Unit 3: PEOPLE IN ORGANIZATIONS

13: Motivation in Theory

The people in a business, or the workforce is one the most important resources any organization has.

Productivity: The rate of output compared to the units of Input. Labor Productivity: The output of a worker during a given period of time. Factors that have improved labor productivity;

o Better machineryo Better Trainingo Improved motivation levelso More effective management

F.W. Taylor and SCEINTIFIC MANAGEMENT; Taylor theory gives the following steps to improve productivity:

o Select workers to perform a tasko Observe them and note key elements of the tasko Record the time takeno Identify the quickest methodo Train all workers to follow that methodo Supervise them keeping time and making sure that the task is being carried out within

the allocated timeo Pay in basis of result

Method Study- Observe and then establish the best method of doing a job. Elton Mayo and the Human Relations Theory (HAWTHORN EFFECT); management and workforce

communication. The results of were:o Financial incentives have little or no effect on productivityo When management consult the workforce and take their interests into consideration

then motivation is improvedo Working in teams can improve productivityo When some control is handed over to the workers, it is very motivating for the

employeeso Informal leaders in group should be supported, as they can help to achieve targets

Maslow’s HIERARCHY OF HUMAN NEEDS; Maslow suggested that the different levels of employees have different needs. And in order to motivate them they have to be identified and fulfilled;

o Level 1: Physical Needs; Income to be high enough to meet the essential needso Level 2: Safety Needs; Job security and health and personal safety concerns are taken

care ofo Level 3: Social Needs; Working in teams and groups, feeling part of the firmo Level 4: Esteem Needs; Recognition for the work done, status etc.

o Level 5: self-actualization: Aiming to reach one’s full potential. Herzberg and THE TWO FACTOR THEORY: he concluded the factors of satisfaction and

dissatisfaction of employees.o Employees are satisfied by;

Achievement Recognition The work itself [how interesting it is and how well suited the worker is] Responsibility Advancement

o Employees are dissatisfied by; Company policies Administration Supervision Salary Relations with other workers Working conditions

McGregor’s THEORY X and THEORY Y (Chapter 15)o There are two approaches to management;

Theory X: the management believes that the workers are not interested in the work and lack initiative.

Theory Y: the management treats the workers as they enjoy their work and that they are creative and that they will do a good job if given the responsibility of a task.

o In this theory it has been identified that there are not two kinds of workers but the workers will act accordingly to the theory adopted.

14: Motivation in Practice

Financial Rewards:o Hourly or Time wage rateo Piece Rateo Salaryo Commissiono Performance related payo Profit Sharing o Fringe Benefits

Non-Financial Methods of Motivationo Job Rotationo Job Enlargement; an attempt to increase the scope of a job.o Job Enrichmento Team Working

o Quality Circles; voluntary group of workers who meet regularly to discus and to try and improve the quality. These are informal meetings and these workers might be paid a bonus it they succeed in improving the quality.

o Target Settingo Delegation and Empowerment

15: Management Roles and Leadership Styles

Mangers get things done – not by doing all the work themselves but by working with and through other people.

The Role of Management;o Setting Objectives and Planning.o Organizing Resources to meet the set objectiveso Communicating with and motivating staffo Coordinating activitieso Measuring and Controlling the Performance

Leadership Styles:o Autocratic: Decisions are made centrally.o Democratic: Opinions of the workforce are taken in consideration in making decisionso Paternalistic: Mangers make decisions that they think are good for the staffo Laissez-Faire: Mangers hand down nearly all the authority t the workers

Informal Leadership: o There are always people who have respect of the people and they are in a position to

influence and motivate the others. o These people are said to be in a position of informal leadership. o If these people are given the task of seeing a job through then, they will have the whole

workforce behind them with high levels of motivation, not only for the staff but also for these informal leaders.

o This will improve the management-worker relations and is a better option than nominating a person to be in-charge.

16: The Structure of Organizations

The structure of an organization is very important as it defines who is answerable to whom and where the authority lies.

Types of Organizational Structure:o Hierarchical; this is the traditional structure. There are levels of authority and there are

people in every level, usually less in higher levels and more in lower levels.o Matrix; this type of structure cuts across the departmental lines of a hierarchal

structure. It creates project teams with people from every department. Advantages:

Good communication between departments The focus will not be on only one department Cross of ideas between specialist people

Disadvantages There may be some differences between the workers due to the cutting

of the hierarchal lines

This approach goes again the bureaucratic control and senior managers may resist this approach.

This can cause a conflict of departmental conflicts Principles of Organizational Structure

o Levels of Hierarchy: each level represents rank of staff. o Chain of Command: This is the route through which the authority is passed down an

organization. o Span of control: this refers to the number of subordinates reporting directly to a mangero Delegation: It means passing down the authority to perform tasks and to take decisions

from the mangers to the workerso Empowerment: this approach not only hands the responsibility of the work down but

gives full liberty on how the work is done tot eh workero Centralization and Decentralization: These two principles are linked to delegation. If

delegation is being practiced then a decentralized system is in practice and if not then it is a centralized system.

o The greater the number of levels of hierarchy, the longer the chain of command. This can cause problems in;

Efficient communication Smaller spans of control will lead to a limited scope for delegation Motivation levels of junior staff will be low as they will feel detached Business costs will increase as ‘middle managers’ are expensive to employ.

o De-layering: To overcome the problems associated with tall organizational structures, companies will look to de-layer; get rid of the unnecessary layers present in a hierarchal structure. This may also be done to reduce cost to survive an economic recession.

o Accountability, Authority and Responsibility: This is essential to understand specially if delegation is being practiced. Delegation gives the authority to subordinates to perform certain task. However, if these tasks are not done properly then, the manager is accountable, as the task was ultimately his responsibility.

o Line and Staff relationships Line managers: mangers that are handed authority over others as the lie at a

higher position. Staff Managers: they are experts and are employed to give advice and they do

not have the authority that a line manager has, but they are specialists so they help in working the company.

Factors affecting organizational Structureso Business Size: A small business has little or no use of an organizational structure. But as

the business grows, there are a lot more things to take care of and it is good practice to make a formal organizational structure.

o Style of Management: A manager running a business by theory X would most probably have small

spans of controls in the organization, resulting in a tall structure.

Whereas a manger who works by theory Y, will prefer the matrix structure thus reducing a lot of the levels of hierarchy.

o Economic recessions may cause firms to downsize by de-layering. This will lead to levels of hierarchy being removed altogether.

o Adopting new technology can also work towards some jobs being made redundant and so levels of hierarchy disappearing.

17: Communication

Importance of Effective Communication:o Better Staff Motivationo More and Better Ideas will be Generatedo Higher Seed of Decisiono Speed of Reaction to Changing Conditionso Correct Communication will result in the desired Reaction from the Receiverso Better Coordination

Communication Mediao Oralo Writteno Electronico Visual

Barriers to Effective Communicationo Failure in One of the Stages of Communication

The wrong medium might have been chosen The message was not clear enough The message was full of jargon and so was not understood Too much information being presented The channel of communication might be too long – down a long chain of

commando Poor Attitudes of the Sender or the Receiver

If either one of the two do not trust the other Low levels of motivation Intermediaries Proper effort is not made to get the message across by the sender

o Physical Reasons Noisy environments Geographical distances

Reducing communication barrierso Clear messageo Short communication channelo Feedback to be made a necessary part of the communication

o Establish trust between the sender and the receivero Overcome physical conditions

Types of Communicationo Formal Communication Networks

The Chain Network

The Vertical Network

The Wheel Network

The Circle

The Integrated or Connected Network

o Informal Communication: These communication networks are known as ‘grapevines’. There are productive uses of this system, for one it help to maintain good motivation levels. They are the result of the workers talking to each other or mailing one another. It can often lead to rumors and exaggerations. Can sometimes be counterproductive.

18: Human Resource Management

The purpose and the role of the human resource management department is to recruit and to train people and utilize the people in an organization in the most productive manner.

The most important job of the HR Department is to provide the business with a workforce of the right number and with the right skills.

The Number of staff depends on:o Demando Labor Productivityo Objectives of the Business [expansion or increase in consumer services etc]o Worker’s Rights [working hours]o Labor Turnover or absenteeism

The Skills of Staff depend on:o Technologyo Business want flexible staff that are multi-skilled

Recruiting and Selecting Staff: For this the following steps need to be followed

o The precise nature of the job needs to be definedo \o A person specification should be drawn upo Devise an appropriate advertisemento A shortlist of applicants needs to be drawn up from the CVs receivedo Interviews conductedo Other tests conducted

Training, Developing and Appraising Staffo Induction Training: For all new recruitso On-the job trainingo Off-the-job training

Ways to measure workforce performanceo Labor Productivityo Absenteeism Rateo Labor Turnover

Methods to Improve Employee Performanceo Appraisalo Trainingo Quality Circleso Cell Production and Autonomous Work-Groups

Here teams of employees are given multi-skilling training and a chance to take responsibility for a complete section of work.

Good alternative to Flow production.o Financial Motivators

19: Further HR Management

The prime cause of conflict between the staff and the owners is that the owners will always work to reduce costs and this includes cutting on labor costs.

Common causes of Management – Labor Conflictso Change –relocation, new technologyo Working Conditions – hours of work, pensions, health and safety

Basic management-labor relations approacheso Autocratic – workers are employed for very short contracts and there is little or no job

securityo Collective bargaining – Discussions with Trade Unions about what the workers wanto Close Coordination between labor and management in the recognition that successful

competitive business will ultimately be god for the interests of both the management and the labor

Trade Unionso Negotiations can take place at

National Level; the union negotiates with a federation (e.g. Engineering Employees federation) about the working condition wages etc for the employees that will be employed for work in that field.

Business Level; a trade union may negotiate with a business with large scale operations for the same conditions and the terms for all their operations

Plant Bargaining; individual or basic team-based bargaining Arbitration

o Arbitration involves a central organization listening to both sides and then deciding what has to be done

o Types of arbitration Binding Arbitration: if both parties agree to accept what the arbitrator suggests

then it is a binding arbitration. The arbitrator listens to both sides then given a solution that he thinks suitable.

Pendulum Arbitration: In this the arbitrator can only enforce the solution that is presented by the Union or the Management on the other.

Staff Trainingo Advantages

Improving performance of unskilled workers Raising the skill levels of the whole business, making workers more flexible Develops the staff to reach their full potential Improved efficiency and Quality

o Disadvantages Financial Cost Costs of Staff tied up in training and not being available to produce fir the firm The Trained staff may leave so there is a high risk of the investment not paying

off