NOGO Railroad Case Analysis - The company is lacking a Human Resource structure. Without this developed structure there is a lack of recruitment procedures, no clear job descriptions

by beckystorey (student)

University Degree Business and Administrative studies

Becky Storey

LeTourneau University

Managing Innovation and Change

August 29, 2012

NOGO RAILROAD CASE ANALYSIS FORM

I. Problems

A. Macro

The company is lacking a Human Resource structure. Without this developed structure there is a lack of recruitment procedures, no clear job descriptions, and there is not a third party department to depend on for any position discrepancies. There are no formal policies, no development, no review of skills before promotions, and no formal design of authority, there is no training or development for leaders and seems to be a general lack of future planning as far as the human resources of the company is concerned.
Employee performance and morale. There is also a lack of control on employee cost and output. There is a need for a reduction of employee cost in the day-to-day operations. There however is an issue that the employees are not performing at their maximum in order to preserve work for their family members working beside them because of the nepotism within the company. There is a threat of layoffs because of the poor use of payroll dollars versus work output. There is a company history of organized employees’ resistance.
Poorly negotiated Union contracts has resulted in high employee expenses and limited options for change with the employee expectations on a daily basis. Union and its members have a strong hold on the company and have successfully leveraged that strength against the company’s best interest.

B. Micro

There is little to no upper management direction or support. Changes have to be a team effort and clearly defined. Management needs to know they have the authority to make decision and that they will be supported by upper management. There should not be the appearance of one “bad guy” of management it should be a united front.
There is nepotism and featherbedding. There needs to be a culture change in hiring relatives and working directly with one another is only a situation with extreme challenges.

II. Causes

Poorly negotiated Union ...

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B. Micro

There is little to no upper management direction or support. Changes have to be a team effort and clearly defined. Management needs to know they have the authority to make decision and that they will be supported by upper management. There should not be the appearance of one “bad guy” of management it should be a united front.
There is nepotism and featherbedding. There needs to be a culture change in hiring relatives and working directly with one another is only a situation with extreme challenges.

II. Causes

Poorly negotiated Union contracts.

They have led to a culture employees that are resistant to change. It also has created the inability for cross-training/replacement between clerks and telegraph operators.

Lack of managerial leadership and development.

There is no real training for management for their positions and clearly as in Dave’s case they are placed in positions they are not qualified for.

Lack of accountability and quality control.
The employees do not have defined job performance expectations and no means to measure job output and performance of union positions; this has allowed an environment for featherbedding.

III. Systems Affected

Culture of the Company

Reduce nepotism and in return reduce featherbedding. With a development of training for employees there will be more hope for employees to advance and have secure positions with the company. This company has been hesitant to change and update with the times, so any change will be a challenge and a change of thinking for the culture of the company. Doing away with the concept that some positions are mainly for men or mainly for women. The expectation that upper management provides little support.

Financial

There is a two way thought process internally here. The employees are concerned that if they improve their work output they are compromising the positions of their family members. What will need to be realized by the employees is without changing their current work methods and making advancements the company itself has a limited future and they may all be out of a job. It will take a commitment by all members union and otherwise to make changes that will keep the company around for many years to come. There will be some streamlining that has the potential to reduce current income excluding overtime and extras but may be what allows the future growth of the company.

Structural

There needs to be a change in the overall operations of the railroad company with procedures being brought up to date with modern technology. There needs to be a Human Resource department of some sort created within the company. Upper management needs training and needs to be involved in the process of training, developing, and holding employees accountable for their work performance.

IV. Alternatives

1. Work with Union to incorporate job duties from one position to another. Approach the Union with an understanding you are trying to work out solutions now before things get harsher during negotiations. Show the need for changes to the vitality of the company’s future.

2. Open up options for employee suggestions. This is where a human resource department is valuable. Having a place that the employees can give input to is often an excellent way to increase morale. Change is always easier when employees have a part in it. Ask for input on how to make their jobs easier, if possible offer rewards for suggestions that are used to make changes in the company.

3. Create a way to start measuring the output of workers and put it into effect. Unless a company is measuring its performance it is impossible to improve. Although this will be met with resistance from employees at first, the hope is that all management is supportive and it is approached as a tool to improve the company.

V. Recommendations

The first recommendation for Dave is to request a meeting with the rail manager, operations manager, and president. If there is going to be change in any organization it has to have to support of all management. One manager cannot act alone and to bring about change across an entire company. Dave needs to establish that the company wants change and discuss the directions they are willing to go to achieve change. Historically this is not a company that embraces advancement and changes. Dave needs to decide if he is willing to lead the way for this change that will possibly save the company despite known resistance he will encounter. Once he has made that decision and partnered with the other managers then they can systematically begin deciding how to achieve these changes. Anytime there is change in a company management must accept their will be some resistance, some employees may be lost and it will be a struggle at first until the new becomes the normal. I think for NOGO railroad they also have to realize their plans for change may materialize slower than other companies because no doubt some changes will have to be solidified during union negotiations.