ASSESSMENT OF STRATEGIC HUMAN RESOURCE MANAGEMENT FOR LEADERS

(SUBJECT TO EXTERNAL EXAMINER APPROVAL)

DEBT BUSTERS – A STORY OF GROWTH AND CHALLENGE

DEBT BUSTERS UK is a Debt Purchase company, started by an entrepreneur named Antony Brown who was specialised in tracing and surveillance activities, predominantly around the debt management services sector. Antony had identified that the services he provided helped the financial services recover debt, was worth significantly more than the rates he was charging and the idea to create a new breed of a debt purchasing company was born. Anthony, along with close friend and financially savvy John Cromwell, started DEBT BUSTERS UK with the financial backing of private equity investors, along with a small team of analysts and I.T. technicians. Within 4 years, the company had grown from a headcount of 14 to 350, demonstrating the achievements and confirmed
through industry awards for best in class. At this stage of the company journey, the entrepreneurial spirit was central to the organisational culture. DEBT BUSTERS UK was fast paced and as Chief Operating Officer, Antony ensured new ideas and strategies were implemented quickly and with little consultation. However, a further 3 years into the future of DEBT BUSTERS UK saw a different picture. The company had continued with success and had evolved in a multi-site organisation, through acquisition and organic growth. Interdepartmental relationships were integral to
implementing change and the business could no longer function through a solo decision maker. This resulted in tensions and employee demotivation, clearly identified through the annual employee survey results but also observed through behaviours. As company CEO, John Cromwell was keen to ensure DEBT BUSTERS UK represented the company values and culture that helped win business from clients’ time and time again. The company mission was to retain the leading position as best in class within the industry sector, through the company image of better systems, better practices and better people. The outward projection of the company’s organisational culture was that how DEBT BUSTERS UK work and deliver was better than any of the competition. DEBT BUSTERS UK were proud of the company image and branded the “better” slogan across artefacts such as promotional material, in additional to office interior designs. Client visits to the company offices became ceremonies, where the clients were walked through departments, showcasing the working practices of the conscientious and hard-working, striving for results. Employees were forewarned of visits and the code of conduct was issued, in order to ensure the observed culture represented the company image. The company’s hero was Antony Brown, founder of DEBT BUSTERS UK and responsible for all operating activities carried out on behalf of clients. It was essential he was held in high esteem
during any external conversations and that he was a role model for the company’s standards. The legend around how the company had begun was the starting point to external presentations and widely known throughout the industry. During the early years of trading, the core business DEBT BUSTERS UK values were; • Take risks • Drive results • Rapid change • Respect authority Underpinning these values were a set of basic assumptions. These were often unspoken but provided guidance on how actions are carried out within organisation. During those early days, DEBT
BUSTERS UK consisted of a small team of like-minded individuals, with more or less a flat organisational structure. Aside from the key senior management positions, CEO, COO, CFO and the Sales and Marketing Director, who were responsible for all decision making. Work was task focussed and individuals were closely managed to ensure they were delivering exactly what was requested. Unplanned detailed progress discussions occurred regularly with senior management and if errors occurred or timescales slipped, DEBT BUSTERS UK operated a public name and shame policy. Communication was open, but often abrasive and the selection criteria would filter out the more sensitive individuals, who were seen to be a bad fit. Fast paced and aggressive, employees would carry out work as quickly as possible, often to the detriment of documentation. The question of “why”, or challenging an idea was not thought of. On questioning an I.T. technician years later to enquire why a system change had occurred, the response given was, “Because Antony wanted it and he was stood over my shoulder whilst I programmed the change there and then. That is how we did things back then. It didn’t make sense to me to have changed it, but who am I to argue.”. Centralised
control was directed through the leadership of Anthony Brown. As the main influencer he acted as the “head of the family”, pulling in those close to them, such as the senior management team and ensures decision making resides only with them. Others had little to no influence on goals or procedures and change was defined and controlled through only those with a position of power. In order to operate in this environment, employees needed the  confidence in the individuals emanating the power or, if there is failure to adapt quickly, it is likely they would leave the organisation. This was evident in the high turnover in management resources during the periods of growth. DEBT BUSTERS UK’s strategy was to grow from being a small to medium sized enterprise, to a large organisation capable of managing 10 million customer accounts by 2015. DEBT BUSTERS UK had undergone the business transformation programme in order to deploy process improvement and change management control. The directive for this initiative came from John Cromwell, CEO, who was informed through the wider board of directors that regulatory compliance was essential for any business to survive in the debt purchase market. There was a significant business need for the success of this programme and business buy-in was evident amongst most, but not all, of the senior management team. In 2011, the senior leadership team identified the need for more managers in order to provide adequate controllership, leaving them to focus on the more significant business decisions. It was determined in that in order to support the growth of the business, there required greater emphasis on structure and control, creating more departments and teams. DEBT BUSTERS UK initiated a recruitment drive that resulted in a large number of the new employees and managers joining the organisation. The managers had been specifically selected and touted based on the multinational company they had previously been working for, General Electric (GE). This was a credential sought after due to the global reputation GE had earned throughout the history of the company, for being world class and a benchmark for business excellence. On assessing GE’s organisational effectiveness; there were a number of values GE used to performance manage their employees; Goal Specification: All goals were aligned to the key business objectives, cost control, growth, customer centricity and stable processes. GE set goals were deployed from the top down during the same annual planning cycle and were clearly communicated business wide. Clarity and communication of goals: GE set goals using the SMART model (smart, measurable, attainable, realistic and time bound). By using this model, employees understood how to achieve high performance and how to provide evidence. It created accountability that resulted in employee motivation to succeed. Awareness of/and ability to function in commercial environment: GE had strong credibility and as a brand, were able to attract clients easily. The company’s reputation gave confidence that performance and financial rewards would be delivered. Facilitative management structure: The emphasis on management at GE was around coaching and mentoring. Networks were
developed to support diversity in the workplace and mentoring relationships existing at all levels. Motivated, valued and appropriately able workforce: GE rewarded for performance and managed those unable to perform into more applicable roles or out of the business if required. Thus, ensuring the workforce were a highly capable set of achievers. It was these qualities that attracted DEBT BUSTERS UK to recruiting GE employees, it was perceived they would be a good fit, given the company vision to create a similar organisational environment. In the years 2011 to 2012, DEBT BUSTERS UK recruited 9 ex-GE employees into management positions, resulting in 46% of the management team from a GE employment background by the end of 2012. However, GE is a corporate organisation with standards, procedures and policies that reflect a large multinational organisation, a different organisation to DEBT BUSTERS UK which was born through entrepreneurial spirit and “do it quick now”, rather than “do it right later”. It was during this phase in DEBT BUSTERS UK’s history that two cultures would join. The in surge of ex-GE employees into managerial roles at DEBT BUSTERS UK during the later period of growth could virtually be treated as a merger, albeit through choice, as managers had willingly joined DEBT BUSTERS UK’s workforce. Results from
employee surveys revealed the attraction of joining DEBT BUSTERS UK was the growth prospects of the organisation and the promise of high rewards through equity shares. Nonetheless, two different organisational cultures were merged, which could potentially be the root cause of conflict and tensions. Contrary to DEBT BUSTERS UK, team work was at the heart of how GE operated. Change happened through teams and employee buy-in was critical to success. Employees were encouraged to challenge the status quo and look for new and better ways of working. The emphasis was around getting the right solutions and processes, rather than the quickest option. The group ethics lent itself well to innovation, brainstorming in diverse groups was a frequent occurrence conducted in a
non-critical and encouraging environment. However, there were disadvantages to working primarily through groups, such as a slower pace of change, in order to achieve sufficient buy-in and the reliance on rules and bureaucracy for decision making. Employees were often treated as relatives at DEBT BUSTERS UK and in doing so poor performance was often over looked. An example was the recruitment of Charles, a qualified accountant and experienced analyst, known to CEO John as a drinking buddy from the local pub. Charles had the relevant qualifications for the roles he was allocated however, he regularly did not turn up to work after attending social events the night before to the extent, the attendance factor score used in Human Relations for absence management, was no longer able to calculate a result. This appeared to the other managers as unprofessional absence resulting in consistently late and low quality work, but it was allowed to continue with what appeared, little action taken. In contrast, poor performance was not sustainable at GE and managed through improvement based personal development plans or a company exit strategy, if improvements were unobtainable. One particular case of where the task is more important than the relationship was when a new manager inherited a poor performer, who was also
an old university friend. There was no question on what the required action was to be taken against the poor performer after assessing the employee records, employment was terminated and the transaction occurred between the two old friends and accepted amicably. This is evidence of the individualist nature of the culture at GE. Where previously the DEBT BUSTERS UK culture was highly visible and dominant in the organisation, upon the recruitment of several senior management professionals from G.E., sub-cultures became more visible. The conflict between the subcultures often manifested during change management meetings. The former GE employees would all adhere to the change control process by attending the meetings, providing sign-off, completing documentation and participating in meetings. This bureaucracy slowed down the pace of change and was not supported by Anthony Brown, COO and key innovator. Those loyal who were loyal to Antony and favoured the old working practices, displayed resentment towards change management structures and would use influence to deploy unauthorised changes. Those involved in change found it difficult to carry out their roles effectively. Escalation of structure not being adhered to made insignificant difference, given the Anthony’s view point and influence. The directive given by the CEO was to formalise and introduce controllership, but the COO preferred an unrestricted and informal way of working, causing role incompatibility. This created role strain, stemming from incompatibility whereby employees felt low morale and tension would account for the demotivation factor highlighted in the employee survey results. A number of grievances were raised regarding the alleged bullying from Anthony Brown, whereby individuals were being forced to go against the direction of their managers due to a conflict within working styles. These grievances were addressed unsuccessfully and eventually the role strain lead to the company departure of 4 of the ex-GE managers in 2014, whose roles were central to strategy and change management. This emphasised the issue of culture at DEBT BUSTERS UK, the departures deemed as a failure in the company’s mission. A strategy was initiated in 2015 to re-develop the culture and new company values were established around driving change, compliance and teamwork. Failure to display the new core set of values would mean poor performance and reduced bonus payment for all employees, including the leadership team. The initiative and incentive scheme was designed to encourage a common practice among all employees, regardless of history. Antony Brown was requested to attend an intensive
leadership course to accompany the new values in a bid to change behaviours. Whether Antony Brown or subgroups will hold onto old values would still remain has yet to be evidenced, as DEBT BUSTERS UK are still early into the new journey.

(Author: Samantha Crossley) Based on the case study above, please now refer to the areas stated in the next page as part for your assessment.

Brief Description of the assessments:

The assessments for this module will require students to demonstrate their criticality in context to effectively apply theory to organisational practice and supply suitable recommendations. The assessment has been designed so that students can demonstrate that they fully understand the SHRM, Management and Leadership issues covered on the module and the context within which they fit. Essentially, it critically explores and develops effective SHRM practices linked with performance measures and business success. Students are required to write a report (4,500 words [+/- 10%]) addressing the Learning Outcomes.

PLEASE NOTE

a) The assessment carries 10% as an opportunity to demonstrate selfawareness evaluation in the form of a self-reflective statement which should be incorporated into an appendix and does not constitute any word count.
b) The assessment carries 5% for your ability to demonstrate academic skills and competences in the crafting of your individual submission.
c) You are reminded to draw upon evidence and arguments presented from a range of relevant human resource management textbooks as well as academic and practitioner journals The assessment is on the next page:

QUESTIONS: –

INDIVIDUAL REPORT (70% — DUE ON by 12:00 pm – Turnitin through VLE for Plagiarism Check and Hard Copy at RB Room TBC; Word Count 4500 words [+/- 10%]).

Your report should cover the following areas:

1. Critically analysing the nature of SHRM models and theories in relation to the HR and Leadership issues discussed in the VLOG (25 marks) [LO2]
2. Critically evaluating the implementation of SHRM policies and practices and state how they would assist the business to better utilise its ‘people’ assets and support the organisational strategy (25 marks) [LO3]
3. Critically analysing the impact of wider cultural and ethical issues faced by leaders during the implementation of SHRM policies at DEBT BUSTERS UK and their implications upon individuals and the business (25 marks) [LO4]
4. A proposed course of action that the leaders within DEBT BUSTERS UK should now take to ensure that the HRM strategy is realised. (10 marks)
5. After your Reference section, include a Reflective Learning Statement to demonstrate how the feedback from the tutor helped you to improve your final assignment submission and the self-learning you undertook to complete the overall assignment task. Use a reflective model to help inform this part of your assignment. (10 marks)
6. Clarity, fluency and logical layout of assignment with all work duly referenced and a full list of references according to Harvard Referencing Style (5 marks)

Recommended Reading:

1. Truss, C. Mankin. D. & Keliher,C. (2012) Strategic Human Resource Management. Oxford, Oxford University Press.
2. Armstrong, M. (2016). Armstrong’s Handbook of Strategic Human Resource Management. Kogan Page
3. Beardwell, J. & Claydon, T. (2010), Human Resource Management: A Contemprary Approach, 6th edition, London, Prentice Hall