-phase-process of behaviour modification. The model agree with the work to large extent as the employees need to know reasons why change is inevitable in organization. The process of introducing the new change as against old order must be clear and understandable and when actual change has been introduced, efforts should be made to sustain the new order. The model would have been better if initial training in the expected changes or methods are embedded to dismiss the fear of lay-off or redundancy. The model did not give attention to human factors. Some of the theories downplay the significance of human agency as a source of change.
Series of opportunities exist in the power sector of the economy, and if change is effectively managed the enormous opportunities could lead to improve state of the economy, low cost of production as a result of economies of large scale production, job opportunities, minimization of wastage, reduction in industrial crises and hazards.
The power sector in Nigeria remains a life line for social, political and economic development in Nigeria. It is an engine room to industrial development. Therefore effort should be made to ensure it performs creditably through well articulated managing change techniques.
Based on the findings and observations of the study, the following recommendations are hereby made;
1. The power Holding Company of Nigeria should encourage employees participation in the introduction of change as it would ensure successful change management in the sector
2. The management of PHCN should know the specific problems facing the organization before introducing change.
3. The employees’ welfare should always be put into consideration whenever management is handling the pressure generated from the institution of change.
4. The PHCN management should always use communication tools as a way of keeping employees informed to avoid resistance.
5. Management should create opportunities for employees to learn or be trained in new skills required by the change effort.
6. Management must clearly describe to employees, exactly why the situation which existed prior to change is no longer acceptable.
7. Finally, in initiating change PHCN should always asses its strength, weakness, opportunities and threat (SWOT) and use a criteria for designing her entire system of change process and activities.
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