1 Prepared by 1. Mr. Somchan Sovandara (S. Leader) 2. Mr. Chhim Phanna 3. Mr. Soun Sear 4. Mr. Sean...

1

Prepared by1. Mr. Somchan Sovandara (S. Leader)2. Mr. Chhim Phanna 3. Mr. Soun Sear 4. Mr. Sean Vuthy

Edited by1. Mr. Srey Bundoeun: Head of Academic Councils2. Mr. Say Rotanak : Dean of Faculties of Business and

Tourism

Copyright © 2014 04/21/23

PRINCIPLES OF MANAGEMENT

ContentsChapter 1. ManagementChapter 2. Planning Decision Making Chapter 3. Organizing Chapter 4. Control System Chapter 5. Motivation and Rewarding

Employees Performance Chapter 6. Managing Employee Attitude and

Well Being Chapter 7. Effective Leadership Chapter 8. Communication

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Chapter 1. MANAGEMENT

Learning Objectives1. Describe the basic functions of management2. Identify where in an organization managers are located3. Discuss the challenges people encounter as they become first-line managers4. Describe the roles managers adopt to perform the basic functions of management5. Outline the competencies managers must have to be effective

Management and Managers

Management: The art of getting things done through people in the organization

Managers: Give organizations a sense of purpose

and direction Create new ways of producing and

distributing goods and services Change how the world works through their

actions

Leaders versus Managers

Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006

Process Management Leadership

VisionEstablishment

* Plans and budgets* Develops process steps

and set timelines

* Set the direction and develops the vision

* Develops strategic plans to achieve the vision

Development and

Networking

* Organizes and staffs* Maintain structure

* Aligns organization* Communicates the vision,

mission, and direction

Vision Execution

* Controls processes* Identifies problems

* Motivates and inspires* Energizes employees to

overcome barriers to change

Vision Outcome

* Manages vision order and predictability

* Provides expected results

* Promotes useful and dramatic changes

Functions of Management

Planning & Strategizing

Controlling Organizing

Leading & Developing

Planning & Strategizing

Planning – a formal process whereby managers choose goals, identify actions, allocate responsibility for implementing actions, measuring the success of actions, and revising plans

Planning is used to develop overall strategies

A strategy is an action that managers take to attain the goals

Planning goes beyond strategy development to include the regulation of a wide variety of organizational activities

Strategizing – the process of thinking through on a continual basis what strategies an organization should pursue to attain its goals

Who Makes the Strategic Decisions?

By Senior Groupincluding CEO

With Formal StrategicPlanning Process

By Business UnitLeaders

By CEO or Equivalent

By Others

Source: Improving Strategic Planning: A McKinsey Survey, The McKinsey Quarterly, September 2006

Organizing

Organizing involves deciding: Who will perform the task? Where will decisions be made? Who reports to whom? How will different parts of the organization

fit together to accomplish the common goal?

Controlling

The process of monitoring performance against goals, intervening when goals are not met, and taking corrective action

First step – Drafting plans

Important aspect is creating incentives that align employees’ and organization’s interests

Benefits & Incentives

1. Performance Bonuses2. Health Benefits3. Performance-based Time Off 4. Education and Learning5. Recognition and Awards6. Retirement Planning and 401(k)7. Promotion8. Child Care and Elder Care Assistance

Leading & Developing

Leading – is the process of motivating, influencing, and directing others in the organization to work productively in pursuit of organization goals.

Developing employees – the task of hiring, training, mentoring, and rewarding employees in an organization, including other managers.

Skilled Leaders:

Drive strategic thinkingHave a plan for organizationProactively structure the organizationExercise control with a deft handUse the right kind of incentivesGet the best out of peopleBuild a high-quality team

Types of Managers

General Managers

Functional Managers

Frontline Managers

Multi-divisional Management Hierarchy

Becoming a ManagerFrom Specialist to Manager

Journey begins when people are successful at a specialist task that they were hired to do

Need to be able to get things done through other people

Mastering the Job Tends to be a large difference between

expectations and realityWorkload is tremendousBiggest challenge within the first year =

“People challenges”

Management Roles

Interpersonal RolesRoles that involve interacting with other people

inside and outside the organizationManagement jobs are people-intensiveInterpersonal roles:

Figureheads: Greet visitors, Represent the company at community events, Serve as spokespeople, and Function as emissaries for the organization

Leader: Influence, motivate, and direct others as well as strategize, plan, organize, control, and develop

Liaison: Connect with people outside their immediate unit

Informational Roles

Collecting, Processing and Disseminating

Roles: Monitor, disseminator, and spokesperson

Decisional RolesWhereas interpersonal roles deal with people and

informational roles deal with knowledge, decisional roles deal with action

Decisional roles: Entrepreneur: Managers must make sure their

organizations innovate, change, develop, and adopt Disturbance handler: Addressing unanticipated

problems as they arise and resolving them expeditiously

Resource allocator: How best to allocate scarce resources

Negotiator: Negotiation is continual for managers

Alan Mulalley, CEOBoeing Commercial Airplanes

Decisional Roles:1. After September 11 attacks, Mulalley had to renegotiate delivery of some 500 airplanes2. Cut jet production by more than half3. Fire 27,000 workers4. During the downturn, he focused on cutting waste and streamlining his airplane production lines 5. He then bet the company’s future on a set of new technologies that are now turning Boeing’s super efficient 787 Dreamliner into the hottest-selling new jetliner in history

Source: Best of 2005, Business Week, December 19, 2005

Management Competencies

Skills

Motivational Preferences

ValuesIncludes

Managerial Skills

Conceptual Skills

Technical Skills

Human Skills

Managerial Values

•Enacted Values

•Espoused Values

•Shared Values

•Ethical Values

Managerial Motivation

Desire to Compete

Desire to Exercise Power

Desire to be Distinct

Desire to Take Action

Review Questions

1. Explain the basic functions of management?2. What are benefits & incentives?3. Describe the leading & developing.4. What are the skilled Leaders?5. How to become a manager?6. Explain in detail of the interpersonal roles, informational roles, and decisional roles.7. What are the managerial values?8. What are the managerial motivation?

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Chapter 2. Planning and Decision Making

Learning Objectives

1) Describe the different levels of planning in an organization.Explain the difference between strategic, tactical, operating, and unit plans.2) Outline the value of simple-use plans, standing plans, and contingency plans.3) Describe the main components of a typical strategic planning system.4) Identify the main pitfalls that managers encounter when engaged in formal planning processes, and describe what can be done to limit those pitfalls.5) Discuss the major reasons for poor decisions, and describe what managers can do to make better decisions.

Steps in Planning

Choose goals

Identify actions

Allocate responsibility

Review Performance

Make adjustments

Unit plans (heads of departments, teams, individuals

Levels of Planning

Operating plans (heads of functions)

Business-level strategic plan(heads of businesses)

Sh

ape

d b

y in

put f

rom

Set

s th

e co

ntex

t fo

rCorporate-level

Strategic plan (CEO)

Types of PlansStrategic plans: A plan that outlines the major goals of an

organization and the organization wide strategies of attaining those goals.

Operating plans: Plans that specify goals, actions, and responsibility for individual functions.

Tactical plans: The action managers adopt over the short to medium term to deal with a specific opportunity or threat that has emerged.

Unit plans: Plans for departments within functions, work teams, or individuals.

Types of PlansSingle-use plans: Plans that address unique events that do not

reoccur.

Standing plans: Plans used to handle events that reoccur frequently.

Contingency plans: Plans formulated to address specific possible future events that might have a significant impact on the organization.

Crisis management planning: Plan formulated specifically to deal with possible future crises.

Scenario planning: Plans that are based on “what if” scenarios about the future.

Scenario Planning

Identify different

Possible futures

(scenarios)

Formulate plans to deal

with those futures

Invest in oneplan but …

Hedge your betsby preparing forother scenarios

and …

Switch strategy iftracking of signposts

shows alternativescenarios becoming

more likely

Scenario Planning Traps

Treating scenarios as forecastsFailing to make scenarios global enough in

scopeFailing to focus scenarios in areas of potential

impactTreating scenarios as informational onlyNot using an experience facilitator

The Strategic Planning Process

FeedbackMission, vision,

values, and goals

SWOT analysisformulate strategies

Draft action plans

ImplementReview progress

against plan

Externalanalysis

(opportunities andthreats)

Internalanalysis

(strengths andweaknesses)

Assign subgoals,roles,

responsibilities,timelines,

and budgets

Setting the Context: Mission, Vision, Values, and Goals

Mission: The purpose of an organization.

Vision: A desired future state.

Values: The philosophical properties to which managers are committed.

Goals: A desired future state that an organization attempts to utilize.

Mission Checklist

Ends, not meansEffortVerbsNouns embodying

activitiesThe Unidentifiable

Brevity

Broad vs. narrow

Value added

Unique

Characteristics of Goals

They are precise and measurable.

They address important issues.

They are challenging but realistic.

They specify a time period in which they should be achieved.

10 Ingredients for Successful Goals

Specific

Simple

Significant

Strategic

Rational

MeasurableTangibleWrittenSharedConsistent with

your values

The Benefits of Planning

Planning gives direction and purpose to an organization; it is a mechanism for deciding the goals of the organization.

Planning is the process by which management allocates scarce resources, including capital and people, to different activities.

Planning drives operating budgets-strategic, operations, and unit plans determine financial budgets for the coming year.

Planning assigns roles and responsibilities to individuals and units within the organization.

Planning enables managers to better control the organization.

Countering the Pitfalls of Planning

Pitfall

Too centralized;top-down

Failure to question

assumption

Failure toimplement

Failure toanticipate

rivals’ actions

Decentralizedplanning

Scenario planning;devil’s advocate

Link to goals;tie to budgets

Role-playing

Solution

The Rational Decision-Making Model

Identify theproblem

Identifydecisioncriteria

Weightcriteria

Generatealternativecourses of

action

Choose onealternative

Implementalternative

Continue with course of action

Evaluate

outcome

Does not meetexpectations

Meetsexpectations

Bounded Rationality and Satisficing

Bounded rationality: Limits in human ability to formulate complex problems, to gather and process the information necessary for solving those problems, and thus to solve those problems in a rational way.

Satisfice: Aiming for a satisfactory level of a particular performance variable rather than its theoretical maximum.

Decision-Making Heuristics and Cognitive Biases

Decision heuristics

80-20 rule

Cognitive bias

Prior hypothesis bias

Framing bias

80-20 Rule

Performing in your 20 percent if you’re: Engaged in activities that advance your overall

purpose in lifeDoing things you have always wanted to do not what

others want you to do Hiring people to do the tasks you are not good at or

don't like doing. Smiling.

Improving Decision MakingDevil’s advocacy: The generation of both a

plan and a critical analysis of the plan by a devil’s advocate.

Dialectic injury: The generation of a plan (a thesis) and a counterplan (an antithesis) that reflect plausible but conflicting courses of action.

Outside view: Identifying a reference class of analogies past strategic initiatives, determining whether those initiatives succeeded or failed, and evaluating a project at hand against those prior initiatives.

Review Questions

04/21/2348

1. Identify all steps of planning?

2. How many levels of planning? What are they? Describe them.

3. Explain all types of plans in detail, please?

4. What are the mission, vision, values, and goals of an organization?

5. How to improving your decision making?

6. What is the mission checklist?

7. What are the 10 ingredients for successful goals?

8. Describe the benefits of planning please.

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Chapter 3. ORGANIZING

Learning objectives

1. Explain what is meant by organization architecture.2. Explain the advantages and disadvantages of centralization and decentralization.3. Discuss the pros and cons of tall versus flat structures.4. Outline the different kinds of structure a firm can operate within and explain how strategy should determine structure.

Learning objectives (cont’d)5. Describe the different integrating mechanisms

managers can use to achieve coordination within a firm, and explain the link between strategy, environment, and integrating mechanisms.

Organization Architecture

Organization architecture: The totality of a firm’s organization, including formal organization structure, control systems, incentive systems, organizational culture, and people.

Organization structure: The location of decision-making responsibilities in the firm, the formal division of the organization into subunits, and the establishment of integrating mechanisms to coordinate the activities of subunits.

Organization Architecture (cont’d)

Controls: Metrics used to measure the performance of subunits and to judge how well managers are running those subunits.

Incentives: Devices used to encourage desired employee behavior.

Organizational culture: Values and assumptions that are shared among the employees of an organization.


People: The employees of an organization, the strategy used to recruit, compensate, motivate, and retain those individuals, and the type of people they are in terms of their skills, values, and orientation.


PeopleControls Incentives

Structure

Culture

Designing Structure

Vertical differentiation: The location of decision-making responsibilities within a structure.

Horizontal differentiation: The formal division of the organization into subunits.

Integrating mechanisms: Mechanisms for coordinating subunits.

Centralization Versus Decentralization

Centralization: The concentration of decision-making authority at a high level in a management hierarchy.

Decentralization: Vesting decision-making authority in lower-level managers or other employees.

Arguments for Centralization

Centralization can facilitate coordination.

Centralization can help ensure that decisions are consistent with organizational objectives.

Centralization can avoid duplication of activities by various subunits within the organization.

Arguments for Centralization (cont’d)By concentrating power and authority in one

individual or a management team, centralization can give top-level managers the means to bring about needed major organizational changes.

Top management can become overburdened when decision-making authority is centralized.

Motivational research favors decentralization.

Arguments for Centralization (cont’d)

Decentralization permits greater flexibility—more rapid response to environmental changes.

Decentralization can result in better decisions.

Decentralization can increase control.

Centralization vs. Decentralization in Purchasing

Centralize for greater cost control and corporate leverage

Decentralize for nimbler procurement responsiveness

Centralize procurement of common productsDecentralize procurement of specialized

productsAlign purchasing structure with corporate

strategy, structure, and size

Decentralization and Control

Decentralization ofdecisions to a

subunit …

Increases responsibility …

Which increases

accountability

Thereby enhancing

control.

The Starfish and the SpiderOri Brafman and Rod Beckstrom show why

businesses need to embrace their own decentralized systems in their book called The Starfish and the Spider.

The book's central metaphor recognizes that if you cut the leg off of a spider, you have at best a (crippled) spider. But if you cut off the leg of a starfish, the starfish will grow a new leg.

The Starfish and the Spider (cont’d)

Traditional centralized organizations are the spiders, and traditional decentralized organizations are the starfish.

Tall Versus Flat Hierarchies

Tall hierarchies: Organizations with many layers of management.

Flat hierarchies: Organizations with few layers of management.

Flat at IDEOIDEO is a product design company comprising

14 studiosEach studio comprises 15 to 35 people with one

head responsible for profit/lossIndividuals are allowed to be best in what their

passion is rather then take up managerial positions

Concept of Hot Teams is encouraged with autonomy

Flat at IDEO (cont’d)Mobility from one studio to another is encouragedBottom line structure: very flat

Problems in Tall Hierarchies

There is a tendency for information to get accidentally distorted as it passes through layers in a hierarchy.

There is also the problem of deliberate distortion by midlevel managers who are trying to curry favor with their superiors or pursue some agenda of their own.

They are expensive.

Types of StructuresFunctional structure: A structure that follows

the obvious division of labor within the firm, with different functions focusing on different tasks.

Multidivisional structure: A structure in which a firm is divided into different divisions, each of which is responsible for a distinct business area.

Types of Structures (cont’d)

Geographic structure: A structure in which a firm is divided into different units on the basis of geography.

Matrix structure: An organization with two overlapping hierarchies.

Hybrid Structure at Ranbaxy

Ranbaxy Laboratories – An India-based generic drug maker

The company redesigned the organization in internationalizing its operations

Developed a hybrid structure: it placed R&D in a global unit and other functions in several geographic units.

Result: Ranbaxy's managers adopted a global mind-set and began spending a substantial amount of time in their most important market—the United States.

Formal Integrating MechanismsDirect contact: This is the simplest

integrating mechanism. Managers of the various subunits just contact each other whenever they have a concern.

Liaison roles: This is a bit more complex than direct contact. As the need for coordination between subunits increase, integration can be improved by assigning a person in each subunit to coordinate with another subunit.

Formal Integrating Mechanisms (cont’d)

Teams: When the need for coordination is greater still, firms use temporary or permanent teams composed of individuals from the subunits that need to achieve coordination.

Matrix structure: When the need for integration is very high, firms may institute a matrix structure, in which all roles are viewed as integrating roles.

Integrating Mechanisms

High

Low

Ne

ed

for

coor

din

atio

n

Simple ComplexIntegrating mechanisms

Centralization

Directcontact

Liaisonroles

Teams

MatrixstructureFavored by firms in

rapidly changing andhigh-technologyenvironments

Favored by firmsin stable and

low-technologyenvironments

Informal Integrating Mechanisms: Knowledge Networks

Knowledge network: A network for transmitting information within an organization based on informal contacts between managers within an enterprise and on distributed information systems.

A

B

C D

F

EG

Strategy, Coordination, and Integrating Mechanisms

All enterprises need coordination between subunits, whether those subunits are functions, businesses, or geographic areas.

There is a high need for coordination in firms that face an uncertain and highly turbulent competitive environment, where rapid adaptation to changing market conditions is required for survival.

Strategy, Coordination, and Integrating Mechanisms (cont’d)

In contrast, if a firm is based in a stable environment characterized by little or no change, and if developing new products is not a central aspect of firm’s business strategy, the need for coordination between functions may be lower.

Review Questions

1. What is an organization architecture?2. What is an organization structure?3. Explain designing structure.4. Explain the arguments for centralization.5. Explain the types of structures.6. What is the Starfish and the Spider? 7. Identify the hybrid structure at Ranbaxy?8. Explain the formal integrating mechanisms.

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Chapter 4. CONTROLL SYSTEM

Learning Objectives

1. Discuss the attributes of a typical organizational control system.

2. Describe the different kinds of controls that are used in organizations.

3. Explain how different controls should be matched to the strategy and structure of an organization.

4. Outline the features of the balance score card approach to control metrics, and explain why it is useful.

5. Discuss informal or backchannel control methods.

Control System

Control: The process through which managers regulate the activities of individuals and units.

Standard: A performance requirement that the organization is meant to attain on an ongoing basis.

Sub-goal: An objective that, if achieved, helps an organization attain or exceed its major goals.

A typical Control System

Establish goalsand standards

Takecorrective action

Measureperformance

Providereinforcement

Variance betweenperformance and

goals and standards

Compareperformance againstgoals and standards

Performance meetsor exceeds

goals and standards

Establishing Goals and Standards

Most organizations operate with a hierarchy of goals.

In the case of a business enterprise, the major goals at the top of the hierarchy are normally expressed in terms of profitability and profit growth.

Establishing Goals and Standards

These goals are normally translated into sub-goals that can be applied to individuals or units within an organization.

As with major goals, sub-goals should be precise and measurable, address important issues, be challenging but realistic, and specify a time period.

Big Hairy Goal

Most individuals probably have a lot of goals, but do they have a Big Hairy goal?

A big hairy goal (BHG) is a goal that is so far from where you are in your career now that you will have to push yourself incredibly hard to achieve it.

Achieving Your Own BHG

1. Ask yourself honestly: Is this a wish, a dream, or a BHG?

2. Tell yourself that quitting is not an option.3. Hang in there and keep fighting.4. Surround yourself with successful people.5. Gonzalez says the path to reaching your BHG

boils down to this: First, you dream it. Then you struggle. Finally, you emerge victorious.

6. Stay focused.

Measuring Performance

Once goals, sub-goals, and standards have been established, performance must be measured against the criteria specified.

This is not as easy as it sounds. Information systems have to be put in place to collect the required data; and the data must be compiled into usable form and transmitted to the appropriate people in the organization.

Measuring Performance (cont’d)

Reports summarizing actual performance might be tabulated daily, weekly, monthly, quarterly, or annually.

With the massive advances in computing power that have occurred over the last three decades, managers have seemingly infinite quantitative information at their disposal.

Comparing Performance Against Goals and Standards

The next step in the control process is to compare actual performance against goals and standards.

If performance is in line with goals or standards, that is good. However, managers need to make sure the reported performance is being achieved in a manner consistent with the values of the organization.

If reported performance falls short of goals and standards, managers need to find the reasons for the variance.

Taking Corrective ActionVariance from goals and standards require that

managers take corrective action.When actual performance easily exceeds a goal,

corrective action might be increasing the goal.When actual performance falls short of a goal,

depending on what further investigation reveals, managers might change strategy, operations, or personnel.

Radical change is not always the appropriate response when an organization fails to reach a major goal.

Providing Reinforcement

If the goals and standards are met or exceeded, managers need to provide timely positive reinforcement to those responsible.

Positive reinforcement could include the following: congratulations for a job well done, awards, pay increases, bonuses or enhanced career prospects.

Providing positive reinforcement is just as important an aspect of a control system as taking corrective action.

Methods of ControlPersonal controlsBureaucratic controlsOutput controlsCultural controlsControl through incentivesMarket controls

Personal ControlPersonal control: Making sure through personal inspection

and direct supervision that individuals and units behave in a way that is consistent with the goals of an organization.

Personal control can be very subjective, with the manager assessing how well subordinates are performing by observing and interpreting their behavior.

Personal control has serious limitations. For example, excess supervision can be demotivating. Employees may resent being closely supervised and perform better with a greater degree of freedom.

Bureaucratic ControlsBureaucratic controls: Control through a formal

system of written rules and procedures.

The great German sociologist Max Weber was the first to describe the nature of bureaucratic controls.

Bureaucratic controls rely on prescribing what individuals or units can and cannot do—this is, on establishing bureaucratic standards.

Almost all large organizations use some bureaucratic controls.

Output Controls

Output controls: Setting goals for units or individuals to achieve and monitoring performance against those goals.

Output controls can be used when managers can identify tasks that are complete in themselves in the sense of having a measurable output or criterion of overall achievement that is visible.

Output Controls (cont’d)

The great virtue of output controls is that they facilitate decentralization and give individual managers within unit much greater autonomy than either personal controls or bureaucratic controls

Cultural Controls

Cultural control: Regulating behavior by socializing employees so that they internalize the values and assumptions of an organization and act in a manner that is consistent with them.

Self-control: Occurs when employees regulate their own behavior so that it is congruent with organizational goals.

Although cultural control can mitigate the need for other controls, thereby reducing monitoring costs, it is not universally beneficial.

Control Through IncentivesIncentives: Devices used to encourage and

reward appropriate employee behavior.Many employees receive incentives in the form of

annual bonus pay.The idea is that giving employees incentives to

work productively cuts the need for other control mechanisms.

Control through incentives is designed to facilitate self-control—employees regulate their own behavior in a manner consistent with organizational goals to maximize their chance of earning incentive-based pay.

Control Through Incentives (cont’d)

When incentives are tied to team performance they have the added benefit of encouraging cooperation between team members and fostering a degree of peer control.

Peer control: Occurs when employees pressure others within their team or work group to perform up to or in excess of the expectations of the organization.

In sum, incentives can reinforce output controls, induce employees to practice self-control, increase peer control, and lower the need for other control mechanisms.

Market ControlsMarket controls: Regulating the behavior of

individuals and units within an enterprise by setting up an internal market for some valuable resource such as capital.

Market controls are usually found within diversified enterprises organized into product divisions, where the head office might act as an internal investment bank, allocating capital funds between the competing claims of different product divisions based on an assessment of their likely future performance.

Market Controls (cont’d)

The main problem with market controls is that fostering internal competition between divisions for capital and the right to develop new products can make it difficult to establish cooperation between divisions for mutual gain.

Review Questions

1. What is the control system consist of?2. Define a big hairy goal? 3. What are the methods of control?4. What is personal controls?5. Explain bureaucratic controls.

Review Questions6. Define output controls?7. Describe the cultural controls.8. What is control through incentives?9. What is market controls?

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Chapter 5. MOTIVATION AND REWARDING EMPLOYEES

PERFORMANCE

Learning Objectives

1. Diagram and summarize the MARS model.2. Describe four-drive theory and explain how these drives influence motivation and behavior.3. Describe the characteristics of effective goal setting and feedback.4. Diagram the expectancy theory model and discuss its practical implications for motivating employees.

Learning Objectives (cont’d)5. Discuss the advantages and disadvantages of the four reward objectives.6. Discuss ways to measure employee performance more accurately.7. Summarize the equity theory model, including how people try to reduce feelings of inequity.8. Diagram the job characteristics model of job design.9. Define empowerment and identify strategies to support empowerment.

Employee Engagement

Employees emotional and rational motivationTheir perceived ability to perform the jobTheir clear understanding of the organization’s

visionTheir belief that they have been given the

resources to get the job done

It encompasses the four main factors that contribute to employee performance

Motivation: True or False?

I can motivate peopleFear is a damn good motivatorI know what motivates me, so I know what

motivates my employeesIncreased job satisfaction means increased job

performance

Source: Managementhelp.org

MARS Model

Ability

Employee behavior and

results

Motivation (effort)

*Direction *Intensity

*Persistence

Role Perceptions

Situational factors

Ability & Role Perceptions

Ability – consists of both the natural aptitudes and learned capabilities required to successfully complete a taskImportant factor of employee development

Role perceptions – they understand the specifics, importance, and preferred behaviors of the tasks. Ways to improve is through job description and ongoing coaching

Managing Employee Motivation

1. Drives and needs

Employee behavior and

results

Motivation (effort)

*Direction *Intensity

*Persistence

2. Goals, expectations, and feedback

3. Extrinsic and intrinsic

rewards

Maslow’s Needs Hierarchy

Self-actualization

Esteem

Belongingness

Safety

Physiological

Challenging tasks, freedom to try new ideas

Job status, recognition, mastering the job

Human interaction, being accepted as a team member

Job security, employee benefits, safe workplace

Work hours, nourishments, air quality, temperature

Called in Sick?

0

510

1520

2530

3540

4550

Need a break Illness in family Errands

Workers who took a sick daywhen not sick

Source: USA Today Snapshots

Management Implications of Maslow’s Theory

1. Employees have different needs at different times

2. Employees have several interdependent needs, not just one dominant need

3. At some point, most employees want to achieve their full potential (self-actualization)

4. Employee needs are influenced by values and norms

Learned Needs Theory

Need for Achievement

(nAch)

Need for Affiliation

(nAff)

Need for Power (nPow)

Four-Drive Theory Motivation

Drive to acquire

Drive to bond

Drive to learn

Drive to defend

Mental skill set resolves competing

drive demands

Goal-directing choice and effort

Social norms

Personal values

Past experience

Goal Setting The process of motivating employees

and clarifying their role perceptions by establishing performance objectives

A goal is a desirable future state that an organization or person attempts to realize

Goal setting improves role perceptions and consequently clarifies the direction of employee effort

Expectancy Theory of Motivation

Effort

Outcome 1 + or -

Outcome 1 + or -

Outcome 1 + or -

Performance

E-to-P expectancy (probability that

effort will result in a specific level of

performance)

P-to-O expectancy (probability that performance will result in specific

outcomes)

Outcome valence (the outcome’s positive or negative value to the

employee)

Rewards

Extrinsic Rewards – anything received from another person that the recipient values and is contingent on his or her behavior or resultsPaychecks, performance bonuses, praise, and other forms of recognition

Rewards (cont’d)Intrinsic Rewards – a positive

emotional experience resulting directly and naturally from the individual’s behavior or resultsLearning a new task, feeling of accomplishment, etc.

Motivation Through Extrinsic Rewards

Membership & seniority-based rewards

Nonfinancial rewards

Job status-based rewards Improving performance appraisals

Competency-based rewards Rewards employees equitably

Performance-based rewards

How to Accurately Evaluate Employee Performance?

1. Use more objective measures of performance2. Use anchored performance appraisal instruments3. Use multiple sources of performance information4. Use performance appraisal training

Best Practices at NucorPay for performance – On average two-thirds of

a Nucor steelworker’s pay is based on a production bonus

Listen to the frontline – According to the Execs, almost all of the best ideas come from the factory floor

Push-down authority – minimizing layers of management

Protect your culture –compatibility of culture with its egalitarian philosophy and team spirit is a big focus of its acquisition research

Source: Business Week, May 1, 2006

Correcting Inequity Feelings

Change Inputs

Change Outcomes

Change Perceptions

Leave the Situation

Job Characteristics Model

Critical psychological states

Meaningfulness

Responsibility

Knowledge of results

Individual differences *Knowledge and skill *Context satisfaction

*Growth need strength

Core job characteristics

Skill variety Task identity

Task significance

Autonomy

Feedback from job

Outcomes

Work motivation

Growth satisfaction

General Satisfaction

Work effectiveness

Core Job Characteristics

Skill variety – the use of different skills and talents to complete a variety of work activities

Task identity – the degree to which a job requires completion of a whole or identifiable piece of work

Task significance – the degree to which the job affects the organization and society

Core Job Characteristics (cont’d)

Autonomy – provide freedom, independence, and discretion in scheduling work and procedures

Job feedback – the degree to which employees can tell how well they are doing

Job enrichment

A job design practice in which employees are given more responsibility for scheduling, coordinating, and planning their own workCombine highly interdependent

tasks into one jobEstablishing client relationshipsGive employees more autonomy

over their work

Loyal vs. Trapped?

28

29

30

31

32

33

34

Loyal High risk Trapped

Workers

Source: CIO, October 1, 2003

Empowerment

A psychological concept represented by four dimensions:

Self-determination – they have freedom, interdependence, and discretion over their work activities

Meaning – they care about their work and believe that what they do is important

Competence – their ability to perform the work well and have a capability to grow with new challenges

Empowerment (cont’d)

Impact – Active participants in the organization; that is, their decisions and actions influence the company’s success

Inspiring Employees

Don’t ask for worker input – use it.Tell your people you care about them.Show employees what they are learningSupport people when they make a mistake.Set clear goals and celebrate accomplishments.

Source: Business Week, May 1, 2006

Review Questions1. What is mean by ability & role perceptions?2. Explain the Maslow’s Needs Hierarchy.3. Identify the management implications of Maslow’s theory?4. Describe in detail of Goal Setting?5. How many kinds of rewards? What are they? Explain, please.6. How to Accurately Evaluate Employee Performance?7. What are the Best Practices at Nucor?

Review Questions (cont’d)

8. Describe in detail of Core Job Characteristics.9. Explain the four dimensions of Empowerment.10. What is the inspiring employees?

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Chapter 6. MANAGING EMPLOYEE ATTITUDE AND WELL-BEING

Learning Objectives

1. Describe the effect of emotions and attitudes on employee behavior.2. Identify four ways in which employees respond to job dissatisfied.3. Explain how job satisfaction relates to customer service and satisfaction.4. Distinguish organizational commitment from continuance commitment, including their effects on employee behavior.5. Discuss ways to strengthen organizational commitment.

Learning Objectives

6. Describe the stress experience and its consequences.7. Summarize three common sources of stress in the workplace.8. List five ways to manage work-related stress.9. Discuss how managers can help employees improve their work-life balance.10. Identify the “Big Five” personality dimensions.11. A. Explain how personality influences emotions, well-being, job performance, and career satisfaction.

Emotions, Attitudes, & Behavior

Emotions – are physiological, behavioral, and psychological episodes experienced toward an object.

Attitudes – clusters of beliefs, assessed feelings, and behavioral intentions toward a person, object, or event.Beliefs – These are established perceptions about

the attitude object-what you believe to be true.Feelings – represent your positive or negative

evaluations of the attitude object.Behavioral intentions – your motivation to engage

and attitudes are connected to each other and to behavior.

Model of Emotions, Attitudes, and Behavior

Perceived Environment

Behavior

Beliefs

Behavioral intentions

Feelings

Att

itud

e

Cognitive process Emotional process

Emotional episodes

Cognitive Dissonance

Cognitive Dissonance An uncomfortable tension experienced when behavior is inconsistent with our attitudes.

Depends on how much the behavior is:

Public Important Voluntary

Job Satisfaction

It is the appraisal of the perceived:

Job characteristicsWork environment Emotional

experiences at work

Job Satisfaction A person’s evaluation of his or her job and work context.

EVLN Model

EXIT – leaving the organization, transferring to another work unit, or at least trying to make these exits

LOYALTY – Employees who respond to dissatisfaction by patiently waiting.

NEGLECT – reducing work effort, paying less attention to quality, and increasing absenteeism and lateness

VOICE – any attempt to change, rather than escape from, a dissatisfying situation.

Employee-Customer-Profit-Chain Model

Organizational Practices

Employee satisfaction with job and company

•Lower turnover•Friendly service•Motivated staff Clients perceive higher-value

service

•Satisfied clients•More returning clients•More client referrals

Higher Revenue and Profits

Organizational Commitment (OC)

Organizational Commitment - An employee’s emotional attachment to, identification with, and involvement in a particular organization.

Continuance commitment – An employee’s calculative attachment to an organization. Motivated to stay only because it is costly to leave.

Organizational Commitment (OC)(cont’d)

Building OCJustice and supportShared valuesTrustOrganizational comprehensionEmployee involvement

StressStress – an adaptive response to a situation that

is perceived as challenging or threatening to a person’s well-being.

The stress response is a complex emotion that produces physiological changes to prepare us for “fight or flight”Heart rate increases, muscles tighten, and

breathing speeds up

Stress (cont’d)

Two types of stressDistress (negative) – physiological,

psychological deviation from healthy functioning.

Eustress (positive) – it activates and motivates people to achieve goals, change their environments, and succeed in life’s challenges

Consequences of Distress

Tension headachesMuscle pain

Cardiovascular disease

Impaired job performance

Lower organizational commitment

Depression

Moodiness

Job dissatisfaction

Aggressive behavior

Workplace accidents

Poor decision making

Consequences

Stressors

Low Task Control

Harassment and Incivility -Psychological harassment -Sexual harassment

Work Overload

Workplace-Related Stress Management Practices

Stress Management Strategy

Examples

Withdraw from the stressor. Work breaks, days off, vacations, and sabbaticals.

Change stress perceptions. Increasing employee confidence, providing humor.

Control stress consequences. Relaxation and meditation techniques, wellness programs.

Receive social support. Supportive leadership, social interaction, support groups.

Remove the stressor. Reassign employees; minimize noise, unsafe conditions, harassment.

Support Work-life Balance

Offer flexible work hours in which employees can arrange to begin and end their workdays earlier or later

Job-sharing – a position is split between two people

Support Work-life Balance (cont’d)

Personal leave – time and flexibility to raise a family, care for elderly, or take advantage of a personal experience

Telecommuting – employees work from home or a remote site, usually with a computer connection to the office.

Big 5 Personality Dimensions

Big Five Dimension People with a high score on this dimension tend to be more:

Conscientiousness Careful, dependable, self-disciplined

Agreeableness Courteous, good-natured, empathetic, caring

Neuroticism Anxious, hostile, depressed

Openness to Experience Sensitive, flexible, creative, curious

Extroversion Outgoing, talkative, sociable, assertive

Effects of Personality

Performance

Personality

Stress & Well-Being

Emotions & Attitudes

Career Satisfaction

Holland’s Six Types of Personalities

Type Personality Traits

Realistic Practical, shy, materialistic, stable.

Investigative Analytic, introverted, reserved, curious, precise, independent.

Artistic Creative, impulsive, idealistic, intuitive, emotional.

Social Sociable, outgoing, conscientious, need for affiliation.

Enterprising Confident, assertive, energetic, need for power.

Conventional Dependable, disciplined, orderly, practical, efficient.

Review Questions

1. What is emotions?2. What is attitudes?3. What is beliefs and feelings?4. Define behavioral intentions?5. Explain EVLN Model.6. What is organizational commitment and continuance commitment? 7. What is stress? And explain the stress response.

Review Questions8. Explain the components of effects of Personality?9. Describe the Holland’s six types of personalities.