Organisational capability Essay Example

commitment is not left to individual employees to enforce. For instance, a significant number of TESCO's board directors, regional directors, retail directors, and store board directors have progressed through the company's ranks. In 2001 alone, TESCO promoted 800 workers to managerial positions within the organization (Parrish, 2003).

Similarly to TESCO, M&S has implemented significant changes in their reward system. Formerly applying only to the top 50 or 60 executives, their senior bonus scheme now encompasses about 1,000 managers (Rana & Crabb, 2002) and is based on profit. Additionally, sales-related bonuses are available to staff four times a year. This has greatly increased performance, as local managers now have greater autonomy when determining bonus allocation.

According to Rana and Crabb (2002), Powell recounts the story of six Pudsey staff members who were short of their sales target by a few thousand pounds with only a day left. To make up for the shortfall, they transported a van load of merchandise and established a gift shop at Yorkshire Water's head office. Although this action went against the new, more flexible rules, it signifies an increase in motivation and morale. An improved bonus system that is based on sales attendance has made a considerable impact. The implementation of the scheme has resulted in a significant decrease in absenteeism from 4.5 per cent to 1 per cent at the food hall of the M;S store in Gateshead. These initiatives are supported by quantifiable data.

Since November 2000, M;S has been conducting regular staff attitude surveys for all of its 60,000 employees (Rana ; Crabb, 2002) and sharing the results company-wide. M;S has also started evaluating its performance against other organizations and

adopted benchmarking practices from leaders such as British Gas and Nationwide while developing its own systems. In contrast to the other three organizations, the development of HR at the Inland Revenue must be viewed within the context of significant changes in its management and organization, which are linked to the central government's policy of implementing 'New Public Management' (Ferlie et al., 1996).

The adoption of New Public Management involved various components in the public sector, including a focus on efficiency, downsizing, decentralization, general management, internal markets, and customer service (Currie & Procter, 2003). The Inland Revenue applied New Public Management through budget cuts and reductions in staff costs while aiming to enhance service quality and output. Efforts to address this challenge clarified the purpose of many managerial strategies, such as teamworking (Currie & Procter, 2003), that emerged within the civil service in the last two decades (Fisher, 2000).