Organization Design and Development

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 3
Organization Design and Development (MGT 404)
Due Date: 30/11/2024 @ 23:59
Course Name:

Student’s Name:

Course Code: MGT404

Student’s ID Number:

Semester: First

CRN: 11560
Academic Year:2024-25-1st

For Instructor’s Use only
Instructor’s Name: Dr. Noorjahan Sherfudeen
Students’ Grade:
Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
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Restricted – ‫مقيد‬

The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Learning Outcomes:
1. Describe the basic steps of the organizational development process.
2. Evaluate the strategic role of change in the organization and its impact on
organizational performance.

Assignment Question(s):
Please refer to the case study titled “Changing the Human Capital Management
Practices at Cambia Health Solutions” given Chapter 15 in your textbook and answer
the following questions:
1. What are internal and external factors that made Cambia Health Solutions to change
its employee management practices? and how do these reasons fit with what’s
happening in the industry? (minimum 400 words, 3 marks)
2. How important was technology in changing Cambia’s employee management
practices, and was it effective in making the changes successful? (minimum 250
words, 2 marks)
3. How did Cambia involve its employees in the redesign process, and did this
involvement help or slow down the changes? (minimum 250 words, 2 marks)
4. What other changes or updates could Cambia make in the future to keep improving
its employee management system and stay effective in the changing healthcare
industry? (minimum 400 words, 3 marks)

Note:
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You must include at least 5 references.
Format your references using APA style.

Answers
1. Answer2. Answer3. Answer-

Restricted – ‫مقيد‬

446

PART5 HUMAN RESOURCE INTERVENTIONS

CHANGING THE HUMAN CAPITAL MANAGEMENT PRACTICES AT
CAMBIA HEALTH SOLUTIONS

C

ambia Health Solutions (www.cambiahealth. com) is
a nonprofit health care and insurance company
dedicated to transforming the way people
experience the health care system. Located in the
Pacific Northwest of the United States, Cambia’s
portfolio of companies spans health care information
technology and software development; retail health care;
health insurance plans; pharmacy benefit management; life,
disability, dental, vision and other lines of protection;
alternative solutions to health care access; and free-standing
health and wellness solutions. The largest business in the
portfolio is Regence Health, a health insurance plan
associated with the Blue Cross and Blue Shield brands.
Regence Health is over 90 years old and operates in
Washington, Oregon, Idaho, and Utah.
In 2010, Cambia convened a crossfunctional design team
to increase the organization’s overall agility. As part of that
effort, the design team initiated a change to its performance
management system for leadership staff (approximately 750
people). The performance management system changes were
based on diagnostic data that the organization was not
focused on the critical areas required for success as well as
feedback from organization members. The feedback
suggested that (1) there were inconsistencies with respect to
disciplined human capital management practices, (2) leaders
were unclear about their individual objectives and how their
objectives related to the organization’s strategies, and (3)
objectives were not clearly connected to professional
development and career advancement.
The design team chartered a crossfunctional task force to
develop a new performance management process aimed at
all leadership roles (supervisors and above), and supported
the team with an external organization development and
performance management consultant. At the highest level,
the task force recommended a process that began with a
requirement that all leaders establish annual objectives,
conduct quarterly performance conversations, and enable a
focused talent review twice a year. On an annual basis, the
performance conversations would be linked to a revised
compensation and reward process. At the center of the new
process was a series of quarterly “performance
conversations.” Performance conversations established a
dialogue where the leader and his/her direct reports could
review past quarter performance on agreed upon objectives
and prepare for the next quarter. The conversation was
oriented around four questions:

• Did the employee accomplish what
was committed to in the prior
performance period?
• How could the employee have
performed more effectively?
• What objectives should be continued
into the next quarter, what should be
stopped, and what new objectives
should be established for the next
quarter?
• How should the employee go about
doing what needs to be done?
The cycle of quarterly performance
conversations and semiannual talent
reviews was initiated by an objectivesetting process. The task force and
design team were influenced by the
timely processes established by some
internal departments who had success
with similar processes around quarterly
conversations and regular talent reviews
(this process was also validated to be a
“best practice” by the external
consultant). This entire process
significantly simplified the existing
performance appraisal process in which
leaders were evaluated across seven
categories. This new process focused on
only two things: (1) the “what” (the
established objectives) and (2) the
“how” (the extent to which the
company’s values were carried out in
achieving the objectives). The “what”
conversation was intended to develop
and establish a total of three to six
objectives with at least one in each of
three categories: (1) human capital
management or how the leader was
going to develop his/her people, (2)
operational goals linked to the
organization’s
strategic
objectives,
operational improvements, and/or
regulatory/legislative mandates, and (3)
the
leader’s
own
professional
development. In addition, the “how”
conversation was to focus on the way the

leader achieved the “what” objectives
(by demonstrating the company’s
values). Leaders were encouraged to—
and their ultimate annual performance
review was dependent on—getting work
done through others, holding people
accountable, and encouraging crossfunctional, innovative, and problemsolving behaviors. These latter two
issues—accountability
and
crossfunctional problem solving—had been
identified as important areas in the
diagnosis.
To support the program, an on-line, ondemand
training module was developed. In the module,
leaders were helped to understand the importance of
employing sound human capital management
practices (with a particular focus on the quarterly
conversations) as well as the importance of
developing “SMART” objectives that were specific,
measurable, achievable, relevant, and timely. This
online training module was provided as a prerequisite
to a series of more detailed webinars which were
facilitated by senior leaders (not HR staff).
The new objective setting and performance
conversation process was approved by the design
team and supported by Cambia’s leadership team. As
part of that support, the leadership team accepted
the recommendation of the task force and design
team to have “coaches” oversee the early
implementation of the new process—which included
the CEO taking on the role of coach for his direct
reports. He committed to monitoring and reviewing
the development and establishment of objectives and
to holding quarterly performance conversations. The
members of the task force served as coaches to the
other levels of management in the organization. The
coaches were a visible means of championing the new
system,
holding
leaders
accountable
for
implementation, and raising the bar and expectations
for human capital management at Cambia.
To reinforce the expected changes in behavior,
the task force also included two rewardsystemrelated recommendations. The first was to increase
differentiation in the appraisal process

CHAPTER15 PERFORMANCE MANAGEMENT

447

by changing the performance categories from four to two.
In the old system, leaders rated their direct reports
according to a “top-key-core-low” scheme and then
engaged in a calibration process that helped ensure the
validity of those ratings. The task force recommended
moving to a two-tier system of “performing and
exceeding.” They acknowledged that there may be
situations where leaders were in a “performance
improvement” scenario that was associated with
correcting poor performance. In most cases, however,
leaders were expected to be “performing” but the highest
performers would be recognized for “exceeding”
expectations. The existing calibration process was
retained as many leaders indicated that it was a beneficial
process for maintaining consistency in the system. The
performing and exceeding performance categories were
tied to recommendations for base-pay increases. The
system was set up to reward “exceeders” at a rate 2.5
times that of “performers” to provide the differentiation.
The second reward system recommendation was to
establish a unique “spot” awards program for all
leadership staff. The spot awards program, entitled the
“Excellence in Leadership Award,” was designed to
recognize leaders for exemplary performance in either
human capital management or agile behaviors. The cash
portion of the award was set at $1,000 and the awards
were to be delivered personally by a member of Cambia’s
leadership team. Recipients of the award are highlighted
in the company’s newsletter—the goal being to reinforce
among all leaders the kind of leadership behavior that is
required for moving forward.
Although the new process had been developed with
a broad range of inputs, it was kicked off with a
presentation to senior leaders at Cambia’s annual senior
leadership summit. There, these senior leaders were able
to ask questions, hear about the way the process worked,
and understand the assumptions underlying its design.
Following the presentation, these leaders were given a
schedule to develop the initial quarterly “what”
objectives for themselves and all other leadership staff
across the company.
As the objectives were submitted, the task force
members and performance coaches reviewed the
objectives and provided feedback as appropriate. By the
deadline, over 90% of all

participation in goal setting generally are substantiated across studies and with both
groups and individuals.19 Longitudinal analyses support the conclusion that the gains in
performance are not short-lived.20 A field study of the goal-setting process, however, failed
to replicate the typical positive linear relationship between goal difficulty and

pro-

performance, raising some concern about the generalizability of the method from the
laboratory to practice.21 Additional research has attempted to identify potential factors
moderating the results of goal setting, including task uncertainty, amount and quality of
planning, personal need for achievement, education, past goal successes, and supervisory
style.22 Some support for the moderators has been found. For example, when the technical
context is uncertain, goals tend to be less specific and people need to engage in more
search behavior to establish meaningful goals.
The existing research on MBO effectiveness is large but mixed.23 However, it suggests
that a properly designed MBO program can have positive organizational results. Carroll
and Tosi conducted a long-term study of an MBO program at Black & Decker,24 first
evaluating the program and then using those data to help the company revise and improve
it. This resulted in greater use of and satisfaction with the program. The researchers
concluded that top-management support of MBO is the most important factor in
implementing such programs. Many programs are short-lived, however, and wither on the
vine because they have been installed without adequate diagnosis of the context factors.
In particular, MBO can focus too much on vertical alignment of individual and
organizational goals and not enough on the horizontal issues that exist when tasks or
groups are interdependent.

15-3 Performance Appraisal
Performance appraisal is a feedback system that involves the direct evaluation of
individual or work group performance by a supervisor, manager, or peers. Most
organizations have some kind of evaluation system that is used for performance feedback,
pay administration, and, in some cases, counseling and developing employees.25 Thus,
performance appraisal represents an important link between goal-setting processes and
reward systems. A 2001 survey of over 300 North American companies, for example, found
that 65% reported a link between performance ratings and rewards, 46% used the system
equally for performance development and decision making, and 53% of the organizations
believed the system was aligned with organizational values and priorities. 26 Abundant
evidence, however, indicates that organizations do a poor job appraising employees. 27 As
one study put it, “The appraisal of performance appraisals is not good…. In fact,

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