1. Define organizing, organizational structure and organizational design. 2. Using a simple diagram, illustrate the organizing process. 3. One of the key elements in developing organization structure is departmentalization. You are required to differentiate the following: i. Departmentalization by Functional ii. Departmentalization by Product iii. Departmentalization by Customer iv. Departmentalization by Geography 4. Explain the following and give suitable example: i.Narrow vs Wide (span of control) ii. Centralization vs Decentralization (distribution of power) 5. When your company producing 2 or more different products, apply the most suitable traditional organizational design for your organization structure. EXERCISE 43
CHAPTER 4: LEADING Learning outcome: After studying this chapter, students will be able to: Describe motivation in an organization Distinguish the theories of motivation Explain leader and leadership in organization Describe the theories of leadership Apply organizational communication 4.1 Motivation in Organization What is Motivation? Motivation is the word derived from the word ’motive’. In general, motivation can be defined as the drive or desire to do things, to have or achieve something. In other word it is an internal drive to satisfy the unsatisfied needs. Motivation in management is refers to the factors that can drive attitudes, behaviors and satisfaction of the employee towards the achievement of organizational goals. It is the process of stimulating people to actions to accomplish the goals. In the work goal contexts, the psychological factors stimulating the people’s behaviour can be: money success recognition job-satisfaction team work, etc. 44
Why motivation is important? Employee motivation is a critical aspect at the workplace which leads to the performance of the department and even the company. Motivating your employees needs to be a regular routine. There are several reasons why employee motivation is important: Increase employees’ productivity It leads to high level performance of an organization Drives willingness of the employee to work hard Encourage creativity, innovation and new skills Improve the relationship between manager and their employee Builds employees’ loyalty toward the organization, etc. What makes employee motivated? Figure 4.1 suggests some points or elements that will answer the question of what interesting things that can stimulate motivation of employees or cause them to improve their work performance. Figure 4.1: Elements That Drives Employees’ Motivation 45
4.2 The Theories of Motivation Motivation theories are used to understand, explain, and influence human behaviour. Early and modern theories of motivation allow a manager to find the reasons for people’s actions, desires, and needs. Motivation theories also explain how to influence one’s direction to behaviour that allows controlling and guiding employees’ actions. Figure 4.2: The Theories of Motivation i. Early Theories of Motivation Early theories are important as they represent a foundation from which contemporary theories have grown. In the 1950s, few motivational theories were formulated and are the best known. Among them are the Hierarchy of Needs Theory by Abraham Maslow and the X and Y Theory by Douglas McGregor. a. Maslow’s Hierarchy of Needs Theory Based on his theory, Abraham Maslow have been classified all human’s needs into the following order: 46
3. Social needs - These needs emerge from society. Humans possess an effective need for a sense of acceptance belonging among example: and social groups. For love, affection, belongingness, friendship, conversation, etc. 4. Esteem needs - These needs relate to individual’s desire for self-respect, recognition and respect from others based on their real capacity and achievement. 5. Self-actualization needs - These are the needs of the are found in those person whose previous four needs are satisfied. Maslow describes accomplish everything this as the desire to that one can, to become the most that one can be. 1. Physiological needs - These are the basic needs of an individual which includes food, clothing, shelter, air, water, etc. These needs relate to the survival and maintenance of human life. 2. Safety needs - These needs are also important for human beings. Everybody wants job highest order and these needs security, protection against danger, safety of property, etc. Figure 4.2i(a): Methods to Fulfill Employee Needs Based on Maslow’s Hierarchy of Needs 47
think that external control is appropriate for dealing with b. McGregor’s X and Y Theory Douglas McGregor expressed his views of human nature in two sets of assumptions. They are popularly known as ‘Theory X’ and ‘Theory Y’. The Theory X assumptions are negative: Employees inherently dislike work and, whenever possible, will attempt to avoid it Employees need close supervision, controlled, or threatened with punishment Employees will avoid responsibilities and seek formal direction whenever possible Employees will display little ambition and they must be pushed to perform Employees only desire is money Managers who accept Theory X assumptions tend to structure, control and closely supervise their employees. These managers unreliable, irresponsible and immature people. While the Theory Y assumptions are positive: Employees naturally wants to work Employees are committed and drive themselves to perform Employees can learn to accept, even seek for responsibility Employees have the ability to make innovative decisions Employees want independence in work and motivated by selffulfilment Managers who accept Theory Y assumptions do not attempt to structure, control or closely supervise the employees. Instead, these managers help their employees mature by subjecting them to progressively less external control and allowing them to assume more and more self-control. 48
Figure 4.2i(b): Summary of McGregor’s Theory X and Y 49 ii. Contemporary Theories of Motivation The following theories are considered contemporary or modern not only because they necessarily were developed recently, but because they represent the current ideas in explaining employee motivation. Among them are the Goal Setting Theory by Edwin Locke and Reinforcement Theory by Burrhus Frederic Skinner. a. Goal-Setting Theory In this theory, Edwin Locke argues that specific and difficult performance. Such goals ensure that employees goals lead to better work will are aware; what tasks to be done and how much effort will be needed. In other words, the clearer the goals, the better the performance. According to him, the goals should be challenging enough. Only then the employees will have the satisfaction sense of victory, and confidence when the task is accomplished. Furthermore, from this victory of achievement, it will be transferred to the individual’s performance in attaining the next goal.
their consequences, and that individual 50 behaviours can be changed, altered or manipulated through reinforcement, punishment and extinction. Here are several behavioural Figure 4.2ii(a): Summary of Goal-Setting Theory by Edwin Locke b. Reinforcement Theory According to B.F Skinner, reinforcement theory is a psychological principle suggesting that behaviours are shaped by concepts that are common in business management: 1. Positive Reinforcement - A key idea in the reinforcement theory of motivation is that positive reinforcement with rewards reinforces desired behaviours. For example, a manager can provide bonuses for good performance and outcome. Do not forget the elements of recognition and reward such as extra pay, salary increment, bonuses, promotion and etc. to recognize the overall outcome and goal achievement made by the employees.
2. Negative Reinforcement - It involves the removal of aversive 51 stimuli to reinforce the target behaviour. For example, a manager can refrain from imposing fines when employees change, such as coming to the office early. 3. Punishment - Positive punishment involves the delivery of an aversive stimulus, such as increase workload to the employee to affect behaviour. Meanwhile, negative punishment removes a pleasant stimulus for example a manager will imposed salary deduction to stop the undesired behaviour. 4. Extinction - Like punishment, the goal of extinction is to minimize the unwanted behaviours. In this situation, pleasant stimulus can be withdrawing to reduce the probability of a specific behaviour from continuing. The idea is to stop a learned behaviour over time. For example, an organization might stop paying overtime to discourage employees from staying late and working too many extra hours. Figure 4.2ii(b): Reinforcement Theory by B.F. Skinner
4.3 Leader and Leadership in Organization Who is leader? Leader is referred to someone who can influence others in order to act in the manner desired and who has the managerial authority. A leader is the one in the charge, the person who able to convinces other people to follow. A great leader inspires confidence in other people and moves them to action. Who is manager? Managers is defined as individuals within an organization who direct the activities of others, who is in charge of coordinating the efforts of individuals and do the allocation of resources. As such, a manager is the one who undertakes the management activities. They can be the owners, founders or employees in an organization. What is the difference between leadership and management? Leadership is the process of directing and inspiring a group towards the achievement of goal. In other words, it is the ability of individual or group to lead, guide, motivate and influence the behaviour of other individuals or group of individuals around him/them to achieve the desired goals or to meets the organization’s need. While management is the process of getting things done, effectively and efficiently, with and through other people. It 52 controlling the human resources, financial, physical, includes the process of planning, organizing, leading, and and information resources of an organization to reach its goals and objectives.
What are the characteristics of effective leader? Ineffective leadership can cost companies more than just morale. It also results of poor management, leading to teams that are less productive, less profitable, and more likely to cause staff turnover. That’s why, in order to retain employees, satisfy customers, and improve company productivity, you need people who have effective leadership skills. Here are some of the characteristics of how to be an effective leader: Communicate and connect effectively Inspire confidence Demonstrate high emotional intelligence Build trust Promote healthy failures Expand common ground (mutual agreement or bring people together) Make difficult conversations easy Manage attention Empower employees Deliver constructive feedback 53 4.4 The Theories of Leadership In the field of leadership there are many theories put forward that try to explain how or why someone is a great leader. Early leadership theories focused on the distinguishing qualities between leaders and followers, while later theories looked at other variables such as situational factors and skill levels.
Figure 4.4: The Theories of Leadership i. The Early Theories of Leadership The following are some of the early theories of leadership that have been introduced and applied in the context of organizational management. Early theory emphasized on characteristics and behaviour of a leader. Among of them are the Trait Theory by Thomas Carlyle & Francis Galton, Management System Theory by Rensis Likert and Managerial Grid Theory by Robert Blake & Jane Mouton. a. Trait Theory Developed by Thomas Carlyle and Francis Galton where in this theory, they focus on the traits or characteristics that differentiate between leader from non-leader. Traits are individual inborn qualities or characteristics such as: 54
Physical (appearance, height, weight) Demographic (education, socioeconomic background) Personality (introvert, self-confident, domineering, positive) Skills and abilities (knowledge, competence, intelligence) Social characteristics (sociable, cooperative) Basically, trait theory suggests that leaders and leader’s traits are important to the success of an organization. The assumption here is that finding people with the right attributes will improve organizational performance. Trait theory focuses exclusively on leaders and ignores followers. To apply this theory today, organizations usually use personality tests to find the 'right' people with the 'right' traits, using various methods such as interviews and Leadership Trait Questionnaires (LTQ). Figure 4.4i(a): Characteristics of a Great Leader 55
b. Management System Theory The Likert Management System introduced by Rensis Likert in the 60s is a theory about various management styles that can be applied by managers in an organization. He is convinced that the role and relationship of management and employees is related to the question of how a company is able to succeed. Here are four management styles, which aim to describe the relationship, role and involvement of managers and subordinates in the organizational environment: 56 1. Exploitative-Authoritative – In this style, the leader will impose decision on employees and uses fear such as warning and threat to achieve employee motivation. Employees do not influence decision-making and are not involved in this process. 2. Benevolent-Authoritative – The main difference with the previous style is that employee motivation is not driven threats and through by warnings, but rewards. But management is still responsible for all decisions and communication from employee to superior is still limited and there is no teamwork. 3. Consultative - In a consultative management style, superiors trust their subordinates Two-way substantially. communication, idea contribution and teamwork are encouraged but the final decision is still made by the superior. Employee motivation rewards and the level is stimulated by of individual involvement. 4. Participative - Through this approach, top management has full faith in subordinates and encourages them to participate actively in the decision-making communication teamwork. And not because of reward process. Exist a very good and just but everyone feels motivated and responsible to achieve the organization goals.
Figure 4.4i(b): Summary of Management System Theor c. Managerial Grid Theory This model was developed by Robert R. Blake and Jane Mouton and also known as ‘Leadership Grid’. This model has been created using a horizontal axis (concern for production) and a vertical axis (concern for people) based on a 9-point scale. Five different leadership styles have been identified based on concern for production and concern for people that meets at right angles in the grid: 1.Impoverished Management (1,1) – Known as ‘Laissez Faire’ or poor management and leadership style where a manager has low concern for both production and people. 2.Team Management (9,9) – Contrast with poor management, in this style a manager has high concern for both production and people. This the most effective type of leadership which can improve overall performance, increase employee satisfaction, lowering turnover etc. 3.Country Club Management (1,9) - In this environment, a manager has high concern for people but low concern in production. He cares too much about the safety and comfort of the employee to improve performance. But he is hardly capable of using a more punitive, coercive, and legitimate power. Friendly environment but not very productive. 57
Figure 4.4i(c): Management Grid Theory By Blake & Mouton 58 4.Authority-Compliance Management (9,1) – It refer to ‘Authoritarian’ management style where a manager has high concern in production but very low concern for employee. This type of leader is highly autocratic, has strict work rules, policies and procedures, and sees punishment as the most effective way to motivate employees. 5.Middle of the Road Management (5,5) - Through this style, a manger has an intermediate concern for production and people and aim to achieve satisfactory level or acceptable performance for both. Suitable to be practiced when production and people issues are seen as a conflict.
ii.The Contingencies Theories of Leadership Contingency theory of leadership assumes that the effectiveness of leaders depends on whether their leadership style is appropriate or not for a particular situation. A leader should be able to examine each situation and decide whether or not their leadership style will be effective. Among the contingency theories that have been introduced are Situational Theory by Paul Hersey & Kenneth Blanchard and Path-Goal Theory by Robert House. a. Situational Theory Known as ‘Situational Leadership Theory’ or ‘HerseyBlanchard Model’. This theory is primarily concerned with the maturity level (high, moderate, low) of a team’s members. It identifies four leadership styles where each of them suits to the different levels of employee maturity. These styles include: 1.Telling (S1) - This style is used by leaders who frequently give explicit directions and who supervise all tasks closely. This style best suits low maturity employees who new, inexperience, need a lot of help, direction and encouragement to get the job done. 2.Selling (S2) - This term refers to a style that involves the leader attempting to sell his ideas to the group by persuasively giving task inFsigturruec4ti.4oin(cs).:TMhainsaagelsmoenstuGitrsidmThoedoeryraBtye Btleaakme &mMeomutboenrs, who have little more responsible, experience and willingness to do the task but do not have the necessary skills. 59
3.Participating (S3) - This style focuses on sharing ideas and decisions. Leaders who use the participating style might apply it to moderately mature team members who have the ability to do the job but unwilling and lack confidence to start or complete the job and need closely mentoring. 4.Delegating (S4) - This style allows other team members to be responsible for certain tasks or to lead subgroups. This style best suits a team of high maturity employees because they are self-sufficient and competent. 60 Figure 4.4ii(a): The Situational Leadership Theory b.Path-Goal Theory In this theory, Robert House primarily identifying processes (paths) that will allow each member to meet their individual goals. Leaders implement this model adjust their behaviours concerned with team who and expectations to positively affect their team’s productivity. This requires the leader to be extremely flexible in their leadership style. The theory identifies four different leadership styles. These include:
1.The Directive Leader - This style is used in situations where the leader tells employees what is expected of them and instructs them on how to perform certain tasks. The theory states that this style is the most effective when the employees’ role and task are unstructured or ambiguous. 2.The Supportive Leader - This style focuses on the satisfaction of employees’ needs and considers their personal preferences. A supportive leader is as concerned with their employees’ mental health and well-being as they are with their productivity. This style is suitable for work environments that can be stressful or mentally challenging. 3.The Participative Leader - Leaders who use this style consult with their employees and ask for their input before making decisions. This behaviour would be well-received in a workplace where the employees are personally invested in the outcome and results of their work. 4.The Achievement-Oriented Leader - This behaviour occurs in situations where the leader sets lofty goals for employees, expects them to perform at a high level and shows complete confidence in their capabilities. This style is productive in environments that attract high-achievers, such as hospitals, scientific laboratories and law firms. 61 Figure 4.4ii(b): The Path-Goal Theory
4.5 Organizational Communication Communication is usually defined as the transmission of information. It is the process of sending and receiving information through verbal or non-verbal means, including speech or oral communication, writing and graphic representation, symbols, signs, gestures, and behavior. The information is exchanged between the sender and receiver through various platforms or media. What is Organizational Communication? Organizational communication is a process of exchanging ideas, opinions, and information that has a specific objective and is presented personally or impersonally among interrelated individuals within the organization through the use of symbols, or signals with the objective of achieving organizational goals. Why Communication is Importance in Organization? Organizational communication is largely focused on building relationships and interacting with internal organizational members and an interested external public. Here are some reasons why communication in organizations is important: increases employee morale, engagement, productivity and satisfaction reducing day-to-day conflict contribute to better team collaboration and cooperation improves and understanding the process and procedure drive better results for individuals, teams and organizations 62
i.The Elementsin Communication Process Communication refers to the process of exchanging information between sender and receiver. The sender can send ideas, opinions, feelings, facts, news, or other forms of information to the receiver. The receiver then provides feedback on the content of the communication and presents their own ideas and opinions. To explain the communication process, here are the elements involved in the communication cycle: 1.Sender - This is the person who delivers the message to the recipient and usually have the intention of sharing information with others 2.Encoding - Refers to the process of converting the information into a symbolic form such as words, actions or pictures etc. 3.Message - This is the subject of communication or the actual information conveyed by a sender. This may be an opinion, attitude, feeling, view, command or suggestion. 4.Channel - Refers to the medium through which the message travels. Information is sent to the recipient through certain channels which may be either formal or informal. 5.Decoding - Refers to the process of translating received messages. The symbols in the message must be converted to a form that can understood by the recipient. 63
6.Receiver - Is the person who receives the message and the person who tries to understand the message in the best way in achieving the desired objective. 7.Response - It is the receiver's action once they see, hear or read the message. The receiver's response can vary from person to person. 8.Feedback - It is a form of reverse communication where the receiver encodes a message for the sender to decode. It is a process to ensure that the receiver has received the message and has the same understanding as the sender. 9.Noise - It refers to anything that interferes with the communication process between sender and receiver. Noise can be internal (mental disturbance) or external (physical noise). Figure 4.5i: The Communication Process 64
ii. The Types of Communication Communication is a simple way to exchange ideas, opinions, messages, information and feelings with and without using words. We use communication every day in almost every environment, including at work. Effective communication is an important part of business communication to ensures coordination, teamwork, and relationship building. There are four main types of communication that we use every day; verbal, written, non-verbal, and electronic communication: 1.Verbal - This is the spoken form of information and it is the most preferred type of communication used by organizations. Senders and receivers share information using dialogue, through talking or chatting. 2.Written – It is he transmission of message instructions or orders in writing. In written communication, organizational members can share information by disseminating messages through letters, memos, policy manuals, reports, forms and other documents. 3.Non-Verbal - Communication in which messages are sent without using language to generate meaning. It is a transfer of information through body language, facial expressions, gestures, created space and many more. For example, smiling when you meet someone shows friendliness and acceptance. 4.Electronic - Known as e-communication and it refers to the transfer of writing, signal, data, sound, image, sign or intelligence sent through an electronic device. For example email, text messages, social media messaging, video conferencing and image sharing. 65
iii. Barriers to Effective Communication Any factor that prevents the exchange of information between sender and receiver is a barrier to communication. Obstacles or barriers are inevitable in the communication process, and they can cause failure of message delivery by the sender or cause misinterpretation in meaning of the message by the receiver. There are two types of barriers: a.Internal Barriers 66 1.Differing Perception - People with backgrounds knowledge, different of education and experience may see the same situation differently. Or, the same message is conveyed but may results in perception understanding different and from different audiences. 3.Emotions - emotions can A person's affect how a message is sent or received. The recipient's sadness may interfere with the delivery of information or the recipient's anger may cause the message to be misinterpreted. 2.Language Differences - It refers to language, jargon, dialect that is not understood and rarely used. In communication, the words used must have to a certain meaning the sender and receiver so that it can be understood by both parties. 4.Distrust - The sender's trustworthiness can determine the extent of trust placed by the receiver in the message conveyed. When the sender is not trustworthy, it can cause the receiver not to take the message seriously. Non-Verbal - This is 5.Inconsistent of Verbal and a situation where a person may say one thing but their body language says the opposite. For example; no smile when congratulating, frowning when delivering good news, no expression or staring out the window while listening.
b. External Barriers 67 1.Noise - External noise from traffic, construction and repair work, machinery noise, or public major obstacle conversation can be a to communicating effectively with someone. 2.Technical Problem - It may be caused by a weak signal on the phone, interference, network equipment damage and so on. Although technology is a blessing, sometimes it is also another obstacle that affects the smooth communication between people. 3.Time and Distance - Time zone differences geographical also interfere effectiveness communication. and distance can the of For example, different working hours can conversation or limit the failure of communication function could happen due to the distance of an area. 4.Environmental Factor - Natural disasters such as thunder, rain, wind and other environmental factors that produce loud noise can have a direct impact to the of is effectiveness communication. It beyond human control.
Figure 4.5iii: Ways to Overcome Communication Barrier 68
EXERCISE 1.List FIVE (5) elements that makes employee motivated. 2.According to Mc Gregor’s Theory X and Theory Y, the perception of managers on the nature of individuals is based on various assumptions. Compare FIVE (5) assumptions of Theory X and Theory Y by Mc Gregor. 3.Hersey and Blanchard came up with four different types of leadership styles based on the task, relationships and maturity levels of subordinates. Discuss FOUR (4) styles of Hersey and Blanchard’s leadership theory that managers can practice in the organization. 4."Sender" is the person who first initiates the communication. Share the other SEVEN (7) more basic elements in a complete communication process. 5.The following are among the FOUR (4) internal barriers to communication. You are required to explain each element and also please provide the way to overcome. i. Differing Perception ii. Language differences iii. Emotions iv. Distrust 69
CHAPTER 5: CONTROLLING Learning outcome: 1. Concept of controlling in organization. Controlling is a continuous managerial exercise that must be undertaken throughout the organization’s operation life. Process of managing and monitoring activities, ‘control’ has evolved over time. Most organization have both traditional and non-traditional approach to organizational control. Traditional control structure was based on the bureaucratic model which featured hierarchical control, division of labour, task specialization and centralized authority systems. Non-traditional approach is control process that are more fully integrated into an organization’s overall operations consider with information revolution, foreign competition, globalization and technological advances. 2. Define controlling in organization. Process whereby managers ensure that actual activities are conducted in line with the planned activities and take corrective action to correct any mistakes that occur in order to achieve organizational goals. Process to ensure that actual activities are conducted according to the planned activities (Stoner, Freeman & Gilbert, 1995) 70
Process to ensure activities are implemented as planned and activities that are considered to be incorrect are corrected (Robbins & Coutler, 1996) A systematic effort in determining a set of performance standards based on the objectives of planning the formation of a feedback system and the comparison between the actual performance and the set standards (Mockler). 5.3 The importance of controlling. Figure 5.2 : Importance of controlling Good management requires an effective control system. The combination of well-planned objective, strong organization, effective instruction and motivation will not bring success to an organization if a suitable control system is not in place. The importance of the controlling function as follow. Accomplishes organizational goals. By comparing actual result with the planned result, corrective action can be taken if there are deviations. Ensures efficient use of resources. Controlling involves checking process for every stage of the operations, hence employee can be helped to do their jobs better, wastage and spoilage can be minimized. 71
5.4 The controlling process. Standards should be flexible so can change when circumstances require. Standards can be quantitative or qualitative. Figure 5.4: The controlling process 1.Set the standards. Standards must not be too high or too low. Standards must be clear, precise and accepted by every member of staff. Standards must be measurable or comparable. Controlling behaviours helps in reducing amongst employee and dishonest/ creating undesired order and discipline in an organization Ensures standards are realistic and fair. When managers regularly monitor the work of employees, they will know whether the standards set by management are too low or too high and adjust the standards, so they are achievable and fair. Improves motivation. Employees know the performance standard and how much effort they will need to put in to get the rewards they desire. Improves employee behaviour. 72
difficult to achieve) or taking corrective action. Maybe corrective action involves changes to several activities in the organizational operations. 2.Measure the actual performance. Must be done regularly and in a consistent manner. Measuring method or techniques include, sample, performance reports, observation. Measure performance continuously in order to ensure no mistake occurs. 3.Compare the actual performance with the standard. Compare to identify whether the actual performance has met the standards. if the standards are met, the activities conducted as planned, is not maybe mistake occurred and corrective action must be taken promptly to amend those mistakes. 4.Taking corrective action If the standards are not met managers must identify the cause of the situation. Re-evaluating the standards (high standards will be one or 5.5 The principles of effective controlling in organization. An effective control system will ensure that all activities are performed in accordance with organizational goals. The following are the principle of controlling: Detecting potential actual and deviations from plans to permit corrective action to be taken in a timely manner. i. Principle of attainment of objective. Plans must be clear, controlled and 73 coordinated to support the plans. ii. Principle of reflection plans
Figure 5.3: The principle of effective controlling in organization the exercise of control rests with the manager charged with the execution of a particular plan. iii. Principle of control responsibility Primary responsibility for iv. Principle of efficiency of control The control system should detect the causes of deviation efficiently with minimum time, effort and cost. their attention on critical points rather of performance than wasting time and effort checking every detail of performance. v. Principle of critical points Managers should focus vi. Principle of individuality of control Control is more effective when they meet the individual requirements of managers. vii. Principle of review Control systems should be reviewed periodically and adjusted as necessary. viii. Principle of action If there are any deviations, action must be taken. Otherwise, there is no use for a control system. 74
5.6 The types of controlling in organization. Figure 4.4: The types of controlling in organization 1.Control types by timing The three basic types of control are feedforward control, concurrent control and feedback control. In all the types of control, speed of information flow and accuracy are vital. The sooner a deviation is detected, the sooner corrective action can be taken. The more accurate the information, the quicker the search for the solution. Figure 5.5: Control types of timing i. Feed forward control Performed before an activity starts. Allow the management to prevent problems rather than having to rectify them later. Feed forward control are usually policies, procedures and rules to eliminate any undesired behaviors Can avoid any problems or mistakes from occurring. Example: drug screening and physical examinations. 75
Take prompt action to correct the mistake before it ii.Concurrent control During the implementation of a job or activity becomes serious. Reduce cost of corrective action Control human and non-human resources. iii.Feedback control To measure the results of an action Any source of weaknesses in plans or standards can be identified. 2. Financial controls measured and compared easily. Financial control included Financial controls include the policies organizations implement and to ensure that their process that resource are properly monitored, directed and measured. Financial control methods are widely used because the information required for these techniques can be collected, Financial statements are usually used to measure the following aspects. Liquidity position, which is the ability to turn assets into cash in order to meet the organization’s current financial needs or obligations. Long term liability and equity position. Profitability position, which is the ability to earn a profit. 76 financial statement, audit, budgets and ratio analysis. i. Financial statement A financial statement is a summary of the major aspects of an organization financial status. The information contained in such a statement is essential formatting financial control over the organization. It is typically prepared at the end of a reporting period for example annually.
There are many ratios, liquidity kinds of ratios such as profitability ratio and leverage ratio. The Two basic types of financial statements typically used by business organization are balance sheet and income statement. Financial statements include: Break even analysis. Study relationship between sales/ revenue and cost to determine the breakeven point whereby total sales will be equal to total sales. Helps the company to understand sales volume, pricing, cost and sales price. Cash flow statement Measure how well a company manages its cash position, generates cash to pay debt and fund its operating expenses. ii. Ratio analysis Comparisons can be made in two ways: comparison over a time period and comparison with competitor or industry as a whole. Comparison over a time period: Show the company performance has changed over time. Comparison with competitor or industry: will indicate the organization’s performance relative to its competitor. management will use different ratios depending on the organization’s purpose and objective. 3. Benchmarking Benchmarking is one of modern non-financial controls. In benchmarking, an organization measure its practices, products or services against its biggest competitor or the leading companies in industry. In benchmarking, internal process are measured against an external standard to identify weaknesses and performance gaps and turn them into opportunities for improvements. Typically measures: Quality Time Cost. 77
EXERCISE 78 1.Describe three major types of control. 2.Every organization needs control. Why is control important for an organization? 3.Describe the steps in the organizational control process. 4.“Superb Global Venture, a well known supplier for frozen sweet potato fries, hopes to ensure its product would fulfil its customer’s satisfaction.” Demonstrate FOUR (4) controlling processes that could be used by Superb Global Venture to ensure product quality is guaranteed. 5.Controlling helps managers eliminate gaps between actual performance and goals. Explain TWO (2) types of controlling by timing with suitable example.
CHAPTER 6: STAFFING Learning outcome: After studying this chapter, students will be able to: Examine staffing in the organization Define staffing in the organization Explain the importance of staffing Explain the staffing process in an organization Explain career development and maintaining staff turnover in the organization 1. Definition staffing in the organization The process of recruiting employees by evaluating their qualifications, skills, and knowledge to fill positions in the organization; and retaining a workforce of sufficient quantity and quality to achieve the organization’s goals. 2. Importance of staffing. Staffing helps to find and hire people who are qualified for the job position and will benefit the company. It also improves the quality and quantity of work done by the company because they have staffed the optimum people. Here are the points that depict the importance of staffing in an organization. i.Efficient organizational performance For the efficient performance of other functions of management, staffing is key. Without competent employees, the four management functions of planning, organizing, leading, and controlling will not be done properly. ii.Reduces cost Staffing ensures the right person is recruited for the right job, at the right time so that there is minimum wastage of time and resources. 79
iii. Maintaining coordination among employees Staffing ensures that people with the right qualifications and who fit in with the organization's culture/values are hired and jobs assigned to the right people, so there is healthy corporation among staff. iv.Job satisfaction Job satisfaction rates are likely to increase because everyone is well-suited for their position and happy to be doing their specialty. Higher rates of productive performance from the company are also common, as they have staffed the right people to do their jobs. It provides employees with the opportunity for further growth and development. v. Development of human capital Another function of staffing is concerned with human capital requirements. Since the management is required to determine in advance the manpower requirements. Therefore, it has also to train and develop the existing personnel for career advancement. This will meet the requirements of the company in the future. vi. Enhances corporate image Staff that is professional, efficient, ethical, and courteous staff will enhance the organization's image. vii.Meeting current and future needs Staffing should be aligned with the organization's plans and direction through preparedness to employ new staff with the requisite skills, develop current staff for future roles, or outsource jobs. 80
6.3 Staffing Process. The staffing process helps to select the right person with appropriate skills, qualifications, and experience to recruit them to different positions and jobs in an organization. Staffing means the process of filling and keeping various roles in an organization filled. Figure 6.3 Staffing Process 6.3.1 Human Resources Planning (HRP) The organization’s objectives and strategies for the future determine the future requirement of human resources. It only means that the number and mix of human resources are reactions to the overall organizational strategy. If the intent is to get closer to people possessing requisite qualifications, the organization should act quickly. Definition: A process of determining the type & number of employees that need to be hired to fill the vacant positions in an organization at a certain period of time (Mondy and Neo, 1986). i. Factors that affect Human resources planning. Several factors affect human resource planning. These factors can be classified into external factors and internal factors. 81
Internal Factors 82 i. Company policies and policies relating strategies. Company strategies expansion, alliances, diversification, etc. determine the human resource demand in terms of quality and quantity. ii. Human resource policies Human resources policies of the company regarding quality of the human resource, compensation level, quality of work-life, etc., influence the human resource plan. External Factors iii. Job analysis Fundamentally, the human resource plan is based on job analysis. Job description and job specification determine the kind of employees required. iv.Time horizons Companies with a stable competitive environment plan for the long run whereas firms with an unstable competitive environment can plan for only short- term range. i. Government Policies Policies of the government like and labour policy, industrial to relations policy, policy towards reserving certain jobs for different communities and sons-of the soil, etc. affect the HRP. ii. Level of Economic Development Level of economic development determines the level of HRD in the country and thereby the supply of human resources in the future in the country. iii. Business Environment External business environmental factors influence the volume and mix of production and thereby the future demand for human resources. iv. Level of Technology The level of technology can determines the kind of human resources required.
Figure 6.3.1 (a) Factors that affect Human resources planning. v. Type and quality of information Any planning process needs qualitative and accurate information. This is more so with human resource plans; strategic, organizational, and specific information. vi. Company’s production operations policy A company’s policy regarding how much to produce and how much to buy from outside to prepare a final product influence the number and kind of people required. 84 Internal Factors External Factors vii. Trade unions The influence of trade unions regarding working the number of hours per recruitment sources, week, etc., affect the HRP. v. International Factors International factors like the demand for resources and supply of human resources in various countries. vi. Outsourcing The availability of outsourcing facilities with the required skills and knowledge of people reduces the dependency on HRP and vice-versa.
ii. Human resource planning Human resource planning can be divided into four key steps. These are examining present conditions, predicting demand, striking a balance between demand and supply, and integrating the plan into the company’s goals. 85 a. Planning for future needs b. Planning to balance the future c. Planning for recruitment, selection, or termination Identifying ways to d. Planning for growth Identify the number of employees required in the future. Identify the number of employees employed and currently expected to remain in the future. obtain the required number of employees training and employee to supply ensure a of Managing programs movement continuous workforce with appropriate abilities and experience iii. Organization evolution In order to determine the workforce and the type of workforce needed in a certain period, the organization needs to do two types of evolution.
a. Current evaluation Review the status of human resources at a specific time. It can be divided into two (2) : Document providing information regarding tasks, duties, and responsibilities of the job. A written profile of a job derived from the job analysis exercise. Typical heading in the job description includes: Job title, location, and grading Relationship bet. Job-holder & other parties. Brief statement of the purpose of the job. List of duties and responsibilities. Terms and conditions of employment to be given to job-holder. Job description Job specification Job specification is a minimum qualification to perform a particular job. Job specification 86 is a standard of personnel and designates required the qualities for acceptable performance. Job specification is a profile of a person who fits the job requirements. Typically, job specifications details of the ideal recruit by using headings such as: Knowledge, skills, and abilities required to do the job Educational qualifications and work experience required Physical requirements of the job Personality requirements, where relevant Career path Figure 6.3.1 (b) Job Description and Job Specification
Figure 6.3.1 (c) Example of Job Descriptions and Job Specification. 87
b. Future evaluation Evaluate the workforce requirements based on the organization’s goals and strategies Forecast the future planning of the environment based on the current labour market 6.3.2 Recruitment/Hiring The aim of the human resource manager at this stage of the recruitment is to attract a group of applicants all of whom are at least minimally qualified. From there he can, after collecting information about the candidates, choose the most suitable candidate to fill the vacancy. Definition of recruitment can be defined as identifying and attracting the interest of qualified individuals in applying for vacant positions in the organization. Potential applicants can be found both internally and externally in the organizations. i. Internal Recruitment In large organizations, it makes good sense to allow existing employees to apply for any vacant position. The effective use of internal sources requires a system for locating qualified job candidates and for enabling those who consider themselves qualified to apply for the opening. Qualified job candidates within the organization can be located in a number of ways. Hiring employees who are currently employed in the organization. Usually conducted who will be promoted. Steps in internal hiring: 1.Inform employees through notices, vacancy lists, emails, or company web 2. Review employee records to identify qualified employees. 3.Check the organizational chart to see the suitability of the promotion 88
ii. External Recruiting Methods Many different external sources are available for recruiting. In some tight labour markets, multiple sources and methods may be used to attract candidates for the variety of jobs available in organizations. Let’s take a closer look at the recruitment methods that may attract external applicants. a.Campus Recruitment Exercise Educational institutions typically are a source of young applicants with formal training but relatively little fulltime work experience. Vocational schools, institutes of technology, and universities all provide a service to both students and employers by posting notices of vacancies and setting up interviews for students about to graduate. Some employers make regular trips to these schools at appropriate times to look for suitable trainees. For jobs where it is difficult to get people with the right skills, an 89 organization undergoing may training offer scholarships to students and required to work with the company for a certain number of years. b. Employee Referrals The recruitment efforts of an organization can be greatly aided by employee referrals or recommendations from the firm’s current employees about potential candidates. In fact, word-of-mouth recommendations are the way most job positions are filled. By informing prospective workers of the existence of vacancies, a source of applicants can be tapped at a minimal cost. Employees recruited in this manner tend to become productive in a relatively short time as they are comfortable in the organization with their ‘sponsor’ on hand to help them settle in.
c. Employment Agencies and Search Firm Private employment agencies and search firms operate in most cities. For a fee collected from either the employee or the employer, these agencies do some preliminary screening and put the organization in touch with the applicant. Private employment agencies differ considerably in the level of service, costs, policies, and types of applicants they provide. Employers can reduce the range of possible problems from these sources by giving job descriptions and specifications on jobs to be filled. d. Advertisement One of the most methods of attracting applicants although web site, newspapers, and trade journals are media used most often by radio, television, billboards, posters, and email. Whatever medium is used, it should be tied to the relevant labour market and provide sufficient information on the company and the job. Advertising has the advantage of reaching a large audience of possible applicants. Preparing to recruit advertisements not only is time-consuming but also requires creativity in terms of developing their design and message content. e. Unsolicited Applicant and Resume Many employers receive unsolicited applications and resume from individuals who may or may not be good prospects for employment. At the time they contact the organization, there may not be any suitable vacancies but shortly after, a job may be available. These applicants can be contacted to see if they are still interested in the job. The percentage of accepted applicants from this source generally is not high, it is a source that cannot be ignored. 90
f. Internet Recruiting Internet is the most commonly used search tactic by job seekers and recruiters to get the word out about a new position. Information on available vacancies can be placed on the site at almost no cost. Major companies use their website to attract applicants. g. Job Fairs and Special Events Employers in tight labour markets or needing to fill a large number of jobs quickly have used job fairs and special recruiting events. Some firms also establish special events such as open houses, sponsor community events at which recruiters try to obtain applications from attendees, and use other means to recruit individuals. 6.3.3 Selection Selection is the process of choosing the most suitable candidate from a group for an available vacancy. To choose the most suitable candidate, information must be collected and each applicant carefully assessed and compared. This is the most crucial step in the selection process. If an unsuitable worker is recruited, not only will it e necessary to go through the stressful procedure of dismissing the newly recruited worker but the recruitment and selection process with all its financial and time costs will also have to be repeated. Hence, it is obviously worthwhile to spend time and money at this stage to ensure only suitable candidates are employed. i. Factors that influence selection. a. Discrimination law in terms of gender and age b. Duration of time taken to make a decision c. The number of applicants and the number of employees required d. Organizational goals 91
ii. Steps in the selection process 1.Reviewing applications forms Ensure the applicant’s information matches the job description and job specification for the position Obtain basic information View the candidate's feedback on the question asked As a reference for the organization when the candidate is hired 2.Conducting the first round of interview Two-way communication between the organization and the applicant enables both parties to qualitatively assess one another 3.Conducting the second round of interview Shortlisted candidate Helps managers make the right decision Job responsibilities and salary will be discussed 4.Conducting evaluation and tests To evaluate his ability to perform the tasks required of the position 5.Offering the job The best candidate will be offered the job 92
iii. Types of the test (depends on the aim of the organization and requirement of the position) 93 intelligence including; memory, mathematical spatial recognition, ability, and analytical short-term thinking. Figure 6.3.3 Types of test a. IQ test or knowledge A typical IQ test consists of taking various tests measuring Commonly misunderstood as something that tests all the knowledge their have acquired over the years, the IQ test is actually testing candidate capacity to learn. b. Personality and psychology test Personality tests indicate to employers either his fit within the company's culture and his personality leads to an increase in productivity. Test results might help employers evaluate his engagement level and if they think candidate interested in a long-term career with the organization. Review the different types of personality tests to understand the format and the questions asked so candidate can properly represent his personality to employers.