CH8 - Behavioral Aspects of Control Flashcards
In addition to legal requirements, organisations need to consider other controls necessary to manage and control the behaviour of their employees. What are the 4 main types of organisational control?
- Personal centralised control - likely to be found in small owner-manager organisations. Control is carried out by owner through personal supervision. But as a organisation grows this may not be possible, and owner may have to employ others to undertake day to day supervision - moving to more bureaucratic control or output control
- Bureaucratic control - controls based on formal rules, procedures, standardisation and hierarchy. Achieved through formal job descriptions and specification of standard methods for performance of tasks. Reward and punishment systems can be used to reinforce this strategy.
Output control - based on measurement of outputs and results achieved. Simple and quantifiable. This approach facilitates delegation without the need for bureaucratic controls- once output standards are agreed employees can work semi autonomously to carry out tasks.
Clan or cultural control - require acceptance of values and beliefs of the organisation. If employees have the necessary skills, experience and ability, they can be given freedom to decide how they undertake their tasks. Leads to semi autonomous working. With few formal controls. Approach requires care selection, socialisation and development of employees
Briefly comment on “trust and control”
Where there is a high level of trust management may reduce the level of formal control.
In the past control systems were more ‘Taylor’s scientific management’ and ‘mcgregor theory X’. Problem with this is that it fails to take account of the human element. Could lead to-
Motivation problems, lack of morale,commitment. No interchangeable skills, high staff turnover
Quality problems - no overall responsibility, no intrinsic satisfaction from work
Little understanding of people - people at work are not necessarily rational. Eg they do not always work harder for more money and sometimes less inclined to work well if closely supervised. Eg budgets may lead people to purchase lower quality materials and thus cause production problems.
Today’s business requires more flexibility, suggesting a theory Y approach.
Allowing trust in control works well for both company and employee. Employee is allowed to work on own initiative and feels valued leading to increased productivity and increased motivation.
For control based trust to work there must be-
*Manager confident that employee has knowledge and skills to undertake the task
- objective must be clear and agreed by both parties
- employee must be motivated to work hard and use initiative to complete objective
What does performance appraisal system involve?
Regular and systematic review of performance
Assessment of potential
Aim to produce action programmes to develop both work and individuals
Aims to improve efficiency of organisation by ensuring individuals are performing to the best of their abilities and by developing potential for improvement.
What are the benefits of performance appraisal to both individuals and organisations?
Individuals
- Feedback about work performance and assessment of competence through comparison against established standards and agreed targets
- identifies work of a particular merit done during review period
- provides a basis for renumeration
- may be used as an opportunity to discuss future prospects and ambitions
- identifies training and development needs
Organisation
- Provides a system for assessing competence of employees and identifies area to improve
- provides fair process for reward decisions
- Helps identify and formulate training needs
- improve communication between managers and subordinates
- provides clear targets linked to corporate objectives
- provides a basis for HR planning
- monitors recruitment and induction process against results
What is the formal process of performance appraisal (TARA)
Targets- employees must agree/understand/buy into, and must be achievable, otherwise can be demotivating
Actual results monitored - during period manager should monitor actual employee performance and provide regular feedback. Manger can offer rewards for good performance and support where it looks as though employee is failing to meet their targets.
Review - at end of period manager will have a formal appraisal interview where they discuss employees performance and investigate how successful employee has been at meeting pre-agreed targets
Action plan- manger and employee will agree on the new targets that will be set in the coming period.
Describe 4 approaches to performance appraisal
The ranking system- formal structured approach which consists of the individual being assessed and analysed in terms of objectives, tasks workflows and results achieved. These then compared with previously agreed statements of required results and performance levels. For each of set targets manager will provide a ranking.
Instructed format - evaluators use essay or short answer questions to grade employees. Approach tries to capture all aspects of employee performance rather than being restricted to pre agreed targets. Unstructured appraisal are meant to be open ended and all encompassing.
Self rating - individuals rate themselves on agreed criteria, this is fed back to manager who reviews the individuals assessment and makes their own assessment. Individuals get the opportunity to consider their own performance and in some cases remind management what they have achieved in the period.
360 approach - allows more participation by the individual. While the manager will appraise the individual, the individual is also given the opportunity to appraise the manager. In some systems colleagues also appraise each other. This is confidential and anonymous and will help senior management build up accurate pictures of performance of departments. It also encourages individuals to work well together.
What does an appraisal require to be effective?
- applied fairly and consistently
- have commitment from senior managers
- be carried out with serious intent
- relate to main objectives of organisation
- be clearly understood by all parties
- be cost effective to operate
What are the barriers to effective performance appraisal and how can it be overcome?
One aspect that can reduce the effectiveness of performance appraisal is the appraisal interview. Poor performance appraisal interview can be -
Confrontational
Judgemental
Just a chat
A paper exercise
A substitute for management process that should happen all year
Barriers may be overcome if-
There is commitment from all involved parties
System of follow up and feedback
Recorded agreement between manager and employee about future training and development. Training should be arranged within an agreed time period
Alternative methods of appraisal such as 360 or self rating could be used.
Reward systems hope to support goals of organisation by aligning goals of employees with these,motivating employees to work in best interest of organisation. Rewards that are given to employees are either intrinsic or extrinsic- what does this mean?
Intrinsic - arise from the performance of the job itself. Intrinsic rewards include there feeling of satisfaction that comes from doing a job well, being allowed to make higher level decisions or being interested in your job ( ties in with Herbert’s motivators)
Extrinsic- separate to the job itself and are dependent on the decisions of others. Pay,working conditions and benefits are all examples of extrinsic rewards. (Linked to herzberg hygiene factors)
Rewards systems should be carefully designed to ensure sure that they;
- Fair and consistent to all employees, even those with different job sizes or required level of skill
- are sufficient to attract and retain staff
- maintain and improve levels of employee performance
- reward progression and promotion
- comply with legislation e.g minimum wage laws
- control salary costs
Employees can be rewards through a number of ways - training and development is one (think Maslow), but they are most likely to be interested in renumeration. What incentive schemes are used?
Performance related pay - PRP part of pay received relates to company performance.
Piecework - reward related to pace of work or amount of effort. Higher output = greater reward.
Points system - range of rewards available based on point system derived from the scale of improvement made, such as the amount of cost reduction achieved.
Commission - typically paid to sales staff, a proportion of sales made / profit made
Bonus schemes - usually a one off as opposed to PRP Schemes. Bonuses may be awarded to teams or groups that may of met or beat certain targets.
Profit sharing - often company wide, payments are made in light of overall profitability of company
Main objective of staff appraisal is to manage and measure performance. In order to measure performance a target must be set to measure performance against. To be acceptable this must be viewed as -
Fair
Measurable
Achievable
Controllable by the person or people being measured
A well set target can -
Influence behaviour in a positive way,
Can lead to increased level of commitment and motivation,
Which in turn can lead to increased productivity
Because jobs have many dimensions, targets must look at a number of different criteria in order to accurately reflect the employees performance. Targets may include -
- Volume of work produced
- Knowledge of work
- quality of work
- management skills
- personal skills
What is Druckers management by objectives ?
A type of control strategy that focuses on controlling outputs. Druckers emphasised if corporate objectives are to be effective, they must be stated in behavioural or measurable terms so any deviation can be highlighted early enough to correct.
It’s a process where individual goals are integrated with the corporate plan as part of ongoing programme of goal setting and performance review involving all levels of management.
