CASE # 4
PUBLIC AGENCY
A
public agency, approximately 2,000 employees, the agency operated as a monopoly
since its inception, raising rates as it deemed appropriate, with little
backlash from its "customers." The public and clients of the agency
began criticizing it because of its bloated size and demanded significant
improvements in many different areas. A major computer systems project was
initiated with the expectation that the results would be better service and
substantial reduction in costs over the next few years. When the computer
systems installation was almost completed, there was a change in executive
leadership - with a mandate to demonstrate benefits of the new system. A
"reorganization" was announced - three divisions were to be
consolidated into one division. Affective employees were told to attend a
meeting with the outside consultants who would be advising management on the
new structure. On the day before the meeting, it was canceled. About 2 months
later, the meeting was finally re-scheduled. By this time, many employees were
becoming nervous about the plans. At the meeting, employees were introduced to
the consultants and told they would be part of making the final
recommendations. Individual meetings were held with affected unit managers, who
were told they would see the results before they became final. The process
dragged on for months - every time a date for release of the final plan was
announced, it would be delayed. Managers were shown the final plan a few days
before all employees were presented with the results. The suggested changes
were not included, and the resulting organizational structure did not make
sense to many affected managers. The final plan involved demotion of
approximately two thirds of the current managers, a reduction in pay for them,
and the hiring of two assistants to the executive in charge of the combined
division. Two of the three former division heads were demoted. None of those
demoted were told they had been doing a bad job, nor were their suggestions for
the new organization considered. The resulting organizational structure seemed
to be a punishment of some kind, at least to those affected. People were also
confused at why new executive level positions were added at higher salary, when
the goal was to "cut costs." Many good people left. Those who could
not find work elsewhere stayed. New managers with no interest or skill in
management were put in manager positions. Competition among those left heated
up as people jockeyed for power. Many tried to find a way to get back their old
salary by competing for jobs they were unqualified for. Other units that had
been publicly praised for their positive contributions to the agency were
abolished and their function eliminated.