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Contents
Chapter 1: Managers and management
i.
ii.
What is an organization?
iii.
iv.
v.
What is management?
vi.
vii.
Management Functions
viii.
Management process
ix.
Managerial Roles
x.
Managerial skills
xi.
Levels of Management
xii.
Introduction: Planning
ii.
iii.
iv.
Approaches to planning
v.
Characteristics of Planning
vi.
Types of plans
vii.
viii.
Chapter 3: Organizing
i.
Introduction- Organizing
ii.
What is organizing?
iv.
v.
Organization as a process
vi.
Principles of organizing
vii.
Departmentation
viii.
Span of control
ix.
Chapter 4: Staffing
i.
Meaning of Staffing
ii.
iii.
iv.
v.
Job Analysis
vi.
vii.
viii.
Performance Appraisals
ix.
Chapter 5 : Direction
i.
What is direction?
ii.
Features of directing
iii.
Importance of directing
iv.
Principles of direction
v.
Elements of direction
vi.
Decision making
vii.
Characteristics of decision-making
viii.
Types of decisions
x.
xi.
Communication- Process
xii.
Motivation
xiii.
Importance of motivation
xiv.
Motivation process
xv.
Theories of motivation
Introduction-co ordination
ii.
Definitions
iii.
Principles of co-ordination
iv.
v.
Techniques of co-ordination
vi.
Types of co-ordination
vii.
Importance of co-ordination
viii.
Hindrances to co-ordination
ix.
Meaning of control
x.
Characteristics of Control
xi.
xii.
xiii.
Process of Controlling
xiv.
Kinds of control
Preface
This book Principles and Practice in management is an attempt to design a comprehensive
introduction to the study of management. Without management, an organization is merely a
collection of men, machines, money and material. In its absence, the resources of production
remain resources and never become production. The text offers a rich fund of contemporary
knowledge, basic concepts, and evolving theories, emerging ideas, latest techniques, everchanging procedures and practices in the field of management in a logical manner.
It is primarily a student-oriented textbook, as it satisfies the requirements of students to gain
basic knowledge of the field of management. The subject matter is presented in a simple,
concise and interesting style. Every attempt has been made to maintain easy readability and
quick comprehension.
The book is supported by references from books, websites and video references to benefit of
readers interested in exploring the topics further. It would enable the student to gain access to
relevant information through the internet.
The organization of this book is made according to the functions of management. Managers
are the coordinators in the organization. They are the individuals charged with examining
the workflow, coordinating efforts, meeting goals and providing leadership. Chapter one of
the book examines managers and management. It covers management theory and practice.
Chapter two discuss planning functions in detail. Successful managers deal with foreseen
problems, and unsuccessful managers struggle with unforeseen problems. The difference lies
in planning. The chapter three explores the organizational context in which managers operate.
Organizing is important to managers because it is the means which they use to align work
with resources, so that organizational plans and decisions can be made and carried out
effectively. In Chapter four, we will first define the basic human resource management
functions. Further, each of the elements in the staffing process is discussed in detail. Staffing
is the process of attracting, developing, evaluating and compensating individuals at work. In
fact
the most important duties of human resource managers are to help the organization
reach its goals through effective and efficient utilization of human resources.
Chapter five discusses directing. Direction is telling people what to do and seeing that they do
it to the best of their ability. The chapter six first describes coordinating and then controlling.
Coordination is the integration of several parts into an orderly whole to achieve the purpose of
undertaking and Controlling is the process of comparing actual performance with standards
Chapter 1
ii.
What is an organization?
iii.
iv.
v.
What is management?
vi.
vii.
Management Functions
viii.
Management process
ix.
Managerial Roles
x.
Managerial skills
xi.
Levels of Management
xii.
Managers are indispensable part of organizations. They work with and through people to
accomplish the organizational tasks. They play a vital role in efficient and effective utilization
of resources. For any organization to sustain with competitive advantage it needs managers.
This chapter intends to help you understand the basic concepts and theories of management
and describes those skills and role set that makes it to become an effective manager.
What is an organization?
All societies have, for example, a need to adapt their environments. This is adaptation need of
the society. It gave rise for production organizations. These organizations came into existence
to produce all the goods the society consumes. In addition to adaptation need all societies
have values and goals. It is goal achievement need and political organizations came into
Make decisions
Allocate resources
Management process
Management as a process refers to a series of inter- related functions, such as planning,
organizing, staffing, leading(directing)
follows:
Informational Roles As a result of the interpersonal roles managers collect and disperse
information, thereby giving rise to their informational role. The informational role is actually
made up of three subroles. As a monitor, managers collect information about the organization
and its environment from all available sources.
Decisional Roles The third major role managers play is the decisional role. It is purely
strategic in nature. As an entrepreneur, managers seek problem and opportunities and initiate
action in the best interests of the organization. As a disturbance handler, managers are
required to handle conflicts among people, group and between organizations or any external
party.
With the role of resource allocator, managers make best of choices to allocate
ultimately to solve problems and view organizations as a whole system need to develop this
skill.
3. Conceptual Skill: The mental ability to analyze and diagnose complex situations and to deal
with abstract concepts and process complex information properly.
Although three skills are essential at each managerial level, the relative importance tends to
vary in its intensity of usage according to the level of management. For example, technical
skills are more important at lower management level where supervisors are dealing with
concrete problems. Long term decisions taken by managers need more of conceptual skill to
The function performed by top managers, middle managers, and lower managers, respectively
are:
TOP MANAGEMENT
Determine objectives and policies
Designs the basic operating and financial structure of an organization
Provides guidance and direction
Lays down standards of performance
This diagram below helps us to understand how much of time a manger spends on the
different functions of management. For example the proportionate of time spent by the middle
level manager would be more in organizing and directing because they perform the role of a
liason between the top and the lower level of management.
The classical management theory, developed during the Industrial Revolution when
new problems related to the factory system began to appear. Managers were worried
about increasing the efficiency and productivity, as the major impetus was on
manufacturing. Thus, the classical management theory developed from efforts to find the
one best way to perform and manage tasks. This school of thought is made up of two
branches: classical scientific and classical administrative, described in the following
sections.
Henry Gantt
Henry Gantt , was an associate of Taylor. He developed the Gantt chart. i.e a bar graph that
measuresd, planned and completed work along each stage of production, based on time
instead of quantity, volume, or weight. This visual display chart is a widely used planning and
control tool since its inception in 1910.
A sample Gantt chart is shown as follows for a classic home contractor
The classical administrative approach focuses on the total organization. The emphasis is on
the development of managerial principles rather than work methods as contrary to the
scientific school where productivity was the focal point.
Thinkers such as Max Weber, Henri Fayol, Mary Parker Follett, and Chester I. Barnard,
propagated and developed this school of thought. These theorists studied the flow of
information within an organization and emphasized the importance of understanding how an
organization operated.
Max Weber
Max Weber propagated that organizations should be managed impersonally within a formal
organizational structure, where specific rules are followed. He believed that authority should
not be based on a person's personality, instead it was part of a person's job and passed from
individual to individual as one person left and another took over. This non-personal, objective
form of organization was termed bureaucracy.
Weber believed that all bureaucracies have the following characteristics:
The theorists who contributed to this school viewed employees as individuals, resources, and
assets to be developed and worked with not as machines, contrary to the past. The human
resource model can be derived to as follows:
Elton Mayo
Elton Mayo's conducted the famous Hawthorne studies, a series of experiments that
rigorously applied classical management theory thereby revealing its shortcomings. The
Hawthorne experiments consisted of two studies conducted at the Hawthorne Works of the
Western Electric Company in Chicago from 1924 to 1932. The first study was conducted by a
group of engineers seeking to determine the relationship of lighting levels to worker
productivity. Surprisingly enough, they discovered that worker productivity increased as the
lighting levels decreased that is, until the employees were unable to see what they were
doing, after which the performance naturally declined.
A few years later, a second group of experiments began. Harvard researchers Mayo and F. J.
Roethlisberger supervised a group of five women in a bank wiring room. They gave the
women special privileges, such as the right to leave their workstations without permission,
take rest periods, enjoy free lunches, and have variations in pay levels and workdays. This
experiment also resulted in significantly increased rates of productivity.
Thus, Mayo and Roethlisberger concluded that the increase in productivity resulted from the
supervisory arrangement rather than the changes in lighting or other associated worker
benefits. Because the experimenters became the primary supervisors of the employees, the
intense interest they displayed for the workers was the basis for the increased motivation and
resulting productivity. Essentially, the experimenters became a part of the study and
influenced its outcome. This is the origin of the term Hawthorne effect, which describes the
special attention researchers give to a study's subjects and the impact that attention has on the
study's findings.
The general conclusion from the Hawthorne studies was that human relations and the social
needs of workers are basic pillars of business management. This principle of human
motivation helped revolutionize theories and practices of management.
Abraham Maslow
Abraham Maslow, a developed the most widely recognized need theories, a theory of
motivation based upon a consideration of human needs . His theory of human needs had three
assumptions:
Human needs are never completely satisfied.
Human behavior is purposeful and is motivated by the need for satisfaction.
Needs can be classified according to a hierarchical structure of importance, from the lowest to
highest.
Maslow broke down the needs hierarchy into five specific areas:
Selfactualization
Esteem
Social
Safety
Physiological
Need Strength
Physiological needs. Maslow grouped all physical needs necessary for maintaining basic
human well-being, such as food and drink, into this category. After the need is satisfied,
however, it is no longer is a motivator.
Safety needs. These needs include the need for basic security and stability, protection, and
freedom from fear. A normal state exists for an individual to have all these needs generally
satisfied. Otherwise, they become primary motivators.
The contingency approach is highly dependent on the experience and judgment of the
manager in a given organizational environment. The above diagram shows the process flow of
contingency model.
Systems Theory
A view of an organization as made up a number of interrelated elements, each functioning to
contribute to the purpose of the whole organization which exists in an interdependent
relationship with the external environment. It tries to solve problems within a framework of
inputs, transformation process, outputs and feedback. A system is a set of inter related parts
(made of sub systems mutually related to each other) eg., every department could be a sub
system of a manufacturing plant. The organization receives inputs from the environment and
processes the resources in the system and provides output, products and services. A systems
view concludes that if sub systems are inter-related properly, organizations can create
synergy. It means whole (outputs) is grater than the sum of parts (inputs). A closed system of
organization does not interact with the environment or they are responsive to organizations
environment viz., an army. An open system interacts with its environment.
A system comprises of four basic elements while functioning in its environment:
1. Input
2. Process
3. Output
4. Feedback
Inputs
(Men,
money,
technology)
etc.)
Transformation
process
(Activities and
operation)
Feedback
Output
(Goals and
profits)
Answer key
1. C
2. B
3. A
4. A
5. D
6. A
7. B
8. D
9. A
10. C
Chapter 2
Management planning process
Chapter outline
i.
Introduction: Planning
ii.
iii.
iv.
Approaches to planning
v.
Characteristics of Planning
vi.
Types of plans
vii.
viii.
Planning refers to the process of deciding what to do and how to do it. Planning occurs at
many levels, from day-to-day decisions made by individuals and families, to complex
decisions made by businesses and governments. Planning is one of those things that we all
know is good, but no one wants to take the time to do. Planning is a mammoth task. While it
may seem that planning only takes time away from running your business, operating a
business without a plan is like searching for a destination without a roadmap ahead. Outcome
of such a trip would be waste of time, resource and energy. For a business, however, the
consequences of such road less travels can even cause to bankruptcy. So, in this chapter let's
take a look as what planning really entails.
The very essence of planning for any business is to see the various opportunities and threats in
its environment for future survival and find ways to exploit and overcome the same as the
case may be.
Origin and Definition
The word "plan" originated from then Medieval Latin word planus which meant a level or flat
surface. This evolved in French into being a map or a drawing of any object made by
Step 1
Developing
awareness of
an
the
state
present
Step 2
Establishing
outcome
statements
Goal
planning
Step 3
Premising
Forecasting
Formulating
assumption
s
Step 4
Determining a
course of action
Identifying
alternatives
Evaluating
alternatives
Selecting
alternatives
Step 5
Formulating
supportive plans
Making
changes
existing plans
in
Creating
supportive
new
plans
considered through time, cost and resource committed by the organization. It is necessary to
evaluate the alternatives in the light of how well each alternative would help the organization
to reach its goals or the desired domain. The pros and cons of each alternative must be well
examined before the choice is made. Selecting a course of action is done considering the
merits of each alternative.
(a) Top-down approach: In this approach the mission flows from the top level of management.
Authority and responsibility to the planning process is centralized in top. In most of the family
owned businesses it is followed. It is either a straight no or a very little contribution in this
approach to planning by lower level managers. In approach the success depends on the skills,
knowledge and competency of people at the top.
(b) Bottom -up approach: In this approach the lower and middle level managers are encouraged
to plan. This brings commitment to goal and resources by the employees themselves.
(c) Composite approach: Here the top management provides the guidelines for planning and set
the premises. The lower and middle level managers come up with tentative plans. It is then
debated and put in practice.
(d) Team approach: In this method the team managers are identified with specialization in
various functional areas. They do the whole exercise of planning for the organization. They
draft the plan and take approvals from the top management.
Characteristics of Planning
1. Planning is goal-oriented.
a. Planning is made to achieve desired objective of business.
b. Planning identifies the action that would lead to desired goals quickly &
economically.
c. It provides sense of direction to various activities.
2. Planning is looking ahead.
a. It requires peeping in future, analyzing it and predicting it.
b. Thus planning is based on forecasting.
3. Planning is a mental exercise involving creative thinking
Single-use plans apply to activities that do not recur or repeat. A one-time occurrence,
such as a special sales program, is a single-use plan because it deals with the who,
what, where, how, and how much of an activity. A budget is also a single-use plan
because it predicts sources and amounts of income and how much they are used for a
specific project.
b.
Continuing or ongoing plans are usually made once and retain their value over a
period of years while undergoing periodic revisions and updates. The following are
examples of ongoing plans:
A policy provides a broad guideline for managers to follow when dealing with
important areas of decision making. Policies are general statements that explain
how a manager should attempt to handle routine management responsibilities.
Strategic plans
A strategic plan is an outline of steps designed with the goals of the entire organization as a
whole in mind, rather than with the goals of specific divisions or departments. It begins with
an organization's mission. Strategic plans look ahead over the next two, three, five, or even
more years to move the organization from where it currently is to where it wants to be.
Requiring multilevel involvement, these plans demand harmony among all levels of
management within the organization. Top-level management develops the directional
objectives for the entire organization, while lower levels of management develop compatible
objectives and plans to achieve them. Top management's strategic plan for the entire
organization becomes the framework and sets dimensions for the lower level planning.
Contingency plans
Intelligent and successful management depends upon a constant pursuit of adaptation,
flexibility, and mastery of changing conditions. Strong management requires a keeping all
options open approach at all times that's where contingency planning comes in.
Contingency planning involves identifying alternative courses of action that can be
implemented if and when the original plan proves inadequate because of changing
circumstances. Keep in mind that events beyond a manager's control may cause even the most
carefully prepared alternative future scenarios to go awry. Unexpected problems and events
frequently occur. When they do, managers may need to change their plans. Anticipating
change during the planning process is best in case things don't go as expected. Management
can then develop alternatives to the existing plan and ready them for use when and if
circumstances make these alternatives appropriate.
Climate of planning. Planning is not left to chance and top level managers must ensure a
conducive environment must be crated to the smooth and systematic take of the plans in the
organization
(ii)
Participation by people. This helps to gain commitment from all the level of management.
(iii)
Communication to people. All the employees must be communicated with the goal, direction
and premise. It helps people to know what to do, when and how in the time limit.
(iv)
Monitoring of the process. With the option of flexibility and regular review process in
planning there is always a possibility to exploit the opportunities in the external environment.
(v)
Management support. Planning always moves from the values held at top level of
management.
Based on the
This is forecasting.
Forecasting
provides pertinent information for successful planning as it is based on systematic models and
techniques.
Essential Elements in Business Forecasting:
Research Redfield identifies four essential elements for business forecasting. They are as
follows:
1.
Developing the ground work with the known and available information about the
companys growth, its positioning, product lines, etc. is the first stage of investigation in the
forecasting.
2.
prospects is made by the management. The trends are projected by the management after a
detailed and close scrutiny of the information.
3.
Comparing the actual with the estimated results is a continuous process. The forecast
provides the measurement apparatus and helps in tracking down reasons for major differences
resulting in unanticipated gains or losses.
4.
The last element is refining the forecast process. As time progresses, managers should
be able to adjust the forecasting techniques to meet the changing needs of business.
Techniques of Forecasting
According to L.S.Silk, three commonly used business forecasting techniques are (1)
Deterministic Techniques; (2) Symptomatic Techniques; and (3) Systematic Techniques.
models to tackle a forecasting problem. These models express the relationship among a
number of variables associated with the changes in sales volume in mathematical terms
through computers, a predictive model is developed from a theory or set of theories that will
determine general business activity. It is more effective as a method to predict future as it is
fully supported by quantitative techniques.
Economic forecasting methods
The basic aim of economic forecasting is to predict business fluctuations. There are numerous
indicators employed to measure economic activity in a nation. Gross national product (GNP)
is the most important indicator. GNP is the value of goods and services produced in the
country in a year. The following methods are employed to forecast the future GNP:
Chapter 3
Organizing
Chapter outline
i.
Introduction -Organizing
ii.
What is organizing?
iii.
iv.
v.
Organization as a process
vi.
Principles of organizing
vii.
Departmentation
viii.
Span of control
ix.
The term organization is used in many different ways. It is generally understood as a form or
into a whole consisting of interdependent or coordinated parts or to systematically arranging
several elements into a purposeful sequential or spatial (or both) order or structure or to
assemble required resources to attain organizational objectives.
What is organizing?
Organizing is the process by which employees, facilities and tasks are related to each other,
with a view to achieve goals. It is the way work is allocated among people. It helps in
prescribing formal relationships among people and resources, to achieve goals or desired
objectives. It also defines responsibility and authority in the process of allocating tasks among
employees. Responsibility is the obligation of a subordinate to perform the duty, as required
by the superior and authority is the formal legitimate right of a manger to make decisions,
issue orders, and allocate resources to achieve goals. The process of organizing is discussed in
detail later. Organizations can be formally created or they can be informal.
Informal organization:
It is a joint activity between two or more individuals not formally designed that
possibly contributes to joint results. Organized to meet the social and personal
needs/wants of organizational members.
Here the Structure (membership), communication networks (grapevine), and
relationships (behaviors and norms) do not necessarily follow those of
the formal organization.
A Functional structure
President
Finance
Marketing
Marketing
Research
Operations
Advertising
Sales
Human
Resources
Research and
Development
Vice President
(Production)
Manager
Automobiles
Manager
Refrigerators
Manager
Spare parts
Departmentation by Time
In some organization that works round-the-clock Departmentation is based on time. We often
notice the doctors, nurses and railway employee changing shifts on the basis of day, evening
and night.
Vice President
(Production)
Day Shift
Evening shift
Night Shift
A Territorial Divisional
structure
President
Western
Division
West
Eastern
Division
Northeast
Midwest
Southeast
Manitoba
Illinois
Saskatchewan
Minnesota
Alberta
Washington
British Columbia
Oregon
California
Matrix structures
In a matrix structure organizations simultaneously integrate and use two or more
organizational structures. It is a permanent organization designed to achieve specific results
by using teams of specialists from different functional areas in the organization. The entire
superstructure is both product and function-based. Matrix design is used to respond to:
- Multiple external demands
- Extensive information needs
- The need for shared resources
A Matrix Superstructure
President
Vice President
Products
Vice President
Finance
Vice President
Marketing
Product A
Manager
Vice President
Operations
Vice President
Human Resources
Manager A
Product Line:
Product B
Manager
Authority, Responsibility,
Coordination Systems
Functional Line:
Authority, Responsibility,
Coordination Systems
Span of control
Span of control is a span of supervision which depicts the number of employees that can be
handled and controlled effectively by a single manager. According to this principle, a manager
should be able to handle what number of employees under him should be decided. This
decision can be taken by choosing either from a wide or narrow span. There are two types of
span of control:a. Wide span of control- It is one in which a manager can supervise and control
effectively a large group of persons at one time. The features of this span are: Less overhead cost of supervision
Prompt response from the employees
Better communication
Better supervision
Better co-ordination
Authority
Introduction
Authority is the key to the management job. Without authority a, manager ceases to be a
manager for he cannot get his wishes carried out. Creating an organization by dividing the
work into departments and positions will not be sufficient to get the results.
What is Authority?
Authority is the capacity of a superior to make decision affecting the behavior of subordinates.
It is the right to take action and utilize organizational resources. It has the following features:
Legitimate right: Authority enables a position holder to regulate the behavior of his
subordinates in a legitimate manner.
Right to decide: Authority allows the positions holder to decide things. He has the
right to enforce decision also.
Nature of Delegation
Every manager must delegate some task or duties to subordinates, since management means
getting work done through others. Organization becomes operational through delegation only.
Delegation is a process by which a manager assigns a portion of his total work load to others.
Some of the important features of delegation may be listed thus:
Two-sided relationship: Delegation is a two-sided relationship. It is a demanding
function; it requires sacrifices from both the assignor and the assignee.
Answer key
1. A
2. B
3. A
4. A
5. B
6. D
7. B
8. C
9. A
10. A
Chapter 4
Staffing
Chapter outline
i.
Meaning of Staffing
ii.
iii.
iv.
v.
Job Analysis
vi.
vii.
viii.
Performance Appraisals
ix.
Meaning of Staffing
Staffing is the process of matching the jobs with the capable people. It is concerned with
attracting, developing and evaluating individuals at work. It involves the determination of
what personnel are needed in what quantity and of what quality. Among the various factors of
production which are used in an organization, human factor is the most important. Broadly
speaking, staffing is concerned with the management of human beings in an organization. .
For an organization to achieve its goal, it must perform the important function of staffing in
its business processes.
Nature of Staffing Function
1. Staffing is an important managerial function- Staffing function is the most
important managerial act along with planning, organizing, directing and controlling.
The operations of these four functions depend upon the manpower which is available
through staffing function.
2. Staffing is a pervasive activity- As staffing function is carried out by all mangers and
in all types of concerns where business activities are carried out.
Purpose of HR Planning
Effective HR
Planning
Right
people
Right
capabilities
Right
time
Right
place
and
disadvantages
of
the
above
sources
in
simple..
Selection
To select means to choose. It is the process of choosing individuals with qualifications needed
to fill jobs in an organization. Organizations need qualified and competent people to gain
competitive advantage. This is one of the important staffing processes. The selection process
starts where the recruitment ends. It means the very step one starts eliminating the collected
applicant.
Mass interview - A panel interviews several candidates simultaneously.
After interviews and tests, candidates background are verified and checked. On a conditional
offer the process of physical examinations are conducted.
Factors Affecting Interviews
First impressions
Not knowing precisely what the job entails and what sort of candidate is best
suited causes interviewers to make decisions based on incorrect stereotypes of
what a good applicant is.
Candidate-order error
Nonverbal behavior
Physically unattractive
Female
Disabled
oriented more toward broadening an individuals skills for the future responsibilities.
Training is conducted by a systematic approach. The training needs of individuals are
identified and then training is provided. There are two methods used in training. The on job
training and the off job training.
On the Job Training -takes place in a normal working situation, using the actual tools
equipment, documents or materials that trainees will use when fully trained. On-the-job
training has a general reputation as most effective for vocational work. This can be imparted
by the following ways:
Coaching and mentoring
Job Rotation
Job instruction training
Apprenticeship training
Orientation training
Off the Job Training -takes place away from normal work situations implying that the
employee does not count as a directly productive worker while such training takes place. It
has the advantage that it allows people to get away from work and concentrate more
thoroughly on the training itself. It can be imparted by
On-the-Job Experiences
Case Studies
Management Games
Role Playing
Behavior Modeling
OBJECTIVES OF APPRAISAL
To effect promotions based on competency and performance.
To confirm the services of probationary employees upon their completing the
probationary period satisfactorily.
To assess the training and development need.
To decide upon a pay raise.
To let the employees know where they stand insofar as their performance is concerned
and to assist them with the constructive criticism and guidance for the purpose of their
development.
To improve communication. Appraisal provides a format for dialogue between the
supervisor and the subordinate, and improves understanding of personal goals and
concerns.
It can also be used to determine whether HR Programs such as selection, training, and
transfers have been effective or not.
The first step in the process of performance appraisal is the setting up of the standards
which will be used to as the base to compare the actual performance of the employees. This
step requires setting the criteria to judge the performance of the employees as successful or
unsuccessful and the degrees of their contribution to the organizational goals and objectives. It
is making sure that superior and subordinate agree on his or her duties and job standards.
Once set, it is the responsibility of the management to communicate the standards to all the
employees of the organization. The employees should be informed and the standards should
be clearly explained to the standards.
Appraising performance
Comparing your subordinates actual performance to the standards that have been set; this
usually involves some type of rating form. It is a continuous process which involves
monitoring the performance throughout the year. This stage requires the careful selection of
the appropriate techniques of measurement, taking care that personal bias does not affect the
outcome of the process and providing assistance rather than interfering in an employees work.
The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards set.
The result can show the actual performance being more than the desired performance or, the
actual performance being less than the desired performance depicting a negative deviation in
the organizational performance. It includes recalling, evaluating and analysis of data related to
the employees performance.
How to measure? Actual performance of employees can be measure any of the following
methods.
o Graphic rating scales
Reallocate incidents
Providing feedback
It is the process of discussing the subordinates performance and progress, and making plans
for any development required. The result of the appraisal is communicated and discussed with
the employees on one-to-one basis. The focus of this discussion is on communication and
listening. The results, the problems and the possible solutions are discussed with the aim of
problem solving and reaching consensus. The feedback should be given with a positive
attitude as this can have an effect on the employees future performance. The purpose of the
meeting should be to solve the problems faced and motivate the employees to perform better.
DECISION MAKING
Chapter 5
Direction
Chapter outline
i.
What is direction?
ii.
Features of directing
iii.
Importance of directing
iv.
Principles of direction
v.
Elements of direction
vi.
Decision making
vii.
Characteristics of decision-making
viii.
Types of decisions
ix.
x.
xi.
Communication- Process
xii.
Motivation
xiii.
Importance of motivation
xiv.
Motivation process
xv.
Theories of motivation
WHAT IS DIRECTION?
Direction represents one of the essential functions of management because it deals with
human relations. Once the organizational plans have been laid down, the structure being
designed, and competent people brought in to fill various positions in organization, direction
starts. Direction is the managerial function of guiding, motivating, leading and supervising the
subordinates to accomplish desired objectives.
According to Dale, direction is telling people what to do and seeing that they do it to the best
of their ability. It consists of:
TYPES OF DECISIONS
The quality of decision making skills is one the critical success factors for managers. So it
would be useful to understand the ways in which decisions are made.
BASIC AND ROUTINE DECISIONS
Basic decisions are unique, one-time decisions demanding large investments, creativeness and
good judgement on the part of managers. For example, decisions about launching a new
product, or buying a more advanced computer system, are non-routine decisions. They require
creativeness, intuition and good judgement, on the pat of managers. They are strategic
decisions which affect the future of an organization. As a manager progresses to higher levels,
number of basic decisions increase.
Routine decisions are repetitive in nature. They require little deliberation and generally
concerned with short-term commitments. Generally, lower-level managers look after such
decisions. For example, a supervisor can decide, whether an employees absence is excused or
unexcused, on the basis of personnel policy guidelines.
PERSONAL AND ORGANISATIONAL DECISIONS
Decisions to watch television, to study or retire early are examples of personal decisions. Such
decisions are taken by managers in their individual capacity. These cannot be delegated.
NON-PROGRAMMED DECISIONS
These
are
no
pre-established
a creative solution.
The
conditions
for
non-
uncertain.
Top management responsibility.
Awareness
Diagnose
Develop
Evaluate
Select
Implement
of
and
the
the
the
and verify
Problem
State
Alternatives
Alternatives
best
alternative
the
decision
the
Problem
FEEDBACK
Awareness of a problem: The first step in the decision-making process is recognising the
problem. Problems arise due to disparity between what is and what should be. At this stage,
the emphasis should be on defining the questions in the right way rather than finding answers
to the questions.
Diagnose and state the problem: Once manager become aware of a problem, he must state
the real problem. In order to state the true problems, the following questions should be looked
into:
What is the problem?
Which problem to solve?
What is the real cause of the problem?
themselves have been involved with the goal setting and the choosing of the course of action
to be followed by them, they are more likely to fulfill their responsibilities.
FEATURES OF MBO
MBO emphasis participation in setting goals that is tangible, verifiable and measurable.
MBO is a dynamic system which seeks to integrate the companys need to achieve its goal.
MBO is a systematic and rational technique that allows management to attain maximum
results from available resources by focusing on achievable goals.
THE MBO PROCESS
6. Rewards /
Punishments
1. Define
Organization
goal
2. Define
5. Providing
Employee
Feedback
Objectives
4.
Performance
Evaluation /
Review
3. Continuous
monitoring of
performance
progress
ADVANTAGES OF MBO
Clarity of goals SMART goals where S stands for Specific, M for Measurable, A for
Achievable, R for Realistic and T for time-related.
Focus is on future rather than on past.
Motivated employees because there is involvement of employees in the whole process
of goal setting which results in their empowerment and thus commitment.
Better communication and co-ordination - Frequent reviews and interactions between
superiors and subordinates helps to maintain harmonious relationships within the
enterprise and also solve many problems faced during the period.
Managers can ensure that objectives of the subordinates are linked to the organization
's objectives
LIMITATIONS OF MBO
Pressure oriented
Time consuming
Increases paperwork
Goal-setting problems
Organizational problems
WHAT IS COMMUNICATION?
IMPORTANCE OF COMMUNICATION
nature and supports the authority of superiors. There are three ways in which formal
communication can go- downward, upward and horizontal. Downward communication
STRUCTURAL BARRIERS
Structural barriers can include:
FEATURES OF MOTIVATION
Motivation is an internal feeling: Motivation points to energetic forces within individuals that
drive them to behave in certain ways and, to environmental forces that trigger these drives.
Motivation produces goal-directed behaviour: Motivation has got a profound influence on
human behaviour, it harnesses human energy to organisational requirements.
Motivation contains system orientation: It considers those forces in individuals and their
surrounding environments that feedback to the individuals either to reinforce the intensity of
their drive and direction of this energy or to dissuade them from their cause of action and
reduce their efforts.
Motivation can be either positive or negative: Positive motivation offers person in the form of
additional pay, incentives, praise etc., for satisfactory performance. Negative motivation
emphasizes penalties while controlling performance.
Motivation is different from job satisfaction: Motivation is the drive to satisfy a want or goal.
It is concerned with goal-directed behaviour. Satisfaction refers to the contentment
experiences when a want is satisfied.
TYPES:
Intrinsic Motivation - comes from rewards inherent to a task or activity itself. Ex Loving
your job profile.
Extrinsic Motivation - comes from outside of the performer. Ex - Money but Coercion and
Threat of punishment are also common extrinsic motivations.
IMPORTANCE OF MOTIVATION
Motivation is a very important for an organization because of the following benefits it
provides:1. Puts human resources into action
Every concern requires physical, financial and human resources to accomplish the
goals. It is through motivation that the human resources can be utilized by making full
use of it. This can be done by building willingness in employees to work. This will
help the enterprise in securing best possible utilization of resources.
2. Improves level of efficiency of employees
The level of a subordinate or a employee does not only depend upon his qualifications
and abilities. For getting best of his work performance, the gap between ability and
willingness has to be filled which helps in improving the level of performance of
subordinates. This will result into-
I
NEED DEFIENCIES
VI
II
NEED DEFIOCIENCIES
REASSESSED BY THE
EMPLOYEE
V
III
REWARDS AND
PUNISHMENT
GOAL- DIRECT
BEHAVIOR
IV
PERFORMANCE
(EVALUATION OF GOALS
ACCOMPOLISHED)
THEORIES OF MOTIVATION
Theories that focus on the content of what factors (needs) motivate people.
DIFFERENCES
Hygiene
Motivators
Achievement
Recognition
Work condition
Work itself
Salary
Responsibility
Advancement
Personal life
Growth
Achievement(nach) - This is the need for challenge, for personal accomplishment and success
in competitive situations.
Power (npow)- This is the need to dominate, influence and control people.
Affiliation(naff)-- This need is a social need, for companionship and support, for developing
meaningful relationships with people.
Maslow -
Herzberg
Need hierarchy
Two-factor
theory
The work itself
Self actualization
High
order
needs
Esteem
Need for
Achievement
Responsibility
Need for Power
Achievement
Safety
And
McClelland
Growth
Motivators
Belongingness,
Social & Love
Basic
needs
Alderfer
Hygiene
factors
Security
Physiological
Recognition
Advancement
Quality of inter
personal
relations
Growthpeers,
among
with
supervisors,
with
Job security
subordinates
Relatedness
Need for
Affiliation
Existence
Working
conditions.
Salary.
The probability that exerting a given amount of effort will lead to performance.
PerformanceReward Relationship
The belief that performing at a particular level will lead to the attainment of a
desired outcome.
REINFORCEMENT THEORY
The term reinforce means to strengthen, and is used in psychology to refer to anything
stimulus which strengthens or increases the probability of a specific response. Reinforcement
is anything that causes a given behaviour to be repeated or inhibited. For example, if you want
your dog to sit on command, you may give him a treat every time he sits for you. The dog will
eventually come to understand that sitting when told to will result in a treat. This treat is
reinforcing because he likes it and will result in him sitting when instructed to do so.
There are four types of reinforcement are used:
Positive reinforcement: It is a method of strengthening behaviour with rewards or positive
outcomes after a desired behaviour is performed. The examples above describe what is
aversive in order to decrease a behavior. The most common example of this is disciplining
(e.g. spanking) a child for misbehaving. The reason we do this is because the child begins to
associate being punished with the negative behavior. The punishment is not liked and
therefore to avoid it, he or she will stop behaving in that manner.
Goal setting Theory
The Goal Setting Process In order to motivate employees managers must know individual
differences, match jobs, link rewards to the effort of the employees.
How the
world
should be
Present
Situation
Am I
consistent
with my
values?
Goal
Setting
1. Self-set
2. Participative
3. Assigned
4. Do your best
Goal
Consequences
Characteristics
1. Difficulty
1. Performance
2. Specificity
2. Satisfaction
3. Acceptance
3. Rewards
4. Commitment
Goal-Setting Theory
Goal Specificity
Yes
Yes
Goal Difficulty
Yes
Yes
Feedback
Yes
Yes
Participation
Yes
No (qualified)
The order of direction vocally discuss and matter that had be instructed.
Content
Time
People
None
The concept of MBO was first given by Peter Drucker in the year ...
1956
1970
1954
1980
a. Herzberg theory
b. Equity theory
c. Maslows need hierarchy
Chapter 6
CO-ORDINATION AND CONTROLLING
Chapter outline
i.
Introduction-co ordination
ii.
Definitions
iii.
Principles of co-ordination
iv.
v.
Techniques of co-ordination
vi.
Types of co-ordination
vii.
Importance of co-ordination
viii.
Hindrances to co-ordination
ix.
Meaning of control
x.
Characteristics of Control
xi.
xii.
xiii.
Process of Controlling
xiv.
Kinds of control
Introduction
Coordination is considered as an essential element of administration. Co-ordination is the
integration, synchronisation or orderly pattern of group efforts in the institution towards the
accomplishment of common objectives, to ensure a harmonious and smooth working of an
organisation with a number of its divisions, department or its units, the activities in all the
areas are required to be pulled together, unified and blended so as to give them a
commonness and purpose.
Definitions
"Co-ordination is the orderly synchronisation of efforts to provide the proper amount,
timing, and directing execution resulting in harmonious and unified actions to a stated
objective"
"Co-ordination is the integration of several parts into an orderly whole to achieve the
purpose of undertaking"
"Co-ordination is the integrating process in an orderly pattern of group efforts in an
organisation toward the accomplishment of a common objective"
Synchronization and integration of activities, responsibilities, and command and
control structures to ensure that the resources are used most efficiently in pursuit of the
specified objectives. Along with organizing, monitoring, and controlling, coordinating
is one of the key functions of management.
The concept of co-ordination is much broader than that of co-operation. Both these have to go
side by side. Co-ordination is only a means to an end and not an end itself.
Principles of co-ordination
1. As the thinking function of management precedes the doing function, co-ordination
endeavour must sort at the planning stage, otherwise it becomes impossible to secure
co-ordination of activities and efforts in the execution of work.
2. There is need for importance of direct personal contact in removing misunderstanding
and conflict between departments.
3. Co-ordination is continual activity that permeates through each managerial function.
4. There should be an integration of all efforts, actions and interests toward a common
purpose. For this co-ordination call for the establishment of a reciprocal relationship
among all pertinent factors by way of balancing, blending and joining together the
factors with one another.
arranges
for
necessary
correlation
and
Characteristics of Control
Control is a continuous process
Control is a management process
Control is embedded in each level of organizational hierarchy
Control is forward looking
Control is closely linked with planning
Control is a tool for achieving organizational activities
The control process assumes that performance standards exist. These are the goals created
during the planning process against performance progress measured. The exhibit explains the
steps
Measuring the actual
performance
step
in
control
process.
PROCESSES
FEED
FORWARD
CONTROL
CONCURRENT
CONTROL
(Anticipates
problems)
(Corrects
problems as
they happen)
OUTPUT
FEEDBACK
CONTROL
(Corrects
problems
after they
occur)
The concept of organizational control is implicit in the bureaucratic theory of Max Weber.
Associated with this theory are such concepts as "span of control", "closeness of supervision",
and "hierarchical authority". Weber's view tends to include all levels or types of
organizational control as being the same. More recently, writers have tended to differentiate
Answer key
1. B
2. A
3. C
4. B
5. B
6. A
7. A
8. A
9. A
10.A
References
Rao, VSP & Krishna, VH: Management Text & Cases, Excel Books, 2002.
Schermerhorn, Hunt & Osborn: Managing Organizational Behavior, John Billy
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Armstrong, Michael: Human Resource Management Practice, Kogan Page 10th
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Pareek, Udai: Understanding Organizational Behavior, Oxford University
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J.A. ,Stoner , Management , Prentice-Hall of India, New Delhi.
R.W. Griffin, Management, AITBS, New Delhi.
Koontz and ODonnell, Essentials of Management, Tata McGrawHill , New
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Gary Desseler ,Management : Fundamentals, Prentice-Hall , Virginia.
Lesile W. Rue, Lloyd L. Byers, Management, Richard D. Irwin Inc., Illinois.
S. Venu, Corporate Planning, Orient Longman, Calcutta.
Planning
for
Non-Profit
Organization
http://www.youtube.com/watch?v=XDP26gGFVJIOrganization and Planning Skills
http://www.youtube.com/watch?v=ikRWdZOxjZs&p=B2187BF27EE3198C&playnext=
1&index=1 Overview of strategic planning
http://www.youtube.com/watch?v=RNjYsYMQ3pI&p=B2187BF27EE3198C&index=1
Planning
http://www.youtube.com/watch?v=vqByFsaIvjY&p=B2187BF27EE3198C&index=3
Planning
http://www.youtube.com/watch?v=sP7Q51zHp4I
Management:
Planning
&
Forecasting
http://www.youtube.com/watch?v=w9OlaH_etBI : Strategy - An Organizational Vision
Quest
http://www.youtube.com/watch?v=NCDlozomQiY : How to Write a Values Statement
http://www.youtube.com/watch?v=7pPlGR6OOmI : Backwords Planning
http://www.youtube.com/watch?v=2PmTP8hMGIc: Achieving Goals Using Think-PlanDo
http://www.youtube.com/watch?v=qpITGIcF520 : Be A Successful Negotiator