The Case of Orticon

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Changes in the way that employees worked at Oticon:

Oticon had a hierarchical structure, where authority falls in the hands of senior management. Now, with a project-based organization, each employee no longer works in a department with a single job, but is involved in a number of projects (business units) simultaneously, with its own resources, time schedule and success criteria. Currently, managerial authority is assigned to project groups or the individual employee whereby every employee has a say in decision-making. Employees now communicate through the Information Technology (IT) system instead of written papers.

To replace individual offices and maximize physical flexibility, open-space office area with “desk-wheeled” allows employees to move around with the desk and gather in different project groups easily.

Correlation between the changes in the way that employees worked and Oticon’s overall business strategy:

Oticon’s business strategy is a strong commitment to hearing care professionals around the world to empower and support people with hearing loss to continue taking an active part in life (Octicon, 2012). Oticon focuses on innovation, empowering people and encourages active communication naturally. Such strategy is to meet the high expectations of today’s consumers and the huge technological challenge of “in-the-ear” hearing aids.

Replacing the hierarchical structure, project-based organization empowers employees in decision-making, which is directed to Oticon’s focus on empowering consumers. Employee empowerment allows employees to own their work and be responsible for their results in a way that meets the goals of business strategy.

To generate innovative ideas, an open-space office area with trolley-desks has replaced the traditional individual cubicles. Such informal environment allows employees to communicate freely and participate actively in project group discussions, rather than having a barrier that intrudes thoughts and conversations. Thus, the effectiveness of group discussion is enhanced, which supports the business strategy of continuously innovating the best hearing aid.

Additionally, electronic networks have reduced the communication process and increased the effectiveness of communications within the organization. This boosts work productivity rate in meeting the goals and objectives.

Recommendation on a HR policy:

Reasons to adopt a Performance Management system
Performance management is a key tool to improve accountability and shape a high performance culture. This is important to the project-based organization at Oticon, which focuses on High Performance Work System (HPWS) such as having multi-functional work teams, empowering employees, and committing to deliver quality. The HPWS increases employee competitiveness and improves overall performance.

At Oticon, every employee with the required technical and leadership skills can be a team leader, and undertakes the accountability of project outcome and overall business strategy. (Corcoran, 2005) supports that leaders are responsible for the delivery of overall firm strategy. Working with the team to develop an action plan such that strategy is achieved. Hence, performance management enhances the responsibilities of these project leaders to better achieve the business strategy.

Moreover, undertaking the HR responsibility by identifying team members, leaders have to understand employees’ forte to better classify the right members that fit into the group. Holding more than one job simultaneously to recognize employee’s capabilities, performance management reviews performance in which aspects they had performed well.

Hence, performance management should be considered as a HR policy for the present Oticon.

Benefits of Performance Management
Performance management ensures employees are goal-oriented in which (Corcoran, 2005) believes that the system should be embedded in the overall goals and objective of...
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