Research Proposal on "Change Management"

Research Proposal 18 pages (4844 words) Sources: 10

[EXCERPT] . . . .

Change Management: A Case Study on the Arts Faculty of Melbourne University

The objective of this work is to examine human resource management and specifically to make a case study of change management in the ARTS Faculty at Melbourne University.

The "Faculty of Arts Management Renewal Strategy" document relates that the strategy of the Faculty of Arts is the development of its renewal strategy for the express purpose of managing the deficit in its current operation via a method that "strengthens its teaching and research in the humanities, social sciences and languages and preserves its status both nationally and internationally." (2007) in early 2007, the Faculty's Business Plan (FBP) made the provision of "a clear analysis of the financial difficulties currently faced by the Faculty." (2007) Reported is an "unplanned budget deficit of $2.9M in 2006, and in 2007 a forecast operating deficit of $5.954M (out of a total Faculty budget of $100M)." (the University of Melbourne, 2007)

It was acknowledged by the University of Melbourne that these deficits described as "built-in negative dynamic" could not be "reversed overnight." Additionally noted is the fact that this built-in deficit results in even larger deficits year upon year if no reversal strategy is in place. The problem is attributed to the fact that salaries in 2006 "accounted for over 82% of the expenditure budget, with inbuilt annual growth mechanisms of around 5% flowing from the Enterprise Agreement, as well as increments and promotions." Yet another contributor to the deficits in the budget is the fact that "...both of the Faculty's key sources of revenue (CSP and fee-paying load) had already flattened, for reasons over which the Faculty had little control." Costs are rising at the rate of two percent each year while simultaneously the "funding flowing from the Commonwealth Government rises by a maximum of 2% a year." While the University of Melbourne Arts has a track record of attraction of "fee-revenue" that compensates for the condition of under-funding the Faculty, just as in all facilities in Australia remain "vulnerable to changes in the international market." The report states that before 2006, the Faculty had a great deal of success in the development of "new teaching programs in accordance with the University's strategic aims, which included the explicit goal of achieving high rates of growth in fee revenue and reducing the staff-student ratio (which fell to 17:1 in 2006). The following figure sets out the changes in growth patterns in staffing levels and student load between 2003 and 2006. The decline in student load makes it necessary for the Faculty to contain expenditure and find new sources of revenue." The following chart illustrates just the same.

Source: The University of Melbourne (2007)

I. STRATEGIES IDENTIFIED

The Faculty acknowledged the need to "...implement a number of cost reduction strategies to address the projected budget deficit and rebuild services." (the University of Melbourne, 2007) the focus is stated as "primarily...reducing staff costs because these constitute the vast majority of the Faculty's expenditure." (the University of Melbourne, 2007) Staff reduction must be approached in a method that serves to "...minimize the impact on staff workloads by focusing clearly on opportunities for efficiencies." (the University of Melbourne, 2007) Additionally stated is that the strategies would be through agreement and collaborative efforts of staff and representatives.

II. PROPOSED CHANGES to REDUCE EXPENDITURE on STAFFING

Proposals for change to reduce expenditure on staffing were stated to include the following:

1) Development of consistent workload allocation models which should generate efficiencies within academic staffing for 2008;

2) Professional staff business process re-engineering in order to reduce professional staff costs without increasing workloads and generate productivity savings between 2008-2010; and 3) Reduction in specific activities, including reducing the range of teaching and research activity, and implementing long-standing University policy on minimum subject enrolments. (the University of Melbourne, 2007)

III. PRINCIPLES

The University of Melbourne Faculty stated the following principles in their proposal to an approach in consultation and to implement the strategies for cost reduction: Principles:

1) We wish to adopt a planned and strategic approach to reducing expenditure on staffing, and central to this is the development of School Business Plans which identify teaching and research priorities for 2008-10, and accurate School budget predictions. All Schools are now working on plans which must indicate how their operating budgets can be brought into surplus by 2010.

2) a 3-year workforce plan will be developed based on these principles for consultation through the agreed University committees and with all staff and their representatives.

3) Within this strategic framework, we will seek to minimize any negative impact on existing staff. For example, we propose initially to focus on providing opportunities for early retirement, which, given the age profile of the faculty and recent changes to superannuation rules, should prove attractive to certain staff. While the University has a relatively low turnover rate when compared to other members of the Go8, it is expected that some of the required reductions can be met through natural attrition. For professional staff, there will be opportunities for redeployment within the University. There will be no arbitrary staff cuts.

4) We wish to achieve the required staff cost reductions without unnecessary delay in order to reduce the impact on staff morale and to minimize the time during which we are unable to invest in new activities.

5) There is no doubt that the scale of expenditure cuts required will re-shape the nature of the Faculty of Arts. These reductions cannot be achieved simply by efficiency gains across the Faculty, but will require us to reduce the spread of our teaching and research. (the Melbourne University, 2007)

IV. TIMING and PROPOSED PROCESS

Stated as 'Timing and Proposed Process" by the Faculty of Arts in the Melbourne University are the following:

1) in 2007 we propose to offer separation packages and incentives to research-inactive staff. We are aware that a number of staff have expressed interest in such arrangements following the earlier round of research-related departures. The same criteria would be used as in the round earlier this year.

2) in 2007 we propose to offer early-retirement incentives to staff who may benefit from the recent superannuation changes and the enhanced attractiveness of the University's early-retirement arrangements.

3) in 2007 we will agree on a Faculty-wide workload allocation model for implementation in 2008 which will generate savings in sessional expenditure initially.

4) in 2007 we will complete a Curriculum Review which will identify the Faculty's undergraduate teaching area priorities on pedagogical grounds, and feed into School Business (5) Plans when making decisions on reduced staffing needs for 2008-09-10; and 5) in 2007 and 2008 we propose to undertake business process re-engineering in order to reduce professional staff costs without increasing workloads.

V. KEY POINTS

Stated as 'key points' by the Faculty of Arts at the Melbourne University as the following:

1) the reduction to expenditure outlined above is based on a conservative view of the Faculty's potential to increase fee-paying revenue.

2) Any improvement in that area between 2007 and 2010 will reduce the extent of the cost reductions that we have planned currently.

3) We are simultaneously investing in market research and the development of new, responsive and sustainable graduate programs.

4) the crisis facing the Arts Faculty is, in part, the same one that nearly every Arts Faculty has already faced in Australia, requiring significant cuts to staffing levels

5) the inadequacy of CSP funding to cover teaching and research costs, the flattening of revenue from fee-paying students, unsustainable increases in the staff profile, together with unfunded growth in salary costs because of the low rate of CSP indexation, are the underlying cause of the budget deficit. While funding flowing from the Commonwealth Government rises by a maximum of 2 per cent a year, costs are going up 4-5 per cent.

6) the impact was exacerbated by the Faculty making continuing appointments after the downturn in load had begun, creating jobs that were not sustainable.

7) Staff reductions will be necessary on an on-going basis because CSP funding does not support the quality of teaching expected at Melbourne, and the historical cross-subsidy from fee-paying students is unlikely to be restored.

8) the Faculty does not wish to address this through opportunistic or a-strategic staff cuts which would undermine the Faculty's strategic plans and, indeed our rankings.

9) the Faculty's three-year plan will be designed to create a renewed and more strategically focused approach to teaching, research and knowledge transfer which will ensure our continued national and international status as a pre-eminent Faculty of Humanities, Social Sciences and Languages.

10) We are determined to ensure that any negative impact on staff and students is minimized during this transition period. (the Melbourne University, 2007)

VI. GROWING ESTEEM WORKFORCE PLAN

It is reported in the 2006 Faculty of Arts, the University of Melbourne 'Workforce Plan' that 'Growing Esteem' "sets out a radical re-orientation of the University designed to ensure that it remains a pre-eminent university for research, teaching and knowledge… READ MORE

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