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2.1 HR Planning
-Teleworking: working away from employers or customers by using electronic forms of
communication
-Home working
Advantages of teleworking/ home working
- geographical distance no problem-customers can save time and money by not
having to travel to retail stores-just phone
- business can pay less rent as dont need to locate call centers. Office space in
city
- absenteeism not an issue
- employees dont have to travel 2 work
- employee can enjoy autonomy in decision making, less formal than traditional
office
- employees benefit from tax allowances by using personal property 4 conductingbusiness
- child care can reduce financial burden
Advantages+ Disadvantages:
Employee Employer
Advantages - job creation,
especially for
those living in
remote areas
- suitable 4 people
that have to carefor family
members
- flexible working
hours
- benefits of not
having to work
-reduced office
overheads
-flexible and extended
working hours available
to customer
-can cater for peak andoff peak trading periods
-continuity of service
from those with young
children or other
dependents
Disadvantages -heavy reliance on ICT
-not always possible lack
of space at home or lack
of confidentiality
-teleworkers oftenexceed legal limits on
working hours
-suffer from social
isolation
-often less job security
and less trade union
representation for
teleworkers
-set up cost high
-requires tight control in
recruitment as not
everyone independent,
self-motivated &experienced
-management and
control more difficult
-technological
breakdowns can cause
big problems 4 business.
Portfolio working:person employed ikn number of different jobs carried out
simultaneously, part time or tempory basis.increased flexibility and mobility and have
varied experiences. However lack of job security.
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Part time: cheaper to employ, lower enumeration, easier tio replace if need.
Handy Shamrock recommended that business place greater emphasis on meeting needs
of workers by methods such as flexile working practices and enrichment. Shamrock org
based on 3 leaf clover:1. core staff-full time professional workers
2. peripheral workers part-time, tempory + portfolio
workers
3. outsourced workers-not employed by organisation to
complete tasks also known as contractual fringe
Business Strategy:
Five Rs : if managers dont make most of HR, suffer these consequences:
1. recruitment higher = higher induction + training cost
2. resources- increasing resources and time spent
3. reservations lower morale
4. returns- lower levels of productivity therefore competitiveness and profits5. reputation poorer image since business cant retain staff
Successful training + development plan should:
show commitment to training + development of staff
link training + development needs to objectives
help promote culture of continuous learning
assess operational requirements of org against skills of staff
provide equal opportunities for all staff yet be cost effective
2.2 Organisational Structure:Responsibility = shows who in charge of whom, accountability = who held responsible
4 what job.
Org structures helps:
identify supervisor/ line manager form of accountability
which people have authority + extent of responsibility they have for others
determine how different areas of business link 2 one another
verify own position in overall org
identify various channels of communication in org
CEO- devise + implement strategies, act as figure head, leaders directors, represent
ideas + beliefs of BOD, formulate org objectives with BOD.
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BOD:
executive directors-work full time @ org-make decisions about daily running of
business
non-executive dont work full time but are consultants 4 particular area of
expertise. Advise on corp strategy
BOD- set targets, devise long-term plans, establish policies + codes of practise, monitor
org activities, advise + support + managing director/CEO
Organisational charts- diagrammatic representation of firms formal structure.
Shows :
shows functional departments within a business
shows chain of command-positions of authority in org, which people have direct
line of authority over others
span of control-number staff directly accountale 2 single (horizontal) linemanager
official channels of communication
levels of hierarchy gives indication of employees rank
orgs can be organised by functions, product, process, geographically.
Delegation=passing on control + authority to others, involve line managers trusting +
empowering staff 2 complete task or project but holding them accountable.
Delegation=form of empowerment and can act as non-financial motivator.
However, line manager has ultimate responsibility. Poor delegation can lead to
confusion + feeling of inadequacy, leading to demotivaton, result in failure to achieve
set task.
Benefits:
manager saves time-not tackling every task focus better on strategic issues
can motivate + develop employees-feel trusted and talents recognised
Managers use SMARTER acronym:
Specific
Measurable
Agreed
Realistic
Time bound
Ethical
Recorded
Span of control: number of subordinates controlled by manager (or directly accountable
to). E.g. CEO has narrow direct span of control, wide indirect.
Wider: fewer layers of hierarchy = many people under manager
Narrow: fewer subordinates under manager
Advantages of wider: (flatter structures)
delegation becomes more important part of managing more opportunities 2
develop professionally communication improved as fewer layers of hierarchy
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cheaper 2 operate wider span of control= fewer layers of management
smaller psychological distance between top and bottom of org
Advantages of narrower spans of control (taller)
quicker communication between small teams
easier 2 control and manage small teams
greater specialisation + division of labour
greater opportunities 4 more people to earn promotion, as more layers may
motivate.
The degree of control granted 2 a manager will depend on :
experience, competence + traits of manager
nature of management styles-management feel need to control subordinates
may have smaller teams, narrower span
type of production system- e.g. flow production managers wide span as simple
tasks that dont need as much supervision
skills and dynamics of subordinates e.g. highly skilled usually in smaller teams nature of work- complex tasks where communication important-may have
smaller teams
Hierarchical structures:
shows lines of communication-improve co-ordination + productivity of
workforce
establish department or teams, create sense of belonging in workplace and act as
a form of motivation
Limitations:
-departmentalization can lead 2 workers being isolated to official teams-lead to inflexibility
delayering is the process of removing one or more levels in hierarchy to flatten
structure. Therefore reduces management + widens span of control.
Reduce costs (by removing management)
Improve speed of communication (structure flatter)
Encourage delegation-since wider spans provide opportunities 4 employees 2
take on more responsibilities
Drawbacks of downsizing:
Create anxiety + sense of insecurity among workers effect motivation +
productivity Delayering can overstretch employees as workforce increase effect quality
Decision-making may take longer since managers deal with larger teams
Flexible working practises require regular up-grading of skills cost
implications.
Bureaucracy refers to execution of tasks that are governed by official administrative +
formal rules of the organisation. Bureaucratic orgs characterized by prescribed rules +
responsibilities standardized procedures and formal hierarchical structures
This may include:
Frequent requirement to fill out unnecessary paperwork Staff working in several departments reporting 2 more than 1 manager
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Too many working parties investigating issues of concerns of org
Long official chains of command
Management with duplicate roles + responsibilities
Max Weber believed bureaucracy to be synonymous with efficiency as it is division of
labour being applied to the administrative tasks within org. bureaucratic org governedby:
Continuity-must follow official rules + regulations, rather than taking high risks
Rules + regulations
Hierarchical structures
Accountability
Core problem with bureaucracy is that work expands filling time available for
completion. It prevents creativity + risk taking, slows decision-making and is highly
inflexible + over cautious.
Centralised structures: majority decisions made by small number people favoured by
Fayol, Taylor + Ford.
Advantage:
-Rapid decision making no need to consult employees
-better control
-better sense of direction-decisions made by senior management team more qualified
to lead business.
Disadvantages:
Possible delays so many decisions 2 make by so few
Increased pressure +stress 4 senior management
Inflexibility org becomes rather bureaucratic + inflexible since less autonomy
Demotivating- employees may lack motivation, since feel less valued
Decentralised: decision making sometimes passed 2 others in org.
Advantages:
Imput from workforce benefit from + exploit different skills of staff
Speeder day 2 day decision-making
Higher morale feel valued, can use initiative + sense of ownership of work
higher productivity
Improved accountability staff directly accountable 4 inputmay improvequality
Encouragement of teamwork-collaborative work can generate innovative ideas
Disadvantages:
Loss of control-authority diluted
Greater chance of mistakes-empowered person must be competent, more people
involved more likely different options, becomes difficult 2 track mistakes
Greater reliance on effective communication
Duplication of functions-if no set overview may carry out same tasks
Centralised or decentralized structure depends on:
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*Size of org larger =greater need 4 decentralisation
*Scale of importance of decision-higher cost decision may be more centralised
*Corporate structure creative + innovative based orgs tend to be unwilling 2 let go of
power + control centralised
*level of risk high risk =key decision makers centralised
*corporate structure-creative + innovative based orgs tend to be decentralised*management attitudes + competencies manager may be unwilling 2 let go of power +
control centralised
*use of info +communication techniques-adopt up-2 date methods of ICT are available
to delegate a greater extent.
The matrix structure-flexible organisation of employees from different departments
within org temporarily working together on a particular project.
Advantages:
-culture of teamworking +collaboration is created
-experts from different parts of business brought together 2 work on project
-good career and personal development opportunities
-project can be spread out among various teams reduce pressure on senior
management
-adds interest + varying 2 work + increase staff motivation
Disadvantages:
-members of project may neglect department roles
-potential team members may not get on with one another especially from different
departments with different culture
-project managers may have a difficult task in controlling team members who have
conflicting interests + priorities
Matrix structures tend to work best in orgs with relatively flat hierarchical structure
with a wide span of control.
Flexible organisational structures should enable business 2 adopt when there is a need
to respond to rapid change, allowing business to be more successful. They help
developed multi-skilled workforce. Re-engineering is a radical form of organisational
flexibility involving re-design of org structures due to the driving forces of customers,
competitors and change. Due to drastic and disruptive nature of change caused by re-
engineering, most large firms would not tend to adopt it.
Organisational structure theorists:
Mitnzberg-business can only remain successful if structure flexible enough 2 deal with
rapid changes in market.
6 organisational configurations:
1. innovative org or adhocray-system where people split into small project teams-
deal with specific tasks
2. entrepreneurial orgs-decision-making power retained by strategic apex=
centralised
3. machine orgs- coordination done by specifying work progresses + people.Inflexible
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4. divisionalised orgs-coordination through middle line who encourage
standardisation of output-inflexible to rapid change
5. professional orgs-professionals with standardised skills, inflexible due to high
specialisation
6. missionary orgs-coordination through standardisation of org norms
Peters argued that flatter org structures are more successful since better channels of
communication, greater opportunities for delegation + empowerment and greater
flexibility in adapting 4 change.
2 key features of successful companies contributing to the development of flexible
structures:
-removal of bureaucracy
-use of project teams e.g. matrix structures
Advantages of informal organisations (relationships existing beyond formal groups of
org)
motivation promote sense of belonging
facilitates communication
assist decision making informal groups can come up with innovative + original
Outsourcing = act of moving non-core activities away from internal operations by
finding a external party to carry out such functions. The purpose is to reduce costs by
using specialists parties that can carry out the function more efficiently + cost
effectively business can focus on developing core competencies.
Limitations:
requires effective communication + coordination
must be mutual trust between outsourcer + other parties quality of outsourced service passed onto external agent concerns whether
expected standards will be met
cause uncertainty among workforce due to restructuring + likelihood of
redundancy
Off shoring= extension of outsourcing involves relocating business + functions
overseas
Increase of migrates can have advantages 4 business
easing of skill shortages
flexible work structures
marketing opportunities-migrant workers different tastes + habits provide
niche
personal opportunities
net social benefits-pay income tax
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2.3 Communication
The purposes or objectives of communication include to instruct, clarify, interpret,
notify, warn, receive feedback, review and, above all, to inform
Effective communication is vital to success of business so: Staff are aware of their roles and expectations
Managers can gather and act upon feedback from employees, customers and other
stakeholders
Verbal communication:
Advantages:
Detailed questions can be asked
Questions can be answered without any delay, i.e. feedback is quick and
spontaneous
Very little cost involved
Interviews/presentations are a good way to judge an employees ability to
communicate
Facial reactions and body language, along with tone of voice, can be judged
Disadvantages:
Information given may not always be truthful
There is usually no permantent record of the conversation for future reference.
Confidential messages may be difficult to communicate verbally
Meetings and interviews can be very time consuming
Non-verbal:
Letters
Reports
Notices
Memorandum(memo)
Executive summaries
Research proposal
Visual communication:
-easily understood
-communicate quicker than words
-cater 4 visual
-may have longer lasting impact-e.g. marketing
e.g. charts, graphs
informal communication- unofficial channels of communication e.g. grapevine. Can
hinder efficiency + productivity of workplace.
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Benefits:
-sense of belonging
-security + support
-pooling of ideas generate solutions
ICT: emails, facsimile (fax), video conference, phones
Factors influencing choice of communication method:
Personal preference
Organizational structure-tall=formal
Security issues + concerns-hard copies needed just in case?
Skills + training
Ease of use
Size of business-larger may use emails 4 large, smaller use verbal
Storage issues- paperwork need to be stored
Location-time-zone differencesUrgency
Cost-e.g email cheaper than sending mail
Barriers 2 effective communication:
High costs may not have
finance to set up effective
communication network
Technological barriers
Language
Accents Geographical location
Poor body language
Physiological barriers-hearing,
sight disabilities
Jargon
Different cultures
Attitude
Internal politics Chinese whispers-tall
hierarchical structures messages
pass through many layers
Poor communication hinders business:
low moral- feel out of touch, lose confidence +direction, feel under valued
errors + reworking as not fully aware what to do
loss of competitiveness due to lower productivity caused by low moral or errors
lack of control
Communication networks:
Communication network shows roots that allow different parties to communicate
message.
Centralized networks: involve key player or team holds decision making power.
-wheel network-experienced person or team leader staff communicate with
-Chain-network- tall hierarchical structure- pass on info from higher managers tolower sometimes message can be distorted.
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Y-chain: similar to chain but passed onto several different parties.
Decentralized: open nature, more ideas generated. Feel more valued, better solve
complex issues. Decision making can be prolonged coz so may people in process
-circle network- team based tasks or group of middle managers communicating with
one another- good 4 solving complex issues
All chain networks: -communicate with whoever necessary, most ideal 4 solving
complex issues.
Objective of introducing new or improved communication systems:
-improved speed, access +accuracy of communication
-greater potential 4 communication 2 reach wider audience
-improved motivation + productivity as ICT reduce errors
Disadvantages:
-cost-threat of security-reliance of ICT
-need for change management
Mehrabian theory (3 Vs)
-visual lifting- facial expression +body language accounts for 55% of interpretation
-tone + paralinguistic cues account for 38% e.g anxiety, enthusiasm
-only 7% of message interpreted by actual words spoken
2.4 Leadership and Management:
Leadership is the process of influencing and inspiring others to achieve goal. Leaders
tend to focus on achieving broader goals or visions with no definite frame of mind.
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Management is essentially problem solving based on reasoning, rather than emotion.
Involved in complex organizational tasks. Managers likely to focus on attainment of
specific goals within definite time frame.
3 broad levels of management:
Senior management Middle management
Junior management
Leadership concerned with influencing others to achieve vision or target. Official
leader is established by an organization and therefore has authority 2 give orders. An
informal leader has natural charisma in influencing other people. All leaders have
power to influence, although source of power is different for official and unofficial
leaders.
Warren Bennis found that no single best way to lead organization. General
characteristics of successful managers:
Management of attention-need clear vision or dream of where want business
Management of meaning- able to communicate vision 2 others
Management of trust- managers + leaders need 2 be consistent, dependable and
honest 2 gain trust-environment created 2 allow people to openly disagree but
still work together professionally.
Management of self- self-reflective of strength and weakness, able to accept
constructive criticism.
Henry Mintzberg
argued manager has 3 main roles1. interpersonal roles- figurehead, liaison role and leader role
2. informational role- manager acting as communication channel between
departments and senior management
3. decision-making role- tactical and strategic decisions made by managers.
The work of managers:
routine tasks
planning tasks
communication tasks
Leadership styles:
consensus model of leadership- found in countries like Japan + Netherlands where
group-decision making is the norm.
charismatic model of leadership- where there is tradition + expectation that leaders
make decisions with decisiveness.
Autocratic = suitable for situations that require quick decision making or critical
decisions. However communication is top-down, no feedback given, opinions and
suggestions ignored, can cause resentment, hence demotivate staff.
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Democratic= suitable if manager cannot always be around to ensure staff remain on
task. Advantage= better morale + motivation, sharing ideas can help improve decision-
making. Limitation= can delay decision-making not so good for large workforce as
there is high dependence on clear leadership.
Laissez- faire: minimal direct input into work of employees, leaves subordinates tomake own decisions and complete own tasks. Limitations= coordination and decision-
making can be time-consuming since there is lack of supervision or direction. Relies
heavily on good will and teamwork 2 achieve goals.
Situational leadership: using right person and right style for the right situation,
managers must be able to change and adapt to different situations. CLOTS:
Culture
Leader how much trust do leaders have in subordinates and preferred leadership style.
Organisation structure e.g. tall/ flat
Task e.g. extent of difficulty, urgency
Subordinates- level of skills, motivation, unity and number of.
Trait Theorists: argue leadership/management stlye depends on personal characteristics
of individual leaders/managers
Likerts 4 styles:
1. exploitative autocratic
2. benevolent autocratic
3. participative
4. democratic
Likert suggests that participative and democratic styles most successful.
Fiedler no best way of leading, effectiveness depends on personality and situation
under consideration. Three principals:
1. relationships how well get along and trust
2. situation- nature of task, level of difficulty
3. authority how much power or authority leader has.
Weakness suggests almost anyone can lead if style is matched to task. Ignores other
situational factors that effect leadership effectiveness e.g. experience + training of
leader.
Blake & Mouton: managerial grid model, 5 different leadership styles.
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Tannenbaum and Schmidt :
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tells autocratic, presents final decision
sells- persuade 2 win support, although decision already made
consults- ask 4 opinions before making decision although not necessarily act on
opinions
participates- absolutely involves employees in decision making
democratic/laissez-faire
Contingency theory: states no single best way to manage an organization or to lead
people because what may work in one situation doesnt necessarily work in other
circumstances. The best style depends on internal + external factors that effect
situation, such as size, knowledge + experience of workforce.
Factors influencing:
organizational culture
attitudes of senior management e.g. optimistic about worker abilities?
Traits of manager
Subordinates how many Task- need to be performed by staff-routine or unfamiliar task is challenging
or straight forward
Time constraints e.g. deadline imminent
Fiedler argued that a leaders own personality has large impact on leadership
effectiveness.
Situational theory:
Similar to contingency theory- both assume no optimal style, difference is situational
places greater focus on behavior of effective managers +leaders. Contingency theorytakes a broader approach and considers the internal and external factors that effect
leader ability.
Blanchard & Hersey model- concern for people and tasks as well as ability and
willingness of subordinates to achieve task set.
Telling/Directing style: autocratic, employees unwilling to complete task,
communication 1-way
Selling/coaching style-used when employees not committed but have some
ability. More 2-way, concern for both people and task.
Participating/supporting workers have high degree of competence,inconsistent commitment.
Delegating style- both ability and willingness high
Effective leaders need to be flexible to given situation and that worker attitudes are
situational. Criticism: fails to distinguish between management and leadership
Robert House Path Goal Theory:
Directive leadership
Supportive leadership
Participative
Achievement orientated- sets challenging goals as has faith in subordinates and
high expectations
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House argued that leaders need to take account of 2 types of situational factors:
-subordinate personality
-characteristics of environment
John Adair Action-Centered leadership model:
Manages and leaders not necessarily born leaders. Use of authority relevant tosituation in question, four types
1. position official position
2. knowledge- access to important info/ experience
3. personality
4. moral persuasion- art of being able to convince or persuade others
The difference between leadership and management:
Time + devotion- managers set hours, leaders 24/7
Leaders have more long-term view + more strategic decisions
Leaders accountable 4 much broader range of responsibilities, managers more
day-2-day
Influence managers listened to due to position of official authority, leaders
inspire and motivate followers
Managers follow pre-determined rules, leaders more radical/ risk taking
thinking
Vision- leaders= more vision
Key Functions Of Management:
Henri Fayol: investigated scientific management, 5 functions Planning
Organising
Commanding
Coordinating
Controlling
Principals of management:
Division of labor 2 develop skills and specialization
Formal lines of authority + wide span of control, like the military
An authoritarian style management decisions made from top only
Unity of command- employees should only have one line manager, to improvecommunication + productivity
Equity in treatment of employees-ensure committed not resentful
esprit de corp harmony
Believed management should ensure discipline to prevent slack disobedience.
However, use of equity of treatment pay reflective of input.
Charles Handy:
Common characteristics of effective managers/leaders
intelligence
initiative
self-assurance
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three key roles:
managers as general practitioners- fix health problems of firm
confronters of dilemmas
balances of cultural mixes
Formal structure not appropriate. Management must rise above situation and see biggerpicture. Managers and leaders need to delegate by being generalists rather than
specialists.
Peter Drucker:
People are the key to success of a business. Decentralization encouraged. Managers
function:
setting organizational objectives
organizing tasks and people
communicating with + moderating employees
measuring performance developing people
effective communication prevents a them and us culture. Maagement by objectives.
Five main steps:
1. review
2. set
3. monitor
4. evaluate
5. reward
All managers should be involved in strategic planning. Business should recognize the
importance of change and embrace change, but should avoid meaningless change.
Business Strategy:
Wally Bock: suggests 5 Ps of effective leadership
pay attension to whats important
praise what you want to continue
punish what you want to stop
pay for results you want
promote people who deliver the results you want
leadership styles depend on: traits + personality
level of skill, experience , motivation and confidence of employees
time-frame how quickly descisions need 2 be made
degree of importance- tactical or strategic decision making
degree of difficulty of task- whether routine or crisis.
2.5 MOTIVATION
motivation = desire, effort and passion to achieve something or willingness to complete
task with enthusiasm.Intrinsic: people do task out of own desire
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Extrinsic: people participate because of benefits or rewards
Advantages of worker motivation:
higher morale/job satisfaction, improved productivity and quality
better industrial relations-reduce chances of conflict in work place
lower staff turnover reduces cost of hiring staff
lower absenteeism
higher profits generated from above factors =)
Signs of poor motivation:
-high absenteeism rates
-high wastage level
high % defected output/ poor quality
increased customer complaints
poor punctuality
increasing number of disciplinarily problems
Taylor: scientific management- employees primarily motivated by money, efficiency
targets and output related to pay.
Repetitive tasks based on division of labour and specialization in production
process.
Piece work where worker receives payment based on level of output.
Workers selected for jobs based on abilities rather than friendship groups.
Criticized for ignoring non-physical contribution of workers, not easy 2 measure output
of some professionals e.g. teachers, doctors etc. also not all people are motivated by
money. Scientific management can lead to monotonous tasks, leading to jobdissatisfaction rather than motivation. Firms use mass production and have many low
skilled workers tend to use this theory.
Maslow: focused on psychological needs of workers.
Criticism:
Levels are difficult to measure- not quantitative measurement. Maslow =psychologist not business man
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Assumes everyone is motivated in prescribed order- home workers dont have
social office interaction but still highly motivated
No explanation of what motivates after self-actualization
McGregor:
Theory X negative management attitude about workforce- see workers as lazy peoplewho avoid work if possible. Workers need close supervision, do not like work and lack
ambition. Authoritarian style, emphasis on output and productivity, rather than people.
Theory Y- positive approach, employees able to achieve org objectives with own
accord and initiative. Managers believe workers gain satisfaction from work and take
on own responsibility. Managers likely to be democratic and decentralized approach in
management style.
Hertzberg:
Recommends democratic style.
Hygiene factors-aspects that dont motivate but must be met to prevent dissatisfaction.
E.g policies, supervision, working conditions, pay
Motivators- factors that lead to psychological growth of workers, leading to increased
satisfaction and performance @ work. Achievement, recognition, responsibility and
advancement of worker led to increased worker satisfaction.
3 key areas to increase motivation:
Job enlargement- variety
Job enrichment- more complex and challenging tasks-exploit potential Job empowerment- delegating decision making power to workers, help boost
overall morale.
Criticisms:
- doesnt apply to many occupations, especially low-skilled/low paid
where job enrichment + empowerment not part of work.
- Some employees dont want enriched jobs as this involves having extra
responsibility and stress.
- Ignores role of team working in motivating workforce
Content theories:
-seek to explain specific factors actually motivate people (hertzberg, McGregor andMaslow are all examples)
Mayo: workers motivated by humane approach to management.
Hawthorne experiments-increase in output due to people working together better
Increase performance when scope 4 discretion, creativity ad teamwork.
When views and efforts recognized, staff have sense of belonging, more
motivated
Encourage team spirit, group dynamics, exploiting skills + expertise of each
team member.
McClelland: theory of needs
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Need for achievemet people will work better
Need for power- people who like to influence behavior of others are strong-
willed managers
Need for affiliation-seek good social + working relationship with colleagues +
management team
Process theories: look @ decision-making processes + behavior of people to determine
motivation.
Vrooms Expectancy theory: people only put in effort when they expect their role will
help achieve required target. If feel lack ability then effort will be lower. 3 parts to
motivate workforce:
1. expectancy
2. instrumentality-expect meet performance-rewarded accordingly
3. valence- people place different values on different rewards whether worth
effort.
Adams Equity theory: workers will naturally compare their efforts or rewards to
others in the workforce.
Each worker should receive a remuneration package that reflects his or
her efforts
Workers only motivated if remuneration package seems fair
Degree of equity in rewarding efforts will have an impact on motivation
level.
If inequity allowed to continue then absenteeism may increase increasing costs:
Hiring temporary staff 2 cover absent workers Overtime costs + disruptions 2 staff that take on work of absent staff
Lower productivity
Detrimental effects on staff morale and customer service
Loss of output if workers position or role cannot be replaced by another.
Financial motivation:
wages-payment based on time devoted
piece rate- rewards on output
salary-fixed annual pay, paid at end of each month
Disadvantages of time-based payment:-not easy to distinguish efforts/ output
-little incentive to 2 work hard since people paid same amount 4 time
Commission rather than time-based=output based
Pays workers based on level of output contributed by worker as portion/ % of sales.
Whereas piece rate is a fixed amount per unit sold or produced.
Limitations:
Speed in production not necessarily correlate with high quality output or
customer care
Added pressure on workers 2 sell more or to perform @ faster rate
Tasks can be repetitive causing boredom
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Since payments depend on fluctuating sales or output levels, lack of security
There may be a need to hire more quality controllers, especially in
manufacturing processes.
Profit-related pay (or profit sharing)- the higher amount of profit made, the greater
pay received by employees. Usually paid as annual bonus. Amount paid is usuallylinked to employee salary and length of service.
Can strengthen employee loyalty and foster teamworking, therefore boosting efficiency
of labour. However, share can often be 2 small 2 motivate, tends to reward senior
management, lower individuals feel no influence.
Performance related pay- more flexible than profit-related pay. Rewards employees
that meet certain goals- e.g. sales targets or competence. Can be paid in form of
performance bonuses(workers who reach targets), loyalty bonus(if stayed in business
long time), or pay rise.
Advantage: create incentive for people to work and perform better.
Disadvantages:
Targets may be unrealistic/unachievable- cause resentment, hinder performance
Stress caused by pressure 2 meet targets
Non-financial motivators ignored
PRP not appropriate in some professions where quality is seen as more
important than quantity.
May not promote teamwork. Workers may feel treated unfairly and colleagues
better rewarded.
Employee share ownership schemes: reward by giving shares in company, employees
take direct interest in companys well-being. However, often only senior management
benefit as others may not qualify or amount too insignificant.
Fringe Payments: or perks are payments + benefits to any employee in addition to
wages/salary. Vary depending on position in org. helps encourage employee loyalty +
safty needs. Can potentially have huge cost.
Non-financial Motivation:
job enrichment
job enlargement
job empowerment
job rotation- form of enrichment, workers perform different tasks of same
complexity-fulfilling number of different tasks in order, again provides variety
and avoids over-specialization
teamworking- staff work alongside other employees e.g. cell production, quality
circles, departmentalized teams
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Adair Model of team building:
Belbin model: of teamworking considers behaviour of managers.
Team-role
type
Contribution
(benefits)
Allowable
weaknesses
Suggested task
allocationShaper Challenging,
dynamic, thrives on
pressure, drive and
courage to overcome
obstacles, directing
team attention and
priorities
Prone to
provocation.
Offends
peoples
feeling.
Person best suited
to overcome
obstacles and
opposition, create
a sense of urgency
and ensure that
talk is turned into
action.Implementer Disciplined, reliable,
conservation and
efficient. Turns ideas
into practical
actions, out agreed
plans systematically
and efficiently
Somewhat
inflexible.
Slow to
respond to new
possibilities.
Appointed as
organizer,
responsible for
procedures and
practical steps to
be taken once team
reaches significant
decisions
Completer
finisher
Thorough,
conscientious,
anxious. Searches
out errors andomissions. Maintains
sense of urgency
within team and
delivers on time.
Inclined to
worry unduly.
Reluctant to
delegate. Slowto respond to
new
possibilities.
Should ensure
teams works
meets necessary
deadlines andconforms to
highest standards.
Responsible for
ensuring no
inaccuracies or
error.
Coodinator Mature, confident,
good chairperson,
clarifies goals,
promotes decision-
making, delegates
well, recognizes
where teams
Can oftn be
seen as
manipulative.
Off loads
personal work.
Best person to
coordinate group
effort,ensure that
everyone has a
useful role and that
team works
towards common
Tasks: must be challenging enough to maintain
interest
Team: must work collectively 2 successfullycomplete task.
Individual needs to be catered for by team
Adair argued that too often, teams focus on
performance paid 2 individualsgroup
dynamics not exploited. Effective management
of teams requires recognition and reinforcement
of every member.
AC
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N
O
R
I
E
N
T
A
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DPE
O
P
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E
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strengths and
weaknesses lie.
goal.
Team
worker
Cooperative, mind,
observant and
diplomatic. Listens,
builds, avertsfriction. Support
member in their
strengths, e.g.
building on
suggestions,
fostering team spirit
generally.
Indecisive in
critical
situations
Should play a
floating role, using
versatile qualities
to help whereothers cannot
manage. Should
use diplomatic
skills to overcome
conflict.
Resource
investigator
Extrovert,
enthusiastic,
communicative.
Explores and report
on opportunities, andresources outside the
group.
Over-
optimistic.
Loses interest
once initial
enthusiasm haspassed.
Should be
responsible for
developing
external contacts
and exploring newopportunities,
needs a chance to
conduct negations
nut must report
back to group.
Plant Creative,
imaginative,
unconventional,
solves difficult
problems, redefines
problems, advances
new ideas andstrategies.
Ignores
incidentals, too
preoccupied to
communicate
effectively.
Deal with most
problem solving or
be responsible for
generating new
strategies or ideas
and proposing
solutions to therest of the team.
Monitor
Evaluator
Objective, impartial
and good at carefully
weighing up all
possibilities to make
the right decision,
judges accurately.
Lacks drive
and ability to
inspire others,
can come
across as
unenthusiastic
or boring.
Responsible for
ensuring all
worthwhile
options are
considered, need a
key role in
planning, an
arbitrator in event
of controversy.
Specialist Single-minded, self-
starting, dedicated.
Provides technical
knowledge and skills
in rare supply.
Contributes
professional
viewpoint on subject
under discussion.
Contributes
only on a
narrow front,
dwells on
technicalities.
Should provide
focus on technical
issues confronting
team, should
provide knowledge
and techniques in
short supply.
Belbins research showed that a balanced team-one with highest chance to succeed- would
contain a balance of team roles.
Other forms of non-financial motivation: recognize and praise
C
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I
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the working environment- worker comfortable?
Worker participation
Continuous professional development- opportunities provided for ongoing training.
More loyal and productive workforce- easier 2 delegate
Argyriss Maturity and immaturity theory suggests that if managers treat workers as adults,they will behave as rational as adults. If treated like children, then workers will behave like
immature children.
Benefits of higher staff retention:
-lower recruitment cost
-better corporate image
-skills + knowledge kept in org
-greater labour productivity as greater stability
- better customer service, leading to better customer satisfaction +loyalty
-improved competitiveness
-ultimately helps improve profitability.
2.6 Organizational and corporate culture-what is considered normal to business org and guide behavior within the org. may be based
on set of beliefs, values and attitudes of management ant employment.
A negative culture can lead to increased absenteeism and lateness, thus esculating costs to the
business. A culture of acceptance and cooperation with management will aid a business in
responding to the changing needs of the market.
Fostering improved culture: main problem 4 managers in fostering desired culture is that must
be established over long-period of time. Culture largely formed by subjective views of people
+ becomes ingrained in workers minds-how see org. not always easy 2 change views,
particularly for large workforce, can be resistance to change. Employees who are rational,motivated +attentive can attain an acceptable level of cultural intelligence. Helps foster
desired culture.
Influences of organizational culture:
Nature of business- depends on mission, objectives, aims.
Organisation structure- tall structures tend 2 have small teams, flatter=more likely 2 have
fggggggggggggggggggcollaborative team working.
Rewards- employees appropriately remunerated 4 efforts=motivated culture of workers
ggggggggstriving 2 achieve good results.
Management style- theory Y=workers deal with problems themselves, theory X=threats +
mggggggggggggggmanagement solve problems
Sanctions-org with few sanctions may encourage staff 2 be slack. However, too many =gggggggggresentment
The strength of culture depends on unity.
Advantages of strong corporate culture:
Create sense of belonging + security 4 staff because feel apart of business
Mistakes + misunderstanding may be minimized since staff familiar with process
Promotes team cohesiveness
Problems associated with culture gap e.g. conflicts between different groups
minimized.
Theories of organizational and corporate culture:
Charles Handy: different cultures needed for different business activities.
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Power cultures-one dominant individual/group hold decision-making power.
Structure likely 2 be flat, wide span of control
Role cultures- occur in highly structured orgs with formal rules and procedures.
Job roles clearly stated in formal job descriptions
Task cultures- occurs in org where focus on getting result from work done, no
single source of power. Employees empowered and control overresponsibilities.
Person cultures- occur in org where staff in similar positions with similar
expertise + training form groups 2 share knowledge + enhance their own skills
Edgar Schein: 3 levels of corp culture
1. artifacts- superficial aspects of org can be easily detected e.g. building, dress
code.
2. espoused values- deal with culture of staff, symbols/metaphors e.g. logos,
brands, mission statement, used to express culture of staff
3. basic assumptions +values- represent deepest level of culture entailing culture
that is unseen + not easily identified.
Deal and Kennedy: described culture as way things get done within org. based on
feedback + reward and risk (either drives workers or demotivates)
Kotter and Heskett: 2 types
1. adaptive culture-receptive 2 change
2. inert cultures- resistant 2 change
Goffee & Jones: double S model- 2 dimensions
1. sociability- extent of concern 4 colleagues. Tend 2 focus on people rather than task.
2. solidarity- degree of cohesiveness or unity in org. high= aid harmony + efficiency,
low = self-interest.
The ideal culture when both high sociability and high solidarity.
Geert Hofstede: link between international culture and org culture
power- extent subordinate accept unequal distribution of power
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individualization Vs collectivism- extent people care 4 themselves or be cared
for by network +society, look after others
masculinity vs femininity- extent culture conforms to traitional gender values
e.g. males aggressive, ambition, selfish. Women= family orientated, caring.
Uncertainly avoidance- extent people in org prefer structural routine or flexible
structures
Long-term vs short-term orientation- extent 2 particular culture values
sacrifices 4 benefits in future.
Culture clashes:
Exist when there is conflict between 2 or more cultures within org. e.g in mergers/takeovers,
firm expands overseas and ignorant of international cultural differences.
Difficulties of changing corp culture:
-costs- of implementing change may be very high
-resistance to change
-public opinion- perception of an orgs expected values may also hinder changes-national cultures-may be so strong that any attempts to change the way things done may
cause resistance + resentment.
Business strategy:
Schein argues that cultural understanding is a prerequisite to effective management +
leadership. Management viewed 2 set corp culture, as they get values, rules, benefits + norms.
Several interrelated steps to creating a positive and harmonious culture:
Develop sense of history- past success glorified, helps keep past present and shape
org future
Create sense of unity-by establishing SMART objectives-establish teamworking
culture
Promote sense of value- strong positive culture created.
Encourage sense of responsibility dedicated + responsible 4 work. More likely if
sense of unity
2.7 Employer and Employee RelationsNegotiation is bargaining process whereby 2 or more parties attempt to achieve a mutually
acceptable outcome.
Collective bargaining describes the process of negotiation between management and trade
unions.
Standoff/ deadlock occurs when failure 2 reach satisfactory compromise and therefore
commencement of dispute likely to follow.
3 levels of negotiation:
1. management negotiations day 2 day concerning affairs of business
2. commercial negotiations between different orgs
3. international- extension of commercial negotiations involving considering cross-
boarder cultural and language differences.
Stages of negotiation process:
1.preparation
2.proposal
3.debate
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4.bargaining
5.closing
6.review
Approaches to negotiation:
-avoidance sometimes leads to a lose, lose situation
-level playing field- negotiation both parties being equal
-winner takes all
-the win-win approach
Trade union: org that consists of worker-members who unite to protect rights + welfare of
members.
Issues unions focus on:
improving work conditions
provide legal advice
provide financial support, to those unfairly dismissed or redundant
supporting right of its members to have continuous professional development +training
pressure employers to ensure equiptment + machinery safe 4 use
outcome of negotiation depends on:
experience +skills of representatives
number members + degree of unity within trade union
state of economy-if high unemployment, employees weaker position 2 negotitate
demand for labour derived from demand of product/service
degree of substitution between labour and capital-if continually push 4 pay rise,
business may become more capital intensive.
public and media opinion government involvement
workers objectives:
increased pay or prevention of pay cuts
improved remuneration e.g. fringe benefits, paid holidays
better working conditions
training and development opportunities
enhanced terms of employment
better quality staff facilities
trade unions+individuals methods to achieve objectives: negotiations
go slows
work 2 rule
overtime bans
strike action
a walk out is often used in conjunction with strike action. Workers collectively leave work as
sign of protest. Whatever method of industrial action used by unions and workers, they
attempt to reduce output and efficiency of business, thus competitiveness. Due to decrease in
popularity of trade unions, many organizations have developed staff associations within org.
Employer objectives:
lower cost of production in order to remain competitive
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No strike agreements-rade union negativee image of causing disruptions, memberships
declining, thus no strike agreements help attract more members
Consultation: ask employee view on key issues before negotitation, allowing some influence
in decision making although views may be ignored
Litigation- seek legal remedy for conflict- win-lose situation
Expectations- conflict can occur when unrealistic expectations set
Avoidance- agree 2 disagree= lose-lose situation
2.8 Crisis Management and Contingency planning:Crisis= situation of instability which results in major problems for a business. Crisis
management= response to crisis in order to minimize impact on business.
Crisis planning is about being reactive to changes that may cause damage. Business will
usually find it difficult to plan for. By contrast contingency planning looks at how to deal with
such crisis- a plan for appropriate action. Therefore managers better prepared to deal withcrisis.
Advantages:
Careful planning can help reduce risks since most if not all eventualities have been
accounted for
Reduce impact of crisis- since plan 2 follow
Reassure staff, hence satisfy safety needs- maslow
Necessitates effective communication between management, thus enhancing
productivity and motivation
Disadvantages: Uses up valuable management time and resources, thus increase costs
Crisis may not happen, therefore time and money could be used elsewhere
If plans based on inaccurate or outdated info/data, the inappropriate action may be
taken in crisis
No amount of planning can prevent totally unexpected
Crisis management or disaster recovery requires managers to deal with potential crisis in
swifter manner before they escalate into a real problem for the business, thus media wont
hear about it.
Stages:
1. select a team of staff trained to deal with crisis-senior manager, PR person
2. team analyses +assesses potential threats.
3. develops and implements alternative tactics
4. information and decisions systematically communicated to those involved and
affected
5. resume normal business operations once crisis dealt with
6. reflect on experiences in order to better deal with crisis in future by up-dating plan
some risks uninsurable since difficult to quantify, making planning more challenging.
Strategy:
-important 2 act fast
- important 2 have coordinator 2 work closely with external agenciese.g. lawyers, emergency services, press.
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- Investigate root cause-Ishikawa cause and effect model or pareto
principal