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Enabling organizational cultural change using systemic strategic human resource management – a longitudinal case study

John Molineux*

Graduate School of Business, Deakin University, Burwood, Victoria, Australia

Researchers report that successful cultural change in an organization is difficult to achieve. This research contends that it is more likely to be successful when a systemic approach to strategic human resource management (SHRM) is used to facilitate the change. The contention was tested in an action research case study and longitudinal assessment of change in a large Australian public sector agency. A clear finding from this research is that the cultural change had been sustained through the systemic application of SHRM.

Keywords: action research; corporate culture; strategic human resource management

Introduction

How does organizational cultural change occur? Many organizations have tried it, but not

many have been successful, according to Smith (2003), who found a success rate of only

19% in four studies of a total of 284 cases. However, it can be successful, and practitioners

and scholars can learn from organizational cases where cultural change has occurred.

Organizational change consultants sometimes come up with 8-step or 10-step

programs to bring about major planned change initiatives in organizations, however

those of us who have worked in the organizations know that the step-by-step process

is difficult to apply in the real world, as we work in complex organizations

consisting of people with lots of different views, values, behaviors and interactions.

Such complex systems possess nonlinear feedback which allows for emergent behavior,

adaptation, learning and self-organization (Richardson 2008). Changes that can emerge

from these interactions and behaviors are often unpredicatable, and even unknowable

(Flood 1999).

So how do you implement cultural change in complex, pluralist organizational

contexts? Benn and Baker (2009) remark that a linear view of change is unsuitable and

inadequate for complex organizational systems, and suggest a whole-of-systems (or

systemic) action research approach as an alternative. The systemic action research

approach (Coghlan 2002; Burns 2007; Flood 2010) may be used in complex pluralist

contexts. Burns (2007) describes it as a strategy for whole system change, and Kocher,

Kaudela-Baum and Wolf (2011) demonstrate its use in practice in generating cycles of

ongoing improvement in a Swiss organization. This study adds to these findings and would

suggest that there is another possibility in designing and implementing cultural change by

using a systemic approach to strategic human resource management (SHRM) embedded in

action research reflective and cyclical processes.

q 2013 Taylor & Francis

*Email: [email protected]

The International Journal of Human Resource Management, 2013

Vol. 24, No. 8, 1588–1612, http://dx.doi.org/10.1080/09585192.2012.723022

With all of this in mind, this case study outlines a longitudinal assessment of

organizational cultural change from 1995 to 2010, based on a major action research project

carried out in a large Australian public sector agency from 1998 to 2002. Guest (2011)

points to the need to know the genesis of HR practices reported in longitudinal studies, and

this case outlines the origins of the decisions on specific HR practices and the process

involved in implementing them. Such illustrative case studies are particularly useful

in longitudinal research, according to Siggelkow (2007). In relation to the time frame,

Richard, Devinney, Yip and Johnson (2009) indicate that 10–15 years are required to

reliably assess change. Examples of longitudinal research in this field are not common

(Fronda and Moriceau 2008; Sø Rocha 2010 are examples), and this study aims to provide

an additional perspective to this field.

Background and context

The agency involved in the project employed between 18,000 and 21,000 people over the

years 2000–2002. During the period of this research, the agency was required by the

elected government to implement a major legislated reform program, with large-scale

impacts on business and society. For the agency, implementing the government’s reform

program became its major focus, and the successful implementation into the community of

the newly legislated program was essential to the credibility of the organization and the

reputation of its senior managers. The government had legislated an implementation date in

mid-2000, so failure to implement on time was not an option. The reform program was a

considerable undertaking, and resulted in a heavy focus on strategic change management,

and the employment and training of an additional 3500 people to enable a successful

change implementation process. However, the executive team of the agency did not believe

that the preexisting culture would deliver the ongoing improvement required to

successfully implement the government’s change program. At a strategy meeting in 1998,

the executive team decided to intervene in the culture of the organization to try and shift it

from what they assessed as an existing ‘entitlement’ culture toward a desired ‘performance’

culture. An ‘entitlement’ culture is noted in the literature (Bardwick 1998; Juechter, Fisher

and Alford 1998; Fisk 2010) as one where people feel entitled to certain benefits

from an organization without regard for their performance level. On the other hand, a

‘performance’ culture is one where employees want to contribute their best for the

organization in return for appropriate benefits, and is noted as a desired state of alternative

corporate culture by a number of authors (Atchison 1999; Figura 2000; Pearse 2000).

A core design team of four people, including the researcher, was established by the

executive to design the cultural change initiative. The researcher was an employee of

the organization during the period and utilized an insider action research approach

(Coghlan and Brannick 2001; Coghlan 2001) duringthe 4 years of the culturalchange project.

As an HR practitioner, the researcher noted from earlier HR experience that there was

a difficulty in achieving sustained organizational change by implementing ad hoc HR

interventions in isolation from a whole-of-organization understanding. For example, the

researcher recalled an intervention to improve attendance at the agency that had some

immediate short-term impact, however in the following years indicators of unplanned

leave had returned to previous levels. The researcher was concerned that previous

interventions dealt largely with surface behavior and did not reach the underlying systemic

structures driving behavior (Senge 1990).

These ideas were shared with the core design team and sponsors of the change project.

The project then used a systems-based approach to understand the implementation of

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a systemic SHRM intervention in an organization. The team assumed that the use of

systemic techniques could enable greater and more aligned change than would otherwise

be the case using ‘piecemeal’ or ‘ad hoc’ approaches. Researchers have noted that

attempts to introduce best HR practices are often piecemeal (Johnson 2000; Edwards and

Wright 2001; Harney and Dundon 2006) and do not bring about sustained change.

According to Monks and McMackin (2001, p. 58), piecemeal introduction of individual

HR practices can ‘neutralize rather than reinforce one another’. The alternative is to have

practices that mutually reinforce one another (Pfeffer 1998; Peña and Villasalero 2010).

A key issue in this paper is cultural change, particularly that related to shifting

an organization’s culture from an ‘entitlement culture’ toward a ‘performance culture’.

However, as Schein (1999) observed, shifting culture in an organization is an

extraordinarily difficult task. For example, Smith (2003) examined three studies

involving 225 samples of culture change, as well as his own study containing 59 samples.

The success rate in both was only 19%. In a report of a detailed case study on change in

seven hospitals, Huq and Martin (2000) demonstrated that implementing large-scale

whole-of-system change was very difficult, with only one of seven hospitals categorized as

highly successful. Also, a McKinsey study reported by Isern and Pung (2007) reported that

in a survey of 1536 executives only 38% of transformational change initiatives were

successful. The poor success rate in organizational cultural change seems to be partly due

to organizational change agents’ lack of systemic thinking and understanding of the causal

structure and leverage possibilities for sustained change within the organization’s context.

Espejo (1994, p. 210) defines systemic thinking as ‘an understanding of how the parts

relate to each other and constitute large wholes, that is, of self-organizing processes’.

Within this systemic concept of the world, ‘phenomena are understood to be an emergent

property of an interrelated whole’ (Flood 2010, p. 269). The social world, then,

is inherently systemic, so systemic thinking helps people gain meaningful insights

into events, behavior and structure (Flood 1999). The complexity of an organization’s

environmental context, business strategy, culture and operations and their impacts on one

another can only be properly understood through systemic thinking. This is because, as

Kim and Senge (1994, p. 277) note, managers’ ‘inability to deal with dynamic complexity,

when cause and effect are not closely related in time and space, and obvious changes do

more harm than good’.

Developing an appropriate HR philosophy, design and change strategy to shift

the culture can only be done effectively through this type of thinking. This is where the

underlying structural solution to the change problem can be developed. As Senge (1990,

p. 53) notes, the structural solution ‘is the least common and most powerful’ as it focuses

on the causality of the patterns of behavior. This is important because only the structural

solution addresses the underlying causes of behavior at a level that patterns of behavior

can be changed. As structure induces behavior, so changing underlying structures can

produce different patterns of behavior (Senge 1990). Thus, the dynamic nature of the

context for change requires systemic understanding of all of the factors to understand

the relationship between organizational and contextual factors affecting proposed change.

Systemic approaches to HR and change are noted and suggested by Chow and

Liu (2009), Paauwe and Boselie (2005), Pudelko (2006), Young (2009) and Karp (2006).

Karp (2006, p. 6) remarks that if a ‘leader wants to influence people’s behavior in an

organization, a systemic perspective is also needed’, and Graetz and Smith (2010) stress

that organization change is effective only when interventions are implemented through the

whole system. It is this whole-of-systems approach that was adopted by the organization’s

change design team.

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The aim for the agency was to shift the organization toward a ‘performance culture’ that

would result in a more effective and responsive workforce and enable the organization to

achieve its future challenges. For the researcher, a parallel aim to the agency’s need for

outcomes was to show how a systemic approach to SHRM could enable the cultural change

to occur and be sustained over time. Therefore, in this context the research question is:

The implementation of a systemically designed strategic human resource management intervention can have a positive and sustained impact on an organization’s culture.

A systems approach to SHRM

The understanding of HR as an organizational system is a key to unlocking leverage for

sustainable change. For example, Barney and Wright (1998) suggest that sustainable

competitive advantage stems from HR systems more than from single HR practices.

Also, Monks and McMackin (2001) point to the advantages of seeing HR as a system over

other approaches, with Huselid (1995, p. 636) noting that systems of HR practices

‘simultaneously exploit the potential for complementarities or synergies among such

practices and help to implement a firm’s competitive strategy’. Such a system, as the

resource-based view of HR puts forward, becomes a strategic asset, and as it is ‘invisible’

and embedded in the operational systems and management infrastructure of the

organization, it creates value and enhances the firm’s capabilities (Becker and Gerhart

1996; Becker, Huseld, Pickus and Spratt 1997). However, as Chadwick and Capelli (1999,

p. 15) lament, simplistic typologies used in SHRM research may prevent a holistic

understanding of HR systems, and they do not believe that many researchers or

practitioners ‘really seem to understand what strategies require of human resources on a

systemic level’.

In response to these findings, a systemically astute business manager would see that

there may be a gap between the performance of the organization’s human capital and its

potential, and that gap may represent a loss of strategic advantage. Such a systemic

strategy would be best delivered through a comprehensive understanding of the way the

HR system should work in the organization, and in alignment to business strategy (Bowen

and Ostroff 2004). This is difficult to achieve though, as a systems approach to HR imposes

significant demands on HR in comparison to the introduction of individual practices

(Monks and McMackin 2001) but can influence employees’ ability to perform, and their

motivation and commitment (Katou and Budhwar 2010). The direct impact of HR on

organizational outcomes is often found to be moderated through various intermediaries

including ability, motivation and opportunity (Katou and Budhwar (2010), HR flexibility

(Beltrán-Martı́n, Roca-Puig, Escrig-Tena and Bou-Llusar 2008) and relational climates

(Gittell, Seidner and Wimbush 2010; Mossholder, Richardson and Settoon 2011). So,

the changes need to occur across all aspects of HR (Caldwell 2001) and the resulting

system then will enable the integration of a range of HR practices so that they

‘complement, rather than conflict with, one another’ (Barney and Wright 1998, p. 40).

A feature of a systems approach is the synergy that exists amongst elements of a

system (Barney and Wright 1998; Chadwick 2010), which in HR is an important

contributor to firm performance (Yeung and Berman 1997; Subramony 2009).

Rodrı́guez and Ventura (2003, p. 1206) outline the reason for this is that HR systems

take advantage of ‘the potential for complementarities or synergies among such practices

and, at the same time, facilitate the implementation of the firm’s competitive strategy’.

This synergy means both aligning the HR processes with the desired culture and ensuring

consistency between short-term and long-term objectives (Beatty and Schneier 1997).

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One of the key systems approaches to SHRM is the use of high performing work

systems (HPWS), which appear in the literature as ‘bundles’ or ‘systems’ of HR practices

that are implemented together with the intention of improving the productive output of an

organization’s workforce. A large number of studies (e.g. Huselid 1995; MacDuffie 1995;

Delery and Doty 1996; Varma, Beatty, Schneier and Ulrich 1999; Guthrie 2001;

Kaman, McCarthy, Gulbro and Tucker 2001; Beltrán-Martı́n et al. 2008), confirmed in a

meta-analysis by Subramony (2009), have found a positive link for high performing work

systems in improving organizational performance. Recent studies keep confirming this

relationship (e.g. Guthrie et al. 2009; Fabling and Grimes 2010; Razouk 2011). Horgan and

Mühlau (2006) note that these practices can have interactive effects or additive effects,

thus reinforcing and enhancing the potential effects of single practices.

Various studies (Becker and Gerhart 1996; Youndt, Snell, Dean and Lepak 1996;

Rynes, Colbert and Brown 2002) have noted the wide variation and inconsistency of high

performing work practices (HPWP) or best HR practices. For example, various different

lists of HPWP are produced by Taylor, Levy, Boyacigiller and Beechler (2008),

Subramony (2009), Horgan and Mühlau (2006) and Datta, Guthrie and Wright (2005).

Despite these different lists, there are common HPWP’s in these lists. With HPWS,

however, there is a clear emphasis on the uniqueness of each organization, and this would

indicate that managers need to decide on what practices are best suited to their particular

business context and strategy.

The practices then work through changed employee behavior (Katou and Budhwar

2006) and through improved abilities, motivations and opportunities to participate

(Boselie, Dietz and Boon 2005). However, Hailey, Farndale and Truss (2005, p. 63)

noted that ‘the best of HRM policies may be designed but that does not mean that they are

implemented within the workplace’. So implementation is also a key issue, with

Kinnie, Hutchinson, Purcell, Rayton and Swart (2005) discovering that different employee

groups responded to different HR practices, which makes the design of HR strategy

become problematic. Therefore, HPWS needs to be differentially employed according to

the expected contribution and expectations of different employee groups (Lepak, Taylor,

Tekleab, Marrone and Cohen 2007; Conway and Monks 2008). However, other reviews

claim that the HPWS studies only show the potential value created through HR practices

and do not reveal the processes through which this value is created, which can often be

quite different for the same practice, making any universal model of HPWS flawed

(Wright, Gardner and Moynihan 2003; Boxall and Macky 2009).

With these factors in mind, it is not enough just to introduce bundles of practices that

may be effective in the short-term, but to embed these practices in the systemic structures

of the organization that changes the norms of behavior within the organization and hence

the culture. In essence, this approach needs to apply to the whole organization to enable it

to be sustained, otherwise elements of the ‘old’ culture would likely reemerge and

overwhelm the new. The systemic approach recognizes that HPWS operates differentially

and in different contexts. For some contexts, some practices will be more evident in

changing the culture than in other contexts, however these practices still need to be

embedded in the structures of the organization to enable change to be sustained.

In this paper, it is recognized that the use of HPWS has made a difference in many

organizations, however, due to the large variation of specific practices in the various

HPWS models, no universal conclusion can possibly be made. Specific HR practices must

be able to work synergistically and fit with both the organization’s business strategy and its

existing cultures and business systems to enable them to work effectively. Many of these

systems are bundles of good HR practices, where systemic interactions produce synergies.

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Guest and Conway (2011) note that HR practices must be present, be effective and be

effectively implemented for HR to be effective overall. The skill of the manager is to get

the right and unique blend of practices suitable for the particular organization, as well as to

understand their interactions, to be able to produce effective outcomes. For the agency in

the present study, it was important to choose the HPWS practices that were appropriate

to the organization’s context and business strategy. The practices to be chosen would not

only leverage successful change but also could be sustained over time. In this way, the

design team chose practices for the long-term, and they were built into the change strategy

and designed in an integrated and systemic way. The strategic choice of HPWS and

practices appropriate to the organization’s context, then, was a major component in the

design to enable sustained change.

Organizational culture and change

Culture is thought to be the natural outgrowth of the social interactions that are

organizations (Trice and Beyer 1993). This is because culture ‘refers to the deep structure of

organizations, which is rooted in the values, beliefs and assumptions held by organizational

members’ (Denison 1996, p. 624). As culture evolves over time in an organization, it can

become a pervasive force and its systemic structures underlie much of what happens

in organizations (Trice and Beyer 1993). As culture is deeply embedded, this leads to it

becoming more of a cause than an effect as it influences strategy, structure, procedures and

the ways in which organization members relate to each other (Schein 1985).

The socialization process in the organization causes the culture to reinforce itself and

thus become relatively stable over time, and so builds inertia (Sastry 1997), although

cultures are never static (Kotter and Heskett 1992). Sastry (1997) explains how inertia,

driven by learning and socialization in an organization, reduces its ability to undertake

transformational change. Given this pervasiveness of culture, then strategy with cultural

alignment is critical for an organization to be effective and financially successful in the long

term (Schneider 2000). Such an approach views culture management as a central function,

with the alignment of organizational culture and strategy seen as an ongoing process

(Ogbonna and Harris 2002) and effective HR management of this alignment becomes a key

difference between top performing and mediocre organizations (Palthe and Kossek 2003).

Then culture can facilitate performance and strengthen the impact of HR systems on

performance, providing it is aligned with the business strategy (Chow and Liu 2009).

Examples of organizations moving toward a performance culture are given by Wright

(1998) with IBM; Artis, Becker and Huselid (1999) with Lucent; and Harris, Huselid and

Becker (1999) with Praxair. Kossek, Ozeki and Kosier (2001) note how some employers

attempt to wean employees away from the entitlement mentality by introducing specific

HR programs such as wellness incentives. As the entitlement culture runs deep, however,

these incentives are only likely to deal with the surface level of culture. In reference to

attempts to introduce a ‘performance culture’ by three Australian Public Service (APS)

agencies, O’Brien and O’Donnell (2000, p. 72) noted that there ‘seemed to be an emerging

gap between the rhetoric of cultural transformation toward a high performance . . . public

service and the reality experienced by employees’. Also, Parker and Bradley (2000, p. 125)

note in discussing major cultural change in the APS, that ‘changes have been pursued

with relatively limited empirical understanding of . . . culture in the public sector’ and are

‘potentially lacking in sensitivity to the culture characteristics of public organizations’.

These examples indicate the difficulty of translating intent into effective implementation

of cultural change.

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The existence of an entitlement culture in an organization is partly related to the level

and type of employee commitment (Allen and Meyer 1990; Virtanen 2000) that exists in it.

The issue of employee commitment is significant for organizational change agents.

The initial momentum of large-scale organizational change, according to Narine and

Persaud (2003, p. 180), ‘eventually decelerates because of internal forces related to

management’s inability to gain employee commitment and then maintain it over the long

haul’. This problem is partly related to inertia (Sastry 1997) and partly related to the

motivation and commitment of individuals (Allen and Meyer 1990). Such commitment

arises from an emotional or intellectual bond linking the individual with the organization,

and it is important because it enables discretionary effort of the employees

(Davenport 1999). The history of an organization is also important as a poor change

history can have a negative impact on future change initiatives (Bordia, Restubog,

Jimmieson and Irmer 2011). Therefore, the careful design of the organization’s system of

HR practices is critical in building commitment to support an organization’s business

strategy, as HR practices shape the behavior and experiences of employees and become

the means whereby cultures are created and sustained (Rowden 2002).

Confirming the importance of the HR-culture link, Gerhart (2009) claims that HR is

a primary avenue for firms to influence culture; Yiing and Bin Ahmad (2009) found

support for HR-organizational culture fit; and Taylor et al. (2008, p. 501) found that an

organizational culture characterized by high adaptability and a HRM system characterized

by HPWP ‘to have a significant and direct effect on employee commitment’.

So what can HR do about this? These issues of organizational change history,

commitment, inertia, etc. add to the complexity in the understanding of organizational

cultural change, reinforcing the need for a systemic view of the change context and

process.

Despite the difficulties, HR does have a central contribution toward achieving cultural

change. For example, Ulrich (1997, p. 158) notes that HR professionals ‘can create the

architecture and action that lead to new cultures’. Varma et al. (1999, p. 33) found that HR

practices, such as HPWS can cause ‘a positive culture change in the organization’ and

Beatty and Schneier (1997, p. 34) believe that culture change ‘may offer the highest

potential leverage for HR to impact the organization’s economic performance’. This can

only occur effectively when SHRM is used in a way that aligns HR strategy to business

strategy (e.g. Chow and Liu 2009). An issue in implementing sustained cultural change is

the achievement of a critical mass (Enderby and Phelan 1994), and this may be developed

through an effective change management process that involves individuals in the change

process. Once a critical mass is achieved, a new norm is created, so that ‘the way we do

things around here’ is transformed to that new norm. The critical mass can be achieved by

embedding the change in the systemic structures of the organization.

However, the process to enable culture change to succeed can be highly complex and

involved. For example, Lofquist (2011) refers to the need to take into account various

subcultures within organizations, as their requirements and expectations will differ. Kotter

and Heskett (1992, p. 99) note that in ‘10 successful cases of cultural change that we

studied, hundreds or thousands of initiatives were required to implement the new visions

and the new strategies’. These examples highlight the issue of trying to change culture by

introducing limited work practices, when a much more holistic and systemic approach

needs to be instituted to be able to shift culture.

These organizational cultural and change issues were a major point of discussion in the

systemic design of cultural change in the agency. A summary of the cultural change model

and implementation process for the agency is outlined later in a later section.

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Methodology

The research paradigm for the project was interpretive, participatory and pragmatic.

The methodology of action research is undertaken from this worldview, i.e. that results

from action taken may be interpreted in the light of both theory and practice, and that

participation is essential in achieving results from practice. It is evaluated as a longitudinal

action research case study. This longitudinal study is similar in methodology to the action

research study by Fronda and Moriceau (2008) in that it also involved a change from

insider to outsider research. Case study data can ‘usually get much closer to theoretical

constructs and provide much more persuasive argument about causal forces than broad

empirical research can’ notes Siggelkow (2007, pp. 22–23). A single deep case study,

such as this research, is considered by some theorists as the optimum form of case

study research, because it can offer insight into underlying organizational processes,

politics and culture (Harris and Ogbonna 2000). Similar public sector case study research

has been undertaken by Ryan, Williams, Charles and Waterhouse (2008) and Teo (2002),

whose research involved HR and change. This gets to the essence of the ‘how to’, not just

an evaluation of change outcomes.

The research contention was evaluated through a range of data as outlined in Table 1,

including comments from structured interviews of the implementation team and senior

managers; an analysis of voting patterns in the Certified Agreement process under the

Workplace Relations Act 1996; content analysis of letters to the editor of the agency’s

internal weekly electronic newsletter; a comparison of several consultants’ reports and

internal reports on staff survey data; theoretical argument drawn from the literature

review; statements obtained from the agency’s Annual Reports and evaluation of the

action research process. The majority of the quantitative data was obtained from internal

agency surveys and data sources, including electronic information. Most of the qualitative

data were obtained through the analysis of structured interviews of senior executives

and implementation team members. Similar methods were used by Harrison and

Corley (2011), Sonenshein (2010) and Teo (2002), and in a public sector case study by

Ryan et al. (2008).

Data triangulation (Denzin 1978) is relied on as a source of credibility. In qualitative

research, triangulation is seen by Schein (1985) as the only safe approach to identify

cultural assumptions, where the synthesis of information sources enables a pattern of

evidence to be revealed. Triangulation strengthens a study design, according to Patton

(1990, p. 187), as it ‘can mean using several kinds of methods or data, including using both

quantitative and qualitative approaches’. In this research, triangulation is used as a tool to

broaden the collection of data in relation to the research and to provide confirmatory data,

rather than to specifically validate findings. This was done by comparing the results in each

Table 1. Data availability over the period of study.

Data availability

Type of data 1995 – 2000 2001 – 2005 2008 – 2010

Structured interviews No Yes Yes Agreement voting Yes Yes Yes Letters to editor Yes Yes Yes Survey data Yes Yes Yes Annual reports Yes Yes Yes Process evaluation Yes Yes No

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of the data types against each other, to ensure consistency. Triangulation was used by

Harrison and Corley (2011), Nielsen et al. (2010), Sonenshein (2010) and Sø Rocha (2010)

in similar case studies.

Theorists in action research note that to be successful, it ‘must be accepted by the

research subjects (host organization) and some improvements effected’ (Rose 1997,

p. 256); and that the theory must have a ‘capacity to resolve problems in real-life

situations’ (Greenwood and Levin 1998, p. 75). Midgley (2003, p. 91) believes that a

‘methodology for systemic intervention should be explicit about taking action for

improvement’. He notes that ‘an improvement has been made when a desired consequence

has been realized through intervention’, whereas ‘a sustainable improvement has been

achieved when this seems like it will last into the indefinite future without the appearance

of undesired consequences’. The process of using the methodology of action research is

described in the next section.

Action research process

With organizational approval, the author acted as an action research insider during the

process of design and implementation of the project. Coghlan (2007) notes that insider

action research offers a unique perspective on organizational systems, due to their

organizational knowledge and engagement in experiential learning cycles. The description

also responds to the call by Guest (2011) to find out where HR change originates.

The agency’s selection of ‘systemic thinkers’, including the author, for the design of

the change strategy proved invaluable in the design phase, particularly in comprehending

and explaining complex interrelationships and issues in a relatively quick time frame.

The four members of the design team were quite familiar with Peter Senge’s work,

particularly the books The Fifth Discipline (Senge 1990) and The Fifth Discipline

Fieldbook (Senge, Kleiner, Roberts, Ross and Smith 1994), and were continually

concerned to design a strategy that would evoke maximum leverage. They believed that

this would be able to be done by changing the systemic structures that caused or enabled

certain behaviors to occur within the agency and that all parts of the system needed to be

aligned to the new approach, otherwise these components could be working in opposition

to each other. Therefore, the change strategy needed to be comprehensive enough to bring

about a coordinated, systemic change in the structures that could help shape the culture.

The design team pointed out to members of the executive that the people management

system could be redesigned depending on their philosophy and business direction, e.g.

via either a control or commitment HR system (Arthur 1994), or some mix of the two.

The agency’s executive team had determined that they wanted to build a partnership

relationship with employees to work toward their desired performance culture.

Subsequently, the executive developed, iteratively with the team, a set of philosophical

statements about the way it wished to proceed with people management in the agency. To

bring the philosophy to life, the design team put forward a large range of integrated people

strategies, which, they believed, would support the new philosophical direction of the

agency. Once approved in May 1999, three members of the design group (including

the author) continued to be involved in the project by managing the implementation of the

change strategy, along with a team of other agency staff. The action research methodology

was accepted as an approach to designing and implementing the change. A summary of

intentions of the change strategy is outlined in Table 2, with a list of relevant projects

undertaken to achieve these intentions. The projects were chosen for their potential to

initiate change to systemic structures. The design team discussed some key leverage points

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that could bring about change, which were translated into the projects. Specifically, the

team believed that the most leverage would come from: a new cooperative approach to

industrial relations (Agency Agreement project); a major redesign of the performance

system with a focus on business alignment and conversations (Performance project);

significant enhancements to communication and involvement of leaders (Leadership

project); a focus on the health and well-being of employees (Well-being project) and a

strategic design of the workforce to target specific initiatives to different work types

(Work Type project). Other projects were involved in designing supporting infrastructure.

Through the action research process, the implementation team operated systemically and

with cultural sensitivity to design strategies for change (Marshall 2011). Public discussion

and involvement in the change processes was actively encouraged, and at one point there

were more than 50 people involved directly in the change projects.

Implementation work on the agency’s change strategy projects commenced late in

1999 and operated for 18 months before being terminated in June 2001. An action research

cycle approach was used during the implementation phase, with a total of six 3-monthly

cycles undertaken during this period. At the end of each 3 monthly period, a workshop

with the implementation team leaders and the project managerswas held to undertake a

full review, to reflect and to redesign where necessary, consistent with the action research

approach (Fletcher, Zuber-Skerritt, Bartlett, Albertyn and Kearney 2010; Maurer and

Githens 2010; Kocher et al. 2011). The projects were fully or partly implemented by

June 2001, and the outcomes from the projects are explained in the next section. Other

work on the concepts developed through the change strategy continued in a business-as-

usual form following June 2001. As at 2010, the major changes to structures implemented

in the change strategy were still in place, with some continuous improvements occurring

along the way. A summary of the changes to the HR system with a comparison to the prior

state of the HR system is included as Table 3.

Table 2. Relationship of change strategy intentions with related change strategy projects.

Change strategy intentions Related projects

† Cultural interventions to enable a shift from an ‘entitlement culture’ to a ‘performance culture’.

All

† A segmentation of the workforce into work types to differentiate strategies appropriate to work type for learning, performance, employment and conditions.

Work type; Workforce design; Employment; Skilling; Agency agree- ment

† A partnership approach to Certified Agreement making based on cooperation and mutual benefit.

Agency agreement; Leadership

† The introduction of a capability framework to enable effective assessment of people capabilities.

Capability; Skilling; Work type

† A holistic assessment system for development, selection and performance evaluation.

Assessment; E-HR; Employment; Capability; Skilling

† A targeted reward and recognition approach to encourage and reward aligned behavior.

Performance; Agency agreement

† The design and introduction of an employee value package.

Employer of choice; Agency agreement; Employment

† A multi-way communication approach to facilitate shared understanding of corporate direction.

Leadership; Agency agreement

† A health and well-being program to improve the overall health of employees.

Well-being

† The introduction of systems and tools to enable the strategies to be achieved, including e-learning.

E-HR; Assessment; Skilling

The International Journal of Human Resource Management 1597

Results

Not all results are included here due to space limitations. Ployhart and Vandenburg (2010)

claim that change is the primary interest in a longitudinal study, and in this paper the

results are focused around specific changes made and sustained. A sample of comments

Table 3. Major changes to elements of the Agency’s HR system.

HR systems prior to the change program HR systems following the change program

Strategic HRM and Workforce design † No stated people (HR) philosophy † Stated people (HR) philosophy and principles † Limited alignment of HR with organizational strategy

† Strategic alignment of HR with organizational strategy

† Workforce planning inconsistent, resulting in staffing fluctuations

† Intentional workforce design and planning for the future; strategic use of people data

† One-size fits all approach to people management practices, but with inconsistent implementation in different parts of the organization

† Introduction of work types with targeted and differentiated strategies in employment, development and performance

Employee relations and communication † Industrial relations approach based on adversarial practice, withholding information and pluralist views

† Partnership fostered with focus on common- ality of interests and sharing of information; open communication systems

† Limited communication and engagement of managers and team leaders

† Quarterly ‘dialogue days’ – discussions with all organizational leaders, cascaded to all staff

Performance and rewards † Fragmented alignment of corporate plan to team plans and individual agreements

† Line of sight from corporate plan through to team plans and individual agreements

† Limited use of performance appraisal and feedback processes

† Widespread use of performance appraisal and feedback, including 360 degree feedback

† Limited use of performance agreements † Mandatory use of performance agreements † Performance not well-linked to expectations † Behavioral statements and expectations

linked to performance agreements and appraisals

† Insufficient links between pay and performance

† HR measures built in to overall pay outcomes

† Limited use of reward and recognition programs

† Significant enhancement of reward and recognition programs

Conditions and work environment † Mostly one-size fits all conditions of employment

† Differentiated conditions of employment by work type

† Focus on health and safety and return to work, but not integrated

† Integrated focus on health and safety linked to wellbeing program, risk management and early return to work

† Diversity management being implemented † Strong focus on diversity, including enhancement of family-friendly working practices

Employment † Slow recruitment and selection practices, inconsistent advertising

† Recruitment practices streamlined and focused on differentiation according to work type, employer of choice and branding focus

† Inconsistent talent management † Focus on talent management and retention Learning and development † Broad but fragmented learning and development processes

† Capability framework developed with focused learning outcomes; on-line learning system

† Inconsistent learning assessment † Integrated learning assessment

J. Molineux1598

from structured interviews is used, plus a comparison of consultant research, results from

Certified Agreement votes and letters to the editor of the agency’s newsletter.

The approach to change implementation was generally consistent with the model of

change as outlined in Figure 1, which was developed out of the experience in this action

research project and the change process involved (Molineux 2005).

The change model

The model at Figure 1 represents a process for integrating SHRM with cultural change

utilizing a systemic approach. Within the oval at the top of the diagram, the element noted

as Systemic thinking is a critical starting point. Such thinking helps an understanding of

the following: the business direction of the organization, the factors in the environment

influencing the business, its organizational and business cycles and the impact of the

existing culture on the business. The dynamics of these relationships are driven by

business, economic and organizational cycles. In the agency’s case, these were driven

by political and economic cycles. The systemic thinking component is critical to avoiding

pitfalls. Systemic thinking should avoid ‘quick fixes’, as the understanding of underlying

structure, context and culture will enable the leaders of the organization to develop a

philosophy and design that aims to provide a fundamental solution, rather than creating

Figure 1. How systemic SHRM influences organizational culture.

The International Journal of Human Resource Management 1599

a symptomatic solution. For example, an organization that uses frequent retrenchment and

hiring sets up a cycle that appears to use quick fixes (Senge 1990). This may cause

fundamental problems with long-term capability and the motivation of staff. The culture

of the organization could also be affected, even though this would not generally be an

intention of management. Such unintended consequences of quick fix solutions will be

avoided if systemic thinking is used. To assist leaders in this type of thinking, systems

approaches such as scenario planning and system dynamics would prove useful.

In Figure 1, the four ‘boxes’ represent a cycle of strategic HRM. From the systemic

thinking about the business direction and other factors represented in the ‘oval’, a new

HR philosophy and design can be drawn that will include the high-level design of

the HR system to be implemented, and images of the future intended culture. Once the

design has been created, a change strategy and methodology needs to be developed.

Implementation of the change strategy then results in HR operational changes, which

would be designed to elicit and reinforce new behaviors required. The whole process

would then be assessed through evaluation mechanisms. At the core of the model,

underpinning this cycle is systems practice, to enable this to occur in a systemic way.

These techniques can be used at any stage of the change process. The various systems

techniques will enable the user to design implementation processes, engage stakeholders,

analyse contexts, evaluate complex dynamic information and evaluate outcomes.

At the outside of the model, the process of cultural and behavioral change is indicated.

The new philosophy and design requires leadership and directional statements to model

the new behavior required. The change strategy and methodology outline the new

behaviors required for the desired culture to set benchmarks that changes may be

measured against. The new HR infrastructure and operations reinforce new behavior.

The extent of alignment and culture change in accordance with the overall philosophy and

business direction can then be measured. This information then feeds back to the systemic

thinking about the business and its direction.

Staff surveys

As indicated earlier, a poor change history has an impact on the organization’s ability to

undertake future change. In the agency’s case, due to some poor leadership feedback in

relation to employee surveys in 1995 and 1997 and an unpopular change process in the

mid-1990s, cultural surveys were not undertaken across the whole organization until 2009.

However, cultural data was available through other sources and in relation to major

organizational divisions in 1998 and 2003. The surveys had some quite similar questions

and scales, and comparable results across the various surveys are included in Table 4.

The cultural survey in 2003 had over 1300 respondents, with the 1995 survey over 6500,

the 1998 survey over 2300 and the 2009 survey over 7600, with the sample of respondents

representative of the demographics of the organization in those years. This data allowed

some clear comparisons with the preexisting culture (prior to 1998), the post-change

culture (2003) and the more recent culture (2009). The difficulties with missing data, both

in terms of population representation and constructs in longitudinal research, are outlined

by Ployhart and Vandenburg (2010). While both of these difficulties are present with the

staff survey data in this research, the data are not relied on as the only indicator of change,

but one of a number of indicators of change. Monks and Loughnane’s (2006) study on

power plants had similar difficulty in comparing employee surveys.

Significant changes in cultural indicators can be noted over time from the data in

Table 4. The indicator of morale is one of the most significant, rising from 24% favorable

J. Molineux1600

T a b le

4 .

C u lt u ra l in d ic a to rs

fr o m

st a ff su rv e y s 1 9 9 8 – 2 0 1 0 .

P e rc

e n

ta g

e o

f e m

p lo

y e e s

a g

re e in

g o

r st

ro n

g ly

a g

re e in

g

P re

-c h

a n

g e

su rv

e y s

P o

st -c

h a

n g

e su

rv e y s

S ig

n ifi

c a

n c e

c o

m p

a ri

n g

1 9

9 5

– 2

0 0

9 (Z

-t e st

fo r

th e

d if

fe re

n c e

b e tw

e e n

p ro

p o

rt io

n s)

1 9

9 5

n ¼

6 5 4 8 (%

) 1

9 9

8 a

n ¼

2 3 0 5 (%

) 2

0 0

3 n ¼

1 3 1 5 (%

) 2

0 0

5 n ¼

7 6 5 8 (%

) 2

0 0

9 n ¼

7 6 9 8 (%

)

In fo rm

e d a b o u t c h a n g e

5 4

6 1

* * *

C h a ll e n g in g w o rk

5 0

6 5

* * *

W o rk

li n k s to

o rg a n iz a ti o n a l g o a ls

9 0

7 9

9 7

* * *

M o ra le

h ig h

2 4

7 2

7 9

* * *

P a y sa ti sf a c ti o n

4 6

8 3

* * *

M a n a g e r g iv e s fe e d b a c k

2 5

7 6

* * *

F o rm

a l a p p ra is a l u n d e rt a k e n

2 7

7 8 b

8 5

8 7 c

* * *

M a n a g e r u n d e rs ta n d s w o rk

6 3

8 2

* * *

M a n a g e r p ro v id e s su p p o rt

7 0

8 2

* * *

G ro u p is w e ll m a n a g e d

5 5

7 8

* * *

G o o d u se

o f e m p lo y e e ’s

sk il ls

5 3

7 3

* * *

P e rf o rm

a n c e a g re e m e n t in

p la c e

4 0

8 4 b

8 6

9 0 c

* * *

C le a r se n se

o f d ir e c ti o n in

b u si n e ss

li n e s

3 8

6 1

* * *

O v e ra ll sa ti sf a c ti o n w it h se n io r li n e

m a n a g e m e n t

3 5

6 2

* * *

P ro u d to

w o rk

fo r th e o rg a n iz a ti o n

3 0

7 2

* * *

S u p p o rt s c h a n g e p ro c e ss

3 7

2 4

5 2

* * *

E m p lo y e e su p p o rt s o rg a n iz a ti o n a l g o a ls

6 9

2 1

7 4

8 9

* * *

S a ti sf a c ti o n w it h jo b

5 9

7 4

7 9

* * *

C le a r jo b e x p e c ta ti o n s

8 7

Q u a li ty

a n d d e p th

o f w o rk

8 3

S o u rc e : V a ri o u s in te rn a l a g e n c y d o c u m e n ts . * * *

p ,

0 .0 0 1 ; * *

p ,

0 .0 1 ; * p ,

0 .0 5 .

a T h e su rv e y in

1 9 9 8 w a s u n d e rt a k e n fo ll o w in g a n u n p o p u la r o rg a n iz a ti o n a l re st ru c tu re

a n d c e n tr a li z a ti o n o f p o w e r.

b n ¼

7 2 2 7 fo r th e se

tw o q u e st io n s.

c T h e se

re su lt s w e re

fr o m

a su rv e y in

2 0 0 8 (n

¼ 6 9 8 9 ) w h e re

th e tw o q u e st io n s w e re

id e n ti c a l to

th e 2 0 0 3 a n d 2 0 0 5 su rv e y s.

The International Journal of Human Resource Management 1601

in 1995 to 72% in 2003 and a high of 79% by 2009. Similarly, the indicator on pride in the

organization changed from 30% favorable in 1995 to 72% by 2009. Job satisfaction had

increased from 59% in 1995 to 74% in 2003, and to 79% with a similar question in the

2009 survey. Despite the problems with comparing data from different surveys and

acknowledging the possibility of error, the changes are significant at the 0.001 level using

a Z-test comparing for the difference in proportions and therefore indicate that a major

change may have occurred. Some of the trend indicators from Table 4 are illustrated

in Figure 2, showing significant change between pre-change indicators with post-change

indicators, and then further marginal improvements in 2008 and 2009, illustrating

sustained change.

Example of systemic structure driving new behavior

As an example of how systemic structure was used to drive change in this project, structural

change was embedded in the agency’s performance system by introducing ‘mandatory’

new performance processes and ensuring acceptance by undertaking an agreement with the

unions. The process used was as outlined in the outside ring of Figure 1, with a process

of top leadership support, changed expected behaviors and reinforcement to achieve

cultural change directed and supported through the strategic cycle of SHRM. An extensive

communication, involvement, education and support program were established to

implement the changes. This initially ‘forced’ the changed behavior through mandatory

processes such as performance agreements, team plans, annual appraisals and mid-year

reviews, and through rating people based equally on outcomes and a set of behaviors so

the ‘what’ and the ‘how’ were equally important in assessing performance. For senior

staff, performance pay was based on this assessment. Managers were trained in the

new techniques and were expected to have regular conversations with their employees.

Collaborative behaviors were assessed and rewarded, as was engagement with clients.

Although these conversations were forced initially by the new processes, compliance was

fairly high and increased over time. The results are included in Table 4, with the indicator

Formal appraisal undertaken showing an increase from only 27% in 1995 to 78% after the

Figure 2. Graphical illustration of several indicators of change presented in Table 4.

J. Molineux1602

implementation of the new system by 2003, and to 87% by 2008. Similarly as presented in

Table 4, the indicator Performance agreement in place increased from 40% in 1995 to 84%

in 2003 and to 90% by 2008. After only a few years, these discussions became embedded as

new norms in the system, and they moved from ‘forced’ toward more ‘natural’ behaviors

as managers and employees became familiar with the processes and could grasp the

ongoing value of them to their work and performance.

Structured interviews

A total of 20 structured interviews were undertaken with strategy designers (core members),

executives and project leaders following the completion of the project. A sample of their

comments is provided in this section as an indicator of their total comments.

A consensus of interviewees confirmed the systemic/holistic approach to the strategy,

with comments such as:

It recognizes the connectedness of an HR system as such, and tries to manage aggregate outcomes of the system and the dependencies of different parts. (Core member)

The [change strategy] was the first attempt for the [agency] to look at a holistic HR strategy. It showed HR strategy’s connectedness. It identified dependencies, and flows through the system. (Executive)

The [change strategy] was planned, and links and relationships were managed. It was an integrated system, e.g. capability and performance assessments would feed into employment decisions. Things were built together – and related and supported each other. (Project leader)

These comments were indicative of the approach in designing the strategy as indicated

in Figure 1, where the internal SHRM cycle influenced the external behavioral and cultural

cycle and outcomes.

In relation to specific outcomes, interviewees confirmed the contributions of the

change strategy and its individual projects which helped the overall cultural change

process and moved the organization toward the intentions of the strategy (Table 2).

For example, one project leader noted ‘We have new people, new processes, etc. . . . It

is a different place to work in – lots of change has been accepted’. A core member noted

that ‘there has been a definite change of behavior’ in relation to the cultural shift that

occurred.

In relation to the contribution of specific projects, the Agency Agreement project

delivered significant change, and an executive member noted: ‘There was a better

agreement making process. It was not so antagonistic. The AA Team built trust with the

unions and used different techniques throughout their process’. Also, a core member noted

that ‘It repositioned the [agency’s Certified] Agreements as an enabling tool for business

strategy, people stuff, and a link from business to what we offer as an employer’.

The Employment project also contributed positively with one core member noting that

it ‘got buy-in from Lines about the one employment system. It was a most critical step –

significant . . . There was support from the business and it worked well with business . . . ’

A core member also noted that the Well-being project ‘was best practice...It introduced

preventative measures’. This understanding was important, to see the relationship of

providing employees valuable psychological and physical support, which in turn may

influence their behavior and enable more effective contribution to the business.

Another core member noted the importance of the Performance project and stated

‘Performance was one of the shining lights. A systemic approach was achieved’. Another

core member noted how it brought a whole-of-organization approach, and stated

The International Journal of Human Resource Management 1603

‘The [CEO] thinks highly of the performance system. It has forced an enterprise view;

e.g. the standards across the organization have brought this thinking together’.

Integration of the projects was critical to achieving the outcomes, and a core member

noted that the Employer of choice project ‘had significant impact on people at the top

level. What it meant was an awareness that all the HR stuff connected’.

These comments indicate a range of successful outcomes with the implementation

projects. Whilst these comments are only a sample of the interviews, a synthesis of

the comments indicates that they believed positive change had occurred in shifting the

organization toward a performance culture, with a noticeable change in the behavior of

employees. The interviewees also positively commented on the integrated and systemic

nature of the change process, aligning it to organizational strategy.

Certified agreement outcomes

In the agency, around 90% of the employees were covered by the General Employees

Agreement (GEA), made under the Workplace Relations Act 1996. In 1998, the first vote

for the GEA was overwhelmingly defeated (over 60% voted no), due to union campaigns.

Eventually, this was turned around when the union won further concessions and supported

the agreement. In June 2000, the next agreement was narrowly defeated by a handful of

votes. Again, this was later turned around. Under the change strategy, the 2001 agreement-

making process was characterized by a different emphasis, based on the change strategy’s

philosophy and principles. Two senior executives were nominated to lead this process,

including the researcher’s manager. They set about a new process, where they would try

and build a partnership with the unions and staff through being more open, honest and

responsive. This involved open communication, sharing of information with unions

and staff, and the weekly publishing through the agency’s electronic magazine of

answers and responses to all employees’ questions and comments. The resulting vote in

October 2001 was 90.85% of votes in favor of the agreement. This was a massive

turnaround on previous agreements. It should be noted here that the pay offers by agency’s

management were fairly consistent for the agreements from 1998 to 2004, at around 4%

per annum, and did not have much influence on the voting processes. Since that time until

the most recent agreement vote in 2009, no vote has been defeated.

Letters to the Editor

The researcher examined thousands of Letters to the Editor of the agency’s internal staff

electronic weekly magazine, between November 1999 and June 2004. As the magazine is

quite open in its publication of letters, including criticism of management, it tends to

attract more negative contributions than positive ones. It is also seen in the agency as a

vehicle for discussion of controversial issues, and one of the methods to obtain answers

from management. Of the letters examined, 624 letters related to management, HR or IR

issues, or presented opinions that were either negative; positive or neutral in relation to the

agency’s desired culture. Content analysis of words and phrases (Krippendorff 2004) was

used to assess this.

Results from the content analysis indicated that the total ratio of negative responses

fell from 80.4% in the period November 1999 to July 2000 to 45.3% in the period January

2003 to June 2004. If letters regarding the Certified Agreement issues are disregarded, then

an even more substantial reduction of negative letters appears between these periods –

from 71.9% to 27.3%. Since that time, another 281 letters were examined between January

J. Molineux1604

2009 and March 2010. The ratio has been maintained, with 43.1% negative responses

between January and July 2009 and 38% negative responses between August 2009 and

March 2010. If Certified Agreement issues are disregarded, then the negative responses are

31.7% and 33.9%, respectively.

Subsequent interviews

In April 2010, the researcher interviewed two of the agency’s senior executives who were

familiar with and involved in the original project to confirm the evidence on sustained

change. Interestingly, both confirmed that the changes had continued and had been

sustained but were not satisfied that the organization had made it yet to the original intent.

One executive noted ‘about 75% of the original [change strategy] has been

implemented’ but a significant challenge remains ‘to move forward with a more holistic,

integrated approach to people matters, and on the delivery front . . . a more efficient and

effective HR function across the [agency]’ and ‘overall, there has been substantial growth’.

This executive noted the progress with the original projects over the time since they

were implemented. For example, the executive noted that in relation to the Work type,

Employment and Assessment projects, ‘Gains were made in capability assessment over

time, the capability dictionary, linking elements of the [change] Strategy, the capability

framework. Differentiated selection processes for various work types were a big

breakthrough’. The executive also noted that the learning and development projects had

produced ‘big gains, including e-learning and new products. The push – pull concept was

accepted. Succession planning was built into the performance systems and L&D’.

Interestingly, this executive felt that the Performance project had achieved a lot of gains, but

‘we have not yet delivered to where we wanted to go with the performance culture. We have

done the groundwork and taken it from a low base’. The executive noted considerable

achievements with the Well-being project as ‘Well-being was a great success – it is still

going and we got awards for it’. The executive also noted that ‘Internal communications –

has improved immensely’, and that the Agency Agreement project

has been an achievement overall. From an initial hard line in the late nineties, the [agency] has moved toward a more co-operative approach with unions, but applies strong business imperatives that include consideration of people issues . . . There has been a huge change in work conditions.

The other executive also noted sustained changes, and in particular discussed the

outcomes of the Performance project. In relation to this, the executive noted that

The PDA process at the individual [level] is more closely aligned and supports the planning process. However, all the levels are not there. This is really important at different levels . . . People see benefit in clearly articulated principles on behavior. We have come a long way . . . The Reward & Recognition program is aligned. It has matured so much, but we haven’t tested the system, and it needs to go to the next level . . . In relation to the Engagement Survey, the performance system is positive, including its design.

Discussing the Employer of choice project, the executive noted that ‘the [agency] is well

supported in work-life balance, remuneration and conditions. We are out-doing other

[government] agencies’. The executive also noted that with the ‘Agency Agreements, we

are getting better at articulating the whole employment proposition, not just about money,

but work-life balance, reward, recognition, etc.’ and that the people system ‘has been

good in relation to differentiation between work types’. Overall, the executive noted that

We have come a long way. As evidence of this, the amount of contact we get with international and local agencies – we are seen as best and better practice. The [head of the

The International Journal of Human Resource Management 1605

public sector] wants to replicate some of our strategies. The work in the late 90s was a catalyst for positioning us where we are now. The structures are in place and the system works anyway despite the problems. There are emerging aims and challenges. We have established a great foundation, positioning us for the future. We have built the infrastructure, and we can run ahead further. There is a great opportunity.

Both executives also outlined current issues and challenges with the HR system and

were keen to see further improvements. Their comments indicate that the systemic

structural foundations built with the change strategy have been sustained and are still

contributing to the performance of the organization more than 10 years following the

original design.

Discussion and conclusion

The results of the systemic change processes undertaken from 1999 to 2002 indicate that

cultural change has occurred in the agency and that it has now been sustained until at least

2010. Such sustainable improvement is an important outcome of an action research change

intervention (Midgley 2008). Evidence from a comparison of staff surveys outlined in

Table 4 indicates that employee engagement has improved and been sustained. Changes

to the pattern of comments in Letters to the Editor and in the voting for the Certified

Agreements are indicators of cultural change. Structured interviews with executives, core

members and project leaders indicate the extent of some of the changes made, and the

executives interviewed in 2010 agree that changes have been sustained.

Changes to the HR system were noted in Table 3. One major change was the focus on

a partnership approach to employee relations (Gill 2009) which significantly reduced

industrial conflict and made it easier to implement other cultural change initiatives.

Another was the differentiation of the workforce into work types (Lepak and Snell 1999,

2002), where HR strategies could be targeted to specific work types. This was particularly

important for the core workforce (now also called ‘strategic jobs’ by Huselid and Becker

2011). A third major change was an open communication process, both in engaging

leaders and managers in the organization (e.g. Conway and Monks 2011) who are essential

for the implementation of change, and in general for employees (e.g. Hammond, Gresch

and Vitale 2011). A fourth major change was to the performance management process,

including alignment of individual and team performance agreements to the organization’s

plan (e.g. Boswell 2006), the introduction of regular feedback and appraisal processes

(e.g. Tremblay, Cloutier, Simard, Chênevert and Vandenberghe (2010), and the

enhancement of reward and recognition programs (e.g. Alfes, Truss and Gill 2010).

A lot of these changes were not particularly groundbreaking or innovative. However,

the context of the organization at the time in 1998 did not have those things in place.

In summary, significant changes that have been sustained include the use of performance

agreements, informal feedback and formal appraisals; relationship-building approach to

industrial relations; the use of work types and a capability framework; differentiated

employment, work conditions and development processes for work types; skill and

capability assessment; employer branding; electronic learning; open communication

processes; dialogue days with all senior managers and employee well-being programs.

Limitations to this research include the single case study design, which does not

provide traditional empirical data, but does provide a recoverable process that may be

applied elsewhere. There is also potentially some bias in the interviews of people, who

were involved in the research and/or implementation process. However, the breadth of the

triangulated data all points toward the same conclusion that cultural change has occurred.

J. Molineux1606

It is clear that much of the change resulted from the systemic approach to implementing

new HR practices and that the new systems were embedded in the day-to-day practice of

the agency, and have become new norms of behavior. While not all changes to behavior

were the direct result of the agency’s change strategy, and those new or improved HR

systems and practices implemented were subsequently further improved on over the period

2003–2010, the infrastructure initiated during the 1999–2002 period remains. Therefore,

the contention that the implementation of a systemically designed SHRM intervention can

have a positive and sustained impact on an organization’s culture is confirmed in relation to

this particular case study.

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