Management-And-Leadership PEOPLE in ORGANIZATION 2011

People in
organizatio
n
Saadat Ali Mughal

9/18/2011
People in Organisations
2AS. 1 Management and leadership
MINTZBERGS ROLE OF MANAGEMENT
Mintzberg's Ten Management Roles are a complete set of behaviours or roles within a
business environment. Each role is different, thus spanning the variety of all identified
management behaviours. When collected together as an integrated whole (gestalt), the
capabilities and competencies of a manager can be further evaluated in a role-specific
way.
The ten roles explored in this theory have extensive explanations which are briefly
developed here:
1. Figurehead
Social, inspirational, legal and ceremonial duties must be carried out. The manager is a
symbol and must be on-hand for people/agencies that will only deal with him/her because
of status and authority.
2. The leader role

This is at the heart of the manager-subordinate relationship and managerial power and
pervasive where subordinates are involved even where perhaps the relationship is not
directly interpersonal. The manager
defines the structures and environments within which sub-ordinates work and are
motivated.
oversees and questions activities to keep them alert.
selects, encourages, promotes and disciplines.
tries to balance subordinate and organisational needs for efficient operations.
3. Liaison
This is the manager as an information and communication centre. It is vital to build up
favours. Networking skills to shape maintain internal and external contacts for
information exchange are essential. These ontacts give access to "databases"- facts,
requirements, probabilities.
4. As 'monitor'
The manager seeks/receives information from many sources to evaluate the organisation's
performance, well-being and situation. Monitoring of internal operations, external events,
ideas, trends, analysis and pressures is vital. Information to detect changes, problems &
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opportunities and to construct decision-making scenarios can be current/historic, tangible

(hard) or soft, documented or non-documented. This role is about building and using an
intelligence system. The manager must install and maintain this information system; by
building contacts & training staff to deliver "information".
5. As disseminator
The manager brings external views into his/her organisation and facilitiates internal
information flows between subordinates (factual or value-based).
The preferences of significant people are received and assimilated. The manager
interprets/disseminates information to subordinates e.g. policies, rules, regulations.
Values are also disseminated via conversations laced with imperatives and signs/icons
about what is regarded as imprtant or what 'we believe in'.
There is a dilemma of delegation. Only the manager has the data for many decisions and
often in the wrong form (verbal/memory vs. paper). Sharing is time-consuming and
difficult. He/she and staff may be already overloaded. Communication consumes time.
The adage 'if you want to get things done, (it is best to do it yourself' comes to mind.
Why might this be a driver of managerial behaviour (reluctance or constraints on the
ability to delegate)?
6. As spokesman (P.R. capacity)

The manager informs and lobbies others (external to his/her own organisational group).
Key influencers and stakeholders are kept informed of performances, plans & policies.
For outsiders, the manager is an expert in the field in which his/her organisation operates.
A senior manager is responsible for his/her organisation's strategy-making system -

generating and linking important decisions. He/she has the authority, information and
capacity for control and integration over important decisions.
7. As initiator/changer/entrepreneur
- he/she designs and initiates much of the controlled change in the organisation. Gaps are
identified, improvement programmes defined. The manager initiates a series of related
decisions/activities to achieve actual improvement. Improvement projects may be
involved at various levels. The manager can
delegate all design responsibility selecting and even replace subordinates.

empower subordinates with responsbility for the design of the improvement
programme but e.g. define the parameters/limits and veto or give the go-ahead on
options.
supervise design directly.
8. The disturbance handler

This is a generalist role i.e. taking charge when the organisation hits an iceberg
unexpectedly and where there is no clear programmed response. Disturbances may arise
from staff, resources, threats or because others make mistakes or innovation has
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unexpected consequences. The role involves stepping in to calm matters, evaluate, re-
allocate, support - removing the thorn - buying time. The metaphors here are
If you are up to your backside in alligators it is no use talking about draining the swamp.
and Stop the bleeding as only then can you take care of the long term health of the
patient. (not Mintzberg's anecdote)
9. As resource allocator
The manager oversees allocation of all resources (, staff, reputation). This involves:
scheduling own time

programming work
authorising actions
With an eye to the diary (scheduling) the manager implicitly sets organisational priorities.
Time and access involve opportunity costs. What fails to reach him/her, fails to get
support.
The managerial task is to ensure the basic work system is in place and to programme staff
overloads - what to do, by whom, what processing structures will be used.
Authorising major decisions before implementation is a control over resource allocation.

This enables coordinative interventions e.g. authorisation within a policy or budgeting
process in comparison to ad-hoc interventions. With limited time, complex issues and
staff proposals that cannot be dismissed lightly, the manager may decide on the proposer
rather than proposal.
To help evaluation processes, managers develop models and plans in their heads (they
construe the relationships and signifiers in the situation). These models/constructions
encompass rules, imperatives, criteria and preferences to evaluate proposals against.
Loose, flexible and implicit plans are up-dated with new information.
10. The negotiator

It takes charge over important negotiating activities with other organisations. The
spokesman, figurehead and resource allocator roles demand this.
LEADERSHIP
Leadership is the ability of a person to persuade and influence other people towards
achievements of goals. They are able to persuade others about the decisions that they
have taken. Leaders are often thought to be charismatic people who have some thing
about them that makes them stand out from others.
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Leadership qualities
One approach to find out what makes good leader is to identify qualities that they should
have. Number of following characteristics has been suggested for a good leader.
Effective leaders have positive self-image, backed up with a genuine ability and
realistic aspirations.
Leaders need to be able to get to a core of a problem and have the vision and
commitment to suggest radical solutions.
They are expert in a particular field, intelligent, articulate, creative and
innovative.
Leaders have ability to sense changes and then respond to it.
At present, leader should have exposure at international level.
Types of leaders
1 The autocratic leaders

They set their own objectives; allocate tasks and insist on obedience. As a result, in an
organization, subordinates become more dependent upon their managers. They do not
have the necessary information to make their own decisions. This type of management
can frequently lead to dissatisfaction. On the other hand this can be essential to improve
discipline in work unit if it is following this type of leadership style.
2 The democratic leader

Encourages participation in the decision making process, consult with group members
and sells the final decisions to them. This style demands good communication skills on
the part of leader. The end result is satisfaction from the subordinates, quality of output,
better performance and achieves the identical targets.
3 paternalistic managers (father like)

Listen, explain issues and consult with the workforce, but will not allow them to take
decisions. The managers will decide what is best for the business and the workforce.
But the delegation of decision making will be most unlikely. These managers are less
concerned with Herzbergs motivators and more directed by the need to satisfy the safety
and security needs of the workers (Maslow). Therefore, this approach is not democratic -
and like some fathers is rather more autocratic than it might at first appear! This style
could be suitable in a situation with unskilled, untrained or newly appointed staff, but it
may lead to disappointment and disillusionment in more experienced staff who would
prefer to be delegated real decision making and participative authority.
4 The laissez faire (you go!) leader

This type of leader allows the people being managed to find their own problems and their
own solutions to them. This can work very well when the manager is one among equals
in terms of expertise and workforce understand the management role and the leader
objectives/targets to which they are all working. This can sometime results in poor
productivity and lack of motivation as employees have little incentive to work hard.
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Factors effecting leadership style

The points at which a manager will fit into that range depend on the following factors.
The task that is being undertaken- for example, autocratic/authoritarian discipline is

developed to meet the needs of the battlefield.
The tradition of the organization- like people or organization develops their own pattern
of behavior.
Types of labour force- confident and articulate people with experience of work involved
have more to offer the democratic leader.
The size of group- the larger the group, the more likely the leader is to resort to autocratic
methods.
Personality of the leader- some people are more suited to one type of leadership or
another.
Personalities- there is people who prefer to be told what to do in certain situations.
Time- the time available to complete a job also influence the leadership style.
Markets in which business operates- a faster changing market may need quick decisions
to be made, where as a highly technical market may need shared experience in new
product development.
Roles of leader
Interpersonal role- this arise from the leaders formal authority.

Leader role- this involves hiring, firing, training and motivating employees.
Figurehead role- it involves to represent company at various occasions.

Liaison role- involves meeting with other managers to know what is happening in other
departments.
Information role- managers act as channels of information from one department to other.
Decision making role- the managers formal authority and access to information means
that no one else is in a better position to take decisions about a departments work.
Motivation role- managers motivate their work force by financial or non-financial

rewards and achieve targets.
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Emotional intelligence ((Emotional Quotient EQ)
Anyone whos been in the business world for any length of time has worked with them.
They are employees who are intelligent and skilled and yet who accomplish far less than
their potential. Even worse, they often exhibit behaviors that create problems for their
boss, their team members, themselves or you the Human Resources professional. They
are the employees who dont know how to effectively manage themselves or interact with
others effectively, so their productivity and the productivity of those around them suffers.
They lack strong emotional intelligence skills.
A form of intelligence relating to the emotional side of life, such as the ability to
recognize and manage one's own and others' emotions, to motivate oneself and restrain
impulses, and to handle interpersonal relationships effectively.
Originated by Daniel Goleman, psychologist, denoting the cluster of
traits/abilities relating to the emotional side of life.
major components of emotional intelligence: knowing our own emotions,
managing our own emotions, motivating ourselves,recognizing the emotions of
others,and handling relationships.
EQ is a Major Indicator of Achievement. It Explains Why Individuals with Similar

Intelligence Can Reach Vastly Different Levels of success in their Professional and
Personal Lives.
Emotional competence/strong intelligence (Intelligent Quotient IQ)
"A learned capability based on emotional intelligence that results in outstanding

performance at work. Our emotional intelligence determines our potential for learning
the practical skills based on the five elements: self-awareness, motivation, self-regulation,
empathy, and adeptness in relationships. Our emotional competence shows how much of
that potential we have translated into on-the-job capabilities."
The table below lists Golemans' four dimensions of emotional competencies.
1. Self-Awareness- The Ability to perceive and Understand Our Own Emotions and the
Behavior that flows predictably therefrom;
2. Social Awareness- The Ability to Read and Understand the Emotional Cues and
Responses/Reactions of Other People;
3. Self-Management- The Ability to Apply this New Awareness to More Effectively

Direct & Manage Ourselves
4. Relationship Management/social skills- The Ability to Build More Effective and

Productive Relationships With Others and to Build on our own Achievement & Success.
The following table illustrates the four groups of Golemans competencies that comprise
the emotional intelligence model. The two groups that deal with Self, look at an
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individuals awareness of his/her emotions as well as his or her ability to manage and
utilize them. The other two groups look at an individuals awareness of Others and his or
her ability to management relationships. Each of these four categories includes multiple
sub-competencies.
An individuals emotional quotient or EQ then is a reflection of his or her ability to use

these skills. Fortunately, these emotional competencies can be learned or strengthened.
Unlike IQ, EQ is not fixed; people have the capacity to increase their emotional
competencies. The Emotional Intelligence model provides a clear road map for growing
and developing employees and dramatically improving performance.
With the help of Golemans theory the role of emotional intelligence skills in the
workplace is being looked at with new respect. In the last decade, numerous behavioral
scientists have explored the concept of emotional intelligence and its impact on on-the-
job success. As a result of their studies, it is becoming widely recognized that strong
emotional intelligence in employees is a major component in the success of the individual
as well as the organization.
Internal research in hundreds of companies and corporations has identified the profound
effect of emotional intelligent on an organization and produced strong evidence that
increasing emotional intelligence in employees can dramatically impact a companys
bottom line. Employees with highly developed emotional competencies out perform
others on almost every measurement.
Conclusion
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According to Goleman, People who rise to the top, of their field arent just good at their
jobs, theyre affable, resilient, confident, optimistic, etc.
In this sense EQ is explained as the ability to restrain negative feelings, such as anger and
self- doubt, and focus on positive ones, like confidence and congeniality.
To Goleman, Cognitive Skills [IQ] may get you in the door of a company, but [EQ] helps
you thrive once you are in.
For example, success in sales requires the empathic ability to gauge a customers mood
and the interpersonal skills to decide when and how to pitch a product and when to keep
quiet.
2AS. 2 Motivation
MOTIVATION
It is argued that if an individual needs or satisfied then that worker will be motivated to
work. In the long term, a lack of motivation will result in high levels of absenteeism,
industrial disputes and falling productivity and profit for business.
Gains of Motivation
For the Workers For the organisation
1. keen to be at work 1. improves efficiency
2. takes pride in business 2. low absenteeism rates
performance 3. punctual and regular staff
3. displaced positive attitude 4. lower labour turnover
4. regular and punctual 5. minimum complains
5. accepts responsibility 6. lower level of accidents
6. willing to accept changes rather 7. workers respond to orders and
than resist them the leaders so it is easy to
7. shows highest level of implement strategies in turn to
commitment achieve desired objectives
8. gets personal satisfaction out of 8. improved quality of goods with
work less wastage
9. makes suggestion for 9. changes are accepted so the
improvement organisation becomes dynamic
10. higher productivity 10. contribution of ideas and higher
productivity
11. higher outputs and profits
What is motivation and why does it matter?

In business, motivation is the desire to see a job done quickly and well. Motivation
results from the individuals requirement to achieve objectives and to satisfy needs. The
best motivated workers will help an organisation to achieve its objectives as cost
effectively as possible.
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Motivated workers will also be trying to reach their own personal goals. Employers need
to be aware of what these are because the greatest motivation will develop if workers feel
that, through working towards the objectives of the organisation , they are achieving their
own.
Unmotivated staff will be reluctant to perform effectively and quickly and will offer
nothing other than the absolute minimum of what is expected. It was seen above how
important improved motivation could be to the level of productivity and thus the
competitiveness of the business. Highly motivated staff will be keen to stay with the firm,
reducing the costs of labour turnover. They will be more likely to offer useful suggestions
and to contribute in ways other than their contractual obligations. They will often actively
seek promotion and responsibility. All of these benefits have an impact on business
efficiency, level of customer service and unit costs.
MOTIVATION THEORIES
1 Maslows hierarchy of needs (1908 - 1970)

Maslow identified the reasons that why people work and set them out in a hierarchy of
needs, distinguishing between lower and higher order needs. Lower order needs are those
that do not actually cause motivation, but mean that employees avoid stress and
discomfort in their lives. Higher order needs are those that do drive employees to greater
level of achievement where as lower order needs are concerned with the basic economic
needs of men which today are considered to be an employees right and as a consequence
are not viewed as being motivators. Higher order needs satisfy the intellectual needs of
the employees.
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Basic needs- these are for reasonable stander of food shelter and clothing and those other
items that are considered as normal to meet the needs of the body and for physical
survival. It is met by an exchange of labour for a wage package or salary.
Security needs- are also concerned with physical survival. In the context of workplace,
the needs could include physical safety, security of employment, adequate rest period,
sick schemes and protection from arbitrary actions.
Group needs- are concerned with an individuals needs for love and affection. Majority
people want to feel that they belong to a group.
Self-esteem needs- are based on an individuals desire for self-respect and the respect of
others. Employees have a need to be recognized as individuals of some importance, to
receive praise for their work and to have their efforts noticed.
Self-fulfillment- is concerned with full personal development and individual creativity

such as achieving promotion for themselves or achieving a higher level of growth in the
share price.
The hierarchy of needs was interpreted by Maslow as follows.
Individuals needs start on the lowest level
Once one level of need has been satisfied, humans will strive to achieve the next
level
Self-actualisation and self-fulfillment is not reached by many people but everyone
is capable of reaching their potential
Once a need has been satisfied it will no longer motivate individuals to action
thus when material needs have been satisfied the offer of more money will not
increase productivity
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Reversion is possible it is possible for satisfaction of one level to be withdrawn,

for example a loss of job security, and for individuals to move down to the next
level
Limitations of Mass lows approach

Criticisms of Maslows hierarchy include
Not everyone have the same needs as is assumed by the hierarchy
In practice it can be very difficult to identify the degree to which each need has
been met and which level of worker is on
Money is necessary to satisfy physical needs yet it might also play a role in
satisfying the other levels of needs, such as status and esteem
Self-actualisation is never permanently achieved as some observers of the
hierarchy have suggested. Jobs must continually offer challenges and
opportunities for fulfillment otherwise regression will occur
2 F. W. Taylor (1856 - 1917) and scientific management

According to Taylor there is one best way to carry out any work task; it is the job of a
management to find out this method by using scientific principles. For example, various
tools should be tested to find the most effective one for a particular job; rest periods of
different lengths and frequency should be carried to discover the relationship between
rest and productivity; the various moments involved in the task should be studded to find
the least time consuming and tiring way to doing it. In this way, scientific managers
should experiment with the various component of work task to produce the best methods.
Employees would then be carefully matched with work tasks according to their attitudes.
Instructions set down by management for the performance of tasks would then be
followed to the letter. The workforce and the machinery could then be seen as one and the
same. It would then be possible to provide incentives; usually in the form of high wages
to encourage employees to identify with these scientifically advised procedures.
Employers would be able to maximize wages. Henry Ford, Mac Donald and Bethlehem
steel used this approach. Communist factories in Eastern Europe, Russia and China
imitated Taylors method.
How to improve productivity Taylors scientific approach

1. Select workers to perform a task
2. Observe them performing the task and note the key elements of it
3. Record the time taken to do each part of the task
4. Identify the quickest method recorded
5. Train all workers in this quickest method and do not allow them to make any
changes in it
6. Supervise workers to ensure that this best way is being carried out and to time
them to check that the set time is not being exceeded
7. Pay workers on the bases of results based on the theory of economic man
Many problems were also observed with Taylors approach like

There is no guarantee that the best way will suit every one.
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Taylor viewed people at work more as machines, with financial needs, than as
humans in social setting. He overloaded that people who also work for reasons
other then money.
Taylors work is based heavily on assumptions that high wages are the key
motivator.
Workers did not necessarily believe Taylors view that the fruit of higher
efficiency would be shared between workers and business owners
3 Elton Mayo (1880 - 1949) and human relation approach

Elton Mayo is best known for his Hawthorne Effect conclusions. These were based on a
series of experiments he and his team conducted over a five year period at the
Hawthorne factory of Western Electric Co. in Chicago. His work was initially based
on the assumption that working conditions lighting, heating, rest periods and so on
had a significant effect on workers productivity. Experiments were undertaken to
establish the optimum working conditions and, as in all good scientific practice, the
output of a control group was also recorded and this group experienced no changes
in working conditions at all. The results surprised all observers as lighting and
other conditions were changed, both improved and worsened, so productivity rose in
all groups including the control group. This forced Mayo to accept that:
Working conditions in themselves were not that important in determining
productivity levels
Other motivational factors needed to be investigated further before conclusions
could be drawn
A business aiming to maximize productivity must make sure that the personal
satisfactions of workers are met so that the workers are fully motivated.
Management must also work and communicate with informal work groups, making
sure that their goals fit in with the goals of the organization. One way to do this is to
allow such groups to be part of the decision-making. Workers are likely to be more
committed to tasks that they have had some say in.
The Volvo plain in Uddevalla, Hondas plant in Swindon, Mac Donald, and Mc Bingo are
examples of these ideas being used in business today.
The Hawthorne Effect the conclusions of Mayos work

Mayo drew the following conclusions from his work
Changes in working conditions and financial reward have little or no effect on
productivity
When management consult with workers and take an interest in their work then
motivation in improved
Working in teams and developing a team spirit can improve productivity
When some control over their own working lives is given to workers, such as
deciding when to take breaks, there is a positive motivational effect
Groups can establish their own targets or norms and these can be greatly
influenced by the informal leaders of the group
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Problems with Mayos approach

It assumes workers and management share the same goals. This idea of work
place consensus may not always exist.
It is assumes that communication between workers and management will
breakdown barriers. It could be argued, however, that the knowledge of director,
salaries or redundancies may lead to even more barrier and unrest.
It is biased towards management. Managers manipulate workers into being
productive.
4 Herzberg (1923 - 2000) two-factor theory

The theory stems from research conducted about bob satisfaction and dissatisfaction. He
asked a group of professionals to describe incidents in their jobs, which gave them strong
feelings of satisfaction or dissatisfaction.
Herzberg introduces the concept of job enlargement (giving the employee more to do of a
similar nature), job rotation (opportunity for the work force to experience a variety of
tasks). He suggested that the job environment should encompass:
Less supervision (to provide a sense of responsibility)
Allowing employees to be responsible for a whole process of production (to
provide a greater sense of achievement)
Ensuring that there are meetings with management or immediate supervisor (to
provide a sense of involvement and recognition).
He divided the causes into two categories or factors i.e.
Motivators- these are the factors, which give workers job satisfaction, such as
Recognition for their efforts.
Sense of achievement.
Chance of promotion.
Chance of improvement.
Recognition of efforts.
Responsibility
Nature of the job itself
Hygiene factors or dissatisfaction factors- these are factors that can lead to workers
being dissatisfied. These will not motivate in themselves. An improvement in hygiene
factors alone is not likely to motivate an individual. But if they are not met, there could
be a fall in productivity.
Hygiene factors include
Pay.
Work conditions.
Company policy.
Treatment at work.
Inability to develop.
Feelings of inadequacy.
Relationships with higher levels of the hierarchy, such as management.
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Problems with Herzbergs theory

Improving pay or conditions may remove dissatisfaction; however these things
become taken for granted.
Wages claim increases the rate of inflation in some businesses every year.
Job enrichment may also be expensive for many firms. Therefore many benefits
from job improvements may not be seen for long time and that business will not
be able to continue with such a policy in periods of recessions.
Surveys that have tried to reproduce Herzbergs results have often failed because
different group of workers have been examined and different techniques used.
There is a problem with relying too much on what people say because they often
blame others for wrong things.
5 Douglas Mc Gregors theory X and theory Y

Mc Gregor gave different reasons why people work. He carried out terms theory X and
theory Y to describe these differences.
Theory X assumes workers are lazy, distrustful of management and unwilling to work.
One method of control is coercion- the threat of punishment if rules are broken or targets
are not achieved. This is often known as the stick approach. The problem with threat is
that they are only effective if the person being threatened believes that they will be
carried out. Modern employment laws and company wide agreements have made it
difficult for managers. For this reason, a carrot approach may be more suitable. People
have to be persuaded to carry out tasks by promises or rewards. In many ways this theory
is similar to Taylors theory.
Theory Y, assumes that people are responsible, committed and enjoys having control over
work.
All workers within the organization have the capacity to take on responsibility. They can
be trained to under take new and varied tasks and be motivated for the benefits of the
organization and themselves. It is the task of the management to ensure that the
procedures within the business are such that these attributes are allowed to be developed.
This theory is similar in some ways to the Hawthorne studies (human relations).
Each theory is implemented on different professions and circumstances/environments.
6 David McClelland - Human Motivation Theory

One of McClellands most well known theories is that human motivation, is dominated
by three needs. McClelland's theory, sometimes referred to as the three need theory or as
the learned needs theory, categorises the needs as follows;
1. The need for achievement ( N-Ach),
2. The need for power ( N-Pow) and
3. The need for affiliation ( N-Affil).
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The importance of each of these needs will vary from one person to another. If you can
determine the importance of each of these needs to an individual, it will help you decide
how to influence that individual.
McClelland asserted that a persons needs are influenced by their cultural background and
life experiences. He also asserted that the majority of these needs can be classified as the
needs for affiliation, achievement or power. A persons motivation and effectiveness can
be increased through an environment, which provides them with their ideal mix of each
of the three needs (N-Ach, N-Pow and/or N-Affil).
The need for affiliation (N-Affil);
This is the need for friendly relationships and human interaction. There is a need to feel
liked and accepted by others. A person with a high need for affiliation is likely to be a
team player and thrive in a customer services environment. They will perform best in a
co-operative environment. McClelland said that a strong need for affiliation will interfere
with a managers objectivity. The need to be liked will affect a managers decisions,
prompting them to make decisions to increase their popularity rather than furthering the
interests of the organisation.
The need for power (N-Pow);
This is the need to lead others and make an impact.
This need can exhibit itself in two ways. The first which is the need for personal power
may be viewed as undesirable as the person simply needs to feel that they have power
over others. They dont have to be effective or further the objectives of their employer.
The second type of need for power is the need for institutional power. People with the
need for institutional power; want to direct the efforts of their team, to further the
objectives of their organisation.
The need for achievement (N-Ach);
This is the need to achieve, excel and succeed. A person with this type of need, will set
goals that are challenging but realistic. The goals have to be challenging so that the
person can feel a sense of achievement. However the goals also have to be realistic as the
person believes that when a goal is unrealistic, its achievement is dependant on chance
rather than personal skill or contribution. This type of person prefers to work alone or
with other high achievers. They do not need praise or recognition, achievement of the
task is their reward.
A person with a need for achievement (N-Ach) needs regular job-related feedback so
that they can review their progress and achievement. Feedback includes advancement in
the persons position in the organisation. Salary scale will also be viewed as measure of
progress. The amount of salary is not about increasing wealth for a person with a high
need for achievement. Instead this type of person is focusing on how their level of salary
symbolises their progress and achievement.
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McClelland believed that people with a strong need for achievement (N-Ach), make the
best leaders for a variety of reasons including setting goals, reviewing progress and
continuously looking at how things can be done better. However they may expect too
much from their team as they believe that others have the same need for achievement
which is often not the case.
7 Vrooms Expectancy Theory

The expectancy theory says that individuals have different sets of goals and can be
motivated if they have certain expectations. This theory is about choice, it explains the
processes that an individual undergoes to make choices. In organizational behavior study,
expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale
School of Management. The expectancy theory of motivation suggested by Vroom,
unlike Maslow and Herzberg, does not concentrate on needs, but rather focuses on
outcomes. Whereas Maslow and Herzberg look at the relationship between internal needs
and the resulting effort expended to fulfill them, Vroom separates effort, which arises
from motivation, performance, and outcomes.
Vroom, hypothesizes that in order for a person to be motivated that effort, performance
and motivation must be linked. Vroom suggested that the relationship between peoples
behavior at work and their goals was not as simple as was first imagined by other
scientists. Vroom realized that an employees performance is based on individual factors
such as personality, skills, knowledge, experience and abilities.
A number of factors can contribute to an employees expectancy perceptions:
the level of confidence in the skills required for the task,

the amount of support that may be expected from superiors and subordinates,
the quality of the materials and equipment,
the availability of pertinent information.
Vrooms Expectancy Theory is based upon three variables or beliefs that he calls Valence,
Expectancy and Instrumentality:
Valence: Is the outcome I get of any value to me?. It refers to the emotional
orientations which people hold with respect to outcomes [rewards]. The depth of the want
of an employee for extrinsic [money, promotion, free time, benefits] or intrinsic
[satisfaction] rewards. Management must discover what employees appreciate. For the
valence to be positive, the person must prefer attaining the outcome to not attaining it.
Vrooms theory suggests that the individual will consider the outcomes associated with
various levels of performance, from an entire spectrum of performance possibilities, and
elect to pursue the level that generates the greatest reward for him or her.
Whats the probability that, if I do a good job, that there will be some kind of outcome in
it for me?
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Expectancy: The belief that I am able to complete the actions. Employees have
different expectations and levels of confidence about what they are capable of doing.
Expectancy refers to the strength of a persons belief about whether or not a particular
job performance is attainable. Assuming all other things are equal, an employee will be
motivated to try a task, if he or she believes that it can be done. This expectancy of
performance may be thought of in terms of probabilities ranging from zero (a case of I
cant do it!) to 1.0 (I have no doubt whatsoever that I can do this job!). Management
must discover what resources, training, or supervision the employees need. Probability or
strength of belief that a particular action will lead to a particular first level outcome.
Instrumentality: The belief that if I complete certain actions then I will achieve the
outcome. In other words, it is the belief that if you perform well that a valued outcome
will be received i.e. if I do a good job, there is something in it for me. The perception
of employees whether they will actually receive what they desire, even if it has been
promised by a manager. Management must ensure that promises of rewards are fulfilled
and that employees are aware of that. Instrumentality may range from a probability of 1.0
(meaning that the attainment of the second outcome, the reward, is certain if the first
outcome, excellent job performance, is attained) through zero (meaning there is no likely
relationship between the first outcome and the second). Commission pay schemes are
designed to make employees perceive that performance is positively instrumental for the
acquisition of money.
Instrumentality is affected by:
1. Clear understanding of the relationship between performance and outcomes e.g.

the rules of the reward game,
2. Trust in the people who will take the decisions on who gets what outcome,
3. Transparency of the process that decides who gets what outcome.
The Expectancy Theory is also called Valence-Instrumentality-Expectancy Theory or VIE

Theory. Vroom says the product of these variables is the motivation and suggests that an
employees beliefs about Expectancy, Instrumentality, and Valence interact
psychologically. In this way they create a motivational force, such that the employee will
act in a way that brings pleasure and avoids pain. This force can be calculated via a
formula:
Motivation = Valence x Expectancy (Instrumentality).

This formula can be used to indicate and predict things as:
job satisfaction, occupational choice, the likelihood of staying in a job, and the effort that
one might expend at work.
Thus, this theory of motivation is not about self-interest in rewards but about the
associations people make towards expected outcomes and the contribution they feel they
can make towards those outcomes.
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In order to enhance the performance-outcome tie, managers should use systems that
tie rewards very closely to performance. In order to improve the effort-performance tie,
managers should engage in training to improve their capabilities and improve their
belief that added effort will in fact lead to better performance.
FINANCIAL MOTIVATION/REWARD SYSTEM
Financial rewards are those rewards in which payment is given to workers or monetary
rewards are given. These rewards are regarded as necessary for motivation according to
Taylors Scientific Management and Theory X by which workers do work as a means to
an end. Theories want the monetary rewards for buying the needs of life like food, lothes,
shelter and some wants. The necessity of financial rewards is recognized by all theorists
as means to live a life, but the difference is over whether financial rewards are the only
source of motivation. They include, time-rate, piece-rate, salary, commission,
performance related pay, profit sharing and fringe benefits.
1 Time base payment
Salaries
It is paid on annual basis. There is more security in receiving a salary. It is paid to
employees who carry out a role within the business e.g. managers, teachers, supervisors
etc.
It gives security of income and gives status compared to time rate or piece arte payment
systems. It aids in costing the salaries will not vary for one year. It is suitable for jobs
where output is not measurable. It is also suitable for management positions where staff is
expected to put in extra time or complete a task or assignment.
The income is not related to effort levels of productivity. It may lead to complacency of
the salary earner. Regular appraisal may be needed to assess weather an individual should
move up a salary band, although this could be an advantage if this becomes positive form
of worker appraisal.
Time rate or wages

This is monetary payment to the manual and clerical workforce according to the time an
individual spends on a job. Usually, an hourly wage rate is fixed according to what other
workers in the market receive for a particular job. This is then multiplied by the number
of hours worked. Payment is made weekly. It may be that 35 hours a week is a fixed
requirement which all workers must conform too. However, if some more enthusiastic
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workers wok for a greater time then they receive over-time which is at a slightly higher
rate.
Advantages:
The major benefit is that it is very easy to calculate the wage that a worker would receive
for a week. The worker doesnt rush a job which proves extremely useful for specialist
tasks or difficult one as workers also maintain high quality standards since they know it
doesnt matter if they havent produced several units since wage is given according to
time.
Time rate is also a guarantee of income and so makes work feel secure about receiving
wages. They know that theyd still get the pay even if production is halted due to an
unprediction breakdown in the process. It is very suitable to give to workers whose
output units cannot be determined e.g. the value of the work of a doctor or a teacher is
very difficult to decide. So they get pay according to the time they spent. However, they
receive annualized payments.
They are also fairer than price-rates when situations exist in which employees cannot
control the speed at which they work (e.g. dependency on the speed of machines). Also it
is easy to adjust the pay level according to the job status of the worker i.e. the skills
required may be different. So this rate is flexible to account for changes of such
differences.
Disadvantages:
The workers may delay their job in order to increase their work hours and get higher pay.
This may result in inefficiency and loss of productivity as workers laze around and work
slowly for overtime as high payment is made. Also as there is no reward for working fast,
the workforce may take too much time to complete a job and so there may be need for
additional supervision. Then if the production is halted completely, the workers would
still have to be paid wages if they have come to work despite no untis being produced.
Annualized hours contract

It is a payment system based on a fixed number of hours to be worked each year, but a
flexible number of hours each day, week or month. It is used to cater for fluctuation in
demand and to save money spent on overtime work.
Workers do not rush their work and this could lead to high quality. It gives workers some
security of payment even if there are unavoidable production hold ups. Wage rate can be
adjusted easily to reflect different skill levels required to do a job. It is most suitable
when the output of individual workers can not be identified or measured. It is fairer than
piece rates in situations when employees have no control over the speed at which they
work.
On the other hand, too much tome may be taken to do a job as there is no additional
reward for extra effort or faster work. To prevent this, additional supervision of workers
may be required. Higher overtime rates are paid after a contractual number of hours
have been worked these could encourage slow working to delay completing a job.
Wages will still have to be paid even if production is halted unless the workers are on a
very flexible hours contract.
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2 Fee income
It is paid on a one-off basis, normally on a service, which is provided over a specific
period of time, for a specific job e.g. solicitors, training companies, consultants etc.
3 Incentive schemes
Piece Rate
This system is the giving of monetary rewards to the workers according to the number of
units produced by an individual. A fixed rate of wage for every unit is given and so the
total wage is found by multiplying the rate by the output. This ensures that wages are paid
only for the work that they employees do. It is regarded as an incentive for the workforce
as the more they produce, the higher wages they get. This system is also known as
Payment by Result.
Advantages:
It is a very easy way to reward employees for whom the value of output can easily be
calculated, e.g. workers in a textile factory. Workers are encouraged to work quickly to
produce more and so there is high productivity and no time wastage as workers dont try
to delay work. The working atmosphere is highly competitive as each worker tries to
produce more in lesson time.
The cost of labour for each unit is determined beforehand and so the total costs of
production can be determined. Therefore the setting of prices is easy.
Disadvantages:
For piece rate to be used fairly amongst all workers, the products being made should be
of the same type quality and standard and should require the same skills. If each product
is different, then piece rate is inappropriate. It may also be that workers may compromise
on the quality of goods in order to rush through the job to produce a greater number of
outputs for higher rewards. In case of failure of machinery, the output produced would
drop considerably and workers who are willing to work and are present on the job will
have no basic salary to fall to and may have to go without wages until production starts
again. This aim fair for workers as it was an unavoidable situation. Workers may decide
to achieve a certain level of pay for themselves as sufficient and so may not be motivated
to work harder or faster. They would only work up to a certain level and get the wages.
Workers may also become rigid by this system of pay as so may lose their willingness to
accept charges if it affect their level of pay. Then it is also difficult to decide the best rate
for each unit of output so that workers get good wages. There is also a continuous trade
union pressure hat piece rate results in tower wages.
Measured day work

The idea of measured day work may provide the answer to the problem of peace rate
schemes. Instead the employees receiving a variable extra amount of pay depending on
their out put, they are paid a fix sum as long as agreed level of out put is maintained. This
should provide stable earning and a stable out put instead.
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Profit sharing
This scheme shares some of the company profits not just with the shareholders but also
with the workers. The essential idea behind these arrangements is that staff will feel more
committed to the success of the business and will strive to achieve higher performance
and cost savings. Some profit sharing schemes do not offer cash but shares in the
business to each worker when a firm declares a profit. This is designed to establish the
workers as part owners of the business and reduce the conflict that might exist between
them (the owners and managers) and us (the workers).
This scheme reduces the potential conflict between owners and workers as everyone now
has an interest in higher profits. It is designed to lead to higher worker effort levels and a
greater preparation to accept cost reduction measures and changes that benefit the
business. By this business is likely to attract better recruits drawn by the chance of
sharing profits or owning shares in the firm. As the bonuses are paid out of profits the
scheme does not add to business costs, unlike a normal increase in pay levels. If it
becomes successful in increasing motivation then the schemes could lead to an increase
in overall business profitability.
The reward offered is not closely related to individual effort why should one worker put
in greater effort when everyone will be benefiting? The schemes can be costly to set up
and operate, especially in large firms with many employees. Small profit shares paid at
the end of the financial year are unlikely to promote motivation throughout the year.
Profit-sharing schemes will reduce profits available to be paid to owners (reducing
dividends) and to be reinvested in the business (retained profits). Worker share ownership
schemes can increase the total number of shares issued and dilute the value of existing
shares.
Share ownership
Business may offer the possibility of purchasing share in the company as an incentive.
The employees are rewarded with dividends if the company performs well.
4 Commission
It is equivalent of piece rate system for the sales force. A percentage of revenue is paid
usually to sales force.
5 Fringe benefits/perks
These are payments other than wages or salaries. They include things like company car,
paid holidays, sick pay, subsidized meals, medical insurance, pensions etc. they are used
by business in addition to normal payment systems in order to give status to higher-level
employees and to recruit and retain the best staff.
6 Performance-related pay (PRP)

This scheme is used to reward workers who have performed well and reached targets on
time or exceeded the targets in addition to their basic salary, they get an extra bonus or
monetary reward. It is usually used to motivate employees.
Advantages:
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PRP is a source of motivation to staff to be improve their performance and efficiency in

order to seek the extra financial rewards. The annual appraisal provides a chance of
feedback on the performance of workers and whether they are performing to their fullest
potential. But just once an year isnt enough to find out exactly where are employee
stands and if its in need of job enrichment then is it possible. Since objectives are set for
workers at an individual level, all of them feel a sense of direction and purpose to work
towards.
Disadvantages:
Since the seniors are appraising the work and giving rewards, it may be that the
employees feel an increased control over themselves, as seniors may not give the bonus
unless employees conform to them. It is not guaranteed that additional financial rewards
will motivate an employee. It may be that employees dont want more pay and to
wouldnt be motivated to improve the performance. Then if some workers receive
frequented and high bonuses, the other employees could accuse managers of favoritisms
which negatively affects the relationship of subordinates & managers. Also due to the
competition and rivalry to do better than others, the team spirit of the organisation could
be damaged due to jealousy of colleagues receiving higher pay.
NON-FINANCIAL REWARDS
Non-financial rewards are those rewards that are given to workers to motivate them but
do not involve any monetary rewards. They are needed for the job satisfaction of
employees. They are required according to the motivation theories of Herzbergs two
factor, McGregors Theory Y, Hawthorns effect and Maslows need hierarchy for the
workers social, self-esteem and self actualization needs. These have proven that money
alone is not an effective motivator and that workers are not machines but have many
other requirements.
It is also not possible to use individual reward scheme in teams. The nonfinancial rewards
include job enlargement, job rotation, job enrichment, team working, quality circles,
target setting, delegation and appreciation by the organisation.
Here are non-financial rewards systems a business may use.
1 All motivation theories

All motivation theories give the importance of reward system. On the other hand they
also give type of incentive, which could bring motivation in to the employees and move
their energies towards organizational goals. These motivation theories focus on:
Job rotation
This is simply encouraging a worker to do more than one task by switching from one job
to another. It should not be confused with job enrichment. Rotation may relieve the
boredom of doing one task and it can give the worker multi-skills, which makes the
workforce more flexible, but it does not, by itself, increases empowerment or
responsibility of the work being performed. In addition, it does not necessarily give a
worker a complete unit of work to perform but just a series of separate tasks.
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Job enlargement
It is the increase of the scope of the job so as to provide broader and deeper tasks. It is for
unskilled or semi-skilled workers as in manufacturing firms. It can include both job
rotation and job enrichment. Job rotation is when workers switch jobs e.g. on a
production line after a set time. This allows them to handle more jobs and breaks the
routine. Job enrichment is organizing work in such a way that employees are able to use
their fullest abilities and do work with lesser supervision. They are given more
responsibility. They are provided with tasks of similar nature to original ones but more
challenging. They may also be allowed to take some decisions e.g. allowing the
shopkeeper to arrange products on shelves along with cleaning and keeping a record of
their quantity.
Advantages:
Job enlargement provides variety to the workers and so they dont get bored or find their
work monotonous. They feel themselves a greater part of the process and business as they
are carrying out more than one task and may be encouraged to become more efficient.
They may find that they are given responsibility and they could feel trusted which may
make them more loyal to the business. As workers may be carrying out tasks related to
the entire production process, they would derive greater satisfaction of having seen the
entire process along with the end result. As the workers have performed more tasks, they
would have increased their skills as well as gained greater experience and so increased
their opportunities for the future.
Since workers feel more satisfied with their job, there would be less labor turnover and
absenteeism and so the effieciency of the business would increase.
Disadvantages:
Even though productivity may increase, however, it may be countered by the time taken
for workers to learn and adjust to the new jobs during which productivity would have
been lost or slowed down. Their motivation isnt guaranteed. It may be that the additional
task is as boring as the one before which leaves no motivating factor.
Not all workers feel ready to do new jobs as they arent sure of their abilities and
whether theyd be able to perform the new tasks efficiently.
Job enrichment
This involves the principle of organising work so that employees are encouraged and
allowed to use their full abilities not just physical effort. The process often involves a
slackening of direct supervision as workers take more responsibility for their own work
are allowed some degree of decision making authority.
Team working
This approaches to work places each member of staff into small team of employees.
Some traditionalists argue that owing away from pure division of labour, where one
worker performs just one simple task all of the time, will result in lower productivity and
time wasting team meetings. Supporters of job enrichment would respond by claiming
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that more challenging and interesting work, as allowed by team working or cell
production will lead to:
Low labour turnover
More and batter ideas from the workforce on improving the product and the
manufacturing process
Consistently higher quality is incorporated
Quality circles
Quality circles are small groups of workers in the same area of production who meet
regularly to study and solve production problems. They not only deal with the quality of
product and its improvements but about the production process as a whole and any
problems with it. They are not led by a proper manager and so are considered as informal
meetings of workers. There may be several teams on a single line. Each team tries to find
the solutions to problems and presents their researches and results to the management.
The management may then implement the best result not only in the production line but
across the whole organisation as per the nature of the solution.
Advantages:
Quality circles allow the successful participation of the entire staff in the
decision making.
They provide responsibility to workers and offer many challenges to give the
workers a deeper sense of trust and satisfaction.
They make the workers feel part of the organisation and workers are more willing
to work and follow targets that they have themselves helped to decide.
Workers have had hands-on experience and are in the best position to understand
the problems and so are best able to provide solutions to exactly meet the situation
and can therefore greatly improve efficiency of the organisation.
Since the most successful circles are also rewarded by the management, this would make
workers feel appreciated and recognized.
Disadvantages:
There may be time wastage if the groups call their meetings a bit too frequently
and keep on requesting changes.
A feeling of jealousy may be created between the successful and other groups that
may affect the team spirit of the entire organization.
The major limitation of Quality circles is the willingness of employees to make
them. Sometimes employees are not willing to take on the responsibility or may
just not willing to try to come up with ideas and be creative.
Target setting
This is the setting of targets for each division, department and individual by dividing the
overall aim of the organization. This process should be undertaken after discussion and
agreements with workers at each level. This would enable the best possible delegation of
responsibility and authority. This is according to Theory Y where workers like
responsibility and wish to work. This enables greater motivation.
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Advantages:
As targets have been discussed with managers and workers, which means that
there is involvement of staff which is a great motivating force as it makes
employees feel part of the decisions.
Also as managers and workers know exactly what they have to do they feel a
sense of direction and purpose? They are able to fully utilize their time in the best
manner possible. As they could see what they are doing, they feel their
importance and their value to the organization.
Since all departments and individuals have objectives as their key focus, they
know exactly what they are aiming for. This should avoid any conflicts and ensure
a co-ordinate approach.
The targets also act as a control. By comparing the work of the employees with
their set targets, their performance is known i.e. what they have achieved by a
particular date.
Disadvantages:
The division of the overall aim all the way down to individual targets is only
possible after consultation with the entire workforce. This could prove very time
consuming and slows down production until targets are set.
New objectives are required all the time as targets become out dated quickly. So if
the economic environment changes then checking workers performance with the
fixed targets is pretty useless as targets have to be updated in accordance with the
economic changes.
Setting targets doesnt guarantee their fulfillment. Managers also have to keep in
mind the resource allocation and staff training so that the set targets could actually
be achieved.
Delegation and empowerment

They involve the passing down the authority to perform tasks to workers, although
empowerment goes further, by allowing workers some degree of control over how the
task should be undertaken.
Advantages of delegation
Releases manager to undertake a more strategic role
Shows trust in subordinates and this motivates staff to do well
Develops and train staff for more senior positions and is one way of assisting
people to achieve their potential (Self-actualisation)
Disadvantages of delegation
If the task is not made clear, if training is nor provided and if sufficient authority
is not transferred then delegation will be unsuccessful
Managers may delegate boring jobs that they do not want to do this will not
prove to be motivating
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2 Job design and redesign

There is continuous improvement in tasks and activities of a job, perhaps in an attempt to
motivate workers.
3 Empowerment
It is to give official authority to employees to make decisions and control their own
activities.
4 Multi-skilling
It describes the process of enhancing the skills of the employees. It is argued that giving
individuals the skills and responsibilities to deal with a greater variety of issues which
will allow a business to respond more quickly and effectively to problems.
5 Quality control circles

These are small group of workers about 5-20 in the same area of production that meets
regularly to study and solve production problems voluntarily.
Q Explain most appropriate ways to improve motivation of workers

Ans Motivation is the desire that pushes an individual to work well. It is an influence that
causes people to behave in a particular way. Organisations can motivate its production
line workers through financial rewards such as an increase in wage rates or profit sharing,
and through non financial rewards such as job enlargement and delegation along with
the use of motivational theories such as McGregors Theory X and Y and Elton Mayos
Hawthorne Effect.
The main reason for low motivation is the dissatisfaction with their wages for production
line workers. They receive half as much as the quality control inspectors who do not
participate in the production process. These workers receives a low weekly wage and a
bonus for meeting output targets. This means that in case of power failures or machinery
break down at the factory the workers would not be able to meet targets and wouldnt
receive the bonus.
This leaves a feeling of frustration as such problems are beyond the control of the
workers and they feel that they have been treated unfairly. Thus firstly he pay of the
workers should be increased. After all according to Taylors Scientific Management
worker want the money. Also according to Maslows Need Heirarchy, the most basic
needs are the psychological needs of hunger, thirst and shelter which are gotten by the
wages. These wages, if not at par should be close to that of the quarterly inspectors
because the inspectors do not contribute to the output of a company. Organisation would
by this definitely face rising costs of labour but if by higher wages the workers are given
an incentive to work hard then the productivity i.e. output per worker would increase.
This may then off set the increase in costs and lead to an increase in production of goods.
Nevertheless, it would be the non financial rewards that would play an important role in
maintaining the high motivation levels that are initiated by the financial rewards. Profit
sharing is also a financial reward would help worker feel more part of the business of in
years of high profits they are given a percentage of profits. They would then wish to
contribute to wards the maintaining of this profitability. Job enlargement (including job
enrichment and job rotation), team working, quality circles, target setting, delegation and
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appreciation and recognition by the organisation (awards) are all methods that
organisations can use to motivate employees.
Job enlargement increases the scope of the job so as to provide broader and deeper tasks.
This would involve job rotation where the workers could switch jobs after a certain time
that allows them to handle a variety of Jobs and job enrichment that organizes work in
such a way that employees are able to use their fullest abilities and do work with lesser
supervision.
Delegation should also be undertaken which is the passing to subordinates. This would
mean telling the workers take certain decisions as to he performing of tasks.
Empowerment would go a step further and give them control on how to perform their
tasks by employing efficient methods.
Job enlargement, delegation and empowerment are all in accordance with McGregros
Theory Y according to which workers like to work and seek responsibility. These
methods help workers to feel a greater part of the process and business as they carry but
more than one task and are encouraged to become more efficient. Since they are given
responsibility, they feel trusted and feel more loyalty to the firm. As they carry out tasks
related to the entire process they derive greater satisfaction of having seen the end result.
They increase their skills gain more experience and open more opportunities for their
future. The only danger is that some workers may be afraid of performing additional tasks
as they are afraid of failure and thus losing jobs.
Then team working and quality circles would also be made. According to this the workers
should be divided into groups and given an area on the production time of which they are
responsible both for production as well as for quality of products. In this way, the quality
inspectors could be removed and the major reason of demotivation among employees
would end. The teams would meet regularly to deal with the quality of the products its
improvements as well as any problems in organisations production line. They would then
present their researches and results to the management who could them implement the
best result on the production line as well as give rewards to the group that came up with
the best idea. Quality circles allow the successful participation of the entire staff in the
decision making. The workers feel a greater part of organization and eel a greater sense
of achieving the targets that they themselves have helped to decide. Workers have hands
on experience and are in the best position to understand the problems, more than any
hired quality control officials. Workers are best able to provide solutions to exactly meet
the situation and thus greatly improve their own productivity as well as the efficiency of
the organisation as a whole.
Since their social and self esteem needs as according to Malsows Need Heirarchy are
met through team working (interaction) and appreciation from the management (rewards)
they are highly motivated.
Oragisations should make full use of the motivational theories as well as the methods
discussed above. It is true that Quality Circles are informal and may lead to certain time
wastes in meeting but these can be avoided by rewarding participation after office hours.
Also the fear of competition amongst different circles shouldnt stop managers from
employing these methods as healthy competition encourages progress and development
of innovative ideas that least to higher motivation, greater productivity and improved
profitability.
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Saadat Ali Mughal
2AS. 3 Human Resource and Management (HRM)
HUMANRESOURCE MANAGEMENT (HRM)
Purpose and functions of HRM

One of the most important tasks that involve the personnel department in a business is
HRM. A business is only likely to achieve its objectives if its employees are used
effectively. Planning how best to use human resource will help the business to do this.
HRM has strategic implications. It must be integrated into the strategic and corporate
planning of the business. It means constantly looking for better ways of using employees
to benefit the organization. Many businesses have shown a renewed interest in the
management on human resource in recent years. They have to realize the importance of
employees and their knowledge and skills as an asset of the business.
The soft side of HRM

These are the tasks, which cover how people are managed, and are mainly subjective
and difficult to measure accurately. It may include;
Developing an organizational culture, which helps to achieve the companys
objectives
Motivating employees to work to their best ability
Providing support and training to develop individuals
Evaluating alternative policies and their likely costs
The hard side of HRM

The hard side of HRM is concerned with quantifying the number and type of employees
that a business will need, deciding whether they are available and planning how to get
them. It is often known as the human resources or workforce plain. It may include:
Analyzing current and future needs for employees.
Assessing whether there is likely to be future supply of the employees.
Pre-deciding the labour turnover.
HRM therefore aim to incorporate the individuals objectives with those of the
employees, so that, for example a particular individual can receive specific training
according to his/her individual needs. Such training requirements are also linked to the
objectives of the organization.
Role of HRM
1 Human resource planning

The workforce plain or man force planning is one of the main areas of responsibilities of
HRM. The work force plan is needed by the organization, so that the correct number of
employees is recruited (now and in the future at the appropriate level of skills and that
they are trained to do the job which helps the organization to achieve its own objectives).
Supply of labour is the most important factor, which is considered while planning human
resource.
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Any business seeking to locate in a new area will look carefully at the local labour market
for the appropriate supply of labour when it comes to selecting the location of its
investment. The supply of labour will tend to depend on:
Population- if there is an ageing population, with few school leavers, then there may not
be as much labour to choose from.
Social factors- it is very difficult for an employer to mold a society according to his wish.
Competition- if local competition is intense, this will push up wages and encourage
employees to trade ones company against anothers.
Customer demand- as market changes due to customer demand, so the requirement of the
labour force.
Trading environment- if the economy is booming, then more people will have jobs. So
skilled employees will be more difficult to find.
Skill levels- certain businesses require certain skill levels, which are specific to a certain
industry.
Technology- as the demand for higher technology continues, so does the demand for
skilled employees.
The state- this includes all government regulations, which directly effect supply of
labour.
2 Finance
The HRM department will need to work closely with finance department in order to build
a budget for employment over a particular time period.
3 Recruitment
Every business, at some time, requires labour to perform a particular role. Businesses that
are capital intensive will require fewer units of labour than others that are more labour
intensive. The recruitment process may start from two sides.
Internal recruitment- the job is advertised within (internally) the organization and offers
the job to an existing employee, as a promotion or transfer. It gives following advantages;
It gives employees within the company a chance to develop their carrier.
There may be shorter induction time as the employee is likely to be familiar with
the company.
Employers know more about internal candidates.
Internal recruitment may be quicker and less expensive.
On the other hand following disadvantage are also associated with internal recruitment:
No new ideas or practices will be brought into the business
There will be fewer applicants than if external recruitment was used
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There may be some resentment amongst other internal applicants who are not
offered the job
The slandered of applicants could be lower than if the job was advertised more
widely
External recruitment- there is many ways of attracting candidates from outside the
company. The choice of method often depends on the type of vacancy and the type of
employee a business wants.
4 Job description
A job description is a list of the general tasks, or functions, and responsibilities of a
position. Typically, it also includes to whom the position reports, specifications such as
the qualifications needed by the person in the job, salary range for the position, etc. A job
description is usually developed by conducting a job analysis, which includes examining
the tasks and sequences of tasks necessary to perform the job. The analysis looks at the
areas of knowledge and skills needed by the job. Note that a role is the set of
responsibilities or expected results associated with a job. A job usually includes several
roles. The job description might be broadened to form a person specification. An alternate
terminology used under the UN system is Terms of reference (TOR).
Purpose
The objective of a job description is to have a clear outline of duties and responsibilities
to make the screening process as direct and focused as possible.
Job descriptions may have the following elements:

improvement cooperation by giving all members of the organization insight in
existing responsibilities/roles
enabling career moves within the organization
determination of amount of pay per function
increase of results by specification of responsibilities and key performance
indicators
development of job owner by specification of competences
may include the phrase "perform other duties as assigned"
Possible job description items

Job title- A specific designation of a post within an organization, normally associated
with a job description that details the tasks and responsibilities that go with it. With the
rise of online job search engines, job titles became increasingly important. In many cases,
this causes job title inflation.
Job duties- may also be called Tasks Performed; may be as lengthy as necessary to fully
describe each essential duty or responsibility which comprises the employee's functions,
generally starting with principle duties.
Roles and responsibilities- This includes supervisory level, managerial requirements, and
any working relationships and may also include your corporate/individual objectives.
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Job specifications or qualifications
Key role interactions
Salary and benefits- Describes the compensation type, hourly or salary, and amount. In
addition it includes both standard benefits and any fringe benefits associated with the
position.
Person specification
The person specification is an extension of the job description. It is a profile of the type
of person needed to do a job and is produced along with a job description following a job
analysis.
Elements of a person specification include:

Attainments (experience and qualifications)
Specialised aptitudes
Interests
Personality etc.
5 Employment contract
A contract of employment is a category of contract used in labour law to attribute right
and responsibilities between parties to a bargain. On the one end stands an "employee"
who is "employed" by an "employer". It has arisen out of the old master-servant law. Put
generally, the contract of employment denotes a relationship of economic dependence
and social subordination. In the words of the influential labour lawyer Sir Otto Kahn-
Freund, "the relation between an employer and an isolated employee or worker is
typically a relation between a bearer of power and one who is not a bearer of power. In its
inception it is an act of submission, in its operation it is a condition of subordination,
however much the submission and the subordination may be concealed by the
indispensable figment of the legal mind known as the 'contract of employment'. The main
object of labour law has been, and... will always be a countervailing force to counteract
the inequality of bargaining power which is inherent and must be inherent in the
employment relationship.
Features of employment contract

The focus of most employment contracts is wages for work. Essential terms might be
notice periods in the event of dismissal, holiday pay rights, the place of work and pension
schemes. Many jurisdictions require these factors to be set out in a written contract.[5] In
terms of pay, the employee may be compensated through wages, a salary, or by
commission. In addition to monetary compensation, the employment contract often
specifies a fringe benefit package, including a retirement plan, employee stock options,
holiday entitlement, required hours of work, and (especially in the US) health insurance
benefits.
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Normally, such contracts provide for termination of employment, by either party, and
include associated matters such as notice period, compensation arrangements and,
sometimes, garden leave.
Some employers use non-disclosure and non-compete clauses to protect their trade
secrets from being dispersed when employees leave. Depending on where people live, the
laws regarding enforceability of these clauses vary widely.
UK law holds that employment contracts have implied terms (assumed, unspoken,
essential terms), as well as explicit terms (typically those in writing). Legal precedent
provides for example that there is an implied contractual term of trust and confidence,
meaning each party to the contract is expected to behave in a manner allowing the other
to maintain trust and confidence in the other.
6 Selection
Along with interviews and tests, companies are using a variety of role-play exercises,
group presentations and simulations to analyze the capabilities of candidates. These
exercises allow candidates to demonstrate social and problem solving skills, which they
need to use in the job.
7 Training
Training is the essential part of managing people. Training refers to the people of
teaching via a system to improve employees job related skills and knowledge. Training is
some time divided into two types.
On-the-job-training takes place when employees are trained while they are carrying out
an activity, often at their place of work.
Off-the-job-training takes place away from the job at a different location.
Methods of training
Sitting next to Nellie- the experienced worker show the trainee exactly what to do.
Coaching- this is where a coach will guide the trainee through the use of the equipments.
Job rotation- employee works in different departments for short periods, picking up
skills from each.
In house courses- businesses may put on courses for their employees through their
trained staff. For example, induction courses, TQM etc.
Graduate training- these are designed for graduates with degree qualifications and are
often used to train employees for senior or management positions in the business.
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Vocational courses- there is many organizations that provide work related or vocational
trainings. For example, BTEC (Edexcel), professional bodies like management, engineers
or nursing.
Self-posed/distance learning- the learning material is provided by a tutor through post or

Internet. There is no need to attend particular classes. The trainee may physically take
lesson from his tutor if required.
8 Appraisal
After a period of time working in a job, a firm may appraise the employee. By this a
business may evaluate usefulness of the employee to the business. Appraisal can be used
by a business to improve performance, provide feedback, increase motivation, award
salary increase, set out job objectives etc.
9 Induction
It is introduction of the new employee to the business. By induction new employee settle
in quickly and feel comfortable in the new job. Induction programs contains information
about the organization, personnel policies, terms of employment, physical facilities,
nature of the work, role and work of supervisor, department rules, safety measures and
introduction of fellow workers etc.
10 Advisory and guidance role

The personnel department is closely in-touch with all employees, provide all technical or
on-technical assistance and guide them so that employees could feel comfortable, learn
quickly and improves production.
11 Disciplinary procedure
It is important for every business to have a disciplinary procedure in place which is fair
and accessible to all employees. The procedure should be referred to in the contract of
employment. All employees should be aware of its existence and what it is about.
Employees are protected where organization has unlawfully deducted money from their
wages or taken similar action without following statutory disciplinary procedures.
The procedure should comply with the Advisory Conciliation and Arbitration Service
(ACAS).
The principal points are as follows:

Outline of procedure
The procedure should specify which level of management takes decisions and specify
that the employee may:
State their case at any stage in the procedure

Be accompanied at the hearing by a person of their choice (for example a trade
union representative)
Appeal to a level of management not previously involved.
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In the case of a small firm the procedure may be simplified. For example, it may not be
practically possible to provide for an appeal to a level of management not previously
involved.
Warning procedure
The procedure should specify a suitable warning of:
Informal discussions
Oral warning
Written warning that further misconduct will lead to dismissal
For serious misconduct, the warnings procedure can start with a final written
warning that further misconduct will lead to dismissal.
12 Dismissal
Dismissal is where your employer tells you that they no longer want you to work for
them after a certain date. It is also classed as a dismissal if:
You are on a fixed term contract that comes to an end and is not renewed.
You are made redundant from your job.
You have been on maternity leave and your employer refuses to let you return to
work, even though you have the right to do so.
Your employer changes the terms of your contract in a way that leaves you no
choice but to resign. This is known as "constructive dismissal".
You are forced to resign, because your employer would definitely dismiss you
otherwise.
Retirement can also count as a dismissal.
Fair dismissals
Your dismissal is 'automatically fair' if:
you are dismissed during a lock out, a strike or other industrial action,
providing all the workers have been treated the same.
your dismissal is for the purpose of safeguarding national security.
Otherwise, for your dismissal to be fair, your employer must have a valid reason for
sacking you and act reasonably when dismissing you for that reason. They must show
that the reasons are genuine and that they believe that your behaviour justifies dismissal.
You can argue against the dismissal if you do not agree with the reasons.
Valid reasons for dismissal include:

Not being capable of doing the job - this can include sickness dismissals.
Retirement if this is the reason for dismissal whether the dismissal is fair or
unfair will depend on whether the employer has complied with the special notice
provisions and their duty to consider the employees request to continue working
beyond retirement.
Misconduct - including theft and dishonesty; violence and fighting; drug or
alcohol abuse; absenteeism; abusive language; disloyalty; disobedience. If your
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misconduct is serious enough to be classed as 'gross misconduct', you may be

summarily (instantly) dismissed without notice.
Redundancy - providing the selection for redundancy is fair.
A statutory restriction which prevents you from doing the job - for instance, if
you need to drive for your job and you lose your driving licence.
'Some other substantial reason', including conduct which your contract says
will result in dismissal.
'Automatically unfair' Dismissal

In some very limited situations you do not have to have a years continuous service in
order to take a case to ET for unfair dismissal. These situations include most dismissals
for automatically unfair reasons, listed below, and dismissal on grounds of unlawful
discrimination. Regardless of your length of service or the number of hours you work, it
is 'automatically unfair' to dismiss you:
Because of your pregnancy or any reason connected with it or for a reason

connected with your right to maternity, paternity, parental or dependants' leave.
For 'asserting a statutory employment right'. This could include asking for a
written statement of employment particulars, or for an itemized pay slip, or for
statutory holidays.
For a reason connected with your right to receive the national minimum wage,
or your rights to statutory minimum hours, holidays and breaks, or your right to
receive Tax Credits from your employer.
For taking action to ensure the safety of the workplace or to avoid danger.
If you are a shop or betting worker who is dismissed, in certain circumstances, for
refusing to work on Sundays.
For making a protected disclosure - that is, whistleblowing.
For a trade union reason e.g. if you join a union (or won't join one) or for taking
part in union activities, or for activities as a pension scheme trustee or an
employee representative.
It is also automatically unfair to dismiss you if the firm you work for is sold
(i.e., there is a 'transfer of an undertaking') and the transfer is the principal
reason for your dismissal. However, you must have worked for the relevant
employer(s) for at least one year to claim unfair dismissal. The dismissal can
sometimes be justified for 'economic, technical or organisational reasons'.
13 Redundancy
An employee is dismissed for redundancy, and may qualify for redundancy pay, if the
following conditions are satisfied:
Less work, and/or;
Changes in conditions that result in the new job being quite different from the
old one, and/or;
Work put out to contract by the employer.
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2AL. 1 Management and leadership
No topic beyond 2AS. 1 Management and leadership
2Al. 2 Motivation
No topic beyond 2AS.2 Motivation
2AL. 3 Human Resource and Management (HRM)
Measure of employees performance or Personnel Effectiveness
Many businesses spend a significant proportion of their total costs on their workforce
(e.g. interviewing costs, training, pay, and fringe benefits). Businesses will, therefore,
wish to discover if the money that they have invested in their workforce has been spent
effectively and if it has improved the effectiveness of the employees.
There are four main measures that a business can use in order to measure the
effectiveness of its employees:
1. Labour Turnover. This measures the number of employees who leave a business per
year, expressed as a percentage of the total number of people employed. It is calculated
using the following formula:
Labour turnover = Number of employees that leave per year x 100
Total number of staff employed
A high labour turnover rate could be a sign that the workforce have low levels of job
satisfaction and motivation. This could be due to poor wages, poor management
techniques, or better remuneration packages being offered by competitors. This high rate
will inevitably lead to the business having to spend a large amount of money on
recruitment and training of new employees.
2. Absenteeism. This measures the proportion of the workforce who are absent from
work in a particular period of time. It is calculated using the following formula:
Absenteeism = Number of employees absent per period x 100
Ideally, the business would wish the figure to be as low as possible, since a high figure
could indicate that the employees have low rates of morale, job satisfaction and
motivation.
A high rate will inevitably lead to the business having to spend a large amount of money
on training and paying temporary workers who are performing the jobs of the absent
employees.
3. Labour Productivity. This reflects the efficiency of the workforce, and it is measured
by the amount of output per worker.
It is calculated using the following formula:
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Labour Productivity = Total output

Total number of workers
It can be argued that labour productivity is the most important measure of employee
effectiveness, since it directly affects the average cost of production and, therefore, the
competitiveness of the business.
An increase in labour productivity will benefit the business since it means that more
output can be produced for a given amount of inputs, hence the production cost per unit
will fall.
4. Waste levels. Waste products refers to lost and damaged raw materials, poor quality
output which has to be reworked, and output which has to be discarded due to its poor
workmanship. It is calculated using the following formula:
Quantity of material wasted

If a business has a high percentage of waste products, then this could be due to a poorly
trained workforce with low levels of both motivation and job satisfaction. In this case, the
business should ensure that the employees are all adequately trained for their specific
tasks, and investigate any other reasons for the poor quality of the output.
It is vital that the reasons for this are discovered quickly, since the effect on customer
loyalty and reputation could be disastrous if the business supplies poor quality output to
its customers.
Management by objective
Management by objectives (MBO) is a systematic and organized approach that allows

management to focus on achievable goals and to attain the best possible results from
available resources. It aims to increase organizational performance by aligning goals and
subordinate objectives throughout the organization. Ideally, employees get strong input to
identify their objectives, time lines for completion, etc. MBO includes ongoing tracking
and feedback in the process to reach objectives.
Core Concepts
According to Drucker managers should "avoid the activity trap", getting so involved in
their day to day activities that they forget their main purpose or objective. Instead of just
a few top managers, all managers should:
participate in the strategic planning process, in order to improve the implementability
of
the plan, and
implement a range of performance systems, designed to help the organization stay on
the right track.
It is all too easy for managers to fail to outline and agree with their subordinates what it is
that everyone is trying to achieve. MBO is a process that requires precise written
description of goals and timelines for their monitoring and completion. It is a sensible
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substitute for just good intentions. The process requires that the manager and the
subordinate agree to what the employee must attempt to achieve in the period ahead and
it is important for employees to believe in the objectives and understand what they are.
Thereafter, managers and employees should regularly communicate to ensure that the
objectives are being met as agreed and will be completed on time. Reliable management
information systems (MIS) are needed to establish relevant objectives and monitor their
penetration across the organization.
Organizations have scarce resources and so MBO ultimately helps to achieve the best
resource allocation effort.
MBO is often achieved using set targets or goals. MBO introduced the SMART criteria
i.e. objectives for MBO must be Specific, Measurable, Agreed, Realistic and Time-
specific.
TRADE UNIONS
The trade union is an organization of workers who join together to further their own
interests.
Features of trade unions
Register itself as a union.

Become affiliated to the trade union congress (although not all do).
Be independent of employers in negotiations.
Regard collective bargaining and the protection of its members interest as its
main functions.
Be prepared to use industrial actions to further its members interests.
Functions/roles of trade union

Unions are examples of a representative body that aim to further its members interest.
These could be,
Obtain satisfactory rate of pay.
Securing adequate work facilities.
Ensuring satisfactory work conditions.
Negotiating bonuses for achieving targets.
Obtain job security for members.
Negotiating employment conditions like redundancy and dismissal.
Negotiating grievance procedures.
Negotiating job descriptions and job specifications.
Types of trade unions
Craft unions- very few of these remain most have4 merged with larger union to gain
greater negotiating power. Equity (actors union) is an example
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Industrial unions- historically based on one particular industry, such as coal mining,
railways and shipping. As many of these industries have declined, so has the membership
and power of the unions based on them.
General unions- these attract members from many different industries manly unskilled
workers but by no means exclusively. Several managers between unions have made some
of the general unions the greatest of all.
White-collar unions- administrative and service workers are in the category of the
unions. Due to the expansion of the service sector of the economy some of these unions
have experienced growth in their membership. BIFU the banking, insurance and
finance union is an example.
Professional unions and associations- qualified professionals tend to join dedication

associations that are designed to only represent one type of career profession. The British
Medical Association (doctors) and the Law Society (solicitors) are examples. Most of
these associations are not referred to as unions as they are not members of the Trade
Union Congress (the collective organisation of unions).
Industrial actions
Trade Unions actions

When the process of negotiating between unions and their employers breakdowns, the
former may resort to industrial action in an attempt to persuade the employer to reach an
agreement. The union may take any of the following measures.
1 work-to-rule
This is where union members are not permitted to do any thing, which is outside the job
description as written into their contract. For example, if employees at a food
manufacturing company are concerned about a dirty machine, then legitimately they can
stop work, but not do anything about it. The contract will be connected with food
manufacturing, not cleaning the machine. Such stoppages were very frequent in the mid
1970 when job demarcation (strict definition of each job) was frequently raised in
disputes.
2 So-slow
Employees purposely take their time, perhaps if they are being paid overtime or are
connected not to work too hard, in case they run out of work and some employees have to
be laid off. The other more straightforward reason is to disrupt production.
3 Sit-in
The work force turns up to work, but does nothing. This prevents the employer from
hiring extra labour to come in and do the work.
Some discontented workers cautiously organized into labor unions during the depression
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in order to improve working conditions and increase pay. By 1936 the United Automobile
Workers (UAW) planned to stop work at General Motors. Workers at a GM plant in
Cleveland were angered when the plant manager refused to discuss reductions in the
piece work rate, and they started one of the first so-called sit-down strike in history,
where workers sat down at their posts and refused to leave until their demands were met.
The six-week strike involved fewer than 2,000 workers, but it affected more than 150,000
other workers in different production areas. The contract negotiated between management
and labor representatives helped boost the reputation of the UAW, although actual
concessions gained in the contract were minimal.
4 Down tools
Employees simply stop what they are doing, whilst the production line continues, thereby
forcing management to stop the line and address the problem.
5 Overtime ban
The union stipulates that members cannot accept overtime. This means that income level
will suffer for the employees but at the same time creates more financial burden for the
employers. Union may use this at a time when extra output is particularly important,
perhaps when an extra order has to come into the business from a prestigious client.
6 Industrial sabotage
Employees would deliberately damage the product in some way that would hinder the
performance of the business. Johnson & Johnson once had to recall all of its baby food
following reports that an employee had deliberately put glass in the mixture, which went
into the pots of food.
7 Blocking
This involves refusing to handle goods, materials, and parts in dispute with management.
8 Strikes
Although strikes are the main way that union action hits the headlines, they are the last
form of industrial action a union will consider.
Employers action
In the same way that that union can prevent disruption to the company, employers are
able to take action in a dispute in an attempt to persuade the union to see their point of
view, using the following measures;
1 Withdrawal of overtime
The employer does not allow an extra pay rate for overtime.
2 Lock-outs
The employer may well refuse to let the workforce in. Such action can lead to an
extremely autogonistic attitude for a long time into the future and employers always need
to think very carefully before doing this.
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3 Short-term contracts
In order to build some insecurity and therefore fear into the minds of employees, it is
possible to change all contracts to include a short-term notice requirements/renewal. This
also means that redundancy payments can be saved when a contract is severed.
4 Alter working practices

In exchange for either higher pay or shorter hours, many employers have insisted on
more flexible practices.
Labour management relations

Recently union actions have been less frequent because of the growing realization of the
need to cooperate at the workplace. For this both parties may follow the following
practices:
Labour legislation
Trade union activities in the UK are regulated by a variety of legislations. Legislation was
designed by the government to give employees more protection at the work place and to
encourage the partnership between union and businesses.
Legislation has focused on following areas:
1 Legal immunity
Certain Acts have dealt with whether unions can be sued by a business or individuals as a
result of damages caused by their action. The 1974 Trade Union and Labour Relation Act
prevented employers from taking civil action in court for damages resulting from
industrial action by unions. The 1982 Employment Act, however, made union liable to
pay civil damages to businesses. Since the 1990 Employment Act, unions have also been
liable for the damages for customers or suppliers as a result of action, which is not
covered in the conditions of legislation.
2 Picketing
Picketing involves the rights of workers on strike to assemble and persuade others to help
or join them. Picket stand outside the work place to inform public that strike is taking
place. The 1980 Employment Act, however, made it possible for civil action to be taken
against secondary picketing (where union members from one place of work picket an
unrelated place of work). It also limited peaceful picketing for employees to at or near
their place of work, and the number of pickets at any one time.
2 The closed Shop

It is an agreement between an employer and a trade union that make it a condition of
employment for each employee to be a member of that trade union. It may make
employees to join a union against their will. The 1980 and 1982 Employment Act
changed the regulations in relation to closed shops. It states that closed shops could now
exist only if there is 85% secret ballot in favors.
3 Unofficial industrial action

Unless the union supported the action, employees have no legal protection.
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4 Secret ballot
A secret ballot must be conducted before industrial action starts to determine the support
of the union members.
5 Sympathetic action
It must not be intended to support other workers in a dispute with their employers, nor
must other workers, who are not directly concerned, join the dispute.
Collective bargaining and negotiations

Trade unions are responsible for collective bargaining in the workplace. They bargain on
behalf of their membership with employer and attempt to obtain the best possible
conditions. It is argued that unions are in far better position to negotiate with management
than an individual employee, who has little bargaining power.
Dispute settlement.
If no agreement is struck between the two parties, then there is a facility to use a neutral
third party in an attempt to find some common ground.
1 Workers councils
These are simply another form of industrial democracy, allowing employees into the
decision making process. Worker directors are employees of the company and are invited
to sit in the board of directors, although with no changes in salary. This can be seen as a
way of avoiding unions.
2 Employee Share Ownership Program (ESOP)

By including employees in sharing profit, through extra dividends or by allowing them to
benefit from an increase in the share price. The intension of ESOP is to encourage
employees to have the same objectives as employers, thereby minimizing the risk of
conflict.
3 Advisory Council and Arbitration Service (ACAS)
When employers and employees can not come to any agreement or perhaps refuse to
discuss the matter further, it is possible to call ACAS, whose role is to bring the two
parties together and try to reach some half-way point where the two sides agree. It may
act as Pendulum of Arbitration.
4 Industrial tribunals
These are formal way of settling claims of unfair dismissal. The panel consists of three;
an employer representative, an employee representative and a chairperson (legally
trained). The employee can represent himself or may need help from the union, if the
employer has hired a lawyer.
Promotion of cooperation between management and work force

Businesses that compete with multinational companies have to adopt best practice in
employee relations. In Japan and many other European and American companies there is
a long established policy of involving the whole work-force in the productive process.
43
Important in this process are the creation of a team sprit and teamwork in the work place.
Techniques such as the use of quality circles are used to draw on knowledge and
experience of all staff. Workers are involved in decision-making.
Some PLC, encourage employees to share ownership in an effort to build collective team
sprit.
Businesses began to negotiate single union and no strike agreement with unions.
Single union agreement enables a business to negotiate with one union over pay and
conditions. A union may agree not to strike in return for wage increase, improved
conditions or limited redundancies.
2AL. 4 Organisation structure
The need for and nature of organizational structure

Organizational structure is a way in which a business is organized and the consideration
of its internal working in an attempt to find an efficient operational practice.
As the business grows in size and the number of personnel increases there is a need to
assure that the objectives of the business are achieved. Defined procedures need to be in
place to insure that if any conflict arises there is some one who has the ultimate
responsibility to make the necessary decisions. It is essential that the business establish
tight control to ensure its objectives are achieved. But in order for the whole organization
to be manageable there may well be the need to delegate some responsibilities to
employees.
Finding the correct structure will require careful attention to the ability of the business to
control and communicate with its employees for the benefit of the organization as a
whole.
Types of organisational structure
1. Functional or independent structure

This emphasizes the individual and is almost a non-organization. The independent
structure is a method of providing a support system. Barristers chamber and doctors
clinic have worked in this way. It is attractive to independent people who are confident of
their ability to be successful. This form of organization tends to be unsuitable for most
types of businesses because of the lack of control and coordination.
2. Bureaucratic structure
Weber saw bureaucratic as representing the application of rational thought to practical
problems in large industrial combines, in the civil service and in other important
organisations (e.g. schools, churches, government departments etc.). His model of
bureaucracy was based on typical characteristics of such a form of organisation.
A set of offices (official positions) for the purpose of caring out given
organisational tasks, to be governed by a set of rules and procedures
A hierarchical structure of offices
Management based on office procedures, files, documents and office staff
The appointment of trained officials to take on roles within the bureaucracy
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Today, various forms of bureaucracy have become the dominant form of administration in
political and economic systems in advanced industrial societies. Bureaucracy is the most
rational form of social organisation and dominates the structure of many business
organisations.
The advantages of bureaucratic organisation are that:

The application of a bureaucratic division of labour, combined with new
technologies, has made possible massive increases in the production of goods and
services
Bureaucracy is often seen as being a fair method of organisation. Officials are
appointed on the basis of qualifications, and organisation deals with individuals
and groups with which it comes into contact on the basis of predetermined rules
and procedures. Provided that officials stick to the rules, there should be no
possibility of giving preferential treatment.
Bureaucracy usually helps to create a predictable pattern of work cycles. People
know what they are supposed to do, how they are suppose to do it and the extent
of their responsibilities. Production targets can be set and plans established to
meet them
However, a number of criticisms have been leveled at bureaucratic:

They are sometimes seen to be slow-moving, unimaginative organisations
because of the way they stick to rules and procedures. Decisions may be arrived at
slow because they have to be processed through the right channels.
Within a bureaucracy a displacement of goals might takes place. Instead of
bureaucrats focusing on the aims and purposes of the organisation, they might
become wrapped up in procedures
Bureaucracies are sometimes seen to be inhuman structures which fail to account
for the fact that many of their internal and external relationships are between
people. They can have a depersonalised effect, concentrating on relationships that
45
are remote, anonymous and confined to rigorously defined topics rather than face-
to-face informal contacts
3. Matrix structure
This emphasizes getting people with particular specialist skills together into project
teams. Individuals within the teams have their own responsibility. The matrix structure
was developed to overcome some of the problems with the entrepreneurial and
bureaucratic structure. Managers often argue that this is the best way of organizing
people, because it is based on the expertise and skills of employees and give scope for
people lower down the organization to use their talent effectively. For example, a project
manager looking into the responsibility of developing a new product, may draw an
expertise to employees with skills in design, research and development, marketing,
costing etc. It is suggested that this structure improves flexibility and motivation of
employees. It has recently lost favour because it often needs expensive support system,
such as extra secretarial staff. There may also be problem with co-ordinating a team
drawn from different departments and the speed of decision-making.
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There are a number of advantages to be gained from implementing a matrix structure

A matrix make it possible to structure an organisation in such a way to focus on a
number of aims at the same time, e.g. servicing different type of customers,
services different regions, producing different type of products.
A matrix structure gives an organisation an extra flexibility to respond to new
situations where there is an increase in demand for its resources.
The system makes it possible to draw groups from specific departments in the
required numbers.
There can be cross-fertilisation of ideas across departments, rather than having
departments working in isolation.
Disadvantages are that

A complex matrix structure may be difficult to understand, and employees can
lose sight of the major organiosational aims.
The system will often require extra administrative resources, which can be costly
in terms of time and money.
Because the system establishes more than one chain of command, this can lead to
power struggles, contradictory orders and general confusion.
A matrix structure can be very effective. However, it must be clearly laid out, and clearly
explained to all those involved.
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4. Organistic/organic Structure
It has few numbers of levels in the structure with wider span of control. It is more flexible
and as a result is more flexible to cope with change. This is an important attribute in the
modern business world because of the small numbers of level within the organization.
There are also fewer barriers to effective communication.
Organistic structures are most likely to occur in groups where there is a need to share
common expertise and skills. Such a network may be found among high-level technicians
or research workers in oil or chemical industries. Alternatively, it may be found in an
advertising agency, where one persons skill might be drawing, anothers design and
layout, a thirds producing slogans and captions, and a fourths finding the best media for
getting a campaign across. In such a system, members of an organisation are most likely
to feel that their individual needs are being met. There is more of an opportunity for them
to make an original contribution to decision-making and to feel that they are helping to
shape organisational behavior.
Organic approaches have also been successfully tried with manual workers. A frequently
quoted example is that of Volvos Kalmar pant, where assembly works has been broken
down into 20 different functions. Each function is performed by a team of between 15
and 20 workers. The cars pass along from team to team on trolleys, allowing workers
considerable freedom of movement. Teams work collaboratively, sharing work and ideas.
They tackle problems together.
This process of organic team building is very important in a number of Japanese
companies.
5. Mechanistic structure
It is highly bureaucratic and machine like in their ability to respond to change and the
manner in which they perform even the most mundane of tasks. Given the number of
layers within this type of organization, there are many barriers to communications.
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The formal organisation of a business

Formal organization is the way in which human resources are organized. It takes into
accounts such things as
The relationship between individuals
Who is incharge?
Who has authority to make decisions?
Who carries out decisions?
How information is communicated.
Features of formal structure
1 Organizational chart
Firms produce organization chart, which illustrate the structure of the business. Different
types of the businesses are likely to have different charts. This may become complex as
organization grows. These organizational charts are very helpful in following ways.
It reduces communication problems.
It tells how employees are linked with each other and any communication
breakdown can easily trace along the chart.
It tells clearly individual position in an organization and indicates hierarchy of
authority.
It pinpoints areas where specialists are needed. It also shows how different
sections of the form relate to each other.
Approaches to organizational chart
Entrepreneurial/centralized structure- is applicable to small businesses where the

managing director is the central figure.
Organizational structure on the basis of product reflects this form of structure. It is
operated if there is a separate company with its own production, finance, sales and
research departments, each serving a particular product. Although there is a degree of
duplication within the business operating in this manner may be advantageous. The need
for particular products are unique and may be better understood within the product. Brand
managers for the various chocolate bars would be in a much better position to decide how
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best to market the product than the marketing expert who would market all the brands of
chocolate.
Area/decentralized structure- is based on concentrating on a particular geographical area
instead of on a product. It means operating in a similar manner and may allow regional
differences to be created for in a more informed and sympathetic manner e.g.
multinational companies such as Uniliver, which needs to accommodate cultural,
religious and social differences.
The key is not the actual location of the organization but the moment of authority away
from a person or particular post.
Advantages of centralization
It encourages responsibility in top management.
It allows local knowledge to prevail.
Decisions may be quicker in many distances.
Disadvantages of centralization
Too much responsibility and work may fall on management.
A lack of flexibility and ability to change.
It prevents subordinates from taking responsibility and therefore being motivated.
Advantages of decentralization
It allows subordinates to take responsibility and develop their own ideas without
having to refer back to higher level within the organization. This may be source of
motivation.
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It prevents the higher levels of management from having too much of a burden in
terms of responsibility and workload.
It provides a more flexible approach bearing in mind the individualistic
characteristics of a given product or sales region.
Disadvantages of decentralization
Lack of control, which could be significant if the decentralization leads to a
divergence of objectives.
Effective communication may be hampered and add the costs of business
Slower decision-making may also add to the costs of the business
It may be out of touch with specific product or area needs
Factors that determine the degree of centralization or decentralization

Objective of the business
Need for coordination
The growth history of organization
The entrepreneurs charisma
The skills of the employees
The geographical spread of the business
Size of the business
Views of the owner or leadership style
External costs
Change in technology etc.
2 Chain of command
The hierarchy in a business is the order of level of management in a firm, from the lowest
to the highest rank. It shows the chain of command within the organization. Order pass
downs the levels and information pass up. Businesses must also consider the number of
links or levels in the chain of command because each extra level of management in the
hierarchy reduces the effectiveness of communication by about 25%. No rules are laid on
down the most effective number of links in the chain. However, businesses generally try
to keep chain as short as possible.
3 Span of control
This refers to the number of subordinates working under a superior or manager. A narrow
span of control has the advantage for a firm of tight control and close supervision. It also
allows better coordination of subordinates activities. In addition, it gives managers time
to link and plain without having to be burden with too many day-to-day problems. A
narrow span also ensures better communication with subordinates, who are sufficiently
small in number to allow this to occur.
A wider span of control, however, effects greater decision making authority for
subordinates and may improve job satisfaction. In addition there are likely to be lower
costs involved in supervision.
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Factors that affect the appropriate span of control

a) The skill, experience and training of the employees/subordinates. This would not
require close supervision.
b) The degree of similarity of task that have been delegated all of which are similar.
By this explanation to all the subordinates can be done at the same time, thus
reducing the amount of time-spent delegating.
c) The rate of change within and outside the organization. If a business needs to
change, it will need a structure, which is more responsive.
d) Communication techniques and the amount of personal contacts that is necessary
to perform the required tasks. The ability of the superior or manager.
e) The level of hierarchy involved. If the level within the hierarchy is high than there
will be similar span of control.
Narrow span of control Wide span of control
Manager is responsible for a few Manager is responsible for large number
subordinates. of subordinates
Less chance of delegation since Greater delegation necessary as difficult
manager can easily keep control over to keep control over all subordinates
subordinates. Greater motivation as more trust
Less trust fill by employees as placed on employees
greater direct control Less supervision of employees
Greater supervision of workers Lower costs involved in
Better co-ordination of supervision
subordinates activities Communication problems as decision to
Good communication with subordinates. be conveyed to many persons
Centralized authority Decentralized authority
There is a long chain of control Usually results in a short chain
Maintenance of quality of control
Quality maintenance difficult
4 Responsibility
Responsibility involves being accountable or being required to justify an action. For
example, managers who are responsible for a department may be asked to justify poor
performance to the board of directors.
5 Authority
Authority on the other hand, is the ability to carry out the task. Employees at lower levels
of the hierarchy have less responsibility and authority than those further up. However it
may be possible for a superior to delegate (pass down) authority to a subordinate.
6 Delegation
Delegation is to pass down responsibility and authority for certain tasks to employees to
further down the hierarchy. It reduces workload from managers.
Explain why managers sometimes fell reluctant to delegate?
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Delegation is the passing down of authority by the manager to the subordinate while the
final responsibility of the tasks done remain with the manager. This is the major reason
that managers feel reluctant to delegate. As the responsibility lies with the manager, this
means that if the subordinate fails to perform the task efficiently and gives a poor result
then the blame would lay with the manager. After all it was the manager who had
authorized the subordinate. It may also be the case that managers dont have enough trust
in the abilities of their subordinate. They may think the subordinates would definitely not
be able to perform the task properly while he, the manager would do it successfully. It
may also be that the costs to the organization involved in the task being delegated are
very high. So poor performance by the subordinate could cost the manager, his job or at
least his position. The reason for reluctance could also be a sense of losing then
importance by delegation authority to juniors. It could be a sense of insecurity that
subordinates may be able to dot he task more efficiently which would lower the status of
the manager amongst his colleagues. It could simply be that the manager isnt a good
delegator.
Informal business structure

Informal business structure is the network of relationship that develops between member
on the basis of their common interests and friendships. These relationships can affect the
way a business operates. There are three types of relationships.
Advice network- who depends on who to same problems.
Trust network- which employees share potential information and back each other up in
times of crises.
Communication network- it includes all day-to-day communication among all

employees and their work related matters.
Types of authorities
1 line authority
It shows the authority that a manager has over his subordinates. Communication from
upward to downward or from superior to the subordinates in the chain of command. By
this managers can allocate work and control subordinates, who have a clear
understanding of who is giving them instructions. The manager can also delegate
authority to others if they feel this will make decision making more effective.
In large organizations, the chain of command can be very long. This means that
instructions given by manager may take time before they are carried out at a lower level.
2 Staff authority
Staff authority might be when a manager or department in a business has a function with
another department, for example, giving specialist advice. A marketing manager may give
advise to the production department based on market research into a new product.
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Although specialist can give advise, they have no authority to make decisions in the other
department.
3 Functional authority
Functional authority is when specialist has an authority to make a line manager to accept
his or her advice. It is different from staff authority, where the specialists can only advice.
For example, the finance manager may have overall authority over the budget holder in
the marketing department.
2AL. 5 Business communication
COMMUNICATION
Why is effective communication

The quality and effectiveness of internal communication can have an impact of many
areas of business:
Staff motivation- and thus labour productivity. If staffs are encouraged to participate
through group discussion, for example, then effective communication will aid motivation.
The number and quality of ideas generated by the staff- if staffs are asked for their ideas
then this can assist withy problem solving.
Speed of decision making- the more people who have to receive and react to a message
then this can assist with problem solving.
Speed of decision making- the more people who have to receive and react to a message
then the slower will be the decision making system.
Speed of reaction to changing conditions- if consumer reactions take a long time to

reach the decision makers at the head of an organization then response times will be slow
too.
The response of receivers- incorrect understanding of the message will lead to incorrect
responses.
Effective coordination- between departments will be aided greatly by good

communication links between them.
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Methods of communication
Internal communications
Internal communications are communicated within an organization. They may follow
Downward from higher to lower level
Upward from lower to higher level
Horizontally between people and departments at the same level
Multi directionally
Internal communications include
a) Verbal communication
Verbal communication involves the trans mission of information by words of mouth.
For many people at work, this involves face-to-face exchanges for the purpose of relying
massages, providing advice, personal discussion, analysis, giving instructions and
guidance etc. verbal communication is less formal relationship, enable communicators to
get to know each other and allows for instantaneous feedback. It is important in meetings.
The main advantage of face-to-face contact, however, is that it can be time consuming
exercise, which usually provides no permanent record of the discussion.
b) Written communications
Written communication is used within the organization to convey information and ideas
to others. They may also be used to confirm important verbal messages. It may include
Memos- it means a thing to be remembered. They are used to communicate

information, instructions and enquiries and the internal equivalents of letter. An
organizations name does not normally appear on a memo for internal use, and it is not
necessary to have a salutation or a complimentary close. Memo shell be kept as short as
possible and should deal with only one item. They will frequently be distributed to more
than one person. Most organizations provide memo pads of headed message forms.
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It should be necessary to be more cautious when writing memos up the ladder, rather than
down.
Reports-Reports are another form of internal written communication. A report is simply a

written communication from some one who has collected and studied some facts
to a person who has asked for the report because he or she requires it for a
particular purpose. A report often contributes towards or forms the basis for a
decision. Reports may be used as follows:
I. To supply information for legal purpose, e.g. as a result of an incident, or to be
presented to shareholders.
II. To present the results of some research and to recommend some form of action.
III. To assess the possibility of some form of change of policy.
A well-written report will be concise and will not contain anything the reader does not
need to know. It should be clear and logically arranged, but at the same time should not
exclude anything that the reader requires. Report may be written as short informal reports
or as formal reports set according to a particular pattern.
Title page
Table of contents/index
Terms of reference (explaining the reason for the report)
Procedure (how the task was completed)
Findings
Conclusion (summery of finding)
Recommendations
Signature of writer and date
In preparing a report, consideration has to be made concerning aspects such as language
style, circulation list, presentation of cover and binding and confidentiality.
Agenda and minutes- before a meeting takes place, an agenda will list the items of
business to be discussed and the order in which they will be taken. Minutes are the
detailed record of a meeting and are often used as a form of internal communication. That
are often placed on notice boards or sent to key people to inform them the decisions that
have taken place. Minutes of a meeting must be presented in a clear and unambiguous
way. They require concise sentence construction with accurate spelling, punctuation and
layout.
Notice and house publications- Notices can be placed in prominent positions and used to
publicize any change in policy, dates to be remembered, events taking place, functions
etc.
House magazines, journals and company newspapers can also be useful way of
communicating policies, information, events and activities to employees. They are a
particularly useful form of internal communication of large organizations.
External communications
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External communication is concerned with how an organization is viewed by others.

They encompass all the action that emanate from an organization. Every organization has
a public face which conveys a message that influences those who have dealing with it,
from customers and shareholders to suppliers, competitors, government and communities.
The positive image that can be projected through external communication helps to create
a better external environment for the organization. The successful manipulation of this
public relations function will help to convince others that the organization is worth
dealing with and might provide it with a considerable competitive and strategic
advantage.
a) Verbal communications
The most frequently used form of external verbal communication is the telephone. A
telephone call may be the first point of contact an outsider has with an organization, and
if a bad impression is created through the first call, this may be difficult to correct.
From time to time it may be necessary to have a face-to-face exchange with somebody
from outside the organization. In many administrative posts employees are constantly in
situations where they are meeting customers, members of the public, suppliers, visitors,
candidates for jobs and so on. Dealing with people on a day-to-day basis requires many
special skills.
b) Written communications
Business letters- the business letter is still the most widely used form of external
communication. It provides a written record and can be used to send almost any type of
information. A well-written business letter may convey a favourable impression of an
organization. Its greatest benefit is its reasonable cost. Business letters are usually typed
on headed A4 or A5 paper. Fully blocked layout is the most common form of display.
Letters should be presented in a logical sequence and written in a style that lacks
ambiguity. They should be concise and yet not leave out any relevant information. A
typical business letter may contain the following features:
Heading or letterhead
Reference, enabling the letter to be filed and letter traced
Date
Inside address of the recipient
Salutation (Dear)
Subject heading
Body of the letter
Complimentary close (yours truly)
Any enclosure will be noted by the letter Enc(s).
Fax and e-mail- Another form of written external communication, and one that has
experienced massive expansion over the recent years is the use of facsimile (fax)
machines to send information electronically over telephone lines.
Another alternative to writing letter is to use electronic mail. The mailbox is a computer
terminal linked to the telephone network; it can put messages in to the system and store
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messages that have been sent through the system. Every user has a password to allow him
to use the system. A message can be sent to many mailboxes at once, so the system can be
used for internal memos in a company to several branches. The message is stored in a
terminals memory until the mailbox is opened.
Other forms of external written communications- Advertising is the form of external

communication. At the heart of advertising lies the need to understand how consumers
will respond to both advertising copy and visual images. The effectiveness of advertising
campaign goes beyond the sale of products.
An annual report is a form of external communication produced by all limited companies.
In addition to information required by the Companys Acts, many will also contain a
range of no financial information covering area such as operations, business strategies,
social and environmental objectives, etc.
Magazines publicity literatures and educational services can provide strong informed
links between organizations and their various publics. Corporate videotapes, although
they constitute a visual rather than a written resource, have become an increasingly
popular way of providing interested parties with information about an organizations
activities. Visits, open days, exhibitions and demonstrations can also be effectively used
to generate interest, provide information and involve peoples understanding and
perception of an organizations activities.
Strengths and weaknesses of communication methods
Method Strength Weakness

Oral Direct Need to listen carefully
Can be varied to suit Affected by noise
needs of receiver Passive
Easy to understand No permanent
Can be questioned quickly accurate record
can be quickly forgotten
Written Recorded permanent Often difficult to read
record Message identical to
More structured reach receiver
East to distribute No body language
Can not be varied Feedback slower
Can be referred to again No immediate response
May be misinterpreted
Costly and time
consuming
Visual More interactive Needs close attention
Demands attention Sometimes too fast
Often easier to remember Not always clear
Creates greater interest Interpretations by
receivers can vary
Electronic Great speed Cannot always be
Interactive received
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Creates interest Relies on receiver is

Encourages response expensive in hardware
Ignores boundaries Risk of communication
Good image for external overload
communication Can be intercepted
Diminishes personal
contact
Factors influencing choice of appropriate media

Managers will consider those factors before deciding on the best communication method:
The importance of a written record that the message has been sent and received,
for example an important new contract
The advantages to be gained from staff input or two-way communication, for
example a new staff shift system proposal could be discussed before
implementation
Electronic media often require expensive capital resources but memos are cheap
and the cost of management time in meetings should not be overlooked
Electronic means can be quick but is this more important than allowing time for
viewers to be aired
The longer and more detailed the message the less likely it is that oral
communication will be adequate
Whether more than one method should be used for clarity and to sure that the
message has been received - a quick telephone call followed up by an official
letter or order form will achieve both speed and accuracy
Reducing communication barriers

There are six steps managers should take in order to minimize the impact of
communication barriers:
Ensure the message is clear and precise but adequately detailed
Keep the communication channel as short as possible
Make sure that channels of communication are clear to all involved
Build in feedback to the communication process so that problems with receipt or
understanding of the message can be checked quickly
Establish trust between senders and receivers this could be most easily achieved
in business where the culture is to accept all staff as being important and as
having useful contribution s to make
Ensure that physical conditions are appropriate for message to be heared or
received in other ways.
Lines/types of communication
1 One-way communication
It is one side communication and there is no feedback, for example putting a notice on a
notice board. The advantages of one-way communication are that it is quick and therefore
cheep when compared with two-way communication. There is no pressure on sender as a
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reply is not required. However this type of communication may suffer from a low degree
of accuracy, as there is no opportunity to check what has been written or said. It can as a
consequence be a cause of frustration to the receiver.
2 Two-way communication
Feedback is always there as in two-way communication. This form of communication is
more time consuming and provides the receiver with an opportunity to question what has
been said or written. As a consequence the information is more likely understood because
clarification is possible. This ability to gain feedback ensures that is more accurate than
one-way communication.
3 Formal communication
There are set procedures for the information in terms of the media used, the style of the
language and the presentation. Communicating through the managerial hierarchy is also
an example of formal communication. When the process of appraisal takes place to asses
the performance of an employee, immediate superior will do this usually. This is a typical
illustration of the formal approach, as there will be a pro forma (pre-printed form to be
filled in) followed by an interview, which is conducted in a prescribed manner by the
superior involved. School reports are another example of formal communication.
The management determines many of these procedures or house rules. Some
documentation need to comply with fixed rules if there are to be valid items such as
ownership of land and certificates of incorporations must be presented in a standard
manner. A large proportion of the information has to be written in order for records to be
kept and to ensure accuracy of the information to be imparted.
4 Informal communication
When meeting friends in local restaurant, the style will be informal, as no particular rules
have to be complied with. There is no planned agenda; the information passed is of
relevance balance because the people involved are friends, no because of the position that
hold. Most importantly, the information is rarely written down, it is mostly spoken.
5 Open communication
Open communication has to be universally understood to be effective and assumed that
no specialist knowledge is required. Any member of the public will easily understand
stating that there is a new bar of chocolate for sale. Great care has to be taken to ensure
the public does understand the message of the advert, which intern requires careful
thought for the selection of the language used.
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6 Closed communication
Only those within the business or a particular group of people may well understand the
language used. For example, unless you are a golfer, the terms birdie, Cagle and albatross
may mean very little to you. This closed communication is appropriate when in golfing
circle but not in general conversation.
7 Vertical communication
The vertical channels or lines of communication are usually used when information or
instructions are handed down from the management to the shop floor or from employer to
employees and when information or suggestions are passed upwards to ensure the
management is kept informed as to what is happening and whether its wishes are being
implemented. Valuable information can be passed to the management from the employees
that may well influence the decision making process. The employees have an opportunity
to state their views of the business, which ensures management is kept in touch with the
feelings of the employees. Vertical communication provides a channel for feed back for
both employers and employees and at the same time ensures that there is a sense of
involvement within the business, which aids the motivational forces.
8 Horizontal or lateral communication

This is when communication takes place between personnel on the same level within the
organization. Two employees within the sales team of the marketing department
discussing the best way of meeting their sales targets or directors deciding whether to
purchase new machine are suitable examples. Vertical communication provides a channel
for feedback for both employer and employee and at the same time ensures that there is a
sense of involvement within the business, which aids the motivational process.
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Communication networks
Communication takes place within different individuals and parts of a business and
between a business and outside bodies.
1 The circle network

In a circle, sections, departments etc. can communicate with only two others. This type of
communication may occur between middle managers from different departments at the
same level of the organization. The main problem with this type of network is that
decision-making can be slow or poor because of a lack of co-ordination. Managers may
have difficulty developing a strategy that all would agree on.
2 The chain network

The chain is where one person passes information to others, who then pass it on. The
approach tends to be the formal approach adopted by hierarchical organizations, such as
Civil Service, Police or Army. The main advantages are that there is a leader/coordinator
at the top of the hierarchy who can oversee communications downwards or upwards to
different areas of business. One problem may be the isolation felt by those at the bottom
of the network. Their motivation may be less than others if they feel at the periphery. This
network does not encourage lateral communication.
3 The wheel network

In the wheel network there is a person, group of department that occupies a central
position. This network is particularly good at solving problem. For example, a head office
communicating with sales people operating in a region.
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4 A connected or all channel networks

The all channel network communication system might be used in small group workings
with its participatory style and more open communication systems. The connected
network provides the best solution to complex problems. It is best when a department
needs to brainstorm. It is slow and tends to disintegrate under time pressure to get
results when operated in a group.
Barriers to affective communication
The skill of the sender and receiver- the ability of the sender to explain the message and
the receiver to understand it are important in communication.
Jargon- a word or phrase that has a technical or specialized meaning is known as jargon.
The terms understood by a certain group of people may be meaningless to those who do
not have this knowledge. For example, technical information about a product, which is
not, understood by the marketing department may result in misleading advertising and
poor sales.
Choice of communication channel or medium- some time the channel or medium

chosen to send the message may not communicate the information effectively. For
example, a message passed through a manager to an employee would have more
successful the message had gone through a representative.
Perception and attitude- how employees perceive other people can effect how they
interpret the message that is sent. Employees are more likely to have confidence in
people they trust, because of past experience of their reliability.
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Form of message- if the message is not clear or unexpected the receiver is unlikely to
understand it or remember it. We have probably forgotten half of what we hearing it, and
no more than 10% will remain after two or three days.
Stereotype- people can often have beliefs about others. This may result in a stereotype of
some people. It is possible that, if one person has a stereotype of another, this may effect
how they interpret a message. So, for example, if a male manager has a certain stereotype
of women being less rational and able than men, this first reaction might be to ignore a
female managers communication because he believes she does not understand the
information.
Length of chain of command or distance- if information is passed down by word of

mouth through a number of receivers, it is possible for the message to be distorted. This
may result in the wrong emphasis or wrong information being received by the individual
or group at the end of the communication.
Wrong target for the message- businesses some times send the wrong information to the
wrong person. This may result in costly delays and errors. It also create poor image in the
eyes of the receiver.
Breakdown of the channel- this could be due to technical problems. Breakdowns, for
example, are unable to tell customers what their balances are if computer terminals are
not working.
Cultural differences- a business may have problems sending message from one country
to another because of time differences, social norms, values and cultures.
Technology- large amount of information can be sent instantly through Fax, E-mail, and
Internet. This may result information overload. Organizations may not be able to fully
process all of the information that is sent. Staff needs training for newly introduced
technologies. Browsing the Internet and constantly checking E-mail can waste time.
Employees may also use the technology for non-business messages. Electronic media
often send messages that can be seen by people other than the intended receiver.
Q.1. Discuss the barriers to effective communication and explain the ways to reduce
them.
Ans. Effective communications will only happen if information is sent, received and
them understood. It occurs when the clear message is sent by the sender through an
appropriate medium who then gives feedback which shows that the message has been
understood. Several factors called barriers can lead to communication bring ineffective.
Firstly, failure could occur in any of the stages of the communication. It may be that the
message is sent through an inappropriate media. E.g. explaining technical diagrams and
graphs and technical language over telephone is most likely going to lead the receiver to
make mistakes in understanding it. Also using jargon which is words or phrase with
specialized meaning may be misunderstood. They are usually understood by a certain
group of people but not by others (e.g. technical computing language). This is definitely
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going to lead to confusion over the meaning of the message by the general employees.
E.g. technical information about a product not understood by the marketing department
may lead to misleading advertisement and poor sales. Also sending long messages orally
may result in the message being forgotten or jumbled up by the receiver. So the form of
the message may be barrier if it is nuclear or unexpected for the receiver or it lacks the
information which was intended to be conveyed. E.g. asking for goods to be sent is an
incomplete message. It may be that goods were required immediately but the receiver not
understanding the urgency sends goods the next day resulting in poor satisfaction of
customer. Also if there is too much information perhaps more than is actually required by
the receiver to respond in the right way then this may result in information overload or
noise. This is unnecessary data that actually prevents the receiver from grasping the
important elements of the message. If information has to pass through a long chain of
command due to too many levels of hierarchy, then it may get distorted. Also the delivery
of messages may be so slow that by the time they reach the receiver, the time of action
has already passed or messages may change their meaning over the way.
The other barriers are due to poor attitudes of either the sender or the receiver.
Employees are more likely to have confidence in people they trust, because of past
experience of their reliability. On the other hand, if an employee has learned to distrust
someone, then what she says will be either ignored or treated with caution. The
demotivated, employees who feel isolated are poor receivers.
Workers that dont derive job. Satisfaction and dont wish to work hard feel no
responsibility towards making communication effective. They may not listen to orders,
follow direction and may not give their feedback. Also employees in an autocratic system
may become suspicious if they are suddenly more involved in decision making. Some
people could have belies about others that may result in a stereotype which may affect
how they interpret a message. E.g. if a male manager has a certain stereotype of women
being less rational and able then men, his first reaction might be to ignore a female
managers communication because he believes she does not understand the information.
Finally physical reasons may also create barriers to effective communication. If factories
are too noisy or office places are too noisy then effective communication is not possible
as oral orders being shouted out do not reach the desired receiver. The noise of fans in an
office can also cause voices to be jumbled up. Their geographical distances can inhitat
effective communication especially interpersonal communication. E.g. meeting can be
delayed. There may be breakdown of channel due to technical problems. E.g. breakdown
of management information system on the computerized network may lead to problems
in dealing with enquiries.
There are several steps that could be taken to reduce these barriers. Firstly, it should be
ensured that the message is clear and precise and contains only required details.
Language used is simple which could be understood by the receiver. The communication
channel used is as short as possible so that chances of message getting distorted are
reduced and they are quickly delivered.
Also the communication channels being used are understood by all so that the right
receiver gets the correct message. Also feedback should be an essential part of the
65
process to ensure that problems with receipt or understanding of message can be checked
quickly. This would increase motivation levels as well as decisionmaking becomes more
participative. Then trust should be established between senders and receivers. This is
easily achieved in a business where culture is to accept all staff as being important and as
having useful contributions to make. Finally ensure that physical conditions are
appropriate for messages to be heard or received in other ways.
Q.2. Evaluate the significance of an informal communication in a business

organization
Ans. Informal communication channels are part of the organizational structure because
people cannot be prevented from interacting with each other. They do not involve the
formal networks and are not under official management control. Informal communication
is very significant as it allow people from all departments and even different hierarchal
levels to socialize with each other. This may help them to four options on work related
issues and problems which can then be passed onto the management through formal
communication networks. Usually workers are better aware of the problems as they have
hands on experience which may help improve overall efficiency of the business. Also
informal channels can be used to encourage discussion of a new idea as employees feel
freer to discuss this way then if asked directly. Their reaction could then be used to see if
the new idea would be any good and if it could be implemented. Informal communication
also satisfies the social need of Maslows Need Hierarchy Theory thus increasing
motivation and job satisfaction. This may lead to higher productivity and greater loyalty
amongst workers for firm and also reduce their frustration levels.
However informal communication may lead to spread of grapevine which are rumors and
exaggerations that could prove counterproductive. If formal messages are unclear then
grapevine may cause unreliable information to spread whose original source is
untraceable. These messages may ruin the reputation of business because of being
inefficient or false gossips. It may also cause a breach of privacy and insecurity by the
leaking of information between departments. Also strategies or policies may be
misunderstood if they hadnt been made clear by the management in first place and may
lead to improper achievement of objectives.
To discuss whether or not informal communication should be a part of the organizational

structure is fertile. It cannot be prevented and is very beneficial for the business. Its
drawback can be minimized by keeping employees very busy so that they do not get too
much time for in constructive talk. Also keeping then formally engaged in business
decision making may serve the same advantages as informal communication but at the
same time reducing the effect of its drawbacks.
HEALTH AND SAFETY IN WORK PLACE

The Health and Safety at Work Act places duties for health and safety on all people at
work- employers, employees and self employed. In companies with more than five
employees, there is a duty to provide a written health and safety policy.
Employers must asses the risk that their employees face at work and carry out regular
screening of employees for possible work related ill effects. When employees carry out
66
Saadat Ali Mughal
dangerous or hazardous work, employers must provide protective clothing that fits the
individuals and is fit for the purpose. As basic minimum employers must provide the
following:
Fire and smoke alarms.
Fire exits.
Warning notices.
Staff training on health and safety.
Restricted accesses to hazardous areas.
Protective guards for machines.
These are responsibilities of employers, but law also requires employees to fallow health
and safety instructions and report dangers. Non-observance of the rules is a disciplinary
offence.
67

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2AS. 1 Management and leadership

MINTZBERGS ROLE OF MANAGEMENT

2. The leader role

opportunities and to construct decision-making scenarios can be current/historic, tangible

6. As spokesman (P.R. capacity)

A senior manager is responsible for his/her organisation's strategy-making system -

delegate all design responsibility selecting and even replace subordinates.

8. The disturbance handler

scheduling own time

Authorising major decisions before implementation is a control over resource allocation.

10. The negotiator

1 The autocratic leaders

2 The democratic leader

3 paternalistic managers (father like)

4 The laissez faire (you go!) leader

Factors effecting leadership style

The task that is being undertaken- for example, autocratic/authoritarian discipline is

Personalities- there is people who prefer to be told what to do in certain situations.

Interpersonal role- this arise from the leaders formal authority.

Figurehead role- it involves to represent company at various occasions.

Motivation role- managers motivate their work force by financial or non-financial

Emotional intelligence ((Emotional Quotient EQ)

EQ is a Major Indicator of Achievement. It Explains Why Individuals with Similar

Emotional competence/strong intelligence (Intelligent Quotient IQ)

"A learned capability based on emotional intelligence that results in outstanding

The table below lists Golemans' four dimensions of emotional competencies.

3. Self-Management- The Ability to Apply this New Awareness to More Effectively

4. Relationship Management/social skills- The Ability to Build More Effective and

An individuals emotional quotient or EQ then is a reflection of his or her ability to use

What is motivation and why does it matter?

1 Maslows hierarchy of needs (1908 - 1970)

Self-fulfillment- is concerned with full personal development and individual creativity

Reversion is possible it is possible for satisfaction of one level to be withdrawn,

Limitations of Mass lows approach

2 F. W. Taylor (1856 - 1917) and scientific management

How to improve productivity Taylors scientific approach

Many problems were also observed with Taylors approach like

3 Elton Mayo (1880 - 1949) and human relation approach

The Hawthorne Effect the conclusions of Mayos work

Problems with Mayos approach

4 Herzberg (1923 - 2000) two-factor theory

Problems with Herzbergs theory

5 Douglas Mc Gregors theory X and theory Y

6 David McClelland - Human Motivation Theory

1. The need for achievement ( N-Ach),

2. The need for power ( N-Pow) and

3. The need for affiliation ( N-Affil).

The need for affiliation (N-Affil);

The need for power (N-Pow);

This is the need to lead others and make an impact.

The need for achievement (N-Ach);

7 Vrooms Expectancy Theory

the level of confidence in the skills required for the task,

Instrumentality is affected by:

1. Clear understanding of the relationship between performance and outcomes e.g.

The Expectancy Theory is also called Valence-Instrumentality-Expectancy Theory or VIE

Motivation = Valence x Expectancy (Instrumentality).

FINANCIAL MOTIVATION/REWARD SYSTEM

1 Time base payment

Time rate or wages

Annualized hours contract

Measured day work