Change management at Melbourne University's Arts Faculty

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 transfer in an increasingly global higher education system. In this system, in which we must increasingly compete for students and research dollars and create new sources of funding, international university rankings are the utmost importance." (Probert, 2006) it is emphasized in this report that these changes are of great significance toward ensuring "greater strategic capacity within the Faculty." Probert (2006) relates two key changes which have been proposed and states them as follows:

1) the reduction in number of existing departments to ensure increased accountability and improved governance structures, and;

2) the creation of a Faculty Executive based on the Heads of School and key Associate Deans. (Probert, 2006)

There are two benefits from these changes noted and stated specifically is: "Growing Esteem requires us to work collaboratively as a Faculty in new ways (for example, in the management of the BA, the improvement of the graduate student experience, development of Graduate Schools, multi-disciplinary teaching and research, as well as the imperative of reducing dysfunctional competition and duplication). If we want to create a more collaborative way of working across disciplines and traditional boundaries then we need an Executive in which this is put into practice as a matter of course. Second, the existing large number of very varied organizational units leads to uneven leadership and management capacity - resulting in faculty decision-making that is less than optimal. We need a strong, smaller group of Heads capable of representing School, discipline and multi-disciplinary interests within the broader Faculty. These considerations, combined with the Faculty's widely shared commitment to collegiality and academic coherence, have led to the proposal that the Faculty's current organizational units be restructured from sixteen departments to seven Schools." (Probert, 2006)

It is further agreed that membership of the key committees of the Faculty should be upon the basis of "functional principles." (Probert, 2006) This includes the nomination of members able to provide effective representation and who "can be held accountable for their work, while at the same time the Faculty is assured of well-informed and relevant input in all areas." (Probert, 2006) Each school should have representation on the key committees of the faculty as well. Stated to be of equal importance is the "recognition that overly complicated administrative structures and organizational units hinder the ability of talented professional staff to provide exemplary services to students and staff alike." (Probert, 2006) Also stated to be equally important is the recognition "that overly complicated administrative structures and organizational units hinder the ability of talented professional staff to provide exemplary services to students and staff alike." (Probert, 2006) it is related that the services must be "more efficient and streamlined" to provide support for students and staff which will involve reconfiguration of the way services are delivered and that this will involve removal of duplication and reconsideration of existing organizational groupings to change groupings to be upon the basis of the performance or functions of services or service provision.

VII. OPERATING ENVIRONMENT

It is stated in relation to 'external' factors that the University and Faculty both are presently greatly dependent on "non government sources of revenue, at the same time as international student fee income is declining in traditional markets, and research funding is threatened by increasing levels of competition." (Probert, 2006) it is related that the University is seeking a reduction in its reliance "on Commonwealth funded undergraduate teaching" and that a need exists for development of "the highest quality graduate courseworth programs, and ensure levels of postgraduate research enrollment from international markets as well as nationally." (Probert, 2006) Stated in the area of internal factors is that the University has stated as one of the 'Growing Esteem' key principles as being reconsideration of approaches previously considered for revenue increase and that while there was "previously...a reliance mostly on increasing enrollments in international, undergraduate programs at the University" that it is "clear that the intention is now to diversify revenue streams with a shift of student load from undergraduate to graduate teaching." (Probert, 2006) in order to achieve this there must be an "increase in quality and strategic focus at every level." (Probert, 2006) in order to achieve these two goals it is necessary that high levels of staff development and management be in existence at the School level. The basis of budgeting decisions is stated to be upon the "explicit planning in the context of 'Growing Esteem'." (Probert, 2006)

It is articulated in the Melbourne Model that a need exist to make provision f "an exemplary postgraduate student experience" and that the logic conclusion appears to be the consideration of the relationship between coursework and research along with recognition of the commonalities "whilst maintaining the distinctiveness of each program." (Probert, 2006) Considered are stated to be the "opportunity to achieve economies of scale and redirect resources toward supporting this cohort" a well as the "opportunity to reduce the duplication that currently occurs across three sections in the Secretariat in relation to student selection and administration." (Probert, 2006) Probert states that reduction of duplication is possible "across three sections in the Secretariat in relation to student selection and administration." (2006)

The Faculty has stated a need for reviewing all post-graduate coursework programs "in order to ensure viability and quality." (Probert, 2006) as well it is stated that the new generation BA will be required to demonstrate the following:

1) a focus on majors as the structuring principle of the degree and a requirement for the completion of at least one major;

2) a revised first year which provides a cohort experience and core skills, and opens up opportunities for further study; and 3) a requirement that all students undertake 75 points of study (25 points at each year level) outside the Faculty of Arts. (Probert, 2006)

In order to develop and support this approach which is more structured in nature there is a requirement for development of structures that are new and that support both collaboration and strategic decision-making. As well, this presents the opportunity to "set down broad educational principles for our first year students, and to construct a stable and coherent set of subjects which provide a foundation for future, discipline-based study." (Probert, 2006)

In relation to the process of consultation it is related by Probert that the following steps were taken:

1) Appointment of an external consultant who will assist in the development and management of a consultative approach that is very thorough with the Deans and the Faculty General Manager;

2) Creation of a consultation website has been established and on which "all working documents relating to every aspect of the review were posted and on which all staff could post comments and contributions of any kind." (Probert, 2006)

3) Key position papers which made identification of principles that were agreed upon and that reported stages in decision making were posted on the Faculty's consultation website; and 4) Proposals for the structure of new Schools and Faculty Portfolios were circulated for discussion to the Standing Committee of Heads. (Probert, 2006)

Three academic working groups were formed to focus on:

1) Academic programs;

2) Decision making; and 3) Arts Strategy. (Probert, 2006)

Investigation by the Academic Programs Group included the following areas:

Mechanisms for supporting the Melbourne Model

Support mechanisms for increased multi-disciplinarily

Administrative processes that could be streamlined

The degree regulations that could be simplified

Possible models for the new generation BA. (Probert, 2006)

The Decision Making Group is stated to have investigated the following:

Governance and management structures across the Faculty

The optimum size of a School / Department.

Faculty committee composition

Where decisions are best made in relation to Faculty and School governance

Structures that support the Faculty's strategic goals and those of the University

The composition and function of Executive (Probert, 2006)

Stated to be that which the Arts Strategy Group investigated were:

Values to be articulated by our academic programs;

The implications of providing an excellent, responsive BA to larger groups of students;

Strategies of retaining the BA as a degree in its own right and not only a pathway to other degrees; an d

The appeal of the new generation BA to students to a broader range of students. (Probert, 2006)

4) Marketing and Development; and 5) Executive Support. (Probert, 2006)

It is related that the applications for School and Secretariat Manager positions will be "limited to staff who meet all the selected criteria." (Probert, 2006) it is related that the selection committees for these positions will "comprise some or all of"

1) the relevant Head of School or Associate Dean (Secretariat);

2) the Faculty General Manager;

3) a representative from Human Resources; and 4) a panel member external to the faculty. (Probert, 2006)

Professional staff positions will be upon consideration of:

1) operational requirements of the unit;

2) recommendations made throughout the consultation process; and 3) constraints posed by the 2007 budget. (Probert, 2006)

In the case where the conditions are met the incumbent will directly placed into a new position. The conditions are stated to include:

1) the responsibilities and duties of a new position are determined by very similar (80%) to their existing positions; and 2) the HEW classification is at the same level; and 3) There is no other staff member in the School or unit who would be equally eligible according to conditions a and b above. (Probert, 2006)

There will be new committees established by the Faculty that will work with the new Associate Dean portfolios of Undergraduate Studies, Research and Graduate and International." (Probert, 2006) Additionally each school will appoint to these committees a member with membership of Faculty Board continuing to make allowance for each School to have representation of its undergraduate and postgraduate students as well as for professional staff and other member of the University community in alignment with the University statute. (Probert, 2006; paraphrased) the following chart illustrates the function-based school structure for professional staff units in new Schools."

Function-based School Structure for Professional Staff Units in New Schools

Source: Probert (2006)

The following illustrates is a flowchart of the process to appoint professional staff positions as adapted from the work of Probert (2006).

Process to appoint to Professional staff positions flowchart

Source: Probert (2006)

Professor Mark Considine writes in the 'Report of the Review Panel: Curriculum in the University of Melbourne Bachelor of Arts' that the key design decisions "built into the Melbourne Model are generating some of the challenges faced by Schools and by conveners of majors." (2007) Considine states that 'The Melbourne Model: Report of the Curriculum Commission' has stated the following:

1) None of the 'new generation' undergraduate courses will be the same as an existing one;

2) Majors in any discipline are to be characterized by development across a three-year program [and] should culminate in a 'capstone' experience in the third year;

3) Designing new programs will also provide an historic opportunity to evaluate and improve the intellectual coherence, research relevance and cohort experience in undergraduate programs. These programs should set a new benchmark in Australian higher education." (Considine, 2007)

Considine states that indication encountered by the Panel indicate that good practice should include the following:

1) Those Schools which have developed intensive relationships with secondary schools, e.g. through VCE preparation and enrichment arrangements (for example, in some of the languages and in Classics and Archaeology);

2) Those Schools which have already reduced the number of subjects which they offer to students at an undergraduate level, and, in particular, the Schools of Philosophy and of Political Science, Criminology and Sociology;

3) Those Schools which have employed student advisors, to assist students with subject choice and with program planning;

4) Those programs, in the Asia Institute and in the School of Languages and Linguistics, which have organized their languages teaching in a way which enables multiple streams (beginners, intermediate, advanced) to be offered on an efficient basis by teaching some subjects across multiple streams (e.g. third-year subjects for the beginners stream are the same subjects for first-year advanced students); and 5) the Asian Institute and the National Centre of Excellence for Islamic Studies for their innovative approach to teaching and learning in this area. (Considine, 2007)

SUMMARY and CONCLUSION

It has been related in this study that the aspiration of the Faculty is the limitation of impact of the changes proposed on staff and positions in all cases where this is possible. There will be however, some degree of effect that is required to be considered and managed in a collaborative approach that is sensitive in nature. This movement of academic positions in better alignments with disciplines in the new schools is inherent in the reorganization and change management of the Melbourne University and will provide strength to the disciplines and present potential opportunities for "collegiality and collaboration." (Considine, 2007) the academic staff of the Melbourne University have been fully involved and consulted with in the changes that are being made which has included a review of the functions of administration at the Melbourne University.