Organizational Control Organizational Control Managers monitor and regulate

Organizational Control • Organizational Control – Managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals 11 -1

Organizational Control Managers must monitor and evaluate: – Is the firm efficiently converting inputs into outputs? • Are units of inputs and outputs measured accurately? – Is product quality improving? • Is the firm’s quality competitive with other firms? – Are employees responsive to customers? • Are customers satisfied with the services offered? – Are our managers innovative in outlook? • Does the control system encourage risk-taking? 11 -2

Control Systems • Control Systems – Formal, target-setting, monitoring, evaluation and feedback systems that provide managers with information about whether the organization’s strategy and structure are working efficiently and effectively. 11 -3

Three Types of Control Figure 11. 1 11 -4

Control Process Steps Figure 11. 2 11 -5

Three Organizational Control Systems Figure 11. 3 11 -6

Output Control • Operating Budgets – Blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently. 11 -7

Behavior Control • Direct supervision – managers who actively monitor and observe the behavior of their subordinates – Teach subordinates appropriate behaviors – Intervene to take corrective action – Most immediate and potent form of behavioral control – Can be an effective way of motivating employees 11 -8

Management by Objectives • Management by Objectives (MBO) – formal system of evaluating subordinates for their ability to achieve specific organizational goals or performance standards and to meet operating budgets 11 -9

Management by Objectives 1. Specific goals and objectives are established at each level of the organization 2. Managers and their subordinates together determine the subordinates’ goals 3. Managers and their subordinates periodically review the subordinates’ progress toward meeting goals 11 -10

Bureaucratic Control • Bureaucratic Control – Control through a system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions, functions, and individuals. 11 -11

Organization Change Movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness 11 -12

Organizational Change 11 -13

Lewin’s Force-Field Theory of Change • There a wide variety of forces arising from the way an organization operates, from its structure, culture, and control systems that make organizations resistant to change 11 -14

Lewin’s Force-Field Theory of Change • To get an organization to change, managers must find a way to increase the forces for change, reduce resistance to change, or do both simultaneously 11 -15

Steps in the Organizational Change Process Figure 11. 7 11 -16

Evaluating the Change • Benchmarking – The process of comparing one company’s performance on specific dimensions with the performance of other, high-performing organizations. 11 -17

Strategic Human Resource Management • Human Resource Management (HRM) – Activities that managers engage in to attract and retain employees and to ensure that they perform at a high level and contribute to the accomplishment of organizational goals. 12 -18

Strategic Human Resource Management • HRM activities – Recruitment and selection – Training and development – Performance appraisal and feedback – Pay and benefits – Labor relations 12 -19

Component s of a Human Resource Managemen t System Figure 12. 1 12 -20

HRM Components • Recruitment and Selection – Used to attract and hire new employees who have the abilities, skills, and experiences that will help an organization achieve its goals. 12 -21

HRM Components • Training and Development – Ensures that organizational members develop the skills and abilities that will enable them to perform their jobs effectively in the present and the future – Changes in technology and the environment require that organizational members learn new techniques and ways of working 12 -22

HRM Components • Performance Appraisal and Feedback – Provides managers with the information they need to make good human resources decisions about how to train, motivate, and reward organizational members – Feedback from performance appraisal serves a developmental purpose for members of an organization 12 -23

HRM Components • Pay and Benefits – Rewarding high performing organizational members with raises, bonuses and recognition. • Increased pay provides additional incentive. • Benefits, such as health insurance, reward membership in firm. 12 -24

HRM Components • Labor relations – Steps that managers take to develop and maintain good working relationships with the labor unions that may represent their employees’ interests 12 -25

The Legal Environment of HRM • Equal Employment Opportunity (EEO) – The equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion, or disabilities. – Equal Employment Opportunity Commission (EEOC) enforces employment laws. 12 -26

Who Appraises Performance? Figure 12. 6 12 -27

Effective Performance Feedback • Formal appraisals – An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance • Informal appraisals – An unscheduled appraisal of ongoing progress and areas for improvement 12 -28

Pay and Benefits • Pay level – The relative position of an organization’s incentives in comparison with those of other firms in the same industry employing similar kinds of workers • Managers can decide to offer low, average or high relative wages. • High wages attract and retain high performers but raise costs; low wages can cause turnover and lack of motivation but provide lower costs. 12 -29

Labor Relations • Laws regulating areas of employment. – Fair Labor Standards Act (1938) prohibits child labor, sets a minimum wage and maximum working hours. – Equal Pay Act (1963) men and women doing equal work will get equal pay. – Work Place Safety (1970) OSHA mandates procedures for safe working conditions. 12 -30

Unions • Unions – Represent worker’s interests to management in organizations. – The power that a manager has over an individual worker causes workers to join together in unions to try to prevent this. 12 -31

Unions • Collective bargaining – Negotiation between labor and management to resolve conflicts and disputes about issues such as working hours, wages, benefits, working conditions, and job security. 12 -32