Pension System Crisis

Althought informal groups are usualy underestimate regarding a organization, theyr role is very important for the well function of the organization and for its survival and developement.

Informal groups in organization increased the cohesiveness which is important to make a comfort environment dominated which lead to increasing the organization productivity.

Is well know the fact that people are reluctant to sudden changes, this was the problem in this study case, the city manager together with the personnel director were trying to copy a new form of personnel management that prove to be successful in some other states in United States and to applied it on the organization they run without trying to adapt it to the organization characteristics and taking in consideration particularities of the community.

As one would normally happen the city employees started to complained about this new changes employees were not satisfied that these changes will lead to differences between them and favoritism of one or another. They were not satisfied with the fact that they were not asked about this and especially because the two were trying to change something that already work although it was an old system.

Another fact that promoted the employees complains was the lack of explanations from those who are trying to introduce the changes. This lack of communication between the personnel director and employees led to miss interpretation of the objective of the changes which were ultimately intended to develop the organization in a more efficient and more effective one.

As was normal the employees threatened the city rulers with forming a union if their complains weren't solved. So again the power of informal groups is shown. They even started to gather signatures to form a union, fact that urged solving theyr complains.

As we can easily see there was a big problem with implementation of the changes and the problem generated complains from two parts: employees on one hand and city council, the political part, on the second one.

The city manager and the personnel director had to manage the situation in such a way that both sides to be satisfied.

The personnel director was trying to impose the changes with any costs because for him it is the only way so he didn't listened to the complains and continued to hope that eventually people will understand.

The city manager was the first who opened the door for consultation with the employees and try to see from their point of view what changes should be made for the organization to work more efficient and more effective.

It is interesting to observe the role of the political factor in all this situation. At the first they were skeptical about the new proposed changes because they weren't "material" investments and the results weren't perceptible. After first good results they agreed to implement