INDUSTRIAL MANAGEMENT
TABLE OF CONTANTS
UNIT 1 INTRODUCTION TO MANAGEMENT
Objectives
1.1
Definition of management
1.2
Definition of Industrial Management
1.3
Industrial Management versus Production Management
1.4
Objective of Industrial Management
1.5
Application of Industrial Management
1.6
Summary
UNIT 2 – FUNCTIONS OF MANAGEMENT
Objectives
2.1
Functions of management
2.2
Types of Management
2.3
Summary
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UNIT 3 - PERSONAL MANAGEMENT
Objectives
3.1
Staff Management
3.2
Personnel Development
3.3
Motivation and Job Satisfaction
3.4
Stress Management
3.5
Effective Communication
3.6
Conflict Management
3.7
Summary
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UNIT 1
INTRODUCTION TO INDUSTRIAL MANAGE MENT
INTRODUCTION
Overview
The first unit, which is to introduce students to Management and industrial
management, shall closely look into definition of Management, Industrial
Management and Production Management to ensure understanding by student. The
module will also show the differences between the Industrial and Production
Management as well as different types of management which will assist students
with an understanding of the difference types
Objectives
Ate the end of this unit, you should be able to:
• Define management
• Define Industrial Management
• Differentiate between Industrial and Production Management
• Need for industrial Management
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Topics
1.1
Definition of Management
Management is the art of getting things done through people. It is the act of
coordinating the efforts of people in an organization to achieve desired goals
and objectives and this can be done through the use of available resources
efficiently and effectively. It is also the creation and maintenance of an
internal environment in an enterprise where individual, working in groups,
can perform efficiently and effectively towards attainment of group goals.
Management comprises Planning, Organizing, Staffing, Leading or
Directing, and Controlling an organization and this means making and
effort for the purpose of accomplishing a goal. Resourcing encompass the
preparation and manipulation of different types of resources in the likes of
human resources, financial resources, Technological resources and Natural
Resources.
Organization can also be viewed as systems and therefore it becomes easier
to define management as human action that includes designing and
facilitating the production of useful outcome from a system. This means that
one is able to manage oneself, which is a prerequisite to attempting to
manage others.
In management, directors and managers should have the authority and
responsibility to make decisions which will help them to direct the
organization.
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1.2
Definition of Industrial Management
Industrial management composed of two words.
➢ Industry and
➢ Management
Industry:
➢ An industry is a group of manufacturers or businesses that produce
a particular kind of goods or services.
➢ Any general business activity or commercial enterprise that can be
isolated from others.
Management:
➢ Management is the process where one or more persons coordinate the
activities of other persons to achieve certain results.
➢ Management is the process of designing and maintaining an environment in
which individuals, working together in groups, efficiently accomplish
selected aims.
Therefore, Industrial management is now a branch of engineering which facilitates
creation of management system and integrates same with people and their activities
to utilize the resources. Industrial management is structured approach to manage
the operational activities of the organization.
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CONCEPT OF INDUSTRIAL MANAGEMENT
Industrial Management is the organizational process includes strategic
planning, setting objectives, managing resources, deploying the human and
financial assets needed to achieve the objectives, and measuring the results. Being
a management functions it also includes recording and storing facts and
information for later use or for others within the organization.
Need for Industrial Management
➢ To ensure maximum output with minimum cost of production.
➢ To ensure that activities of different individuals are coordinated to attain the
common purpose in the factory.
➢ Goods are produced and delivered on the promised dates.
➢ Goods are manufactured in strict specification of customer’s orders.
➢ Proper accounting, reporting and controlling the operations in the factory.
➢ To prevent wastage and losses.
➢ Quality products.
➢ Utilization of full capacity of the factory.
➢ Innovation
1.3
Industrial Management versus Production Management
➢ Industrial management deals with the analysis, design and control of
productive systems. A productive system is any system that produces either
a product or a service. On the other hand, production management attempts
to familiarize a person with concepts and techniques specific to the analysis
and management of a production activity.
➢ Production management is mostly associated with managing a production
environment. The design and analysis of productive system are outside its
purview on the other hand, industrial management is concerned with
designing system and providing expert information without actually
operating the systems. Production or operations management is a subspecialty of industrial management.
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1.4
Importance of Industrial Management
Industrial management is the key function that plays a vital role in the
success of organization. The results of industrial management are reflected
in the serving of many interested parties of an organization such as:
1. The Consumers: The consumers benefit from higher productivity, better
and reliable quality, reasonable price, satisfactory service and timely
delivery of goods.
2. The Investors: The investors get higher return on investment and their
investments obtain capital appreciation also. Market value of securities is
governed by the earning power and asset value of the business.
3. The Community: When all business which are operating in the community
are prosperous, due to industrial management, we have economic and social
stability and the citizens of that community have pride and satisfaction.
4. The Suppliers: Small or large companies depend upon other companies as
sources of raw materials, Components and services. We have effective cooperation, best inter communication and mutual confidence between the
business buyers and their suppliers. The company and its suppliers can have
enduring partnership for the satisfaction of both.
5. The Employees: The employees including the management get higher
remuneration, stable employment, security of jobs, better working conditions
and above all enhanced personal satisfaction through joy of achievement.
High employee morale due to job satisfaction gives higher output
6. The Nation: When all industries in the national economic system
demonstrate industrial management, the entire national economy will
accomplish all round security and prosperity.
1.5
Objectives of Industrial Management
The ultimate objective of industrial management is to produce the right
quantity of right quality goods at the right time. These are attained through:
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1. Manufacturing Costs:
The unit cost of the product should be estimated carefully and every effort
should be made to stick to the cost standards. For this purpose, the efforts should
be made to segregate the costs into two-direct costs and variable costs. Efforts
should be made for the following:
i.
ii.
iii.
iv.
Reduction in the variable costs.
Reduction in the fixed costs.
Increase in the volume of production, so that the fixed cost
maybe spread over more production resulting in the reduction
in the per unit absorption.
Proper allocation of fixed and overheads should be made on
scientific basis.
2. Machinery and Equipment:
The objectives in the area of machinery and equipment are divided into:
i.
ii.
Selection and acquisition of machinery and equipment
according to production process.
Utilization of machinery and equipment.
The adequacy of the existing machinery should be considered and proper
additions and replacements should be made according to the requirements. Efforts
should also be made to increase the utilization rate of machinery through repair
maintenance and maximum occupancy of the machines.
3. Materials:
The materials objectives must be prescribed in terms of units, Maluti/Rands
value and space requirements. The per unit materials costs should be specified and
efforts should be made to increase the inventory turnover of all types of
inventories-raw materials, work-in-progress and finished goods.
4. Manpower:
Manpower is an important as well as typical input in manufacturing
activities. So, the objectives of the production activities are as regards manpower
must be closely allied with the objectives of selection, placement, training,
rewarding and utilization of manpower. Usually, these objectives are considered in
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terms of employee turnover rates, safety measurements, industrial relations,
absenteeism, etc.
5. Manufacturing Services:
The provision of proper and adequate services directly affects the utilization
of other inputs such as men, machines and materials. Proper objectives should be
set for the installation of important facilities such as power, water supply, material
handling, etc. In a condensed form, it can be stated that the objectives of the
manufacturing activities are-to manufacture a quality product on schedule, at the
lowest possible costs, with maximum asset turnover, to achieve consumer
satisfaction. This statement is closely related to the ultimate and intermediate
objectives of the production function.
6. Product Quality:
Generally, the product quality standards are often established by the product
specifications or by the consumers. The manufacturing organization should try to
translate such quality prescriptions into some measurable objectives. It should be
noted that the product quality comes in conflict with the manufacturing cost
objective and the manufacturing time-schedule. The maintenance of the quality
should not result in increase in manufacturing costs or delay in the production. A
proper balance must be maintained between quality and cost as well as quality and
time-schedule
7. Manufacturing Schedule:
There are many forces which compel side-tracking in the manufacturing
activity. The time schedule should not be set for the shipment alone; it should be
broken up into all the sub-systems like operating cycle time, inventory turnover
rate, machine utilization rate, direct and indirect man-hours per unit, capacity
utilization, machine and Labours idle time, set-up, repair and maintenance time,
etc. Time schedule objective directly affects the cost, quality and the goodwill of
the business in terms of regularity of shipment.
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1.6
Application of Industrial Management
Today also, Industrial Management find major applications in manufacturing
plants and industries. In the present era of cut-throat competition at various stages
of operations, an enterprise should produce goods and services keeping into
consideration the requirements and satisfaction of the potential customer. The
objective should be to produce goods at least costs and to the maximum
satisfaction of the buyer. To meet this objective, application of Industrial
Management is in following areas:
1.6.1 Design and Development – product design and development depend
heavily on input from the marketing and several branch of engineering ie
Plant engineering, manufacturing engineering, including production
engineering. If the design of the production is not good from the production
stand point, it may require costly adjustments to the production process in
terms of equipment, material and man power. If the design is good,
production costs may be low enough to substantially enhance a firm's profitmaking position. The key role of good and effective product design is
rapidly becoming evident and firms prominent in competitive market tends
to exploit details of design that reduce production costs or develop product
features that allow it to appeal to a wider market.
1.6.2 Plant Layout and Material Handling - The physical arrangement of
manufacturing components and the equipment for handling the material
during production process has considerable effect on cost of production. The
material handling system and the plant layout should be most efficient for
the given situation.
1.6.3 Production Forecasting - Forecasting is necessary if the business firm is its
products and services. Sufficient time must be allowed to get inputs and
transform them into output at right time and right place. Forecasts can be
used as an analysis of past data, consideration of current events and future
developments. These forecasts become the basis for the plants and schedules
for buying, manufacturing, selling and other activities of the firm.
1.6.4 Production Planning and Scheduling - In order to co-ordinate different
activities and operations of an organization, a master plan of activities and a
schedule of their performance is needed. Careful planning anticipates the
need for people, materials and equipment so that sufficient time between
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order and delivery of goods and services is available to make necessary
changes, if required. The planning and scheduling of a firm perform a
coordinated effort with resources and available time in attempting to utilize
the full capacity to the firm to produce.
1.6.5 Quality Control - While planning, scheduling and inventory control are
responsible for providing quantity and timing of production, quality control
is responsible for providing quality. Quality must be designed and
manufactured into the product. Although customers may desire higher
quality, they may not be willing to pay the resulting price. In such a way
quality standard should be set up that will be acceptable to the customers and
yet economically feasible to the product. It is a matter of finding a balance
between too much and too little quality.
1.6.6 Production Control – it is very necessary in today’s highly competitive
world that organization should invest its resource intelligently and carefully.
A major part of these resources are utilized in production activities. Through
it is the prime responsibility of production manager to control the quantity of
the produced goods, proper Industrial Management avoids the situation of
over-production and under-production. In case of over-production the
resources which are scare in nature will be wasted and in the situation of
under production organisation will be unable to meet the demand in the
market. So, both the situations will adversely affect the profitability of the
company.
1.6.7 Method analysis - There can be a number of ways in which some operation
can be executed. Through Industrial Management we select the most
efficient and economical method to perform the operation. Method analysis
improves the productivity of the concern and minimizes the cost of
production
1.6.8 Motivate Workers - We have to motivate workers to generate their interest
work and increase their efforts. This can be done by providing them wage
incentives. This will result in an increase of labour productivity.
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1.7
Industry Organisation
When we talk about management of an industry, we should be clear about
what is to be managed. There are various departments in a big organisation
engaged in various activities which play their own role in helping the
production department meet its objectives. Even in service organisations like
banks, software companies, hospitals, etc. there are various departments
which have to managed through industrial management. Here we will be
discussing the general organisation of a big manufacturing factory which can
be modified for any service-industry also according to its needs.
1. Head of Production Department: Production head is the supreme
officer of production organisation. He is called Plant manager or
general manager. He is the person who is responsible for all the
function of production department and all the other sub-divisions of
production organisation is controlled and directed by him.
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2. Manufacturing Department: Manufacturing department is that
portion of production organization where the actual activities or
operations are performed for the transformation of raw material into
finished goods. The head of this department is called production
manager. The prime responsibility of production manager is to ensure
the production according to the predetermined plan and directions
received. If the organisation is diversified, meaning producing
different types of product then in such a case the manufacturing
department can be further divided in various sub-manufacturing
department like manufacturing unit, repairing unit, assembling unit,
etc.
3. Technical Department: The primary task of technical department is
to enhance the quality of finished goods by performing research and
development on modern techniques of production. Technical director
is the head of this department. Generally following sub-sections are
included in this department:
i. Development section
ii. Design section
iii. Research section
iv. Testing section
4. Production, Planning and Control Department: The main function
of this department is preparation of production plan and execution of
that plan in order to achieve predetermined goals in a given period of
time. This department also controls all the other department related to
production. The head of this department is known as Production
Controller
5. Quality Control Department: Generally, the function of quality
control is performed by production planning and control department
but some firms establish a separate quality control department to
ensure the quality of their finished product. Quality Manager is the
head of this department. He has a group of inspectors under him. This
department controls the quality at various level of production.
6. Engineering Department: This department is headed by chief
engineer. Maintenance of machinery of firm as well as continuous
improvement in machines and tools used in production are included in
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the function of this department. Department also prepares various dies
used in production.
7. Purchase Department: Generally, the purchase department works
under the chief works manager. The main function of this department
includes the purchase of raw material, machine tools and other
necessary items used in production. This department evaluates the
price and quality of purchased material at the point of purchase.
Various departments send their requirement to purchase department
which purchases the items at favourable price.
8. Store Department: Each firm establishes a store department headed
by chief store keeper to balance the demand and supply of raw
material and finished goods. Availability of required type of material
of required quality in adequate quantity, adequate and safe handling,
disposal of scrape, measurement of material and record of entries
related to store in related books are the various functions performed
by the store department. Inventory management is also performed by
them.
9. Maintenance Department: Maintenance department is a main and
necessary department of a manufacturing firm. Maintenance
department looks after the various assets of the firm like machinery,
building, vehicles, etc. Department is headed by Maintenance Manger.
10. Security Department: This department is responsible for security in
the industry. Department is headed by Security Director. Department
formulates the security related rules and execute the rules at all the
level in the concern. In case of any accident, investigation and
analysis is done by this department and department also prepares
necessary documents.
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1.8
Summary
We have discussed Management, Industrial Management and the difference
between the Industrial and Production Management. I believe from what has
been stated above, you have gained a lot of information which will assist
you in the future.
Questions:
1.
2.
3.
4.
5.
6.
7.
8.
Define Industrial Management and explain its concept.
How is Industrial Management different from Production Management?
How is an industry organised?
What are the principles of industrial management in an organisation?
What are the various objectives of industrial management?
Why is industrial management necessary?
What are the application areas of industrial management?
Describe clearly the various functions of industrial management in a
modern organisation.
9. What are the responsibilities of a person associated with industrial
management?
10. What is the importance of industrial management?
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UNIT II - MANAGEMENT FUNCTIONS
Objectives
General Learning Objectives: to understand the roles of all levels of management
for efficient and effective operations of the organization
Specific Objective
• Meaning of management – its principles and functions
• Different management skills – Technical, Interpersonal (Human),
Conceptual, Diagnostic and Political Skill
• State functions of management – Planning, Organizing, Coordinating,
Activating and Controlling.
• Showing which functions are important and relevant under the required
Managerial Skills
• Understand and Describe all planning functions of a Manager/Supervisor
• Explain the need for effective work plan
• Understand the planning process
• State the benefits of planning
• Types of plans
• Problems associated with plans
• Understand and describe all the controlling functions of a
Manager/Supervisor
• Explain and discuss the controlling process
• Explain the interrelationship of control with other managerial functions.
• Discuss what is being controlled
• Discuss the Types of control
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3.0
MANAGEMENT FUNCTIONS
3.1
INTRODUCTION
Let us first understand “what is management”. The management
may be called an art as well as a science. It is an art in the sense that
management means coordinating and getting work done through others. On
the other hand, it is a science in the sense that management techniques are
susceptible to measurement and factual determination.
Management is an executive function and does not frame policies. It
only implements/executes the policies laid down by the administration.
Therefore, the main functions of management are executive and largely
governing. The various functions of management include planning,
organising, motivation, directing, coordination and control all functions.
The management provides new ideas and vision to the organizations. It
provides stability to the enterprise by changing and modifying the resource
in accordance with the changing environment of the society. So,
management meet the challenge of change.
Let us now consider administration. Administration is supreme
master of the industry and is needed for controlling any enterprise.
Administration makes policies and decides the goals/targets to be achieved.
It coordinates finance, production and distribution. An administrator
organises his own work and that of his subordinates. He delegates
responsibility and authority and measures, evaluates and control position
activities.
Finally let us define an organisation. Organisation is a framework of
management. This is a group of persons or a system. The organisation is
concerned with the building, developing and maintaining of a structure of
working relationship in order to accomplish the objectives of the enterprise.
So, we can say that, “Management carries out the policies of administration
through the framework of the organisation.” The aim of this chapter is to
discuss the functions and principles of management and also discuss various
management tools.
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3.2
IMPORTANCE OF MANAGEMENT
No enterprise can be run without management. The importance of
management can be understood as under:
1. Management guides and controls the activities of man-power
for the optimum utilization of company resources, such as men,
materials, money, machines, methods etc.
2. Management creates a vital, dynamic and life-giving force to
the enterprise.
3. Management coordinates activities of different departments in
an enterprise and establishes team-spirit among the different
persons.
4. Management provides new ideas and vision to the organisation
to do better.
5. Management tackles business problems and provides a tool for
the best way of doing things.
6. It is by management only that we can meet the challenges of
change
7. Management provides stability to the enterprise by changing
and modifying the resources in accordance with the changing
environment of the society
8. Management helps personality development. Thereby it raises
efficiency and productivity
3.3
CHARACTERISTICS OF MANAGEMENT
1. Management is goal oriented. It achieves the organizational
goals through coordination of the efforts of the personnel.
2. Management. works as a catalyst to produce goods using labour
materials and capital.
3. Management is a distinct process comprising of functions such
as planning, organising, staffing, directing and controlling.
4. Management represents a system of authority-a hierarchy of
command and control. Managers at different levels possess
varying degrees of authority.
5. Management harmonises the individual's goals with the
organizational goals to minimizes conflicts in the organisation.
6. Management is an art because it requires actual work to be done
through other people
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3.4
OBJECTIVE OF MANAGEMENT
Managerial objectives are the intended goals which prescribe definite scope
and suggest direction to the efforts of a manager. They should be clearly defined,
properly communicated and reasonably attainable. Further, these objectives should
not be conflicting with the overall organizational goals.
Managerial objectives may be classified as;
• General Objectives
• Specific Objectives
3.4.1 General objectives
▪
▪
▪
▪
▪
▪
Nature of business
Continuous supply of capital
Growth of firm
Increasing production and productivity
Economic objective (e.g., profit).
Social objectives (e.g., to offer goods of superior quality
and services to the society at reasonable rates, to provide
workers with fair wages and incentives and to pay taxes
honestly, etc.).
▪ Human. objectives (e.g., to understand the needs of
subordinates, to motivate them and to boost their
morale).
3.4.2 Specific Objectives
▪ Nature of goods to be produced or services to be
rendered.
▪ Type of Customers (e.g. rich, poor, individuals, business
houses, Government, etc.
▪ Market standing (e.g., local, national or international).
▪ Product diversification, if required.
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3.5
MANAGEMENT SKILLS
All managers must have five critical skills: technical skill, interpersonal
skill, conceptual skill, diagnostic skill and political skill.
3.5.1 Technical Skill
Technical skill involves understanding and demonstrating proficiency in a
particular workplace activity. It is essential for a manager to know which technical
skill should be employed in a particular work situation. Technical skills are things
such as using a computer word processing program, creating a budget, operating a
piece of machinery, or preparing a presentation. The technical skills used will
differ in each level of management. First-level managers may engage in the actual
operations of the organization. they need to have an understanding of how
production and service occur in the organization in order to direct and evaluate line
employees. Additionally, first line managers, needs skill in scheduling workers and
preparing budgets. Middle managers use more technical skill related to planning
and organizing, and top managers need to have skill to understand the complex
financial working of the organization.
3.5.2 Interpersonal Skill
Interpersonal skill involves human relations, or the manager’s ability to
interact effectively with organizational members. Communication is a critical part
of interpersonal skill. communicating skill is the ability to pass on information to
others. Improper, insufficient and poorly expressed information/instruction can
create confusion and annoyance. A manager with excellent technical skill but poor
interpersonal skill is unlikely to succeed in their job. This skill is critical at all
levels of management. Motivation is also a part of interpersonal skill. Motivating
skill inspires people to do what the manager wants them to do.
Another interpersonal skill is the leadership. It enables a manager to lead
people working under him. It is the ability to inspire confidence and trust in the
subordinates in order to have maximum cooperation from them for getting the
work done.
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3.5.3 Conceptual Skill
Conceptual skill is a manager's ability to see the organization as a whole,
i.e., as a complete entity. It involves understanding how organizational units work
together and how the organization fits into its competitive environment.
Conceptual skill is crucial for top managers, whose ability ii to see “the big
picture” can have major repercussions on the success of the business. However.
conceptual skill is still necessary for middle and supervisory managers, who must
use this skill to envision. For example, how work units and teams are best
organized.
Decision making skill is a part of conceptual skill. It is the ability of a
person to take timely and accurate decisions. This requires mental ability and
presence of mind.
Organization skill help to select and assign different people to different
works. There is always a right person for the right job.
3.5.4 Diagnostic Skill
Diagnostic skill is used to investigate problems, decide on a remedy and
implement a solution. Diagnostic skill involves other skills-technical,
interpersonal, conceptual and political. For instance, to determine the root cause of
a problem, a manager may need to speak with many organizational members or
understand a variety of informational documents. The difference in the use of
diagnostic skill across the three levels of management is primarily due to the types
of problems that must be addressed at each level. For example, first-level managers
may deal primarily with issues of motivation and discipline, such as determining
why a particular employee's performance is flagging and how to improve it.
Middle managers are likely to deal with issues related to larger work units, such as
a plant or sales office. For instance, a middle-level manager may have to diagnose
why sales in a retail location have dipped. Top managers diagnose organizationwide problems, and may address issues such as strategic position, the possibility of
outsourcing tasks, or opportunities for overseas expansion of a business.
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3.5.5 Political Skill
Political Skill involves obtaining power and preventing other employees
from taking away one's power. Managers must use power to achieve organizational
objectives. This skill can often reach goals with less effort than others who lack
political skill. Much like the other skills described, political skill cannot stand
alone as a manager's skill. In particular, using political skill without appropriate
levels of other skills can lead to promoting a manager's own interest rather than
reaching organizational goals. Managers at all levels require political skill.
Managers must avoid others taking control that they should have in their work
positions. Top managers may find that they need higher levels of political skill in
order to successfully operate in their environments. Interacting with competitors,
suppliers, customers, shareholders, government and the public may require
political skill at all levels of management.
3.6
LEVELS OF MANAGERS
The term 'Levels of Management' refers to a line of demarcation between
various managerial positions in an organization. The number of levels increases
with the size of the business and work force increases and vice versa. The level of
management determines a chain of command, the -amount of authority and status
enjoyed by any managerial position. The levels of management can be classified in
three broad categories;
1.
Top Level/ Administrative level
2.
Middle level/ Executive level
3.
Lower Level/Supervisory/Operative/First line managers
Managers at all these levels perform different functions. The role of
managers at all the three levels is summarized in fig. (1)
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Fig. 1 Levels of Management
3.6.1 Top Level of Management
It consists of board of directors, chief executive or managing director. The
top management is the ultimate source of authority and it manages goals and
policies for an enterprise. It devotes more time on planning and coordinating
functions.
The role of the top management can be summarized as follows:
1. Top management lays down the objectives and broad
policies of the enterprise.
2. It issues necessary instructions for preparation of
department budgets, procedures, schedules, etc.
3. It prepares strategic plans and policies for the enterprise.
4. It appoints the executive for middle level, i.e.,
departmental managers.
5. It controls and coordinates the activities of all the
departments.
6. It is also responsible for maintaining a contact with the
outside world.
7. It provides guidance and direction.
8. The top management is also responsible towards the
shareholders for the performance of the enterprise.
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3.6.2 Middle Management
The branch managers and departmental managers constitute middle level.
They are responsible to the top management for the functioning of their
department. They devote more time to organizational and directional functions. In
small organization, there is only one layer of middle level of management but in
big enterprises, there may be senior and junior middle level management. Their
role can be emphasized as:
1. They execute the plans of the organization in accordance
with the policies and directives of the top management.
2. They make plans for the sub-units of the organization.
3. They participate in employment and training of lower
level management.
4. They interpret and explain policies from top level
management to lower level.
5. They are responsible for coordinating the activities
within the division or department.
6. They also send important reports and other important
data to top level management.
7. They evaluate performance of junior managers.
8. They are also responsible for inspiring lower level
managers towards better performance.
3.6.3 Lower Management
Lower Level of Management is also known as supervisory/operative level of
management. It consists of supervisors, foreman, section officers, superintendent,
etc. Supervisory management refers to those executives whose work has to be
largely with personal oversight and direction of operative employees. In other
words, they are concerned with direction and controlling function of management.
Their activities include:
1. Assigning of jobs and tasks to various workers.
2. They guide and instruct workers for day to day activities.
3. They are responsible for the quality as well as quantity of
production.
4. They are also entrusted with the responsibility of
maintaining good industrial relations in the organization.
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Lecture Notes By: Khotso Shai
5. They communicate workers problems, suggestions and
recommendatory appeals, etc. to the higher level and
higher-level goals and objectives to the workers.
6. They help to solve the grievances of the workers.
7. They supervise and guide the sub-ordinates.
8. They are responsible for providing training to the
workers.
9. They arrange necessary materials, machines, tools, etc.
for getting the things done.
10.They prepare periodical reports about the performance of
the workers.
11.They ensure discipline in the enterprise.
12.They motivate workers.
13.They are the image builders of the enterprise because
they are in direct contact with the workers.
It therefore obvious that at all levels of management including that of a
supervisor involves manpower (human resources), materials, money, methods,
machinery and morale. The relative importance of each of these management
activities depends on the managers position in the management hierarchy.
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Lecture Notes By: Khotso Shai
3.7
FUNCTIONS OF MANAGEMENT
Organizations/institutions always strive for their survival through
success. Their successes are measured through achievement of their
goals/aims/objectives. Organization differ in size and in services they provide. No
matter how small or large an organization is, it needs leadership and direction for
its smooth running. The role played by management are planning, organising,
activating/coordinating, controlling and more importantly leading people into a
functioning, Productive and unified organization.
• Planning: means choosing appropriate organizational goals and
courses of action to best achieve those goal.
• Organising: Organising is the process by which the structure and
allocation of jobs is determined.
• Activating: means motivating, coordinating and energizing
individuals and groups to work together to achieve organizational
goals.
• Controlling: Controlling is the process that measures current
performance and guides it towards some predetermined goal.
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Following are the basic elements in various functions of management.
1. Forecasting
▪ Forecasting is a necessary preliminary to planning.
▪ Forecasting estimates the future work or what should be done in
future; for example, with regards to sales or production or any other
aspect of business activities.
▪ Forecasting begins with the sales forecast and is followed by
production forecast and forecasts for costs, finance, purchase, profit or
loss, etc.
2. Planning
▪ Planning all aspects of production, selling, etc., are essential in order
to minimize intangibles.
▪ Planning is a process by which a manager anticipates the future and
discovers alternative courses of action open to him.
▪ Planning is a rational, economic, systematic way of making decisions
today which will affect the future, e.g. what will be done in future,
who will do it and where it will be done.
▪ In fact, every managerial act is some type of planning.
▪ Without proper planning, the activities of an enterprise may become
confused, haphazard and ineffective. For example, if a refrigerator
making concern does not plan in advance-how many refrigerators and
of what capacities are to be made before the summer starts and thus it
does not procure necessary materials, tools, supplies and personnel in
time, it cannot reach the production targets and hence may not run
profitably.
▪ Prior planning is very essential for utilizing the available
facilities/resources (men, materials, machines, methods, money etc.)
to the best of advantage.
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Lecture Notes By: Khotso Shai
There are six steps involved when planning;
a) Establishing a realist target.
b) Use of the 5W’s and 1H “triggers” (What? Who? Where? Why?
How?)
c) Sequence the activity in the order in which they should occur
d) Communicate your plan to those who will be involved in it or affected
by it.
e) Implement your plan
f) Check the progress against the plan to make sure that your original
target is being achieved.
2.1
Benefits of Planning
➢
➢
➢
➢
➢
➢
➢
➢
➢
➢
➢
2.2
Provides direction
Encourage managers to think ahead
Formally allocate resources
Requires a formal statement of what to be achieved
Provides, in writing information for successors
Seeks to prevent problems
Allows managers at all levels to see how their departments or
divisions fit into the total organizational plan
Allows employees to provide inputs, thus making them part of the
organisation.
Motivates by providing challenging and realistic goals for employees
Leads to more profitable organizational performance
Leads to better coordination of organizational efforts
Problems Associated with Planning
➢
➢
➢
➢
➢
LP – INM 322
Untrained planner
Lack of follow through
Lack of upper, middle or lower management support
Lack of communications
Lack of time, (too busy putting out fire)
pg. 28
Lecture Notes By: Khotso Shai
2.3
Types of Plans
a) Long term plans: it often referred to as strategic plans because they
should describe the organizational strategy. Long term plane typically
reflects forward thinking of five or more years. Because of the
uncertainty of the future events this plans describes a general direction
rather than activities. Long term plans are often beyond the scope of
the production planner’s activities. In large organizations upper level
managers are usually responsible for long term planning.
b) Medium term plans: it is often called business plans. It reflects
forward thinking of two to five years. They are more specific than
long term plans, because there is less uncertainty.
c) Short term plans: these reflect forward thinking of less than two
years into the future. Over this period of time the amount of
uncertainty is typically reduced to a level of that monthly sales can be
projected, production figures can be planned and appropriate orders
can be placed with suppliers and distributors. Some short-term plans
are called schedules are details plans that rarely projected more than
six months into the future. They are often single use plans in that they
commit labour, time and/or materials for use in the day to day
activities of the organisation.
d) Contingency plans: these are types of plans that does not fit in the
time -horizon category. This is because of the uncertainty involved in
the making decisions for the future, and alternative course of action
should be considered. Contingency plans are an alternative course of
action that may be taken if an activity does not produce the
unexpected results.
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Lecture Notes By: Khotso Shai
3. Organizing
▪ Organising is the process by which the structure and allocation of jobs
is determined
▪ Organising involves determining activities required to achieve the
established company objectives, grouping these activities in a logical
basis for handling by subordinate (persons), managers and finally,
assigning persons to the job designed. In carrying out the above, the
manager will delegate necessary authority to his subordinates
(persons). They, in turn, will take the necessary responsibility.
▪ Organising means, organising people, materials, jobs, time, etc., and
establishing a framework in which responsibilities are defined and
authorities are laid down.
4. Staffing
▪ Staffing is the process by which managers select, train, promote and
retire their subordinates.
▪ Staffing involves the developing and placing of qualified people in the
various jobs in the organisation.
▪ Staffing is a continuous process. The aim is to have appropriate
persons to move into vacated positions or positions newly created in
the enterprise.
5. Directing
▪ Directing is the process by which actual performance of subordinates
is guided towards common goals of the enterprise.
▪ Directing involves motivating, guiding and supervising subordinates
towards company objectives.
▪ Directing thus includes:
▪ Giving instructions to subordinates.
▪ Guiding the sub-ordinates to do the work.
▪ Supervising the subordinates to make certain that the work done by
them as per the plans established.
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Lecture Notes By: Khotso Shai
▪ Directing involves functions such
(a) Leadership,
(b) Communication,
(c) Motivation, and
(d) Supervision
a)
i.
ii.
Leadership is the quality of the behaviour of the persons (Managers)
whereby they inspire confidence and trust in their subordinates, get
maximum cooperation from them and guide their activities in
organized effort.
Leadership is more than personal ability and skill.
b)
i.
ii.
iii.
iv.
Communication
Communicating is the process by which ideas are transmitted,
received and understood by others for the purpose of effecting desired
results.
Communication may be verbal or written orders, reports, instruction
etc.
A manager communicates to his subordinates as what they should do.
An ineffective communication leads to confusion, misunderstanding,
dissatisfaction and sometimes even strikes.
c)
i.
Leadership
Motivation
Motivating means inspiring the subordinates to do a work or to
achieve company objectives effectively and efficiently.
(d)
Supervision
▪ Supervision is necessary in order that,
(i)
the work is going on as per the plan established, and
(ii) the workers are doing as they were directed to do.
6. Coordinating
▪ Coordinating means achieving harmony of individual effort towards
the accomplishment of company objectives.
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Lecture Notes By: Khotso Shai
▪ Ineffective coordination between different functions of a business
enterprise (such as production, sales, administration, etc.) can ruin the
enterprise.
▪ Coordination involves making plans that coordinate the activities of
subordinates, regulate their activities on the job and regulate their
communications.
▪ Besides other factors, informal relationships within an organization
also tend to facilitate co-ordination, because workers who like each
other outside the factory, prefer to work together on the job also.
7. Controlling
▪
▪
(i)
(ii)
▪
▪
▪
▪
(i)
(ii)
(iii)
LP – INM 322
Controlling is an aspect of supervisor’s job that ensures that his plans
are carried out according to plan.
Controlling is the process that measures current performance and
guides it towards some predetermined goal.
Controlling involves:
the monitoring of programme activities to make sure that end
objectives are being met
the initiation of corrective action as required to over-come problems,
if any, hindering the accomplishment of objectives.
Checks and examinations are required on a periodic basis to ensure
that the things are proceeding as per plans established.
Controlling is necessary to ensure that orders are not misunderstood,
rules are not violated and objectives have not been unknowingly
shifted. Control means control of persons and other things.
Controlling is a continuous process which measures the progress of
operations, compares, verifies their conformity with the
predetermined plan and takes corrective action, if required.
Hence, we can say that controlling process
Sets standards,
Measures job performance, and
Takes corrective action, if required.
pg. 32
Lecture Notes By: Khotso Shai
7.1
What is being Controlled
Supervisors have responsibility of exercising control over all the
activities in their departments and these includes;
➢ Time – exercising control over time is a critical element in keeping
work schedule on track. Work starts and finish on time, exercise
proper control on workers arriving late or leaving early before the
shift ends or if they break for lunch early or taking longer than
expected.
➢ Behaviour – this means providing employees with standard against
which their actions can be compared.
➢ Materials and Equipment – using material wisely with minimum
lose and equipment or machinery effectively is vital for the success
and making profit for the company. Supervisors are the people closely
involved in the day to day operations and therefore she/he is the one
who will that materials is not wasted or machinery is operated and
working properly. Their responsibility is to ensure that controls are in
place to prevent waste and improper use of material and machinery.
They have to come up with action plan where usage is not good that
might include training, corrective actions and Standard Operating
Procedure (SOP’s) where necessary.
➢ Process – sometimes the process of converting inputs to outputs is
flawed or perhaps the flow of work is insufficient. Work is not
moving through the organizations in a smooth flow, it is bottlenecked
or slow at one or more stations. When this kind of problems occurs in
the productions line, we expect a supervisor to examine the satiation
and provide a solution for more efficient methods to follow.
➢ Cost – money expended to produce a goods or services must be must
be controlled if an organisation wants to have profit. How to spend
money profitably is vital.
➢ Quality and Quantity – the supervisors greatest concerns are to meet
the quantity and quality standards sets in order to produce or provide
the services. If there are too many defective goods produced or service
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Lecture Notes By: Khotso Shai
rendered that requires repeat calls, then the unit/department and
ultimately the company will not be profitable.
7.2
Types of controls
Some controls can be implemented before productions, some during
production and others after productions. Hence there are three types of
controls;
➢ Pre-controls: these are controls that are in place before the product is
produced or services is provided. They are preventive in nature and
that means their purpose is to prevent problems before they could
occur rather than correcting problems.
Another example of pre-controls is the maintenance activities
performed to keep machines in good working condition.
➢ Concurrent controls - this controls are used to identify and correct
problems during productions
➢ Feedback controls or post-controls - are exercised after product is
manufactured or services is provided. These controls are directed at
the results of the process and are primarily implemented through
reporting and feedback.
When a supervisor is receiving a report from the quality control on the
number of rejects from a given period, the supervisor is exercising
feedback controls.
Information given after the product is manufactured or service is
provided provides a basis of feedback. Did we meet or exceeds the
goals? do we have customer complaint? Are we within budget? These
are questions answered through post-controls.
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Lecture Notes By: Khotso Shai
8. Decision Making
▪ Decision making is the process by which a course of action is chosen
from available alternatives for the purpose of achieving desired
results.
▪ An outstanding quality of a successful manager is his ability to make
sound and logical decisions.
▪ Management decisions range from establishing consumer operational
development needs to the selection of a preferred system design
configuration to many other aspects of business enterprise.
The following are the main types of decisions every organization need to take:
1. Programmed and non-programmed decisions:
Programmed decisions are concerned with the problems of repetitive nature
or routine type matters. A standard procedure is followed for tackling such
problems. These decisions are taken generally by lower level managers. Decisions
of this type may pertain to e.g. purchase of raw material, granting leave to an
employee and supply of goods and implements to the employees, etc.
Non-programmed decisions relate to difficult situations for which there is
no easy solution. These matters are very important for the organisation. For
example, opening of a new branch of the organisation or a large number of
employees absenting from the organisation or introducing new product in the
market, etc., are the decisions which are normally taken at the higher level.
2. Routine and strategic decisions:
Routine decisions are related to the general functioning of the organisation.
They do not require much evaluation and analysis and can be taken quickly. Ample
powers are delegated to lower ranks to take these decisions within the broad policy
structure of the organisation.
Strategic decisions are important which affect objectives, organizational
goals and other important policy matters. These decisions usually involve huge
investments or funds. These are non-repetitive in nature and are taken after careful
analysis and evaluation of many alternatives. These decisions are taken at the
higher level of management.
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Lecture Notes By: Khotso Shai
3. Tactical (Policy) and operational decisions:
Decisions pertaining to various policy matters of the organisation are policy
decisions. These are taken by the top management and have long term impact on
the functioning of the concern. For example, decisions regarding location of plant,
volume of production and channels of distribution (Tactical) policies, etc. are
policy decisions. Operating decisions relate to day-to-day functioning or operations
of business. Middle and lower level managers take these decisions.
An example may be taken to distinguish these decisions. Decisions
concerning payment of bonus to employees are a policy decision. On the other
hand, if bonus is to be given to the employees, calculation of bonus in respect of
each employee is an operating decision.
4. Organizational and personal decisions:
When an individual takes decision as an executive in the official capacity, it
is known as organizational decision. If decision is taken by the executive in the
personal capacity (thereby affecting his personal life), it is known as personal
decision. Sometimes these decisions may affect functioning of the organisation
also. For example, if an executive leaves the organisation, it may affect the
organisation. The authority of taking organizational decisions may be delegated,
whereas personal decisions cannot be delegated.
5. Major and minor decisions:
Another classification of decisions is major and minor. Decision pertaining
to purchase of new factory premises is a major decision. Major decisions are taken
by top management. Purchase of office stationery is a minor decision which can be
taken by office superintendent.
6. Individual and group decisions:
When the decision is taken by a single individual, it is known as individual
decision. Usually routine type decisions are taken by individuals within the broad
policy framework of the organisation.
Group decisions are taken by group of individuals constituted in the form of
a standing committee. Generally, very important and pertinent matters for the
organisation are referred to this committee. The main aim in taking group decisions
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Lecture Notes By: Khotso Shai
is the involvement of maximum number of individuals in the process of decision-making.
8.2Problem Solving and Decision Making
8.2.1 Approach to Decision making and Problem solving
A leader is expected to get the job done. To do so, he or she must learn to
plan, analyze situations, identify and solve problems (or potential problems), make
decisions, and set realistic and attainable goals for the unit. These are the thinking
or creative requirements of leadership and they set direction. These actions provide
vision, purpose, and goal definition.
They are your eyes to the future, and they are crucial to developing a
disciplined, cohesive, and effective organization. Decision-making and problemsolving are basic ingredients of leadership. More than anything else, the ability to
make sound, timely decisions separates a leader from a non-leader. It is the
responsibility of leaders to make high quality decisions that are accepted and
executed in a timely fashion.
Leaders must be able to reason under the most critical conditions and decide
quickly what action to take. If they delay or avoid making a decision, this
indecisiveness may create hesitancy, loss of confidence, and confusion within the
unit, and may cause the task to fail. Since leaders are frequently faced with
unexpected circumstances, it is important to be flexible — leaders must be able to
react promptly to each situation. Then, when circumstances dictate a change in
plans, prompt reaction builds confidence in them.
As a leader, you will make decisions involving not only yourself, but the
morale and welfare of others. Some decisions, such as when to take a break or
where to hold a meeting, are simple decisions which have little effect on others.
Other decisions are often more complex and may have a significant impact on
many people. Therefore, having a decision making, problem-solving process can
be a helpful tool. Such a process can help you to solve these different types of
situations.
LP – INM 322
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Lecture Notes By: Khotso Shai
Within business and the military today, leaders at all levels use some form of
a decision-making, problem-solving process. There are at least several different
approaches (or models) for decision-making and problem solving. We will present
three such approaches: The first, and most common, is the seven-step problemsolving, decision-making process; the second is a more complex problem-solving
8.2.2 Seven steps problem solving, Decision making
process
Having a logical thought process helps ensure that you will not neglect key
factors that could influence the problem, and ultimately your decision. In fact, you
should always apply a clear, logical thought process to all leadership situations that
you encounter. The seven-step process is an excellent tool that can guide you in
solving problems and making those sound and timely decisions. The seven steps
are:
1. Identify (recognize/define) the problem.
2. Gather information (facts/assumptions).
3. Develop courses of action (solutions).
4. Analyze and compare courses of action (alternatives/solutions).
5. Make a decision; select the best course of action (solution).
6. Make a plan.
7. Implement the plan (assess the results).
LP – INM 322
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Lecture Notes By: Khotso Shai
Fig. 8.1 Fishbourne
Identify the Problem
Being able to accurately identify the nature of a problem is a crucial
undertaking. All leadership problems, whether they involve a work-related
situation or a counseling session, are exploratory in nature — that is, leaders do not
always identify the right cause of a problem or develop the best plan. In fact, two
of the most common errors of leaders are identifying the wrong problem and
identifying the wrong causes of a problem. Plus, the tendency for leaders to make
mental errors increases as their levels of stress increase. We all make mistakes. If
leaders are given false information, it may lead them to incorrect problem
identification and to incorrect assumptions about the causes of a problem. Then, if
leaders fail to determine the true source of a problem, they may develop an
inadequate plan.
Learn to identify the real problems. Consider all angles. Learn to seek only
accurate information that leads to the real causes of a problem. To ensure that
information is accurate, question its validity. In other words, leaders must take
what accurate information they have, use their best judgment, and make educated
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Lecture Notes By: Khotso Shai
assumptions about the causes of a problem. Then, they must consider the courses
of action that will be most likely to succeed.
Even though leaders may use the right problem-solving process, incorrect
problem identification can lead to the wrong decision. It is a fallacy to think that
using a correct formula or set of steps will lead you to the real problem and to a
successful course of action. Your values, character, knowledge, and way of
thinking have a direct and vital impact on the problems you identify as important.
These inner qualities affect how you view, gather, and analyze information bearing
on the identified problem.
Gather Information
In this step, leaders must gather all available information that pertains to or
can influence the situation (identified problem) from sources such as higher,
lateral, and subordinate levels of command as well as from applicable outside
agencies. Although some of the information may not bear on the problem at hand,
it must be available for leaders to consider when developing and analyzing courses
of action.
The amount of available time in a leadership situation can be a limiting
factor on how much time a leader spends performing the various steps of the
problem-solving, decision making process. If time is extremely limited, this is the
only step that leaders may omit so they can quickly think through the remaining
steps.
Develop Courses of Action
With the problem identified and available information gathered, you are now
ready to develop possible courses of action. Keep an open mind throughout this
step and be prepared to anticipate change. “Sixty percent (of good problemsolving) is the ability to anticipate; 40 percent . . . is the ability to improvise, to
reject a preconceived idea . . . , and to rule by action instead of acting by rules.”
(S.L.A. Marshall)
Think of as many “what-ifs” as you can and prepare for them — do not be
surprised. The laws of probability are strongly in favor of surprise. Develop
courses of actions to counteract events that might hinder accomplishment of your
mission. Conducting “brainstorming” sessions is a good technique to use when
there is difficulty in developing courses of action. Brainstorming is a creative
technique that encourages several people to suggest as many solutions to a problem
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Lecture Notes By: Khotso Shai
as possible. Generally, you want to have at least two or three possible courses of
action — more if the situation dictates and time permits.
Analyze and Compare Courses of Action
The next step is to determine which course of action will best solve the
problem. Therefore, leaders should develop as many advantages and disadvantages
for each course of action as possible. Then, they must objectively and logically
analyze the advantages and disadvantages of each one against the advantages and
disadvantages of the others.
It is another fallacy to think that the course of action with the most
advantages or the fewest disadvantages is the one that you should recommend or
use. In most cases that may be true, but by weighing the importance of each
advantage and disadvantage, there may be times when the “best” course of action
has fewer advantages (all critical to mission accomplishment) and one or more
disadvantages than another choice (but most are insignificant).
Up to this point in the problem-solving, decision-making process, leaders
should have involved subordinates to research the problem, gather information,
and develop and analyze the various courses of action. Subordinates are more
likely to support a plan or decision if they took part in its development. This
technique will pay off in terms of increased interest, higher morale, and better
efficiency by team members.
Make a Decision
After you have carefully analyzed the possible courses of action using all
available information, consider your intuitions and emotions. The decision-making
process is not a purely objective, mathematical formula. The human mind does not
work that way, especially under stress. Instead, the mind is both rational and
intuitive, and since the decision-making process is a thought process, it is also both
rational and intuitive. Your intuition is that aspect of your mind that tells you what
“feels” right or wrong. Your intuition flows from your instincts and experience.
However, never make the mistake of making decisions guided totally by
emotions or intuitions and immediately doing what “feels” right. This is a
prescription for disaster. Follow the problem-solving process as rationally and
objectively as possible. Gather information; then develop, analyze, and compare
courses of action. Consider your intuition or hunches, emotions, and values. Try to
identify a “best” course of action that is logical and likely to succeed and that also
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Lecture Notes By: Khotso Shai
“feels” right in terms of your intuition, values, and character. Finally, make your
decision, make a plan, and take action.
Make a Plan
Make a plan that includes who would do what, when, where, how, and why.
Be as specific as time permits, but do not leave out vital information that could
prevent mission accomplishment. Plus, ensure that you specify the what, when,
where, how and why for all personnel or elements under your authority. Finally,
include contingencies in your plan that address possible unexpected situations or
actions. Develop these contingencies based on the assumptions made when you
identified the problem and gathered available information.
As you did when developing the courses of action, be prepared to anticipate
change. The ability to make appropriate changes in decisions and plans requires a
certain flexibility of mind — a crucial trait of a good problem-solver, decisionmaker, and planner.
Implement the Plan
Once the decision and plan are made, it is time to act. In this final step, you
must put the plan into action, then evaluate it to ensure that the desired results are
being achieved. Evaluation is often a neglected step in the decision-making
process.
The key to evaluation is to seek feedback constantly on how your plan is
doing. Get feedback from subordinates. Go to the point of the action and determine
first hand if the plan is working or not. If not, determine why not and take
immediate action to correct the plan. Mental flexibility is vital.
8.2.3 Four (4) Methods of Decision Making
According to Patterson, Grenny, McMillan, and Switzler, there’s four
common ways of making decisions:
▪
▪
▪
▪
Command – decisions are made with no involvement.
Consult – invite input from others.
Vote – discuss options and then call for a vote.
Consensus – talk until everyone agrees to one decision.
LP – INM 322
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Lecture Notes By: Khotso Shai
1. Command Style Decision Making
According to Patterson, Grenny, McMillan and Switzler, command is when
there’s no involvement:
“Let’s start with decisions that are made with no involvement whatsoever.
This happens in one of two ways. Either outside forces place demands on us
(demands that leave us no wiggle room), or we turn decisions over to others and
then follow their lead. We don’t care enough to be involved – let someone else do
the work.”
2. Consult Style Decision Making
According to Patterson, Grenny, McMillan and Switzler, consult is when
you ask for input:
“Consulting is a process whereby decision makers invite others to influence
them before they make their choice. You can consult with experts, a representative
population, or even everyone who wants to offer an opinion.
Consulting can be an efficient way of gaining ideas and support without
bogging down the decision-making process. At least not too much. Wise leaders,
parents, and even couples frequently make decisions in this way. They gather
ideas, evaluate options, make a choice, and then inform the broader population.”
3. Vote Style Decision Making
Patterson, Grenny, McMillan and Switzler, suggest only using a vote when
team members agree to support whatever decision is made:
“Voting is best suited to situations where efficiency is the highest value –
and you’re selecting from a number of good options. Members of the team realize
they may not get their first choice, but frankly they don’t want to waste time
talking the issue to death.
They may discuss options for a while and then call for a vote. When facing
several decent options, voting is a great time saver but should never be used when
team members don’t agree to support whatever decision is made. In these cases,
consensus is required.”
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Lecture Notes By: Khotso Shai
4. Consensus Style Decision Making
Patterson, Grenny, McMillan and Switzler, suggest using consensus when
there’s high stakes or you need everyone to fully support the final decision:
This method can be both a great blessing and a frustrating curse. Consensus
means that you talk until everyone honestly agrees to one decision. This method
can produce tremendous unity and high-quality decisions. If misapplied, it can
also be a horrible waste of time. It should only be used with (1) high-stakes and
complex issues or (2) issues where everyone absolutely must support the final
choice.
9.0
PERSONAL QUALITIES
Why are supervisor skills important?
These proficiencies are essential because they set the tone for the workplace.
If someone is a good supervisor, they can perform their job more efficiently and
gain more respect from their peers and subordinates. It can be challenging to learn
all of the skills needed to be an effective leader, but a few key items should be
noted.
A “supervisor” is anyone who directs and is responsible for the work of others.
This person is familiar with the daily work their staff and receives direction from
those who make bigger decisions for the company. Overall, they need to be able to:
▪
▪
▪
▪
Communicate well with diverse groups in and out of the organization
Utilize problem-solving skills, creativity, and critical thinking
Demonstrate qualities like empathy, support, and concern
Be able to develop their employees based on their individual strengths
There are 15 essential skills for supervisors that they need to possess in order to
do their job as successfully as possible.
Excellent Communication
Communication skills are one of the most important assets a good supervisor
should have. They need to assign projects clearly and communicate important
information to staff regularly. Transparency is important, and supervisors should
strive to keep an open door for employees to approach them with their needs or
issues.
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Conflict Resolution
Conflict can happen in the workplace. A good manager recognizes this and
creates an effective method of minimizing conflict and dealing with it when it
takes place. Being a good listener and mediator is also important in tricky
situations.
Strong Leadership
The supervisor should serve as an example to their staff. They must assert
leadership and make their employees want to follow them as they take their
organization through normal business changes. A strong leader will encourage
their team and lead the way to success.
Critical Thinking
There are many tasks that a supervisor needs to deal with that require
excellent critical thinking skills. With a high-level position comes more
responsibilities, and more decisions to be made. Critical thinking skills make the
decision process easier.
Time Management
Time management is essential in a business with deadlines and deliverables.
Being able to juggle timelines and meet goals regularly means supervisors must
have both the awareness of when things need to be complete and how much time it
takes to do them – plus getting their team to work on the same timeline as well.
Priority Management
Managers must also be able to structure the workload to ensure all projects
are given the correct amount of priority, and that high priority projects are finished
first. They need to be familiar with all company goals in order to determine which
projects are the most important.
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Diversity Awareness
Diversity is extremely important in organizations today. A great manager
recognizes this and encourages their company to continue working on company
diversity and inclusion (D&I). The supervisor may even decide to to join the team
that works on D&I in order to help with the initiative more.
Problem Solving
When issues in the workplace arise, supervisors should use their skills to handle
them. Great problem-solving skills help a manager assess the situation at hand and
develop an effective plan on how to tackle it.
Guiding Workloads
Supervisors need to guide the overall work of their employees. Their view of
work must be broader than that of their employees. Being an effective supervisor
means understanding the bigger picture, and adjusting work to accommodate that.
They must give direction and carry it out purposefully, plan the workflow and give
active direction to staff members.
Workload Organization
Constantly changing priorities in the office mean that a supervisor needs to
continually organize the work. They need to take into account the demands placed
on the employees when they are organizing the workload. They should also
recognize the employees’ needs and listen to feedback when making work and
organizational decisions.
Staff Development
A large role of a supervisor is developing personnel. Thorough and strategic
employee development is essential for a happy and satisfied staff, so supervisors
should get to know their subordinates’ strengths and ambitions so they can help
them grow as a valuable asset within the company. They should have a plan for the
employee’s development, and set goals for how they can work on their weaknesses
and contribute to projects where they are likely to succeed.
Managing Performance
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The supervisor is responsible for managing employee performance. They
should continually coach direct reports on how to achieve their individual potential
and set appropriate expectations. Managers should look at future projects and
determine how well the employee should perform, and manage them accordingly.
On occasion, there may be performance problems with a member of the team. In
this situation, the supervisor must calmly approach the issue and discuss a plan to
overcome it.
Interpersonal Skills
Developing and maintaining good relationships with other departments is
also vital. The supervisor wants to ensure both their employees and the
organization meet their goals, so they should recognize the importance of working
together cohesively.
Openness to Advice
The supervisor should look to their peers for advice and guidance when they
are faced with a problem that is outside of their expertise. Issues can be assuaged
successfully when they have a mentor in their organization or field who is willing
to offer advice when requested.
Willingness to Learn
A last trait that supervisors should have is the willingness to learn and grow.
While their team is learning, they too should be developing themselves in their
careers and trying to learn as much as they can about both their subject matter and
about supervising their employees in the best way possible.
Conclusion
With these essential skills, managers can effectively solve any supervisory
issues they may encounter, and prepare for future situations that require the
oversight of a knowledgeable and dedicated supervisor.
The Importance of Communication within Organizations:
Communication can be defined as the exchange of an information, thought
and emotion between individuals or groups; in other words, communication plays a
fundamental role in balancing individual and organizational objectives.
Communication is the activity of conveying information. The communication
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process is complete once the receiver has understood the message of the sender.
Feedback is critical to effective communication between parties.
Communication within organizations is classified into two groups as formal
and informal. The types of formal communication are “up to down”, “down to up”,
“horizontal” and “cross” communication.
Effective Communication is significant for managers in the organizations so
as to perform the basic functions of management, i.e., Planning, Organizing,
Leading and Controlling.
Communication helps managers to perform their jobs and responsibilities.
Communication serves as a foundation for planning. All the essential information
must be communicated to the managers who in-turn must communicate the plans
so as to implement them. Organizing also requires effective communication with
others about their job task. Similarly, leaders as managers must communicate
effectively with their subordinates so as to achieve the team goals. Controlling is
not possible without written and oral communication.
Managers devote a great part of their time in communication. They generally
devote approximately 6 hours per day in communicating. They spend great time on
face to face or telephonic communication with their superiors, subordinates,
colleagues, customers or suppliers. Managers also use Written Communication in
form of letters, reports or memos wherever oral communication is not feasible.
Thus, we can say that “effective communication is a building block of
successful organizations”. In other words, communication acts as organizational
blood.
The importance of communication in an organization can be summarized as
follows:
➢ Communication promotes motivation by informing and clarifying the
employees about the task to be done, the manner they are performing the
task, and how to improve their performance if it is not up to the mark.
➢ Communication is a source of information to the organizational members for
decision-making process as it helps identifying and assessing alternative
course of actions.
➢ Communication also plays a crucial role in altering individual’s attitudes,
i.e., a well-informed individual will have better attitude than a less-informed
individual. Organizational magazines, journals, meetings and various other
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forms of oral and written communication help in molding employee’s
attitudes.
➢ Communication also helps in socializing. In today’s life the only presence of
another individual foster communication. It is also said that one cannot
survive without communication.
➢ As discussed earlier, communication also assists in controlling process. It
helps controlling organizational member’s behaviour in various ways. There
are various levels of hierarchy and certain principles and guidelines that
employees must follow in an organization. They must comply with
organizational policies, perform their job role efficiently and communicate
any work problem and grievance to their superiors. Thus, communication
helps in controlling function of management.
An effective and efficient communication system requires managerial proficiency
in delivering and receiving messages. A manager must discover various barriers to
communication, analyze the reasons for their occurrence and take preventive steps
to avoid those barriers. Thus, the primary responsibility of a manager is to develop
and maintain an effective communication system in the organization.
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UNIT III – EMPLOYMENT,
DEVELOPMENT.
4.0
MOTIVATION
TRAINING
AND
STAFFING
Definition:
The staffing function can be viewed as consisting of a series of steps that managers
perform to provide the organization with the right people in the right positions.
The staffing process: 8 steps
1. Human resource planning: The purpose of human resource planning is to
ensure that the personnel need of the organization will be met. (Patient/therapist
ratio), (bed per staff)…
2. Recruitment: They may accomplish it through newspaper and professional
journal advertisements, employment agencies.
3. Selection: The selection process involves evaluating the candidates and
choosing the one whose credentials match job requirements.
4. Introduction and orientation: This step integrates the selected employee into
the organization (orientation to all organizational policies such as leave, standard
precautions, organizational chart and communication).
5. Training and development: (attendance to lectures, BCLS certification,
training with specialized staff, post grad. education...)
6. Performance appraisal. (punctuality, number of sick leave days, teamwork,
knowledge to organizational work, response to supervisor corrections, efficiency
and efficacy, respect of organizational rules etc…)
7. Employment decisions
▪ Rewards,
▪ Promotion
▪ Demotion
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8. Separation
4.0.1 Human Resource
Sources of applicants:
▪ There are 2 sources of applicants, internal and external.
➢ Internal sources are the employees of the organizations which have policies
of promoting from within. This has a positive impact on the organizational
members and the internal working environment as there is chance for
improving the position.
➢ A second potential source for candidates is of outside the organization.
Organizations can develop programs using on-visits to colleges, schools or
classified adverts.
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4.0.2 Recruitment and 3. Selection
▪ The different procedural steps involved in the selection process are:
➢ Job description:
A job description is a combination of short statements that
describe both the work to be performed and the essential
requirements of the particular jobs.
(i) Able to…
(ii) Is required to…
(iii)
Should have the knowledge of…
(iv)
Is skilled in…
(v) Has experience of…
The job description includes:
▪
▪
▪
▪
▪
▪
▪
▪
▪
Job title.
Department in which the job exists.
Work to be performed by the new employee.
Job responsibilities.
Machines, tools and processes (equipment and tasks) to be handled.
Relation with other jobs.
Qualification and experience required.
Physical activities.
Working conditions.
Application form:
An application blank or form is the most universal mechanism used to screen
(select) the applicants to be called for interview and other tests for selection
purposes.
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Employment tests:
Very often considerable training and money is expended upon an employee when
it is discovered that he is unsuited to do the job for which he was employed. For
this reason, and in order to avoid the recurrence of such a situation, employment
tests are, sometimes, considered an essential part of the selection program. An
employment test measures selected psychological factors such as ability to reason,
capacity for learning, physical or motor abilities etc.
Characteristics of employment tests are as follows:
A test should be designed on the basis of a sound job analysis program. The test
should be reliable (an applicant if tested even second or third time under the same
condition should achieve the same score = test-retest). The test should be valid
(highly specific to the objective it intends to measure and to the particular business
situation i.e. physical therapy technician, therapist, senior staff).
Types of employment tests:
▪
▪
▪
▪
▪
Achievement tests.
Intelligence tests (maths, problem solving…)
Interest tests (general knowledge…).
Motor tests (fine and gross motor…driving,..).
Personality tests (psychological assessment).
4.0.3 Interviewing
An interview is a conversation directed to a definite purpose between an
applicant and the interviewer and a much of the interaction between these
two is carried on by gestures, postures, facial expressions and other
communicative behavior.
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One can evaluate the general appearance, looks, nervousity or tension or
carelessness, flexibility, …
It is in the interview that both the prospective employee and employer get
the chance to learn and know about each other.
Postures
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Purpose of interview:
▪ To find the most suitable candidate for the job. (the best for that job).
▪ To view and appraise the applicant in totality. (to evaluate completely the
person and not just from the written tests).
▪ To study the applicants motivational and emotional pattern. (mental and
emotional quotient, capability to solve problem, oversensitivity,
……motivation to work = for the money, temporarily or committed).
▪ To explore the applicant innate abilities (hidden skills).
▪ To study the impact of the applicant’s personality upon others.
Types of interviews:
▪ Guided interview: A list of questions is prepared based on an analysis of
the job specifications. This type of interview measures the personality traits
as self – reliance, emotional stability, ability to get along with others,
willingness to shoulder responsibility etc. what to do to treat or evaluate a
CVA, a complex case,… what is the important aspect in work,…)
▪ Unguided interview: It is not directed by the interviewer, instead the
applicant talks about what he chooses. Unguided interview is more often
used in situation other than employment, e.g. counseling, handling
grievances etc. i.e. what to do if a drive or oil pump leaks or computer
screen went blank, what are the strength of the candidate….
Physical examination:
▪ Physical examination or medical check-up has to be carried out for the
freshly recruited people. As it denotes the physical wellbeing of an
employee.
▪ Physical examination has at least three objectives:
➢ To confirm the applicant’s ability to meet the job requirements.
➢ It serves to protect the organization against the unwarranted
claims under Workman’s Compensation Act or against law
suits for damages. It helps to prevent communicable diseases
entering the organization.
The physical examination should be done by a qualified expert appointed by the
organization to certify whether the candidate is physically fit to meet the
requirements of the job.
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4.2 MOTIVATION AND MORALE
The term motivation is derived from the Latin word 'emovere' which means 'to
move'. Motivation is the complex of psychological forces. Motivation is something
that moves a person into action and inspires him to continue in the course of action
already initiate.
There are different definitions of motivation. Stanley Vanace opinion is that
'motivation implies any motion or desire which so conditioned one's will that the
individual is propelled into action'. Dale and Beach felt motivation as 'a
willingness to expend energy to achieve a goal or reward'. Shartte understood
motivation as 'a reported urge or tension to move in a given direction or to achieve
certain goals'.
Objectives of Motivation
The objectives of motivation put forth by psychologists and sociologists are the
means of answering two basic questions concerning human behaviour i.e., why an
individual is impelled to act and what determines the direction of his actions.
According to prominent Psychologists and Sociologists, who attempted to evaluate
the human behaviour in different contexts.
a) According to Skinner motivation objectively exists to make an individual
learn what may regarded as positive behaviour i.e. desirable behaviour.
b) Abraham Maslow observes that the objective of motivation is always to
create a need for an individual. It is just like the process of lower needs being
satisfied and the higher needs gradually emerging (Hierarchy or Needs).
c) Frederick Herzberg felt that the important objective of motivation is to
provide opportunities to become a better expert on one's job, to handle more
demanding assignments, to control one's own work rather than be supervised.
d) Mclelland opined that the objective of motivation is to create a strong desire
in an individual, where he derives a special kind of joy in successfully attaining an
objective in accomplishing a task. in facing up to a challenge rather than monetary
or other rewards.
e) Victor Wroom thinks that motivation should work as a means of
communication for increasing positive values in the employees. Obviously, the
objectives of motivation are to increase efficiency by good performance.
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Motives are abundant and divergent. There is no single strategy that will
motivate the employees forever and everywhere. The motives for individuals to
work are numerous.
Types of Motivation
There are basically two types of motivation:
a) Negative motivation, and
b) Positive motivation.
Negative Motivation
The traditional form of motivation emphasises more on authority. This approach
consists of forcing people to work by threatening to fire them if they do not. It
believes that man is inherently lazy, pleasure seeking, despises work. To prevent
him from doing so, there must be close supervision. This approach further assumes
that employees' performance would be increased by fear, which causes the people
to act in a certain way. Because they are afraid of the consequences like, lay-off,
demotions, and dismissals. This approach paid off fairly well in the early days of
the industrial revolution when workers and their families were so close to
starvation. Imposition of punishment frequently results in frustration among those
punished, leading to the development of maladaptive behaviour. The negative
motivation also creates a hostile state of mind and unfavourable attitude to the job.
The approach of negative motivation had proved to be ineffective as the employees
were responding to them perversely. In recent years, however, people have begun
to expect more from their jobs than sheer punishment.
Positive Motivation
The behavioural approach is much sophisticated than traditional approach which
recognizes the importance of positive aspects of motivation. Positive motivation
involves the possibility of increased motive satisfaction. Positive motivation is a
process of attempting to influence others to do their best, and thereby adopting
good human relations. It seeks to create an environment which will make the
individual talent flourish and encourages informal communications positively.
Positive motivation is generally based on rewards.
The positive motivation may be extrinsic or intrinsic. The extrinsic motivators can
be enjoyed after completion of work. The intrinsic factors are those which occur at
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the time of performance of work. Since positive motivation appears to be more
workable, now let us discuss the role of some positive motivators, which promote
efficiency.
Motivators which promotes Efficiency
The exact nature and extent of motivator would depend upon the internal
and external factors prevailing in a given organisation. Some of the important
motivators which can promote efficiency are:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
Job Enlargement
Job Enrichment
Delegation of authority
Job Security
Status and pride
Participation
Congenial work environment
Flexible hours
Good health insurance and benefits
Job Enlargement and Job Enrichment
If the additional responsibilities to enhance variety are of a horizontal nature,
it is termed job enlargement while if the additional responsibilities are of
vertical nature involving delegation and decentralization the process is termed
job enrichment. Job enrichment can be ensured provided the work is
meaningful, a worker has knowledge of the work and the worker is entrusted
with the responsibility through proper delegation. According to Hippo, job
autonomy can be secured if the following are given:
(1) setting one's own work schedule and work breaks;
(2) varying work place;
(3) changing duties with others;
(4) making crisis decisions in problem situations rather than relying on the
boss; and
(5) making one's own quality checks, etc. It is obvious that the most
important condition for achieving better work performance from employees is
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to give them interesting worthwhile, challenging, and responsible job, to ensure
that the employees are not frustrated by meaningless, disinteresting and
purposeless tasks, fundamental rethinking of both the process and purpose of
management is necessary.
Koontz and O'Donnell have suggested the following to ensure job
enrichment:
(a) giving workers more latitude in deciding about such things as work
methods, sequence, and pace or by letting them make decisions about accepting
or rejecting materials;
(b) encouraging participation of subordinates and interaction between
workers;
(c) giving workers a feeling of personal responsibility for their tasks;
(d) taking steps to make sure that people can see how their tasks contribute
to a finished product and the welfare of the enterprise;
(e) giving people feedback on their job performance preferably before their
supervisors get it; and
(f) involving workers in analysis and change of physical aspects of work
environment such as layout of office or plan, temperature, lighting and
cleanliness.
Delegation of Authority
A very common technique being advocated for motivating employees is
delegation of authority. Delegation of the rights and obligations to execute a
given task very often proves to be a strong motivating force.
Job Security
Job security is one of the good promoters of organizational efficiency and
economy. The employees feel responsible and committed to the work as long as
their job security is ensured. They would be more attached with the
organisation and its day-to-day / activities.
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Status and Pride
Status and pride are linked with the organizational set-up. Age of the
organisation and its reputation in the society will also motivate the employee.
Employees working in the well reputed organizational will be motivated better
than the employees of other institutions. They feel proud of their employment
in the organisation.
Participation
Participation is an individual's mental and emotional involvement in a group
situation that encourages him to contribute to group goals and to share
responsibility for them. Employees' participation yields their personal
commitment and involvement in accomplishing organizational goals. It also
produces flow of communication for informal work force. Self-guidance and
monitoring in the employees may be expected. Produce high degree of mutual
respect and trust among organizational members. A high degree of confidence
is shown in subordinates which facilitates interpersonal process.
Congenial Work Environment
Motivation is some form of exchange between the individual and his work
environment. The congenial work environment gives to the individual sets of
preference or values; which constitute the goals towards which the instinctual
drives are expressed. Further, ' the work environment is the source of norms of
behaviour which draws the lines between good and bad, right and wrong,
legitimate and illegitimate.
Delegating of Authority
As a leader, delegating is important because you can’t—and shouldn’t—do
everything yourself. Delegating empowers your team, builds trust, and assists with
professional development. And for leaders, it helps you learn how to identify who
is best suited to tackle tasks or projects.
Of course, delegating tasks can lighten your workload, and also, delegating does
much more than just get stuff off your plate. For one, the people who work for you
will be able to develop new skills and gain knowledge, which prepares them for
more responsibility in the future.
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“Delegation can also be a clear sign that you respect your subordinates’ abilities
and that you trust their discretion,” Williams writes. “Employees who feel that they
are trusted and respected tend to have a higher level of commitment to their work,
their organization, and, especially, their managers.”
Why Managers Fail to Delegate
While the benefits of delegating are obvious and plentiful, many managers still fail
to delegate effectively. The reality is that there are several myths and
misconceptions about delegating that can make some leaders wary of handing off
work to others.
▪ They think delegating is just passing off work to someone else – Managers
often mistake delegation for passing off work, so they don’t do it, and they
wind up wasting their time as well as the company’s time and resources.
Delegation can be a chance to make workloads more manageable, but more
than that, it can provide really valuable teaching opportunities for your
employees
▪ They think they can do it better – the self-enhancement effect, which is a
manager’s tendency to evaluate a work product more highly the more
involved he/she is in its production. The faith in supervision effect, which is
when people have a tendency to think work performed under the control of a
supervisor is better than work performed without as much supervision
▪
▪ They’re nervous about letting go – Letting go can be challenging, but
accepting that you can’t do everything yourself is important.
▪
▪ They’re worried delegating will take longer than just doing the work –
Another common barrier to delegation is that it can take longer to teach
someone else how to do a task than to just do it yourself. And while that
might be true the first time you delegate the task, over time, the amount of
time you have to dedicate to that task decreases because you won’t have to
be involved with it at all.
▪
▪ Lack of trust – some supervisors do not trust their subordinate’s ability to do
anything beyond routine assignments.
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4.3 TRAINING AND DEVELOPMENT
Training is the formal and systematic modification of behaviour through learning
which occurs as a result of education, instruction, development and planned
experience.” (Armstrong, 2001: 543)
Development is any learning activity, which is directed towards future, needs
rather than present needs, and which is concerned more with career growth than
immediate performance.
Nature of Training and Development:
In simple terms, training and development refer to the imparting of specific
skills, abilities and knowledge to an employee. A formal definition of training and
development is - it is any attempt to improve current or future employee
performance by increasing an employee’s ability to perform through learning,
usually by changing the employee’s attitude or increasing his or her skills and
knowledge.
The need for training and development is determined by the employee’s
performance deficiency, computed as follows:
Learning Dimension Training
➢ Who
Non-Managers
➢ What
Development
Managers
➢ Why
Technical/Mechanical/Electrical Theoretical/Conceptual
and others
Ideas
Specific job-related information General knowledge
➢ When
Short term
Long term
To bring the distinction among training, education and development into
sharp focus, it may be stated that the training is offered to operatives, whereas
developmental programmes are meant for employees, their grades notwithstanding.
➢ Training and Development Methods
It is indeed the responsibility of the senior management of any company to
understand not only the apparent but also the ‘hidden’ needs of their employees.
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Generally speaking, of modern Organization, there are two major types of
trainings:
▪ On-Job training
▪ Off-Job Training
The primary difference between both the types is that, in case of on-job
training, employee learning takes place at his actual place and while doing his
actual job. Whereas the off-job training is conducted at a remote location which is
away from employee’s normal working environment.
On job training becomes more important when objective is to build
economies around high productivity. On job trainings are usually more common in
larger firms due to their large internal structures i.e. in case of large firms,
probability of employee mobility within the internal boundaries of the firm,
increases to some extent, and on-job training plays its vital part by developing the
required level of skills for the employees.
Different Methods of On-the-Job Training
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Off-the-Job Training Methods
Training provided away from the workplace is called off the job training.
The working environment is duplicated and is used for training. Hence this method
is also called as vestibule training. Generally, this type of training is followed for
the new employees who has zero knowledge on the working environment and the
doesn’t have the skills for the current job. Also, when large number of employees
need to be trained, off the job training method is the best option.
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Importance of Training and Development:
Training and development programmes, as was pointed out earlier, help remove
performance deficiencies in employees. This is particularly true when –
a) The deficiency is caused by a lack of ability rather than a lack of motivation
to perform,
b) The individuals involved have the aptitude and motivation need to learn to
do the job better, and
c) Supervisors and peers are supportive of the desired behaviors.
There is greater stability, flexibility and capacity for growth in an organization.
Training contributes to employs contribute to the stay with the organization.
Growth renders stability to the workforce. Further, trained employees tend to stay
with the organization. They seldom leave the company. Training makes the
employees versatile in operations. All-rounder can be transferred to any job.
Flexibility is therefore ensured. Growth indicates prosperity, which is reflected in
increased profits from year to year. Who else but well-trained employees can
contribute to the prosperity of an enterprise?
The purpose of training
The aim of training is to help the organisation achieve its purpose by adding
value to its key resource – the people it employs. The purpose of training is to:
▪
▪
▪
▪
▪
To increase productivity and quality
To promote versatility and adaptability to new methods
To reduce the number of accidents
To reduce labour turnover
To increase job satisfaction displaying itself in lower labour turn-over and
less absenteeism
▪ To increase efficiency
When does the need for training arise?
▪
▪
▪
▪
▪
▪
The installation of new equipment or techniques
A change in working methods or products produced
A realization that performance is inadequate
Labour shortage, necessitating the upgrading of some employees
A desire to reduce the amount of scrap and to improve quality
An increase in the number of accidents
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▪ Promotion or transfer of individual employees.
▪ Ensures availability of necessary skills and there could be a pool of talent
from which to promote from.
Advantages of training
1. Leads to improved profitability and/or more positive attitudes toward profits
orientation.
2. Improves the job knowledge and skills at all levels of the organization.
3. Improves the morale of the workforce.
4. Helps people identify with organizational goals.
5. Helps create a better corporate image.
6. Fasters authentically, openness and trust.
7. Improves the relationship between boss and subordinate.
8. Aids in organizational development.
9. Learns from the trainee.
10.Helps prepare guidelines for work.
11.Aids in understanding and carrying out organizational policies.
12.Provides information for future needs in all areas of the organization.
13.Organization gets more effective decision-making and problem solving.
14.Aids in development for promotion from within.
15.Aids in developing leadership skill, motivation, loyalty, better attitudes, and
other aspects that successful workers and managers usually display.
16.Aids in increasing productivity and/or quality of work.
17.Helps keep costs down in many areas, e.g. production, personnel.
Administration, etc.
18.Develops a sense of responsibility to the organization for being competent
and knowledgeable.
19.Improves labor-management relations.
20.Reduces outside consulting costs by utilizing competent internal consulting.
Disadvantages of training
1. Can be a financial drain on resources; expensive development and testing,
expensive to operate?
2. Often takes people away from their job for varying periods of time;
3. Equips staff to leave for a better job
4. Bad habits passed on
5. Narrow experience
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Lecture Notes By: Khotso Shai
Purposes of Performance Appraisal
Performance appraisal has become a term used for a variety of activities
through which organizations seek to assess employees and develop their
competence, improve performance, and allocate rewards (Fletcher, 2001). Grote
(2002) identified the following purposes of performance appraisal:
➢
➢
➢
➢
➢
➢
➢
➢
Providing feedback to employees about their performance.
Facilitating decisions concerning pay increases, promotions, layoffs.
Encouraging performance improvement.
Setting and measuring goals.
Determining individual and organizational training and development needs.
Confirming that good hiring decisions are being made.
Provide legal support for personnel decisions.
Improving overall organizational performance (pp. 4-5).
Benefits of Performance Appraisal
Widespread attention has been given in recent years to the function of the
formal appraisal process because of the idea that a well designed and implemented
appraisal system can create many benefits for organizations. Mohrman, ResnickWest and Lawler (1989) found that the appraisal process can:
➢ provide a managerial instrument for goal setting and performance planning
with employees,
➢ improve employee motivation and productivity,
➢ encourage interaction concerning employee growth and development,
➢ make available a basis for wage and salary changes, and e) generate
information for a variety of human resource decisions.
Murphy and Cleveland (1995) defined four ways in which performance appraisal
can help organizations. First, performance appraisal can improve organizational
decisions including reward allocation, promotions, layoffs and transfers. Second,
performance appraisal can improve individual career decisions and decisions about
where to focus one’s time and effort. Individual employees must make many
decisions concerning their present and future roles in an organization. They must
decide how, or if, they will develop future strengths and what sort of career goals
they should pursue. Performance appraisal can provide accurate, timely and
detailed feedback to assist in the quality of these decisions.
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A third way that Murphy and Cleveland (1995) suggest that performance
appraisal can assist organizations is by providing a set of tools for evaluating the
effectiveness of current or planned ways of operating. Finally, performance
appraisal can impact employees’ views of and commitment to their organization.
The quality of performance appraisal and feedback has a role in the perceptions of
the fairness, legitimacy, and rationality of a wide range of organizational practices.
Oberg (1972) noted that appraisals can help encourage supervisors to observe their
employees more closely and to do a better job of managing them. None of these
four benefits will automatically accrue to an organization due to the mere presence
of a performance appraisal system (Murphy & Cleveland). However, an
organization that does a good job at performance appraisal may incur some or all
of these benefits.
Challenges of Performance Appraisal
Supervisors and employees generally have ambivalent attitudes, at best, toward
performance appraisal (Cederblom & Pemerl, 2002). Although most would
recognize the perceived benefit, in principle, of documenting, communicating, and
setting goals in areas of performance, many are also frustrated concerning the
actual benefit received from performance appraisal in their organizations. The
benefits and rewards of performance appraisal appear to be often overstated
(Longenecker & Nykodym, 1996). Nickols (2007) suggests that “the typical
performance appraisal system devours staggering amounts of time and energy,
depresses and demotivates people, destroys trust and teamwork and, adding insult
to injury, it delivers little demonstrable value at great cost” (p. 13). The findings of
several studies addressing the challenges of performance appraisal and the
consequences of performance appraisal that is not done well are summarized
below.
Oberg (1972) mentions several pitfalls that are common to performance appraisal
systems:
a)
b)
c)
d)
e)
They demand too much from supervisors,
Standards and ratings vary widely and sometimes unfairly,
Personal values and bias can replace organizational standards,
Employees may not know how they are rated due to lack of communication,
The validity of ratings is reduced by supervisory resistance to give the
ratings - particularly negative ratings,
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Lecture Notes By: Khotso Shai
f) Negative feedback can demotivate employees, and
g) They interfere with the more constructive coaching relationship that should
exist between superiors and their employees.
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Lecture Notes By: Khotso Shai
UNIT IV -FINANCE AND ACCOUNTING
What Are Capital Expenditures – CapEx?
Capital expenditures, commonly known as CapEx, are funds used by a company to
acquire, upgrade, and maintain physical assets such as property, buildings, an
industrial plant, technology, or equipment. CapEx is often used to undertake new
projects or investments by the firm. Making capital expenditures on fixed assets
can include everything from repairing a roof to building, to purchasing a piece of
equipment, to building a brand-new factory. This type of financial outlay is also
made by companies to maintain or increase the scope of their operations.
Put differently, CapEx is any type of expense that a company capitalizes, or shows
on its balance sheet as an investment, rather than on its income statement as an
expenditure.
The Formula for CapEx Is
CapEx = ΔPP&E + Current Depreciation
where: CapEx = Capital expenditures
ΔPP&E = Change in property, plant, and equipment
Capital Expenditures vs. Operating Expenditures (Expenses):
An Overview
In financial accounting capital expenditures (CapEx) and operating expenditures
(expenses) (OPEX) are two categories of business expenses. However, there are
distinct differences between the two, including their respective tax treatments.
Capital expenditures comprise major purchases that will be used in the future.
Operating expenditures (expenses) represent day-to-day costs that are necessary to
keep a business running.
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Lecture Notes By: Khotso Shai
Capital Expenditures
Capital expenditures consist of the funds that companies use to purchase major
physical goods or services that the company will use for more than one year. A
company might incur CapEx to increase or improve its fixed assets, for example.
Fixed assets are treated as noncurrent assets from an accounting standpoint, which
means that they will not be consumed in the first year.
Capital expenditures can include:
▪
▪
▪
▪
Plant and equipment purchase
Building expansion and improvements
Hardware purchases, such as computers
Vehicles to transport goods
The type of industry in which a company operates largely determines the nature of
its capital expenditures. The asset purchased can be a new item or something that
improves the productive life of a previously purchased asset. The capital
expenditure is recorded as an asset on the balance sheet under the property, plant,
and equipment (PP&E) section. However, it's also recorded on the cash flow
statement under investing activities because it's a cash outlay for that accounting
period.
Once the asset is being used, it is depreciated over time to spread the cost of the
asset over its useful life. In other words, each year, a portion of the fixed asset is
being used up. Depreciation represents the degree of wear and tear on a fixed asset;
companies may deduct the amount of depreciation on their annual tax return.
Capital expenditures are often depreciated over 5 to 10 years, but in the case of real
estate, they may be depreciated over more than two decades.
Operating Expenses
Operating expenditures are the ordinary and necessary expenses (O&NE) that a
company spends to operate its business each day.
Operating expenditures can include:
▪ Rent
▪ Utilities
▪ Salaries and pension plan contributions
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Lecture Notes By: Khotso Shai
▪ Any expense that falls under selling, general, and administrative expense
(SG&A) on the income statement
▪ Research and development (R&D)
▪ Property taxes
▪ Business travel
Because operating expenses make up the bulk of a company's ongoing costs,
management typically looks for ways to reduce its OPEX without causing a critical
drop in quality or production output. In contrast to CapEx, operating expenses are
fully tax-deductible in the year they are made. An item that normally would
classify as a capital expenditure may be considered an operating expense if the
company chooses to lease it instead of buying it. This can be an attractive
accounting option if the company has limited cash flow and wants to be able to
deduct the total cost of an item in a tax year.
Key Differences vs. CapEx and OPEX
Funds that fall under capital expenditures are for major purchases that will be used
in the future. The life of these purchases extends beyond the current accounting
period in which they were purchased. Because these costs can be recovered only
over time through depreciation, companies usually prepare a capital expense
budget apart from OPEX.
Operating expenses represent the day-to-day expenses necessary to run a business.
Because these are short-term costs that are used up in the same accounting period
in which they were purchased, it makes sense for them to have a separate budget.
What Is a Cash Flow Statement?
The statement of cash flows, or the cash flow statement, is a financial statement
that summarizes the amount of cash and cash equivalents entering and leaving a
company. The cash flow statement (CFS) measures how well a company manages
its cash position, meaning how well the company generates cash to pay its debt
obligations and fund its operating expenses. The cash flow statement complements
the balance sheet and income statement and is a mandatory part of a company's
financial reports since 1987.
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Lecture Notes By: Khotso Shai
The aim of a cash flow statement should be to assist users:
▪ to assess the company's ability to generate positive cash flows in the
future
▪ to assess its ability to meet its obligations to service loans, pay dividends
etc
▪ to assess the reasons for differences between reported and related cash
flows
▪ to assess the effect on its finances of major transactions in the year.
The statement therefore shows changes in cash and cash equivalents rather than
working capital.
The Difference Between Fixed and Variable Assets
A fixed asset is a long-term tangible piece of property or equipment that a firm
owns and uses in its operations to generate income. Fixed assets are not expected
to be consumed or converted into cash within a year. Fixed assets most commonly
appear on the balance sheet as property, plant, and equipment (PP&E). They are
also referred to as capital assets.
Variable assets, on the other hand, refer to equipment, inventory and accounts
receivable. The accounts receivable refers to those current assets that report the
amount of money that the customers owe the business for the services or goods
that have been provided on credit terms.
Variable and Fixed Cost in Accounting
Fixed costs are predetermined expenses that remain the same throughout a specific
period. These overhead costs do not vary with output or how the business is
performing. To determine your fixed costs, consider the expenses you would incur
if you temporarily closed your business. You would still continue to pay for rent,
insurance and other overhead expenses.
Some examples of fixed costs include:
▪
▪
▪
▪
▪
Rent
Telephone and internet costs
Insurance
Employee Salaries
Loan Payments
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Lecture Notes By: Khotso Shai
Any small business owner will have certain fixed costs regardless of whether or
not there is any business activity. Since they stay the same throughout the financial
year, fixed costs are easier to budget. They are also less controllable than variable
costs because they’re not related to operations or volume.
Variable costs, however, change over a specified period and are associated directly
to the business activity. These are based on the business performance and the
volume of services the business generates.
Some examples of variable costs include:
▪
▪
▪
▪
Direct labor
Commissions
Taxes
Operational expenses
Since they are changing continuously and the amount you spend on them differs
from month-to-month, variable expenses are harder to monitor and control. They
can decrease or increase rapidly, cut your profit margins and result in a steep loss
or a whirlwind profit for the business.
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Lecture Notes By: Khotso Shai
UNIT V: THE WORKING ENVIRONMENT (BUSINESS AND ITS
ENVIRONMENT
NATURE OF BUSINESS (ENTERPRISE)
Business may be understood as the organized efforts of enterprise to supply
consumers with goods and services for a profit. Businesses vary in size, as
measured by the number of employees or by sales volume. But all businesses share
the same purpose: to earn profits.
The purpose of business goes beyond earning profit. There are:
➢
➢
➢
➢
➢
It is an important institution in society.
Be it for the supply of goods and services
Creation of job opportunities
Offer of better quality of life
Contributing to the economic growth of the country.
Hence, it is understood that the role of business is crucial. Society cannot do
without business. It needs no emphasis that business needs society as much.
Business Today
Modern business is dynamic. If there is any single word that can best
describe today’s business, it is change. This change makes the companies spend
substantially on Research and development (R & D) to survive in the market.
Mass production and mass marketing are the norms followed by business
enterprises. The number of companies with an annual turnover of M100 000.00
each was few in the 1960’s – 70’s. The figure has gone up by hundreds these days.
Today’s business is characterized by diversification, which may be:
Concentric Diversification - It refers to the process of adding new, but relates
products or services.
Horizontal Diversification - Adding new, unrelated products or services for
present customers is called horizontal Diversification.
Conglomerate Diversification - It refers to adding new and unrelated products or
services.
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Lecture Notes By: Khotso Shai
Going international is yet another trend followed by modern enterprise
houses. Enterprise houses are exposed to global competition, which argues well for
consumers. Also occupying a major role is science in the global economic
scenario.
Business in the 21st Century
Large organizations, with a large workforce will not exist. They will be
‘Mini’ organizations. Business during the 21st century will be knowledge-based;
tomorrow’s manager needs not spend his time on file pushing and paper-shuffling.
Information technology will take care of most of that work. Organizations will
become flat. Linear relationship between the boss and manger and authority
flowing downwards and obedience upward will disappear. Employees will have no
definite jobs. Most of the jobs will last for two to five years. Remuneration will
depend on one’s contribution to organization.
Business Goals:
Profit – Making profit is the primary goal of any business enterprise.
Growth – Business should grow in all directions over a period of time.
Power – Business houses have vast resources at its command. These resources
confer enormous economic and political power.
Employee satisfaction and development – Business is people. Caring for employee
satisfaction and providing for their development has been one of the objectives of
enlightened business enterprises.
Quality Products and Services – Persistent quality of products earns brand loyalty,
a vital ingredient of success.
Market Leadership – To earn a niche for oneself in the market, innovation is the
key factor.
Challenging – Business offers vast scope and poses formidable challenges.
Joy of creation – It is through business strategies new ideas and innovations are
given a shape and are converted into useful products and services.
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Lecture Notes By: Khotso Shai
Service to society – Business is a part of society and has several obligations
towards it.
Business Environment
Environment refers to all external forces, which have a bearing on the
functioning of business. Environment factors “are largely if not totally, external
and beyond the control of individual industrial enterprises and their managements.
The business environment poses threats to a firm or offers immense opportunities
for potential market exploitation.
Types of Environment
Environment includes such factors as socio-economic, technological, supplier,
competitor and the government. There are two more factors, which exercise
considerable influence on business. They are physical or natural environment and
global environment.
➢ Technological Environment
Technology is understood as the systematic application of scientific or other
organized knowledge to practical tasks. Technology changes fast and to keep pace
with it, businessmen should be ever alert to adopt changed technology in their
businesses.
➢ Economic Environment
There is close relationship between business and its economic environment.
Business obtains all its needed inputs from the economic environment and it
absorbs the output of business units.
➢ Political Environment
It refers to the influence exerted by the three political institutions viz., legislature
executive and the judiciary in shaping, directing, developing and controlling
business activities. A stable and dynamic political environment is indispensable for
business growth.
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Lecture Notes By: Khotso Shai
➢ Natural Environment
Business, an economic pursuit of man, continues to be dictated by nature. To what
extend business depends on nature and what is the relationship between the two
constitutes an interesting study.
➢ Global or international Environment
Thanks to liberalization, Lesotho companies are forces to view business issues
from a global perspective. Business responses and managerial practices must be
fine-tuned to survive in the global environment.
Social and culture Environment
It refers to people’s attitude to work and wealth; role of family, marriage, religion
and education; ethical issues and social responsiveness of business.
Environment – Business Relations
Business is the product of the technological, political-legal, economic, social
– cultural, global and natural factors amidst which it functions. Three features are
common to this web of relationship between business and its environment.
▪ There is symbolic relationship between business and its environment and
among the environmental factors. In other words, business is influenced by
its environment and in turn, to certain degree, it will influence the external
forces. Similarly, political-legal environment influences economic
environment and vice versa. The same relationship between other
environment factors too.
▪ These environmental forces are dynamic. They keep on changing as years
roll by, so does business.
▪ The third feature is that a particular business firm, by itself, may not be in a
position to change its environment. But along with other firms, business will
be in a position to mould the environment in its favor.
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Lecture Notes By: Khotso Shai
Importance of Environmental Study
The benefits of environmental study are as follows;
▪ Development of broad strategies and long-term policies of the firm.
▪ Development of action plans to deal with technological advancements.
▪ To foresee the impact of socio-economic changes at the national and
international levels on the firm’s stability.
▪ Analysis of competitor’s strategies and formulation of effective
countermeasures.
▪ To keep oneself dynamic
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Lecture Notes By: Khotso Shai