NOTES

Management (or managing) is the administration of an organization, whether it is a business, a not

for-profit organization, or government body. Management includes the activities of setting the
strategy of an organization and coordinating the efforts of its employees (or of volunteers) to
accomplish its objectives through the application of available resources, such as financial, natural,
technological, and human resources.

According to Fayol, management operates through five basic functions: planning, organizing, staffing,
directing and controlling.
Creating a structure through which an organization's goals can be accomplished.

1. Planning

It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. According to KOONTZ, “Planning is deciding in advance -
what to do, when to do & how to do. It bridges the gap from where we are & where
we want to be”. A plan is a future course of actions. It is an exercise in problem
solving & decision making. Planning is determination of courses of action to achieve
desired goals. Thus, planning is a systematic thinking about ways & means for
 accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is all pervasive, it is an intellectual
activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, “To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.
To organize a business involves determining & providing human and non-human
resources to the organizational structure. Organizing as a process involves:

 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing

It is the function of manning the organization structure and keeping it manned.

Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc. The main
purpose o staffing is to put right man on right job i.e. square pegs in square holes and
round pegs in round holes. According to Kootz & O’Donell, “Managerial function of
staffing involves manning the organization structure through proper and effective
selection, appraisal & development of personnel to fill the roles designed un the
structure”. Staffing involves:

 Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.
4. Directing

It is that part of managerial function which actuates the organizational methods to

work efficiently for achievement of organizational purposes. It is considered life-
spark of the enterprise which sets it in motion the action of people because planning,
organizing and staffing are the mere preparations for doing the work. Direction is that
inert-personnel aspect of management which deals directly with influencing, guiding,
supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:

 Supervision
 Motivation
 Leadership
 Communication
 Supervision- implies overseeing the work of subordinates by their superiors. It is the
act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal

to work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.

Leadership- may be defined as a process by which manager guides and influences

the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from

one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is
the measurement & correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out
deviation if any.
d. Corrective action.
FOURTEEN PRINCIPLES OF MANAGEMENT
Roles of a Manager by Mintzberg
Category Roles
Figurehead
Leader
Interpersonal
Liaison

Monitor
Informational Disseminator
Spokesperson
Entrepreneur

Decisional Disturbance Handler

Resource Allocator
Negotiator

Interpersonal Category

The managerial roles in this category involve providing information and ideas.

1. Figurehead – As a manager, you have social, ceremonial and legal responsibilities. You're
expected to be a source of inspiration. People look up to you as a person with authority, and
as a figurehead.
2. Leader – This is where you provide leadership for your team, your department or perhaps
your entire organization; and it's where you manage the performance and responsibilities of
everyone in the group.
3. Liaison – Managers must communicate with internal and external contacts. You need to be
able to network effectively on behalf of your organization.

Informational Category

The managerial roles in this category involve processing information.

4. Monitor – In this role, you regularly seek out information related to your organization and
industry, looking for relevant changes in the environment. You also monitor your team, in
terms of both their productivity, and their well-being.
5. Disseminator – This is where you communicate potentially useful information to your
colleagues and your team.
6. Spokesperson – Managers represent and speak for their organization. In this role you're
responsible for transmitting information about your organization and its goals to the people
outside it.

Decisional Category

The managerial roles in this category involve using information.

7. Entrepreneur – As a manager, you create and control change within the organization. This
means solving problems, generating new ideas, and implementing them.

8. Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the
manager who must take charge. You also need to help mediate disputes within it.
 9. Resource Allocator – You'll also need to determine where organizational resources are best
applied. This involves allocating funding, as well as assigning staff and other organizational
resources.
10. Negotiator – You may be needed to take part in, and direct, important negotiations within
your team, department, or organization.

LEVELS OF MANAGER

The three levels of management typically found in an organization are low-level management,
middle-level management, and top-level management. Top-level managers are responsible for
controlling and overseeing the entire organization.

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top

management is the ultimate source of authority and it manages goals and policies for
an enterprise. It devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the
enterprise.
b. It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the
performance of the enterprise.
2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They
devote more time to organizational and directional functions. In small organization,
there is only one layer of middle level of management but in big enterprises, there
may be senior and junior middle level management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and
directives of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or
department.
f. It also sends important reports and other important data to top level
management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better
performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists

of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
“Supervisory management refers to those executives whose work has to be largely
with personal oversight and direction of operative employees”. In other words, they
are concerned with direction and controlling function of management. Their activities
include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in
the organization.
e. They communicate workers problems, suggestions, and recommendatory
appeals etc to the higher level and higher level goals and objectives to the
workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things
done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact
with the workers.
 THEORIES OF MANAGEMENT

The classical school of management theories were developed during the Industrial
Revolution of the mid- to late- 1800s and early 1900s. They are largely concerned with
improving efficiency and productivity. The main classical management theories include:
Fayol's five functions of management.

Management models and theories associated with motivation, leadership and

change management, and their application to practical situations and problems

Management models and theories associated with motivation, leadership and

change management, and their application to practical situations and problems

This section covers:

 Classical Management Theory

 Human Relations Theory
 Neo-Human Relations Theory
 System Theory
Classical Management Theory

Here we focus on three well-known early writers on management:

Henri Fayol
FW Taylor
Max Weber

Definition of management:

Management takes place within a structured organizational setting with prescribed roles. It is
directed towards the achievement of aims and objectives through influencing the efforts of
others.

Classical management theory

 Emphasis on structure
 Prescriptive about 'what is good for the firm'
 Practical manager (except Weber, sociologist)

Henri Fayol (1841 - 1925), France

Reduces the span of attention or effort for any one person or

1.Division of work
group. Develops practice and familiarity
The right to give an order. Should not be considered without
2. Authority
reference to responsibility
Outward marks of respect in accordance with formal or informal
3. Discipline
agreements between firm and its employees
4. Unity of command One man superior
One head and one plan for a group of activities with the same
5. Unity of direction
objective
6. Subordination of
The interests of one individual or one group should not prevail
individual interests to the
over the general good. This is a difficult area of management
general interest
7. Remuneration Pay should be fair to both the employee and the firm
Is always present to a greater or less extent, depending on the
8. Centralisation
size of the company and quality of its managers
9. Scalar chain The line of authority from top to bottom of the organisation
A place for everything and everything in its place; the right man
10. Order
in the right place
11. Equity A combination of kindliness and justice towards the employees
12. Stability of tenure of Employees need to be given time to settle into their jobs, even
personnel though this may be a lengthy period in the case of the managers
Within the limits of authority and discipline, all levels of staff
13. Initiative
should be encouraged to show initiative
Harmony is a great strength to an organisation; teamwork should
14. Esprit de corps
be encouraged
Advantages

 Fayol was the first person to actually give a definition of management which is
generally familiar today namely 'forecast and plan, to organise, to command, to co-
ordinate and to control'.
 Fayol also gave much of the basic terminology and concepts, which would be
elaborated upon by future researchers, such as division of labour, scalar chain, unity
of command and centralisation.

Disadvantages

 Fayol was describing the structure of formal organisations.

 Absence of attention to issues such as individual versus general interest, remuneration
and equity suggest that Fayol saw the employer as paternalistic and by definition
working in the employee's interest.
 Fayol does mention the issues relating to the sensitivity of a patient’s needs, such as
initiative and 'esprit de corps', he saw them as issues in the context of rational
organisational structure and not in terms of adapting structures and changing people's
behaviour to achieve the best fit between the organisation and its customers.

Many of these principles have been absorbed into modern day organisations, but they were
not designed to cope with conditions of rapid change. The language used by Fayol may
appear dictatorial, however if we examine Fayol’s work and concepts, it is clear that Fayol’s
‘command’ is similar to a description of what we would call empowering manager today.

F W Taylor - (1856 - 1915), USA- The Scientific Management School

Taylorism involved breaking down the components of manual tasks in manufacturing

environments, timing each movement ('time and motion' studies) so that there could be a
proven best way to perform each task. Thus employees could be trained to be 'first class'
within their job.

This was a scientific system where every task became discrete and specialised. Specialised
services are provided in the NHS, and these management techniques could prove useful in
these areas, to review productivity.

Key points about Taylor, who is credited with what we now call 'Taylorism':

 he was in the scientific management school

 his emphases were on efficiency and productivity
 but he ignored many of the human aspects of employment

For the managers, scientific management required them to:

 develop a science for each operation to replace opinion and ‘rule of thumb’
 determine accurately from the science the correct time and methods for each job (time
and motion studies)
 set up a suitable organisation to take all responsibility from the workers except that of
the actual job performance
 select and train the workers
  accept that management itself be governed by the science deployed for each operation
and surrender its arbitrary powers over the workers, i.e. cooperate with them.

For the workers, scientific management required them to:

 share in the prosperity of the firm by working in the correct way and receiving wage
increases
 give up their idea of time wasting and co-operate with the management in developing
the science
 accept that management would be responsible for determining what was done and
how
 agree to be trained in new methods where applicable.

The benefits arising from scientific management can be summarised as follows:

 improving work methods brought enormous increases in productivity

 its rational approach to the organisational work enables tasks and procedures to be
measured with a considerable degree of accuracy
 measurement of paths and processes provide useful information on which to base
improvements in working methods, plant design, etc
 it enabled employees to be paid by results and to take advantage of incentive
payments
 it stimulated management into adopting a more positive role in leadership at shop
floor level
 it contributed to major improvements in physical working conditions for employees
 it provided the formation for modern work studies.

The drawbacks were mainly for the workers:

 it reduced the worker's role to that of a rigid adherence to methods and procedures
over which he/she had little discretion
 it led to increased fragmentation of work due to its emphasis on divisional labour
 it generated an economically based approach to the motivation of employees by
linking pay to geared outputs
 it put the planning and control of workplace activities exclusively in the hands of the
managers
 it ruled out any realistic bargaining about wage rates since every job was measured
and rated 'scientifically'.

Therefore, in summary, while the scientific management technique has been employed to
increase productivity and efficiency both in private and public services, it has also had the
disadvantages of discounting many of the human aspects of employment. Taylor’s ideas on
management and workers demonstrates justice for both parties (employer and
employee).Taylorism prevailed in the '30s through to the early '60s - and in many
organisations considerably later than this. Peters and Waterman in the 70s/80 and Senge late
'80s/early '90s led us towards what we now call 'systems thinking' where the rights and
potential wider contributions of employees received considerably greater emphasis.
Max Weber (1864 - 1924), Germany

Weber described bureaucracy as the most efficient way of working.

Bureaucracy in this context is the organisational form of certain dominant characteristics such
as a hierarchy of authority and a system of rules.

Bureaucracy in a sense of red tape or officialdom should not be used as these meanings are
value-ridden and only emphasise very negative aspects of the original Max Weber model.

Authority is distinguished from power by Weber. Power is a unilateral thing - it enables a

person to force another to behave in a certain way, whether by means of strength or by
rewards. Authority, on the other hand, implies acceptance of the rules by those over whom it
is to be exercised within limits agreeable to the subordinates that Weber refers to in
discussing legitimate authority.

Weber presented three types of legitimate authority (also discussed in Section 5a):

Traditional authority: where acceptance of those in authority arose from tradition and
custom.
Charismatic authority: where acceptance arises from loyalty to, and confidence in, the
personal qualities of the ruler.
Rational-legal authority: where acceptance arises out of the office, or position, of the person
in authority as bounded by the rules and procedures of the organisation.

It is the rational-legal authority form that exists in most organisations today and this is the
form to which Weber ascribed the term 'bureaucracy'.

The main features of bureaucracy according to Weber were:

 a continuous organisation or functions bounded by rules

 that individuals functioned within the limits of the specialisation of the work, the
degree of authority allocated and the rules governing the exercise of authority
 a hierarchical structure of offices
 appointment to offices made on the grounds of technical competence only
 the separation of officials from the ownership of the organisation
 the authority was vested in the official positions and not in the personalities that held
these posts. Rules, decisions and actions were formulated and recorded in writing.

It is no coincidence that Weber's writings were at a time of the major industrial revolutions
and the growth of large complex organisations out of the cottage industries and/or
entrepreneurial businesses.

The efficiency of this rational and logistical organisation shares a considerable amount of
common ground with the thinking of Fayol. In particular, features such as scalar chain,
specialisation, authority and the definition of jobs which were so essential to successful
management as described by Fayol, are typical of bureaucracy. There is also little doubt that
Weber's ideas concerning specific spheres of competence and employment based on technical
competence would have considerable appeal for Taylor's scientific managers.
Advantages

 Appointment, promotion and authority were dependent on technical competence and

reinforced by written rules and procedures of promoting those most able to manage
rather than those favoured to manage. We take a lot of this for granted in the UK
today. Anything else is regarded as nepotism and corruption.
 The adoption of bureaucratic type of management systems allow organisations to
grow into large complex organised systems that are focused towards formalised
explicit goals.
 It cannot be stated strongly enough that the Weber theory has the advantage of being
used as a 'gold standard' on which to compare and develop other modern theories.

Disadvantages

Subsequent analysis by other researchers have identified many disadvantages:

 Tendency for organisations to become procedure dominated rather than goal

dominated.
 Tendency for heavily formalised organisational roles to suppress initiative and
flexibility of the job holders.
 Rigid behaviour by senior managers can lead to standardised services that do not meet
the needs of the client.
 Rigid procedures and rules are demotivating for the subordinates that work in the
organisations.
 Exercise of control based on knowledge as advocated by Weber has led to the growth
of 'experts' whose opinions and attitudes may frequently clash with those of the more
generalised managers and supervisors.

Human Relations Theories

Elton Mayo: Hawthorne studies

Where Classical theorists were concerned with structure and mechanics of organisations, the
theorists of human relations were, understandably, concerned with the human factors.

The foci of human relations theory is on motivation, group motivation and leadership.

At the centre of these foci are assumptions about relationship between employer and
employee.

Schein (1965) and Mayo (1933)

 were academic, social scientists

 their emphasis was on human behaviour within organisations
 they stated that people's needs are decisive factors in achieving an organisation's
effectiveness
 they were descriptive and attempted to be predictive of behaviour in organisations

A 'motive' is described as a need or driving force within a person.

The process of motivation involves choosing between alternative forms of action in order to
achieve some desired end or goal

Alternative forms of action

of motivation depend on a manager's assumptions about his/her subordinates:

Prime Motivators Theory

1. Rational- Self interest and Basis of Classical, especially,
economic man maximisation of gain Taylor/Scientific theory
Social need, being part of a
2. Social man Basis of Mayo
group
3. Self actualising Maslow, Likert, McGregor, Argyris,
Self-fulfilment of individual
man Herzberg
Depends on individual,
4. Complex man 'Systems approach'
group, task

Elton Mayo : Hawthorne Studies

The ground-breaking Hawthorne studies carried out in the Hawthorne plant of the Western
Electric Company (USA) 1927 - 32.

Stage 1 (1924 -27)

Study of the physical surroundings (lighting level) on productivity of workers. Control group
and experimental group previously had similar productivity before study began.

Control Group = constant lighting level

Experimental Group = varied lighting level

Result
Both groups productivity increased - even when experimental group was working in dim
light.

Product leader called Mayo and colleagues to explain the results.

Stage 2 (1927 - 29) 'Relay assembly room stage'

Still analysing effect of physical surroundings (rest, pauses, lunch break duration, length of
working week) on output.

Result
Output increased even when worsening conditions

Hypothesis was now that it was the attitudes of subjects at work and not the physical
conditions. This gave rise to the 'Hawthorne Effect' - employees were responding not so
much to changes in the environment as to the fact they were the centre of attention - a special
group.

Stage 3 (1928 - 30)

A Total of 20,000 interviews were collected with the workers on employee attitudes to
working conditions, their supervision and their jobs.

Stage 4 (1932) 'Bank winning observation room'

This time the new subjects (14 men) put in separate room for six months.

Result
Productivity restricted due to pressure from peers to adopt a slower rate to circumvent
company wages incentive scheme to generally adopt own group rules and behaviour.

Advantages

 first real attempt to undertake genuine social research in industrial setting

 individuals cannot be treated in isolation, but function with group members
 that individual motivation did not primarily lie in monetary or physical condition, but
in need and status in a group
 the strength of informal (as opposed to formal) groups demonstrated a behaviour of
workers (formal supervisors were powerless in Stage 4)
 it highlighted need for supervisors to be sensitive and cater for social needs of
workers within the group

Disadvantages

 from 1930s -1950s some doubt was cast on the increased applicability of these
theories to every day working life

Neo-Human Relations Theory

This group were social psychologists who developed more complex theories:

Maslow
McGregor (Theory X and Theory Y)
Herzberg
Likert
Argyris

Maslow is often-quoted still today, having developed a seminal theory of the needs of human
beings. Herzberg's and McGregor's neo-human relations theories both focus on motivation
and leadership, but their theories are very different.
Maslow (1943) Heirarchy of Needs

1. Maslow proposed a hierarchy of human needs building from basic needs at the base to
higher needs at the top.

2. Maslow made assumptions that people need to satisfy each level of need, before
elevating their needs to the next higher level e.g. a hungry person's need is dominated
by a need to eat (i.e survival), but not to be loved, until he/she is no longer hungry.

3. Today the focus in most Western societies is on the elements towards the top of
Maslow's hierarchy - in which work environments and 'jobs', including 'having a job'
and the satisfaction or otherwise such jobs provide - have become typical features.
Notably the attainment of self-esteem and, at the very top of the hierarchy, what
Maslow calls 'self-actualisation' - fundamentally the synthesis of 'worth', 'contribution'
and perceived 'value' of the individual in society.

Advantages

 Managers should consider the needs and aspirations of individual staff.

Disadvantages

 The broad assumptions in 2 above have been disproved by exceptions e.g. hungry, ill
artist working in combination.

Whilst this research provides a basic framework, life is complex.

McGregor (Theory X and Theory Y)

Managers were perceived by McGregor, whose theories are still often quoted, to make two
noticeably different sets of broad assumptions about their employees.

Theory X (essentially 'scientific'

Theory Y
management)
Lazy Like working
Avoid responsibility Accept/seek responsibility
Therefore need control/coercion Need space to develop imagination/ingenuity
Schein type: 'rational economic man' Schein type: 'self-actualising man'

Advantages

 Identifies two main types of individual for managers to consider how to motivate.

Disadvantages

 Only presents two extremes of managerial behaviour.

Herzberg’s theory

Herzberg showed that satisfaction at work came from different factors to dissatisfaction.
Dissatisfaction was not simply the opposite of the factors which caused satisfaction.

200 engineers and accountants were asked to recall the times/occasions when they
experienced satisfactory and unsatisfactory feeling about their jobs. Later this also involved
manual and clerical staff similar results were found. Herzberg showed two categories of
findings:

Motivators - factors giving rise to satisfaction

Hygiene factors - factors giving rise to dissatisfaction

Important Motivators Important Hygiene Factors

Achievement Company policy and recognition
Recognition Supervision - the technical aspects
Work itself Salary
Responsibility Interpersonal relations - supervision
Advancement Working conditions

Other features include:

Motivators Hygiene Factors

Related to content of work Related to context/environment of work
Promote satisfaction Only prevent dissatisfaction

Advantages

 Herzberg's work led to a practical way to improve motivation, which had, up to that
point, been dominated by Taylorism (salary, wages). In particular ' job enrichment'
programmes mushroomed. The aim of these was to design work and work structures
to contain the optimum number of motivators.
 This approach counters the years of Taylorism, which sought to break down work into
its simplest components and to remove responsibility from individuals for planning
and control.

Disadvantages

 There remain doubts about Herzberg's factors applicability to non-professional

groups, despite the fact that some of his later studies involved the clerical and manual
groups. The numbers in these categories though were small, and researchers still
argue about the applicability of the manual and clerical group.
 Social scientists argue about the validity of his definition of 'job satisfaction'.

Likert

Described 'new patterns of management' based on the behaviours of managers.

Four main patterns:

1. Exploitative - authoritative where power and direction come from the

top down', where threats and punishment are employed, where 'Rational
communication is poor and teamwork is minimal. Productivity is typically economic man'
mediocre.
2. Benevolent - authoritative is similar to the above but allows some
Weaker version
upward opportunities for consultation and some delegation. Rewards may
of 'rational -
be available as well as threats. Productivity is typically fair to good but at
economic man'
cost of considerable absenteeism and staff turnover.
3. Consultative - where goals are set or orders issued after discussion with
subordinates, where communication is upwards and downwards and where
'Social man'
teamwork is encouraged, at least partially. Some involvement of employees
as a motivator.
4. Participative - this is reckoned by many to be the ideal system. Under Self - actualising
this system, the keynote is participation, leading to commitment to the man
organisation's goals in a fully co-operative way. Communication is both (see also
upwards, downwards and lateral. Motivation is obtained by a variety of McGregor:
means. Productivity is excellent and absenteeism and turnover are low. theory Y)

Advantages
Essentially Likert's work gives more alternatives in the spectrum between Theory X and
Theory Y of McGregor

Disadvantage

 criticised for being based more on theory than empirical practice. Therefore not
widely accepted by practising managers.

Argyris

Studied the needs of people and the needs of organisation. He felt that classical models of
organisation promoted 'immaturity' (see below). He felt that it was important to understand
the needs of people and integrate them with needs of organisation. Only in this way, he said,
can employees become co-operative rather than defensive or aggressive.
Characteristics of Employee
Immaturity Maturity
Passivity ---------------------------------------------------Activity
Dependence--------------------------------------------------Relative independence
Behave in a few ways----------------------------------------Behave in many ways
Erratic, shallow interests----------------------------------Deeper interests
Short time perspective-------------------------------------Long time perspective
Subordinate position---------------------------------------Equal or superior position
Lack of awareness of self--------------------------------Awareness and self control

Advantages

 Argyris is moving here towards a 'contingency approach' i.e. remedy depends on

diagnosing problems first
 He presents a spectrum rather than bipolar patterns of employees behaviour could be
expected from immaturity to maturity. Certain behaviours of employees may be
preferred.

Disadvantages

 Still too centred around 'self-actualising man'. Viewed not to be applicable to

production lines with manual workers, workers in sterile supplies, people manning
phone helplines etc whose needs are perceived to be typically lower in Maslow's
hierarchy of needs.

System Theories

Attention began to focus on organisations as 'systems' with a number of inter-related sub-

systems. The 'systems approach' attempted to synthesise the classical approaches (
organisations without people') with the later human relations approaches that focused on the
psychological and social aspects, emphasised human needs - almost 'people without
organisations'.
Systems theory focuses on complexity and interdependence of relationships. A system is
composed of regularly interacting or interdependent groups of activities/parts that form the
emergent whole.

Part of systems theory, system dynamics is a method for understanding the dynamic
behaviour of complex systems. The basis of the method is the recognition that the structure of
any system -- the many circular, interlocking, sometimes time-delayed relationships among
its components -- is often just as important in determining its behaviour as the individual
components themselves.

Early systems theorists aimed at finding a general systems theory that could explain all
systems in all fields of science. The term goes back to Bertalanffy’s (1951) basic work
'General Systems Theory'. Sociologists like Niklas Luhmann (1994) also worked towards a
general systems theory. As of today, whilst no systems theory can live up to this claim, there
are general system principles which are found in all systems. For example, every system is an
interaction of elements manifesting as a whole. Miller and Rice (1967) likened the
commercial and industrial organisation to biological organisms.

Systems theories took much more of an holistic view of organisations, focusing on the total
work organisation and the inter-relationships between structures and human behaviours
producing a wide range of variables within organisations. They help us understand the
interactions between individuals, groups, organisations, communities, larger social systems,
and their environments and help us enhance our understanding of how human behaviour
operates in a context.

A system is a part, and it is a whole, at the same time.

An example of this in the Modern NHS is care pathways for patients which will often require
a range of health disciplines to work together and will often also include professionals from
the local authority.

System Theory Key Terms:

Boundary - an imaginary line around system of focus. Regulates flow of energy (e.g.
information, resources) into and out of the system.

Focal system - the system on which you are concentrating at any given time (e.g.: a
manufacturing plant or a family).

Subsystem - a part of the focal system (e.g., in a family, it may be children or parents)
sometimes referred to as 'sibling subsystem' and 'parental subsystem').

Suprasystem - is external to focal system; it is its environment. May include place of

employment, school, neighbourhood, church, social service system.

Open system - Relatively open systems have a freer exchange of information and resources
within the system and also allow relatively free passage of energy from and to the outside of
the system.

Closed system - is more self-contained and isolated from their environment.

The business organisation is an Open System: there is continual interaction with the broader
external environment of which it forms a part. The systems approach considers the
organisation within its total environment and emphasises the importance of 'multiple channels
of interaction'. Thus the systems approach views organisations as a whole and involves the
study of the organisation in terms of the relationship between technical and social variables
with the systems. Thus changes in one part, technical or social, will affect other parts and
therefore the whole system.

It was Trist (1963) and others at the Tavistock Institute of Human relations who focused in on
socio-technical systems arising from their study of the effects of changing technology in the
coal-mining industries in the 1940s.

The following Timeline gives perspective to the development of Systems Theory:

 1950 General Systems Theory (founded by Ludwig von Bertalanffy)

 1960 cybernetics (W. Ross Ashby, Norbert Wiener) Mathematical theory of the
communication and control of systems through regulatory feedback. Closely related:
"control theory"
 1970 catastrophe theory (René Thom, E.C. Zeeman) Branch of mathematics that deals
with bifurcations in dynamical systems, classifies phenomena characterised by sudden
shifts in behavior arising from small changes in circumstances.
 1980 chaos theory (David Ruelle, Edward Lorenz, Mitchell Feigenbaum, Steve
Smale, James A. Yorke) Mathematical theory of nonlinear dynamical systems that
describes bifurcations, strange attractors, and chaotic motions.
 1990 complex adaptive systems (CAS) (John H. Holland, Murray Gell-Mann, Harold
Morowitz, W. Brian Arthur). The "new" science of complexity which describes
emergence, adaptation and self-organisation, all of which are basic system principles,
was established mainly by researchers of the Santa Fe Institute (SFI). It is based on
agents and computer simulations and includes multi-agent systems (MAS) which have
become an important tool to study social and complex systems. CAS are still an active
field of research.

Tavistock Institute of Human Relations

 organisation is an 'open system' with environment

 organisations are complex systems of people, task, technology
 technological environmental factors are just as important as social/psychological

Contingency Theories

From the late 1950s, a new approach to organisation theory was developed which became
known as contingency theory. This theory argues that there is no 'one best way' to structure
an organisation. An organisation will face a range of choices when determining how it should
be structured, how it should be organised, how it should be managed. Successful
organisations adopt structures that are an appropriate response to a number of variables, or
contingencies, which influence both the needs of the organisation and how it works.
  these theories take a comprehensive view of people in organisations
 they recommend a diagnosis of people/ task/ technology/environment – then suggest
the development of appropriate solutions

Contingency theorists including Pugh, Burns and Stalker and Laurence and Lorsch have
found that three contingencies are particularly important in influencing an organisation's
structure. These are:

 its size
 the technology it uses
 its operating environment.

There are two significant implications of contingency theory:

 if there is no 'one best way', then even apparently quite similar organisations, for
example, two nearby colleges, may choose significantly different structures and still
survive and be reasonably successful in achieving their missions
 if different parts of the same organisation are influenced in different ways by the
contingencies bearing upon them, then it may be appropriate for them to be structured
differently, for example, one university department may have a functional structure,
whilst another may have a matrix structure.
Organization as a System
Very simply, a system is a collection of parts (or subsystems) integrated to accomplish an overall
goal (a system of people is an organization). Systems have input processes, outputs and outcomes,
with on-going feedback among these various parts. ... There are numerous types of systems.
ORGANISATION CULTURE

Organizational culture encompasses values and behaviors that "contribute to the unique social
and psychological environment of an organization".[1] According to Needle (2004),[2]
organizational culture represents the collective values, beliefs and principles of organizational
members and is a product of such factors as history, product, market, technology, strategy,
type of employees, management style, and national culture; culture includes the
organization's vision, values, norms, systems, symbols, language, assumptions, environment,
location, beliefs, and habits
 Adapted from Schein, E. H. (1992). Organizational Culture and Leadership. San Francisco: Jossey-Bass.

Organizational culture consists of some aspects that are relatively more visible, as well as
aspects that may lie below one’s conscious awareness. Organizational culture can be thought
of as consisting of three interrelated levels (Schein, 1992).

At the deepest level, below our awareness, lie basic assumptions. These assumptions are
taken for granted and reflect beliefs about human nature and reality.

At the second level, values exist. Values are shared principles, standards, and goals.

Finally, at the surface, we have artifacts, or visible, tangible aspects of organizational

culture. For example, in an organization, a basic assumption employees and managers share
might be that happy employees benefit their organizations. This might be translated into
values such as egalitarianism, high-quality relationships, and having fun. The artifacts
reflecting such values might be an executive “open door” policy, an office layout that
includes open spaces and gathering areas equipped with pool tables, and frequent company
picnics.

Understanding the organization’s culture may start from observing its artifacts: its physical
environment, employee interactions, company policies, reward systems, and other observable
characteristics. When you are interviewing for a position, observing the physical
environment, how people dress, where they relax, and how they talk to others is definitely a
good start to understand the company’s culture. However, simply looking at these tangible
aspects is unlikely to give a full picture of the organization, since an important chunk of what
makes up culture exists below one’s degree of awareness. The values and, deeper, the
assumptions that shape the organization’s culture can be uncovered by observing how
employees interact and the choices they make, as well as by inquiring about their beliefs and
perceptions regarding what is right and appropriate behavior.
ASSESSMENT TOOLS – SWOT & PESTEL ANALYSIS

When you run a business, making the most of it becomes the prime purpose of life. Both big
and small business owners need to conduct various analyses. There are many methods, which
help to conclude about the firm’s current state before taking an informed decision. SWOT
analysis is perhaps the most commonly used technique. STEEP, STEEPLE, and PEST are
also used by individuals and companies.

Strengths:

Assess the characteristics of your business that give it an advantage over the others in this
step. Questions like the following are often asked when considering Strengths:

 What does your business do better than others?

 What advantages does it have?
 What lowest-cost or unique resources do you have which others do not?
 What does the market think your strengths are?
 What factors help you sell products?
 What is your Unique Selling Proposition?

Weaknesses:

These are characteristics that place the business at a disadvantage when compared to others.
Answer the following questions:

 What could your business improve?

 What should the firm avoid?
 What does the market think your weaknesses are?
 What factors could lose you sales?

Opportunities:

In this part, consider elements that the project could profit from. The 2 most important
questions to ask in this section are:

 What good opportunities can you think of?

 What are some interesting trends in the market?

Threats:

Find out what elements in the environment could cause trouble for your business or project.
Some of the questions you can ask here are:

 What are the obstacles?

 What are the competitors doing?

 Are the quality standards or specifications for your products, services or job
changing?
 Is technological advancement threatening firm’s position?
  Do you have cash-flow problems or bad debt?
 Could your weaknesses threaten your business seriously?

PESTEL ANALYSIS

It is a precise analysis that helps to understand how each of the factors impacts business. It
studies the opportunities and threats section of SWOT, but in more detail.

Political Factors

The Political factors include government regulations and legal issues. It defines both formal
and informal rules that a firm must abide by. Below are some factors you should consider:

 tax policy
 employment laws
 environmental regulations
 trade restrictions and tariffs
 political stability

Economic Factors

The economic factors affect the potential customers’ purchasing power and company’s cost
of capital. These are some related factors:

 economic growth
 interest rates
 exchange rates
 inflation rate

Social Factors

Social factors involve the cultural and demographic aspects of the external macro-
environment. The following factors impact customer needs and size of markets:

 health consciousness
 population growth rate
 age distribution
 career attitudes
 emphasis on safety

Technological Factors

These factors can remove or lower barriers to entry. They can also reduce minimum efficient
production levels and sway outsourcing decisions. Some of the technological factors are:

 R&D activity
 Automation
 technology incentives
  rate of technological change

Environmental Factors

The environmental factors assess what kind of impact the company is having on the
environment. The impact can either be negative or positive. Usually, this affects agricultural
firms. Some factors to consider are:

 water, wind, soil

 food
 soil energy
 pollution
 environmental regulations.

Legal Factors

These are factors, which deal with legal complications. You need to constantly check on new
legal requirements to ensure compliance. The factors you should consider are:

 Legal restraints and regulations

 Health and safety of employees
 Managerial Decision – Making
The act of making up your mind about something, or a position or opinion or judgment reached
after consideration.

• The process of selecting from several choices, products or ideas, and taking action. Four Functions
of Management

• an effective decision making includes following 7 steps.

In business undertaking, the manager needs to take different types of decision to support their
duties and responsibilities. Decisions are taken at various levels of management. Some of the
important types of managerial decisions are as follows:

 Programmed and Non-programmed Decisions

The decisions which are normally repetitive in nature are known as programmed
decisions. Normally, these types of decision are taken by the middle and lower level
managers. Programmed decisions have very short-term impact. Granting leave to an
employee, pricing ordinary customers’ orders, recording office supplies, purchase of
materials required in the daily course of action, etc. are some of the examples of
programmed decisions. Therefore, we can say that they are related to policy and the
rules of the management.
 Non-programmed decisions are opposite of programmed decisions. Decisions, which
are non-repetitive in nature is known as non-programmed decisions. These kinds of
decisions are taken by top executives. Non-programmed decisions don’t have ready-
made course of actions. They have to collect data, analyze them, forecast and prepare
strategic plans.

In conclusion, taking non-programmed decisions are much tougher and challenging

than taking programmed decisions.

 Major and Minor Decisions

The decisions, which are relatively more important, are known as major and which
are less important, are known as minor decisions. The major decisions have long term
impact like replacement of men by machine, diversification of existing product line,
change the basis of overhead allocation in preparing departmental profit and loss
account and so many others which are rare and have no precedents as guides.

Just opposite of major decisions, minor decisions are those decisions which do not
have long range impact. For example, minor decisions are related to storing raw
materials.

 Routine (tactical) and Basic (strategic) Decisions

The decisions which are frequently taken to achieve a high degree of efficiency in the
ongoing activities are known as routine decisions. These types of decisions are also
known as tactical decisions. For example, parking facilities, cafeteria services,
deputing employees, etc.

Basic and strategic decisions are prepared by the top level of management for the
formulation of the organizational rules, regulations, programs, etc. It has long term
impact in the management. Therefore, much analysis is needed. A small mistake in
the basic decisions may be the cause of business failure.

 Organizational and Personal Decisions

Decisions which are related to the policy of the business and affect the organizational
functions directly is known as organizational decisions. These types of decisions are
taken by the top level management. It has long term impact in the management.

Personal decisions are taken by an individual for the personal benefits rather than an
organizational benefit. It has short term impact. Therefore, much analysis is not
needed.

 Individual and Group Decisions

If an individual is involved in taking the decision, it is called individual decision.

Generally, individual decisions are taken in small business organizations. Similarly, it
is also taken when and where the problem is of a routine nature, where the analysis of
variable is simple and where definite procedures to deal with the problem already
 exist.

Decisions taken in the consent of more than one person is known as group decisions.
Decisions taken by the board of directors, shareholders, etc. are some of the examples
of a group decision.

 Policy and Operating Decisions

Policy decisions are taken by the top level management with the involvement of high-
ranking officers and legal advisor to change the organizational rules, regulation,
event, and producers. Policy decisions are most important decisions. On the other
hand, operating decisions are taken by the operating level of management to perform
the day to day activities efficiently and effectively. This type of decisions is taken by
a middle or lower level of management. It has short term impact. Therefore, much
analysis is not needed.
Rational Decision Making
Rational-decision making is a multi-step process, from problem identification through
solution, for making logically sound decisions.

The Process of Rational Decision Making

Rational decision making is a multi-step process for making choices between alternatives.
The process of rational decision making favors logic, objectivity, and analysis over
subjectivity and insight. The word “rational” in this context does not mean sane or clear-
headed as it does in the colloquial sense.

The approach follows a sequential and formal path of activities. This path includes:

1. Formulating a goal(s)
2. Identifying the criteria for making the decision
3. Identifying alternatives
4. Performing analysis
5. Making a final decision.

Key Points

 Critics of the rational decision -making model say that the model makes unrealistic
assumptions, particularly about the amount of information available and an
individual’s ability to processes this information when making decisions.
 Bounded rationality is the idea that an individual’s ability to act rationally is
constrained by the information they have, the cognitive limitations of their minds, and
the finite amount of time and resources they have to make a decision.
 Because decision-makers lack the ability and resources to arrive at optimal solutions,
they often seek a satisfactory solution rather than the optimal one.

Key Terms

 Rational choice theory: A framework for understanding and often formally modeling
social and economic behavior.
 bounded rationality: The idea that decision-making is limited by the information
available, the decision-maker’s cognitive limitations, and the finite amount of time
available to make a decision.
 satisficer: One who seeks a satisfactory solution rather than an optimal one.
Non-Rational Decision Making

People frequently employ alternative, non-rational techniques in their decision making

processes.

Key Points

 The rationality of individuals is limited by the information they have, the cognitive
limitations of their minds, and the finite amount of time they have to make a decision.
 Simon defined two cognitive styles: maximizers and satisficers. Maximizers try to
make an optimal decision, whereas satisficers simply try to find a solution that is
“good enough” for the situation.
 Some research has shown that simple heuristics frequently lead to better decisions
than the theoretically optimal procedure.
 Emotion appears to aid the decision-making process; decisions often occur in the face
of uncertainty about whether one’s choices will lead to benefit or harm.
 Robust Decision Making (RDM) is a particular set of methods and tools that is
designed to support decision making under conditions of uncertainty.

Key Terms

 rational: Logically sound; not contradictory or otherwise absurd.

 heuristic: An experience-based technique for problem solving, learning, and
discovery; examples include using a rule of thumb, an educated guess, an intuitive
judgment, or common sense.
 cognitive: The part of mental functions that deals with logic, as opposed to affective
functions, which deal with emotion.
Alternative Theories of Decision-Making

Prospect Theory

Alternative theories of how people make decisions include Amos Tversky’s and Daniel
Kahneman’s prospect theory. Prospect theory reflects the empirical finding that, contrary to
rational choice theory, people fear losses more than they value gains, so they weigh the
probabilities of negative outcomes more heavily than their actual potential cost. For instance,
Tversky’s and Kahneman’s studies suggest that people would rather accept a deal that offers
a 50% probability of gaining $2 over one that has a 50% probability of losing $1.

Bounded Rationality

Other researchers in the field of behavioral economics have also tried to explain why human
behavior often goes against pure economic rationality. The theory of bounded rationality
holds that an individual’s rationality is limited by the information they have, the cognitive
limitations of their minds, and the finite amount of time they have to make a decision. This
theory was proposed by Herbert A. Simon as a more holistic way of understanding decision-
making. Bounded rationality shares the view that decision-making is a fully rational process;
however, it adds the condition that people act on the basis of limited information. Because
decision-makers lack the ability and resources to arrive at the optimal solution, they instead
apply their rationality to a set of choices that have already been narrowed down by the
absence of complete information and resources.
 MIS
Management information system (MIS) refers to the processing of information through computers and
other intelligent devices to manage and support managerial decisions within an organization.

The concept may include systems termed transaction processing system, decision support system,
expert system, or executive information system. The term is often used in the academic study of
businesses and has connections with other areas, such as information systems, information
technology, and informatics, e-commerce and computer science; as a result, the term is used
interchangeably with some of these fresh cut areas.

Managerial Planning
Management planning is the process of assessing an organization's goals and creating a realistic,
detailed plan of action for meeting those goals. The basic steps in the management planning process
involve creating a road map that outlines each task the company must accomplish to meet its overall
objectives.
 MbO

Management by objectives, a performance management system popularised by Peter

Drucker. Peter Drucker first used the term "management by objectives" in his 1954 book The
Practice of Management.[1] While the basic ideas of MBO were not original to Drucker, they
pulled from other management practices to create a complete “system”.[4] The idea draws on
the many ideas presented in Mary Parker Follett's 1926 essay, "The Giving of Orders".

MBO or management by objectives is defined as a comprehensive managerial system that

integrates many key managerial activities in a systematic process and that is consciously
directed toward the effective and efficient achievement of organizational and individual
objectives.

The practical importance of objectives in management can best be seen by summarizing how
successful managing by objectives works in practice.

The six steps of MBO process are shown below graphically;

 1. Define organizational goals
2. Define employees objectives
3. Continuous monitoring performance and progress
4. Performance evaluation
5. Providing feedback
6. Performance appraisal

Let’s briefly look at each of these;

1. Define Organizational Goals

Goals are critical issues to organizational effectiveness, and they serve a number of
purposes. Organizations can also have several different kinds of goals, all of which
must be appropriately managed.

And a number of different kinds of managers must be involved in setting goals. The
goals set by the superiors are preliminary, based on an analysis and judgment as to
what can and what should be accomplished by the organization within a certain
period.

2. Define Employees Objectives

After making sure that employees’ managers have informed of pertinent general
objectives, strategies and planning premises, the manager can then proceed to work with
employees in setting their objectives.

The manager asks what goals the employees believe they can accomplish in what time
period, and with what resources. They will then discuss some preliminary thoughts
about what goals seem feasible for the company or department.

Also, Read Four Common Ingredients that makes up an MBO Program.

3. Continuous Monitoring Performance and Progress

MBO process is not only essential for making line managers in business organizations
more effective but also equally important for monitoring the performance and
progress of employees.

For monitoring performance and progress the followings are required;

 Identifying ineffective programs by comparing performance with pre-

established objectives,
 Using zero-based budgeting,
 Applying MBO concepts for measuring individual and plans,
 Preparing long and short range objectives and plans,
 Installing effective controls, and
 Designing sound organizational structure with clear, responsibilities
and decision-making authority at the appropriate level.

4. Performance Evaluation

Under this MBO process performance review are made by the participation of the
concerned managers.

5. Providing Feedback

The filial ingredients in an MBO program are continuous feedback on performance

and goals that allow individuals to monitor and correct their own actions.

This continuous feedback is supplemented by periodic formal appraisal meetings

which superiors and subordinates can review progress toward goals, which lead to
further feedback.

6. Performance Appraisal

Performance appraisals are a regular review of employee performance within

organizations. It is done at the last stage of MBO process.
 ORGANISATION STRUCTURE
An organizational structure defines how activities such as task allocation, coordination and
supervision are directed toward the achievement of organizational goals.
 JOB DESIGN AND ENRICHMENT
Job design (also referred to as work design or task design) is a core function of human resource
management and it is related to the specification of contents, methods and relationship of jobs in order
to satisfy technological and organizational requirements as well as the social and personal
requirements of the job holder.

Its principles are geared towards how the nature of a person's job affects their attitudes and behavior
at work, particularly relating to characteristics such as skill variety and autonomy.The aim of a job
design is to improve job satisfaction, to improve through-put, to improve quality and to reduce
employee problems (e.g., grievances, absenteeism).

JOB CHARACTERISTICS THEORY

The job characteristic theory proposed by Hackman & Oldham (1976)[3] stated that work should be
designed to have five core job characteristics, which engender three critical psychological states in
individuals—experiencing meaning, feeling responsible for outcomes, and understanding the results
of their efforts. In turn, these psychological states were proposed to enhance employees’ intrinsic
motivation, job satisfaction, quality of work and performance, while reducing turnover.[4]
Core job dimensions

1. Skill variety — This refers to the range of skills and activities necessary to complete the job.
The more a person is required to use a wide variety of skills, the more satisfying the job is
likely to be.
2. Task identity — This dimension measures the degree to which the job requires completion of
a whole and identifiable piece of work. Employees who are involved in an activity from start
to finish are usually more satisfied.
3. Task significance — This looks at the impact and influence of a job. Jobs are more satisfying
if people believe that they make a difference, and are adding real value to colleagues, the
organization, or the larger community.
4. Autonomy — This describes the amount of individual choice and discretion involved in a
job. More autonomy leads to more satisfaction. For instance, a job is likely to be more
satisfying if people are involved in making decisions, instead of simply being told what to do.
5. Feedback — This dimension measures the amount of information an employee receives
about his or her performance, and the extent to which he or she can see the impact of the
work. The more people are told about their performance, the more interested they will be in
doing a good job. So, sharing production figures, customer satisfaction scores etc. can
increase the feedback levels.

Job-enlargement means taking charge of more duties and responsibilities which are not mentioned in
the job description. Job enrichment gives more control and managerial access to perform tasks and
responsibilities. Job enlargement is horizontal, whereas job enrichment is vertical expansion.
 JOB - ENRICHMENT

What is Job Enrichment?

Job enrichment is a management concept that involves redesigning

jobs so that they are more challenging to the employee and have less
repetitive work.

The concept is based on a 1968 Harvard Business Review article by psychologist Frederick
Herzberg titled 'One More Time: How Do You Motivate Employees?' In the article, Herzberg
stated that the greatest employee motivators, based on several investigations, are (in
descending order): achievement, recognition, work itself, responsibility, advancement, and
growth. To improve employee motivation and productivity, jobs should be modified to
increase the motivators present for the employee.

To make this concept more usable, let's imagine you are a company manager and want to
increase the satisfaction of your staff. As you walk through the process of job enrichment,
you'll need to keep in mind these goals:

1. Reduce repetitive work.

2. Increase the employee's feelings of recognition and achievement.
3. Provide opportunities for employee advancement (i.e. promotions into jobs requiring
more skills).
4. Provide opportunities for employee growth (i.e. an increase in skills and knowledge
without a job promotion).

Why enrich Jobs?

The purpose of job enrichment is to make the position more satisfying to the employee.
Overall goals for the company often include increasing employee job satisfaction, reducing
turnover, and improving productivity of employees.

To rephrase this: we want to enrich our staff's positions so that they will be happier, more
productive, and less likely to seek a job elsewhere.
 JOB - EVALUATION

A job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs
in an organization. It tries to make a systematic comparison between jobs to assess their relative worth
for the purpose of establishing a rational pay structure.

The objective of job evaluation is to determine which jobs should get more pay than others.Several
methods such as job ranking, job grading, and factor comparison are employed in job evaluation.
Research indicates, however, that each method is nearly as accurate and reliable as the other in
ranking and pricing different jobs. Job evaluation forms the basis for wage and salary negotiations.

Process
The process of job evaluation involves the following steps:

 Gaining acceptance: Before undertaking job evaluation, top management must

explain the aims and uses of the programme to managers, emphasizing the benefits.
Employees and unions may be consulted, depending on the legal and employee
relations environment and company culture. To elaborate the program further,
presentations could be made to explain the inputs, process and outputs/benefits of job
evaluation.
 Creating job evaluation committee: It is not possible for a single person to evaluate
all the key jobs in an organization. Often a job evaluation committee consisting of
experienced employees, union representatives and HR experts is created to set the ball
rolling.
 Finding the jobs to be evaluated: Every job need not be evaluated. This may be too
taxing and costly. Certain key jobs in each department may be identified. While
picking up the jobs, care must be taken to ensure that they represent the type of work
performed in that department, at various levels.
 Analysing and preparing job description: This requires the preparation of a job
description and also an analysis of job specifications for successful performance. See
job analysis.
 Selecting the method of evaluation: The method of evaluating jobs must be
identified, keeping the job factors as well as organisational demands in mind.
Selecting a method also involves consideration of company culture, and the capacity
of the compensation and benefits function or job evaluation committee.
 Evaluating jobs: The relative worth of various jobs in an organisation may be
determined by applying the job evaluation method. The method may consider the
"whole job" by ranking a set of jobs, or by comparing each job to a general level
description. Factor-based methods require consideration of the level of various
compensable factors (criteria) such as level and breadth of responsibility, knowledge
and skill required, complexity, impact, accountability, working conditions, etc. These
factor comparisions can be one with or without numerical scoring. If there is
numerical scoring, weights can be assigned to each such factor and scores are
associated with different levels of each factor, so that a total score is determined for
the job. All methods result in an assigned grade level.
Techniques for designing jobs
Basically, there are four techniques used in the design of jobs. These include Job
simplification, Job enlargement, Job enrichment and Job rotation.

Job simplification

Job simplification is a design method whereby jobs are divided into smaller components and
subsequently assigned to workers as whole jobs. Simplification of work requires that jobs be
broken down into their smallest units and then analysed. Each resulting sub-unit typically
consists of relatively few operations. These subunits are then assigned to the workers as their
total job. Many fast food restaurants such as McDonald's, Burger King and KFC use
simplification because employees can learn tasks rapidly; short work cycles allow task
performance with little or no mental effort and low-skilled and low-paid employees can be
hired and trained easily.

On the negative side, job simplification results in workers experiencing boredom, frustration,
alienation, lack of motivation and low job satisfaction. This, in turn, leads to lower
productivity and increased cost.

Job enlargement

Job enlargement expands a job horizontally. It increases job scope; that is, it increases the
number of different operations required in a job and the frequency with which the job cycle is
repeated. By increasing the number of tasks an individual performs, job enlargement
increases the job scope, or job diversity. Instead of only sorting the incoming mail by
department, for instance, a mail sorter's job could be enlarged to include physically delivering
the mail to the various departments or running outgoing letters through the postage meter.

Efforts at job enlargement have met with less than enthusiastic results. As one employee who
experienced such a redesign on his job remarked, "Before I had one lousy job. Now, through
enlargement, I have three!" So while job enlargement attacks the lack of diversity in
overspecialised jobs, it has done little to provide challenge or meaningfulness to a worker's
activities.

Job rotation

Job rotation refers to the movement of an employee from one job to another. Jobs themselves
are not actually changed, only the employees are rotated among various jobs. An employee
who works on a routine job moves to work on another job for some hours/days/months and
returns to the first job. This measure relieves the employee from the boredom and monotony,
improves the employee's skills regarding various jobs and prepares worker's self-image and
provides personal growth. However, frequent job rotations are not advisable in view of their
negative impact on the organisation and the employee.

Job enrichment

Job enrichment, as currently practiced in industry, is a direct outgrowth of Herzberg's Two

Factor Theory of motivation. It is, therefore, based on the assumption that in order to
motivate personnel, the job itself must provide opportunities for achievement recognition,
responsibility, advancement and growth. The basic idea is to restore to jobs the elements of
interest that were taken away under intensive specialisation. Job enrichment tries to embellish
the job with factors that Herzberg characterised as motivators: achievement, recognition,
increased responsibilities, opportunities for growth, advancement and increased competence.
There is an attempt to build into jobs a higher sense of challenge and achievement, through
vertical job loading. 6 Job enrichment has four unique aspects:

 It changes the basic relationship between employees and their work. Interesting and
challenging work, as studies have proved, can be a source of employee satisfaction.
 It changes employee behaviours in ways that gradually lead to more positive attitudes
about the organisation and a better self-image. Feeling of autonomy and personal
freedom help employees view their jobs in a favourable way.
 It helps the employer to bring about organisational changes easily, securing employee
cooperation and commitment.
 Job enrichment can humanise an organisation. 'Individuals can experience the
psychological that comes from developing new competencies and doing a job well.
Individuals are encouraged to grow and push themselves.'

MERIT RATING

A merit rating is a score that each state assigns to employers based on their employment stability and
employee turnover. The state then uses the merit rating to levy state unemployment taxes on each
employer. Companies with lower ratings will have to pay lower unemployment tax percentages.

Main objectives of merit rating are as follows:

1. To assess the work of employees in relation to their job requirements.

2. To consider employees/workers for promotions, transfer, layoffs etc.

3. To assess the good and bad points in working of employees and then making suggestions
fo

4. To help in wage and salary administrations and taking decisions about incentives and
increments to be given to the workers.

5. To evaluate skill and training capabilities of employees and helping in planning suitable
training and development programmes for workers.

6. To know the problems faced by workers while doing various jobs.

7. To provide a basis for comparison to segregate efficient and inefficient workers.

8. To help management in placement/transfer to workers according to their capacity, interest,

aptitude and qualifications.
9. To help supervisors to know their subordinates more closely for increasing their efficiency
and improving productivity.

Psychological Theories of Motivation to Increase Productivity

We all want to be more productive but getting motivated enough to actually get things done
can seem impossible.

Social scientists have been studying motivation for decades, trying to find out what motivates
our behaviour, how and why.

Dozens of theories of motivation have been proposed over the years. Here are 5 popular
theories of motivation that can help you increase workplace productivity…

1. Hertzberg’s Two-Factor Theory

The Two-Factor Theory of motivation (otherwise known as dual-factor theory or motivation-

hygiene theory) was developed by psychologist Frederick Herzberg in the 1950s.

Analysing the responses of 200 accountants and engineers who were asked about their
positive and negative feelings about their work, Herzberg found 2 factors that influence
employee motivation and satisfaction…

1. Motivator factors – Simply put, these are factors that lead to satisfaction and motivate
employees to work harder. Examples might include enjoying your work, feeling recognised
and career progression.
2. Hygiene factors – These factors can lead to dissatisfaction and a lack of motivation if they
are absent. Examples include salary, company policies, benefits, relationships with managers
and co-workers.

According to Herzberg’s findings, while motivator and hygiene factors both influenced
motivation, they appeared to work completely independently of each other…

While motivator factors increased employee satisfaction and motivation, the absence of these
factors didn’t necessarily cause dissatisfaction. Likewise, the presence of hygiene factors
didn’t appear to increase satisfaction and motivation but their absence caused an increase in
dissatisfaction.

How to apply it to the workplace

This theory implies that for the happiest and most productive workforce, you need to work on
improving both motivator and hygiene factors.

To help motivate your employees, make sure they feel appreciated and supported. Give
plenty of feedback and make sure your employees understand how they can grow and
progress through the company.
To prevent job dissatisfaction, make sure that your employees feel that they are treated right
by offering them the best possible working conditions and fair pay. Make sure you pay
attention to your team and form supportive relationships with them.

Don’t forget that all of your employees are different and what motivates one person might not
motivate another. Paul Hebert of Symbolist believes that benefits packages should not be
one-size-fits all…

“For true engagement to occur in a company you must first remove the issues that cause
dissatisfaction – the baseline benefits offered by the company that satisfy the hygiene needs
of the employee. Then you must focus on the individual and what they want out of their
association with your enterprise.”

2. Maslow’s Hierarchy of Needs

The Hierarchy of Needs theory was coined by psychologist Abraham Maslow in his 1943
paper “A Theory of Human Motivation”.

The crux of the theory is that individuals’ most basic needs must be met before they become
motivated to achieve higher level needs.

The hierarchy is made up of 5 levels:

1. Physiological – these needs must be met in order for a person to survive, such
as food, water and shelter.
2. Safety – including personal and financial security and health and wellbeing.
3. Love/belonging – the need for friendships, relationships and family.
4. Esteem – the need to feel confident and be respected by others.
5. Self-actualisation – the desire to achieve everything you possibly can and
become the most that you can be.

2.

According to the hierarchy of needs, you must be in good health, safe and secure with
meaningful relationships and confidence before you are able to be the most that you can be.

How to apply it to the workplace

Chip Conley, founder of the Joie de Vivre hotel chain and Head of Hospitality at Airbnb,
used the Hierarchy of Needs pyramid to transform his business. According to Chip, many
managers struggle with the abstract concept of self actualization and so focus on lower levels
of the pyramid instead.
Conley found one way of helping with higher levels was to help his employees understand
the meaning of their roles during a staff retreat…

“In one exercise, we got groups of eight housekeepers at a table and asked an abstract
question: if someone from Mars came down and saw what you were doing as a housekeeper
in a hotel, what name would they call you? They came up with “The Serenity Sisters,” “The
Clutter Busters,” and “The Peace of Mind Police.” There was a sense that people were doing
more than just cleaning a room. They were creating a space for a traveler who was far away
from home to feel safe and protected.”

Conley’s team were able to realize the importance of their job to the company and to the
people they were helping. By showing them the value of their roles, the team were able to
feel respected and motivated to work harder.

In order to get the most out of your team, you should also make sure you support them in
other aspects of their lives outside work. Perhaps you could offer flexible working hours to
give employees time to focus on their families and make sure they are paid fairly to help
them feel financially stable.

3. Hawthorne Effect

The Hawthorne Effect was first described by Henry A. Landsberger in 1950 who noticed a
tendency for some people to work harder and perform better when they were being observed
by researchers.

The Hawthorne Effect is named after a series of social experiments on the influence of
physical conditions on productivity at Western Electric’s factory at Hawthorne, Chicago in
the 1920s and 30s.

The researchers changed a number of physical conditions over the course of the experiments
including lighting, working hours and breaks. In all cases, employee productivity increased
when a change was made. The researchers concluded that employees became motivated to
work harder as a response to the attention being paid to them, rather than the actual physical
changes themselves.

How to apply it to the workplace

The Hawthorne Effect studies suggest that employees will work harder if they know they’re
being observed. While I don’t recommend hovering over your employees watching them all
day, you could try providing regular feedback, letting your team know that you know what
they’re up to and how they’re doing.

Showing your employees that you care about them and their working conditions may also
motivate them to work harder. Encourage your team to give you feedback and suggestions
about their workspace and development.

4. Expectancy Theory

Expectancy Theory proposes that people will choose how to behave depending on the
outcomes they expect as a result of their behaviour. In other words, we decide what to do
based on what we expect the outcome to be. At work, it might be that we work longer hours
because we expect a pay rise.

However, Expectancy Theory also suggests that the process by which we decide our
behaviours is also influenced by how likely we perceive those rewards to be. In this instance,
workers may be more likely to work harder if they had been promised a pay rise (and thus
perceived that outcome as very likely) than if they had only assumed they might get one (and
perceived the outcome as possible but not likely)

Expectancy Theory is based on three elements:

1. Expectancy – the belief that your effort will result in your desired goal. This is based on
your past experience, your self-confidence and how difficult you think the goal is to achieve.
2. Instrumentality – the belief that you will receive a reward if you meet performance
expectations.
3. Valence – the value you place on the reward.

Therefore, according to Expectancy Theory, people are most motivated if they believe that
they will receive a desired reward if they hit an achievable target. They are least motivated if
they don’t want the reward or they don’t believe that their efforts will result in the reward.

How to apply it to the workplace

The key here is to set achievable goals for your employees and provide rewards that they
actually want.

Rewards don’t have to come in the form of pay rises, bonuses or all-expenses paid nights out
(although I find these are usually welcomed!) Praise, opportunities for progression and
“employee of the month” style rewards can all go a long way in motivating your employees.

Need some inspiration? Check out these 51 inexpensive ways to reward employees from
author of The Toilet Paper Entrepreneur, Mike Michalowicz.

5. Three-Dimensional Theory of Attribution

Attribution Theory explains how we attach meaning to our own, and other people’s,
behaviour. There are a number of theories about attribution.

Bernard Weiner’s Three-Dimensional theory of attribution assumes that people try to

determine why we do what we do. According to Weiner, the reasons we attribute to our
behaviour can influence how we behave in the future.

For example, a student who fails an exam could attribute their failure to a number of factors
and it’s this attribution that will affect their motivation in the future.

Weiner theorised that specific attributions (e.g. bad luck, not studying hard enough) were less
important than the characteristics of that attribution. According to Weiner, there are three
main characteristics of attributions that can affect future motivation.
1. Stability – how stable is the attribution? For example, if the student believes they failed
the exam because they weren’t smart enough, this is a stable factor. An unstable factor is less
permanent, such as being ill.

According to Weiner, stable attributions for successful achievements, such as passing exams,
can lead to positive expectations, and thus higher motivation, for success in the future.

However, in negative situations, such as failing the exam, stable attributions can lead to lower
expectations in the future.

2. Locus of control – was the event caused by an internal or an external factor?

For example, if the student believes it’s their own fault they failed the exam, because they are
innately not smart enough (an internal cause), they may be less motivated in the future. If
they believed an external factor was to blame, such as poor teaching, they may not experience
such a drop in motivation.

3. Controllability – how controllable was the situation? If an individual believes they could
have performed better, they may be less motivated to try again in the future than someone
who believes they failed because of factors outside of their control.

How to apply it to the workplace

Weiner’s Three-Dimensional theory of attribution has implications for employee feedback.

Make sure you give your employees specific feedback, letting them know that you know they
can improve and how they can about it. This, in theory, will help prevent them from
attributing their failure to an innate lack of skill and see that success is controllable if they
work harder or use different strategies.

You could also praise your employees for showing an improvement, even if the outcome was
still not correct. For example, you might praise someone for using the correct methodology
even though the results weren’t what you wanted. This way, you are encouraging employees
to attribute the failure to controllable factors, which again, can be improved upon in the
future.
 Different Types of Leadership Styles
According to Research by asaecenter, leadership style is the way a person uses power to lead
other people. Research has identified a variety of leadership styles based on the number of
followers. The most appropriate leadership style depends on the function of the leader, the
followers and the situation.

Some leaders cannot work comfortably with a high degree of followers’ participation in
decision making. Some employers lack the ability or the desire to assume responsibility.
Furthermore, the specific situation helps determine the most effective style of interactions.
Sometimes leaders must handle problems that require immediate solutions without consulting
followers.

What are Different Leadership Styles?

We have covered 12 different types of ways people tend to lead organizations or other
people. Not all of these styles would deem fit for all kind of situations, you can read them
through to see which one fits right to your company or situation.

1. Autocratic Leadership

Autocratic leadership style is centered on the boss. In this leadership the leader holds all
authority and responsibility. In this leadership, leaders make decisions on their own without
consulting subordinates. They reach decisions, communicate them to subordinates and expect
prompt implementation. Autocratic work environment does normally have little or no
flexibility.

In this kind of leadership, guidelines, procedures and policies are all natural additions of an
autocratic leader. Statistically, there are very few situations that can actually support
autocratic leadership.

Some of the leaders that support this kind of leadership include: Albert J Dunlap (Sunbeam
Corporation) and Donald Trump (Trump Organization) among others.

2. Democratic Leadership

In this leadership style, subordinates are involved in making decisions. Unlike autocratic, this
headship is centered on subordinates’ contributions. The democratic leader holds final
responsibility, but he or she is known to delegate authority to other people, who determine
work projects.

The most unique feature of this leadership is that communication is active upward and
downward. With respect to statistics, democratic leadership is one of the most preferred
leadership, and it entails the following: fairness, competence, creativity, courage, intelligence
and honesty.

3. Strategic Leadership Style

Strategic leadership is one that involves a leader who is essentially the head of an
organization. The strategic leader is not limited to those at the top of the organization. It is
geared to a wider audience at all levels who want to create a high performance life, team or
organization.

The strategic leader fills the gap between the need for new possibility and the need for
practicality by providing a prescriptive set of habits. An effective strategic leadership
delivers the goods in terms of what an organization naturally expects from its leadership in
times of change. 55% of this leadership normally involves strategic thinking.

4. Transformational Leadership

Unlike other leadership styles, transformational leadership is all about initiating change in
organizations, groups, oneself and others.

Transformational leaders motivate others to do more than they originally intended and often
even more than they thought possible. They set more challenging expectations and typically
achieve higher performance.

Statistically, transformational leadership tends to have more committed and satisfied

followers. This is mainly so because transformational leaders empower followers.

5. Team Leadership

Team leadership involves the creation of a vivid picture of its future, where it is heading and
what it will stand for. The vision inspires and provides a strong sense of purpose and
direction.

Team leadership is about working with the hearts and minds of all those involved. It also
recognizes that teamwork may not always involve trusting cooperative relationships. The
most challenging aspect of this leadership is whether or not it will succeed. According to
Harvard Business Review, team leadership may fail because of poor leadership qualities.

6. Cross-Cultural Leadership

This form of leadership normally exists where there are various cultures in the society. This
leadership has also industrialized as a way to recognize front runners who work in the
contemporary globalized market.

Organizations, particularly international ones require leaders who can effectively adjust their
leadership to work in different environs. Most of the leaderships observed in the United
States are cross-cultural because of the different cultures that live and work there.

7. Facilitative Leadership

Facilitative leadership is too dependent on measurements and outcomes – not a skill, although
it takes much skill to master. The effectiveness of a group is directly related to the efficacy of
its process. If the group is high functioning, the facilitative leader uses a light hand on the
process.
On the other hand, if the group is low functioning, the facilitative leader will be more
directives in helping the group run its process. An effective facilitative leadership involves
monitoring of group dynamics, offering process suggestions and interventions to help the
group stay on track.

8. Laissez-faire Leadership

Laissez-faire leadership gives authority to employees. According to azcentral, departments or

subordinates are allowed to work as they choose with minimal or no interference. According
to research, this kind of leadership has been consistently found to be the least satisfying and
least effective management style.

9. Transactional Leadership

This is a leadership that maintains or continues the status quo. It is also the leadership that
involves an exchange process, whereby followers get immediate, tangible rewards for
carrying out the leader’s orders. Transactional leadership can sound rather basic, with its
focus on exchange.

Being clear, focusing on expectations, giving feedback are all important leadership skills.
According to Boundless.com, transactional leadership behaviors can include: clarifying what
is expected of followers’ performance; explaining how to meet such expectations; and
allocating rewards that are contingent on meeting objectives.

10. Coaching Leadership

Coaching leadership involves teaching and supervising followers. A coaching leader is highly
operational in setting where results/ performance require improvement. Basically, in this kind
of leadership, followers are helped to improve their skills. Coaching leadership does the
following: motivates followers, inspires followers and encourages followers.

11. Charismatic Leadership

In this leadership, the charismatic leader manifests his or her revolutionary power. Charisma
does not mean sheer behavioral change. It actually involves a transformation of followers’
values and beliefs.

Therefore, this distinguishes a charismatic leader from a simply populist leader who may
affect attitudes towards specific objects, but who is not prepared as the charismatic leader is,
to transform the underlying normative orientation that structures specific attitudes.

12. Visionary Leadership

This form of leadership involves leaders who recognize that the methods, steps and processes
of leadership are all obtained with and through people. Most great and successful leaders
have the aspects of vision in them.
However, those who are highly visionary are the ones considered to be exhibiting visionary
leadership. Outstanding leaders will always transform their visions into realities.

US LEADERSHIP STYLE

America is one of the most advanced nations of the world. America is in fact, leader in modern
management techniques. The economy of America is a free economy and people lead their lives
freely without much social checks and barriers.

They want to lead independent life and are accustomed to the ‘hire and fire’ style of
management. Employment on contract basis started in America, which is being followed by
other countries of the world.

Main Features of American Management System:

1. Process of decision making is quite fast and it is undertaken on individual basis. Decisions
are taken at different levels of management by the people or superiors operating at these
levels.

2. The system adheres to bureaucratic and formal organizational structure with the specific
line of individual responsibility and accountability.

3. American companies meet their manpower requirements usually by conducting campus

interviews and inviting people working in other companies. It is helpful in developing a
culture of frequent hopping.

4. People are more careers conscious and are honest towards their profession rather than the
company in which they are working. In-fact, they use the present company as a stepping
stone for the advancement of their career.

5. Promotions in American companies are based on individual performances. Annual

performance evaluation is undertaken select the most efficient workers.

6. Training and development programmes are part and parcel of every type of organisation in
the United States of America.

7. Leadership style is autocratic or directive in nature and main decisions are undertaken by
the leaders.

8. Usually, one way communication takes place in American style of management. It travels
from top to bottom.

JAPANESE MANAGEMENT STYLE

Japanese management culture. Japanese management culture is a management style

based on and derived from Japanese living and working philosophies or methods in Japan.
It included concepts and philosophies such as Just in Time, Kaizen and Total Quality
Management.
Eleven most important features of Japanese management are: (i) life time employment
(shusliinkoyo) (ii) discrimination (iii) recruitment (iv) seniority wage principle (v) training
(vi) enterprise unionism (vii) single status (viii) employee involvement (ix) core and
peripheral workers (x) employee welfare and (xi) internal labour market.

(I) Life Time Employment (Shusliinkoyo):

Organisations in Japan provide permanent and life time employment to workers. They
experience security of employment until they decide to retire. The principle is based on
Japanese manufacturers treating employees as a mean for competitive advantage.

Nobody do the employees enjoy security, but also managements are able to derive
commitment from the work force. However, 1990’s saw a lot of economic instability
occurring in Japan. This instability led to a much more diminished level of life time
employment being implemented. Currently a job for life is only offered to a small number
(one-third) of the total work force.

(ii) Discrimination:

Japanese ideology does not reflect a tendency towards discrimination at the work place in the
sense that male workers have higher chances of a job for life, as opposed to women who are
expected to leave the job once they are married. If women are not married they tend to suffer
from discrimination in promotional issues.

(iii) Recruitment:

With higher levels of educational attainment in Japan, the recruitment procedures for new
employees are more rigorous to ensure the cream of the crop are identified, utilized and
cultivated.

(iv) Seniority Wage Principle:

This is based on the wages of employees being linked to the number of years he has worked.
It is used on the premise of securing long term loyalty from the employees for the firm.

(v) Training:

A vital element of the Japanese system involves the continuous training of core staff to
ensure their training needs match with those which benefits the organisation.

(vi) Enterprise Unionism:

There is a popular perception that single union agreements are the corner stone’s of Japanese
industrial relations system. However, this does not appear contradictory, where one would
expect a single union to be originating from an external trade union, in-fact it is not. The
modern Japanese trade union originated from a series of Lockouts at Toyota and Nissan,
which were supported by the Japanese government.

This enabled the major corporations in Japan to extinguish independent trade unionism and
replace it with the system of enterprise unionism. The Japanese trade unions aim for shared
prosperity, with security of employment and the stability of the business being the main
prerogatives.
(vii) Single Status:

The visual differences between blue and white collar workers are viewed as being irrelevant
for commercial advantage in Japanese system. Management is often trained for some period
on the shop floor, wearing the same uniforms and sharing the same dining areas to become
more familiar with the shop floor workers.

Shop floor workers also share common benefits which would normally show the differences
between them and the office/management workers. The basic idea is to develop proper team
spirit among the employees.

(viii) Employee Involvement:

In the Japanese systems, employees are actively encouraged in the decision making process.
From making suggestions on the shop floor to improve efficiency and productivity through
the involvement in the business decision making process. The employee involvement process
ties in with single status ethics to reduce conflicts between workers and management which
can lead to industrial unrest.

(ix) Core and Peripheral Workers:

In the Japanese management system, large organisations often recruit a core work force
(generally graduates) which is considered to be the long term permanent staff. The permanent
staff enjoys all the usual staff benefits. The peripheral workers consist of a part time and
temporary staff. These workers have little or no benefits. They are used to meet fluctuating
demand.

(x) Employee Welfare:

Japanese manufacturers provide a complete welfare packages for the employees such as
reduced priced goods, health care measures, low rent housing and low rate loans etc.
Observers of the Japanese system point out those using loans provide management with a
form of indirect control over employees.

(xi) Internal Labour Market:

The Japanese system favors the employers promoting people from within the organization as
against the external recruitment, thereby utilizing skills and experience from a wide range of
workers within the organization. Besides the above mentioned characteristics of Japanese
management system, includes performance appraisal, daily team briefings, performance
related to pay, company councils and general housekeeping etc.
 MANAGERIAL GRID MODEL

The managerial grid model (1964) is a style leadership model developed by Robert R.
Blake and Jane Mouton.This model originally identified five different leadership styles based
on the concern for people and the concern for production.The optimal leadership style in this
model is based on Theory Y.

The grid theory has continued to evolve and develop. The theory was updated with two
additional leadership styles and with a new element, resilience.In 1999, the grid managerial
seminar began using a new text, The Power to Change.

The model is represented as a grid with concern for production as the x-axis and concern for
people as the y-axis; each axis ranges from 1 (Low) to 9 (High). The resulting leadership
styles are as follows:

1. The Impoverished style (1,1): evade and elude. In this style, managers have low
concern for both people and production. Managers use this style to preserve job and
job seniority, protecting themselves by avoiding getting into trouble. The main
concern for the manager is not to be held responsible for any mistakes, which results
in less innovation decisions.
2. The Country Club style (1,9): yield and comply. This style has a high concern for
people and a low concern for production. Managers using this style pay much
attention to the security and comfort of the employees, in hopes that this will increase
performance. The resulting atmosphere is usually friendly, but not necessarily very
productive.
3. The Produce or perish style (9,1): control and dominate. With a high concern for
production, and a low concern for people, managers using this style find employee
needs unimportant; they provide their employees with money and expect performance
in return. Managers using this style also pressure their employees through rules and
punishments to achieve the company goals. This dictatorial style is based on Theory
X of Douglas McGregor, and is commonly applied by companies on the edge of real
or perceived failure. This style is often used in cases of crisis management.
4. The Middle-of-the-road style (5,5): balance and compromise. Managers using this
style try to balance between company goals and workers' needs. By giving some
concern to both people and production, managers who use this style hope to achieve
suitable performance but doing so gives away a bit of each concern so that neither
production nor people needs are met.
5. The Team style (9,9): contribute and commit. In this style, high concern is paid both
to people and production. As suggested by the propositions of Theory Y, managers
choosing to use this style encourage teamwork and commitment among employees.
This method relies heavily on making employees feel themselves to be constructive
parts of the company.

Element Description
Initiative Taking action, driving and supporting
Inquiry Questioning, researching and verifying understanding
Advocacy Expressing convictions and championing ideas
Decision making Evaluating resources, choices and consequences
Conflict resolution Cnfronting and resolving disagreements
Resilience Dealing with problems, setbacks and failures
Critique Delivering objective, candid feedback
Types of Organizational Controls
Control can focus on events before, during, or after a process. For example, a local
automobile dealer can focus on activities before, during, or after sales of new cars. Careful
inspection of new cars and cautious selection of sales employees are ways to ensure high
quality or profitable sales even before those sales take place. Monitoring how salespeople act
with customers is a control during the sales task. Counting the number of new cars sold
during the month and telephoning buyers about their satisfaction with sales transactions are
controls after sales have occurred. These types of controls are formally called feedforward,
concurrent, and feedback, respectively.

 Feed forward controls, sometimes called preliminary or preventive controls, attempt

to identify and prevent deviations in the standards before they occur. Feedforward
controls focus on human, material, and financial resources within the organization.
These controls are evident in the selection and hiring of new employees. For example,
organizations attempt to improve the likelihood that employees will perform up to
standards by identifying the necessary job skills and by using tests and other
screening devices to hire people with those skills.

 Concurrent controls monitor ongoing employee activity to ensure consistency with

quality standards. These controls rely on performance standards, rules, and
regulations for guiding employee tasks and behaviors. Their purpose is to ensure that
work activities produce the desired results. As an example, many manufacturing
operations include devices that measure whether the items being produced meet
quality standards. Employees monitor the measurements; if they see that standards are
not being met in some area, they make a correction themselves or let a manager know
that a problem is occurring.

 Feedback controls involve reviewing information to determine whether performance

meets established standards. For example, suppose that an organization establishes a
goal of increasing its profit by 12 percent next year. To ensure that this goal is
reached, the organization must monitor its profit on a monthly basis. After three
months, if profit has increased by 3 percent, management might assume that plans are
going according to schedule.

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 https://iedunote.com/management-by-objectives-mbo-process