Principles of Management Essay Sample

Principles of Management Pages
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Management is divided into:
1st- Planning :

I.e Managers have to set objectives of an organization and decide how to achieve them. This will involve developing strategies, precises tactics, and allocating resources of people and money.
2nd-Organizing:

This involves analysing and classifying the activities of the organization and the relations among them. Then separate manageable activities from individuals ones. Staff the organization with qualifies people, that means the right person for the right job.
3rd- Integrating:

I.e Communicate the objectives of the organization to the staff, and motivate the workforce in order to make sure they accomplish their tasks.
4th- Controlling:

Managers have to measure or control the performance of their staff, to see whether there is any deviation, and then take actions consequently.
Last-Developing:

Managers have to develop both their subordinates and themselves. E.g. On-job training.

A principle refers to a fundamental truth. It establishes cause and effect relationship between two or more variables under given situation. They serve as a guide to thought & actions. Therefore, management principles are the statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions. These principles are derived: – a. On the basis of observation and analysis i.e. practical experience of managers. b. By conducting experimental studies.

1. Division of Work:

Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby he can be more productive.

According to Henry Fayol under division of work, “The worker always on the same post, the manager always concerned with the same matters, acquire an ability, sureness and accuracy which increases their output. In other words, division of work means specialization. According to this principle, a person is not capable of doing all types of work. Each job and work should be assigned to the specialist of his job. Division of work promotes efficiency because it permits an organizational member to work in a limited area reducing the scope of his responsibility. Fayol wanted the division of work not only at factory but at management levels also.

2. Authorityand Responsibility:

The right to issue commands, along with which must go the balanced responsibility for its function.

Authority and responsibility go together or co-existing. Both authority and responsible are the two sides of a coin. In this way, if anybody is made responsible for any job, he should also have the concerned authority. Fayol’s principle of management in this regard is that an efficient manager makes best possible use of his authority and does not escape from the responsibility. In other awards when the authority is exercised the responsibility. In other awards when the authority is exercised the responsibility is automatically generated.

3. Discipline:

Employees must obey, but this is two-sided: employees will only obey orders if management play their part by providing good leadership.

According to Henry Fayol discipline means sincerity about the work and enterprise, carrying out orders and instructions of superiors and to have faith in the policies and programmes of the business enterprise, in other sense, discipline in terms of obedience, application, energy and respect to superior. However, Fayol does not advocate warming, fines, suspension and dismissals of worker for maintaining discipline. These punishments are rarely awarded. A well disciplined working force is essential for improving the quality and quantity of the production.

* There are good superiors at all levels.
* There are clear & fair agreements with workers.
* Sanctions (punishments) are judiciously applied.

4. Unity of Command:

Each worker should have only one boss with no other conflicting lines of command.

A subordinate should take order from only one boss and he should be responsible and accountable to him. Further he claimed that if the unit of command is violated, authority is undermined, disciplined in danger, order disturbed and stability threatened. The violation of this principle will face some serious consequences. In this way, the principle of unity of command provides the enterprise disciplined, stable and orderly existence. It creates harmonious relationship between officers and subordinates, congenial atmosphere of work. It is one of the Fayol’s important essential principle of management.

5. Unity of Direction:

People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise. Unity of command does not exist without unity of direction but does not necessarily flows from it.

Fayol advocates “One head and one plan” which means that group efforts on a particular plan be led and directed by a single person. This enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way the principle of direction create dedication to purpose and loyalty. It emphasizes the attainment of common goal under one head.

Basis| Unity of command| Unity of direction|
Meaning| It implies that a sub-ordinate should receive orders & instructions from only one boss.| It means one head, one plan for a group of activities having similar objectives.| Nature| It is related to the functioning of personnel’s.| It is related to the functioning of departments, or organization as a whole.| Necessity| It is necessary for fixing responsibility of each subordinates.| It is necessary for sound organization.| Advantage| It avoids conflicts, confusion & chaos.| It avoids duplication of efforts and wastage of resources.| Result| It leads to better superior sub-ordinate relationship.| It leads to smooth running of the enterprise.|

6. Subordination of individual interest to the general interest:

Management must see that the goals of the firms are always paramount.

The interest of the business enterprise ought to come before the interests of the praise individual workers. In other words, principle of management state that employees should surrender their personnel interest before the general interest of the enterprise. Sometimes the employees due to this ignorance, selfishness, laziness, carelessness and emotional pleasure overlook the interest of the organisation. This attitude proves to be very harmful to the enterprise.

7. Fair Remuneration To Employees:

Payment is an important motivator although by analyzing a number of possibilities, Fayol points out that there is no such thing as a perfect system.

According to Fayol wage-rates and method of their payment should be fair, proper and satisfactory. Both employees and ex-employers should agree to it. Logical and appropriate wage-rate and methods of their payment reduces tension and differences between workers and management, create harmonious relationship and a pleasing atmosphere of work. Further Fayol recommends that residential facilities be provided including arrangement of electricity, water and facilities.

8. Centralization and Decentralization:

This is a matter of degree depending on the condition of the business and the quality of its personnel.

There should be one central point in the organisation which exercises overall direction and control of all the parts. But the degree of centralization of authority should vary according to the needs of situation. According to Fayol there should be centralization in small units and proper decentralization in big organisation. Further, Fayol does not favor centralization or decentralization of authorities but suggests that these should be proper and effective adjustment between centralization and decentralization in order to achieve maximum objectives of the business. The choice between centralization and decentralization be made after taking into consideration the nature of work and the efficiency, experience and decision-making capacity of the executives.

9. Scalar chain (Line of Authority):

A hierarchy is necessary for unity of direction. But lateral communication is also fundamental, as long as superiors know that such communication is taking place. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organization. It should not be over-stretched and consist of too-many levels.

The scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. An employee should feel the necessity to contact his superior through the scalar chain. The authority and responsibility is communicated through this scalar chain. Fayol defines scalar chain as “the chain of superiors ranging from the ultimate authority to the lowest rank.” The flow of information between management and workers is a must. Business opportunities must be immediately avoided of. so we must make direct contact with the concerned employee. Business problems need immediate solution, so we cannot always depend on the established scalar chain. It requires that direct contact should be established.

10. Order:

Both material order and social order are necessary. The former minimizes lost time and useless handling of materials. The latter is achieved through organization and selection.

According to Fayol there should be proper, systematic and orderly arrangement of physical and social factors, such as land, raw materials, tools and equipments and employees respectively. As per view, there should be safe, appropriate and specific place for every article and every place to be used effectively for a particular activity and commodity. In other words, principles that every piece of land and every article should be used properly, economically and in the best possible way. Selection and appointment of the most suitable person to every job. There should be specific place for every one and every one should have specific place. This principle also stresses scientific selection and appointment of employees on every job.

11. Equity:

In running a business a ‘combination of kindliness and justice’ is needed. Treating employees well is important to achieve equity.

The principle of equality should be followed and applicable at every level of management. There should not be any discrimination as regards caste, sex and religion. An effective management always accords sympathetic and human treatment. The management should be kind, honest and impartial with the employees. In other words, kindness and justice should be exercised by management in dealing with their subordinates. This will create loyalty and devotion among the employees. Thus, workers should be treated at par at every level.

12. Stability of Tenure of Personnel:

Employees work better if job security and career progress are assured to them. An insecure tenure and a high rate of employee turnover will affect the organization adversely.

Principle of stability is linked with long tenure of personnel in the organisation. This means production being a team work, an efficient management always builds a team of good workers. If the members of the team go on changing the entire process of production will be disturbed. It is always in the interest of the enterprise that its trusted, experienced and trained employees do not leave the organisation. Stability of job creates a sense of belongingness among workers who with this feeling are encouraged to improve the quality and quantity of work.

13. Initiative:

Allowing all personnel to show their initiative in some way is a source of strength for the organization. Even though it may well involve a sacrifice of ‘personal vanity’ on the part of many managers.

Under this principle, the successful management provides an opportunity to its employees to suggest their new ideas, experiences and more convenient methods of work. The employees, who has been working on the specific job since long discover now, better alternative approach and technique of work. It will be more useful, if initiative to do so is provided to employees. In simple, to ensure success, plans should be well formulated before they are implemented.

14. Team Spirit (Esprit de Corps):

Management must foster the morale of its employees. He further suggests that: “real talent is needed to coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s merit without arousing possible jealousies and disturbing harmonious relations.”

In order to achieve the best possible results, individual and group effort are to be effectively integrated and coordinated. Production is a team work for which the whole-hearted support and co-operation of the members at all levels is required. Everyone should sacrifice his personal interest and contribute his best energies to achieve the best results. it refers to the spirit of loyalty, faithfulness on the part of the members of the group which can be achieved by strong motivating recognition and importance of the members for their valuable contribution, effective coordination, informal mutual social relationship between members of the group and positive and constructive approach of the management towards workers’ welfare.

Fayol’s definition of management roles and actions distinguishes between Five Elements:

1. Prevoyance. (Forecast & Plan). Examining the future and drawing up a plan of action. The elements of strategy.

2. To organize. Build up the structure, both material and human, of the undertaking.

3. To command. Maintain the activity among the personnel.

4. To coordinate. Binding together, unifying and harmonizing all activity and effort.

5. To control. Seeing that everything occurs in conformity with established rule and expressed command.

Henri Fayol (1841-1925) was a French management theorist whose theories in management and organization of labor were widely influential in the beginning of 20th century. He was a mining engineer who worked for a French mining company Commentry-Fourchamboult-Decazeville, first as an engineer. Then he moved into general management and became Managing Director from 1888 to 1918. During his tenure as Managing Director he wrote various articles on ‘administration’ and in 1916 the Bulletin de la Société de l’ Industrie Minérale, printed his “Administration, Industrielle et Générale – Prévoyance, Organisation, Commandement, Coordination, Contrôle”. In 1949 the first English translation appeared: ‘General and Industrial Management’ by Constance Storrs.

* Change and Organization.
* Decision-making.
* Skills. Can be used to improve the basic effectiveness of a manager. * Understand that management can be seen as a variety of activities, which can be listed and grouped.

This presentation would be showcasing the evolution in Management practices within anorganization.

The theories and approaches discussed would be asfollows:

* The Classical approach

* Human Resource Approach

* Modern Approach

The Classical perspective to management emerged during the nineteenth century and continued into the twentieth century. Due to the new challenges that organizations faced, management sought methods of efficiency which included a rational and scientific approach.

Scientific Management or Taylorism was a scientificmethod which was used to optimize the way in whichtasks were performed thus improving the labour productivity. One of Taylor’s philosophy was “In thepast man must has been first. In the future, thesystem must be first.”

* Develop a standard method for performing a task and train workers to use these methods. (Managers developed precise procedures based each organizational task)

* Provide workers with the proper tools needed to work.

* Selected employees were chosen for specific tasks.
(Workers that were stronger both mentally and physically were assigned specific tasks)

* Wage incentivewere provided when output was increased.
(Employees were motivated to increase their output with the use of additional benefits)

* Workers felt exploited because their social aspect of life was disregarded. (Workers were treated as machines and not humans)

* Management stereotyped workers and did not allow them to prove their skills in other areas.

* Workers were not allowed to form innovative ways toper form their tasks.

Weber’s theory concentrated on the fact that positions should be structured where there must be a clear line of authority (hierarchy) and all persons must be selected by competency for the job and promotion (promotion based on achievement and a specialized division of labor) also, a formal structure and position rather than an individual.

Good bureaucracy removed or reduced opportunities for corruption, favoritism and arbitrary exercises of power (instead of bribing a single official, you now have to bribe several officials) . Sometimes extra paperwork is added to a system. Identified bureaucracy with any large organization. Sometimes bureaucracy would be mistaken for civil service (governmental organizations) but actually is being used at various types of organizations .Bureaucracy is inflexible

The Human Resource perspective to management suggested that jobs should be designed to meet higher levels needs by allowing workers to use their full potential.

* The Hawthorne Studies by Elton Mayo

* The Maslow Theories of Human’s Need

* Mc Gregor’s Theory (x y theory)

After a series of studies, it was proven that employees increase the level of output when given better treatment. He carried out research at the Hawthorne Works of the Western Electric Company in Chicago .He and his team of researchers took a group of six women and segregated them. They then altered their conditions of work in a number of ways, over a five year period, and observed theeffects on production and the morale of the group.

Over the period, changes such as new payment systems, rest breaks of different sorts and lengths, varying the length of the working day, and offering food and refreshments were tried. In almost all cases, productivity improved. In the end, he realized that firstly, the women had felt important because they had been singled out. Secondly ,the women had developed good relationships amongst each other and had been allowed to set their own work patterns. Thirdly, the case of relationship had made for a much more pleasant working environment. Mayo decided that work satisfaction must depend, to a large extent, upon the informal social relationships between workers in a group and upon the social relationships between workers and their bosses.

Work is a group activity. The social world of an adult is primarily patterned by their work activity. The need for recognition, security and belonging is more important than physical conditions of the work environment. A complaint is commonly a symptom manifesting disturbance of an individual’s current position. An employee is a person whose attitudes and effectiveness are conditioned by social demands from continued conclusions from Mayo’s investigations: Informal groups with an organization creates a strong social control over the work habits and attitudes of an individual. Groups collaboration must be planned and developed ,then a cohesion within an organization would be formed thus resisting the disrupting effects of a continuously adaptive society. The change from an established society in the home to an adaptive society in the work plant resulting from the use of new techniques contribute to the disruption of the social organization of the workplace

Maslow’s hierarchy of needs is a theory in psychology that contends, each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow’s Hierarchy of Needs helps to explain how these needs motivate us all. Maslow’s Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development.

Maslow said that needs must be satisfied in the given order. Aims and drive always shift to next higher order needs. Levels 1 to 4 are deficiency motivators; level 5, and by implication 6 to 8, are growth motivators and relatively rarely found. The thwarting of needs is usually a cause of stress, and is particularly so at level 4.Examples he used were: You can’t motivate someone to achieve their salestarget (level 4) when they’re having problems withtheir marriage (level 3).You can’t expect someone to work as a team member (level 3) when they’re having their house re-possessed (level 2)

So while it is broadly true that people move up (or down) the hierarchy, depending what’s happening to them in their lives, it is also true that most people’s motivational ‘set’ at any time comprises elements of all of the motivational drivers. Like any simple model, Maslow’s theory not a fully responsive system nevertheless, it remains extremely useful and applicable for understanding, explaining and handling many human behavior situations.

In 1960 Douglas McGregor, an American psychologist proposed a book “The Human Side Of Enterprise” making contrasting assumptions about the nature of humans in the work place. These assumptions are the basis of Theory X and Theory Y teachings .Generally speaking, Theory X assumes that people are lazy and will avoid work whenever possible. Theory Y, on the other hand, assumes that people are creative and enjoy work.

The average individual dislikes work and will avoid it. Most people must be forced or penalized to get them effectively achieve the organizations goals. The average human has little or no ambition ,would avoid responsibility but like the security and benefits.

The average individual likes to work and it’s a natural activity .A person could be self motivated and is committed to their work. The average human learns to accept and seek responsibility. Has the capacity to be innovative and creative. The potential of a human under modern industrial life is moderately utilized.

Mc Gregor’s theory is a useful and simple reminder of the natural rules for managing people and he maintained that there are two fundamental approaches to managing people. Theory X Manager is an authoritarian manager and generally gets poor results. Theory Y Manager is a participative manager which produces better performance and results, and allows people to grow.

Theory X

Motivation style- Threats and disciplinary action are used more effectively in this situation ,also monetary gain.

Leadership-Authoritarian

Power & Authority-Arrogant, one way communicator

Conflict-Intolerant

Performance Appraisals-Appraisals occur on a regular basis

Theory Y

Motivation style-Rewarding

Leadership-Participative

Power & Authority- The manager would take suggestions from workers ,but would keep the power to implement the decision

Conflict-Workers might be given the opportunity to exert” Negotiating” strategies to solve their own differences

Performance Appraisals-Promotions also occur on regular basis.

With respect to overall management style, McGregor’s Theory X and Theory Y managers seem to have a much more formal leadership style and managers seem to have different views of the workers, while their views of the tasks remains the same in both cases: that is, one of specialization, and doing a particular task. Albeit that Theory Y suggests that the workers would become very good at their particular tasks, because they are free to improve the processes and make suggestions. While the Theory X worker is said to require force, threats, and possibly even disciplinary action. Theory Y are, again, self motivated, this allows them to focus on the task, and also their role within the company. Their desire is to be more productive and enable the company to succeed. Theory X workers, on the other hand, seem to have just enough self motivation to show up at work, punch the time clock, as it were, and do only that which is necessary to.

Elements of various perspectives, mostly the humanistic perspective evolved into what is known as the Modern Approach to management.

* Open Systems

* Contingency Thinking

* Lessons from the Japanese management style (theory z)

A system is defined as a group of interacting units or elements that have a common purpose. Therefore Open systems refer to systems that interact with other systems or the outside environment. In other words organizations is an entity that takes inputs from the environment, transforms them, and releases them as outputs in sequence with mutual effects on the organization itself along with the environment in which the organization operates.

Open systems refer to systems that interact with other systems or the outside environment. For example, living organisms are considered open systems because they take in substances from their environment such as food and air and return other substances to their environment.

The three major characteristics of open systems are:

* They receive inputs or energy from their environment.

* They convert these inputs into outputs.

* They discharge their outputs into their environment.

Companies use inputs such as labor, funds, equipment, and materials to produce goods or to provide services and they design their subsystems to attain these goals.

Two early pioneers in this effort, Daniel Katz and Robert Kahn, began viewing organizations as open systems with specialized and interdependent subsystems and processes of communication, feedback, and management linking the subsystems. Katz and Kahn argued that the closed-system approach fails to take into account how organizations are reciprocally dependent on external environments. For example, environmental forces such as customers and competitors exert considerable influence on corporations, highlighting the essential relationship between an organization and its environment as well as the importance of maintaining external inputs to achieve a stable organization.

The contingency approach to management is an extension of the humanistic perspective which is based on the idea that in an organization there is no one best way in the management process (planning, organizing, leading, and controlling) to successfully resolve any tailored circumstances; because organizations, people, and situations vary and change over time. Thus, the right thing to do depends on a complex variety of critical environmental and internal contingencies.

The contingency approach was suggested by two American academics, Lawrence and Lorsch in 1967. Their important contribution to this approach was as follows:

* The more dynamic and diverse the environment, the higherthe degree of both differentiation and integration required for successful organization.

* Less changeable environments require a lesser degree of differentiation but still require a high degree of integration.

* The more differentiated an organization, the more difficult it is to resolve conflict.

* Where the environment is uncertain, the integrating functions tend to be carried out by middle and low-level managerswhere the environment is stable, integration tends to beachieved at the top end of the management hierarchy.

Also, Fred Fiedler, in the 1960s and 1970s, was an early pioneer in this area. He identified that various aspects of the situation had an impact on the effectiveness of different leadership styles. For example, Fiedler suggests that the degree to which subordinates like or trust the leader, the degree to which the task is structured, and the formal authority possessed by the leader are key determinants of the leadership situation. Task-oriented or relationship oriented leadership should would each work if they fit the characteristics of the situation.

McGregor, identified a negative set of assumptions about human nature, which he called Theory X. He asserted that these assumptions limited the potential for growth of many employees. McGregor presented an alternative set of assumptions that he called Theory Y and were more positive about human nature as it relates to employees. In McGregor’s view, managers who adopted Theory Y beliefs would exhibit different, more humanistic, and ultimately more effective management styles and Theory Y became a well-known prescription for improving management practices. Concerns about the competitiveness of U. S. companies led some to examine Japanese management practices for clues to the success enjoyed by many of their industries. This led to many articles and books purporting to explain the success of Japanese companies. It was in this atmosphere that Theory Z was introduced into the Management lexicon.

Theory Z is humanistic approach to management approach by William Ouchi.

The key features of Japanese industrial organizations, according to Ouchi are as follows:

* Offer lifetime employment (at least for their core workers).

* Promote from within.

* Insist on mandatory retirement of core workers at age55.

* Employ a large number of temporary employees mostly women.

The key features of Japanese industrial organizations:

* Career paths are non-specialized with life-long job rotation as a central feature of career development.

* Decision making is shared at all levels.

* Performance appraisal is long term (i.e. the first appraisal takes place 10 years after joining the company).

* There is a strong sense of collective responsibility for the success of the organization.

* And cooperation effort rather than individual achievement is encouraged.

Although Ouchi recognizes that many of the features of Japanese management could not be translated into Western industrial society, he believes that certain features could be applied in a Western context. The move from the present hierarchical type of organization to a Theory Z type organization is a process which, says Ouchi:“Has the objective of developing the ability of the organization to coordinate people, not technology to achieve productivity.”

In his view, this requires a new philosophy of managing people based on a combination of the following features of Japanese management:

* Lifelong employment prospects

* Shared forms of decision-making

* Relationship between boss and subordinate based on mutual respect

According to Ouchi the introduction of Theory Z Approaches into Western firms requires the following strategy:

* Adoption of a “Top down” approach, based on definition of the new philosophy agreed and supported by the organization’s top management.

* Implementation of the new approach should be carried through on the basis of consultation and communication with the workforce and with full training supportto develop relevant skills for managers, supervisors and their teams.

1. Principles of Management are Universal

a. Management principles are applicable to all kinds of organizations – business & non business. b. They are applicable to all levels of management.
c. Every organization must make best possible use by the use of management principles. d. Therefore, they are universal or all
pervasive.

2. Principles of Management are Flexible

e. Management principles are dynamic guidelines and not static rules. f. There is sufficient room for managerial discretion i.e. they can be modified as per the requirements of the situation. g. Modification & improvement is a continuous phenomenon in case of principles of management.

3. Principles of Management have a Cause & Effect Relationship

h. Principles of management indicate cause and effect relationship between related variables. i. They indicate what will be the consequence or result of certain actions. Therefore, if one is known, the other can be traced.

4. Principles of Management – Aims at Influencing Human Behavior

j. Human behavior is complex and unpredictable.
k. Management principles are directed towards regulating human behavior so that people can give their best to the organization. l. Management is concerned with integrating efforts and harmonizing them towards a goal. m. But in certain situations even these principles fail to understand human behavior.

5. Principles of Management are of Equal Importance

n. All management principles are equally important.
o. No particular principle has greater importance than the other. p. They are all required together for the achievement of organizational goals.

Following are the main importance of the Principles of Management.

1. Improves Understanding.
2. Direction for Training of Managers.
3. Role of Management.
4. Guide to Research in Management.

1. Improves Understanding
From the knowledge of principles managers get indication on how to manage an organization. The principles enable managers to decide what should be done to accomplish given tasks and to handle situations which may arise in management. These principles make managers more efficient.

2. Direction for Training of Managers
Principles of management provide understanding of management process what managers would do to accomplish what. Thus, these are helpful in identifying the areas of management in which existing & future managers should be trained.

3. Role of Management
Management principles makes the role of managers concrete. Therefore these principles act as ready reference to the managers to check whether their decisions are appropriate. Besides these principles define managerial activities in practical terms. They tell what a manager is expected to do in specific situation.

4. Guide to Research in Management

The body of management principles indicate lines along which research should be undertaken to make management practical and more effective. The principles guide managers in decision making and action. The researchers can examine whether the guidelines are useful or not. Anything which makes management research more exact & pointed will help improve management practice.

The working relationships — vertical and horizontal associations between individuals and groups — that exist within an organization affect how its activities are accomplished and coordinated. Effective organizing depends on the mastery of several important concepts: work specialization, chain of command, authority, delegation, span of control, and centralization versus decentralization. Many of these concepts are based on the principles developed by Henri Fayol.

In addition to formal organizational structures, an organization may also have a hidden side that doesn’t show up on its organizational chart. This hidden informal organization is defined by the patterns, behaviors, and interactions that stem from personal rather than official relationships.

After an organization’s structural design is in place, it needs people with the right skills, knowledge, and abilities to fill in that structure. People are an organization’s most important resource, because people either create or undermine an organization’s reputation for quality in both products and service.

In addition, an organization must respond to change effectively in order to remain competitive. The right staff can carry an organization through a period of change and ensure its future success. Because of the importance of hiring and maintaining a committed and competent staff, effective human resource management is crucial to the success of all organizations. Human resource management (HRM), or staffing, is the management function devoted to acquiring, training, appraising, and compensating employees. In effect, all managers are human resource managers, although human resource specialists may perform some of these activities in large organizations. Solid HRM practices can mold a company’s workforce into a motivated and committed team capable of managing change effectively and achieving the organizational objectives. Understanding the fundamentals of HRM can help any manager lead more effectively. Every manager should understand the following three principles: * All managers are human resource managers.

* Employees are much more important assets than buildings or equipment; good employees give a company the competitive edge. * Human resource management is a matching process; it must match the needs of the organization with the needs of the employee.

Staffing is an ongoing process that begins with finding the right people through proper planning, recruiting, and selecting. But staffing doesn’t end once employees are hired; management must keep and nurture its people via training, appraising, compensating, and implementing employment decisions that determine such things as promotions, transfers, and layoffs.

The first step in the staffing process involves human resource planning. Human resource planning begins with a job analysis in which descriptions of all jobs (tasks) and the qualifications needed for each position are developed. A job description is a written statement of what a jobholder does, how it’s done, and why it’s done. It typically portrays job content, environment, and conditions of employment. The job specification states the minimum acceptable qualifications an incumbent must possess to perform a given job successfully. It identifies the knowledge, skills, and abilities needed to do the job effectively. Job analysis is then followed by a human resource inventory, which catalogs qualifications and interests. Next, a human resource forecast is developed to predict the organization’s future needs for jobs and people based on its strategic plans and normal attrition. The forecast is then compared to the inventory to determine whether the organization’s staffing needs will be met with existing personnel or whether managers will have to recruit new employees or terminate existing ones.

Recruitment
includes all the activities an organization may use to attract a pool of viable candidates. Effective recruiting is increasingly important today for several reasons: * The U.S. employment rate has generally declined each year through the 1990s. Experts refer to the current recruiting situation as one of “evaporated employee resources.” * Many experts believe that today’s Generation X employees (those born between 1963 and 1981) are less inclined to build long-term employment relationships than were their predecessors. Therefore, finding the right inducements for attracting, hiring, and retaining qualified personnel may be more complicated than in previous years. Keep in mind that recruiting strategies differ among organizations. Although one may instantly think of campus recruiting as a typical recruiting activity, many organizations use internal recruiting, or promote-from-within policies, to fill their high-level positions. Open positions are posted, and current employees are given preferences when these positions become available. Internal recruitment is less costly than an external search. It also generates higher employee commitment, development, and satisfaction because it offers opportunities for career advancement to employees rather than outsiders. If internal sources do not produce an acceptable candidate, many external recruiting strategies are available, including the following: * Newspaper advertising

* Employment agencies (private, public, or temporary agencies)
* Executive recruiters (sometimes called headhunters)
* Unions
* Employee referrals
* Internship programs
* Internet employment sites
But there’s more to recruiting than just attracting employees; managers need to be able to weed out the top candidates. Once a manger has a pool of applicants, the selection process can begin.

Motivation Strategies
To some extent, a high level of employee motivation is derived from effective management practices. To develop motivated employees, a manager must treat people as individuals, empower workers, provide an effective reward system, redesign jobs, and create a flexible workplace.

Empowering employees
Empowerment occurs when individuals in an organization are given autonomy, authority, trust, and encouragement to accomplish a task. Empowerment is designed to unshackle the worker and to make a job the worker’s responsibility. In an attempt to empower and to change some of the old bureaucratic ideas, managers are promoting corporate intrapreneurships. Intrapreneurshipencourages employees to pursue new ideas and gives them the authority to promote those ideas. Obviously, intrapreneurship is not for the timid, because old structures and processes are turned upside down. Providing an effective reward system

Managers often use rewards to reinforce employee behavior that they want to continue. A reward is a work outcome of positive value to the individual. Organizations are rich in rewards for people whose performance accomplishments help meet organizational objectives. People receive rewards in one of the following two ways: * Extrinsic rewards are externally administered. They are valued outcomes given to someone by another person, typically a supervisor or higher level manager. Common workplace examples are pay bonuses, promotions, time off, special assignments, office fixtures, awards, verbal praise, and so on. In all cases, the motivational stimulus of extrinsic rewards originates outside the individual. * Intrinsic rewards are self-administered. Think of the “natural high” a person may experience after completing a job. That person feels good because she has a feeling of competency, personal development, and self-control over her work. In contrast to extrinsic rewards, the motivational stimulus of intrinsic rewards is internal and doesn’t depend on the actions of other people. To motivate behavior, the organization needs to provide an effective reward system.

An effective reward system has four elements: * Rewards need to satisfy the basic needs of all employees. * Rewards need to be included in the system and be comparable to ones offered by a competitive organization in the same area. * Rewards need to be available to people in the same positions and be distributed fairly and equitably. * The overall reward system needs to be multifaceted. Because all people are different, managers must provide a range of rewards—pay, time off, recognition, or promotion. In addition, managers should provide several different ways to earn these rewards. This last point is worth noting.

With the widely developing trend toward empowerment in American industry, many employees and employers are beginning to view traditional pay systems as inadequate. In a traditional system, people are paid according to the positions they hold, not the contributions they make. As organizations adopt approaches built upon teams, customer satisfaction, and empowerment, workers need to be paid differently. Many companies have already responded by designing numerous pay plans, designed by employee design teams, which base rewards on skill levels. Rewards demonstrate to employees that their behavior is appropriate and should be repeated. If employees don’t feel that their work is valued, their motivation will decline. Redesigning jobs

Many people go to work every day and go through the same, unenthusiastic actions to perform their jobs. These individuals often refer to this condition as burnout. But smart managers can do something to improve this condition before an employee becomes bored and loses motivation. The concept of job redesign, which requires a knowledge of and concern for the human qualities people bring with them to the organization, applies motivational theories to the structure of work for improving productivity and satisfaction When redesigning jobs, managers look at both job scope and job depth. Redesign attempts may include the following: * Job enlargement. Often referred to as horizontal job loading, job enlargement increases the variety of tasks a job includes.

Although it doesn’t increase the quality or the challenge of those tasks, job enlargement may reduce some of the monotony, and as an employee’s boredom decreases, his or her work quality generally increases. * Job rotation. This practice assigns people to different jobs or tasks to different people on a temporary basis. The idea is to add variety and to expose people to the dependence that one job has on other jobs. Job rotation can encourage higher levels of contributions and renew interest and enthusiasm. The organization benefits from a cross-trained workforce. * Job enrichment. Also called vertical job loading, this application includes not only an increased variety of tasks, but also provides an employee with more responsibility and authority. If the skills required to do the job are skills that match the jobholder’s abilities, job enrichment may improve morale and performance. Creating flexibility

Today’s employees value personal time. Because of family needs, a traditional nine-to-five workday may not work for many people. Therefore, flextime, which permits employees to set and control their own work hours, is one way that organizations are accommodating their employees’ needs. Here are some other options organizations are trying as well: * A compressed workweek is a form of flextime that allows a full-time job to be completed in less than the standard 40-hour, five-day workweek. Its most common form is the 4/40 schedule, which gives employees three days off each week. This schedule benefits the individual through more leisure time and lower commuting costs. The organization should benefit through lower absenteeism and improved performance. Of course, the danger in this type of scheduling is the possibility of increased fatigue. * Job sharing or twinning occurs when one full-time job is split between two or more persons. Job sharing often involves each person working one-half day, but it can also be done on weekly or monthly sharing arrangements. When jobs can be split and shared, organizations can benefit by employing talented people who would otherwise be unable to work full-time. The qualified employee who is also a parent may not want to be in the office for a full day but may be willing to work a half-day. Although adjustment problems sometimes occur, the arrangement can be good for all concerned.

* Telecommuting, sometimes called flexi place, is a work arrangement that allows at least a portion of scheduled work hours to be completed outside of the office, with work-at-home as one of the options. Telecommuting frees the jobholder from needing to work fixed hours, wearing special work attire, enduring the normal constraints of commuting, and having direct contact with supervisors. Home workers often demonstrate increased productivity, report fewer distractions, enjoy the freedom to be their own boss, and appreciate the benefit of having more time for themselves. * Of course, when there are positives, there are also negatives. Many home workers feel that they work too much and are isolated from their family and friends. In addition to the feelings of isolation, many employees feel that the lack of visibility at the office may result in the loss of promotions.

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