Lecture 2. - Methods & measures Flashcards
(!) Describe the pros & cons of decentralisation
Advantages:
- Complex & uncertain envi.
- Local knowledge
- Timely response
- TM has time for LT obj.
- Limits in human computation
- Train local managers
- Motivate local managers
__________
Disadvantages:
- Competition
- Measurement problems
- Too result-focused
- Lack goal congruency: Alignment
- Risk sub- optimization
- Scale lost & add. cost: Efficiency
- TM lose some control
- Lack general managers
- Diff. interaction among org. units
- Risk empire building: Look good
(!) Describe how to evaluate a PMS
General:
- No best control form: In situ
- Some models better than others
__________
Evaluation of system:
Best fit:
- System assumption
- Practice situ
Pro-active judgment of response:
- Reasoning: Rational & experience
- Effects on actions, objectives, motivation & strategy if optimized
How to counteract to shortcomings:
Obs. pragmatic effects:
- Actual human reasoning & action
- Problems
Learning:
___________
Design qualities: (VIgtig!)
Technical qualities:
Responsibility / Controllability:
- Manager only responsible controllable outcome
- Management vs. economic performance
Effective result measuring poss.:
- Completeness: Reflect all controllable items
- Conceptual quality: Objective & Precisely
- Timely
- Well defined & meaningful
Know right norm:
Goal congruent:
- Efficiency
- Effectiveness
___________
Pragmatic effects:
- People response determine succes
- Seek goal-congruency: Yet practice
- Model as ideal assumptions: Yet practice
___________
Accountability vs. decision relevance:
- Insert picture
(?) Describe the different PM tools
General:
- Also in combination
- Important for responsibility centers
- Three others suppl. or replace result control
Controls:
- Action controls
- Results controls
- People / Personnel controls
- Culture / Communication controls
Idea behind:
- Empowerment: Best interest + Active actor
- Actions require fit
- Actor active in DM
(!) Describe action controls & types. Relate it to pragmatic constructivism
General:
- Performance oriented
- Ensure certain actions performed
- Try ensure best interest
- Ref. Boundary system
- Risk passive actors
- No empowerment
- More prescriptive
- Needs combined w. other controls
- Most direct form of MC
- Only when manager know & has ability to ensure desirable & undesirable actions
- Expensive to perfect
- Emergent role of digitalization
____________
Types:
Behavioral constraints:
- Physical or administrative
- Prevent: Before
- Address: Motivational problems
- Separate duties: Internal control to avoid fraud
- Make undesired things impossible or difficult
- Negative form of action control
- Expensive < Benefit
- Difficult if illoyal employees
- Eg. Double check
Pre-action reviews:
- Action plans & budgets
- Prevent: Before
- Address: Lack of direction, motivational & personal limitations
- Reviewers: Controlled employees: Approve actions, ask for modifications or better plan
Action accountability:
- Define, comm., obs. & reward
- Prevent & detect: Before & under
- Address: Lack of direction, motivational problems & personal limitations
- Hold employees accountable
- Punishment > rewards
Redundancy:
- Assign more people or machines to important tasks
- Prevent: Before
- Expensive
- Address: Motivation & personal limitations
- Only in critical situ
- Back ups: Security & health care
- Eg. Checklist before flights
__________
General:
- Merchant vs. pragmatic constructivism
Pros:
- Formulate rules & routines
- Action predictable & reliable
- Document best practice knowledge
- Most suit routine jobs
- Direct control at a distance
Cons:
- May not know (un)desirable action
- Maybe not able to ensure (un)desirable action occur
- Risk no creativity & innovation
- Risk gaming & negative attitudes
Describe people control
Ensure employees control their behavior:
- Personnel controls: Self-controls
- Self-monitoring
Ensure employees control others behavior:
- Cultural controls: Social controls
- Mutual-monitoring
(!) Describe personnel controls, its benefits & implementation
General:
- Not performance oriented
- Ability to self-control
- Types employed
- Human knowledge
- Build on self-motivation
- Intrinsic > Extrinsic motivation
- Self-satisfy if going good or firm succeed
- Ethical
- People seek doing “the right thing”
- People are conscious
- Ref. Self-control, ethics, trust & loyalty
- Ref. Belief systems
- Ref. Research & innovation
- Soft control
- Shared values & norms
- Ref. Creativity
- Often when professionals
- Vary across individuals, groups & societies
- Usable in most settings
- Eg. Intellectual capital: Often non-financial measures
Benefits:
- Natural commitment to goals
- Often lower costs
- Engagement in firm & its goals
- Likely doing desired task on their own
- Fewer harmful side effects
Implementation:
- Selecting right people: Education, skill, experience, ethic, motivation
- Training: Formal/informal. Address lack of direction & personal limitations
- Job design: Personal limitations & freedom
- Needed ress.: Address personal limitations
(!) Describe cultural/communication controls & methods
General:
- Not performance oriented
- Interaction w. people
- Hard to separate from personnel
- Org. structure
- Fixed over time
- Written/unwritten rules
- Effect vary across individuals, groups & societies
- Easiest in early stage
- Soft control
- Shared value, belief & assumption
- Culture regulate people
- Environmental
- Must ensure three psychological needs
Benefits:
- Often stronger than legal contracts
- Mutual monitoring
- Bring employees closer
___________
Methods: (Text)
Code of conduct:
- Mission/vision
- Communicate expectations & their reason
- Require TM support: “Tone at top”
- Address: Lack of direction & personal limitations
Group rewards:
- Beyond Budgeting
- Differ from result control
- Coworkers monitor
- Important if open book management / OBM
- Motivate
- Encourage team work
- Address: Lack of direction, motivation & personal limitations
- Eg. Profit sharing or bonus system
Inter-org. transfer / employee rotation:
- Improve socialization
- Reduce conflicting goals
- Reduce fraud: Never too familiar
- Address: Lack of direction & personal limitations
Arrangements:
- Physical: Office design
- Social: Dress code
- Address: Personal limitations
Tone at the top:
- Manager as role model
- Address: Lack of direction
(!) Describe results controls & its pros and cons
General:
- Performance oriented
- Rewards & punishment
- Classic PM control
- Financial & non-financial measures
- Beyond monetary compensation
- Sometimes weighted
- Targets & standards
- Not always rewards
- Ref. Responsibility centers
- Ref. Incentive & compensation
- Ref. Bonus system
Pros:
- Preventive control
- Motivation: Pay for performance
- Accountability: Employee concerned w. actions cons.
- Influence behavior while autonomy
- Provide direction
- Attract high performers
- Empowerment
- Highlight important areas
- Encourage talent development
Cons:
- Conflicts
- “What you measure is what you get”
- Subjective, non-neutral measures: Diff. to measure
- Dysfunctional motivation: Gaming, sub-optimization
- Negative attitude = Lost commitment
- Management-by-exeption approach: Only when low performance
- Not usable in all situ
- Require controllability & measurability
Describe tight control
General:
- Increase objectives achievement
- More likely to act in best interest
- Always big debate
(!) Describe performance measures dysfunctionalities
General:
- Measure poss. to be inaccurate
- Often lack understanding of motivation
- Risk undesirable behavior
- “What you measure is what you get”
- “If you can’t measure it, you can’t manage it”
- Ref. Incompleteness
__________
Single measures:
- Can’t capture complexity of firm
- May motivate undesired behavior
- Eg. Number
Multiple measures:
- Require alignment & controllability
- Stress objectives
- May contradict
Composite measures:
- Weightings
- Combine multiple measured into one
- Ratchet principle: Difficult to reverse
- Representation issue
(!) Describe considerations on different measures
General:
- Also benchmarking & outsourcing
- Standard too low = No effort
- Standard too high = Stress
- Cultural diff.
__________
Non-financial measures:
General:
- Composite: Eg. Quality
- Weightings
- Req. Financial link
- Subjective
Advantages:
- Avoid demotivation
- Avoid dys-functionality
- Avoid neglect of quality & service
- Avoid data manipulation
- LT planning
- Forward looking
- Suppl. budget & financial goals & measures
__________
Financial:
- Too tight control
- Number fixation: Numbers > business
- Understandability
Describe the mechanistic & organistic form
Mechanistic form:
- Conditions: Stable
- Task: Highly specialized, differentiated & precise
- Control: Hierarchical
- Rules: Rigid
- Knowledge & control: TM
- Communication: Downward. Rules & instructions
Organistic form:
- Conditions: Changing
- Tasks: Shared, cooperative & when problem
- Control: Network
- Rules: Often ignored
- Knowledge & control: At decision
- Communication: Vertical. Share info & advice
(!) Compare result- & self-control
General:
- Energy, direction & persistence
- Highly individual
Result control:
- Rewards link to standard & norms
- Assume known norms
- Assume controllability
- Risk suboptimization
- Come from outside
- Motivation by rules & demands
- May hinder intrinsic motivation
- Ref. Extrinsic motivation
___________
Self control:
- By individual
- Interest & values
- Exercised by person
- Assume competence
- Assume know-how
- Responsible & active individual
- Reward from inside
- Needed for active, creative & responsible problem solver
- Insufficient for rules & obj.
- Eg. Being a lector
- Ref. Intrinsic motivation
(!) Describe cognitive evaluation theory of self-determined motivation and what it is a basis for
Cognitive evaluation theory / CET:
General:
- Assume 3 psychological needs
- Enhance intrinsic motivation
- Require intrinsic interest
- Internalize extrinsic motivation if needs are supported
- Has implications for MC
- Environment influence extrinsic motivation
Needs:
Competences:
- Positive feedback
- Reward
- Communication
- Ref. External lotus of control
Autonomy:
- Will
- Ref. Internal lotus of control
- Depend on feeling of choice vs. others regulate behavior
Relatedness:
- Secure relational base important
- Eg. Feeling seen as a child
- Supportance
___________
Meeting needs are the basis for:
- Self-motivation
- Personality integration
- Social dev.
- Well-being
- Joyfulness
- Self-esteem
(!) Describe locus of causality
General:
- Best to be in the middle: “Free but within boundaries”
___________
External locus of causality:
Extrinsic motivation:
- Satisfaction from gain of doing task
- Do activity for outcome
- From outside
- Insufficient to be active, creative & responsible problem-solver
- Often if prompted or valued by significant other
- May crowd out intrinsic motivation
- Clearly defined
Extrinsic approach:
- Hire good people –> Pay well –> Expect high performance
Examples:
- Expected tangible reward
- Threat of punishment
- Deadlines
- Directives
- Forced evaluations
- Imposed goals
- Rules & demand
- Feedback
- Support
- Ress.
- Recognition
___________
Internal locus of causality:
Intrinsic motivation:
- Satisfaction from doing activity itself
- From inside individual
- Within oneself
- Autonomy & relatedness
- Needed to be an active, creative & responsible problem-solver
- Increase well-being
- Insufficient to establish org. rules & obj.
- Often when intellectual demanding jobs: Rarely boring ones
- In non: Equal to agency theory
- When need for creativity, innovation & learning
- Can overrule skill & experience
- If high: Less crowding out
- More if trust in TM
- More if clear comm.
- More if diverse workgroup
- Explain creativity
Intrinsic approach:
- Hire good people –> high performance –> pay well
Examples:
- Choice
- Acknowledgement of feelings
- Poss. self-direction
- Feeling of free choice
___________
Dimensions:
General:
- From external to internal
A-motivation:
- Incompetence
- Lack of control
External regulation:
- Compliance
- External rewards
- Punishment
- Interpersonal
Introjected regulation:
- Self-oppression
- Ego-involvement
- Internal rewards
- Internal punishment
- Intra-personal
- Self-worth
- Guilt guidance
Identified regulation:
- Personal importance
- Aligned w. other values
- Self-worth
- Guilt guidance
- Conscious valuing
Integrated regulation:
- Awareness
- Congruence
- Synthesis w. self
- Value outcome
Intrinsic regulation:
- Interesting
- Enjoyment
- Inherent satisfaction
- Self-determined
- Purpose synthesis w. self
__________
Combination:
- Poss. Synergies
- If already strong intrinsic motivation, extrinsic has additive effects
- Depend on extrinsic motivation type: Confirm competence or feedback
- Motivation depend on dev. stage
