1

Submitted by:-Gayatri Gouda

MBA- 4th Semester
Roll No- 520941188

(Under the guidance of Sri R. Gangadhar Pattanaik, Chief Manager,

SBI, Bhanjanagar,Ganjam,Odisa)

LC Code- 02872

DECELERATION

I Miss Gayatri Gouda hereby declared that the project submitted by

me is done under the guidance of Sri R.G.Pattanaik, Chief Manager,
SBI, Bhanjanagar for completion of my MBA Degree.

(GAYATRI GOUDA)

CONTENTS

Introduction
1. Performance Management: An Overview
2. Motivation and Satisfaction
3. Training and Development
4. Recruitment and Induction
5. Employee Evaluation
6. The Problem:- Objective of the study
7. Scope of the study
8. What is a high performance culture?
9. Characteristics of a high performance culture
10. Empathy
11. Emotional quotient
12. Exogenous variables

Competency and performance

management: A review of research literature
1. Introduction
2. Why should individual employee map their competencies
3. War for talent
4. Good people are great for business
5. The cost of a bad boss

Methods of competency performance

1. Personal credibility
2. Interpersonal effectiveness
3. Personal management
4. Relationship Orientation
5. Continuous learning
6. Tolerance for stress/change/ambiguity
7. Creative/Analytical/Problem solving approaches rive
8. Adaptability

Competency

management

and

organizational effective

1. What is organizational effectiveness?

2. Different models of organizational effectiveness
3. Organizational life cycle
4. Organizational structure
5. Measures of structure

Conclusion

A STUDY ON EMPLOYEE COMPETENCY

AND PERFORMANCE MANAGEMENT

CHAPTER 1

(1)

INTRODUCTION

Competency management is a process through which one assesses and

determines ones strengths as an individual worker and in some cases, as part
of an organization. It generally examines two areas: emotional intelligence or
emotional quotient (EQ), and strengths of the individual in areas like team
structure, leadership, and decision-making. Large organizations frequently
employ some form of competency performance to understand how to most

effectively employ the competencies of strengths of workers. They may also

use competency performance to analyze the combination of strengths in
different workers to produce the most effective teams and the highest quality
work.
Competency management can also be done for contract or freelance
workers, or for those seeking employment to emphasize the specific skills
which would make them valuable to a potential employer. These kinds of skills
can be determined, when one is ready to do the work, by using numerous
books on the subject. One of the most popular ones is Now, Discover Your
Strengths by Marcus Buckingham and Donald Clifton, initially published in
2001.
Competency management also requires some thought, time, and
analysis, and some people simply may not want to do the work involved to
sufficiently map competencies. Thus a book like the above is often used with a
human resources team, or with a job coach or talented headhunter.
Competency performance alone may not produce accurate results unless one
is able to detach from the results in analyzing past successes and failures.
Many studies find that people often overestimate their abilities, making selfcompetency management results dubious.
Usually, a person will find himself with strengths in about five to six
areas. Some- times an area where strengths are not present is worth
developing. In other cases, competency management can indicate finding work
that is suited to ones strengths, or finding a department at ones current work
where one's strengths or needs as a worker can be exercised.
Performance Management: An Overview
Perhaps the most significant benefit of appraisal is that, in the rush and
bustle of daily working life, it offers a rare chance for a supervisor and
subordinate to have "time out" for a one-on-one discussion of important work
issues that might not otherwise be addressed. Almost universally, where
performance

appraisal

is

conducted

properly,

both

supervisors

and

subordinates have reported the experience as beneficial and positive.

Appraisal offers a valuable opportunity to focus on work activities and

goals, to identify and correct existing problems, and to encourage better future
performance. Thus the performance of the whole organization is enhanced.
For many employees, an "official" appraisal interview may be the only
time they get to have exclusive, uninterrupted access to their supervisor. Said
one employee of a large organization after his first formal performance
appraisal, "In twenty years of work, that's the first time anyone has ever
bothered to sit down and tell me how I'm doing." The value of this intense and
purposeful interaction between a supervisors and subordinate should not be
underestimated.
Motivation and Satisfaction

Performance appraisal can have a profound effect on levels of employee

motivation and satisfaction - for better as well as for worse.
Performance appraisal provides employees with recognition for their work
efforts. The power of social recognition as an incentive has been long noted. In
fact, there is evidence that human beings will even prefer negative recognition
in preference to no recognition at all.
If nothing else, the existence of an appraisal program indicates to an
employee that the organization is genuinely interested in their individual
performance and development. This alone can have a positive influence on the
individual's sense of worth, commitment and belonging.
The strength and prevalence of this natural human desire for individual
recognition should not be overlooked. Absenteeism and turnover rates in some
organizations might be greatly reduced if more attention were paid to it. Regular
performance appraisal, at least, is a good start.
Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best

that will ever occur - for a supervisor and subordinate to recognize and agree
upon individual training and development needs. During the discussion of an
employee's work performance, the presence or absence of work skills can
become very obvious - even to those who habitually reject the idea of training
for them!
Performance appraisal can make the need for training more pressing
and relevant by linking it clearly to performance outcomes and future career
aspirations. From the point of view of the organization as a whole, consolidated
appraisal data can form a picture of the overall demand for training. This data
may be analyzed by variables such as sex, department, etc. In this respect,
performance appraisal can provide a regular and efficient training needs audit
for the entire organization.
Recruitment and Induction
Appraisal data can be used to monitor the success of the organization's
recruitment and induction practices. For example, how well are the employees
performing who were hired in the past two years?
Appraisal data can also be used to monitor the effectiveness of changes in
recruitment strategies. By following the yearly data related to new hires (and
given sufficient numbers on which to base the analysis) it is possible to assess
whether the general quality of the workforce is improving, staying steady, or
declining.
Employee Evaluation
Though often understated or even denied, evaluation is a legitimate and
major objective of performance appraisal. But the need to evaluate (i.e., to
judge) is also an ongoing source of tension, since evaluative and
developmental priorities appear to frequently clash. Yet at its most basic level,
performance appraisal is the process of examining and evaluating the
performance of an individual.

Though organizations have a clear right - some would say a duty - to conduct
such evaluations of performance, many still recoil from the idea. To them, the
explicit process of judgment can be dehumanizing and demoralizing and a
source of anxiety and distress to employees. It is been said by some that
appraisal cannot serve the needs of evaluation and development at the same
time; it must be one or the other.
But there may be an acceptable middle ground, where the need to
evaluate employees objectively, and the need to encourage and develop them,
can be balanced.
THE PROBLEM:-OBJECTIVES OF THE STUDY

Competency performance is a process through which one assesses and

determines ones strengths as an individual worker and in some cases, as part
of an organization. It generally examines two areas: emotional intelligence or
emotional quotient (EQ), and strengths of the individual in areas like team
structure, leadership, and decision-making. Large organizations frequently
employ some form of competency performance to understand how to most
effectively employ the competencies of strengths of workers. They may also
use competency performance to analyze the combination of strengths in
different workers to produce the most effective teams and the highest quality
work.
Competency performance also requires some thought, time, and
analysis, and some people simply may not want to do the work involved to
sufficiently map competencies. Thus a book like the above is often used with a
human resources team, or with a job coach or talented headhunter.
Competency performance alone may not produce accurate results unless one
is able to detach from the results in analyzing past successes and failures.
Many studies find that people often overestimate their abilities, making selfcompetency performance results dubious.
However, competency performance can ultimately serve the individual
who decides to seek employment in an environment where he or she perhaps
can learn new things and be more intellectually challenged. Being able to list

10

competencies on resumes and address this area with potential employers may
help secure more satisfying work. This may not resolve issues for the company
that initially employed competency performance, without making suggested
changes. It may find competency performance has produced dissatisfied
workers or led to a high worker turnover rate.
SCOPE OF THE STUDY:
It is often said an organization's long-term success depends on the
ability of that organization to sustain the delivery of quality products and
services. However, if this ability to sustain high performance is a learnable
competence, then why do many organizations fail to do so?
The answer to this pertinent question often lies in the following three
major deterrents to sustaining high performance.
The senior management of an organization could have an inaccurate
understanding of the marketplace in which the organization is to compete.
Should this be the case, undoubtedly, the vision, mission, and strategies of the
organization are also inappropriate.
The behavior required to successfully implement the business strategy could
be misaligned with the customer and marketplace requirements. This is usually
true for leadership or employee behavior.
Organizational systems and processes often fail to support the organizational
vision and strategy. As a result thereof, the focus of organizations is incorrect in
that the wrong things are being focused on and measured.
It is this very responsiveness to the marketplace, leadership and
employee behavior, and systems and infrastructure design and deployment that
creates an organizations' culture. It is also the set of shared beliefs and
experiences that essentially define the identity of an organization and ultimately
guides its behavior.

11

Culture, inevitably changes over time, but also guides the notions of
value, opportunity, and reality. Usually rewards and punishments that have
become normative in an organization are preceded by these very beliefs being
expressed.
One such belief is that quantitative measures are more than adequate to
measure the performance of an organization. However, this belief is contrary to
a sustainable high performance culture, as the softer issues of culture are what
in reality enable the quantitative measures to grow positively.
Also consider the findings of a study done by Healy, Krishna, and
Ruback. That study finding was that, 55 to 77 percent of such deals (mergers
and acquisitions) failed to deliver the organizational and/or financial results that
were intended, and more than 50 percent of those failures are attributable to
serious cultural incompatibility.
What is a High Performance Culture?
This is a question often asked, What is organizational culture? The following is
one definition provided by E.J. Schein.
A pattern of shared, basic assumptions that the group learned as it solved
problems of external adaptation and internal integration, that has worked well
enough to be considered valid, and, therefore, to be taught to new members as
the correct way to perceive, think, and feel in relation to those problems.
Simply stated, an organizational culture is, The way we do things
around here These definitions will become inherently clearer as one looks at
the characteristics of a high performing culture. In a true business setting or
environment, the organization culture is often also referred to as the corporate
culture. It is often said that the cultural differences can have a major effect on
the performance of organizations and the quality of work life experienced by its
members.
Characteristics of a High Performance Culture

12

The culture of an organization is created when the founders of the

organizations, make decisions and take action based on their personal views of
the world. Depending on the success of these actions, and the continuation of
success applying these actions, a culture embodying these predictable patterns
is formed over time. This is said to be the organizational culture.
Over time, as successes continue, the culture is said to be highly
ingrained to the point of being invisible to the members of that organization.
However, very often an organization will also have subcultures and
countercultures.
Subcultures are unique patterns of values and philosophies within a
group that are consistent with the dominant culture of the larger organization.
Strong subcultures will generally be found in high performance task forces,
teams, and special project groups within an organization.
It is this subculture that binds the individuals to working in a certain
manner in order to get a task or activity accomplished. Individuals working
within a strong subculture often share in the dominant values associated with
working with the organization.
Countercultures, on the other hand, are the patterns of values and philosophies
that outwardly reject those of the larger organization. Within an organizational
setting, countercultures may be produced with mergers and acquisitions.
Employers and managers of an acquired company may hold certain
values and assumptions that are quite inconsistent with those of the acquiring
company. An organization with a strong high performing culture does share
common elements across the entire organization.
This has the positive side that there generally is no need to debate
certain issues as everyone knows of the correct ways of getting things done. By
default, a developed culture will strive to preserve the tried and tested. If the
organizational culture aligns itself with an appropriately developed strategy, the
net result is a stronger culture, and ultimately, a high-performing organization.
This scenario calls for the leader's role to reinforce the existing culture by way
of modeling, encouraging, and rewarding behavior. According to Edgar Schein,

13

Leadership and culture are two sides of the same coin. Leaders create and
change cultures, while managers live within them.
Two approaches to high performance include a humanistic framework
and a rational process framework. In the former, high performance will be
attributed to organizations which value trust, and empower their people, work
collaboratively, and connect effectively with the wider community through, for
example, the involvement of stakeholders external to the organization.
In the latter framework, high performance will be attributed to
organizations which exhibit characteristics such as the ability to interpret the
business environment, the ability to foresee and act upon new business
opportunities and the flexibility necessary to maintain core values while still
being able to adjust its output to meet new market demands or conditions.
Furthermore, the willingness to implement employee remuneration
strategies such as stock ownership schemes which increase productivity and
financial returns to the organizations are prevalent.
Elements of a strong organizational or corporate culture include the widely
shared real understanding of what the organization stands for. There is also a
concern for individuals over rules, policies, procedures, and adherence to job
duties.
Organizations with a strong corporate culture also have a recognition for
heroes whose actions illustrate the company's shared philosophy and concerns.
These organizations believe in building a common identity where there is a well
understood sense of the informal rules and expectations, thus enabling the
members of the organization to understand what is expected of them. There is
also a belief that what employees and managers do is important and that it is
equally important to share information and ideas.
The important aspects of an organization's culture will emerge from the
collective experience of its members. These emergent aspects of the culture
help make it unique and may well provide a competitive advantage for the
organization. Some of these aspects may be directly observed in its day-to-day
operations and workings, while others may be discovered, for example, by

14

asking its members to tell of important incidents in the history of the

organization.
By observing specific employee actions, listening to experiences, and
asking members to interpret what is going on, enables one to better understand
an organization's culture.
Literature generally acknowledges the inadequacy of intelligence as a
predictor of leadership effectiveness. Sternberg (2002) suggests that "the
predictive value of intelligence may have been flagged in various studies
because these studies examined and measured aspects of intelligence that,
however effective they may be in predicting academic and certain other kinds
of performance are not effective predictors of leadership performance".
Traditional conceptualization of intelligence is generally concerned with
the analytical or academic aspect of intelligence, but an adequate
conceptualization of this construct comprises other aspects as well. Studies on
intelligence over many years focused mainly on the adaptive use of cognition,
but in recent years theorists such as Gardner (1983, 1999) and Sternberg
(1985,

2002)

have

suggested

more

encompassing

approaches

to

conceptualizing intelligence.
Sternberg suggests that there are other dimensions of intelligence:
social intelligence, emotional intelligence, or practical intelligence or what
scholars refer to as "street smarts. which indicates that an individual is not
limited simply because he or she has a below average academic intelligence or
IQ. Although Gardner did not use the term emotional intelligence (EQ), his
concepts of intrapersonal and interpersonal intelligences provided the basis for
the conceptualization of EQ. whereas intrapersonal intelligence is the ability to
understand one's own emotions; interpersonal intelligence is one's ability to
understand the emotions of others.
In his role as a consultant in organizations, Goleman found that
emotional intelligence (EQ) is twice more important than technical skills and IQ
for jobs at all levels. He also reported that emotional intelligence plays an
increasingly important role at the highest levels of a company. When he
compared "Star performers with average ones in senior leadership positions,
nearly 90% of the difference in their profiles was attributable to emotional

15

intelligence factors rather than cognitive abilities".

Starting with the Hawthorne Experiments at General Electric,
management started to disentangle the assumptions on that Taylors ideas
were built. The Hawthorne studies well known and discussed at length in
nearly every Organizational Behavior textbook set off a process that helped
management to look closer to the question how workers feel and how social
relations at the shop floor influenced the productivity. In that period the agenda
emerged to what extent social needs of the workers dominated the productivity
but in these early years there was no explicit focus on the impact of emotions
and feelings.
With Maslow, motivation theory started to look at the needs like selfesteem that he thought were major drivers that push our motives forward.
Although not entitled as feeling or emotion by Maslow, it makes sense to
identify self-esteem as one out of five important needs that drive on our
personal motivation, as a basic emotion, especially if we consider the fact that
much of our life is spend at work, then the question how much self-esteem
derives form our work relations, how much self-esteem we obtain from our
relationship with our co-workers, direct superior and friends and foes at work
seems significant.
Followed by McGregors management practicing tried to follow a more
fine-tuned idea of men that later merged into various personal traits theories
and models and personal assessment tests that tried to select people that fitted
most perfect into distinct organizations. But the major focus remained always
on the question how to motivate the potentially unmotivated work force. Later
McGregor told that management is responsible for organizing the elements of
productive enterprise including such elements like money, materials,
equipment, and last but not least people. Not very much was said at this time
how much personal feelings and emotions fuel, guide and inform the complex
structure of motivation in human beings.
Although it is argued that McGregor was very closely to consider
feelings and emotions as the very important factors that contribute to the
failure or success of work. McGregor always referred to atmosphere to

16

denominate a positive and supporting work environment. He denoted that a

positive atmosphere supports people to express their feelings: as well as their
ideas both on the problem and on the groups operation. McGregor
convincingly argued that atmosphere is affecting the functioning of groups
and in developing his argument he constantly used rather strong emotional
words like to be afraid being foolish, tyranny of the minority, to express
hostility, permitting to block its efforts and it was articulate noting: we have
to learn how to operate successfully in our individual relationships with
subordinates. However it did not explicitly associate success or failure with
strong emotions rather it identified situations that instigate or generate strong
emotions (i.e. to be afraid being foolish, block efforts, tyranny, express
hostility).
In the 70s McClelland started to look closer to the question what exactly
motivates managers? He strongly believed that the need for power is
probably the most important motivational driving force for the management. it
articulately noted: a good manager is one who, among other things, helps
subordinates feel strong and responsible, rewards them properly for good
performance, and sees that things are organized so that subordinates feel they
know what they should be doing. Above all, managers should foster among
subordinates a strong sense of team-spirit, of pride in working as part of a
team. This single quote illustrates that from now on worker are invited to feel
responsible, feel strong, or simply posses a strong feeling of being part of a
team, we share a spirit, something you can feel, workers will be pride.
McClelland refers here to a set of emotions and feelings that make
management more productive.
Today we call this HRM policy using Firemans phrase putting feelings to
work but as it tried to show feelings did play a major role in the HRM
conception in the 50s and 60s, albeit the major texts used not exactly the
expression feeling and emotion it very well recognized situations and social
environments that produced strong feelings and consequently focussed on the
question how these atmosphere influenced the productivity of groups and the
success of managing people.
A few years later Hackman and Oldham initiate the discussion how much

17

job related factors influenced the motivation of workers. The basic assumption
Hackman and Oldham put forward was simply that working hard and better
performance happens when work is satisfying and rewarding. it argued that
work has to be meaningful, that people must feel responsible and that they
depend on feedback in order to feel good about their job. Beyond factors such
as skill variety, task identity and task significance this human resource
model encouraged managers to make workers feel significant, identify and
perceive work as something meaningful.
Hackman and Oldham focused on on ready available aspects such
being responsibility for doing something significant; possessing enough
autonomy to catch the feeling of being part of a somewhat important task that
has to be done; and having freedom and discretion how to do the job that has
to be done is all in all encouraging motivating because the worker feels
responsible, significant, and autonomously. While Hackman and Oldham put
forward the brilliant idea that people not only needed to identify themselves with
the job to which somebody else had assigned them, they perform better when
they get the feeling and get a sense of being responsible and or doing
something significant that is good for their identity.
All in all, Weber, Taylor, Maslow, McGregor, McClelland, Hackman and
Oldham have in common although their differences could not be greater - that
they focus on personal and individual needs in order to find an answer how to
motivate people and they all refer although from a totally different angle to
some helpful atmosphere that encourage communication, relations and/or
group work or job performance and finally they all seem to be very closely to
argue although not yet explicitly that emotions and feelings play a major
role in organizing people.
While Max Weber and F.W. Taylor strongly believed that feelings
negatively interfere with their rationally planned conceptions how to do work,
most if not all early text that influenced HRM practices believed that social
environment and personal traits do have a positive impact of performance,
albeit job environment and work atmosphere were fully charged with strong
emotions they still did not yet fit the overall rationally designed concept about
organizing work. Max Webers belief in the possibility of rationality, exemplified

18

in his conception of the rational bureaucracy banished unneeded and inapt

emotions such as love, hatred, and he regarded personal ambitions and
interests as totally inappropriate for a rational organization. Chris Argyris and
Rensis Likert may mark the beginning of a rethinking in organization studies.
No surprise, studies using the concept of emotions and feelings to study
work relationships have increased in recent years. Parallel to the literature that
used emotional labor as a focus to study the positive and negative effects of
emotions there is a tremendous growth of popular books that used to ask how
professionally human being deals with emotion. In addition, since the work of
Goleman, or as it is now called how much emotional intelligence do people
need mastering their job; the concept of emotional intelligence is used to tell the
audience of management best selling books how instrumental emotions are
as a new form of competence in order to succeed in todays work and/or social
relationships. But it was Hochschild, who initially took a new look on the topic of
emotions. Since then, what the use of emotions and the application of feelings
rules are called emotional labor.
EMPATHY
The origin of the word empathy dates back to the 1880s, when German
psychologist Theodore Lipps coined the term "einfuhlung" (literally, "in-feeling")
to describe the emotional appreciation of another's feelings. Empathy has
further been described as the process of understanding a person's subjective
experience by vicariously sharing that experience while maintaining an
observant stance.9 Empathy is a balanced curiosity leading to a deeper
understanding of another human being; stated another way, empathy is the
capacity to understand another person's experience from within that person's
frame of reference.
Can Empathy Be Taught?
Unfortunately, many physicians were trained in the world of "Find it and
Fix it" medicine, a world where empathetic communication was only an
afterthought--if this behavior was considered at all. Empathy was known as
"bedside manner," a quality considered innate and impossible to acquire--either

19

you were born with it or you weren't. More recently, greater emphasis has been
placed on empathy as a communication tool of substantial importance in the
medical interview, and many experts now agree that empathy and empathetic
communication are teachable, learnable skills. As we might therefore expect,
empathy is the cornerstone of several communication models, including "The
Four Habits" model (Invest in the Beginning, Elicit the Patient's Perspective,
Demonstrate Empathy, Invest in the End) developed by The Permanente
Medical Group's Terry Stein with Richard Frankel.
"The 4 E's" (Engage, Empathize, Educate, and Enlist) model used by the
Bayer Institute for Health Care Communication.
The "PEARLS" (Partnership, Empathy, Apology, Respect, Legitimization,
Support) framework adopted by the American Academy on Physician and
Patient, and other models.
Barriers to Giving Empathy
Because empathy is such a powerful communication skill, we might
suppose that clinicians would scramble to learn about and use it at every
available opportunity. However, this is not necessarily the case. Clinicians have
many reasons for not offering empathy to patients. An informal survey of
practicing clinicians participating in a recent clinician-patient communication
course

revealed

misgivings

(and

misconceptions)

about

empathetic

communication. Concerns mentioned included:

"There is not enough time during the visit to give empathy."
"It is not relevant, and I'm too busy focusing on the acute medical problem."
"Giving empathy is emotionally exhausting for me."
"I don't want to open that Pandora's box."
"I haven't had enough training in empathetic communication."
"I'm concerned that if I use up all my empathy at work I won't have anything left
for my family."
Empathy is a powerful, efficient communication tool when used
appropriately during a medical interview. Empathy extends understanding of

20

the patient beyond the history and symptoms to include values, ideas, and
feelings. Benefits of improved empathetic communication are tangible for both
physician and patient.
Empathy versus Sympathy (and Versus Pity)
Despite some divergent opinion on the matter, it may propose a subtle but
important distinction between empathy and sympathy.
Whereas empathy is used by skilled clinicians to enhance communication and
delivery of care, sympathy can be burdensome and emotionally exhausting and
can lead to burnout. Sympathy implies feeling shared with the sufferer as if the
pain belonged to both persons: it sympathizes with other human beings when it
share and suffer with it. It would stand to reason, therefore, that completely
shared suffering can never exist between physician and patient; otherwise, the
physician would share the patient's plight and would therefore be unable to
help.
Harry Wilmer summarizes these three emotions--Empathy, Sympathy, and
Pity--as follows:
Pity describes a relationship which separates physician and patient. Pity is
often condescending and may entail feelings of contempt and rejection.
Sympathy is when the physician experiences feelings as if he or she were the
sufferer. Sympathy is thus shared suffering.
Empathy is the feeling relationship in which the physician understands the
patient's plight as if the physician were the patient. The physician identifies with
the patient and at the same time maintains a distance. Empathetic
communication enhances the therapeutic effectiveness of the clinician-patient
relationship.
The buzzword one hears ever so often today is empathy '. While
we have all heard of sympathy , which is synonymous with compassion, pity
and understanding, not many of us are aware of the importance of empathy,
which is even beyond any expression of sympathy. So, what then is empathy'
and why has it become so important today? According to a famous psychiatrist,
empathy is to see with the eyes of another, to hear with the ears of another

21

and to feel with the heart of another. This explanation will show you the exact
difference between sympathy' and empathy'. When you show sympathy, you
are an outsider who views the situation from a distance and feel for the person
experiencing the situation. But empathy' involves the observer totally at any
given level. There is a complete identification with the experiences perspective
and there is a total emotional connect. To the extent that one may even go
through sensations that identify one with the other person. It is, in short, a
holistic involvement.

Empathy: Key to Individual Success

Empathy is the ability to sense the reactions of another person. It is the
ability to pick up the subtle clues and cues provided by another in order to
accurately assess what they are thinking and feeling?
What is very important to keep in mind is that empathy does not necessarily
involve agreeing with the other person's feelings. Rather, it does involve
knowing what their feelings or ideas are.
Empathy is not sympathy. Objectivity is lost in sympathy. Someone once
said that "empathy is placing oneself in the other person's shoes, but sympathy
is putting them on and feeling the pinch.
Sympathy involves a feeling of loyalty to another person and, thus, the
loss of objectivity. On the other hand, if you identify with and feel the emotions
of another, you cannot view them in a dispassionate, objective and helpful
manner. How do the differences between sympathy and empathy play out in
the work place? Let's take a look at the two qualities, and how a salesperson,
for example, might be helped or hindered by sympathy or empathy.
Emotional Quotient (E.Q.)
Goleman suggests that EQ at work is a multidimensional construct

22

consisting of five components, such as self-awareness, self-regulation,

motivation, empathy, and social skills. Unfortunately, Goleman uses the term
EQ to include almost everything but IQ: emotional awareness, accurate selfassessment, self-confidence, trustworthiness, conscientiousness, adaptability,
innovation, achievement drive, commitment, initiative, optimism, leveraging
diversity, political awareness, influence, communication, conflict management,
change catalyst, building bonds, collaboration and cooperation, and team
capabilities.
Bar-On (1997) and Bar-On and Parker's (2000) definition of EQ also falls
into this category. This framework stretches the conceptualization of
intelligence way beyond acceptable limits. As suggested by Salovey and
Mayer (1994) and Mayer, Caruso, and Salovey (2000) there should be a more
restrictive model of EQ based on ability and distinguished from personality. We
do this for the present study by redefining the following Goleman dimensions
of EQ:
Exogenous variables: Five Dimensions of EQ

1. Self-Awareness is associated with the ability to be aware of which

emotions, moods, and impulses one is experiencing and why. This also
includes one's awareness of the effects of his or her feelings on others.
2. Self-Regulation refers to the ability to keep one's own emotions and
impulses in check, to remain calm in potentially volatile situations, and to
maintain composure irrespective of one's emotions.
3. Motivation represents the ability to remain focused on goals despite
setbacks, to operate from hope of success rather than fear of failure, delaying
gratification, and to accept change to attain goals.
4. Empathy refers to one's ability to understand the feelings transmitted
through verbal and nonverbal messages, to provide emotional support to
people when needed, and to understand the links between others' emotions
and behavior.
The 5 components of Emotional Quotient (EQ)

23

1 Showing empathy towards others.

2

Understanding and expressing your own emotions.

Controlling your emotional impulses.

Taking

feelings

into

account

when

making

decisions.
5

Motivating yourself and others

Showing empathy towards others: Being EQ smart does not mean

becoming a psychologist, but it means being alert to how what you do and say
have an impact on others. A good way to improve in this area of Emotional
Quotient is to raise your self-awareness by completing an EQ assessment. If it
shows negative differences between how you and other people rate youre EQ,
then be aware that the Centre for Creative Leadership Studies in the United
States has found that over 75% of the reasons for career derailment among
leaders are related to emotional competencies.
Understanding and expressing your own emotions:
In former United States President Bill Clinton, the world sees a leader
who more readily engages with people because he communicates more than
just information. His communication shows how he feels about an issue in a
sincere and human manner. This is also why he is considered one of the
leading Democrat Politicians of all time in the United States. This has direct
relevance for business leaders, who all face the challenge to engage and
inspire others to be a part of the company vision and values. Executives have
to recognize and appropriately express their emotions. This is applicable
throughout the spectrum of activities: from the tone of conducting meetings and
presentations in formal board sessions with the top brass, to lively, inspiring
events designed for line staff.
Taking feelings into account when making decisions:
Many business situations demand analytical decision making, but the
high performance leader also knows that creativity and flexibility are not just

24

about the numbers game. Though sometimes it seem a good decision to

restructure based purely on the figures available. If the management team had
also considered how the decision might affect some of their top performers at
an emotional level, then (for example) the restructure may not seem so
sensible. Optional retrenchment could be brought up instead, with the top
executives explaining their rational and guiding people through the transition
phase.
Motivating yourself and others:
Business is often a roller coaster of highs and lows. Therefore it is to be
expected that high performance leaders are more skilled at motivating
themselves and others in challenging situations. Smart leadedrs are alert to
shifts of their own and others moods and the need to take actions to repair and
reinvigorate them changes are that the differences are less to do with technical
capability or IQ and more with now smart they are in handling their emotions
and the feelings of others. In fact, research has shown that over 70% of the
differences between an average leader and a high performance leader is due
to the emotional intelligence.

25

CHAPTER 2
COMPETENCY AND PERFORMANCE
MANAGEMENT: A REVIEW OF RESEARCH
LITERATURE

26

Introduction:
Many organizations today are using the process of 360 degree
feedback to compare an individuals self assessment of his/her own
performance against key position and organization competencies to the
assessment of key stakeholders that the individual interacts regularly with.
The 360 feedback received is then used as input to the Individual Development
plan. David McClelland takes the position that definitions for various
competencies, which contain real-life examples of more competent behavior,
provide specific guideposts as to how to develop the competency. The
feedback information also provides a basis for career counseling or explaining
why a person should or should not be promoted.
First and foremost, individuals must demonstrate competencies. Perhaps the
most common place where they are demonstrated is within the scope of a
particular job or project involvement. However, competencies are also
developed and demonstrated by individuals in the following settings: volunteer
roles in the community, professional associations, school projects, sports
participation settings, and even within ones own home life.
Up to this point, it is implied that the main need for identifying and
performance competencies is for individuals who may be pursuing full-time
employment with an organization. However, the need for performance of
competencies also extends to independent contractors seeking project work
with those organizations that broker their services.

27

Take the example of The Fulcrum Network, an organizational

development consulting brokerage organization. Fulcrum recently released a
manual entitled How to Hire the Right Consultant, in which it identified 18
factors that can be used to evaluate consultants. (Fulcrum Network, 2002, pg.
10) Most of the 18 factors would be considered competencies, according to the
definition included earlier in this article. (Note that the process for performance
competencies will not differ significantly for self-employed individuals from the
process explained in a later section of this article.)
Why Should Individual Employees Map Their Competencies?
A list of compelling reasons includes, at a minimum, the following. An
individual:
Gains a clearer sense of true marketability in todays job market; once the
individual knows how his/her competencies compare to those that are asked for
by the job market in key positions of interest.
Projects an appearance as a cutting-edge and well-prepared candidate, who
has taken the time to learn about competencies, investigate those in demand,
and map his/her, own competencies prior to interviewing.
Secures essential input to resume development - a set of important terms to
use in describing expertise derived from prior career experience.
Gains advanced preparation for interviews, many of which may be delivered
using a competency-based approach called structured behavioral interviewing
or behavioral event interviewing.
Develops the capability to compare ones actual competencies to an
organization or positions required/preferred competencies, in order to create
an Individual Development Plan.
War for talent
An update of McKinseys 1997 survey on the war for talent found that it
is escalatingdespite the current economic slowdown and the end of the dotcom boom.

28

The war for management talent is intensifying dramatically. McKinsey

updated a 1997 study in which researchers surveyed 6,900 managers
(including 4,500 senior managers and corporate officers) at 56 large and
midsize US companies. The update found that 89 percent of those surveyed
thought it is more difficult to attract talented people now than it was three years
ago, and 90 percent thought it is now more difficult to retain them. Just 7
percent of the surveys respondents strongly agreed that their companies had
enough talented managers to pursue all or most promising business
opportunities. Demographic and social changes have played a growing role in
this trend. In the United States and most other developed nations, the supply of
35- to 44-year-olds is shrinking. And many of the best-trained people entering
the workforce are not bound for large traditional companies: last year, a full 30
percent of MBAs in the United States preferred to work for a start-up or a small
business. And the proportion of computer science and electrical engineering
graduates who went to smaller companies rather than more established ones
has risen to 37 percent, from 22 percent in the 1980s. The update also found
that the companies doing the best job of managing their talent deliver far better
results for shareholders. Companies scoring in the top quintile of talentmanagement practices outperform their industrys mean return to shareholders
by a remarkable 22 percentage points. Talent management isnt the only driver
of such performance, but it is clearly a powerful one senior managers report
that A playersthe best 20 percent or so of managersraise operational
productivity, profit, and sales revenue much more than average performers do.
In one manufacturing company, the best plant managers increased profits by
130 percent; in an industrial-services firm, the best operations managers
achieved increases of 80 percent. (The worst managers in both companies
brought The Universe Graduate Survey 2000American MBA Edition,
Stockholm: Universe. McKinsey career progression surveys no improvement.)
The senior executives in the year 2000 survey thought top performers deserve
pay 42 percent higher than that of average performersa far greater spread
than most companies have but a solid investment nonetheless The researchers
found that paying an additional 40 percent to hire an A player could yield an
overall return of 100 percent or more in a single year. Despite the potential

29

impact of top performers, both the 1997 study and the year 2000 update
revealed a gap between awareness of the talent issue and an effective
response to it. Only 14 percent of the managers in last years survey (as
opposed to 23 percent in 1997) strongly agreed that their companies attract
highly talented people. Only 3 percent of the respondents to both surveys
strongly agreed that their companies develop talent quickly and effectively. At a
time of greater awareness of the shortage of talent and increased competition
for it, the imperative to manage it effectively is more urgent than ever. Leaders
must make talent a priority at all levels of their organizations, create reasons for
top talent to choose their companies, rebuild their recruiting strategies, create
plenty of opportunities for development, and learn to identify their A (as well as
their less capable) performers and invest in them appropriately companies and
preempt positions
Good people are great for business
How much more does a high performer generate annually than an
average performer? Mean of responses from 410 corporate officers Source:
McKinseys War for Talent 2000 survey of 410 corporate officers at 35 large US
companies increased revenue in sales roles 40% increased productivity in
operations roles increased profit in general management roles 49% 67% that
could have been used as development opportunities. Last year, nearly 60
percent of the respondents strongly agreed that they would be delighted if their
companies were quicker to dismiss underperformers or to move them into less
critical roles. Organizations that take talent seriously can deliver greater
shareholder value and start to realize the promise of competitive advantage
through better talent. But the implementation of that strategy must start at the
top: in the highest-ranked companies we studied, improving the strength of the
talent pool is among the top three priorities of senior leaders.
The cost of a bad boss
Learning and Performance in Teams and Organizations it starts with

30

some definitions. Performance is conceptualized as the achievement of goals.

Performance usually includes multiple dimensions, some more important to
stakeholders than others. For example, performance in hospitals typically
includes achievement of clinical as well as financial goals. In addition,
academic medical centers typically seek to achieve research and teaching
aims. Group goals are often aligned, such that their mutual achievement is
possible. However, some performance goals are not necessarily aligned, such
as when an organization seeks to excel in innovation while also achieving
superb quality and efficiency in an existing business. Where goals conflict,
organizations inevitably need to make tradeoffs among competing objectives.
In these situations, one aspect of learning is learning which performance
variables to maximize. This requires learning how to manage the tensions that
may exist between efficiency and cost versus clinical and customer experience.

31

CHAPTER 3
METHODS OF COMPETENCY
PERFORMANCE

32

There are a lot of methods are there for performance the competence.
Some of them are as follows Personal credibility
Interpersonal effectiveness
Personal management
Relationship orientation
Continuous learning
Tolerance for stress/change/ambiguity
Creative/analytical/problem-solving approaches rive
Adaptability
Personal credibility
In todays fast-changing environment, it is important that
employees not only represent the organization well, but that they also
establish personal credibility in the account. In the 1970s, it was thought
positive if a person worked at one organization for their entire career,
putting in 30 or 40 years. This type of individual was thought to be stable
and productive because they knew the practices and protocols of the
organization. Things have changed dramatically in the 1990s. It is
expected today that the most valuable employee in the organization will
have two or three different jobs, maybe as many as six jobs, in their
lifetime.
While loyalty and commitment are still considered to be valuable
assets, equally important is diverse experience. Its thought that by

33

bringing in people from the outside, the organization is kept aware of

new and different thought processes that are occurring in the
marketplace. It is especially important that sales professionals recognize
this trend.
The one person that you have dealt with year after year in the
organization to buy your products and services may be soon is gone. If
one sees this trend occurring more frequently, there are a number of
things one can do to prepare for success, not only in todays endeavors
but in the future as well.
Personal credibility also plays a vital role in the assessment of
competency. That means, one has to deal with more than just one
person in any account. It is advantageous when products and services
offered by an employee are recognized in the account by all levels of the
organization. Because the champion may leave and seek employment in
another organization, an employee does not want to lose the account.
How do you establish personal credibility?
What you have to do is continually resell the client. Your
competition will be in there nipping at your heels. From the day you get
the business, you must resell the account on the value of the
relationship. If you fail to do this, you wont be able to establish your
personal credibility. You will not be known in the account and, if your
champion should leave the account, you are now vulnerable.
Job-hopping is a fact of life. In order to be effective in this changed
environment, we must recognize the trends in the environment and
respond appropriately. There is nothing a sales person can do that is
more valuable to the client or their organization than to establish
personal credibility within the account. When times are tough, the
account will turn to you for solutions and they will give you the benefit of
the doubt when things dont go right. When times are good, you have the
ability to continue to build your relationship at all levels of the

34

organization, preparing for the pendulum to swing the other direction;

because no matter how good you have it in an account, you are
vulnerable if you do not have the personal relationship established when
things go wrong. We all know that we live in an imperfect world, and
things have a habit of not going right all the time.
- Paul Thomas
Interpersonal effectiveness
Interpersonal Effectiveness is all about - getting along with others
in a particular situation to accomplish certain goals. The situation may be
at work, at home, in school or in the community, but it's success
depends on our ability to function successfully with others - even though
they behave very differently!
The importance of Interpersonal Effectiveness: With an everincreasing reliance on virtual methods of communication, particularly
email, the opportunity to practice and develop ones interpersonal skills
in a professional context has diminished. When situations arise which
require something other than written communication, whether it be
delivering a difficult message, handling a complaint or issue or building a
relationship with a new colleague or client, employees sometimes find
that they lack the key interpersonal skills required to achieve the
necessary result.
Benefits of Interpersonal Effectiveness Training
This programme will provide you with the tools to: Understand
and adopt the principles of effective interpersonal communication
Network and build rapport and trust Handle difficult situations with
professionalism. Be a more effective communicator in a wide range of
work-related scenarios and contexts

35

Who should attend an Interpersonal Effectiveness Course?

Anyone who:
Requires more confidence when interacting with colleagues and clients
Needs to refresh and develop their existing skill set
Has experienced challenging interpersonal situations
Personal Management
Personal management is about performance a plan for your life
that will involve setting short-range and long-range goals and
investigating different ways to reach those goals. Education, training,
and experience all help make your goals become a reality. To achieve
your goals, you will choose the best path and make a commitment to it,
while remaining flexible enough to deal with changes and new
opportunities
Determining company policies and procedures as they relate to
personnel is another important aspect of the personnel management
process. HR functions often include drafting vacation, sick leave, and
bereavement policies that apply to all employees of the company. The
personnel management team often is also responsible for managing the
health care program provided to the employees as well.
One aspect of company organization that definitely requires the
input of effective personnel management is the drafting of a company
handbook. Establishing operation policies and procedures, requirements
for employment, commendation and disciplinary procedures, guidelines
for dismissals and promotions, and even something as simple as a dress
code has to be compared with state and federal guidelines before the
handbook is ready for release to the company at large. Personnel
managers and the HR staff are ideal for drafting and reviewing the
company handbook.
Depending on the size of the organization, it may be possible for
one person to handle the personnel management functions. As a

36

company grows, it may be necessary to expand from a single personnel

manager to a full-fledged personnel management, or Human Resources
team. By understanding the needs of the company at each point in its
growth, management can readily see to the addition to the Human
Resources team over time.

Relationship Oriention
The relationship oriented person sees other people as the best way
to achieve success. In an extreme case, almost everything such an
individual does in life must involve other people.

Some general factors that describe a relationship oriented

person:
When faced with a problem or a new situation, the first instinct for a
relationship oriented person is to contact a friend or family member who
might be able to help solve the problem or explain how to deal with it.
This person does not like to be alone. Almost all activities must have a
social element, even such simple tasks as doing the dishes, walking the
dog, or working in the garden.
A weekend is not complete unless at least some parts have a social
element. A quiet Friday night makes a relationship oriented person
uncomfortable - unless by quiet you mean going out to a friends house
for drinks and a chat.
Recreational activities are in and of them selves not important only the social element of the activity is important. Almost any activity is
fun if there are friends along and as long as the focus is on the social
element and not on the activity itself (an important distinction).
Finding out about other people is a natural instinct for the relationship
oriented person. How people fit together - who is whose friend, for
example, is extremely important to relationship oriented people.
Verbal communication skills and body language awareness are the

37

highest of any orientation. Verbal skills are naturally developed from

infancy through the intense desire for interpersonal interactions. A
relationship-oriented person can sometimes be seen actually repetitively
practicing speech patterns, mimicking people they have strong bonds
with, and reveling in verbal handshaking.
Relationship oriented people who are not self-aware consider the other
orientations boring and cold (process oriented people) or greedy,
selfish, and self-centered (goal oriented people). Caveat: These
thoughts dont last long if these other people show a modicum of real
sociability. All can be (nearly) forgiven if someone is friendly.
Homework or studying of any kind only works for relationship oriented
people if there are other people around to do the homework or studying
with.
Solitary, individual, no-talking exams are an abomination to the
relationship oriented person. Group projects with lots of time for social
interaction are a delight.
Continuous learning
Continuous learning is NOT about continually taking courses -- it's
about developing skills in reflection and inquiry -- it's about learning how
to learn so that your life's experiences become your own learning lab.
The concept of continuous learning has become quite prominent over
the past five years. Organizations are changing rapidly. Therefore, it's
difficult to find any approach to doing anything in organizations that
doesn't soon become outdated. The concept of continuous learning has
become important because it places priority on noticing, adapting and
learning from change.
Simply put, continuous learning is the ability to learn to learn.
Learning need not be a linear event where a learner goes to a formal
learning program, gains areas of knowledge and skills about a process,
and then the learning ceases. If the learner can view life (including work)
as a "learning program", then the learner can continue to learn from

38

almost everything in life. As a result, the learner continues to expand his

or her capacity for living, including working.

Requirements for Continuous Learning

Peter Senge, noted systems theorist, explains that continual
learning and personal mastery are very similar. In continuous learning,
the learner continues to: Recognizes priorities or overall values about
themselves and how they want to live and work -- they have a personal
vision Takes an active role in the world and work Continues to reflect on
their experiences in the world and work Seeks ongoing feedback about
the world (including work) and their activities in it (which is why working
in teams, using 360-degree appraisals, etc., are so important in
organizations) Remains as open as possible to the feedback (which
requires a fair degree of personal maturity) Makes ongoing adjustments

Thus, important aspects of continuous learning are

1 Having some basic values in your life or priorities in your work

2 Doing something in the world, applying new information and skills
3 Taking the time to inquire and reflect about your life and experiences
4 Getting up-to-date feedback, that is, understood and useful information
about yourself and your experiences

What Continuous Learning is not?

Continuous learning is a way of being in the world. It is not
staying busy by continuing to attend one course after another, gathering
more and more information. Someone once said that neurosis is doing
the same thing over and over again, expecting to get a different result
each time. (Those of us who have thousands of books in our library
might think more seriously about this definition.)
Tolerance for stress
Tolerance for Stress -- Working well under pressure and/or
against opposition.
Many jobs need people who can work well and stay positive in a

39

stressful work environment. Time pressure, opposing ideas, group

pressures, and/or task difficulty can cause stress. If one or more of these
sources of stress is normally part of the job, then tolerance for the
specific stress is important.

Key Behaviors:
Keeps the same style even when working under deadlines, tired, or
opposed on a point.
Stays calm when frustrated.
Works without making mistakes even when there are several conflicting
priorities.
Contributes constructive ideas even when everyone seems to hold an
opposing viewpoint.
Stays on course as policy or procedure changes suddenly.
Works well under tight deadlines.
Works well when having normal day-to-day stress in personal life.
Stays calm with irate citizens/clients.
Responds to citizens' needs in emergencies.
Key Words -- pressure, stability, opposition, conflict, deadlines,
problems, arguments, disruption, change, uncomfortable
Creative/analytical/problem-solving approaches
This is an approach to highly deep-rooted, intractable conflicts
that uses social-psychological analysis to identify the fundamental
human needs that underlie the conflicts and hence hold the key to
resolution. Typically, carefully chosen disputants from all sides meet with
a panel of conflict scholars in a week-long workshop. The scholars help
the disputants work together to analyze the fundamental sources of
conflict, focusing especially on unmet human needs (such as identity,
security, or recognition). After identifying these needs, the participants try
to develop approaches for restructuring their societies in a way that
meets the needs of all sides simultaneously.

40

Adaptability
Adaptability is a feature of a system or of a process. This word
has been put to use as a specialized term in different disciplines and in
business operations. Word definitions of adaptability as a specialized
term differ little from dictionary definitions. According to Andresen and
Gronau

[1]

adaptability in the field of organizational management can in

general be seen as an ability to change something or oneself to fit to

occurring changes. In ecology, adaptability has been described as the
ability to cope with unexpected disturbances in the environment

[2]

However, the word definitions in these fields are just the starting points
for detailed analysis of system adaptability.
1 Development of the use of this term
2 Criteria of adaptability
2.1 Adaptability of a system
1. Development of the use of this term
In the life sciences the term adaptability is used variously. At one
end of the spectrum, the ordinary meaning of the word suffices for
understanding. At the other end, there is the term as introduced by
Conrad, referring to a particular information entropy measure of the biota
of an ecosystem, or of any subsystem of the biota, such as a population
of a single species, a single individual, cell, protein or gene.
In the technical research field this feature has been considered only
since the late 1990s. H. P. Wiendahl first introduced adaptability as a
necessary feature of a manufacturing system in 1999 [4]. The need to
consider adaptability arose in the context of factory planning, where it is
an objective to develop modular, adaptable systems. It has now become
an important consideration for manufacturing and system engineers.
2. Criteria of adaptability

41

2.1 Adaptability of a system

Adaptability is to be understood here as the ability of a system to
adapt itself efficiently and fast to changed circumstances. An adaptive
system is therefore an open system that is able to fit its behavior
according to changes in its environment or in parts of the system itself.
That is why a requirement to recognize the demand for change without
any other factors involved can be expressed
Results orientation
What is ... Results Orientation?
A Results Orientation is a healthy organizational practice of
looking at data to see if agency, program and case goals are achieved,
in order to maximize results and to learn and apply the most we possibly
can from our collective experience.

APPROACHES TO RESULTS:
Across disciplines, management and program improvement texts
are littered with approaches to create and sustain the use of data.
Unfortunately, the proliferation of similar terms may undermine clear
communication and successful collaboration (Friedman, 2003). Among
the approaches, Results-based Management (RBM) trumpets making
decisions regarding programs based on recently measured results and
consideration of obstacles and facilitators facing current operations.
Another example, managing for Results (MFR), emphasizes building a
results focus into every aspect of management practice and routine.
With Caseys Continuous Quality Improvement (CQI) effort, as with the
Annie E. Casey Foundations concept of Results Accountability, we
recognize that all who can contribute to finding solutions and making
improvements must be involved, not only managers.
Team commitment

42

In order for any project to be completed successfully, each team

member must feel confident about, and committed to, his or her
responsibilities.

The purpose of this segment is to provide some

practical guidelines on how to obtain and maintain the commitment of

team members to the project.
Method
While ensuring effective performance, one has to make sure that each
team member has a clear understanding of:

The work products they are being asked to produce and the quality

requirements for each work product,

The applicable standards and procedures to be followed in producing

each end-product,

The detailed cost estimates and schedule that they are being asked to

commit to.
Look for the signs that indicate that the team member has accepted
responsibility for the end-products.

Commitment and confidence is usually

indicated by the team member asking questions, giving a specific time-frame

(e.g., you'll have it by Friday) and generally indicating "no problem" as opposed
to "I'll try my best" or "I'll see what I can do." Ask the team member to rephrase the responsibility in their own words. Assess their response to your
questions. Observe the non-verbal indications.
The delegation and acceptance of responsibility is an ongoing process
rather than a one time event. Witness, monitor, and maintain the commitment
level on an ongoing basis by:

meeting with team members on an individual basis, both formally and

informally ("management by walking around") just to see how they're getting

along,
observing their level of initiative and interest in their work, and the frequency
with which they approach you with questions,
Reviewing and providing feedback on their project tracking documents and
weekly status reports,

43

CHAPTER 4
COMPETENCY MANAGEMENT AND
ORGANISATIONAL
EFFECTIVENESS

44

Introduction
1

WHAT IS ORGANISATIONAL EFFECTIVENESS?

DIFFERENT MODELS OF ORGANISATIONAL EFFECTIVENESS

ORGANISATIONAL LIFE CYCLE

ORGANISATIONAL STRUCTURE

MEASURES OF STRUCTURE

TECHNOLOGY
1. WHAT IS ORGANISATIONAL EFFECTIVENESS?
Organizational Effectiveness, within the Office of Human Resources,
serves as a gateway to training, development, and consulting resources that
build organizational capacity, increase individual capabilities, and promote a
culture of excellence through strong leadership. The division collaborates with
institutional stakeholders to strategically and systemically address the
University's mission and goals.
Areas of service include:
Employee Career Services
Organizational Development
Leadership Development
Personal & Professional Development
Supervisory Training and Development
Training Services
An organization's effectiveness is also dependent on its communicative
competence and ethics. The relationship between these three is simultaneous.
Ethics is a foundation found within organizational effectiveness. An organization
must exemplify respect, honesty, integrity and equity to allow communicative

45

competence

with

the

participating

members. Along

with

ethics

and

communicative competence, members in that particular group can finally

achieve their intended goals.
Foundations and other sources of grants and other types of funds are
interested in organizational effectiveness of those people who seek funds from
the foundations. Foundations always have more requests for funds or funding
proposals and treat funding as an investment using the same care as a venture
capitalist would in picking a company in which to invest.
Organizational effectiveness is an abstract concept and is basically
impossible to measure. Instead of measuring organizational effectiveness, the
organization determines proxy measures which will be used to represent
effectiveness. Proxy measures used may include such things as number of
people served, types and sizes of population segments served, and the
demand within those segments for the services the organization supplies.
Volunteers), and amount of wastage. Since the organization has as its
goal the preparation of meals and the delivery of those meals to house bound
people, it measures its organizational effectiveness by trying to determine what
actual activities the people in the organization do in order to generate the
outcomes the organization wants to create.
Activities such as fundraising or volunteer training are important because
they provide the support needed for the organization to deliver its services but
they are not the outcomes per se. These other activities are overhead activities
which assist the organization in achieving its desired outcomes.
2. DIFFERENT MODELS OF AN ORGANISATIONAL EFFECTIVENESS
To be effective and achieve its goals, an organization must successfully
respond to environmental factors. How can the effectiveness of an organization
be measured? Various models of determining organizational effectiveness exist
because organizations face different environments, they produce different
products, their organizational members are made up of different kinds of
people, and the organizations are at different stages of development. Each
model is most useful to an organization having a particular combination of

46

these environmental and organizational attributes.

According to the rational goal model of effectiveness, an organization is
effective to the extent that it accomplishes its stated goals. For example, the
formal goals of the Toronto Blue Jays are to win their division, the American
League pennant, and the World Series.
The human relations model focuses on the development of the
organizations personnel. Marlin Travel sends its agents on familiarization trips
to expand their knowledge of specific hotels, cruises, and destinations.
The competing values model requires that an organization scrutinize the
balance among the above four effectiveness models. In this model there are
three sets of competing values. The first is the tension between internal versus
external focus. The more the organization focuses on one, the less it can
concentrate on the other. For example Apple Computer has focused externally
on its customers and making computers that are intuitive and easy to use. The
computer chip maker Intel has had a more internal focus on how to make faster
and more powerful central processing units at a low price. The second set of
values in competition is flexibility versus control. Flexibility allows quick
response to changing conditions and values innovation. Control values the
opposite. Stability and predictability mean that routine activities are performed
well but change is more difficult. The third set of competing values is the
relative concern with the feelings, needs, and development of the people
making up the organization versus the organization and its requirement to
accomplish its tasks.
An organization seeking legitimacy survives by acting in a manner seen
by other organizations as legitimate. An example would be producing a
business plan and projected income statement in order to obtain a bank loan.
Finally, the organization as a high performing system compares itself to
other similar organizations. The Vancouver Symphony Orchestra can measure
ticket sales and customer satisfaction with performances. But to determine the
quality of the orchestra itself, comparison is made to other orchestras in the
world. Effectiveness is seen as the degree to which that comparison is positive.
One method used by high performers to make such comparisons is to examine
industry rankings. An example is the Macleans magazine ratings of Canadian

47

universities.

3.

ORGANISATIONAL LIFE CYCE

What makes an organization effective varies with its stage of development.
As organizations pass through common stages throughout their life cycle their
structure changes, their basis of growth changes, and their goals change. It
should be remembered that organizations may not grow continuously but may
remain at one stage of development for long periods.
Most organizations are in operation for significantly fewer years than the
average person lives. We know that failure is very common with new
organizations. Restaurants, for example, are known to have high rates of
startups and closures. This tendency is called the liability of newness. Older
organizations die, too, though we often feel a sense of shock when we read of
a well-established company that closes its doors. A recent example is Eatons.
The next stage of development is the organizations youth. Growth now is
by direction, as professional managers brought into the company start to
impose organizational rules and bureaucracy. The goal is growth and
management aims to provide a sense of mission to members of the
organization. The crisis faced at this stage is that senior managers may not
wish to relinquish control to more junior managers by delegating tasks and
authority to them.
At the organizations midlife, growth is through delegation and coordination, the
goal is efficiency, and the structure becomes more bureaucratic and
departmentalized. To be able to change from a red-tape bureaucracy to a
collaborative team-oriented organization is the crisis that will eventually arise.
At maturity this collaboration will be achieved. The crisis at this stage is to avoid
becoming stagnant and enduring a slow decline and eventual death. Instead,
the organization must continually renew itself. In the final stage of decline and
death some organizations cannot change because their management becomes
a roadblock to change. Also, the organizations current structure can become a
constraint on necessary change.

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4.

ORGANISATIONAL STRUCTURE
The founder of an organization has to make a series of decisions about
what business to be in, what the organizations goals and objectives are, what
work has to be performed to attain those goals, how the work will be divided
and coordinated, and who will do the work. These decisions may be
interdependent if the organization is small. Making one decision will affect
others. For example, the skills and abilities of the particular people hired into
the organization will then affect decisions about what the organization can do
and how it will do it.
Another simple form of organization would be a restaurant whose manager has
divided the staff into three groups: the bar, the food, and the service.
These simple forms could be much enlarged by adding more people to the
basic structure. But as more people work in an organization, coordination
becomes more difficult. There often isnt enough time for the manager to deal
with every person individually on every issue. To solve this problem, more
vertical division of labour would occur. In the travel agency an assistant
manager could be hired to manage the Corporate Travel department. Those
agents would report to the assistant manager, whose job would be to help them
sell, deal with problems, and manage their work life (holidays, pay, training,
etc.). The agency manager would then, in this example, manage the holiday
travel agents as well as the assistant manager of corporate travel.
Besides accounting, other staff services might include public relations,
advertising, finance, and legal services. However, whether these activities are
staff or a line service depends on the basic work of the organization. For
example, accountants working for a public accounting firm are line personnel,
not staff.
As an organization grows it may become inefficient to have employees
who each deal with many different products and/or a variety of clients. It begins
to make sense for the organization to increase the amount of specialization of
its personnel. The travel agency may assign its corporate travel agents to
different teams. Each team might then deal with only a certain group of
corporate clients or one large client such as a federal government department.

49

The teams are therefore specialized by customer and would be managed by an

assistant manager in charge of all corporate travel. Holiday travel agents may
be divided by their specialty knowledge of a particular geographic region or
type of travel (for example cruises, adventure travel). These agents would have
their own assistant manager.
Recently two U of A graduates, Shawn Lowry and Lorne Fierbach,
opened a web-based greeting card business in Los Angeles. Their technology
and structure can handle up to 200,000 cards per day. Lowry says, We didnt
want to be a small card store where we took a few orders a day and
personalized them and mailed them out. We built it like it was going to be a
very successful company where we would be taking care of the nations or
North Americas or the worlds greeting card needs. Initial capital of $10 million
was required to set up the operation for large-scale activity.
Departmentation is the horizontal division of work into logical groupings.
It can be done on the basis of customer, product, geographic location, function
performed or special knowledge, project, or a mixture of these components.
The division of the travel agency into corporate and holiday travel is a
departmentation by type of customer. This separation assumes that there are
two distinct kinds of travelers, with different perspectives and needs. Work with
each group may be both more efficient and more effective if agents specialize
and train to understand either corporate or holiday travelers, but not both.
A division by product is illustrated in the supermarket example. Work is
split into bakery, meats, dry goods, and produce, the four classes of product
provided. Employees would specialize in working with and knowing one type of
product.
In

manufacturing

firm

functional

departments

typically

include

production, marketing and sales, and research and development. Production

makes the shoes; marketing and sales is responsible for advertising,
distribution, and pricing; and R&D studies new designs and materials for shoes.
Organizations often create a mixture, or hybrid, of the above-mentioned ways
to departmentalize.
5.

MEASURES OF STRUCTURE

50

Structure concerns more than the division of labor or the boxes on the
organization chart. It is also about the reporting relationships between
organizational members. These are the lines connecting the boxes, rules and
regulations about how the work is performed, and whether organizational
decisions are made at the top of the organization or lower down. In order to
compare one organizations structure with that of another or to study the effects
of structure on organizational performance, we need to have consistent ways to
measure structure. Three important structure measures are complexity,
formalization, and centralization.
Formalization refers to the extent to which job activity is defined and
controlled by rules. The more rules there are about how to do the work and how
decisions are made, the more an organization is formalized. Police
departments are often much formalized as the activities of officers are strictly
controlled by rules that cover almost every situation that may arise. A campus
radio station, on the other hand, may be much less formal, having only a few
rules governing the broadcasting behavior of station members.
Centralization concerns where in the organization decisions are made.
When decision-making is reserved for top management, vertical centralization
is high. Vertical centralization is low when lower-level employees in the
hierarchy are given decision-making authority. Horizontal decentralization
occurs when workers in many different organizational units are allowed to make
decisions without referring to a more central authority.
Organic organizations act more as living things. They have tasks that
are more interdependent and that are continually adjusted and redefined
through interaction with organizational members. An advertising agency such
as Saatchi & Saatchi needs to be flexible in dealing with customers and in
creating concepts for television commercials and print advertisements. In an
organic organization, control depends less on formal job position and more on
expertise relevant to the particular problem being considered. Communication
is both vertical (up and down the hierarchy) and horizontal (across different
departments of the organization) depending on where the needed information
resides. These communications primarily take the form of information and
advice. Commitment in the organic organization is to the organizations tasks

51

and goals. Members accept general responsibility for task accomplishment

beyond their individual role definition. That is, they do not stick to a job
description as a definition of the work they will do. Organic organizations tend
to be simple, low in formalization, and decentralized. They adapt to and create
change in their environments.
Bureaucratic theory makes the assumption that people are rational and
can work within the rules. These guide behavior, meaning that conflict would be
avoided. Weber provides guidelines for how to structure an organization. This is
the ideal type bureaucracy, as it should work. Non-rational behavior and conflict
between individuals were not anticipated. We now know that non-rationality and
conflict are present in bureaucratic structures.
TECHNOLOGY
Technology is defined as the sequence of physical techniques,
knowledge, and equipment used to turn organizational inputs into outputs. Joan
Woodward conducted research into the connection between technology and
structure by studying 100 manufacturing firms in the southern part of England.
She identified three types of technology.
Woodwards second technology type was large batch/mass production.
This is the production of many units of an identical product. A common example
of mass production is an automobile assembly line. When in operation, many
units of the same product are made. An example of large batch production is
the making of beer, which in a brewery is made in large fermentation kettles
that may each hold many thousands of liters. Each kettle holds one batch of
beer.
Woodwards third technology type was continuous process. This is the
production of a standard product without pause. An example of continuous
process technology is a nuclear power plant. Once started, electricity is
generated without pause for a long period of time. A few highly skilled
technicians monitor the nuclear reactor. Expended uranium fuel rods may even
be replaced while the reactor is in operation. A second example of this type of
technology is an oil refinery. Crude oil is continually input into the refinerys
cracking and distilling apparatus and refined products such as gasoline are
continually extracted.

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CHAPTER 5
CONCLUSION

53

CONCLUSION
Competency management is such a process by which one can
measure the working potential of a person or a group of Competency
performance is a process through which one assesses and determines
ones strengths as an individual worker and in some cases, as part of an
organization. It generally examines two areas: emotional intelligence or
emotional quotient (EQ), and strengths of the individual in areas like
team structure, leadership, and decision-making. Large organizations
frequently employ some form of competency performance to understand
how to most effectively employ the competencies of strengths of
workers. They may also use competency management to analyze the
combination of strengths in different workers to produce the most
effective teams and the highest quality work.
Competency management also requires some thought, time, and
analysis, and some people simply may not want to do the work involved
to sufficiently map competencies. Thus a book like the above is often
used with a human resources team, or with a job coach or talented
headhunter. Competency management alone may not produce accurate
results unless one is able to detach from the results in analyzing past
successes and failures. Many studies find that people often overestimate
their abilities, making self-competency performance results dubious.
Usually, a person will find himself with strengths in about five to
six areas. Some- times an area where strengths are not present is worth
developing. In other cases, competency management can indicate
finding work that is suited to ones strengths, or finding a department at
ones current work where one's strengths or needs as a worker can be
exercised.
A problem with competency management, especially when
conducted by an organization is that there may be no room for an
individual to work in a field that would best make use of his or her
competencies. If the company does not respond to competency

54

management by reorganizing its employees, then it can be of little shortterm benefit and may actually result in greater unhappiness on the part
of individual employees. A person identified as needing to learn new
things in order to remain happy might find himself or herself in a position
where no new training is ever required. If the employer cannot provide a
position for an employee that fits him or her better, competency
management may be of little use.
Finally, performance appraisals are an important part of performance
management. In itself an appraisal is not performance management, but
it is one of the range of tools that can be used to manage performance.

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APPENDIX
BIIBLIOGRAPHY
1. Minnesh Kaliprasad (2006), Creating a High Performance Culture in an
Organization, Cost Engineering, Vol. 48, No. 6 JUNE.
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Organizations.
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Performance Improve After Mergers?, Journal of Financial Economics
31, pp. 135-175.
4. Hughes, J. (2005), Bringing emotion to work: emotional intelligence,
employee resistance and the reinvention of character, Work
Employment and Society, 19(3), Pp. 603-625.
5. Corelli C. (2003), Creating a High Performance Culture of Excellence,
Expert Magazine, ExpertMagazine.com.
6. Alexander J.A. (2001), Creating a High-Performance Culture:
Leadership Roles and Responsibilities, Professional Services
Leadership Report, 4th quarter edition, AFSM International, Florida.
7. Argyris C., and D.A. Schon. (1996), Organizational Learning II, MA:
Addison-Wesley.
8. Kur E.(1996), The Faces Model of High Performing Team
Development, Leadership & Organizational Development, Vol.17, No. 1.
9. Kotter J.P., and J.L. Heskett. (1992), Corporate Culture and
Performance, New York: Free Press.
10. Schein E.J. (1992), Organizational Culture and Leadership, 2nd ed.,
San Francisco, Jossey-Bass.
11. McGregor, D. (1960), The Human Side of Enterprise, Auckland,
McGraw-Hill.