Change Management: A Case Study

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) VIII. NEW WORKING GROUPS Probert (2006) relates that the working party was established for the purpose of providing a systematic definition and review of possible Graduate Schools in the Faculty of Arts. In addition the working groups were also involved in development of the schools response to the proposals which emerged for the +2 of the 3+2+3 model.

Requirements of the working party are those as follows: 1) Develop a position paper on the role of Graduate Schools in Arts and the difference between Graduate Schools and other Masters coursework programs; 2) Through consultation across the Faculty identify all existing suggestions for the development of Graduate Schools, and establish a process and timeframe for developing each proposal (bringing together key people from within and without the University), and bringing them to Executive, SCHD and Curriculum Review Committee for discussion; 3) Follow on from the existing review of Masters coursework programs and bring forward to Executive and SCHD proposals for: a) New coursework masters programs; b) Consolidation of existing masters programs; and Closure of unviable masters programs.

(Probert, 2006) Probert states that the working party held requirements of staying ahead of research matters "with SGS and the Curriculum Commission" and that the focus was stated to be inclusive of: 1) Defining pathways for research students through the +2+3 years with a particular emphasis on the future of Honors and Masters by research; and 2) Develop proposal for a Graduate College of Humanities and Social Sciences. (Probert, 2006) The working party of the B.A.

was stated to have requirement of developing proposals of the "...earlier Working Group" and to work in collaboration with the Curriculum Review Steering Group of the Faculty in: 1) Continuing to work on the proposed BA model; 2) Developing proposals for the streams called 'core knowledge' and 'intercultural studies'; 3) Defining and negotiating proposals to reduce 1st year offerings; 4) Ensuring flexibility of subject choice and articulation to discipline majors; 5) Development of 3rd year capstone proposals; 6) Clarification the way in which generic skills are to be embedded; 7) Liaison with Economics and Commerce (and other Faculties) about 75 points outside the Faculty; and 8) Develop terms of reference and membership of a First Year team.

(Probert, 2006) It is stated that the working party has developed a paper on options for structure of a PPE program as well as identified other possible structured pathways.

This working party had additionally made examination of a "...full range of pathways for PPE students into Graduate Schools and research" and has also "...examined questions of selection and quota." (Probert, 2006) Probert states that there were six working groups established composed of professional staff from Departments and the Secretariat in order to give consideration to the functions and roles that professional staff performed.

These groups were instructed to make identification of efficiencies that are possible through economies of scale and as well were asked to make a review of the duplication which takes place "across departments and the Faculty as well as across organizational units within the Secretariat." (Probert, 2006) the working groups made identification of methods for improving services to students and staff and as well identified models that would streamline administration through replacement of the organization units that exist with "function-based organizational units." (Probert, 2006) the working groups formed were those as follows: 1) Coursework Programs; 2) Research; 3) Finance; 4) HR and Operational; 5) it; and 6) Marketing and Development.

(Probert, 2006) Questions that the working groups considered in making identification of new opportunities for the organization include the following questions: 1) Approximately how many people (number and effective full-time (EFT)) are engaged in these activities at present? 2) What are the main requirements (skill/expertise/deployment of staff) for these tasks to be done very well? How do other institutions undertake this task? For some working groups, a web search of institutions like UQ or UNSW will suffice. Other groups may choose to speak to Education or LFR about these requirements.

(Lynne Wrout will undertake this exercise across some functions on behalf of the working groups) 3) What will be the impact of the organization changes (e.g.: common first year, larger academic units, Graduate Schools, etc.) on these tasks within Schools?; 4) Map the most important processes, showing which steps should be undertaken at Faculty and which at School level in order to maximize coherence and increase efficiency; 5) Define the resource requirements within a typical School: a) principal accountabilities and performance measures; b) service agreements with University or Faculty units; skills and experience profile; d) staffing (range) and expected costs vs.

current; e) What compliance or regulatory rules dictate the procedures? 6) Identify particular training needs that are required to deliver these services?; and 7) Should School resources be reallocated to support the strategic planning? (Probert, 2006) Probert relates that the Faculty have been authorized by the University Council to create six new schools and one institution as follows: 1) Asia Institute; 2) School of Culture and Communication; 3) School of Historical Studies; 4) School of Languages and Linguistics; 5) School of Philosophy; 6) School of Political Science, Criminology and Sociology; and 7) School of Social and Environmental Inquiry.

(Probert, 2006) Probert relates that the Faculty of Arts will continue as in the past to have a central Secretariat which will be composed of six units of administration as follows: 1) Arts it; 2) Executive Office; 3) Marketing and Development Office; 4) Research and Postgraduate Studies; 5) Resources and Planning Office; and 6) Undergraduate Studies. (Probert, 2006) The following tables lists the movement of Academic staff positions to new Schools according to the strategic plans of the Arts Faculty.

Movement of Academic Staff Positions to New Schools Source: Probert (2006) KEY ADMINISTRATIVE FUNCTIONS Key administrative functions are stated to be those as follows under this new plans by the Arts Faculty: 1) Undergraduate support; 2) Research and Postgraduate Support; 3) Resources and Planning; 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.