Behavioral aspects of control Management Level Paper E

Behavioral aspects of control Management Level – Paper E 2 Project and Relationship Management Lecture - 019 Vidya Rajawasam ACMA CGMA MBA

Behavioral aspects of control In the previous lecture, we have discuss about the § Discipline § Grievance procedure § Dismissal and redundancy

Behavioral aspects of control In this lecture, we will discuss about the § Approaches to HR controls § Employee performance appraisal

Behavioral aspects of control Approaches to HR controls In our previous lectures we have discussed about responsibilities of HR and legal requirements related to Human resource management / human capital development. in addition to above the organizations should consider controls related to the employee behaviour in order to improve the organizational effectiveness.

Behavioral aspects of control Approaches to HR controls Control of an organization's performance ultimately depends on controlling the people who work in that organisation. By ‘control’ we do not necessarily mean ordering people around and watching them closely, but their performance has to be managed so that the necessary organizational performance is attained.

Behavioral aspects of control Approaches to HR controls A completely hands-off approach by management is unlikely to work. Apart from anything else, the organisation would probably be poorly coordinated and potentially chaotic.

Behavioral aspects of control Types of organizational control There has been increasing interest among both theorists and managers in the significance of culture for organizational control and the role of managers in shaping it. Ouchi’s (1981) work, developed by Child (1988), distinguished different types of control strategies in organisations. These are:

Behavioral aspects of control Types of organizational HR controls There has been increasing interest among both theorists and managers in the significance of culture for organizational control and the role of managers in shaping it. Ouchi’s (1981) work, developed by Child (1988), distinguished different types of control strategies in organisations. These are:

Behavioral aspects of control Personal centered controls This approach is likely to be found in small owner-managed organisations where there is centralized decisionmaking by the owner. Reward and punishment will reinforce conformity to personal authority. Control is carried out by the owner through personal supervision.

Behavioral aspects of control Personal centered controls The authority is based on rights of ownership, charisma or technical expertise. However, as the organisation grows in size and complexity, owners may fi nd increasing external demands on their time and will need to employ others to undertake supervision of day-to-day tasks.

Behavioral aspects of control Personal centered controls In this phase of growth, control moves away from personal centralized control to more bureaucratic control or output control.

Behavioral aspects of control Bureaucratic controls Controls will be based on formalized rules, procedures, standardization and hierarchy. This is achieved through specifications of how employees should behave and carry out their work using formal job descriptions and specification of standard methods for performance of tasks.

Behavioral aspects of control Bureaucratic controls Reward and punishment systems can be used to reinforce this control strategy. Managers will typically use budgets and standard cost accounting systems.

Behavioral aspects of control Output controls This approach is a form of control that is based on the measurement of outputs and the results achieved. It is most appropriate where there is a need for quantifiable and simple measures of organizational performance since it requires a specification of output standards and targets to be achieved.

Behavioral aspects of control Output control This approach facilitates delegation without the need for bureaucratic controls, because once output standards have been agreed, employees can work semiautonomously to carry out tasks.

Behavioral aspects of control Clan or Cultural controls This form of control requires the development of employees’ strong identification with management goals, for example through professional identification and acceptance of the values and beliefs of the organisation. If employees have the necessary skills, experience and ability, they can be given freedom in deciding how to undertake their tasks.

Behavioral aspects of control Clan or Cultural control This leads to semi-autonomous working with few formal controls. This approach depends on the common agreement of objectives and shared cultural values. It will require careful selection, socialization and development of employees.

Behavioral aspects of control Effective control systems To be effective, a control system needs to be: § Acceptable to the people using it, that is tailored to the culture of the area being controlled. § Appropriate for the people using it, for example credit control might be an appropriate control for use by accountants but not by salesmen.

Behavioral aspects of control Effective control systems To be effective, a control system needs to be: § Accessible, in that it should be as simple as possible and only as technical as necessary. § Action oriented, in that corrective action should be taken, for example discrepancies investigated. § Adaptable, so that it can be flexed to suit changed circumstances.

Behavioral aspects of control Effective control systems To be effective, a control system needs to be: § Affordable, that is cost-effective – the benefit should outweigh the cost. Costeffective control systems are those based on an assessment of risk.

Behavioral aspects of control Review MCQs The important facts related to control of employees are ? a. Employee controls supports the organizational effectiveness. b. Employee controls do not support the organizational effectiveness. c. Employee controls increase the remuneration costs. d. Non of the above

Behavioral aspects of control Review MCQs The important facts related to control of employees are ? a. Employee controls supports the organizational effectiveness. b. Employee controls do not support the organizational effectiveness. c. Employee controls increase the remuneration costs. d. Non of the above

Behavioral aspects of control Review MCQs The types of organizational controls related to HR are? a. b. c. d. Personal centered controls Bureaucratic controls Competitive controls Non of the above

Behavioral aspects of control Review MCQs The types of organizational controls related to HR are? a. b. c. d. Personal centered controls Bureaucratic controls Competitive controls Non of the above

Behavioral aspects of control Employee Performance Appraisals In today’s organisations, one of the most important systems to control is the human resource system and we shall use this as our example of a control system in practice. The quality of an organization's employees is fundamental to its success. It is essential for the organisation to get its people system right.

Behavioral aspects of control Employee Performance Appraisal Strategic level-Performance Appraisal The board sets out its policy on human resources. It will, of course, be guided by the organization's human resource experts and should include:

Behavioral aspects of control Employee Performance Appraisals Strategic level-Performance Appraisal § The employment status of the people: whether it is willing to use (and what the percentage mix will be) permanent, contract or agency staff; use of self employed; whether flexible working arrangements will be encouraged, for example annualized hours, job sharing, family-friendly policies; whether some activities will be outsourced, for example catering.

Behavioral aspects of control Employee Performance Appraisal Strategic level-Performance Appraisal § A policy on training and developments including, for example: what training it is willing to provide or pay for; what level of experience or qualification it will buy in rather than train; whether it will have an internal management development program; whether Investors in People accreditation is appropriate.

Behavioral aspects of control Employee Performance Appraisals Strategic level-Performance Appraisal § The organizational structure that defines the division of work, reporting lines and spans of control. § The recruitment and selection processes, including the extent to which it will be delegated.

Behavioral aspects of control Employee Performance Appraisals § § Strategic level-Performance Appraisal The use and content of contracts of employment. The reward structure. The performance appraisal system. A code of conduct and the disciplinary process.

Behavioral aspects of control Employee Performance Appraisal Tactical level – Performance appraisal The HR or personnel department is responsible for the implementation of the board policy. It will devise the detailed procedures to control the implementation of, for example, the performance appraisal system.

Behavioral aspects of control Employee Performance Appraisal Tactical level – Performance appraisal The performance staff appraisal system is a typical control system. It is designed to influence the behaviour of employees in order to improve efficiency and to help the achievement of organizational objectives.

Behavioral aspects of control § § § The appraisal system A typical appraisal system will consist of: criteria for assessment; agreement of objectives; preparation of an appraisal report; an appraisal interview; a formal review, usually by the reporting officer’s line manager; an action plan to be implemented.

Behavioral aspects of control The appraisal system An effective performance appraisal process will identify key deliverables; compare performance against requirements (the standard); identify training and development needs; identify areas for improvement; provide feedback on the organization's recruitment and selection procedures.

Behavioral aspects of control The appraisal system It will be relevant to the needs of the organisation and the individual; fair, objective and consistent; taken seriously by the parties involved; a cooperative process; not overly time consuming or costly to administer.

Behavioral aspects of control The appraisal system One aspect of this typical performance appraisal system that can reduce its effectiveness is the appraisal interview. Poor performance appraisal interviews can be confrontational, judgmental, just a chat, a paper exercise, a substitute for the management process that should be undertaken during the year and/or out of date and irrelevant because it is annual, that is things have changed in the year.

Behavioral aspects of control Approaches to performance appraisal Self-assessment, which offers the advantage of increasing the employee’s responsibility as well as saving the manager’s time. However, people are often not the best judge of their own performance and this reduces the effectiveness of the control it offers.

Behavioral aspects of control Approaches to performance appraisal A combination of self-assessment and assessment by the manager, which offers the advantages of self-assessment but takes more time and means there is a negotiation to reconcile the two opinions.

Behavioral aspects of control Approaches to performance appraisal 360 -degree appraisal, where the reporting process is informed by subordinates of the person reported on, their peers, their customers (internal and external as appropriate) as well as their line manager. This provides a fuller view of performance but is time consuming and, again, leaves different views to be reconciled.

Behavioral aspects of control Review MCQs The types employee performance appraisals are ? a. b. c. d. Strategic level controls Organizational level controls Tactical level controls Non of the above.

Behavioral aspects of control Review MCQs The types employee performance appraisals are ? a. b. c. d. Strategic level controls Organizational level controls Tactical level controls Non of the above.

Behavioral aspects of control Review MCQs The approaches related to employee performance appraisals are? a. b. c. d. 360 degree appraisal Redundancy Self assessment Demotion

Behavioral aspects of control Review MCQs The approaches related to employee performance appraisals are? a. b. c. d. 360 degree appraisal Redundancy Self assessment Demotion

Behavioral aspects of control Lecture Summary We have discussed the § Approaches to control § Employee performance appraisal

Behavioral aspects of control Management Level – Paper E 2 Project and Relationship Management Lecture - 019 Vidya Rajawasam ACMA CGMA MBA