An HR Manager's Perspective on Organizational Change

Change is disruptive. Change is beneficial. A number of our employees have struggled with the fact that Santa Ana Federal Credit Union has changed its direction since a major reorganization in 2001. Was it necessary for SAFCU to reorganize? Why change anything that has worked for over 50 years? Prior to our reorganization, SAFCU valued family-orientation. This meant every employee dealt with members, like they were family, humorously enough, some have even become family members in the process. As a matter of fact, the tradition of serving cookies to the members on Fridays began when the credit union operated at a mom and pop scale. The members treated SAFCU like their home and everyone knew everyone’s name and like Cheers, they wanted to “go where everybody knows their name.” This practice was so comfortable, that every employee valued the members’ friendship, which influenced the manner products and services were offered, happening only when members inquired about them. This value system influenced the way the members utilized SAFCU’s products and services based on loyalty, which was not at all undesirable. Employee benefits were also all family-oriented. For example, health benefits were offered to the employees and their dependents at 100%; retirement plans consisted of a money purchase pension plan, in which SAFCU contributed 10% of the employee’s annual income after a year of service; vacation and sick time started at 10 hours vacation per month and increased based on longevity and the sick hours were offered at eight hours per month. While SAFCU offered extremely generous benefits, we discovered it unfortunately gave the employees a sense of entitlement, resulting in a noticeable decline in their desire to perform beyond normal expectations and their motivation to receive further training and development. We had inadvertently motivated our employees to be content with the status quo. It was time to revamp our organizational structure, which resulted not only in some changes within the board of directors but also a new CEO. Employees have been given the opportunity to move with the change by accepting new responsibilities and obtaining the necessary training. Employee benefits were also modified to realign with the new set of values. The benefit changes revolved around the goal to grow all aspects of the business by making training and development part of every employee’s performance measurement and to encourage employees to seek formal education, by introducing a tuition reimbursement program. In addition, we reduced health benefits offered to the employees’ dependents; modified the pension plan to a 401(k) and profit sharing plan; and combined employees’ time-off benefits to one paid time-off bank. Training and development has become part of every employee’s performance measurement including back office employees as well as the management team of SAFCU, who became eligible for year-end bonuses based on the goals set by the board of directors. The new management team works together to motivate employees in all levels to continue to contribute to the success of SAFCU. If there were any lesson to be learned throughout the process, it would be that there are no bad guys in organizational changes, just some bad judgment exercised in the process of putting the change in place. To prepare for reorganizations, employees in every level have to learn to keep up with the needs of the future by obtaining the necessary education and training today. The lesson that employers have to learn is to set realistic goals for the employees to reach, document any counseling sessions held and give regular feedback so as not to surprise the employees should they find themselves without a job as a result of their inability to meet the new requirements of their job. If an employee receives regular coaching and feedback and the employee is aware of his or her inability to cope, termination most often becomes a relief on their part. Most importantly, it would be wise to make any separation as amicable as possible. Easier said than done! But it can and should be done. Leadership and ethics play a crucial role in the success of any organizational change. Employees merely react from their leaders’ stimuli and this is why it is very important for management to set a positive example. In addition, employees must keep up with the needs of the organization by obtaining the necessary education and training. While obtaining a degree is ideal, seminars, online courses, and training modules are all wonderful supplements. The key to lasting success is for employees to go out and experience the world by networking, going back to school, and keeping abreast of the economy. Through the new incentive and bonus program our employees now have more control over their compensation based in some part on cross-selling achievements. The new reward system has changed our employees’ values and expectations. Now every employee appears to have a clearer understanding that the members, though friends, are primarily owners, which means that they determine SAFCU’s potential for growth and development, based on the service they receive. The employees buy into the idea that the purpose of our existence is to serve by offering products and services based on the members’ needs. The more profitable SAFCU gets, the greater the chance for SAFCU to survive the economic changes, which means that the stakeholders – both employees and members – all benefit. To answer the question why SAFCU messed with a good thing, the answer is in Streisand’s song, “Some Good Things Never Last.” Understandably, the members and the employees still miss the “good old days,” but are slowly realizing that reorganization is not about simply changing the previous management, but rather about SAFCU’s fight against mergers, acquisitions and the on-going economic changes. In the grand scheme of things, the ultimate question is: Will we be proud of ourselves at the end of the day.at the end of time?