Aaron Manickchand

MOB U1 Module II

Unit 1 Module 2

Management of People

Management is the act of getting things accomplished in the organization through others. It is the

process of achieving objectives by planning, organizing, and controlling resources and at the

same time motivating employees.

The Classical Theory

The main feature of these theories was that there was little concern for the human element in the

organisation.

FW Taylor (1856 – 1917)

He was known as the father of scientific management. He was a mechanical engineer at the

Midvale and Bethlehem Steel Company in Pennsylvania. He thought at the time, that there were

high levels of inefficiency and worker output was 1/3 of what it should be.

He viewed man as an economic animal i.e., workers made rational and economic choices based

on monetary or material reward. This led him to develop a system linking efforts and rewards

i.e., the piece rate system.

Principles of Scientific Management

1. Management should have rules, laws and principles to replace outdated ones. This would be

done by gathering information for management to make informed decisions

2. Workers needed to be trained and given jobs, which were best suited for them. The selection

and progression of workers needed to be calculated.

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3. There should be an equal division of tasks and responsibilities between managers and workers.

This allows for proper planning of work.

4. Consistent co-operation between management and employees to ensure work was done in

accordance with prescribed principles.

Elements of scientific management to effectively manage staff:

1. Separate planning from actual performance

2. Careful selection of workers for a task in his scientific manner

3. Closely monitor worker performance and documenting findings

4. Job analysis to determine the best way of completing a task

5. Standardisation of tasks based on job analysis

6. Assigning persons to supervise workers

7. Fostering environments to encourage cooperation

8. Providing financial incentives to motivate workers based on their performance

Success and Applications

1. Factory benefited from increased productivity

2. Some organisations benefited from increased profits

3. Theories led to the development of specialised fields of employment.

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Limitations of Scientific Management

1. Tasks become boring one specialisation and workers lacked a variety of skills

2. Output was the only measure of a worker’s day work

3. His view of man being only motivated by money was heavily criticised

Contributions to Society

1. The piece rate system of payment

2. Specialisation

3. The economic man principle

4. Staff appraisals

5. Recruitment and selection processes

Henry Fayol (1841 - 1925)

He was a French industrialist who popularised the concept of administrative management. He

was regarded as the father of “modern-day management” and utilised the “university of

management” principles. He postulated that all organisations could be structured and managed

according to the same rational principles.

However, he himself found out later that such principles and practises would have been quite

difficult to apply in every situation.

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His focus was on management and he concluded that business activities could be divided into 6

inter dependent groups which managers should co-ordinate to achieve the organisation’s goals.

The six groups were as follows:

1. Technical – production

2. Commercial – buying or selling

3. Financial – raising capital

4. Security - job or physical

5. Accountant- record-keeping

6. Managerial

He proposed five functions of management:

1. Planning – establishing objectives and developing strategies to achieve them. Managers

should also be able to anticipate future events and plan accordingly.

2. Organising - this is the delegation of responsibilities to subordinates to get the job done.

The establishment of structured tasks into jobs for individuals and providing systems of

information on communication and coordinating activities within the organisation.

3. Commanding - this is giving clear instructions to workers and ensuring that the business

is operated efficiently. The managers are ultimately responsible for performance

4. Coordinating - harmonising the activities of individuals to ensure that all the employees

within the organisation are working towards a common goal

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5. Controlling- ensuring that activities are done according to plan. Performance is matched

against rules, procedures and forecasted outcomes and any inefficiencies are corrected.

Fayol’s 14 Principles of Management

1. Division of Labour / Specialisation - This is dividing work into a number of smaller related

parts. This results in increased efficiency productivity and output.

2. Authority or Responsibility - managers need to be empowered to carry out their

responsibilities

3. Obedience or Discipline - managers need to be disciplined to accomplish tasks. Discipline

will help them develop obedience, diligence, energy and respect

4. Unity of command – subordinates take command from and report to one supervisor only, to

avoid confusion

5. Unity of Direction - each group of organisational activities that have the same objectives

should be directed by one manager, using one plan.

6. Co-ordination of individual interests with the general interest of the firm - the intent of an

individual or group should not override the interests of the enterprise as a whole

7. Remuneration - these refer to wages, salaries or compensation. Workers must be paid fairly

for their services

8. Centralization - this refers to the degree to which subordinates are involved in the decision-

making process.

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9. Scalar Chain - there must be a clear line of authority from the highest level to the lowest level

of the organisation. There must be an organisational hierarchy within a manageable span of

control.

10. Order – people and materials should be in the right place at the right time.

11. Equity - employees should be treated fairly and justly.

12. Stability of the Tenure of Personnel - high turnover rates are deemed inefficient. This rate

should be minimised so that each employee can grow and propel the organisation forward.

Suitable replacements should be obtained in a timely manner.

13. Initiative - if employees are allowed to originate and implement plans, they will exert high

levels of effort as a result of buy-in or acceptance

14. Espirit de Corp - this means the spirit of Co-operation. Unity and harmony should be

promoted in order to strengthen the organisation

Bureaucratic Management

Max Weber (1864 – 1920)

He describes three types of legitimate authority

1. Traditional Authority - this is when acceptance of those in authority arises from traditions

and customs E.g. monarchies and tribal hierarchies

2. Charismatic Authority - this is where acceptance for loyalty to and confidence in the

personal qualities of a ruler or leader occurs

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3. Legal or Rational Authority - this is where the acceptance of authority arises from office,

position or rank in the organisation. It is the most mentioned form of authority buy him, which

he later dubbed “ideal bureaucracy”

Main features of Bureaucratic Management

1. Division of Labour - specialisation often leads to increases in efficiency. By dividing labour

authority and responsibility, tasks will be clearly defined.

2. Authority or Hierarchy – the chain of command should be clearly outlined from the top to

the bottom of the organisation. Each employee must be aware of who he reports to.

3. Formal selection - each employee should be hired based on their qualifications education and

training

4. Career orientation – managers were seen as professionals and not just owners of their units

5. Formal rules and control – the organisation should have formal rules and controls which

must be adhered to by employees in the performance of their duties

6. Impersonality – rules and controls should be applied impersonally and uniformly across the

organisation

Advantages of Bureaucracy

1. It is ideal for standardised, routine, tasks e.g. jobs requiring systematic work

2. Efficiency

3. Rigid adherence to procedures is necessary for fairness, safety and security

4. Some people like a structure, predictable environment

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Disadvantages of Bureaucracy

1. Slow Decision Making because of the complexity of the organisation

2 It inhibits people’s growth

3. It represses creativity and initiative

4. Communication is restricted to the establishment of structure and as such, important

information may not be considered

5. It is difficult to deal with change in the environment because of the rigidity of the

organisation

Weber felt that bureaucracy was in dispensable for the needs of large scale

organisations and there was no doubt that this form of organisation has been adopted in one

way or another by practically every enterprise of any size the world over. The two most

significant factors in the growth of bureaucratic organisations are size and complexity. Once an

organisation begins to grow the amount of specialisation increases, which usually tends to lead

to an increase in job levels.

New jobs are created an old ones are redefined. Recruitment from outside becomes more

important. Relationships, authority and discipline have to be regulated. Questions of control and

coordination become important. Thus, a relatively small, informal, family business can suddenly

grow into a large organisation requiring new skills and attitudes.

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Contributions to modern organisations

1. Design prototype for large organisations

2. Offices, positions and skills need to be organised into a hierarchy with each lower one being

controlled and supervised by a higher one

3. Employees still depended heavily on formal selection and rules

4. The importance of accountability in organisations

The Human Relations or Behavioural school

By the 1920s while the classical theories were, successful scientists started to look for other

solutions to manage problems.

These scientists formed the human relations school or the behavioural management theory,

which focused on the human side of management.

The human relations approach emphasised the importance of human attitudes, values and

relationships for the efficient and effective functioning of organisations.

Elton Mayo (1880 – 1949) wrote, “First class, technical training was sufficient in a modern and

mechanical age. Consequently, we are technically competent as no other age in history has been

and man has combined with this utter social incompetence”.

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The Hawthorne study – (Elton Mayo 1880 – 1949)

This study was conducted at the western electrical company Hawthorne plant in Chicago. Mayo

was a university professor. The main purpose of this research was to determine the effects of

working conditions on worker productivity.

The Hawthorne study started as a study on the effect of lighting in the workplace on worker

productivity. The initial experiment yielded no positive results so Mayo then combined his

efforts with his colleague Fitz Roethlisberger to find out about other variables.

The study was then conducted on a group of female employees. The workers were allowed to

supervise themselves. The theorists soon revealed that the privileges boosted worker morale.

They no longer felt that they were small part of the organisation, which led to an improvement in

their output.

This study outlines the following:

1. Workers were not only motivated by money but by social and personal factors

2. Management needed to analyse employee attitudes when trying to ascertain their

behaviour.

3. Effective supervision helped maintain employee morale and productivity

4. More emphasis should be placed on informal groups and they may have a significant

impact on employee performance.

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Contributions to modern organisations

1. It brought the human dimension of working firmly into the mainstream of management

2. It paved the way and justified modern-day employee assistance e.g. substance abuse and

day care for children

3. Developed the field of Human Resource Management.

Limitations

1. Complexity - people were motivated by more than one need at a given time and managers

had no simple formula that could motivate all individuals in the workplace.

As seen, earlier theorists say the organisations is primarily a structure of tasks and authority

which could be drawn on an organisational chat. This will just be a snapshot of the organisation

or what it looks like frozen at a particular point in time. Organisations are neither self-contained

no static they are open systems.

The Douglas McGregor Theory

He was another behavioural theorist whose contribution formed Theory X and Theory Y.

What is Theory X?

This approach assumes that some employees are lazy or not motivated by the work (in fact, they

have a distaste of the work), unambitious, avoid responsibility, is self-centered, indifferent about

organizational goals, and prefers to be directed.

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It calls on the leader to be proactive in managing the employees and allocation of resources. She

should motivate the subordinate through specific directives, closely supervise their efforts, and

take steps to motivate (through reward or punishment) accordingly.

In other words, it is an authoritative style of management.

What is Theory Y?

Theory Y assumes that subordinates do not dislike the work, are self-motivated, can be creative,

seeks responsibility (leadership roles), and can be self-directed. Leaders must respond with a

participative style of management.

As such, threats of punishment are far less effective in motivating the employee. Also, the

employee is committed to an objective that is based upon rewards - though they may respond to

different types of rewards.

These types of employees generally respond better to rewards leading to esteem and self-

actualization. Management attempts to get the maximum output with the least efforts on their

part.

These theories are diametrically opposed. They do, however, view behavior as an effect of

attitude rather than a trait.

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The Classical View vs the Human Behavioural View

The Classical View

1. People tried to satisfy their needs at work –economic needs

2. No conflict existed between the individual and organisational needs

3. People act rationally (more money = better work)

4. People act individually to satisfy individual needs

Human Behavioural View

1. People are motivated by many needs

2. We are independent- behaviour is shaped by our social context

3. Management is only one factor affecting behaviour - informal groups also have a strong

impact

4. Teamwork is essential for co-operation and sound decisions

5. Job satisfaction leads the job productivity

6. Good managers need social as well as technical skills.

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The Systems Approach (Katz & Kahn)

This approach focuses on the organisation as a system that transforms inputs into outputs. There

were number of inter-dependent parts (subsystems) that connected to each other in the

accomplishment of a purpose or a task. It sees the organisation as having four elements:

1. Inputs – people, material, money or information

2. Transformation- managerial or technological processes

3. Output – goods and services that are produced

4. Feedback - this includes the possible reactions from the environment in which the firm

operates e.g. information from customers.

The Systems Approach

The interaction of these basic components determine the success or failure of a business.

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The systems approach also suggested that management integrates its major functions i.e.

planning organising, staffing, leading, human resource management and controlling.

The external environment would comprise of societal values, legislation and shareholders

demands.

In the Systems theory, it is possible to have a closed or opened system. In a closed system, it

shuts out the effects of the external environment and acts independent of it. In an open system it

is connected to, interacts with and is influenced by the external environment.

Organisations have seen has open social systems mainly because they are comprised of people

and these people participate in other social systems in the environment for example the family.

Additionally the organisation takes input from the environment and generates output from it.

Characteristics of this Systems Theory

1. Subsystems - a firm is made up of subsystems e.g. production marketing and accounting.

The subsystems are dependent on each other for the functioning of the entire system.

2. Entropy - this refers to the natural process by which things tend to breakdown or die. If

the system is open then new imports can be imported however if they are closed off from

the external environment the system would not survive.

3. Cyclical – the returns of the outputs are ploughed back to gain inputs to complete the

cycle of production once again.

4. Synergy - this is the concept that the total output of the system is greater than his sum of

its parts. Each department should not aim to solely cover its own objectives but work

together to achieve the overall goals of the firm.

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Contributions of the System Theory

1. Synergy - the failure of one subsystem might lead to the downfall of the whole

organisation e.g. if the marketing department fails to promote a firm’s product, that will

lead to the reduction in sales, the production department may have to reduce production,

as well as the human resource department may also have to reduce its labour force.

The Contingency Theory

This theory was popularised in the 1950s by Joan Woodward and later by Lawrence and Lorsch

1967. The latter were two American scholars.

It was based on the premise that management’s approach was dependent on the variables of the

situation that they faced. This was summarised by a, “It all depends” device.

The contingency theory was based on the findings of the Systems theory. Some of these findings

were:

1. Organisations were not seen as static structures but they were continuously reacting to

internal and external changes

2. Subsystems of the organisation each will have potential goals which must be synergised

3. Awareness of the environment in which the organisation exists is vital for its survival

The contingency theory arose from the notion that there were universal principles designed for

business organisations.

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Newer research revealed that there were other factors, which would affect performance of

employees other than those presented by the classical theories. Essentially performance was

dependent on internal as well as external factors. Managers needed to find the best fit for varying

demands. The contingency theory suggests that management’s approach should be dependent on

the best combination of the following variables

1. The external environment

2. Technological factors

3. Human skills and motivation

The contingency approach does not seek to produce universal prescriptions or principles but is

flexible and draws from the concepts of all previously proposed theories. It integrates the

findings of all theories in an attempt to deal with each situation.

Main Ideas

1. A Universal “one best way” to manage does not exist

2. The organisation should ensure that there is coordination between design and subsystems

and the environment in which it operates

3. For an organisation to be effective its subsystems must be in sync

Contributions

1. It can be applied to almost any organisation

2. To experiment until you find the right means

3. To think outside the box

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Functions of Management

Management is the process of organizing the available resources to achieve desired results. It

becomes even more important for managers since employees are most times not mature enough

to do so themselves.

There are three (3) levels of management:

i) Top Management ( CEOs, Presidents, CFOs and COOs)

ii) Middle Management (Vice-Presidents, Head of Departments, Heads of Divisions etc)

iii) Low level/First Line Managers (supervisors, foremen, office managers)

NB – Regardless of the level of management, there are a number of functions that must be

carried out on a daily basis.

Planning

 Setting business objectives

 Establishing the necessary short and medium term plans to achieve long term plans.

 It outlines the direction that the business should be heading in.

 Alternative ways of achieving the plans also need to be outlined.

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 Top managers plan usually for 1-5 year periods which must be flexible with the

changing. economic environment.

 Middle managers plan year to year.

 Low-level manager plan daily, weekly and monthly.

 Planning will be influenced by internal and external factors.

 When the plans of higher level management affect the plans of lower level management,

it is referred to as a vertical influence.

 Outside the organization, planning is affected by social, legal, economic, political and

technological factors (SLEPT)

 As a result of the factors that may affect planning, planning needs to be flexible.

NB. Planning is an ongoing process. As a company’s situation changes, so too will its goals and

objectives

Organizing

Management organizes the human and other resources to execute the plans previously made by

management. It involves the grouping of activities to achieve objectives. It may also the

distribution of authority to employees. Work may be organized and assigned to groups,

departments or individuals. Established lines of authority would assist in improved

communication, improved decision making and a prevention of duplication of tasks/resources.

For example, FedEx is organized to do air and land delivery. Swiss has to be organized

according to its varying product lines.

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Staffing

Staffing deals with the recruitment, selection, development and compensation of staff.

Management uses this function to build the human resource of the organization.

The function is of utmost importance since the firm needs employees to carry out its day to day

activities.

It involves management filling organizational positions, improving workers’ professionalism and

making full use of the human resources.

It usually falls under the Human Resource (HR) Management Department.

Leading

This is the process of managers helping the organization and their employees to achieve their

goals. Leaders lead and serve as models for expected behaviour. They coach, counsel, inspire

and encourage individuals and groups.

Leaders build and maintain work relationships based on mutual respect and trust. These activities

place a premium on a manager’s ability to work with and through people.

Communication is integral leading process. Leaders have to be motivational to influence their

employees to achieve a desired outcome.

Controlling

The evaluation and correction of activities to ensure that the business is on track to achieve its

objective is known as controlling. It is the process of measuring performance, comparing it to

actual performance with the firm’s objectives, highlighting variances and taking the necessary

steps to rectify short faults. All other functions may be wasted unless there is a mechanism to

ensure that things go according to plan.

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Organizational Structures

This is the framework that outlines the lines of authority and communication in the organization.

Classification of Organizations

These can be classified in numerous ways, each way giving a different structure of the

organization.

I) Functional Structures

The organizational structure is designed in terms of the various functional areas of the business.

For example: production, marketing and finance. This is the most widely used classification and

is inexpensive. This type of structure was credited to F.W Taylor and his theory of scientific

management.

Features of Functional Structures:

- Well defined communication channels which are usually downward.

- Clearly outlined chains of command and supervisory roles.

- Utilises job specialisation and departments have well defines roles.

- Not flexible and relies heavily on formal procedures.

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CEO

Purchasing Production
Finance Manager HR Manager (HR
Manager Manager
(Finance Dept) Dept)
(Purchasing Dept) (Production Dept)

Advantages

 Promotes coordination and control

 Specialization can lead to improved productivity

 Allows for delegation to lower level management

 Accountability and clarity displayed

Disadvantages

- Too stringent and may lead to low morale

- Decision making process is very slow

- Difficulty in adapting to change because of rigidity

- In the long run, specialization can lead to a lack of focus on the organization as a

whole (inertia)

- Not suitable for large businesses

- Coordination problems

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2) Product Structure

In situations where businesses have different products, management may decide to separate the

activities for each product. Each product will have its own management structure answerable to

top management. The structure under the product line could be extended to functional areas such

as marketing, production and finance.

Features

- Allows for delegation

- Each unit is responsible for its own profitability

- Each product is assigned its own functional areas of the business

CEO

Product Product
(eg Bread) (eg Cake)

Production Marketing Finance Production Marketing Finance

Advantages

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 Focus can be placed on a particular product’s performance

 Diversification is encouraged

 Promotes positive competition

 Each product division is given more autonomy (independence/power/authority) to

achieve divisional and organizational objectives.

Disadvantages

- Can be expensive

- Duplication of functional areas in some cases unnecessarily

- Competition may have some negative consequences to the firm

- Success of a product is highly dependent on the people direct contact with the product

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3) Geographical Structures

This structure organizes the enterprise in terms of regions or countries. However, each region or

country may be organized in terms of a functional area or product. It is frequently used by

Multinationals with firms in different countries.

Features

- Each region is responsible for its own profitability

- The different regions could be arranged on a functional or product basis.

- Regions are allowed some amount of autonomy in the management of their

operations.

CEO

Country 1 Country 2

Marketing Finance

Advantages

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 Quick response time to local environmental changes

 The organization is presented with international opportunities which may not always be

possible

 Ease of delegation to regions

 Responsibility for profits may breed efficiency

Disadvantages

- Duplication of resources between regions

- Poor coordination across the regions can hurt the entire organization

- Competition may lead to conflict

- Lack of control

4) Matrix Organizational Structure

This type of structure was developed for the rapidly changing business environment. It combines

elements functional, product and possibly geographical organizational structures. It displays two

sets of lines of authority. It may illustrate vertical lines of authority concentrating on the major

functional areas and horizontal lines showing lines of authority across the division.

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Advantages

 Total communication between all members of the team

 Flexible and more adaptable to the changing environment

 Improved managerial skills

 Crossover of ideas between people with specialist knowledge of different areas tend to

create more successful solutions

 More focus on the operations of projects and businesses and not just individual

departmental goals.

Disadvantages

- Less direct control from the top

- Slower decision making process

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- Power struggle among managers

- Conflict between goals

5) Team Structure

The thrust of teamwork in organizations has led to the development of team organizational

structures. The team structure seeks to remove departmental boundaries by establishing teams

which work together to complete an overall business objectives. These teams are usually cross

functional and are composed of employees from different departments.

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Advantages

 Employee motivation

 Remove departmental barriers while facilitating intra-departmental relationships

 Speeds up decision making

 Easily adaptable to changes in the environment and consumer tastes and preferences

 Allows authority to be delegated as hierarchy is lessened

 Avoids the problem of double reporting as in the matrix structure

Disadvantages

- Conflict as departs compete for scarce resources

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- Possibility of a problem of dual loyalties

- Time spent on communication i.e. meetings

- Dependence on training of which the costs are high

6) Network Structures

This structure links a number of separate organizations with a desire to achieve a common goal

through their interaction. The network can be in the form of a joint venture or where some of the

major functions are subcontracted to another firm. The firms are linked by and to a company

which serves as the headquarters.

E.g. NIKE and Espirit. Nike and Espirit do not own their own manufacturing facilities, they

utilise independent designers, manufacturers and sales representatives to perform the functions

on a contractual.

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Advantages

 Minimizes administrative costs

 Flexibility

 No big hierarchical structure so there is faster decision making

Disadvantages

- Loss of control

- Time consuming communications i.e. Meetings.

- Failure of an external company affects the hub.

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7) Virtual Organizations

This is a goal-oriented enterprise composed of multiple members who reside in geographically

dispersed locations and use technology media to communicate and coordinate the fulfilment of a

defined objective/task. The term virtual in this sense has its roots in the computer industry.

When a computer appears to have more storage capacity that it actually has, it is referred to as

virtual memory. Likewise, when an organization assembled resources from a variety of firms, it

can be seen as a virtual organization having more capabilities than it actually possesses e.g.

Amazon

Features:

i) Minimal physical structure

ii) Heavy reliance on communication technology

iii) No boundaries to operation

iv) Work from home

v) Few physical assets

vi) Reliance on part time, self-employed works who are connected electronically

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Advantages

 Swifter reaction times to changes in products and markets

 Reduction of operating expenses – utilities and salaries

 Efficient use of office space

 Access to worldwide expertise

 The flatter structure gives more control

 Elimination of physical barriers

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Disadvantages

- Complexity since there is restricted face to face interaction

- Lack of job security

- Inefficiencies if workers are not self-motivated

- Increased risk of miscommunication because of cultural barriers

- Lack of control

Factors Affecting the Classification of Organizational Structures

 Size of the firm – small, medium or large

 Business Cycles – inflations or recessions

 Business strategies or objectives – the strategies employed by a company may require a

specific type of structure.

 Business Environment – S.L.E.P.T

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Characteristics of Formal Organizational Structures

1. Hierarchy

This shows the levels of authority in an organization. There are usually three main levels:

1. Top level management

2. Middle level management

3. Low level management

Each level in the hierarchy represents a grade or a rank of staff. Lower ranks are subordinates to

the higher ranks. The greater the number of levels of hierarchy the longer the chain of

command.

Implications of hierarchy levels:

1. Communication inefficiency

2. Span of control

3. Delegation

4. Costs

5. Motivation levels of low-level managers

Chain of Command

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Authority is passed down an organization through this route. The lines of authority are used to

transmit instructions and information up and down the hierarchy of the organization. The higher

the level of management the greater the level of authority.

Senior Management is at the top of the chain of command and subordinates receive instructions

from them along the chain.

Span of Control

This refers to the number of subordinates reporting directly or working under a Supervisor or a

Manager. Henri Fayol argued that the ideal span of control should be between 3 to 6. The greater

number of people being supervised by one person, the less effective that supervisor will be.

Spans of control could be 1. Narrow or 2. Wide.

Narrow spans of control are characteristic of tall organizational structures. This results in close

supervision of workers, thus maintaining quality and minimizing risks.

Wide spans of control involves the supervision of a large number of people. These are

characteristic of wider organizational structures with few levels of Complexity and Authority.

This concept also offers greater decision-making Authority for subordinates, which can lead to

job satisfaction.

Factors affecting span of control:

1. The nature of the work being undertaken

2. The ability and competence of workers

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3. Leadership styles

4. The structure of the organization

Delegation

This is the passing down of authority to perform tasks and make decisions from higher to lower

levels of the organizational structure. The wider the span of control the greater the degree of

Delegation that may be undertaken. A manager with a wide span of control will find it difficult

to closely monitor staff as well as time-consuming. Their time can be spent on strategic matters.

When Authority is delegated to staff members they are now accountable to the manager for

good performance. The manager retains ultimate responsibility for the performance of their

tasks.

In modern times, delegation has been transformed into empowerment where subordinates also

get to decide on the best method to use to complete a task. This gives increased opportunities for

individuals to showcase their initiative and creativity - Herzberg Motivators.

Advantages

1. Motivation - this places trust in employees

2. Reduces the workload of the manager and they can concentrate on strategic matters

3. It fully utilizes the skills of employees

4. Succession planning

Disadvantages

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1. Inefficiency - if there is miscommunication or subordinates are not suitably equipped to

complete tasks

2. Managers delegate tedious tasks, which may demotivate workers.

Delegation is dependent on:

1. The ability and experience of workers

2. Management culture

3. Control Systems available

4. Quality of managers

5. Nature of the task

6. Business size

7. The need for uniformed policies and decision-making

Factors affecting delegating:

1. Employees need to be empowered to make effective decisions. They need to have self-

confidence and control over what they do

2. If managers only delegate when overloaded employees may become resentful

3. It requires planning

4. Managers must take time to communicate tasks clearly

5. Managers must give subordinates Authority and Responsibility with delegated tasks

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6. Delegated tasks should be given to suitable employees

7. Managers should avoid interfering with the delegated tasks

8. Provision of support and resources by the manager

Centralization

This means keeping all the decision-making powers and control with the Central Office or Senior

Management. There is minimal delegation.

Decentralization

This is where power and decision-making authority is delegated from the head office to the

lower levels of the hierarchy, divisions or regions of a business. Decisions are made away from

the head office.

Advantages of Centralization or Disadvantages of Decentralization

1. There are fixed rules and procedures in all areas of the firm, which should lead to faster

decision-making with little need for discussion

2. With consistent policies, there is very little conflict

3. Senior managers have more personal stake in the business and would take better decisions

4. Senior managers are more experienced and skilled to make better decisions

5. Communication should be more effective with fewer decision-makers.

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Disadvantages of Centralization or Advantages of Decentralization

1. It allows more local decisions to be made - the managers who take decisions will have local

knowledge and a likely to have closer contact with consumers

2. Develops more junior managers and prepares them for more challenging roles

3. The workload of management is spread across the different departments and to different

individuals

4. The firm is more flexible and can quickly respond to changes in the market

5. Improvements in the levels of motivation of employees

Delayering

This is the removal of entire layers of management to create shorter organizational structures

Advantages

1. Reduces business costs

2. It shortens the chain of command and improves communication

3. It increases the span of control and delegation

4. It increases workforce motivation due to less remoteness from top management and grants

greater responsibility to lower-level workers

Disadvantages

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1. It increases the workload of managers who remain

2. The fear of redundancy may be used to cut cost, reduce a sense of job security and leads to job

demotivation

Responsibility

This refers to the fact that all people and organizations have to perform a given task to the best of

their ability.

One’s responsibility will then give them Authority in the organization to assign tasks to

subordinates and make decisions. A manager can delegate some or all of his responsibility to his

workers because he has the authority to do so but is held accountable and can hold them

(workers) accountable for the set task.

Authority

Delegation gives subordinates the authority to perform certain tasks. They have the power to

undertake jobs and make decisions for these jobs to be completed. The manager delegates via his

authority but is held ultimately responsible for the performance or the mistakes of his

department.

Accountability

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The concept of Responsibility and Authority brings forth Accountability. A subordinate

cannot perform a delegated task without considering that they can be held accountable for their

actions. Accountability is aided by regular appraisals of staff, monitoring performance against

targets and by adopting management by objectives techniques. The subordinates are always

accountable for any tasks that are given to them for completion.

Line and Staff Relationships

Line Relationships

This exists between Senior Management and Subordinates. It shows where Authority and

Directions flow from Top management through to the other departments in the organizational

structure.

Line managers are those who have the authority over others. The relationship gives managers the

opportunity to delegate Authority and Direct and Control employees. Line managers have the

responsibility of achieving specific business objectives. This means that instructions given by

those at the top of the chain of command may take time before they are carried out at a lower

level.

Staff Relationships

In an organization there are people who offer specialist advice to managers. They do not have

authority to ensure that decisions are implemented. They perform a supporting role to the line

managers E.g., a marketing manager may give advice to a production manager about the

marketing research of a new product.

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In another E.g., personal managers have responsibility for personal matters in all departments.

Line and Staff Organizations

These organizations combine line Authority with the supporting specialist rules within the

organization. Both sets of people work together to achieve organizational goals and objectives.

Functional Authority

This is when a specialist has authority to make a line manager accept his advice. It is different

from staff Authority where advice is optional e.g., a finance manager will have overall authority

over the budget of the marketing department.

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Theory and Application Motivation

Motivation is the desire to see a job done quickly and well. This is the force that energizes

behaviour, gives direction to and underlies the tendency to persist. It refers to the factors within

an individual to stimulate, maintain and direct them. Since it is part of a manager’s job to get

their work done through others, they need to understand what motivates their employees.

Advantages

 Increases productivity

 Improves quality and industrial relations

 Lowers absenteeism and labour turnover

 Workers make suggestions for improvements and readily accepts responsibility

These benefits increase efficiency, improves customer service, reduces costs, increases profits

and improves the image of the firm.

Symptoms of Poor Motivation

- Absenteeism

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- Poor performance

- Low quality output

- Accidents

- High labour turnover

- Lots of grievances

- Poor response to leader

Factors that Stimulate and Influence Motivation

Individual Needs

We are driven by our own needs and the things we do are very often influenced by our desire to

satisfy these needs. The opportunity to satisfy one’s needs through work is a great motivator.

Self-Motivation

This is the situation in which someone has the drive or ability to perform a task without the

influence of someone else. The people who are self-motivated tend to be able to complete a task

when faced with obstacles. Such people are often optimistic, energetic and driven by the desire

to succeed.

Ability to Make Choices

Without choice, people may feel confined or unhappy. In organizations, some employees desire

to have autonomy to make choices which would influence their work environment and the way

that work is done. They would like to participate in decision making, knowing that their

suggestions would be seriously considered. These choices are usually given to employees by a

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democratic leader rather than one that is autocratic. These employees are generally more

motivated.

Environmental Opportunities

Both internally and externally, the environment can motivate employees. If the economic and

business environment has opportunities to work, earn money, change jobs, advance careers or

even start one’s own business, it will be motivational. If the workplace offers opportunities for

personal growth and promotion it can be motivational. With the absence of these, workers can

become demotivated.

Theories of Motivation

Content Theories

These theories focus in the needs of employees and how these needs motivate them. The school

of thought is that workers are driven by these needs and if transformed into internal forces, can

influence their behavioural pattern. Motivation would depend on the level or strength of an

individual’s need.

Abraham Maslow (1908 – 1970)

HIERARCHY OF HUMAN NEEDS

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Self-Actualization: reaching one’s full potential.

Esteem Needs: respect from others, status, recognition of achievement.

Belongingness: trust, acceptance, friendship.

Safety: protection from threats.

Physiological: food, clothing, shelter, job security.

NB – Each individual need must be acquired or fulfilled before the individual can move on to a

higher need. Lower needs must be fulfilled before the higher level needs are accomplished.

Physiological Needs

These are the basic needs, including food, water, clothing and shelter. Employees seek to satisfy

their needs through work. If the salary earned cannot sufficiently provide for their needs, the

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individual will not be motivated.

Some organizations seek to satisfy their needs through subsidized lunches, housing solutions,

concessions on motor vehicle usage and other rewards.

Management provides: pay, holidays, canteen and rest periods.

Safety or Security Needs

Individuals desire to be in a safe and secure physical environment. Examples include Job

security stability, freedom from fear or threat, being treated fairly and in avoidance of pain.

Management provides: security guards, job security, good working conditions, structured

organizations, ensuring the environment is not easily accessed to unscrupulous people and

protect workers from harmful substances such as toxic wastes.

Belonging Needs/Social Needs

Employees want to feel accepted by their peers, to be loved and have lasting friendships. To be a

part of a group. They yearn to socialize with co-workers and have good relationships with both

peers and supervisors.

Managers provide: social events at work, promoting group work, encouraging interaction

between managers and employees, trust building, good communication.

Esteem Needs

These include a desire to have a positive self-image, status, recognition and appreciation by

others. Workers would like to be recognised and credited for any contributions given to the

organization.

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Management provides: having merit awards, promotions, bonuses, award ceremonies.

Self-Actualization

This is the highest category of needs. Employees feel a sense of fulfilment. The employee desires

to reach his/her full potential while increasing the level of competence at the task being

completed.

Managers provide: help to employees by providing additional training for them, providing

scholarships to further studies, challenging them in work.

Summary

Individuals need to start on the lowest level. The needs at one level need to be fulfilled before the

next level becomes relevant. They must be satisfied in sequence. Lower level needs take priority

and must be satisfied before higher level needs.

Once one level of needs is satisfied, as humans, we will strive to achieve the next level. As one

level’s needs are satisfied, they cease as acting as motivators, tension develops to fulfil needs at

the next level. Self-actualization or self-fulfilment is not realised by many people but everyone is

capable of reaching their potential.

Reversion is possible – it is possible for satisfaction of one level to be withdrawn, for example: a

loss of job security may result in individuals to move down to the previous level.

Limitations

- Not everyone has the same needs as is assumed by the hierarchy; creative people are

satisfied by higher order needs even though lower order needs are not yet satisfied.

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- In reality, it is difficult to identify when a need is fully satisfied and which level a worker

is on.

- Money cannot only be applied to the physiological needs but can be utilised at other

levels.

- Self-actualization is never permanently achieved as managers must continually offer

challenges and opportunities for fulfilment.

- Some people will never have high aspirations. Esteem and self-actualization will have no

impact on them.

Herzberg’s Hygiene Theory

In the late 1950s Fredrick Herzberg developed a two factor theory. After conducting interviews

with employees he came to the conclusion that there were some factors that will lead to job

satisfaction and then there are some that will lead to job dissatisfaction.

The factors that will lead to job satisfaction were called motivators. These factors relate directly

to the nature of the work people perform i.e. Job content.

When these motivators are present, employees enjoy job satisfaction and higher performances.

These include:

Motivators

Achievement:

The job provides the opportunity to accomplish something or contribute something of value.

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Recognition:

Employee efforts are appreciated by management.

Responsibility:

The job provides the potential for expansion i.e. acquiring new duties through delegation.

Advancement:

There is the opportunity for growth in the work place based on your job performance.

Personal Growth:

Acquiring new qualifications.

The Work Itself:

When the job offers the opportunity for self-expression, personal satisfaction and meaningful

challenges, workers are more likely to attracted and enthusiastic to come to work.

Hygiene Factors

These do not directly relate to the job activity. They are a part of the environment. When the

hygiene factors are absent, employees feel job dissatisfaction. However if they are present it

doesn’t necessarily lead to job satisfaction.

Hygiene factors include:

i) Adequate Salaries

ii) Job Security- company grievance procedures and seniority privileges contribute to

hygiene factors.

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iii) Working Conditions- working conditions must be suitable and adequate in order to be

a hygiene factor.

iv) Status- managers must be mindful of job titles and other symbols of rank and

position.

v) Company Policies-managers must provide guidelines for behaviour and administer

them fairly.

vi) Quality of Technical Supervision- when employees are unable to receive good

technical advice from their superiors they may become frustrated in the work place.

vii) Quality of interpersonal relationships between peers, supervisors and subordinates.

Conclusion

 Job satisfaction resulted from the motivators, while job dissatisfaction resulted from the

hygiene factors.

 Providing the hygiene factors would eliminate employee dissatisfaction but would not

motivate them to work at higher levels.

 Recognition, challenge and opportunities for personal growth are powerful motivators

and will promote high satisfaction and performance.

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 A managers role is therefore to remove dissatisfiers i.e. provide hygiene factors and then

use the motivators to meet the higher level needs of employees and propel them towards

greater achievements and satisfaction.

Pay and working conditions, if improved, will help to remove dissatisfaction in the work place,

however, they cannot provide conditions for motivation to exist. Motivation to do a job and do it

well if motivators were in place.

Herzberg did not claim that pay did not matter but that it moves people to do a job, but still it

does not motivate them to do it. If work is not interesting, rewarding or challenging then workers

will not be satisfied or motivated to operate at their full potential regardless of the pay.

Leadership

Leadership is the interpersonal process of influencing others to work willingly towards goals. It

depends on relationships, communication and influence not organizational authority.

“The essence of leadership is followership” Koontz, O’Donnell and Weihrich.

Power depends on the perception of others and it is conferred from below not delegated from

above.

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Leadership is the influential increment over and above mechanical compliance with the routine

directive of management. (Katz and Kahn)

Compliance or obedience may be sufficient for routine work but the modern flexible

organization increasingly requires extra input from employees: cooperation, effort and creativity.

For leadership to be effective, the leader has to have some form of influence or power over the

people being led.

Power is defined as having the potential or capability to influence the action of others.

Types of Power

(i) Reward: This is associated with the distribution of rewards.

(ii) Coercive: Exercising control over employees and meting out punishment to correct

mishaps.

(iii) Legitimate: Power by virtue of his position.

(iv) Expert Power: Ability and knowledge sanctions power.

(v) Referent: Based on the qualities of the leader.

Leadership Theories (McGregor’s Theory X vs Theory Y)

In the 1960s, Douglas McGregor proposed theories on leadership and motivation. He believed

that the level of employee motivation was influenced by the leadership style of management. He

called theories Theory X and Theory Y.

He suggested that managers would adopt one of the two styles depending on the belief and views

of the employees.

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Theory X Managers

Theory X managers assumed that their employees were:

1) Lazy and dislike work.

2) They needed to be forced, controlled directed or threatened in order to get work done.

3) Possess little ambition and avoid responsibility at all cost.

4) They were self-centred; not caring about the goals of the organization

Theory Y Managers

Theory Y managers assumed that:

1) People did not dislike work, but instead work came as natural as play or rest.

2) Employees exercise self-direction and self-control as they achieve the firms’ objectives.

3) People readily sought responsibility.

4) Workers possessed skills, imagination, ingenuity and creativity needed to solve

organizational problems.

5) The intellectual potential of the workers was only being partially used.

Therefore, it can be said that the leadership style came as a result of the assumptions that

managers made about their workers.

Trait Theory

The trait approach to leadership seeks to identify the characteristics of leaders and how they

affect their effectiveness.

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Its main assumption is that leaders are born and not made. It is also known as the “great man”

theory.

A trait is defined as a distinguishing feature in character, appearance or habit from which an

individual’s personality is formed and can be identified.

The traits identified may range from different categories:

- Physical/physiological (appearance, height, weight, activity or energy)

- Personality (self-confidence and aggressiveness)

- Intellectual (intelligence, decisiveness, judgement and knowledgeable)

- Social (sociability and cooperativeness)

- Work-related characteristics (achievement-driven, desire to excel, task oriented)

While the list above is not exhaustive, the more traits a leader possesses, the more effective he

will be.

Ralph Stogdill

He was among the first to challenge the early traditional views of trade theorists. He did not

believe that age, weight, height, and physique were important for a good leader. Instead he

postulated ten (10) other traits.

1. Honesty

2. Intelligence

3. Good sense of humour

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4. Initiative

5. Competence

6. Conviction

7. Responsibility

8. Insight

9. Self-confidence

10. Inspiration

Richard D. Mann

In his research, Mann summarized the traits of the previous theorists and identified others as

well. He said that these traits separated leaders from followers.

1) Intelligence

2) Masculinity

3) Dominance

4) Extra-version

Hans Eysenck

He sought to put a statistical twist on the research of traits. His research was characterized by a

list of adjectives that was issued to hundreds of thousands of people. He then used the statistics

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to figure out which factors carry the most weight. He then developed a leadership test called the

Eysenck Personality Questionnaire. His research findings presented that there were three features

of personality:

1) Introversion/Extroversion

Introversion involves directing attention on one’s own experiences while extroversion is where

attention is placed on other people and the environment.

2) Neuroticism/Stability

Neuroticism refers to the tendency of an individual to become upset or emotional while stability

refers to the tendency of the individual to remain emotionally sound.

3) Psychoticism

This feature was added after further research was carried out on mentally ill people. Individuals

with this trait were said to have difficulty dealing with reality and were often antisocial, hostile,

manipulative and non-empathetic. They were also said to suffer from hallucinations.

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Five Factor Theory:

This identifies five personality traits:

- Introversion/Extroversion

- Emotional Stability

- Openness

- Agreeableness

- Consciousness

Advantages of the Trait Theory

 It is used as a benchmark to assess an individual’s leadership traits.

 The theory has been validated by more than one study.

 It outlines the individual elements of the leadership process.

Disadvantages

- Subjectivity.

- The traits tend to be a very long list.

- Physical traits, as outlined by some theorists, are not necessary for the leadership process.

- There were disagreements by the theorists on which traits were most important.

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- The traits for some organizations may be different when compared to the traits needed for

other organizations.

- There is no uniformity.

NB: The two final theories speak to one’s personality so we can clearly see how the personality

traits of one leader affects the way he leads.

Leadership Skills

(I) Communication

Great leaders have to be great communicators. A good leader must be able to effectively and

clearly communicate his message to his subordinates. For example: Goals and objectives of the

firm. Effective communication could also lead to a good relationship between managers and

employees, whereas poor communication can lead to low worker morale and confusion. The

ability of a leader to listen is also imperative for effective communication. Good listening skills

can lead to motivated employees.

(II) Critical Thinking

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A critical thinker is one who asks appropriate questions to obtain relevant information and then

uses the information to draw logical conclusions. He needs to practice higher order thinking to

make responsible judgements and decisions.

(III) Problem Solving

As a leader it is inevitable that you are faced with problems of different natures. The skill of

problem solving is therefore vital to the effective operation of your firm. It speaks to the ability

of the leader to work through problems and reach appropriate solutions.

(IV) Planning

An effective leader outlines the plans that his subordinates should follow in order to achieve the

goals and objectives of the firm. A good planner should be aware of the near future, i.e.

opportunities and threats, and develop strategies to deal with possible problems that may be

encountered.

(V) Consideration

A leader needs to gain the trust and support of subordinates. This can be done through

consideration.

Leadership Styles

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 Autocratic

 Participative/ Democratic

 Lassies-Faire

 Transformational

*refer to table in hand out*

Factors influencing your choice of Leadership Styles

1. Time

The length of time available for the completion of the project will dictate the style of leadership

employed by the leader.

2. Organizational Cultural

The overall culture of the organization may determine the style of leadership to be adopted. E.g.

In an organization with a warm culture, participative / democratic leadership may be best.

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3. Staff Size (Span of Control)

Leaders in large firms will find it difficult to practice democratic or consultative leadership

because of the expansive responses they may get to make decisions on their own.

4. Attitudes of Subordinates

A leader must tailor his leadership style according to his subordinates. E.g. In an organization

where workers may prefer to be led rather than to participate in decision making and vice versa.

5. Skill Level of Labour Force

Certain leadership styles, democratic may only be successful if there is a highly skilled labour

force.

6. Personality of Leader

The personality of the leader will dictate his leadership style. It is based on the traits of the

leader. This can be positive or negative.

7. Nature of the Task

In certain situations a leader may be required to make a decision without consultation. E.g. based

on urgency. There are also times where a leader has to make a unilateral decision because of its

nature and impact on the organization.

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Leadership Roles

Guidance

A leader is often seen as a guide and subordinates look to the leader to provide guidance. The

leader is often perceived to having a wealth of knowledge regarding a particular area and is

expected to use this knowledge to guide his subordinates.

Direction

A leader should be able to provide a sense of guidance to his subordinates. This is necessary for

the completion of tasks. More importantly a leader should provide direction to the organization.

He should be a visionary to the organization and be able to communicate his vision to his

subordinates. Directing employees is an important part of leadership and is paramount when the

leader has an inexperienced staff.

Counselling

It is inevitable for employees of an organization to have conflict and concerns that they need to

offload. With this in mind, the leader has to play the role of a counsellor. Some leaders practice

an “open-door” policy and thus, establish a good relationship with their subordinates. To be an

effective counsellor, the leader must be a good listener and he has to be trusted by his employees.

Coaching

This is the process of training and providing employees with the necessary knowledge and tools

to carry out their jobs effectively. In an organization, the leader is expected to play the role of a

coach. It is particularly important in the coordination of teams.

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Inspiration of Others

A leader should be able to inspire his subordinates to complete tasks. In doing so, he will try to

transfer his passion about the vision and mission of the firm to his employees. This should

inspire them to go beyond the call of duty to attain the goals of the form.

Informal Leadership

This refers to the scenario or situation where “unsung heroes” are informal leaders in the

organizations. These unsung heroes are usually not credited with the success of the organization.

An informal is a person who does not have formal authority in the organization but is able to

inspire and motivate his peers to achieve goals. They are often described as charismatic and

influential.

Within recent times, formal leaders have started to give more recognition to informal leaders.

Roles if an Informal Leader

- Motivating and inspiring peers.

- Being the driver of a business concept to lower level staff.

- Bridging the communication gap between management and lower level employees.

- Offering mentorship and support.

Advantages of Informal Leadership

 As a result of a motivated workforce: higher productivity.

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 Improves employees’ relationships and self-esteem.

 More informed about the needs of lower level employees and as a result gives better

decisions for formal leadership to follow.

 More effective communication about work with low level employees.

Disadvantages of Informal Leadership

- Informal leaders can use their influence to resist change in the organization

- They can sometimes mislead employees about organizational matters.

Group and Team Management

A team or group may be defined as the interaction of two or more people in an interdependent

way to achieve a common goal or objective.

In an organization, a team is a group of two or more people interacting regularly and

coordinating their work to accomplish a common objective. (Larson and La Fasto, 1989)

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Teams can be formal or informal.

Formal teams are those created by the organization with a defined and designated task to

accomplish goals. The discussion and activities of formal teams are directed towards the

achievement of business objectives.

Informal teams are self-created in the work environment without the influence of management.

For example, sports, socialization, interest groups, and reference groups.

Teams can be analysed along three (3) main lines:

Composition

According to the nature of the task assigned to the team, members need to have the requisite

skills and knowledge to accomplish the task. The personality of the team members must also be

considered because members with clashing personalities may result in conflict.

Objectives

Objectives need to be clear and team members should know why the team was created. The

nature of a team is embedded in its objectives. The team must be created with the objective in

mind.

Interaction

The effectiveness of any team depends on the level and quantity of interaction among its team

members. Interaction may take the form of face to face interviews, telephone calls, video

conferencing. Regular interaction may lead to increased cohesiveness and synergy.

Characteristics of effective teams

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One commitment teams will be committed if the goals are clearly communicated and if team

members deem their contribution has been worthwhile.

2 participation – teamwork flourishes on the participative leadership. Work related problems

may require the input of team members and if they are only accustomed to autocratic

management. They may find difficulty in contributing to a team effort.

3 trust – there is little point in setting up a team and not empowering them. Senior managers need

to hand over control and show trust and the members ability to meet agreed objectives.

For the session by consensus- each member should be given a see and did research on. Issues

need to be thoroughly discussed and the front views considered before arriving at a final

decision. This way members are more likely to feel motivated and appreciated.

5 flexibility- members need to be able to adapt to changes in the internal and external

environment.

Encouragement

Someone support on good iPhone team members should support each other when needed by

sharing experiences they can help each other learn 100.

Synergy this is based on emotion but when individuals work together their output is greater than

the sum all of the output if they were to work individually in this week individuals achievement

should be transcended into a group stages of group develop

One forming

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This stage is marked by high degree of uncertainty purpose structure and leadership members

display behaviour to ascertain what is acceptable or unacceptable. Formal and informal leaders

begin to accept their roles

Stomach

Disagreements and conflict began to occur for various reasons such as personal opinions on

objectives. There is a lot of individuality. Some grooves do not move beyond the stage and may

sometimes be dissolved. The group leaders are usually task would resolve any conflict and take

any group to new stage.

3 norming

This is the comment together of the team. The conflicts are resolved and the team achieves unity.

There is consensus as to who holds power and team members understand their role. There is

increased focus on your goal at hand.

4 performing the team begins to functions and move towards accomplishing new objectives.

Team members interact well with each other. The deal with problems coordinates work and

comfort each other if necessary. The leaders rule is the guide on mountain.

5 adjourning

Teams temporarily wrap up activities and prepare for disbandment. The task is now complete

and team members look towards another project.

Roles within a group

1 the chairman or re coordinator

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2 the initiator - generates ideas on suggestions

3 the shaper - task oriented the door

4 the informer – gets factual info

5 the clarifier

6 the recorder or summariser – restates any information already proposed

Factors that Influence Group Cohesiveness

Team cohesiveness refers to the degree to which group members are drawn to each other and

encouraged to remain within the group. The school of thought is that groups that are cohesive

tend to be more efficient and are more likely to be successful. It is the responsibility of

management to enhance group cohesiveness.

1) Size

Very large groups find it difficult to work together whereas small groups are usually more

cohesive. If the group is too small, however, members tend to be overworked which can lead to

conflict. It is therefore very important that management determine the optimum size of the group

for the task at hand.

2) Group Goals

A pillar of group cohesiveness is its members having a common goal. By definition, a group

should have a common goal. Cohesiveness will occur if members agree on the common goal and

work towards achieving it. Group goals should be clearly communicated.

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3) Similarities

Members who share similar characteristics such as: social background, interests, ethnicity, age,

values and beliefs are more likely to develop cohesion. This could, however, lead to conflict as a

result of clashing personalities.

4) Diversity

The group should consist of people with a variety of abilities who are willing to work towards a

common goal. If, however, members are too diverse in their personalities, ability and experience

in can result in competition and conflict.

5) Attraction

The more attracted group members are to each other, the greater the cohesion will be.

Advantages of Working in Teams

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 Better decision making because a team combines the strengths of its members. The

combination of each individual’s ability would improve the effectiveness of the team.

 Teamwork improves the flexibility of the organization since the skill and knowledge base

is broader and adaptation to change is quicker.

 It improves the motivational levels of employees by catering to their social needs.

 Can improve productivity since each member encourages the other to do well.

Disadvantages of Working in Teams

- Longer decision making process since consensus takes time.

- The cost associated with setting up a team. For example: Training of more than one

person.

- Difficult to ascertain the member of the team who is at fault.

Benefits of Team Management

 Higher quality decision making

 Flexibility is increased

 Improves motivation

 Higher quality output

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Conflict Management

Conflict is defined as a disagreement that exists between two or more individuals. It is almost

inevitable that conflict would exist in the workplace because of differing personalities, opinions

and goals. Disagreements may occur between management and subordinates or between

subordinates and subordinates.

Stoner(1986)

Whether or not a manager is working with teams or with individuals, conflict inevitably occurs.

Whenever people work together, the potential for conflict exists. Conflict is disagreement

between two or more organizational members or teams.

Sources of Conflict

Competition for Scarce Resources

At any given time, a business could have a limited number of resources for which employees

compete. For example: Cash, supplies and information. Competition may also take the form of

two individuals trying to outperform each other. They may be competing for rewards associated

with performance. Managed properly, such conflict generates positive results.

Management Style

Conflict may arise as a result of a reaction of employees to the leadership style. If management is

autocratic, workers may rebel against decisions that negatively affect them. Employees may not

see eye to eye with a manager who does not show regard for them.

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Lack of Communication

Communication is seldom perfect and as a result may lead to misunderstandings. These

misunderstandings breed conflict as organizational goals are unclear and may be misinterpreted

by different employees.

Clashing Personalities

Because individuals vary in their personalities, values and attitudes, it may be difficult to always

get along with each other, as a result, there is conflict. Conflict in some cases may be so severe

that the parties have to be separated.

Differences in Objectives

Individual employees’ objectives may differ from those of the organization. For example: An

individual may aim to be promoted within a three (3) periods / 3 financial years however the

company’s policy is to promote after five (5) years. Example 2: Departments may have conflict-

the production department focuses on manufacturing products at the lowest possible cost

whereas the sales department wishes to promote higher quality.

Conflict of Duties

Responsibilities and boundaries are not always clearly defined and as such, some workers’ duties

may overlap resulting in confusion and conflict.

Strategies to Deal with Conflict

A manager must recognize potential sources of conflict and prepare for it. A viable strategy is

analysis of the situation.

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Analysis can be done by three main questions:

1) Who is in conflict?

2) What is the source of the conflict?

3) What is the level of the conflict? (i.e. low level, moderate or high intensity)

(i) Avoidance

Sometimes the conflict does not have much bearing on the organization so the manager may opt

to allow employees to resolve it on their own. This is appropriate for conflicts that are trivial and

not worthy of management intervention. The process needed to solve the problem may be costly

and as such it may be best to let the parties disagree if it is of inconsequence.

(ii) Smoothing

(AKA accommodating) This is where the manager seeks to emphasize the areas of

agreement or downplay the areas of disagreement. One party may be forced to sacrifice his

interest to appease the other. Smoothing may not always work as the sacrificing party is not

appeased or satisfied. This method is best suited for situations where the stakes are low.

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(iii) Compromise

This is where each party agrees to give up something in order to get something else. There may

be no clear winners or losers but the willingness of parties to accept a solution. This may be best

suited in situations where the end result of the conflict may be very costly as compared to the

individual sacrifices of each party. For example: A worker agreeing to accept half pay to ease the

financial strain of on firm. It can be also used when a temporary solution is needed for a complex

issue or if time-pressures force a quick resolution.

(iv) Collaboration

This seeks to meet the needs and satisfy the concerns of each party. The desired result is

consensus and a win-win situation. Each party seeks to satisfy their interests by openly

discussing issues, understanding differences and developing a full range of alternatives. This

method may prove time consuming but may be imperative to choosing the best alternative.

(v) Confrontation

This happens when conflicting parties meet face to face and are forced to state or verbalise their

disagreements. This approach may be stressful but very effective. Using this method should lead

to open communication and solution of the problem. Many times, however, confrontation results

in hurt feelings and no resolution.

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Change Management

Change is probably one of the most feared activities in business especially when employees have

become accustomed to doing things in a particular way over a number of years. Change,

however, is inevitable, so the real concern should be how the change will affect the business and

how the stakeholders will respond to it.

Factors that may cause Changes in an Organization

These factors can be divided into two:

(i) Internal Influences

(ii) External Influences

Internal Influences

Internal influences are as a result of management policies or employees’ attitudes and are

controlled by the management of the firm. These include:

1) Development of a New product

This may require changes in staff composition or the processes that are necessary to introduce

the product to the market.

2) Mergers and Take Overs

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Once there is a merger or take-over, the two entities will have changes in management and staff.

Sometimes there may be staff cuts as well as there may be additions to the team. For example:

The merger between RBC Trinidad and RBC Canada.

3) Control Systems

As the firm seeks to improve the quality of their products and services offered there may be

some changes in the way things are done.

4) Customer Service

In order to remain competitive, firms are more customer-oriented. Therefore, changes in

customer tastes and lifestyles may spur changes in the way the business carries out its business

activities.

External Influences

These result from factors that are outside the control of the firm. These include:

1) Technological

These refer to advances in technology that have affected both products and business processes.

This is probably the fastest changing external variable. There have been vast improvements in

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technology over the past decade sparking changes such as reduction of wages and changing

labour costs such as retraining and training of workers to operate the new technology.

2) Economics

Some of the major economic variables include inflation, exchange rates, interest rates,

unemployment, economic growth and development. Changes in any one of these will affect the

financial viability of the business and consequently, the lives of the employees. For example, in a

recession, many businesses and consequently their workers are financially worse off than before.

Employees may suffer from job-insecurity and pay cuts.

3) Demographic

This refers the characteristics and structure of the organization: population, age, size of families,

marital status, gender, income and occupation. Any changes in these result in changes in

consumption patterns. As a result, firms have to modify their activities to adapt to these changes

in consumption.

4) Social

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These refer to changes in society, lifestyle and the environment. For example: The increasing

number of women now at work. Changes in the social structure may cause firms to change their

activities as well.

5) Legal/Political

These include laws and other government policies that would affect the way a firm does

business. For example, health and safety laws, taxation policies, protection laws. A change in

any of these would impact the firm’s operations and its employees.

A change in the political Environment may cause instability in certain firms. For example:

Changes in government may result in a lack of activity as well as changes in personnel. Changes

in economic policies by the government may also cause changes in firm.

Difference between Leading and Managing Change

According to S. Robins (organizational behavior 6th edition 1993 prentice called international

editions) “Leading is the act of motivating subordinates, directing others, selecting the most

effective communication channels and resolving conflict.”

Leading change involves actions on the part of senior management to create a plan of action to

implement the change and delegate the responsibility of people who manage the process. On the

other hand managing is the act of bringing people together to achieve a common goal. Managing

change involves the action on the part of lower level management to implement and oversee

change while evaluating the progress and effectiveness of such change.

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Resistance to Change

Resistance to change is any action of non-conformance taken by employees because of the

perception that the change will be a threat to them. The extent to which the employees may resist

change is dependent on whether or not the change will be beneficial to them. There are several

factors that may lead to resistance to change:

(1) Fear

Uncertainty to the possible impact of change in the lives of employees may create a sense of fear.

The fear of the unknown may prevent employees from accepting change within the organization.

(2) Disrupted Habits

Humans are creatures of habit and a habit is something that we may do every day in the same

way and become good at doing it. Change may involve employees having to stop old habits and

create new ones. For example: A telephone operator who has grown accustomed to answering

the phone in a particular way may find it hard to deal with a name change.

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(3) Loss of Control and Confidence

Trust takes time to be built and over time employees may develop confidence in the management

of a particular firm. This trust and confidence becomes particularly important if change is to be

implemented.

(4) Poor Training

Employees need to be trained to deal with change and the various new situations that may occur

as a result of the change. Ignorance in dealing with such situations may cause resistance to

change.

(5) Redistribution of Workload

Over time, employees would have become comfortable the nature and volume of their workload.

If a firm decides to shuffle staff and redistribute workloads, there may be a lot of resistance to

change.

(6) Lack of Focus

Employees need to know what the purpose of any change is. If they are not clear on it, they may

be reluctant to support it, especially employees who place great importance on the vision of the

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firm; if they think that the change lacks purpose or they do not see the need for it, they may be

reluctant or unwilling to support it.

(4) Loss of Power

In any situation where change results in the loss of autonomy or power, the change may be met

with resistance. For example: If an employee once had a supervisory role and is now being

asked to accept a lower position.

(5) Lack of Communication

If change is not communicated properly, i.e. the nature and purpose, then the employees may not

want to accept it. This is further magnified where management is autocratic.

Strategies to Deal with Resistance to Change

 Education of the employees and communication of the change

Some people resist change if they are not aware of all the benefits that come along with it.

Employees should be educated about the necessity for the change and how it coincides with the

company’s goals and objectives. In most cases, resistance is as a result of misinformation and

miscommunication. Effective communication of change is therefore necessary for it to be

accepted.

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 Allow employees to participate in the change process

This is based on the school of thought that if employees are involved in the decision making

process that brings about a change it may be met with less resistance. If each employee is given a

chance to look at the pros and cons of the change and voice their opinions, change will be more

readily accepted. Such a move may prove time-consuming and sometimes necessary change is

not implemented.

 Negotiate with resistance

This tactic involves conferring or bargaining with employees until an amicable agreement is

reached regarding the change. Negotiation is particularly effective when the change might

involve the trade union. For example: Downsizing an organization. This is especially needed

where individuals start to lose significantly as a result of the change. In severe situations,

managers may result to blackmail.

 Play a supportive role

In trying to manage resistance, managers tend to play a more supportive role, i.e. they expense

themselves and the organization by trying to provide skills training and counselling sessions to

deal with fear and anxiety.

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 Coerce employees to comply

This tactic is least popular and involves managers threatening employees to accept the change.

Importance of Communication in the Management Process of Change

The message should be unambiguous / clear

The information should be communicated in a timely manner – The information

should not be communicated after the change is implemented because would have

already been created.

Use numerous methods of communication – Management should utilise as many

methods of communications as possible to enable effective communication of the change

process.

Communication must be thorough – All important points should be communicated.

The information must be true and not misleading.

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Give the opportunity for feedback – Two-way communication is imperative for the

acceptance of change.

Why change might fail

- Faulty thinking leading to wrong ideas

- Inadequate process: the process to implement the change would have been faulty.

- Lack of resources

- Lack of acceptance and commitment: the resistance to change was greater than the

acceptance.

- Poor timing.

Communication

Communication may be defined as the two-way process that enables information to be

disseminated between two or more people. It is the exchange of ideas, facts and emotions

between individuals. Communication is the transmission of information and understanding

from one person or group to another.

Communication Process

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Source/Sender

Encoding

Feedback
Channel

Decoding

Receiver

Message is information that the sender wants to transmit. This may take the form of spoken or

written word words. It is important that the sender’s message is clear or it may distort effective

communication.

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Sender is the person or group that initiates the communication process. It is equivalent to the

source of the information.

Encoding is the process by which the process is converted into a symbolic form to facilitate

transmission. The way a message is encoded is affected by the level of skill attitude knowledge

attitude knowledge and the socio-cultural system of the sender. This may also affect the

effectiveness of communication.

Channel is the means by which the sender transmits a message. It is also known as the medium

of communication. It is the connection between the sender and the receiver and the channel used

is selected by the sender. The channel is also dictated by the type of message to be

communicated.

Decoding must occur before the message can be understood. This is done by re-translating the

message that was sent by the sender. It is important that message received is the same as the

message sent.

Receiver is the person or group for whom the communication effort is intended. This is the stage

at which the decoded message is received. The receiver should have good listening skills to

accept the message being sent.

Feedback is the information of the receiver’s perception of the sender’s message. The process is

not complete without feedback. It is sent in acknowledgement that the sender’s message was

received. If the message is not clear enough, the feedback allows the receiver to seek

clarification.

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Types of Communication

Verbal (via the use of words) – It can be spoken or written. For example: telephone, face to face

conversation, meetings and e-meeting (ZOOM or GOOGLE MEET).

Non-Verbal is communication without words or speech. It includes body language, gestures and

pictures.

Formal is the use of established channels of communication in the organization

Informal does not take into consideration the established channels but rather communication is

done through the channel of employees, for example: the grapevine.

Channels of Communication

Oral Communication

This is the use of spoken words when communicating. It takes place face to face or over the

telephone and allows for rapid exchange of information and feedback.

Advantages

 Usually quick and requires little preparation;

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 Allows for immediate feedback;

 Flexible and can be easily adjusted;

 The sender can use the powers of persuasion;

 Offers direct contact between the sender and the receiver.

Disadvantages

- Little time to think about feedback that will be given;

- Lacks record unless tape-recorded;

- More susceptible to distraction (barriers);

- Influence by non-verbal clues which may distort the message.

Written Communication

This includes the use of letters, memos, bulletins, reports and notices and is suited for formal

long term records where details must be kept. It solves the problem of “lack of record” as seen in

oral communication. Organizations usually opt for written communication especially for

meetings in which future reference may be made.

Advantages

 All records can be kept;

 Information can be sent to people who are in different locations;

 Can be used to clarify, explain and confirm oral communication;

 Better organization of the message;

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 Suitable for messages of a complex nature, example: dismissal of staff.

Disadvantages

- Time consuming in terms of preparation;

- Feedback is slower;

- Impersonal;

- Sometimes more expensive than oral;

- Does not offer the opportunity for immediate clarification.

Visual Communication

This is transmission of information that can be seen or read. Research has shown that people

remember more of what they see than what they hear. It could take the form of films, videos,

graphs and power point presentations.

Advantages

 Helps to simplify both oral and written communication;

 Suitable for communication over long distances

 People tend to remember visual images over audio;

 Enables complex information such as statistical data to be communicated effectively.

Disadvantages

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- Sometimes can be difficult to understand if not accompanied by other methods of

communication;

- Expensive;

- Might be time-consuming.

Electronic Communication

This involves the sending of written, oral or visual messages by electronic means e.g. emails,

whatsapp, text messages. This helps firms with increasing their networking capability and

reduces the amount of paper used in the office as well as the time taken for a written message to

be communicated.

Advantages

 Faster to transmit information ;

 Other than the initial cost to set up, it is relatively cheap;

 The receiver can give instant feedback;

 Allows you to work from home.

Disadvantages

- Can be expensive to maintain equipment;

- Increase in security risk (viruses and hacking);

- There are privacy issues, which prevent the transmission of certain information.

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Non-Verbal Communication

This takes place without the use of words (speech or written). It is very difficult at times to

transmit a verbal message without using non-verbal cues. The way the sender of the message

looks, listens and moves sends a signal to other people. If the sender’s non-verbal signals match

their verbal, it builds trust, transparency and good relationships. The reverse can lead to distrust,

anxiety and misunderstanding.

Popular Non-Verbal Signals

 Eye contact

 Touch (e.g. pat on the back or hand shake)

 Body movements (i.e. the way you sit stand and walk)

 Gestures

 Facial expressions

 Intonation (this is where emphasis is placed on certain words which changes the meaning

of the message)

Factors Affecting Choice of Channel

- Nature of message
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- Line of Communication (if the communication flows upward, i.e. from subordinate to

management, only certain methods can be used)

- Cost

- Level of urgency

- Length of the message

- Record requirement (the extent to which the message will be referred to in the future.)

Lines of Communication

This refers to the flow or direction of communication from the sender to the receiver. The two

main types are formal channels and informal channels.

Formal Channels

Downwards

This allows for information to be passed on from top management to subordinates. The effect of

such communication is dependent on how the information is transmitted. Communication can

take place in a number of ways, for example: newsletters, meetings, emails, memos and bulletin

boards. It assists in:

1. Communicating the mission, vision, goals and objectives of the firm;

2. Communicates job descriptions and responsibilities ;

3. Communicates instructions about procedures that should be followed.

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Upward

These channels allow for communication from subordinates to top management, usually utilised

under democratic leadership styles. They give employees an avenue to negotiate salaries and

pacify conflicts. It can be used to communicate the following:

1. Conflicts and disputes;

2. Suggestions to improve the business;

3. Submitting reports about different aspects of the organization;

4. Presenting financial data to senior management.

Horizontal / Lateral

This allows communication among peers and co-workers. It allows communication to deal with

interdepartmental issues or projects. It allows communication between people or organizational

groups on the same level of authority. It may be used to communicate the following:

1. Sharing information between departments;

2. Resolving conflicts in the department or between departments;

3. Solving problems that may potentially affect other departments.

Limitations of Formal Channels of Communication

- Rigidity (it has to be sanctioned by those in authority and is limited to those who are part

of the channel.)

- Can be costly (e.g. the cost of having a secretary or storage space for records)

- Because it can be recorded, it maybe deterrent for people to be truthful.

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- Can be impersonal and de-motivational

- Can be time consuming because of the need for proper planning.

Informal Channels

Communication that occurs outside the formal channel is known as Informal Communication. It

does not follow established channels but is able to coexist with formal communication. It must

be pointed out that is it not necessarily bad for the organization and some managers actually

depend on the effective formal communication network.

An informal channel of communication is the grapevine.

Conditions under which the Grapevine Exists

o When there is insufficient information about an issue, employees may tend to fill in the

missing pieces;

o Lack of confidence in the formal channel;

o If employees feel threatened or insecure in their job;

o If there is a strong need for socialization that isn’t fulfilled by the formal channel.

Advantages of Informal Channel

 They tend to be less intimidating and are good to share plans and ideas beneficial to the

firm;

 Usually verbal and facilitates two-way communication;

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 Motivational and can build team spirit and comradery;

 It can be used to supplement formal communication.

Disadvantages

- Because of a lack of control, people may be misinformed;

- When a rumour is spread, it may be difficult to exercise damage control;

- Employees may sacrifice productive time for socialization;

- Classified information may be circulated which may have serious repercussions.

Barriers to Effective Communication

The communication process is, at time, interrupted by various barriers to communication. These

barriers may distort the message being sent and how it is perceived by the receiver. Barriers to

effective communication include:

(i) Noise

This is any interference that occurs between when a message is sent and when it received. It can

be internal or external. Internal includes a person’s background, experiences or perceptions.

External includes those physical sounds that would impede communication, for example: a noisy

environment or a faulty telephone cable.

(ii) Selective Perceptions

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We are all unique and as such our interpretation of messages will differ. This is because of some

preconceived notion of what was supposed to be communicated. How employees perceive each

other also amounts to barriers. One’s perception of another may be influenced by past

experiences, distrust, social background, personal characteristics or a bad relationship with the

sender.

(iii) Attitude

The level of comradery in an organization may influence how a message is interpreted.

Attitudinal barriers usually exist when employees have poor relationships, for example: lack of

trust. Attitudinal Barriers may come from poor management, personality clashes, lack of

consultation, lack of motivation and resistance to change.

(iv) Cultural Bias

The culture of a country influences the way people see and hear things and think and interpret

the world. Cultural factors that may create barriers to communication include age, social

position, economic status, political views, morals and values, ethics, standards and motives.

(v) Physical Barriers

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The nature of the environment where communication is taking place can be a barrier. If staff is

located in two different buildings, it poses a problem. The use of poor or outdated equipment is

also a barrier. Other distractions such as poor working conditions or background noise can also

prevent effective communication.

(vi) Filtering

This is where the sender manipulates the information being sent so it appears more favourable to

the receiver. It goes hand in hand with the notion of tell someone “what they want to hear.” In an

organization with a number of hierarchical levels, information may be filtered before it reaches

from senior management to lower level staff.

(vii) Non-verbal Signals

While gesticulations occur a lot during communication, it can also become a barrier to

communication. This is especially true when a person’s body language contradicts what is being

spoken.

Reducing Barriers to Communication

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Ensure the Message is Clear

The sender should ensure that the message is unambiguous and communicates what was

intended. The message should be kept simple and free of jargon that the receiver may not be

aware of. A clear message increases the chances of it being received and feedback being sent.

Choice of Channel

The use of inappropriate channels can distort messages. The nature of the message and your

audience should be considered when choosing the channel of communication.

Managing Feedback

Communication has not taken place if there is not feedback. Unless there is feedback there is no

guarantee that the receiver has gotten the message. An organization will try to communicate its

goals and objectives to its employees and obtain feedback from the evaluation of staff, emails or

open door policies. If management is not satisfied with the feedback received, they may need to

adjust the communication process because there may be barriers which prevent the message from

be transmitted.

Improving Physical Conditions

The onus is on management to create the right environment which is conducive to work. It

should be safe and ergonomically arranged. It should be free of health hazards with proper

lighting and space. It should be free of physical barriers which create noise in the communication

process.

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Human Resource Management

Adam Smith’s thought that man is an “economic animal” has been criticized over the years and

as such, organizations have come to realise the importance of the human capital. To this end,

firms are placing greater emphasis on human relations and creating Human Resource

Departments (HRD) to ensure that staff is motivated and well trained.

Human Resource Management (HRM) has its roots in the human relations school of thought led

by Elton Mayo in the 1920s.

HRM is seen as the policies, practices and systems that influence employee behaviour attitude

and performance.

The growth of HRD and HRM was as a result of:

1) Government Legislation

2) Increase in Financial Resources

3) Changing goals and objectives of the business

4) Increasing numbers of trade unions

5) Increased competition between business for staff

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The main role of the HRM is to attract, develop and maintain an effective workforce. The HRD

should be aware of the organization’s needs when attempting to hire staff as well as developing

the current workforce.

Benefits of the HRM

 Prevents Industrial action;

 Easier to anticipate changes that may occur in the workforce requirement;

 Motivational, thus reducing potential costs and increasing productivity;

 Prevents absenteeism and high labour turnover;

 When workers are given high regard, it increases the competitive nature of the firm.

Possible Limitations of HRM

- Poor human relations can result in serious industrial disputes;

- Constant monitoring required.

Functions of HRM

(1) Workforce/Manpower Planning

This is the process whereby a firm forecasts its future demand for labour and develops a

plan to meet such demands.

In planning for the workforce, the major factor to be considered is the demand for the

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firm’s products.

Other factors to be considered are as follows:

(a) Financial Resources and Stability of the Firm

The firm has to consider its expected labour cost and its ability to cover such costs

with projected revenue. Poor outlooks will reduce the amount of workers in the

organizations.

(b) Objectives of the Firm

If expansion locally or internationally is a goal of the firm, then more workers would be needed.

Conversely, if it is trying to reduce labour costs by becoming more capital intensive, it will

reduce staff.

(c) Technological Advancements

With more technology implemented, the less labour would be needed.

(d) Success of Training and Development Programs

Firms tend to train and retain the employees that they train.

(e) Changes in Populations and its Composition

Factors such as migration, war, increased birth rates or gender affect man power planning

(f) Labour Turnover and absenteeism rate

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Labour turnover refers to the rate at which a firm fires and hires employees. Firms with high

labour turnover must constantly make plans to replace workers when they leave so that the

operation of the firm is not affected.

(2) Recruitment

RL Daft (Management, 6th edition 2003) Recruitment is the activity or practice that defines the

desired characteristics of applicants for a specific job.

Recruitment Plan (5 stages)

1. Job Analysis: What the job entails. i.e. Responsibilities, skills, training and tasks that

are required for the job. The HRD must conduct research about the job to obtain this

information. When completed, it is used as a benchmark or yard stick by which the

applicant is measured in their interview.

2. Job Evaluation: This is an assessment of the worth of the job. The main aim is to

assess whether the reward given for the job is fair when compared to others within the

organization. It enables the firm to determine salaries and wages.

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3. Job Descriptions: This originates from the job analysis and gives details of the

position. It speaks to purpose, duties, tasks and responsibilities. It is used to measure

performance of employees.

4. Person or Job Specification: The profile of the person to fit the job is outlined: years

of experience, minimum qualifications and character. It is used to recruit a suitable

person for the job.

5. Job Advertisement: This is the final stage where the particular job is communicated

either internally or externally. The main aim is to attract a cohort of suitable

applicants for the job.

Recruiting Internally vs Recruiting Externally

Recruitment internally takes place within the organization whereas recruitment externally takes

place outside the organization.

It is general rule of thumb that vacancies are advertised internally before externally.

Factors that influence the Recruitment Process

(i) The amount of time available to fill the position;

(ii) The level of skills available internally;

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(iii) The type and nature of the job;

(iv) Research on the external labour market to determine if an applicant will be

available;

(v) The impact of external recruitment on the level of motivation of staff.

Advantages of Internal Recruitment

 Improves employee morale as it is viewed as a reward;

 Cost reduced on advertising;

 Less time consuming;

 Employees benefit from job enlargement and job rotation and can be used to then fuel

potential.

Disadvantages of Internal Recruitment

- Absence of new ideas;

- Cost of training existing staff to fill position;

- Lack of options;

- Vacuum will still be created by promoting existing staff.

Advantages of External Recruitment

 More choice because of a greater variety of applicants;

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 New ideas, different perspectives and approaches are introduced.

Disadvantages of External Recruitment

- High advertising costs;

- Low morale within firm.

Selection

This refers to choosing the most suitable candidate from the applicants for the job.

Stages of Selection

Applications

Once advertised, applicants are required to submit an application letter accompanied by a resume

and curriculum vitae (CV). This can be mailed, dropped off or even emailed. Some organizations

even have an application process to be completed by potential workers.

Short Listing

When the number of applicants out-numbers the positions to be filled, the HRD has to sift

through the applications to select a manageable list of applicants for the job. The persons

selected will be called in for the interviews, which aids in a further trimming of the list.

Interviews

Both employers and applicants interact with each other. It gives the employer the opportunity to

clarify issues with the applicant’s letter or CV. It presents the opportunity, also, for employees to

answer the deportment, articulation and persona questions.

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Main purpose:

1) Opportunity to decide on suitability of applicants;

2) Opportunity for applicants to learn about the organization.

Testing

Examinations are given to applicants to see if they can perform the job, especially for jobs which

require prior knowledge.

Employment

Communication to the applicant chosen that he/she was accepted and the starting date.

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(3) Compensation

Another function of the Human Resource Management of a firm is developing a fair and

attractive remuneration package. Without this, the firm runs the risk of industrial action, low

productivity and low performance.

The compensation package is dependent on the job analysis and job evaluation carried out in

earlier stages. These give the firm ideas of the worth of the job and level of compensation in the

market.

Compensation may be influenced by the complexity of the job, working conditions, years of

experience, education, qualifications and responsibility.

Some firms choose to pay at the going market rate of compensation while others choose to go

above to attract and keep highly skilled workers.

Compensation may take various forms:

(i) Wages and Salaries

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Wages: are often paid weekly, fortnightly or monthly and can be based on an hourly rate which

is paid to unskilled workers.

Salaries: are fixed payments to employees for work done. They are usually made on a monthly

basis to white collar employees.

(ii) Allowances

These are usually paid in addition to bare salaries to settle out-of-pocket salaries incurred. For

example: Travelling allowance, housing allowance, car upkeep.

(iii) Pension Plan

Contributions are made by the employer toward the pension of employees when they retire from

the firm. The contributions form a pension fund which is managed by an external financial

institution.

(iv) Health Insurance

Part of fringe benefits to employees and covers them for payment of medical expenses. It is

either paid by the firm entirely or by agreed percentages of employee and employer.

(4) Training and Development

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Training is the process of improving the knowledge and skills of employees. Firms invest in the

training of their employees to maintain and improve efficiency.

Purposes of Training and Development

1) Preparation of employees for their job;

2) Helping existing employees to sharpen skills and abilities;

3) Promotions;

4) Improving Efficiency;

5) Adaptation to using new technologies and innovations.

Main Types of Training

o Introduction: introducing new employees to the firm;

o Basic Skills training: developing skills of low level staff;

o Refresher training: for long serving employees to update skills and learn new

technologies.

o Management Trainee Programmes: this is used to prepare employees for

management positions. It is usually a part of succession planning.

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Organizations have two (2) main options available in forms of training:

On the Job Training/Internal

Employees learn while they are performing the job. It can take several forms:

1) Job Rotation: This is the lateral transfer of employees to enable learning and

experiencing of other job responsibilities in the organization.

2) Apprenticeship: New employees understudy more experienced employees in an attempt

to learn the job.

3) Coaching: Trainees are guided by a coach who will give instructions on how to perform

the job.

4) Mentoring: trainee is paired with an experienced worker who acts as an advisor while

they perform the job.

Advantages

 Cost-effective;

 No loss in productivity-learning while working;

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 Knowledge shared.

Disadvantages

- Quality of training compromised-because it is done internally;

- Bad habits passed on;

- Production may be disrupted

Off the Job Training/External

Employees are trained away from their immediate environment. It can be elsewhere in the firm’s

premises or on an entirely new location. For example: University.

It can take place in several forms:

1) Lectures: Verbal presentations on an area of study.

2) Audio-visual: done by using videos or films to conduct training.

3) Simulation: A real-life situation is created and participants may be asked how they will

respond to a particular situation.

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4) E-Learning and Distance Learning: Both can take place over the internet for ease of

access and convenience.

Advantages

 Wide variety of skills available;

 Trainees may have specialist training;

 Systematic and organized;

 Trainees exposed to more up to date information.

Disadvantages

- Costly;

- Loss of productive time while workers are being trained;

- Firms may be lose their investment in workers when they leave;

- Firms have to provide practical experience.

Training vs Development

***The difference is the TIMEFRAME***

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Training focuses on the present situation and the job that the employee is currently doing. Its aim

is to enhance specific skills and abilities to improve performance on the job.

Development focuses on future jobs in the organization. The organization seeks to develop

employees based on succession plans or on the fact that in the future, new skills and abilities will

be required. Developing employees will help prepare them for the future when these skills

and abilities are needed.

(5) Performance Management

This is a practice of the HRD managers to measure how well employees are executing the tasks

given to them.

It identifies, measures, manages and develops the performance of employees within the firm.

It is a measure against the goals and objectives of the firm.

The firm uses this to measure the extent to which employees’ performance is below, meets or

exceeds the acceptable standards of the organization.

It helps the firm to:

1) Select people with a possibility of promotion or redeployment.

2) Determine pay structure of employees.

3) Identify possible training needs.

4) Assess the efficiency with which the previous functions are performed.

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Performance Appraisal

This is the ongoing process of measuring and evaluating employees’ performance.

Characteristics of a Performance Appraisal Scheme / Tool

1) Fairness

This plays a critical role in the work life of an employee and as such, it is imperative that

it is done in a fair and a transparent manner.

For example: Using the same appraisal instrument for all employees.

Employees should not perceive the appraisal too skewed or it may be met with resistance.

Sometimes it may be subjective because it is conducted by an individual.

Usually when the appraisal is concluded there is the requirement of signing by the appraiser and

employee to show agreement.

Discussion could then be held on areas of weakness.

2) Participative

Employees should be allowed to participate in the appraisal process. For example: asking them

to help create their performance goals and development plans. Employees can also be asked to

select the appraisal tool.

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The thought is that employees will more likely buy into the appraisal procedure when they have

contributed to it, plus, they are more likely to meet the targets they set.

In other organizations, employees engage in peer evaluations. Co-workers are knowledgeable of

the job requirements and as such, would be able to assess each other’s work.

This, however, can also cause conflict and corruption in the workplace.

3) Feedback

It is critical that feedback be provided to employees once the appraisal is completed. If

development is to be the goal of the appraisal, employees must be informed of their deficient

areas.

Feedback should be meaningful and timely. Employees should be given feedback of what the

findings were and be given guidelines on how to improve their performance.

MEANINGFUL: It should be, “you need to improve your performance” but addressing the

specific areas that need development.

TIMELY: Delaying feedback can bring feelings of anxiety and the employees may feel that the

appraisal was a waste of time. Additionally, the longer the time before communication takes

place the employee will continue doing the same things.

4) Periodic

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It should not be an isolated occurrence but should happen periodically. The time frame varies

from organization to organization. Sometimes, it is done quarterly, semi-annually.

Strategies to measure performance include:

LABOUR PRODUCTIVITY = Total Output

Per Hour Input of Labour (Labour hours)

LABOUR TURNOVER

The number of workers who leave an organization in a given time period compared with the

average numbers employees within the same time period:

Number of Workers Leaving

Average Number Employed x 100

High Labour Turnover may be caused by the following:

1) Low salary package or Fringe benefits;

2) Poor management styles;

3) Poor working conditions;

4) Workers getting more attractive offers elsewhere.

Impact of High Labour Turnover

1) Production time loss during recruitment and shortage;

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2) High training costs because of irregularity;

3) Affects morale of staff and consequently their performance;

4) It may be disruptive and unsettling since it affects synergy and camaraderie.

ABSENTEEISM RATE

This is the amount of the total workforce that is absent from work during a given time period,

when they should have been there:

Number of Absent of Workers

Total Number of Workers x 100

High absenteeism rate results in poor performance. Employees who are frequently absent will

not contribute much to production.

High absenteeism is also a sign that something is wrong in the organization.

(6) Labour Management Relations

When there is a breakdown in good labour management, it results in industrial action.

Factors that cause a breakdown in Labour Management Relation

1) Unfair dismissal;

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2) Poor working conditions;

3) Low remuneration;

4) Unfair practices;

5) Lack of job security.

NB: It is the best intent of both parties to attempt to resolve the dispute before it escalates.

Collective Bargaining

This is the situation where trade unions and employers meet to negotiate better terms and

conditions of employment i.e. salaries, wages and working conditions.

A trade union is an association of workers who have joined together to accomplish the common

goal of improving terms and conditions of employment.

Trade Union Rep: Since it is impossible for the entire workforce to meet Management, they

select representatives to speak on their behalf. The Trade Union Representative represents the

rights of the workers while the HRD represents the firm.

Any agreement reached by the collective bargaining process is binding by both parties. If the

agreement is breached, the injured party may get redress from the Industrial Dispute Tribunal or

the Courts.

Benefits of Collective Bargaining for EMPLOYEES

 Workers have greater bargaining power;

 Discourages managers from making unilateral decisions that affect employees;

 Trade Union Reps communicate between management and employees;

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 Fair settlement for grievances;

 Provides for all employees’ benefits not just those who are part of the bargaining unit.

Benefits of Collective bargaining for EMPLOYERS

 Easier and less time consuming for management to bargain with union instead of each

individual;

 Can avoid the possibility of industrial action;

 Avoids misunderstanding of terms.

Dispute Settlement

Sometimes in the collective bargaining process, a problem may be encountered to which a

solution may not be immediately reached. When this occurs, it delays the negotiation process.

Parties can then turn to options available under the Grievance Procedure.

Three stages:

1) Conciliation

A third party from the Ministry of Labour is asked to sit in on discussions between the

two parties. This person is usually known as the Conciliator and will NOT offer a

solution to the dispute. At this stage, the focus is on:

(i) Negotiations between employers and employees or unions;

(ii) Settlement of dispute regarding perceived unfair dismissals;

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(iii) Infringement of labour privileges.

If no agreement is reached at this stage, they move on to…

2) Mediation

The third party (Min of Labour) who is asked to sit in on negotiations is now called a

Mediator. He will give suggestions on how to resolve the dispute. Deliberation/discussion

occurs and a solution is attempted.

If no agreement is reached at this stage, they move on to…

3) Arbitration

This is the final stage of the grievance procedure. It is where a third party termed the

Arbitrator is called in to come up with a solution to the ongoing dispute. Unlike the

previous two stages, the arbitrator will give a solution to both parties. The solution is

legally binding by both parties. In some Caribbean countries, there are designated boards

or courts to deal with these disputes. For example: Industrial Disputes Courts, Labour

Courts. In Jamaica: Industrial Dispute Tribunal;

In Trinidad: Industrial Court.

Trends in Industrial Action

When collective bargaining fails and workers become militant and resolute in seeking a

settlement to their disputes with management. In such cases, workers take industrial action in the

hope that management will change its stance.

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Strikes

Workers withdraw their services from work. It is usually the last form of action taken and

resorted to when all others fail

Official Strike: is called forth by the union.

Unofficial Strike: takes place without the backing of the union.

Work to Rule

Employees work rigidly to every rule in the organization. This can slow down the work process

considerably.

They do not perform any job outside of their job description.

Go Slow

This refers to the deliberate effort by employees to slow down the pace at which they work. It is

aimed to frustrate management into settlement.

Sit In

Employees attend work but refuse to leave the work site when work is done. It is popular when a

firm is threatening employees to close down operations.

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Picketing

This is used in conjunction with a strike. Workers use placards and signs to show their

dissatisfaction with management outside the work site. They look for support and sympathy from

the public.

Overtime Bans

Workers refuse to work overtime hours, only regular hours. It causes a shutdown in production

especially during peak season. It results in loss of production and sales revenue.

Need for Reconciliation

Even after industrial disputes are settles, “Bad Blood” still exists between members of staff and

management. It is important that they work together to repair relationships. A workforce

continuously disagreeing with management may not even be able to achieve anything at all.

Rebuilding relationships will take time. Therefore, it is advisable that both parties do not create

any long term hurt in the period of dispute. Open door policies are a way of trying to foster good

relationships between managers and employees. Staff functions are also used to foster synergy

and team work.

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Laws Affecting Health and Safety in the Workplace

Within the mid latter part of the 20th century central governments have moved to enact laws to

promote Health and Safety in the workplace.

In 1974, the United Kingdom passed the Health and Safety at Work Act.

The International Labour Organization (ILO), an arm of the United Nations, has started to

celebrate April 28 as World Day of Safety and Health and Work.

Trinidad and Tobago, Guyana and the Bahamas have based their health and safety laws on the

Caribbean Model Law on Occupational Safety and Health and the Working Environment.

Some general responsibilities include:

1) Use of dangerous machinery;

2) Wearing of protective clothing;

3) Protection against dust and dangerous fumes;

4) Cleanliness and sanitary conveniences;

5) Proper disposal of waste;

6) Minimising noise and ventilation;

7) Functioning fire and emergency exits.

Education of Employees on Safety Regulations

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Policies need to be communicated to staff. This is especially important in manufacturing

industries, where mistakes cost lives. Training is also important for staff to become familiar with

safety regulations. The HR department is responsible for organizing such training for existing

and new employees. Employees must also be trained as to what to do when there is an

emergency or natural disaster. Today, safety monitors and safety officers are appointed from

staff.

Importance of Providing Safety Facilities

 Mitigate the possibility of lawsuits and costs incurred through accidents;

 Protection of all workers and employees from bodily harm;

 Minimizes the possibility of high labour turnover rates resulting from hazardous

environments;

 Good working environments can improve productivity;

 Requirement of law

Procedures for dealing with Safety Complaints

o Appointment of safety monitor or committee that will spearhead the health and safety

policy on the ground;

o Any safety complaints would first be lodged with the safety monitor;

o Upon receipt of the complaint, the necessary checks should be done to substantiate the

complaint. This may be done by the committee itself or a trained professional;

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o Addressing the complaint in the shortest possible time and take corrective action to

ensure there is no reocurrence.

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