HUMAN RESOURCES MANAGEMENT

HUMAN RESOURCE MANAGEMENT Management Definitions: -Management is getting things done through people. -It is the process undertaken by one or more persons to co-ordinate the activities of other persons to achieve results not attainable by one person. There is no management without people. Development of Management Theory i) Classical Organization Theory It is concerned with the formal structure of organizations. It focuses not on the work rate of an individual worker but on the technical efficiency of the organization and is an attempt to formulate universally valid principles of sound and effective management of organizations. It was developed by Henri Fayol during the industrial revolution. He identified the manager’s roles as planning, organizing, leading, controlling and co-coordinating. -Fayol believed that management was not a personal talent but a skill that could be taught. He developed the following principles of management to serve as a guide for managers: 1. Division of Work –Work should be divided among individuals to ensure that effort and attention are focused on special portions of a task. Such specialization allows managers and workers to acquire an ability, sureness and accuracy (efficiency) which will increase output. 2. Authority and Responsibility –Authority is the right to give orders and the power to exact obedience. Responsibility is the duty to act. It leads to accountability. Managers with responsibility to carry out a task should be given a requisite authority to undertake the task. 3. Discipline –Discipline is composed of obedience, application, energy, behavior and outward marks of respect between employers and employees. When it is accompanied by penalties, they should be applied judiciously to encourage common effort. 4. Unity of Command –Each subordinate should have a single superior. One person, one boss. 5. Unity of Direction –It is necessary to ensure that the effort of everyone in the organization is directed towards the organizational goals. 6. Subordination of individual interest to general interest –the interest of one person or group should not have priority over the interests of the organization as a whole. 7. Centralization –the extent to which authority is concentrating or dispersed (decentralized) will vary with the circumstances of the organization. 8. Scalar chain –this is the chain of command or the hierarchy formed by managers from the highest to the lowest. Subordinates should observe the formal chain of command unless expressly authorized by their superiors to skip the links in the chain. 9. Remuneration –the price of services rendered by employers should be fair in accordance with their contribution and should be satisfactory to both employees and employer. The level of pay depends on the employees value to the organization, cost of living, availability of qualified personnel, general business conditions and success of the business. 10 Order –both materials and people should be in their proper places. The objective of order is to avoid loss and waste. 11 Equity –all employees should be treated as equally as possible. Kindliness and justice are necessary to obtain loyalty and devotion from the workforce. 12 Stability of tenure of personnel –high labor turnover is costly and is an effect of bad management. Retaining productive workers should always be a high priority of the manager. It reduces staffing costs while increasing efficiency. 13 Initiative –management should take steps to encourage worker initiative. Initiative can be defined as new or additional work activity undertaken through self-direction. 14 Espirit de corps –there should be unity and harmony among employees as this is key to organizational success. ii) Theory of Bureaucracy -This was developed by Max Weber (1864-1924). He was a German sociologist. Weber believed that organizations could be instruments of efficiency if they were based on the following principles: 1. A high degree of specialization based on functional specialisms. 2. A hierarchy with well defined levels of authority. 3. Duties carried out impersonally. 4. Employment and promotion based on qualifications and merit. 5. A consistent system with formal rules and procedures. 6. Written records of decisions taken. 7. Authority vested in positions rather than individuals. 8. Separation of ownership from control. iii) Scientific Management It was developed by Frederick Taylor (America) in 1911. The piece rate system in use at that time did not provide an incentive for increased output. Taylor’s solution was the application of scientific principles to improve methods of operation in order to secure an increase in productivity. Greater emphasis is placed on: 1. Greater division on labor with clearly defined tasks 2. The application of logic to the management process 3. Full managerial control over the workshop 4. The measurement of work and the setting of appropriate piece rates 5. Standardization, efficiency and discipline -Criticisms that arise accuse Taylor of concentrating on instrumental aspects of human behavior while neglecting the psychological and social variables. Criticisms of Classical Theory 1. Assume that these principles are applicable universally yet circumstances differ and need appropriate solutions. 2. Classical writers possessed a mechanistic view of human nature. Man today is not just ‘economic’ but also has social and self-actualizing needs. 3. The methods of production have changed drastically since the industrial revolution. The aspirations of workers have also changed. 4. Classical structures are rigid and static. Today’s business environment is dynamic and needs organizations that are able to adapt to change- quickly. 5. Division of labor led to fragmentation of work leading to boring and repetitive tasks. *The other school of management is the human relations school. It will be dealt with in motivation. Management Functions 1. Planning –This is the capstone activity in organizations. It is the process of determining how the organization can get where it wants to go, Planning is the systematic development of action programs aimed at reaching agreed business objectives by the process of analyzing, evaluating, and selecting among the opportunities which are foreseen. Salient points about planning 1. Planning activity focuses on attaining goals. 2. Managers at every level of the organization do planning. Through their plans, they outline exactly what the organization must do to be successful. 3. While plans may differ in focus, they all concern achieving short (tactical) and long range (strategic) organizational goals. 4. The length of time and scope of planning will vary according to the level in the company. Top level management is long-range planning while the opposite is true for lower-level management. 2 Organizing –It is the function of management that assigns the tasks identified or developed during planning to various individuals and/or groups within the organization so that the objectives set by planning can be achieved. 1. The organizing function is to create a structure of task and authority relationships to reach the goals set. 2. It includes developing a framework or organizational structure to indicate how personnel, equipment and materials are to be employed to attain the predetermined goals. 3. The activities necessary to attain the objectives are grouped into working divisions, departments or other identifiable units primarily by clustering similar and related duties, the result of which is a network of interdependent units. 4. Each unit should have clearly defined authority, or a clearly defined list of duties and one person to whom to report. 3 Leading –Leading is defined as the process of influencing other people to attain organizational goals. It is behavioral in nature and involves personal interaction. Leadership is not the same as management. It is a subset of management. Leadership involves behavioral issues (i.e. directing and motivating people) while management is mostly non-behavioral. It emphasizes more of planning, organizing, staffing and controlling. The leading function’s major purpose is to channel human behavior toward organizational goals. This is also called motivating. -When appropriate behavior is encouraged, the ultimate purpose is to increase productivity and improve quality. 4 Controlling –It is the process of ensuring that actual activities conform to planned activities. It involves evaluating actual performance, comparing it to set goals and taking corrective action when there is a difference between performance and goals. -Planning and controlling are inseparable. They are called ‘The Siamese twins of Management”. Types of Control 1. Precontrol/Preliminary/Preventive Control -It takes place before work is performed. It focuses on establishing conditions that will make it difficult or impossible for deviations from norms to occur. It involves the creation by management of policies, procedures and rules aimed at eliminating behavior that will cause future undesirable work results. -Prevention is better than cure. An example of a pre-control measure is locks and bars on windows. 2. Concurrent/Feed forward/Steering Control -It monitors ongoing operations to ensure that objectives are pursued. It is designed to detect and anticipate deviations from standards at various points throughout the process. Diagnostic control devices include gauges, meters and warning lights. 3. Feedback/Post Control -It concentrates on past organizational performance. It focuses on the end results of the process. The information derived is used to examine and apply to future activities which are similar to the present one. The purpose is to help prevent the same mistakes in the future. Levels of Management The Horizontal Perspective 1. Top Management -Is made up of the relatively small group of executives who control the organization and in whom the final authority and responsibility for the execution of the management process rests. It includes the Board of Directors (BOD), Chief Executives, the Managing Director (MD), the partners. -The planning function of top management consists of developing the major purpose of the organization, its mission, global objectives and the major policy statements for implementation by middle and lower-level managers. -Top management is concerned with acquiring talent to fill upper-management positions. It also keeps an eye on the environment within which the business operates. 2. Middle Management -It is primarily responsible for developing or executing implementation strategies for the broad policies, plans and strategies determined by top management. It consists of the functional heads such as Marketing Manager, Production Manager, Personnel/Human Resources Director and Finance Manager. -Middle management is responsible for medium and long-term planning. The managers organize within their own functional areas. 3. Lower Management -These are called First line, Supervisory or Bottom Management. First line managers’ duties involve day-to-day activities and tasks of a particular section, short-term planning and supervision of the finer details (nitty gritties) of organizing. Controlling at this level involves meeting targets for production, sales or quality objectives. -In reality the levels of management can vary depending on the size of the organization. Management Skills CONCEPTUAL TOP MANAGEMENT HUMAN MIDDLE MANAGEMENT TECHNICAL BOTTOM MANAGEMENT Technical Skills -This is the specialized knowledge or expertise and ability in using processes, practices, techniques, or tools of a specialty responsibility area/discipline to attain ends. Examples are accountants, engineers, sales persons, computer programmers etc. A manager at a lower level should have sufficient knowledge of the technical activities which he has to supervise. Human Skills/Interpersonal Skills -It is the ability to work with other people or to interact with other people successfully. Such skills build cooperation within teams being led. They involve working with attitudes, communication, individuals and groups. Since management is dealing with people about 60% of the time, it is obvious that a manager should be able to communicate and to motivate groups as well as individuals. Conceptual Skills -Conceptual skills deal with ideas and abstract relationships. It is the mental capacity and ability to view the organization as a whole and to see how the parts of the organization relate to and depend on one another – a holistic view of the organization. Managers with conceptual skills are better able to understand how various functions of the organization complement each other and how changes in the environment affects the organization. -The importance of these skills depend on a manager’s level of management in the organization. Technical skill is most important for a manager at the first-line of management. Human skills are extremely important to managers at every level in the organization. Conceptual skills are increasingly important as manager moves up the levels of management. Managerial Roles Interpersonal Roles 1. Figurehead –these are duties that are symbolic or ceremonial in nature. Invited guests at occasions usually perform this role. 2. Leadership –involves directing and coordinating the activities of subordinates. It involves staffing (hiring, training, promotion and dismissing) and motivating subordinates. 3. Liaison –it involves managers in interpersonal relationships outside of their areas of command. This role involves contacts both inside and outside the organization. The aim is to establish good relationships. Informational Roles 1. Monitor –it involves examining the environment in order to gather information, changes, opportunities and problems that may affect the unit. 2. Disseminator –involves providing important or privileged information to subordinates. 3. Spokesperson –the manager represents the unit to other people, internal or external. Decisional Roles 1. Entrepreneur –it involves the process of continually looking for new ideas or new methods to improve the unit’s performance. The effective marketing manager, for example continually seeks new product ideas. 2. Disturbance handler –it involves the manager making decisions to take corrective action in response to situations out of control. The aim is to bring about stability. Emergencies like strikes, breakdowns, disasters etc need quick responses. 3. Resource allocator –this is a manager’s position of deciding who will get what resources. These resources include money, people, time and equipment. Resources are always scarce. 4. Negotiator –a manager must bargain with other units and individuals to obtain advantages for his unit. The negotiations may concern work, performance, objectives, resources etc. Managerial Effectiveness and Efficiency -A manager is judged by his own performance. The criteria used is effectiveness and efficiency. A balance of the two should be struck by any good manager in utilizing resources. Not reaching goals and not wasting resources Reaching goals and not wasting resources Not reaching goals and wasting resources Reaching goals and wasting resources Efficient Effectiveness Ineffective Effective Managerial Effectiveness –it is defined as “doing the right thing”. It is defined in terms of resource utilization in relation to organizational goal attainment. A manager has the responsibility of selecting the right goal and appropriate means of achieving that goal. If organizations are using their resources to attain their goals, the managers are effective. Managerial Efficiency –it is defined as “doing the thing right”. It measures the cost of attaining a given goal. The higher the proportion of organizational resources that contribute to productivity, the more efficient the manager. If minimum cost is spent to obtain the desired goal, the manager is being efficient. Organizational Structure Organizational structure is represented primarily by means of a graphic illustration called an organizational chart or organogram. -The organizational chart has its value to managers in depicting the basic framework of the organization. Traditionally, an organizational chart is constructed in pyramid form with individuals toward the top of the pyramid having more authority and responsibility than the individuals toward the bottom. -The relative positioning of individuals within boxes on the chart indicates broad working relationships while lines between boxes designate formal lines of communication between the individuals. -A chart can tell us: 1) Who reports to whom – the chain of command. 2) How many subordinates work for each manager _ the span of control. 3) Channels of official communication through the solid lines that connect each job (box) 4) How the company is structured – by function, customer, product etc. 5) The work being done in each job – the label on the boxes. 6) The hierarchy of decision making. 7) Types of authority relationships – solid lines illustrate line authority and dotted lines show staff and functional authority. -In addition, the chart is a trouble-shooting tool,. It can help managers locate duplications and conflicts as a result of awkward arrangements. -What the chart does not show are the degrees of authority, the informal communication channels and the informal relationships. An Organizational Chart Approaches to Organizational Structure 1. Functional Structure - The most common approach. A function is a type of activity being performed. The major categories are marketing, production, finance and personnel. Advantages 1. –helps avoid overlap in the execution of basic business activities 2. –provides for occupational specialization therefore aids in training Disadvantages 1. –since personnel are separated, their understanding and concern for the specialty areas outside their own is not easy to achieve 2. –communication difficulties and lack of co-operation between the functional areas can arise, leading to hostility 3. –it does not develop generalists in the management area 2 Product Departmentation - Resources are departmentalized according to the product(s) being manufactured. This means that all the specialists associated with particular products are grouped together in particular product sections. It is most applicable if each product requires a unique strategy or production process or distribution system or capital resources. Advantages 1. –specialized knowledge of employees is used to maximum effect 2. –decisions can be made quickly within a section 3. –the performance of each group can easily be measured Disadvantages 1. –managers give exclusive attention to their particular section and loose sight of other particular products 2. –cost is increased due to duplication of business functions within each product line 3 Geographic/Location Departmentation - The structure is based on the place where the work is being done. As market areas and work locations expand, physical space between various places can make the management task extremely cumbersome. It is logical for businesses which sell their products in different geographical regions to have such a logical structure. Advantages 1. –it gives autonomy to area managers – facilitates decision making and adjustments to local business environments 2. –it furnishes a training ground to develop general management structure Disadvantages 1. –cost is increased (of personnel and facilities) due to duplication of personnel positions and additional building sites 4 Customer Departmentation - The structure is based on response to major customers of the firm if they can be positively identified. It is adopted mainly by firms with special segments of the market. Its advantages and disadvantages are similar to product departmentation. 5 The Matrix Structure - It combines functional managers with an overlay of project managers. These are 2 chains of command. It is applicable in high-technology, project-based industries such as Aerospace, Government contracting R & D etc. Advantages 1. –it utilizes the technical resources of an organization 2. –leads to co-coordinated effort since it focuses on functional expertise on a project 3. –encourages decentralization Disadvantages 1. –power struggle can occur 2. –costly to implement 3. –creates problems of control Formal Organization -This term refers to the deliberately planned structure of roles within an organization. It is represented on the organizational structure. -The informal structure, on the other hand, is a network of personal and social relationships or cliques which arise at work. It is not planned or official. The power of the group leader is personal and behavior of the group is guided by norms rather than by rules laid down. Control is not by means of financial rewards or penalties but by threats of expulsion. Advantages of Informal groups 1. –a lighter workload for management 2. –work group satisfaction 3. –improved communication 4. –forces management to plan 5. –greater co-operation Disadvantages 1. –resistance to change 2. –interpersonal and intergroup conflicts 3. –lower motivation 4. –low management control 5. –development and spread of unhelpful rumors Authority -It is defined as the right to give orders and the power to exact obedience. Authority should be vested in positions, not people, should be acceptable to subordinates and should flow down the vertical hierarchy. Three types of Authority 1. Line Authority –This is direct authority which all superiors have over their subordinates. Authority is delegated from the highest to the lowest e.g. Production Managers are line managers responsible for the work of the production department. 2. Staff Authority –This is auxiliary authority based on specialist advisory or support services e.g. legal advisors or computer services. 3. Functional Authority –It is the right to give orders in a department other than one’s own. Conflict between line and staff managers Line Staff 1. Action-oriented Study in depth 2. Intuitive Analytical 3. Short sighted Long sighted 4. Seeks simple solution Complicates the situation with detail 5. Protective of the organization Critical of the organization Delegation It is the act of assigning duties to subordinates. It is done to enable top managers to concentrate on major issues especially as the organization grows in size and complexity. -Delegation of decision making should be done through giving subordinates sufficient authority to carry out the tasks. -Delegation can be achieved if: 1. The subordinate possesses sufficient skills and experience 2. The objective is defined and understood 3. The subordinate is given sufficient authority and responsibility 4. The procedure is clearly understood 5. There is a clear schedule for completion of task Span of Control -It is the number of people directly accountable to and reporting to a manager. A span of 4-8 is acceptable at upper levels of management and up to 15 at lower levels. Advantages of a Narrow Span 1. –close supervision of subordinates 2. –tight control 3. –faster communication (vertical communication) Disadvantages 1. –superiors are too closely involved in subordinates’ work 2. –creates a tall organizational structure 3. –high costs e.g. staffing costs 4. –stretches the communication line between managers and subordinates Factors affecting the Span of Control 1. –the nature of the task 2. –the ability of experience of the people concerned 3. –the effectiveness of communication 4. –the cohesiveness of the team 5. –the degree of delegation exercised Flat and Tall Organizations A tall organizational structure is one in which the span of control is narrow and as a result there are a large number of hierarchical levels. A flat structure has a broad span of control and relatively few hierarchical levels. Tall Flat Characteristics Tall Flat 1. Decentralized authority Centralized authority 2. Many authority levels Fewer authority levels 3. Narrow span of control Wide span of control 4. Long lines of communication Easier communication 5. High delegation Low delegation 6. Bureaucratic Easier co-ordination Centralization A centralized organization is one in which most decisions are taken at the centre or upper levels of the organization. There is little autonomy for lower levels. The degree of centralization depends on: 1. Cost 2. Desire for uniform policy 3. Size of the organization 4. Management philosophy 5. The quality of middle and junior management 6. Availability of control techniques 7. Geographical dispersion of the organization Advantages 1. Greater control 2. Economies in staffing 3. Economies of specialization 4. Easier communications Disadvantages 1. Excessively bureaucratic 2. Rigidity 3. Delays in decision making 4. Loss of initiative 5. Stifles personal development Decentralization A decentralized organization is one in which there is considerable delegation and authority at the lower levels of management. -Functional decentralization involves delegation of decision making authority to specialist functional areas/departments e.g. finance, personnel, marketing etc. -Federal decentralization involves the grouping of activities on a product basis. Departments/divisions are responsible for a range of products and operate autonomous business units Advantages 1. Decisions are made where the action is 2. Recognition of local conditions 3. Improved morale 4. Personal development 5. More responsive to the environment Disadvantages 1. Loss of control 2. Loss of some economies of scale 3. Development of a narrow departmental view Consequences of Poor Organizational Structure 1. Low motivation and morale 2. Ineffective decision making 3. Lack of co-ordination and control 4. Poor communication 5. Poor adherence to organizational objectives 6. Inability to respond to changing conditions 7. Duplication of activities 8. Failure to provide opportunities for development of future managers Motivation and Leadership Motivating is the management process of influencing people’s behavior to achieve stated goals. These are basic assumptions about motivating: 1. Motivation is commonly assumed to be a good thing. People always need to be praised for doing well. 2. Motivation is directly related to a person’s performance. 3. Motivation should be a continuous process and should be done frequently at work. 4. Motivation is a tool within which managers can arrange job relationships in organizations. Theories of Motivation The human relations school of management is the major proponent of motivation. It was developed by Mayo and contemporary human relations researches in the 20th Century as they studied particularly the factors which influence people’s performance at work. They found out that boredom and repetitiveness of many tasks reduced motivation while social contacts helped create and sustain motivation. -Modern theories of motivation are grouped into 2, namely Content and Process theories. Content Theories -They focus on what motivates people, that is, a need which must be satisfied. The need is satisfied by a reward which is either extrinsic (outward e.g. money) or intrinsic (inward e.g. job satisfaction). 1 Maslow’s Hierarchy of Needs Maslow viewed human motivation as a hierarchy of five needs, ranging from basic physiological needs to self-actualization which fulfill the basic requirements of continued biological existence. Once these needs are satisfied a person seeks to satisfy higher level needs. Once a need is satisfied it no longer motivates. 2 Alderfer’s ERG Theory Alderfer (1972) categorized needs into three groups, namely: i) Existence Needs –Maslow’s fundamental needs ii) Relatedness Needs –Need for interpersonal relations iii) Growth Needs –Need for personal creativity or productive influence Alderfer stressed that when higher needs are frustrated, lower needs will return, even though they were already satisfied. Alderfer saw people moving up and down the hierarchy of needs from time to time and from situation to situation. 3 McGregor’s Theory X and Theory Y McGregor (1960) suggested that many managers adopt a particular style due to their basic beliefs concerning human nature. i) Theory X managers assume that: -people dislike work and will avoid it -people must be coerced, controlled, directed and threatened in order to get them to work. -the average person prefers to be directed, has little ambition and avoids responsibility. ii) Theory Y –managers assume that: -work is as natural as play -people can exercise self-direction -people seek responsibility -the potential in people can be fully exploited by managers McGregor believed that people-centered management (Theory Y) was more effective for motivation than work-centered management (Theory X). 4 Herzberg’s Two Factor Theory Herzberg distinguished between motivators (which lead to job satisfaction) and hygiene factors (which reduce job dissatisfaction). Motivators include: • -Recognition for work done • -Promotion prospects • -Sense of achievement • -Responsibility for tasks Hygiene factors include: • -Relationships within the organization • -Rules and regulations • -Fringe benefits and social facilities • -Wages and salaries • -Working environment • -Style of management • -Status and security Herzberg argued that people do not work any harder if the hygiene factors are present at work, but their output can decline if conditions deteriorate. Motivators on the other hand are intrinsic in nature, and produce job satisfaction and higher output. Job Enlargement -Involves giving workers a number of tasks to perform to increase job enrichment. Job Design -It is the application of motivational theories to the structure of work so as to improve productivity and the sense of satisfaction. In designing jobs, the following should be developed, job enlargement, enrichment etc. Job Enrichment -This is the process of making tasks more interesting and satisfying to workers. Job Rotation -This involves changing a worker’s tasks more regularly to overcome potential boredom Mayo’s Hawthorne Experiments In an experiment, a small group of workers were placed in separate rooms and a number of variables were altered; wages were increased, rest periods reduced, workdays reduced. Different outcomes were experienced. The researchers concluded that employees would work harder if they believed management was concerned about their welfare. They also concluded that informal work groups have a positive influence on productivity. Process Theories 1 Vroom’s Expectancy Theory In expectancy theory, effort is linked not just to the desire for a particular outcome but it is moderated by an evaluation (expectancy) that if a particular course is followed, a particular outcome will be attained. The conclusion was: i) Individuals will only act when they have a reasonable expectation that their behavior will lead to the desired outcome. ii) Effort alone is insufficient. It has to be accompanied by ability and skill. iii) Job satisfaction results from effective job performance instead of the opposite. iv) Job design is of crucial importance. 2 Equity Theory In return for an input (effort, skill, training), the worker receives an outcome (pay, status, fringe benefits). Equity exists when the ratio of one person’s outcome to his/her inputs equals the ratio of other workers. Workers will feel a sense of injustice if their efforts are not rewarded in a way commensurate with the rewards of others. Financial Motivation Wages are the prices paid to labor. They are analyzed in terms of demand and supply of labor. Wage rates are determined by: i) hours of work – unsocial hours raise the pay rate ii) nature of work iii) training, responsibility and qualities iv) bargaining power of trade unions Pay Systems 1 Time rates Under this system, earnings are calculated by multiplying the hourly time rate by the number of hours at work. Condition for use 1. –where employees have no control over the speed of work 2. –where output cannot be measured or attributed to individuals. 3. –where output is of a non-standard type 4. –where quality, accuracy or care would be jeopardized by a system which relates to pay output 5. –where periods of enforced but temporary idleness occur Advantages 1. –less harmful to quality 2. –less harmful to health of employees 3. –simple and easy to understand 4. –appropriate in most circumstances Disadvantages 1. –pay is not related to effort or output but merely to the time spent at work 2. –can encourage time wasting 3. –does not provide incentive for increased effort 4. –requires supervision of workforce 2 Piece rates The earnings of an individual worker or group of workers are related to the quality of items produced. Conditions for use 1. -appropriate where output is standardized 2. –appropriate where output is measurable 3. –there should be a link between effort ad output 4. –appropriate where output can be attributed to an individual work and he/she receives a reward commensurate with effort Advantages 1. –stimulates effort 2. –encourages workers to devise improved methods 3. –simplifies costing Disadvantages 1. –must be adjusted for local circumstances 2. –encourages more output at the expense of quality and safety 3 Profit Share Involves the employee receiving a share of the company’s profits. The employee’s basic pay is not affected. It is introduced to: 1. –encourage employees to identify with the company 2. –provide an incentive for increased effort 3. –make employees profit and cost-conscious 4. –reduce staff turnover 4 Performance related pay (PRP) Bonus is related to the performance of the individual. It is used for many groups of managerial, administrative and professional workers. If performance standards are not visible in terms of quality produced, a system of staff appraisal is established for PRP to be introduced. Non-Financial Motivation It includes: 1. Training 2. Effective induction 3. Opportunities for promotion and development 4. Status and recognition 5. Job enrichment 6. Team working 7. Delegation LEADERSHIP It is the process of direction and influencing the task-related activities of people so that they can perform them effectively and efficiently. All managers should have leadership qualities. Successful leaders should possess the following traits: 1. Adaptable to situations 2. Ambitious and achievement oriented 3. Assertive 4. Co-operative 5. Decisive 6. Dependable 7. Dominant (desire to influence others) 8. Energetic 9. Persistent 10 Self-confident 11 Tolerant 12 Responsible The Managerial Grid It was developed by Robert Blake and Jane Mouton and it identifies a range of managerial behaviors based on the various ways that task-oriented and employee-oriented styles can interact with each other. 1.9 9.9 5.5 1.1 9.1 Five styles of management can be identified from the grid: 1. Impoverished Management (1.1) –Managers have low concern for people and low concern for tasks or production. It is also called laissez-faire management. 2. Country-club Management (1.9) -Managers have high concern for employees but low concern for production. 3. Task/Authoritarian Management (9.1) –Managers have high concern for production and efficiency but low concern for employees. 4. Middle-of-the-road Management (5.5) –There is an intermediate amount of concern for both production and employee satisfaction. 5. Team/democratic Management (9.9) –There is high concern for production and employee morale and satisfaction. It is the most ideal management style. Leadership Styles 1 Autocratic Style -The leader is authoritarian and assumes responsibility for all aspects of the operation. Communication is one-way with little or no feedback. A paternalistic, autocratic leader demands compliance on the grounds that he knows best. This kind of leadership can be convenient in situations which require quick decisions, where the leader is more experienced and knowledgeable than the employees, where employees are new to the job and emergency situations e.g. fire brigades. However, such a style creates frustration and resentment, hinders employees’ development and impedes team work. 2 Democratic Style -The leader believes in consulting employees and allowing them to share in decision making. However, he retains the ultimate responsibility for decision-making. Such a style results in improved decision-making, increases employee morale and causes greater commitment. However, it is time-consuming and there is danger of loss of management control. 3 Bureaucratic Style -These are constitutional leaders who manage by acting in accordance with the ‘rule book’. Subordinates are permitted little freedom or scope of initiative. It usually causes consistency in performance but it is inflexible and causes resentment. 4 Free reign/Laissez-faire Style -The leader sets goals for subordinates and clear parameters within which they work but gives them the freedom and responsibility to achieve their objectives. This style works well if employees are willing to assume responsibility. It motivates employees. However, its success depends on the competence and integrity of the employees. -All leaders/managers exert power. Power is the ability to exert influence on other people. Sources of Power 1 Reward Power –based on one person’s ability to reward another person for carrying out orders or meeting performance requirements. 2. Coercive Power –based on the influencer’s ability to punish the influence for not meeting requirements. 3. Legitimate Power –this is formal authority. The influencer has the right or is entitled to exert influence on the influence. 4. Expert Power –it is based on the belief that the influencer has some relevant expertise or special influence does not have. 5. Referent Power –this is power based on the desire of the influence to be like or identify with the influencer. Factors affecting Motivation 1. –pay rate and security 2. –prospects of promotion or employee development 3. –style and quality of leadership 4. –existence of informal groups 5. –desire for autonomy and responsibility 6. –working conditions 7. –opportunities to participate in decision-making BUSINESS COMMUNICATION Communication is the process by which people seek to share meaning by the transmission of symbolic messages. Communication is important to managers because: 1. –it provides a common threat for the management process of POLS. All policies, leadership, groups and teams are activated through the regular exchange of information. 2. –effective communication skills can enable managers to draw on the vast array of talents available in the multicultural world of organizations. 3. –managers spend more time communicating either face-to-face, on the phone or in writing reports. 4. –communication is the means by which business relate to their external environment. It links organizations to their customers, suppliers, creditors, shareholders and the wider community. The Communication Process Communication takes place in the relationship between a sender and receiver. The sender or source of the message, initiates the communication. He has information, needs or desires. The receiver is the person who senses the sender’s message. A Model of Communication TRANSMIT MESSAGE MESSAGE RECEIVE Effective communication involves the sender, the message, the channel and the receiver. Three factors that can influence effective communication are encoding, decoding and noise. 1 Encoding This is the translation of information into a series of symbols for communication. In this case, the sender wants to establish mutuality of meaning with the receiver by choosing symbols, usually words and gestures that the sender believes to have the same meaning for the receiver. Encoding Problems i) -lack of planning ii) -unclarified, unstated assumptions behind the message iii) -use of jargon iv) -lack of empathy v) -inaccurate use of terminology vi) -use of obsolete words, poor expression 2 Channel The channel may be open and accessible to anyone e.g. notice boards, memorandums, newsletters. It may also be electronic or technology-based e.g. telephones, computer networks etc. Channels are affected by noise. Noise is any factor that disturbs, confuses or interferes with communication. Noise can be internal (psychological and physiological) as well as external (physical). Transmission Problems i) -inappropriate channel ii) -failure to speak/write clearly iii) -contradictory verbal/non-verbal messages iv) -noise v) -distortion 3 Decoding It is the process by which the receiver interprets the message and translates it into meaningful information. The receiver must first perceive the message and then interpret it. Decoding is affected by the receiver’s past experience, personal assessments of the symbols and gestures used (people hear what they expect to hear), and mutuality of meaning with the sender. -Effective communication then means that the receiver’s decoding matches the sender’s intended message. Decoding Problems i) -failure to take in the message ii) -distractions iii) -differing interpretations of words iv) -information overload v) -lack of interest in the subject matter vi) -premature evaluation vii) -emotional state of the recipient Objectives of Communication 1. To enable decisions to be taken 2. To keep staff up-to-date and informed about what is going on 3. To communicate externally with suppliers, customers etc 4. To enable employees to communicate with each other Types of Communication 1. Verbal –spoken, telephone, interviews, business meetings 2. Non-Verbal –written, body language 3. Formal –following correct laid down procedures of which records are usually kept e.g. meetings. 4. Informal –happens where and when appropriate – interpersonal and inter-departmental Classification of communication 1 Vertical Communication -consists of communication up and down the organization’s chain of command i) Downward Communication – starts with top management and flows down through management levels to line workers. It follows the authority-responsibility relationship. Its major purpose is to advise, inform, direct, instruct and evaluate employees and to provide organization members with information about organizational goals and policies. ii) Upward Communication – is to supply information to upper levels about what is happening at the lower levels. It includes progress reports, suggestions, explanations, requests for aid or decisions. 2. Horizontal Communication -It refers to contacts (formal or informal) between people at the same level within the organization. It is coordinative in nature and usually involves sharing information, resolving conflicts and solving problems across the organizational structure. -Communication is always better if it is two-way. Criteria for Effective Communication 1. Easy accessibility to information 2. Ease of use 3. Efficiency of user-efficiency of communication media 4. Confidentiality and security of information 5. Timeliness of information 6. Accuracy of information 7. Proper use of facilities within the organization e.g. telephone, notice boards, messenger systems, meetings etc Barriers to Effective Communication 1. Physical barriers – these are often due to the nature of the environment. Some of them include different locations, poor equipment, poor lighting, distractions etc 2. Attitudes – problems within the organization among staff e.g. poor management, personality conflicts, lack of motivation and dissatisfaction by employees etc 3. System design faults – inefficient or inappropriate information systems, lack of supervision or training, lack of clarity in roles and responsibilities etc. 4. Psychological – concerns the state of mind of people. Personal problems like worries or worries or otherwise happiness affects communication. 5. Different languages and cultures/semantics 6. Physiological barriers – ill-health, poor sight, discomfort etc affect communication How managers can become better communicators 1. Examine the true purpose of each communication 2. Consider the total physical and human setting whenever communicating 3. Consult with others, where appropriate, in planning communications 4. Listen positively. A good communicator is a good listener 5. Empathy – managers should identify with the feelings and thoughts of the recipient of the message 6. Managers should follow up their communications 7. Managers should possess proper reading and speaking skills 8. Managers should make sure their actions support their communications. HUMAN RESOURCE MANAGEMENT People are an essential and very valuable resource in an organization. A business’s success can very often depend upon the quality of staff it employs. The relationship between employees and employers is very important. Employees usually expect: 1. fair wages 2. fair treatment by managers 3. reasonable working hours and good working environment 4. holidays with pay 5. appropriate training and opportunities for promotion etc Employers also expect: 1. punctuality and cooperation from employees 2. obedience to instructions 3. government responsibility for facilities and equipment 4. loyalty and trustworthiness 5. ability to do the job well etc. -For this reason, HRM becomes a staff function. It is an ongoing procedure that tries to keep the organization supplied with the right people in the right positions, when they are needed. -The main activities undertaken by the personnel/HR function can be grouped as: 1. employee resourcing 2. employee development 3. health, safety and welfare 4. pay 5. employee relations. The Human Resource Management Process The HRM process includes 7 basic activities as represented in the following diagram: Employee Resourcing 1 Manpower Planning It involves forecasting the future demand for labor in the organization and planning to meet it. It is accomplished through analysis of internal factors such as current and expected skills needs, vacancies and departmental expansions and reductions as well as external factors such as the labor market. -Manpower planning also involves a skills audit involving an assessment of staff (including management) capabilities and matching them against future needs. Skills can be manual, social, intellectual, technical, managerial, administrative etc. -Short-term manpower planning involves training for new and existing staff and replacing people who retire. It covers a period of 1-2 years. Long-term planning (2-5 years) is geared toward corporate objectives and proposed future objectives e.g. expansion of firm, development of new technology, state of the economy etc. 2 Recruitment It is concerned with developing a pool of job candidates in line with the human resource plan. A vacancy must first of all exist. This is followed by making a job analysis which leads to the writing of a job description and personnel specification. A job description is a written description of a job covering its title, purpose, duties and responsibilities and position on the organizational chart. A personnel specification is a written description of the education, experience and skills needed to perform a job effectively. -The main sources of candidates are internal, external, employment agencies, educational and training institutions, job centers etc. -The main legislation that governs the recruitment and selection process in Zimbabwe is the Labor Relations Act. It governs, among other things, equal employment opportunities, prohibition of discrimination on the grounds of sex, ethnicity, disability, creed etc. *Identify the Employment Agencies in Zimbabwe *Discover how job descriptions and personnel specifications are made especially in newspapers and magazines 3 Selection It involves using application forms, CVs (resumes), interviews, skills tests and reference checks to evaluate and screen job candidates for the managers who will ultimately select and hire a candidate. Interview -It is the last and most critical part of the selection process and is a two-way exchange of information and ideas to allow the candidates and the organization to know about each other. -Interviews are carried out in many ways depending on the size of the organization. Candidates are given an aptitude test in order to assess whether or not someone is suitable for the type of work. 4 Socialization It is also known as orientation. It is designed to help the selected individuals fit smoothly into the organization. Newcomers are introduced to their colleagues, acquainted with their responsibilities and informed about the organization’s culture, policies and code of conduct for employees. 5 Training and Development Training is needed to prepare new employees for change and to improve the efficiency of the organization. The emphasis on quality, competitiveness and participation, including also the rapid pace of technological change has increased the need for training. The objectives of training are: 1. to provide employees with the skills, knowledge and aptitude 2. to develop workers in order to enable them to progress 3. to provide for succession 4. to improve morale 5. to attract recruits 6. to facilitate the introduction of new technologies Types of Training 1. Induction –involves introduction of new staff to the firm as they are told about its business and way of operation 2. Basic Skills –designed to teach basic skills required for the job by junior staff to increase efficiency and effectiveness 3. Retraining –involves regular refresher and updating courses especially when new technology, Health and Safety measures or new products are introduced 4. Management training –these are graduate trainee programs which are intensive, targeted at potential managers who join the firm from school or college Benefits of Training, To Employees 1. feel valued by the organization 2. improves promotion prospects 3. acquisition of transferable skills 4. may improve job satisfaction 5. employee is better able to cope with change For the Employer 1. improves quality and motivation of staff 2. reduction in waste and scrap 3. higher level of service to customers 4. may reduce labor turnover 5. increases commitment to the organization 6. helps to develop individual, team and corporate competence 7. helps to develop a positive culture in the organization e.g. TQM 6 Performance Appraisal It is the process of reviewing an individual’s performance at work. It is important for: 1. identifying training needs 2. motivating staff by discussing and recognizing their achievements 3. remuneration 4. assessment of potential 5. identifying people worth of promotion 6. checking the efficiency of the organization in recruitment, selection and training 7. agreeing on future performance targets -Formal appraisal involves use of standardized forms which are completed by employees and managers combined with regular interviews. Employees can also draw up a personal action plan. -Informal appraisal takes place when managers check on the work of the employees and discuss how it can be improved. It is an ongoing process. -Employees usually dislike appraisals because they fear criticism and exposing their weaknesses. Badly designed forms or poorly conducted interviews may result in subjective appraisal. Examples of Causes of poor Solutions Poor Performance Performance Probation Absenteeism Lack of job knowledge Advice, support Time wasting Lack of skills Review meetings Missing deadlines Stress Realistic targets Resisting change Health problems Lack of commitment Poor Management Poor quality output Poor working conditions Upsetting customers Inadequate training 7 Promotions, Transfers, Demotions and Separations They reflect an employee’s value to the organization. High performers may be promoted or transferred to help them develop their skills. Low performers may be demoted, transferred to less important positions or even separated. Functions of Personnel Managers 1. recruitment and selection 2. staff welfare – provision of essential needs 3. recommending promotions and keeping confidential staff records 4. discussing staff problems 5. industrial relations 6. health and safety 7. training and development 8. termination of employment. How Managers determine the Training needs of Individuals 1. performance appraisal 2. analysis of job requirements 3. organizational analysis 4. employee survey Approaches to Training 1. On-the-job training –It involves instruction at work station where an employee works over a series of jobs thereby learning a broad variety of skills. It can take the form of job rotation, interrelationship (job training combined with related classroom instruction) and apprenticeship (training under the guidance of a highly skilled co-worker). It is less costly and more relevant and based on real problems facing the employee. 2. Off-the-job training –It takes place outside the workplace but attempts to simulate actual working conditions. It is provided by colleagues and private training organizations. External trainers have advantages in breath of experience and knowledge and provision of an outside perspective. Development Training focuses on the skills needed to do one’s current job. Employee development is more future oriented, that is, it deals with preparing employers for future positions that will require higher level skills, knowledge or abilities. All employees no matter what their levels can be developed. Health and Safety The Factories and Works Act (Ch 14:08) in Zimbabwe places a general responsibility on all employees to maintain a healthy and safe working environment. The Act requires employers to: 1. Prepare and distribute to employees a written statement on safety policy. 2. Educate and train the workforce in the need for safe working practices. 3. Ensure that working places are safe, all products are safe and clear instructions are issued for safe use. 4. Consult and cooperate with employees’ representatives. Conflict in Organization It is the struggle for dominance between 2 or more elements. The conflict is interpersonal in nature arising from the need to share resources, having different goals, values or perceptions. It centers on departments, divisions, or other groups to achieve and maintain their identities, missions and goals. Types of Organizational Conflict 1 Horizontal Conflict -It is a type of conflict between line and staff managers. It is based on clash of domains of authority, expertise, and activity. -The line authority attitude is that staff people interfere while staff authority attitude is that line people are arrogant and refuse advice. 2 Vertical Conflict -It is conflict between hierarchical levels and is manifested in subordinate-boss conflict as they interpret roles, missions and objectives. MBO can be used to resolve this conflict. 3 Lateral Conflict -It is interdepartmental conflict. It is based on the degree of task interdependence and the pursuit of conflicting goals. 4 Role Conflict -It occurs when and individual must assume various roles covering different situations that are inconsistent. It can lead to problems of evaluation for the individual. -Delegation can be used to resolve such conflicts. Advantages of Conflict 1. brings change and dynamism 2. improves decision making 3. challenges people Limitations 1. demoralizes subordinates 2. can be emotionally disturbing 3. creates resentment and hesitation Conflict Resolution -It is done by clearly defining the scope of each group -Encourage dialogue -Line people must constantly inform staff people on problems and help solve them and vice versa. Industrial Relations Trade Unions -A trade union is a group of workers who have joined together to bargain with their employers about pay and conditions of work, giving advice and information, defending employees’ rights (including legal representation), and resolving conflict. They also influence the economic, industrial and social policy of government. -To achieve their aims, trade unions negotiate with employers by a process known as Collective Bargaining. Each side seeks to get the best deal and reach a collective agreement which they both find acceptable. The need to bargain for pay increases is based on the following: 1. rise in cost of living 2. need to pay wages sufficient for retaining employees 3. need to maintain pay differentials 4. when productivity rises -Employers also have their own representation. Worker Participation It refers to the inclusion of employees in the decision-making process. Arguments for, 1. increases satisfaction and personal development 2. improves motivation and commitment 3. improves industrial relations 4. utilizes the knowledge and experience of workers 5. democracy and consensus 6. improved information flow. Arguments against 1. time consuming 2. conflict of interest 3. employees take a short-term view 4. workers lack managerial skill ORGANIZATIONAL CHANGE Change is inevitable. It can be caused by controllable and uncontrollable factors. An important aspect of change to talk about is Planned change. This is a systematic attempt to redesign an organization in a way that will help it to adapt to changes in the external environment or to achieve new goals. change is definitely influenced or necessitated by changes in the internal and external environment of business e.g. shifts in government policy, technological breakthroughs, redesign of an organization’s production processes etc. The implementation of change programs does not usually occur without resistance. Some of the common sources of resistance to planned change are: 1. Organizational culture – employees within a company may be used to the old way of doing things that have shaped the organization to the extent of failing to think of a possible shift from the old normal ways even if the change may be beneficial. 2. Self interests – employees can also resist change because it may disadvantage them in one way or the other. For example, if the change affects their present advantages like adequate pay, job security, power, prestige, etc. employees are likely to resist the planned change. 3. Perceptions of organizational goals and strategies – employees may not accept the need for a new goal if they do not have the same view as management. THE PROCESS OF CHANGE Most efforts to bring about change may fail because of attitudes and behavior. The process of bringing about change may involve “unfreezing” the present behavior pattern, “changing” or developing a new behavior pattern, and then “refreezing” or reinforcing the new behavior. Unfreezing involves making the need for change so obvious that the individual or group or organization can readily see and accept that the change must occur. Changing involves discovering and adopting new attitudes, values, and behaviors with the help of a trained change agent, who leads individuals, groups, or the entire organization through the change process. Refreezing involves transforming a new behavioral pattern into the norm through reinforcement and support mechanisms. METHODS OF DEALING WITH RESISTANCE TO CHANGE 1. Education and Communication – it involves explaining the need for and the logic of change to individuals, groups and even the entire organization. The advantage is that once persuaded, people can often help implement the change. However, the major disadvantage is that it can be very time-consuming. 2. Participation and Involvement – it involves asking members of the organization to help design the change. The advantage is that people will participate with commitment. However, it is also time-consuming and people can design an inappropriate change. 3. Facilitation and Support – this involves offering training programs and emotional support to people affected by the change. 4. Negotiation and Agreement – it involves negotiating with potential resistors and soliciting written letters of understanding. 5. Manipulation and Cooptation – it involves giving key persons a desirable role in designing or implementing the change. It can be relatively cheap and a quick solution to resistance problems but can lead to future problems if people feel manipulated. 6. Explicit and Implicit Coercion – it involves threatening resistors with job loss, transfer and lack of promotion. Its major problem is that it leaves people angry and creates bad relations between employees and managers. CONFLICT IN SOCIETY Sources of Conflict in Business 1. Varying Objectives 2. Bad organization -Conflict might arise out of bad organization. A failure to create the necessary lines of communication or the framework in which teams of people with varying expertise can operate (e.g. design) from mean that people are making decision on insufficient information. 3. Organizational Structure - Conflict may also be generated by the organizational structure e.g. change to matrix structure can lead to individual or several superiors who may not agree on priorities or resource allocation. This problem can be intensified if one or several of the superiors see the ability to command obedience from the subordinates as a matter of prestige. 4. External Factors -Employer-employee conflict is likely to be more marked within the employees or members of an active trade union, when there is a tradition of labor militancy in the industry as a whole, where demand from the product is declining and management responds with rationalization of plant and manpower. Ways of Resolving Conflict 1. Forcing -the person in authority uses force as he/she is the boss 2. Smoothing -a more diplomatic way of suppressing conflict where the manager tries to persuade one side into giving in 3. Avoidance -the managers avoid tracing a position or pretend to be unaware of the conflict 4. Majority -the group conflict is resolved by a majority vote 5. Compromise -convincing each part to the conflict to sacrifice certain objectives in order to gain others 6. Collaboration -the willingness of the 2 parties to identify the major causes of conflict and try to search for solutions considered to be mutually beneficial Advantages and Disadvantages of Internal and External Recruitment Internal Search Advantages -low cost -builds employee morale -candidates are familiar with the organization Disadvantages -limited supply -may not increase proportion of employees from protected groups Advertisements Advantages -wide distribution -can be targeted to specific groups Disadvantages -generates many unqualified candidates Employee Referrals Advantages -knowledge about the organization provided by current employee -can generate strong candidates because a good referral reflects on the recommender Disadvantages -may not increase the diversity and mix of employees Public Employment Agencies Advantages -wide contacts -careful screening -short term guarantee often given Disadvantages -high cost