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Management: Skills and Application
MSOM 301 ? Managing People and Organizations Fall 2009 Lecture 10 ? November 11, 2009 Types of Control MSOM 301 Fall 2009 Markin Types and Purposes of Budgets Figure 17.6 MSOM 301 Fall 2009 Markin Budgetary Control MSOM 301 Fall 2009 Markin Effective Budgeting Suggestions for effective budgeting: Performance incentives can be tied to budget control, accuracy, and fulfillment. Could also be tied not only to financial data but also to customer satisfaction. Zero-based budgeting Form of budgeting in which the manager must build and justify each area of a budget. Each activity is identified, evaluated, and ranked by importance. MSOM 301 Fall 2009 Markin Profitability Ratios Figure 17.7 MSOM 301 Fall 2009 Markin Methods of Control Direct observation A store manager?s daily tour of the facility, a company president?s annual visit to all branches, and a methods study by a staff industrial engineer are all examples. Written reports Planning what is to be done Collecting the facts Organizing the facts Interpreting the facts (this step is omitted with informational reports) Writing the report MSOM 301 Fall 2009 Markin Methods of Control (cont?d) Electronic monitors Electronic cash registers Video cameras Internet programs Management by objectives The development of an MBO system is part of the planning function. Balanced scorecard (BSC) BSC attempts to balance traditional financial measures with measures relating to customer service, internal processes, and potential for learning and innovation on both the short and the long term. MSOM 301 Fall 2009 Markin Methods of Control (cont?d) Management information systems Periodic reports, special reports, and outputs of mathematical simulations. Audits Management audits attempt to evaluate the overall management practices and policies of the organization. Break-even charts Graphic depiction of the relationship of volume of operations to profits. MSOM 301 Fall 2009 Markin Break-Even Chart Figure 17.8 MSOM 301 Fall 2009 Markin Understanding Performance Performance Degree of accomplishment of the tasks that make up an employee?s job. Determinants of Performance Effort Results from being motivated; refers to the amount of energy an employee uses in performing a job. Abilities Personal characteristics used in performing a job. Role perception Direction in which employees believe they should channel their efforts on jobs. MSOM 301 Fall 2009 Markin Performance Appraisal Process that involves determining and communicating to employees how they are performing their jobs and establishing a plan for improvement. Can be used to make decisions related to merit pay increases, promotions, layoffs, and firings. Can also provide needed input for determining both individual and organizational training and development needs. Encourages performance improvement. To work effectively, performance appraisals must be supported by documentation and a commitment by management to make them fair and effective. MSOM 301 Fall 2009 Markin Management by Objectives MSOM 301 Fall 2009 Markin Setting Production Standards Figure 18.2 MSOM 301 Fall 2009 Markin Performance Appraisal Methods MSOM 301 Fall 2009 Markin Job Descriptions MSOM 301 Fall 2009 Markin Potential Errors in Performance Appraisals MSOM 301 Fall 2009 Markin Factors Associated with Effective Performance Appraisals MSOM 301 Fall 2009 Markin Overcoming Performance Appraisal Errors Do?s include: Base performance appraisal on job performance only and not other factors unrelated to the job. Use only those rating scales that are relevant to the job itself and are indicators of job performance and attainment. Sincerely work at the appraisal interview process. Be problem solving oriented. Don?ts include: Don?t criticize. Be proactive. Carefully avoid the halo effect and leniency errors. Don?t dominate conversations about performance. Encourage employees to speak and to address issues in the evaluation process themselves. Avoid general prescriptions to fix performance. Always present concrete and realizable objectives. MSOM 301 Fall 2009 Markin Providing Feedback through Appraisal Interview MSOM 301 Fall 2009 Markin Performance Improvement Plans MSOM 301 Fall 2009 Markin Legal Aspects of Performance Appraisal Deriving the content of the appraisal system from job analyses. Emphasizing work behaviors rather than personal traits. Emphasizing work behaviors rather than personal traits. Ensuring that the results of appraisals are communicated to employees. Ensuring that the results of appraisals are communicated to employees. Training managers in how to conduct proper evaluations. Ensuring that appraisals are written, documented, and retained. Ensuring that personnel decisions are consistent with the performance appraisals. MSOM 301 Fall 2009 Markin Rewarding Performance MSOM 301 Fall 2009 Markin Intrinsic vs. Extrinsic Rewards Figure 18.9 MSOM 301 Fall 2009 Markin Merit Pay Preconditions for implementing a successful merit pay program include: Trust in management. Absence of performance constraints. Trained managers. Good measurement systems. Ability to pay. Clear distinction among cost of living, seniority, and merit pay. Well-communicated total pay policy. Flexible reward schedule. MSOM 301 Fall 2009 Markin MSOM 301-001 Professor Markin Leaderhip Power, Authority, and Leadership Sources of Power Figure 14.1 Leadership and Management Leadership and management are dissimilar but compatible. Effective leadership, Creates a vision for the future, that considers the long-term interests of the organization. Develops a strategy for that vision. Enlists employee support towards producing a movement. Motivates employees to implement the strategy. In practice, effective leadership and management must ultimately coincide. Classifying Leadership Styles Figure 14.3 Source: Arthur G. Yago, ?Leadership Perspectives in Theory and Practice,? Management Science, March 1982, p. 316. Leadership Styles Autocratic leader Makes most decisions for the group. Laissez-faire leader Allows people within the group to make all decisions. Democratic leader Guides and encourages the group to make decisions. Ohio State Studies Leader Behavior Description Questionnaire (LBDQ) Questionnaire to determine what a successful leader does, regardless of the type of group being led. Consideration Leader behavior of showing concern for individual group members and satisfying their needs. Initiating structure Leader behavior of structuring the work of group members and directing the group toward the attainment of the group?s goals. Major Conclusions of the Ohio State Studies Leaders scoring high on consideration tend to have more satisfied subordinates than do leaders scoring low on consideration. The relationship between the score on consideration and leader effectiveness depends on the group being led. High score on consideration was effective in leading managers and office staff. High consideration score on was less effective in leading production foremen. There is no consistent relationship between initiating structure and leader effectiveness; rather, the relationship varies depending on the group that is being led. University of Michigan Studies Managers of high-producing work groups were more likely: To receive general rather than close supervision from their superiors. To like the amount of authority and responsibility they have in their job. To spend more time in supervision. To give general rather than close supervision to their employees. To be employee oriented rather than production oriented. The Managerial Grid Figure 14.5 Fiedler?s Contingency Studies The Least Preferred Co-Worker Scale (LPC) Dimensions of Leadership Fiedler turned to the situation in which the leader was operating. He placed leadership situations along a favorable?unfavorable continuum based on three major dimensions: Leader-member relations Degree that others trust and respect the leader and the leader?s friendliness. Task structure Degree to which job tasks are structured. Position power Power and influence that go with a job. Fiedler?s Classification of Situations Figure 14.6 Forces Affecting Leadership Figure 14.8 Continuum of Leader Behavior Figure 14.9 Path-Goal Theory of Leadership Situational Leadership Theory As the level of maturity of followers increases, structure should be reduced while socioemotional support should first be increased and then gradually decreased. Leader?s behavior should move from: High task?low relationships to high task?high relationships to low task?high relationships to low task?low relationships. Figure 14.10 Transformational and Transactional Leaders Transactional leadership: Takes the approach that leaders engage in a bargaining relationship with their followers. Under this approach, the leader (manager): Tells employees what they need to do to obtain rewards. Takes corrective action only when employees fail to meet performance objectives. Transformational leadership involves cultivating employee acceptance of the group mission. Servant Leadership Leader exists to meet the needs of the people who he or she nominally leads. Primary aim is to fulfill followers? needs. Believes that business exists as much to provide meaningful work to employees as it does to provide a quality product or service to the customer. Lessons from Leadership Studies MSOM 301-001 Professor Markin Myers Briggs Personality Types The Myers-Briggs typology model regards personality type as similar to left or right handedness: individuals are either born with, or develop, certain preferred ways of thinking and acting. The MBTI sorts some of these psychological differences into four opposite pairs, or "dichotomies," with a resulting 16 possible psychological types. None of these types is "better" or "worse"; however, Briggs and Myers theorized that individuals naturally prefer one overall combination of type differences. In the same way that writing with the left hand is hard work for a right-hander, so people tend to find using their opposite psychological preferences more difficult, even if they can become more proficient (and therefore behaviorally flexible) with practice and development. The 16 different types are often referred to by an abbreviation of four letters, the initial letters of each of their four type preferences (except in the case of iNtuition, which uses N to distinguish it from Introversion). For instance: ESTJ - Extraversion, Sensing, Thinking, Judging INFP - Introversion, iNtuition, Feeling, Perceiving And so on for all 16 possible type combinations. MSOM 301-001 Professor Markin Jung?s Psychological Functions Jung identified two pairs of psychological functions: The two perceiving functions, sensing and intuition The two judging functions, thinking and feeling According to the Myers-Briggs typology model, each person uses one of these four functions more dominantly and proficiently than the other three; however, all four functions are used at different times depending on the circumstances. Conflict Management Myths and Truths about Conflict Figure 15.1 Source: Jerry Wisinski, Resolving Confllicts on the Jo (New York: American Management Association, 1993). Potentially Useful Effects of Conflict Progressive Stages of Conflict Latent conflict Perceived conflict Felt conflict Manifest conflict Conflict aftermath Analyzing Conflict Intrapersonal (Goal) Conflict Intrapersonal (Goal) Conflict (cont?d) Interpersonal Conflict Factors Inhibiting Reward Implementation Mutual and Unequal Departmental Dependence Functional Unit and the Environment Role Dissatisfaction and Role Ambiguity Role Ambiguity Common Resource Dependence and Communication Barriers Types of Structural Conflict Figure 15.3 Organizational Conflict Political Conflict Approaches to Address Interpersonal Conflict Tactics for Managing Interpersonal Conflict with Difficult People Figure 15.4 Organizational Diplomacy Source: Jacqueline A. Gilbert and John M. Ivancevich, ?Organizational Diplomacy: The Bridge for Managing Diversity,? Human Resource Planning 22, no. 3 (1999), p. 30. Figure 15.5 Workplace Stress Stress - Mental or physical condition that results from a perceived threat of danger (physical or emotional) and the pressure to remove it. Stress strikes all levels of workers. Common Sources of Organizational Stress Figure 15.6 Stress Audit Managing Stress Technostress Burnout The Path to Professional Burnout Source: Reprinted by permission from State of Business Magazine, ?Helping Employees Cope with Burnout,? by Donald P. Rogers, October?December 1984. Copyright © 1984 by the Robinson College of Business, Georgia State University, Atlanta. Figure 15.7 Methods for Increasing Career Motivation Figure 15.8 Sources: M. London and E. M. Moore, Career Management and Survival in the Workplace (San Francisco: Jossey-Bass, 1987), p. 5; and K. N. Wexley and J. Hinricks, eds., Developing Human Resources (Washington, DC: BNA Books, 1991), pp. 51?59. Sabbaticals Workaholism Workplace Violence Employee Assistance Programs (EAPs) Program sponsored by the organization that attempts to help employees with stress, burnout, and other personal problems that include alcohol and drug abuse, depression, anxiety, domestic trauma, financial problems, and other psychiatric/medical problems. Ten Critical Elements of an EAP Figure 15.11 Wellness Programs Specific Company Benefits of Wellness Programs Figure 15.12 MSOM 301-001 Professor Markin Dispute Resolution Theory and Practicum MSOM 301-001 Professor Markin Coping with Conflict MSOM 301-001 Professor Markin Creative Ways to Manage Conflict MSOM 301-001 Professor Markin 3 Categories of Negotiation MSOM 301-001 Professor Markin Six Stages of Traditional Mediation MSOM 301-001 Professor Markin Alternative Dispute Resolution A growing number of companies, organizations and agencies throughout the world have recognized the value of mediation to resolve disputes with their employees, customers, and business partners. Mediation allows parties to work together with the aid of a neutral facilitator - a mediator - who assists them in reaching a settlement of their choosing. MSOM 301-001 Professor Markin Alternative Conflict Resolution Parties identify issues Parties develop positions on issues Desired outcome Comfort zone Areas of overlap put aside until end Disparate areas addressed in mediated session A neutral party facilitates the process Types of Change Types of Changes Affecting Organizations Figure 16.1 Force Field Analysis Kurt Lewin, discussed that change is a function of the forces that support or promote the change and those forces that oppose or resist the change. The sum total of these forces determines the extent to which a change will be successfully implemented. Lewin?s Three-Step Model for Change Resistance to Change Typical Change Scenarios Directing Change ? Issuing A Change Directive Employee Response Model Source: Waldron Berry, ?Overcoming Resistance to Change,? Supervisory Management, February 1983. Figure 16.2 Reducing Resistance to Change Overcoming Resistance to Change Figure 16.3 Source: Reprinted by permission of Harvard Business Review, Exhibit from ?Choosing Strategies for Change,? by John P. Kotter and Leonard A. Schlesinger, March?April 1979. Copyright © 1979 by the Harvard Business School Publishing Corporation; all rights reserved. Model for Leading Change Figure 16.4 Source: Reprinted by permission of Harvard Business School Press. From Leading Change, by J. Kotter. Boston, MA 1996. Copyright © 1996 by the Harvard Business School Publishing Corporation; all rights reserved. Organizational Development Organizational Development Phases MSOM 301 Fall 2009 Markin Organizational Development ? Diagnosis and Change Planning Organizational Development - Intervention / Education Organizational Development Evaluation Model for Management of Organizational Development Figure 16.5 Essential Principles for Managing Innovation An organization?s approach to innovation must be comprehensive. Innovation must permeate the entire organization, and it must encompass all aspects of organization. Innovation must include systematic, organized, and continual search for new opportunities. The rapid pace of change today dictates much broader participation than just top management in these decisions. Organizations must involve everyone in the innovation process. The dormant creativity of employees across the organization must be tapped. An organization must work constantly to improve its climate for innovation. Innovative climates expect a certain degree of failure, learn from failures, and share the learning throughout the organization. Principles for Learning Organizations Managing Corporate Culture Factors Contributing to Organization?s Culture Characteristics of a Strong Corporate Culture Source: Terrence E. Deal and Allan A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982). Figure 16.6 Characteristics of a Weak Corporate Culture Source: Terrence E. Deal and Allan A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, MA: Addison-Wesley, 1982). Figure 16.7 Identifying Characteristics of Organization Culture Types of Cultures Generic Types of Cultures Figure 16.8 Organizational Subcultures Justifications for Large Scale Cultural Change The organization has strong values that do not fit into a changing environment. The industry is very competitive and moves with lightning speed. The organization is mediocre or worse. The organization is about to join the ranks of the very large companies. The organization is small but growing rapidly.
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