When the Older Ones Leave
-“The knowledge of 35 years simply walks out of the door and never comes back – that happens on and on”, a 3M Supply Chain Manager
Synergy-Maintenance in Transition Management Processes Due to Age-related Company Exits of Strategically Important
Specialists and Supervisors in Manufacturing Companies
Gerrit Alan Daniels Student number: 1695134 Rijksuniversiteit Groningen
Faculty of Business and Economics, Msc Human Resource Management
Weißdornweg 36 40723 Hilden, Germany
Tel: 06-26339420 or +49-2103-66325 E-mail: s1695134@student.rug.nl or
Graduation Supervisor: Drs. Hans van Polen Rijksuniversiteit Groningen
Faculty of Business and Economics, Msc Human Resource Management Report August 22nd, 2012
By order of 3M Germany Christoph Häusler HR Manager / Business Partner Düsseldorfer Str. 121-125, 40721 Hilden
Acknowledgements
University of Groningen
The research conducted at 3M Germany Gmbh was supervised by Drs. Hans van Polen of the University of Groningen. Thank you very much for your great support, feedback and triggering of thoughts – it was very comfortable and enjoyable to work with you.
3M Germany GmbH
In the company 3M Germany Gmbh Mr. Christoph Häusler was in charge of supervision and mentoring. Thank you so much for your support, the nice meals and talks we had together and the meetings you organized to share knowledge and integrate me in all aspects needed to successfully conduct my research.
Thanks to all employees involved into the great amount of interviews
conducted during this study who are
Site Engineering Hilden Mr. Peter Wieczorek
Mr. Stephan Schmidt Mr. Axel Coling Mr. Carsten Mattern
Division Engineering Mr. Carl-Heinz Kamen Dr. Sven Prollius Mr. Detlev Bargatzky
Supply Chain Management Mr. Olaf Jordan Mr. Robert Sassenberg
Site Engineering Neuss Mr. Jörg Tenbrock Mr. Stefan Deveny Mr. Stefan Zimmermann Mr. Teunis Hoetink
Plant Manager Kamen Mr. Lutz Konze
Logistics Mr. Christoph Beyer
Industrial Communication Mr. Jörg Karthaus
Manufacturing Recruitment Mrs. Petra Kuncar
Abstract and Key words
Key words: Age-related Exits, Human Capital Planning, Transition Management, Change Management,
Qualitative Research, Synergy Effects, Manufacturing Company, SMME-approach, Innovation Models
1. Introduction
If then, as already approached above, team compositions are dissolved and irritated through member exits, teams have to rebuild their structure and thereby lose their emerged efficiency and routine (Ilgen, Hollenbeck, Johnson & Jundt, 2005). These synergy losses are of high importance because they imply a loss in performance, in particular when the most influential team members leave the company (Yukl, Kim& Falbe 1996). Most companies internally promote employees to a great extent based on seniority (Heneman III, Judge & Kanmeyer-Mueller, 2012). Hence, the chance that the team members who leave the company - because of their age and seniority - are team leaders or at least members with high influence and higher job levels is exceptionally high. These influential or strategically important employees – referred to as knowledge workers (Noe, Hollenbeck, Gerhart & Wright, 2010) - possess a particularly high amount of experience, due to their seniority, so in most cases their knowledge exceeds that of their followers, hence not only a loss of synergy might be apprehended but rather a loss of strategically important knowledge (Noe et al., 2010). Therefore knowledge management constitutes a second major variable - next to synergy – which needs to be investigated to manage performance maintenance. All aspects described are part of a company`s Human Capital Planning process. That means that a company plans the upcoming personnel developments to ensure a strategic framework in which decisions are made with regard to future economic or cultural developments of their personnel which are called intangible assets (Noe et al., 2010).
successors. The existing recruitment systems make use of performance appraisal systems, candidates` reputation, bio-data, and achievements such as college degrees (Heneman III, Judge & Kanmeyer-Mueller, 2012). But they overlook synergy-components, too, in that those systems do not take surrounding employees into account, who will make up the new team, and rely mainly on supervisors, who often know the value of a function`s expertise but again, overlook synergy-effects in the respective functions. Thus, personnel instruments have to be carefully chosen to sustain existing synergy-effects in new team compositions and transition processes need to be investigated to counteract the performance loss described above.
Different instruments and means need to be used to close the hypothesized gap of synergy-losses by moderating the relationship between company exits and synergy-losses. That means transition management instruments are used to bridge this gap; which instruments, techniques and methods need to be used to guarantee the successful transition of the new job holder into his position is unclear; until today not much research is done to investigate the appropriate means to establish a successful transition management process (Wright & MacMahan, 2008). The authors state “[…] `our most important assets walk out the door each day´, this aspect of human capital seems to be largely ignored in the human capital literature”; which clearly highlights the need for further exploration of this topic (2008).
Therefore this research is of investigative nature - it will explore the topic of synergy maintenance and the possibilities how to enhance the functioning of a team, when a strategically important person exits the company. The described constitution of this study thus requests for a black box (Gray, 2007): an unknown field of research which will not rely on stating hypotheses but the qualitative exploration of this new topic. Therefore the research question is:
How do transition processes, due to age-related exits, have to be managed to guarantee synergy-maintenance and thereby performance perpetuation in work teams?
Figure 1: Hypothesized performance level after age related job-exit with making use of transition management initiatives and without making use of transition management initiatives
The research question is asked to ascertain the black box which is exemplified in figure 2 and will be specified by the following sub-questions:
a) What are the contextual influences of transition processes?
b) How should knowledge transfer be achieved to integrate job-followers?
c) How does the transition management process differ for internal versus external job candidates?
this research are shown as a conceptual research model in figure 2 to give the reader a clear picture and guide for simplicity while following this investigation.
Figure 2: Composite components and black box of this research
2. Theoretical Background
into their Human Capital Planning and elaborate a clear understanding of the transition process. According to Wright & McMahan (2011) synergy-upkeep and knowledge management are two major underlying variables to execute these transitions successfully. Each of these topics forms a building block of the ultimate research model which will be presented in the end of section 2, to give a framework of the interactions and interdependencies of all single aspects of this investigation. But first the single components are separately explained in the following sections.
2.1 Age-related Exits
The ageing of the population and with it the ageing of the workforce is of growing concern for many Western companies. Companies observe more age related job-exits into retirement than ever before. 20.6% of Germany`s current population is aged 65 years and over (https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html, 2012). The population rose from approximately 65 million in 1910 to 79 million inhabitants in 1988 (see figure 3, figure 4 and figure 5 in the appendix). In 2003 Germany`s peak in average population was more than 82 million inhabitants. Since then Germany`s population is shrinking to a forecasted value of 62 million inhabitants in 2040; the last decrease in population was declared in July 2010 (http://www.destatis.de/-jetspeed/portal/cms/Sites/destatis/Internet/DE/Navigation/Statistiken/Bevoelkerung/Bevoelker ung.psml, 2010). Figure 3 (see appendix) shows a typical stable pyramid of the German population in 1910. Until 2040 the pyramid is predicted to develop more into a constrictive pyramid; a form showing much lower percentages of younger people (see appendix figure 4-5). This is often a typical pattern for developed countries with high over-all education and sufficient incentives to ensure a living without being dependent on the care of own children.
In Germany life expectancy in the year 2000 was 75.1 years for men and 81.2 years for women, compared to the year 2010 with 77.8 years for men and 82.8 years for women (http://www.oecd.org/-document-/47/0,3746,en_2649_33927_39371887_1_1_1_1,00.html, 2009). Notwithstanding this very short time interval it clearly shows how the German life expectancy is increasing. The life expectancy in 2050 in Germany is forecasted to rise to even more than 90 years.
increase up to 67 during the upcoming 20 years and is in political discussion in these days. Therefore for Germans born in the year 1964 or later the retirement age will be 67 years (http://www.oecd.org/dataoecd/58/3/40962-388.pdf, 2008).
Given these official numbers, the problem for companies is only truncated; the age itself also is a major problem for companies, due to a demanding change in working conditions, but here the focus is on the troubles occurring with the age-related exit of strategically important employees, who carry high responsibilities and execute important tasks in the company and the team. Therefore the exit of these employees is difficult to cope with; the transition of the exiting employee and his / her successor asks for a reasonable and planned transition management process. This is of major concern for companies as in the near future more employees, including the strategically important ones, will leave the company and will create a performance gap.
2.2 Performance Loss in Teams
When, according to McDonald & Smith (1995), work is designed for groups, also performance management should aim for group behaviors. That means performance is only measured for groups, when it is designed for groups. Such teams rely on their expertise and knowledge to achieve their goals so the performance of the team is dependent on the knowledge workers or strategically important specialists. If those workers leave the group, or leave the whole company due to their age, the performance is logically hypothesized to decrease because of a no more input of the leaving knowledge worker (figure 1 above).
2.3 Human Capital Planning
According to Noe et al. (2010), human capital is described as the productive capabilities of individuals, which are their knowledge, experience and skills, which have an economic value. Here, human capital is defined as exactly these components but specified for the leaving employee, who exits the company and his/her team due to his / her age. The authors (2010) describe a shift in former West-Germany (where this investigation is conducted) towards “types of production […] that require high-skilled workers […]”. To guarantee a long-term perspective for the company it is a challenge to the Human Resource management to anticipate economic developments and matching their company´s personnel to this situation. Therefore clear Human Capital Plans need to be established in cooperation with the respective departments´ line managers and team supervisors, who possess the specific knowledge of their subject. These plans must be in line with economic surplus and shortage forecasts concerning personnel, but especially with the specific KSAOs (Knowledge, Skills, Abilities, and other characteristics according to Henemann III et al., 2012).
2.4 Transition Management
Transition management is mainly known as the control and configuration of portfolios (Faros Consulting, 2012. http://www.faros-consulting.de/index.php?id=7) but is also referred to as the implementation of organizational change, moving from a current state, through a transition state to a desired one, as depicted in figure 6 (Cummings & Worley, 2008).
Figure 6: Three steps of managing transitions according to Cummings & Worley (2008), and the three corresponding steps according to Lewin (Dictionary of Human Resource Management, 2001)
Management, 2001).These three different states of transition management can be applied to the hypothesized performance loss as as can be seen in figure 7.
Figure 7: Hypothesized performance loss and the three corresponding states of transition management
processes describes the emergence of new knowledge, skills and behaviors through the filling of the left position with a new job-holder.
2.5 Synergy
According to Lawford (2003), synergy is defined as the output of team members that exceeds the performance that they would have achieved when they worked non-collaboratively. In short: a situation in which collaboration produces a greater common effect than the sum of its parts (http://www.businessdictionary.com, 2012). In order to achieve the peak level of performance, called synergy (Lawford, 2003), all team members and the ones who interact with the team need to invest in their formation. If a long-term team member leaves the group investments become irritated and the performance changes into instability. It is the task of the remaining group members and the job-follower to uphold the level of performance, to a great extent by building up new synergies and ties to the new group members. Yet, it is unclear how this synergy-maintenance needs to be managed to keep the performance levels high. Together with the transfer of strategically important knowledge, synergy is expected to be a main underlying variable of high performance and therefore be focused on in transition processes (Wright & McMahan, 2011) The authors describe synergy-effects – together with knowledge management – as two major underlying variables of successful performance upkeep in transition processes, which need further elaboration. Therefore the focus in this research is on those two variables building the basis of successful transitions.
2.6 Knowledge Management
According to Wright & McMahan (2011) knowledge management is a major underlying variable – next to synergy-effects – of successful transitions. Knowledge management focuses on the transfer of knowledge from person A to person B (Cummings & Worley, 2008). Here this means from the leaving “knowledge-worker” (Noe, Hollenbeck, Gerhart & Wright, 2010) to the new job-follower. The job-follower can serve as a source of new knowledge and insight, but can also lack practical insights due to less experience or less seniority. The job-follower can be as well an internal as an external candidate.
2.7 External Versus Internal Candidates
Candidates for every function in a company can be internal, meaning that they worked in the company for at least 1 year and were still working there until the date of this investigation, or can be external candidates, meaning they are recruited from outside the company`s candidate pool (Henemann III et al., 2012). This distinction has clear practical implications: an internal candidate is assumed to have already investigated, experienced or even `learned´ the organizational structure and culture of the organization he or she works for (Noe et al., 2010). Assuming internal candidates to persevere in this internal pool until their replacement or promotion (Henemann III et al., 2012), ascertains an organization that those candidates know the culture and work in line with organizational values (Landy & Conte, 2004). New candidates entering the organization need to learn the organizational culture, its values and workings through socialization processes (Cooper-Thomas, Anderson & Cash, 2012). Therefore recommendations how to successfully execute a job-transition need to follow different models or routes: For example internal candidates already know a company´s culture, while external candidates are complete strangers to a specific company culture, so different approaches how to integrate candidates or how to maintain synergy in teams need to be applied.
3. Method
organization due to their age, and surrounding employees were conducted to investigate the topic of transition management processes in teams. These qualitative interviews were used to investigate the topic in a multi-level approach to attain an all-embracing sighting, as advised by Wright and Nishii (2007).
3.1 The Organization
The data were conducted in the company 3M. It is a chemical manufacturing company which employs 84.000 people worldwide and had an annual business volume of 29.6 Billion Dollar in 2011. The German division of 3M, called 3M Germany GmbH, which is the artifact of this research, has 5.500 employees and an annual business volume of 2.2 Billion Dollars. The focus in this research were the German production plant of 3M Hilden (900 employees), the production plant 3M Kamen (300 employees), and 3M Germany´s administrative headquarter in Neuss (1500 employees). The investigation focused on the manufacturing divisions due to virtual reasons and the fact that high-skill engineering graduates and employees are predicted to become rare in Germany. Therefore the manufacturing division predestinated for this study. The organizational chart of 3M Germany`s whole manufacturing division can be seen in figure 8 in the appendix.
Five different departments served as the location for data gathering:
• Department 1: Site Engineering & Logistics, Hilden, which is responsible for infrastructural engineering, facility management, outside company coordination, canteen, and in-house transport processes and mounting.
• Department 2: Administration Service & Site Engineering, Neuss, which is in charge of event management, site administration, gliding time administration, energy management, and canteen.
• Department 3: Division Engineering Germany, Hilden, which is in charge of implementing investment decision of buildings and chemical machinery for all facilities of 3M Germany and its subsidiaries. The buildings and machinery are mostly developed in teams, extending across locations.
production, from the basic material to the end-product which is given to the customer. Therefore this department is interrelated in every process, is dependent on a heavy network and needs to monitor all aspects of the production process. Both departments heavily rely on employee`s expertise.
• Department 5: (a) General plant management and (b) Logistics and Industrial Communication, Kamen, which are responsible for the logistics, planning and management of the whole process of product coordination of this production plant.
Three of those five (eight divisions) departments were located at 3M´s biggest German production plant 3M Hilden; the organizational chart of this plant is depicted in figure 9 (see appendix 7.2, page 43). The organizational chart includes all management and supervisory positions of the respective plant. Please note that this chart is mainly shown for completeness; its rather complex structure is not topic of investigation and therefore will not be explained in detail.
3.2 Participants
Five general- or line managers and two supervisors of the respective departments were interviewed in the first round of this multilevel approach. In the second round strategically important employees, who were going to leave the organization due to their age (to retire), were interviewed. Those employees were in the main focus because they were going to be replaced by new candidates. The third round of interviews was conducted with surrounding employees of the leaving employees of round two. The concrete setup is illustrated in figure 10.
3.3 Interviews & Questions
The study is of qualitative nature; it encounters a keenly new domain of research. Therefore no experimental design is applied but an establishing analysis of qualitative insights through the use of investigative interviews. During the interviews the structured analysis-tool SMME was used; the SMME-model was developed by Emans & Vos (2011) at the Rijksuniversiteit Groningen, Netherlands. It is a conceptual model which gives a comprehensive framework for situations which ask for analysis of change situations. The model is chosen because of its all-embracing and extensive nature. It includes as well starting points of changes, as direct and ultimate outcomes. Most importantly it includes moderators, variables which influence a relationship in an intriguing contextual way. Moderators are important because they represent excellent starting points and contextual influences to implement changes or practical implications. Therefore the SMME-model is of high use for practical analysis of any complex situation which asks for change-interventions.
The SMME-model consists of four parts; (1) firstly, it investigates the strategy that someone uses, which in this research would be the HR policies, the line-managers strategy of building/maintaining synergy-effects or the employees` strategy of building/maintaining synergy in teams. (2) The second part of this model is the mediators, which describe the direct effects of the respective strategies, which in this case should be successful transition management. (3) Those direct effects together make up the ultimate effect, which in this case should be the successful maintenance and assembly of synergy-effects in teams. (4) The fourth part of the model is the moderators – elements, which influence the relationship of the strategy with the direct effects (mediators) – which in this study would be contextual variables, mostly from the interviews with the surrounding employees. Therefore the acronym “SMME” stands for (1) strategy, (2) mediator, (3) moderator, and (4) effect (Emans & Vos, 2011). The SMME-framework can be seen in the appendix 7.1 (page 41) as model 1.
(1) An example of a cross-references question for the current phase of the transition process is: In how far do the existing team compositions give stability and hierarchy (Philipps, Rothbart & Dumas, 2009), as well as efficiency and routine (Ilgen, Hollenbeck, Johnson & Jundt, 2005)?
(2) The second cluster of interview questions are directly referring to the (hypothesized/future) transition phase – the age-related exit of the respective employee: an example of a cross-referenced question for the transition phase is: Do you plan for differences between internal and external new team members (Landy & Conte, 2004)? (3) The third cluster of interview questions concerns the desired future state after the
transition and as the last step of the transition process. Questions concerning this desired and requested situation are of hypothetical nature and ask for ideal situations. A cross-referenced example question concerning this ideal situation is: What is, according to you, the ultimate goal of a successful job-transition (Emans & Vos, 2011)? All questions asked during the interview are listed in the appendix 7.4 (page 48-50).
All answers are be analyzed by using this SMME-model (Emans & Vos, 2011). The different clusters of three different job-levels and five different departments are be analyzed separately and compared according to the different job levels and departments as depicted in figure 10.
3.4 Research Framework and Variables
The separate theoretical parts of this research are explained above - together they form a chain of actions and events (figure 11 below) which make up the situation of (1) an ageing workforce, (2) resulting in more age-related job exits, (3) which leads to knowledge and experience (synergy-) loss for companies. The outcome is a (4) lower performance, especially immediately after the exit of the knowledge worker. This 4th event is the major problem for
every company and is the reason for this research. Therefore this study focuses on (5) the maintenance of synergy and knowledge management to ensure high and stable levels of performance. The variables investigated in this study are
• Transition management initiatives as part of the Human Capital Planning process • In specific: synergy-effects in teams and knowledge management and transfer from the
leaving employee to his or her follower and his/her surrounding employees
even to avoid performance loss, which has high financial costs for every company and to manage job transitions to perpetuate a high level of performance.
Figure 11: event/research-chain of an ageing workforce, which exits the company, resulting in performance loss, which asks for transition management implementations to maintain high performance levels
4. Results
4.1 SMME-Analysis
Strategy
is described to support the social aspects as well as the technical or task-related aspects of an integration process.
Mediator
The direct effect of the strategies used is firstly performance upkeep in all departments. Performance developments differ in the five departments due to major differences in the corresponding transition circumstances (for the respective graphs of the departments see appendix 7.3). A long overlapping transition period as in D1 guarantees the maintenance of performance and the transfer of knowledge and routine ways of working. In comparison short or no overlapping transition periods result in new ways to work, breaking of routine work cycles which are described by the plant manager of D5 as useful for innovative functions which need new insights and ideas to improve the level of performance. A second major effect of the strategies used is the status maintenance of the exiting employees. Through the involvement of these employees, they describe their situation as being important until the day of their exit. One specialist of energy management of D2 says “I feel valued and I want this image to maintain even when I am gone. Therefore I am willing to integrate my follower, so that nobody can say that I didn´t do my best to keep the system running even without me”. According to the interviewees of D1 the status maintenance is very important to guarantee a transition process without major complications. If the exiting employee feels replaced and not needed anymore, he / she will not try to integrate the follower, so a positive interpersonal relation is a basic to all transition processes. A former follower in D2 describes his integration process as very uncomfortable due to interpersonal difficulties which were intriguing the transfer task-related knowledge. This interviewee says “if you do not like each other, you will not be able to transfer knowledge as well as you could”.
Ultimate Effect
company´s infrastructure. Therefore the aim of D1 and D2 is described as the maintenance of routine work, performance upkeep at the same level with minor innovative impulses, which are mainly executed in project work. According to the line managers of D1 and 2 longer transition periods of more than 6 months are needed to ensure the maintenance of routine work. In comparison department 3, 4 and 5 are described by the line managers as innovation-oriented. They expect innovative impulses, new ideas and insights if exiting employees are replaced by new team members. Routine work should be broken and new ways of working are expected by followers in these departments. According to the line managers short transition periods of only 3 weeks are needed to ensure innovative impulses and renewal in these departments. Figure 19 (explained in the discussion section) shows the different departments and their functions according to an orientation to maintenance or innovation.
Moderator (the contextual variables of the transition)
All transitions are described by the interviewees as bringing high workloads and a high stress level. According to the followers of D1 and D4 it often remains unclear who is responsible for which tasks when both, the exiting employee and the follower execute the same function. In D1 minor difficulties to transfer knowledge existed, which needed open conversations by supervisors to clarify positions and overcome barriers of resistance.
of the respective employee interviewed. Another important aspect for external candidates is the company´s culture and language. According to the follower of D4 and the supervisor of D1 it takes time for externals to understand the company´s values and especially the abbreviations and language meanings when new employees are in conversations, meetings and `company talks´.
In department 4 the transition is characterized by the supervisor and the follower as clearly changing in interpersonal harmony due to the positive characteristics of the job-follower. The follower is an internal employee who by herself also has to integrate her own follower in a different department. This creates work-overload and stress; she explains that she has to learn the responsibilities and tasks of her new function while she is responsible to integrate her own follower. “Therefore, the transition period takes more time than if I would have been an external candidate who can simply focus on the transition into the open function”, she says. The follower complains about the secret announcement behavior in the company. When a function is replaced it takes a long time until all surrounding employees are officially informed of this change. Therefore it is even unclear to the internal replacement candidate from which day on he / she is fulfilling the function; this clearly is described to frustrate the respective employee and ideas of leaving the company come into play. Nevertheless this employee considered the positive work-life balance of the company to be the major reason to remain in the company and in the department.
4.2Results for different job-levels (supervisors versus age-related exits versus surrounding employees / followers)
Line Managers / Supervisors
The line managers and supervisors interviewed show a clear innovation-oriented perspective of new employees, especially of followers of age-related exits. The IC manager describes this performance-level expectation that followers should reach 120% of the performance level of the previous job-holder. Only in rare cases as in the Supply Chain department - in which a specialist leaves, who is described as working at an extraordinary performance level, which is difficult to reach by a follower – the performance of the follower is expected by the supervisor to be lower than the previous job-holder´s performance.
“The higher the need for innovational impulses, the higher is the need for new ways to work”, the plant manager of Kamen states. That is described as that non-routine work is only possible when transition periods are short (3-8 weeks) and are different from the previous job-holders work style. If maintenance, as in department 1 and 2, is the aim (ultimate effect) of a transition, longer overlapping transition periods (> 6 moths) are advised by the line managers of D1 and D2 to ensure the transfer of routine work patterns.
Age-related Exiting Employees
Age-related exiting employees describe their own importance as marginal and interchangeable. This clearly contradicts the description of their supervisors and surrounding co-workers. They rely on routine which is achieved through a long work experience of often more than 20 years in the company and in the respective field of expertise.
Surrounding Employees / Followers
surrounding employees and followers clearly advise overlapping transition periods for strategically important functions. In general, followers ask for much longer transition periods than supervisors do.
4.3Results Theoretical Background Topics Derived from the SMME-Analyses 4.3.1 Age-related Exits
According to the HR manager age is a topic of growing concern, more employees with strategically important functions leave the company which in most cases results in performance loss and corresponding costs as described in detail in the SMME-analyses in the appendix. Every department investigated in this research is concerned with one or more of such cases at the moment or in the near future. The age numbers of the company of this investigation are depicted in figure 20. Most current workers are between the age of 41 and 50 while the second biggest group is above the age of 50 and will retire in the near future
Total employees Percentages of employees
< 20 to 30 521 11.2%
31 to 40 1.149 24.8%
41 to 50 1.857 40.1%
> 50 1.109 23.9%
4636 100%
Figure 20: age groups and numbers in total and percentages in August 2011
4.3.2 Performance Loss in Teams
employees, who all try to compensate for the gap, an immense cascade effect is expected. That means that the performance of every single employee is decreasing due to more work which needs to be executed due to the performance gap. If the exiting employee is highly experienced and specialized, he often functions as a center of expertise, which means answering questions and facilitating problem solving, than the exit of this expert leads to a sharp decrease of the information flow and speed, so any synergy effects developed through the expert cannot be used anymore”. The problem of cascade effect is described by all employees who experienced the exit of a strategically important employee. According to the supervisor of D3, in rare cases in which the whole department relies on one synergetic employee, the existing network completely changes after the expert´s exit, so information networks and communicational contacts have to be renewed (see figure 12-18 for details and inter-departmental differences; appendix). The worst case in this research is described by the line manager as the prognosis of department 5a (logistics in Kamen) in which a whole team leaves at approximately the same time period. Here the whole structure, including networks, information flows, experience, knowledge and any synergy effects developed is described by the interviewee as going to vanish.
The only exception of the performance loss hypothesis is described by the employees of department 4a (Process Engineering, Hilden) in which the unstructured work style of the age-related exit is described as intriguing the daily routine, so misunderstandings, disharmony and resulting technical difficulties arise, which lowers the performance level. In this case the placement of a more structured and interpersonally accepted engineer is expected by the supervisor to increase the performance level immediately. Nevertheless, according to her, an age-related exit always means the loss of existing networks and special expert knowledge build up through a long period of experience.
4.3.3 Human Capital Planning
remain open for a certain period as recruitment is planned to take mostly 60 days which makes overlapping transition periods impossible. According to the HR manager, both, recruitment and transition periods are and should be steps of the company´s Human Capital Planning.
This planning is based on 7 steps which are (1) the blueprint of the company which describes the current situation and the desired future situation according to an analysis of the company´s needs. (2) The assessment of current competencies to compare the needs of step 1 with the corresponding personnel situation. (3) The comparison of the personnel needs with the actual headcount planning of the company. (4) The qualitative analysis of employee developments. (5) A corresponding action plan of which employees need further development and which departments need further personnel. (6) The quantitative analysis of demographic employee developments and changes. (7) The actual planning and reviewing of the whole process. The transition period investigated in this research describes an additional step X. The line managers and supervisors interviewed, describe the idea of long-term Human Capital Plans as very useful, even though the use is not very common yet. Frameworks and guidelines exist but are not often applied to the department ´s situation.
4.3.4 Transition Management
planning - the identification process of the personnel which is of core value to succeed in the transition process – according to the plant manager of D5 in most cases is completely overlooked. Transitions are executed on a one-on-one basis from the exiting employee to his / her follower, even when the function is characterized by teamwork. The only exception is the plant Kamen (D5), where especially in the logistics department new employees are integrated with a mentor on a team basis. Change-management structures - the organizational features which make the transition process possible – according to the supervisor of D3 show a major problem of transition periods. The recruitment difficulties described above resemble the main objective which is intriguing change-management structures. The last aspect learning processes - the emergence of new knowledge, skills and behaviors through the filling of the left position with a new job-holder – in most cases is “one of the supervisors´ main ultimate goals” as the line manager of D3 states. New knowledge, skills and behaviors means new work styles and innovational impulses which are capable of increasing the function´s performance.
4.3.5 Synergy
To achieve the peak level of performance, the team members and the ones who interact with the team need to invest in their formation. If a long-term team member leaves the performance becomes irritated, which is the scenario of the age-related exits. According to the line manager of D2, the remaining group members´ and the job-follower´s tasks are to uphold the level of performance, to a great extent by building up new synergies and ties to the new group members. According to nearly all interviewees building synergies means organizing networks and communication. The exiting employee and his co-worker of department D2 state that the more experienced an employee is in a certain network, the more intensive the contacts are and therefore the knowledge who could be the best partner to find a corresponding solution when a problem exists. Age-related exiting employees are described by the line manager of D5b to possess the greatest networks and knowledge, often due to their seniority, so their exit is negative influencing the performance of the existing network.
4.3.6 Knowledge Management
the main consumers of new knowledge during their transition period, knowledge transfer should be achieved through on-the-job transfer. “Theoretical explanations - in the form of presentations and documentation handbooks - are slow, not useful, fatiguing and not practical”, as the follower of D4 says. She describes on-the-job transfer as being easier to remember and applied in future situations. Exiting employees also support the transfer of knowledge on-the-job because of a much faster transfer, which appears to be more practical and clear.
Because of often long times of open positions and no overlapping transition periods supervisors advice the documentation of the functions´ tasks and responsibilities, so followers who are not able to make use of an overlapping transition period do have a basis for their integration.
4.3.7 External Versus Internal Candidates
According to all line managers clear distinctions between the integration of internal versus external candidates exist. Internal candidates are described to already possess the network needed to successfully execute their function. This is even the case across the different plants investigated in this research. Internal candidates mainly are integrated on a technical basis dependent on the different function´s profile.
5. Discussion & Conclusion
The main question
“How do transition processes, due to age-related exits, have to be managed to guarantee synergy-maintenance and thereby performance perpetuation in work teams?”
and the corresponding sub-questions
a) What are the contextual influences of transition processes?
b) How should knowledge transfer be achieved to integrate job-followers?
c) How does the transition management process differ for internal versus external job candidates?
which guide this investigation are answered by the different performance developments of the respective department´s situations. The following paragraphs pick up those questions and explain the recency and newness of the findings. A conceptual model of clear set transition times summarizes the research and gives a best practice overview especially useful for managers implementing transition processes (see next section), as already advised by Boxall and Purcell (2011).
5.1Debate of Performance Developments
the job successfully and ensure the buildup of a network, so social integration is ensured. Unfortunately in most cases the follower is placed when the previous job-holder already left the company, so the integration process of the follower is dependent on a slow integration process of merely technical plans, job descriptions and unhandy documentation handbooks which take an enormous amount of time to use efficiently.
Figure 21: Innovation-Maintenance Model for overlap times and corresponding functional areas
The answer to the research question thus clearly states that transition processes have to differentiate between innovation-orientation and maintenance-orientation, which results in different integration times. The different functional areas in figure 21 are not simply descriptions of departments` functions but split-off contents which can be found in different departments or even in one single function.
5.2Debate of Synergy-effects and Knowledge-Management
Synergy-effects and knowledge management where hypothesized to be the main underlying variables of a successful transition process. The research reveals this hypothesis and strengthens the role of these two variables. The performance decrease is described to be mainly based on losses in networking with the exit of the employee and as a knowledge loss. “The knowledge of 35 years simply walks out of the door and never comes back – that happens on and on”, one supervisor states, which expressively describes the great impact of age-related exits. As synergy and knowledge seem to be such important underlying variables which account for a high degree of performance decrease, companies need to focus on the maintenance of networks and the transfer of knowledge.
The sub-question how knowledge should be transferred can be clearly answered; nearly all interviewees favor knowledge transfer on-the-job in a planned manner, so practical insights and the visual component of learning is the most efficient way to transfer knowledge. Meetings including presentations about engineering topics are regarded as time-consuming and therefore are not advised for transferring knowledge. The attachment planned knowledge-transfer targets on the importance of structured standardized plans for follower-integration. Too many differences between supervisors how to integrate followers exist, so followers are confused and irritated why other co-workers from other departments enjoy more structured, more efficient and more comfortable integration practices than they do.
Kuipers (2010). This seems to be very effective due to the fact that the whole team monitors the integration of the newcomer and supports the new employee. Therefore, this integration model is advised as the best practice approach for successful integration. The different perspectives given by all team members facilitate the buildup of job-relevant knowledge and increase the integration in the relevant networks. This is especially important for external newcomers / followers who do not know the company-culture, or the networks or work-styles. Therefore the sub-question of how the transition process differs for external versus internal followers is clear: external followers need more extensive integration, especially on a social dimension which means networks, company-culture or even company language. Internal followers already know most of these aspects so their integration can directly focus on job-relevant technical aspects. Cummings and Worley (2008) describe the company culture as being based on knowing the company´s basic norms and values, which supports the findings of this research and the differentiation between transition processes of internals versus externals who are more in the need to learn new company cultural aspects.
5.3Differences concerning job levels
Clear differences between job-levels follow from the analysis; higher job-levels seem to demand a higher need for innovation and creativity. Therefore organizational development issues are mainly shouldered by the heads of departments, by their line-managers. That means that not filling vacancies of manager position not only results in less performance of that function but in innovational stop. A company as 3M which is based on innovation as the main value to battle competitors is in need of continuous innovation. A gap in innovational progress means losing prominence and not being “benchmark” any more as Eisenhardt and Brown (1998) already revealed. Therefore it is enormously useful for innovation-oriented companies to focus on performance perpetuation or even performance enhancement.
5.4 Relevance of the Findings
The newness of this research clearly lies in the overlooked aspect of the performance loss of the situation in which an age-related exit is replaced by his or her follower. This “change-situation” obviously resembles the previously mentioned unfreeze-mode by Lewin (2001; in Cummings & Worley, 2008). A new employee takes over the former
employee´s work which means changes in work styles, changes in personal relations, habits and routines. This research shows the different foci and different contextual influences which follow those changes. Therefore the first sub-question of this research is especially important: contextual differences shape every single transition process – no transition is a standard procedure. Still, there is an underlying framework which gives direction of how to approach transition situations. This is what makes this research relevant and especially useful for companies which want to profit from a continuously high level of performance.
Implementing the Research
The implementation of transition processes in this research focuses on the two aspects of synergy-effects and knowledge-management. Every company exit moves along with a change of the current network. The result is a cascading effect which firstly changes responsibilities, then relations and lastly the roles of the current members of the network. For example new employees differ in their role to the age-related exiting employees who were valued because of their experience, while the new followers might be valued because of their freshness, energy and motivation. Therefore synergy needs to be managed during the integration process of the new follower – followers need to be publicized and communicated on a non-technical basis which focuses on bonding and interpersonal relations (Noe et al., 2010). The technical aspect of followers´ integration needs to be managed with the help of knowledge transfer; as already mentioned, knowledge needs to be transferred on-the-job to ensure the greatest learning effects. Team integration and especially mentoring, as described in the results section, facilitates both synergy buildup and knowledge transfer which according to Noe et al. (2010) leads to a more successful employee integration.
As the implications of this research are an untested advice, naturally doubts of the practical usefulness arise. In situations characterized by for example difficult interpersonal circumstances such as disharmony and open conflict - which is frequently part of change-situations (Ford, Ford & D’Amelio, 2008) – the standard procedure of tackling transition processes will certainly not fit. Such situations imply a hindrance for the typical sequence of transition management processes. Unfortunately neither theoretical model fits any situation; once again I claim that this investigation and its new scopes must be understood as a basic framework and not as the remedy for all possible situations.
Future-oriented and Sustainable View of the Research
As elaborated in the introduction, age in Western societies is a topic of growing concern. The theoretical background briefly describes current developments affecting companies´ personnel planning. This development is the reason and backbone for the transition processes investigated. The future means an increased number of age-related exits and with it an increased amount of experience and knowledge “which walks out of the company´s door”, as the front page tells (also see figure 11, page 19). A sustainable Human Capital Planning therefore needs to be long-term focused incorporating concurrent side-effects of age-related company exits which are performance losses.
5.5 Limitations
Methodological and Practical Limitations
The nature of this research is qualitative; no quantitative data is obtained which challenges the significance of the research. Nevertheless 23 structured interviews are conducted, which resembles approximately 70 hours of interviewing. The power of qualitative expert knowledge should not be underestimated, especially in the context of an investigative terrain.
at least reduce their impact on the research data, confidentiality is guaranteed to all interviewees in this research.
Strengths of this Research
The highly visible strengths of this research are the completely new insights in transition management processes, the resulting ideas how to implement transition processes successfully (see figure 21 as the main implementation model) and a widening of knowledge about human capital compositions in the field.
Further Research
6. References
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7. Appendices 7.1 Models
Model 1: Framework of the SMME-model by Emans & Vos (2011).
Figure 3: German population in 1910 – stable pyramid
(Adopted from
http://www.oberbergischer-kreis.de/imperia/md/images/cms200/aemter/amt50/alterspyramide.png, 2011)
Figure 4: German population in 1988 – a mix of stationary and constrictive pyramid form
(Adopted from
Figure 5: German population estimation in 2040 – constrictive pyramid
(Adopted from
http://www.oberbergischer-kreis.de/imperia/md/images/cms200/aemter/amt50/alterspyramide.png, 2011)
Figure 12: Anticipated performance loss after age-related exit, department 1
Figure 14: Performance developments when the follower uses the documentation system, department 3
Figure 16: Anticipated performance development and hypothesized advantage of a transition period, department 4b
7.4 An Example of a Question-set
Collection of Possible Questions for the Questionnaire and the Interviews
The following questions derive from the theoretical background of this research in combination with orientation with the HR-department of the respective company. The question sets differ for the three different respondent groups: line management, exiting employees, and surrounding employees. The questions are in most cases directly linked to theory, but in some cases serve explorative and investigative purposes and therefore are only by content linked to the topics of this research.
Interview question scheme for line managers
For the purpose of my Thesis for the master study Human Resource Management, I am investigating the topic of transition management of age-related exits and synergy-maintenance in teams. The following questions in are about the factors that seek to explore the outcomes and disadvantages of age-related exits and are aimed to investigate how to solve the corresponding difficulties. The interview will take about 120-135 minutes of your time. Thank you in advance for taking your time and participating in this research.
With kind regards,
Gerrit Alan Daniels (Student HRM at the Rijksuniversiteit Groningen, working student at 3M ´s HRM department)
General questions
I. Current State
1. To which department do you belong?
3. What is the exiting employee`s length of job tenure (seniority-based promotion according to Heneman III, Judge & Kanmeyer-Mueller, 2012)?
<5 years 6-15 years 15-25 years > 25 years
4. In how far is the exiting employee valuable in terms of (1) experience, (2) knowledge, and (3) expertise (According to Noe, Hollenbeck, Gerhart & Wright (2010), strategically important employees possess a particularly high amount of experience, due to their age, so in most cases their knowledge exceeds that of their follower)?
5. In how far is the respective employee involved in teamwork (Rink & Ellemers 2008)?
6. In how far did synergy-effects evolve during his/her involvement in teams (Stahl & Voigt, 2008, Wright & McMahan, 2011)?
7. In how far do the existing team compositions give stability and hierarchy (Philipps, Rothbart & Dumas, 2009), as well as efficiency and routine (Ilgen, Hollenbeck, Johnson & Jundt, 2005)?
II. Transition State
1. If strategically important employees exit the team, how does this incidence affect the team`s performance?
2. Assume to undergo a exit, will you (in most cases) immediately have a new job-follower?
b. If yes – how are you going to integrate/incorporate the new team member (According to Cooper-Thomas, Anderson & Cash (2012), new candidates need to learn the organizational culture, values and workings through socialization processes)?
3. How did you manage transitions so far; what are your experiences and which problems did you face?
4. Do you plan for differences between internal and external new team members (Landy & Conte, 2004)?
5. How are you currently compensating for exiting employee`s (1) experience, (2) knowledge, and (3) expertise?
6. Are you currently transferring knowledge and expertise? How are you managing this?
7. In how far is the exiting employee involved in the transition process of transferring his/her expertise and knowledge (Cummings & Worley, 2008)?
8. How are surrounding employees involved in the transition process?
III. Desired Future State
1. What is, according to you, the ultimate goal of a successful job-transition (Emans & Vos, 2011)?
