Organizational Leadership and Supervision
decaydemon
JohnM.LannonLauraJ.Gurak-TechnicalCommunicationMLAUpdate14thEdition-Pearson2017.pdf
Stephen P. Robbins San Diego State University, San Diego, California
David A. DeCenzo Coastal Carolina University, Conway, South Carolina
Robert M. Wolter Indiana University Purdue University Indianapolis (IUPUI), Indianapolis, Indiana
Supervision Today!
Ninth Edition
New York, NY
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Library of Congress Cataloging-in-Publication Data Names: Robbins, Stephen P., author. | DeCenzo, David A., author. | Wolter, Robert M., author. Title: Supervision today! / Stephen P. Robbins, San Diego State University San Diego, California, David A. DeCenzo, Coastal Carolina University Conway, South Carolina, Robert M. Wolter, Indiana University, Purdue University Indianapolis (IUPUI), Indianapolis, Indiana. Description: Ninth edition. | Hoboken, NJ : Pearson Education, [2018] Identifiers: LCCN 2017040149| ISBN 9780134730356 | ISBN 0134730356 Subjects: LCSH: Supervision of employees. Classification: LCC HF5549.12 .R628 2018 | DDC 658.3/02–dc23 LC record available at https://lccn.loc.gov/2017040149
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ISBN 10: 0-13-473035-6 ISBN 13: 978-0-13-473035-6
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ABOUT THE AUTHORS
STEPHEN P. ROBBINS received his Ph.D. from the University of Arizona. He previously worked for the Shell Oil Company and Reynolds Metals Company, and has taught at the University of Nebraska at Omaha, Concordia University in Montreal, the University of Baltimore, Southern Illinois University at Edwardsville, and San Diego State University. He is professor emeritus in management at San Diego State.
Dr. Robbins is the world’s best-selling textbook author in the areas of management and organiza- tional behavior. His books have sold more than 7 million copies, and have been translated into 20 lan- guages. His books are currently used at more than 1,500 United States colleges and universities, as well as in hundreds of schools throughout Canada, Latin America, Australia, New Zealand, Asia, Europe, and the Middle East. His research interests have focused on conflict, power, and politics in organizations; behavioral decision making; and the development of effective interpersonal skills. His articles on these and other topics have appeared in numerous academic journals.
Dr. Robbins also participates in masters track competitions. Since turning 50 in 1993, he’s won 23 national championships and 14 world titles in sprints—from 60 meters to 400 meters. He was inducted into the U.S. Masters Track & Field Hall of Fame in 2005.
DAVID A. DECENZO received his B.A. in economics from the University of Maryland, College Park, and his M.A. with an emphasis on labor economics and Ph.D. in industrial relations from West Virginia University. He has worked as an assistant professor at the University of Baltimore; a corporate trainer/ employee development specialist with Blue Cross Blue Shield of Maryland; a professor, scholar, and an administrator in various capacities at Towson University in Baltimore; and dean of the Wall College of Business at Coastal Carolina University. Since 2007, he has served as president of Coastal Carolina University, where he has implemented a comprehensive strategic planning process, assured fiscal account- ability through policy and practice, and promoted assessment and transparency throughout the university.
Dr. DeCenzo is the author or co-author of nearly 30 textbooks that are used widely at colleges and universities across the United States and throughout the world. His articles have been published in schol- arly journals such as the Harvard Business Review and Indiana University’s Business Horizons, as well as in numerous professional publications.
Dr. DeCenzo has served as a member of several academic associations and on many boards for local, community, and corporate organizations. He is a member of the board of directors for the North Eastern Strategic Alliance, Myrtle Beach Regional Economic Development Center, Conway Chamber of Com- merce, South Carolina Sea Grant Consortium, and AVX Corp., among others. He is chair of the Council of Presidents for comprehensive public universities in South Carolina and of the NCAA’s Committee on Institutional Performance, and is a member of the NCAA Division I Presidential Forum.
ROBERT M. WOLTER received A.S. and B.S. degrees in organizational leadership and supervision from Purdue University in 1995 and 1997, respectively. He received a M.S. in adult education from Indiana University in 2002. He holds the position of senior lecturer in the Department of Technology Leadership and Communication at Indiana University Purdue University Indianapolis, where he works in the Organi- zational Leadership (OLS) program in the Purdue School of Engineering and Technology.
Mr. Wolter co-developed an OLS video course/workbook that ran on public TV for five years. With an interest in human behaviors in organizations, as well as the application of leadership techniques, he has been teaching at all levels of the undergraduate program for over 16 years. He earned the Indiana University Trustees Teaching Award five times, and received the IUPUI Wisner-Stoelk Outstanding Faculty Award three times.
Mr. Wolter’s working background is in the field of automotive technology, and he was an Automo- tive Service Excellence (ASE)-certified Master Technician for many years. Prior to coming to IUPUI, he taught automotive technology in a private post-secondary vocational technical institute for 13 years.
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BRIEF CONTENTS
PART 1 Defining Supervision and Supervisory Challenges 1
CHAPTER 1 Supervision Fundamentals 2 CHAPTER 2 Supervision Challenges 28
PART 2 Planning, Organizing, Staffing, Controlling, and Decision Making 59
CHAPTER 3 Planning and Goal Setting 60 CHAPTER 4 Organizing 88 CHAPTER 5 Staffing and Recruiting 118 CHAPTER 6 Controlling 148 CHAPTER 7 Problem Analysis and Decision Making 178
PART 3 Motivating, Leading, Communicating, and Developing 207
CHAPTER 8 Motivating Followers 208 CHAPTER 9 Leading Followers 238 CHAPTER 10 Communicating Effectively 264 CHAPTER 11 Developing Groups 292
PART 4 Appraisal, Safety, Negotiation, Change, and Labor Relations 317
CHAPTER 12 Performance Appraisal 318 CHAPTER 13 Workplace Health and Safety 346 CHAPTER 14 Conflict, Politics, Discipline, and Negotiation 374 CHAPTER 15 Change Management 404 CHAPTER 16 Supervision and Labor 424
POSTSCRIPT: PERSONAL DEVELOPMENT 447
ANSWERS TO COMPREHENSION CHECKS AND CROSSWORD PUZZLES 454
GLOSSARY 463
INDEX 472
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Contents PREFACE xix
PART 1 Defining Supervision and Supervisory Challenges 1
CHAPTER 1 Supervision Fundamentals 2 Key Concepts 2 Chapter Outcomes and Learning Objectives 3 Responding to a Supervisory Dilemma 4 Organizations and Their Levels 4
What Common Characteristics Do All Organizations Have? 5 What Are the Organizational Levels? 5
The Management Process 6 What Is Management? 6 What Are the Four Management Functions? 7 Do Management Functions Differ By Organizational Levels? 7
Changing Expectations of Supervisors 8 What Roles Do Supervisors Play? 8 Are Supervisors More Important in Today’s Organizations? 9 Comprehension Check 1-1 9 Is Sustainability Important to a Supervisor? 10 Does a Supervisor Need to Be a Coach? 11
Transition from Employee to Supervisor 11 Where Do Supervisors Come From? 12 Is the Transition to Supervisor Difficult? 12 Do You Really Want to Be a Supervisor? 14
Supervisory Competencies 14 Something to Think About (and Promote Class Discussion) Becoming a Supervisor 15 News Flash! The Supervisor’s Role in Modern Organizations 15 What Is Technical Competence? 15 How Do Interpersonal Competencies Help? 17 What Is Conceptual Competence? 17 Why Must One Have Political Competence? 17 How Do Competencies Shift By Managerial Level? 17
From Concepts to Skills 18 What Is a Skill? 19 What Else Is Critical for Me to Know About Supervising? 19
Why Study Supervision? 20 Comprehension Check 1-2 21
Enhancing Understanding 22 Summary 22 Comprehension: Review and Discussion Questions 22 Key Concept Crossword 23
Developing Your Supervisory Skills 24 Getting to Know Yourself 24 Building a Team 24
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Mentoring Others 24 Communicating Effectively 25 Thinking Critically 25
CHAPTER 2 Supervision Challenges 28 Key Concepts 28 Chapter Outcomes and Learning Objectives 29 Responding to a Supervisory Dilemma 30 Global Competitiveness 30
Is There Such a Thing As “Buy American”? 31 How Does Globalization Affect Supervisors? 32 Something to Think About (and Promote Class Discussion) Who Owns What? 32
Technology Enhancements 33 News Flash! The Cultural Variables 34 What Is Technology? 35 How Does Technology Change the Supervisor’s Job? 35
E-Business at Work 36 What Is an E-Business? 36 What Changes Can Supervisors Expect From E-Business? 37 Comprehension Check 2-1 40
Working in a Diverse Organization 40 What Is Workforce Diversity? 40 How Does Diversity Affect Supervisors? 41
Changing How Business Operates 42 Why Are Organizations Doing More with Less? 43 Why the Emphasis on Continuous-Improvement Programs? 43 How Does Work Process Engineering Differ From Continuous Improvement? 44 What Are the Supervisory Implications of Downsizing, Contingent Workforces, Continuous-Improvement Programs, and Work Process Engineering? 44
Thriving on Chaos 46 From Chaos to Crisis 47 The Good and Profitable Organization 48
What Is a Socially Responsible Organization? 48 How Do We Act Responsibly? 49 What Is Ethics? 50 Comprehension Check 2-2 51
Enhancing Understanding 52 Summary 52 Comprehension: Review and Discussion Questions 53 Key Concept Crossword 54
Developing Your Supervisory Skills 55 Getting to Know Yourself 55 Building a Team 55 Guidelines for Acting Ethically 55 Communicating Effectively 56 Thinking Critically 56 ANSWERS TO “SOMETHING TO THINK ABOUT: WHO OWNS WHAT?” 57
Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making 59
CHAPTER 3 Planning and Goal Setting 60 Key Concepts 60 Chapter Outcomes and Learning Objectives 61
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Responding to a Supervisory Dilemma 62 What Is Formal Planning? 63
Productivity 63 What Is Productivity? 63 News Flash! The Downsides of Planning 63 Why Is Productivity Important to the United States? 65
Planning and Level in the Organization 66 What Is the Breadth of Planning? 66 How Do Planning Time Frames Differ? 66 How Are Plans and Supervisory Levels Linked? 66 Can Continuous-Improvement Programs Be a Help in Planning? 67
Key Planning Guides 69 What Are Standing Plans? 69 What Are Single-Use Plans? 70 Comprehension Check 3-1 71 Something to Think About (and Promote Class Discussion) From the Past to the Present 75
Goal Setting 76 How Were Goals Set in Years Past? 76 What Is the Key to Making Goal Setting Effective? 76 Why Might Goal Setting Work for You? 77 Self-Fulfilling Prophecy for Your Followers 77 Balanced Scorecard: The Natural Evolution of Goal Setting? 78
A Special Case of Planning: The Entrepreneurial Supervisor 78 What Is Entrepreneurship? 79 Do Entrepreneurs Possess Similar Characteristics? 79
How Do Entrepreneurs Recruit and Retain Employees? 80 What Supervisory Issues Are Faced By Entrepreneurs? 81
How Do Entrepreneurs Compare with Traditional Supervisors? 81 Comprehension Check 3-2 82
Enhancing Understanding 83 Summary 83 Comprehension: Review and Discussion Questions 83 Key Concept Crossword 84
Developing Your Supervisory Skills 85 Getting to Know Yourself 85 Building a Team 85 Setting Goals 85 Communicating Effectively 86 Thinking Critically 86
CHAPTER 4 Organizing 88 Key Concepts 88 Chapter Outcomes and Learning Objectives 89 Responding to a Supervisory Dilemma 90 What Is Organizing? 92 Basic Organizing Concepts 92
What Is Work Specialization? 92 What Is the Span of Control? 93 Something to Think About (and Promote Class Discussion) Return to Yesteryear 94 What Is the Chain of Command? 95 What Is Authority? 96 News Flash! Obeying Authority 96 Where Are Decisions Made? 98 What Are the Five Ways to Departmentalize? 99 Comprehension Check 4-1 101
From Departmentalization to Structure 102
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A Simple Structure 102 The Functional Structure 103 The Divisional Structure 103 Matrix Structure 103 Project Structure 104 Team-Based Structure 105 The Boundaryless Organization 105 The Learning Organization 107
Organizing Your Employees 107 How Do You Identify the Tasks to Be Done? 108 What Is the Purpose of Job Descriptions? 108
Empowering Others Through Delegation 108 What Is Delegation? 109 Isn’t Delegation Abdication? 110 Comprehension Check 4-2 110
Enhancing Understanding 112 Summary 112 Comprehension: Review and Discussion Questions 112 Key Concept Crossword 113
Developing Your Supervisory Skills 114 Getting to Know Yourself 114 Building a Team 114 Delegating 114 Communicating Effectively 115 Thinking Critically 115
CHAPTER 5 Staffing and Recruiting 118 Key Concepts 118 Chapter Outcomes and Learning Objectives 119 Responding to a Supervisory Dilemma 120 The Human Resource Management Process 121 The Legal Environment of HRM 122
Something to Think About (and Promote Class Discussion) Is It Safe? 124 Employment Planning 125
How Does a Supervisor Conduct an Employee Assessment? 125 How Are Future Employee Needs Determined? 125
Recruitment and Selection 125 Where Do Supervisors Look to Recruit Candidates? 125 How Does a Supervisor Handle Layoffs? 127 Is There a Basic Premise to Selecting Job Candidates? 127 How Effective Are Tests and Interviews As Selection Devices? 129 News Flash! The Realistic Job Preview 131 Preparation for the Interview 131 Interview Questions You Shouldn’t Ask 132 Interview Questions You Should Ask 132 Comprehension Check 5-1 133
Orientation, Training, and Development 133 How Do You Introduce New Hires to the Organization? 133 What Is Employee Training? 134
Performance Appraisals 136 Compensation and Benefits 136
How Are Pay Levels Determined? 136 Why Do Organizations Offer Employee Benefits? 137
Current Issues in Human Resource Management 137 Workforce Diversity 137 The Workplace: Reasonable Grounds for Romance? 137 What Is Sexual Harassment? 138
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How Do “Survivors” Respond to Layoffs? 140 Comprehension Check 5-2 141
Enhancing Understanding 142 Summary 142 Comprehension: Review and Discussion Questions 142 Key Concept Crossword 143
Developing Your Supervisory Skills 144 Getting to Know Yourself 144 Building a Team 144 Interviewing 145 Communicating Effectively 145 Thinking Critically 146
CHAPTER 6 Controlling 148 Key Concepts 148 Chapter Outcomes and Learning Objectives 149 Responding to a Supervisory Dilemma 150 The Control Process 151
How Do You Measure Actual Performance? 151 How Do You Compare Results with Standards? 152 When Should Corrective Action be Taken? 156
Types of Controls 157 What Is Preventive Control? 157 When Are Concurrent Controls Used? 157 What Is Corrective Control? 158
The Focus of Control 158 What Costs Should You Control? 158 News Flash! On the Rocks 159 Comprehension Check 6-1 160 Why Pay Attention to Inventories? 161 What Is Value Chain Management? 162 Why the Focus on Quality? 163 What Are the Characteristics of Effective Controls? 164 Can Controls Create Problems? 165
Contemporary Control Issues 167 Is Employee Theft Increasing? 167 Something to Think About (and Promote Class Discussion) Out with E-Mail 168 What Is the Sarbanes–Oxley Act? 169 Do Controls Need to Be Adjusted for Cultural Differences? 170 Comprehension Check 6-2 171
Enhancing Understanding 172 Summary 172 Comprehension: Review and Discussion Questions 172 Key Concept Crossword 173
Developing Your Supervisory Skills 174 Getting to Know Yourself 174 Building a Team 174 Establishing Budgets 174 Communicating Effectively 175 Thinking Critically 175
CHAPTER 7 Problem Analysis and Decision Making 178 Key Concepts 178 Chapter Outcomes and Learning Objectives 179 Responding to a Supervisory Dilemma 180 The Decision-Making Process 181
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How Do You Identify the Problem? 181 How Do You Collect Relevant Information? 181 How Do You Develop Alternatives? 182 How Do You Evaluate Each Alternative? 182 How Do You Select the Best Alternative? 183 How Do You Implement the Decision? 183 How Do You Follow Up and Evaluate? 184
Decision Tools 184 What Are the Conditions of Decision Making? 184 What Is the Expected Value Analysis? 184 How Are Decision Trees Useful? 185 What Is Marginal Analysis? 186
Decision-Making Styles 186 What Are the Four Decision-Making Styles? 186 What’s the Point of These Four Decision-Making Styles? 187 What Common Errors Are Committed in the Decision-Making Process? 187 Comprehension Check 7-1 189
Problems Versus Decisions 189 News Flash! Daily Delivery Decisions at UPS 189 How Do Problems Differ? 190 What Is the Difference Between Programmed and Non-Programmed Decisions? 191
Group Decision Making 191 What Are the Advantages of Group Decisions? 191 Are There Disadvantages to Group Decision-Making? 192 Is There a Guide for When to Use Group Decision-Making? 193 How Can You Improve Group Decision-Making? 193 Something to Think About (and Promote Class Discussion) Making Good Decisions 194
Global Diversity in Decision-Making 195 Design Thinking in Decision-Making 196 Big Data in Decision-Making 197 Ethics in Decision-Making 198
What Are Common Rationalizations? 198 What Are the Three Views on Ethics? 199 Is There a Guide to Acting Ethically? 200 Comprehension Check 7-2 200
Enhancing Understanding 201 Summary 201 Comprehension: Review and Discussion Questions 201 Key Concept Crossword 202
Developing Your Supervisory Skills 203 Getting to Know Yourself 203 Building a Team 203 Becoming More Creative 203 Communicating Effectively 204 Thinking Critically 204
Part 3 Motivating, Leading, Communicating, and Developing 207
CHAPTER 8 Motivating Followers 208 Key Concepts 208
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Chapter Outcomes and Learning Objectives 209 Responding to a Supervisory Dilemma 210 What Is Motivation? 211 Understanding Individual Differences 211
Can Personality Measures Predict Practical Work-Related Behaviors? 212 Do You Need to Develop Your Emotional Intelligence to Improve Your Supervision Skills? 213
The Early Theories of Motivation 213 How Do You Focus on Needs? 213 Do Supervisors Focus on the Nature of People? 214 What Effect Does the Organization Have on Motivation? 214 Comprehension Check 8-1 216
Contemporary Theories of Motivation 216 What Is a Focus on Achievement? 216 How Important Is Equity? 217
Do Employees Really Get What They Expect? 218 Something to Think About (and Promote Class Discussion) Motivated to Do What? 219 How Do You Create an Atmosphere in Which Employees Really Want to Work? 220
Designing Motivating Jobs 222 Motivation Challenges for Today’s Supervisors 224
What Is the Key to Motivating a Diverse Workforce? 224 Should Employees Be Paid for Performance Or Time on the Job? 225 How Can Supervisors Motivate Minimum-Wage Employees? 226 How Are Contingent Workers Motivated? 227 What’s Different in Motivating Professional and Technical Employees? 227 What Can a Supervisor Do to Improve Employees’ Work–Life Balance? 228 News Flash! Making It Rain . . . at Gravity 230 How Can Supervisors Use Employee Recognition Programs? 231 How Can Employee Stock Ownership Plans Affect Motivation? 232 Comprehension Check 8-2 232
Enhancing Understanding 233 Summary 233 Comprehension: Review and Discussion Questions 233 Key Concept Crossword 234
Developing Your Supervisory Skills 235 Getting to Know Yourself 235 Building a Team 235 Designing Jobs That Motivate 235 Communicating Effectively 236 Thinking Critically 236
CHAPTER 9 Leading Followers 238 Key Concepts 238 Chapter Outcomes and Learning Objectives 239 Responding to a Supervisory Dilemma 240 Understanding Leadership 241 Are Leaders Born or Made? 241
What Are the Traits of Successful Leaders? 241 What Is This Thing Called Charisma? 242 What Is Visionary Leadership? 244 Comprehension Check 9-1 245
How Do You Become a Leader? 246 Why Does a Leader Need Technical Skills? 246 How Do Conceptual Skills Affect Your Leadership? 246 How Do Networking Skills Make You a Better Leader? 246 What Role Do Human Relations Skills Play in Effective Leadership? 247
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Something to Think About (and Promote Class Discussion) Growing New Leaders 248
Leadership Behaviors and Styles 249 What Is Task-Centered Behavior? 250 What Are People-Centered Behaviors? 250 What Behavior Should You Exhibit? 250
Effective Leadership 251 News Flash! National Culture Could Affect Your Leadership Style 252
Contemporary Leadership Roles 252 Do Credibility and Trust Really Matter? 252 Why Are Credibility and Trust Important? 253 What If You Play Favorites? 254 How Can You Lead Through Empowerment? 254 Why Should Supervisors Engage Their Employees? 255
Leadership Issues Today 255 What Are Transactional and Transformational Leaders? 255 What Is Team Leadership? 256 What Is E-Leadership? 257 Is Leadership Always Relevant? 257 Comprehension Check 9-2 258
Enhancing Understanding 259 Summary 259 Comprehension: Review and Discussion Questions 259 Key Concept Crossword 260
Developing Your Supervisory Skills 261 Getting to Know Yourself 261 Building a Team 261 Mentoring Others 261 Communicating Effectively 262 Thinking Critically 262
CHAPTER 10 Communicating Effectively 264 Key Concepts 264 Chapter Outcomes and Learning Objectives 265 Responding to a Supervisory Dilemma 266 What Is Communication? 268 The Communication Process 268 Methods of Communication 269
How Do You Communicate Orally? 269 Why Do You Use Written Communication? 270 Something to Think About (and Promote Class Discussion) What Is the Best Method to Communicate Bad News? 270 Do Women and Men Communicate Differently? 271 Is Electronic Communication More Efficient? 271 What Issues Are Created By Instant Messaging and Text Messaging? 272 How Does Nonverbal Communication Affect Your Communication? 273 What Is the Grapevine? 273
Barriers to Effective Communication 275 How Does Language Affect Communication? 275 What Did you Say? 276 Did You Get My Message? 276 Do You See What I See? 276 What Do Roles Have to Do with Communication? 277 Is There a Preferred Information Medium? 277 Comprehension Check 10-1 277 How Does Honesty Affect Communication? 278
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How Can You Improve Your Communication Effectiveness? 279 News Flash! Twitter . . . Social Benefit Or Social Disaster? 280
A Special Communication Skill: Active Listening 282 The Importance of Feedback Skills 283
What’s the Difference Between Positive Feedback and Feedback for Improvement? 283 How Do You Give Effective Feedback? 283 Comprehension Check 10-2 285
Enhancing Understanding 286 Summary 286 Comprehension: Review and Discussion Questions 286 Key Concept Crossword 287
Developing Your Supervisory Skills 288 Getting to Know Yourself 288 Building a Team 288 Active Listening 289 Communicating Effectively 290 Thinking Critically 290
CHAPTER 11 Developing Groups 292 Key Concepts 292 Chapter Outcomes and Learning Objectives 293 Responding to a Supervisory Dilemma 294 What Is a Group? 295 Why Do People Join Groups? 295 Understanding Informal Workgroups 296
What Are Norms and How Do They Affect Work Behavior? 296 News Flash! Solomon Asch and Group Conformity 297 Are Cohesive Groups More Effective? 298 What Is an Emergent Leader? 298 How Can Informal Groups Be Helpful? 298 Are There Ways to Influence the Informal Workgroup? 299 Comprehension Check 11-1 299
The Increasing Use of Teams 300 What Are the Different Types of Work Teams? 300 Turning Groups into Teams 301 The Five-Stage Model of Group Development 301 A Model of Development for Deadline-Driven Ad Hoc Groups 303 How Do You Build Effective Teams? 304
Team Challenges for Supervisors 305 What Obstacles Exist in Creating Effective Teams? 305 Something to Think About (and Promote Class Discussion) Fast Times! 306 How Can Team Obstacles Be Overcome? 307
Contemporary Team Issues 308 Why Are Teams Central to Continuous-Improvement Programs? 309 How Does Workforce Diversity Affect Teams? 309 What Challenges Exist When Supervising Global Teams? 310 When Are Teams Not the Answer? 311 Comprehension Check 11-2 311
Enhancing Understanding 312 Summary 312 Comprehension: Review and Discussion Questions 312 Key Concept Crossword 313
Developing Your Supervisory Skills 314 Getting to Know Yourself 314 Building a Team 314
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Developing Your Coaching Skills 314 Communicating Effectively 315 Thinking Critically 315
Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations 317
CHAPTER 12 Performance Appraisal 318 Key Concepts 318 Chapter Outcomes and Learning Objectives 319 Responding to a Supervisory Dilemma 320 The Purpose of Employee Performance Appraisals 321
When Should Appraisals Occur? 322 What Is Your Role in Performance Appraisals? 322
What Are the Legal Issues in Performance Appraisals? 323 Are There Appropriate Criteria for Appraising Performance? 326 How Do You Gather Performance Data? 327
Performance Appraisal Methods 327 What Are the Absolute-Standards Measurements? 327
How Do You Use Relative Standards? 329 Comprehension Check 12-1 331 Objectives 331
Potential Problems in Performance Appraisals 332 What Is Leniency Error? 332 How do Halo Errors Affect Appraisals? 332 What Is Similarity Error? 332 What Is Recency Error? 333 Something to Think About (and Promote Class Discussion) an Unfair Performance Review 333 How Does Central Tendency Error Affect Appraisals? 334 Are You Inclined to Use Inflationary Pressures? 334 How Can You Overcome the Hurdles? 334 Responding to Performance Problems 336 What Do You Need to Know About Counseling Employees? 337 News Flash! The Anytime Feedback Tool at Amazon 337 Is Your Action Ethical? 338 Comprehension Check 12-2 339 Enhancing Understanding 340 Summary 340 Comprehension: Review and Discussion Questions 340 Key Concept Crossword 341
Developing Your Supervisory Skills 342 Getting to Know Yourself 342 Building a Team 342 Conducting a Performance Evaluation 342 Communicating Effectively 343 Thinking Critically 343
CHAPTER 13 Workplace Health and Safety 346 Key Concepts 346 Chapter Outcomes and Learning Objectives 347
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Responding to a Supervisory Dilemma 348 The Occupational Safety and Health Act 349
What Are the OSHA Enforcement Priorities? 350 How Does a Supervisor Keep OSHA Records? 351 What Are the OSHA Punitive Actions? 353 Does OSHA Work? 354 Comprehension Check 13-1 356
Job Safety Programs 356 What Causes Work-Related Accidents? 356 How Can Accidents Be Prevented? 357 How Do Supervisors Ensure Job Safety? 357 News Flash! Causes Of Workplace Violence 358
A Special Case of Safety: Workplace Violence 359 Maintaining a Healthy Work Environment 360
How Do You Create a Smoke-Free Environment? 361 Something to Think About (and Promote Class Discussion) Save Lives, Save Money: Make Your Business Smoke-Free 362 What Are Repetitive Stress Injuries? 362
Stress 363 Are There Common Causes of Stress? 364 What Are the Symptoms of Stress? 364 How Can Stress Be Reduced? 365
Helping the Whole Employee 365 Where Did EAPS Come From? 365 Why Provide Wellness Programs? 366 Comprehension Check 13-2 367
Enhancing Understanding 368 Summary 368 Comprehension: Review and Discussion Questions 368 Key Concept Crossword 369
Developing Your Supervisory Skills 370 Getting to Know Yourself 370 Building a Team 370
Developing Safety Skills 370 Communicating Effectively 371 Thinking Critically 371
CHAPTER 14 Conflict, Politics, Discipline, and Negotiation 374 Key Concepts 374 Chapter Outcomes and Learning Objectives 375 Responding to a Supervisory Dilemma 376 What Is Conflict? 377
Is All Conflict Bad? 377 Where Do Conflicts Come From? 378 How Do You Manage Conflict? 378 What Resolution Techniques Can You Use? 378 Which Conflicts Do You Handle? 380 How Do You Choose the Appropriate Resolution Technique? 380 How Do You Stimulate Conflict? 381 How Cautiously Should You Proceed in Stimulating Conflict? 382 Comprehension Check 14-1 382
Understanding Organizational Politics 383 What Is Politics? 383 Why Does Politics Exist in Organizations? 383 Can You Play Politics and Still Be Ethical? 384 How Do You Know When You Should Play Politics? 385
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News Flash! Status in Organizations 386 The Disciplinary Process 387
What Types of Discipline Problems Might You Face? 388 Is Discipline Always the Solution? 388 Basic Tenets of Discipline 389 How Do You Lay the Groundwork for Discipline? 389 How Do You Make Discipline Progressive? 390 What Factors Should You Consider in Discipline? 392 What About the Law? 392
Negotiation 393 How Do Bargaining Strategies Differ? 393 How Do You Develop Effective Negotiation Skills? 394 Something to Think About (and Promote Class Discussion) Hand Me a Towel 395 Comprehension Check 14-2 396
Enhancing Understanding 397 Summary 397 Comprehension: Review and Discussion Questions 397 Key Concept Crossword 398
Developing Your Supervisory Skills 399 Getting to Know Yourself 399 Building a Team 399 Six Steps to Resolve Conflict 400 Disciplining an Employee 400 Communicating Effectively 401 Thinking Critically 402
CHAPTER 15 Change Management 404 Key Concepts 404 Chapter Outcomes and Learning Objectives 405 Responding to a Supervisory Dilemma 406
News Flash! This Changes Everything 407 The Forces for Change 408
What Are the External Forces Creating a Need for Change? 408 What Are the Internal Forces Creating a Need for Change? 408 How Can Supervisors Serve as Change Agents? 409
Two Views of the Change Process 409 What Is the Traditional View of Change? 409 What Is the Contemporary View of Change? 410 Will You Face a World of Constant and Chaotic Change? 410 Why Do People Resist Change? 411 How Can You Overcome Resistance to Change? 412 Something to Think About (and Promote Class Discussion) Robot Doc 413 Comprehension Check 15-1 413 Stimulating Innovation 414 How Are Creativity and Innovation Related? 414 What Is Involved in Innovation? 415 What Is Disruptive Innovation? 415 How Can a Supervisor Foster Innovation? 416 Comprehension Check 15-2 417
Enhancing Understanding 418 Summary 418 Comprehension: Review and Discussion Questions 418 Key Concept Crossword 419
Developing Your Supervisory Skills 420 Getting to Know Yourself 420 Building a Team 420
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Innovation in the Workplace 420 Communicating Effectively 421 Thinking Critically 422
CHAPTER 16 Supervision and Labor 424 Key Concepts 424 Chapter Outcomes and Learning Objectives 425 Responding to a Supervisory Dilemma 426 What Is Labor Relations? 426
Why Do Employees Join Unions? 427 Labor Legislation 430
The Wagner Act 430 The Taft-Hartley Act 430 Other Laws Affecting Labor–Management Relations 431 Comprehension Check 16-1 432
How Are Employees Unionized? 433 News Flash! When the Union Arrives 434
Collective Bargaining 434 What Are the Objective and Scope of Collective Bargaining? 435 What Is the Collective Bargaining Process? 435 What Happens When Agreement Cannot Be Reached? 437 Something to Think About (and Promote Class Discussion) A Bitter Taste at the Coffe House 439 Comprehension Check 16-2 440
Enhancing Understanding 441 Summary 441 Comprehension: Review and Discussion Questions 441 Key Concept Crossword 442
Developing Your Supervisory Skills 443 Getting to Know Yourself 443 Building a Team 443 Resolving a Grievance 443 Communicating Effectively 444 Thinking Critically 444
POSTSCRIPT Personal Development 447 Introduction 447 What Is a Career? 448 How Do I Make a Career Decision? 448 Can I Increase My Chances for Getting into the Organization? 449 Where Can I Find Jobs Advertised on the Internet? 449 Preparing a Résumé 449 Excelling at the Interview 450 Some Suggestions for Developing a Successful Career 451 Once You Get a Job Be Proactive and Find Yourself a Mentor 452 A Final Word 453
ANSWERS TO COMPREHENSION CHECKS AND CROSSWORD PUZZLES 454
GLOSSARY 463
INDEX 472
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xix
PREFACE
New to This Edition We have been pleased with the response to the previous edition of the textbook. Reviewers and current adopters tell us that the content is solid and that the skill- building exercises work well in the classroom. For the ninth edition, we have concen- trated on refining the presentation and addressing the evolving roles that supervisors are asked to embrace in today’s workplace. Significant additions to the ninth edition include the following:
Chapter 1 New section “Why Study Supervision?”
Chapter 2 Updates on Contingent Workforces
Chapter 3 Updates on Six Sigma Quality
Chapter 4 Updates on Teleworking New Case Study “Push the Magic Button”
Chapter 5 New Case Study “Attracting the Perfect Candidate”
Chapter 6 Updates on Cost Reduction Updated “Something to Think About – Out With E-mail”
Chapter 7 New “News Flash! – Daily Delivery Decisions at UPS” New “Something to Think About – Making Good Decisions” New section “Global Diversity in Decision Making” New Case Study “Simply Orange Decisions”
Chapter 8 New “News Flash! – Making it Rain . . . at Gravity” Updates on Employee Recognition Programs New Case Study “Naturally Motivated”
Chapter 9 New “Something to Think About – Growing New Leaders” New Case Study “Insane Leadership Legacy”
Chapter 10 New “Something to Think About – What is the Best Method to Communicate Bad News?” Updates on Communication
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xx Preface
Chapter 11 New Case Study “An Rx for Improved Teamwork in the Health-Care industry”
Chapter 12 New “Something to Think About – An Unfair Performance Review” New “News Flash! – The Anytime Feedback Tool at Amazon” New Case Study “Accentuate the Positive!”
Chapter 13 New Responding to a Supervisory Dilemma Updates on OSHA Enforcement Actions Updates on Workplace Violence New Case Study “When Stress Kills”
Chapter 14 New Case Study “Dealing with Conflict at Nomura Holdings Inc.”
Chapter 15 New “News Flash! – This Changes Everything” New section “What is Disruptive Innovation?” New Case Study “Poor Performance Forces a Make Over at Avon”
Chapter 16 New “Something to Think About – A Bitter Taste at the Coffee House” New Case Study “A Slap Shot at USA Hockey”
Postscript New section “Once You Get a Job Be Proactive and Find Yourself a Mentor”
Solving Teaching and Learning Challenges Welcome to the ninth edition of Supervision Today!. We continue to present this book in a way that our users have found useful. Many of you helped make the previous editions of this book a resounding success. In this edition, we continue that trend and make your reading experience even better.
In our quest to make this the most complete supervision text currently available, we’ve taken into account feedback from our readers. We continue to present a book that focuses on the basic elements of supervision—one that covers the essential and traditional concepts in effectively supervising employees; that has a strong applied, practical, and skill focus; and that is user friendly.
Most of us understand concepts better when we can relate them to our everyday lives. In this edition, we help you build an understanding of supervising through real- life concepts, examples, and practice. We believe that when you have an opportunity to apply what you are learning—in an educational setting that encourages risk taking— you will perform more effectively on the job. Moreover, in the process you will build your supervisory skills portfolio!
We recognize that the supervisor’s job continues its rate of dramatic change. Super- visors are working with a more diverse workforce in terms of race, gender, and ethnic background. Supervisors’ jobs are constantly affected by technological changes, a more competitive marketplace, and corporate restructuring and workflow redesign. Despite all of these changes, supervisors still need to understand the traditional elements of directing the work of others and the specific skills required: goal setting, budgeting, scheduling, delegating, interviewing, negotiating, handling grievances, counseling employees, and evaluating employees’ performance.
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Preface xxi
A good supervision text must address both traditional and contemporary issues. We believe we’ve done this by focusing on relevant issues and by including lots of examples and visual stimuli to make concepts come alive. The full-color design for- mat captures visually the reality and the excitement of the supervisor’s job. We’ve also spent years developing a writing style that has been called “lively, conversa- tional, and interesting.” That’s just another way of saying that you should be able to understand what we’re saying and feel as though we’re actually in front of you giving a lecture. Of course, only you can judge this text’s readability. We ask you to read a few pages at random. We think you’ll find the writing style both informative and lively.
Developing Employability Skills Today it’s not enough simply to know about supervision; you need skills to succeed in your supervisory efforts and in a rapidly changing job market. You should be aware of your career options and how to go about developing a variety of skills. To focus on developing your supervisory abilities, we offer our skill component in the Enhancing Understanding and Developing Your Supervisory Skills sections at the end of each chapter, which include the following features:
• Summary • Comprehension: Review and Discussion Questions • Key Concept Crossword • Getting to Know Yourself • Building a Team • A step-by-step description of how to develop your skills in the area discussed
in that chapter • Communicating Effectively • Thinking Critically
These features are designed to help you build analytical, diagnostic, team- building, investigative, and writing skills. We address these skill areas in several ways. For example, we include experiential exercises to develop team-building skills; cases to build diagnostic, analytical, and decision-making skills; and suggested topical writing assignments to enhance writing skills.
Summary Just as Chapter Outcomes and Learning Objectives clarify where you are going, chapter sum- maries remind you where you’ve been. Each chapter of this book concludes with a concise summary orga- nized around the opening chapter outcomes and learning objectives.
Comprehension: Review and Discussion Questions These questions reinforce chapter content. If you have read and understood the content of a chapter, you should be able to answer the review questions, which are drawn directly from the material in the chapter. The discus- sion questions, on the other hand, tend to go beyond comprehension of chapter content. They’re designed to foster higher-order thinking skills. The discussion questions enable you to demonstrate that you not only know the facts in the chapter but can also use those facts to deal with more complex issues.
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Key Concept Crossword Crossword puzzles using the key concepts from each chapter provide another way to reinforce compre- hension on a level and in a way that you may enjoy. Answers are provided in the Solutions section at the end of the book.
Getting to Know Yourself Before you can effectively supervise others, you must understand your current strengths as well as areas in need of development. To assist in this learning process, we encourage you to find and complete self-assessments.
Building a Team These exercises give you an opportunity to work as a team, learning and practicing the supervisory skills introduced in the chapter. By com- bining your new knowledge and natu- ral talents, you will be able to practice a supervisory activity and assess your own progress.
Chapter Topic How-To Focus This section gives step-by-step instructions on how to develop a skill directly related to a topic addressed in the chapter.
Communicating Effectively In this fea- ture, suggested writing projects help you
develop writing skills. Projects can also become presentations to reinforce verbal and presentation skills.
Thinking Critically: Case Analyses Each chapter concludes with two case studies designed to make you think critically as you make decisions regarding a supervisory issue. These cases enable you to apply your knowledge to solve problems faced by supervisors. For this edition, 11 of the cases have been replaced and updated with new topical situa- tions dealing with current workplace issues.
Instructor Teaching Resources Before you start a journey, it’s valuable to know where you’re headed so you can minimize detours. The same holds true in teaching with a text. To make learning more efficient, we continue to include the following features to enhance your interactions with students.
Chapter Outcomes and Learning Objectives Each chapter opens with a list of outcomes and learning objectives that describe what students will be able to do after reading the chapter. These outcomes and learning objectives are designed to focus student’s atten- tion on the major issues in each chapter. Each outcome and learning objective is a key learning element.
Key Concepts Each chapter contains a list of the key concepts addressed in the chap- ter. These terms represent critical comprehension areas. And through the Key Concept Crossword, students can get feedback on how well they’ve understood the key concepts.
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Responding to a Supervisory Dilemma These interesting chap- ter-opening stories focus on an issue regarding a topic that will be discussed in the chapter. Although they have value, these vignettes are often overlooked. To address this problem, and to focus heavily on supervisory issues, all of our open- ing vignettes are posed as situational dilemmas. No matter where students may work as a supervisor, at some point in their career they will be faced with a difficult issue. Usually the issue is one that goes beyond simply following the law. These opening vignettes are designed to encourage students to think about what they may face and to begin to develop a plan of action for handling workplace dilemmas.
Margin Notes Key concepts identified at the beginning of each chapter are set in boldface when they first appear in the chap- ter. The marginal note defines the term for quick reference.
News Flash! Because of the popularity of these vignettes in previous editions, we continue to include them in this new edition. Each vignette presents an issue that highlights a distinction between traditional and contemporary supervi- sory roles. Each chapter contains a news flash item specific to the topics included in the chapter.
Something to Think About Supervisors make many decisions every day. Some decisions present clear answers based on legal and company rules and regulations. Other reso- lutions may not be so obvious. Students need to evaluate and think through a number of variables to develop an answer or course of action. These sections are excellent class discussion starters, and are included in each chapter to focus on the presented topics.
Preface xxiii
Focus on Comprehension Second-level headings are presented in the form of questions. Each of these questions was carefully written to reinforce understanding of specific information. After reading a chapter (or a section), students should be able to return to these headings and answer the question. If students are unable to answer a question or are unsure of their response, instructors will know exactly what sections students need to reread or review, or where to place more of their effort. All in all, this format provides a self-check on student reading comprehension.
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Comprehension Check This is a quick “Are-you- understanding-what-you’re-reading?” feature. In each chapter, there are two Comprehension Checks with objective questions. These questions are answered in the “Solutions” section at the end of the book and offer quick feedback on whether stu- dents have understood what they read. If students have problems answering these questions correctly, instructors can direct them to reread specific sec- tions before moving on to new material in the book. Of course, not every element of the chapter’s material can be tested, and simply answering these questions correctly does not guarantee comprehen- sion. But answering these questions correctly can indicate that students are making progress and that learning has taken place.
Thinking Critically Critical thinking is also an important outcome. Several years ago, training organizations began taking a hard look at themselves. Typically, they found that their programs needed to expand language-based skills, knowledge, and abilities across the curriculum. What outcomes did this achieve? In essence, it indicated the need for all training programs to cover the basic skill areas of communication, critical thinking, computer technology, globalization, diversity, and ethics and values. This edition of Supervision Today! continues this feature to help students acquire these key skills by upgrading levels of thinking from knowledge to comprehension and, finally, to application. We convey relevant supervisory knowledge, give students an opportu- nity to reinforce their comprehension, and demonstrate to the instructor how they can apply the concepts.
Instructor Resource Center By visiting www.pearsonhighered.com/irc, instructors can access a variety of print, digital, and presentation resources available with this text in downloadable format. Registration is simple and gives instructors immediate access to new titles and new editions. As a registered faculty member, you can download resource files and receive immediate access to, and instructions for, installing course management content on your campus server. In case you ever need assistance, Pear- son’s dedicated technical support team is ready to help with the media supplements that accompany this text. Visit http://support.pearson.com/getsupport for answers to frequently asked questions and toll-free user support phone numbers.
The following supplements are available for download to adopting instructors:
xxiv Preface
Supplements available to instructors at www.pearsonhighered.com/irc
Features of the Supplement
Instructor’s Manual
authored by Barbara S. Faries from Mission College, Santa Clara, CA
• Chapter-by-chapter summaries • Examples and activities not in the main book • Discussion questions • Example figures • Additional exercises • Solutions to all questions and problems in the book
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Supplements available to instructors at www.pearsonhighered.com/irc
Features of the Supplement
Test Bank
authored by Barbara S. Faries from Mission College, Santa Clara, CA
800 multiple-choice, true/false, short- answer, and graphing questions with these annotations: • Correct answer • Difficulty level (1 for straight recall, 2 for some analysis, 3 for complex
analysis) • Type (Multiple-choice, true/false, short-answer, essay) • AACSB learning standard (Analytical Thinking; Reflective Thinking;
Application of Knowledge) • Page reference
Computerized TestGen® TestGen allows instructors to: • Customize, save, and generate classroom tests • Edit, add, or delete questions from the Test Item Files • Analyze test results • Organize a database of tests and student results
PowerPoints Presentations
authored by Jeffrey Anderson from Ohio University College of Business
• Slides include all the figures, tables, maps, and equations in the text- book.
• PowerPoints meet accessibility standards for students with disabilities. Features include, but not limited to: ○ Keyboard and Screen Reader access ○ Alternative text for images ○ High color contrast between background and foreground colors
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Contents xxvii
Acknowledgements
Writing a textbook is often the work of a number of people whose names generally never appear on the cover. Yet without their help and assistance, a project like this would never come to fruition. We’d like to recognize some special people who gave so unselfishly to making this book a reality.
We want to thank the users of previous editions and students who provided a num- ber of suggestions for this revision. To all who provided us feedback, please know that we take your comments and suggestions seriously. We review each comment and see how it might be incorporated into the text. Unfortunately, in a few instances, although the comments and suggestions were absolutely on target, sometimes adding specific information isn’t feasible. That’s not to say that we discounted what you said, but we had to balance the focus of the book with the feedback given.
Finally, we’d like to add personal notes. From Steve’s corner: To my wife, Laura Ospanik. Laura continues to be a phe-
nomenal source of ideas and support. For that I am grateful. From Dave’s corner: I want to give special thanks to my family, who give me the
encouragement and support to do my job. Each of you is special to me in that you continue to bring love and warmth into my life. Terri, Mark, Meredith, Gabriella, and Natalie, thank you. You continue to make me proud to be part of your lives.
From Rob’s corner: I want to thank my wife, Sheila, for encouraging and support- ing me in my work on the ninth edition of Supervision Today!. I also thank my grand- daughters Kennedy, Katherine, and Caroline for demonstrating the love of learning this book is meant to inspire. I continue to be grateful for the opportunity to be part of this learning endeavor.
Now that we’ve explained the ideas behind the text, we’d like to extend an open invitation. If you’d like to give us some feedback, we encourage you to contact us.
Send your correspondence to Dave DeCenzo at E. Craig Wall, Sr. College, Coastal Carolina University, P.O. Box 269154, Conway, SC 29528-6054. Dave is also avail- able via e-mail at [email protected]. Alternatively, you may contact Rob Wolter at [email protected]. Either way, we welcome your feedback!
We hope you enjoy reading this book as much as we enjoyed preparing it for you.
Steve Robbins Dave DeCenzo
Rob Wolter
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Part 1 introduces you to the world of work and the functions of a
supervisor. Emphasis in this section is placed on supervisory roles
and the skills needed to be successful in today’s ever-changing
work environment. Supervisory positions are also being influenced
by a number of environmental factors. What these factors are, and
how they affect the supervisory function, are discussed.
PART
Chapter 1 ■ Supervision Fundamentals
Chapter 2 ■ Supervision Challenges
1 Defining Supervision and Supervisory Challenges
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■ conceptual competence
■ controlling
■ effectiveness
■ efficiency
■ employee engagement
■ first-level managers
■ interpersonal competence
■ leading
■ management
■ management functions
■ middle managers
■ operative employees
■ organization
■ organizing
■ planning
■ political competence
■ process
■ skill
■ supervisors
■ supervisory competencies
■ sustainability
■ technical competence
■ top management
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Supervision Fundamentals1 C
H A
P T
ER
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1-1. Explain the difference among supervisors, middle managers, and top management.
1-2. Define supervisor.
1-3. Identify the four functions in the management process.
1-4. Explain why the supervisor’s role is considered ambiguous.
1-5. Describe the four essential supervisory competencies.
1-6. Identify the elements that are necessary to be successful as a supervisor.
1-7. Identify the value of studying supervision.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
Kzenon/123RF.com
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4 Part 1 Defining Supervision and Supervisory Challenges
Responding to a Supervisory Dilemma
Organizations are changing, but are organizations changing their tradi- tional structures? By and large, the answer is no, traditional organiza- tional structures are still evident today. However, some organizations are changing the traditional organi- zational structure to appeal to poten- tial employees. One such company is Google. According to Fortune, Google/Alphabet is the No. 1 place to work for the seventh time in 10 years.1 What makes this organization so different from others? Why are employees flocking to organizations such as Google?
The traditional organizational pyramid has opera- tive employees at the bottom of the triangle, supervisors above them, middle managers above supervisors, and top management above all (see Exhibit 1-1). This struc- ture is a vertical approach to management in which the decision-making is done at the top and orders are sent down to the operational employees at the bottom of the organizational hierarchy. Operative employees do not have much say in the organization’s operations.
Google uses a cross-functional organizational structure combined with a unique philosophy. Their cross-functional organizational structure is more of a
team approach to management and is structured horizontally. According to Google.com, they purposively main- tain “the open culture often associated with startups, in which everyone is a hands-on contributor and feels com- fortable sharing ideas and opinions.”2 Google’s benefits package also plays a major part in attracting employees. Google states that, from employee retirement funds to their free lunch and
dinner program, they strive to offer customizable pro- grams that suit the needs of each of their employees. What more could an employee want?
Which organizational structure do you think works best and why? Do you think the vertical struc- ture works better in some cases, whereas the horizontal structure works better in others? Would you prefer a more relaxed working environment or do you prefer something more structured?
This book is about the millions of supervisors working in today’s dynamic organizations and the jobs they do in helping their organizations reach their goals. This book will introduce you to the challenging activities and the rapidly changing world of supervi- sion today!
1Fortune, “100 Best Companies to Work for,” 2016, http://fortune.com/best-companies/ (accessed December 27, 2016).
2Google, “Our Culture,” Google.com, https://www.google.com/intl/en/about/company/facts/culture/ (accessed December 27, 2016).
Eric Carr/Alamy Stock Photo
Organizations and Their Levels Supervisors work in places called organizations. Before we identify who supervisors are and what they do, it’s important to clarify what we mean by the term organization. An organization is a systematic grouping of people brought together to accomplish some specific purpose. Your college or university is an organization. So are supermarkets, charitable agencies, churches, neighborhood gas stations, the Indianapolis Colts football team, Nokia Corporation, the Australian Dental Association, and Cedars-Sinai Hospital. These are all organizations, because each comprises specific common characteristics.
OBJECTIVE 1.1 Explain the difference among super- visors, middle managers, and top management.
organization A systematic grouping of people brought together to accomplish some specific purpose.
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Chapter 1 Supervision Fundamentals 5
WHAT COMMON CHARACTERISTICS DO ALL ORGANIZATIONS HAVE? All organizations, regardless of their size or focus, share three common characteristics. First, every organization has a purpose. The distinct purpose of an organization is typi- cally expressed in terms of a mission, vision, goal, or set of goals that the organization hopes to accomplish. Second, each organization is composed of people. People establish the purpose and perform a variety of activities to make the goal a reality. Third, all organizations develop a system- atic structure that defines the various roles of members and often sets limits on members’ work behaviors. This may include creating rules and regulations, giving some mem- bers supervisory responsibility over other members, forming work teams, or writing job descriptions so organizational members know their responsibilities.
Although organizations and their structures vary widely, often adapting to the environment in which the organization operates, we can show—in most traditional organizations—an organization’s structure as a pyramid con- taining four general categories (see Exhibit 1-1).
WHAT ARE THE ORGANIZATIONAL LEVELS? Generally speaking, organizations can be divided into four distinct levels: operative employees, supervisors, middle managers, and top management. Let’s briefly look at each level.
The base level in the pyramid is occupied by operative employees. These employees physically produce an organization’s goods and services by working on specific tasks. The counter clerk at Burger King, the claims adjuster at Progressive Insurance, the assembly-line worker at the Toyota auto plant, and the UPS representative who delivers your packages are examples of operative employees. This category may also include many professional positions: doctors, lawyers, accountants, engineers, and information technology specialists. The common feature these operative workers share is that they generally don’t manage or oversee the work of any other employee.
Now turn your attention to the top two levels in Exhibit 1-1. These are traditional management positions. Top management is a group of people responsible for establishing the organization’s overall objectives and developing the policies to achieve those objectives. Titles of typical top management positions in business firms include chair of the board, chief executive officer, president, and senior vice-president. Among nonprofit organizations, top management may have such titles as museum director, superintendent of schools, or gov- ernor of a state. Middle managers include all employees below the top management level who manage other managers. These individuals are responsible for establishing and meeting specific goals in their particular department or unit. Their goals, however, are not estab- lished in isolation. Instead, the objectives set by top management provide specific direction to middle managers regarding what they are expected to achieve. Ideally, if each middle manager meets their goals, the entire organization meets its objectives. Examples of job titles held by middle managers include vice-president of finance, director of sales, division manager, group manager, district manager, unit manager, or high school principal.
Let’s again return to Exhibit 1-1. The only category that we haven’t described is supervisors. Like top and middle managers, supervisors are also part of an organization’s management team. What makes them unique is that they oversee the work of operative employees. Supervisors, then, are the only managers who don’t manage other managers. Another way to think of supervisors is as first-level managers. That is, counting from the bottom of the traditional pyramid-shaped organization, supervisors represent the first level in the management hierarchy.
operative employees Employees who physically produce an organization’s goods and services by working on specific tasks.
top management A group of people responsible for establishing an organization’s overall objectives and developing the policies to achieve those objectives.
middle managers All employees below the top manage- ment level who manage other manag- ers and are responsible for establishing and meeting specific departmental or unit goals set by top management.
supervisors As part of an organization’s manage- ment team, supervisors oversee the work of operative employees and are the only managers who don’t manage other managers. See also first-level managers.
first-level managers Managers who represent the first level in the management hierarchy. See also supervisors.
Exhibit 1-1 Levels in the traditional organizational pyramid.
Middle Managers
Supervisors
Operative Employees
Top Management
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6 Part 1 Defining Supervision and Supervisory Challenges
What kinds of titles are likely to tell you that someone is a supervisor? Though names may be sometimes deceiving, people with job titles such as assistant manager, department head, department chair, head coach, foreman, or team leader are typically in supervisory positions. An interesting aspect of supervisors’ jobs is that they may engage in operating tasks with their employees. The counter clerk at Burger King may also be the shift super- visor. The claims supervisor at Progressive may also process claim forms. It is important to recognize that even though they perform operative tasks, supervisors are still part of management. That was made clear in 1947, when the U.S. Congress passed the Taft- Hartley Act. This act specifically excluded supervisors from the definition of employee. Moreover, the Taft-Hartley Act stated that any person who can “hire, suspend, transfer, lay off, recall, promote, discharge, assign, reward, or discipline other employees while using independent judgment is a supervisor.” Because first-level managers usually have this authority, the fact that they also engage in the same kind of work their employees perform in no way changes their management status. In reality, they are still expected to perform the duties and responsibilities associated with the management process.
The Management Process Just as organizations have common characteristics, so, too, do managers at all levels of the organization. Although their titles vary widely, there are several common elements to their jobs—regardless of whether the supervisor is a head nurse in the Heart Center unit of the Washington Hospital Center who oversees a staff of eleven critical-care specialists, or the chief executive officer of the 82,000-plus-member ExxonMobil Corporation. In this section, we look at these commonalities as we discuss the management process and what managers do.
WHAT IS MANAGEMENT? The term management refers to the process of getting things done, effectively and effi- ciently, through and with other people. Several terms of this definition warrant some discussion: process, efficiently, and effectively.
The term process in the definition of management represents the primary activities that supervisors perform. We call these the management functions. The next section will describe these functions.
Efficiency means doing the task right, and refers to the relationship between inputs and outputs. If you get more output for a given input, you have increased efficiency. You also increase effi- ciency when you get the same output with fewer resources. Because supervisors deal with input resources that are scarce—money, people, and equip- ment—they are concerned with efficient use of these resources. Consequently, supervisors must be con- cerned with minimizing resource costs.
Although minimizing resource costs is important, it isn’t enough simply to be efficient. A supervisor must also be concerned with completing activities. We call this effectiveness. Effectiveness means doing the right task. In an organization, this translates into goal attain- ment. Exhibit 1-2 shows how efficiency and effective- ness are interrelated. The need for efficiency has a profound effect on the level of effectiveness. It’s easier to be effective if you ignore efficiency. For instance, you could produce more sophisticated and higher-quality products if you disregard labor and material input
costs—yet that would more than likely create serious financial problems. Consequently,
OBJECTIVE 1.2 Define supervisor.
management The process of getting things done, effectively and efficiently, through and with other people.
process The primary activities supervisors perform.
efficiency Doing a task right; also refers to the relationship between inputs and outputs.
effectiveness Doing the right task; goal attainment.
Exhibit 1-2 Efficiency versus effectiveness.
Goals
Low Waste High Attainment
Means: Efficiency
R e s o u r c e
U s a g e
Ends: Effectiveness
G o a l
A t t a i n m e n t
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Chapter 1 Supervision Fundamentals 7
being a good supervisor means being concerned with both attaining goals (effectiveness) and doing so as efficiently as possible.
WHAT ARE THE FOUR MANAGEMENT FUNCTIONS? In the early part of the twentieth century, a French industrialist named Henri Fayol wrote that all managers perform five management functions: They plan, organize, command, coor- dinate, and control.3 In the mid-1950s, two professors at UCLA used the functions of planning, organizing, staffing, directing, and controlling as the framework for their man- agement textbook.4 Most management textbooks continue to be organized around man- agement functions, though these have generally been condensed to the basic four: planning, organizing, leading, and controlling (see Exhibit 1-3).
Because organizations exist to achieve some purpose, someone has to define that purpose and the means for its achievement. A manager is that someone. The planning function encompasses defining an organization’s goals, establishing an overall strategy for achieving those goals and developing a comprehensive hierarchy of plans to integrate and coordinate activities. Setting goals keeps the work to be done in its proper focus and helps organizational members keep their attention on what is most important.
Managers also have to divide work into manageable components and coordinate results to achieve objectives. This is the organizing function and includes determining which tasks will be done, who will do them, how the tasks will be grouped, who will report to whom, and when decisions will be made.
We know that every organization contains people, and that part of a manager’s job is to direct and coordinate the activities of these people. Performing this activity is referred to as the leading function of management. When managers motivate employees, direct the activities of others, select the most effective communication channel, or resolve conflicts among members, they’re engaging in leading.
The final function managers perform is controlling. After the goals are set, the plans formulated, the structural arrangements determined, and the people hired, trained, and motivated, something may still go amiss. To ensure that things are going as they should, a manager must monitor the organization’s performance. Actual performance must be compared with the previously set goals. If there are any significant deviations, it’s the manager’s responsibility to get the organization back on track. This process of monitor- ing, comparing, and correcting constitutes the controlling function.
DO MANAGEMENT FUNCTIONS DIFFER BY ORGANIZATIONAL LEVELS? A manager’s level in an organization affects how these management functions are per- formed. A supervisor in the sales department at Black & Decker won’t do the same kind of planning as Black & Decker’s president. That’s because although all managers perform the four management functions, there are important differences relating to
3H. Fayol, Industrial and General Administration (Paris: Dunod, 1916). 4H. Koontz and C. O’Donnell, Principles of Management: An Analysis of Managerial Functions (New York: McGraw-Hill, 1955).
management functions Planning, organizing, leading, and controlling.
planning defining an organization’s goals, estab- lishing an overall strategy for achieving those goals and developing a compre- hensive hierarchy of plans to integrate and coordinate activities.
organizing Arranging and grouping jobs, allocat- ing resources, and assigning work so that activities can be accomplished as planned; determining which tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and when decisions are to be made.
leading Motivating employees, directing activities of others, selecting the most effective communication channel, and resolving conflicts among members.
controlling Monitoring an organization’s perfor- mance and comparing performance with previously set goals. If significant deviations exist, getting the organiza- tion back on track.
Exhibit 1-3 Management functions.
+ +
Planning
Setting goals and organizational direction
Achieving
Organizational goals
Leading
Directing, motivating, and handling conflicts
Organizing
Determining what needs to be done
Controlling
Monitoring activities+ =
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8 Part 1 Defining Supervision and Supervisory Challenges
their level. Typically, top management focuses on long-term strategic planning, such as determining in what overall business a company should be. Supervisors focus on short-term, tactical planning such as scheduling departmental workloads for the next month. Similarly, top management is concerned with structuring the overall organiza- tion, whereas supervisors focus on structuring the jobs of individuals and workgroups.
Changing Expectations of Supervisors Seventy years ago, if you had asked a group of top executives what they thought a supervisor’s job was, you would have gotten a fairly standard answer. They would describe a man (which it was likely to be back then) who forcefully made decisions, told employees what to do, closely watched over those employees to make sure they did as they were told, disciplined them when they broke the rules, and fired those that didn’t “shape up.” Supervisors were the bosses “on the operating floor,” and their job was to keep the employees in line and get the work out.
If you ask top executives that same question today, you’ll find a few who still hold to the supervisor-as-boss perspective, but you’ll also hear executives describe today’s supervisor using terms such as trainer, adviser, mentor, facilitator, or coach. In this sec- tion, we look at some of these changing expectations of supervisory managers.
WHAT ROLES DO SUPERVISORS PLAY? The supervisor’s job is unique in that it bridges the management ranks with the operating employees. No one else in the organization can make that claim. Yet because of this uniqueness, supervisors have an ambiguous role. Each of the following offers a different viewpoint of the supervisor’s role:5
Key person Supervisors serve as the critical communication link in the organization’s chain of authority. They are like the hub of a wheel around which all operating activi- ties revolve.
Person in the middle Because they are “neither fish nor fowl,” supervisors must interact and reconcile the opposing forces and competing expectations from higher management and workers. If unresolved, this conflicting role can create frustration and stress for supervisors.
Just another worker Some people, particularly upper-level managers, see supervisors as “just another worker,” rather than as management. This is reinforced when their decision-making authority is limited, when they’re excluded from participating in upper- level decisions, and when they perform operating tasks alongside the same people they supervise.
Behavioral specialist Consistent with the belief that one of the most important abilities needed by supervisors is strong interpersonal skills, they are looked at as behavioral specialists. To succeed in their jobs, supervisors must be able to understand the varied needs of their staff and be able to listen, motivate, and lead.
Although each of these four role descriptions has some truth to it, each also offers a slanted view of the supervisor’s job. Our point is that different people hold different perceptions of this job, which can create ambiguity and conflicts for today’s supervisor.
OBJECTIVE 1.3 Identify the four functions in the man- agement process.
5Based on J. Newstrom and K. Davis, Organizational Behavior: Human Behavior at Work, 9th ed. (New York: McGraw-Hill, 1993), 239.
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Chapter 1 Supervision Fundamentals 9
ARE SUPERVISORS MORE IMPORTANT IN TODAY’S ORGANIZATIONS? Regardless of what people think and the different role perceptions they hold, a case can be built that the supervisor’s job will continue to become increasingly important and complex in the future. Why? We can provide at least three reasons.
First, organizations are implementing significant change and quality programs to cut costs and increase productivity. Examples of these programs include continuous quality improvements, the introduction of work teams, group bonus plans, flexible work hours, and accident-prevention and stress-reduction programs. These programs tend to focus on the work activities of operating employees. As a result, supervisors have become increasingly important because they typically assume responsibility for introducing and implementing these change efforts at the operations level.
Second, organizations are making extensive cutbacks in their number of employees. Boeing, General Motors, United Airlines, Motorola, IBM, and American Express are just a few of the major companies that have cut anywhere from 1,000 to 50,000 jobs. Organizations are constantly thinning their ranks among middle managers and staff- support personnel. “Lean and mean” continues to be a major theme for the best corpo- rations. The implications of these cutbacks will be that supervisors have more people directly reporting to them. Moreover, many tasks previously performed by people in support units—such as work design, process flow, scheduling, and quality control—will be reassigned to supervisors and their employees. The net effect will be significantly expanded responsibilities for supervisors.
Finally, employee training is more important than ever as organizations seek to improve productivity. New employees—many of whom are poorly prepared for work or have language or communication deficiencies—require basic training in reading, writing, and mathematics. Changes in jobs brought about by computers, automation, and other
Comprehension Check 1-1
1. All of the following except one are characteristics of all organizations. Which one is not a characteristic?
a. Purpose b. Profit c. People d. Structure
2. The term process in the definition of management refers to: a. the primary activities supervisors perform on their jobs. b. the transformation of raw materials into goods. c. the relationship between doing a task correctly and doing the correct task. d. the means of goal attainment.
3. The management function that involves monitoring activities to ensure that targets are being met is called:
a. planning. b. organizing. c. leading. d. controlling.
4. A key person in a supervisory role is someone who:
a. interacts with opposing forces to reconcile differences. b. serves as the critical communication link in the organization. c. is just another worker. d. has a strong ability to listen and understand what is being said.
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10 Part 1 Defining Supervision and Supervisory Challenges
technological advances require additional skills training among current employees to prevent their skills from becoming obsolete. Supervisors will carry the primary burden for identifying these skill deficiencies, designing appropriate training programs, and in some cases, even providing the training itself.
Obviously, being a supervisor is both challenging and exciting. One thing we know for sure is that supervisors matter to organizations. The Gallup Organization, which has polled millions of employees and tens of thousands of supervisors, has found that the single most important variable in employee productivity and loyalty isn’t pay or benefits or workplace environment; it’s the quality of the relationship between employees and their direct supervisors. Gallup also found that a relationship with their manager is the largest factor in employee engagement—which is when employees are connected to, satis- fied with, and enthusiastic about their jobs—accounting for at least 70 percent of an employee’s level of engagement.6 Gallup also found when companies increase their num- ber of talented managers and double the rate of engaged employees, their earnings per share is 147 percent higher than their competitors.7 The same research showed that tal- ented managers contribute about 48 percent higher profit to their companies than average managers8. Lastly, another study showed that when a poor manager was replaced with a great one, employee productivity increased by 12 percent9. What can we conclude from such reports? Supervisors matter, and will continue to matter, to organizations!
IS SUSTAINABILITY IMPORTANT TO A SUPERVISOR? Organizations recognize the need to add products that will meet the challenges of a changing world, and contemporary corporate action affirms that sustainability and green management have become mainstream issues for supervisors. What’s emerging in the twenty-first century is the concept of managing in a sustainable way, which has had the effect of widening corporate responsibility not only to supervising in an efficient and effective way, but also to responding strategically to a wide range of environmental and societal challenges.10 Although “sustainable development” means different things to different people, in essence, according to the United Nations in their Brundtland Com- mission Report (1987), it is concerned with “meeting11 the needs of people today with- out compromising the ability of future generations to meet their own needs.” From a business perspective, sustainability has been defined as a company’s ability to achieve its business goals and increase long-term shareholder value by integrating economic, envi- ronmental, and social opportunities into its business strategies.12 Sustainability issues are now moving up the agenda of business leaders and the boards of thousands of companies. As supervisors at Walmart are discovering, running an organization in a more sustainable way will mean they have to make informed business decisions based on thorough communication with various stakeholders, understanding their require- ments, and starting to factor economic, environmental, and social aspects into how they pursue their business goals.
employee engagement When employees are connected to, satisfied with, and enthusiastic about their jobs.
6J. Harter and A. Adkins, “Employees Want a Lot More from Their Managers,” April 8, 2015, http:// www.gallup.com/businessjournal/182321/employees-lot-managers.aspx?g_source=Employees%20 Want%20a%20Lot%20More%20From%20Their%20Managers&g_medium=search&g_campaign=tiles (Accessed December 28, 2016) 7R. Beck and J. Harter, “Why Great Managers Are So Rare,” March 26, 2014, http://www.gallup.com/ businessjournal/167975/why-great-managers-rare.aspx?g_source=Why%20Great%20Managers%20 Are%20So%20Rare&g_medium=search&g_campaign=tiles (Accessed December 28, 2016) 8Ibid 9S. Bailey, “No Manager Left Behind,” Chief Learning Officer, February 3, 2015, http://www.clomedia. com/2015/02/03/no-manager-left-behind/ (Accessed December 28, 2016). 10KPMG Global Sustainability Services, Sustainability Insights, October 2007. 11World Commission on Environment and Development, Brundtland Commission, Our Common Future (Oxford University Press, 1987), “Our Common Future, Chapter 2: Towards Sustainable Development” http://un-documents.net/ocf-02.htm (accessed December 28, 2016) 12Symposium on Sustainability—Profiles in Leadership, New York, October 2001.
sustainability A company’s ability to achieve its business goals and increase long- term shareholder value by integrat- ing economic, environmental, and social opportunities into its business strategies.
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Chapter 1 Supervision Fundamentals 11
DOES A SUPERVISOR NEED TO BE A COACH? Today’s supervisors are far less likely to be able to do all aspects of their employees’ jobs. Supervisors need to know what their employees are doing, but they are not necessarily expected to be as skilled at specific job tasks as each employee. Moreover, employees don’t need an author- ity figure to tell them what to do or to “keep them in line.” Instead, they may need a coach who can listen to, guide, train, and assist them. In their coaching role, supervisors are expected to ensure that their employees have the resources they need to do a first-class job. They must also develop their employees’ skills and knowledge, clarify responsibili- ties and goals, motivate employees to higher levels of per- formance, and represent their workgroup’s interests within the organization.
Transition from Employee to Supervisor It wasn’t easy making the move from being one of the quality-control specialists in the de- partment to being the supervisor. On Friday, I had been one of them. The next Monday, I became their boss. Suddenly, people with whom I had joked around and socialized for years were distancing themselves from me. I could see that they were apprehensive. They weren’t sure, now, if I could be trusted. I didn’t think our relationship was going to be much different. Hey, we were friends. We went out together every Friday after work. But I’m management now. I still think I’m like them—part of the group. But they don’t see me that way. Even when I join them for drinks, it’s not like it used to be. They have their guard up now. It’s been a hard adjustment for me.
These comments from an individual promoted to quality-control supervisor at Mon- santo capture the dilemma many new supervisors face when they’re promoted from the ranks.
It’s important to reflect for a moment on what this step of becoming a supervisor really means. For many in the workforce, becoming a supervisor is a major turning point in their career. It’s a time when one becomes responsible not only for one’s own work but also for the work of oth- ers. It’s a time when authority is given to someone—and that authority can be used in a variety of ways. It’s a time of added responsibility and accountability to the organiza- tion—when one becomes part of the management team.
Although for many this is an exciting time, being a supervisor can present challenges. Meeting goals, making appropriate decisions, supervising employees, and being the communication vehicle for information that needs to be conveyed to employees can be overwhelming. But they can also be rewarding when one has the skills and competencies to be an effective supervisor.
A number of recent surveys of first-time supervisors reveal a broad spectrum of reac- tions to, and realities of, their supervisory position. Ten percent of supervisors say they’re prepared, trained and qualified, and yet 48 percent of first-time supervisors fail. Although 68 percent of supervisors confess they really don’t like being in their position, 40 percent of supervisors are ranked in the top ninetieth percentile of effectiveness, and 40 percent are reported to be in the bottom tenth percentile of effectiveness. And yet, 42 percent of new supervisors believe they know how to succeed at their jobs. Ninety percent of workers
OBJECTIVE 1.4 Explain why the supervisor’s role is considered ambiguous.
Like athletic coaches, today’s supervisors need to get their employees “ready for the game” and cheer them on to success.
Cathy Yeulet/123RF.com
Supervisors must understand that supervising employees today is dramatically different from in the past. A supervisor must act as a coach rather than as a task- master. This translates into being aware of employees’ needs and being willing to let them do their jobs, giving support wherever it is needed.
Dotshock/Shutterstock
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12 Part 1 Defining Supervision and Supervisory Challenges
who responded to a survey said that good supervisors are effective in increasing their loyalty to the company, and 42 percent of workers responding said that communicating ideas/expectations clearly was the most important quality in a good boss.13 In this section, we look at the primary roads people take to becoming supervisors, and the challenges they face in mastering a new identity.
WHERE DO SUPERVISORS COME FROM? Many new supervisors are promoted from within the ranks of their current employers. The second major source of supervisory personnel is new college graduates. Occasion- ally, employees from other organizations are hired to become first-line supervisors; how- ever, this is increasingly rare because if employers have an open supervisory position, they often prefer to fill it with someone they know and who knows the organization. That favors promoting from within.
Employers tend to promote operative employees to first-line management jobs for several reasons. Operative employees know how the operations function. They under- stand how things are done in the organization. They typically know the people they’ll be supervising. Another advantage is that the organization knows a lot about the candidate. When management promotes “one of its own” into a supervisory position, it minimizes risk. When hiring from the outside, management must rely on limited information pro- vided by previous employers. By promoting from within, management can draw on its full history with a candidate. Finally, and most importantly, promoting from within acts as an employee motivator by providing an incentive for employees to work hard and excel.
What criteria does management tend to use in deciding who to promote into first- line managerial positions? Employees with good work records and an interest in man- agement tend to be favored. Ironically, not all “good” operative employees make good supervisors. The reason is that people with strong technical skills don’t necessarily have the skills needed to manage others. Organizations that successfully promote from the ranks select employees with adequate technical skills and provide them with supervisory training early in their new assignments.
Recent college graduates provide the other primary source of candidates for super- visory positions. Two-year and four-year college programs in supervision and manage- ment provide a basic foundation for preparing for the supervisor’s job. With additional organizational training, many new college graduates are equipped to step into first-line management.
IS THE TRANSITION TO SUPERVISOR DIFFICULT? Moving from one middle-management job to another, or from a middle-management position to one in top management, rarely creates the anxiety that comes when one moves from being an employee to being a supervisor. It’s a lot like being a parent. If you already have three kids, the addition of one more isn’t too big a deal. Why? Because you already know quite a bit about parenting—and you’ve been through it before. The challenge lies in the transition from being childless to being a parent for the first time. The same applies here. The challenge is unique when one moves into first-line management; it is unlike anything managers will encounter later in their rise up the organizational ladder.14
13Based on D. Zack, “Lead From Your Strengths,” T&D, February 2013, pp. 72–73; M. S. Plakotnik and T. S. Rocco, “A Succession Plan for First-Time Managers,” T&D, December 2011, pp. 42–45; D. Zack, “How to Manage When You Hate Being a Boss,” www.fastcompany.com, September 26, 2012; A. Fox, “Help Managers Shine,” HR Magazine, February 2013, pp. 43–48; A. Fisher, “Unhappy Manager? You’re Far from Alone,” management.fortune.cnn.com, July 20, 2012; J. Yang and P. Trap, “What Is Effective in Increasing Your Loyalty to Your Company,” USA Today, August 14, 2012, p.1B; D. Meinert, “Executive Briefing,” HR Magazine, May 2012, p. 18; and K. Plombino, “No. 1 Quality in a Good Boss?” hrcommu- nications.com, November 26, 2012. 14See, for example, R. D. Ramsey, “So You’ve Been Promoted or Changed Jobs. Now What?” Supervision, November 1998, 6–8.
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Chapter 1 Supervision Fundamentals 13
A previous study of what nineteen new supervisors experienced in their first year on the job helps us to better understand what it’s like to become a first-line manager.15 Fourteen men and five women participated in this study. All worked in sales or market- ing. However, their experiences are relevant to anyone making the employee–supervisor transition.
Even though these new supervisors had worked in their respective organizations as salespeople for an average of six years, their expectations of a supervisory position were incomplete and simplistic. They didn’t appreciate the full range of demands that would be made on them. Each had previously been a star salesperson. They were promoted, in large part, as a reward for their good performance. But good performance for a sales- person and good performance for a supervisor are very different—and few of these new supervisors understood that. Ironically, their previous successes in sales may actually have made their transition to management more difficult. Because of their strong technical expertise and high motivation, they depended on their supervisors less than the average salesperson for support and guidance. When they became supervisors and suddenly had to deal with low-performing and unmotivated employees, they weren’t prepared for it.
The nineteen new supervisors actually encountered a number of surprises. We briefly summarize the major ones because they capture the essence of what many supervisors encounter as they attempt to master their new identity.
Their initial view of the manager as “boss” was incorrect Before taking their supervisory jobs, these managers-to-be talked about the power they would have and of being in control. As one put it, “Now I’ll be the one calling the shots.” After a month, they spoke of being a “troubleshooter,” a “juggler,” and a “quick-change artist.” All emphasized solving problems, making decisions, helping others, and providing resources as their primary responsibilities. They no longer conceived of their jobs as being “the boss.”
They were unprepared for the demands and ambiguities they would face In their first week, these supervisors were surprised by the unrelenting workload and pace of being a manager. On a typical day, they had to work on many problems simultaneously and were met with constant interruptions.
Technical expertise was no longer the primary determinant of success or failure The supervisors were used to excelling by performing specific technical tasks and being individual contributors, not by acquiring managerial competence and getting things done through others. It took four to six months on the job for most to come to grips with the fact that they now would be judged by their ability to motivate others to high performance.
A supervisor’s job comes with administrative duties These supervisors found that routine communication activities such as paperwork and exchange of information were time consuming and interfered with their autonomy.
They weren’t prepared for the “people challenges” of their new jobs The supervisors unanimously asserted that the most demanding skills they had to learn in their first year dealt with managing people. They expressed being particularly uncomfortable in coun- seling employees and providing leadership. As one stated, “I hadn’t realized . . . how hard it is to motivate people or develop them or deal with their personal problems.”
Given this and similar issues that arise when one becomes a supervisor, what does it take to be an effective supervisor? What competencies or general categories of skills are needed? Are these the same, regardless of one’s level in the organization? We answer these questions in the next section.
15This section is based on L. A. Hill, Becoming a Manager: Mastery of New Identity (Boston: Harvard Business School Press, 1992).
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14 Part 1 Defining Supervision and Supervisory Challenges
DO YOU REALLY WANT TO BE A SUPERVISOR? The fact that you’re learning about supervision indicates you’re interested in under- standing how to supervise people. What is it about supervising people that excites you? Is it the fact that you can help an organization achieve its goals? Is it the challenge of supervising others—directing their work—that interests you? Is it the fact that super- vision may lead to a management position and hopes of climbing the career ladder? Whatever your reasons, you need a clear picture of what lies ahead.
Supervisory positions are not easy. Even if you’ve been a superstar as an employee, this is no guarantee that you’ll succeed as a supervisor. The fact that you are capable of doing excellent work is a big plus, but there are many other factors to consider. You need to recognize that supervising others may mean longer work hours. You’re often on the job before your employees and leave after they do. Supervising can literally be a twenty-four-hours-a-day, seven-days-a-week job. Now, that’s not to be interpreted as being on the job every hour of every day. But when you accept the responsibility of supervising others, you really never can “get away” from the job. Things happen, and you’ll be expected to deal with them—no matter when they happen or where you are. It’s not unheard of to get a call while you’re on vacation if problems arise. Organizational policy may require peers and subordinates to contact you via cell phone in the event of any unforeseen event. How was someone in the organization able to contact you during your getaway? You are probably required by organizational policy to provide emergency contact information, and to call in periodically to see how things are going.
You also need to recognize that as a supervisor, you may have a seemingly end- less pile of paperwork to complete. Although organizations are continually working to eliminate much of their paperwork, much still remains. This may include employee work schedules, production cost estimates, inventory documentation, or budget and payroll matters.
Another matter of importance that you should consider is the effect the supervisor’s job may have on your pay! In some organizations, a raise in your base pay when you become a supervisor may not translate into higher annual earnings. How so? Consider that, as a supervisor, you are generally no longer eligible for overtime pay or commission. Instead, you may get compensatory (comp) time (time off). When you are an operative employee, your organization is legally required to pay you a premium rate (typically time-and-a-half) for overtime work. That may not be true when you become a supervisor. If you get a $6,000 raise when you become a supervisor, but earned $6,500 last year in overtime, you’re actually earning less as a supervisor. This is something that you’ll need to discuss with your organization before making your decision to become a supervisor.
What are the previous paragraphs really saying? They’re telling you to think about why you want to supervise. Managing others can be rewarding. The excitement is real—and so are the headaches. You need to understand exactly what your motives are for becoming a supervisor, and what trade-offs you’re willing to make to become the best supervisor you can be.
Supervisory Competencies More than thirty years ago, Professor Robert Katz began a process of identifying essen- tial supervisory competencies.16 What Katz and others have found is that successful super- visors must possess four critical competencies: technical, interpersonal, conceptual, and political competencies. They are as relevant today as when Katz originally described them.
OBJECTIVE1.5 Describe the four essential supervisory competencies.
16R. L. Katz, “Skills of an Effective Administrator,” Harvard Business Review, September–October 1974, 90–102; and B. Humphrey and J. Stokes, “The 21st Century Supervisor,” HR Magazine, May 2000, 185–192.
supervisory competencies Conceptual, interpersonal, technical, and political competencies.
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Chapter 1 Supervision Fundamentals 15
WHAT IS TECHNICAL COMPETENCE? Top management is composed of generalists. The activities that consume top managers— strategic planning, developing the organization’s overall structure and culture, main- taining relations with major customers and bankers, marketing the product, and the like—are essentially generic in nature. The technical demands of top management jobs tend to be related to knowledge of the industry and a general understanding of the organization’s processes and products. This isn’t true for managers at other levels.
Most supervisors manage within areas of specialized knowledge: the vice-president of human resources, the director of computer systems, the regional sales manager, and the supervisor of health claims. These supervisors require technical competence, which is the ability to apply specialized knowledge or expertise. It’s difficult, if not impossible, to supervise employees with specialized skills effectively if you don’t have an adequate understanding of the technical aspects of their jobs. Although the supervisor need not be able to perform certain technical skills, understanding what each worker does is part of every supervisor’s job. For example, the task of scheduling workflow requires technical competence to determine what needs to be done.
technical competence The ability to apply specialized knowl- edge or expertise.
Something to Think About (and promote class discussion)
BECOMING A SUPERVISOR Becoming a supervisor is a challenging opportunity. Some individuals look forward to “taking the helm” of a crew of workers, whereas others are put into this situation with little advance notice or training. As you consider going into a supervisory position—or making yourself a more effective supervisor than you are today—think about the following two areas:
1. List five reasons why you want to be a supervisor.
2. Identify five potential problems or difficulties that you may encounter when you become a supervisor.
THE SUPERVISOR’S ROLE IN MODERN ORGANIZATIONS
NEWS FLASH!
For years, the role of the working or front-line supervisor has been considered by many organiza- tions to be little more than a stepping-stone into management. Business and management schools devoted their attention primarily to teaching prin- ciples and theories applicable to upper manage- ment. Many professors figured their graduates would hold down beginning supervisory roles for a short period and then move into something more challenging. How things have changed!
Today’s organizations are complex. Some of the complexity is a result, in part, of the following:
■ A more culturally diverse workforce than ever before.
■ Molding a productive team out of a mix of full-timers, part-timers, “temps,” and con- tract workers.
■ Implementation of quality and productiv- ity programs such as ISO certification and Six Sigma, just-in-time and lean manufactur- ing, and organizing work using self-directed teams.
■ Enforcing the ever-growing number of employ- ment laws pertaining to hiring and dismissal, antidiscrimination, sexual harassment, disabil- ity accommodation, workplace violence, Family and Medical Leave Act (FMLA) of 1993, Occupational Safety and Health Administration
(continued)
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16 Part 1 Defining Supervision and Supervisory Challenges
Continued
(OSHA), Health Insurance Portability and Accountability Act (HIPAA) of 1996, worker’s compensation, overtime, and ergonomics.
■ Globalization and international competition, downsizing, outsourcing, and flattening of the organizational structure by removing levels of management.
The Good News for Supervisors To meet all the challenges inherent in the complex- ity of modern organizations, the role of the front- line supervisor has changed dramatically. This is great news for someone aspiring to become a front-line supervisor because, although challeng- ing, these changes present tremendous career and growth opportunities.
1. The stature of the front-line supervisor has been elevated. Instead of being a bit player at the bottom rung of the management ladder, the supervisor has become a key position. The obvious reason is that many middle and upper- level management positions have been elimi- nated. Organizations are “flattening” their organizational hierarchy. There are fewer mid- dle and upper-level managers in flat organiza- tions. The flat organizational structure means more authority, power, and responsibility are being delegated to lower-level managerial posi- tions. The talent and skill of the supervisor in a flat organization is a major factor to its success.
2. Empowerment of the supervisor’s job is ongo- ing. Some of the “power” previously held by those whose jobs have been eliminated will be delegated to the supervisors they used to super- vise. This shift means that line supervisors or “team leaders” of the past can take a more positive stance. They can submit new sugges- tions with more freedom and more influence. In short, the line supervisor will play a big- ger role in the total management team. Upper management (those who remain) will have to listen more and react to what they hear.
3. Supervisors have more autonomy. With fewer directives to follow, fewer inspections from those above, and fewer people to please, supervisors have the power and responsibility
to run their departments or “teams” more like the owner of a small business might do. Super- visors will be encouraged to operate with more authority while also being held accountable.
4. Supervisors receive more advanced train- ing. As upper management shifts additional responsibilities to their front-line supervisors, they will provide more training to help them succeed. In addition, more supervisors will appoint assistants and prepare them for tem- porary “takeover” roles when they are absent. In other words, front-line supervisors will move closer to those upper-management lead- ers who remain with the firm and whose roles, in turn, will be expanded.
5. Supervisors derive tremendous personal ben- efits from their role in today’s business cul- ture. For example:
■ Effective supervisors will be easier to spot and will be “first call” on promotional possibilities.
■ Women who excel as front-line supervisors will discover that the so-called glass ceiling is less likely to affect them.
■ The challenges of front-line supervision provide a great training ground and prepa- ration for upper-management positions.
■ Supervision offers the opportunity to en- gage in meaningful and challenging work that will enhance one’s self-respect and the respect from others.
■ Supervisors will receive more immediate positive reinforcement of their contribution to organizational success as a result of lead- ing their employees through collaborative and team-based approaches than was pos- sible through former top-down manage- ment methods.
■ Supervisors will have greater opportunities to engage in continuous learning, which is a top motivator.
Sources: Goodwin, Cliff B,: Griffith, Daniel B., Supervisors Survival Kit, 11th., © 2009. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.
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Chapter 1 Supervision Fundamentals 17
HOW DO INTERPERSONAL COMPETENCIES HELP? The ability to work well with people, understand their needs, communicate well, and motivate others—both individually and in groups—constitutes interpersonal competence. Many people are technically proficient but interpersonally incompetent. They might be poor listeners, be unconcerned with the needs of others, or have difficulty dealing with conflicts. Supervisors get things done through other people. They must have good inter- personal skills to communicate, motivate, negotiate, delegate, and resolve conflicts.
WHAT IS CONCEPTUAL COMPETENCE? Conceptual competence is the mental ability to analyze and diagnose complex situations. Strong conceptual abilities allow a supervisor to see that the organization is a complex system of many interrelated parts and that the organization itself is part of a larger sys- tem that includes the organization’s industry, the community, and the nation’s economy. This gives the supervisor a broad perspective and contributes to creative problem solv- ing. On a more practical level, strong conceptual abilities help managers make good decisions.
WHY MUST ONE HAVE POLITICAL COMPETENCE? Political competence is the supervisors’ ability to enhance their power, build a power base, and establish the “right” connections in the organization. Supervisors engage in politics when they attempt to influence the advantages and disadvantages of a situation. It goes beyond normal work activities. Whenever two or more people come together for some purpose, each has some idea of what should occur. If people try to influence the situa- tion such that it benefits them more than the others, or keeps others from gaining some advantage, politics is “being played.” But not all political behavior is negative. It doesn’t have to involve manipulating a series of events, complaining about fellow supervisors, or sabotaging the work or reputation of another to further one’s career. There’s a fine line between appropriate political behavior and negative politics. We will come back to organizational politics in Chapter 14.
HOW DO COMPETENCIES SHIFT BY MANAGERIAL LEVEL? Although supervisors need to possess all the four competencies, the importance of each competency in any manager’s job varies with the individual’s level in the organization. As Exhibit 1-4 illustrates, (1) technical competence declines in importance as individu- als rise in the organization; (2) interpersonal competencies are a constant for success, regardless of level in the organization; and (3) conceptual and political competencies increase in importance as managerial responsibility rises.
Technical abilities typically have the greatest relevance for first-level managers. This is true for two reasons. First, many supervisors perform technical work as well as managerial work. In contrast to other levels of management, the distinction between individual contributor and first-line manager is often blurred. Second, supervisors spend more time on training and developing their employees than do other managers. This requires them to have a greater technical knowledge of their employees’ jobs than that needed by middle- and top-level managers.
There is overwhelming evidence that interpersonal abilities are critical at all levels of management. This shouldn’t come as a shock because we know that managers get things done through other people. Supervisors are particularly in need of interpersonal competencies because they spend so much of their time in leading-function activities. When we talked with dozens of practicing supervisors, the one common viewpoint they shared was the importance of people skills to the successful achievement of their units’ objectives.
interpersonal competence The ability to work with, understand, communicate with, and motivate other people, both individually and in groups.
conceptual competence The mental ability to analyze and diag- nose complex situations.
political competence Supervisors’ ability to enhance their power, build a power base, and estab- lish the “right” connections in the organization.
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18 Part 1 Defining Supervision and Supervisory Challenges
The importance of conceptual competence increases as managers move up in the organization. This is because of the types of problems managers encounter and the decisions they make at higher levels. Generally speaking, the higher managers rise in an organization, the more the problems they face tend to be complex, ambiguous, and ill defined. These problems require custom-made solutions. In contrast, supervisors generally have more straightforward, familiar, and easily defined problems, which lend themselves to more routine decision-making. Ill-structured problems and custom-made solutions make greater conceptual demands on managers than do structured problems and routine decision-making.
Finally, the higher one climbs in the organization’s hierarchy, the more critical political competence becomes. Because resource-allocation decisions are made at higher levels in an organization, middle and top managers are “fighting” for their piece of the organizational pie. Their need to develop alliances, support one project over another, or influence certain situations involves higher-level political skills. But don’t interpret this as implying that politics are less important for supervisors. Because so much of the supervisor’s job is well-defined, they need strong political skills to get their unit’s work completed and to survive.
From Concepts to Skills Knowledge about a subject is important, but just as important is whether you can do anything with that knowledge. Can you put your knowledge into practice? Just as you wouldn’t want a surgeon who had never operated on anyone taking a knife to you, or to fly on an aircraft with a pilot who’s never flown, it’s not enough for you to just know about supervision. You should be able to actually supervise! You can learn to be an effective supervisor. No one is born with supervisory skills, although some people have a head start.
It’s true that supervision comes easier to some people than to others. Individuals who are fortunate enough to have parents, relatives, or friends who supervise employees have role models to emulate and give them insights into what the job entails. Similarly, individuals whose parents helped them set realistic goals, provided positive feedback, encouraged autonomy, practiced open communication, and fostered the development
OBJECTIVE 1.6 Identify the elements that are neces- sary to be successful as a supervisor.
Exhibit 1-4 How competency demands vary at different levels of management.
Technical Interpersonal Conceptual Political
Top
Middle
SupervisoryL e
v e
l in
M a
n a
g e
m e
n t
Supervisory Competencies
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Chapter 1 Supervision Fundamentals 19
of a strong self-concept have learned behaviors that will help them as supervisors. Also, those who have had the fortune to work for a good supervisor have a role model to imitate. However, those without these advantages can improve their supervisory abili- ties. This text will help you to be an effective supervisor by focusing on both conceptual knowledge and practical skills. In a succeeding chapter, for example, we discuss the importance of planning to a supervisor’s success and show how setting goals is a key part of planning. Then, we present specific techniques for helping employees set goals and provide you with an opportunity to practice and develop your goal-setting skills.
WHAT IS A SKILL? A skill is the ability to demonstrate a system and sequence of behavior that is function- ally related to attaining a performance goal.17 No single action constitutes a skill. For example, the ability to write clear communications is a skill. People who have this skill know the particular sequence of actions to take to propose a project or summarize a report. They can separate primary from secondary ideas. They can organize their thoughts in a logical manner. They can simplify complex ideas. None of these actions is by itself a skill. A skill is a system of behavior that can be applied in a wide range of situations.
Which key skills are related to supervisory effectiveness? Although there is no unani- mous agreement among teachers and trainers of supervision, certain skills have surfaced as being more important than others. Exhibit 1-5 lists key supervisory skills, organized as they are presented in this text. In aggregate, they form the competency base for effec- tive supervision.
WHAT ELSE IS CRITICAL FOR ME TO KNOW ABOUT SUPERVISING? By now, you may be somewhat amazed by what supervisors have to do and the skills they must have to succeed in an organization, but you should consider several other elements. Specifically, what personal issues should you address? Let’s look at these.
One of the first things you’ll need to do is to recognize that you are part of manage- ment as a supervisor. This means that you support the organization and the wishes of management above you. Although you might disagree with those wishes, as a supervisor, you must be loyal to the organization. You must also develop a means of gaining respect from your employees, as well as your peers and boss. If you’re going to be effec- tive as a supervisor, you’ll need to develop their trust and build credibility with them. One means of doing this is to keep your skills and competencies up to date. You must continue your education, not only because it helps you, but also because it sets an example for your employees. It communicates that learning matters.
You’ll also have to understand what legitimate power you have been given by the organization because you direct the activities of others. This legitimate power is your authority to act and expect others to follow your directions. Yet ruling with an iron fist may not work. Accordingly, you’ll need to know when to assert your authority and how to get things done without resorting to “Because I told you
17R. E. Boyatzis, The Competent Manager: A Model for Effective Performance (New York: Wiley, 1982), 33.
skill The ability to demonstrate a system and sequence of behavior that is functionally related to attaining a per- formance goal.
Exhibit 1-5 Key supervisory skills.
Related to Planning and Control • Goal setting • Budgeting • Creative problem solving • Developing control charts
Related to Organizing, Staffing, and Employee Development • Empowering others • Interviewing • Providing feedback • Coaching
Related to Stimulating Individual and Group Performance • Designing motivating jobs • Projecting charisma • Listening • Conducting a group meeting
Related to Coping with Workplace Dynamics • Negotiation • Stress reduction • Counseling • Disciplining • Handling grievances
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20 Part 1 Defining Supervision and Supervisory Challenges
so.” In the latter case, you need to develop interpersonal skills that help you influence others. This is particularly true when dealing with organizational members whom you don’t supervise.
Finally, you’ll need to recognize that organizational members are different—not only in their talents, but as individuals. You’ll need to be sensitive to their needs, tol- erate and even celebrate their differences, and be empathetic to them as individuals. Success, in part, begins with understanding what being flexible means. Throughout this text, we address each of these areas. For instance, in the next chapter, we will introduce you to the diversity of the workforce and what that may mean for you. In Chapter 9, we will introduce trust and credibility and their role in your leadership effectiveness.
Why Study Supervision? A good number of students regularly tell us they are not planning a career in supervi- sion and never plan to be in a supervisory position. These students identify their career goals in computer information, engineering, accounting, communication, and marketing without ever seeing themselves in a leadership position within the organization. They ask: Why do I need to take a course in supervision? How will studying supervision help my career?
Our answer: Because understanding supervision concepts and how supervisors think will help you get better results at work and enhance your career. As a parent, leader, and supervisor, you are in the unique position of offering support and guidance to fol- lowers who will benefit from your knowledge and experience. Successful employees are regularly promoted to supervisory roles. Even though you may begin your career in your major field of study, life and opportunity often have a way of taking you far afield, and a few years later, you’re overseeing a team in your own entrepreneurial startup or you’re an organizational partner thrust into supervising an expanding office. So, if you expect to work with others—whether it’s in a Fortune 100 corporation or in your own three-person startup—studying supervision can pay big dividends when it comes to your ability to lead and influence followers.
Throughout Supervision Today!, you’ll come upon sections we call “Something to Think About” and “News Flash!” These features will introduce you to challenges you’re likely to face at work—such as organizational politics, an uncommunicative boss, or an unfair performance review—and offer you specific suggestions on how to deal with these challenges. These challenging features, paired with the comprehensive chapter coverage of leadership topics and chapter-ending “Developing Your Super- visory Skills” section, will help develop your communication, critical thinking, and collaboration skills.
As an outcome of interacting with Supervision Today! We hope you come to the realization that supervision is needed in all types and sizes of organizations, at all orga- nizational levels, in all organizational areas, and in all organizations no matter where they may be located. Because of the widespread need for supervisors to plan, organize, lead, and control we want to find ways to improve the way organizations are super- vised. However, that’s not to say that supervision is done the same way everywhere; it is mostly a matter of degree and emphasis, not function. Because situations and context vary by organization, it is easy to say that even though supervisors will plan, organize, lead, and control, how much and how they do so will differ widely.
Supervision is commonly needed in all organizations because people interact with organizations every single day. Organizations that are well-supervised will develop a loyal employee and customer base, grow, and prosper, even during challenging times. Those that are poorly supervised find themselves losing employees, customers, and rev- enues. The study of supervision will enable you to identify poor leadership and work to
OBJECTIVE 1.7 Identify the value of studying supervision.
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Chapter 1 Supervision Fundamentals 21
get it corrected. In addition, you’ll be able to recognize and support good supervision, regardless of whether you’re interacting with it as a customer or an employee.
A more realistic reason to study supervision is the simple fact that for most of you, once you graduate from college and begin your career, you will either supervise or be supervised. If you plan to be a supervisor, a foundational understanding of supervision provides a base on which to build additional supervisory knowledge and skills. If you don’t see yourself supervising, you’re still likely to be working for or with others, and being supervised in the process. Also, assuming you will work for a living and recog- nizing that you are likely to work in an organization, you will probably have some supervisory responsibilities. Experience shows that you can gain insight into the way your boss and fellow employees behave, and how organizations function by studying supervision. Remember, you don’t have to aspire to be a supervisor to benefit from a course in supervision.
Supervisors have the unique responsibility of creating a work environment in which organizational members can do their work to the best of their ability and help them and the organization achieve their goals. Supervisors help others find meaning and fulfillment in their duties. Supervisors support, coach, and nurture followers and help them make good decisions. In addition, as a supervisor, you often have the opportunity to think creatively and use your imagination. Supervisors get to meet and work with a variety of people inside and outside their organization. Supervisors are often rewarded by receiving recognition and status in their organization and in the community, playing a role in influencing organizational outcomes, and receiving attractive compensation in the form of salaries, bonuses, and stock options. Finally, organizations need good supervisors and it is through the combined efforts of motivated and passionate people working together that organizations accomplish their goals. As a supervisor, you can be assured that your efforts, skills, and abilities are needed!
Comprehension Check 1-2
5. True or false? The transition from middle manager to top-level manager creates about as much anxiety as going from worker to supervisor.
6. Which one of the following is an interpersonal competency?
a. Specialized knowledge b. Motivating others c. Analyzing skills d. Enhancing one’s power base
7. A is the ability to demonstrate a system and sequence of behavior that is functionally related to attaining a performance goal.
a. planning effort b. political competency c. skill d. successful planner
8. Which one of the following items does not relate to stimulating individual and group performance?
a. Listening b. Conducting group meetings c. Interviewing d. Projecting charisma
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22 Part 1 Defining Supervision and Supervisory Challenges
4. Explain why the supervisor’s role is considered ambiguous. A supervisor is (1) a key person (a critical communication link in the organization); (2) a person in the middle (interacting and reconciling opposing forces and competing expectations); (3) just another worker (decision-making authority is limited, and supervisors may perform operating tasks alongside the same people they supervise); and (4) a behavioral specialist (able to listen, motivate, and lead).
5. Describe the four essential supervisory competen- cies. The four essential supervisory competencies are technical, interpersonal, conceptual, and politi- cal competence. Technical competence reflects one’s ability to apply specialized knowledge or expertise. Interpersonal competence is the ability to work with, understand, and communicate with others both indi- vidually and in groups. Conceptual competence is one’s mental ability to analyze and diagnose com- plex situations. Political competence is the ability to enhance one’s power by building a power base and establishing the right connections in the organization.
6. Identify the elements that are necessary to be success- ful as a supervisor. Several elements are necessary to become a successful supervisor, including under- standing that you’re part of the management team, handling legitimate power properly, and recognizing differences in employees.
1. Explain the difference among supervisors, middle managers, and top management. Whereas all are part of the managerial ranks, they differ by their level in the organization. Supervisors are first-level man- agers—they manage operative employees. Middle managers encompass all managers from those who manage supervisors up to those in the vice-presiden- tial ranks. Top management is composed of the high- est-level managers—those responsible for establishing the organization’s overall objectives and developing the policies to achieve those objectives.
2. Define supervisor. A supervisor is a first-level man- ager who oversees the work of operative or non-man- agement employees.
3. Identify the four functions in the management pro- cess. Planning, organizing, leading, and controlling make up the management process. Planning involves establishing the overall strategy and setting goals. Organizing involves arranging and grouping jobs, allocating resources, and assigning work so activities can be accomplished as planned. Leading involves motivating employees, directing the activities of oth- ers, communicating properly, and resolving conflict among organizational members. Controlling involves monitoring the organization’s performance and com- paring it with previously set goals.
After reading this chapter, you can:
SUMMARY
Enhancing Understanding
1-5. “The best rank-and-file employees should be pro- moted to supervisors.” Do you agree or disagree with this statement? Explain.
1-6. Why is conceptual competence more important for top managers than it is for first-level supervi- sors?
1-7. A supervisor is both “a key person” and “just an- other worker.” Explain this phenomenon.
1-1. What differentiates supervisory positions from all other levels of management?
1-2. Is the owner–manager of a small store with three employees an operative employee, a supervisor, or a top manager? Explain.
1-3. What specific tasks are common to all managers, regardless of their level in the organization?
1-4. Contrast time spent on management functions by supervisors versus top management.
COMPREHENSION: Review and Discussion Questions
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Chapter 1 Supervision Fundamentals 23
KEY CONCEPT CROSSWORD
1 2
3 4 5 6
7
8
9 10
11
12 13
14 15
16 17
18
19
DOWNACROSS
1. people who manage other managers 3. competency in the ability to analyze and diagnose complex situations 5. competency in the ability to work with and communicate with others 7. people responsible for establishing an organization's overall goals 8. conceptual, interpersonal, technical, and political 9. the ability to demonstrate a behavior related to attaining a performance goal 10. doing the right task 12. planning, organizing, leading, and controlling 14. first-line managers 16. competency in the ability to enhance one's power 17. defining an organization's goals 18. the systematic grouping of people to accomplish a specific purpose 19. doing a task right
2. the process of getting things done, e�ectively and e�ciently through and with people 4. monitoring activities 6. motivating employees 11. competency in the ability to apply specialized knowledge or expertise 13. an employee who physically produces goods and services 15. arranging and grouping jobs 16. the primary activities supervisors perform
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24 Part 1 Defining Supervision and Supervisory Challenges
Developing Your Supervisory Skills
• What’s My Jungian or Myers-Briggs 16-Type Personal- ity?
• What’s My Emotional Intelligence Score? Finally, after you complete any self-assessment, we
suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• How Motivated Am I to Manage? • What’s My Basic Personality?
GETTING TO KNOW YOURSELF
A. What do I want from this course? Why? B. Why are these things important to me? C. How does this course fit into my career plans? D. What is my greatest challenge in taking this class?
When you have finished answering these questions, pair up with another class member (preferably someone you do not already know) and exchange papers. Get to know each other using the information on these sheets as a starting point. Prepare an introduction of your partner, and share your partner’s responses to the four questions with the class and your instructor.
1-8. An Experiential Exercise: Sharing and Receiving Information When you begin a new course, do you have specific expec- tations of what you want from the class? You probably do, but how often do you communicate them to the instructor?18 This information is important to both of you. As a supervisor, you will need to become accustomed to sharing and receiving information about your expecta- tions and the expectations of others. You can begin by defining your expectations for this course. First, take out a piece of paper and write your name at the top. Then, respond to the following questions:
18The idea for this exercise came from B. Goza, “Graffiti Needs Assessment Involving Students in the First Class Session,” Journal of Management Education 17, no. 1 (February 1993), 99–106.
BUILDING A TEAM
STEPS IN PRACTICING THE SKILL
STEP 1: Communicate honestly and openly with your protégé. If your protégé is going to learn from you and benefit from your experience, you’re going to have to be open and honest as you talk about what you’ve done. Bring up the failures as well as the suc- cesses. Remember that mentoring is a learning pro- cess, and for learning to take place, you’re going to have to be open and honest in “telling it like it is.”
STEP 2: Encourage honest and open communication from your protégé. You need to know as the mentor what your protégé hopes to gain from this relation- ship. You should encourage the protégé to ask for
A mentor is someone in the organization, usually more experienced and in a higher-level position, who spon- sors or supports another employee or student (frequently called a protégé). A mentor can teach, guide, and encour- age the protégé as that person is socialized to the culture of the organization. Some organizations have formal men- toring programs, but even if your organization does not, mentoring is an important supervisory skill for you to develop. Increasingly, students are asked to participate in providing service to the community by mentoring K–12 students, as well as college-level peers. Check with your program or department chair to determine whether men- toring opportunities are available within your school or community.
MENTORING OTHERS
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Chapter 1 Supervision Fundamentals 25
person as he or she does from you. So, be open to listening to what your protégé is saying.
STEP 4: Take the time to get to know your pro- tégé. As a mentor, you should be willing to take the time to get to know your protégé and his or her interests. If you’re not willing to spend extra time, you should probably not embark on a mentoring relationship.
information and to be specific about what he or she wants to gain.
STEP 3: Treat the relationship with the protégé as a learning opportunity. Don’t pretend to have all the answers and all the knowledge. But do share what you’ve learned through your experiences. And in your conversations and interactions with your pro- tégé, you may be able to learn as much from that
argument and include supporting data. Conclude your discussion by defending and supporting one of the two arguments you’ve presented.
1-9. Develop a three to four-page response to the fol- lowing question: Are supervisors in a no-win situ- ation in an organization? Present both sides of the
COMMUNICATING EFFECTIVELY
succeed. However, this was quickly proven erroneous, and when it became obvious the hoped-for production quality was nonexistent, everything became a dismal failure all at once. The department failed to produce at the expected quality level, and turmoil among the employees was wide- spread. During the nearly two years he was supervisor, Tristan was never able to earn the respect of his employees or experience the success in production quality envisioned by the company.
In reality, many first-time supervisors earn their posi- tion by simply doing well at their job; however, without proper training, in both supervision and leadership, disap- pointing outcomes like Tristan’s are more common than you would imagine. Just because an employee is good, or even great, it does not mean he or she will be a great supervisor.
RESPONDING TO THE CASE
1-10. If you envision transitioning into a supervisory posi- tion, what can you do to ensure you don’t end up like Tristan?
1-11. What supervisory competencies should you work to develop? Why?
1-12. With which of the four management functions do you believe most supervisors need help? Why do you think this is the case?
1-13. The role of supervisor can be considered a first step toward management. What are the benefits and potential disadvantages of pursuing a management career?
➤ Case 1-A: Transition to Supervisor Tristan came in on the ground floor in his company and had excelled in his position for several years when he was promoted to a supervisory position. He was excited about the increased responsibility and money, and he also enjoyed the status and respect that came with the new title.
Tristan’s position was to supervise a new production department at a new plant site of his small regional com- pany. In preparation, he was ordered to attend a two- week supervisor’s training program at headquarters. As he expected, the training was focused on human resources (HR) concerns, customer satisfaction issues, and corporate quality production expectations. Because the new loca- tion was intended to showcase the company’s strength in quality manufacturing, he was allowed to recruit his own team from among the company’s statewide employee pool. Several seasoned workers, acquainted with him as a result of his time with the company, expressed interest in the startup department.
Lauren was hired as the departmental administrative assistant and William was hired as the new line foreman. Tristan was elated and felt that things were moving ahead quickly enough for his superiors to be pleased with the progress he was making. He continued to fill the necessary positions. Within a month, the department was ready to get going. Everyone was excited, attitudes were positive, and he was looking forward to the inaugural production run.
Tristan had never held a supervisory position before, yet he knew Lauren and William were both strong employ- ees with great work ethics. He was certain everyone he selected possessed a similar work ethic and was driven to
THINKING CRITICALLY
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26 Part 1 Defining Supervision and Supervisory Challenges
importance of technical expertise was ranked number eight (very last) on the list.
Here is the complete list provided to Dave and his fellow supervisors, ranked from most important to least important, along with what each characteristic entails:
■ Provide coaching support when needed. (Provide specific feedback and have regular one-on-one meet- ings with employees; offer solutions tailored to each employee’s strengths.)
■ Avoid over-managing; let your team be responsible. (Give employees space to tackle problems themselves, but be available to offer advice.)
■ Express interest in employees’ well-being. (Make new team members feel welcome and get to know your employees as people.)
■ Focus on being productive and on end results (Focus on helping the team achieve its goals by prioritizing work and getting rid of obstacles.)
■ Display good communication skills, especially listening. (Learn to listen and to share information; encourage open dialogue and pay attention to the team’s concerns.)
■ Help individuals to reach their long-term work goals (Notice employees’ efforts so they can see how their hard work is furthering their careers; appreci- ate employees’ efforts and make that appreciation known.)
■ Provide an unambiguous vision of the future. (Lead the team but keep everyone involved in developing and working toward the team’s vision.)
■ Ensure you have the necessary technical abilities to support employee efforts. (Understand the challenges facing the team and be able to help team members solve problems.)
Now, Dave and the other supervisors at Google aren’t just encouraged to be great supervisors; they know what Google expects them to do to be great supervisors. The company continues to do its part with ongoing supervisory training, as well as individual coaching and performance review sessions for Dave and the others. Google believes Project Oxygen breathed new life into their supervisors, and Vice-President Bock says the company’s efforts paid off quickly, allowing them to see a statistically significant improvement in quality for 75 percent of their worst-per- forming supervisors.
Sources: Based on R. D’Aprix, “A Simple Effective Formula for Leadership,” Strategic Communication Management, May 2011, p. 14; R. Jaish, “Pieces of Eight,” e-learning Age, May 2011, p. 6; M. L. Stallard, “Google’s Project Oxygen: A Case-Study in Connection Culture,” www.humanresourcesiq.com, March 25, 2011; J. Aquino, “8 Traits of Stellar Managers, Defined by Googlers,” www.businessinsider.com, March 15, 2011; and A. Bryant, “Google’s Quest to Build a Better Boss,” New York Times Online, March 12, 2011.
➤ Case 1-B: Build a Better Boss Dave couldn’t have been more excited. Working for Google, he knew they didn’t do anything halfway. So, when he had the opportunity to be part of a new super- visor training project intended to “build a better boss,” he couldn’t wait to get started. During the training to understand what a great boss is and does, Google train- ers helped Dave and his fellow supervisors compare their appraisal data to performance reviews, feedback surveys, and supporting papers turned in for individuals rated as top-supervisors. They soon found out the training materi- als were developed from Google’s Project Oxygen, which identified eight characteristics or habits of Google’s most effective supervisors.
The “big eight” characteristics listed for Dave and the others were:
1. Provide an unambiguous vision of the future 2. Help individuals to reach their long-term work goals 3. Express interest in employees’ well-being 4. Ensure you have the necessary technical abilities to
support employee efforts 5. Display effective communication skills, especially
listening 6. Provide coaching support when needed 7. Focus on being productive and on end results 8. Avoid over-managing; let your team be responsible
Initially, Dave and the others were underwhelmed and thought these eight attributes seemed pretty simplistic and obvious. In fact, Dave wondered why Google spent all this time and effort to uncover these at all. He later learned that even Google’s vice-president for people operations, Laszlo Bock, said, “My first reaction was, that’s it?”
However, as Dave and the other supervisors contin- ued to work through the training, they began to realize there was more to this list than met the eye. The next step in training was for them was to look closer and see how Google ranked the eight items by importance. As they did, so did the results of Project Oxygen become surprising and much more interesting! As supervisors, Dave and the others knew that Google’s approach to management since being founded in 1999 was for them to leave people alone and let them do their stuff. If workers got stuck, Google believed they would ask their bosses, whose deep tech- nical expertise propelled them to supervision in the first place. It wasn’t hard for Dave and the others to see that Google wanted its supervisors to be outstanding technical specialists. The surprise for Dave was that previously, in the Google context, they were always reminded that to be a supervisor, particularly on the engineering side, they needed to be as deep or deeper a technical expert than the people who worked for them. Now, Project Oxygen turned that idea upside down as Google revealed that the
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Chapter 1 Supervision Fundamentals 27
1-16. Do you agree with Google’s rank ordering of the eight characteristics of most effective supervisors? Why or why not? How would you order them and why?
1-17. How do Google’s eight characteristics of most effec- tive supervisors align with Katz’s list of supervisory competencies? With the four management functions?
RESPONDING TO THE CASE
1-14. Are you surprised at what Google found out about “building a better boss?” Explain your answer.
1-15. What’s the difference between encouraging supervi- sors to be great supervisors and knowing what being a great supervisor involves?
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■■ baby boomers
■■ code of ethics
■■ collectivism
■■ continuous improvement
■■ cultural environments
■■ cyberloafing
■■ downsizing
■■ e-business
■■ e-commerce
■■ ethics
■■ individualism
■■ kaizen
■■ parochialism
■■ power distance
■■ quality of life
■■ quantity of life
■■ social obligation
■■ social responsibility
■■ social responsiveness
■■ technology
■■ telecommuting
■■ uncertainty avoidance
■■ workforce diversity
■■ work process engineering
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Supervision Challenges2 C
H A
P T
ER
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2-1. Explain how globalization affects supervisors.
2-2. Describe how technology is changing the supervisor’s job.
2-3. Explain the concepts of e-business and e-commerce.
2-4. Identify the significant changes that have occurred in the composition of the workforce.
2-5. Explain why corporations downsize.
2-6. Understand the concept of continuous improvement and identify its goals.
2-7. Describe why supervisors must be able to “thrive on chaos.”
2-8. Define ethics.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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30 Part 1 Defining Supervision and Supervisory Challenges
I t has been said often that the only thing that remains constant in our lives is change. Most people would undoubtedly agree this statement is true. Supervisors must always be prepared for changing events that may have a significant effect on their lives.
Changing events have always helped shape the interactions between supervisors and their employees, and undoubtedly will continue to do so. Some of the more recent changes include global market competitiveness, technology and e-business enhance- ments, workforce diversity, continuous-improvement programs, downsizing, and the issue of ethics. Let’s look at how these changes are affecting supervisors in organizations.
Global Competitiveness Many North American companies grew large and powerful following World War II because they faced modest competition from around the world. For instance, in the 1950s and 1960s, General Motors (GM) became the world’s largest and most
OBJECTIVE 2.1 Explain how globalization affects supervisors.
Responding to a Supervisory Dilemma
Technology is any equipment, tool, or operating method designed to make work more efficient. Technology is making it possible to better serve cus- tomers in many industries. Technology in the workplace has enormous ben- efits, but it can also have downsides.
Employees have always been susceptible to distractions at work, and the Internet has only broad- ened this challenge. Workers admit to spending more than two hours per day wasting their time at work, and almost half of that time is spent online. Some employees have access to social media websites such as Facebook and Twitter and spend company time looking at what their friends are doing. Shopping on web- sites such as Amazon and writing blogs are all serious timewasters while on the job. Some companies have blocked such websites so employees are not allowed to use them while at work. However, with the use of smartphones, employees can easily view Facebook and other sites from their phones. The biggest shopping day—the day after Thanksgiving—is called Black Fri- day and the Monday following Thanksgiving is Cyber Monday. Employees return to work following the holi- day and do their shopping while at work. Hours of
employee time and company money are spent doing everything but work.
There are two conflicting perspec- tives regarding surfing the Internet while at work: (1) that time wasted costs employers billions of dollars, and (2) that occasional diversions from the work are necessary to refresh work- ers and to stimulate their creativity, thus actually boosting the employer’s “bottom line.”* As a supervisor, com- bating Web surfing or cyberloafing can be a difficult task. Although the supervisor could make the job more interesting, provide breaks to use the Internet, and establish clear guide- lines for employee’s Internet usage, employees will most likely still go online at their own discretion.
Do you think surfing the Internet is a timewaster resulting in loss of money, or is it necessary for employ- ees to remain focused? Do you use company time to go online for personal use? How much time do you spend going online at work? Do you think the key to keeping employees off of the Internet is to block popular social media websites? Do you feel that it would prevent employees from wasting work hours? As a supervisor, what would your approach be to employees that are caught using Facebook and Twitter on company time?
*S. Opperman, “‘Surfin’ USA’—Accessing the Net at Work and Other Time-Wasting Activities—Are They a Cost or a Benefit to Your Agency,” FedSmith, July 11, 2007, www.fedsmith.com/article/1298 (accessed February 15, 2011).
Balázs Justin/123RF.com
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Chapter 2 Supervision Challenges 31
profitable corporation. Was it because GM efficiently produced first-rate products that were carefully matched to the needs of auto consumers? Maybe in part; how- ever, GM’s success was more a result of the fact that its only major competition came from two other relatively less-efficient US producers—Ford and Chrysler. Now, look at GM today. GM has drastically reduced costs, improved quality, and cut the time it takes from designing a car to having it in dealer showrooms. Did GM make these changes voluntarily? Absolutely not! It was forced to do this to meet changing global competition. Ford and Chrysler significantly improved their quality, developed inno- vative products such as the minivan, and began selling imported cars under their brand names. Ford and Chrysler also forged ahead in their global presence through a series of international acquisitions. Ford went global by purchasing Jaguar in 1990, Volvo in 1999, and Land Rover in 2000. However, because of global competitiveness and an economic turnaround, Ford sold Jaguar and Land Rover to Indian auto manufacturer Tata Motors in 2008. Zhejiang Geely Holding Group of China acquired Volvo Cars from Ford in 2010. Chrysler went global by acquiring Maserati in 1987, selling it in 1993, then merging with Daimler-Benz in 1998 to form Daim- lerChrysler. However, the alliance was short-lived, and economic uncertainty resulted in the 2007 sale of Chrysler to Cerberus Capital Management, where it was known as Chrysler LLC. In April 2009, Chrysler LLC declared bankruptcy, and on June 10, 2009, it emerged as Chrysler Group LLC from a Chapter 11 reorganization bankruptcy. Chrysler was sold to the Italian automaker Fiat, whose stake in Chrysler was 30 percent. In 2011 Chrysler’s owners other than Fiat were the United Auto Workers (UAW) retiree healthcare trust fund (59.2 percent), the US government (8.6 percent), and the Canadian and Ontario governments (2.2 percent).1 Now known in the United States as FCA US LLC, Fiat eventually acquired all shares of Chrysler except those held by the UAW retiree healthcare trust fund, and on January 1, 2014, they announced a deal to purchase those shares as well2. Meanwhile, aggressive competition from foreign companies such as Honda, Toyota, Nissan, and BMW has been increasing pressure on GM to continue to change if it is going to survive.
IS THERE SUCH A THING AS “BUY AMERICAN”? The GM example illustrates that organizations are no longer constrained by national borders. Consider, for instance, that McDonald’s sells hamburgers in China, and KFC sells chicken in China. ExxonMobil, Apple, Berkshire Hathaway, and Walmart are US companies that receive significant portions of their income from foreign operations.3 Honda, BMW, Mitsubishi, Mercedes-Benz, Subaru, Nissan, and Hyundai all have plants in the United States. Parts for Ford vehicles come from all over the world: Mexico (seats, windshields, and fuel tanks), Japan (shock absorbers), Spain (electronic engine controls), Germany (antilock brake systems), and England (key axle parts).
It is important to point out that although organizations have become increas- ingly global in their perspectives and have accepted the reality that national borders no longer define corporations, some in the public have been slower to accept this fact. Some people feel that the sale of foreign products takes jobs from Americans. The cry often is “Buy American.” The irony is that many so-called foreign products are made in the United States. For example, Michelin, a French company, sells tires made in the United States. The message from this example should be obvious: A com- pany’s national origin is no longer a good gauge of where it does business or the
1Fred Meier, USA Today, April 12, 2011, http://content.usatoday.com/communities/driveon/post/2011/04/ fiat-given-another-5-by-feds-now-owns-30-of-chrysler/1 (accessed May 9, 2011). 2“Fiat completes Chrysler acquisition in $4.35 billion deal”. Autonews.com. January 21, 2014, http:// europe.autonews.com/article/20140121/ANE/140129979/fiat-completes-chrysler-acquisition-in-$4.35- billion-deal (accessed December 29, 2016). 3“Fortune Global 500,” Fortune.com, http://beta.fortune.com/global500 (accessed December 30, 2016).
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32 Part 1 Defining Supervision and Supervisory Challenges
nationality of its employees (see “Something to Think about: Who Owns What?”). Such companies as Honda and Samsung employ thousands of people in the United States. At the same time, such firms as Coca-Cola, ExxonMobil, and Citicorp employ thousands in places such as India, Hong Kong, and the United Kingdom. So, phrases such as “Buy American” represent old stereotypes that fail to reflect the changing global village.
HOW DOES GLOBALIZATION AFFECT SUPERVISORS? A borderless world introduces new challenges for supervisors. These range from how supervisors view people from foreign countries to how they develop an understand- ing of these immigrating employees’ cultures. A specific challenge for supervisors is to recognize the differences that might exist and find ways to make their interactions with all employees more effective. One of the first issues to deal with, then, is the perception of “foreigners.”
Something to Think About (and promote class discussion)
WHO OWNS WHAT? One way to grasp the changing nature of the global environment is to consider the country of owner- ship for some familiar products and companies. You might be surprised to find that many name-brand products you thought were made by US companies aren’t so. Take the following quiz. Correct answers are listed at the end of the chapter; however, because the international world of business is so dynamic you may wish to explore online resources to determine whether there have been any ownership changes.
1. The parent company of Braun household appliances (electric shavers, coffee makers) is located in:
a. Switzerland b. Germany
c. the United States d. Japan
2. Bic Corporation (pen manufacturer) is: a. Japanese b. British
c. American (US) d. French
3. The company that makes Häagen-Dazs ice cream is located in:
a. Germany b. Great Britain
c. Switzerland d. the United States
4. RCA television sets are produced by a com- pany based in:
a. France b. the United States
c. China d. Taiwan
5. The firm that owns Green Giant (vegetables) is located in:
a. the United States b. Canada
c. Great Britain d. Italy
6. The owners of the Godiva chocolate company are located in:
a. the United States b. Switzerland
c. Turkey d. Sweden
7. The company that produces Vaseline is: a. American (US) b. Dutch/British
c. German d. French
8. Wrangler jeans are made by a company head- quartered in:
a. Japan b. Taiwan
c. Great Britain d. the United States
9. The company that owns Holiday Inn is based in:
a. Saudi Arabia b. France
c. the United States d. Great Britain
10. Tropicana orange juice is made by a com- pany that is headquartered in:
a. Mexico b. Canada
c. the United States d. Japan
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Chapter 2 Supervision Challenges 33
Americans in general have previously held a rather parochial view of the world. Parochialism means that we see things solely through our own eyes and from our uniquely American perspective. This translates into “We believe what we do is best.” Americans often do not recognize that other people have valid, though different, ways of thinking and doing things. Parochialism causes Americans to view their practices as being better than practices in other cul- tures. Obviously, we know that cannot be the case. How- ever, changing this perception first requires us to understand different cultures and their environments.
All countries have different cultural environments— values, morals, customs, and laws. Although cultural issues are much more involved than this and go beyond the scope of this book, we will look at some basic cultural issues that supervisors need to understand. For example, in the United States, we have laws that guard against discriminatory hir- ing and employment practices. Similar laws do not exist in all other countries. Understanding cultural environments, then, is critical to the success of supervising others in the global village.
One of the better known studies about cultural environ- ments was done by researcher Geert Hofstede.4 Hofstede analyzed various aspects of different countries’ cultures and found that a country’s culture has a major effect on employ- ees’ work-related values and attitudes. By analyzing various dimensions, Hofstede developed a framework for under- standing cultural differences. Countries that share similar cultures are represented in Exhibit 2-1.
Hofstede’s findings group countries according to such cultural variables as status differences, societal uncertainty, and assertiveness. These variables indicate a country’s means of dealing with its people and how the people see themselves. For example, in an individualistic society, people are primarily concerned with their own family. On the contrary, in a collective society (the opposite of individualistic), people care for all indi- viduals who are part of their group. The United States is a strongly individualistic soci- ety. Therefore, US supervisors may have difficulties relating to people from Pacific Rim countries, where collectivism dominates, unless they are aware of this cultural difference.
When working with people from different cultures, we informally learn the differ- ences that exist between their culture and ours. Many companies also provide formal training in this area. Supervisors learn that they must be flexible and adaptable in their dealings with employees. Recognizing differences in employees’ backgrounds and cus- toms fosters appreciation and even celebration of those differences (see “News Flash! The Cultural Variables”).
Technology Enhancements Change, newness, uncertainty—what do they mean for tomorrow’s supervisors? Although making predictions can be viewed as an exercise in futility, evidence supports the idea that supervisors need to concern themselves with change. The key to success—if it can be narrowed down to one statement—is this: Be prepared to make adjustments. Opportuni- ties will abound for those prepared to accept and deal with the information age. Realize
parochialism Seeing things solely through one’s own eyes and from one’s own perspective; believing that one’s own way is the best.
4G. Hofstede, Cultural Consequences: International Differences in Work-Related Values (Beverly Hills: Sage, 1990).
cultural environments Values, morals, customs, and laws of countries.
OBJECTIVE 2.2 Describe how technology is changing the supervisor’s job.
Exhibit 2-1 Countries with similar cultural characteristics. Source: Adapted from S. Ronen and A. Kranut, “Similarities among Countries Based on Employee Work Values and Attitudes,” Columbia Journal of World Business (Summer 1977), 94. Elsevier Limited.
Latin American
Anglo-American
Central European
Latin European
Nordic
Argentina Chile Colombia Mexico Peru Venezuela
Australia Canada Ireland New Zealand South Africa United Kingdom United States
Austria Germany Switzerland
Belgium France Italy Portugal Spain
Denmark Finland Norway Sweden
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34 Part 1 Defining Supervision and Supervisory Challenges
that as little as thirty-five years ago, almost no one had a fax machine or cellular phone. Computers were still too large to fit on desks. E-mail, modem, and Internet weren’t everyday words spoken by the general public. Home security typically involved having a large dog. Sophisticated gadgetry was pretty much left to the action-packed movies!
THE CULTURAL VARIABLES
NEWS FLASH!
To date, the most valuable framework to help managers better understand differences between national cultures was developed by Geert Hofst- ede.* He surveyed more than 116,000 employees in forty countries, all of whom worked for IBM. What did he find? Hofstede found that supervisors and employees vary in four dimensions of national culture: (1) individualism versus collectivism; (2) power distance; (3) uncertainty avoidance; and (4) quantity versus quality of life.†
Individualism refers to a loosely knit social framework in which people are supposed to look after their own interests and those of their immediate family. This is made possible because of the large amount of freedom that such a society allows indi- viduals. Its opposite is collectivism, which is char- acterized by a tight social framework. People expect others in groups to which they belong (e.g., a family or an organization) to look after them and protect them when they are in trouble. In exchange for this, they feel they owe absolute allegiance to the group.
Power distance is a measure of the extent to which a society accepts the fact that power in insti- tutions and organizations is distributed unequally. A high-power-distance society accepts wide differ- ences in power in organizations. Employees show a great deal of respect for those in authority. Titles, rank, and status carry a lot of weight. In contrast, a low-power-distance society plays down inequalities as much as possible. Supervisors still have authority, but employees are not fearful or in awe of the boss.
A society that is high in uncertainty avoidance is characterized by an increased level of anxiety among its people, which manifests itself in greater nervousness, stress, and aggressiveness. Because people feel threatened by uncertainty and ambigu- ity in these societies, mechanisms are created to provide security and reduce risk. Their organiza- tions are likely to have more formal rules, there is less tolerance for deviant ideas and behaviors, and members strive to believe in absolute truths. Not surprisingly, in organizations in countries with high uncertainty avoidance, employees demonstrate
relatively low job mobility, and lifetime employ- ment is a widely practiced policy.
Quantity of life versus quality of life, like indi- vidualism and collectivism, represents a dichotomy. Some cultures emphasize the quantity of life, and value things such as assertiveness and the acquisi- tion of money and material goods. Other cultures emphasize the quality of life, placing importance on relationships and showing sensitivity and con- cern for the welfare of others.
With which cultures are US supervisors likely to best fit? Which are likely to create the biggest adjustment problems? All we have to do is iden- tify those countries that are most and least like the United States on the four dimensions. The United States is strongly individualistic, but low on power distance. This same pattern is exhibited by Great Britain, Australia, Canada, the Netherlands, and New Zealand. Those least similar to the United States on these dimensions are Venezuela, Colom- bia, Pakistan, Singapore, and the Philippines.
The United States scores low on uncertainty avoidance and high on quantity of life. This same pattern is shown by Ireland, Great Britain, Canada, New Zealand, Australia, India, and South Africa. Those least similar to the United States on these dimensions are Chile and Portugal.
The study supports what many suspected: the US supervisor transferred to London, Toronto, Melbourne, or a similar Anglo city would have to make the fewest adjustments. The study further identifies the countries in which culture shock—a feeling of confusion, disorientation, and emotional upheaval caused by being immersed in a new cul- ture—is likely to be the greatest, resulting in the need to radically modify the American supervisory style.
*G. Hofstede, Cultural Consequences: International Differ- ences in Work-Related Values (Beverly Hills: Sage, 1990). † Hofstede called this last dimension masculinity versus femi- ninity. We changed it because of the strong gender reference in Hofstede’s choice of terms.
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Chapter 2 Supervision Challenges 35
Today, information technology, supported by advances in the silicon chip, has altered a supervisor’s life forever. Electronic communications, optical character recogni- tion, voice recognition, and storage and retrieval databases, among other technologies, are significantly influencing how information is created, stored, and used.
Equally important are the constantly evolving skills and competencies supervisors must possess. Those who embrace knowledge and continuously learn new skills will be the ones who survive in the high-tech world. Imagine needing information on how well your unit is meeting production standards. Forty years ago, obtaining that information might have taken as long as a month. Today, a few keystrokes on the keyboard of the computer on your desk can get you that same information almost instantaneously!
In the past four decades, US companies such as General Electric, Walmart, and 3M have witnessed automated offices, robotics in manufacturing, computer-assisted design software, integrated circuits, microprocessors, and electronic meetings. These technolo- gies combined have made organizations more productive and, in some cases, helped them create and maintain a competitive advantage.
WHAT IS TECHNOLOGY? Technology is any equipment, tool, or operating method designed to make work more efficient. Technological advances involve integrating technology with any process for changing inputs (raw materials) into outputs (goods and services). In decades past, most processing operations were performed by human labor. Technology has made it possible to enhance most production processes by replacing human labor with sophisticated electronic and computer equipment. An example is the assembly operation at Chrysler Group LLC (now FCA US LLC), which relies heavily on robotics. These robots perform repetitive tasks—such as spot welding and painting—much faster than humans can. In addition, the robots aren’t subject to the health problems caused by exposure to chemi- cals or other hazardous materials.
The use of technology goes far beyond application to mass-production manufactur- ing processes. Technology is making it possible to serve customers better in many indus- tries. The banking industry, for instance, has replaced thousands of bank tellers by installing ATMs and electronic bill-paying systems—often at locations that are more convenient to the customer. One Medical developed a mobile app that allows patients to pick a physician, schedule appointments, and tell their doctor what’s wrong, and offers an option to “get treated now” in case a more pressing matter arises—all at their patients’ fingertips. Creating this system allowed One Medical to increase, retain, and track patients more effectively to reduce wait times.5
Technological advancements are also used to provide better, more useful informa- tion. Cars built today, for example, have a built-in computer circuit that a technician can plug into to diagnose problems with the automobile—saving countless diagnostic hours for a mechanic. Many automobiles have systems that permit drivers to map their location and receive accurate, on-the-spot directions to the driver’s destination.
HOW DOES TECHNOLOGY CHANGE THE SUPERVISOR’S JOB? Few jobs today are unaffected by advances in computer technology. Whether it is automated robotics on the production floor, computer-aided design in the engineer- ing department, or automated accounting systems, new technologies are changing the supervisor’s job.
technology Any equipment, tool, or operating method designed to make work more efficient.
5E. Rasowsky, “4 Examples of Companies Using Social Technology to Increase Sales,” Get With the Future Blog, Posted: November 18th, 2013, http://socialdriver.com/2013/11/18/4-examples-companies- using-social-technology-increase-sales (accessed December 30, 2016); R. Mac, “One Medical Group: A Concierge Service By Another Name (And Price),” Forbes, 3/27/2013, http://www.forbes.com/sites/ryan- mac/2013/03/27/one-medical-group-a-concierge-service-by-another-name-and-price (accessed December 30, 2016).
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36 Part 1 Defining Supervision and Supervisory Challenges
Although technology has had a positive effect on inter- nal operations within organizations, how, specifically, has it changed the supervisor’s job? To answer that question, we need only look at how the typical office is set up. Orga- nizations today have become integrated communications centers. By linking computers, telephones, fax machines, copiers, scanners, printers, and the like, supervisors can get more complete information more quickly than ever before. With that information, supervisors can better formulate plans, make faster decisions, more clearly define the jobs that workers need to perform, and monitor work activities on an as-they-happen basis. In essence, technology today has enhanced supervisors’ ability to perform their jobs.
Technology is also changing where a supervisor’s work is performed. Historically in organizations, the supervisor’s work site was located close to the operations site. As a
result, employees were in close proximity to their bosses. A supervisor could observe how the work was being done, as well as easily communicate with employees face-to- face. Through ongoing advancements in technology, supervisors are now able to super- vise employees in remote locations. Face-to-face interaction has decreased dramatically. Work, for many, takes place where their computers are. Telecommuting capabilities— linkage of a remote worker’s computer to those of coworkers and management at an office—have made it possible for employees to be located anywhere in the global village. Communicating effectively with individuals in remote locations and ensuring that their performance objectives are being met are some of the supervisor’s new challenges.
E-Business At Work College faculty are fond of saying that “the world of organizations is changing” and “the only thing constant is change.” There is no better evidence of these statements than the change in business brought about by the Internet. This section highlights how computers and the Internet are reshaping supervisory practices. To begin this discus- sion, let’s take a look at what we mean by e-businesses, and what’s unique about them.
WHAT IS AN E-BUSINESS? Two terms that seem to cause considerable confusion need to be clarified: e-commerce and e-business.6 The term e-commerce is becoming the standard label to describe the online buying and selling of products or services. It encompasses presenting products on websites and filling orders. The vast majority of articles and media attention given to using the Internet in business are directed at online shopping—marketing and selling goods and services over the Internet. When you hear about the tremendous number of people shopping on the Internet, and how businesses set up websites where they can sell goods, conduct transactions, fulfill orders, and get paid, you’re hearing about e-com- merce. It’s a dramatic change in the way a firm relates to its customers. Online retail sales are expected to grow steadily through 2017 with a projected 10 percent compound annual growth rate (CAGR). Online sales in the form of e-commerce generated $231 billion in 2013 sales for US retailers. According to the US Commerce Department,
telecommuting Linking a worker’s remote computer and modem with those of coworkers and management at an office.
OBJECTIVE 2.3 Explain the concept of e-business and e-commerce.
6E. Strout, “Launching an E-Business: A Survival Guide,” Sales and Marketing Management, July 2000, 90–92. A. Bartels, “The difference between e-business and e-commerce,” Computerworld, October 30, 2000, http://www.computerworld.com/article/2588708/e-commerce/e-commerce-the-difference-between-e- business-and-e-commerce.html (accessed December 30, 2016).
e-commerce The online buying and selling of prod- ucts or services.
Telecommuting means an employee can do work from nearly anywhere—as long as the work gets completed in a timely fashion.
David Pereiras/Shutterstock
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Chapter 2 Supervision Challenges 37
e-commerce sales in 2014 totaled $305 billion7. They also stated that online sales accounted for more than a third of total retail sales growth in 2015, with Web sales in 2015 totaling $341.7 billion, a substantial increase over 2014. Overall, e-commerce accounted for 60.4 percent of total retail sales growth in 20158. E-commerce is expected to outpace sales growth at brick-and-mortar stores over the next several years, reaching $370 billion in sales by 2017, and eventually will account for a full tenth of all retail sales in the United States. Studies indicate that as more smartphones and tablets boost the amount of time consumers spend online, they are used to research purchases, find stores, and find the best prices available.9 You should be aware that 90 percent of e-commerce sales are business-to-business transactions. The vast majority of e-commerce sales are of products such as Intel chip sales to Dell or Goodyear sales to Ford, rather than to con- sumers like you and me buying computers or sweaters for personal consumption.
In contrast, e-business refers to the full breadth of activities included in a successful Internet-based enterprise. As such, e-commerce is a subset of e-business. E-business includes developing strategies for running Internet-based companies, improving com- munication with suppliers and customers, collaborating with partners to electronically coordinate design and production, identifying a different kind of leader to run a “vir- tual” business, finding skilled people to build and operate intranets and websites, and running the “back room” or the administrative side. E-business includes creating new markets and customers, but it’s also concerned with finding optimal ways to combine computers, the Web, and applications software.
An e-business uses the Internet (a worldwide network of interconnected comput- ers), intranets (an organization’s private network), and extranets (an extended intranet accessible only to selected employees and authorized outsiders) to open up an organiza- tion’s communication channels, making it possible to integrate and share information and allowing customers, suppliers, employees, and others to communicate with and throughout the organization on a real-time basis.
Now that you have a better understanding of what an e-business is, let’s turn our attention to some of the implications e-business will have for supervisors.
WHAT CHANGES CAN SUPERVISORS EXPECT FROM E-BUSINESS? Alan Naumann, former head of Calico Commerce, expressed a view widely held by e-business supervisors: “Despite all our focus on speed, we consciously slow down for one thing: hiring people . . . it’s the one aspect of busi- ness today in which the cost of mistakes is greater than the advantage of acting in real time.” Recruiting good people is particularly challenging for supervisors in e-businesses. These jobs require a unique brand of technical and profes- sional people. The employees have to be smart and able to survive in the demanding cultures of e-business firms. How- ever, people who understand e-business are in short supply and tend to have high mobility.10 This makes it difficult for supervisors to recruit effectively.
7T. Duryee, “Cha-ching!: U.S. e-commerce sales surpass $300B for the first time in 2014,” GeekWire, Feb- ruary 17, 2015, http://www.geekwire.com/2015/cha-ching-u-s-e-commerce-sales-surpass-300b-for-the-first- time-in-2014/ (accessed December 30, 2016). 8S. Zaroban, “U.S. e-commerce grows 14.6% in 2015,” Internet Retailer, February 17, 2016 https://www. internetretailer.com/2016/02/17/us-e-commerce-grows-146-2015 (accessed December 30, 2016). 9Natasha Lomas, “Forrester Research Inc. cited in “‘Forrester: U.S. Online Retail Sales to Rise to $370BN by 2017 (10% CAGR) As Ecommerce Motors on with Help from Tablets & Phones”’ TechCrunch, March 13, 2013, http://techcrunch.com/2013/03/13/forrester-2012-2017-ecommerce-forecast (accessed January 01, 2014).
e-business A comprehensive term describing the way an organization does its work by using electronic linkages with its key constituents to achieve its goals effi- ciently and effectively.
10“E-Commerce: Online Recruiting—Notable Websites,” Fortune, Winter 2001, 224.
An example of an intranet.
NetPhotos/Alamy Stock Photo
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38 Part 1 Defining Supervision and Supervisory Challenges
Once applicants have been identified, supervisors in e-businesses need to carefully screen final candidates to ensure that they fit well into the organization’s culture. E-busi- nesses tend to have common cultural characteristics: an informal workplace, team spirit, intense pressures to complete projects quickly and on time, and a 24 × 7 (twenty-four hours a day, seven days a week) work mentality. Selection tools such as tests, interviews, and references need to “weed out” people who aren’t team players and can’t handle ambiguity and stress.
Motivating employees in an e-business also poses a challenge to today’s supervi- sors. Employees in e-businesses are more susceptible to distractions that can undermine their work effort and reduce their productivity. In addition, technical and professional employees in e-businesses often have skills that make them marketable, and many real- ize their employers’ dependence on these skills. As a result, employees in e-businesses frequently have different compensation expectations than do their peers in more tradi- tional organizations and will cope with a variety of distractions that may not be evident in traditional businesses.
Employees have always been susceptible to distractions at work such as interrup- tions by colleagues or personal phone calls. The Internet, however, has significantly broadened these distractions to include surfing the Net, checking Facebook, Tweeting, playing online games, stock trading, shopping at work, and searching for other jobs online. Recent estimates indicate that a good portion of lost worker productivity is caused by cyberloafing. If the work itself isn’t interesting or creates excessive stress, employees are likely to be motivated to do something else. If employees have easy access to the Internet, that “something else” is increasingly using the Net as a diversion. How- ever, because smartphones and Internet access make many employees as productive at home as at work, the off-hours activity may more than make up for nonwork-related pursuits at the office.11
How widespread is wasting time at work? A recent survey of workers indicated 69 percent of them waste time at work every single day. Most people (34 percent) said they routinely waste thirty minutes or less each day while on the clock. Nearly one-quarter (24 percent) said they waste between thirty and sixty minutes daily, with 11 percent claiming they spend several hours per day wasting time on nonwork- related items on a daily basis. Of the people who don’t waste time each day, 21 percent reported slacking off one to two times a week, whereas only 10 percent claimed they never waste time on the job. But are they cyberloafing? Survey data show the Internet is a big time-waster, with 37 percent of respondents selecting checking the news as their top time-waster; however, 20 percent of workers claim they don’t visit any nonwork-related websites while they’re on the clock. The most-visited time- wasting sites include social media, 14 percent; online shopping, 12 percent; entertain- ment/lifestyle, 8 percent; sports, 3 percent; and travel, 2 percent. The most visited nonwork-related website between 9 am and 5 pm is Facebook, with 15 percent of all respondents choosing it as the biggest time-waster; followed by Yahoo!, 14 percent; LinkedIn, 10 percent; Google+, 8 percent; Amazon, 6 percent; ESPN, 2 percent; You- Tube, 2 percent; Twitter, 2 percent; CraigsList, 2 percent; and Pinterest, 1 percent. It is also interesting to view time-wasting stats demographically. Based on wasting time on a daily basis the survey shows that men waste more time than women by a 73 to 66 percent margin. It also indicates that 82 percent of employees aged twenty-six to thirty-two and 76 percent of workers aged thirty-three to thirty-nine waste time on a daily basis—higher than the 75 percent of workers aged eighteen to twenty-five who said the same. Single people and those in committed relationships waste the most time
11S. Oppermann, “‘Surfin’ USA’—Accessing the Net at Work and Other Time-Wasting Activities—Are They a Cost or Benefit to Your Agency?” FedSmith, July 11, 2007, http://www.fedsmith.com/2007/07/11/ surfin-usa-accessing-net-at-work/ (accessed December 31, 2016).
cyberloafing Lost productivity time as a result of an employee using the Internet at work for personal reasons.
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per day at work with 75 percent each, compared to just 51 percent of divorced respondents who waste time daily. The survey also reveals more educated workers are more likely to waste time—76 percent of people with doctorate degrees waste time at work every day, compared to 59 percent of those with a high school diploma or less. When asked why they waste time at work, the main reason given by 11 per- cent of respondents was a lack of incentive followed closely by 10 percent who said they are unsatisfied in their jobs; 9 percent claimed to be bored, but only 3 percent said they slack off because of low pay. Additionally, 43 percent said interacting with coworkers caused them to miss the most work, beating out the 28 percent who answered with surfing the Internet, followed by texting, social media, and taking personal phone calls all receiving 4 percent, whereas shopping online accounted for 2 percent. When it comes to which day people slack off the most, it probably is no surprise that Friday takes the cake with 43 percent of people choosing the day before the weekend as the day they waste time most often. That’s followed by Monday at 16 percent, Wednesday at 9 percent, Thursday at 6 percent, and Tuesday at 3 percent. The most popular time of day to slack off is later in the day with 27 percent, choosing 3 pm to 5 pm as their main window to waste time, followed by 16 percent at 1 pm to 3 pm, 13 percent from 11 am to 1 pm, and 10 percent from 9 am to 11 am. Surpris- ingly, 15 percent of people are early birds and get to work between 7 am and 9 am to waste time.12
The solution to this problem for supervisors includes making jobs interesting to employees, providing formal breaks to overcome monotony, and establishing clear guidelines so employees know what online behaviors are expected. Many supervisors are also installing Web-monitoring software to assist in this matter, although doing so may have an effect on employee morale. Supervisors in e-businesses will also have to make faster decisions and maintain their flexibility. Supervisors in any organiza- tion never have all the data they want when making decisions. But the problem is much worse in e-businesses. Their world is moving fast and the competition is intense. Supervisors in e-businesses often see themselves as sprinters and their contemporaries in offline businesses as long-distance runners. Their rapidly speeded-up working envi- ronment makes waiting for more and more data to make a decision simply ineffective in an e-business. In addition to speed, supervisors in e-businesses need high flexibility. They have to be able to roll with the ups and downs. They need to be able to redirect their employees when they find that something doesn’t work. They have to encourage experimentation.
Finally, e-businesses are rewriting the rules of communication. Because they’re designed around comprehensive, integrated information networks, traditional com- munication channels of going through the “chain of command” no longer constrain communication. E-businesses allow and even encourage individuals to communicate directly without going through channels. Employees can communicate instantly any- time, with anyone, anywhere, and their supervisors may not know what is being said. As such, how communication flows has changed dramatically, making obsolete or revising interpersonal communication concepts such as the distinction between formal and informal networks, nonverbal communication, and filtering. They also are rede- fining how activities such as meetings, negotiations, supervision, and “water cooler” talks are conducted.
12A. Gouveia, “2013 Wasting Time at Work Survey: Everything You’ve Always Wanted to Know About Wasting Time in the Office” Salary.com, July, 2013, http://www.salary.com/2013-wasting-time-at-work- survey (accessed December 31, 2016).
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40 Part 1 Defining Supervision and Supervisory Challenges
Working in a Diverse Organization Half a century ago, workers and their needs were strikingly alike. In the 1950s, for example, the US workforce consisted primarily of white males, many of whom came from the same neighborhoods or towns, were employed in manufacturing, and had wives who stayed at home tending to the family’s two-plus children. Today’s workforce is far more diverse, and it will continue to change. Diversity has been “one of the most popular business topics over the last two decades. It ranks with modern business disci- plines such as quality, leadership, and ethics. Despite this popularity, it’s also one of the most controversial and least understood topics13.”
WHAT IS WORKFORCE DIVERSITY? The single most important human resource issue in organizations today may be adapting organizational policies and practices in light of increasing workforce diversity. This diverse workforce is made up of males, females, whites, blacks, Hispanics, Asians, Native Amer- icans, people with disabilities, LGBTQ, and older adults. Some excellent predictors are available to indicate exactly what the composition of this workforce will look like in the future. According to the US Department of Labor, the US labor force is projected to increase to 163.5 million by 2022, an increase of 8.5 million from 2012. The 2022 labor
13R. Anand and M. F. Winters, “A Retrospective View of Corporate Diversity Training from 1964 to the Present,” Academy of Management Learning & Education, September 2008, 356–72.
workforce diversity The composition of the workforce to include men, women, whites, blacks, Hispanics, Asians, Native Americans, people with disabilities, LGBTQ, older adults, and so on.
Comprehension Check 2-1
1. Parochialism refers to: a. one’s religion. b. seeing things through one’s own eyes. c. having values and morals. d. placing importance on the quality of life.
2. Allowing workers to work at remote sites and have them linked to the organization through some form of technology is called:
a. outsourcing. b. global management. c. telecommuting. d. all of the above.
3. refers to the full breadth of activities included in a successful Internet-based enterprise.
a. E-business b. E-commerce c. Telecommuting d. None of the above
4. Lost productivity time as a result of employees using the Internet for personal rather than work matters is called:
a. electronic commerce. b. telecommuting. c. employee theft. d. cyberloafing.
OBJECTIVE 2.4 Identify the significant changes that have occurred in the composition of the workforce.
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force will differ from 2012, affected by the demographic composition of those leaving, those entering, and those staying in the workforce. Entrants are projected to be mostly men, with the expectation that during the 2012–2022 timeframe, 19.7 million men will enter the labor force, compared with 15.7 million women. The women’s share of the labor force is projected to be 46.8 percent in 2022, whereas the men’s share is expected to be 53.2 percent. The Bureau of Labor Standards projects that, between 2012 and 2022, entrants to the labor force will consist of about 25.8 million white non-Hispanics; a little more than 5 million blacks; 9.2 million Hispanics (the Hispanic share of the labor force is expected to increase more than that of any other demographic group); and an increase of 3 million Asians. These numbers will result in a 2022 workforce that is 60.8 percent white non-Hispanic, 20.6 percent Hispanic, 12.4 percent black, and 6.2 percent Asian.14 What is important is the makeup of those new workers. Minorities and women will make up a significantly larger share of the workforce. As a result, companies and their supervisors must ensure that their motivational programs and techniques are appropriate for such diverse groups of people.
HOW DOES DIVERSITY AFFECT SUPERVISORS? The implications of workforce diversity for supervisors are widespread. Employees don’t set aside their cultural values and lifestyle preferences when they come to work. There- fore, supervisors must remake organizations to accommodate these different lifestyles, family needs, and work styles. They must be flexible enough in their supervisory style to seek the involvement of all employees and be aware of the fact that all employees are differently motivated in terms of what they want and need from work. Awareness of the diversity of the employee pool requires a broad range of new policies and practices. A few examples will make this point. Work schedules will need to be more flexible to accommodate single parents, working parents, and couples maintaining commuter rela- tionships (living in different locations). Companies will need to explore the possibilities of providing childcare and elder care so employees may be better able to give full atten- tion to their work. Benefits programs may need to be redesigned and individualized to reflect more varied needs. Career-planning programs may need to be reassessed to deal with employees who are less willing to relocate for broadened job experience or promo- tions. All employees will need training so they can learn to understand and appreciate people who are different from themselves. And, of course, supervisors will need to rethink their motivation techniques to respond to a widening range of employee needs.
In addition to the diversity brought about by such factors as lifestyle, gender, nationality, and race, supervisors must be aware of the potential effect brought about by the baby boomers. You’ve probably heard a lot about the baby boomers. This group typically includes individuals born between 1946 and 1964. The reason you hear so much about them is because there are so many of them. Through every stage of their life (going to elementary school, teenage years, climbing the career ladder, etc.), they’ve had an enormous effect on the US economy because of their sheer numbers. And as they enter their retirement years, they may have one final effect on supervisors. How so? Again, their sheer numbers play a role.
Many of these baby boomers hold skilled positions in organizations. Although not typically as computer proficient as individuals entering the workforce today, their skills in mathematics, the sciences, skilled trades, and the like are outstanding. When an employee group such as this retires en masse, their departure will leave gaping skill-level holes in organizations. Clearly, this has the potential to create a labor shortage—making it much more difficult for supervisors to recruit and to direct the job activities needed to accomplish organizational goals.
14M. Toossi, “Labor force projections to 2022: The labor force participation rate continues to fall,” Monthly Labor Review, December 2013, http://www.bls.gov/opub/mlr/2013/article/labor-force-projec- tions-to-2022-the-labor-force-participation-rate-continues-to-fall.htm (accessed December 30, 2016).
baby boomers The largest group in the workforce; they are regarded as the career climbers—at the right place at the right time. Mature workers view them as unrealistic in their views and workaholics.
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42 Part 1 Defining Supervision and Supervisory Challenges
Generational differences often surface as a cause for tension in the workplace and can become a concern for the supervisor. Exhibit 2-2 identifies the massive group ste- reotypes associated with the different age groups in the workforce.
Changing How Business Operates Where supervisors work today is changing. Whereas in the past, big business dominated the US scene, that’s not necessarily the case today. More growth has occurred in small and medium-sized companies during the past decade, and these businesses have been able to be more customer responsive. Nonetheless, big business is not throwing in the towel. Instead, to be more like their smaller counterparts, large businesses have been
OBJECTIVE 2.5 Explain why corporations downsize.
Exhibit 2-2 Value stereotypes for several genera- tions of workers.
Baby Boomers (1946 –1964) Generation X (1965–1980) Generation Y (1981–2002) Millennials
Uses technology as a necessary tool, but not obsessed with technology for its own sake
Techno-savvy Techno-savvy, and even questions the value of standard IT technique such as e-mail, with a preference for communications on a Web site
Appreciates hierarchy Dislikes hierarchy Dislikes hierarchy, prefers participation
Tolerates teams but values independent work
Teamwork very important Teamwork very important
Strong career orientation Strives for work–life balance but will work long hours for now, prefers flexible work schedule
Strives for work–life balance and may object to work interfering with personal life; expects flexible work schedule
More loyalty to organization Loyalty to own career and profession
Loyalty to own career and profession and feels entitled to career goals
Favors diplomacy and tact Candid in conversation Quite direct in conversation
Seeks long-term employment Will accept long-term employment if situation is right
Looks towards each company as a stepping stone to better job in another company
Believes that issues should be formally discussed
Believes that feedback can be administered informally and welcomes feedback
Believes that feedback can be given informally, even on the fly, and craves feedback
Somewhat willing to accept orders and suggestions
Often questions why things should be done in a certain way
Frequently asks why things should be done in a certain way, and asks a lot of questions
Willing to take initiative to establish starting and completion dates for projects
Slight preference for a manager to provide structure about project dates
Prefers structure on dates and other activities based on childhood of structured activities
Regards rewards as a positive consequence of good performance and seniority
Expects frequent rewards Feels strong sense of entitlement to rewards, including promotions
Will multitask in front of work associates when it seems necessary
Feels comfortable in multitasking while interacting with work associates
Assumes that multitasking, including listening to music on earphones while dealing with work associates, is acceptable behavior
Note: Disagreement exists about which age brackets fit baby boomers, Generation X, and Generation Y, with both professional publications and dictionaries showing slight di�erences.
Sources: The majority of ideas in this table are from Robers McGarvey, “The Coming of Gen X Bosses,” Entrepreneur, November 1999, pp. 60–64; Gregg Hammill, “Mixing and Managing Four Generations of Employees,” FDU Magazine Online, Winter/Spring 2005, p. 5; Sommer Kehrli and Trudy Sopp, “Managing Generation Y: Stop Resisting and Start Embracing the Challenges Generation Y Brings to the Workplace,” HR Magazine, May 2006, pp. 113–119; Ron Alop, The Trophy Kids Grow Up: How the Millennial Generaion Is Shaking Up the Workplace (San Francisco, CA: Jossey-Bass/Wiley, 2008); Ronald Alsop,“Schools, Recruiters Try to Define Traits for Future Students,”Wall Street Journal, February 4,2006, p. B6; Kathyryn Tyler, “Generation Gaps: Millennials May Be Out of Touch with the Basics of Workplace Behavior,” HR Magazine, January 2008, pp. 69–72.
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Chapter 2 Supervision Challenges 43
making some significant changes. The most obvious of these are downsizing, continu- ous-improvement programs, and work process engineering. Let’s look at each of these and discuss how they will affect you on the job.
WHY ARE ORGANIZATIONS DOING MORE WITH LESS? US companies have been working to become “lean and mean” organizations. As a result of deregulation in certain industries (e.g., the airlines), foreign competition, mergers, and takeovers, organizations have cut employees from their payrolls. In fact, by the end of the twentieth century, almost all Fortune 500 companies—such as Sears, General Electric, American Airlines, and IBM—had cut staff and reshaped their operations. In business terms, this action is called downsizing.15
Organizations downsize to accomplish two primary goals: to create greater effi- ciency, and to reduce costs. In many cases, this meant reducing the number of workers employed by the organization. This included employees at all levels, including supervi- sors. Organizations did not do this because it was fun for them. Many were forced into this action. Why? The world around them changed!
To deal effectively with factors in a rapidly changing business environment, such as increased global competition, companies had to become more flexible about how work got done. Formal work rules that dominated bureaucracies didn’t permit changes to occur fast enough. There were just too many people involved in making decisions—and in their implementation. In addition, workers in the organizations may not have had the necessary skills to adapt to the changes in their jobs. In some cases, the organization had not planned ahead, or had not spent the money years earlier, to ensure that employee skills would be up to date. As a result, someone outside the organization had to be hired to do the work. Companies believed that it was sometimes cheaper to continue to do the work outside than it was to train and pay for a full-time employee. Thus, along with downsizing for flexibility’s sake came a realization that costs should be significantly cut by downsizing full-time staff resources.
However, downsizing didn’t achieve its goals in all cases. Downsizing efforts some- times took their toll on workers and the potential financial gains they were supposed to achieve. Several studies have indicated that more than two-thirds of all companies that downsized had problems with employee morale, and those remaining in the organiza- tion mistrusted management. Moreover, companies that downsized experienced a higher incident rating of employees filing disability claims.
WHY THE EMPHASIS ON CONTINUOUS-IMPROVEMENT PROGRAMS? A quality revolution continues to take place in both the private and the public sectors. The generic term that has evolved to describe this revolution is continuous-improvement.16 The revolution was inspired by a small group of quality experts—individuals such as Joseph Juran (1904–2008) and W. Edwards Deming (1900–1993). Today, many of these individuals’ original beliefs have been expanded into a philosophy of organiza- tional life that is driven by customer needs and expectations (see Exhibit 2-3). Impor- tantly, however, continuous-improvement programs expand the term customer beyond the traditional definition to include everyone involved with the organization, either internally or externally—encompassing employees and suppliers as well as the people who buy the organization’s products or services. The objective is to create an organiza- tion committed to continuous improvement, or as the Japanese call it, kaizen.17
15Downsizing may also be referred to as restructuring, reduction in force, or rightsizing.
downsizing A reduction in workforce and reshap- ing of operations to create “lean and mean” organizations. The goals of organizational downsizing are greater efficiency and reduced costs.
OBJECTIVE 2.6 Understand the concept of continuous improvement and identify its goals.
16In some cases, continuous-improvement programs may be grouped under a concept called total quality management (TQM). 17“Winning with Kaizen,” IIE Solutions, April 2002, 10.
continuous improvement Activities in an organization that enhance processes that result in the improved quality of goods and services produced.
kaizen Japanese term for an organization committed to continuous improvement.
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44 Part 1 Defining Supervision and Supervisory Challenges
Although continuous-improvement plans have been criticized by some for overpromis- ing and underperforming, their overall record is good. Varian Medical Systems, Inc., a maker of scientific equipment, used continuous-improve- ment programs in its semiconductor unit to cut the time it took to put out new designs by four- teen days. Another Varian unit, which makes vacuum systems for computer clean rooms, boosted on-time delivery from 42 to 92 percent through continuous-improvement methods. Globe Metallurgical, Inc., a 1988 Malcolm Bal- drige National Quality Award Recipient and a wholly owned subsidiary of Globe Specialty Metals Inc. since 2006, credits continuous- improvement programs with helping it become 50 percent more productive. And the significant improvements made over the past decade in the quality of cars produced by GM, Ford, and FCA US LLC can be directly traced to the implemen- tation of total quality management methods.
HOW DOES WORK PROCESS ENGINEERING DIFFER FROM CONTINU- OUS IMPROVEMENT? Although implementing continuous-improve- ment methods is a positive start in many orga-
nizations, these methods generally focus on incremental change. Such action—a constant and permanent search to make things better—is intuitively appealing. Many organiza- tions, however, operate in an environment of rapid and dynamic change. As the elements around them change ever so quickly, a continuous-improvement process may keep them behind the times.
The problem with a focus on continuous improvement is that it can provide a false sense of security. It may make organizational members feel as if they are actively doing something positive, which is somewhat true. Unfortunately, ongoing incremental change can avoid facing up to the possibility that what the organization may really need is radical or quantum change, referred to as work process engineering.18 Continuous change may also make employ- ees feel as if they are taking progressive action while, at the same time, avoiding having to implement quantum changes that will threaten certain aspects of organizational life. The incremental approach of continuous improvement, then, may be today’s version of rear- ranging the deck chairs on the Titanic. It is imperative in today’s business environment that all organizational members consider the challenge that work process engineering may have on their organizational processes. Why? Because work process engineering can lead to major organizational gains in cost- or time-cutting or improved service, as well as help an organiza- tion prepare to meet the challenges that technology changes foster.
WHAT ARE THE SUPERVISORY IMPLICATIONS OF DOWNSIZING, CON- TINGENT WORKFORCES, CONTINUOUS-IMPROVEMENT PROGRAMS, AND WORK PROCESS ENGINEERING? Although downsizing, contingent workforces, continuous-improvement programs, and work process engineering are activities that are frequently initiated at the top management levels of an organization, they do have an effect on supervisors. Supervisors are often
18 M. Hammer and J. Champy, Reengineering the Corporation: A Manifesto for Business Revolution, (New York: Collins Business Essentials, 1993, Harper Business, 2006).
work process engineering Radical or quantum change in an organization.
Exhibit 2-3 The foundations of continuous improvement.
1. Focus on the customer. The customer includes not only outsiders who buy the organization’s products or services, but also internal customers (such as shipping or accounts payable personnel) who interact with and serve others in the organization.
2. Seek continuous improvement. This is a commitment to never being satisfied. ”Very good“ is not enough. Quality can always be improved.
3. Improve the quality of everything the organization does. Continuous improvement uses a very broad definition of quality. It relates not only to the final product but also to how the organization handles deliveries, how rapidly it responds to complaints, how politely the phones are answered, and the like.
4. Measure accurately. Continuous improvement uses statistical techniques to measure every critical variable in the organization’s operations. These are compared against standards or benchmarks to identify problems, trace them to their roots, and eliminate their causes.
5. Involve employees. Continuous improvement involves the people on the line in the improvement process. Teams are widely used in continuous-improvement programs for finding and solving problems.
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Chapter 2 Supervision Challenges 45
heavily involved in implementing the changes. They must be prepared to deal with the organizational issues these changes bring about. Let’s look at some of the implications.
Downsizing and Supervisors When an organization downsizes, the most obvious effect is that people lose their jobs. Therefore, a supervisor can expect certain things to occur. Employees—both those let go and the ones that remain—may get angry. Both sets of employees may perceive that the organization no longer cares about them. Even though the downsizing decision is made at higher levels of management, the supervisor may receive the brunt of this resentment. In some cases, the supervisor may have participated in deciding which individuals to let go and which ones to keep based on the organiza- tion’s goals. After downsizing, employees who remain may be less loyal to the company.
An important challenge for supervisors is motivating a workforce that feels less secure in their jobs and less committed to their employers. Corporate employees used to believe that their employers would reward their loyalty and good work with job security, generous benefits, and pay increases. By downsizing, companies have begun to discard traditional policies on job security, seniority, and compensation. These changes have resulted in a sharp decline in employee loyalty. As corporations have shown less com- mitment to employees, employees have shown less commitment to them. This affects the supervisor’s ability to motivate employees and maintain high productivity.
Downsizing may also cause increased competition among a supervisor’s employees. If decisions are made to eliminate jobs based on a performance criterion, employees may be less likely to help one another. It may become every employee for himself or herself. Such behavior can defeat the team that a supervisor has built.
Finally, downsizing may foster issues for the survivors. Unless the work processes have been revamped, major tasks of jobs that were cut may still be required. Usually that means increased workloads for the remaining employees. This can lead to longer workdays, creating conflicts for employees between their work and personal lives. It can also lead to greater anxiety, more stress on the job, and increased absenteeism. For the supervisor, these too can dramatically affect work unit productivity.
Contingent Workforces Shifting away from traditional full-time jobs toward a contin- gent workplace experience, an American independent workforce is emerging as part- time, temporary workers. These contract workers seek more control and flexibility in their work life and make themselves available for hire on an as-needed basis.19 Depend- ing on how they are defined, numbers of contingent workers estimated to work in the United States vary widely. However, most recent data suggest that as a result of orga- nizations converting full-time permanent jobs into contingent jobs, the self-employed work force in the United States numbers around 40 million. Of this number, the inde- pendent work force is estimated to consist of 40 percent of Millennials and 31 percent of Baby Boomers.20 A report by recruiting firm MBO Partners estimates there will be 34 million contingent workers by 2021, making up 29 percent of the workforce.21 That’s likely to include you!
What are the implications for supervisors and organizations? Because contingent employees are not “employees” in the traditional sense of the word, supervising them has its own set of challenges and expectations. Supervisors must recognize that because contingent workers lack the stability and security of permanent employees, they may not identify with the organization or be as committed or motivated. Supervisors may need to treat contingent workers differently in terms of practices and policies. How- ever, with good communication and leadership, an organization’s contingent employees can be just as valuable a resource to an organization as permanent employees are.
19 “America’s Independents: A Rising Economic Force,” 2016 State of Independence in America Report, MBO Partners, https://www.mbopartners.com/uploads/files/state-of-independence-reports/2016_MBO_ Partners_State_of_Independence_Report.pdf (accessed January 4, 2017). 20 Ibid. 21 Ibid.
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46 Part 1 Defining Supervision and Supervisory Challenges
Today’s supervisors must recognize that it will be their responsibility to motivate their entire workforce—full-time and contingent—and to build their commitment to doing good work!
Continuous-Improvement Programs and Supervisors Supervisors must clearly define what quality means to the jobs in their unit. This needs to be communicated to every staff member. Each individual must then exert the needed effort to move toward perfection. Supervisors and their employees must recognize that failing to do so could lead to unsat- isfied customers taking their purchasing power to competitors; should that happen, jobs in the unit might be in jeopardy.
The premise of continuous improvement can generate a positive outcome for super- visors and employees. Everyone involved may now have input into how work is best done. The foundation of continuous improvement is built on the participation of the people closest to the work. As such, continuous improvement can eliminate many of the bottlenecks that have hampered work efforts in the past. Continuous-improvement pro- grams can help create more satisfying jobs—for both supervisors and their employees.
Work Process Engineering and Supervisors If you accept the premise that work process engineering will change how businesses operate, it stands to reason that supervisors, too, will be directly affected. First of all, work process engineering may leave some supervisors and employees confused and angry. When processes are restructured, some longtime work relationships are severed.
Although work process engineering has its skeptics, it can generate some benefits for supervisors. It may mean that they have an opportunity to learn new skills. They may now work with the latest technology, supervise work teams, or have more decision- making authority. These same skills may keep them marketable and help them move to another organization, should that time ever come. Finally, as these changes sweep across corporate America, supervisors may see changes in how they are paid. Under a work-process-engineered work arrangement, supervisors and their employees may be in a better position to be compensated for the work they do and receive bonuses and incentives when they excel.
Employee Loyalty and Engagement Supervisors have generally viewed employee loyalty as necessary for decreasing turnover and achieving organizational stability. Problems develop when marginal employees cannot or will not leave the organization, instead exhibiting loyalty by remaining on the job. Employee loyalty is not the ultimate measure of effectiveness and should be balanced by workforce engagement in meaningful work. Supervisors must diligently strive to improve those practices leading to workforce engagement by identifying strategic issues, core human resources (HR) processes, and operational components inherent in the organization.22
Thriving On Chaos As a student, which of the following scenarios do you find more appealing?
Scenario 1: Semesters are fifteen weeks long. On the first day of each class, faculty members are required to provide a course syllabus that specifies daily assignments, exact dates of examinations, and the precise percentage weights that various class activities count toward the final grade. College rules require instructors to hold classes only at the time specified in the class schedule. These rules also require instructors to grade assignments and return the results within one week from the time they’re turned in.
22 S. Hundley, F. Jacobs, and M. Drizin, Workforce Engagement: Strategies to Attract, Motivate, and Retain Talent (Scottsdale, AZ: WorldatWork Press, 2007).
OBJECTIVE 2.7 Describe why supervisors must be able to “thrive on chaos.”
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Chapter 2 Supervision Challenges 47
Scenario 2: Courses vary in length. When you sign up for a course, you don’t know how long it will last. It might go for two weeks or thirty weeks. Furthermore, in- structors can end a course any time they want, with no prior warning. The length of a class also changes each time it meets. Sometimes it lasts twenty minutes; other times it runs for three hours. Scheduling of the next class meeting is done by the instructor at the end of each class. Oh yes, the exams are all unannounced, so you have to be ready for a test at any time; instructors rarely provide you with any significant feedback on the results of those exams.
If you’re like most people, you chose Scenario 1. Why? Because it provides secu- rity through predictability, you know what to expect, and you can plan for it. It may, therefore, be disheartening for you to learn that the supervisor’s world—including the supervisor’s job—increasingly looks a lot more like Scenario 2 than Scenario 1.
We propose that tomorrow’s successful supervisors will be those who have learned to thrive on chaos. They will confront an environment in which change is taking place at an unprecedented rate. New competitors spring up overnight; old ones disappear through mergers, acquisitions, new technologies, or failure to keep up with the chang- ing marketplace. Downsized organizations mean fewer workers to complete the neces- sary work. Constant innovations in computer and telecommunications technologies make communications instantaneous. These factors, combined with the globalization of product and financial markets, have created chaos. As a result, many traditional business strategies—created for a world that was far more stable and predictable—no longer apply.
Successful supervisors must change, too. They must be able to make sense out of a situation in which everything appears futile. Supervisors must be able to turn disasters into opportunities. To do so, they must be more flexible in their styles, smarter in how they work, quicker in making decisions, more efficient in managing scarce resources, bet- ter at satisfying the customer, and more confident in enacting massive and revolutionary changes. As management writer Tom Peters captured this concept in one of his best-selling books, “Today’s supervisors must be able to thrive on change and uncertainty.”23
From Chaos To Crisis Although supervisors today must be able to deal with the chaos surrounding them, managing in a crisis takes on a different proportion in a supervisor’s work life. A super- visor must be alert to the warning signs of a unit in trouble. Some signals may include potential performance declines, budget deficiencies, unnecessary and cumbersome poli- cies, fear of conflict and taking risks, tolerance of work incompetence, and poor com- munications within the department.
Another perspective on recognizing performance declines revolves around the “boiled frog phenomenon,”24 a classic psychological response experiment. In one case, a living frog is dropped into a boiling pan of water, reacts instantly, and jumps out of the pan. But the second frog, a live frog that’s dropped into a pan of mild water that is gradually heated to the boiling point, fails to react, and dies. Supervisors may be particularly vulner- able to the boiled frog phenomenon because they may not recognize the “water heating up”—that is, the subtly declining situation. When changes in performance are gradual, a serious response may never be triggered or may not be triggered until it is too late to do anything about the situation. So, what does the boiled frog phenomenon teach us? It tells us that supervisors need to be alert to the signals that something is amiss in the depart- ment, and not wait until the situation reaches the crisis (boiling) point.
23 T. Peters, Thriving on Chaos: Handbook for a Management Revolution (New York: Knopf, 1987). 24 P. Strozniak, “Averting Disaster,” Industry Week, February 12, 2001, 11–12.
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48 Part 1 Defining Supervision and Supervisory Challenges
Although most crises in organizations don’t go from problem to crisis overnight, traumatic events do occur.25 On April 20, 2010, the explosion of Deepwater Horizon, which drilled on the BP-operated Macondo Prospect, is a clear example. So, what can organizations and supervisors do?
One of the key components in handling a disaster is to have a plan in place. This may include having disaster recovery plans, which may include duplicate and backup systems, emergency work sites, and telecommuting options26 Although these are impor- tant, one aspect appears to have the consensus of the experts in this arena—supervisory support for employees and their families. 27 Good communications during these disas- ters becomes paramount to help employees understand what is happening. Supervisors must be able to let employees talk about their feelings and allow them to grieve, if needed. Supervisors must also recognize that stress may be rampant in some employees, and some may become depressed and need additional assistance. In such situations there are no manuals to rely on; rather, such times require supervisors to be kind, sensitive, and empathetic. And they must do this at a time when they, too, may be experiencing the same emotional “crises” as their employees!
There’s no doubt that trying times require drastic measures. And although the hope is that events like those we witnessed on April 20, 2010, will never happen again, traumatic events in an organization may occur at any time. Those organizations and supervisors that anticipate such catastrophes and have disaster plans in place will be one step ahead in minimizing the effects of the aftermath.
The Good and Profitable Organization Every organization has one simple goal: It wants to survive. Survival may take on dif- ferent forms, though. For many it means being profitable, whereas for others it means generating enough money to continue the work for the good of society. The former often raises many questions. Can an organization operate in a manner that allows it to do the “right” thing and still make money? Although the answer is yes, the news headlines are filled with stories about organizations that may not operate in a manner that seems appropriate. For instance, if tobacco companies know that nicotine leads to serious health problems, should they have withdrawn cigarettes from the market decades ago? Should US companies manufacturing products in Mexico adhere to US environmental and safety laws when Mexico doesn’t require them—even when it’s been shown that some birth defects in Brownsville, Texas, are a function of pollution coming across the gulf from Mexico? Regardless of our feelings on such issues, we really can’t condemn such organizations. In most cases, after all, they are obeying the law—and that’s all that is required of them! We frequently assume that as long as businesses obey the law, they have a right to do whatever is necessary to ensure survival. We take this as a given. However, many organizations today are implementing policies and practices that focus on socially responsible behavior. Let’s look at this phenomenon.
WHAT IS A SOCIALLY RESPONSIBLE ORGANIZATION? Social responsibility is an obligation that organizations have to society. It means going beyond the law and profit-making. Social responsibility tries to align organizational long-term goals with what is good for society. Society in this context refers to such groups as an organization’s employees, its customers, and the environment in which it operates.
25 “What Companies Can Do in Traumatic Times,” BusinessWeek, October 8, 2001, 92. 26 L. Copeland, C. Sliwa, and M. Hamblen, “Companies Urged to Revisit Disaster Recovery Plans,” Com- puterworld, October 15, 2001, 7. 27 See, for example, J. Brandt, “Survivors Need Your Solace,” Chief Executive, October 2001, 12; and H. Paster, “Manager’s Journal: Be Prepared,” Wall Street Journal, September 24, 2001, A-24.
social responsibility An obligation that organizations have to pursue long-term goals that are good for society.
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We can understand social responsibility better if we compare it with two similar concepts: social obligation and social responsiveness (see Exhibit 2-4).28 Social obligation is the foundation of a business’s social involvement. A business has fulfilled its social obligation when it meets its economic and legal responsibilities and no more. It does the minimum that the law requires. In contrast to social obligation, both social responsibility and social responsiveness go beyond merely meeting basic economic and legal standards. Social responsiveness adds a moral obligation to do those things that make society better and not to do those that could make it worse. Social responsiveness, then, requires busi- ness to determine what is right or wrong and thus seek fundamental truths. Societal norms guide this process. Let’s look at these two concepts in an example to make them clearer.
When a company meets pollution control standards established by the federal government or doesn’t discriminate against employees on the basis of their race in a promotion decision, the organization is fulfilling its social obligation—and nothing more. Various laws say that employers may not pollute or be biased against certain groups, and this company is abiding by those laws. However, when a company pack- ages its products in recycled paper or provides healthcare insurance for an unmarried employee’s significant other, this firm is being socially responsive. How so? Although pressure may be coming from a number of societal groups, such businesses are providing something society desires—without having to be told to do so by law!
It’s often easy for us to sit back and talk about a company being socially responsible, but what about when “they” become “us”? Socially responsible behavior for individuals brings the matter a little closer to home!
HOW DO WE ACT RESPONSIBLY? Many people believe that our society is currently suffering a moral crisis. Behaviors that were once thought reprehensible—lying, cheating, misrepresenting, covering up mistakes—have become, in many people’s eyes, common business practices. Products that can cause harm to their users remain on the market. Males in one large organization have been alleged to have sexually harassed their female counterparts.
How about in business—and more specifically, the job of supervisor? What kinds of questionable issues might a supervisor face? Here are a few general questions related to supervisory actions: Should you tell the truth all the time? Is it right to bend the rules to your company’s advantage whenever you can? Does anything go, as long as you don’t get caught? Now consider a couple of specific cases: Is it proper for one of your salespeople to offer a bribe to a purchasing agent as an inducement to buy? Is it wrong to use the company computer for online shopping?
Supervisors face many dilemmas. Situations exist in which they’re required to define right and wrong conduct. Because of their comments and behavior, super- visors are a primary source for conveying an organization’s climate. For most employees, their supervisor is the only contact they have with management. As such, management’s stan- dards are interpreted by employees through the actions of their supervisor. If supervisors take company supplies home, cheat on their expense accounts, or engage in similar practices, they set a tone in their workgroups that is likely to undermine all the efforts by top management to create a corporate climate of high-principled standards. In large companies such as Ameri- can Express and ExxonMobil, supervisors have
28 W. Acar, K. E. Aupprele, and R. M. Lowry, “An Empirical Exploration of Measures of Social Respon- sibility Across the Spectrum of Organizational Types,” International Journal of Organizational Analysis (January 2001), 26–57.
social obligation The foundation of a business’s social involvement. An organization’s social obligation is fulfilled when it meets its economic and legal responsibilities.
social responsiveness A process guided by social norms that requires businesses to determine what is right or wrong and thus seek fundamental truths; an attempt to do those things that make society better and not to do those things that could make it worse.
Exhibit 2-4 Social obligation versus social responsiveness.
Meet Economic and Legal
Requirements
Doing What Is Right
Social Responsiveness
Social Obligation
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codes of conduct to guide them as to what constitutes acceptable and unacceptable practices. These are often formal documents that state an organization’s primary values and the ethical rules it expects employees to follow.
As organizations apply increased pressure on supervisors and employees to cut costs and increase productivity, ethical dilemmas are almost certain to increase. Through their actions and words, supervisors contribute to setting their organization’s standards. Organizations must be on guard against the appearance of impropriety in any form. The time honored practice of suppliers offering free tickets or discounts to organizational purchasing agents, or restaurants offering free or discounted meals to police officers, may raise the suspicion of outside observers and call into question the impartiality of future business and police decisions.
What supervisors want from their employees is for them to act ethically. What exactly is this thing we call ethics?
WHAT IS ETHICS? Ethics commonly refers to the rules or principles that define right and wrong conduct. People who lack a strong moral character are much less likely to do the wrong things if they are constrained by rules, policies, job descriptions, or strong cultural norms that frown on such behaviors. Conversely, moral people can be corrupted by an organization and its culture that permit or encourage unethical practices. Consider an ethical situation alluded to previously—that of a purchasing agent taking a bribe. Taking a monetary bribe, we believe, is something almost everyone would consider unethical behavior. That’s because it could also be an illegal activity. But what if the “bribe” is not as visible as money—or doesn’t exist at all? For example, suppose you are the supervisor of the purchasing department for a medium-sized hospital. You have several vendors who are making their best sales pitch to you in an effort to get your business. Vendor 1 makes his presentation to you and leaves with you quite an attractive price list, given the large quantities you may be buying. Vendor 2 makes a similar presentation, and her com- pany’s prices are comparable. But she also invites you and your friend to attend an upcoming sporting event—tickets you wanted to get but couldn’t because they were sold
out. Do you go to the event with this vendor? Do you think it is okay to do so? After all, it’s a game. Furthermore, even if her company does get your business, their prices are, in fact, in line with the com- peting vendor.
This example illustrates how ambiguity about what is ethical can be a problem for employees. Codes of ethics (formal documents that state an organiza- tion’s primary values and ethical rules it expects employees to follow) are an increasingly popular response for reducing that ambiguity. It has been sug- gested that codes be specific enough to guide employ- ees in what they’re supposed to do. Unfortunately, you may not have such a policy to fall back on. In that case, you are going to have to respond in a way that you feel is appropriate—and deal with the conse- quences. Let’s look at this more closely.
Suppose you are asked by your boss to fix prices with competitors and, at the same time, steal technology from the same groups with which you are colluding. Your boss knows that in so doing, your organization can create an unbeatable market for its products and possibly run your competitors out of business. Also, if you do these things, you’ll be rewarded handsomely—in fact, you may be put in charge of the opera- tion.29 What are your options? One option is to do what your boss has asked. After all,
OBJECTIVE 2.8 Define ethics.
ethics Rules or principles that define right and wrong conduct.
code of ethics A formal document that states an organization’s primary values and the ethical rules it expects employees to follow.
29 This example is adapted from M. Whitacre “My Life as a Corporate Mole for the FBI,” Fortune, September 4, 1995, 52–62.
Rob Marmion/Shutterstock
How ethical will employees be? That’s a difficult question to answer. However, if the behavior of their supervisor is ethical, there is a stronger likelihood that these employees will follow suit. Accordingly, the role a supervisor plays in establishing ethical behavior in a department is critical.
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he’s the boss, and he can make your life great or miserable. However, if you go to such extremes as price fixing or stealing trade secrets, you might be criminally liable. You, not the manager, may face the charges. Even though you did it for the good of your organization, you realize the boss may not protect you if you get caught. In essence, your career may be tarnished.
Another option is to talk to your boss and register your displeasure with being asked to do this deed. It’s doubtful that the request will be withdrawn, but at least you can state your position. You may also refuse to do what you’ve been asked to do. Of course, this refusal could create problems for you. You may feel that you need to go to organizational members in positions of higher authority. You may find that they are willing to help you, but you cannot always count on that happening. Yet another option is to give the impression that you’ll do what your boss asked, but never carry out the request. You might make up excuses that prices couldn’t be fixed because other com- panies wouldn’t agree to go along. In such an instance, you’re hoping that the manager will “buy” your excuse, or simply forget to follow up on the request. Again, it’s a risk you may be willing to take. Another downside to this option is that you are still com- mitting an unethical act—lying to your boss.
Assuming your boss continues to press you, you’ll have another choice available to you. This, however, is the most extreme. If the request clearly goes against your beliefs, and you cannot get any help from individuals in the organization, you may have to think about quitting, or even going outside the organization to report what is happening. Sure, there are disadvantages to doing so, but at least you may have the comfort of knowing you’ve done the right thing. In situations involving ethics, it’s impossible to predict what you’ll face. It helps if you prepare ahead of time and anticipate how you will handle ethical dilemmas (see “Guidelines for Acting Ethically” at the end of this chapter). The more you do to prepare, the easier it will be when and if that day arrives and you’re asked to do something that goes against what you believe is right.
Comprehension Check 2-2
5. The composition of the workforce that includes people from all walks of life is called:
a. supply of labor. b. human resource inventory. c. workforce diversity. d. the global village.
6. When an organization is reducing its workforce and reshaping its operations to create a leaner organization, this process is called:
a. planning. b. organizing. c. efficient operations. d. downsizing.
7. An obligation that organizations have to pursue long-term goals that are good for society is referred to as:
a. social responsibility. b. social obligation. c. social awareness. d. social responsiveness.
8. Rules or principles that define right and wrong conduct are called:
a. social responsibility. b. corporate governance. c. ethics. d. all of the above.
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52 Part 1 Defining Supervision and Supervisory Challenges
needs, and work styles. The most significant implica- tion for supervisors is the requirement of sensitivity to the differences in each individual. That means they must shift their philosophy from treating everyone alike to recognizing differences and responding to these differences in ways that will ensure employee retention and greater productivity.
5. Explain why corporations downsize. Corporate downsizing has occurred in response to global compe- tition. It is an attempt by companies to become more responsive to customers and more efficient in their operations. The supervisory effect is twofold. First, supervisors must ensure that their skills and those of their employees are kept up to date. Employees whose skills become obsolete are more likely to be candi- dates for downsizing. Second, those who keep their jobs will more than likely be doing the work of two or three people. This situation can create frustration, anxiety, and less motivation.
6. Understand the concept of continuous improvement and identify its goals. Continuous-improvement pro- grams expand the term customer beyond the tradi- tional definition to include everyone involved with the organization, either internally or externally. This encompasses employees and suppliers as well as the people who buy the organization’s products or ser- vices. The objective is to create an organization com- mitted to continuous improvement—always looking to be better and to provide a better, higher-quality product or service. The five primary goals of continu- ous improvement are (1) focus on the customer, (2) seek continuous improvement, (3) improve the qual- ity of everything the organization does, (4) measure accurately, and (5) involve employees.
7. Describe why supervisors must be able to “thrive on chaos.” Supervisors work in environments in which change is taking place at an unprecedented rate. They must be more flexible in their styles, smarter in how they work, quicker in making decisions, more efficient in handling scarce resources, better at satisfying the customer, and more confident in enacting massive and revolutionary changes. Supervisors must also be pre- pared for and sensitive to employee needs in the event of a traumatic occurrence in an organization. This
1. Explain how globalization affects supervisors. Glo- balization affects supervisors in many ways. The key factor is recognizing differences that exist among people from various cultures and under- standing how these differences may block effective communications.
2. Describe how technology is changing the supervisor’s job. Technology is changing the supervisor’s job in several ways. Supervisors have immediate access to information that helps them make decisions. Tech- nological advancements assist supervisors who have employees in remote locations, reducing the need for face-to-face interaction with these individuals. On the other hand, effectively communicating with indi- viduals in remote locations, as well as ensuring that performance objectives are being met, will become a major challenge for supervisors.
3. Explain the concepts of e-business and e-com- merce. The term e-commerce is becoming the stan- dard label to describe the online buying and selling of products or services and refers to any sales activity involving electronic business. It involves using the Internet to conduct business transactions. E-busi- ness, on the other hand, involves the full breadth of activities in a successful Internet-based enterprise. It includes developing strategies for running the busi- ness, improving communications with suppliers and customers, collaborating with partners to electroni- cally coordinate design and production, identifying a different kind of leader to run a virtual business, finding skilled people to build and operate intranets and websites, and running the administrative side.
4. Identify the significant changes that have occurred in the composition of the workforce. Compared to sixty years ago, when the workforce consisted primarily of white males, the workforce has become more diverse and will continue in this direction. Changing popula- tion demographics, globalization of businesses, and passage of federal legislation that prohibits employ- ment discrimination have contributed to this change. The changing workforce means that supervisors inter- act with people who are diverse in terms of gender, race, ethnicity, physical ability, sexual orientation, and age—all of whom have different lifestyles, family
After reading this chapter, you can:
SUMMARY
Enhancing Understanding
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Chapter 2 Supervision Challenges 53
sensitivity comes in the form of listening to employ- ees, recognizing the stress they are experiencing, and providing them help as needed.
8. Define ethics. Ethics refers to rules or principles that define right or wrong conduct. In an organization,
these rules or principles may be defined in a writ- ten code of ethics—a formal document that states an organization’s primary values and ethical rules it expects employees to follow.
2-6. Describe the difference between continuous-im- provement programs and work process engineering.
2-7. How can learning to manage chaos better prepare supervisors for their jobs in the next decade?
2-8. Can organizations be socially responsible and still be profitable? If you think so, cite some examples of companies you believe fit this profile and de- scribe what they are doing.
2-9. Is it ethical to cheat on an exam if you know that it will not affect another student’s grade and you are guaranteed that you won’t get caught? Why or why not?
2-10. Identify the characteristics and behaviors of what you would consider an ethical supervisor.
2-1. Do you believe that globalization has had the ef- fect of making US organizations more responsive to their customers? Explain.
2-2. “Technology improvements sometimes hinder su- pervisory effectiveness.” Do you agree or disagree? Support your position.
2-3. What supervisory effects does e-business have for supervisors?
2-4. What is workforce diversity, and what challenges does it create for supervisors?
2-5. What advice would you give to a friend who doesn’t understand downsizing but knows that her company is going to be laying off employees in about three months?
COMPREHENSION: Review and Discussion Questions
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54 Part 1 Defining Supervision and Supervisory Challenges
KEY CONCEPT CROSSWORD
1
6
3
4
7
9
14
16
5
8
10
11
15
17
12
13
2
DOWNACROSS
1. an obligation that organizations have to pursue long-term goals that are good for society 4. rules that define right or wrong conduct 6. formal document that states an organization's primary values that it expects employees to follow 8. radical or quantum change in the organization 9. reduction in the workforce 10. linking a worker's remote computer with the o�ce 11. composition of the workforce that reflects the varied backgrounds of workers 12. an organizational process guided by social norms 13. the largest group in the workforce who were born between 1946 and 1964 14. seeing things from one's own perspective 15. lost productivity as a result of an employee using the Internet at work for personal reasons 16. doing work by using electronic linkages with key constituents 17. activities that enhance processes designed to improve the quality of the goods and services produced
2. values, morals, customs, and laws of a country 3. any transaction that occurs when data are processed and transmitted over the Internet 5. an organization’s fulfillment when it meets its economic and legal responsibilities 7. any high-tech equipment, tools, or operating methods that are designed to make work more e�cient
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Chapter 2 Supervision Challenges 55
Developing Your Supervisory Skills
• What Are My Attitudes toward Workplace Diversity? • How Do My Ethics Rate? • How Committed Am I to My Organization?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• Am I Likely to Become an Entrepreneur? • Am I Well-Suited for a Career as a Global Manager?
GETTING TO KNOW YOURSELF
C. What do you believe each group expects from their supervisor?
D. Now, identify two characteristics that best de- scribe each group.
STEP 2
A. Each group will share its responses to the ques- tions in Step 1 with the entire class.
B. What similarities and what differences exist be- tween the views of the groups? Do these differenc- es reflect how you see people differently? Discuss your responses.
C. Are the characteristics of your age bracket more positive for yourself than the characteris- tics you listed for the other two groups? What does this tell you about the perceptions of diverse workers?
2-11. An Experiential Exercise: Working with Diversity In today’s workforce, several generations coexist. There are the baby boomers (born between 1946 and 1964); Generation X (born between 1965 and 1980); and Gener- ation Y aka “Millennials” (born between 1981 and 2002). Each group has its own focus and holds different values. Form three groups based on these age brackets. Group 1 will include the baby boomers; Group 2, Generation X; and Group 3, Generation Y. Refer to Exhibit 2-2 to help guide your discussion.
STEP 1 Discuss your feelings about all three groups. To help frame your responses, use the following questions:
A. What do you believe each group values in life? B. What do you believe each group wants from
their job?
BUILDING A TEAM
you clarify what is permissible for you to do—the managerial discretion you have. It will become your code of ethics to follow.
STEP 2: Understand the ethics policy. Just having the policy in your hand does not guarantee that it will achieve what it is intended to do. You need to fully understand it. Ethical behavior is rarely a cut-and- dried process. With the help of the policy as a guiding light, you will have a basis from which to decide ethi- cal issues in the organization. Even if a policy doesn’t exist, there are several steps you can take when con- fronted with a difficult situation.
Making ethical choices can often be difficult for supervi- sors. Obeying the law is mandatory, but acting ethically goes beyond mere compliance with the law. It means acting responsibly in gray areas in which rules of right or wrong are ambiguous. What can you do to enhance your supervi- sory abilities in acting ethically? We offer some guidelines.
STEPS IN PRACTICING THE SKILL
STEP 1: Know your organization’s policy on ethics. Company policies on ethics, if they exist, describe what the organization perceives as ethical behavior and what it expects you to do. This policy will help
GUIDELINES FOR ACTING ETHICALLY
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responsibility may have had on supervisors in this business.
2-13. Faced with a traumatic crisis, supervisors may be required to take some drastic measures. Identify one organization that has experienced a catastro- phe. Discuss the nature of the tragedy and what the organization did to assist the affected employees.
2-12. Provide a two- to three-page write-up on a socially responsible business and the effect social responsibility is having on the operation of the business. Emphasize the way the business has had to change to become a socially responsible business and the benefits that have accrued. End your paper with a discussion on the effect social
COMMUNICATING EFFECTIVELY
documents first thing Monday morning. Apparently, sev- eral major decisions regarding the acquisition were to be made during the following week.
Julie thought, “I have always been proud to be an executive of Big Bank of America. I know I hold a special position as the first female executive vice-president with the bank. That means getting the job done for the bank, particularly the executives who supported my promo- tion and provided me the opportunity to show what I am capable of accomplishing. But how far do my obligations go? There is no way I can get the paperwork completed without spending most of the weekend in here. I have been spending more and more time at work during the past six months. Where do I draw the line? Should my responsi- bilities to the bank ever outweigh the needs of my family and life partner? I have scheduled time off coming up; what if some big issue emerges with the acquisition just as my family and I are scheduled to go on vacation? Do I owe it to the Big Bank of America to postpone my vacation?”
■➤ Case 2-A: Work–Life Balance Julie, executive vice-president of Big Bank of America, loved working for the bank and openly acknowledged that part of the reason she was so enthusiastic about her employer was because of their espoused values and principles in regard to issues of work–life balance for their employees. However, as she looked around her office this Friday afternoon and took in the view of stacks and stacks of files related to the upcoming acquisition of Main Street Bank, she realized she was in for a long weekend of work. She had been anxiously anticipating a relaxing weekend with her significant other and their two young children as sort of a payback for the long hours she had been working in preparation for the acquisition. She reluctantly sighed as she realized this was the price of her high-paying job, and there was no way she would finish the required analysis and report by the end of the day. Furthermore, she had just taken an urgent call from the bank president, indicating that he needed a report on the delivery of some specific acquisition closing
THINKING CRITICALLY
STEP 3: Think before you act. Ask yourself, why are you doing what you’re about to do? What led to the problem? What is your true intention in taking some action? Is it for a valid reason, or are there ulterior motives behind it—such as demonstrating organiza- tional loyalty? Will your action injure someone? Can you disclose to your manager or your family what you’re going to do? Remember, it’s your behavior that will be seen in your actions. You need to make sure that you are not doing something that will jeop- ardize your role as a manager, your organization, or your reputation.
STEP 4: Ask yourself “what-if” questions. When you think ahead about why you’re doing something, you should also be asking yourself “what-if” ques- tions. For example, the following questions may help you shape your actions: What if you make the wrong decision—what will happen to you? To your job? What if your actions are described, in detail, on the
local news or in the newspaper? Would it bother or embarrass you or those around you? What if you get caught doing something unethical? Are you prepared to deal with the consequences?
STEP 5: Seek opinions from others. If you must do something major, and you’re uncertain about it, ask for advice from other managers. Maybe they’ve been in a similar situation and can give you the benefit of their experiences. If not, maybe they can just listen and act as a sounding board for you.
STEP 6: Do what you truly believe is right. You have a conscience and you are responsible for your behavior. Whatever you do, if you truly believe it is the right action to take, what others say (or what the proverbial “Monday morning quarterbacks” say) is immaterial. You need to be true to your own inter- nal ethical standards. Ask yourself, can you live with what you’ve done?
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The new company will receive substantial incentives in the form of free land, tax relief, and generous training allow- ances from local and state government. Hiring for the new operation has been announced and will include high-tech positions, supervisory positions, and a few technical posi- tions. The published pay rates for these positions appear to be at or near the top of the local range for comparable jobs.
Marilyn is an experienced supervisor with one of the remaining textile plants in the area. She has received some literature in the mail explaining the mission of the new company and alerting the community to its need to fill a number of positions, including supervisor positions. An employment application for the new company was enclosed with the materials.
At lunch and on breaks, Marilyn has heard her crew talking about the opportunities at the computer manu- facturing company. She has been told that several of her people plan to fill out applications for the new company. In the last week, a representative from the new company left a message on her home phone saying that she would like to invite Marilyn to visit the company and interview for a supervisor’s position. Marilyn is in a quandary about several issues.
RESPONDING TO THE CASE
2-17. What is Marilyn’s responsibility to her present employer regarding her knowledge that several employees are planning to seek positions with the new company?
2-18. How should Marilyn reply to the recruiter who is asking her to come in for an interview? Does this constitute an ethical decision for her?
2-19. Is it ethical for one company to receive funds to move into an area when other companies struggle to keep jobs from going offshore or from being lost to automation?
Julie considered the ethical decision as it related to her position with the bank: if the acquisition process did not go smoothly because she couldn’t provide enough sup- port, the bank would suffer. As a result, her career, and ultimately her family, could suffer. Clearly, her best busi- ness decision would be to work all weekend to complete the reports for the acquisition. On the other hand, as she considered the ethical dilemma in regard to her family, her relationship was already under stress because of the needs of her two young children and stay-at-home part- ner. Clearly, her best family relationship decision would be to spend the weekend with them as promised. These questions touched on Julie’s deepest values and, depend- ing on which position she chose, she could express strong arguments for both decisions.
RESPONDING TO THE CASE
2-14. Obviously, Julie has a problem—an ethical problem. Should she spend the weekend working in her office (which the bank fully expected), or should she spend the weekend with her family (who were desperately in need of her attention)? Support your position.
2-15. If Julie spends the weekend working, should she later initiate an executive discussion of the bank’s espoused values and principles in regard to issues of work–life balance for their employees? Support your position.
2-16. If Julie opts to spend the weekend with her fam- ily what should she expect in terms of workplace reaction and how should she prepare to defend her family-oriented ethical decision?
■➤ Case 2-B: Ethical Considerations A major computer parts manufacturer has decided to open a plant in a medium-sized city in the southeast that has been especially hard hit with job losses in the textile field.
7-b Unilever, Rotterdam, Netherlands and London, United Kingdom
8-d VF Corporation, Greensboro, SC 9-d InterContinental Hotels Group, Denham, United
Kingdom 10-c PepsiCo, Purchase, NY
1-c Braun GmbH, Kronberg, Germany 2-d Societe BIC SA, Clichy, France 3-d General Mills, Minneapolis, MN 4-c TLC Corp, Huizhou, Guangdong Province 5-a B&G Foods, Parsippany, NJ 6-c Yidiz Holding, Istanbul, Turkey
ANSWERS TO “SOMETHING TO THINK ABOUT: WHO OWNS WHAT?
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The foundation of supervision is effectively planning the work to
be done; properly grouping work activities and employees; hiring
the people who possess the proper skills, knowledge, and abilities
to do those jobs; and monitoring the activities of the work being
done. In Part 2, we discuss the major elements that facilitate estab-
lishing and attaining organizational and departmental goals. Once
goals are established, employees must be properly grouped to sup-
port those goals. Then, after determining what work is to be done,
supervisors must find qualified job candidates, develop them, and
keep their skills up to date. With plans, structures, and employees
in place, supervisors must design and implement controls that will
ensure that goals are met. Each area of planning, organizing, staff-
ing, and controlling requires a high level of decision-making and
problem-solving skills. Thus, we examine these crucial supervisory
skills as well.
PART
Chapter 3 ■ Planning and Goal Setting
Chapter 4 ■ Organizing
Chapter 5 ■ Staffing and Recruiting
Chapter 6 ■ Controlling
Chapter 7 ■ Problem Analysis and Decision Making
2 Planning, Organizing, Staffing, Controlling, and Decision Making
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■ activities
■ balanced scorecard
■ benchmarking
■ budget
■ business plan
■ critical path
■ entrepreneurial
■ entrepreneurship
■ events
■ Gantt chart
■ goal setting
■ intermediate-term plan
■ intrapreneurs
■ ISO 9000 series
■ long-term plan
■ PERT chart
■ policies
■ procedure
■ productivity
■ program
■ rule
■ scheduling
■ short-term plan
■ single-use plan
■ Six Sigma
■ standing plan
■ strategic planning
■ tactical planning
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Planning and Goal Setting3 C
H A
P T
ER
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ESB Professional/Shutterstock
3-1. Define productivity.
3-2. Describe how plans should link from the top to the bottom of an organization.
3-3. Identify what is meant by the terms benchmarking, ISO 9000 series, and Six Sigma.
3-4. Contrast policies and rules.
3-5. Describe the Gantt chart.
3-6. Explain the information needed to create a PERT chart.
3-7. Describe the four ingredients common to goal-setting programs.
3-8. Define entrepreneurship and explain how it affects supervision.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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62 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Responding to a Supervisory Dilemma
Supervisors often find themselves faced with similar situations, and standing plans help them to deal with them in a procedurally consis- tent fashion. Organizations typically have maternity leave policies and procedures in place for supervisors to help them deal with the tempo- rary loss of a valuable employee. Top management will define the policies to allow the organization to operate within the limits of the law. If the organization has determined that it will allow flexible maternity leave for its employees, the supervisor may be in charge of organizing a replace- ment worker to ensure that work continues during the absence. Maternity leave is usually created from a vari- ety of benefits that include sick leave, vacation, holiday time, personal days, short-term disability, and unpaid family leave time.
Interestingly, women reporting workplace discrim- ination because of pregnancy is on the rise even as birth rates decline. “Employment lawyers say that, in many cases, employers are simply making honest mistakes as they try to understand a variety of federal and state laws governing issues such as pregnancy discrimination and family leave. And they say it’s easy to overlook the very real costs of pregnancy to small employers, who may see productivity suffer significantly when women take time off after having a baby. But pregnant women claim they’ve been unfairly fired, denied promotions and in some cases urged to terminate pregnancies in order to keep their jobs.”*
The Equal Opportunity Employment Commission (EEOC) filed a suit against Denham Springs Publishing Company for violation of federal law after firing an employee because she was pregnant. In the press release, EEOC states that Denham “discharged Jayme Fraught Jones due to her pregnancy instead of allowing her to take maternity leave. Jones began working for Denham Springs Publishing in May 2005 as the special programs coordinator for the Livingston Parish News. In December 2005, Jones became the sales and market- ing director for the newly acquired Antiques Gazette. In October 2006, Jones began inquiring about the
company’s maternity leave policy because it was unwritten. Despite Jones’ repeated requests for informa- tion, her supervisor, Lauren Katz, the sales and marketing director of the Livingston Parish News, refused to tell her what maternity leave was available . . . . Prior to her requests for maternity leave, Jones had no dis- ciplinary action, she received a salary
increase with increased responsibility, and within days of her discharge, she received a large bonus for generat- ing increased revenue. Jones was terminated because she was pregnant and they did not want to provide her with any maternity leave.Ӡ
Imagine you are a supervisor, and one of your female employees has just told you that she is pregnant and will be taking maternity leave. Can you demand medical notes from a pregnant woman’s doctor con- cerning her work status? Can you reassign female employees to lower-paying positions because of preg- nancy? Can you forbid a pregnant employee from con- tinuing to work if she wants to and is physically capable of doing all tasks associated with the work? Can you refuse to adjust workloads for a pregnant employee if you do so for a worker who is not pregnant but claims some other disability or mitigating circumstance? Pay- ing close attention to maternity leave laws, such as the Pregnancy Discrimination Act of 1978 and the Family and Medical Leave Act of 1993, which protects the rights of the pregnant mother, will allow your organiza- tion to plan for and be better prepared to answer these questions and handle situations as they arise. The bot- tom line is that you should treat your pregnant employ- ees no differently than you would any other employees.
As mentioned in Chapter 1, planning encompasses defining an organization’s objectives or goals, estab- lishing the overall strategy for achieving those goals, and developing a comprehensive hierarchy of functions to integrate and coordinate activities. For our purposes, we treat the terms objectives and goals as interchange- able. Each is meant to convey some desired outcome that an organization, department, workgroup, or indi- vidual seeks to achieve.
*S. Armour, “Pregnant workers report growing discrimination,” USA TODAY, February 17, 2005, http://www.usatoday.com/money/ workplace/2005-02-16-pregnancy-bias-usat_x.htm (accessed January 4, 2017). †U.S. Equal Employment Opportunity Commission, “Denham Springs Publishing Company Sued by EEOC for Pregnancy Discrimina- tion,” Press Release, September 15, 2010, http://www.eeoc.gov/eeoc/newsroom/release/9-15-10e.cfm (accessed January 4, 2017).
RTimages/Shutterstock
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Chapter 3 Planning and Goal Setting 63
What Is Formal Planning? Does planning require that goals, strategies, and plans be written down? Ideally, they should be, but they often aren’t. In formal planning, specific goals are formulated, com- mitted to writing, and made available to other organization members. Additionally, specific action programs exist in formal planning to define the path for the achievement of each goal.
Many supervisors engage in informal planning. They have plans in their heads, but nothing is written down, and there is little or no sharing of these plans with others. This probably occurs most often in small businesses where the owner–supervisor has a vision of where they want to go and how to get there. In this chapter, when we use the term planning, we refer to the formal variety. Formal planning is most often required for an organization to be productive (see “News Flash! The Downsides of Planning”).
PRODUCTIVITY In almost any discussion of performance in an organization, the focus will eventually turn to the topic of productivity. Productivity, in essence, becomes the name of the game! This could refer to producing a product, such as computer chips, or providing a service, such as fixing a computer’s hard drive when it has a problem. Yet in a number of orga- nizations—especially those that provide services—defining productivity can be difficult. In some cases, it becomes a perceived, if not a real, impossibility. In today’s organiza- tions, supervisors must be able to determine what constitutes productivity.
WHAT IS PRODUCTIVITY? In its simplest form, productivity can be expressed in the following ratio:
Productivity = Output
Labor + Capital + Materials
Output per labor hour is perhaps the most common partial measure of productivity. Industrial engineers, who conduct time-and-motion studies in factories, largely focus on generating increases in labor productivity. The US Navy ARIES biodiesel plant— an Automated Real-time, Remote, Integrated Energy System—located at Naval Base Ventura County, is an example of increasing productivity by substituting capital (i.e., machinery and equipment) for labor. Materials productivity is concerned with increasing the efficient use of material inputs and supplies. A meat-packing plant, as an illustrative case, improves its materials productivity when it finds additional uses for by-products that were previously treated as waste.
productivity Output per labor hour, best expressed by the formula Productivity + Output/ (Labor + Capital + Materials). Produc- tivity measures can be applied to the individual, the group, and the total organization.
OBJECTIVE 3.1 Define productivity.
THE DOWNSIDES OF PLANNING
NEWS FLASH!
Formalized planning became popular in the 1960s. And for the most part, it still is popular today! It makes sense to establish some direction. After all, as the Cheshire Cat said to Alice in Alice in Wonderland, the way you ought to go “depends a good deal on where you want to get to.” But critics have begun to challenge some of the basic assumptions underlying
planning. Let’s look at the major arguments that have been offered against formal planning.
■ Planning may create rigidity. Formal plan- ning efforts can lock an organization into specific goals to be achieved within specific timetables. When these objectives were set,
(Continued)
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64 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Productivity can also be applied at three different levels—the individual, the group, and the total organization. Word-processing software, fax machines, and email have made administrative assistants more productive by allowing them to generate more output dur- ing their workdays. The use of teams has increased the productivity of many workgroups at companies such as Coors Brewing and Aetna Life. Southwest Airlines is a more produc- tive organization overall than rivals such as American Airlines or jetBlue because South- west’s cost per available seat-mile is 30–60 percent lower than that of these competitors.
Productivity has become a major goal in virtually every organization. By productivity, we mean the overall output of goods and services produced divided by the inputs needed to generate that output. For countries, high productivity can lead to economic growth and development. Employees can receive higher wages, and company
Continued
the assumption may have been made that the environment wouldn’t change during the time period the objectives cover. If that assumption is faulty, supervisors who follow a plan may have trouble. Rather than remaining flex- ible—and possibly scrapping the plan—super- visors who continue to do the things required to achieve the original objectives may not be able to cope with the changed environment. Forcing a course of action when the environ- ment is fluid can be a recipe for disaster.
■ Plans can’t be developed for a dynamic envi- ronment. As we just mentioned, most organi- zations today face dynamic change in their en- vironments. If a basic assumption of making plans—that the environment won’t change— is faulty, then how can one make plans at all? We have described today’s business environ- ment as chaotic. By definition, that means random and unpredictable. Dealing with chaos and turning disasters into opportuni- ties require flexibility. And that may mean not being tied to formal plans.
■ Formal plans can’t replace intuition and cre- ativity. Successful organizations are typically the result of someone’s vision. But these vi- sions tend to become formalized as they evolve. Formal planning efforts typically include a thorough investigation of the organization’s capabilities and opportunities and an analysis that reduces the vision to a routine event. That can spell disaster for an organization. For in- stance, the rapid rise of Apple Computer in the late 1970s and throughout the 1980s was at- tributed, in part, to the creativity and anti-cor- porate attitudes of one of its cofounders, Steve Jobs. But as the company grew, Jobs felt a need for more formalized management—something
he was uncomfortable performing. He hired a CEO, who ultimately ousted Jobs from his own company. With Jobs’ departure came in- creased organizational formality—the same thing Jobs despised so much because it ham- pered creativity. By 1996, this one-time leader of its industry had lost much of its creativity and was struggling for survival. Jobs returned to Apple that same year and began working to turn the organization around. Tim Cook suc- ceeded Jobs as CEO after his death in 2011, and struggles to maintain the creative atmo- sphere in which Jobs reveled.
■ Planning focuses supervisors’ attention on today’s competition, not on tomorrow’s sur- vival. Formal planning reinforces success, which may lead to failure. We have been taught that success breeds success. That has been an American “tradition.” After all, if it’s not broken, don’t fix it. Right? Well, maybe not! Success may, in fact, breed failure in an uncertain environment. It is hard to change or discard successful plans—leaving the com- fort of what works for the anxiety of the unknown. Successful plans, however, may provide a false sense of security— generating more confidence in the formal plans than they deserve. Supervisors often won’t deliberately face that unknown until they are forced to do so by changes in the environment. But by then, it may be too late!
Sources: H. Mintzberg, The Rise and Fall of Strategic Planning (New York: Free Press, 1994); K. Rebello and P. Burrows, “The Fall of an American Icon,” Business- Week, February 5, 1996, 34–42; and D. Miller, “The Architecture of Simplicity,” Academy of Management Review, 18, no. 1 (January 1993), 116–138.
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Chapter 3 Planning and Goal Setting 65
profits can increase without causing inflation. For individual organizations, increased productivity lowers costs and allows firms to offer more competitive prices.
Increasing productivity is vital to global competitiveness. Organizations that hope to succeed globally are looking for ways to improve productivity. Because productivity is a composite of people and operations variables, to improve productivity, managers must focus on both. W. Edwards Deming, a management consultant and quality expert, believed that supervisors, not workers, were the primary source of increased productiv- ity. Deming’s fourteen points for improving an organization’s productivity reveal his understanding of the interplay between people and operations. High productivity can’t come solely from good “people management.” The truly effective organization maxi- mizes productivity by successfully integrating people into the overall operations system.
WHY IS PRODUCTIVITY IMPORTANT TO THE UNITED STATES? In recent years, US productivity, as calculated by the federal government, was stagnant and at times decreasing. As little as twenty-five years ago, the United States ranked eighth or ninth in terms of productivity for industrialized nations. Is that an accurate depiction of what is happening in the United States today? The most recent figures from the Confer- ence Board, formerly a division of the US Bureau of Labor Statistics, showed that overall labor productivity in mature economies which include the United States, the European Union-28 and Japan, as well as Australia, Canada, Iceland, Israel, Hong Kong, Norway, South Korea, Switzerland, New Zealand, Singapore, and Taiwan grew by 0.6 percent in 2014, slightly down from 2013 when it was 0.8 percent. Despite the slowdown in pro- ductivity growth in the United States, its level of output per hour remains among the highest in the world—about 25 percent above the average of the mature economies.1 By all accounts, it appears that US productivity is steady or rising and the United States has retained a top spot among industrialized nations, yet much of this achievement has been attributed to downsizing and work process engineering efforts in the early 1990s. By reducing inefficiencies, focusing heavily on quality, and introducing technological improvements, companies have maintained, or even increased, production—all the while employing fewer workers. US companies are also increasing productivity by becoming more quality and customer-oriented. The industries in which the United States is doing exceptionally well in relation to other industrialized nations are depicted in Exhibit 3-1.
1The Conference Board Productivity Brief 2015, “Global Productivity Growth Stuck in the Slow Lane with No Signs of Recovery in Sight,” https://www.conference-board.org/retrievefile.cfm?filename=the-confer- ence-board-2015-productivity-brief.pdf&type=subsite (accessed January 4, 2017).
Exhibit 3-1 Industries in which the United States is a major producer in the world market.
Biotechnology Computer Networks
Software Development
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66 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
What does all this fuss about productivity mean? In essence, having increased pro- ductivity makes the US economy stronger. All economic indicators typically revolve around how much US industries produce and sell—both at home and in the global village. Accordingly, when an industrialized nation such as the United States has a strong productivity base, it creates jobs, enhances its production dominance among industrialized nations, encourages job security for employees, and affords research and development efforts to continue finding ways to further productivity gains.
Planning and Level in the Organization All supervisors, irrespective of their level in the organization, should plan. But the type of planning they do tends to vary with their level in the organization, and the planning they do will differ in several ways. In the discussion that follows, we look at plans in terms of their breadth and their time frames.
WHAT IS THE BREADTH OF PLANNING? The best way to describe planning is to look at it in two parts: strategic and tactical. Strategic planning covers the entire organization; it includes establishing overall goals and positioning the organization’s products or services against the competition. Walmart’s strategy, for instance, is to build large stores in rural areas, offer an extensive selection of merchandise, provide the lowest prices, then draw consumers from the many sur- rounding small towns.
Tactical planning covers the specific details on how overall goals are to be achieved. The Walmart store manager in Fayetteville, Arkansas, is engaged in tactical planning when developing a quarterly expense budget or making out weekly employee work schedules.
For the most part, strategic planning is done by top-level managers; a supervisor’s time is more likely devoted to tactical planning. Both are important for an organization’s success, but they are different in that one focuses on the big picture, whereas the other emphasizes the specifics within that big picture.
HOW DO PLANNING TIME FRAMES DIFFER? Planning often occurs in three time frames—short term, intermediate term, and long term. Short-term plans are less than one year in length. Intermediate-term plans cover from one to five years. Long-term plans cover a period of more than five years. A supervisor’s planning horizon tends to emphasize the short term: preparing plans for the next month, week, or day. People in middle-level managerial jobs, such as regional sales directors, typically focus on one- to five-year plans. Long-term planning tends to be done by the top executives, such as vice-presidents and above.
HOW ARE PLANS AND SUPERVISORY LEVELS LINKED? It is important to remember that effective planning is integrated and coordinated throughout the organization. Long-term strategic planning sets the direction for all other planning. Once top management has defined the organization’s overall strategy and goals and the general plan for getting there, then, in descending order, the other levels of the organization develop plans.
Exhibit 3-2 illustrates this linking of plans from the top to the bottom of an orga- nization. The president, vice-president, and other senior executives define the organiza- tion’s overall strategy. Then upper-middle managers, such as regional sales directors, formulate their plans. This continues down to first-line supervisors. Ideally, these plans will be coordinated through joint participation. In the case shown in Exhibit 3-2,
strategic planning Organizational planning that includes the establishment of overall goals and positioning an organization’s products or services against the competition.
tactical planning Organizational planning that provides specific details on how overall goals are to be achieved.
short-term plan A plan that covers a period of less than one year.
intermediate-term plan A plan that covers a period of one to five years.
long-term plan A plan that covers a period in excess of five years.
OBJECTIVE 3.2 Describe how plans should link from the top to the bottom of an organization.
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Chapter 3 Planning and Goal Setting 67
for instance, the Tucson territory supervisor would participate with other territory supervisors in providing information and ideas to the Arizona district manager as she formulates plans for her entire district. If planning is properly linked, the successful achievement of all the territory managers’ goals should result in the Arizona district manager achieving her goals. If all the district managers meet their goals, this should lead to the successful attainment of the regional sales manager’s goals, and so on up each level in the organization.
CAN CONTINUOUS-IMPROVEMENT PROGRAMS BE A HELP IN PLANNING? An increasing number of organizations are applying quality practices as a way to build a competitive advantage.2 As we discussed in the last chapter, to the degree that an organization can satisfy a customer’s need for quality, it can also differentiate itself from the competition and attract and hold a loyal customer base. Moreover, constant improvement in the quality and reliability of an organization’s products or services can result in a competitive advantage others cannot steal. Product innovations, for example, offer little opportunity for sustained competitive advantage. Why? Because usually they can be quickly copied by rivals. But incremental improvement is something that becomes an integrated part of an organization’s operations and can develop into a considerable cumulative advantage.
In addition to continuous-improvement programs, three other quality elements can be useful in planning. These are benchmarking, ISO 9000 series, and Six Sigma. Let’s briefly look at each of these.
What Is Benchmarking? Benchmarking involves the search for the best practices among competitors or non-competitors that lead to their superior performance.3 The basic idea
OBJECTIVE 3.3 Identify what is meant by the terms benchmarking, ISO 9000 series, and Six Sigma.
2 F. K. Wang and W. Lee, “Learning Curve Analysis in Total Productive Maintenance,” Omega, December 2001, 491–499. 3 E. Jossi, “Take a Peek Inside,” HR Magazine, June 2002, 46–52; and R. A. Martins, “Continuous Improvement Strategies and Production Competitive Criteria: Some Findings in Brazilian Industries,” Total Quality Management 12, no. 3 (May 2001), 281–291.
benchmarking The search for the best practices among competitors or non-competitors that lead to their superior performance.
Exhibit 3-2 Planning and levels in the organization.
Type of Plans
Strategic
Tactical
Long-Term
Intermediate
Short-Term
Level Management
Positions (abbreviated)
Top Management
Upper-Middle Management
Lower-Middle Management
First-Line Supervisor
V.P., Production
V.P., Sales
V.P., Human
Resources
President
V.P., Finance
Director, Western Region
Director, Central Region
Director, Southern Region
Director, Eastern Region
Arizona District
Manager
Tucson Territory
Supervisor
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68 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
underlying benchmarking is that supervisors can improve quality by analyzing and then copying the methods of the leaders in various fields.
What Is the ISO 9000 Series? During the 1980s, global corporations increasingly pushed to improve their quality. They knew that to compete in the global village, they had to offer some assurances to purchasers of their products and services that what they were buying was of the quality they expected. In years past, purchasers had to accept indi- vidual “guarantees” that what was being sold met their needs and standards. That individual guarantee changed in 1987, with the formation of the ISO 9000 series, designed by the International Organization for Standardization based in Geneva, Switzerland.4 The ISO 9000 standards were revised in 2000, 2008, and again in 2015. The Standards are based on the quality management principles of customer focus, leadership, engage- ment of people, process approach, improvement, evidence-based decision making, and relationship management.5 These standards, once met, assure customers that a company uses specific steps to test the products it sells; continuously trains its employees to ensure that they have up-to-date skills, knowledge, and abilities; maintains satisfactory records of its operations; and corrects problems when they occur. Some of the multinational and transnational companies that have met these standards are Texas Petrochemical; British Airways; Shanghai-Foxboro Company, Ltd.; Braas Company; Betz Laboratories; Hong Kong Mass Transit Railway Corporation; BP Chemicals International Ltd.; Cin- cinnati Milacron Electronic Systems Division; Borg-Warner Automotive; and Taiwan Synthetic Rubber Corporation.
A company that obtains an ISO certification can boast that it has met stringent international quality standards and is one of a select group of companies worldwide to achieve that designation. Certification can offer more than just a competitive advan- tage; it also permits entry into some markets not otherwise accessible. For example, 163 nations have adopted the ISO standards. Uncertified organizations attempting to do business in those countries may be unable to compete successfully against certified companies. Many customers in the global village want to see the certification, and it becomes a dominant customer need. And in 1997, ISO 14000 went into effect. Compa- nies achieving this certification will have demonstrated that they are environmentally responsible.
How Can Attaining Six Sigma Signify Quality? More than 30 years ago, Motorola popu- larized the use of stringent quality standards through a trademarked quality improve- ment program called Six Sigma6. The Six Sigma concept attempts to “design in” quality as the product is being made rather than measuring the quality of a product after it is produced (see Exhibit 3-3). Basically, Six Sigma is a quality standard that establishes a goal of no more than 3.4 defects per million units or procedures. The name comes from Sigma, the Greek letter that statisticians use to define a standard deviation from a bell curve. The higher the sigma, the fewer the deviations from the norm—that is, the fewer the defects. At One Sigma, two-thirds of whatever is being measured falls within the curve. Two Sigma covers about 95 percent. At Six Sigma, you’re about as close to defect- free as you can get7. It’s an ambitious quality goal! Although it’s an extremely high
4 See, for example, J. P. Wilson, M. A. T. Walsh, and K. L. Needy, “An Examination of the Economic Benefits of ISO 9000 and the Baldrige Award to Manufacturing Firms,” Engineering Management Journal 15, no. 4 (December 2003), 3–5; and International Organization for Standardization, “ISO 9000 - Quality management,” http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/%20quali- ty_management/iso_9000 (accessed January 4, 2017). 5 American Society for Quality, “What is the ISO 9000Standards Series?,” http://asq.org/learn-about-qual- ity/iso-9000/overview/overview.html (accessed January 4, 2017).
ISO 9000 series Standards designed by the Interna- tional Organization for Standardization that reflect a process whereby inde- pendent auditors attest that a com- pany’s factory, laboratory, or office has met quality management standards.
6 G. Hasek, “Merger Marries Quality Efforts,” IndustryWeek, Dec 21, 2004, http://www.industryweek. com/articles/merger_marries_quality_efforts_695.aspx (accessed January 5, 2017)
Six Sigma A philosophy and measurement pro- cess that attempts to “design in” qual- ity as a product is being made.
7 J. Jusko, “An Elite Crew of Master Black Belts,” IndustryWeek, Feb 14, 2011, http://www.industryweek. com/companies-amp-executives/elite-crew (accessed January 5, 2017)And M. Arndt, “Quality Isn’t Just for Widgets,” Business Week, July 22, 2002, http://www.lasaterinstitute.com/casestudy/Information%20Technol- ogy/Dell,%20Sales%20&%20Financial%20Processes(Lean%20Six%20Sigma).pdf (accessed January 5, 2017)
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Chapter 3 Planning and Goal Setting 69
standard to achieve, many quality-driven businesses are using it and benefiting from it. For instance, General Electric estimates that it has saved billions since 1995 by using Six Sigma, according to company executives8. Other examples of companies pursuing Six Sigma include ITT Industries, Dow Chemical, 3M Company, American Express, Sony Corporation, Nokia Corporation, and Johnson & Johnson. Although manufactur- ers seem to make up the bulk of Six Sigma users, service companies such as financial institutions, retailers, and health-care organizations are beginning to apply it. Although it’s important for managers to recognize that many positive benefits come from obtain- ing ISO 9000 certification or Six Sigma, the key benefit comes from the quality improve- ment journey itself. In other words, the goal of quality certification should be having work processes and an operations system in place that enable organizations to meet customers’ needs and employees to perform their jobs in a consistently high-quality way.
Key Planning Guides Once an organization’s strategy and overall goals are in place, supervision in the com- pany will design additional plans to help guide decision makers. Some of these will be standing plans that, once designed, can be used over and over again by managers faced with recurring activities. Others will be single-use plans, which are detailed courses of action used once or only occasionally to deal with problems that don’t occur repeatedly. In this section, we review the popular types of each.
WHAT ARE STANDING PLANS? Standing plans allow supervisors to save time by handling similar situations in a prede- termined and consistent manner. For example, when a supervisor has an employee who increasingly fails to show up for work, the problem can be handled more efficiently and consistently if a discipline procedure has been established in advance. Let’s review the three major types of standing plans: policies, procedures, and rules.
Policies “We promote from within wherever possible.” “Do whatever it takes to sat- isfy the customer.” “Our employees should be paid competitive wages.” These three statements are examples of policies—that is, broad guidelines for supervisory action.
8 E. White, “Rethinking Quality Improvement,” The Wall Street Journal, September 19, 2005, http://www. wsj.com/articles/SB112709098674044484 (accessed January 5, 2017).
OBJECTIVE 3.4 Contrast policies and rules.
OBJECTIVE 3.6 Explain the information needed to cre- ate a PERT chart.
OBJECTIVE 3.5 Describe the Gantt chart.
standing plan A plan that can be used over and over again by managers faced with recur- ring situations.
policies Broad guidelines for supervisory action.
Exhibit 3-3 Six Sigma—twelve process steps. Source: D. Harrold and F. J. Bartos, “Optimize Existing Processes to Achieve Six Sigma Capability,” reprinted with permission from Control Engineering, March 1998, 87, © Reed Business Information. http://www.csemag.com/ home/single-article/optimize-existing- processes-to-achieve-six-sigma-capab ility/6296d5b0905a0a50f98b4ea2da1b c0b0.html (accessed January 5, 2017))
Select the critical-to-quality characteristics. Define the required performance standards. Validate the measurement system, methods, and procedures. Establish the current processes capability. Define upper and lower performance limits. Identify sources of variation. Screen potential causes of variation to identify the vital few variables needing control. Discover the variation relationship for the vital variables. Establish operating tolerances on each of the vital variables. Validate the measurement system’s ability to produce repeatable data. Determine the capability of the process to control the vital variables. Implement statistical process control on the vital variables.
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70 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Typically established by top management, they define the limits within which supervisors must stay as they make decisions.
Supervisors rarely make policies. Rather, they inter- pret and apply them. Within the parameters that policies set, supervisors must use their judgment. For instance, the company policy that “our employees should be paid com- petitive wages” doesn’t tell a supervisor what to pay a new employee. However, if the going hourly rate in the com- munity for this specific job is in the $16.20–$19.50 range, the company policy would clarify that offering a starting hourly rate of either $14.75 or $26.00 is not acceptable.
Procedures Suppose a purchasing supervisor receives a request from the engineering department for five computer-assisted-design worksta- tions. The purchasing supervisor checks to see whether the requisition has been properly filled out and approved. If not, she sends the requisition back with a note explaining what is deficient. When the request is complete, the approximate costs are estimated. If the total exceeds $15,000, which they do in this case, three bids must be obtained. If the total had been $15,000 or less, only one vendor would need to have been identified, and the order could have been placed.
The previous series of steps for responding to a recurring problem is an example of a procedure. Where procedures exist, supervisors only have to identify the problem. Once the problem is clear, so is the procedure to handle it. In contrast to policies, procedures are more specific; like policies, they provide consistency. By defining the steps that are to be taken and the order in which they are to be done, procedures provide a standard- ized way of responding to repetitive problems.
Supervisors follow procedures set by higher levels of management and also create their own procedures for their staff to follow. As conditions change and new problems surface that tend to recur, supervisors develop standardized procedures for handling them. When the service department of a local Chevrolet dealership began accepting debit cards for payment, the department’s supervisor had to create a procedure for process- ing such transactions, then carefully train all the service agents and cashiers in how to handle such a transaction.
Rules A rule is an explicit statement that tells employees what they ought or ought not to do. Rules are frequently used by supervisors to confront a recurring problem because they are simple to follow and ensure consistency. In the previous example, the $15,000 cutoff rule simplifies the purchasing supervisor’s decision about when to use multiple bids. Similarly, rules about lateness and absenteeism permit supervisors to make disci- pline decisions rapidly and with a high degree of fairness.
WHAT ARE SINGLE-USE PLANS? In contrast to the previous discussions of standing plans, single-use plans are designed for a specific activity or time period. The most popular types of these plans are pro- grams, budgets, and schedules.
Programs Mike Arnold got the news at a meeting on Monday morning. His com- pany—American Airlines—was going to lay off a thousand employees. As the baggage- handling supervisor for American’s Dallas hub, he was told to put together a reorganization plan that would allow his department to operate effectively with as many as 20 percent fewer workers. What Mike developed was a program—a single-use set of plans for a specific major undertaking within the organization’s overall goals. It included a list of the most expendable employees, plans for new equipment, plans for redesigning the handling area, and suggested options for jobs that could be potentially combined.
procedure A standardized way of responding to repetitive problems; a definition of the limits within which supervisors must stay as decisions are made.
rule An explicit statement that tells employ- ees what they ought or ought not to do.
single-use plan A detailed course of action used once or only occasionally to deal with a problem that doesn’t occur repeatedly.
program A single-use set of plans for a specific major undertaking within an organiza- tion’s overall goals. Programs may be designed and overseen by top manage- ment or supervisors.
Kaspri/123RF.com
When you see a sign like this one, what does it mean to you? Is it a suggestion? A general guideline? No! It’s a statement of what you must do or not do. Accordingly, we call such “signs” rules.
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Chapter 3 Planning and Goal Setting 71
All supervisors develop programs. A major program—such as building a new manufacturing plant or merging two companies and consolidating their headquarters’ staff—will tend to be designed and overseen by top management. It may extend over several years and may even require its own set of policies and procedures. Supervisors also frequently have to create programs for their departments. Some examples include the departmental reorganization at American Airlines, mentioned previously; creation of a comprehensive ad campaign by an advertising account supervisor for a new client; or development by a regional sales supervisor for Hallmark Cards, Inc. of a training program to teach her staff a new phone-activated, computerized inventory system. Note the common thread through all these examples: They are nonrecurring undertakings that require a set of integrated plans to accomplish their objectives.
Budgets Budgets are numerical plans. They typically express anticipated results in dollar terms for a specific time period. For example, a department may budget $30,000 this year for employee computer training. Budgets may also be calculated in non-dollar terms—for example, employee hours, capacity utilization, or units of production. Budgets may cover daily, weekly, monthly, quarterly, semiannual, or annual periods.
Budgets are covered here as part of the planning process. However, they are also control devices. The preparation of a budget involves planning because it gives direc- tion. The creation of a budget tells what activities are important and how resources should be allocated to each activity. A budget becomes a control mechanism when it provides standards against which resource consumption can be measured and compared.
If there is one type of plan in which almost every manager at any level gets involved, it’s the budget. Supervisors typically prepare their department’s expense budget and submit it to the manager at the next higher level for review and approval
budget A numerical plan that expresses antici- pated results in dollar terms for a spe- cific time period; used as a planning guide as well as a control device.
Comprehension Check 3-1
1. Planning that covers the entire organization in establishing the overall goals is called:
a. tactical planning. b. long-term planning. c. strategic planning. d. organizational planning.
2. When a company searches for the best practices among competitors, this is called:
a. strategic planning. b. benchmarking. c. work process engineering. d. all of the above.
3. The philosophy and measurement process that attempts to “design in” quality is called:
a. Six Sigma. b. benchmarking. c. work process engineering. d. kaizen.
4. A broad guideline that defines limits within which supervisors must stay is called a:
a. procedure. b. rule. c. policy. d. code of ethics.
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72 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
(see Exhibit 3-4). Supervisors may also, depending on their needs, create budgets for employee work hours, revenue forecasts, or capital expenditures such as machinery and equipment. Once approved by higher management, these budgets set specific standards for supervisors and their departmental personnel to achieve.
Schedules If you were to observe a group of supervisors or department managers for a few days, you would see them regularly detailing what activities have to be done, the order in which the activities are to be done, who is to do each, and when the activi- ties are to be completed. These supervisors are performing an activity called scheduling.
Two popular scheduling techniques that can help you prioritize activities and complete work on time are the Gantt chart and the PERT chart. The Gantt chart was developed early in the twentieth century by an industrial engineer named Henry Gantt. The idea was inherently simple, but has proved extremely helpful in scheduling work activities. The Gantt chart is essentially a bar graph with time on the horizontal axis and activities to be scheduled on the vertical axis. The bars show output, both planned and actual, over a period of time. The Gantt chart visually shows when tasks are supposed to be done and compares that to the actual progress on each. As stated, it is a simple but important device that allows managers to detail easily what has yet to be done to complete a job or project, and to assess whether it is ahead, behind, or on schedule.
Exhibit 3-5 depicts a simplified Gantt chart that was developed for producing a book by a supervisor in the production department of a publishing firm. Time is expressed in months across the top of the chart. The major activities are listed down the left side. The planning comes in deciding what activities need to be done to get the book finished, the order in which they need to be done, and the time that should be allocated to each activity. Where a box sits within a time frame reflects its planned sequence. The shading represents actual progress. The chart also becomes a control device when the supervisor looks for deviations from the plan.
Gantt charts are helpful as long as the activities being scheduled are few in number and independent of each other. But what if a supervisor had to plan a large project such as reorganizing a department, launching a cost-reduction campaign, or installing a major piece of new equipment? Such projects often require coordinating hundreds of activities, some of which must be done simultaneously and some of which cannot begin until other activities have been completed. If you’re constructing a building, for example,
scheduling Detailed planning of activities to be done, the order in which they are to be done, who is to do each activ- ity, and when the activities are to be completed.
Gantt chart A bar chart with time on the horizontal axis and activities to be scheduled on the vertical axis; shows when tasks are supposed to be done and compares actual progress on each task.
Exhibit 3-4 Department expense budget.
Department Expense Budget Calendar Year 2018
Salaries/ Fixed Salaries/ Variable Performance Bonuses Office Supplies Photocopying Telephone Mail Travel Employee Development Total Quarterly Expenses
$33,600 3,000
800 1,000 2,500
800 2,500
600 $44,800
$33,600 5,000
800 1,000 2,500
800 1,000
600 $45,300
$33,600 3,000
800 1,000 2,500
800 1,000
600 $43,300
$33,600 10,000
800 1,000 2,500
800 1,000
600 $62,300
12,000
ITEM 1st 2nd 3rd 4th
QUARTER
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Chapter 3 Planning and Goal Setting 73
you obviously can’t start erecting walls until the foundation is poured. How, then, can you schedule such a complex project? You could use a Program Evaluation and Review Technique (PERT) chart.
A PERT chart is a diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity. The PERT chart was originally developed in the late 1950s for coordinating the more than 3,000 contractors and agencies working on the Polaris submarine weapon system. This project was incredibly complicated, with hundreds of thousands of activities that had to be coor- dinated. PERT is reported to have cut two years off the completion date for the Polaris project.
A PERT chart can be a valuable tool in the hands of a supervisor. With a PERT chart, a supervisor must think through what has to be done, determine which events depend on one another, and identify potential trouble spots. A PERT chart makes it easy to compare what effect alternative actions will have on scheduling and costs. Thus, PERT allows supervisors to monitor a project’s progress, identify possible bottlenecks, and shift resources as necessary to keep the project on schedule.
To understand how to construct a PERT chart, you need to know three terms: events, activities, and critical path. Let’s define these terms, outline the steps in the PERT process, and then work through an example.
Events are endpoints that represent the completion of major activities. Activities rep- resent the time or resources required to progress from one event to another. The critical path is the longest or most time-consuming sequence of events and activities in a PERT chart. Developing a PERT chart requires the supervisor to identify all key activities needed to complete a project, rank them in order of dependence, and estimate each activity’s completion time. This can be translated into five specific steps:
Step 1: Identify every significant activity that must be achieved for a project to be completed. The accomplishment of each activity results in a set of events or outcomes.
Step 2: Determine the order in which these events must be completed.
PERT chart A diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity.
events Endpoints that represent completion of major activities.
activities The time or resources required to prog- ress from one event to another.
critical path The longest or most time-consuming sequence of events and activities in a PERT chart.
Exhibit 3-5 A sample Gantt chart.
1
Copyedit manuscript
Design sample pages
Draw artwork
Print galley proofs
Print page proofs
Design cover
2 3 4 Month
Actual progress
Goals Reporting
date
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74 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Step 3: Diagram the flow of activities from start to fin- ish, identifying each activity and its relationship to all other activities. Use circles to indicate events and arrows to represent activities. This results in the diagram that we call the PERT chart. Step 4: Compute a time estimate for completing each activity. Step 5: Finally, using a PERT chart that contains time estimates for each activity, determine a schedule for the start and finish dates of each activity and for the entire project. Any delays that occur along the critical path require the most attention because they delay the entire project. That is, the critical path has no slack in it; therefore, any delay along that path immediately translates into a delay in the final deadline for the com- pleted project.
Now let’s work through a simplified example. Sup- pose you’re the production supervisor in the casting department at the Benson Metal Fabricators plant in eastern Michigan. You have proposed and received approval from corporate management to replace one of three massive furnaces with a new, state-of-the-art electronic furnace. This project will seriously disrupt the operations in your department, so you want to com-
plete it as quickly and as smoothly as possible. You have carefully dissected the entire project into activities and events. Exhibit 3-6 outlines the major events in the furnace modernization project and your estimate of the expected time required to complete each activity. Exhibit 3-7 depicts the PERT chart based on the data in Exhibit 3-6. Your PERT chart tells you that if everything goes as planned, it will take twenty-one weeks to complete the modernization program. This is calculated by tracing the chart’s criti- cal path: Start-A-C-D-G-H-J-K-Finish. Any delay in completing the events along this path will delay the completion of the entire project. For example, if it took six weeks instead of four to get construction permits (activity B), this would have no effect on the final completion date. Why? Because Start-B + B − E + E − F + F − G equals only eleven weeks, whereas Start-A + A − C + C − D + D − G equals seventeen weeks. However, if you wanted to cut the twenty-one-week time frame, you would give attention to those activities along the critical path that could be speeded up.
Exhibit 3-6 Data for the furnace modernization project.
Event Description
Expected Time
(in weeks) Preceding
Event
Approve design None8A
Get construction permits None4B
Take bids on new furnace and its installation
A6C
Order new furnace and equipment
C1D
Remove old furnace 2 BE
Prepare site 3 EF
Install new furnace 2 D, FG
Test new furnace 1 GH
Train workers to handle new furnace
2 GI
Final inspection by company and city officials
2 HJ
Bring furnace on-line into production flow
1 I, JK
Exhibit 3-7 PERT chart for the furnace modernization project.
8
Start Finish
B E F
G
I
H J
K
DCA 6 1
2 3
1 2
2
1
1 0
2
2
4
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Chapter 3 Planning and Goal Setting 75
Something to Think About (and promote class discussion)
FROM THE PAST TO THE PRESENT Management by objectives (MBO) is not new. The concept goes back more than fifty years when Peter Drucker first popularized the term in his 1954 book The Practice of Management.* Its appeal lies in its emphasis on converting overall objectives into specific objectives for organizational units and individual members.
MBO makes goals operational by a process in which they cascade down through the organization. The organization’s overall objectives are translated into specific objectives for each succeeding level— division, departmental, individual—in the organization. The result is a hierarchy that links objectives at one level to those at the next level. For the individual employee, MBO provides specific personal perfor- mance objectives. If all the individuals achieve their goals, then the unit’s goals will be attained. Likewise, if all the units attain their goals, then the divisional goals will be met until ultimately the organization’s overall goals will become a reality.
Does MBO work? Assessing the effectiveness of MBO is a complex task. But goal-setting research can give us some answers. For instance, research has shown that specific, difficult-to-achieve goals produce a higher level of output than do no goals or generalized goals such as “do your best.” Also, feedback favorably affects performance because it lets people know whether his or her level of effort is sufficient or needs to be increased. These findings are consistent with MBO’s emphasis on specific goals and feedback. What about participation, though, since MBO strongly advocates that goals be set participatively? Research comparing participatively set goals with assigned goals has not shown any strong or consistent relationship to performance. One critical factor in the success of any MBO program, however, is top management commitment to the process. When top managers had a high commitment to MBO and were personally involved in its implementation, productivity gains were higher than if this commitment was lacking.
* “From the Past to the Present” box based on P. F. Drucker, The Practice of Management (New York: Harper & Row, 1954); J. F. Castellano and H. A. Roehm, “The Problem with Managing by Objectives and Results,” Quality Progress 34, no. 3 (March 2001), 39–46; J. Loehr and T. Schwartz, “The Making of a Corporate Athlete,” Harvard Business Review (January 2001), 120– 128; A. J. Vogl, “Drucker, of Course,” Across the Board (November–December 2000), 1. For information on goals and goal setting, see, for example, E. A. Locke, “Toward a Theory of Task Motivation and Incentives,” Organizational Behavior and Human Performance 3, no. 2 (May 1968), 157–189; E. A. Locke, K. N. Shaw, L. M. Saari, and G. P. Latham, “Goal Setting and Task Performance: 1969–1980,” Psychological Bulletin (July 1981), 12–52; E. A. Locke and G. P. Latham, A Theory of Goal Setting and Task Performance (Upper Saddle River, NJ: Prentice Hall, 1990); P. Ward and M. Carnes, “Effects of Posting Self- Set Goals on Collegiate Football Players’ Skill Execution During Practice and Games,” Journal of Applied Behavioral Analysis 35, no. 1 (Spring 2002), 1–12; D. W. Ray, “Productivity and Profitability,” Executive Excellence (October 2001), 14; D. Archer, “Evaluating Your Managed System,” CMA Management (January 2000), 12–14; and C. Antoni, “Management by Objectives: An Effective Tool for Teamwork,” International Journal of Human Resource Management 16, no. 2, (February 2005), 174– 184. For information on participation in goal setting, see, for example, T. D. Ludwig and E. S. Geller, “Intervening to Improve the Safety of Delivery Drivers: A Systematic Behavioral Approach,” Journal of Organizational Behavior Management 24, no. 1 (April 4, 2000), 11–24; P. Latham and L. M. Saari, “The Effects of Holding Goal Difficulty Constant on Assigned and Participa- tively Set Goals,” Academy of Management Journal 22, no. 1 (March 1979), 163–168; M. Erez, P. C. Earley, and C. L. Hulin, “The Impact of Participation on Goal Acceptance and Performance: A Two Step Model,” Academy of Management Journal 28, no. 1 (March 1985), 50–66; and G. P. Latham, M. Erez, and E. A. Locke, “Resolving Scientific Disputes by the Joint Design of Crucial Experiments by the Antagonists: Application to the Erez Latham Dispute Regarding Participation in Goal Setting,” Jour- nal of Applied Psychology 73, no. 4 (November 1988), 753–772. For information on effectiveness of MBO, see, for example, F. Dahlsten, A. Styhre, and M. Williander, “The Unintended Consequences of Management by Objectives: The Volume Growth Target at Volvo Cars,” Leadership & Organization Development Journal 26, no. 7 (July 2005), 529–541; J. R. Crow, “Crash- ing with the Nose Up: Building a Cooperative Work Environment,” Journal for Quality and Participation 25, no. 1 (Spring 2002), 45–50; and E. C. Hollensbe and J. P. Guthrie, “Group Pay-for-Performance Plans: The Role of Spontaneous Goal Set- ting,” Academy of Management Review 25, no. 4 (October 2000), 864–872.
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Goal Setting Many supervisors are helping their employees set performance goals in an effort to achieve departmental and organizational goals. One means of doing this is through a process called goal setting, which is the next generation of the management practice called management by objectives (MBO). In this system, employees jointly determine specific performance goals with their supervisors. Progress toward goals is periodically reviewed, and rewards are allocated on the basis of this progress. Rather than using goals to control, goal setting uses them to motivate people.
Goal setting makes objectives operational by devising a process by which they cascade down through the organization. The organization’s overall goals are translated into specific goals for each succeeding level (e.g., divisional, departmental, individual) in the organization. Because lower-unit managers jointly participate in setting their own goals, goal setting works from the bottom up as well as from the top down. The result is a hierarchy that links goals at one level to those at the next level. That’s not how organizational members did things in the past.
HOW WERE GOALS SET IN YEARS PAST? The traditional role of goals in organizations was one of control imposed by top man- agement. The president of a manufacturing firm would typically tell the production vice-president what he expected manufacturing costs to be for the coming year. The president would tell the marketing vice-president what level she should expect sales to reach for the coming year. The plant manager would tell her maintenance supervisor how much his departmental budget would be. Then, at some later point, performance would be evaluated to determine whether the assigned goals had been achieved.
The central theme in traditional goal setting was that goals were set at the top, and then were broken down into subgoals for each level in the organization. It was a one-way process: The top imposed its standards on everyone below. This traditional perspective assumed that top management knew what was best because only it could see the “big picture.”
In addition to being imposed from above, traditional goal setting was often largely nonoperational. If top management defined the organization’s goals in broad terms such as achieving “sufficient profits” or “market leadership,” these ambiguities had to be turned into specifics as the goals filtered down through the organization. At each level, managers would supply their own meaning to the goals. Specificity was achieved by each manager applying his or her own set of interpretations and biases. As shown in Exhibit 3-8, the result was that goals lost clarity and unity as they made their way down from the top.
WHAT IS THE KEY TO MAKING GOAL SETTING EFFECTIVE? There are four ingredients common to goal-setting pro- grams: goal specificity, participation, time limits, and per- formance feedback. Let’s look at each of these.
Goal Specificity Goals should be specific statements of expected accomplishments. It’s not adequate, for example, merely to state a desire to cut costs, improve service, or increase quality. Such desires have to be converted into tangible goals that can be measured and evaluated. To cut departmental costs by 7 percent, to improve service by ensuring that all telephone orders are processed within
goal setting A system by which employees jointly determine specific performance goals with their supervisors. Progress toward goals is periodically reviewed, and rewards are allocated on the basis of this progress
OBJECTIVE 3.7 Describe the four ingredients common to goal-setting programs.
Exhibit 3-8 What may happen in traditional goal setting.
Top management’s
goal
Division manager’s
goal
Department supervisor’s
goal
Individual employee’s
goal
“We need to
improve the company’s
performance.”
“I want to see a significant improvement in this division’s profits.”
“Increase profits, regardless of the means.”
“Don’t worry about quality; just work fast.”
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Chapter 3 Planning and Goal Setting 77
twenty-four hours of receipt, or to increase quality by keeping returns to less than 1 percent of sales are examples of specific goals.
Participation In goal setting, the goals are not unilaterally set by the boss and assigned to employees, as was characteristic of traditional goal setting. Instead, goal setting replaces these imposed goals with jointly determined goals. Together, the supervisor and employee choose the goals and agree on how they will be achieved and evaluated (see the section titled “Goal Setting” in this chapter).
Time Limits Each goal has a concise time period in which it is to be completed. Typi- cally, the time period is three months, six months, or a year. So, everyone has not only specific goals, but also a specific time period in which to accomplish them.
Performance Feedback The final ingredient in a goal-setting program is feedback on performance. Goal setting seeks to give continuous feedback on progress toward goals. Ideally, this is accomplished by providing ongoing feedback to individuals so that they can monitor and correct their own actions. This is supplemented by periodic formal appraisal meetings in which supervisors and employees can review progress toward goals and further feedback can be provided.
WHY MIGHT GOAL SETTING WORK FOR YOU? There are several reasons why goal setting works, and why it can help you be a more effective supervisor. First, it gives both you and your employees clarity and direction in your jobs. Your employees will know what’s important to you in their jobs—and the specific outcomes by which their performance will be judged. Second, goal setting increases your employees’ involvement, commitment, and motivation. They’ll feel more empowered because they will have the freedom to choose the means for achieving their goals. That is, it’s the goals that are important to you. How they do it is not the focal point. Additionally, providing regular feedback on their performance and tying rewards to the achievement of objectives act to stimulate employee motivation. Finally, goal setting can minimize the politics in performance appraisals and reward allocations. Subjective factors—such as an employee’s effort and attitude, or your prejudices— are replaced by objective measures of performance and rewards based on that performance.
SELF-FULFILLING PROPHECY FOR YOUR FOLLOWERS Behave in a positive fashion when setting goals with your employees. Research indicates that effective supervisors behave in a way that leads to superior employee performance, but unfortunately supervisors are better at communicating low expectations than they are at communicating high expectations.
Consider that every supervisor has expectations of their subordinates. Supervisors communicate positive and negative expectations consciously and unconsciously; subor- dinates are effective at picking up on the expectations of their supervisor, and subordi- nates’ behavior is generally consistent with the perceived expectations of their supervisor. So, even if it requires some acting, behave as though you believe in the overwhelming greatness and ability of your subordinates and let them rise to their perception of your expectations!9
9 J. S. Livingston, “Pygmalion in Management,” Harvard Business Review 66, no. 5 (September– October 1988), 121–130; and “TAU Researchers Examine ‘Great Expectations’ in the Workplace,” American Friends of Tel Aviv University, April 29, 2008, http://www.aftau.org/news-page-business- -management?&storyid4701=1969&ncs4701=3 (accessed January 5, 2017).
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BALANCED SCORECARD: THE NATURAL EVOLUTION OF GOAL SETTING? The balanced scorecard approach is a way to evaluate organizational performance from more than just the financial perspective.10 A balanced scorecard typically looks at four areas that contribute to a company’s performance: financial, customer, internal pro- cesses, and people/innovation/growth assets. According to this approach, supervisors should develop goals in each of the four areas and then measure whether the goals are being met.
Although a balanced scorecard makes sense, supervisors will tend to focus on areas that drive their organization’s success and use scorecards that reflect those strategies.11 For example, if strategies are customer-centered, then the customer area is likely to get more attention than the other three areas. Yet, you can’t focus on measuring only one performance area because others are affected as well. For instance, at IBM Global Services in Houston, supervisors developed a scorecard around an overriding strategy of customer satisfaction. However, the other areas (financial, internal processes, and people/innovation/growth) support that central strategy. The division manager described it as follows, “The internal processes part of our business is directly related to responding to our customers in a timely manner, and the learning and innovation aspect is critical for us since what we’re selling our customers above all is our expertise. Of course, how successful we are with those things will affect our financial component.”12
A Special Case of Planning: The Entrepreneurial Supervisor You have heard the story dozens of times. With only an idea, a few hundred dollars, and use of the family garage, someone starts what eventually becomes a multibillion- dollar global corporation. Formal planning often carries a “big business” bias. It implies a formality that fits well with large, established organizations that have abundant resources. But the primary interest of many students is not in managing large and estab- lished organizations. That desire, coupled with changes in technology, the economy, and social conditions such as two-income families, has fostered an increase in entrepreneurial startup companies. Like the “Google Guys” Larry Page and Sergey Brin, Hotmail founders Jack Smith and Sabeer Bhatia, Groupon creator Andrew Maso, Spanx innovator Sara Blakely, Pinterest developers Ben Silbermann, Paul Sciarra, and Evan Sharp, or Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams of Twitter, they are excited about the idea of starting their own business from scratch—an action that is called entrepreneurship.
10 R. S. Kaplan and D. P. Norton, “How to Implement a New Strategy Without Disrupting Your Orga- nization,” Harvard Business Review (March 2006), 100–109; L. Bassi and D. McMurrer, “Developing Measurement Systems for Managers in the Knowledge Era,” Organizational Dynamics (May 2005), 185–196; G. M. J. DeKoning, “Making the Balanced Scorecard Work (Part 2),” Gallup Brain, August 12, 2004, http://gmj.gallup.com/content/12571/making-balanced-scorecard-work-part.aspx (accessed Janu- ary 5, 2017); G. J. J. DeKoning, “Making the Balanced Scorecard Work (Part 1),” Gallup Brain, July 8, 2004, http://gmj.gallup.com/content/12208/making-balanced-scorecard-work-part.aspx (accessed January 5, 2017); K. Graham, “Balanced Scorecard,” New Zealand Management (March 2003), 32–34; K. Ellis, “A Ticket to Ride: Balanced Scorecard,” Training (April 2001), 50; and T. Leahy, “Tailoring the Balanced Scorecard,” Business Finance (August 2000), http://businessfinancemag.com/bpm/tailoring-balanced-score- card (accessed January 5, 2017).
balanced scorecard A strategic planning and management system used to translate and align business activities to the vision state- ment of a business after review of the company’s financial processes, cus- tomer processes, internal processes, and innovation/growth processes.
11 T. Leahy, “Tailoring the Balanced Scorecard,” Business Finance (August 2000), http://businessfi- nancemag.com/bpm/tailoring-balanced-scorecard (accessed January 5, 2017). 12 Ibid.
OBJECTIVE 3.8 Define entrepreneurship and explain how it affects supervision.
entrepreneurial Willing to use initiative and take risks to make a profit.
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WHAT IS ENTREPRENEURSHIP? Entrepreneurship is the process of starting new businesses, generally in response to oppor- tunities. Many people think that entrepreneurial ventures and small businesses are the same, but they’re not. Entrepreneurs create entrepreneurial ventures—organizations that pursue new opportunities, are characterized by innovative practices, and have growth and profitability as their main goals. Even though entrepreneurial ventures may start small, they pursue growth, and entrepreneurship itself continues to be strong. According to The Kauffman Index of Entrepreneurial Activity 530,000 new businesses were created each month during 2015.”13
However, as many entrepreneurs (successful and not-so-successful) would attest, being an entrepreneur isn’t easy. According to the Small Business Administration, “About half of all new establishments survive five years or more, and about one-third survive 10 years or more.”14 These results were similar for different industries, but the interesting thing is that entrepreneurial venture survival rates are about the same in economic expansions and recessions.
In comparison to entrepreneurial ventures, a small business is an independent busi- ness having fewer than five hundred employees that doesn’t necessarily engage in any new or innovative practices, and that has relatively little impact on its industry. Any small business isn’t necessarily entrepreneurial because it’s small and some new small firms may grow, but many remain small businesses, by choice or by default. It is impor- tant not to confuse supervising in a small business with entrepreneurship. Why? Because not all small-business supervisors are entrepreneurs. Many do not innovate. A great many supervisors in small businesses are merely scaled-down versions of the conserva- tive, conforming bureaucrats who staff many large corporations and public agencies. Those who do act like entrepreneurs—creating the intensity and entrepreneurial spirit— in larger organizations are sometimes called intrapreneurs.15 However, in such organiza- tions, intrapreneurs do not have the autonomy to do what they want, and neither do they deal with the amount of risk entrepreneurs do. However, their efforts to be bold and creative, although not always having the financial independence, do go a long way in helping advance their careers.
DO ENTREPRENEURS POSSESS SIMILAR CHARACTERISTICS? One of the most researched topics in entrepreneurship has been the search to determine what, if any, psychological characteristics entrepreneurs have in common. A number of common characteristics have been found, and one list of personality characteristics included the following: high level of motivation, abundance of self-confidence, ability to be involved for the long term, high energy level, persistent problem solver, high degree of initiative, ability to set goals, and moderate risk-taker. Another list of characteristics of “successful” entrepreneurs included high energy level, great persistence, resourceful- ness, the desire and ability to be self-directed, and relatively high need for autonomy. Another development in defining entrepreneurial personality characteristics was the proactive personality scale to predict an individual’s likelihood of pursuing entrepre- neurial ventures. The proactive personality is a personality trait describing those
13 L. Dishman, “The State of the American Entrepreneur in 2015,” Fast Company, May 29, 2015, https:// www.fastcompany.com/3046773/hit-the-ground-running/the-state-of-the-american-entrepreneur-in-2015 (accessed January 5, 2017).
entrepreneurship The process of initiating a business venture, organizing the necessary resources, and assuming the risks and rewards.
14 “Frequently Asked Questions about Small Business,” U.S. Small Business Administration Office of Advo- cacy, June 2016 https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf (accessed January 5, 2017). 15 J. S. Hornsby, D. E. Kuratko, and S. A. Zahara, “Middle Managers’ Perception of the Internal Environ- ment for Corporate Entrepreneurship: Assessing a Measurement Scale,” Journal of Business Venturing 17, no. 3 (May 2002), 253–273; and F. Batten, “Out of the Blue and into the Black,” Harvard Business Review (April 2002), 112–119, https://hbr.org/2002/04/out-of-the-blue-and-into-the-black (accessed January 5, 2017).
intrapreneurs A supervisor within an organization who promotes innovative prod- uct development and marketing approaches and behaves similar to the risk-taking style of an entrepreneur.
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individuals who are more prone to take actions to influence their environment—that is, they’re more proactive.16
The research allows us to draw a general description of entrepreneurs. They tend to be independent types who prefer to be personally responsible for solving problems, for setting goals, and for reaching those goals by their own efforts. They plan extensively and the most important thing that an entrepreneur does in planning the venture is devel- oping a business plan—a written document that summarizes a business opportunity and defines and articulates how the identified opportunity is to be seized and exploited. A written business plan can range from basic to thorough. The most basic type of business plan would simply include an executive summary, sort of a mini-business plan that’s no longer than two pages. A synopsis-type plan is a little more involved. It’s been described as an “executive summary on steroids.” In addition to the executive summary, it includes a business proposal that explains why the idea is relevant to potential investors. A sum- mary business plan includes an executive summary and a page or so of explanation of each of the key components of a business plan. A full business plan is the traditional business plan. Finally, an operational business plan is the most detailed (fifty or more pages) because it’s used by ventures that are already operating with an existing strategy.17
Entrepreneurs also value independence and particularly do not like being controlled by others. They are not afraid of taking chances, but they are not wild risk-takers. That is, entrepreneurs prefer to take calculated risks where they feel that they can control the outcome.
The evidence on entrepreneurial personalities leads us to several conclusions. First, people with this personality makeup are not likely to be contented, productive employ- ees in the typical large corporation or government agency. The rules, regulations, and controls that these bureaucracies impose on their members frustrate entrepreneurs. Sec- ond, the challenges and conditions inherent in starting one’s own business mesh well with the entrepreneurial personality. Starting a new venture, which they control, appeals to their willingness to take risks and determine their own destinies. But because entrepre- neurs believe their future is fully in their own hands, the risk they perceive as moderate is often seen as high by non-entrepreneurs. Finally, the cultural context in which individu- als were raised will have an effect. For instance, in the former East Germany, where the cultural environment exhibits high power distance and high uncertainty avoidance (see the discussion of Geert Hofstede in Chapter 2), many of the associated entrepreneurial characteristics—such as initiative and risk taking—are lacking.
How Do Entrepreneurs Recruit and Retain Employees? Because entrepreneurs want to ensure the venture has people to do the required work, recruiting new employees is one of the biggest challenges they face. The ability of small firms to successfully recruit employees is rated as one of the most important factors influencing organizational success. Entrepreneurs, then, look for high-potential people who can perform multiple roles during the growth of the venture. Ideally, they would find individuals willing to “buy into” the venture’s entrepreneurial culture and who have a passion for the business. Entrepreneurs must fill job openings with employees possessing critical skills. They are on the outlook for people who are exceptionally capable and self-motivated, flexible, multi-skilled, and who can help grow the entrepre- neurial venture, entrepreneurs are concerned with matching characteristics of the person
16 S. Robbins, M. Coulter, and D. Decenzo, Fundamentals of Management (Upper Saddle River, NJ: Pren- tice Hall, 2017). 17 Ibid.
business plan A document that identifies the busi- ness founder’s vision and describes the strategy and operations of that business.
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to the values and culture of the organization. Once on board, entrepreneurs want to keep the people they have hired and trained, so an issue they must deal with is compen- sation. Small entrepreneurial firms tend to view compensation from a total rewards perspective and many times compensation encompasses psychological reward, learning opportunity, and recognition in addition to monetary reward.18
What Supervisory Issues are Faced by Entrepreneurs? Having motivated employees is an important goal for any supervisor, and employee empowerment is an important motivational tool entrepreneurs can use. Employee empowerment—giving employees the power to make decisions and take actions on their own—is not easy for entrepreneurs. Because successful entrepreneurial ventures must be ready to pursue opportunities and go off in new directions, it is important for employees to feel empowered. Empowered employees often display stronger work motivation, better work quality, higher job satisfaction, and lower turnover. However, employee empowerment is a supervisory concept that entrepreneurs often resist because the business is their life. But continuing to grow the entrepreneurial venture is going to require handing over more responsibilities to employees.
Entrepreneurs often begin by using participative decision-making, encouraging employees to provide input into decisions. Although getting employees to participate in decisions isn’t quite taking the full plunge into employee empowerment, at least it’s a way to begin tapping into the collective array of employees’ talents, skills, knowledge, and abilities. Entrepreneurs may also employ the supervisory technique of delegation, the process of assigning certain decisions or specific job duties to employees. By delegat- ing decisions and duties, the entrepreneur is turning over the responsibility for carrying them out.
Once comfortable with the idea of employee empowerment, the entrepreneur is in position to redesign employee’s jobs so they have discretion over the way they do their work. Allowing employees to do their work effectively and efficiently using their creativ- ity, imagination, knowledge, and skills frees the entrepreneur to focus on other impor- tant aspects of their fledgling business. Employee empowerment implemented properly—with complete and total commitment to the program and with appropriate employee training—can produce impressive outcomes for the entrepreneurial venture and for the empowered employees. The business can enjoy significant productivity gains, quality improvements, more satisfied customers, increased employee motivation, and improved morale. Employees can enjoy the opportunities to do a greater variety of work that is more interesting and challenging.19
HOW DO ENTREPRENEURS COMPARE WITH TRADITIONAL SUPERVISORS? Exhibit 3-9 summarizes some key differences between entrepreneurs and traditional supervisors. Whereas the latter tend to be custodial, entrepreneurs actively seek change by exploiting opportunities. When searching for these opportunities, entrepreneurs often put their personal financial security at risk. The hierarchy in large organizations typi- cally insulates traditional supervisors from these financial wagers and rewards them for minimizing risks and avoiding failures.
18 Ibid. 19 Ibid.
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Exhibit 3-9 Comparison of entrepreneurs and traditional supervisors. Source: Based on Intrapreneuring by G. Pinchot, 1985, New York: Harper & Row.
Traditional Supervisors Entrepreneurs/Intrapreneurs
Primary motivation Promotion and other Independence, opportunity traditional corporate to create, financial gain rewards such as office, staff, and power
Time orientation Achievement of Achievement of five- to ten- short-term goals year growth of business
Activity Delegation and Direct involvement supervision
Risk propensity Low Moderate
View toward failures Avoidance Acceptance and mistakes
Comprehension Check 3-2
5. A diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity is called a:
a. Gantt chart. b. PERT chart. c. load chart. d. critical path chart.
6. The longest length of time it takes to complete a project in the shortest amount of time is called the:
a. PERT chart analysis. b. Gantt chart perspective. c. activity analysis. d. critical path.
7. The following descriptors are consistent with which type of person: bold, innovative, taking initiatives, and risk-taking?
a. Top managers b. Entrepreneurs c. First-line supervisors d. Charismatic leaders
8. A document that identifies the vision of the organization and describes the goals and opera- tions of the business is called a:
a. business plan. b. strategic plan. c. tactical plan. d. code of ethics.
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Chapter 3 Planning and Goal Setting 83
5. Describe the Gantt chart. The Gantt chart is a simple scheduling device. It is a bar graph with time on the horizontal axis and activities on the vertical axis. It shows planned and actual activities, and it allows supervisors to easily identify the status of a job or project.
6. Explain the information needed to create a PERT chart. To create a PERT chart, you need to identify all key activities needed to complete a project, their order of dependence, and an estimate of each activ- ity’s completion time.
7. Describe the four ingredients common to goal-setting programs. Goal setting is a system in which specific performance goals are jointly determined by employ- ees and their supervisors. Progress toward attaining goals is periodically reviewed, and rewards are allo- cated on the basis of the progress. The four ingredients common to goal-setting programs are goal specificity, participation, time limits, and performance feedback.
8. Define entrepreneurship and explain how it affects supervision. Entrepreneurship is the process of ini- tiating a business venture, organizing the necessary resources, and assuming the risks and rewards in making things happen. Entrepreneurs approach plan- ning by first seeking out opportunities that they can exploit, and then working to make things happen. Traditional supervisors often approach planning by first determining the availability of their resources, and then taking what action they can.
1. Define it productivity. In its simplest form, productivity can be expressed in terms of the following ratio: outputs divided by labor plus capital, plus materials. Productiv- ity can also be calculated for three different areas: the individual, a workgroup, and the total organization.
2. Describe how plans should link from the top to the bottom of an organization. Long-term strategic plans are typically set by top management. Then, each suc- ceeding level down the organization develops its plans. Plans at each level should help to accomplish those for the level above and give direction for the level below.
3. Identify what is meant by the terms benchmarking, ISO 9000 series, and Six Sigma. Benchmarking is a term that reflects the search for best practices among competitors or non-competitors that lead to the identification and implementation of enhanced per- formance. The ISO 9000 series, designed by the Inter- national Organization for Standardization, reflects a process whereby independent auditors attest that a company’s factory, laboratory, or office has met cer- tain quality standards. Six Sigma is a philosophy and measurement process that attempts to “design in” quality as a product is being made.
4. Contrast policies and rules. Policies and rules are both standing plans. Policies are broad statements that leave room for supervisory discretion. Rules, on the other hand, are explicit statements that tell super- visors what they can and cannot do. Rules do not allow supervisory discretion.
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
3-6. Explain how budgets are both a planning and a control device.
3-7. How might you use a Gantt chart to schedule a group term paper for a college class?
3-8. What are the implications of the critical path for PERT analysis?
3-9. Why has goal setting proved so popular in organi- zations?
3-10. What differentiates a traditional supervisor in a small business from an entrepreneurial supervisor? An intrapreneur?
3-1. Why is productivity so important to organizations and their members?
3-2. Contrast the planning top managers do with that done by supervisors.
3-3. Under what circumstances are short-term plans preferred? Under what circumstances are specific plans preferred?
3-4. Why do companies benchmark their operations with other organizations in their industry?
3-5. Do you believe that obtaining certifications such as Six Sigma or ISO 9000 really helps an organiza- tion compete? Discuss your position.
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
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DOWNACROSS
1. a system by which employees jointly determine specific performance goals with their supervisors 4. a numerical plan 5. a diagram that depicts the sequencing of activities needed to complete a project 8. a plan used to deal with a problem once 11. the longest or most time-consuming sequence of events in a PERT chart 13. the time or resources required to progress from one event to another 20. the search for best practices 22. a plan that can be used over and over again 23. output per labor hour
2. endpoints that represent completion of major activities 3. a set of plans for a specific major undertaking 4. the document that explains the business founder's vision and describes the strategy and operations of that business 6. a measurement process attempting to design in quality 7. a type of planning that establishes the overall goals and positioning of the organization 9. the process of initiating a business venture 10. detailed planning of activities to be done in the order in which they are to be done 12. an explicit statement that tells employees what they can and cannot do 14. a plan that covers a period from one to five years 15. broad guidelines for supervisory actions 16. a type of planning that provides specific details on how overall goals will be met 17. a plan that covers a period of less than one year 18. a standardized way of responding to repetitive problems 19. a plan that covers a period in excess of five years 21. a bar chart with time on one axis and activities on the other
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Developing Your Supervisory Skills
• How Good Am I at Personal Planning? • How Satisfied Am I with My Job? • How Involved Am I in My Job?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• What Time of the Day Am I Most Productive?
GETTING TO KNOW YOURSELF
Mike has suggested to all three project leaders that they establish goals for themselves and their employees.
Chris Smith, who is responsible for the warehouse, has set up a meeting with the most senior employee, Lee Brannigan, to begin the goal-setting process. The objec- tive of this exercise is to end up with a set of goals for Lee. They might address issues such as prompt attention to customer needs, showing courtesy to customers, keeping proper inventory levels, and enhancing job skills.
This exercise should take no more than fifteen min- utes. Afterward, the observers from each group should discuss with the entire class how their goal-setting ses- sion went. Focus specifically on the steps presented in the next section, “Setting Goals,” and any problems that surfaced.
3-11. An Experiential Exercise: Setting Goals This is a role-play exercise. Break into groups of four to six students. One student in each group will assume the role of Chris, and one will assume the role of Lee. The other students will serve as observers and evaluators.
Michael Brooks has recently been promoted to the po- sition of branch supervisor at one of the largest branches of Myer Company, a plumbing supply chain in the Mid- west. His staff includes three project leaders who report directly to him, and another fifteen or so employees who work on these projects. One of these project leaders is responsible for directing the nine warehouse employees, whereas the other two direct showroom sales and the ad- ministrative functions, respectively. Mike reports to the owner.
BUILDING A TEAM
STEP 2: Establish specific and challenging goals for each task. This is self-explanatory. We should add that, if possible, these goals should be made public. When employees’ goals are made public—announced in a group or posted for others to see—employees seem to be more highly committed to them.
STEP 3: Specify deadlines for each goal. Again, as previously discussed, goals should include a specific time limit for accomplishment.
STEP 4: Allow the employee to participate active- ly. Employees are less likely to question or resist a process in which they actively participate rather than one that is imposed on them from above.
We want to take the basic concepts of goal setting and turn them into specific goal-setting skills that you can apply on the job. Effective goal-setting skills can be con- densed into eight specific behaviors. When you follow all eight, you will have mastered the skill of goal setting.
STEPS IN PRACTICING THE SKILL
STEP 1: Identify an employee’s key job tasks. Goal setting begins with defining what you want your em- ployees to accomplish. The best source for this infor- mation is each employee’s up-to-date job description, if one is available. It details what tasks an employee is expected to perform, how these tasks are to be done, what outcomes the employee is responsible for achieving, and the like.
SETTING GOALS
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3-13. Under what circumstances do you believe goal set- ting would be most useful to you as an employee? As a supervisor? Explain your position for both situations.
3-12. “Supervisors that fail to plan formally are planning to fail.” Do you agree or disagree with the state- ment? Explain your position.
COMMUNICATING EFFECTIVELY
is supposed to come up with a plan to incorporate this work into her area.
The night shift at the Mailing Place is currently working from 5 p.m. to 4 a.m., four days a week. Each employee needs about one week of on-the-job training to become efficient on all the machines and the PC programs. The labor cost is the major component of the Mailing Place’s expenses, and controlling labor is a key to its suc- cess. The new line of work will start in about a month, and after three months, the new volume is expected to be equal to their present level of work. Jill’s boss is hopeful that with the increased volume the operation will become more productive.
RESPONDING TO THE CASE
3-14. List and describe the planning elements that Jill needs to consider in preparing for this new line of work.
3-15. Describe two options for handling the staffing levels for this new line of work. What issues and compli- cations are likely to surface with the new amount of work for Jill’s department?
3-16. How would you suggest using schedules and bud- gets in the planning process for the Mailing Place?
➤ Case 3-A: Establishing Plans The Mailing Place is a full-service direct-mail company with many clients in the home services industry. Companies such as the Rug Doctor, House Maids, and Handyman Inc., use the Mailing Place to send out targeted direct-mail pieces to homes that typically use these types of services. Jill Akers started with the Mailing Place when she was a college stu- dent and in four years has progressed to the position of evening supervisor. Her responsibilities include assembling the materials for an order; planning for labor to fold, stuff, and run the PCs used to produce labels; and ensuring that orders have the proper postage. There are four full-time workers in her area, and some large orders will require as many as ten temporary positions. The Mailing Place is paid based on the number of pieces mailed, and receives a sizable bonus when their customers acquire new business.
Jill’s boss has come to her and asked for her assistance with a new line of work for the company. The new work is to produce personalized mailings for mortgage and bank- ing companies in support of their call center operations. The new clients will give the Mailing Place a listing of the contacts made in a day. The Mailing Place will assemble materials to be mailed within twenty-four hours. Jill’s boss thinks the night shift should handle this work to ensure the type of rapid fulfillment the banks are requiring. Jill
THINKING CRITICALLY
STEP 7: Build in feedback mechanisms to assess goal progress. Ideally, feedback on goal progress should be self-generated rather than provided ex- ternally. When employees are able to monitor their own progress, the feedback is less threatening and less likely to be perceived as part of a management control system.
STEP 8: Commit rewards contingent on goal attain- ment. Offering money, promotions, recognition, time off, or similar rewards to employees contingent on goal achievement is a powerful means to increase goal commitment. When the going gets tough on the road toward meeting a goal, people are prone to ask themselves, “What’s in it for me?” Linking rewards to the achievement of goals helps employees answer this question.
STEP 5: Prioritize goals. When someone is given more than one goal, it is important to rank the goals in order of importance. The purpose of this step is to encourage the employee to take action and expend effort on each goal in proportion to its importance.
STEP 6: Rate goals for difficulty and impor- tance. Goal setting should not encourage people to choose easy goals to ensure success. So, goal setting needs to take into account the difficulty of the goals selected and whether individuals are emphasizing the right goals. When these ratings are combined with the actual level of goal achievement, you will have a more comprehensive assessment of overall goal performance. This procedure gives credit to individu- als for trying difficult goals even if they don’t fully achieve them.
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Chapter 3 Planning and Goal Setting 87
➤ Case 3-B: When Proper Procedure Is Not Followed “You are so out of here!” Cindy could hardly believe the words she heard coming from the mouth of Sonja, the new corporate assistant property manager for the Desir- able Apartment Company. After all, Sonja had barely been working as long as Cindy, and Cliff, the corporate prop- erty manager himself, was sitting right next to Sonja hardly saying a word. Cindy, as the wife of one of the members of the executive committee (Larry), knew coming into the organization that she could not expect to be treated any differently than anyone else, but this was way out of hand.
As soon as Cindy left the property, Sonja and Cliff quickly reported the situation to Lamarr, the vice--presi- dent of corporate assets, and their immediate supervisor. After hearing the story, Lamarr walked into the office of the vice-president of Human Resource Development, Heather, and said, “You are not going to believe what just happened out at the Builtwell property with Larry’s wife Cindy.” He went on to tell her the entire story as he understood it.
Heather was a thoughtful seasoned veteran of human resources and knew the company inside and out. She knew this incident had the potential to shake the company to its core because of the close relationship of all the members of the executive committee. This company was built on a strong foundation of family values, and she could see the potential disruption from firing the wife of an executive. She immediately contacted Cindy to hear her side of the story and give her the opportunity to describe what hap- pened that day.
Cliff spent the evening trying to figure out what had gone wrong during the meeting with Cindy. What had started out to be a simple meeting to discuss sales expec- tations for Cindy in her role as leasing agent had quickly gone from bad to worse as Sonja attempted to assert her- self during the meeting. Sonja had recently been hired into her new position and was eager to have an impact on the company. “Boy, was she ever,” he thought with remorse. Cliff worked late into the evening crafting an explanatory e-mail to Heather, trying to explain why company proto- col had not been followed during the dismissal and why he, as Sonja’s supervisor, had not intervened.
After reading Cliff’s e-mail late that night, Heather sent a response to Lamarr that was apparently never
received. Early the next morning she sent a follow-up e-mail, saying that, “It does not appear that you received my e-mail from this morning, so this is my 2nd attempt, in response to Cliff’s e-mail last night, to offer my viewpoint on the situation.”
Heather went on to state, “I also spent last evening trying to digest the current events. I hope that Sonja can eventually succeed in exhibiting leadership that represents the Desirable Apartment culture. I listened to both points of view of what happened. I heard examples of how Cindy was poorly treated by the Builtwell staff, and I listened to management’s description of Cindy’s behavior. I think everyone is viewing the situation through their particular filter, and it is challenging to piece it together. I do not think that the Builtwell on-site manager, Jill, is totally innocent in this situation, either.”
“I would like to believe it was not Sonja’s intention to have Cindy terminated. However, Sonja and Jill had a conversation before the meeting, and Jill asked if she should sit in. I believe this set the tone for the later meet- ing with Cindy. I am also left wondering about Jill’s reply to the Builtwell property maintenance manager when he asked where Cindy was that day. Jill replied, ‘Cindy is no longer with the company.’ Jill had the perception Cindy was terminated . . . and I have to wonder, why?”
Talking with Lamarr in his office later the next day, trying to wrap up the situation, Heather told him she had been doing damage control, “I spoke to Larry, and although still upset, he is focused and moving forward.” As Heather was leaving, she looked Lamarr in the eye and said, “In the end, I am left with what must have been the feeling of the Butler team after the final game of the 2011 NCAA game, ‘What the heck just happened?”’
RESPONDING TO THE CASE
3-17. Outline the specific steps Cliff should have taken with Sonja prior to their meeting with Cindy to ensure the meeting went smoothly with no surprises.
3-18. As supervisor, what should Cliff have done when it became apparent Sonja was overstepping her authority during the meeting with Cindy?
3-19. What steps do you believe Heather should take with Sonja? With Cliff? With Cindy?
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■■ authority
■■ boundaryless organization
■■ centralization
■■ chain of command
■■ customer departmentalization
■■ decentralization
■■ delegation
■■ departmentalization
■■ divisional structure
■■ empowerment
■■ functional authority
■■ functional departmentalization
■■ functional structure
■■ geographic departmentalization
■■ job description
■■ learning organization
■■ line authority
■■ matrix
■■ network organization
■■ process departmentalization
■■ product departmentalization
■■ responsibility
■■ simple structure
■■ span of control
■■ staff authority
■■ team-based structure
■■ unity of command
■■ virtual organization
■■ work specialization
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Organizing4 C
H A
P T
ER
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Goodluz/Shutterstock
4-1. Define organizing.
4-2. Describe why work specialization should increase economic efficiency.
4-3. Explain how the span of control affects an organization’s structure.
4-4. Contrast line and staff authority.
4-5. Explain why organizations are becoming increasingly decentralized.
4-6. Describe how flatter organizational structures can be beneficial to the organization.
4-7. Explain the concept of a learning organization and how it influences organiza- tional designs and supervisors.
4-8. Discuss the value of job descriptions.
4-9. Identify the four-step process of delegation.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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90 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Responding to a Supervisory Dilemma
How should work be organized for efficiency a n d e f f e c t i v e n e s s ? Yahoo!, a pioneer in Web search and naviga- tion, struggles to remain relevant in the face of competition from the likes of Google, Face- book, and Twitter. Yahoo! missed two of the biggest Internet trends—social network- ing and mobile. How- ever, in July 2012, after the company did its own search, it snagged a gem as the company’s new CEO—Marissa Mayer, one of the top executives at Google. Mayer had been one of the few public faces of Google and was responsible for the look and feel of Google’s most popular products. Guiding Yahoo! as it tries to regain its former prominence is proving to be the challenge that experts predicted, but they’re also saying that if anyone could take on the challenge of making Yahoo! an innovator once again, Mayer is the person.
Two of her initial decisions included free food at the office and new smartphones for every employee, something that Google does. However, in February 2013, Mayer launched an employee initiative that has generated lots of discussion—positive and negative. She decided that as of June 2013, Yahoo! employees who worked remotely had to come back to the office. The memo from the vice-president of people and develop- ment (code for head of human resources) clarified that the new initiative was a response to productivity issues that often can arise when employees work from home. With a new boss and a renewed commitment to making Yahoo! a strong company in a challenging industry, employees were expected to be physically present in the workplace, hopefully leading to developing a strong common bond and greater productivity. The announce- ment affected not only those who work from home full- time—mainly customer service representatives—but also those employees who had arranged to work from
home one or two days a week. How- ever, Yahoo! isn’t the only company that asked remote work- ers to return. Just one week after the Yahoo CEO banned telecommuting at her company, Best Buy ended its Results Only Work Environ- ment (ROWE) flex- ible work program. Bank of America, which had a popular remote work pro- gram, decided late in 2012 that employees in certain roles had
to come back to the office. Also, computing and tech- nology services giant Hewlett-Packard (HP) quietly enacted a policy late in 2013 requiring employees to work from the office and not from home. HP employ- ees were told by their bosses that if they can work at the office, they should work at the office.
Before Mayer became CEO at Yahoo!, it was a wonder anything ever got done there. What she found wasn’t even remotely similar to the way employees functioned at Google. At Yahoo!, few people were physically at work in the office cubicles throughout the building. Few cars or bikes or other vehicles could be found in the facility’s parking lots. Even more dis- turbing, some of the employees who were physically there at work did as little work as needed then took off early. She also discovered that other employees who worked from home did little but collect a pay- check or maybe worked on a sideline business they had started. Even at the office, one former manager described morale as low as it could be because employ- ees thought the company was failing. These were some of the reasons that Mayer abolished Yahoo!’s work- from-home policy. If Yahoo! was to again become the nimble company it had once been, a new culture of innovation, communication, and collaboration was needed. And that meant that employees had to be at work, physically at work together. Restoring Yahoo!’s
David Paul Morris/Bloomberg via Getty Images
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“cool”—from its products to its deteriorating morale and culture—would be difficult if the organization’s people weren’t there. That’s why Mayer’s decision at Yahoo! created such uproar. Yahoo!’s only official statement on the new policy said, “This isn’t a broad industry view on working from home. This is about what is right for Yahoo!, right now.”
Where work is done most efficiently and effec- tively—office, home, or a combination—is an important workplace issue. The three main managerial concerns are productivity, innovation, and collaboration. Do flexible arrangements lead to greater productivity or inhibit innovation and collaboration? Another concern is that employees, especially younger ones, expect to be able to work remotely. Yes, the trend has been toward greater workplace flexibility, but does that flexibility lead to a bloated, lazy, and unproductive remote work- force? These are the challenges of designing work struc- tures. What can supervisors and organizations do to help employees who work from home be efficient and effective? Take the three main concerns: productivity, innovation, and collaboration. From the perspective of
management, how do you think flexible arrangements stack up? How about from the employee’s perspective? Is “face-time” (that is, showing up at work to be seen by your boss and others) critical to one’s career?
Sources: Based on C. C. Miller and N. Perlroth, “Yahoo Says New Policy Is Meant to Raise Morale,” New York Times Online, March 5, 2013; C. Suddath, “Work-From-Home Truths, Half-Truths, and Myths,” Bloomberg Business Week, March 4–March 10, 2013, p. 75 Q. Fot- trell, “The Home Office in the Spotlight,” Wall Street Journal, Feb-ruary 27, 2013, p. B6; E. Weise, “Telecommuters to Yahoo: Boo.” USA Today, February 26, 2013, p. 1A; R. E. Silverman and R. Bell, “ Examining Marissa Mayer’s Out-of-Office Message to Yahoo Employees,” www.workforce.com, February 26, 2013; C. C. Miller and C. Rampell, “Yahoo Orders Home Workers Back to the Office,” New York Times Online, February 25, 2013; K. Swisher, “‘Physically Together’: Here’s the Internal Yahoo No-Work-From-Home Memo for Remote Workers and Maybe More,” AllThingsD.com, February 22, 2013; A. Hesseldahl, “Yahoo Redux: HP Says “All Hands on Deck” Needed, Requiring Most Employees to Work at the Office (Memo),” AllThingsD.com, October 8, 2013, http://allthingsd.com/20131008/ yahoo-redux-hp-says-all-hands-on-deck-needed- requiring-most- employees-to-work-at-the-office-memo, (accessed January 6, 2017); J. Pepitone, “Best Buy ends work-from-home program,” CNNMoney, March 5, 2013, http://money.cnn.com/2013/03/05/technology/best buy-work-from-home, (accessed January 6, 2017).
I n the 1920s and 1930s, as organizations got bigger and more formal, supervi- sors felt a need to provide more coordination of activities and tighter control over operations. Early business researchers argued that formal bureaucracies
would best serve the company. That belief held for more than seven decades. As such, bureaucratic structures flourished. However, by the 1980s, the world began to change drastically. The global marketplace, rapid technological advancements, diversity in the workforce, and socioeconomic conditions made these formal bureau- cracies inefficient for many businesses. Consequently, since the late 1980s, many organizations have restructured to be more customer- and market-oriented and to increase productivity.
It is critical today for an organization to have the right structure. Although set- ting up the organization’s structure is typically done by top management in an orga- nization (or the owner/entrepreneur in a small/startup business), it is important for all organizational members to understand how these structures work. Why? Because you’ll understand your job better if you know why you’re “arranged” as you are. For example, how many people can you effectively supervise? When do you have authority to make a decision, and when is it merely advice that you’re providing? What tasks can you delegate to others? Will you supervise employees who produce a specific product? Will your department exist to serve a particular customer, a geographic region, or some combination of these? You’ll see how to find the answers to questions such as these in this chapter. We look at the traditional components that go into developing an organi- zation’s structure, discuss the various ways that employees may be grouped, and look at how organizational structures change over time.
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What is Organizing? Organizing is arranging and grouping jobs, allocating resources, and assigning work in a department so that activities can be accomplished as planned. As previously men- tioned, the top management team in an organization typically establishes the overall organization structure. They determine, for instance, how many levels there will be from the top of the organization to the bottom, and the extent to which lower-level managers will have to follow formal rules and procedures in carrying out their jobs. In large US corporations, it’s not unusual to have five to eight levels from top to bottom; hundreds of departments; and dozens of manuals (e.g., manuals on purchasing, human resources, accounting, engineering, maintenance, sales) that define procedures, rules, and policies within departments. Once the overall structure is in place, supervisors need to organize their individual departments. In this chapter, we show you how to do that.
Keep in mind that our discussion here concerns the formal arrangement of jobs and groups of jobs. This arrangement is defined by management. In addition, individuals and groups will develop informal alliances that are neither formally structured nor orga- nizationally determined. Almost all employees in all organizations form these informal arrangements to meet their needs for social contact.
Basic Organizing Concepts Every organization—large and small, for-profit and not-for-profit, and so on—has a structure. Some organizations, such as Toyota and IBM, have a more formalized struc- ture. Others, such as many entrepreneurial ventures, have a less formalized and simple structure. So, what makes up this “thing” we work in? Let’s look at what we call the organization structure.
The early writers in management developed a number of basic organizing principles that continue to offer valuable guidance to supervisors today: work specialization, span of control, chain of command, authority and responsibility, centralization versus decen- tralization, and departmentalization.
WHAT IS WORK SPECIALIZATION? Work specialization means that rather than an entire job being done by one individual, it is broken down into a number of steps that are each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entire activity. Assembly-line production, in which each worker does the same standardized task over and over again, is an example of work specialization.
Until recently, designers of organizations have taken as an irrefutable law that increases in work specialization lead to increases in economic efficiencies. In most orga- nizations, some tasks require highly developed skills; others can be performed by the untrained. If all workers were engaged in each step of, say, an organization’s manufac- turing process, all would have to have the skills necessary to perform the most-demand- ing and the least-demanding tasks. The result would be that, except when performing the most highly skilled or highly sophisticated tasks, employees would be working below their skill level. Because skilled workers are paid more than unskilled workers, and their wages tend to reflect their higher level of skill, it is an inefficient use of resources to pay highly skilled workers to do easy tasks.
Today, supervisors understand that although work specialization provides economic efficiencies, it is not an unending source of increased productivity. There is a point at which the problems of work specialization surface—boredom, fatigue, stress, low pro- ductivity, poor quality, increased absenteeism, and high turnover. Contemporary super- visors still use the work specialization concept in designing jobs. At the same time, they
OBJECTIVE 4.1 Define organizing
OBJECTIVE 4.2 Describe why work specialization should increase economic efficiency.
work specialization The process of breaking down a job into a number of steps, with each step being completed by a different individual.
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recognize that in an expanding number of situations, productivity, quality, and employee motivation can be increased by giving employees a variety of activities to do, allowing them to do a whole and complete piece of work, and putting them together into teams.
WHAT IS THE SPAN OF CONTROL? It is not efficient for a supervisor to direct only one or two employees. Conversely, it’s pretty obvious that the best of supervisors would be overwhelmed if he or she had to directly oversee several hundred people. This, then, brings up the span of control question: How many employees can a supervisor direct efficiently and effectively?
There is, unfortunately, no universal answer. For most supervisors, the optimal number is probably somewhere between five and thirty. Where, within that range, the exact number should be depends on a number of factors. How experienced and com- petent is the supervisor? The greater his or her abilities are, the more employees he or she can handle. What level of training and experience do employees have? The greater their abilities are, the fewer demands they’ll make on their supervisor; thus, a supervisor can directly oversee more employees. How complex are the employees’ activities? The more difficult the employees’ jobs, the more narrow the span of control. How many different types of jobs are under the supervisor’s direction? The more varied the jobs, the more narrow the span. How extensive are the department’s formal rules and regula- tions? Supervisors can direct more people when employees can find solutions to their problems in organizational manuals rather than having to go to their immediate boss.
An important trend has been taking place in organizations. Spans of control have expanded almost universally (see Exhibit 4-1). The reason is that this is a way for an organization to reduce costs. For example, by doubling the span size, you cut the number of supervisors needed in half. This, remember, is one of the basic premises of downsizing. Of course, this move to wider spans may not be effectively carried out without modifications in work assignments and improvements in skill levels. To make wider spans work, organizations may need to spend more on supervisory and employee training. They may also be able to redesign jobs around teams so that individuals can help each other solve problems without needing to go to their manager.
Something else important is taking place in organizations that involves a supervi- sor’s span of control: the increased use of telecommuting (see “Something to Think About (and Promote Class Discussion): Return to Yesteryear” later in this chapter). Telecommuting, e-commuting, e-work, telework, working at home (WAH), or working from home (WFH) allows employees to do their work at home (or anywhere they can find to log in) on a computer linked to the office.
OBJECTIVE 4.3 Explain how the span of control affects an organization’s structure.
span of control The number of employees a supervisor can efficiently and effectively direct.
Exhibit 4-1 Contrasting spans of control.
The 1970s: Narrow Spans
Contemporary Organization: Wide Spans
Wide spans create flat organizations with fewer vertical levels.Narrow
spans create tall organizations
with a large number of vertical levels.
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Something to Think About (and promote class discussion)
RETURN TO YESTERYEAR One hundred and fifty years ago in US history, it was not uncommon for workers to perform their craft out of their homes. In fact, most workers performed some tasks, produced a finished product, and took it to a market to sell. But the Industrial Revolution changed all that. Large manufacturing companies drew workers away from rural areas and into the cities. Along with this movement came the traditional job—one that required employees to show up at the company’s facility and spend their eight- to twelve- hour workday—and developed the need for someone, the supervisor, to keep the workers working.
As time went on and the urban gave way to the suburban, there developed a strong commuting men- tality in workers and businesses. The expectation was that businesses located according to some strategic imperative and workers would find their way to the workplace on their own. The automobile industry flourished, and mass transit largely disappeared in many locations throughout the country. Today, the paradigm of work being inexorably linked to commuting is undergoing a major reframing as organiza- tions and their employees react to the high prices of fuel in a global economy.
Initially viewed as an opportunity for organizations to take advantage of increased connectivity between home and office, while reducing costs associated with underused office space, the concept of telecommuting or the broader term of telework* is now being viewed as the ethical solution for organi- zations intent on reducing their carbon footprint. Additionally, in the aftermath of catastrophic events such as 9/11, Hurricane Katrina, the 2008 earthquake in China, the 2010 BP Oil Deepwater Horizon drilling rig explosion, the 2011 earthquake and tsunami in Japan which resulted in severe damage to the Fukushima Daiichi Nuclear Power Plant, and Hurricane Sandy in 2012, organizations are increasingly aware of the need to maintain business continuity for customers, employees, and shareholders.
Downsizing and work process engineering have resulted in the wholesale disappearance of traditional jobs. When you factor in technological changes and the widespread acceptance and use of computers, modems, wireless technologies, fax machines, and cell phones, the concept of workers reporting to a centralized location does not make sense. Existing telework capabilities make it possible for employees to be located anywhere on the globe, and employers no longer have to consider locating a business near its workforce. For example, if an insurance company in Idaho finds that it is having problems attracting qualified local applicants for its claims-processing jobs, and a pool of qualified workers is available in Colorado Springs, the company doesn’t need to establish a facility in Colorado. Instead, the company can provide these employees with computer equipment and appropriate ancillaries; the work can be done hundreds of miles away, and then transmitted to the “home” office.
Teleworking also offers an opportunity for a business in a high-labor-cost area to have its work done in an area where lower wages prevail. Take the publisher in New York City that finds that manuscript editing costs have skyrocketed. By having that work done by a qualified editor in Parkton, West Virginia, the publisher could reduce labor costs. Likewise, not having to provide office space in the city to this editor, given the cost per square foot of real estate in the area, adds to the cost savings.
Decentralized work sites also offer opportunities that may meet the needs of the diversified work- force. Those who have family responsibilities, such as child care, or those who have disabilities may prefer to work in their homes, rather than travel to the organization’s facility. Teleworking, then, provides the flexibility in work scheduling that many members of the diversified workforce desire.
With the increasing move to retirement by baby boomers, and the increased influx of Millenni- als into the workplace, flexibility in working conditions continues to be a prime recruitment tool for many organizations. Teleworking has the potential to provide a better work–life balance for those who choose to work from home, thereby holding promise for increases in productivity and worker satisfac- tion. Working from home may also benefit the community by reducing traffic, exhaust emissions, and US dependence on foreign oil.
Finally, there’s some incentive from government agencies for companies to consider these alterna- tive work arrangements. For example, the federal government, in its effort to address environmental concerns in the United States, may make state highway funds contingent on the state’s ability to reduce traffic congestion in heavily populated areas. One means of achieving that goal is for businesses to receive some incentive, such as a tax break, for implementing decentralized work sites. In a similar fashion, state
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departments of labor may also provide an incentive to businesses to relocate their work activities from more affluent communities to economically depressed areas.
As a supervisor, however, you’ll bear the brunt of the change. You’ll be expected to keep in con- tact with your offsite employees. You’ll have to monitor their work and evaluate what they have done. Teleworking is clearly changing the supervisor’s job description—or is it? What do you think about teleworking and its impact on corporate America?
*J. M. Nilles, Managing Telework: Options for Managing the Virtual Workforce (New York: John Wiley & Sons, 1998); and Lifewire, “Differences Between Telecommuting and Telework” https://www.lifewire.com/difference-between-telecommuting- and-telework-2378090 (accessed January 7, 2017).
Currently, several million employees in the United States are teleworking from home or another remote location, either for an employer or through self-employment. Based on an analysis of the 2005-2014 American Community Survey (US Census Bureau) data, the Global Workplace Analytics organization has determined that 50 percent of the US workforce holds a job that is compatible with at least partial telework. Although their study shows 80 percent to 90 percent of the United States workforce would like to telework at least part time, two to three days a week seems to allow for the balance of at home and at office work tolerated by most organizations. They go on to reveal that, based on studies showing workers are not at their desk 50-60 percent of the time, many Fortune 1000 companies around the globe are actively revamping their space around the concept of mobile employees. Since 2005, regular work-at-home, among the non- self-employed population, has grown by 103 percent and 3.7 million employees (2.8 percent of the workforce) now work from home at least half the time. A study of tele- worker demographics by Global Workplace Analytics shows the average telecommuter is college-educated, 49 years old, earning an annual salary of $58,000 and working for a company with more than 100 employees. Additionally, 75 percent of employees who work from home earn over $65,000 per year, putting them in the upper 80th percentile of all employees, home or office-based.1
The big plus in telecommuting is that it gives employees more flexibility. It frees them from the constraints of commuting and fixed hours and increases opportunities for meeting family responsibilities. For supervisors, telecommuting means supervising individuals they rarely see. Where it is being used, supervisors usually have a fairly wide span of control. This is because telecommuters tend to be skilled professionals and cleri- cal employees—computer programmers, marketing specialists, financial analysts, and administrative support personnel—who typically make minimal demands on their super- visors. Additionally, because the supervisor’s computer and the employee’s computer are typically networked, supervisors often are able to communicate with telecommuters as well as or better than they can with employees who are physically in their offices.
WHAT IS THE CHAIN OF COMMAND? For many years, the chain-of-command concept was a cornerstone of organizational design. Although it has far less importance today, contemporary supervisors still need to consider its implications when deciding how best to structure their organization.
The chain of command is the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom. It helps employees answer questions such as, “Whom do I go to if I have a problem?” or “To whom am I ultimately responsible?” Such questions led early management writers to
1Global Workplace Analytics, “Latest Telecommuting Statistics,” 2015, GlobalWorkplaceAnalytics.com, http://globalworkplaceanalytics.com/telecommuting-statistics (accessed January 7, 2017).
chain of command The continuous line of authority in an organization.
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the conclusion that an employee should have one and only one supervisor to whom he or she is directly responsible.
An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities.2 Accordingly, the early writers believed that each employee should report to only one manager, a concept known as unity of command. In those rare instances when the unity of command had to be violated, early management workers always explicitly designated a clear separation of activities and a supervisor responsible for each.
The unity of command was logical when organizations were comparatively simple. Under some circumstances it is still sound advice, and organizations continue to adhere to it. But technology, for instance, has enabled information access in an organization that was once accessible only to top managers. Moreover, with computers, employees can communicate with anyone else in the organization without going through the formal communication channels—the chain of command. As such, there are instances, which we will introduce later in this chapter, when strict adherence to the unity of command creates a degree of inflexibility that hinders an organization’s performance.
WHAT IS AUTHORITY? Authority refers to rights inherent in a supervisory position to give orders and expect the orders to be obeyed. Each supervisory position has specific rights that incumbents acquire from their position’s rank or title. Authority, therefore, relates to one’s position within an organization and ignores the personal characteristics of the individual supervisor. People follow individuals in authority not because they like or respect them but because of the rights inherent in their position (see “News Flash! Obeying Authority”).
2R. Preston, “Inside Out,” Management Today, September 2001, 37; and R. D. Clarke, “Over Their Heads,” Black Enterprise, December 2000, 79.
unity of command A principle that states that an employee should have one and only one supervisor to whom he or she is directly responsible.
OBJECTIVE 4.4 Contrast line and staff authority.
authority Rights inherent in a supervisory posi- tion to give orders and expect those orders to be obeyed.
OBEYING AUTHORITY
NEWS FLASH!
Do people do what they are told and not question those in a position of authority? Years ago in most businesses, that was a standard of operating. For many supervisors, this is what they expected—if not demanded! But just how far would someone go in obeying orders? Probably the best indication of an answer to this was a research project con- ducted years ago by a social psychologist at Yale University.
Subjects were placed in the role of a teacher in a learning experiment and told by the exper- imenter to administer a shock to a learner each time that learner made a mistake. The question was, would the subjects follow the commands of the experimenter? Would their willingness to comply decrease as the intensity of the shock was increased? To test these questions, the researcher
hired a set of subjects. Each was led to believe that the experiment was to investigate the effect of punishment on memory. Their job was to act as teachers and administer punishment whenever the learner made a mistake on a learning test. Pun- ishment in this case was administered by electric shock. The subject sat in front of a shock generator with thirty levels of shock, beginning at zero and progressing in 15-volt increments to a high of 450 volts. The range of these positions was from “slight shock” at 15 volts to “danger: severe shock” at 450 volts. To add realism to the experiment, the subjects received a sample shock of 45 volts and saw the learner strapped in an electric chair in an adjacent room. Of course, the learner was an actor, and the electric shocks were phony—but the sub- jects didn’t know this.
(Continued)
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There are three different types of authority relations: line, staff, and functional (see Exhibit 4-2). The most straightforward and easiest to understand is line authority. This is the authority that gives the supervisor the right to direct the work of his or her employees and make certain decisions without consulting others.
Staff authority supports line authority by advising, servicing, and assisting, but it is typically limited. For example, the assistant to the science department head at a univer- sity has staff authority. She acts as an extension of the department head. She can give advice and suggestions, but they needn’t be obeyed. However, she may be given the authority to act for the department head. In such cases, she gives directives under the line authority of her boss. For instance, she might issue a memo and sign it “Joan Wilson for R. L. Dalton.” In this instance, Wilson is acting only as an extension of Dalton. Staff authority allows Dalton to get more things done by having an assistant who can act on his behalf.
A third type of authority, functional authority, represents rights over individuals out- side one’s own direct areas of responsibility. For example, it is not unusual for a supervi- sor in a manufacturing plant to find that his or her immediate boss has line authority over him or her but that someone in corporate headquarters has functional authority over some of his or her activities and decisions. The supervisor in charge of the purchas- ing department at an Allison Transmission, Inc., plant in Chennai, India, is responsible to that plant’s manager and the corporate director of purchasing at the company’s global headquarters in Indianapolis, Indiana.
Why, you might wonder, would the organization create positions of functional authority? After all, it breaks the unity-of-command principle by having people report to two bosses. The answer is that it can create efficiencies by permitting specialization of skills and improved coordination. Its major problem is overlapping relationships. This is typically resolved by clearly designating to an individual which activities his or her line boss has authority over and which activities are under the direction of someone else with functional authority. To follow up our purchasing example, the director in Indianapolis, Indiana, might have functional authority to specify corporation-wide purchasing policies on forms to be used and common procedures to be followed. All other aspects of the purchasing supervisor’s job would be under the authority of the plant manager.
line authority The authority that entitles a supervisor to direct the work of his or her employ- ees and to make certain decisions without consulting others.
staff authority A limited authority that supports line authority by advising, servicing, and assisting.
functional authority Control over individuals outside one’s own direct areas of responsibility.
Continued The subjects were instructed to shock the
learner each time he or she made a mistake. Subse- quent mistakes would result in an increase in shock intensity. Throughout the experiment, the subject got verbal feedback from the learner. At 75 volts, the learner began to grunt and moan; at 150 volts, he demanded to be released from the experiment; at 180 volts he cried out that he could no longer stand the pain; and at 300 volts, he insisted he be let out because of a heart condition. After 300 volts, the learner did not respond to further questions.
Most subjects protested and, fearful that they might kill the learner if the increased shocks were to bring on a heart attack, insisted they could not go on. But the experimenter responded by saying that they had to, that was their job. The major- ity of the subjects dissented, but dissension isn’t
synonymous with disobedience. Sixty-two per- cent of the subjects increased the shock level to the maximum of 450 volts. The average level of shock administered by the remaining 38 percent was nearly 370 volts—more than enough to kill even the strongest human!
What can we conclude from this experiment? Well, one obvious conclusion is that authority is a potent source of getting people to do things. Sub- jects in the experiment administered levels of shock far above that which they wanted to do. They did it because they were told they had to and despite the fact that they could have voluntarily walked out of the room anytime they wanted.
Source: Based on S. Milgram, Obedience to Authority (New York: Harper & Row, 1974).
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How Do Authority and Responsibility Differ? Supervisory jobs come with authority. They also come with responsibility. Supervisors are responsible for achieving their unit’s goals, keeping costs within budget, organizational policies, and motivating their employees. Authority without responsibility creates opportunities for abuse. For instance, if the super- visor isn’t held responsible for motivating employees, he or she may become inclined to make excessive demands on an employee, resulting in that employee being injured on the job. Conversely, responsibility without authority creates frustration and the feeling of powerlessness. If you’re held responsible for your territory’s sales performance, you should have the authority to hire, reward, discipline, and fire the salespeople who work for you.
Why Must Authority and Responsibility Be Equal? The previous analysis suggests the importance of equating authority and responsibility. When top management creates organizational units such as divisions, regions, territories, and departments—and allo- cates supervisory personnel to each with specific goals and responsibilities—it must also give these supervisors enough authority to successfully carry out those responsibili- ties. The more ambitious and far reaching the goals a supervisor undertakes, the more authority he or she needs to be given.
WHERE ARE DECISIONS MADE? One of the questions that needs to be answered in the organizing function is, “At what level are decisions made?” Centralization is a function of how much decision-making authority is pushed down to lower levels in the organization. Centralization–decentral- ization, however, is not an either–or concept. Rather, it’s a degree phenomenon. By that we mean that no organization is completely centralized or completely decentralized. Few, if any, organizations could effectively function if all their decisions were made by a select few people (centralization) or if all decisions were pushed down to the level closest to the problems (decentralization). Let’s look, then, at how the early management writers viewed centralization, as well as at how it exists today.
Early management writers proposed that centralization in an organization depended on the situation.3 Their objective was the optimal and efficient use of employees. Tra-
responsibility Supervisory obligations such as achieving a unit’s goals, keeping costs within budget, following organizational policies, and motivating employees.
OBJECTIVE 4.5 Explain why organizations are becom- ing increasingly decentralized.
centralization Decision-making responsibility in the hands of top management.
decentralization The pushing down of decision-making authority to those closest to the problems.
3H. Fayol, General and Industrial Management, C. Storrs, trans. (London: Pitman Publishing, 1949), 19–42.
Exhibit 4-2 Organization chart depicting line, staff, and functional authority relationships.
President Line Staff Functional
Assistant to the President
Other Directors
Director of Operations
Unit 2 Plant Manager
Other Supervisors
Supervisor of Human
Resources
Other Supervisors
Supervisor of Human
Resources
Supervisor of Purchasing
Unit 1 Plant Manager
Director of Purchasing
Director of Human
Resources
Supervisor of Operations
Supervisor of Purchasing
Supervisor of Operations
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ditional organizations were structured in a pyramid, with power and authority concen- trated near the top of the organization. Given this structure, historically, centralized decisions were the most prominent. But organizations today have become more complex and are responding to dynamic changes in their environments. As such, many believe that decisions need to be made by the individuals closest to the problems—regardless of their organizational level. In fact, the trend over the past three decades has been move- ment toward more decentralization in organizations.
Today, more than any time in recent years, supervisors and operatives are being actively included in the decision-making process. As many organizations have cut costs and streamlined their organizational design to respond better to customer needs, they have pushed decision-making authority down to the lowest levels in the organization. In this way, those people most familiar with a problem—and often those closest to it—are able to quickly size it up and solve it. What works in one organization, however, won’t necessarily work in another, so supervisors must determine the amount of decentraliza- tion for each department and work units within it. When supervisors empower employ- ees and delegate to them the authority to make decisions on those things that affect their work and to change the way that they think about work, that’s decentralization. Notice, however, this doesn’t imply that supervisors no longer make decisions.
WHAT ARE THE FIVE WAYS TO DEPARTMENTALIZE? Early management writers argued that activities in the organization should be specialized and grouped into departments. Work specialization creates specialists who need coordi- nation. This coordination is facilitated by putting specialists together in departments under the direction of a manager. Creation of these departments is typically based on the work functions being performed, the product or service being offered, the target cus- tomer or client, the geographic territory being covered, or the process being used to turn inputs into outputs. No single method of departmentalization was advocated by the early writers. The method or methods used should reflect the grouping that would best con- tribute to the attainment of the organization’s objectives and the goals of individual units.
How Are Activities Grouped? One of the most popular ways to group activities is by functions performed, or functional departmentalization. A supervisor might find his or her plant separated into work units—such as engineering, accounting, information systems, human resources, and purchasing (see Exhibit 4-3). Functional departmentalization can be used in all types of organizations. Only the functions change to reflect the organiza- tion’s objectives and activities. A hospital might have departments devoted to research, patient care, accounting, and so forth. A professional indoor soccer franchise might have departments labeled player personnel, ticket sales, and travel and accommodations.
Exhibit 4-4 illustrates the product departmentalization method used at Bombardier Ltd., a Canadian company. Each major product area in the corporation is placed under the authority of a senior manager who is a specialist in, and is responsible for, everything
departmentalization Grouping departments based on work functions, product or service, target customer or client, geographic terri- tory, or the process used to turn inputs into outputs.
functional departmentalization Grouping activities into independent units based on functions performed.
product departmentalization Grouping activities into independent units based on problems or issues relating to a product.
Exhibit 4-3 Functional departmentalization.
Manager, Information
Systems
Plant Manager
Manager, Accounting
Manager, Engineering
Manager, Purchasing
Manager, Human
Resources
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having to do with his or her product line. Another company that uses product depart- mentalization is L.A. Gear. Its structure is based on its varied product lines, which include women’s footwear, men’s footwear, and apparel and accessories. If an organiza- tion’s activities were service-related, rather than product-related—as are those of Bom- bardier and L.A. Gear—each service would be autonomously grouped. For instance, an accounting firm would have departments for taxes, management consulting, auditing, and the like. In such a case, each department offers a common array of services under the direction of a product or service supervisor.
The particular type of customer the organization seeks to reach can also be used to group employees. The sales activities in an office supply firm, for instance, can be broken down into five departments to serve government, military, corporate, small business, and nonprofit customers (see Exhibit 4-5). A large law office can segment its staff on the basis of individual clients served. The assumption underlying customer departmentalization is that customers in each department have a common set of problems and needs that can best be met by having specialists for each.
Another way to departmentalize is on the basis of geography or territory— geographic departmentalization. The sales function might have western, southern, midwestern, and eastern regions (see Exhibit 4-6). A large school district might have six high schools to provide for each of the major geographic territories within the district. If an organiza- tion’s customers are scattered over a large geographic area, this form of departmental- ization can be valuable. For instance, Coca-Cola’s organizational structure reflects the company’s operations in two broad geographic areas—the North American business
customer departmentalization Grouping activities around common customer categories.
geographic departmentalization Grouping activities into independent units based on geography or territory.
Exhibit 4-4 Product departmentalization.
Vice-President, Lubricants and Waxes
President
Vice-President, Fuels
Vice-President, Chemicals
Marketing
Planning and Economics
Supply and Distribution
Manufacturing
Marketing
Planning and Economics
Supply and Distribution
Manufacturing
Marketing
Planning and Economics
Supply and Distribution
Manufacturing
Exhibit 4-5 Customer departmentalization.
Military Accounts
Small Business Accounts
Government Accounts
Corporate Accounts
Vice President for Sales and
Marketing
Nonprofit Accounts
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Chapter 4 Organizing 101
sector, and the international business sector (which includes East, South Asia and Pacific Rim Group, North Asia, Eurasia and Middle East Group, and the Africa, European Union, and Latin America Groups).
The final form of departmentalization is called process departmentalization, which groups activities on the basis of work or customer flow. Exhibit 4-7 represents an example of process departmentalization by depicting the various departments in a motor vehicle department. If you have ever been to a state motor vehicle office to get a driver’s license, you probably went through several departments before receiving your license. In some states, applicants go through three steps, each handled by a separate department: (1) validation, by the motor vehicle division; (2) processing, by the licensing department; and (3) payment collection, by the treasury department.
process departmentalization Grouping activities around a process; this method provides a basis for the homogeneous categorizing of activities.
Exhibit 4-6 Geographic departmentalization.
Sales Director, Midwestern
Region
Vice President for Sales
Sales Director, Southern Region
Sales Director, Western Region
Sales Director, Eastern Region
Exhibit 4-7 Process departmentalization.
MVD Director
Validation Department Supervisor
Licensing Department Supervisor
Treasury Department Supervisor
Comprehension Check 4-1
1. The process of breaking down a job into a number of steps that are completed by different individuals is called:
a. span of control. b. work specialization. c. chain of command. d. workforce diversity.
2. Reporting to one and only one boss is commonly referred to as:
a. unity of command. b. span of control. c. chain of command. d. none of the above.
3. The control a supervisor has over individuals outside his or her own direct area is called:
a. responsibility. b. power. c. centralization. d. functional authority.
4. Which of the following is not one of the ways an organization can group its employees? a. Functional departmentalization b. Product departmentalization c. Service departmentalization d. Customer departmentalization
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From Departmentalization to Structure Most large organizations continue to use most or all of the departmental groups sug- gested by the early management writers. Black & Decker, for instance, organizes each of its divisions along functional lines, its manufacturing units around processes, its sales around geographic regions, and its sales regions around customer groupings. But a recent trend needs to be mentioned. That is, rigid departmentalization is being com- plemented by the use of cross-functional teams made up of individuals from various departments and that cross over traditional departmental lines.
Today’s competitive environment has refocused the attention of management to its customers. To better monitor the needs of customers and to be able to respond to changes in those needs, many organizations have given greater emphasis to customer departmentalization. We are also seeing a great deal more use of teams today as a device for accomplishing organizational objectives. Nearly all Fortune 500 firms are using teams.4 As tasks have become more complex and diverse skills are needed to accomplish those tasks, management has increasingly introduced the use of teams and task forces.
So, what types of organization designs exist in companies such as Toshiba, Liz Clai- borne, Hershey Foods, and Sun Life Assurance Company of Canada? Let’s look at the various types of organization designs that you might see in contemporary organizations.
A Simple Structure Most organizations start as an entrepreneurial venture with a simple structure. This organization design reflects the owner as president, with all employees reporting directly to him or her.
A simple structure is defined more by what it is not than by what it is. It is not an elabo- rate structure. If you see an organization that appears to have almost no structure, it is probably of the simple variety. By that we mean that work specialization is low, few rules govern the operations, and authority is centralized in a single person—the owner. The simple structure is a “flat” organization; it usually has only two or three vertical levels, a loose body of empowered employees in whom the decision-making authority is centralized.
The simple structure is most widely used in smaller businesses in which the supervisor and the owner are often the same person. The strengths of the simple structure should be obvious. It is fast, flexible, and inexpensive to maintain, and accountability is clear. One major weakness is that it is effective only in small organizations. It becomes increasingly inadequate as an organization grows because its few policies or rules to guide operations, and its high centralization result in information overload at the top. As size increases, deci- sion-making becomes slower and can eventually come to a standstill as the single executive tries to continue making all the decisions. If the structure is not changed and adapted to its size, the firm is likely to lose momentum and eventually fail. The simple structure’s other weakness is that it is risky: Everything depends on one person. If anything happens to the owner–manager, the organization’s information and decision-making center is lost.
Many organizations do not remain simple structures; that decision is often made by choice or because structural contingency factors dictate it. For example, as production or sales increase significantly, companies generally reach a point at which more employees are needed. As the number of employees rises, informal work rules of the simple structure give way to more formalized rules. Rules and regulations are implemented, departments are created, and levels of management are added to coordinate the activities of depart- mental people. At this point, a bureaucracy is formed. Two of the most popular bureau- cratic design options grew out of the functional and product departmentalizations; these are appropriately called the functional and divisional structures, respectively.
4E. Kelly, “Keys to Effective Virtual Global Teams,” Academy of Management Executive 15, no. 2 (May 2001), 132–133; and D. Ancona, H. Bresman, and K. Kaeufer, “The Comparative Advantage of X-Team,” Sloan Management Review 43, no. 3 (Spring 2002), 33–39.
simple structure A nonelaborate structure, low in com- plexity, with little formalization, and with authority centralized in a single person; a “flat” organization with only two or three levels.
OBJECTIVE4.6 Describe how flatter organizational structures can be beneficial to the organization.
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THE FUNCTIONAL STRUCTURE We introduced functional departmentalization a few pages ago. The functional structure merely expands the functional orientation to make it the dominant form for the entire organization. As displayed in Exhibit 4-3, the company groups employees in similar and related occupational specialties together. The strength of the functional structure lies in the advantages that accrue from work specialization. Putting like specialties together results in economies of scale, minimizes duplication of personnel and equipment, and makes employees comfortable and satisfied because it gives them the opportunity to “talk the same language” as their peers. The most obvious weakness of the functional structure, however, is that the organization frequently loses sight of its best interests in the pursuit of functional goals. No single function is totally responsible for end results, so members within individual functions become insulated and have little understanding of what people in other functions are doing.
THE DIVISIONAL STRUCTURE The divisional structure is an organization design made up of self-contained units or divi- sions. Hershey Foods and PepsiCo are examples of companies that have implemented such a structure. Building on product departmentalization (see Exhibit 4-4), each divi- sion is generally autonomous, with a division manager responsible for performance and holding complete strategic and operational decision-making authority. In most divi- sional structures, central headquarters provides support services—such as financial and legal services—to the divisions. Of course, the headquarters also acts as an external overseer to coordinate and control the various divisions. Divisions are, therefore, auton- omous within given parameters.
The chief advantage of the divisional structure is that it focuses on results. Division managers have full responsibility for a product or service. The divisional structure also frees the headquarters staff from being concerned with day-to-day operating details so they can pay attention to long-term and strategic planning. The major disadvantage of the divisional structure is duplication of activities and resources. Each division, for instance, may have a marketing research department. In the absence of autonomous divisions, all of the organization’s marketing research might be centralized and done for a fraction of the cost that splitting into divisions requires. Thus, the divisional form’s duplication of functions increases the organization’s costs and reduces efficiency.
MATRIX STRUCTURE The functional structure offers the advantages that accrue from specialization. The divisional structure has a greater focus on results but suffers from duplication of activi- ties and resources. Does any structure combine the advantages of functional specializa- tion with the focus and accountability that product departmentalization provides? The answer is yes, and it’s called the matrix structure.5
Exhibit 4-8 illustrates the matrix structure of an aerospace firm. Notice that along the top of the figure are the familiar functions of engineering, accounting, human resources, manufacturing, and so forth. Along the vertical dimension, however, the various projects that the aerospace firm is currently working on have been added. Each program is directed by a supervisor who staffs his or her project with people from the functional departments. The addition of this vertical dimension to the traditional hori- zontal functional departments, in effect, weaves together elements of functional and product departmentalization—hence the term matrix.
The unique characteristic of the matrix is that employees in this structure have at least two bosses: their functional departmental supervisor, and their product or project
functional structure An organization in which similar and related occupational specialties are grouped together.
divisional structure An organization made up of self- contained units.
5See, for instance, J. Wolf and W. G. Egelhoff, “A Reexamination and Extension of International Strategy- Structure Theory,” IEEE Transaction on Engineering Management 43, no. 1 (May 2001), 144–156.
matrix A structure that weaves together elements of functional and product departmentalization, creating a dual chain of command.
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104 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
supervisors. Project supervisors have authority over the functional members who are part of that supervisor’s project team. But authority is shared between the two supervi- sors. Typically, the project supervisor is given authority over project employees relative to the project’s goals, but decisions such as promotions, salary recommendations, and annual reviews remain the functional supervisor’s responsibility. To work effectively, project and functional supervisors must communicate regularly and coordinate the demands on their common employees.
The primary strength of the matrix is that it can facilitate coordination of a multiple set of complex and interdependent projects while still retaining the economies that result from keeping functional specialists grouped together. The major disadvantages of the matrix lie in the confusion it creates and its propensity to foster power struggles. When you dispense with the chain-of-command principle, you significantly increase ambiguity. Confusion can exist over who reports to whom. This confusion and ambiguity, in turn, plant the seeds for power struggles.
PROJECT STRUCTURE Instead of a matrix structure, many organizations are using a project structure, in which employees continuously work on projects. Unlike the matrix structure, a project struc- ture has no formal departments where employees return at the completion of a project. Instead, employees take their specific skills, abilities, and experiences to other projects. Also, all work in project structures is performed by teams of employees. For instance, at design firm IDEO, project teams form, disband, and form again as the work requires. Employees “join” project teams because they bring needed skills and abilities to that project. Once a project is completed, however, they move on to the next one.6
Project structures tend to be more flexible organizational designs and can offer advantages to the organization. Employees can be deployed rapidly to respond to
6 P. Kaihla, “Best-Kept Secrets of the World’s Best Companies,” Business 2.0, April 2006, p. 83 C. Taylor, “School of Bright Ideas,” Time Inside Business, April 2005, pp. A8–A12; and B. Nussbaum, “The Power of Design,” BusinessWeek, May 17, 2004, pp. 86–94.
Exhibit 4-8 A matrix structure in an aerospace firm.
Human Resources
Group
Accounting Group
Accounting Group
Accounting Group
AccountingPurchasing
Contracts Group
Contracts Group
Contracts Group
Contracts Group
Purchasing Group
Purchasing Group
Purchasing Group
Purchasing Group
Accounting Group
Manufacturing Group
Manufacturing Group
Manufacturing Group
Design
Design Group
Design Group
Design Group
Design Group
Gamma Project
Beta Project
Alpha Project
Omega Group
Manufacturing Group
Contract Administration
Manufacturing
Human Resources
Group
Human Resources
Group
Human Resources
Group
Human Resources
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environmental changes. No departmentalization or rigid organizational hierarchy exists to slow down decisions or actions. Supervisors serve as facilitators, mentors, and coaches and work to eliminate or minimize organizational obstacles and ensure that teams have the resources they need to effectively and efficiently complete their work. The disadvantages to the organization come from the complexity of assigning people to projects along with the inevitable task of dealing with personality conflicts that arise.
TEAM-BASED STRUCTURE In a team-based structure, the entire organization consists of workgroups or teams that perform the organization’s work.7 In such a structure, it goes without saying that team members have the authority to make decisions that affect them because there is no rigid chain of command in these work arrangements. How can team structures benefit the organization?
Let’s look at what happened at the National Cooperative Bank in Washington, D.C.8 Bank officials became aware of how their functional structure in the lending area was slowing decision making and constraining customer service; processing a loan often took as long as twenty weeks. To remedy the situation, they restructured the bank into teams representing specific industries, such as health care, distribution, and so on, based on the special regulatory issues in each industry. In doing so, the bank witnessed significant reduc- tions in the time spent to process a loan; customer satisfaction increased, as did employee cooperation. And at AMS, Operations Hillend’s factory in Fife, Scotland, a team-based structure for its circuit board production resulted in “enhanced customer responsiveness, quality and efficiency gains, and an 88 percent increase in productivity.”9
Although team structures have been positive, simply arranging employees into teams is not enough. Employees must be trained to work on teams, receive cross-functional skills training, and be compensated accordingly. Without a properly implemented team- based pay plan, many of the benefits of a team structure may be lost.10
THE BOUNDARYLESS ORGANIZATION A boundaryless organization is an organization design that is not defined or limited by boundaries or categories imposed by traditional structures. Former General Electric (GE) chairman Jack Welch coined the term because he wanted to eliminate vertical and horizontal boundaries within GE and break down external barriers between the com- pany and its customers and suppliers. Although the idea of eliminating boundaries may seem odd, many of today’s most successful organizations are finding that they can oper- ate most effectively by remaining flexible and unstructured: that the ideal structure for them is not having a rigid, bounded, and predefined structure.11 What do we mean by
7 M. Dufficy, “Training for Success in a New Industrial World,” Industrial and Commercial Training 26, no. 5 (February 2001), 48–54.
team-based structure An organization that consists entirely of workgroups, or teams.
8 R. L. Cross, A. Yan, and M. R. Louis, “Boundary Activities in ‘Boundaryless’ Organizations: A Case Study of a Transformation to a Team-Based Structure,” Human Relations 53, no. 6 (June 2000), 841–868. 9 D. Drickhamer, “Europe’s Best Plants: Mission Critical,” Industry Week, March 2002, 44–46. 10 C. Garvey, “Steer Teams with the Right Pay,” HR Magazine, May 2002, 70–78.
boundaryless organization An organization that is not defined or limited by boundaries or categories imposed by traditional structures.
11 For additional readings on boundaryless organizations, see M. F. R. Kets de Vries, “Leadership Group Coaching in Action: The Zen of Creating High Performance Teams,” Academy of Management Execu- tive, February 2005, pp. 61–76; J. Child and R. G. McGrath, “Organizations Unfettered: Organizational Form in an Information-Intensive Economy,” Academy of Management Journal (December 2001), pp. 1135–1148; M. Hammer and S. Stanton, “How Process Enterprises Really Work,” Harvard Business Review, November–December 1999, pp. 108–118; T. Zenger and W. Hesterly, “The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Modular Units,” Organization Science, vol. 8 (1997), pp. 209–222; R. Ashkenas, D. Ulrich, T. Jick, and S. Kerr, The Boundaryless Organization: Breaking the Chains of Organizational Structure (San Francisco: Jossey-Bass, 1997); R. M. Hodgetts, “A Conversation with Steve Kerr,” Organizational Dynamics, Spring 1996, pp. 68–79; and J. Gebhardt, “The Boundaryless Organization,” Sloan Management Review, Winter 1996, pp. 117–119. For another view of boundaryless organizations, see B. Victor, “The Dark Side of the New Organizational Forms: An Editorial Essay,” Organization Science, November 1994, pp. 479–482.
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“boundaries”? There are two types: (1) internal—the horizontal ones imposed by work specialization and departmentalization and the vertical ones that separate employees into organizational levels and hierarchies and (2) external—the boundaries that separate the organization from its customers, suppliers, and other stakeholders. To minimize or eliminate these boundaries, managers might use virtual or network structural designs. Sometimes called network organizations, learning organizations, or barrier-free, modu- lar, or virtual organizations, boundaryless structures cut across all aspects of the orga- nization.12 Rather than having functional specialties located in departments working on distinctive tasks, these internally boundaryless organizations group employees to accomplish some core competency.
Typically a virtual organization consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects.13 An example is Nashville-based Emma Inc., an e-mail marketing firm with 100 employees who work from home or offices in Austin, Denver, New York, and Portland.14 Their challenge has been to create a “virtual” culture, a task made more challenging by the fact that the organization itself is virtual. The inspiration for this structural approach comes from the film industry where people are essentially “free agents,” moving from project to project applying their skills in directing, talent casting, costuming, makeup, and set design, as needed. Another attempt to minimize or eliminate organizational boundaries comes in the form of a network organization. This arrangement uses its own employees to do some work activities, and networks of outside suppliers to provide other needed product components or work processes.15 Often referred to as a modular organization by manufacturing firms, this structural approach allows organizations to concentrate on what they do best by contracting out other activities to companies that do those activities best.16 At Penske Truck Leasing, dozens of business processes such as securing permits and titles, entering data from drivers’ logs, and processing data for tax filings and accounting have been outsourced to Mexico and India.17
12K. R. T. Larsen and C. R. McInerney, “Preparing to Work in the Virtual Organization,” Information and Management 39, no. 6 (May 2002), 445–456; P. R. Sparrow, “New Employee Behaviors, Work Designs and Forms of Work Organization: What Is in Store for the Future of Work?” Journal of Managerial Psy- chology 15, no. 3, March 2000, 202–218; and P. Auditore, “Enabling Knowledge Management in Today’s Knowledge Economy,” KM World, January 2002, S8–S9. 13See, for instance, Y. Shin, “A Person-Environment Fit Model for Virtual Organizations,” Journal of Man- agement (December 2004), pp. 725–743; D. Lyons, “Smart and Smarter,” Forbes, March 18, 2002, pp. 40–41; W. F. Cascio, “Managing a Virtual Workplace,” Academy of Management Executive, August 2000, pp. 81–90; G. G. Dess, A. M. A. Rasheed, K. J. McLaughlin, and R. L. Priem, “The New Corporate Archi- tecture”; H. Chesbrough and D. Teece, “When Is Virtual Virtuous: Organizing for Innovation,” Harvard Business Review, January–February 1996, pp. 65–73; and W. H. Davidow and M. S. Malone, The Virtual Corporation (New York: Harper Collins, 1992). 14M. V. Rafter, “Cultivating A Virtual Culture,” Workforce Management Online, April 5, 2012. 15R. E. Miles, C. C. Snow, J. A. Matthews, G. Miles, and H. J. Coleman, Jr., “Organizing in the Knowl- edge Age: Anticipating the Cellular Form,” Academy of Management Executive, November 1997, pp. 7–24; C. Jones, W. Hesterly, and S. Borgatti, “A General Theory of Network Governance: Exchange Conditions and Social Mechanisms,” Academy of Management Review, October 1997, pp. 911–945; R. E. Miles and C. C. Snow, “The New Network Firm: A Spherical Structure Built on Human Investment Phi- losophy,” Organizational Dynamics, Spring 1995, pp. 5–18; and R. E. Miles and C. C. Snow, “Causes of Failures in Network Organizations,” California Management Review, vol. 34, no. 4 (1992), pp. 53–72. 16G. Hoetker, “Do Modular Products Lead to Modular Organizations?” Strategic Management Journal (June 2006), pp. 501–518; C. H. Fine, “Are You Modular or Integral?” Strategy & Business, Summer 2005, pp. 44–51; D. A. Ketchen, Jr. and G. T. M. Hult, “To Be Modular or Not to Be? Some Answers to the Question,” Academy of Management Executive, May 2002, pp. 166–167; M. A. Schilling, “The Use of Modular Organizational Forms: An Industry-Level Analysis,” Academy of Management Journal (Decem- ber 2001), pp. 1149–1168; D. Lei, M. A. Hitt, and J. D. Goldhar, “Advanced Manufacturing Technology: Organizational Design and Strategic Flexibility,” Organization Studies, vol. 17 (1996), pp. 501–523; R. Sanchez and J. Mahoney, “Modularity Flexibility and Knowledge Management in Product and Organiza- tion Design,” Strategic Management Journal, vol. 17 (1996), pp. 63–76; and R. Sanchez, “Strategic Flex- ibility in Product Competition,” Strategic Management Journal, vol. 16 (1995), pp. 135–159. 17P. Engardio, “The Future of Outsourcing,” BusinessWeek, January 30, 2006, pp. 50–58.
network organization Uses its own employees to do some work activities and networks of outside suppliers to provide other needed prod- uct components or work processes.
virtual organization Consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects.
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So then, boundaryless organizations are not merely flatter organizations; they attempt to eliminate vertical, horizontal, and intraorganizational barriers. Supervisors must break down the traditional hierarchies that often have existed for many decades. Horizontal organizations require multidisciplinary work teams who have the author- ity to make the necessary decisions to do the work and be held accountable for measurable outcomes. What factors have contributed to the rise of boundaryless organization designs in today’s organizations? Undoubtedly, many of the issues we covered in Chapter 2 have had an effect. Specifi- cally, globalization of markets and competitors has played a major role. An organization’s need to respond and adapt to the complex and dynamic environment is best served by boundaryless organizations. Changes in technology also have contributed to this movement. Advances in computer power, “intelligent” software, and telecommunications enable boundaryless e-commerce organizations to exist. Each of these supports the information network that makes the virtual workplace possible.
THE LEARNING ORGANIZATION A learning organization is an organization that has developed a capacity to continuously adapt and change because all of its members take an active role in identifying and resolv- ing work-related issues.18 In learning organizations, employees are practicing knowledge management by continually acquiring and sharing new knowledge and are willing to apply that knowledge in making decisions or performing their work.
What type of organizing elements would be necessary for learning to take place in an organization? In a learning organization, it’s critical for members to share informa- tion and collaborate on work activities throughout the entire organization—across dif- ferent functional specialties and even at different organizational levels. This can be done by minimizing or eliminating existing structural boundaries. In this type of boundaryless environment, employees are free to work together and collaborate in doing the organi- zation’s work the best way they can and to learn from each other. Because of this need to collaborate, teams also tend to be an important feature of a learning organization’s structural design. Employees work in teams on whatever activities need to be done, and these employee teams are empowered to make decisions about doing their work or resolving issues. With empowered employees and teams, there is little need for “super- visors” to direct and control. Instead, supervisors serve as facilitators, supporters, and advocates for employee teams.
Organizing Your Employees Once your departmental structure is in place, you need to organize the specific jobs of each of your employees. How do you do that? By identifying the tasks to be done, combining them into jobs, and then formalizing the process by creating job descriptions.
18Initial work on the learning organization is credited to P. M. Senge, The Fifth Discipline: The Art and Practice (New York: Doubleday, 1990).
learning organization An organization that has developed the capacity to adapt and change continuously.
OBJECTIVE 4.8 Discuss the value of job descriptions.
OBJECTIVE 4.7 Explain the concept of a learning orga- nization and how it influences organi- zational designs and supervisors.
Monkey Business Images/Shutterstock
Employees at many compa- nies have found the learning- organization concept a positive way of work. Learning to work together and sharing information have helped transform how they do their jobs—and have led to successful improvements throughout the company.
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HOW DO YOU IDENTIFY THE TASKS TO BE DONE? You begin the process by making a list of all the specific tasks with which your department has been charged. These are the tasks that, when effectively accomplished, result in your department successfully achieving its goals.19 Exhibit 4-9 illustrates a partial list drawn up by a production supervisor in a large book publishing company.
It is unlikely that one person can do all the tasks that need to be accomplished. So, the tasks need to be com- bined into individual jobs. Work specialization typically drives the creation of jobs. When tasks are specialized and grouped by individuals, each person becomes more profi- cient at his or her job. So, the book production supervisor described previously will create specific jobs such as copy- editor, proofreader, photo editor, production coordinator, and designer.
In addition to grouping similar tasks, you need to be sure that workloads within your department are balanced. Employee morale and productivity will suffer if some employees’ jobs are significantly more difficult or time consuming than others are. You should take into consid- eration the physical, mental, and time demands that the various tasks require to be accomplished, and use this infor- mation to help balance the workloads among department employees.
WHAT IS THE PURPOSE OF JOB DESCRIPTIONS? A job description is a written statement of what a jobholder does, how the job is done, and why it is done. It typically portrays job duties, working conditions, and operating responsibilities. Exhibit 4-10 illustrates a job description for a production editor in a publishing company.
Why do you need to write job descriptions for each job under your supervision? There are two reasons. First, it provides you with a formal document describing what each employee is supposed to be doing. It acts as a standard against which you can determine how well the employee is performing. This, in turn, can be used in the employee’s performance appraisal, feedback, wage adjustment, and need-for-training decisions. Second, the job description helps employees learn their job duties and clari- fies the results that you expect them to achieve. Such information is crucial—especially when you empower your employees to perform certain duties that supervisors once performed.
Empowering Others Through Delegation Contemporary supervisors need to learn to empower others. Empowerment means increasing your employees’ involvement in their work through greater participation in decisions that control their work and by expanding responsibility for work outcomes. Two ways to empower people are to delegate authority to them and to redesign their
19 For a detailed explanation of this area, see D. D. DeCenzo and S. P. Robbins, Human Resource Manage- ment, 8th ed. (New York: John Wiley & Sons, 2005), Chapter 5.
job description A written statement of job duties, working conditions, and operating responsibilities.
OBJECTIVE4.9 Identify the four-step process of delegation.
empowerment An increase in the decision-making discretion of workers.
- Attend initial planning meeting with acquisition editor to launch new books
- Contact with acquisition editors
- Contact with authors
- Contact with marketing personnel
- Contact with advertising group
- Contact with manufacturing buyers
- Develop production schedules for each book
- Design the internal layout of books and develop sample pages and design specifications
- Have figures and tables drawn; size and crop photos
- Lay out pages
- Design book covers
- Organize and direct weekly coordination meetings for each book
- Proofread and correct pages
Exhibit 4-9 Partial listing of tasks in a book pro- duction department.
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Chapter 4 Organizing 109
jobs. In this section, we address delegation. In Chapter 8, we will show you how to empower people through job design.
WHAT IS DELEGATION? There is no question that effective supervisors need to be able to delegate. Many supervi- sors find that this is difficult for them. Why? They’re typically afraid to give up control. In this section, we want to show that delegation can actually increase your effectiveness and that, when done properly, it still provides you control.
Delegation is frequently depicted as a four-step process: (1) allocation of duties, (2) delegation of authority, (3) assignment of responsibility, and (4) creation of account- ability. Let’s briefly look at each of these:
1. Allocation of duties. Duties are the tasks and activities that a manager desires to have someone else do. Before you can delegate authority, you must allocate to an employee the duties over which the authority extends.
2. Delegation of authority. The essence of the delegation process is empowering the employee to act for you. It is passing to the employee the formal rights to act on your behalf.
delegation Allocation of duties, assignment of authority, assignment of responsibility, and creation of accountability.
Job Title: Production Editor
Department: College Book Editorial Production
Wage Category: Exempt
Reports to: Business Team Production Supervisor
Job Class: 7-12B
Job Statement: Performs and oversees editing work in the areas of book specifications, design, composition, printing, and binding. May carry a number of books at the same time. Works under general supervision. Exercises initiative and independent judgment in the performance of assigned tasks.
Job Duties:
1. Identifies activities to be completed, determines sequencing, and prepares a schedule for the six-month process.
2. Performs or contracts out copyediting of book manuscript.
3. Coordinates specification (size, color, paper, covers) and design (typefaces, art) with assigned designer. Coordinates preparation of pages with manufacturing buyers and compositor.
4. Distributes scheduling status reports to acquisition editors and others as needed.
5. Acts as liaison with authors on all production issues.
6. Checks all permissions for completeness and accuracy.
7. Responsible for maintaining in-stock date set at initial launch meeting.
8. Performs related duties as assigned by team supervisor. Exhibit 4-10 A job description for a production editor in a publishing company.
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110 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
3. Assignment of responsibility. When authority is delegated, you must assign respon- sibility. That is, when you give someone rights, you must also assign to that person a corresponding obligation to perform. Ask yourself: “Did I give my employee enough authority to get the materials, the use of equipment, and the support from others necessary to get the job done?”
4. Creation of accountability. To complete the delegation process, you must create accountability; that is, you must hold your employee answerable for properly car- rying out his or her duties. So, although responsibility means an employee is obliged to carry out assigned duties, accountability means that he or she has to perform the assignment in a satisfactory manner. Employees are responsible for the completion of tasks assigned to them, and are accountable to you for the satisfactory performance of that work.
ISN’T DELEGATION ABDICATION? If you dump tasks on an employee without clarifying exactly what is to be done, the range of the employee’s discretion, the expected level of performance, when the tasks are to be completed, and similar concerns, you are abdicating responsibility and invit- ing trouble. But don’t fall into the trap of assuming that, to avoid the appearance of abdicating, you should minimize delegation. Unfortunately, this is the approach taken by many new and inexperienced supervisors. Lacking confidence in their employees, or fearful that they will be criticized for their employees’ mistakes, they try to do everything themselves.
It may very well be true that you’re capable of doing the tasks you delegate to your employees better, faster, or with fewer mistakes. The catch is that your time and energy are scarce resources. It’s not possible for you to do everything yourself. So, you need to learn to delegate if you’re going to be effective in your job. This suggests two important points. First, you should expect and accept some mistakes by your employees. This is part of delegation. Mistakes are often good learning experiences for your employees, as long as the costs of their mistakes are not excessive. Second, to ensure that the costs of mistakes don’t exceed the value of the learning, you need to put adequate controls in place. Delega- tion without proper feedback controls that let you know when there are serious problems is abdication.
Comprehension Check 4-2
5. An organizational structure that consists primarily of workgroups is called a _____ structure.
a. functional b. team-based c. matrix d. divisional
6. An organization that has developed the capacity to adapt to change continuously is called a _______ organization.
a. learning b. boundaryless c. functional d. work process engineering
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7. A written statement of the duties, working conditions, and operating responsibilities of a job is called a:
a. work plan. b. goal-setting plan. c. job description. d. benchmark.
8. Allocating duties and assigning authority to others is called:
a. efficient management. b. delegation. c. responsibility. d. leadership.
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112 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
having employees perform specialized jobs and work in departments with people who do similar tasks, the organization groups them with other employees who have different skills, forming a work team. Flatter organizational structures can be beneficial because they are flexible and more adaptable to conditions external to the organization.
7. Explain the concept of a learning organization and how it influences organizational designs and supervi- sors. A learning organization is an organization that has developed the capacity to continuously adapt and change because all members take an active role in making decisions or performing their work. It influ- ences organizational designs because an organiza- tion’s ability to learn is enhanced (or hindered) by its structural boundaries and the amount of collaborative work. Supervisors in a learning organization also play a different role. Rather than being the “boss,” super- visors become facilitators, supporters, and advocates for their employees.
8. Discuss the value of job descriptions. Job descrip- tions (a) provide supervisors with a formal document describing what the employee is supposed to be doing, (b) help employees learn their job duties, and (c) clar- ify the results that management expects.
9. Identify the four-step process of delegation. Delega- tion consists of (1) allocation of duties, (2) delegation of authority, (3) assignment of responsibility, and (4) creation of accountability.
1. Define organizing. Organizing is arranging jobs and groups of jobs in a department so that activities can be accomplished as planned.
2. Describe why work specialization should increase economic efficiency. Work specialization increases economic efficiency by allocating the most difficult and complex tasks to the employees with the highest skill level and paying people less to do the less difficult and less skilled tasks.
3. Explain how the span of control affects an organiza- tion’s structure. The narrower the span of control, the more supervisory levels are necessary to directly oversee activities. Wider spans create fewer manage- rial levels and flatter organizational structures.
4. Contrast line and staff authority. Line authority refers to the right to direct the work of employees. Staff authority, on the other hand, advises, services, and assists line authority in accomplishing its job. Only line authority allows individuals to make deci- sions independently and without consulting others.
5. Explain why organizations are becoming increasingly decentralized. Organizations are becoming increas- ingly decentralized to meet competitive challenges through knowledgeable and rapid decision-making.
6. Describe how flatter organizational structures can be beneficial to the organization. Flatter organi- zational structures mean that job-related activities cut across all parts of the organization. Rather than
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
4-6. Why would an organization use a matrix structure? 4-7. What are the purposes of a job description? 4-8. Is delegation synonymous with abdication? Dis-
cuss. 4-9. “A learning organization makes supervision
obsolete.” Do you agree or disagree with this statement? Defend your position.
4-1. What are the limitations, if any, to work special- ization?
4-2. How might wider spans of control lead to cost reductions for an organization?
4-3. What is functional authority? Why would an orga- nization use it?
4-4. What happens when authority and responsibility are out of balance?
4-5. What are the advantages of (a) product, (b) geo-graphic, (c) customer, and (d) process depart- mentalization?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
1
54
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2 3
7
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10 11
8
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20
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DOWNACROSS
1. allocation of duties, assignment of authority, and accountability 4. a type of departmentalization in which activities are grouped based on how issues relate to a product 7. a type of structure that combines functional and product departmentalization 9. a type of authority in which one has control over individuals outside one's direct areas of responsibility 12. an organization not defined or limited by traditional structures 15. a type of departmentalization in which activities are grouped based on territory 18. a type of authority that supports line authority by advising, servicing, and assisting 19. supervisory obligation such as achieving a unit's goal 20. the grouping of work functions in an organization 22. a type of departmentalization in which activities are grouped based on the clients served 23. a type of departmentalization in which activities are grouped based on work flow 24. a type of organization that has developed the capacity to adapt and change continuously 25. a principle that states that an employee should report to one and only one supervisor
2. a type of authority that allows a supervisor to direct the work of his or her employees 3. a type of structure that consists entirely of work groups 5. the continuous line of authority that extends from the highest levels to the lowest levels in an organization 6. a type of structure that is characterized as nonelaborate 8. a written statement of job duties 10. pushing down decision-making authority to those closest to the problem 11. process of breaking down jobs into a number of steps 13. the number of employees a supervisor can e�ciently and e�ectively direct 14. decision-making responsibility in the hands of top management 16. a type of departmentalization in which activities are grouped based on the work performed 17. an increase in the decision-making discretion of workers 21. rights inherent in a supervisory position
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114 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Developing Your Supervisory Skills
• What Type of Organization Structure Do I Prefer? • What’s the Right Organizational Culture for Me?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• How Power Oriented Am I? • What’s My Preferred Type of Power?
GETTING TO KNOW YOURSELF
more, look at the departmentalization that exists. Is your school’s structure more functional or divisional? Does it exhibit learning-organization tendencies? Based on your assessments, what kind of structure would you predict your college to have? Does it have this structure now? Compare your findings with other classmates. Are there similarities in how each viewed the college? Differences? What do you believe has contributed to these findings?
tween you and the employee, improve that employ- ee’s motivation, and enhance accountability for the results.
STEP 2: Specify the employee’s range of discretion. Every act of delegation comes with constraints. You’re del- egating authority to act, but not unlimited authority. What you’re delegating is authority to act on certain issues and, on those issues, within certain parameters. You need to specify what those parameters are so em- ployees know, in no uncertain terms, the range of their discretion. When this has been successfully communi- cated, both you and the employee will have the same idea of the limits to the latter’s authority and how far he or she can go without checking further with you. How much authority do you give an employee? In other words, how tight do you draw the parameters? The best answer is that you should allocate enough authority to allow the individual to complete the task successfully.
STEP 3: Allow the employee to participate. One of the best sources for determining how much authority will be necessary to accomplish a task is the employee who will be held accountable for that task. If you allow em- ployees to participate in determining what is delegated, how much authority is needed to get the job done, and
4-10. An Experiential Exercise: How Is Your School Organized? Every college has a specific type of organizational struc- ture. That is, if you are taking business courses, your classes are often “housed” in a department, school, or college of business. But have you ever asked why? Or is it something you just take for granted?
Analyze your school’s overall structure in terms of formalization, centralization, and complexity. Further-
In learning to delegate, recognize that delegation is not the same as participation. In participative decision-making, there’s a sharing of authority. With delegation, employees make decisions on their own. That’s why delegation is such a vital component of empowering workers! A num- ber of actions are recommended that when followed can make you an effective delegator.
STEPS IN PRACTICING THE SKILL
STEP 1: Clarify the assignment. The place to begin is to determine what is to be delegated, and to whom. You need to identify the person best capable of do- ing the task, then determine whether he or she has the time and motivation to do the job. Assuming you have a willing and capable employee, it is your re- sponsibility to provide clear information on what is being delegated, the results you expect, and any time or performance expectations you hold. Unless there is an overriding need to adhere to specific methods, you should delegate only the end results. That is, get agreement on what is to be done and the end results expected, but let the employee decide on the means. By focusing on goals and allowing the employee the freedom to use his or her own judgment as to how those goals are to be achieved, you increase trust be-
BUILDING A TEAM
DELEGATING
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Chapter 4 Organizing 115
The establishment of controls to monitor the employ- ee’s progress increases the likelihood that important problems will be identified early and that the task will be completed on time and to the desired specifications. Ideally, controls should be determined at the time of the initial assignment. Agree on a specific time for comple- tion of the task, and then set progress dates when the employee will report back on how well he or she is doing and any major problems that have surfaced. This can be supplemented with periodic spot checks to ensure that authority guidelines are not being abused, organization policies are being followed, proper procedures are being used, and the like. But too much of a good thing can be dysfunctional. If the controls are too constraining, the employee will be deprived of the opportunity to build self-confidence, and much of the motivational proper- ties of delegation will be lost. A well-designed control system permits your employee to make small mistakes, but quickly alerts you when big mistakes are imminent.
STEP 6: When problems surface, insist on recommenda- tions from the employee. Many supervisors fall into the trap of letting employees reverse the delegation process: The employee runs into a problem and then comes back to the supervisor for advice or a solution. Avoid being sucked into reverse delegation by insisting from the be- ginning that when employees want to discuss a problem with you, they come prepared with a recommendation. When you delegate downward, the employee’s job in- cludes making necessary decisions. Don’t allow the em- ployee to push decisions back upward to you.
the standards by which they’ll be judged, you increase employee motivation, satisfaction, and accountability for performance. Be aware, however, that participation can present its own set of potential problems, as a result of employees’ self-interest and biases in evaluating their own abilities. Some employees, for example, are person- ally motivated to expand their authority beyond what they need and beyond what they are capable of han- dling. Allowing such people too much participation in deciding which tasks they should take on and how much authority they must have to complete those tasks can undermine the effectiveness of the delegation process.
STEP 4: Inform others that delegation has occurred. Delegation should not take place in a vacuum. Not only do you and the employee need to know specifi- cally what has been delegated and how much authority has been granted, but anyone else who may be affected by the delegation act also needs to be informed. This in- cludes people outside the organization as well as inside it. Essentially, you need to convey what has been dele- gated (the task and amount of authority) and to whom. If you fail to follow through on this step, the legitimacy of your employee’s authority will probably be called into question. Failure to inform others makes conflicts likely, and decreases the chances that your employee will be able to accomplish the delegated task efficiently.
STEP 5: Establish feedback controls. To delegate with- out instituting feedback controls is to invite problems. There is always the possibility that an employee will misuse the discretion that he or she has been delegated.
the time differences in terms of efficiencies of work specialization. Also note whether the second order was completed correctly. What are the implications of this simple research for product specialization?
4-12. Discuss the pros and cons of a learning organiza- tion. Do you believe there are organizations that are better suited for a learning-organization envi- ronment? Discuss.
4-11. Visit a McDonald’s restaurant on a weekday around noon. On your first order, ask for a Big Mac or Quar- ter Pounder with Cheese. Record how long it takes to have your order filled. Leave, and return to the counter. On your second order, order the Big Mac or Quarter Pounder with (a) no lettuce, (b) extra pickles, and (c) no cheese. Record how long this special order takes. Compare the two times. Discuss
COMMUNICATING EFFECTIVELY
of labor.20 Maybe you’ve volunteered at a Habitat for Humanity build, a homeless shelter, or some nonprofit organization. However, what if the volunteer assignment was at a for-profit business, and the job description read
■➤ Case 4-A: Supervising Volunteers They’re individuals you might never have thought of as being part of an organization’s structure, but for many organizations, volunteers provide a much-needed source
20A. Fox, “Pave the Way for Volunteers,” HR Magazine, June 2010, pp. 70–74; G. Morse, “The Power of Unwitting Workers,” Harvard Business Review, October 2009, pp. 27–27; S. Lohr, “Customer Service? Ask a Volunteer,” New York Times Online, April 26, 2009; and B. Xu, D. R. Jones, and B. Shao, “Volunteers’ Involvement in Online Community Based Software Development,” Information & Management, April 2009, pp. 151–158.
THINKING CRITICALLY
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like this: “Work only a couple of hours a day at your computer answering customers’ technical questions, all for no pay.” Many large corporations, start-up companies, and venture capitalists are betting that a new group of tal- ented “volunteer” individuals who are quite knowledge- able about the Web and other technical areas will alter how customer service is provided.
Businesses have become good at getting customers to do free work such as self-checkouts, self check-ins, and pumping your own gas (as opposed to having an attendant pump your gas, check your oil, and wash your windshield) and filling out online forms. Now, they’re taking the con- cept even further, especially in customer service settings, by getting “volunteers” to perform specialized work tasks.
The role that these volunteer “enthusiasts” have played, especially in contributing innovations to research and development efforts, has been closely researched in recent years. For example, case studies highlight the product tweaks made by early skateboarders and moun- tain bikers to their gear. Researchers have also studied the programmers behind open source software like the Linux operating system. Individuals who do this type of “volunteering” seem to be motivated mainly by a payoff in enjoyment and respect among their peers, and to some extent the skills they’re able to develop. Now, as the con- cept of individuals volunteering for work tasks moves to the realm of customer service, can it work and what does it mean for managers?
At Verizon’s high-speed fiber optic Internet, televi- sion, and telephone service, “volunteers” are answering customer questions about technical matters on a com- pany-sponsored customer-service website for no pay. Mark Studness, director of Verizon’s e-commerce unit was familiar with websites where users offered tips and answered questions. His challenge was to find a way to use that potential resource for customer service. His solu- tion was to identify “Super” or lead-users who provide the best answers and dialogue in Web forums.
The experiment at Verizon seems to be working well, and these online volunteers can be an important addition to a company’s customer service efforts. Studness says that creating an atmosphere that these super users find desir- able is a key consideration because without that, you have nothing. A company that worked with Verizon to set up its structure said that these super or lead-users are driven by the same online challenges and aspects as fervent gam- ers are. So they set up the structure with an elaborate rating system for contributors with ranks, badges, and “kudos counts.” So far, Studness is happy with how it’s
gone. He says the company-sponsored customer-service site has been extremely useful and cost efficient in redirect- ing thousands of questions that would have been answered by staff at a Verizon call center.
RESPONDING TO THE CASE
4-13. What do you think about using volunteers to do work that other people get paid to do?
4-14. If you were in Mark Studness’s position, what would you be most concerned about in this arrangement? How would you manage that concern?
4-15. How do these volunteers fit into an organization’s structure? Take each of the basic organizing con- cepts and discuss how they would affect this struc- tural approach.
■➤ Case 4-B: Push the Magic Button21
When working on mind-numbing and monotonous proj- ects, wouldn’t it be great to have a magic button you could push to get someone else to do that boring, time-consuming stuff? At Pfizer, that “magic button” is a reality for a large number of employees.
As a global pharmaceutical company, Pfizer is con- tinually looking for ways to help employees be more efficient and effective. The company’s senior director of organizational effectiveness found that the “Harvard MBA staff we hired to develop strategies and innovate were instead Googling and making PowerPoints.” Indeed, internal studies conducted to find out just how much time its valuable talent was spending on menial tasks was startling. The average Pfizer employee was spending 20 percent to 40 percent of his or her time on support work (creating documents, typing notes, doing research, manipulating data, scheduling meetings) and only 60 per- cent to 80 percent on knowledge work (strategy, innova- tion, networking, collaborating, critical thinking). And the problem wasn’t just at lower levels. Even the highest-level employees were affected. Take, for instance, David Cain, an executive director for global engineering. He enjoys his job—assessing environmental real estate risks, managing facilities, and controlling a multimillion-dollar budget. But he didn’t so much enjoy having to go through spread- sheets and put together presentations. Now, however, with Pfizer’s “magic button,” those tasks are passed off to individuals outside the organization.
Just what is this “magic button”? Originally called the Office of the Future (OOF), the renamed PfizerWorks allows employees to shift tedious and time-consuming
21Based on S. Silbermann, “How Culture and Regulation Demand New Ways to Sell,” Harvard Business Review, July/August 2012, 104–05; P. Miller and T. Wedell-Wedellsborg, “How to Make an Offer That Managers Can’t Refuse?” IESE Insight, second quarter, issue 9 (2011): 66–67; S. Hernández, “Prove Its Worth,” IESE Insight, second quarter, issue 9 (2011): 68; T. Koulopoulos, “Know Thyself,” IESE Insight, second quarter, issue 9 (2011): 69; M. Weinstein, “Retrain and Restructure Your Organization,” Training, May 2009, 36; J. McGregor, “The Chore Goes Offshore,” Business Week, March 23 & 30, 2009, 50–51; “Pfizer: Making It ‘Leaner, Meaner, More Efficient,’” BusinessWeek Online, March 2, 2009; and A. Cohen, “Scuttling Scut Work,” Fast Company, February 2008, 42–43.
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tasks with the click of a single button on their computer desktop. They describe what they need on an online form, which is then sent to one of two Indian service-outsourc- ing firms. When a request is received, a team member in India calls the Pfizer employee to clarify what’s needed and by when. The team member then e-mails back a cost specification for the requested work. If the Pfizer employee decides to proceed, the costs involved are charged to the employee’s department. About this unique arrangement, Cain said that he relishes working with what he prefers to call his “personal consulting organization.”
The number 66,500 illustrates just how beneficial PfizerWorks has been for the company. That’s the number of work hours estimated to have been saved by employees who’ve used PfizerWorks. What about Joe Cain’s experi- ences? When he gave the Indian team a complex project
researching strategic actions that worked when consoli- dating company facilities, the team put the report together in a month, something that would have taken him six months to do alone. He says, “Pfizer pays me not to work tactically, but to work strategically.”
RESPONDING TO THE CASE
4-16. What type of departmentalization is evident in the employee grouping of PfizerWorks? Cite specific examples to support your point of view.
4-17. What authority implications—good and bad—does this approach have?
4-18. Refer to Delegating and the Steps in Practicing the Skill to describe what Pfizer had to accomplish when setting up and implementing the teams at the Indian service-outsourcing firms supporting PfizerWorks.
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■■ affirmative action
■■ compensation administration
■■ employee benefits
■■ employee training
■■ employment planning
■■ human resource inventory
■■ human resource management (HRM)
■■ layoff-survivor sickness
■■ orientation
■■ performance-simulation tests
■■ realistic job preview (RJP)
■■ recruitment
■■ reliability
■■ selection process
■■ sexual harassment
■■ validity
■■ websumés
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Staffing and Recruiting5 C
H A
P T
ER
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5-1. Describe the human resource management process.
5-2. Discuss the influence of government regulations on human resource decisions.
5-3. Contrast recruitment and downsizing options.
5-4. Explain the importance of validity and reliability in selection.
5-5. Describe the selection devices that work best with various kinds of jobs.
5-6. Identify various training methods.
5-7. Describe the goals of compensation administration and factors that affect wage structures.
5-8. Explain what is meant by the terms sexual harassment and layoff-survivor sickness.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
Andrey_Popov/Shutterstock
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Responding to a Supervisory Dilemma
Your interview day has finally arrived. You are all dressed up to make that lasting first impres- sion. You finally meet Mrs. Landers, as she shakes your hand firmly and invites you to get comfortable. Your interview has started! This is the moment for which you’ve waited.
The first few moments appear mundane enough. The questions to this point, in fact, seem easy. Your confidence is growing. That little voice in your head keeps telling you that you are doing fine—just keep going. Suddenly, the ques- tions get tougher. Mrs. Landers leans back and asks about why you want to leave your current job—the one you’ve been in for only eighteen months. As you begin to explain that you want to leave for personal reasons, she begins to probe more. Her smile is gone and her body language is different. All right, you think, be honest. So, you tell Mrs. Landers that you want to leave because you think your boss is unethical and you don’t want your reputation tarnished by being associated with this person. This has led to a number of public disagree- ments with your boss, and you’re tired of dealing with the situation any longer. Mrs. Landers looks at you and replies: “If you ask me, that’s not a valid reason for want- ing to leave. It appears to me that you should be more assertive about the situation. Are you sure you’re confi- dent enough and have what it takes to make it in this com- pany?” How dare she talk to you that way! Who does she think she is? You respond with an angry tone in your voice. Guess what? You’ve just fallen victim to one of the tricks of the interviewing business—the stress interview.
Stress interviews are becoming more commonplace in today’s business. Every job produces stress, and at some point, every worker has a hor- rendous day. So, these types of interviews become predic- tors of how you may react at work under less than favorable conditions. How so? Interview- ers want to observe how you’ll react when you are put under pressure. Those who demon- strate the resolve and strength to handle the stress indicate a level of professionalism and confidence. Those are the char- acteristics being assessed. People who react to the pressure inter- view in a more positive manner indicate that they will likely be able to handle the day-to-day irritations that exist at work. Those who don’t, well . . .
On the other hand, stress interviews are staged events. Interviewers deliberately lead
applicants into a false sense of security—the com- fortable interaction. Then, suddenly and drastically, they change. They go on the attack. And it’s usually a personal affront that picks on a weakness they’ve uncovered about the applicant. It’s possibly humiliat- ing; at the very least it’s demeaning. So, should stress interviews be used? Should interviewers be permitted to assess professionalism and confidence and how one reacts to the everyday nuisances of work by putting applicants in confrontational scenarios? Does getting angry in an interview when pressured indicate one’s propensity toward violence should things not always go smoothly at work? Should supervisors advocate the use of an activity that could possibly get out of control?
Monkey Business Images/Shutterstock
T he quality of a department and the entire organization is to a large degree deter- mined by the quality of people it employs. Success for most supervisors depends on finding the right employees with the necessary skills to successfully perform
the tasks required to attain the company’s strategic goals. Staffing and human resource
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management decisions and methods are critical to ensuring that the organization hires and keeps the right personnel.
The Human Resource Management Process You may be thinking, “Sure, personnel decisions are important. But aren’t most of them made by people who specifically handle human resource issues?” In many organizations, a number of the activities grouped under the label human resource management (HRM) are done by specialists in human resources. In other cases, HRM activities may even be outsourced to companies. But not all supervisors may have HRM staff support. Small- business owners, for instance, are an obvious example of individuals who frequently must do their own hiring without the assistance of HRM specialists. Even supervisors in larger organizations are frequently involved in recruiting candidates, reviewing appli- cation forms, interviewing applicants, inducting new employees, making decisions about employee training, providing career advice to employees, and evaluating employees’ performance. So, whether or not an organization provides HRM support activities, every supervisor is involved with human resource decisions in his or her unit.
Exhibit 5-1 introduces the key components of an organization’s HRM process. It represents eight activities or steps—strategic human resource planning, recruitment and downsizing, selection, orientation, training and development, performance appraisal, compensation and benefits, safety and health—that, if properly executed, will staff an organization with competent, high-performing employees who are capable of sustaining their performance level over the long term.
The first three steps represent employment planning, which is the adding of staff through recruitment, the reduction in staff through downsizing, and selection. When executed properly, these steps lead to the identification and selection of competent
OBJECTIVE 5.1 Describe the human resource management process.
human resource management (HRM) The process of finding, hiring, train- ing, and keeping employees in the organization.
Exhibit 5-1 The human resource management process.
Competent and high- performing employees
who are capable of sustaining high
performance over the long term
Training and
development
Orientation
Selection
Recruitment and
downsizing
Strategic human
resource planning
Identification and selection of competent employees
Adapted and competent
employees with up-to-date skills, knowledge, and
abilities
Compensation and
benefits
Safety and
health
Performance appraisals
Legislation
R e st
ru ct
u ri
n g
D ow
ns izi
ng
Environment
Unions
G lo
b a liza
tio n
En gi
ne er
in g
Diversity
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Here is a comprehensive list of federal employment laws HR professionals and supervisors need to be familiar with. Work with a partner to select one law from each grouping. Go online to locate a brief description of the law for presentation to the class.
2010 through 2016
American Taxpayer Relief Act of 2012 Dodd-Frank Act of 2011 Health Care Education and Reconciliation Act of 2010 Hiring Incentives to Restore Employment Act of 2010 (HIRE) Patient Protection and Affordable Care Act of 2010
2000 through 2009
American Recovery and Reinvestment Act of 2009 Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) Generic Information Nondiscrimination Act (GINA) of 2008 Mental Health and Addiction Equity Act of 2008 Lilly Ledbetter Fair Pay Act of 2007 Pension Protection Act (PPA) of 2006 Veterans Benefits Improvement Act of 2004 Workforce Reinvestment and Adult Education Act of 2003 Fair and Accurate Credit Transactions Act (FACT) of 2003 Contract Work Hours and Safety Standards Act (CWHSSA) of 2002 Sarbanes-Oxley Act (SOX) of 2002 Executive Order 13201 of 2001 Notification of Employee Rights Concerning Payment of Union Dues or Fees Energy Employees Occupational Illness Compensation Program Act (EEOICPA) of 2000
employees. These activities are important to assist organizations in achieving their goals. Accordingly, once an organization’s plans have been established and the organization’s structure has been designed, it’s now time to “add” the people. That’s one of the most critical roles for supervisors.
Once you have selected competent people, you need to help them adapt to the organi- zation and ensure that their job skills and knowledge are kept current. You do this through orientation, training, and development. The last steps in the HRM process are designed to identify performance goals, correct performance problems if necessary, and help employ- ees sustain a high level of performance over their entire work life. The activities involved include performance appraisal, compensation and benefits, and safety and health.
Notice in Exhibit 5-1 that the entire employment process is influenced by the exter- nal environment. Many of the factors introduced in Chapter 2 (e.g., globalization, downsizing, and diversity) directly affect all management practices. But their effect is probably most severe in the management of human resources because whatever hap- pens to an organization ultimately influences what happens to its employees. So, every supervisor must have a fundamental understanding of the current laws and regulations governing equal employment opportunity (see “Something to Think about (and Promote Class Discussion): Is It Safe?”).
The Legal Environment of HRM Since the mid-1960s, the federal government has greatly expanded its influence over HRM decisions by enacting a wealth of laws and regulations (see Exhibit 5-2 for exam- ples). As a result, today’s supervisors must ensure that equal employment opportunities exist for job applicants and current employees. Decisions regarding who will be hired,
OBJECTIVE 5.2 Discuss the influence of govern- ment regulations on human resource decisions.
Exhibit 5-2 Major US federal laws and regulations related to HRM.
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1990 through 1999
Women’s Health & Cancer Rights Act of 1998 Immigration and Nationality Act (INA) of 1996 Mental Health Parity Act (MHPA) of 1996 Health Insurance Portability and Accountability Act (HIPAA) of 1996 Newborns’ and Mothers’ Health Protection Act of 1996 Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994 OSHA Hazard Communication Standard of 1994 Family and Medical Leave Act (FMLA) of 1993 Federal Employees’ Compensation Act (FECA) of 1993 Civil Rights Act of 1991 Americans with Disabilities Act (ADA) of 1990
1980 through 1989
Drug-Free Workplace Act of 1988 Employee Polygraph Protection Act (EPPA) of 1988 Worker Adjustment and Retraining Notification Act (WARN) of 1988 Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 Immigration Reform and Control Act of 1986 (IRCA) Migrant and Seasonal Agricultural Worker Protection Act (MSPA) of 1983
1970 through 1979
Equal Employment Opportunity Act of 1972 Mandatory Retirement Act of 1978 Pregnancy Discrimination Act, Title VII of 1978 Uniform Guidelines on Employee Selection Procedures of 1978 Federal Mine Safety and Health Act (Mine Act) of 1977 Employee Retirement Income Security Act (ERISA) of 1974 Privacy Act of 1974 Vietnam-Era Veterans Readjustment Act (VEVRA) of 1974 Rehabilitation Act 1973, Section 503 Occupational Safety And Health Act (OSHA) of 1970
1960 through 1969
Black Lung Benefits Act (BLBA) authorized by Title IV, Federal Coal Mine Health and Safety Act of 1969 Fair Credit Reporting Act (FCRA) of 1969 Consumer Credit Protection Act (CCPA) of 1968 Jury Service and Selection Act of 1968 Age Discrimination in Employment Act (ADEA) of 1967 Executive Order 11246 of 1965 requiring Equal Employment Opportunity McNamara-O’Hara Service Contract Act (SCA) of 1965 Title VII of the Civil Rights Act of 1964 Equal Pay Act (EPA) of 1963
1890 through 1959
Labor-Management Reporting and Disclosure Act (LMRDA) of 1959 National Labor Relations Act (NLRA) of 1947 Fair Labor Standards Act of (FLSA) of 1938 Walsh-Healey Act of 1936 Federal Insurance Contributions Act (FICA) of 1935 Copeland Act of 1934 Norris-LaGuardia Act of 1932 Davis Bacon Act of 1931 Longshore and Harbor Workers’ Compensation Act (LHWCA) of 1927 Sherman Anti-Trust Act of 1890
Based on Society for Human Resource Management (SHRM), “Federal Statutes, Regulations and Guidance,” https://www.shrm.org/resourcesandtools/legal-and-compliance/ employment-law/pages/federal-statutes-regulations-and-guidance.aspx (accessed January 8, 2017).
Exhibit Continued
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for example, or which employees will be chosen for a training program must be made without regard to race, sex, religion, age, color, national origin, or disability. Excep- tions can occur only when special circumstances exist. For instance, a community fire department can deny employment to a firefighter applicant who uses a wheelchair. But if that same individual is applying for a desk job, such as fire department dispatcher, the disability cannot be used as a reason to deny employment. The issues involved, however, are rarely that clear-cut. For example, employment laws protect most employees whose religious beliefs require a specific style of dress—robes, long shirts, long hair, and the
Something to Think About (and promote class discussion)
IS IT SAFE? Today, most supervisors know that their hiring practices must meet the requirements of employment laws. As a result, rarely will you find a supervisor who blatantly excludes certain groups of people. This doesn’t mean, however, that discrimination cannot occur. Employment practices that appear harmless may, in fact, keep certain people from having an equal chance. To see how this can happen, read the following situations that may arise in the employment process. After reading each one, check whether you feel it is a safe or a risky practice for an organization to be using. Don’t be concerned with whether you think the practice is legal or illegal. Just consider whether you believe it is okay to do, or whether it could create problems for the organization.
Safe Risky
1. “Wanted: Recent college graduate to teach first grade in the local public school.” □ □ 2. A waiter in an exclusive restaurant is fired when his supervisor finds out he tested
positive for HIV. □ □
3. You want to take twelve weeks off without pay to care for your new child during the busiest part of your work year, and your supervisor denies the request.
□ □
4. A Broadway theater hires a woman for the job of restroom attendant and assigns her to the men’s restroom.
□ □
5. An applicant who uses a wheelchair is denied a job as a computer programmer. This seventy-five-person company is on the third floor of an office building, and the building does not have elevators. Furthermore, door openings to offices are not wide enough for a wheelchair to safely pass through—thus creating a safety hazard for the individual.
□ □
6. The company policy states: “Applicants applying for jobs in the organization must have, at a minimum, a high school diploma.”
□ □
7. A pilot for United Airlines celebrates his sixty-fifth birthday. The following day, he is no longer permitted by his supervisor to fly the commercial flights he has been flying for the past twenty-eight years.
□ □
8. “Wanted: Sales rep to sell medical supplies to regional hospitals. The successful applicant must have five years of sales experience.”
□ □
Trying to balance the shoulds and should-nots of complying with these laws often falls under the realm of affirmative action. Many organizations have affirmative action programs to ensure that decisions and practices enhance the employment, upgrading, and retention of members from protected groups, such as minorities and females. That is, the supervisors in the organization not only refrain from discrimina- tion, but actively seek to enhance the status of members from protected groups.
Our conclusion is that supervisors are not completely free to choose whom they hire, promote, or fire. Although these regulations have significantly helped reduce employment discrimination and unfair employment practices in organizations, they have, at the same time, also reduced management’s discre- tion over human resource decisions.
affirmative action An active effort to recruit, select, train, and promote members of protected groups.
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like. However, if the individual’s job involves operating machinery where the specific style of dress may be hazardous or unsafe in the work setting, a company could refuse to hire a person who would not adapt to a safer dress code.
Employment Planning Employment planning is the process by which supervisors ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently completing tasks that will help the organization achieve its overall objectives. Employment planning, then, translates the organization’s and depart- ment’s goals into a personnel plan that will allow those goals to be achieved. Employ- ment planning can be condensed into two steps: (1) assessing current human resources, and (2) assessing future human resource needs and developing a program to meet them.
HOW DOES A SUPERVISOR CONDUCT AN EMPLOYEE ASSESSMENT? Supervisors begin by reviewing their current human resource status. This review is typi- cally done by generating a human resource inventory. In an era of sophisticated computer systems, it is not too difficult a task for most supervisors to generate a human resource inventory report. The input for this report is derived from forms completed by employees. Such reports might list the name, education, training, prior employment, languages spo- ken, capabilities, and specialized skills of each employee in the organization. This inven- tory allows a supervisor to assess what talents and skills are currently available in the department and elsewhere in the organization.
HOW ARE FUTURE EMPLOYEE NEEDS DETERMINED? Future human resource needs are determined by the department’s goals. Demand for human resources (its employees) is a result of demand for what the department produces. On the basis of its estimate of total work to be completed, a supervisor can attempt to establish the number and mix of human resources needed to reach that revenue.
After a supervisor has assessed both current capabilities and future needs, he or she is better able to estimate shortages—both in number and in type—and to highlight areas in which the department is overstaffed. A program can then be developed that matches these estimates with forecasts of future labor supply. So, employment planning provides information not only to guide current staffing needs, but also to project future employee needs and availability.
Recruitment and Selection Once supervisors know their current staffing levels—whether they are understaffed or overstaffed—they can begin to do something about it. If one or more vacancies exist, they can use the information gathered through job analysis (see Chapter 4) to guide them in recruitment, which is the process of locating, identifying, and attracting capable applicants. On the other hand, if employment planning indicates a surplus, management will want to reduce the labor supply within the organization. This activity initiates downsizing or layoff activities.
WHERE DO SUPERVISORS LOOK TO RECRUIT CANDIDATES? Candidates can be found by using several sources—including the Internet. Exhibit 5-3 offers some guidance. The source that is used should reflect the local labor market, the type or level of position, and the size of the organization.
employment planning Assessing current human resources and future human resource needs; developing a program to meet future human resource needs.
human resource inventory A database listing name, education, training, prior employer, languages spoken, and other information for each employee in the organization.
OBJECTIVE 5.3 Contrast recruitment and downsizing options.
recruitment The process of locating, identifying, and attracting capable applicants.
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Are Certain Recruiting Sources Better Than Others? Do certain recruiting sources produce superior candidates? The answer is generally yes. The majority of studies have found that employee referrals produce the best candidates.1 The explanation for this finding is intuitively logical. First, applicants referred by current employees are prescreened by those employees. Because the recommenders know both the job and the person being recommended, they tend to refer applicants who are well-qualified for the job. Second, because current employees often feel that their reputation in the organization is at stake with a referral, they tend to refer others only when they are reasonably confident that the referral won’t make them look bad. But this finding should not be interpreted to mean that supervisors should always opt for the employee-referred candidate. Employee referrals may not increase the diversity and mix of employees.
A Special Case: Online Recruiting Newspaper advertisements and the like may be on their way to extinction as primary sources for identifying job candidates. The reason: Internet recruiting. Nearly four out of five companies currently use the Internet to recruit new employees—increasingly by adding a recruitment section to their website.2 Because almost every organization—small as well as large—creates its own website, these become
1J. Salopek, “Employee Referrals Remain a Recruiter’s Best Friend,” Workforce Management Online, December 2010, http://www.workforce.com/2010/12/06/employee-referrals-remain-a-recruiters-best- friend/ (accessed January 8, 2017); “Employee Referral Programs: Highly Qualified New Hires Who Stick Around,” Canadian HR Reporter, June 4, 2001, 21; and C. Lachnit, “Employee Referral Saves Time, Saves Money, Delivers Quality,” Workforce, June 2001, 66–72. 2M. N. Martinez, “Get Job Seekers to Come to You,” HR Magazine, August 2000, 42–52, https://www. shrm.org/hr-today/news/hr-magazine/Pages/0800martinez.aspx (accessed January 8, 2017).
Source Advantages Disadvantages
Internal searches Low cost; build employee morale; candidates are familiar with organization
Limited supply; may not increase proportion of protected-group employees
Advertisements Wide distribution can be tar- geted to specific groups
Generate many unqualified candidates
Employee referrals Knowledge about the orga- nization provided by current employees; can generate strong candi- dates because a good referral reflects on the recommender
May not increase the diversity and mix of employees
Public employment agencies
Free or nominal cost Candidates tend to be lower- skilled, although some skilled employees available
Private employment agencies
Wide contacts; careful screening; short-term guarantees often given
High cost
School placement Large, centralized body of candidates
Limited to entry-level positions
Temporary help services
Fill temporary needs Expensive
Employee leasing and independent contractors
Fill temporary needs, but usually for more specific, longer-term projects
Little commitment to organization other than current project
Exhibit 5-3 Traditional recruiting sources.
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natural extensions for finding new employees. Organizations planning to do a lot of Internet recruiting often develop dedicated sites specifically designed for recruitment. They have the typical information you might find in an employment advertisement— qualifications sought, experience desired, benefits provided. But they also allow the organization to showcase its products, services, corporate philosophy, and mission state- ment. This information increases the quality of applicants because those whose values don’t mesh with the organization tend to self-select themselves out. The best designed of those websites include an online response form so that applicants don’t need to send a separate résumé by mail, e-mail, or fax. Applicants only need to fill in a résumé page and click the “Submit” button. Many commercial Internet recruitment service compa- nies—such as Monster.com, LinkedIn.com, ZipRecruiter.com, and CareerBuilder. com—also provide these services.
Aggressive job candidates are also using the Internet. They set up their own webpages to “sell” their job candidacy—frequently called websumés. When they learn of a possible job opening, they encourage potential employers to “Check me out on my website.” There, applicants have standard résumé information, supporting documentation, and sometimes a video in which they introduce themselves to potential employers.
Internet recruiting provides a low-cost means for most businesses to gain unprece- dented access to potential employees worldwide. For example, a job posted online for San Francisco–based Joie de Vivre Hospitality cost $50. Had a supervisor used the more traditional local paper advertisement, the same ad would have cost $2,000.3 It’s also a way to increase diversity and find people with unique talents. Job-posting services create subgroup categories for employers looking, for example, to find bilingual workers, female attorneys, or African-American engineers.
Finally, Internet recruiting won’t be merely the choice of those looking to fill high- tech jobs. Computer availability and Internet access combined with increasing computer savvy have opened the door to the use of online recruiting for all kinds of nontechnical jobs—from those paying thousands of dollars a week, to those paying minimum wage.
HOW DOES A SUPERVISOR HANDLE LAYOFFS? In the past decade, most large US corporations, as well as many government agencies and small businesses, have been forced to shrink the size of their workforce or restruc- ture their skill composition. Downsizing has become a relevant means of meeting the demands of a dynamic environment.
What are a supervisor’s downsizing options? Obviously, people can be “let go.” But other choices may be more beneficial to the organization. Exhibit 5-4 summarizes a supervisor’s major downsizing options. But keep in mind, regardless of the method chosen, employees may suffer. We will discuss this phenomenon for employees—both victims and survivors—later in this chapter.
IS THERE A BASIC PREMISE TO SELECTING JOB CANDIDATES? Once the recruiting effort has developed a pool of candidates, the next step in the employment process is to identify who is “best” qualified for the job. In essence, then, the selection process is a prediction exercise. It seeks to predict which applicants will be successful if hired. Successful in this case means performing well on the criteria the organization uses to evaluate its employees. In filling a network administrator position, for example, the selection process should be able to predict which applicants will be able to install, debug, and manage the organization’s computer network properly. For a position as a sales representative, it should predict which applicants will be effective
websumé A web page used as a résumé.
3M. Zall, “Internet Recruiting,” Strategic Finance, June 2000, 66; S. L. Thomas and K. Ray, “Recruiting and the Web: High-Tech Hiring,” Business Horizons, May/June 2000, 43; and M. Whitford, “Hi-Tech HR, Hotel,” Hotel and Motel Management, October 16, 2000, 49.
OBJECTIVE 5.4 Explain the importance of validity and reliability in selection.
selection process The hiring process, designed to expand the organization’s knowledge about an applicant’s background, abilities, and motivation.
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in generating high sales volumes. Consider, for a moment, that any selection decision can result in four possible outcomes. As shown in Exhibit 5-5, two of those outcomes would indicate correct decisions, but two would indicate errors.
A decision is correct (1) when the applicant was predicted to be successful (was accepted) and later proved to be successful on the job or (2) when the applicant was predicted to be unsuccessful (was rejected) and, if hired, would not have been able to do the job. In the former case, we have successfully accepted; in the latter case, we have successfully rejected. Problems occur, however, when we make errors by rejecting candidates who, if hired, would have performed successfully on the job (called reject errors) or by accepting those who subsequently perform poorly (accept errors). These problems are, unfortunately, far from insignificant.
A generation ago, reject errors meant only that the costs of selection would be increased because more candidates would have to be screened. Today, selection tech- niques that result in reject errors can open the organization to charges of employment discrimination, especially if applicants from protected groups are disproportionately rejected. Accept errors, on the other hand, have obvious costs to supervisors and their organizations, including the cost of training the employee, the costs generated or profits forgone because of the employee’s incompetence, and the cost of severance and the sub- sequent costs of further recruiting and selection screening. The major thrust of any selec- tion activity is therefore to reduce the probability of making reject errors or accept errors while increasing the probability of making correct decisions. We do this by using selection
activities that are both reliable and valid.
What Is Reliability? Reliability addresses whether a selection device measures the same thing consistently. For example, if a test is reli- able, any single individual’s score should remain fairly stable over time, assuming the characteristics the test is measuring also are stable. The importance of reliability should be self-evident. No selection device can be effec- tive if it is low in reliability. Using such a device would be the equivalent of weighing yourself every day on an erratic scale. If the scale is unreliable—randomly fluctuating, say,
reliability An indication of whether a test or device measures the same thing consistently.
Exhibit 5-5 Selection decision outcomes.
Selection Decision
L a te
r J o
b P
e rf
o rm
a n
ce
Successful
Unsuccessful
Accept Reject
Correct decision
Accept error
Correct decision
Reject error
Option Description
Firing Permanent involuntary termination
Layoffs Temporary involuntary termination; may last only a few days or extend to years
Attrition Not filling openings created by voluntary resignations or normal retirements
Transfers Moving employees either laterally or downward; usually does not reduce costs but can reduce intraorganizational supply– demand imbalances
Reduced workweeks Having employees work fewer hours per week, share jobs, or perform their jobs on a part-time basis
Early retirements Providing incentives to older and more-senior employees for retiring before their normal retirement date
Job sharing Having employees, typically two part-timers, share one full-time position
Exhibit 5-4 Downsizing options.
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ten to fifteen pounds every time you step on it—the results will not mean much. To be effective predictors, selection devices must possess an acceptable level of consistency.
What Is Validity? Any selection device that a supervisor uses—such as application forms, tests, interviews, or physical examinations—must also demonstrate validity. That is, there must be a proven relationship between the selection device used and some rel- evant measure. For example, a few pages ago, we introduced a firefighter applicant who uses a wheelchair. Because of the physical requirements of a firefighter’s job, someone who uses a wheelchair would be unable to pass the physical endurance tests. In that case, denying employment could be considered valid. But requiring the same physical endurance tests for the dispatching job would not be job related. Thus, the law prohibits supervisors from using any selection device that cannot be shown to be directly related to successful job performance. And that constraint goes for “entrance” tests as well; supervisors must be able to demonstrate that, once on the job, individuals with high scores on this test outperform individuals with low test scores. Consequently, the burden is on supervisors and their organizations to verify that any selection device used to screen applicants is related to job performance.
HOW EFFECTIVE ARE TESTS AND INTERVIEWS AS SELECTION DEVICES? Supervisors can use a number of selection devices to reduce accept and reject errors. The best-known devices include written tests, performance-simulation tests, and interviews. Let’s briefly review these devices, giving particular attention to the validity of each in predicting job performance. After we review them, we discuss when each should be used.
How Do Written Tests Serve a Useful Purpose? Typical written tests include tests of intelligence, aptitude, ability, and interest. Such tests have long been used as selection devices, although their popularity has run in cycles. Written tests were widely used for twenty years after World War II. Beginning in the late 1960s, however, they fell into disfavor. Written tests were frequently characterized as discriminatory, and many organizations could not validate that their written tests were job related. But since the late 1980s, written tests have made a comeback. Managers have become increasingly aware that poor hiring decisions are costly and that properly designed tests could reduce the likelihood of making such decisions. In addition, the cost of developing and validat- ing a set of written tests for a specific job has come down markedly.
What Are Performance-Simulation Tests? What better way is there to find out whether an applicant for a technical writing position at Microsoft can write technical manuals than to have him or her do it? The logic of this question has led to the expanding interest in performance-simulation tests. Undoubtedly, the enthusiasm for these tests lies in the fact that they are based on job analysis data, and therefore should more easily meet the requirement of job-relatedness than do written tests. Performance-simulation tests are made up of actual job behaviors rather than substitutes. The best-known performance- simulation tests are work sampling (a miniature replica of the job) and assessment centers (simulating real problems a candidate may face on the job). The former is suited to routine jobs; the latter to selecting managerial personnel.
What about Personality Profiles? Are there certain personality types that can be counted on to be more productive than others? And are there effective, reliable methods of selecting applicants who will perform well in the situations encountered on a particular job? Five factors of personality dimensions are identified by the Big Five model. They are the following:
Extroversion. Sociable, talkative, and assertive. Agreeableness. Good-natured, cooperative, and trustworthy.
validity A proven relationship between a selec- tion device and some relevant criterion.
OBJECTIVE 5.5 Describe the selection devices that work best with various kinds of jobs.
performance-simulation tests Selection devices based on actual job behaviors, work sampling, and assess- ment centers.
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Conscientiousness. Responsible, dependable, persistent, and achievement oriented. Emotional stability. Calm, enthusiastic, and secure. Openness to experience. Imaginative, artistically sensitive, and intellectual.
Relationships have been shown to exist between these personality dimensions and on-the-job performance. One study of professionals, police, managers, salespeople, and skilled and semiskilled workers has shown conscientiousness to be a predictor of job performance for these occupational groups. The other factors figure differently depend- ing on the occupational group and the situation.4
Is the Interview Effective? The interview, along with the application form, is an almost universal selection device. Few of us have ever gotten a job without one or more inter- views. The irony of this fact is that the value of the interview as a selection device has been the subject of considerable debate.5
Interviews can be reliable and valid selection tools, but too often, they are not. When interviews are structured and well organized, and when interviewers are held to common questioning, interviews are effective predictors.6 But those conditions do not characterize many interviews. The typical interview—in which applicants are asked a varying set of essentially random questions in an informal setting—often provides little in the way of valuable information.
All sorts of potential biases can creep into interviews if they are not well-struc- tured and standardized. To illustrate, a review of the research leads us to the following conclusions:
■■ Prior knowledge about the applicant will bias the interviewer’s evaluation. ■■ The interviewer tends to hold a stereotype of what represents a “good” applicant. ■■ The interviewer tends to favor applicants who share his or her own attitudes. ■■ The order in which applicants are interviewed will influence evaluations. ■■ The order in which information is elicited during the interview will influence evaluations. ■■ Negative information is given unduly heavier weight. ■■ The interviewer may make a decision concerning the applicant’s suitability within
the first four or five minutes of the interview. ■■ The interviewer may forget much of the interview’s content within minutes after
its conclusion. ■■ The interview is most valid in determining an applicant’s intelligence, level of moti-
vation, and interpersonal skills. ■■ Structured and well-organized interviews are more reliable than unstructured and
unorganized ones.7
4S. Robbins, M. Coulter and D. Decenzo, Fundamentals of Management, 10th edition (Upper Saddle River, NJ: Pearson Prentice Hall, 2017), 274. 5R. A. Posthuma, F. P. Morgeson, and M. A. Campion, “Beyond Employment Interview Validity: A Com- prehensive Narrative Review of Recent Research and Trends Over Time,” Personnel Psychology 55, no. 1 (Spring 2002), 1–81. 6A. I. Huffcutt, J. M. Conway, P. L. Roth, and N. J. Stone, “Identification and Meta-Analysis Assessment of Psychological Constructs Measured in Employment Interviews,” Journal of Applied Psychology 86, no. 5 (October 2001), 897–913; and A. I. Huffcutt, J. A. Weekley, W. H. Wiesner, T. G. Degroot, and C. Jones, “Comparison of Situational and Behavioral Description Interview Questions for Higher-Level Posi- tions,” Personnel Psychology 54, no. 3 (Autumn 2001), 619–644. 7See E. Hermelin and I. T. Robertson, “A Critique and Standardization of Meta-Analytic Coefficients in Personnel Selection,” Journal of Occupational and Organizational Psychology 73, no. 4 (September 2001), 253–277; C. H. Middendorf and T. H. Macan, “Note-Taking in the Employment Interview: Effects on Recall and Judgments,” Journal of Applied Psychology 87, no. 2 (April 2002), 293–303; D. Butcher, “The Interview Rights and Wrongs,” Management Today, April 2002, 4; and P. L. Roth, C. H. Can Iddekinge, A. I. Huffcutt, C. E. Eidson, and P. Bobko, “Corrections for Range Restriction in Structured Interview Eth- nic Group Differences: The Value May Be Larger than Researchers Thought,” Journal of Applied Psychol- ogy 87 (April 2002), 369–376.
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What can supervisors do to make interviews more valid and reliable? (See the “News Flash! The Realistic Job Preview.”) A number of suggestions have been made over the years. We list some in the section titled “Interviewing” at the end of this chapter.
THE REALISTIC JOB PREVIEW
NEWS FLASH!
Supervisors who treat the recruiting and hiring of employees as if the applicants must be sold on the job and exposed only to an organization’s positive characteristics set themselves up to have a work- force that is dissatisfied and prone to high turnover.
Every job applicant acquires, during the hir- ing process, a set of expectations about the com- pany and about the job for which he or she is inter viewing. When the information an applicant receives is excessively inflated, a number of things happen that have potentially negative effects on the company. First, mismatched applicants who would probably become dissatisfied with the job and quit soon would be less likely to withdraw from the search process. Second, the absence of accurate information builds unrealistic expectations. Con- sequently, the new employees are likely to become quickly dissatisfied—leading to premature resigna- tions. Third, new hires are prone to become disil- lusioned and less committed to the organization when they face the “harsh” realities of the job. In many cases, these individuals feel that they were duped or misled during the hiring process and, therefore, may become problem employees.
To increase job satisfaction among employees and reduce turnover, supervisors should provide a realistic job preview (RJP). An RJP includes both positive and negative information about the job
and the company. For example, in addition to the positive comments typically expressed in the inter- view, the candidate would be told of the downside of joining the company. He or she might be told that there are limited opportunities to talk to coworkers during work hours, that promotional advancement is slim, or that work hours fluctuate so erratically employees may be required to work during traditional off hours (nights and weekends). Applicants who have been given a more RJP hold lower and more realistic job expectations for the jobs they’ll be performing, and are better able to cope with the job and its frustrating elements. The result is fewer unexpected resignations by new employees.
For supervisors, realistic job previews offer a major insight into the selection process—that retaining good people is as important as hiring them in the first place. Presenting only the positive aspects of a job to a job applicant may initially entice him or her to join the organization, but it may be an affiliation that both parties quickly regret.
Source: Based on S. L. Premack and J. P. Wanous, “A Meta-Analysis of Realistic Job Preview Experiments,” Journal of Applied Psychology 70, no. 4 (November 1985), 706–720.
realistic job preview (RJP) A job interview that provides both posi- tive and negative information about the job and the company.
PREPARATION FOR THE INTERVIEW Prepare for an interview with an applicant by reviewing job descriptions to find lists of tasks required by the job and lists of skills and experience required for the position. You may then use the lists as a guide during the interview. By using the lists, you can prepare and conduct multiple structured interviews while being certain you asked the same questions of all applicants.
Remember that all interview questions should be job related—don’t ask if they’re not! You may be able to determine the candidate’s qualifications by stating the condi- tions or requirements of the job, then asking if the condition or requirement presents the candidate with a problem; this allows candidates to provide affirmative or negative responses without the necessity of providing details or specifics.
Remember to check federal, state, and local guidelines regarding employment regu- lations. You may wish to consult an attorney or the legal department of your organiza- tion before beginning the hiring process. Remember, you may inform the candidate that misleading statements or omissions of significant facts may be grounds for non-selection.
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INTERVIEW QUESTIONS YOU SHOULDN’T ASK During an interview, supervisors should never ask questions that:
■■ Identify applicants between forty and sixty-four years of age ■■ Inquire about US citizenship prior to hiring ■■ Identify applicant’s ancestry, place of birth, or native language ■■ Directly or indirectly relate to race or color ■■ Identify religious preference, holidays, or customs ■■ Reveal sex or gender ■■ Relate to education or training not required for the job ■■ Identify membership in nonprofessional clubs or organizations that are not job
related ■■ Reveal applicant’s family or marital status ■■ Regard child-care, children’s ages, or non-job-related areas ■■ Identify conditions of discharge from the military ■■ Identify security clearance level ■■ Relate to applicant’s credit history ■■ Identify height and weight if these factors do not affect ability to perform job ■■ Regard home ownership or rental status ■■ Relate to applicant’s arrest record ■■ Reveal names and addresses of relatives unless they are employed by the organization ■■ Inquire about pregnancy ■■ Regard disability-related issues until after a conditional job offer has been made
INTERVIEW QUESTIONS YOU SHOULD ASK During an interview supervisors may ask questions:
■■ Related to the applicant’s ability to speak English if it is required for the job ■■ Regarding academic, vocational, or professional education pertaining to knowledge,
skills, and abilities (KSAs) for the position ■■ Regarding membership in organizations if they are related to the job or KSAs for
the position ■■ Related to travel, unusual hours, or overtime required by the job ■■ Stating the type of security clearance required for the position ■■ Regarding applicant’s conviction for crimes ■■ Regarding applicant’s physical ability to perform specific job functions ■■ Probing attendance at previous employers as long as you do not refer to illness or
disability ■■ Identifying communication skills ■■ Demonstrating emotional maturity and behaviors ■■ Demonstrating decision-making ability ■■ Discussing applicant’s experience in preparation for the position ■■ Identifying appropriate behaviors for specific work-related situations8
8“Interview Skills for Supervisors: Finding the Best Match,” www.nps.gov/training/tel/Guides/Inter- view%20Skills_for_Supervisors_pg030405.pdf (accessed January 15, 2017); U.S. Equal Employment Opportunity Commission, http://www.eeoc.gov (accessed January 15, 2017); and S. Israel, Apr 14, 2012, “9 Tips on Conducting Great Interviews,” Forbes, http://www.forbes.com/sites/shelisrael/2012/04/14/8- tips-on-conducting-great-interviews/#112bc7da387a (accessed January 15, 2017).
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Orientation, Training, and Development If supervisors have done their recruiting and selecting properly, they should have hired competent individuals who can perform successfully. But successful performance requires more than possession of certain skills. New hires must be acclimated to the organization’s culture and be trained to do the job in a manner consistent with the orga- nization’s objectives. To achieve these ends, supervisors embark on two processes— orientation and training.
HOW DO YOU INTRODUCE NEW HIRES TO THE ORGANIZATION? Once a job candidate has been selected, he or she needs to be introduced to the job and organization. This introduction is called the new employee orientation or onboarding process. The major objectives of orientation are to reduce the initial anxiety all new employees feel as they begin a new job; to familiarize new employees with the job, the work unit, and the organization as a whole; and to facilitate the outsider–insider transi- tion. Job orientation expands on the information the employee obtained during the recruitment and selection stages. The new employee’s specific duties and responsibilities are clarified, as well as how his or her performance will be evaluated. This is also the time to rectify any unrealistic expectations new employees might hold about the job. Work-unit orientation familiarizes the employee with the goals of the work unit, makes clear how his or her job contributes to the unit’s goals, and includes introduction to his or her coworkers. Organization orientation informs the new employee about the orga- nization’s objectives, history, philosophy, procedures, and rules. This information should include relevant personnel policies such as work hours, pay procedures, overtime requirements, and benefits. A tour of the organization’s physical facilities is often part of the orientation.
Supervisors have an obligation to make the integration of the new employee into the organization as smooth and as free of anxiety as possible. Successful orientation,
OBJECTIVE 5.6 Identify various training methods.
orientation An expansion on information a new employee obtained during the recruit- ment and selection stages; an attempt to familiarize new employees with the job, the work unit, and the organization as a whole.
Comprehension Check 5-1
1. Employer action to make an active effort to recruit, select, and promote protected group members is called:
a. equal employment opportunity. b. effective supervision. c. human resource management. d. none of the above.
2. Which one of the following is not a traditional recruiting source? a. Internal searches b. Cyberspace recruiting c. Employee referrals d. Advertisements
3. Validity means: a. consistency of measurement. b. equal employment opportunity for protected group members. c. a proven relationship exists between a selection device and some relevant criterion. d. all of the above.
4. True or false? Interviewers tend to give more weight to negative information than to positive information from a job candidate.
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whether formal or informal, results in an outsider–insider transition that makes the new member feel comfortable and fairly well-adjusted, lowers the likelihood of poor work performance, and reduces the probability of a sur- prise resignation by the new employee only a week or two into the job.
WHAT IS EMPLOYEE TRAINING? On the whole, planes don’t cause airline accidents—people do. Most collisions, crashes, and other mishaps—nearly three-quarters of them—result from errors by the pilot or air traffic controller or from inadequate maintenance. These statistics illustrate the importance of training in the airline
industry. These maintenance and human errors could be prevented, or the frequency significantly reduced, by better employee training.
Employee training is a learning experience in that it seeks a relatively permanent change in employees such that their ability to perform on the job improves. Thus, train- ing involves changing skills, knowledge, attitudes, or behavior. This may mean changing what employees know; how they work; or their attitudes toward their jobs, coworkers, supervisors, and the organization. It has been estimated, for instance, that US business firms alone spend billions of dollars a year on formal courses and training programs to develop workers’ skills.9 Supervisors, for the most part, are responsible for deciding when employees need training and what form that training should take. Determining training needs typically involves generating answers to several questions (see Exhibit 5-6). The leading questions in Exhibit 5-6 suggest the kinds of signals that can warn a supervisor that training may be necessary. The more obvious ones are related directly to productivity—that is, they may indicate that job performance is declining. These indications may include actual decreases in production numbers, lower quality, more accidents, and higher scrap or rejection rates. Any of these outcomes might suggest that worker skills need to be fine-tuned. Of course, we are assuming the employee’s perfor- mance decline is in no way related to lack of effort. Supervisors, too, must also recognize that training may be required because of a “future” element. Changes that are being imposed on employees as a result of job design or a technological breakthrough also
require training.
How Are Employees Trained? Most train- ing takes place on the job. The prevalence of on-the-job training can be attributed to the simplicity of such methods and their usually lower cost. However, on-the-job training can disrupt the workplace and result in an increase in errors while learn- ing takes place. Also, some skill training is too complex to learn on the job. In such cases, it should take place outside the work setting.
What Are Some of the Typical Methods Used? Many different types of training methods are available. For the most part, however, we can classify them in two ways: on-the-job, or off-the-job. We have summa- rized the most popular training methods in Exhibit 5-7.
employee training Changing the skills, knowledge, atti- tudes, or behavior of employees. Deter- mination of training needs is made by supervisors.
Carlos E. Santa Maria/ShutterStock
How are most pilots trained? Through intensive flight-sim- ulation programs. Simulators let pilots actually experience a variety of situations—some of them life threatening—without having to suffer the potentially disastrous consequences of poor decisions. As a result, the pilots are exposed to a wide variety of events, most of which they will never have to deal with on the job. But if they do, they have been prepared.
Exhibit 5-6 Determining training needs.
Is there a need for training?
What employee behaviors are necessary for each jobholder
to complete his or her job tasks?
What job tasks must be completed to achieve these goals?
What are the organization’s goals?
What deficiencies, if any, do current employees have in
skills, knowledge, or abilities required to exhibit the
necessary job behaviors?
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How Can Supervisors Ensure That Training Is Working? It is easy to generate a new train- ing program, but if the training effort is not evaluated, it becomes possible to rationalize any employee-training efforts.
Can we generalize how training programs are typically evaluated? The following is probably generalizable across organizations: Several supervisors, possibly representa- tives from HRM, and a group of workers who have recently completed a training pro- gram are asked for their opinions. If the comments are generally positive, the program may get a favorable evaluation and the organization will continue it until someone decides, for whatever reason, that it should be eliminated or replaced.
The reactions of participants or managers, although easy to acquire, are the least valid; their opinions are heavily influenced by factors that may have little to do with the training’s effectiveness—such as difficulty, entertainment value, or personality charac- teristics of the instructor. However, trainees’ reactions to the training may in fact pro- vide feedback on how worthwhile the participants considered the training. Beyond general reactions, however, training must also be evaluated in terms of how much the participants learned, how well they are using their new skills on the job (did their behav- ior change?), and whether the training program achieved its desired results (reduced turnover, increased customer service, etc.)9
9See, for example, R. E. Catalano and D. L. Kirkpatrick, “Evaluating Training Programs—The State of the Art,” Training and Development Journal 22, no. 5 (May 1968), 2–9.
Exhibit 5-7 Typical training methods.
On-the-job training
Apprenticeship
Description
A time—typically two to five years—when an individual is under the guidance of a master worker to learn specific skills.
Job instruction training
A systematic approach to on-the-job training consisting of preparing the trainees by telling them about the job, presenting the instructions, having the trainees try the job to demonstrate their understanding, and placing trainees into the job under the leadership of a resource person.
Off-the-job training
Classroom lectures Lectures designed to communicate specific interpersonal, technical, or problem-solving skills.
Multimedia Using various media productions to demonstrate specialized skills and deliver specific information.
Simulation exercises Training that occurs by actually performing the work. This may include case analysis, experiential exercises, roleplay, or group decision making.
Computer-based training
Simulating the work environment by programming a computer to imitate some of the realities of the job.
Vestibule training Training on actual equipment used on the job, but conducted away from the actual work setting—a simulated workstation.
Programmed instruction
Condensing training materials into highly organized, logical sequences. May include computer methods, interactive video disks, or virtual reality simulations.
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Performance Appraisals It is important for supervisors to get their employees to behave in ways that the orga- nization considers desirable. How do managers ensure that employees are performing as they are supposed to? In organizations, the formal means of assessing the work of employees is through a systematic performance appraisal process. We will look at this topic in depth in Chapter 12.
Compensation and Benefits You open the newspaper and the following job advertisement grabs your attention. “Wanted: Hardworking individual who is willing to work sixty hours a week in a less-than-ideal environment. The job pays no money, but gives you the opportunity to say ‘I’ve done that.”’ Does this sound intriguing to you? Probably not! In fact, although there are exceptions, most of us work for money. What our jobs pay and what benefits we receive fall under the heading of compensation and benefits. Deter- mining what pay and benefits will be is by no means easy—and it’s usually out of the hands of the immediate department supervisor. Although the supervisor will rarely set the wage rate, it’s important to have an understanding of where the wage rate came from.
HOW ARE PAY LEVELS DETERMINED? How does an organization decide who gets paid $14.65 an hour and who receives $325,000 a year? The answer lies in compensation administration. The goals of compensation administration are to design a cost-effective pay structure that will attract and retain competent employees, and to provide an incentive for these individuals to exert high energy levels at work. Compensation administration also attempts to ensure that whatever pay levels are determined will be perceived as fair by all employees. Fair- ness means the established pay levels are adequate and consistent with the demands and requirements of the job. Therefore, the primary determination of pay is the kind of job an employee performs. Different jobs require different kinds and levels of skills, knowl- edge, and abilities—and these vary in their value to the organization. So, too, do the responsibility and authority held in certain positions. In short, the higher the skills, knowledge, and abilities—and the greater the authority and responsibility—the higher the pay.
Although skills, abilities, and the like directly affect pay levels, other factors may come into play. Pay levels may be influenced by the kind of business, the environ- ment surrounding the job, geographic location, and employee performance levels and seniority. For example, private-sector jobs typically provide higher rates of pay than comparable positions in public and not-for-profit jobs. Employees who work under hazardous conditions (say, bridge builders operating two hundred feet in the air), work unusual hours (e.g., the overnight shift), or work in geographic areas where the cost of living is higher (e.g., New York City versus Tucson, Arizona) are typically more highly compensated. Likewise, employees who have been with an organization for a long time may have had a salary increase each year.
Irrespective of these factors, one other factor is most critical—the organization’s compensation philosophy. Some organizations, for instance, don’t pay employees any more than they have to. In the absence of a union contract that stipulates wage levels, those organizations have to pay only minimum wage for most of their jobs. On the other hand, some organizations are committed to paying their employees at or above area wage levels to emphasize they want to attract and keep the best pool of talent.
OBJECTIVE 5.7 Describe the goals of compensation administration and factors that affect wage structures.
compensation administration The process of determining a cost- effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard, and ensure that pay levels will be perceived as fair.
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WHY DO ORGANIZATIONS OFFER EMPLOYEE BENEFITS? When an organization designs its overall compensation package, it has to look farther than just an hourly wage or annual salary. It has to take into account another element: employee benefits. Employee benefits are nonfinancial rewards that are designed to enrich employees’ lives. They have grown in importance and variety over the past several decades. Once viewed as “fringes,” today’s benefit packages reflect great thought in an effort to provide something that each employee values.
The benefits offered by an organization vary widely in scope. Most organizations are legally required to provide Social Security and workers’ and unemployment com- pensation, but organizations also provide an array of benefits such as paid time off from work, life and disability insurance, retirement programs, and health insurance. The costs of some of these, such as retirement and health insurance benefits, are often paid by both the employer and the employee.
Current Issues in Human Resource Management We conclude this chapter by looking at several human resource issues facing today’s supervisors. These are dealing with workforce diversity, workplace romance, sexual harassment, and layoff-survivor sickness.
WORKFORCE DIVERSITY We discussed the changing makeup of the workforce previously in this book. Let’s now consider how workforce diversity will affect such basic HRM concerns as recruitment, selection, and orientation.
Improving workforce diversity requires supervisors to widen their recruiting net. For example, the popular practice of relying on current employee referrals as a source of new job applicants tends to result in candidates who have similar characteristics to present employees. So, supervisors have to look for applicants in places where they haven’t typically looked before. To increase diversity, supervisors are increasingly turn- ing to nontraditional recruitment sources. These include women’s job networks, over- fifty clubs, urban job banks, disabled people’s training centers, ethnic newspapers, and LGBTQ-rights organizations. This type of outreach should enable the organization to broaden its pool of applicants.
Once a diverse set of applicants exists, efforts must be made to ensure that the selec- tion process does not discriminate. Moreover, applicants need to be made comfortable with the organization’s culture and be made aware of the supervisor’s desire to accom- modate their needs.
Finally, orientation can be difficult for women and minorities. Many organizations today, such as IBM and Hewlett-Packard, provide special workshops to raise diversity consciousness among current employees, as well as programs for new employees that focus on diversity issues. The thrust of these efforts is to increase individual understand- ing and appreciation of the differences each of us brings to the workplace.
THE WORKPLACE: REASONABLE GROUNDS FOR ROMANCE? More and more workers are displaying high motivation to engage in and develop their careers; the consequent result is the incorporation of their occupation with pleasure and other aspects of daily life. In an attempt to maintain work–life balance, interpersonal socialization and attraction among colleagues has increasingly developed into the norm, particularly in terms of romance relationships. With more than 43 percent of employees seeking to “meet their mate” in the workplace, supervisors must work with human resource professionals to develop new policies and procedures for dealing with these
employee benefits Nonfinancial rewards designed to enrich employees’ lives.
OBJECTIVE 5.8 Explain what is meant by the terms sexual harassment and layoff- survivor sickness.
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to three hundred US women for the rampant sexual harass- ment to which they were exposed.13 But it’s more than just jury awards. Sexual harassment results in millions lost in absenteeism, low productivity, and turnover.14 Further- more, sexual harassment is not just a U.S. phenomenon. It’s a global issue. For instance, sexual harassment charges have been filed against employers in such countries as Japan, Australia, the Netherlands, Belgium, New Zealand, Swe- den, Ireland, and Mexico.15 Although discussions of sexual harassment cases often focus on the large awards granted by a court, there are other concerns for supervisors. Sexual harassment creates an unpleasant work environment for organization members and undermines their ability to per- form their job. But just what is sexual harassment?
Sexual harassment can be regarded as any unwanted activity of a sexual nature that affects an individual’s employment. It can occur between members of the opposite sex or of the same sex—between employees of the organi- zation or an employee and a nonemployee. Much of the problem associated with sexual harassment is determining what constitutes this illegal behavior. In 1993, the EEOC cited three situations in which sexual harassment can occur. These are instances in which verbal or physical conduct toward an individual:
1. creates an intimidating, offensive, or hostile environment;
2. unreasonably interferes with an individual’s work; or 3. adversely affects an employee’s employment
opportunities.
For many organizations and their supervisors, it’s the offensive or hostile environment issue that is problematic. Just what constitutes such an environment? For instance, does sexually explicit language in the office create a hostile environment? How about off-color jokes? Pictures of people totally undressed? The answer to any of these is: It could! It depends on the people in the department, and the environment in which they work. What does this tell us? We all must be attuned to what makes fellow employees uncomfortable—and if we don’t know, then we should ask!
If sexual harassment brings with it potential costs to the organization, what can supervisors do for themselves and their organizations? The courts typically want to know two things: (1) Did the supervisor know about—or should the supervisor have known about—the alleged behavior? (2) What was done to stop it? With the number and dollar amounts of the awards against organizations today, there is even a greater need for supervisors to educate their employees on sexual harassment matters. Further- more, in June 1998, the Supreme Court ruled that sexual harassment may have occurred even if the employee did not experience any “negative” job repercussions.16 The Supreme
12U.S. Equal Employment Opportunity Commission, “Charges Alleging Sexual Harassment FY 2010 - FY 2015,” EEOC, https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm (accessed January 15, 20017).
13N. F. Foy, “Sexual Harassment Can Threaten Your Bottom Line,” Strategic Finance, August 2000, 56–57; and “Federal Monitors Find Illinois Mitsubishi Unit Eradicating Harassment,” Wall Street Journal, September 7, 2000, A-8. 14L. J. Munson, C. Hulin, and F. Drasgow, “Longitudinal Analysis of Dispositional Influences and Sexual Harassment: Effects on Job and Psychological Outcomes,” Personnel Psychology, Spring 2000, 21. 15See, for instance, G. L. Maatman, Jr., “A Global View of Sexual Harassment,” HR Magazine, July 2000, 151–158.
sexual harassment Anything of a sexual nature that is required for getting a job, has an employment consequence, or creates an offensive or hostile environment, including sexually suggestive remarks, unwanted touching, sexual advances, requests for sexual favors, and other verbal and physical conduct of a sexual nature.
16See, for instance, P. W. Dorfman, A. T. Cobb, and R. Cox, “Investigations of Sexual Harassment Allega- tions: Legal Means Fair—Or Does It?” Human Resource Management 39, no. 1 (Spring 2000), 33–39.
risky relationships. When romance relationships were taboo in the workplace, issues such as sexual harassment, favoritism, and potential retaliation were less common con- cerns that needed to be addressed. However, as non-platonic relationships continue to develop, supervisors and human resource experts have reacted by taking accountability and developing a framework for dealing with such situations. According to a survey conducted by the Society for Human Resource Management (SHRM), only 20 percent of HR departments had verbal or written policies regarding workplace romance in 2005. More recent studies show those numbers have since more than doubled to 42 percent.10
HR professionals have developed several alternatives for supervisors responding to, and dealing with, surfacing issues related to workplace romance. Many of the conse- quences to workers are contingent on the strictness of policies on romance, as well as the situation occurring between employees. SHRM research shows that 99 percent of organizations implementing policies regarding workplace romance forbid direct rela- tionships between superiors and subordinates. At the same time, organizations recognize the difficulty in prohibiting relationships among employees of the same rank. Therefore, supervisors and HR staff may choose different options to deal with the romance and avoid legal allegations. Evident sexual interaction or physical contact during working hours likely would result in termination of both employees (20 percent). Often, to pre- vent romantic behavior and the establishment of a relationship, one employee may be transferred to a different department (34 percent). Occasionally, HR professionals in conjunction with supervisors may choose to implement a “love contract,” which indi- cates that the relationship is consensual, and sets parameters to avoid legal action if the relationship goes awry (21 percent).11
Many organizations fear the involvement of supervisors and HR professionals in workplace romance may cross ethical and moral lines, but at the same time, these professionals must take responsibility to prevent negative consequences of romance. Supervisors must learn to respond appropriately and consistently to office gossip and concerns regarding apparent relationships between employees of the same rank, as well as situations regarding a developing relationship between a superior and a subordinate.
WHAT IS SEXUAL HARASSMENT? Sexual harassment is a serious issue in both public- and private-sector organizations. On average, more than 7,300 complaints were filed each year from 2010 through 2015 with the Equal Employment Opportunity Commission (EEOC).12 Not only have settle- ments in these cases incurred a substantial cost to the companies in terms of litigation, but also it is estimated that sexual harassment is the single biggest financial risk facing companies today—and can result in a more than 30 percent decrease in a company’s stock price. At Mitsubishi, for example, the company paid out more than $34 million
10See F. J. Cavico, M. Samuel, and B. G. Mujtaba, “Office Romance: Legal Challenges and Strategic Impli- cations,” International Journal of Management, IT and Engineering, 2 (8, August 2012), 10–35, http:// www.ijmra.us/project%20doc/IJMIE_AUGUST2012/IJMRA-MIE1479.pdf (accessed January 15, 2017); S. Kumar, “Managing Workplace Romance: An Emerging Challenge for Human Resource Leaders in Cor- porate World,” National Conference on Emerging Challenges for Sustainable Business 2012 (June 2012), 954–964, http://domsiitr.minddevicetech.com/allpaper/Managing%20Workplace%20Romance_Suren- dra_HRM002.pdf (accessed February 8, 2014); D. Wilkie, “Forbidden Love: Workplace-Romance Policies Now Stricter,” SHRM.org, September, 24, 2013, http://www.shrm.org/hrdisciplines/employeerelations/ articles/pages/forbidden-love-workplace-romance-policies-stricter.aspx (accessed January 15, 2017); and Press Release, “Office Romance Is Here to Stay, but How Employers Deal with It Is Changing,” SHRM. org, September, 24, 2013, http://www.shrm.org/about/pressroom/pressreleases/pages/officeromancesurvey. aspx (accessed January 15, 2017). 11Ibid.
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to three hundred US women for the rampant sexual harass- ment to which they were exposed.13 But it’s more than just jury awards. Sexual harassment results in millions lost in absenteeism, low productivity, and turnover.14 Further- more, sexual harassment is not just a U.S. phenomenon. It’s a global issue. For instance, sexual harassment charges have been filed against employers in such countries as Japan, Australia, the Netherlands, Belgium, New Zealand, Swe- den, Ireland, and Mexico.15 Although discussions of sexual harassment cases often focus on the large awards granted by a court, there are other concerns for supervisors. Sexual harassment creates an unpleasant work environment for organization members and undermines their ability to per- form their job. But just what is sexual harassment?
Sexual harassment can be regarded as any unwanted activity of a sexual nature that affects an individual’s employment. It can occur between members of the opposite sex or of the same sex—between employees of the organi- zation or an employee and a nonemployee. Much of the problem associated with sexual harassment is determining what constitutes this illegal behavior. In 1993, the EEOC cited three situations in which sexual harassment can occur. These are instances in which verbal or physical conduct toward an individual:
1. creates an intimidating, offensive, or hostile environment;
2. unreasonably interferes with an individual’s work; or 3. adversely affects an employee’s employment
opportunities.
For many organizations and their supervisors, it’s the offensive or hostile environment issue that is problematic. Just what constitutes such an environment? For instance, does sexually explicit language in the office create a hostile environment? How about off-color jokes? Pictures of people totally undressed? The answer to any of these is: It could! It depends on the people in the department, and the environment in which they work. What does this tell us? We all must be attuned to what makes fellow employees uncomfortable—and if we don’t know, then we should ask!
If sexual harassment brings with it potential costs to the organization, what can supervisors do for themselves and their organizations? The courts typically want to know two things: (1) Did the supervisor know about—or should the supervisor have known about—the alleged behavior? (2) What was done to stop it? With the number and dollar amounts of the awards against organizations today, there is even a greater need for supervisors to educate their employees on sexual harassment matters. Further- more, in June 1998, the Supreme Court ruled that sexual harassment may have occurred even if the employee did not experience any “negative” job repercussions.16 The Supreme
12U.S. Equal Employment Opportunity Commission, “Charges Alleging Sexual Harassment FY 2010 - FY 2015,” EEOC, https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm (accessed January 15, 20017).
13N. F. Foy, “Sexual Harassment Can Threaten Your Bottom Line,” Strategic Finance, August 2000, 56–57; and “Federal Monitors Find Illinois Mitsubishi Unit Eradicating Harassment,” Wall Street Journal, September 7, 2000, A-8. 14L. J. Munson, C. Hulin, and F. Drasgow, “Longitudinal Analysis of Dispositional Influences and Sexual Harassment: Effects on Job and Psychological Outcomes,” Personnel Psychology, Spring 2000, 21. 15See, for instance, G. L. Maatman, Jr., “A Global View of Sexual Harassment,” HR Magazine, July 2000, 151–158.
sexual harassment Anything of a sexual nature that is required for getting a job, has an employment consequence, or creates an offensive or hostile environment, including sexually suggestive remarks, unwanted touching, sexual advances, requests for sexual favors, and other verbal and physical conduct of a sexual nature.
16See, for instance, P. W. Dorfman, A. T. Cobb, and R. Cox, “Investigations of Sexual Harassment Allega- tions: Legal Means Fair—Or Does It?” Human Resource Management 39, no. 1 (Spring 2000), 33–39.
kzenon/123RF.com
Is the action of this supervisor sexual harassment? It is if it makes the employee feel that such action is creating an offen- sive work environment.
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Court’s decision in this case indicates that “harassment is defined by the ugly behavior of the supervisor, not by what happened to the worker subsequently.”17
Finally, whenever involved in a sexual harassment matter, a supervisor must remem- ber that the harasser may have rights, too. This means that no action should be taken against someone until a thorough investigation has been conducted. Furthermore, the results of the investigation should be reviewed by an independent and objective indi- vidual before any action against the alleged harasser is taken. Even then, the harasser should be given an opportunity to respond to the allegation and have a disciplinary hear- ing if desired. Additionally, an avenue for appeal should exist for the alleged harasser— an appeal heard by someone in a higher level of management, who is not associated with the case.
HOW DO “SURVIVORS” RESPOND TO LAYOFFS? As we discussed in Chapter 2, one of the significant organizational trends in the past decade has been organizational downsizing. Many organizations have done a fairly good job of helping layoff victims by offering a variety of job-help services, psychologi- cal counseling, support groups, severance pay, extended health insurance benefits, and detailed communications. Although some affected individuals react negatively to being laid off (the worst cases involve returning to the separating organization and committing some form of violence), the assistance offered reveals that the organization does care about its former employees. Unfortunately, little has been done for those who have been left behind and have the task of keeping the organization going or even of revitalizing it.
It may surprise you to learn that both victims and survivors experience feelings of frustration, anxiety, and loss.18 But layoff victims get to start over with a clean slate and a clear conscience. Survivors don’t. A new syndrome seems to be popping up in more and more departments across organizations: layoff-survivor sickness. It is a set of attitudes, perceptions, and behaviors of employees who remain after involuntary employee reductions. Symptoms include job insecurity, perceptions of unfairness, guilt, depression, stress from increased workloads, fear of change, loss of loyalty and com- mitment, reduced effort, and an unwillingness to do anything beyond the required minimum.
To address this survivor syndrome, supervisors may want to provide opportuni- ties for employees to talk to counselors about their guilt, anger, and anxiety. Group discussions can also provide an opportunity for the “survivors” to vent their feelings. Some organizations have used downsizing efforts as the spark to implement increased employee-participation programs such as empowerment and self-managed work teams. In short, to keep morale and productivity high, every attempt should be made to ensure that individuals who are still working in the organization know that they are a valuable and much-needed resource.
Here are eight practical tips supervisors can give to employees to help them over- come layoff-survivor sickness:
1. Remain calm and overcome panic and anxiety by developing a personal and profes- sional plan for what to do in case of a layoff.
2. Recognize that survivor guilt is normal and it won’t help to deny or internalize the pain, so be prepared to grieve the loss of colleagues and a personal sense of stability.
3. Talk it out and remember that keeping grief and frustration bottled up is a recipe for trouble, and it’s not a sign of weakness to vent personal feelings.
17W. L. Kosanovich, J. L. Rosenberg, and L. Swanson, “Preventing and Correcting Sexual Harassment: A Guide to the Ellerth/Faragher Affirmative Defense,” Employee Relations Law Journal 28, no. 1 (Summer 2002), 79–99; and Milton Zall, “Workplace Harassment and Employer Liability,” Fleet Equipment, Janu- ary 2000, B1. 18P. P. Shah, “Network Destruction: The Structural Implications of Downsizing,” Academy of Manage- ment Journal 43, no. 1 (February 2002), 101–112.
layoff-survivor sickness A set of attitudes, perceptions, and behaviors of employees who survive involuntary staff reductions.
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4. Be honest and efficient at work and keep in mind that layoff survivors usually end up with heavier workloads, so it may be best to eliminate distractions from the work environment and schedule meetings rather than discuss work issues spontaneously with colleagues who stop by.
5. Unhook self-esteem from the company by breaking organizational codependence and finding a sense of value and purpose in a profession rather than in the company.
6. Become empowered by developing transferrable skills and being proactive about professional development.
7. Manage stress by practicing stress-management techniques after hours and keeping life in balance.
8. Maintain perspective by remembering that life is not the job, and if layoff-survivor sickness is incapacitating or resulting in dramatic work overload with no respite in sight, quit the job.19
19D. M. Noer, Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations (San Francisco: Jossey Bass, 2009); M. Malugani, “Coping with Layoff Survivor Sickness,” Monster, May 9, 2011, https://www.monster.com/career-advice/article/layoff-survivor-sickness (accessed January 15, 2017).
Comprehension Check 5-2
5. The process of determining a cost-effective pay structure is called:
a. compensation administration. b. financial reward package. c. human resource management. d. human resource inventory.
6. Nonfinancial rewards designed to enrich employees’ lives are called:
a. compensation administration. b. legally required perks. c. perquisites. d. employee benefits.
7. Which of the following situations can lead toward sexual harassment?
a. Something of a sexual nature creates an intimidating or offensive work environment. b. Something of a sexual nature interferes with an individual’s work. c. Something of a sexual nature adversely affects an employee’s employment opportunities. d. All of the above are matters that can lead to sexual harassment.
8. True or false? Those left in an organization after other workers have been laid off often experience similar feelings of frustration, anxiety, and loss.
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proven relationship exists between it and relevant job criteria.
5. Describe the selection devices that work best with various kinds of jobs. Selection devices must match the job in question. Work sampling works best with low-level jobs. Assessment centers work best for man- agerial positions. The validity of the interview as a selection device increases at progressively higher levels of management.
6. Identify various training methods. Employee training can be on-the-job or off-the-job. Popular on-the-job methods include job rotation, understudying, and apprenticeships. The more popular off-the-job meth- ods are classroom lectures, films, and simulation exercises.
7. Describe the goals of compensation administration and factors that affect wage structures. Compensa- tion administration attempts to ensure that whatever pay levels are determined will be perceived as fair by all employees. Fairness means that the established lev- els of pay are adequate and consistent for the demands and requirements of the job. Therefore, the primary determination of pay is the kind of job an employee performs.
8. Explain what is meant by sexual harassment and layoff-survivor sickness. Sexual harassment is any unwanted activity of a sexual nature that affects an individual’s employment—such as creating a hostile environment, interfering with work, or adversely affecting one’s employment opportunities. Layoff- survivor sickness represents a set of attitudes, percep- tions, and behaviors of employees who remain in the organization after involuntary employee reductions.
1. Describe the human resource management pro- cess. The human resource management (HRM) pro- cess seeks to staff the organization and to sustain high employee performance through strategic human resource planning, recruitment or downsizing, selec- tion, orientation, training, performance appraisal, compensation and benefits, and safety and health and by dealing with contemporary issues in HRM.
2. Discuss the influence of government regulations on human resource decisions. Since the mid-1960s, the US government has greatly expanded its influence over HRM decisions by enacting new laws and regu- lations. Because of the government’s effort to provide equal employment opportunities, management must ensure that key HRM decisions—such as recruitment, selection, training, promotions, and terminations— are made without regard to race, sex, religion, age, color, national origin, or disability. Financial penalties can be imposed on organizations that fail to follow these laws and regulations.
3. Contrast recruitment and downsizing options. Recruit- ment seeks to develop a pool of potential job can- didates. Typical sources include an internal search, advertisements, employee referrals, employment agencies, school placement centers, and temporary help services. Downsizing typically reduces the labor supply within an organization through options such as firing, layoffs, attrition, transfers, reduced work- weeks, early retirements, and job sharing.
4. Explain the importance of validity and reliability in selection. All HRM decisions must be based on fac- tors or criteria that are both reliable and valid. If a selection device is not reliable, it cannot be assumed to be a consistent measure. If a device is not valid, no
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
5-3. What are the major problems of the interview as a selection device?
5-4. What is the relationship among selection, recruit- ment, and job analysis?
5-1. How does HRM affect all supervisors? 5-2. Contrast reject errors and accept errors. Which one
is most likely to open a supervisor to charges of discrimination? Why?
COMPREHENSION: Review and Discussion Questions
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5-5. Compare and contrast orientation and employee training.
5-6. Should a supervisor have the right to choose employees without government interference in the hiring process? Explain your position.
5-7. What constitutes sexual harassment? Describe how supervisors and their companies can minimize the occurrences of sexual harassment in the workplace.
5-8. Why should supervisors be concerned with diver- sity in the workplace? What special HRM issues does diversity raise for them?
5-9. “Victims of downsizing are not those employees who were let go. Rather, the victims are the ones who have kept their jobs.” Do you agree or dis- agree with this statement? Defend your position.
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DOWNACROSS
1. nonfinancial rewards designed to enrich employees’ lives 4. determining a cost-e�ective pay structure 6. a selection device based on actual job behaviors 8. a web-based résumé 9. a database of employee skills, knowledge, and abilities 13. a formal introduction to the organization 14. assessing current employee resources and determining future employee needs 15. anything of a sexual nature that is required for getting or keeping a job, or one that creates an o�ensive work environment 16. making an e�ort to recruit, train, and promote minorities
2. a means of changing the skills, attitudes, or behavior of employees 3. the process of finding, hiring, training, and keeping employees 5. an employment interview that reveals both positive and negative aspects about the job and the company 7. a means of determining who is the best candidate for a job opening 10. measuring consistently 11. showing a relationship between a selection device and some relevant criterion 12. the process of locating, identifying, and attracting capable applicants
KEY CONCEPT CROSSWORD
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Developing Your Supervisory Skills
• Am I Experiencing Work/Family Conflict? Finally, after you complete any self-assessment, we sug- gest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
GETTING TO KNOW YOURSELF
number of overdue and uncollected accounts that you had thought should be written off as a loss.
Lisa Parks: White female, age thirty-five. Lisa has been with your company seven years. Four years ago, Lisa was in an automobile accident while traveling on business to a customer’s location. As a result of the accident, she is disabled and now uses a wheelchair. Rumors have it that she is about to receive several million dollars from the insurance company of the driver that hit her. Her performance the last two years has been above average. She has a bachelor’s degree in accounting and specializes in computer information systems.
Charles Thomas: African-American male, age forty-three. Charles just completed his joint master’s degree in taxation and law, and recently passed the bar exam. He has been with the department the past four years. His evaluations have been good to above average. Five years ago, Charles won a lawsuit against your company for discriminating against him in a promo- tion to a supervisory position. Rumor is now, with his new degree, Charles is actively pursuing another job outside the company.
Given these five brief descriptions, make a recommen- dation on which two employees you will suggest to your boss be laid off. Discuss any other options that you feel can be used to meet the requirement of downsizing by two employees without resorting to layoffs. Discuss what you will do to (A) assist the two individuals who have been let go and (B) assist the remaining three employees. Then, in a group of three to five students, seek consensus on the question of who gets laid off. Be prepared to defend your actions.
5-10. An Experiential Exercise: Laying Off Workers Every supervisor, at some point in his or her career, is likely to be faced with the difficult task of laying off em- ployees. Assume you are the supervisor in the account- ing department of a 750-member organization. You have been notified by top management that you must reduce your staff by two individuals. The following are some data about your five employees:
Janet McGraw: African American female, age thirty-six. Janet has been employed with your company for five years, all in the accounting department. Her evalua- tions over the past three years have been outstanding and above average. Janet has an MBA from a top-25 business school. She has been on short-term disability the past few weeks following the birth of her second child and is expected to return to work in twenty weeks.
Bill Keeney: White male, age forty-nine. Bill has been with you for four months and has eleven years of experi- ence in the company in payroll. He has an associate degree in business administration, and bachelor’s and master’s degrees in accounting. He’s also a CPA. Bill’s performance evaluations over the past three years in the payroll department have been average, but he did save the company $150,000 after he made a sugges- tion regarding the use of electronic time sheets.
José Melendez: Hispanic male, age thirty-one. José has been with the company almost four years. His evalu- ations over the past three years in your department have been outstanding. He is committed to getting the job done and devoting whatever it takes. He has also shown initiative by taking job assignments that no one else wanted. Additionally, he has recovered a
BUILDING A TEAM
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weather—you give the candidate time to adjust to the interview setting. By providing a preview of topics to come, you are giving the candidate an “agenda.” This helps the candidate begin framing what he or she will say in response to your questions.
STEP 5: Ask your questions and listen carefully to the applicant’s answers. Select follow-up questions that naturally flow from the answers given. Focus on the responses as they relate to information you need to ensure that the candidate meets your job requirements. Any uncertainty you may still have requires a follow-up question to probe further for the information.
STEP 6: Close the interview by telling the applicant what is going to happen next. Applicants are anxious about the status of your hiring decision. Be up-front with the candidate regarding others who will be inter- viewed and the remaining steps in the hiring process. If you plan to make a decision in two weeks or so, let the candidate know what you intend to do. In addi- tion, tell the applicant how you will let him or her know about your decision.
STEP 7: Write your evaluation of the applicant while the interview is still fresh in your mind. Don’t wait until the end of your day, after interviewing several candidates, to write your analysis of a candidate. Memory can fail you! The sooner you complete your write-up after an interview, the better chance you have for accurately recording what occurred in the interview.
Every supervisor needs to develop his or her skills at in- terviewing. The following list highlights the key behav- iors associated with this skill.
STEPS IN APPLYING THE SKILL
STEP 1: Review the job description and job specifica- tion. Reviewing pertinent information about the job provides valuable information about what you will assess the candidate on. Furthermore, relevant job requirements help eliminate interview bias.
STEP 2: Prepare a structured set of questions you want to ask all applicants for the job. By having a set of prepared questions, you ensure that the informa- tion you wish to elicit is attainable. Furthermore, by asking similar questions, you are able to better com- pare all candidates’ answers against a common base.
STEP 3: Before meeting a candidate, review his or her application form and résumé. Doing so helps you to create a complete picture of the candidate in terms of what is represented on the résumé or application and what the job requires. You will also begin to identify areas to explore in the interview. That is, areas that are not clearly defined on the résumé or application, but that are essential for the job, will become a focal point in your discussion with the candidate.
STEP 4: Open the interview by putting the applicant at ease and by providing a brief preview of the topics to be discussed. Interviews are stressful for job candi- dates. By opening with small talk—such as about the
INTERVIEWING
5-12. Go to the Equal Employment Opportunity Commission (EEOC) website at www.eeoc.gov. Research the process one must follow to file an EEOC charge. Also, review the sexual harassment data and summary statistics the EEOC collects. Identify the number of cases filed during the past three years in which data have been kept, how many of the cases were settled, and the amount of the monetary benefits awarded.
5-11. Visit your campus career center and make an appointment with a career counselor. During your meeting, ask the counselor for insight on how to succeed in interviews. Focus specifically on what sorts of things campus recruiters are looking for today, how you should prepare for the interview, and what kinds of questions you can expect to get in the interview. Once your appointment is com- pleted, provide a three- to five-page summary of the interview, highlighting how the information can be useful for you in a future job search.
COMMUNICATING EFFECTIVELY
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would you respond to other employees’ uneasiness, while still maintaining an ethical stance toward the situation? Explain.
5-15. Upon acceptance of employment, should new hires be required to sign and agree to a contract to keep all relationships in the workplace platonic? If so, what consequences would result from breaking this upfront contract?
■➤ Case 5-B: Attracting the Perfect Candidate Attracting and selecting the right talent is critical to a com- pany’s success. For tech companies, the process is even more critical, since it’s the knowledge, skills, and abilities of their employees that determines these companies’ effi- ciency, innovation, and, ultimately, financial achievements. So, how do companies like Google and Facebook, and even IBM and Microsoft, attract the talent they need?20 As you’ll see, these companies use some unique approaches.
Modis, a global provider of IT staffing and recruiting, has an interesting philosophy about searching for talented tech types. As pressure has mounted on businesses to find qualified employees, the search for the “perfect” candi- date has become increasingly competitive. This company calls its search for the perfect candidate “the quest for the ‘purple squirrel.”’ Sometimes, you just have to realize that, like the purple squirrel, the “perfect” candidate isn’t available or doesn’t even exist. But that doesn’t mean you don’t try to find the best available talent.
For “mature” tech companies like IBM, Microsoft, and Hewlett-Packard (H-P), the challenge can be especially difficult since they don’t have the allure of startups or the younger, “sexier” tech companies. So these businesses have to really step up their game. Take IBM, for instance. After its Watson computer beat two former Jeopardy champions in a televised match, the company hauled the machine to Carnegie Mellon, a top school, where students got a chance to challenge the computer. IBM’s goal was to lure some of those students to consider a career at IBM. H-P is using the pizza party/tech talk approach at various schools, trying to lure younger students before other tech companies and startups snatch them away. Microsoft,
20“Digital Report: Tug-of-War for Digital Talent,” Campaign Asia- Pacific, June 2012, 12; N. Blacksmith and Y. Yang, “Executives: Your Company Isn’t Attracting the Best Talent,” Gallup Manage- ment Journal Online, May 29, 2012, 1; J. Cullen, “Stop Searching for the Elusive Purple Squirrel,” Computerworld, April 9, 2012, 25; G. Anders, “The Rare Find,” Bloomberg BusinessWeek, October 17–23, 2011, 106–12; and J. Light, “At Mature Techs, a Young Vibe,” Wall Street Journal, June 13, 2011, B7.
■➤ Case 5-A: It Takes Two Destiney Freeman, department supervisor at WhinCo, takes great pride in the organizational culture which the company has worked diligently to establish. Employees are encour- aged to develop healthy relationships among one another, and positive manager–employee relationships also serve a vital role. Recently, however, Destiney has been hearing breakroom gossip regarding other employees’ concerns about a developing relationship between Timothy Kane and Rebecca Caldwell. Timothy is the shift supervisor of the sales merchandise department, where Rebecca serves as a sales specialist.
Timothy conducted onboarding and training sessions with Rebecca when she began her role at WhinCo. Since the first month under Timothy’s supervision, it was obvi- ous to other employees that their relationship was more than platonic. Recently, Destiney has received complaints that Timothy and Rebecca have developed an obviously physical relationship that they often openly display in the workplace. As a supervisor, Destiney fears this behavior will not only disturb her employees, but also make the customers feel uncomfortable. Gossip has spread around the department about the employees’ fear of managerial favoritism toward Rebecca. She has received additional work hours during the week, whereas other employees’ hours continue to dwindle. Destiney has also considered that if the relationship goes awry, the company’s reputa- tion may be at stake and result in legal repercussions.
To resolve the situation, Destiney is considering sev- eral solutions. Also, because ethical behavior is a strong part of the WhinCo. organizational culture, she wants to maintain that while making her decision regarding this case. Destiney’s first solution includes setting a one-on- one meeting with each of the two employees where they will discuss the situation with her and develop a mutual solution. However, to appease her other employees, she is also considering moving Rebecca to a different depart- ment where she will not have direct contact with Timo- thy. The most drastic solution would involve dismissing both employees for their misconduct in the workplace. Destiney hopes to provide a solution that will alleviate employee concerns about the developing romance, while keeping in mind the rights of Timothy and Rebecca as employees.
RESPONDING TO THE CASE
5-13. Describe the potential risks of permitting romance in the workplace. How, and to what degree, may these risks affect the organization and its employees?
5-14. As a department supervisor, what decision(s) should Destiney make in regard to this romance? How
THINKING CRITICALLY
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which was once one of those startups, has sent alumni back to schools to promote why Microsoft is a great place to take their talents. Microsoft also hosts game nights, final-exam study parties, app-building sessions, and other events to try to lure students.
For companies like Facebook and Google, the search for talent is still challenging because of the increasing demand for and limited supply of potential employees. So even these companies have to be creative in spotting talent. Google, for instance, found that they had been looking at résumés too narrowly by focusing on education, GPA, and even SAT scores trying to find those candidates with the highest IQs. But they discovered some of those so-called geniuses weren’t as effective on the job as expected. So, they started looking at résumés differently. Rather than looking at résumés starting at the top and reading to the bottom, it began to look from the bottom-up, trying to find some rare, special attribute that set an applicant apart as a unique talent. Facebook found that old-fashioned hiring channels weren’t getting the talent it needed fast enough. So it tried online puzzles and programming chal- lenges to attract and spot talent. It was an easy, fast, and cheap approach to get submissions from potential can- didates. Despite these unique approaches, it’s also true that younger tech companies, like these and many others,
have a built-in appeal for candidates primarily because such companies are what’s “in” and what’s “hot” right now. Also, in many of the younger tech companies, there’s no entrenched bureaucracy or cultural restrictions. If an employee wants to come to work in cargo shorts, T-shirts, and flip-flops, they can. In fact, what attracts many tal- ented employees to companies like these is the fact that they can set their own hours, bring their pets to work, have access to free food and drinks, and a variety of other perks.
RESPONDING TO THE CASE
5-16. What does this case imply about the supply and demand for employees? What implications does that have for supervisors?
5-17. What’s the meaning behind the search for the “pur- ple squirrel” in relation to spotting talent? Is this relevant to non-tech companies as well? Discuss.
5-18. Do you think that mature tech companies are always going to have a more difficult time attracting tech talent? Explain.
5-19. What do you think of the recruiting approaches that Google and Facebook have tried?
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■■ basic corrective action
■■ cause-effect diagram
■■ concurrent control
■■ control by exception
■■ control chart
■■ control process
■■ corrective control
■■ flowchart
■■ immediate corrective action
■■ just-in-time (JIT) inventory system
■■ kanban
■■ preventive control
■■ quality control
■■ range of variation
■■ scatter diagram
■■ supply chain management
■■ value chain management
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Controlling6 C
H A
P T
ER
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Nejron Photo/Shutterstock
6-1. Describe the control process.
6-2. Contrast two types of corrective action.
6-3. Compare preventive, concurrent, and corrective control.
6-4. Explain how a supervisor can reduce costs.
6-5. Explain what is meant by the term just-in-time inventory systems.
6-6. Describe what is meant by the term value chain management.
6-7. List the characteristics of an effective control system.
6-8. Explain potential negatives that controls can create.
6-9. Identify the ethical dilemmas in employee monitoring.
6-10. Explain what is meant by employee theft and describe its effect on the organization.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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Responding to a Supervisory Dilemma
Technological advances have made the process of supervision in an organization much easier. But they have also provided supervisors a means of sophisticated employee monitoring. Although most of this monitoring is designed to enhance worker productivity, it could be, and has been, a source of concern over worker privacy. These advan- tages have also brought with them difficult questions regarding what supervisors have the right to know about employees and how far they can go in control- ling employee behavior—both on and off-the-job.
Consider the following:
■■ The mayor of Colorado Springs, Colorado, reads the e-mail messages that city council members send to each other from their homes. He defended his actions by saying he was making sure that e-mail was not being used to circumvent his state’s “open- meeting” law that requires most council business to be conducted publicly.
■■ The US Internal Revenue Service’s internal audit group monitors a computer log that shows employee access to taxpayers’ accounts. This moni- toring activity allows management to check and see what employees are doing on their computers.
■■ American Express has an elaborate system for monitoring telephone calls. Daily reports are pro- vided to supervisors that detail the frequency and length of calls made by employees, as well as how quickly incoming calls are answered.
■■ Supervisors in several organizations require employees to wear badges at all times while on company premises. These badges contain a variety of data that allow employees to enter certain loca- tions in the organization. Smart badges can trans- mit where the employee is at all times.
Just how much control should a supervisor have over the private lives of employees? Where should a supervi- sor’s rules and controls end? Does the supervisor have the right to dictate what you do on your own free time and in your own home? Could your supervisor, in essence, keep you from engaging in riding a motorcycle, skydiving, smoking, drinking alcohol, or eating junk food? Again, the answers may surprise you. What’s more, supervi- sors’ involvement in employees’ off-work lives has been going on for decades. For instance, in the early 1900s,
Ford Motor Company would send social workers to employees’ homes to deter- mine whether their off-the-job habits and finances were deserving of year-end bonuses. Other firms made sure employ- ees regularly attended church services. Today, many organizations, in their quest to control safety and health insur- ance costs, are once again delving into their employees’ private lives.
Although controlling employees’ behaviors on and off the job may appear unjust or unfair, nothing in our legal system prevents employers from engaging in these practices. Rather, the law is based on the premise that if employees don’t like the rules, they have the option of quitting. Supervisors, too, typically defend their actions in terms of ensuring quality, productivity, and proper employee behavior.
When does a supervisor’s need for information about employee performance cross over the line and interfere with a worker’s right to privacy? Is any action by a supervisor acceptable as long as employees are notified ahead of time that they will be monitored? And what about the distinction between monitoring work and non-work behavior? When employees perform work-related activities at home during evenings and weekends, does a supervisor’s prerogative to monitor employees remain in force? What’s your opinion?
You’ve completed your planning. You know your own department’s objectives. Your department is orga- nized to maximize the possibility of completing your goals. You’ve hired quality employees, and you’ve jointly set specific job objectives with all the people that report to you. Standing plans are in place. So, too, are your department’s budgets and important schedules. Your next concern should be this: How will I know if all my plans are being achieved? You won’t, unless you’ve also developed controls!
As described in Chapter 1, controlling is the man- agement function concerned with monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations. In this chapter, we show how effective supervisors perform the control- ling function. Specifically, we detail the control process, discuss the timing of controls, identify the major areas where supervisors concentrate their control activity, and describe the characteristics of effective controls. We also discuss some of the potentially undesirable side effects of controls that supervisors need to be on guard against.
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The Control Process The control process consists of three separate and distinct steps: (1) measuring actual performance, (2) comparing results with standards, and (3) taking corrective action (see Exhibit 6-1). Before we discuss each of these steps, you should be aware that the control process assumes that standards of performance already exist. These standards are actu- ally detailed in specific goals that you created in planning. So, planning must precede application of the control process.
If goal setting is used, the goals become the standards against which actual per- formance is compared. This is because goal setting integrates planning and control by providing supervisors with a set of objectives or standards to be attained. If goal setting is not practiced, then standards are the specific performance indicators for equipment use, resource use, quality, employee productivity, and the like. These standards can be applied to individuals, teams, departments, or the entire organization. Some examples of popular performance standards include percentage of plant capacity, number of units produced per work hour, average amount of scrap per unit produced, lost workdays resulting from injuries, absentee rates, return on investment, cost per unit sold, returns as a percentage of sales, and total dollar sales per sales territory.
HOW DO YOU MEASURE ACTUAL PERFORMANCE? To determine actual performance, we must acquire information about it. The first step in control, then, is measurement. Let’s consider both how we measure and what we measure.
Ways to Measure Four common sources of information used by supervisors to measure actual performance are personal observation, statistical reports, oral reports, and writ- ten reports.
Personal observation provides firsthand, intimate knowledge of the actual activ- ity. As such, it is probably the most widely used means by which supervisors assess actual performance. In fact, it has even acquired its own label—MBWA, or manage- ment by walking around. It permits intensive coverage because both minor and major performance activities can be observed. Personal observation also provides opportuni- ties for the supervisor to “read between the lines.” It can pick up verbal omissions, facial expressions, and tones of voice that may be missed by other methods. However, supervisors should take note that in a time when quantitative information suggests objectivity, personal observation is often considered an inferior information source. Observers are subject to perceptual biases, and what one supervisor sees, another might
OBJECTIVE 6.1 Describe the control process.
control process A three-step process that consists of (1) measuring actual performance, (2) comparing results with standards, and (3) taking corrective action.
Exhibit 6-1 The control process.
Correct Standards
2. Compare Results with Standards
3. Take Corrective Action
Results 1. Measure Actual Performance
Performance Standards
Adjust Actual Performance
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not. Observation of performance requires time, and finally, this method may seem intrusive. That is, employees might interpret a supervisor’s overt observation as a lack of confidence or a sign of mistrust.
The use of computers in organizations has led to supervisors increasingly relying on statistical reports for measuring actual performance. This measuring device, however, is not limited to computer outputs. It also includes graphs, bar charts, and numerical displays of any form that supervisors may use for assessing performance.
Information can also be acquired through oral reports, that is, through conferences, meetings, and one-on-one conversations. The advantages of oral reports are that they are fast; allow for feedback; and permit language expression and tone of voice, as well as words themselves, to convey meaning.
Finally, actual performance can be measured by written reports. The strength of written reports is that they offer greater comprehensiveness and conciseness than is typically found in oral reports. They are also easier to catalog and reference. Written reports are often combined with statistical reports. They may also be used to precede or follow up oral reports.
What to Measure What you measure is probably more critical to the control process than how you measure it. The selection of the wrong criteria can result in serious dysfunctional consequences (which we will discuss later in this chapter). More importantly, what you measure determines—to a great extent—what employees will attempt to emphasize.
For instance, suppose you’re a supervisor in the information systems department of a large hospital. You expect office staff to be at work at 8 a.m. Every morning, at precisely 8 a.m., you walk around the office to make sure everyone is in. What you typically find are purses and lunch bags on desks, open briefcases, coats over backs of chairs, and other physical evidence that your employees have arrived. But most of them are down in the cafeteria having coffee. Your employees make sure that they are at the office by 8 a.m. because you have communicated that this is an important control criterion. However, being in doesn’t necessarily mean that they are actually working.
Keep in mind that some control criteria are applicable to most supervisory situations, whereas others are job specific. For instance, because all supervisors direct the activities of others, criteria such as employee satisfaction and absenteeism rates have universal application. Almost all supervisors also have budgets for their area of responsibility set in dollar costs. Keeping costs within budget, therefore, is a fairly common control measure. However, control criteria need to recognize the diversity of activities among supervisors. A production supervisor in a manufacturing plant might use measures of the quantity of units produced per day, units produced per labor hour, scrap per unit of output, or percentage of rejects returned by customers. The supervisor of an administrative unit in a government agency might use number of document pages processed per day, number of orders processed per hour, or average time required to process service calls. Sales supervisors often use measures such as percentage of market captured in a given territory, average dollar value per sale, or number of customer visits per salesperson. The key is what you measure must be adjusted to fit the goals of your department.
Although jobs and activities can usually be expressed in tangible and measurable terms, when a performance indicator cannot be stated in quantifiable terms, supervisors should look for and use subjective measures. Subjective measures have significant limita- tions, but they are better than having no standards at all and ignoring the control function. If activities are important, the excuse they are difficult to measure is inadequate. In those situations, supervisors should use subjective performance criteria. However, any analysis or decision made on the basis of subjective criteria should recognize the limitation of the data.
HOW DO YOU COMPARE RESULTS WITH STANDARDS? The comparing step determines the degree of variation between actual performance and the standard. Some variation in performance can be expected in all activities; it is there- fore critical to determine the acceptable range of variation.
range of variation Variation in performance that can be expected in all activities.
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Determining Acceptable Ranges Deviations in excess of the acceptable range become significant and receive the supervisor’s attention. In this comparison stage, you need to be concerned with the size and direction of the variation. An example should help make this clear.
Frank Singleton is the sales supervisor at Circle City Chevrolet/Buick in Indianapo- lis, Indiana. Frank prepares a report during the first week of each month that describes sales for the previous month, classified by model. Exhibit 6-2 displays both the standard (goal) and the actual sales figures for the month in review.
Should Frank be concerned with the July performance? If he focused on Chevrolet unit sales and Buick average dollar sales, the answer would be no. But there appear to be some significant deviations. Average sales prices on Chevrolets were far below projection. A closer look at Exhibit 6-2 offers an explanation. The higher-priced SUVs weren’t selling, whereas the lower-priced cars and pickups sold better than expected. On the Buick side, every model had disappointing sales.
Exhibit 6-2 Circle City’s sales performance for July.
Model Goal Actual Over (under)
Chevrolet
Spark 2 3 1
Camaro 4 7 3
Corvette 2 1 −1
Cruze 3 2 −1
Sonic 3 2 −1
Impala 3 4 1
Malibu 4 8 4
Volt 5 2 −3
Equinox 2 2 0
Suburban 1 2 1
Tahoe 1 2 1
Traverse 5 2 −3
Colorado 2 1 −1
Express 2 2 0
Silverado 5 6 1
Total Units 44 46 2
Total Sales $1,273,800.00 $1,285,475.00
Average Sales $28,950.00 $27,945.11
Buick
Enclave 8 6 −2
Encore 6 5 −1
Lacrosse 5 4 −1
Verano 3 2 −1
Regal 8 6 −2
Total Units 30 23 −7
Total Sales $937,500.00 $780,735.00
Average Sales $31,250.00 $33,945.00
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Which performance deviations deserve Frank’s attention? This depends on what Frank and his boss believe to be significant. How much tolerance should be allowed before corrective action is taken? The deviation on several models is small and undoubt- edly not worthy of special attention; for example, for some models the sales goal and actual sales were off by only one vehicle. The shortages for the Chevrolet Traverse and Volt and the Buick Enclave, Encore, Lacrosse, Verano, and Regal may be more signifi- cant. That’s a judgment Frank must make.
By the way, an error in understanding sales can be as troublesome as an overstate- ment or understatement of sales. For instance, are the strong sales for the Chevrolet Camaro and Malibu a one-month abnormality, or are these models increasing in popu- larity? Frank has concluded that the Indianapolis economy is to blame. With some uncertainty about the economy, gas prices, and their job security, people appear to be moving to less expensive models. Reflecting national recessionary trends, sales of Buick cars are down across the board. This example illustrates that both overvariance and undervariance may require corrective action.
Some Special Measurement Tools Any discussion of control would be incomplete without a discussion of the basic statistical techniques used to control variabil- ity. In this section, we will describe the more popular statistical process control techniques.
Cause-Effect Diagrams Cause-effect diagrams (also sometimes called fishbone diagrams) are used to depict the causes of a certain problem and to group the causes according to common categories such as machinery, materials, methods, personnel, finances, or management.
As shown in Exhibit 6-3, these diagrams look somewhat like a fishbone, with the problem—or the effect—defined as the head. On the “bones,” growing out of the “spine,” are the possible causes of production problems. They’re listed in order of pos- sible occurrence. Cause-effect diagrams provide guidance for analyzing the influence that alternative courses of action will have on a given problem.
Flowcharts Flowcharts are visual representations of the sequence of events for a particu- lar process. They clarify exactly how things are being done so inefficiencies can be identified and the process improved. Exhibit 6-4 provides an illustration.
cause-effect diagram A depiction of the causes of a problem that groups the causes according to common categories such as machin- ery, materials, methods, personnel, finances, or management.
flowchart Visual representation of the sequence of events for a particular process that clarifies how things are being done so that inefficiencies can be identified and the process can be improved.
Exhibit 6-3 Example of a cause-effect (fishbone) diagram.
Power variability high
Maintenance problems
Frequent breakdowns
Steel rods off-size
Steel carbon content incorrect
Needed rod sizes not available
Manual feed variability
Calibration incorrect
Autofeed speed incorrect
Scheduling problems
Poor training
Ball Bearing Defects
Personnel
Methods
Materials
Machinery
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Scatter Diagrams Scatter diagrams illustrate the relationship between two variables, such as height and weight or the hardness of a ball bearing and its diameter (see Exhibit 6-5). These diagrams visually depict correlations and possible cause and effect. So, for instance, a scatter diagram could reveal that the percentage of rejects increases as the size of production runs increases. This, in turn, might suggest the need to reduce produc- tion runs or reevaluate the process if quality is to be improved.
Control Charts Control charts are the most sophisticated of the statistical techniques we will describe. They are used to reflect variation in a system. Control charts reflect measure- ments of sample products averaged with statistically determined upper and lower limits. For instance, Timken, a manufacturer of ball bearings, samples its .215 ball bearings after they are produced to ensure that their measurements are within established standards. As long as the process variables fall within the acceptable range, the system is said to be “in control” (see Exhibit 6-6). When a point falls outside the limits set, the variation is unac- ceptable. Improvements in quality should, over time, result in a narrowing of the range between the upper and lower limits through elimination of common causes.
scatter diagram An illustration of the relationship between two variables that shows correlations and possible cause and effect.
control chart A statistical technique used to measure variation in a system to produce an average standard with statistically determined upper and lower limits.
Exhibit 6-4 Example of a flowchart.
Select an approved test lamp
or voltage indicator
Verify that the device is
functioning correctly by
testing ona known supply
or proving unit
Satisfactory? Replace or repair
YES
NO
Locate and identify circuit or
equipment to be worked on
Is the circuit or equipment safe?
Establish where and why
dis-energised NO
YES
Ensure isolation of circuit or
equipment by switching off,
withdrawing fuses and locking
offisolation switches or MCBs
Identify means of isolation
Verify that the circuit or
equipment to be worked on is
dead using a voltage indicator
Phase–Earth Phase–Neutral
Phase–Earth
DEAD
LIVE
Satisfactory?
Discover why with care
Fit warning labels
Re-check that the voltage-
indicating device is functioning
correctly on a known supply
Satisfactory?
YES
NO
Replace or repair and re-check
Begin work
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WHEN SHOULD CORRECTIVE ACTION BE TAKEN? The third and final step in the control process is the action that will correct the devia- tion. It will be an attempt either to adjust actual performance, or to correct the standard, or both (see Exhibit 6-1).
There are two distinct types of corrective action. One type is immediate and deals predominantly with symptoms. The other type is basic and delves into the causes. Immediate corrective action is often described as “putting out fires” and adjusts something right now and gets things back on track. Basic corrective action gets to the source of the deviation, and seeks to adjust the differences permanently. It asks how and why perfor- mance deviated. Unfortunately, many supervisors rationalize they don’t have the time to take basic corrective action, and therefore must be content to perpetually “put out
OBJECTIVE 6.2 Contrast two types of corrective action.
immediate corrective action Action that adjusts something right now and gets things back on track.
basic corrective action Action that gets to the source of a deviation and seeks to adjust the differences permanently.
Exhibit 6-5 Example of a scatter diagram.
Exhibit 6-6 Example of a control chart.
Vichie81/Shutterstock
Dusit/Shutterstock
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Chapter 6 Controlling 157
fires.” Effective supervisors recognize they must find the time to analyze deviations and, in situations where the benefits justify such action, permanently correct significant dif- ferences between standard and actual performance.
Referring back to our earlier Frank Singleton example, Frank might take basic cor- rective action on the positive deviation for the Chevrolet Camaro and Malibu models. If sales have been greater than expected for the past several months, he might upgrade the standard for future months’ sales of these models and increase his orders with the factory. The poor showing on all the Buick models might justify a number of actions— for instance, cutting back on orders of these cars, running a sales promotion to move the increased inventory, reworking the sales commission plan to reward salespeople for selling Buicks, or recommending an increase in his dealership’s advertising budget.
Types of Controls Where in the process should you apply controls? You can implement controls before an activity commences, while the activity is going on, or after the fact. The first type is called preventive control, the second is concurrent control, and the last is corrective control (see Exhibit 6-7). Some special types of statistical controls can also be used.
WHAT IS PREVENTIVE CONTROL? There’s an old saying: An ounce of prevention is worth a pound of cure. The message here is that the best way to handle a deviation from standard is to see that it doesn’t occur. Most supervisors understand that the most desirable type of control is preventive control because it anticipates and prevents undesirable outcomes.
What are some examples of preventive controls? Companies such as McDonald’s, Kyocera, and Southwest Airlines spend millions of dollars each year on preventive main- tenance programs for their equipment with the sole purpose of avoiding breakdowns during operations. The National Collegiate Athletic Association (NCAA) requires all college coaches under its jurisdiction take an exam on recruiting practices and viola- tions. Coaches can’t participate in recruiting athletes unless they get at least 80 percent on this exam. Other examples of preventive controls include hiring and training people in anticipation of new business, inspecting raw materials, practicing fire drills, and giv- ing employees company “code of ethics” cards to carry in their wallets.
WHEN ARE CONCURRENT CONTROLS USED? As the name implies, concurrent control takes place while an activity is in progress. When control is enacted while the work is being done, you can correct problems before they get out of hand or become too costly.
Much of supervisors’ day-to-day activities involve concurrent control. When they directly oversee the actions of employees, monitoring employees’ work and correcting problems as they occur, concurrent control is taking place. Although there is obviously some delay between an action and a supervisor’s corrective response, the delay is essentially minimal. You’ll find other examples of concurrent control on factory machinery and com- puters. Temperature, pressure, and similar gauges, which are checked regularly during a production process, and that automatically send a signal to an operator that there is a problem, are examples of concurrent controls. So, too, are programs on com- puters that give operators an immediate response when an error is made. If the operator inputs the wrong command, the program rejects the input and may even provide the correct command.
OBJECTIVE 6.3 Compare preventive, concurrent, and corrective control.
preventive control A type of control that anticipates and prevents undesirable outcomes.
concurrent control A type of control that takes place while an activity is in progress.
Exhibit 6-7 Three types of control.
OutputsInputs
Work process activities
Preventive Control
Concurrent Control
Corrective Control
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158 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
WHAT IS CORRECTIVE CONTROL? Corrective control provides feedback after an activity is finished to prevent any future deviations. Examples of corrective control include final inspection of finished goods, annual employee performance appraisals, financial audits, quarterly budget reports, and the like. The sales report that Frank Singleton at Circle City Chevrolet/Buick reviews each month, shown in Exhibit 6-2, is an example of a corrective control.
The obvious shortcoming of corrective control is that, by the time you have the information, it’s often too late. The damage has been done, or the mistakes have already occurred. For instance, where information controls are weak, you may learn for the first time in mid-August that your employees have already spent 110 percent of the depart- ment’s annual photocopying budget. Nothing can be done to correct the overexpendi- ture in August. But corrective control does alert you that there is a problem. Then, you can determine what went wrong and initiate basic corrective action.
On the other hand, corrective controls do have advantages.1 First, feedback gives supervisors meaningful information on how effective their planning efforts were. Feed- back that shows little variance between standard and actual performance indicates the planning was generally on target. If the deviation is significant, a supervisor can use that information to formulate new plans. Second, feedback can enhance motivation. People want to know how well they’re doing, and feedback provides that information.
The Focus of Control What do supervisors control? Most of their control efforts are directed at four areas: costs, inventories, quality, and safety. It’s important, too, to note that supervisors also control employee performance (see Exhibit 6-8). Because performance appraisals are a critical component of managing your employees, we will devote more space to that discussion in Chapter 12.
WHAT COSTS SHOULD YOU CONTROL? You are regularly under pressure to keep your costs in line. Let’s look at the cost catego- ries that you are likely to encounter and present a general program for cost reduction.
corrective control A type of control that provides feed- back after an activity is finished to prevent future deviations.
1W. H. Newman, Constructive Control: Design and Use of Control Systems (Upper Saddle River, NJ: Pren- tice Hall, 1975), 33.
OBJECTIVE 6.4 Explain how a supervisor can reduce costs.
Exhibit 6-8 Focus of control.
AP PR
OV ED
CONTROL
Inventories Quality Safety
Employee PerformanceCosts
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ON THE ROCKS
NEWS FLASH!
Just after midnight on March 22, 2006, the Queen of the North ferry of the BC Ferries system hit rocks off Gil Island, south of Prince Rupert. It was imme- diately clear the ferry was in trouble, and within fifteen minutes, all the passengers and crew were off the ship and in the ferry’s lifeboats. As local towns- people and the Coast Guard rescued the passen- gers from the lifeboats, the ferry sank, a little over an hour after first striking the rocks. Initial media reports celebrated the fact that all ninety-nine pas- sengers and crew had managed to get off the ferry safely. The crew was widely praised for conduct- ing an orderly evacuation, something for which employees practice and train at regular intervals.
On day two, passengers were reported missing. While international maritime regulations require that ferries record identifying information about all passengers (name, gender, and whether they are adults, children, or infants), the Canadian govern- ment doesn’t require BC’s ferry fleet to meet interna- tional standards. Passenger names aren’t collected, and ferry staff don’t even take a head count after loading. The number of passengers is only roughly determined by the number of tickets sold. Thus, the initial reports from BC Ferries that all passengers and crew survived were based on the simple belief that everyone had been evacuated. Demands for explanations of what had gone wrong arose.
The regional director of communications for Transport Canada (a governmental agency) reported the Queen of the North passed an annual safety inspection less than three weeks earlier, including a lifeboat drill that required passengers be evacuated in less than thirty minutes. “They did very well at it and they obviously did very well when it happened for real,” he said.
The internal investigation BC Ferries con- ducted after the incident concluded that “human factors were the primary cause” of what happened. During the investigation, crew members respon- sible for navigating the ship that night claimed they were unfamiliar with newly installed steering
equipment. In addition, they had turned off a mon- itor displaying their course, because they could not turn on the night settings. The bridge crew used the equipment “in a way different than as instructed,” the report noted, although this was not cited as a cause of running the boat aground. The report also concluded that the crew maintained a “casual watch-standing behavior,” had “lost situational awareness,” and “failed to appreciate the vessel’s impending peril.” A transcript of radio calls that evening noted that music was heard playing on the bridge.
Regarding the evacuation, though the crew was praised for acting quickly, several things made the evacuation more difficult than need be. There was no master key to the sleeping cabins; rather multiple keys had to be tried. A chalk X is sup- posed to be drawn on searched cabin doors, but no one had chalk. As well, only fifty-three of the fifty- five cabins were confirmed to have been searched.
Describe the type(s) of control that could be used to improve the BC Ferries service to prevent such an accident as this occurring again. Be spe- cific. Assume you are the president of BC Ferries. You have read the report of the investigation and noted some of the problems found. What would you do? Explain your reasoning. Would some types of controls be more important than others in this situation? Discuss.
Sources: Based on “Union Will Defend Fired Ferry Work- ers,” Kamloops Daily News, May 7, 2007, A5; C. Mont- gomery and I. Austin, “Human Error Is Faulted for Ship Sinking,” Province (Vancouver), March 27, 2007, A6; C. E. Harnett, “Human Error Sank B.C. Ferry,” Cal- gary Herald, March 27, 2007, A5; C. E. Harnett, “Ferry Brass,” Times Colonist (Victoria), June 6, 2006, A3; C. Montgomery, “Loose Manifest Rules Led to Miscount,” Province (Vancouver), March 28, 2006, A4; E. Baron and E. O’Connor, “Why So Far Off Course?” Province (Van- couver), March 23, 2006, A3; and W. Boei, M. Bridge, and L. Pynn, “99 Escape After Ship Runs Aground, Slides into Depths,” Vancouver Sun, March 23, 2006, A1.
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Major Cost Categories The following list describes the major cost categories that super- visors come in contact with and need to monitor.
1. Direct labor costs. Expenditures for labor that are directly applied in the creation or delivery of the product or service. Examples: machine operators in a factory or teachers in a school.
2. Indirect labor costs. Expenditures for labor that are not directly applied in the creation or delivery of the product or service. Examples include cost accountants, human resources recruiters, and public relations specialists.
3. Raw materials costs. Expenditures for materials that go directly into the creation of a product or service. Examples include sheet steel at a Toyota plant, or hamburger buns at a Wendy’s restaurant.
4. Supportive supplies costs. Expenditures for necessary items that do not become part of the finished product or service. Examples include cleaning compounds at the Toyota plant, or photocopying costs at Aetna Life.
5. Utility costs. Expenditures for electricity, gas, water, and similar utilities. An exam- ple is the monthly electric bill for a regional office.
6. Maintenance costs. Material and labor expenditures incurred to repair and main- tain equipment and facilities. Examples include repair parts for equipment or jet engine maintenance technicians at United Airlines.
7. Waste costs. Expenditures for products, parts, or services that cannot be reused. Examples include unsold french fries at Burger King, or scrap metal at a Whirlpool Corporation plant.
Typically, you will have a budget for each major cost category. By monitoring expenditures in each category, you can keep costs within your total budget plans.
Comprehension Check 6-1
1. Measuring performance, comparing against a standard, and taking corrective action are all part of the:
a. supervisory process. b. control process. c. value chain process. d. none of the above.
2. Variances in performance that can be expected in all activities are called the:
a. measurement process. b. standard deviation. c. range of variation. d. benchmarking.
3. A is a visual representation of the sequence of events for a particular process.
a. flowchart b. scatter diagram c. cause-effect diagram d. control chart
4. Which one of the following is not a type of control? a. Preventive control b. Concurrent control c. Immediate control d. Corrective control
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Cost Reduction Programs When costs are too high, you will more than likely be expected to implement a cost reduction program. Beginning in the late 1980s, US corporations began a massive effort to reduce costs and improve their competitive position in relation to their global competitors. Much of this had a direct effect on supervisors. For instance, direct labor costs have been cut by automating jobs and redesigning work around teams that are more productive than individuals are. Indirect labor costs have been slashed by laying off tens of thousands of support personnel in research, finance, human resources, and clerical functions. Budgets for training, travel, telephone calls, photocopying, com- puter software, office supplies, and similar expenditures have undergone significant cuts.
Consider reducing costs in your department by improving methods to eliminate unnec- essary activities while introducing new work methods that can increase efficiency. At the same time, level the workflow to reduce the peaks and valleys in the workflow. A level workflow eliminates inefficiencies and allows the organization to make do with fewer employees and cut down on overtime. Simple things like minimizing waste by turning off lights in unused areas, eliminating misuse of office supplies, reducing idle time for employ- ees, determining underused equipment, and controlling wasteful use of raw materials will all add up and to help reduce a supervisor’s departmental costs. Sometimes the need for cost control calls for installation of modern equipment so supervisors should budget for new equipment to replace obsolete and worn-out machinery, computers, and the like. And as you update equipment, don’t forget to invest in employee training. People, like machines, can become obsolete if you allow their skills to become dated. Finally, remember to make cuts selectively and avoid across-the-board cuts. Some people and groups contribute sig- nificantly more than others. Make cuts where they will generate the greatest efficiencies.
WHY PAY ATTENTION TO INVENTORIES? Supervisors are routinely responsible for ensuring that adequate inventories of materials and supplies are available for activities under their jurisdiction. For a shift supervisor at McDonald’s, that would include paper products, buns, burger patties, french fries, condiments, cooking utensils, cleaning supplies, and even proper change for the cash register. For a nursing supervisor at a hospital, that might mean pharmaceuticals, gloves, hypodermic needles, and bed linens. The challenge in monitoring inventory cost is bal- ancing the cost of maintaining inventories against the cost of running out of inventory. If excessive inventory is carried, money is needlessly tied up and unnecessary storage costs are incurred. Excessive inventory also adds to insurance premiums and taxes, and of course, there are potential obsolescence costs. If Frank Singleton gets overstocked on Chevrolets and the new models begin to arrive, he might have to sell last year’s models at below cost to get rid of them. If inventories drop too low, operations can be disrupted and sales lost. A stockout of paper can bring a publisher’s printing presses to a halt. If the McDonald’s supervisor fails to monitor his inventory of frozen french fries, he might find himself with some very disgruntled customers. Frank Singleton may also find that many Chevrolet and Buick customers will expect his dealership to have the model and color they want available immediately, or they’ll take their business to another dealer.
A popular inventory technique in today’s organizations is called just-in-time (JIT) inven- tory systems. Large companies such as Boeing, Toyota, and General Electric have billions of dollars tied up in inventory. It is not unusual for even small firms to have a million dollars or more tied up in inventory. So, anything supervisors can do to significantly reduce the size of inventory will improve the organization’s productivity. Just-in-time (JIT) inventory systems change the technology around which inventories are managed. With JIT, inventory items arrive when they are needed in the production process instead of being stored in stock. The ultimate goal of JIT is to have only enough inventory on hand to complete the day’s work— thereby reducing a company’s lead time, inventory, and associated costs.
In Japan, JIT systems are called kanban, a word that gets to the essence of the just- in-time concept.2 Kanban is Japanese for “card” or “signal.” Japanese suppliers ship
OBJECTIVE 6.5 Explain what is meant by the term just-in-time inventory systems.
just-in-time (JIT) inventory system A system in which inventory items arrive when they are needed in the production process instead of being stored in stock. See also kanban.
2See J. Cauhorn, “The Journey to World Class,” Industry Week, April 6, 2001. Available online at www. industryweek.com.
kanban In Japanese, a “card” or “sign.” Shipped in a container, a kanban is returned to the supplier when the container is opened, initiating the ship- ment of a second container that arrives just as the first container is emptied.
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parts in containers. Each container has a card, or kanban, slipped into a side pocket. When a production worker at the manufacturing plant opens a container, he or she takes out the card and sends it back to the supplier. Receipt of the card initiates the shipping of a second container of parts that, ideally, reaches the production worker just as the last part in the first container is being used up. This simple card system helped the Dana Corporation win the 2000 National Association of Manufacturers award for Workforce Excellence.3 This system in part is helping the company save nearly $300,000 annually. It’s also credited with decreasing inventory costs by 20 percent and reducing parts-dispatching errors by more than 50 percent at Waterville TG, the Quebec-based manufacturer of sealing systems for automotive assembly lines.4
The ultimate goal of a JIT inventory system is to eliminate raw material inventories by coordinating production and supply deliveries precisely. When the system works as designed, it results in a number of positive benefits for a manufacturer: reduced inven- tories, reduced setup time, better work flow, shorter manufacturing time, less space consumption, and even higher quality. Of course, suppliers that can be depended on to deliver quality materials on time must be found. Because there are no inventories, there is no slack in the system to compensate for defective materials or delays in shipments. Mak- ing this become a reality has focused supervisory attention on value chain management.
WHAT IS VALUE CHAIN MANAGEMENT? Every organization needs customers if it’s going to survive and prosper. Even not-for- profit organizations, such as churches and government agencies, must have customers who use its services or purchase its products. Customers want some type of value from the goods and services they purchase, or use, and these end users determine what has value.5 Organizations must provide that value to attract and keep customers. Value is reflected in the performance characteristics, features, and attributes, or any other aspects of goods and services for which customers are willing to give up resources (usually money). For example, when you purchase Taylor Swift’s new CD at Best Buy, a slice of pizza at a Sbarro’s, or a haircut from your local hair salon, you’re exchanging money in return for the value you desire from these products—providing music entertainment during your evening study time, alleviating your lunchtime hunger pangs, or looking professionally groomed for the job interview you have next week.
How is value provided to customers? Through the transformation of raw materials and other resources into some product or service that end users need or desire—in the form they want, when they want it. However, that seemingly simple act of turning a variety of resources into something that customers value and are willing to pay for involves a vast array of interrelated work activities performed by different participants. That is, this entire process involves the value chain. The value chain is the entire series of work activities that add value at each step beginning with the processing of raw materials and ending with a finished product in the hands of end users. The value chain can encompass anything from the supplier’s suppliers to the customer’s customers.6
The concept of value chain was popularized by Michael Porter in his book Competi- tive Advantage: Creating and Sustaining Superior Performance.7 He wanted supervisors to understand the sequence of organizational activities that created value for customers.
3D. Bartholomew, “One Product, One Customer,” Industry Week, September 12, 2002. Available online at www.industryweek.com. 4S. Chausse, S. Landry, F. Paisn, and S. Fortier, “Anatomy of a Kanban: A Case Study,” Production and Inventory Management Journal 41, no. 4 (Fall 2000), 4–15.
OBJECTIVE 6.6 Describe what is meant by the term value chain management.
5J. H. Sheridan, “Managing the Value Chain,” Industry Week, September 6, 1999. Available online at www.industryweek.com. 6Ibid. 7M. E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Simon & Schuster, 1998).
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Although he focused primarily on what was happening within a single organization, he did emphasize that supervisors must understand how their organization’s value chain fits into the industry’s overall creation of value. In some cases, that’s difficult to do. For example, organizations do a number of things that offer no value to the customer. Con- sider, for instance, the movie industry. A lot of film producers spend significant amounts of money on things that do little to make a movie better. Money well spent in this case is anything that is presented on the screen where customers can see it. The money spent, however, for catering, limo services, and private jets for stars doesn’t add value, because those services don’t end up on the screen. As such, they don’t create value. A similar claim could be made about supervision. As one noted writer pointed out, “Supervisors are not value-added. A customer never buys a product because of the caliber of supervi- sion. Supervision is, by definition, indirect. So if possible, less is better. One of the goals of reengineering [work process engineering] is to minimize the necessary amount of supervision.”8
Value chain management is the process of managing the entire sequence of integrated activities and information about product flows along the entire value chain. In contrast to supply chain management, which is internally oriented and focuses on the efficient flow of incoming materials to the organization, value chain management is externally ori- ented and focuses on both incoming materials and outgoing products and services. Supply chain management is efficiency-oriented (its goal is to reduce costs and make the organization more productive), whereas value chain management is effectiveness-ori- ented and aims to create the highest value for customers.9
WHY THE FOCUS ON QUALITY? With the possible exception of controlling costs, achieving high quality has become a pri- mary focus of today’s organizations. In years past, many American products were criti- cized for being shoddy in quality compared to their Japanese and German counterparts. On the other hand, companies such as Whirlpool Corporation, Motorola, and Ford have thrived in the past decade by focusing on quality products or services. With this new emphasis has come an increased demand on supervisors to engage in quality control.
Historically, quality referred to achieving some pre-established standard for an organization’s product or service. Today, quality has taken on a larger meaning. We introduced continuous-improvement programs in Chapter 2, describing them as com- prehensive, customer-focused programs to continuously improve the quality of the orga- nization’s processes, products, and services. Whereas continuous-improvement programs emphasize actions to prevent mistakes, quality control emphasizes identifying mistakes that may have already occurred. Quality control continues to address monitoring quality—weight, strength, consistency, color, taste, reliability, finish, or any one of a myriad of quality characteristics—to ensure that quality meets some pre-established standards.
Quality control is needed at multiple points in a process, and begins with the receipt of inputs. Are the raw materials satisfactory? Do new employees have the proper skills and abilities? It continues with work in process and all the steps up to the completion of the final product or service. Assessments at intermediate stages of the transformation process are typically part of quality control. Early detection of a defective part or process can save the cost of further work on the item.
A comprehensive quality-control program would encompass preventive, concurrent, and corrective controls. For example, controls would inspect incoming raw materials, monitor operations while they are in progress, and conduct final inspection and rejec- tion of unsatisfactory outputs. This same comprehensive program could be applied to services. For instance, a claims supervisor for State Farm could hire and train her
8 R. Karlgaard, “ASAP Interview: Mike Hammer,” Forbes ASAP, September 13, 1993, 70. 9See, for instance, K. P. O’Brien, “Value-Chain Report: Supply-Chain Success in the Aftermarket,” Indus- try Week, December 21, 2004, http://www.industryweek.com/articles/managing_the_value_chain_429.aspx
value chain management The process of managing the entire sequence of integrated activities and information about product flows from start to finish—when the product is in the hands of the ultimate user.
supply chain management An internally oriented process that focuses on the efficient flow of incom- ing materials to the organization.
quality control Identification of mistakes that may have occurred; monitoring quality to ensure that (it) meets some pre- established standard.
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people to make sure they fully understand their jobs, monitor their daily work flow to ensure that it is done properly and on time, review completed claims for accuracy and thoroughness, and follow up with customers to determine their degree of satisfaction with the way their claims were handled.
WHAT ARE THE CHARACTERISTICS OF EFFECTIVE CONTROLS? Effective control systems tend to have certain qualities in common. The importance of these characteristics varies with the situation, but the following checklist can guide supervisors in designing their unit’s control system (see Exhibit 6-9).
Timeliness Controls should call attention to variations in time to prevent serious infringement on a unit’s performance. The best information has little value if it is dated. Therefore, an effective control system must provide timely information.
Economy A control system must be economically reasonable to operate. Any system of control has to justify the benefits that it gives in relation to the costs it incurs. To minimize costs, you should try to impose the least amount of control that is neces- sary to produce the desired results. The widespread use of computers, to a large extent, is because of their ability to provide timely and accurate information in a highly efficient manner.
Flexibility Effective controls must be flexible enough to adjust to adverse change or to take advantage of new opportunities. In today’s dynamic and rapidly changing world, you should design control systems that can adjust to the changing nature of your departmental objectives, work assignments, and job tasks.
Understandability Controls that cannot be understood by those who have to use them are of little value. It is sometimes necessary, therefore, to substitute less complex controls for sophisticated devices. A control system that is difficult to understand can cause unnecessary mistakes and frustrate employees; it will eventually be ignored.
Reasonable Criteria Consistent with our discussion of goals in a previous chapter, control standards must be reasonable and attainable. If they are too high or unrea- sonable, they no longer motivate. Because most employees don’t want to risk being labeled incompetent for telling their bosses that they ask too much, employees may
resort to unethical or illegal shortcuts. Controls should, therefore, enforce standards that are reasonable; they should challenge people to reach higher performance lev- els without being demotivating or encouraging deception. Critical Placement You can’t control everything that
goes on in your department. Even if you could, the benefits wouldn’t justify the costs. As a result, you should place controls on those factors that are criti- cal to your unit’s performance goals. Controls should cover the critical activities, operations, and events within your unit. That is, you should focus on where variations from standard are most likely to occur or where a variation would do the greatest harm. For instance, if your labor costs are $20,000 a month and postage costs are $50 a month, a 5 percent over- run in the former is more critical than a 20 percent overrun in the latter. Hence, you should establish controls for labor and a critical dollar allocation, whereas postage expenses would not appear to be critical.
Emphasis on the Exception Because you can’t control all activities, you should place your control devices where they
OBJECTIVE 6.7 List the characteristics of an effective control system.
Exhibit 6-9 Characteristics of effective controls.
Emphasis on the Exception
Flexibility
Critical Placement
Reasonable Criteria
Understandability
Timeliness
Economy
Effective Controls
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can call attention only to the exceptions. A control by exception system ensures that you are not overwhelmed by information on variations from standard. For instance, sup- pose as an accounts receivable supervisor at a Sears store, you instruct your employees to inform you only when an account is fifteen days past due. The fact that 90 percent of your customers pay their bills on time or no more than two weeks late means you can devote your attention to the 10 percent of exceptions.
CAN CONTROLS CREATE PROBLEMS? Yes, controls can create their own problems. The introduction of controls comes with potential negatives that need to be guarded against. These include employee resistance, misdirection of employee effort, and ethical dilemmas for supervisors concerning control devices. Let’s take a brief look at each.
Employee Resistance Many individuals don’t like to be told what to do, or to feel that they’re being “checked up on.” When work performance is deficient, few people enjoy being criticized or corrected. The result is that employees often resist controls. They see their supervisor, daily production reports, performance appraisals, and similar control devices as evidence that their employer doesn’t trust them.
Reality tells you that controls are a way of organizational life because you have a responsibility to ensure that activities are going as planned. So, what can you do to lessen this resistance?
First, wherever possible, encourage employee self-control. Once employees know their goals, give them the benefit of the doubt and leave them alone. Let them monitor and correct their own performance. Supplement this with regular communication so that they can let you know what problems they’ve encountered and how they’ve solved them. The assumption with self-control is that employees are responsible, trustworthy, and capable of personally correcting any significant deviation from their goals. Only if this assumption proves incorrect, do you need to introduce more formalized external control mechanisms.
When external controls are needed, there are some methods you can use to mini- mize employee resistance. Have employees participate in establishing the standards. This lessens the likelihood that they’ll view them as unrealistic or too demanding. Explain to employees how they will be eval- uated. Surprisingly, the problem is often not the controls themselves that create resistance but the lack of understand- ing of how information will be gathered and how it will be used. Provide employees with regular feedback. Ambiguity causes stress and resistance, so let people know how they’re doing. Finally, most people want the satisfaction that comes from doing their work better and want to avoid the pain and embarrassment that comes with discipline. As a result, supervisors should treat controls as devices for helping employees improve rather than for punishment.
Misdirection of Effort Did you ever notice that people who work in some government offices—for example, in depart- ments that process motor vehicle licenses and building permits—sometimes appear not to care so much about the problems of taxpayers? They become so fixated on ensuring that every rule is followed, they lose sight of the fact that their job is to serve the public, not hassle them!
This example illustrates another potential problem with controls: People may mis- direct their efforts to look good on the control criteria. Because any control system has imperfections, problems occur when individuals or organizational units attempt to look good exclusively in terms of the control devices. In actuality, the result is dysfunctional in terms of the organization’s goals. More often than not, this is caused by incomplete measures of performance. If the control system evaluates only the quantity of output,
control by exception A system that ensures that one is not overwhelmed by information on varia- tions from standard.
OBJECTIVE 6.8 Explain potential negatives that controls can create.
Dmitry Kalinovsky/123RF.com
Just how far can supervisors go in monitoring their employ- ees? Laws give them a lot of discretion. That means they can read an employee’s e-mail or computer files, or even film employees while they are on company premises! The real question, however, is just how much of an employee’s privacy can be invaded.
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people will ignore quality. Similarly, if the system measures activities rather than results, people will spend their time attempting to look good on the activity measures.
What can you do to minimize this problem? Two things. First, make sure that con- trol standards are reasonable. It is important that this not be only your perception. Your employees must believe the standards are fair and within their capability. Second, select and evaluate criteria that are directly related to achievement of employee job goals. If the licensing supervisor in the motor vehicle office evaluates her people on how well they follow rules, rather than on how effectively they serve the needs of clients, then her employees are not going to give much attention to satisfying clients. Finding the right criteria often means using a multiple set of standards. For instance, the goal of “serving clients” might require the licensing supervisor to evaluate her clerks on criteria such as “greets all clients with a smile and friendly greeting,” “answers all client questions without seeking outside assistance,” and “solves the client’s problems in one visit.” In addition, the supervisor might set up a client comment box in her licensing department where individual employees could be praised or criticized on their service, and then use this feedback as one measure of how well employees are doing their jobs.
Ethics and Control Devices Because ethical issues can and do arise as supervisors design efficient and effective control systems, technological advances in computer hardware and software, for example, have made the process of controlling much easier. But these advantages have also brought with them difficult questions regarding what manag- ers have the right to know about employees and how far they can go in controlling employee behavior both on and off the job. Special attention needs to be given to the topic of employee monitoring.
In Chapter 2, we briefly introduced how technology is changing our organizations. Many of these improvements enable organizations to become more productive; to help members work smarter, not harder; and to bring efficiencies into the organization that weren’t possible just a decade ago. But technological advancements have also provided supervisors a means of sophisticated employee monitoring. Although most of this moni- toring is designed to enhance worker productivity, it could be, and has been, a source of concern over worker privacy.
What can supervisors find out about their employees? You might be surprised by the answers! Supervisors can, among other things, read employees’ e-mail (even confidential messages), tap their work telephone, determine their computer activities, and monitor employees anywhere on company property.
One area that has been a hot topic of debate over employee workplace privacy is e-mail communications. The use of e-mail is flourishing throughout global organiza- tions, and employees are concerned about whether they can be fired or disciplined for things they have written and sent. Many companies can, and do, monitor these elec- tronic transmissions.
Computer monitoring can be an excellent control mechanism. Computer monitoring systems can be used to collect, process, and provide performance feedback information about employees’ work that can help supervisors with performance improvement sug- gestions and with employee development. They have also been used to help supervisors identify employee work practices that might be unethical or costly. For example, nursing supervisors in many hospitals and other health-care organizations use computer monitor- ing to control costs of medical procedures and access to controlled medications. Likewise, many supervisors in business organizations use computer monitoring systems for control- ling costs, employee work behavior, and a number of other areas of organizational activi- ties. Telemarketing organizations often monitor telephone calls of their service operators. Other organizations monitor employees who deal with consumer complaints to ensure that the complaints are being handled appropriately. Unfortunately, computer monitor- ing has a questionable reputation because of instances of overuse and abuse.
Many individuals perceive computer monitoring as nothing more than a technologi- cally sophisticated form of eavesdropping, or a surveillance technique to catch employ- ees slacking on the job. Critics also claim that these techniques lead to an increase in
OBJECTIVE 6.9 Identify the ethical dilemmas in employee monitoring.
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stress-related complaints from employees who feel pressured by being under constant surveillance. Supporters argue that computer monitoring can be an effective employee- training device and a way to improve work performance levels. And these actions aren’t that uncommon. In fact, some 30 percent of companies have fired workers for misusing the Internet, and another 28 percent have terminated workers for e-mail misuse.10
How can supervisors benefit from the control information provided by computer monitoring systems and yet minimize the potential behavioral and legal drawbacks? Experts suggest that organizations do the following:
■■ Tell employees, both current and new, that they may be monitored. ■■ Have a written policy on monitoring that is posted where employees will see it;
distribute it to each employee. Have all employees acknowledge in writing that they have received a copy of the policy and that they understand it.
■■ Monitor only those situations in which a legitimate business purpose is at stake, such as training or evaluating workers or controlling costs. When used in this manner, computer monitoring can be an effective—and ethical—supervisory control tool.
Contemporary Control Issues Control is an important supervisory function and issues can arise as supervisors review control elements. The more noteworthy control issues concern employee theft, the Sar- banes–Oxley Act, and cross-cultural differences.
IS EMPLOYEE THEFT INCREASING? Would you be surprised to find that up to 85 percent of all organizational theft and fraud is committed by employees, not outsiders?11 And it’s a costly problem—estimated to be around $4,500 per worker per year.12 In a recent survey of US companies, 20 percent said that workplace theft has become a moderate to very big problem.13
Employee theft is defined as any unauthorized taking of company property by employees for their personal use.14 It can range from embezzlement to fraudulent filing of expense reports to the removal of equipment, parts, software, or office supplies from company premises. Although retail businesses have long faced serious potential losses from employee theft, loose financial controls at start-ups and small companies, and the ready availability of information technology, have made employee theft an escalating problem in all kinds and sizes of organizations. It’s a control issue that managers need to educate themselves about and be prepared to deal with.15
10 “2007 Electronic Monitoring & Surveillance Survey,” American Management Association, www.ama- net.org.
OBJECTIVE 6.10 Explain what is meant by employee theft and describe its effect on the organization.
11 A. M. Bell and D. M. Smith, “Theft and Fraud May Be an Inside Job,” Workforce Online, December 3, 2000, http://www.workforce.com. 12 C. C. Verschoor, “New Evidence of Benefits from Effective Ethics Systems,” Strategic Finance (May 2003), 20–21; and E. Krell, “Will Forensic Accounting Go Mainstream?” Business Finance (October 2002), 30–34. 13 S. E. Needleman, “Businesses Say Theft by Their Workers Is Up,” Wall Street Journal, December 11, 2008, B8. 14 J. Greenberg, “The STEAL Motive: Managing the Social Determinants of Employee Theft,” in R. Giacalone and J. Greenberg (eds.), Antisocial Behavior in Organizations (Newbury Park, CA: Sage, 1997), 85–108. 15 B. E. Litzky, K. A. Eddleston, and D. L. Kidder, “The Good, the Bad, and the Misguided: How Manag- ers Inadvertently Encourage Deviant Behaviors,” Academy of Management Perspective (February 2006), 91–103; “Crime Spree,” BusinessWeek, September 9, 2002, 8; B. P. Niehoff and R. J. Paul, “Causes of Employee Theft and Strategies That HR Managers Can Use for Prevention,” Human Resource Man- agement 39, no. 1 (Spring 2000), 51–64; and G. Winter, “Taking at the Office Reaches New Heights: Employee Larceny Is Bigger and Bolder,” New York Times, July 12, 2000, C1+.
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Something to Think About (and promote class discussion)
OUT WITH E-MAIL The average corporate user is estimated to send and/or receive some 112 e-mails daily. That’s about 14 e-mails per hour, and even if half of those don’t require a lot of time and concentration, that level of e-mail volume can be stressful and lead to unproductive time. Once imagined to be a time-saver, has the inbox become a burden? What about voicemails? Are phone messages even necessary for organizational communication? These and other concerns are forcing many organizations to take a closer look at how information is communicated.
Several years ago, U.S. Cellular’s executive vice president implemented a ban on e-mail every Friday. In his memo announcing the change to employees, he told them to get out and meet the people with whom they work, rather than send an e-mail. That directive went over with a thud. One employee con- fronted him saying that Ellison didn’t understand how much work had to get done and how much easier it was when using e-mail. Eventually, however, employees were won over. Forced to use the phone, one employee learned that a coworker he thought was across the country was, instead, across the hall. Now, other executives are discovering the benefits of banning e-mail.
Jessica Rovello, cofounder and president of Arkadium, which develops games, has described e-mail as “a form of business attention-deficit disorder.” She found herself—and her employees—putting e-mail in the inbox ahead of everything else being worked on. What she decided to do was only check her e-mail four times a day, and to turn off her e-mail notification. Another executive, Tim Fry of Weber Shandwick, a global public relations firm, spent a year preparing to “wean” his employees off their e-mail system. His goal: dramatically reduce how much e-mail employees send and receive. His approach started with the firm’s interoffice communication system, which became an internal social network, with elements of Facebook, work group collaboration software, and an employee bulletin board. And then there’s Thierry Breton, head of Europe’s largest IT firm, Atos. He announced a “zero e-mail policy” to be replaced with a service more like Facebook and Twitter combined.
The latest casualty in organizational communication choices is voice mail. Under pressure to cut costs, several large financial institutions, including J.P. Morgan Chase & Co., Citigroup Inc., and Bank of America Corp., are deleting or cutting back on phone voice mail. Some company executives explain- ing their actions cite the reality that few people use voice mail anymore. The question remains, however, whether customers still expect to be able to maintain voice contact with their financial advisors.
What advantages and disadvantages are there to e-mail as a form of communication? In addition to your own personal experience with e-mail, you should do some research before answering this question. Why do you think the employees rebelled? What’s your opinion about the actions of these organiza- tions? Were they right or wrong? Be sure to look at this from the perspective of both the organization and the employees. What other approaches might organizations have taken to address this issue of out- of-control e-mail?
Sources: Based on M. Nalsky, “How Quitting Email Helped My Company Communicate Better,” http://thenextweb.com/ entrepreneur/2014/11/09/quitting-email-helped-company-team-communicate-better/, November 9, 2014.........One of the Biggest Information Technology Companies in the World to Abolish E-mails,” www.dailymail.com, November 30, 2011.
Why do employees steal? The answer depends on whom you ask.16 Experts in vari- ous fields—industrial security, criminology, and clinical psychology—have different perspectives. The industrial security people propose that people steal because the oppor- tunity presents itself through lax controls and favorable circumstances. Criminologists say that it’s because people have financial-based pressures (e.g., personal financial prob- lems) or vice-based pressures (e.g., gambling debts). And the clinical psychologists sug- gest that people steal because they can rationalize whatever they’re doing as being
16 This section is based on J. Greenberg, Behavior in Organizations: Understanding and Managing the Human Side of Work, 8th ed. (Upper Saddle River, NJ: Prentice Hall, 2003), 329–330.
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correct and appropriate behavior (“Everyone does it,” “They had it coming,” “This company makes enough money and they’ll never miss anything this small,” “I deserve this for all that I put up with,” and so forth).17 Although each approach provides com- pelling insights into employee theft and has been instrumental in attempts to deter it, employees continue to steal. What can supervisors do? It’s a control issue about which supervisors need to educate themselves and be prepared to address.18 Fortunately, the concept of preventive, concurrent, and corrective control is useful for identifying mea- sures to deter or reduce employee theft.19
WHAT IS THE SARBANES–OXLEY ACT? During the past several years, corporate scandals have received a lot of attention. The media has been filled with discussions of management practices at companies such as WorldCom, Enron, and ImClone. The actions executives at these companies took may be questionable, and some may have been illegal. For many, the aftermath of these corporate scandals has been a lack of trust for those who run organizations.20 Although the law is not directed toward first-line supervisors, as a supervisor you should have some understanding about the implications of Sarbanes–Oxley. Let’s briefly look at these.
Signed into law in July 2002 by President George W. Bush, the Sarbanes–Oxley Act establishes procedures for public companies regarding how they handle and report their financial picture. The legislation also established penalties for noncompliance. For example, Sarbanes–Oxley requires the following21:
■■ Top management (the CEO and chief financial officer [CFO]) must personally cer- tify the organization’s financial reports.
■■ The organization must have in place procedures and guidelines for audit committees. ■■ CEOs and CFOs must reimburse the organization for bonuses and stock options
when required by restatement of corporate profits. ■■ Personal loans or lines of credit for executives are now prohibited.
The penalty aspect of Sarbanes–Oxley for noncompliance is something that is get- ting executives’ attention. Failure to comply with the requirements stipulated under Sarbanes–Oxley—such as falsely stating corporate financial position—can result in the executive being fined up to $1 million and imprisoned for up to ten years.22 Moreover, if the executive’s action is determined to be willful, both the fine and the jail time can be doubled.
17 A. H. Bell and D. M. Smith, “Why Some Employees Bite the Hand That Feeds Them,” Workforce Online, December 3, 2000, http://www.workforce.com. 18 M. S. Hershcovis, “Incivility, Social Undermining, Bullying . . . Oh My! A Call to Reconcile Constructs Within Workplace Aggression Research,” Journal of Organizational Behavior (April 2011), pp. 499–519; B. E. Litzky, K. A. Eddleston, and D. L. Kidder, “The Good, the Bad, and the Misguided: How Managers Inadvertently Encourage Deviant Behaviors,” Academy of Management Perspective, February 2006, pp. 91–103; “Crime Spree,” BusinessWeek, September 9, 2002, p. 8 B. P. Niehoff and R. J. Paul, “Causes of Employee Theft and Strategies That HR Managers Can Use for Prevention,” Human Resource Manage- ment, Spring 2000, pp. 51–64; and G. Winter, “Taking at the Office Reaches New Heights: Employee Lar- ceny Is Bigger and Bolder,” New York Times, July 12, 2000, pp. C1+. 19 Litzky et al., “The Good, the Bad, and the Misguided”; Bell and Smith, “Protecting the Company Against Theft and Fraud”; J. D. Hansen, “To Catch a Thief,” Journal of Accountancy (March 2000), pp. 43–46; and J. Greenberg, “The Cognitive Geometry of Employee Theft,” in Dysfunctional Behavior in Organizations: Nonviolent and Deviant Behavior, edited by R. W. Griffin, A. O’Leary-Kelly, and J. Collins (Stamford, CT: JAI Press, 1998), pp. 147–193. 20 “Coming Clean,” Money, May 2002, 33. 21 Based on J. A. Segal, “The Joy of Uncooking,” HR Magazine, November 2002, 53. 22 Based on J. A. Segal, “The Joy of Uncooking,” HR Magazine, November 2002, 53.
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Sarbanes–Oxley does not specifically identify general supervisory activities in the law, but it does require a number of items that generally fall under the topic of human resources management (see Chapter 5). For example, the act provides protection for employees who come forward (whistle-blowing) to report wrongdoing by executives. Supervisors must create an environment in which employees can come forward with allegations without fear of reprisal from the employer. Although this critical employee relations aspect is not limited solely to whistle-blowing, the act does require companies to have mechanisms in place for receiving complaints and undertaking an investigation. As a result, many companies are creating “organizational ombuds,” professionals who will offer confidential help for employees and “handle potentially unethical or illegal behavior” in the organization.23
Supervisors also have other responsibilities under the Sarbanes–Oxley Act. Someone in the organization must make sure that employees know about corporate ethics policies and train employees and supervisory personnel on how to act ethically in organizations.
The bottom line is that corporate greed and unethical behavior must be stopped. Employees and other stakeholders demand it. Although regulations signed into law are attempting to legislate “proper” behavior, legislation alone cannot work. Instead, com- pany officials must take the lead in establishing the moral fabric of the organization—and ensuring that it becomes part of the standard operating procedures of the enterprise.24
DO CONTROLS NEED TO BE ADJUSTED FOR CULTURAL DIFFERENCES? Methods of controlling employee behavior and operations can be quite different in dif- ferent countries. The differences in organizational control systems of global organiza- tions are primarily in the measurement and corrective action steps of the control process. In a global corporation, for instance, supervisors of foreign operations tend not to be closely controlled by the home office, if for no other reason than that distance keeps upper management from being able to observe work directly. Because distance creates a need for formalized controls, the home office of a global company often relies on extensive, formal reports for control. The global company may also use information technology to control work activities. Technology allows the use of automated cash registers to record sales, monitor inventory, and may be used to prompt supervisors to perform scheduled tasks. Supervisors performing below expectations are often told to increase their activities.25
The impact of technology on control is evident in comparisons of technologically advanced nations with countries that aren’t as technologically advanced. Organizations in advanced nations such as the United States, Japan, Canada, Great Britain, Germany, and Australia use indirect control devices, such as computer-related reports and analy- ses, along with standardized rules and direct supervision to ensure that activities are going as planned. In less technologically advanced countries, direct supervision and highly centralized decision-making are the basic means of control.
Finally, a challenge for global companies is collecting comparable data. A com- pany’s manufacturing facility in Mexico might produce the same products as a facility in Scotland, but the Mexican facility might be much more labor intensive than its Scottish counterpart to take advantage of lower labor costs in Mexico. Supervisors must be able to explain the metrics of their facility because management attempts to control costs by calculating labor costs per unit, or output per worker, would produce incomparable data. Supervisors in global companies must account for and address these types of global control challenges.
23 C. Hirschman, “Someone to Listen: Ombuds Can Offer Employees a Confidential, Discrete Way to Handle Problems—But Setup and Communication Are Crucial to Making This Role Work Properly,” HR Magazine, January 2003, 46–52. 24 B. McConnel, “Executives, HR Must Set Moral Compass, Says Ethics Group,” HR News, August 19, 2003. Available online at www.shrm.org/hrnews.published/archives/CMS.003406.asp 25 Hoovers Online, www.hoovers.com (June 17, 2011); and N. Shirouzu and J. Bigness, “7-Eleven Opera- tors Resist System to Monitor Managers,” Wall Street Journal, June 16, 1997, p. B1.
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Comprehension Check 6-2
5. A system in which materials arrive when they are needed in the production process instead of being stored in stock is called:
a. work process engineering. b. just-in-time inventory. c. cause-effect diagram. d. none of the above.
6. The process of managing the entire sequence of integrated activities and information about product flows is called:
a. supply chain management. b. kaizen. c. value chain management. d. process mapping.
7. Which one of the following is not a characteristic of effective quality controls? a. Timeliness b. Reasonable criteria c. Placement on all activities d. Flexibility
8. True or false? Employee theft is a significant problem with which most organizations have to deal.
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6. Describe what is meant by the term value chain man- agement. Value chain management is the process of managing the entire sequence of integrated activities and information about product flows along the entire value chain.
7. List the characteristics of an effective control system. An effective control system should be timely, be eco- nomical, be flexible, be understandable, have reason- able standards, be critically placed, and emphasize the exception.
8. Explain potential negatives that controls can cre- ate. Potential negatives include employee resistance, employees directing their efforts to the wrong activi- ties, and ethical dilemmas created by advances in con- trol technology.
9. Identify the ethical dilemmas in employee monitoring. The ethical dilemmas in employee monitoring revolve around the rights of employees versus the rights of employers. Employees are concerned with protect- ing their workplace privacy and intrusion into their personal lives. Employers, in contrast, are primarily concerned with enhancing productivity and ensuring that the workplace is safe.
10. Explain what is meant by employee theft and describe its effect on the organization. Employee theft is any unauthorized taking of property by employees for their personal use. Employee theft costs US companies more than $29 billion annually.
1. Describe the control process. The control process con- sists of three separate and distinct steps: (1) measuring actual performance, (2) comparing results with stan- dards, and (3) taking corrective action.
2. Contrast two types of corrective action. There are two types of corrective action: immediate and basic. Immediate corrective action deals predominantly with symptoms. Basic corrective action looks for the cause of the deviation and seeks to adjust the differences permanently.
3. Compare preventive, concurrent, and corrective con- trol. Preventive control is implemented before an activity begins. It anticipates and prevents undesir- able outcomes. Concurrent control takes place while an activity is in progress. Corrective control is imple- mented after an activity is finished and facilitates pre- vention of future deviations.
4. Explain how a supervisor can reduce costs. Supervi- sors can reduce costs by improving work methods, leveling the work flow, reducing waste, installing more modern equipment, investing in employee train- ing, and making selective cuts that will generate the greatest efficiencies.
5. Explain what is meant by the term just-in-time inven- tory systems. Just-in-time inventory systems change the technology around which inventories are managed. Inventory items arrive when they are needed in the production process instead of being stored in stock.
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
6-5. In terms of characteristics of an effective control system, where do you think most control systems fail? Why?
6-6. Why should a supervisor control by exception? 6-7. How can a supervisor lessen employee resistance to
controls? 6-8. What can a supervisor do to minimize the problem
of people trying to look good on control criteria?
6-1. Why may what we measure be more critical to the control process than how we measure it?
6-2. What constitutes an acceptable range of variation? 6-3. Which type of control is preferable: preventive,
concurrent, or corrective? Why? What type do you think is most widely used in practice?
6-4. What is the challenge of monitoring inventory costs? Of implementing a just-in-time inventory system?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
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DOWNACROSS
4. management of the e cient flow of incoming materials 7. a visual representation of the sequencing of events 8. expected di�erence in actual performance 10. an action that adjusts something right now and gets things back on track 11. a statistical technique used to measure variation to produce an average standard 12. measuring, comparing, and taking corrective action 13. a system that ensures that one is not overwhelmed by information on variations from standard 14. an illustration of the relationship between two variables 15. an inventory system in which items arrive as needed 16. identification of mistakes that may have occurred to ensure that preestablished standards are met 17. anticipating and preventing undesirable outcomes
1. a diagram depicting the roots of a problem 2. an inventory system designed around a card system 3. management of the entire sequence of integrated activities 5. a type of control that provides feedback after an activity is finished to prevent future deviations 6. an action that gets to the source of a problem and adjusts it permanently 9. a type of control that takes place while an activity is in progress
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Developing Your Supervisory Skills
• What’s the Motivating Potential of My Job? • Do I Want an Enriched Job?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine: • How Confident Am I in My Abilities to Succeed?
GETTING TO KNOW YOURSELF
totaling $6 million during Today’s Fitness’s first year. You believe you can do this with a staff of about eight people. Because this is a completely new publication, there is no previous budget for your advertising group. You’ve been asked by Jennifer to submit a preliminary budget for your group.
Prepare a report no more than three pages long. (A) Describe in detail how you would go about this assign- ment. For example, where would you get budget catego- ries? Who would you contact? (B) Present your best effort at creating a budget for your department. (Your instructor will inform you whether this is to be turned in as a written assignment or discussed in class.)
6-9. An Experiential Exercise: Developing a Budget You have recently been appointed advertising supervi- sor for a new monthly health magazine, Today’s Fitness, being developed by the magazine division of the Rupert Murdoch organization. You were previously an advertis- ing supervisor on one of the company’s established maga- zines. You will report to the new magazine’s publisher, Jennifer Clark.
Estimates of first-year subscription sales for Today’s Fitness are $125,000. Magazine stand sales should add another $40,000 a month to this estimate. Your concern is with developing advertising revenue for the magazine. You and Jennifer have set a goal of selling advertising space
BUILDING A TEAM
you require to achieve these goals? Think in terms of things such as staffing requirements, workloads, and the materials and equipment you’ll need. This is also your opportunity to formulate new programs and propose new responsibilities for your department.
STEP 3: Gather cost information. You’ll need accu- rate cost estimates of the resources you identified in step 2. Old budgets may be of some help. But you’ll also want to talk with your immediate boss, other supervisors, colleagues in similar positions, key employees, and other contacts you have developed inside and outside your organization.
STEP 4: Share your goals and cost estimates with your boss. Your immediate boss will need to approve your budget, so his or her support is necessary. Discuss your goals, cost estimates, and other ideas with your imme- diate boss and key individuals in your organization
Budgets are an important component in running an effec- tive department. If you’ve never been exposed to bud- geting (other than your personal finances), developing a realistic budget can be difficult—especially the first few times. The following steps are designed to provide you with some guidance in developing an effective budget.
STEPS IN PRACTICING THE SKILL
STEP 1: Review the organization’s overall strategy and goals. Understanding your organization’s strat- egy and goals will help you focus on where the overall organization is going and your department’s role in that plan.
STEP 2: Determine your department’s goals and the means to attaining them. What activities will you do to reach your departmental goals and help the orga- nization achieve its overall goals? What resources will
ESTABLISHING BUDGETS
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Chapter 6 Controlling 175
credits for future budgets. If certain projects aren’t approved this time, use this point in the budget pro- cess to get some assurance that they will be recon- sidered next time.
STEP 7: Monitor your budget. Once your budget is approved and implemented, you’ll be judged on how well you manage it. Supervise by exception. Set vari- ance targets that include both percentages and dollars. For instance, you could set a rule that says you’ll inves- tigate all monthly variances of 15 percent or larger where the actual dollar variance is $200 or more.
STEP 8: Keep your boss informed of your progress. Keep your immediate boss and other relevant par- ties advised on how you’re doing in terms of meeting your budget. This is likely to help protect you if you exceed your budget for reasons beyond your control. Also, don’t expect to be rewarded for underspending your budget. Underspending may indicate that you need less money than you expected, and this could adversely affect your next budgeting cycle.
before you include them in your budget. This discus- sion will ensure that your objectives align with upper management’s vision of your department’s role, and will build consensus for your proposed submission.
STEP 5: Draw up your proposed budget. Once your goals and costs are in place, constructing the actual budget is fairly mechanical. Be sure to show the link between your budget items and your depart- mental goals. You need to justify your requests and be prepared to explain and sell your budget to your immediate boss and other people in management. If other supervisors are competing for some of the same resources that you want, your rationale will have to be especially strong.
STEP 6: Be prepared to negotiate. It’s unlikely that your budget will be approved exactly as you submitted it. Be prepared to negotiate changes that management suggests and to revise your original budget. Recognize the politics in the budget pro- cess and negotiate from the perspective of building
6-12. Review the “Steps in Practicing the Skill” from the “Establishing Budgets” piece (in this chapter) to develop your personal budget. Substitute yourself for the organization/department as you develop your goals and cost estimates related to complet- ing an A.S. or B.S. degree at your school. Take on the role of the boss as you negotiate and monitor your own budget for the school year. Discuss what you learned as you reviewed your personal budget.
6-10. “Controls have to be sophisticated to be effective.” Present arguments for and against this statement. Conclude your paper with a persuasive argument why you agree or disagree with the statement.
6-11. Describe how you can use the concepts of control in your own personal life. Be specific with your examples, and think in terms of the preventive, concurrent, and corrective controls that you use for different parts of your life.
COMMUNICATING EFFECTIVELY
to train housekeepers on how to quickly and effectively clean guest rooms didn’t seem to have a lasting impact. So they began doing surprise inspections evaluating room cleanliness based on the video information. A manager would choose a room that had just been cleaned, place 10 one-dollar bills on the bed, then go through the room and look for areas not up to cleanliness standards. If a hair was found on the bathroom counter or in the tub, for instance, the manager would pick up a dollar. Other cleaning “mis- takes” also cost a dollar. After the inspection, any money left on the bed was given to the housekeeper as a bonus. At first, the housekeepers resented the $10 tests because there wasn’t much left after the inspection. However, after
■➤ Case 6-A: Walk the Talk The hospitality industry has been hit hard by the economic turmoil. Not only are families not going on vacation, but many companies are also curtailing business travel. Hotel occupancy rates were down over previous years and fore- casted to continue their decline in coming years. Hotel managers recognized that to attract guests and keep them returning, they had to offer exceptional customer service. That’s why so many are taking control actions to ensure that employees are working efficiently and effectively to provide that service.
This is called the $10 test.1 Managers at a Florida resort hotel felt that the instructional videos they used
THINKING CRITICALLY
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176 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
swing. As the crew arrived for their shift in the kitchen, they donned uniforms and washed up before beginning work. The first task was to prepare a number of chick- ens for oven roasting. The raw chickens were stored in the restaurant’s walk-in cooler in compliance with the HACCP principle of hazard analysis. The crew was aware that poultry is a potentially hazardous food. They knew improperly handled chicken contained microor- ganisms that could contaminate the food and cause food poisoning.
Once the crew had the chickens roasting in the oven, they checked them at intervals to ensure they were thor- oughly cooked. This was an application of the HACCP principle of setting critical control points. Everyone knew foods needed to be cooked to at least 167°F to prevent bacteria from developing, and the correct temperature being set on the oven was part of the HACCP principle— setting critical limits. For the banquet recipes the critical limit was a cooking temperature of 167°F.
Later, during a periodic check of the roasting pro- cess, it was determined someone had reduced the oven temperature. Quickly recalling the HACCP principle to establish monitoring systems for the critical limits, the crew used an instant reading probe thermometer, tested the internal temperature of one of the chickens, and found it to be 140°F. Because the temperature was below the critical limit of 167°F, the crew implemented the HACCP principle of corrective action to be taken when critical limits are not met, and returned the oven to the correct temperature setting. As required by Plucky Chicken TQM policy, the variation in temperature was noted on the cooking temperature chart, under the comments section. As part of protocol, the crew also recorded the finished cooking temperature of one of the batch of chickens, and the time during which the batch was cooked. At the end of their shift, the crew cleaned and sanitized the oven, and recorded the time and date on the cleaning roster.
Afterward, at the daily crew meeting, the change in oven temperature was reported to the shift supervisor. Working with the supervisor, the crew carried out the HACCP principle of verification measures that will make sure the system is working properly. They reviewed the past cooking temperature charts and discussed the steps to be sure each one had been carried out. Everyone was con- fident the system was working properly, but they followed policy and noted the variation of the oven temperature. The supervisor kept a record of the event and planned a training session for all kitchen crews to remind them about the potential hazards of temperature variations and the need to monitor and maintain critical temperature limits.
doing the “tests” for a time, most of the housekeepers ended up with an extra $9 or $10 and actually started looking forward to the inspections. And managers got what they wanted . . . guest rooms cleaned to an impec- cable standard, an important consideration because clean- liness is a critical component in customer satisfaction.
RESPONDING TO THE CASE
6-13. Refer to the steps of the control process (see Exhibit 6-1). Where in the process do the steps taken by the Florida resort hotel fall?
6-14. As a supervisor, do you think the $10 test is a fair and appropriate method to measure the perfor- mance of the housekeeping staff? Why or why not?
6-15. Describe which type(s) of control(s) is(are) illus- trated in this case. How do you know?
Sources: Based on R. A. Clark, M. D. Hartline, and K. C. Jones, “The Effects of Leadership Style on Hotel Employees’ Commi tment to Service Quality,” Cornell Hospitality Quarterly (May 2009), 209–231; C. Crowell, “Staff Management Is Key for Smaller Budgets,” Hotel & Motel Management, February 2009, 4+; G. Withiam, “Scripts Can Ensure Quality but Must Be Used Carefully,” Hotel & Motel Management, January 19, 2009, 20; B. De Lollis, “Most Hotels Likely to See Occupancy Rates Fall Next Year,” USA Today Online, November 11, 2008; G. Kranz, “Hospitality’s Sharpened Focus,” Workforce Management Online, September 2008; A. Dombey, “How To: Excel in Service Delivery,” Caterer & Hotelkeeper, June 12, 2008, 57; M. Nelson, “The Ten-Dollar Test Toward Customer Satisfaction,” Executive Housekeeping Today, May 2008, 5+; and H. Dolezalek, “We Train to Please,” Training (March/ April 2008), 34–35.
■➤ Case 6-B: Food Safety Procedures at the Plucky Chicken Restaurant The kitchen crew at the Plucky Chicken restaurant con- sisted of graduates of the local culinary school. They were well-trained in a variety of specialty cooking styles. Regard- less of their specialty approaches to cooking, one aspect they shared in common was an awareness of the systematic preventive approach to food safety known as hazard analy- sis and critical control points (HACCP) developed by the National Aeronautics and Space Administration (NASA) and Pillsbury. The seven HACCP principles are included in the international standard ISO 22000 FSMS 2005, and are integral to the Plucky Chicken organization’s Total Quality Management (TQM) system.
On this particular day, the Plucky Chicken was pre- paring for a large banquet, so food preparation was in full
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Chapter 6 Controlling 177
For these final actions the kitchen crew and the supervisor were also applying HACCP principles of record keeping and corrective action.
Sources: Based on “Hazard analysis and critical control points,” Wikipedia, http://en.wikipedia.org/wiki/Hazard_analysis_and_ critical_control_points (accessed January 29, 2017); J. Ross- Nazzal “‘From Farm to Fork’: How Space Food Standards Impacted the Food Industry and Changed Food Safety Stan- dards,” http://history.nasa.gov/sp4801-chapter12.pdf (accessed January 29, 2017).
RESPONDING TO THE CASE
6-16. Identify and describe each of the various types of controls used in the situation at the Plucky Chicken.
6-17. Identify and describe the focus of control used by the supervisor at the Plucky Chicken.
6-18. Identify and describe where the steps in the con- trol process were applied at the Plucky Chicken.
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■■ availability heuristic
■■ big data
■■ brainstorming
■■ decision-making process
■■ decision tree
■■ design thinking
■■ electronic meeting
■■ escalation of commitment
■■ expected value analysis
■■ groupthink
■■ ill-structured problems
■■ justice view of ethics
■■ marginal analysis
■■ nominal group technique
■■ nonprogrammed decision
■■ problem
■■ programmed decision
■■ representative heuristic
■■ rights view of ethics
■■ ringisei
■■ utilitarian view of ethics
■■ well-structured problems
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Problem Analysis and Decision Making7
C H
A P
T ER
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Odua Images/Shutterstock
7-1. List the seven steps in the decision-making process.
7-2. Describe expected value analysis.
7-3. Explain the four types of decision styles.
7-4. Identify and explain the common decision-making errors.
7-5. Describe the two types of decision problems and the two types of decisions that are used to solve them.
7-6. Compare and contrast group decision making and individual decision making.
7-7. List and describe three techniques for improving group decision-making.
7-8. Explain three different ethical viewpoints.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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180 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
Tyler Olson/123RF.com
Responding to a Supervisory Dilemma
Consider the case of Advanced Cell Technology. This technology is embarking on a major activity— “to produce the world’s first-ever cloned human embryo . . . a micro- scopic version of an already living person.” Leaders of the organization have begun the implementation of this goal by interviewing women to serve as egg donors. Combining these eggs with a human cell produces an embryo that permits scientists at Advanced Cell Technology to cap- ture stem cells. As the stem cells are captured, the embryo is destroyed. Stem cells are believed to be able to develop into human tissue that could help cure a variety of diseases or even repair a severed spinal cord.
Advanced Cell Technology’s goal, of course, is facing a major debate. People sup- porting both sides of the issue have voiced their opin- ions strongly. On one hand, if such research is proven effective, many diseases as we know them today—such as Parkinson’s disease and muscular dystrophy—could be eliminated. This could be both a major scientific breakthrough in our world, and a major financial coup for Advanced Cell. Moreover, similar research is being conducted in other parts of the globe, such as Europe, where it has received support. In an attempt to ensure that the highest ethics prevail in all decisions made, the company has formed an ethical board of advisers con- sisting of scientists and professors of religion.
But critics of such research see this differently. They view stem cell research as the next step toward clon- ing humans—and at times, liken it to creating a “great society.” Religious groups, too, have voiced this con- cern over Advanced Cell’s decisions, claiming that it is working in an area that it shouldn’t be. They also say that making decisions regarding such research raises
significant ethical issues, particularly as to how far this research can go. The federal government has also entered into the discussion, and on March 9, 2009, President Barack Obama issued Executive Order (EO) 13505, titled “Removing Barriers to Responsible Scientific Research Involving Human Stem Cells,” effectively reversing the presidential statement of President George W. Bush that set specific regulations on what kind of stem cell research is funded by the government. However, even some Advanced Cell ethics board members have resigned, complaining that Advanced Cell is more interested in “obtaining patents in the field and using the board as a rubber stamp.”
Supervisors may not be fully involved in establishing lofty goals for organizations, but they may be responsible for implementing actions that make the goals achievable. Do you believe that com- pany officials should be able to make ethical decisions in this arena when so much is at stake? Should public opinion keep a company from doing something simply because it is unpopular—even though it is legal? If you were a supervisor at Advanced Cell and you were against this research for personal reasons, would you voice your opinion and ask not to be part of this research? As a supervisor, what recourse might you have if you disagree with the decisions that are being handed down in the organization?
Sources: Based on A. Regalado, “Experiments in Controversy— Ethicists, Bodyguards Monitor Scientists’ Effort to Create Copy of Human Embryo,” Wall Street Journal, July 13, 2001, B1; “Stem-Cell Research Is Forging Ahead in Europe,” Wall Street Journal, July 13, 2001, B6; Federal Policy. In Stem Cell Information [website]. Bethesda, MD: National Institutes of Health, U.S. Department of Health and Human Services, 2016, https://stemcells.nih.gov/ (accessed January 29, 2017).
D ecisions, decisions, decisions! One of your employees has been arriving at work late recently, and the quality of her work has fallen off. What do you do? You’ve got a vacancy in your department, and your company’s human resources represen-
tative has sent you six candidates. Which one do you choose? Several of your salespeople have told you that they’re losing business to an innovative new product line introduced by one of your competitors. How do you respond?
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Chapter 7 Problem Analysis and Decision Making 181
As a supervisor, you will be regularly confronted with problems that require deci- sions. For example, you help employees select goals, schedule workloads, and decide what information—and how much of it—to share with your boss.1 How do you learn to make good decisions? Are you born with some intuitive talent? Probably not! Sure, some of you, because of your intelligence, knowledge, and experience, can unconsciously analyze problems; this analysis can result, over time, in an impressive trail of decisions. There are, however, some conscious decision-making techniques that anyone can use to become a more effective decision maker. We review a number of these techniques in this chapter.
The Decision-Making Process Let’s begin by describing a rational and analytical way of looking at decisions. We call this approach the decision-making process. It’s composed of seven steps (see also Exhibit 7-1):
1. Identify the problem 2. Collect relevant information 3. Develop alternatives 4. Evaluate each alternative 5. Select the best alternative 6. Implement the decision 7. Follow up and evaluate
To help illustrate this process, we’ll work through a problem faced by Carol Prince. Carol is head of operations at WCIV, a Fox affiliate in Charleston, South Carolina. She has just received the news that the syndicated program she runs in the 7:00–7:30 p.m. time slot, COPS, has been canceled by the syndicator. Let’s look at how Carol handles this problem by working through the decision-making process.
HOW DO YOU IDENTIFY THE PROBLEM? Step 1 in the decision-making process begins with identifying the existence of a problem or, more specifically, a discrepancy between an existing and a desired state of affairs. For Carol Prince, it’s suddenly having a half-hour gap in her early-evening program schedule, which she wants filled with profitable, high-rated shows.
In the real world, many of the problems you will confront aren’t as obvious as Carol’s dilemma. One of the most difficult chores in this stage, then, is separating symptoms from problems. Is a decline in sales a problem? Or are declining sales merely a symptom of another problem? To use a medical analogy, aspirin doesn’t deal with the problem of stress on the job; it merely relieves the headache symptom. One last point: Solving the wrong problem perfectly is no better an outcome, and may be worse, than coming up with the wrong solution to the right problem! Correctly identifying the real problem is not an easy task. So, how do supervisors identify a problem? They have to make a comparison between current reality and some standard, which can be past performance, previously set goals, or the performance of some other unit within the organization or in other organizations.
HOW DO YOU COLLECT RELEVANT INFORMATION? Once the problem has been identified, you need to gather the facts and information rel- evant to the problem while identifying the decision criteria. Why has it occurred now? How is it affecting productivity? What organizational policies are relevant for dealing with this problem? What time limitations exist for solving it? What costs are involved?
1See, for instance, K. Fracaro, “Pre-Planning: Key to Problem Solving,” Supervision, November 2001, 9–12.
OBJECTIVE 7.1 List the seven steps in the decision-making process.
decision-making process A seven-step process that provides a rational and analytical way of look- ing at decisions. The steps include identification of the problem, collection of relevant information, development of alternatives, evaluation of alterna- tives, selection of the best alternative, implementation of the decision, and follow-up and evaluation.
problem A discrepancy between an existing and a desired state of affairs.
Exhibit 7-1 The decision-making process.
1. Identify the problem
3. Develop alternatives
4. Evaluate each alternative
5. Select the best alternative
6. Implement the decision
7. Follow up and evaluate
2. Collect relevant information
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In Carol’s case, she’ll need to find answers to questions such as these: What was she paying the syndicator for COPS? For how much longer will the syndicator provide episodes? What are competitors currently showing in the 7:00–7:30 p.m. time slot? What are the ratings of these shows? What contractual obligations does she have that would constrain her options to shuffle other programs into this slot?
HOW DO YOU DEVELOP ALTERNATIVES? After collecting relevant information, it’s now time to identify all possible alternatives. At this step in the decision process you demonstrate your creativity (see the section titled “Becoming More Creative” at the end of this chapter) by considering which alternatives exist beyond the obvious or those that may have been used previously.
Remember this step requires only identifying alternatives. No alternative—no matter how unusual or unconventional—should be discarded at this point. If an alter- native isn’t viable, you’ll find out at the next stage. Avoid the tendency to stop searching for alternatives after only a couple have been identified. If you see only two or three choices, you probably haven’t thought hard enough. The more alternatives you can generate, the better your final solution will be because your final choice can be only as good as the best alternative you’ve generated.
Here are the alternatives Carol Prince developed:
1. Buy a syndicated tabloid news show for this time slot. ET is available. 2. Buy the syndicated program Jeopardy. 3. Buy comedy reruns in syndication. Friends is available. 4. Move The King of Queens from the 7:30 p.m. slot and fill the gap with a local
human-interest program—similar to Atlanta Today, a program that she had devel- oped at her previous job at a station in Georgia.
5. Develop a new show around local college and professional sports teams.
HOW DO YOU EVALUATE EACH ALTERNATIVE? Step 4 is to evaluate the strengths and weaknesses of each alternative. What will each cost? How long will each take to implement? What is the most favorable outcome you can expect from each? What is the most unfavorable outcome?
In many decision-making situations, the criteria are not all equally important, and it may be necessary to weight them to establish their priority in terms of the decision.2 You may decide to determine the most important criterion, weight it heavily, and use it as a standard for the other criterion. The idea is to use your personal preferences to assign priorities to the relevant criteria in your decision as well as to indicate their degree of importance by assigning a weight to each. Then list the alternatives that could succeed in resolving the problem without evaluating them.3 Finally, you must critically analyze each alternative by appraising it against the criteria. Some assessments can be achieved in a relatively objective fashion because of cost, availability, or level of interest.
In this step, remember to guard against biases. Undoubtedly, some alternatives will have looked more attractive when they were first identified. Others, at first glance, may have seemed unrealistic or exceedingly risky. As a result, you may tend to prematurely favor some outcomes over others then bias your analysis accordingly. Put your initial biases on hold and evaluate each alternative as objectively as you can. No one is per- fectly rational, but you can improve the final outcome if you acknowledge your biases and overtly attempt to control them.
2See J. Figueira and B. Ray, “Determining the Weights of Criteria in the Electre Type of Methods with a Revised Simons’ Procedure,” European Journal of Operational Research, June 1, 2002, pp. 317–326. 3For instance, see M. Elliott, “Breakthrough Thinking,” IIE Solution, October 2001, pp. 22–25; and B. Fazlollahi and R. Vahidov, “A Method for Generation of Alternatives by Decision Support Systems,” Journal of Management Information Systems (Fall 2001), pp. 229–250.
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Chapter 7 Problem Analysis and Decision Making 183
Exhibit 7-2 summarizes the highlights from Carol’s evaluation of her five alterna- tives. Writing down key considerations often makes it easier for decision makers to compare alternatives.
HOW DO YOU SELECT THE BEST ALTERNATIVE? In Step 5, it is time to select the best alternative. What’s “best” will reflect any limita- tions or biases that you bring to the decision process. It depends on things such as the comprehensiveness and accuracy of the information gathered in Step 2, your ingenuity in developing alternatives in Step 3, the degree of risk that you’re willing to take, and the quality of your analysis in Step 4.
Carol’s analysis led her to choose development of a new program focusing on local college and professional sports teams (Alternative 5). Her logic went like this: “First of all, the syndicator advised me that they would offer COPS through the end of the season. That meant I had ten more weeks of the show. I wanted to make my decision perma- nent, so I eliminated the option of expanding the local news. The payoff of going with Jeopardy didn’t seem high enough to justify the cost. I think the tabloid news market is saturated in this time slot, so I passed on buying ET. We’re in business to make money and, although I felt confident we could get the highest ratings in this time period with Friends, the cost was too high. That left developing a sports show. I thought the sports show alternative offered me the highest potential market share for the lowest cost.”
HOW DO YOU IMPLEMENT THE DECISION? Step 6 involves putting the decision into action. If others will be affected by the decision, implementation also includes conveying the decision to those affected and getting their commitment to it.4 You’ll want to assign responsibilities, allocate necessary resources, and clarify deadlines
4D. Miller, Q. Hope, R. Eisenstat, N. Foote, and J. Galbraith, “The Problem of Solutions: Balancing Clients and Capabilities,” Business Horizons, March–April 2002, pp. 3–12.
Exhibit 7-2 Evaluating alternatives.
Alternative
Estimated Weekly
Cost
Estimated Market Share* Strengths Weaknesses
Tabloid news show
Jeopardy
Comedy reruns
Human-interest program
New sports show
$ 25,000
$16,000
$30,000
$12–15,000
$6,000
15–25
8–12
20–35
8–12
6–20
Competition does well with Inside Edition and E! News in this time slot.
Known entity.
Could provide strong lead-in to 8:00 P.M. network programming. Might be perfect counterprogramming move against competitor's tabloid shows.
Possible stopgap measure.
Unique. Nothing like this in our market. Build goodwill in community. Low cost. Strong appeal among 18–39 male market.
High cost. Would leave little potential profit. Would split tabloid market further.
Low market potential.
High cost. Would leave almost no profit.
Low potential. Not a viable long-term solution.
Risky. Is there a market for a half hour of local sports coverage?
* Percentage of sets turned on that would be watching this show
1.
2.
3.
4.
5.
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Carol called a meeting of her programming staff, explained the decision and how she arrived at it, and encouraged discussion on any problems people anticipated. She cre- ated a three-member departmental task force to develop the concept, prepare a format, and suggest key personnel for the program. She appointed one of the team members as the project leader, and together they decided that the task force would make a formal presentation to Carol within three weeks.
HOW DO YOU FOLLOW UP AND EVALUATE? The last phase in the process consists of follow-up and evaluation of the outcomes of the decision. Did your choice accomplish the desired result? Did it correct the problem originally identified in Step 1? In Carol’s decision, did she fill the time slot with a prof- itable, high-rated show? She won’t know the final answer until after the program has aired for a few months.
If the follow-up and evaluation indicate the sought-after results weren’t achieved, you’ll want to review the decision process to see where you went wrong. You essentially have a brand-new problem, and you should go completely through the decision process again with a fresh perspective.
Decision Tools In this section, we will present tools and techniques developed over the years to help supervisors improve their decision-making capabilities. Let’s begin, however, with a brief review of the conditions supervisors face when making decisions.
WHAT ARE THE CONDITIONS OF DECISION MAKING? Supervisors may face three conditions as they make a decision: certainty, risk, and uncertainty.
Certainty Supervisors facing decisions in which certainty abounds are in the best pos- sible situation. Certainty exists when the outcome and every alternative are known. For example, suppose a supervisor is deciding what transportation company to use to ship goods. The supervisor knows the exact weight of the item to be shipped and the cost incurred if the item is shipped by UPS, FedEx, or DHL. The supervisor is also certain about the outcomes of each alternative—delivery will be made. As you might expect, most supervisory decisions aren’t as clear-cut as this.
Risk A far more common situation supervisors face is one of risk, in which they must estimate the likelihood of certain outcomes. To assign probabilities to outcomes, super- visors can rely on personal experiences, secondary information, or historical data.
Uncertainty Supervisors who are not certain about the outcomes and can’t even make a reasonable probability estimate are said to be making a decision under a condition of uncertainty. In this case, the choice of alternatives is influenced by the limited informa- tion available and by one’s view of the problem. The optimistic supervisor will select an alternative offering the highest possible payoff, whereas the pessimistic supervisor will attempt to minimize the maximum loss. Although supervisors facing uncertainty will try to quantify the decision when possible, making a choice based on a “gut reaction” often results in the best outcome.
WHAT IS THE EXPECTED VALUE ANALYSIS? The head of the skiing department at a Bass Pro Shops store is looking at several new brands of ski jackets. Given his space and budget limitations, he can purchase only one of these new brands to add to his selection. Which one should he choose?
OBJECTIVE 7.2 Describe expected value analysis.
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Chapter 7 Problem Analysis and Decision Making 185
Expected value analysis permits decision makers to place a monetary value on the various consequences likely to result from the selection of a particular course of action. The procedure is to calculate the expected value of a particular alternative by weighting its possible outcomes by the prob- ability (0 to 1.0, with 1.0 representing absolute certainty) of achieving the alternative, then summing up the totals derived from the weighting process.
Our Bass Pro Shops supervisor is looking at three lines of ski jackets: Nike, Adidas, and one that will carry the Bass label. He’s constructed the payoff table in Exhibit 7-3 to summarize his analysis. Based on his past experience and personal judgment, he’s calculated the potential yearly profit from each alternative and the probability of achieving that profit. The expected value of each alternative ranges from $6,500 to $8,800. Based on this analysis, the supervisor could anticipate the highest expected value by purchasing the Bass line of jackets.
HOW ARE DECISION TREES USEFUL? Decision trees are a useful way to analyze hiring, marketing, investment, equipment purchase, pricing, and similar decisions that involve a progression of decisions. They’re called decision trees because, when diagrammed, they look like a tree with branches. Typical decision trees encompass expected value analysis by assigning probabilities to each possible outcome and calculating payoffs for each decision path.
Exhibit 7-4 illustrates a decision facing Mike Flynn, the site-selection supervisor for the Barnes & Noble bookstore chain. Mike supervises a small group of specialists who analyze potential locations and make store site recommendations to the midwestern region’s director. The lease on the company’s store in Cleveland, Ohio, is expiring, and the landlord has decided not to renew it. Mike and his group have to make a relocation recommendation to the regional director.
Mike’s group has identified an excellent site in a nearby shopping mall in North Olmsted. The mall owner has offered him two comparable locations: one with
expected value analysis A procedure that permits decision makers to place a monetary value on various consequences likely to result from the selection of a particular course of action.
decision tree A diagram that analyzes hiring, market- ing, investment, equipment purchases, pricing, and similar decisions that involve a progression of decisions. Decision trees assign probabilities to each possible outcome and calculate payoffs for each decision path.
Exhibit 7-3 Payoff table for ski jacket decision.
Alternative Possible Outcome Probability
Expected Value
$12,000 8,000 4,000
$15,000 10,000 6,000 2,000
$12,000 8,000 4,000
0.1 0.7 0.2
0.1 0.2 0.4 0.3
0.4 0.4 0.2
$1,200 5,600
800 $7,600
$1,500 2,000 2,400
600 $6,500
$4,800 3,200
800 $8,800
Nike
Adidas
Bass label
Exhibit 7-4 Decision tree and expected values for renting a large or small retail space.
Denotes an outcome point
$320,000
$50,000 $240,000
$130,000
Ren t 20
,000
sq. feet
Rent 12,000sq. feet
Add 4,000
Add 8,000
No expansion
Stro ng (
0.70 )
Stro ng (
0.70 )
Weak (0.30)
Weak (0.30)
Expected value:
0.70(320) + 0.30(50) = 239
21
Denotes a decision point
Expected value:
0.70(240) + 0.30(130) = 207
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186 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
12,000 square feet (the same as he has now) and the other a larger, 20,000-square-foot space. Mike has an initial decision to make about whether to recommend renting the larger or smaller location. If he chooses the larger space and the economy is strong, he estimates the store will make a $320,000 profit. However, if the economy is poor, the high operating costs of the larger store will mean that only $50,000 in profit will be made. With the smaller store, he estimates the profit at $240,000 with a good economy and $130,000 with a poor one.
Exhibit 7-4 shows the expected value for the larger store is $239,000[(0.70 × 320) + (0.30 × 50)]. The expected value for the smaller store is $207,000[(0.70 + 240) × (0.30 × 130)]. Given this, Mike is planning to recommend renting the larger store space. If Mike wants to consider the implications of initially renting the smaller space then expanding if the economy picks up, he can extend the decision tree to include this second decision point. He has calculated three options: no expansion, adding 4,000 square feet, and adding 8,000 square feet. Following the approach used for Decision Point 1, he could calculate the profit potential by extending the branches on the tree and calculating expected values for the various options.
WHAT IS MARGINAL ANALYSIS? Marginal, or incremental, analysis helps decision makers optimize returns or minimize costs. Marginal analysis deals with the additional cost in a particular decision, rather than the average cost. For example, suppose the operations supervisor for a large commercial dry cleaner wonders whether she should take on a new customer. She should consider what additional revenue would be generated by this particular order and at what addi- tional cost. If the incremental revenues exceed the incremental costs, total profits would be increased by accepting the order.
Decision-Making Styles Personality and experiences impact our decisions. If you’re basically conservative and uncomfortable with uncertainty, you’re likely to value decision alternatives differently from someone who enjoys uncertainty and risk-taking. These facts have led to research that has sought to identify individual decision-making styles.5
WHAT ARE THE FOUR DECISION-MAKING STYLES? The basic foundation for a decision-making style model is the recognition that people differ along two dimensions. The first is their way of thinking. Some people are logical and rational. They process information serially. In contrast, some people are intuitive and creative. They perceive things as a whole. The other dimension addresses tolerance for ambiguity. Some people have a need to structure information to minimize ambiguity, whereas others process many thoughts simultaneously. When these two dimensions are diagrammed, they form four styles of decision-making (see Exhibit 7-5): directive, analytic, conceptual, and behavioral.
Directive Style People using the directive style have low tolerance for ambiguity and seek rationality. Efficient and logical, their efficiency concerns may result in their making decisions with minimal information and after assessing few alternatives. Directive types make decisions quickly and focus on the short run.
marginal analysis A method that helps decision makers optimize returns or minimize costs by dealing with the additional cost in a particular decision, rather than the average cost.
5See, for example, G. A. Williams and R. B. Miller, “Change the Way You Persuade,” Harvard Business Review, May 2002, 65–73; J. A. Andersen, “Intuition in Managers: Are Intuitive Managers More Effective?”Journal of Managerial Psychology 15, no. 1–2 (January 2000), 46–63; and G. Walsh, T. Henning-Thurau, V. Wayne-Mitchell, and K. P. Wiedmann, “Consumers’ Decision-Making Styles as a Basis for Market Segmentation,” Journal of Targeting, Measurement and Analysis for Marketing 10, no. 2 (December 2001), 117–131.
OBJECTIVE 7.3 Explain the four types of decision styles.
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Chapter 7 Problem Analysis and Decision Making 187
Analytic Style Analytic types have a greater tolerance for ambiguity than do directive managers. They desire more infor- mation and will consider more alternatives than directive types. Analytic supervisors are characterized as careful decision mak- ers with the ability to adapt or cope with new situations.
Conceptual Style Individuals with a conceptual style have a broad outlook and consider many alternatives. Their focus is long range, and they are good at finding creative solutions to problems.
Behavioral Style Decision makers with the behavioral style work well with others and are concerned with the achievement of their employees. Receptive to suggestions from others and relying on meetings for communicating, this type of decision maker tries to avoid conflict and seek acceptance.
WHAT’S THE POINT OF THESE FOUR DECISION-MAKING STYLES? Most individuals have characteristics that fall into more than one decision-making style. Although it is best to think in terms of dominant style and backup styles, some rely almost exclusively on their dominant style whereas other, more flexible individuals shift styles depending on the situation.
Business students, supervisors, and top executives tend to score highest in the ana- lytic style because of the emphasis that formal education, particularly business educa- tion, gives to developing rational decision-making skills.
Understanding how two intelligent people, with access to the same information, can differ in the ways they approach decisions and in the final choices they make can help explain conflicts between you and your employees. If you are a directive supervisor, you expect work to be performed rapidly and may be frustrated by the slow, deliber- ate actions of a conceptual or analytic. As an analytic, you might criticize a decisive employee for incomplete work or acting too hastily and you may not understand the behavioral approach of using feelings as the basis for decisions rather than rational logic.
WHAT COMMON ERRORS ARE COMMITTED IN THE DECISION-MAKING PROCESS? Availability Heuristic Availability heuristic is the tendency for supervisors to base their judgments on readily available information. Events that evoke strong emotions, are vivid to the imagination, or have recently occurred create a strong impression on them. As a result, supervisors are likely to overestimate the frequency of the occurrence of unlikely events. For instance, many people have a fear of flying and media coverage of an air disaster results in individuals’ overstating the risk in flying and understating the risk of driving. For supervisors, availability heuristic can also explain why, when conducting performance appraisals (see Chapter 12), they tend to give more weight to more recent behaviors of an employee than to behaviors of six or nine months ago.
Representative Heuristic Millions of recreational-league players dream of becoming professional football players someday. These dreams are examples of what we call representative heuristic. Representative heuristic causes individuals to match the likeli- hood of an occurrence with something with which they are familiar. For example, our young football players may think about someone from their local league who went on to play in the NFL fifteen years ago.
In organizations, decision makers may predict the future success of a new depart- ment process by relating it to a previous process’ success. Supervisors may also be
OBJECTIVE 7.4 Identify and explain the common decision-making errors.
availability heuristic The tendency of people to base their judgments on information that is read- ily available to them.
representative heuristic The tendency of people to match the likelihood of an occurrence with some- thing they are familiar with.
Exhibit 7-5 Decision-making style model.
Analytic Conceptual
Directive Behavioral
High
Low
Rational Intuitive Way of Thinking
T o
le ra
n ce
f o
r A
m b
ig u
it y
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188 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
affected by representative heuristic when they stop hir- ing college graduates from a particular college program because the last three hired from that program were poor performers.
Escalation of Commitment A popular strategy in playing Blackjack is to “guarantee” you can’t lose. When you lose a hand, double your next bet. This strategy, or decision rule, may appear innocent enough, but if you start with a $5 bet and lose six hands in a row (not uncommon for many of us), you will be wagering $320 on your seventh hand merely to recoup your losses and win $5.
The Blackjack strategy illustrates a phenomenon called escalation of commitment. Specifically, it is defined as an increased commitment to a previous decision despite negative information. That is, the escalation of commit-
ment represents the tendency to “stay the course,” despite negative data that suggest one should do otherwise.
In organizations, supervisors may recognize evidence that their previous solution is not working. But rather than search for new alternatives, they further increase their commitment to the original solution. Why do they do this? In many cases, it’s an effort to demonstrate that their initial decision was not wrong.
Here are some other decision errors and biases that supervisors make of which you should be aware.6 Decision makers who tend to think they know more than they do or hold unrealistically positive views of themselves and their performance are exhibiting the overconfidence bias. The immediate gratification bias describes decision-makers who tend to want immediate rewards and to avoid immediate costs; these supervisors favor decision choices that provide quick payoffs. The anchoring effect describes when deci- sion makers fixate on initial information as a starting point and then fail to adjust for subsequent information. The selective perception bias occurs when decision makers selectively organize and interpret events based on their biased perceptions, thus influencing the information they pay attention to, the problems they identify, and the alternatives they develop. Decision makers exhibiting the confirmation bias seek and accept at face value information affirming their past choices and preconceived views; they discount information that contradicts past judgments and are critical and skeptical of information that challenges these views. The framing bias happens when decision makers select and highlight certain aspects of a situation while excluding others, thereby distorting what they see and creating incorrect reference points. The randomness bias describes when decision makers try to create meaning out of random events and explain the unpredictability of chance even though random events happen to everyone and there’s nothing that can be done to predict them. The sunk costs error takes place when decision makers forget that current choices can’t correct the past and they fixate on past expenditures of time, money, or effort in assessing choices rather than on future conse- quences. Decision makers who quickly accept credit for their successes and blame failure on outside factors are exhibiting the self-serving bias. Finally, hindsight bias is the ten- dency for decision makers to falsely believe that they would have accurately predicted the outcome of an event once that outcome is actually known.
How can supervisors avoid the negative effects of these decision errors and biases? First, be aware of them, and then don’t use them! Second, supervisors also should pay attention to “how” they make decisions and try to identify the heuristics they typically use and critically evaluate how appropriate those are. Finally, supervisors could ask colleagues to help identify weaknesses in their decision-making style and then work on improving those weaknesses.
escalation of commitment An increased commitment to a previous decision despite negative information.
6Information for this section taken from S. P. Robbins, Decide and Conquer (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004).
Tribune Content Agency LLC/Alamy Stock Photo
Go to almost any youth football game and you’ll likely find one thing in common. Someone is playing football wearing the jersey of Andrew Luck. Why? Because many of these players are trying to be just like Andrew. After all, wearing his jersey and playing like him will help them one day fulfill a dream and play in the NFL—after a success- ful college career. That dream is what we call representative heuristic.
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Chapter 7 Problem Analysis and Decision Making 189
Problems Versus Decisions The type of problem a supervisor faces in a decision-making situation often determines how the problem is treated. In this section, we present a categorization scheme for problems and for types of decisions. Then, we show how the type of decision a supervi- sor uses should reflect the characteristics of the problem (see also “News Flash! Daily Delivery Decision at UPS”).
OBJECTIVE 7.5 Describe the two types of decision problems and the two types of decisions that are used to solve them.
Comprehension Check 7-1
1. The first step in the decision-making process is:
a. collecting relevant information. b. developing alternatives. c. evaluating alternatives. d. none of the above.
2. A procedure that permits decision makers to place a monetary value on various conse- quences is called:
a. expected value analysis. b. decision tree. c. marginal analysis. d. none of the above.
3. People using a style of decision making have a much greater tolerance for ambiguity than do those using other styles.
a. directive b. analytic c. conceptual d. behavioral
4. Mental shortcuts in decision making, in which people base their judgments on information that they have easy access to, are called:
a. representative heuristics. b. escalation of commitment. c. availability heuristics. d. none of the above.
DAILY DELIVERY DECISIONS AT UPS
NEWS FLASH!
United Parcel Service (UPS) is the world’s largest package delivery company with the instantly recog- nizable trucks.7 Every day, UPS transports more
than 18 million packages and documents throughout the United States and to more than 220 countries and territories, including every address in North
7www.fastcompany.com/3004319/brown-down S. Rosenbush and L. Stevens, “At UPS, the Algorithm Is the Driver,” Wall Street Journal, February 17, 2015, B1+; D. Zax, “Brown Down: UPS Drivers vs. the UPS Algorithm,” http://ups-drivers-vs-ups-algorithm, January 3, 2013; T. Bingham and P. Galagan, “Deliver- ing ‘On-Time, Every Time’ Knowledge and Skills to a World of Employees,” T&D, July 2012, 32–37; J. Levitz, “UPS Thinks Outside the Box on Driver Training,” Wall Street Journal, April 6, 2010, B1+; and K. Kingsbury, “Road to Recovery,” Time, March 8, 2010, Global 14–Global 16.
(continued)
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190 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
America and Europe. (Total worldwide delivery vol- ume in 2014 was 4.6 billion packages and docu- ments.) Delivering those packages efficiently and on time is what UPS gets paid to do, and that takes a massive effort in helping drivers to make decisions about the best routes to follow.
Efficiency and uniformity have always been important to UPS. The importance of work rules, procedures, and analytic tools are continually stressed to drivers through training and retraining. For instance, drivers are taught to hold their keys on a pinky finger so they don’t waste time fumbling in their pockets for the keys. And for safety reasons, they’re taught no-left turns and no backing up. Now, however, the company has been testing and rolling out a quantum leap in its long-used business model of uniformity and efficiency. It goes by the name ORION, which stands for On-Road Inte- grated Optimization and Navigation. What it boils down to is helping UPS drivers shave millions of miles off their delivery routes using decision-based algorithms built by a team of mathematicians. Con- sider that each UPS driver makes an average of 120 stops per day. The efficiency challenge is deciding the best order to make all those stops (6,689,502,913,449,135 + 183 zeroes of possible alternatives)—taking into consideration “variables such as special delivery times, road regulations, and the existence of private roads that don’t appear on a map?”8 Another description of the logistics deci- sion challenge: There are more ways to deliver packages along an average driver’s route “than
there are nanoseconds that Earth has existed.”9 Any way you look at it, that’s a lot of alternatives. The human mind can’t even begin to figure it out. But the ORION algorithm, which has taken 10 years and an estimated hundreds of millions of dollars to build, is the next best thing. IT experts have described ORION as the largest investment in operations research ever by any company.
So what does ORION do? Instead of searching for the one best answer, ORION is designed to refine itself over time, leading to a balance between an optimum result and consistency to help drivers make the best possible decisions about route delivery. And considering how many miles UPS drivers travel every day, saving a dollar or two here can there can add up quickly. When a driver “logs on” to his delivery information acquisition device (DIAD) at the beginning of his shift each workday, what comes up are two possible ways to make the day’s package deliveries: one that uses ORION, and one that uses the “old” method. The driver can choose to use either one but if ORION is not chosen, the driver is asked to explain the decision. The roll-out of ORION hasn’t been without chal- lenges. Some drivers have been reluctant to give up autonomy; others have had trouble understanding ORION’s logic—why deliver a package in one neighborhood in the morning and come back to the same neighborhood later in the day? But despite the challenges, the company is committed to ORION, saying that “a driver together with ORION is better than each alone.”10
8S. Rosenbush and L. Stevens, “At UPS, the Algorithm Is the Driver,” Wall Street Journal, February 17, 2015, B1+ 9D. Zax, “Brown Down: UPS Drivers vs. the UPS Algorithm,” http://www.fastcompany.com/3004319/brown- down-ups-drivers-vs-ups-algorithm, January 3, 2013 10S. Rosenbush and L. Stevens, “At UPS, the Algorithm Is the Driver,” Wall Street Journal, February 17, 2015, B1+
Continued
HOW DO PROBLEMS DIFFER? Some problems are straightforward. The goal of the decision maker is clear, the problem familiar, and information about the problem easily defined and complete. Examples might include a supplier’s being late with an important delivery or a customer wanting to return a mail-order purchase. Such situations are called well-structured problems.
Some situations faced by supervisors, however, are ill-structured problems. They are new or unusual. Information about such problems is ambiguous or incomplete. The decision on whether to restructure the department or to invest in and implement new, unproven technology are examples of ill-structured problems.
well-structured problems Straightforward, familiar, easily defined problems.
ill-structured problems New problems about which information is ambiguous or incomplete.
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WHAT IS THE DIFFERENCE BETWEEN PROGRAMMED AND NON-PROGRAMMED DECISIONS? Just as problems can be divided into two categories, so, too, can decisions. Programmed, or routine, decision-making is the most efficient way to handle well-structured problems. However, when problems are ill-structured, supervisors must rely on non-programmed decision-making to develop unique solutions.
Suppose a Goodyear Tire mechanic breaks an alloy wheel rim while installing new tires on a vehicle. What does the supervisor do? There is probably some standardized routine for handling this type of problem. For example, the supervisor replaces the rim at the company’s expense. This is a programmed decision. Decisions are programmed to the extent that they are repetitive and routine, and to the extent that a definite approach has been worked out for handling them. Because the problem is well-structured, the supervisor does not have to go to the trouble and expense of working up an involved decision process.
Programmed decision-making is relatively simple and tends to rely heavily on previ- ous solutions. The “develop-the-alternatives” stage in the decision-making process is either nonexistent or given little attention. Why? Because once the structured problem is defined, its solution is usually self-evident, or at least reduced to a few alternatives that are familiar and that have proved successful in the past. In many cases, programmed decision making becomes decision making by precedent. Supervisors simply do what they and others have done previously in the same situation, and the supervisor falls back on a systematic procedure, rule, or policy (see Chapter 3).
Non-programmed decisions, on the other hand, are decisions that are unique and non- recurring. When a supervisor confronts an ill-structured problem, there is no cut-and-dry solution. A custom-made, non-programmed response is required.
For example, setting strategy in the organization is a non-programmed decision. This decision is different from previous organizational decisions because the issue is new. The company faces a different set of environmental factors—like new laws or competition from countries that previously did not compete in the global marketplace. Conditions have changed, and using the “tried-and-true” choices from the past may lead to problems in the future.
Group Decision Making Decisions in organizations are increasingly being made by groups rather than by individ- uals. There seem to be at least two primary reasons for this: First is the desire to develop more and better alternatives. The belief is groups are able to generate a greater number, and potentially a more creative set, of decision alternatives. Second, organizations rely less on the idea that departments and other organizational units should be separate and independent decision units. To get the best ideas and to improve their implementation organizations use teams that cut across traditional departmental lines and employ group decision-making techniques.
WHAT ARE THE ADVANTAGES OF GROUP DECISIONS? Individual and group decisions each have their own set of strengths. Neither is ideal for all situations. Let’s review the advantages that group decision-making has over indi- vidual decision-making (see Exhibit 7-6).
■■ Provides more complete information. A group brings a diversity of experience and perspective to the decision process that an individual, acting alone, cannot.
■■ Generates more alternatives. Because groups have a greater quantity and diversity of information, they can identify more alternatives than can an individual.
programmed decision A repetitive decision that can be handled by a routine approach.
nonprogrammed decision A decision that must be custom-made to solve a unique and nonrecurring problem.
OBJECTIVE 7.6 Compare and contrast group decision-making and individual decision-making.
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■■ Increases acceptance of a solution. If the people who will be affected by a certain solution and who will help implement it get to participate in the decision making itself, they will be more likely to accept the decision and to encourage others to accept it.
■■ Increases legitimacy. The group decision-making process is consistent with demo- cratic ideals and may be perceived as more legitimate than decisions made by a single person.
ARE THERE DISADVANTAGES TO GROUP DECISION-MAKING? Groups are good but group decisions are not without their drawbacks. The major dis- advantages of group decision-making are as follows:
■■ Time-consuming. It takes time to assemble a group and the group interaction is frequently inefficient. The result is that groups almost always take more time to reach a solution than an individual making the decision alone.
■■ Minority domination. Members of a group are never equal, often differing in terms of rank in the organization, experience, knowledge about the problem, influ- ence with other members, verbal skills, assertiveness, and the like. This creates the opportunity for members to use their advantages to dominate others in the group and impose undue influence on the final decision.11
■■ Pressure to conform. There are social pressures in groups. The desire of members to be accepted and considered assets can quash any overt disagreement and encour- age conformity among viewpoints. The withholding of different views to appear in agreement is called groupthink.
■■ Ambiguous responsibility. Group members share responsibility, but who is actu- ally responsible for the final outcome? In an individual decision, it is clear who is responsible, but in a group decision, the responsibility of any single member is watered down.
Groupthink Groupthink is a style of thinking often seen in cohesive groups. Irving Janis described it as a form of conformity in which group members withhold deviant, minority, or unpopular views to give the appearance of agreement.12 These groups attempt to reduce their conflict and reach agreement without thoroughly evaluating
11See C. K. W. De Drue and M. A. West, “Minority Dissent and Team Innovation: The Importance of Participation in Decision Making,” Journal of Applied Psychology 86, no. 6 (December 2001), 1191–1201.
groupthink Withholding of differing views by group members to appear to be in agreement.
12I. L. Janis, Groupthink (Boston: Houghton Mifflin, 1982). See also J. Chapman, “Anxiety and Defec- tive Decision Making: An Elaboration of the Groupthink Mode,” Management Decision, October 2006, pp. 1391–1404.
Exhibit 7-6 The advantages and disadvantages of group decision making.
ADVANTAGES
More information More alternatives Solution acceptance Legitimacy
DISADVANTAGES Time-consuming Minority domination Conformity Ambiguous responsibility
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alternative actions. Eight symptoms often seen in groups experiencing groupthink are the following:
■■ Feelings of invulnerability where danger is ignored and excessive risks are taken ■■ Rationalizing anything contrary to group assumptions ■■ Overriding belief in the morality of the group regardless of ethical outcomes ■■ Stereotyping opposition as weak and ineffectual ■■ Pressuring group members not to be disloyal to the group ■■ Self-censoring individual ideas not in harmony with the group viewpoint ■■ Illusion of unanimous agreement with silence viewed as assent ■■ Mindguards who shield the group from adverse outside information.13
IS THERE A GUIDE FOR WHEN TO USE GROUP DECISION-MAKING? When are groups better than individuals and vice versa? That depends on what you mean by better. Let’s look at four criteria frequently associated with “better” decisions: accuracy, speed, creativity, and acceptance.
The evidence indicates that, on average, groups make more accurate decisions than individuals. This doesn’t mean all groups outperform every individual. Rather, group decisions have been found to be more effective than those that would have been reached by the average individual in the group. However, they seldom are as good as decisions by the best individual.
If better is defined in terms of decision speed, individuals are superior. Group deci- sion processes are characterized by give-and-take, which consumes time.
Decision quality can also be assessed in terms of the degree to which a solution demonstrates creativity. Groups tend to be more creative than individuals. This requires, however, that the forces that foster groupthink—pressure to repress doubts about the group’s shared views, the validity of favored arguments, excessive desire by the group to give an appearance of consensus, and the assumption that silence or abstention by members is a yes vote—be constrained.
Finally, because group decisions have input from more people, they are likely to result in solutions that have a higher degree of acceptance.
HOW CAN YOU IMPROVE GROUP DECISION-MAKING? When members of a group meet face-to-face and interact with one another, they create the potential for groupthink. Three ways of making group decision-making more cre- ative have been suggested: brainstorming, the nominal group technique, and electronic meetings.
Brainstorming Brainstorming is a relatively simple technique for overcoming pressures for conformity that retard the development of creative alternatives.14 It does this by using an idea-generating process that specifically encourages any and all alternatives while withholding any criticism of those alternatives. In a typical brainstorming session, a half-dozen to a dozen people sit around a table. Of course, technology is changing where and what that “table” is. The group leader states the problem in a clear manner that is understood by all participants. Members then shout out, offer up, fire off, and “freewheel” as many alternatives as they can in a given time. No criticism is allowed, and all the alternatives are recorded for later discussion and analysis. Brainstorming,
13I. L. Janis,Victims of Groupthink: A Psychological Study of Foreign-Policy Decisions and Fiascoes (Boston: Houghton, Mifflin, 1972); and I. L. Janis and L. Mann, Decision Making: A Psychological Analysis of Conflict, Choice, and Commitment (New York: Free Press, 1977).
OBJECTIVE 7.7 List and describe three techniques for improving group decision-making.
14J. Wagstaff, “Brainstorming Requires Drinks,” Far Eastern Economic Review, May 2, 2002.
brainstorming A technique for overcoming pressures for conformity that retards the develop- ment of creative alternatives; an idea- generating process that specifically encourages alternatives while with- holding criticism of those alternatives.
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Something to Think About (and promote class discussion)
MAKING GOOD DECISIONS Life comes with tough decisions. Let’s begin with the basic tenet that you can’t avoid tough decisions by ignor- ing them. The decision to do nothing is still a decision. It’s a decision to maintain the status quo.
You can maintain the status quo by following either of two paths—one active, and the other passive. You can rationally assess the current situation, identify the options, carefully review the strengths and weaknesses of these options, and conclude that no new alternative is superior to the path currently taken. This active approach is fully consistent with rational decision-making. Our concern here, however, is with the passive approach—where the current path is followed only because of the failure to consider other options.
How do you counter the non-decision decision? The first step is awareness. You can’t opt out of decisions by ignoring them. To do so is merely choosing to continue along the current path. That path may be the one you want, but the astute decision maker recognizes there are costs associated with maintaining the status quo as well as with change. You also need to directly challenge the status quo. It’s not enough to know that doing nothing is a decision. You also need to occasionally justify why you shouldn’t pursue another path that’s dif- ferent from the one you’re currently following. Finally, consider the costs of inaction. Too often the focus is only on the risks associated with change. You’re less likely to get caught up in decision inaction if you also address the risks related to doing nothing.
We should also take a look at arguably the three most critical errors likely to be made in your decision- making: overconfidence, immediate gratification bias or short-term focus, and the confirmation bias. Conquer these three, and you’ll go a long way toward improving the quality of your decisions.
It has been said that no problem in judgment and decision-making is more prevalent and more potentially catastrophic than overconfidence. Almost all of us suffer from it. When we’re given factual questions and asked to judge the probability that our answers are correct, we tend to be far too optimistic. In general, we overestimate our knowledge, undervalue risk, and overestimate our ability to control events. In fact, studies have found that when people say they’re 65 percent to 70 percent confident that they’re right, they’re actually correct only about 50 percent of the time. And when they say they’re 100 percent sure, they tend to be only 70 percent to 85 percent correct.
To reduce overconfidence, begin by recognizing this tendency, and expect it to most likely surface when your confidence is extremely high or when accurate judgments are difficult to make. Next, adjust your con- fidence awareness to reflect your level of expertise on an issue. You’re most likely to be overconfident when you’re considering issues outside your expertise. Finally, directly address this bias by challenging yourself to look for reasons why your predictions or answers might be wrong.
A lot of us suffer from immediate gratification bias or short-term focus. This is the tendency to want to grab for immediate rewards and avoid immediate costs. If it feels good, we want to do it now; if it implies pain, we want to postpone it. This immediate gratification bias explains why it’s so hard to diet, quit smoking, avoid credit card debt, or save for retirement. Each comes with an immediate reward—tasty food, an enjoy- able cigarette, an immediate purchase, or extra disposable money to spend. And each delays the respective cost to some nebulous future.
If you see yourself as vulnerable to the immediate gratification bias or short-term focus, what can you do? First, set long-term goals and review them regularly. This can help you focus on the longer term and help you to justify making decisions whose payoff may be far into the future. If you don’t know where you want to be in 10 or 20 years, it’s easier to discount your future and live for the moment. Second, pay attention to both rewards and costs. Our natural tendency is to inflate immediate rewards and underplay future costs.
Finally, the rational decision-making process assumes we objectively gather information. But we don’t. We selectively gather information so it confirms our current beliefs, and we dismiss evidence that challenges those beliefs. We also tend to accept at face value information that confirms our preconceived views, while being critical and skeptical of information that challenges these views.
Overcoming this confirmation bias begins by being honest about your motives. Are you seriously trying to get information to make an informed decision, or are you just looking for evidence to confirm what you’d like to do? If you’re serious about making an informed decision, then you need to purposely seek out contrary or disconfirming information. That means you have to be prepared to hear what you don’t want to hear. You’ll also need to practice skepticism until it becomes habitual. You have to think of reasons why your beliefs might be wrong and then aggressively seek out evidence that might prove them to be so.
Based on S. P. Robbins, Decide & Conquer: The Ultimate Guide for Improving Your Decision Making, 2nd ed. (Upper Saddle River, NJ: Pearson Education, 2015).
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however, is merely a process for generating ideas. The next method, the nominal group technique, goes further by helping groups arrive at a preferred solution.15
Nominal Group Technique The nominal group technique helps groups arrive at a preferred solution by restricting discussion during the decision-making process.16 Group members must be present, as in a traditional committee meeting, but they’re required to operate independently. They secretly write a list of general problem areas or potential solutions to a problem. The chief advantage of this technique is that it permits the group to meet formally, but does not restrict independent thinking or lead to groupthink, as can often happen in a traditional interacting group.17
Electronic Meetings Electronic meetings blend the nominal group technique with sophis- ticated computer and videoconferencing technology. Once the technology for the meet- ing is in place, the concept is simple. Many individuals sit around a table outfitted with laptops or tablets. Issues are presented to participants, and they type their responses onto their computers. Individual comments, as well as aggregate votes, are displayed on a projection screen in the room. Experts claim the major advantages of electronic meet- ings are anonymity, honesty, and speed.18 Supervisors at Freeport-McMoRan Copper & Gold Inc. (formerly Phelps Dodge Mining), for instance, used the approach to cut its annual planning meeting from several days down to twelve hours. However, there are drawbacks. Those who can type quickly may outshine those who may be verbally elo- quent but who are lousy typists; those with the best ideas don’t get credit for them; and the process lacks the informational richness of face-to-face oral communication.
Global Diversity In Decision-Making Making good decisions is tough!19 Supervisors continuously make decisions—for instance, developing new products, establishing weekly or monthly goals, implementing an advertising campaign, reassigning an employee to a different workgroup, resolving a customer’s complaint, or purchasing new laptops for sales reps. One important sug- gestion for making better decisions is to tap into the diversity of the workgroup. Draw- ing on diverse employees can prove valuable to a supervisor’s decision making. Why? Diverse employees can provide fresh perspectives on issues. They can offer differing interpretations on how a problem is defined and may be more open to trying new ideas. Diverse employees can be more creative in generating alternatives and more flexible in resolving issues. Getting input from diverse sources increases the likelihood that creative and unique solutions will be generated.
Research shows that, to some extent, decision-making practices differ from country to country. The way decisions are made—whether by group, by team members, partici- patively, or autocratically by an individual supervisor—and the degree of risk a decision maker is willing to take are just two examples of decision variables that reflect a coun- try’s cultural environment. For example, in India, power distance and uncertainty avoid- ance (see Chapter 2) are high. There, only senior-level people make decisions, and they
15T. Kelley, “Six Ways to Kill a Brainstormer,” Across the Board, March/April 2002, 12; and K. L. Dowling and R. D. St. Louis, “Asynchronous Implementation of the Nominal Group Technique: Is It Effective?”Decision Support Systems 29, no. 3 (October 2000), 229–248. 16Ibid 17See also B. Andersen and T. Fagerhaug, “The Nominal Group Technique,” Quality Progress, February 2000, p. 144.
nominal group technique A technique that restricts discussion during the decision-making process.
18J. Burdett, “Changing Channels: Using the Electronic Meeting System to Increase Equity in Decision Making,” Information Technology, Learning, and Performance Journal (Fall 2000), pp. 3–12.
electronic meeting A group decision-making technique in which participants are positioned in front of computer terminals as issues are presented. Participants type responses onto computer screens as their anonymous comments and aggre- gate votes are displayed on a projec- tion screen in the room.
19This section based on N. J. Adler (ed.), International Dimensions of Organizational Behavior, 4th ed. (Cincinnati: South-Western College Publishing, 2001); B. C. McDonald and D. Hutcheson, “Dealing with Diversity Is Key to Tapping Talent,” Atlanta Business Chronicle, December 18, 1998, 45A+; and P. M. Elsass and L. M. Graves, “Demographic Diversity in Decision-Making Groups: The Experience of Women and People of Color,” Academy of Management Review (October 1997), 946–973.
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are likely to make safe decisions. In contrast, in Sweden, power distance and uncertainty avoidance are low. Swedish supervisors are not afraid to make risky decisions. Senior managers in Sweden also push decisions down in the ranks. They encourage supervisors and employees to take part in the decisions that affect them. In countries such as Egypt, where time pressures are low, supervisors make decisions at a slower and more deliberate pace than supervisors in the United States. And in Italy, where history and traditions are valued, supervisors tend to rely on tried and proven alternatives to resolve problems.
Decision-making in Japan is much more group-oriented than in the United States. The Japanese value conformity and cooperation. Before making decisions, Japanese supervisors collect a large amount of information, which is then used in consensus- forming group decisions called ringisei. Because employees in Japanese organizations have high job security, supervisory decisions take a long-term perspective rather than focusing on short-term profits, as is often the practice in the United States.
Supervisors in France and Germany also adapt their decision styles to their coun- try’s culture. In France, for instance, autocratic decision-making is widely practiced, and supervisors tend to avoid risks. Supervisory styles in Germany reflect the German culture’s concern for structure and order. Consequently, there are extensive rules and regulations in German organizations. Supervisors have well-defined responsibilities and accept that decisions must go through channels.
Even though diversity in decision-making can be valuable, there are drawbacks. The lack of a common perspective usually means that more time is spent discussing the issues. Communication may be a problem particularly if language barriers are present. In addition, seeking out diverse opinions can make the decision-making process more complex, confusing, and ambiguous. And with multiple perspectives on the decision, it may be difficult to reach a single agreement or to agree on specific actions. As supervi- sors deal with employees from diverse cultures, they need to recognize what is common and accepted behavior when asking them to make decisions. Some individuals may not be as comfortable being closely involved in decision making as others are, or they may not be willing to experiment with something radically different.
Although these drawbacks are valid concerns, the value of diversity in decision- making outweighs the potential disadvantages. Getting diverse perspectives on an important decision could help a supervisor make the best decision! Supervisors also should consider the cultural value to the organization that could be gained from diver- sity in decision making. Supervisors who accommodate the diversity in decision-making philosophies and practices can expect a high payoff: capturing the perspectives and strengths that a diverse workforce offers.
Design Thinking In Decision-Making The way supervisors traditionally approach decision making may not be the best and is certainly not the only choice in today’s environment. That’s where design thinking comes in. Design thinking has been described as “approaching management problems as designers approach design problems.”20 More organizations are beginning to recognize how design thinking can benefit them.21 For instance, Apple has long been celebrated for its design thinking. The company’s lead designer, Jonathan “Jony” Ive (who was behind some of Apple’s most successful products including the iPod and iPhone) had
ringisei In Japanese organizations, consensus- forming decision-making groups.
20D. Dunne and R. Martin, “Design Thinking and How It Will Change Management Education: An Inter- view and Discussion,” Academy of Management Learning &Education, December 2006, p. 512. 21M. Korn and R. E. Silverman, “Forget B-School, D-School Is Hot,” Wall Street Journal, June 7, 2012, pp. B1+; R. Martin and J. Euchner, “Design Thinking,” Research Technology Management, May/June 2012, pp. 10–14; T. Larsen and T. Fisher, “Design Thinking: A Solution to Fracture-Critical Systems,” DMI News & Views, May 2012, p. 31 T. Berno, “Design Thinking versus Creative Intelligence,” DMI News & Views, May 2012, p. 28 J. Liedtka and Tim Ogilvie, “Helping Business Managers Discover Their Appetite for Design Thinking,” Design Management Review, Issue 1, 2012, pp. 6–13; and T. Brown, “Strategy By Design,” Fast Company, June 2005, pp. 52–54.
design thinking Approaching management problems as designers approach design problems.
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this to say about Apple’s design approach, “We try to develop products that seem some- how inevitable. That leave you with the sense that that’s the only possible solution that makes sense.”22
Although many supervisors don’t deal specifically with product or process design decisions, they still make decisions about work issues that arise, and design thinking can help them be better decision makers. The design thinking approach begins with the first step of identifying problems. Design thinking says supervisors should examine problem identification collaboratively and integratively, with the goal of gaining a deep under- standing of the situation. They should look not only at the rational aspects, but also at the emotional elements. Then invariably, of course, design thinking would influence how supervisors identify and evaluate alternatives. “A traditional supervisor (educated in a business school, of course) would take the options that have been presented and analyze them based on deductive reasoning and then select the one with the highest net present value. However, using design thinking, a supervisor would say, “What is some- thing completely new that would be lovely if it existed but doesn’t now?”23 Design thinking means opening up your perspective and gaining insights by using observation and inquiry skills, and not relying simply on rational analysis. Supervisors must realize there’s more needed in making effective decisions in today’s world.
Big Data In Decision-Making Big data is a term for a collection of data sets so large and complex that it becomes dif- ficult to process using traditional data processing applications. Big data is changing the way supervisors make decisions and depends on the technological capability of the organization and the applications used to process information. Big data is a moving target requiring organizations to evaluate their decisions in real time to create value and competitive advantage. For example:
■■ Amazon.com, Earth’s biggest online retailer, earns billions of dollars of revenue each year—estimated at one-third of sales—from its “personalization technologies” such as product recommendations and computer-generated e-mails.24
■■ AutoZone decision makers are using new software that gleans information from a variety of databases and allows its 5,000-plus local stores to target deals and reduce the chance customers will walk away without making a purchase. AutoZone’s chief information officer says, “We think this is the direction of the future.”25
■■ A team of San Francisco researchers was able to predict the magnitude of a disease outbreak halfway around the world by analyzing phone patterns from mobile phone usage.26
Information is available—100 petabytes in the decade of the 2010s, according to experts. (In bytes, that translates to 1 plus 17 zeroes, in case you were wondering!)27 And organizations are figuring out how to use it. Big data is the vast amount of quantifi- able information that can be analyzed by highly sophisticated data processing. One IT expert described big data with “3V’s: high volume, high velocity, and high variety information assets.”28
22C. Guglielmo, “Apple Loop: The Week in Review,” Forbes.com, May 25, 2012, p. 2. 23Dunne and Martin, “Design Thinking and How It Will Change Management Education: An Interview and Discussion,” p. 514.
big data The vast amount of quantifiable infor- mation that can be analyzed by highly sophisticated data processing.
24K. Cukier and V. Mayer-Schönberger, “The Financial Bonanza of Big Data,” Wall Street Journal, March 8, 2013, p. A15. 25R. King and S. Rosenbush, “Big Data Broadens Its Range,” Wall Street Journal, March 14, 2013, p. B5. 26“Big Data, Big Impact: New Possibilities for International Development,” World Economic Forum, wefo- rum.org, 2012 (accessed May 30, 2014). 27M. Kassel, “From a Molehill to a Mountain,” Wall Street Journal, March 11, 2013, p. R1. 28D. Laney, “The Importance of ‘Big Data’: A Definition,” www.gartner.com/it-glossary/big-data, March 22, 2013 (accessed May 30, 2014).
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With this type of data at hand, decision makers have powerful tools to help them make decisions. However, experts caution that collecting and analyzing data for data’s sake is wasted effort. Goals are needed collecting and using this type of information. As one individual said, “Big data is a descendant of Taylor’s ‘scientific management’ of more than century ago.”29 Whereas Taylor used a stopwatch to time and monitor a worker’s every movement, big data is using math modeling, predictive algorithms, and artificial intelligence software to measure and monitor people and machines like never before. Therefore, managers need to examine and evaluate how big data might contrib- ute to their decision-making.
Ethics In Decision-Making Earlier in Chapter 2, we introduced the topic of ethics and described ways in which you can act ethically. The inherent idea is that when you face ethical choices, you face a problem. Ethical concerns become part of your decision-making. For instance, one alternative may generate a considerably higher financial return than the others, but it might be ethically questionable because it compromises employee safety.
WHAT ARE COMMON RATIONALIZATIONS? Through the ages, people have developed some common rationalizations to justify ques- tionable conduct.30 These rationalizations provide insights into why supervisors might make poor ethical choices.
■■ “It’s not really illegal or immoral.” Where is the line between being smart and being shady? Between an ingenious decision and an immoral one? Because this line is ambiguous, people rationalize what they’ve done is not really wrong. People in an ill-defined situation will often conclude that whatever hasn’t been labeled spe- cifically as wrong must be okay. Especially if there are rich rewards for attaining certain goals, and the organization’s appraisal system doesn’t look too carefully at how those goals are achieved. Profiting on a stock tip through insider information often seems to fall into this category.
■■ “It’s in my (or the organization’s) best interest.” Believing unethical conduct is in a person’s or an organization’s best interest usually results from a narrow view of what those interests are. For instance, supervisors can come to believe that it’s acceptable to bribe officials if the bribe results in the organization getting a contract, or to falsify financial records if this improves their unit’s performance record.
■■ “No one will find out.” The third rationalization accepts the wrongdoing but assumes that it will never be uncovered. Philosophers ponder, “If a tree falls in a forest and no one hears it, did it make a noise?” Some supervisors answer the analogous question, “If an unethical act is committed and no one knows it, is it wrong?” in the negative. This rationalization is often stimulated by inadequate controls, strong pressures to perform, the appraisal of performance results while ignoring the means by which they’re achieved, the allocation of big salary increases and promotions to those who achieve these results, and the absence of punishment for those who get caught in wrongdoing.
■■ “Because it helps the organization, the organization will condone it and protect me.” This response represents loyalty gone berserk. Some supervisors come to believe that not only do the organization’s interests override the laws and values of society, but
29S. Lohr, “Sure, Big Data Is Great. But So Is Intuition,” http://www.nytimes.com/2012/12/30/ technology/ big-data-is-great-but-dont-forget-intuition.html?_r=0 , New York Times Online, December 29, 2012 (accessed February 11, 2017).
OBJECTIVE 7.8 Explain three different ethical viewpoints.
30S. W. Gellerman, “Why Good Managers Make Bad Ethical Choices,”Harvard Business Review, July– August 1986, 89.
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also that the organization expects its employees to exhibit unqualified loyalty. Even if the supervisor is caught, he or she believes that the organization will support and reward him or her for showing loyalty. Supervisors who use this rationalization to justify unethical practices place the organization’s good name in jeopardy. Although supervisors should be expected to be loyal to the organization against competitors and detractors, that loyalty shouldn’t put the organization above the law, common morality, or society itself.
WHAT ARE THE THREE VIEWS ON ETHICS? In this section, we will present three different ethical positions. They can help us see how individuals can make different decisions by using different ethical criteria (see Exhibit 7-7).
The Utilitarian View The first is the utilitarian view of ethics, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. This view dominates business decision-making because it’s consistent with goals such as efficiency, productivity, and high profits. By maximizing profits, a supervisor can argue they are securing the greatest good for the greatest number.
The Rights View The rights view of ethics calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights. The rights view of ethics is concerned with respecting and protecting the basic rights of individuals. This view would protect employees who report unethical or illegal practices by their organization to the press or government agencies, on the grounds of their right to free speech.
The Justice View Finally, the justice view of ethics requires individuals to fairly and impartially impose and enforce rules so there is an equitable distribution of benefits and costs. Union members favor this view because it justifies paying people the same wage for a given job, regardless of performance differences, and it uses seniority as the crite- rion in making layoff decisions.
Each of these three perspectives has advantages and liabilities. The utilitarian view promotes efficiency and productivity, but it can result in ignoring the rights of some individuals, particularly those with minority representation in the organization. The rights perspective protects individuals from injury and is consistent with freedom and privacy, but it can create an overly legalistic work environment that hinders productiv- ity and efficiency. The justice perspective protects the interests of the underrepresented and less powerful, but it can encourage a sense of entitlement that reduces risk taking, innovation, and productivity.
New trends toward individual rights and social justice mean that supervisors need ethical standards based on non-utilitarian criteria. This is a solid challenge to today’s supervisor because making decisions using criteria such as individual rights and social justice involves far more ambiguities than using utilitarian criteria such as effects on efficiency and profits.
utilitarian view of ethics A view in which decisions are made solely on the basis of their outcomes or consequences.
rights view of ethics A view that calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights.
justice view of ethics A view that requires individuals to impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs.
Exhibit 7-7 Three views on ethics.
Ethical questions
Does it provide the greatest good for the greatest
number?
Is it fair and equitable?
Does it respect the rights of the
individuals affected?
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IS THERE A GUIDE TO ACTING ETHICALLY? We all make mistakes in ethical judgments, so we offer some questions you can and should ask yourself when making important decisions and decisions with obvious ethical implications.31
■■ How did this problem occur in the first place? ■■ Would you define the problem differently if you stood on the other side of the fence? ■■ To whom and to what do you give your loyalty as a person and as a member of
your organization? ■■ What is your intention in making this decision? ■■ What is the potential for your intention to be misunderstood by others in the
organization? ■■ How does your intention compare with the probable result? ■■ Whom could your decision injure? ■■ Can you discuss the problem with the affected parties before you make the decision? ■■ Are you confident that your position will be as valid over a long period of time as
it seems now? ■■ Could you disclose your decision to your boss or your immediate family? ■■ How would you feel if your decision were described, in detail, on the front page of
your local newspaper?
31Adapted from L. J. Hash, “Ethics without the Sermon,” Harvard Business Review, November–December 1981, 81.
Comprehension Check 7-2
5. A repetitive decision can be best handled by:
a. a nonprogrammed decision. b. a rule. c. a programmed decision. d. all of the above.
6. Which one of the following is a disadvantage of group decision-making?
a. Conformity b. Legitimacy c. Solution acceptance d. More information
7. Withholding of differing views by group members to appear to be in agreement is called:
a. minority domination. b. groupthink. c. brainstorming. d. escalation of commitment.
8. The view of ethics in which decisions are made solely on the basis of their outcomes or consequences is called the:
a. justice view of ethics. b. rights view of ethics. c. social obligation view of ethics. d. utilitarian view of ethics.
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Chapter 7 Problem Analysis and Decision Making 201
After reading this chapter, I can:
and are solved using non-programmed decisions— decisions that must be custom-made to solve the unique and nonrecurring problem.
6. Compare and contrast group decision-making and individual decision-making. Group and individual decisions can be evaluated on the basis of accuracy, speed, creativity, and acceptance. The advantages of group decisions are that they have more complete information, generate more alternatives, and have an increased acceptance of a solution, which increases legitimacy (accuracy, creativity, and acceptance). Indi- vidual decision-making, on the other hand, is typically faster (speed). Accordingly, when speed alone is the primary factor, individual decisions should be made. If speed alone is not the primary factor, group decisions are better.
7. List and describe three techniques for improving group decision-making. Three techniques for improving group decision-making are 1) brainstorming, 2) the nominal group technique, and 3) electronic meetings. Brainstorming is a technique used for overcoming pressures to conform that retard development of creative alternatives. This idea-generating process specifically encourages alternatives while withhold- ing criticism of those alternatives. The nominal group technique restricts discussion during the decision- making process. In electronic meetings, participants are positioned at computer terminals as issues are pre- sented. Participants type anonymous responses into the computer, and aggregate votes are displayed on a projection system in the same room.
8. Explain three different ethical viewpoints. The three different viewpoints of ethical decisions are the utili- tarian view, the rights view, and the justice view. The utilitarian view of ethics makes decisions based on the greatest good for the greatest number. The rights view of ethics makes decisions consistent with fundamental liberties and privileges. The justice view of ethics seeks fairness and impartiality.
1. List the seven steps in the decision-making process. The seven steps in the decision-making process are (1) identifying the problem, (2) collecting relevant information, (3) developing alternatives, (4) evaluat- ing each alternative, (5) selecting the best alternative, (6) implementing the decision, and (7) following up and evaluating the decision.
2. Describe expected value analysis. Expected value analysis calculates the expected value of a particular alternative by weighting its possible outcomes by the probability of achieving the alternative, then summing up the totals derived from the weighting process.
3. Explain the four types of decision styles. The four types of decision-making styles are directive, analytic, concep- tual, and behavioral. The directive type is efficient and logical. The analytic type is careful, with the ability to adapt to or cope with new situations. The conceptual type considers many alternatives and is good at coming up with creative solutions. The behavioral type empha- sizes suggestions from others and conflict avoidance.
4. Identify and explain the common decision-making errors. The common errors in decision-making are called heuristics. Heuristics are shortcuts supervisors may take to speed up the decision-making process. Heu- ristics commonly exist in two forms: availability and representative. Both types can create biases in a supervi- sor’s judgment. A third common error, called escalation of commitment, reflects an increased commitment to a previous decision despite negative information.
5. Describe the two types of decision problems and the two types of decisions that are used to solve them. Supervisors face both well and ill-structured prob- lems. Well-structured problems are straightforward, familiar, easily defined, and solved using programmed decisions—repetitive decisions that can be handled by a routine approach, such as a policy, procedure, or rule. Ill-structured problems are new or unusual prob- lems, involve ambiguous or incomplete information,
SUMMARY
Enhancing Understanding
which step would quantitative analysis tools be most helpful?
7-3. Calculate your estimated grade point average this semester using expected value analysis.
7-1. Contrast symptoms with problems. Give three examples.
7-2. In which step of the decision-making process do you think creativity would be most helpful? In
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
3
4
11
12 13
16
17
10
14
15
7 8
1
5 6
2
9
DOWNACROSS
3. a group decision-making technique in which participants are positioned in front of computers 4. a method that helps decision makers optimize returns or minimize costs 11. an increasing support of a previous decision despite negative information 13. the withholding of di�ering views by group members in order to appear to be in agreement 14. new problems 15. a technique that restricts discussion during the decision- making process 16. a rational and analytical process of resolving problems 17. the tendency of people to match the likelihood of an occurrence with something they are familiar with
1. a view of ethics in which decisions are made solely on the basis of their consequences 2. the tendency of people to base their judgments on information that is readily accessible 3. a procedure that permits one to place a monetary figure on likely consequences 5. a decision that is repetitive 6. a technique for overcoming pressures for conformity 7. a view of ethics that calls on individuals to make decisions consistent with fundamental liberties 8. straightforward, familiar, and easily defined problems 9. a discrepancy between an existing and a desired state 10. a diagram that shows a progression of decisions and their respective payo� calculations 12. a view of ethics that requires individuals to impose and enforce rules fairly
7-4. How might certain decision styles fit better with specific jobs? Give examples.
7-5. How does escalation of commitment affect decision making? Give an example.
7-6. What rationalizations do people use to justify ques- tionable conduct?
7-7. Which view of ethics do you believe dominates in business firms? Justify your response.
7-8. When should supervisors use groups for decision mak- ing? When should they make the decisions themselves?
7-9. Contrast the nominal group technique and elec- tronic meetings.
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Chapter 7 Problem Analysis and Decision Making 203
Developing Your Supervisory Skills
• Am I a Procrastinator? Finally, after you complete any self-assessment, we
suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
GETTING TO KNOW YOURSELF
THE STORY: A sales clerk had just turned off the lights in the store when a man appeared and demanded money. The owner opened a cash register. The contents of the cash register were scooped up, and the man sped away. A member of the police force was notified promptly.
7-10. An Experiential Exercise: Individual versus Group Decisions
BUILDING A TEAM
OBJECTIVE: To contrast individual and group decision- making.
TIME: Fifteen minutes.
STEP 1: You have five minutes to read the following story and individually respond to each of the eleven state- ments as true, false, or unknown.
11. The following events in the story are true: Some- one demanded money; a cash register was opened; its contents were scooped up; a man dashed out of the store.
STEP 2: After you have answered the eleven questions individually, form groups of four or five members each. The groups have ten minutes to discuss their answers and agree on the correct answers to each of the eleven statements.
STEP 3: Your instructor will give you the actual cor- rect answers. How many correct answers did you get at the conclusion of step 1? How many did your group achieve at the conclusion of step 2? Did the group out- perform the average individual? The best individual? Discuss the implications of these results.
1. A man appeared after the owner had turned off his store lights.
2. The robber was a man. 3. The man did not demand money. 4. The man who opened the cash register was the owner. 5. The store owner scooped up the contents of the
cash register and ran away. 6. Someone opened a cash register. 7. After the man who demanded the money scooped
up the contents of the cash register, he ran away. 8. The cash register contained money, but the story
does not state how much. 9. The robber demanded money of the owner.
10. The story concerns a series of events in which only three persons are referred to: the owner of the store, a man who demanded money, and a member of the police force.
Statements about the Story
STEPS IN PRACTICING THE SKILL
STEP 1: Think of yourself as creative. Although it’s a simple suggestion, research shows that if you think that you can’t be creative, you won’t be. Just as the little engine in the children’s fable says, “I think I can,” if we believe in ourselves, we can become more creative.
Creativity is the ability to combine ideas in a unique way to make unusual associations between them. Each of us has the ability to be creative, yet some use their creativity more than others. Although creative people are sometimes referred to as “artsy” and difficult to describe, there are certain steps you can take in becoming more creative.
BECOMING MORE CREATIVE
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7-12. Describe a situation in which a decision you made was influenced by availability or representative heuristics. In retrospect, provide an evaluation of how effective that decision was. Given your evalu- ation, are you more or less inclined to use judg- mental shortcuts in your decision-making process? Explain.
7-11. “Supervisors often make decisions that are good enough, but may not be the best solution.” Build a case that presents both sides of this argument. In your discussion, emphasize when “good enough” may be appropriate, and when the “best solution” may be critical. Provide specific examples in your paper.
COMMUNICATING EFFECTIVELY
billion-dollar brands, and also claims four of the top five soft-drink brands (Coke, Diet Coke, Fanta, and Sprite). Each year since 2001, global brand consulting firm Inter- brand, in conjunction with Bloomberg BusinessWeek, has
■➤ Case 7-A: Simply Orange Decisions
THINKING CRITICALLY
STEP 2: Pay attention to your intuition. Everyone has a subconscious mind that works well. Sometimes answers come when we least expect them. For exam- ple, when you are about to go to sleep, your relaxed mind sometimes comes up with solutions to problems you face. You need to listen to this intuition. In fact, many creative people keep a notepad near their bed and write down those “great” ideas when they come to them. That way, the ideas are not forgotten.
STEP 3: Move away from your comfort zone. Every individual has a comfort zone in which certainty exists. But creativity and the known often don’t mix. To be creative, we need to move away from the status quo and focus on something new.
STEP 4: Engage in activities that put you outside your comfort zone. Not only must we think differently, but we also need to do things differently. By engag- ing in activities that are different to us, we challenge ourselves. Learning to play a musical instrument or learning a foreign language, for example, opens the mind and allows it to be challenged.
STEP 5: Seek a change of scenery. As humans, we are creatures of habit. Creative people force themselves out of their habits by changing their scenery. Going into a quiet and serene area where you can be alone with your thoughts is a good way to enhance creativity.
STEP 6: Find several correct answers. Just as we set boundaries in rationality, we often seek solutions that
are only good enough. Being creative means continu- ing to look for other solutions, even when you think you have solved the problem. A better, more creative solution just might be found.
STEP 7: Play your own devil’s advocate. Chal- lenging yourself to defend your solutions helps you develop confidence in your creative efforts. Second- guessing may also help you find more correct answers.
STEP 8: Believe in finding a workable solution. Like believing in yourself, you also need to believe in your ideas. If you don’t think you can find a solution, you won’t find one. Having a positive mental attitude, however, may become a self-fulfilling prophecy.
STEP 9: Brainstorm with others. Creativity is not an isolated activity. Bouncing ideas off others causes a synergistic effect.
STEP 10: Turn creative ideas into action. Coming up with ideas is only half of the process. Once the ideas are generated, they must be implemented. Great ideas that remain in someone’s mind, or on papers that no one reads, do little to expand one’s creative abilities.
Source: Based on J. Calano and J. Salzman, “Ten Ways to Fire Up Your Creativity,” Working Woman, July 1989, 94– 95. See also, J. V. Anderson, “Mind Mapping: A Tool for Creative Thinking,” Business Horizons, January–February 1993, pp. 42–46; and T. Proctor, Creative Problem Solving for Managers, New York: Routledge, 2005.
The Coca-Cola Company (Coke) is in a league by itself.32 As the world’s largest and number one nonalcoholic bev- erage company, Coke makes or licenses more than 3,500 drinks in more than 200 countries. Coke has built 15
32Based on D. D. Stanford, “Coke Has a Secret Formula for Orange Juice, Too,” Bloomberg Businessweek, February 4–10, 2013, 19–20; P. Sellers, “The New Coke,” Fortune, May 21, 2012, 138–44; and Adi Ignatius, “Shaking Things Up at Coca-Cola,” Harvard Business Review, October 2011, 94–99.
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Chapter 7 Problem Analysis and Decision Making 205
identified Coke as the number one best global brand. Coke’s executives and managers are focusing on ambi- tious, long-term growth for the company—doubling Coke’s business by 2020. A big part of achieving this goal is building up its Simply Orange juice business into a pow- erful global juice brand. Decision-making is playing a cru- cial role as managers try to beat rival PepsiCo., which has a 40 percent market share in the not-from-concentrate juice category compared to Coke’s 28 percent share. And those managers aren’t leaving anything to chance in this hot—umm, cold—pursuit!
You’d think that making orange juice (OJ) would be relatively simple—pick, squeeze, pour. While that would probably be the case in your own kitchen, in Coke’s case, that glass of 100 percent OJ is possible only through the use of satellite images, complex mathematical algorithms, and a pipeline solely for the purpose of transporting juice. The purchasing director for Coke’s massive Florida juice packaging facility says that when you’re dealing with “Mother Nature,” standardization is a huge problem. Yet, standardization is what it takes for Coke to make this work profitably. And producing a juice beverage is far more complicated than bottling soda.
Using what it calls its “Black Book model,” Coke wants to ensure that customers have consistently fresh, tasty OJ for 12 months a year despite a peak growing season that’s only three months long. To help in this, Coke relies on a consultant experienced with revenue analyt- ics, who has described OJ as “one of the most complex applications of business analytics.” How complex? To consistently deliver an optimal blend given the challenges of nature requires some 1 quintillion (that’s 1 followed by 18 zeroes) decisions!
There’s no secret formula to Black Book: it’s simply an algorithm that includes detailed data about the more than 600 different flavors that make up an orange and about customer preferences. This data is correlated to a profile of each batch of raw juice. The algorithm then determines how to blend batches to match a certain taste and consistency. At the juice bottling plant, “blend techni- cians” carefully follow the Black Book instructions before beginning the bottling process. The weekly OJ recipe they use is constantly “tweaked”. Black Book also includes data on external factors such as weather patterns, crop yields, and other cost pressures. This is useful for Coke’s decision makers as they ensure they’ll have enough sup- plies for at least 15 months. One Coke executive says the company’s mathematical modeling means that if a weather catastrophe (hurricane or hard freeze) hits, the business can quickly regroup and make new plans in a very short time frame—as little as 5 or 10 minutes.
RESPONDING TO THE CASE
7-13. Which decisions in this story could be considered ill-structured problems? Well-structured problems?
7-14. How does the Black Book help Coke’s managers and other employees in decision making?
7-15. What does Coke’s big data have to do with its goals?
■➤ Case 7-B: Improvement Ideas from a Car Sales Star
Jeff Scott, the general manager at Carr Chevrolet, had a problem he needed to solve. The new car sales force was not productive enough. Specifically, they were slow to greet, meet, and determine the new car buyer’s needs and were not meeting the dealership’s sales plan projections. Scott wanted to find a way to help them become more efficient.
To solve the problem, Scott called a meeting with the new and used car sales manager; he also included the parts and service manager in the hope there was a nugget of inspiration to be found. He and the other managers brainstormed a list of possible solutions. Afterward, they discussed the pros and cons of each of their ideas.
As Scott left the meeting, he passed a wall of plaques listing the names of past “Salesperson of the Month” and “Salesperson of the Year” awards. He noticed the name of Leroy Perez appeared on multiple plaques over the past five years. Scott walked over to the cubicle where Perez was stationed and found him completing paperwork for a sale he had just closed. Scott thanked Perez for his hard work and contributions to the performance of the store. Then he asked him how he managed to be such an effec- tive sales person over the past several years—even during an economic downturn.
Scott learned more than he expected from that simple question. Perez explained that he had formed a team of individuals from the parts and service department, as well as the receptionists and cashiers. They listened to custom- ers as they talked about old cars with problems, family members with car needs, safety concerns for teenage driv- ers, as well as upcoming birthdays and anniversaries. All of these team members were willing to share the informa- tion with Perez because he was willing to reward them with dinners and tickets to events if their information led to a sale. In addition, he often bought lunch for them just because he genuinely liked them.
Scott asked Perez for other examples of salesmanship techniques and received many. He actually got more ideas for improving car sales in a fifteen-minute discussion than he and his fellow managers had thought of in their previ- ous brainstorming session.
Scott thought Perez might be the key to turning around a slow sales period and offered Perez the oppor- tunity to be sales trainer/sales manager—a position that offered the chance to learn a new skill while maintaining touch with the skills that made him so valuable to the organization. Perez worked with the sales force, passing on his ideas as well as uncovering many other sales tech- niques. Soon, the dealership was surpassing the sales plan
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206 Part 2 Planning, Organizing, Staffing, Controlling, and Decision Making
projections, the sales force was setting monthly records, and Perez became much sought after as a sales consultant in the industry. Scott knew that the simple act of listening to a hidden in-house sales expert improved the attitudes and productivity of his sales force.
RESPONDING TO THE CASE
7-16. What was the difference in the way Scott and Perez viewed the problem in this case?
7-17. How did the initial problem definition affect the approach to, and solution of, the problem?
7-18. How does this case illustrate any advantages or dis- advantages of group decision-making?
7-19. List some ways Scott can apply what he learned from this situation to continue improving the qual- ity and productivity of sales.
7-20. How might Scott continue to include the sales force in problem solving?
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If there is one thing common to employees wherever they work, it
is the fact that they tend to give their effort to things that benefit
them. Employees understand that they have to work—and work
hard—but in doing so, they want something in return. They
expect to work for supervisors who respect them, who keep them
informed of things happening in the organization, and who can
find a way to bring out their best.
Chapter 8 ■ Motivating Followers
Chapter 9 ■ Leading Followers
Chapter 10 ■ Communicating Effectively
Chapter 11 ■ Developing Groups
Motivating, Leading, Communicating, and Developing 3
PART
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■ competency-based compensation
■ employee stock ownership plan (ESOP)
■ equity theory
■ expectancy theory
■ hierarchy-of-needs theory
■ hygiene factors
■ job design
■ job enrichment
■ locus of control
■ Machiavellianism
■ motivation
■ motivation-hygiene theory
■ need
■ need for achievement
■ pay-for-performance programs
■ risk propensity
■ self-esteem
■ self-monitoring
■ Theory X–Theory Y
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Motivating Followers8 C
H A
P T
ER
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Michael Jung/Shutterstock
8-1. Define motivation.
8-2. Identify and define five personality characteristics relevant to understanding the behavior of employees at work.
8-3. Explain the elements and the focus of the three early theories of motivation.
8-4. Identify the characteristics that stimulate the achievement drive in high achievers.
8-5. Identify the three relationships in expectancy theory that determine an individu- al’s level of effort.
8-6. List actions a supervisor can take to maximize employee motivation.
8-7. Describe how supervisors can design individual jobs to maximize employee performance.
8-8. Explain the effect of workforce diversity on motivating employees.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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1125089601/Shutterstock
Successful supervisors understand that what motivates them personally may have little or no effect on oth- ers. Effective supervisors tailor moti- vational practices to satisfy the needs and wants of employees. Motivating and rewarding employees is one of the most important and challenging activities that supervisors perform. To get employees to put forth maxi- mum work effort, supervisors need to know how and why employees are motivated.
Several CEOs were attending a meeting where the topic was, “What do employees want?”* Each CEO took turns describing the benefits they provided and how they gave out free M&Ms every Wednesday and offered their employees stock options and free parking spaces. However, the meeting’s main speaker made the point that “Employees don’t want M&Ms; they want to love what they do.” Half-expecting his audience to laugh, the speaker was pleasantly surprised as the CEOs stood up one-by-one to agree. They all recognized that “the value in their companies comes from the employees who are motivated to be there.”
These CEOs understand how important employee motivation is. Like them, all supervisors need to be able to motivate their employees. That requires understand- ing what motivation is. Many people incorrectly view motivation as a personal trait; that is, they think some people are motivated and others aren’t. Our knowledge of motivation tells us that we can’t label people that way because individuals differ in motivational drive, and their overall motivation varies from situation to situation.
Motivating high levels of employee performance is an important organizational concern, and supervi- sors keep looking for answers. A recent Gallup poll found that a large majority of US employees—some 73 percent—are not excited about their work. As the researchers stated, “These employees are essentially ‘checked out.’ They’re sleepwalking through their workday, putting time, but not energy or passion, into their work.”† It’s no wonder then that supervisors want
to understand and explain employee motivation.
In today’s ongoing economic crisis, organizational downsizing is common and may include as many as half of the employees that work for the company. Many employees are going to be motivated to retain their jobs because they are scared, and as a result, their performance and pro- duction may improve. The opposite may be true for other employees who think they will lose their job regard- less of the work they do, so they feel it really doesn’t matter. And still oth- ers might see the writing on the wall and leave the job before the downsiz- ing occurs.
Whatever the situation, once cuts have been made in numbers of employees, supervisors are faced
with the employees who remain. Supervisors need to invest energy in the people who remain after downsiz- ing. Supervisors need to aid recovery, fuel productivity, boost morale, and minimize the damage to workplace trust. Showing value in the remaining employees is critical in motivating them. How could a supervisor motivate employees who just lost their longtime col- leagues and friends? Faced with layoffs and organiza- tional downsizing how would you treat the surviving employees? How could they be motivated? Do you think an organization can survive after losing employ- ees through downsizing?
Tommy Sapp is a hard-driving, competitive person. He gives a maximum effort on everything he does— at his job, on his summer softball team, in detailing his classic 1963 Corvette. In contrast, his good friend Brad Wilson appears to have no discipline in his life. People who know him think he’s lazy. Although Brad is smart and highly capable, he has trouble holding a job because of his inability to put forth much sustained effort. Tommy summed up his appraisal of Brad: “He can’t stay with anything for more than a half-hour or so. He gets bored and is easily distracted.”
Supervisors like having Tommy types working for them. Such people are essentially self-motivated. You
Responding to a Supervisory Dilemma
*P. Bronson, “What Should I Do with My Life Now?” Fast Company, April 2009, 35–37. †J. Krueger and E. Killham, “At Work, Feeling Good Matters,” Gallup Management Journal, December 8, 2005, http://businessjournal.gallup.com/ content/20311/work-feeling-good-matters.aspx (accessed February 17, 2017).
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Chapter 8 Motivating Followers 211
What Is Motivation? First, let’s describe what we mean by the term motivation. Motivation is the willingness to do something; it is conditioned by this action’s ability to satisfy some need for the individual. A need, in our terminology, means a physiological or psychological defi- ciency that makes certain outcomes seem attractive.
An unsatisfied need creates tension, which sets off a drive to satisfy that need (see Exhibit 8-1). The greater the tension, the greater the drive or effort required to reduce that tension. When we see employees working hard at some activity, we can conclude that they’re driven by a desire to satisfy one or more needs that they value.
Understanding Individual Differences A common error supervisors make is to assume that other people are like them. If they’re ambitious, they think others will be ambitious just like them. If they place a high value on spending evenings and weekends with their family, they often assume that others feel the same way. These assumptions are frequently big mistakes! What’s important to us is not necessarily important to others. Not everybody is driven by the desire for money. Yet a lot of supervisors believe that a bonus or an opportunity for a pay increase should make every employee want to work harder. If you’re going to be successful in motivating people, you have to begin by accepting and trying to understand individual differences.
OBJECTIVE 8.1 Define motivation.
motivation The willingness to do something conditioned on the action’s ability to satisfy some need for the individual.
need A physiological or psychological deficiency that makes certain outcomes seem attractive.
OBJECTIVE 8.2 Identify and define five personality characteristics relevant to understanding the behavior of employees at work.
don’t have to do much to get them to produce a full day’s effort. The Brad Wilsons of the world are another story. They’re a supervisor’s challenge. It’s a challenge to develop creative ways to motivate them. Most employ- ees, however, aren’t like either Tommy or Brad. They’re more like Samantha Carr. On some activities, Samantha is incredibly motivated. For example, she reads two or three romance novels a week, and she gets up at 5:30 every morning and religiously runs three or four miles
before showering and going to work. But at her sales job at the local Bally’s Fitness Center, she seems bored and unmotivated. Most people are like Samantha in that their levels of motivation vary across activities.
What can supervisors do to increase the motivation of people like Brad Wilson and Samantha Carr? In this chapter, we provide you with some insights and tools that can help answer this question, while exploring the exciting supervisory concept of motivation.
Exhibit 8-1 Needs and motivation.
Drive Increased Tension
Unsatisfied Need
Decreased Tension
Satisfied Need
Motivation
Needs
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The major value of understanding personality differences probably lies in selection. You are likely to have higher-performing and more satisfied employees if you match per- sonality types with compatible jobs. Recognizing that people approach problem-solving, decision making, and job interactions differently, you can better understand why an employee is uncomfortable with making quick decisions or why an employee insists on gathering as much information as possible before addressing a problem.
CAN PERSONALITY MEASURES PREDICT PRACTICAL WORK-RELATED BEHAVIORS? Let’s look at the five specific personality measures that have proven most powerful in explaining individual behavior in organizations: locus of control, Machiavellianism, self-esteem, self-monitoring, and risk propensity.
Some people believe they control their own fate. Others see themselves as pawns of fate, believing what happens to them in their lives is a result of luck or chance. The locus of control in the first case is internal; these people believe that they control their destiny. In the second case it is external; these people believe that their lives are controlled by outside forces.1 Studies tell us that employees who rate high in externality are less satisfied with their jobs, more alienated from the work setting, and less involved in their jobs than are those who rate high in internality. For instance, employees with an external locus of control may be less enthusiastic about their jobs because they believe that they have little personal influence on the outcome of their performance appraisals. Poor appraisals are blamed on their supervisor’s prejudice, their coworkers, or other events outside their control.
The second measure is Machiavellianism (Mach), named after Niccolo Machiavelli, who wrote in the sixteenth century on how to gain and manipulate power. Someone with strong Machiavellian tendencies is manipulative and believes that the ends can justify the means. Often seen as ruthless, a high Mach tends to be motivated on jobs requiring bargaining (e.g., labor negotiator) or where there are substantial rewards for winning (as in commis- sioned sales). They can get frustrated in jobs where rules must be followed or where rewards are based more on using the proper means than on the achievement of outcomes.
A third measure is called self-esteem. Studies confirm that people high in self-esteem (SE) believe they possess more of the ability they need to succeed at work. But the most significant finding on self-esteem is that low-SEs are more susceptible to external influ- ence than are high-SEs. Low-SEs depend on positive evaluations from others and are more likely to seek approval from others, often conforming to the beliefs and behaviors of those they respect more than high-SEs.
The fourth measure, the ability to adjust one’s behavior to changing situations, is called self-monitoring. Individuals high in self-monitoring show considerable adaptability in adjusting their behavior to external situational factors. Sensitive to external cues, they can behave differently in different situations and are capable of presenting striking con- tradictions between their public personas and their private selves. Low self-monitors can’t disguise behaviors, instead tending to display their true feelings and beliefs in every situation. Evidence tells us high self-monitors pay closer attention to the behavior of others and are more capable of conforming than are low self-monitors. Because high self-monitors are flexible they easily adjust to job situations that require individuals to play multiple roles in their workgroups.
Finally, a willingness to take chances is described as one’s risk propensity. Those with high risk propensity make more rapid decisions and use less information in making their choices than people with low risk propensity.
1See, for example, J. Silvester, F. M. Anderson-Gough, N. R. Anderson, and A. R. Mohamed, “Locus of Control, Attributions and Impression Management in the Selection Interview, Journal of Occupational and Organizational Psychology 75, no. 1 (March 2002), 59–77; D. W. Organ and C. N. Greene, “Role Ambi- guity, Locus of Control, and Work Satisfaction,” Journal of Applied Psychology 59, no. 1 (February 1974), 101–102; and T. R. Mitchell, C. M. Smyser, and S. E. Weed, “Locus of Control: Supervision and Work Satisfaction,” Academy of Management Journal 18, no. 1 (September 1975), 623–631.
locus of control The source of control over an individual’s behavior.
Machiavellianism Manipulative behavior based on the belief that the ends can justify the means.
self-esteem The degree to which an individual likes or dislikes himself or herself.
self-monitoring The ability to adjust behavior to external situational factors. High self- monitors adapt easily and are capable of presenting striking contradictions between public personas and private selves; low self-monitors tend to dis- play their true feelings and beliefs in almost every situation.
risk propensity A willingness to take chances, charac- terized by rapid decision-making with the use of less information.
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DO YOU NEED TO DEVELOP YOUR EMOTIONAL INTELLIGENCE TO IMPROVE YOUR SUPERVISION SKILLS? Becoming more attuned to your own emotions and those of others may increase your effectiveness on the job. Emotional intelligence consists of five dimensions that may help you cope with the daily demands and pressures of the workplace. The dimensions of emotional intelligence are the following:
■ Self-awareness: An awareness of what or how you are feeling ■ Self-management: The ability to manage your emotions and impulses ■ Self-motivation: The ability to persist in the face of setbacks and failures ■ Empathy: The ability to sense how others are feeling ■ Social skills: The ability to handle the emotions of others
Multiple studies indicate that emotional intelligence characterizes high performers and they are better able to relate to others in individual as well as team environments. Many human resources managers indicate that emotional intelligence is essential for career success in the organization, especially in jobs requiring social interaction.2
The Early Theories of Motivation Once we accept individual differences, we begin to understand why no single motiva- tor applies to all employees. Because people are complex, any attempt to explain their motivations will also tend to be complex. We see this in the number of approaches that have been taken in developing theories of employee motivation. In the following pages, we will review the most popular of these early theory approaches.
HOW DO YOU FOCUS ON NEEDS? The most elementary approach to motivation was developed by Abraham Maslow.3 He identified a set of basic needs that he argued were common to all individuals, and stated individuals should be evaluated in terms of the degree to which these needs are fulfilled. According to Maslow’s hierarchy-of-needs theory, a satisfied need no longer creates tension and therefore doesn’t motivate (see Exhibit 8-1). The key to motivation, then, at least according to Maslow, is to determine where an individual is along the needs hierarchy and to focus motivation efforts at the point where needs become essentially unfulfilled.
Maslow proposed that within every human being exists a hierarchy of five needs:
1. Physiological: Includes hunger, thirst, shelter, sex, and other bodily needs 2. Safety: Includes security and protection from physical and emotional harm 3. Social: Includes affection, a sense of belonging, acceptance, and friendship 4. Esteem: Includes internal factors such as self-respect, autonomy, and achievement,
and external factors such as status, recognition, and attention 5. Self-actualization: The drive to become what one is capable of becoming, includes
growth, achieving one’s potential, and self-fulfillment
As each of these needs becomes substantially satisfied, the next need becomes domi- nant. In terms of the theory, the individual moves up the hierarchy, as if climbing a staircase. From the perspective of motivation, the theory would say that although no need is ever completely fulfilled, a substantially satisfied need no longer motivates.
A number of studies to test the validity of Maslow’s theory have been made over the years. Generally, these studies have not been able to support the theory. We can’t say,
2S. Robbins and D. DeCenzo, Fundamentals of Management: Essential Concepts and Applications (Upper Saddle River, NJ: Pearson Prentice Hall, 2008), 224–225.
OBJECTIVE 8.3 Explain the elements and the focus of the three early theories of motivation.
3A. Maslow, Motivation and Personality (New York: Harper & Row, 1954).
hierarchy-of-needs theory A theory of Abraham Maslow that states that a satisfied need no longer creates tension and therefore doesn’t motivate. Maslow believed that the key to motivation is to determine where an individual is along the needs hierarchy and to focus motivation efforts at the point where needs become essentially unfulfilled.
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for example, that everyone’s need structure is organized along the dimensions Maslow proposed. So, although this theory has been around for a long time and is certainly well- known, it is probably not a good guide for helping you motivate your employees.
DO SUPERVISORS FOCUS ON THE NATURE OF PEOPLE? Some supervisors believe that their employees are hardworking, committed, and respon- sible. Others view their employees as essentially lazy, irresponsible, and lacking ambi- tion. This observation led Douglas McGregor to propose his Theory X–Theory Y view of human nature and motivation.4 McGregor argued that a supervisor’s view of the nature of human beings is based on a certain grouping of assumptions, and they tend to mold their behavior toward subordinates according to these assumptions.
Under Theory X, the four assumptions held by supervisors are the following:
1. Employees inherently dislike work, and whenever possible, will attempt to avoid it. 2. Because employees dislike work, they must be coerced, controlled, or threatened
with punishment to achieve desired goals. 3. Employees will shirk responsibilities and seek formal direction whenever possible. 4. Most workers place security above all other factors associated with work and will
display little ambition.
In contrast to these negative views toward the nature of human beings, McGregor listed four other assumptions that he called Theory Y:
1. Employees view work as being as natural as rest or play. 2. A person will exercise self-direction and self-control if they are committed to the
objectives. 3. The average person can learn to accept, even seek, responsibility. 4. The ability to make good decisions is widely dispersed throughout the population
and is not necessarily the sole province of supervisors.
What are the motivational implications of Theory X–Theory Y? McGregor argued that Theory Y assumptions were more valid than Theory X assumptions. As a result, he proposed ideas such as participation in decision-making, responsible and challeng- ing jobs, and good group relations as approaches that would maximize an employee’s job motivation.
Unfortunately, there is no evidence to confirm that either set of assumptions is valid, or that acceptance of Theory Y assumptions and altering one’s actions accordingly will lead to more motivated workers. Evidence shows that either Theory X or Theory Y assumptions may be appropriate in a particular situation.
WHAT EFFECT DOES THE ORGANIZATION HAVE ON MOTIVATION? “First, describe situations in which you felt exceptionally good about your job. Second, describe situations in which you felt exceptionally bad about your job.” Beginning in the late 1950s, Frederick Herzberg asked these two questions of a number of workers. He then tabulated and categorized their responses. What he found was that the replies people gave when they felt good about their jobs were significantly different from the replies given when they felt bad. As shown in Exhibit 8-2, certain factors tend to be consistently related to job satisfaction (when they felt “good”) and others to job dissatisfaction (when they felt “bad”). Intrinsic factors such as achievement, recognition, the work itself, responsibility, and advancement seemed to be related to job satisfaction. When those questioned felt good about their work, they tended to attribute these factors to themselves. On the other hand, when they were dissatisfied, they tended to cite external factors, such as company policy and administration, supervision, interpersonal relations, and working conditions.
4D. McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960).
Theory X–Theory Y A theory of Douglas McGregor that a supervisor’s view of human nature is based on a certain grouping of assumptions and that he or she tends to mold behavior toward subordinates according to those assumptions.
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Herzberg took these results and formulated his motivation-hygiene theory.5 He said the responses suggest that the opposite of satisfaction is not dissatisfaction, as was tra- ditionally believed. Removing dissatisfying characteristics from a job does not necessar- ily make the job satisfying. Herzberg proposed that his findings indicate the existence of a dual continuum: The opposite of “satisfaction” is “no satisfaction,” and the oppo- site of “dissatisfaction” is “no dissatisfaction” (see Exhibit 8-3).
According to Herzberg, the factors leading to job satisfaction are separate and distinct from those that lead to job dissatisfaction. Therefore, supervisors who seek to eliminate factors that can create job dissatisfaction may bring about peace, but not necessarily motivation. They will be placating their employees rather than motivating them. As a result, such characteristics as company policy and administration, supervi- sion, interpersonal relations, working conditions, and salary have been characterized by Herzberg as hygiene factors. When they’re adequate, people will not be dissatisfied; however, neither will they be satisfied. If we want to motivate people in their jobs, Herzberg suggests emphasizing achievement, recognition, the work itself, responsibility, and growth. These are the characteristics that people find intrinsically rewarding.
5F. Herzberg, B. Mauser, and B. Snyderman, The Motivation to Work (New York: John Wiley & Sons, 1959).
motivation-hygiene theory A theory of Frederick Herzberg that the opposite of satisfaction is not “dissatisfaction” but “no satisfaction” and the opposite of dissatisfaction is not “satisfaction” but “no dissatisfaction.”
hygiene factors Frederick Herzberg’s term for factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction.
Exhibit 8-2 Comparison of satisfiers and dissatisfiers. Source: Reprinted by permission of Har- vard Business Review. An exhibit from “One More Time: How Do You Motivate Employees?” by Frederick Herzberg. September/October 1987. Copyright 1987 by the President and Fellows of Harvard College; all rights reserved.
Factors characterizing 1,844 events on the job that led to extreme dissatisfaction
Factors characterizing 1,753 events on the job that led to extreme satisfaction
Achievement
Recognition
Work itself
Responsibility
Advancement
GrowthCompany policy and administration
Supervision
Relationship with supervisor
Work conditions
Salary
Relationship with peers
Personal life
Relationship with subordinates
Status
Security
All factors contributing
to job dissatisfaction
All factors contributing
to job satisfaction
69 19
31 81
80%60 40 20 20 40 6080% Ratio and percent
50% 40 30 20 10 0 10 20 30
Percentage frequency
40 50%
Hygiene
Motivators
0
Exhibit 8-3 Contrasting views of satisfaction/ dissatisfaction.
Traditional View
Satisfaction Dissatisfaction
Dissatisfaction No DissatisfactionNo SatisfactionSatisfaction
Herzberg's View
(Motivators) (Hygiene Factors)
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Contemporary Theories of Motivation The previous three theories are well-known, but unfortunately have not held up well under close examination. The contemporary theories presented next have a reasonable degree of valid supporting documentation. These theories represent the current “state- of-the-art” explanations of employee motivation.
WHAT IS A FOCUS ON ACHIEVEMENT? Some people have a compelling drive to succeed—personally and professionally. They desire to do something better or more efficiently than it has been done before. This drive is the need for achievement (nAch). People with a high need for achievement are intrinsi- cally motivated.6 When high achievers are placed into jobs that stimulate their achieve- ment drive, they are self-motivated and require little of your time or energy.
High achievers desire to do things better and they seek situations where they can attain personal responsibility for finding solutions to problems. Looking for rapid and unambiguous feedback on their performance, they set moderately challenging goals. High achievers are not gamblers; they dislike succeeding by chance. Preferring the chal- lenge of working at a problem and accepting the personal responsibility for success or failure, they avoid what they perceive to be very easy or very difficult tasks.
High achievers perform best when they perceive that they have a fifty–fifty chance of success. They dislike accidental success as much as guaranteed success. They like goals that require stretching themselves a little and challenging their skills. Tasks with
OBJECTIVE 8.4 Identify the characteristics that stimulate the achievement drive in high achievers.
6D. C. McClelland, The Achieving Society (New York: Van Nostrand Reinhold, 1961).
need for achievement A compelling drive to succeed; an intrinsic motivation to do something better or more efficiently than it has been done before.
Comprehension Check 8-1
1. A physiological or psychological deficiency that makes certain outcomes seem attractive is called:
a. a need. b. motivation. c. increased tension. d. drive.
2. Manipulative behavior based on the belief that the ends justify the means is called:
a. locus of control. b. esteem. c. Machiavellianism. d. risk propensity.
3. Which one of the following is not a need proposed in Maslow’s hierarchy-of-needs theory? a. Safety b. Esteem c. Locus of control d. Physiological
4. Which motivation theory is attributed to Douglas McGregor?
a. Motivation-hygiene theory b. Theory X–Theory Y c. Hierarchy-of-needs theory d. None of the above.
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equal chance of success or failure provide them the optimum opportunity to experience feelings of accomplishment and satisfaction from their efforts.
In developed countries, between 10 and 20 percent of the workforce is made up of high achievers. The percentage is considerably lower in developing countries. The reason is that the cultures of developed countries tend to socialize people more toward striving for personal achievement.
Based on achievement research, we draw three reasonably well-supported conclu- sions. First, individuals with a high nAch prefer job situations with personal respon- sibility, feedback, and an intermediate degree of risk. When these characteristics are prevalent, high achievers will be strongly motivated. Evidence consistently demonstrates that high achievers are successful in entrepreneurial activities such as running their own businesses as well as in many sales positions.
Second, a high need to achieve does not necessarily lead to being a good supervisor or manager. High-nAch salespeople do not necessarily make good sales supervisors, and the good manager in a large organization does not typically have a high need to achieve. The reason seems to be that high achievers want to do things themselves rather than lead others toward accomplishments.
Last, employees can be trained to stimulate their achievement need. If a job calls for a high achiever, you can select a person with a high nAch or develop your own candidate through achievement training. Achievement training focuses on teaching people to act, talk, and think like high achievers by having them write stories emphasizing achieve- ment, play simulation games that stimulate feelings of achievement, meet with successful entrepreneurs, and learn how to develop specific and challenging goals.
HOW IMPORTANT IS EQUITY? Suppose your company just hired someone new to work in your department, doing the same job you’re doing. That person is essentially the same age as you, with almost identical educational qualifications and experience. The company is paying you $4,800 per month (which you consider very competitive). How would you feel if you found out that the company is paying the new person—whose credentials are not one bit better than yours—$5,600 per month? You’d probably be upset and angry. You’d probably think it wasn’t fair. You’re now likely to think you’re underpaid. And you might direct your anger into actions such as reducing your work effort, taking longer coffee breaks, or tak- ing extra days off by calling in “sick.”
Your reactions illustrate the role that equity plays in motivation. People make com- parisons of their job inputs and outcomes relative to others, and inequities have a strong bearing on the degree of effort that employees exert.7 Equity theory states that employees perceive what they can get from a job situation (outcomes) in relation to what they put into it (inputs), and then compare their input–outcome ratio with the input–outcome ratio of others. If they perceive their ratio to be equal to the relevant others with whom they compare themselves, a state of equity is said to exist. They feel their situation is fair—that justice prevails. If the ratios are unequal, inequity exists; that is, the employees tend to view themselves as underrewarded or overrewarded. When inequities occur, employees attempt to correct them.
Equity theory recognizes that individuals are concerned not only with the absolute amount of rewards they receive for their efforts, but also with the relationship of this amount to what oth- ers receive (see Exhibit 8-4). Inputs such as effort, experience, education, and competence can be compared to outcomes such as salary levels, raises, recognition, and other factors. When people perceive an imbalance in their input–outcome ratio relative to
7J. S. Adams, “Inequity in Social Exchanges,” in L. Berkowitz, ed., Advances in Experimental Social Psychology, Vol. 2 (New York: Academic Press, 1965), 267–300.
equity theory The concept that employees perceive what they can get from a job situation (outcomes) in relation to what they put into it (inputs), then compare their input–outcome ratio with the input– outcome ratio of others.
Exhibit 8-4 Equity theory.
Others’ inputs
Individual inputs
Individual outcomes
Others’ outcomes
Compare with
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others, tension is created. This tension provides the basis for motivation, as people strive for what they perceive as equity and fairness.
The comparable other persons, systems, or selves individuals compare themselves against to assess equity is an important variable in equity theory.8 Each of the three ref- erenced categories is important. The “persons” category includes other individuals with similar jobs in the same organization, but also includes friends, neighbors, or professional associates. Based on what they hear at work or read in newspapers or trade journals, employees compare their pay with that of others. The “system” category includes orga- nizational pay policies, procedures, and allocation. The “self” category refers to inputs– outcomes ratios that are unique to the individual. It reflects past personal experiences and contacts and is influenced by criteria such as past jobs or family commitments.
There is substantial evidence to confirm the equity thesis: Employee motivation is influenced significantly by relative rewards as well as absolute rewards. It helps to explain why, particularly when employees perceive themselves as underrewarded (we all seem to be pretty good at rationalizing being overrewarded), they may reduce their work effort, produce lower-quality work, sabotage the system, skip workdays, or even resign.
Do Employees Really Get What They Expect? The final perspective we present is an integrative approach to motivation. It focuses on expectations. Specifically, expectancy theory argues that individuals analyze three rela- tionships: effort–performance, performance–rewards, and rewards–personal goals. Their level of effort depends on the strengths of their expectations that these relation- ships can be achieved.9 According to expectancy theory, an employee will be motivated to exert a high level of effort when he or she believes that effort will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards such as a bonus, a salary increase, or a promotion; and that the rewards will satisfy the employee’s personal goals. The theory is illustrated in Exhibit 8-5.
Expectancy theory helps explain why a lot of workers aren’t motivated in their jobs and they merely do the minimum necessary to get by. This can be made clearer if we look at the theory’s three relationships in a little more detail. We present them as questions that employees need to answer affirmatively.
■ First, if I give a maximum effort, will it be recognized in my performance evaluation? For some, the answer is no. Their skill level may be deficient, which means that no matter how hard they try, they’re not likely to be a high performer. The company’s
8P. S. Goodman, “An Examination of Referents Used in the Evaluation of Pay,” Organizational Behavior and Human Performance, October 1974, pp. 170–195; S. Ronen, “Equity Perception in Multiple Com- parisons: A Field Study,” Human Relations, April 1986, pp. 333–346; R. W. Scholl, E. A. Cooper, and J. F. McKenna, “Referent Selection in Determining Equity Perception: Differential Effects on Behavioral and Attitudinal Outcomes,” Personnel Psychology, Spring 1987, pp. 113–127; and C. T. Kulik and M. L. Ambrose, “Personal and Situational Determinants of Referent Choice,” Academy of Management Review, April 1992, pp. 212–237.
OBJECTIVE 8.5 Identify the three relationships in expectancy theory that determine an individual’s level of effort.
9V. H. Vroom, Work and Motivation (New York: John Wiley & Sons, 1984).
expectancy theory A theory that individuals analyze effort–performance, performance– rewards, and rewards–personal goals relationships, and their level of effort depends on the strengths of their expectations that these relationships can be achieved.
Exhibit 8-5 Expectancy theory.
Individual effort
Organizational rewards
Individual performance
Personal goals32
Effort–performance relationship 1
2
3
Performance–reward relationship
Rewards–personal goals relationship
1
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performance appraisal system may be poorly designed—assessing traits instead of behaviors—making it difficult or impossible for the employee to achieve a strong evaluation. Another possibility is that employees perceive that their supervisors don’t like them and, as a result, they expect to get a poor appraisal regardless of their level of performance. This suggests that one possible source of low employee motivation is the belief of an employee that no matter how hard they work, the likelihood of getting a good performance appraisal is low.
■ Second, if I get a good performance appraisal, will it lead to organizational rewards? Many employees see the performance–rewards relationship in their job as being weak. The reason is that organizations reward a lot of things besides just perfor- mance. For example, when pay is allocated to employees based on factors such as seniority, being cooperative, or “kissing up” to the boss, employees are likely to see the performance–rewards relationship as being weak and demotivating.
■ Last, if I’m rewarded, do I find the rewards personally attractive? The employee works hard in hope of getting a promotion, but gets a pay raise instead. Or the employee wants a more interesting and challenging job, but receives only a few words of praise. Unfortunately, many supervisors are limited in the rewards they can distribute, making it difficult to tailor rewards to individual employees. Other supervisors incorrectly assume all employees want the same thing, thus overlooking the motivational effects of differentiating rewards. Either way, employee motivation is not fully maximized.
Expectancy theory makes clear the need for supervisors to understand an indi- vidual’s goal and the linkage between effort and performance, between performance and rewards, and finally, between rewards and individual goal satisfaction. The theory emphasizes payoffs, or rewards, and as a result, supervisors have to believe the rewards an organization offers align with what the individual wants. Expectancy theory recog- nizes that no universal principle explains what motivates individuals and thus stresses that supervisors understand why employees view certain outcomes as attractive or unat- tractive. Also, expectancy theory emphasizes expected behaviors. Do employees know what is expected of them and how they’ll be evaluated? Finally, the theory is concerned with perceptions. Reality is irrelevant. Individuals’ perceptions of performance, reward, and goal outcomes, not the outcomes themselves, will determine their motivation and subsequent level of effort.
Something to Think About (and promote class discussion)
MOTIVATED TO DO WHAT? Google gets more than 777,000 applicants a year. And it’s no wonder! With a massage every other week, on-site laundry, swimming pool and spa, free delicious all-you-can-eat gourmet meals—what more could an employee want? Sounds like an ideal job, doesn’t it? However, at Google, many people are demonstrating by their decisions to leave the company that all those perks (and these are just a few) aren’t enough to keep them there. As one analyst said, “Yes, Google’s making gobs of money. Yes, it’s full of smart people. Yes, it’s a wonderful place to work. So why are so many people leaving?”
Google has been in the top ten list of “Best Companies to Work For” by Fortune magazine for three years running, and was number one on the list for two of those three years. But make no mistake. Google’s executives decided to offer all these fabulous perks for several reasons: to attract the best knowl- edge workers it can in an intensely competitive, cutthroat market; to help employees work long hours and not have to deal with time-consuming personal chores; to show employees they’re valued; and to have employees remain Googlers (the name used for employees) for many years. But a number of Googlers have jumped ship and given up these fantastic benefits to go out on their own.
(continued)
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HOW DO YOU CREATE AN ATMOSPHERE IN WHICH EMPLOYEES REALLY WANT TO WORK? If you’re a supervisor concerned with motivating your employees, how do you apply the various motivational concepts introduced in this chapter? There is no simple set of guidelines, but the essence of what we know about motivating employees is distilled in the following suggestions.
Recognize Individual Differences Remember that employees are not the same. People have different needs. Whereas you may be driven by the need for recognition, I may be far more concerned with satisfying my desire for security. We know that a minority of employees have a high need for achievement. But if one or more of the people working for you are high achievers, make sure you design their jobs to provide them with the personal responsibility, feedback, and intermediate degree of risk that is most likely to provide them with motivation. Your job as a supervisor includes learning to recognize the dominant needs of each of your employees.
Match People to Jobs Evidence supports the idea that motivational benefits accrue from carefully matching people to jobs. Some people prefer routine work with repetitive tasks. Others enjoy being part of a team; others do their best work when they’re isolated from people and able to do their jobs independently. When jobs differ in terms of autonomy, variety of tasks, and range of skills, you should try to match employees to jobs that best fit with their capabilities and personal preferences.
Set Challenging Goals Earlier in Chapter 3, we showed that challenging goals can be a source of motivation. When people accept and are committed to a set of specific and
OBJECTIVE 8.6 List actions a supervisor can take to maximize employee motivation.
For instance, Sean Knapp and two colleagues, brothers Bismarck and Belsasar Lepe, came up with an idea on how to handle web video. They left Google, or as one person put it, “expelled themselves from paradise to start their own company.” When the threesome left the company, Google really wanted them and their project to stay. Google offered them a “blank check.” But the trio realized they would do all the hard work and Google would own the product. So off they went, for the excitement of a start-up.
If this were an isolated occurrence, it would be easy to write off. But it’s not. Other talented Google employees have done the same thing. In fact, there are so many of them who have left that they’ve formed an informal alumni club of ex-Googlers turned entrepreneurs.
If Google is such a motivational organization, what’s it really like to work at Google? (Hint: Go to Google’s website and click on “About Google.” Find the section on Jobs at Google, and go from there.) What’s your assessment of the company’s work environment? Even though Google is doing a lot for its employees, it obviously has not been enough to retain several of its talented employees. Reflecting on what you’ve learned from studying the various motivation theories, what does this situation tell you about employee motivation? What do you think is Google’s biggest challenge in keeping employees moti- vated? If you were managing a team of Google employees, how would you keep them motivated? Will Google continue to hemorrhage talented workers? Should Google invest the time to correct the situation or accept it as a normal part of doing business in the IT world?
Sources: Based on R. Levering and M. Moskowitz, “And the Winners Are . . . ,” Fortune, February 2, 2009, 67+; A. Lashinsky, “Where Does Google Go Next?” CNNMoney.com, May 12, 2008;........Benefits Offered by Google and Others May Be Grand, But They’re All Business,” Knowledge @ Wharton, March 21, 2007, http://knowledge.wharton.upenn.edu/article (accessed February 19, 2017).
Continued
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difficult goals, they will work hard to achieve them. Our review of the evidence clearly indicates the power of goals in influencing employee behavior. Based on that, we sug- gest you sit down with each of your employees and jointly set tangible, verifiable, and measurable goals for a specific time period. Then, create a mechanism by which these employees will receive ongoing feedback as to their progress toward achieving these goals. This goal-setting process should act to motivate employees.
Encourage Participation Allowing employees to participate in decisions that affect them has been shown to increase their motivation. Participation is empowering. It allows people to take ownership of decisions. Decisions in which employees might participate include setting work goals, choosing their benefits packages, and selecting work sched- ules and assignments. Participation, of course, should be at the option of the employee, with no one compelled to participate in decision-making. Although participation is associated with increasing employee commitment and motivation, consistent with our discussion of individual differences, some people may prefer to waive their rights to participate in decisions that affect them.
Individualize Rewards Because employees have different needs, what acts to reinforce for one may not work for another. Use your knowledge of individual differences to indi- vidualize the rewards over which you have control. Some of the rewards that supervisors allocate include pay, job assignments, work hours, and the opportunity to participate in goal setting and decision-making.
Link Rewards to Performance In both reinforcement theory and expectancy theory, motivation is maximized when supervisors make rewards contingent on performance. Rewarding factors other than performance only acts to reinforce and encourage those other factors. Connect rewards such as pay increases and promotions to the attain- ment of the employee’s specific goals. Maximize the impact of the reward contingencies by increasing the visibility of rewards. Publicizing performance bonuses and allocat- ing salary increases in a lump sum rather than spreading them out over the entire year are examples of actions that will make rewards more visible and potentially more motivating.
Check for Equity Rewards or outcomes should be perceived by employees as equaling the inputs they give. This should mean that experience, abilities, effort, and other obvi- ous inputs should explain differences in pay, responsibility, and other obvious outcomes. The issue is complicated by the fact there are dozens of inputs and outcomes, and employee groups place different degrees of importance on them. One person’s equity may be another’s inequity, so an ideal reward system should weight inputs differently to arrive at the proper rewards for each job.
Don’t Ignore Money! Finally, it is easy to get so caught up in setting goals or providing opportunities for participation that you forget money is a major reason most people work. The allocation of performance-based wage increases, piecework bonuses, and other pay incentives is important in determining employee motivation. Simply stated, money motivates! A review of eighty studies evaluated motivational methods and their impacts on employee productivity.10 Goal setting alone produced, on average, a 16 percent increase in productivity; efforts to redesign jobs to make them more interest- ing and challenging yielded 8 to 16 percent increases; and employee participation in decision making produced a median increase of less than 1 percent. In contrast, mon- etary incentives led to an average increase of 30 percent.
10E. A. Locke, “The Relative Effectiveness of Four Methods of Motivating Employee Performance,” in K D. Duncan, M. M. Gruneberg, and D. Wallis, eds., Changes in Working Life (London: John Wiley & Sons, 1980), 363–383.
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Designing Motivating Jobs The structure of the work itself can impact the motivation of the employee and the level of productivity an employee can expect to achieve. Some jobs are routine because the tasks are standardized and repetitive; others have variety and are non-routine. Some require a large number of varied and diverse skills; others are narrow in scope. Some jobs constrain employees by requiring them to follow precise procedures; others allow employees substantial freedom in how they do their work. The term job design refers to the way that tasks are combined to form complete jobs. According to the Job Characteristics Model (JCM) developed by Hackman and Oldham there are five key characteristics that define a job, and together they constitute the core dimensions of any job:11
1. Skill variety: The degree to which the job requires a variety of different activities so the worker can use a number of different skills and talents
2. Task identity: The degree to which the job requires completion of a whole and identifiable piece of work
3. Task significance: The degree to which the job has a substantial impact on the lives or work of other people
4. Autonomy: The degree to which the job provides substantial freedom, indepen- dence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out
5. Feedback: The degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effective- ness of his or her performance
The JCM explains how the first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work. If these three characteristics exist in a job, the prediction is that employees will view their jobs as being important, valu- able, and worthwhile. Jobs that possess autonomy provide the job incumbent a feeling of personal responsibility for the results and if jobs provide feedback, the employees will know how effectively they are performing. The JCM suggests that internal rewards are obtained when employees learn (knowledge of results through feedback) they personally (experienced responsibility through autonomy of work) have performed well on a task they care about (experienced meaningfulness through skill variety, task identity, or task significance). The more these conditions characterize a job, the greater the employee’s motivation, performance, and satisfaction and the lower his or her absenteeism and the likelihood of resigning. The JCM provides significant guidance to managers for job design for both individuals and teams.12
Exhibit 8-6 offers examples of job activities that rate high and low for each charac- teristic. When these five characteristics are all present in a job, the job becomes enriched and potentially motivating. Whether that potential is actualized depends on the strength of the employee’s growth need. Individuals with a high growth need are more likely to be motivated in enriched jobs than their counterparts with a low growth need.
Job enrichment increases the degree to which a worker controls the planning, execu- tion, and evaluation of his or her work. An enriched job organizes tasks so as to allow the worker to do a complete activity, increases the employee’s freedom and indepen- dence, increases responsibility, and provides feedback so that an individual can assess and correct his or her own performance.
OBJECTIVE 8.7 Describe how supervisors can design individual jobs to maximize employee performance.
11J. R. Hackman and G. R. Oldham, “Motivation through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance, August 1976, 250–279.
job design Combining tasks to form complete jobs.
12G. Van Der Vegt, B. Emans, and E. Van Der Vliert, “Motivating Effects of Task and Outcome Interdependence in Work Teams,” Journal of Managerial Psychology (July 2000), p. 829; and B. Bemmels, “Local Union Leaders’ Satisfaction with Grievance Procedures,” Journal of Labor Research (Summer 2001), pp. 653–669.
job enrichment The degree to which a worker controls the planning, execution, and evaluation of his or her work.
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Flow in the Workplace The design of a job provides the organization an opportunity to match workers’ skills with the conditions of the task and the workplace. When workers are able to find intrinsic motivation to complete a task, and become engaged in the task, to the apparent exclusion of outside influences, they can be said to be in the flow of the task, job, or even their career. Flow is a high level of intrinsic motivation occurring when individuals become so absorbed in what they are doing they lose all awareness of things external to the task.
Flow is most common during work activities, often occurring when:
■ Skills are appropriately matched by challenges ■ Concentration is so intense that there is no excess attention to focus on irrelevant
problems or everyday worries ■ Concept of the self disappears, and one loses a sense of time ■ An activity is so rewarding that people undertake the activity for its own sake
Supervisors should realize that when employees’ skills surpass their job challenges, they easily become bored. Conversely, job challenges greater than the skills of the employee may cause anxiety over inability to complete the task successfully. When chal- lenges are appropriate for the skill set possessed by the employee, the employee is more likely to engage fully with the task and optimize the experience. In a modern highly competitive workplace it is important to identify work environments that possess the potential to increase employee engagement.13
13M. Csíkszentmihályi, Flow: The Psychology of Optimal Experience (New York: Harper & Row, 1990); J. Chamberlin and Monitor staff, “Reaching Flow to Optimize Work and Play,” APA Online 29, no. 7 (July 1998), www.apa.org/monitor/jul98/joy.html (accessed June 10, 2008); M. Csíkszentmihályi, Good Business: Leadership, Flow, and the Making of Meaning (New York: Penguin Books, 2003); Hindu Busi- ness Line Internet Edition, “Discern Opportunities Around When Others Don’t,” March 8, 2004, www. thehindubusinessline.com/mentor/2004/03/08/stories/2004030800251100.htm (accessed February 19, 2017); and A. Marsh, “The Art of Work,” FastCompany.com, August 1, 2005 https://www.fastcompany. com/53713/art-work (accessed February 19, 2017).
Exhibit 8-6 Examples of high and low levels of job characteristics.
The owner–operator of a garage who does electrical repair, rebuilds engines, does body work, and interacts with customers
A cabinet maker who designs a piece of furniture, selects the wood, builds the object, and finishes it to perfection A worker in a furniture factory who operates a lathe solely to make table legs
A nurse who cares for the sick in a hospital intensive-care unit A janitor who sweeps hospital floors
A telephone installer who schedules his or her own work for the day, makes visits without supervision, and decides on the most effective techniques for a particular installation A telephone operator who must handle calls as they come according to a routine, highly specified procedure
An electronics factory worker who assembles a radio and then tests it to determine whether it operates properly An electronics factory worker who assembles a radio and then routes it to a quality control inspector who tests it for proper operation and makes needed adjustments
A body shop worker who sprays paint eight hours a day
Low feedback
High feedback Feedback
Low autonomy
High autonomy Autonomy
Low significance High significance
Task Significance
Low identity
High identity Task Identity
Low variety
High variety Skill Variety
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Motivation Challenges For Today’s Supervisors Today’s supervisors have the challenge of motivating a diverse workforce, paying for performance, motivating minimum-wage employees, motivating contingent employees, motivating professional and technical employees, improving employees’ work–life bal- ance, providing employee recognition programs, and introducing employee stock own- ership plans.
WHAT IS THE KEY TO MOTIVATING A DIVERSE WORKFORCE? To maximize motivation among today’s diversified workforce, supervisors need to think in terms of flexibility.14 Studies tell us that men place considerably more importance on having autonomy in their jobs than do women. In contrast, the opportunity to learn, have convenient work hours, and enjoy good interpersonal relations appear more important to women than to men. Supervisors need to recognize that what motivates a single mother with two dependent children who is working full-time to support her family may be very different from what motivates a young, single, part-time worker or the older employee who is working to supplement their pension income. Employees have different personal needs and goals that they’re hoping to satisfy through their job. The offer of various types of rewards to meet their diverse needs can be highly motivating for employees.
Supervisors must be aware of cultural differences. The theories of motivation we have been studying were developed largely by US psychologists and were validated by studying American workers. Therefore, these theories need to be modified for different cultures.15 The self-interest concept is consistent with capitalism and the extremely high value placed on individualism in countries such as the United States. Because almost all the motivation theories presented in this chapter are based on the self-interest motive, they should be applicable to employees in such countries as Great Britain and Australia, where capitalism and individualism are highly valued. In more collectivist nations—such as Venezuela, Singapore, Japan, and Mexico—the link to the organiza- tion is the individual’s loyalty to the organization or society, rather than his or her self-interest. Employees in collectivist cultures should be more receptive to team-based job design, group goals, and group-performance evaluations. Reliance on the fear of being fired in such cultures is likely to be less effective, even if the laws in those coun- tries allow it.
The need-for-achievement concept provides another example of a motivation theory with a US bias. The view that a high need for achievement acts as an internal motivator assumes a willingness to accept a moderate degree of risk and a concern with perfor- mance. These characteristics would exclude countries with high uncertainty-avoidance scores and high quality-of-life ratings. The remaining countries are exclusively Anglo- American countries such as New Zealand, South Africa, Ireland, the United States, and Canada.
However, results of several recent studies among employees in countries other than the United States indicate that some aspects of motivation theory are transferable.16 For instance, motivational techniques presented in this chapter were shown to be effective in changing performance-related behaviors of Russian textile mill workers. Supervisors must remember that motivation concepts are not universally applicable. They should change their motivational techniques to fit the culture. The technique used by a company specializing in trading auto and financial loans in Baishan City, Jilin, China—forcing
OBJECTIVE 8.8 Explain the effect of workforce diversity on motivating employees.
14See S. Bates, “Getting Engaged,” HR Magazine, February 2004, 44–51; and G. M. Combs, “Meeting the Leadership Challenge of a Diverse and Pluralistic Workplace: Implications of Self-Efficacy for Diversity Training,” Journal of Leadership Studies 8, no. 4 (Spring 2002), 1–17. 15G. Hofstede, “Motivation, Leadership, and Organizations: Do American Theories Apply Abroad?” Organizational Dynamics 9, no. 1 (Summer 1980), 55.
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employees to crawl on all fours in public because they did not hit their sales goals—may be a means of supervising in China, but doing something that humiliates employees isn’t likely to work in North America or Western Europe.17
SHOULD EMPLOYEES BE PAID FOR PERFORMANCE OR TIME ON THE JOB? What’s in it for me? Our knowledge of motivation tells us that people do what they do to satisfy some need. Before they do anything they look for a payoff or reward. Although different rewards may be offered by organizations, most of us are concerned with earning an amount of money that allows us to satisfy our needs and wants. Because pay is an important variable in motivation as one type of reward, we need to look at how we can use pay to motivate high levels of employee performance. This explains the intent and logic behind pay-for-performance programs.
Pay-for-performance programs are compensation plans that pay employees on the basis of some performance measure. Piece-rate plans, gain sharing, wage incentive plans, profit sharing, and lump-sum bonuses are examples of pay-for-performance programs. What differentiates these forms of pay from the more traditional compensa- tion plans is that instead of paying an employee for time on the job, pay is adjusted to reflect some perfor- mance measures. These performance measures might include such things as individual productivity, team or workgroup productivity, depart- mental productivity, or the overall organization’s profits for a given period.
Performance-based compensation is probably most compatible with expectancy theory. Employees should perceive a strong relationship between their performance and the rewards they receive if motivation is to be maximized. If rewards are allocated solely on nonperformance factors such as seniority, job title, or across-the-board cost-of-living raises, then employees are likely to reduce their efforts.
Pay-for-performance programs are popular. Some 94 percent of employers have some form of variable pay plan.18 The growing popularity can be explained in terms of both motivation and cost control.19 From a motivation perspective, making some por- tion of pay conditional on performance measures focuses employee attention and effort on that measure, and then reinforces the continuation of that effort with rewards. However, if performance declines, so too does the reward. Thus, there is an incentive to keep efforts and motivation strong.
Does it work? The jury is still out. For the most part, studies seem to indicate it does. One study found companies that used pay-for-performance programs performed better financially than those that did not.20 Another study showed pay-for-performance
16D. H. B. Walsh, F. Luthens, and S. M. Sommer, “Organizational Behavior Modification Goes to Russia: Replicating an Experimental Analysis across Cultures and Tasks,” Journal of Organizational Behavior Management 13, no. 2 (Fall 1993), 15–35; and J. R. Baum, J. D. Olian, M. Erez, and E. R. Schnell, “Nationality and Work Role Interactions: A Cultural Contrast of Israel and U.S. Entrepreneurs’ versus Managers’ Needs,” Journal of Business Venturing 8, no. 6 (November 1993), 499–512. 17S. Williams, “Think your boss is tough? Chinese employees are forced to CRAWL on the street for missing their sales targets,” DailyMail.Com, April 8, 2016, http://www.dailymail.co.uk/news/peoplesdaily/ article-3529474/Think-boss-tough-Chinese-employees-forced-CRAWL-street-missing-sales-targets.html (accessed February 19, 2017).
pay-for-performance programs Compensation plans that pay employ- ees on the basis of some performance measure.
18“Incentive Pay Practices: Privately Held Companies,” WorldatWork, February 2016. 19“Exclusive PFP Survey: Latest Data—What’s Hot and What’s Not in PFP,” Pay for Performance Report, May 2002, 1. 20H. Rheem, “Performance Management Programs,” Harvard Business Review, September–October 1996, pp. 8–9; G. Sprinkle, “The Effect of Incentive Contracts on Learning and Performance,” Accounting Review, July 2000, pp. 299–326; and “Do Incentive Awards Work?,” HRFocus, October 2000, pp. 1–3.
Praphan Jampala/123RF.com
A contemporary pay-for- performance culture rewards employees for their contributions to the success and profitability of the organization.
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programs with outcome-based incentives had a positive impact on sales, customer sat- isfaction, and profits.21 However, in organizations that use work teams, managers should consider group-based performance incentives that will reinforce team effort and commitment. But, others say that linking pay to performance doesn’t work.22 So if a business decides it wants to use pay-for-performance programs, managers need to ensure they’re specific about the relationship between an individual’s pay and his or her expected level of appropriate performance. Employees must clearly understand exactly how performance—theirs and the organization’s—translates into dollars on their paychecks.23
An extension of the pay-for-performance concept is called competency-based compensation.24 This compensation program pays and rewards employees on the basis of the skills, knowledge, or behaviors employees possess. Competencies may include such behaviors and skills as leadership, problem-solving, decision-making, or strategic planning. Pay levels are established on the basis of the degree to which these competen- cies exist. Pay increases are awarded for growth in personal competencies as well as for the contributions one makes to the overall organization. An employee’s rewards are tied directly to how capable they are of contributing to the achievement of the organization’s goals and objectives.
HOW CAN SUPERVISORS MOTIVATE MINIMUM-WAGE EMPLOYEES? One of the toughest motivational challenges facing many supervisors today is how to achieve high performance levels among minimum-wage workers. Offering more pay for high levels of performance is out of the question because companies can’t afford it. What are your motivational options at this point?25
One trap many supervisors fall into is thinking that employees are motivated only by money. Although money is important as a motivator, it’s not the only “reward” that people seek and that supervisors can use. In motivating minimum- wage employees, supervisors should look at other types of rewards that help motivate employees. Many companies use employee recognition programs such as employee of the month, quarterly employee-performance award ceremonies, or other celebra- tions of employee accomplishment. For instance, at many fast-food restaurants such as McDonald’s and Wendy’s, you’ll often see plaques hanging in prominent places that feature the “Crew Member of the Month.” These programs highlight employees whose work performance has been of the type and level the organization wants to encourage. Supervisors may also use praise to motivate, but you need to be sure that praise is sincere and done for the right reasons—otherwise, employees can see such actions as manipulative.
We know that rewards are only part of the motivation equation. We can look to job design and expectancy theories for additional insights. In service industries such as travel and hospitality, retail sales, child-care, and maintenance where pay for front- line employees generally doesn’t get much above the minimum-wage level, successful companies are empowering these front-line employees with more authority to address cus tomers’ problems. We can see that this type of job redesign provides enhanced moti- vating potential because employees now experience increased skill variety, task identity, task significance, autonomy, and feedback.
21R. D. Banker, S. Y. Lee, G. Potter, and D. Srinivasan, “Contextual Analysis of Performance Impacts on Outcome-Based Incentive Compensation,” Academy of Management Journal, August 1996, pp. 920–948. 22B. S. Frey and M. Osterloh, “Stop Typing Pay to Performance,” Harvard Business Review, January– February 2012, pp. 51–52. 23T. Reason, “Why Bonus Plans Fail,” CFO, January 2003, p. 53; and “Has Pay For Performance Had Its Day?,” The McKinsey Quarterly, no. 4, 2002, accessed on Forbes website, www.forbes.com. 24See D. A. DeCenzo and S. P. Robbins, Human Resource Management, 8th ed. (New York: John Wiley & Sons, 2005), 286.
competency-based compensation Payments and rewards to employees on the basis of skills, knowledge, and behaviors.
25P. Falcone, “Motivating Staff Without Money,” HR Magazine, August 2002, 105–108.
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HOW ARE CONTINGENT WORKERS MOTIVATED? As full-time jobs have been eliminated, the number of openings for part-time, contract, and other forms of temporary work have increased. Contingent workers don’t have the security or stability that permanent employees have, and they don’t identify with the organization or display the commitment that other employees do. Temporary workers also typically get little or no benefits such as health care or pensions.26
What will motivate involuntarily temporary employees? An obvious answer is the opportunity to become a permanent employee. In cases in which permanent employees are selected from a pool of temps, the temps will often work hard in hopes of becoming permanent. A less obvious answer is the opportunity for training. The ability of tempo- rary employees to find a new job is largely dependent on their skills. If employees see that the job they are doing can help develop marketable skills, then motivation is increased. From an equity standpoint, when temps work alongside permanent employees who earn more and get benefits too for doing the same job, the performance of temps is likely to suffer. Separating such employees or perhaps minimizing interdependence between them might help supervisors counteract potential problems.27
How do these issues influence contingent workers’ job satisfaction? Research shows that differences in job satisfaction between contingent and permanent workers is not significant until we consider the particular contingent work arrangements— temporary employee versus independent contractor.28 Temporary workers are less satisfied than permanent workers. This difference may be explained by the fact that most temporary employees do not receive benefits such as paid vacation and are paid lower wages than earned by comparably skilled permanent workers. In contrast, independent contractors are about as equally satisfied as permanent workers. This may be the case because organizations are more likely to recognize the importance of independent contractors’ contributions because they’re mostly highly skilled individuals. For instance, manage- ment consultants are well educated and have a proven track record of success.
WHAT’S DIFFERENT IN MOTIVATING PROFESSIONAL AND TECHNICAL EMPLOYEES? Professional and technical employees are typically different from nonprofessionals. They have a strong and long-term commitment to their field of expertise. Their loyalty, how- ever, is more often to their profession than to their employer. To keep current in their field, they need to regularly update their knowledge. And their commitment to their
26K. Bennhold, “Working (Part-Time) in the 21st Century,” New York Times Online, December 29, 2010, http://www.nytimes.com/2010/12/30/world/europe/30iht-dutch30.html?pagewanted=all (accessed Febru- ary 19, 2017); and J. Revell, C. Bigda, and D. Rosato, “The Rise of Freelance Nation,” CNNMoney, cnnmoney.com (June 12, 2009) http://money.cnn.com/2009/06/11/magazines/moneymag/entreprenuerial_ workplace.moneymag/ (accessed June 2, 2014); and R. J. Bohner, Jr. and E. R. Salasko, “Beware the Legal Risks of Hiring Temps,” Workforce, October 2002, pp. 50–57, 55. 27H. G. Jackson, “Flexible Workplaces: The Next Imperative,” HR Magazine, March 2011, p. 8; E. Frauenheim, “Companies Focus Their Attention on Flexibility,” Workforce Management Online, March 6, 2011, http://www.workforce.com/2011/03/06/companies-focus-their-attention-on-flexibility/ (accessed February 19, 2017); P. Davidson, “Companies Do More with Fewer Workers,” USA Today, February 23, 2011, pp. 1B1; M. Rich, “Weighing Costs, Companies Favor Temporary Help,” New York Times Online, December 19, 2010, http://www.nytimes.com/2010/12/20/business/economy/20temp.html?pagewanted=all (accessed February 19, 2017); P. Davidson, “Temporary Workers Reshape Companies, Jobs,” USA Today, October 13, 2010, pp. 1B1; J. P. Broschak and A. Davis-Blake, “Mixing Standard Work and Nonstandard Deals: The Consequences of Heterogeneity in Employment Arrangements,” Academy of Management Jour- nal (April 2006), pp. 371–393; M. L. Kraimer, S. J. Wayne, R. C. Liden, and R. T. Sparrowe, “The Role of Job Security in Understanding the Relationship Between Employees’ Perceptions of Temporary Workers and Employees’ Performance,” Journal of Applied Psychology (March 2005), pp. 389–398; and C. E. Connelly and D. G. Gallagher, “Emerging Trends in Contingent Work Research,” Journal of Management (November 2004), pp. 959–983. 28C. L. Wilkin, “I Can’t Get No Job Satisfaction: Meta-analysis Comparing Permanent and Contingent Workers,” Journal of Organizational Behavior, vol. 34, 2013, pp. 47–64.
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profession or technical field means they rarely define their work week in terms of a nine-to-five schedule, five days a week.29
Money and promotions into supervisory positions typically are low on the priority list of professional and technical employees because they tend to be well paid, and they enjoy what they do. In contrast, job challenge tends to be ranked high. They like to tackle problems and find solutions. Their chief reward in their job is the work itself. Professional and technical employees generally also value support. They want others to think that what they are working on is important.30
Supervisors should provide professional and technical employees with new assign- ments and challenging projects. Give them autonomy to follow their interests and allow them to structure their work in ways they find productive. Reward them with educa- tional opportunities that enable them to keep current in their field and to network with their peers. Also reward them with recognition. Supervisors should ask questions and engage in other actions that demonstrate to their professional and technical employees that they’re sincerely interested in what they’re doing.
An increasing number of companies are creating alternative career paths for these employees. These allow employees to earn more money and status, without assuming managerial responsibilities. At Merck, IBM, and AT&T, the best scientists, engineers, and researchers gain titles such as Fellow and Senior Scientist. Their pay and prestige are comparable to those of managers, but without the corresponding authority.
WHAT CAN A SUPERVISOR DO TO IMPROVE EMPLOYEES’ WORK–LIFE BALANCE? Communication technology allows employees to do their work at home, in their cars, or on the beach in Tahiti.
Typical employees in the 1960s or 1970s showed up at the workplace Monday through Friday and did their job in eight- or nine-hour chunks of time. The workplace and hours were clearly specified. That’s no longer true for a large segment of today’s workforce. Employees are increasingly complaining that the line between work and non-work time has become blurred, creating personal conflicts and stress.31 A number of factors have contributed to blurring the lines between work and personal lives.
First, the creation of global organizations means their world never sleeps. At any time and on any day, for instance, thousands of Royal Dutch Shell employees are work- ing somewhere. The need to consult with colleagues or customers eight or ten time zones away means that many employees of global firms are on call twenty-four hours a day. Second, communication technology allows employees to do their work at home, in their car, or on the beach in Tahiti. This lets many people in technical and professional jobs do their work any time and from any place.32 However, working anywhere and at any time means there’s no escaping from work. Third, as organizations lay off employees, the “surviving” employees are often asked to put in longer hours.
According to a recent report by the Center for American Progress, over the last thirty years, the majority of Americans have started working longer hours while earning less.
29See, for instance, P. J. Sauer, “Open-Door Management,” Inc., June 2003, 44. 30“One’s CEO’s Perspective on the Power of Recognition,” Workforce Management, February 27, 2004, http://www.workforce.com/2004/02/27/one-ceos-perspective-on-the-power-of-recognition/ (accessed February 19, 2017); and R. Fournier, “Teamwork Is the Key to Remote Development—Inspiring Trust and Maintain- ing Motivation Are Critical for a Distributive Development Team,” InfoWorld, March 5, 2001, 48. 31See, for example, P. Cappelli, J. Constantine, and C. Chadwick, “It Pays to Value Family: Work and Family Trade-Offs Reconsidered,” Industrial Relations, April 2000, 175–198; M. A. Verespej, “Balanc- ing Act,” Industry Week, May 15, 2000, 81–85; and R. C. Barnett and D. T. Hall, “How to Use Reduced Hours to Win the War for Talent,” Organizational Dynamics, March 2001, 42. 32See, for instance, L. Belkin, “From Dress-Down Friday to Dress-Down Life,” New York Times, June 22, 2003, 1; and E. Tahminicioglu, “By Telecommuting, the Disabled Get a Key to the Office, and a Job,” New York Times, July 20, 2003, 1. http://www.huffingtonpost.com/2011/06/30/americans-now-view- 40-hou_n_888231.html (accessed December 31, 2016).
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Findings are that in 2006, US families worked an average of eleven hours more per week than they did in 1979. Top-level professionals, lawyers, and doctors view the traditional forty hour work week as a “part-time” job, and according to the report, “Many feel, with some justification, that a 40-hour week would be career suicide. This schedule is seen as ‘part time’ in many professional-managerial jobs, and tends to spell a less-pres- tigious and less upwardly-mobile career path.” Examining two government surveys— one using data from 1977 to 1979 and the other using data from the years 2006 to 2008—the report finds that people’s approach to work–life and work–family balance has changed significantly. Replacing the customary forty-hour work week, many employees now work fifty hours or more. The report indicates male professionals espe- cially work longer hours with 37.9 percent of men with professional and managerial positions working more than fifty hours a week between 2006 and 2008, compared to 34 percent from the years 1977 to 1979. With professional women, the change is even more striking—evidence shows 14.4 per-cent work more than fifty hours currently, whereas only 6.1 percent did thirty years ago.33
Today’s employee is typically part of a dual-career couple. This makes it increas- ingly difficult for employees in committed relationships to find the time to fulfill obliga- tions to home, spouse, children, parents, and friends.34 Employees recognize that work is squeezing out their personal lives, and they’re not happy about it. Progressive work- places must accommodate the varied needs of a diverse workforce and in response, many organizations are offering family-friendly benefits that provide a wide range of schedul- ing options to allow employees more flexibility at work, accommodating their need for work–life balance. They’ve introduced programs such as on-site child-care, summer day camps, flextime, job sharing, time off for school functions, telecommuting, and part- time employment. This is extremely important since younger employees put a higher priority on family and a lower priority on jobs and are looking for organizations that give them more work flexibility.35
Recent studies suggest that employees want jobs that give them flexibility in their work schedules so they can better manage work–life conflicts.36 Flextime (short for “flexible work time”) is a scheduling option that allows employees, within specific parameters, to decide when to go to work. Employees have to work a specific number of hours a week, but they are free to vary the hours of work within certain limits. Flex- time has become a popular scheduling option, especially among professional employees and Gen-Xers. 37 For instance, a recent study of firms’ practices to enhance the work–life balance found that about 60 percent offered employees some form of flextime.38 The potential benefits of flextime are numerous for both the employee and the employer. They include improved employee motivation and morale, reduced absenteeism as a result of enabling employees to better balance work and family responsibilities, increased wages as a result of productivity gains, and the ability of the organization to recruit higher-quality and more diverse employees.39
33J. C. Williams and H. Boushey, “The Three Faces of Work-Family Conflict: The Poor, the Profession- als, and the Missing Middle,” Center for Work Life Law, January 2010, http://www.worklifelaw.org/ pubs/ThreeFacesofWork-FamilyConflict.pdf (accessed December 31, 2016); Harry Bradford, “Top-Level Professionals View 40-Hour Work Week as Part-Time: Report,” The Huffington Post, August 30, 2011, http://www.huffingtonpost.com/2011/06/30/americans-now-view-40-hou_n_888231.html (accessed December 31, 2016). 34M. Conlin, “The New Debate over Working Moms,” BusinessWeek, November 18, 2000, 102–103. 35M. Elias, “The Family-First Generation,” USA Today, December 13, 2004, 5D. 36 Sloan Center on Aging & Work at Boston College, “Why Employees Need Workplace Flexibility,” The Alfred P. Sloan Foundation, http://workplaceflexibility.bc.edu/need/need_employees (accessed December 31, 2016). 37J. Wiscombe, “Flex Appeal—Not Just for Moms,” Workforce, March 2002, 18. 38S. Roberts, “Companies Slow to Employ Alternative Work Options; Use of Arrangements Such as Flextime Is Up Slightly, If at All,” Business Insurance, April 8, 2002, T3. 39S. F. Gale, “Formalized Flextime: The Perk That Brings Productivity,” Workforce, February 2001, 38; and B. S. Gariety and S. Shaffer, “Wage Differentials Associated with Flextime,” Monthly Labor Review 124, no. 3 (March 2001), 68–75.
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In addition, not only the current workforce generation but the next generation of employees is likely to have similar concerns.40 In fact, a majority of college and univer- sity students say that attaining a balance between personal life and work is a primary career goal. They want “a life” as well as a job! Organizations that don’t help their people achieve a work–life balance will find it increasingly hard to attract and retain the most capable and motivated employees.41
Job sharing is a special type of part-time work. It allows two or more individuals to split a traditional forty-hour-a-week job. One person might perform the job from 8 a.m. to noon whereas another performs the same job from 1 p.m. to 5 p.m., or both could work full, but alternate, days. Job sharing, growing in popularity, allows organiza- tions to draw on the talents of more than one individual for a given job. It provides the opportunity to acquire skilled workers who might not be available on a full-time basis.
40S. Masunaga, “Millennials want more flexibility in workplace schedule, survey says,” De-cember 31, 2016, Los Angeles Times, http://www.latimes.com/business/la-fi-millennial-work-life-20150528-story.html (accessed December 31, 2016). 41S. K. Yazinski, “Strategies for Retaining Employees and Minimizing Turnover,” August 03, 2009, HR. BLR.com, http://hr.blr.com/whitepapers/Staffing-Training/Employee-Turnover/Strategies-for-Retaining- Employees-and-Minimizing- (accessed December 31, 2016).
MAKING IT RAIN . . . AT GRAVITY
NEWS FLASH!
Does money buy happiness? Several of the 120 employees at Gravity Payments, a credit card processing company based in Seattle, are about to find out.
The company’s founder, 29-year-old Dan Price, made the news in the spring of 2015 when he decided to bump up the salary of 70 employees to a new “minimum wage” of $70,000. Now, everyone in the company will be making at least $70,000. Some employees at the company, where the average salary was $48,000, doubled their pay, and others got a nice salary increase—probably enough, you’d think, for employees to be pretty happy about!
Why did Price do it? He said that he had been thinking about employee pay for a while, espe- cially after reading several news reports about the glaring pay disparities between corporate CEOs and employees, which he says struck him as “ridiculous” and “absurd.” Also, Price had read an article on happiness by two Princeton researchers (one a Nobel Prize-winning psycholo- gist) who had surveyed 450,000 US residents on whether money could buy happiness—both as it affected overall happiness and how it affected day-to-day life. The researchers concluded that people claimed to be happier with each doubling of income but only to a point. But even more interesting was the dollar amount that respon- dents said would make their daily life more pleas- ant: about $75,000 a year. Price decided to offer
his employees a minimum salary of $70,000. He felt that giving his employees this amount could enable many of them to buy homes and pay for their kids’ educations.
To pay for the salary increase, Price is taking a pay cut from his annual $1 million salary down to $70,000. Also, the company will have to use 75 to 80 percent of its profits to help cover the cost. Some management consultants are questioning the move, wondering if it will affect employee produc- tivity and pay off in the long run. Concerns about what happens to employee motivation include: Will employees be less motivated to work to be pro- moted to higher levels of responsibility, and would those employees who put in additional effort above and beyond their current tasks lose the incentive to do so (“Why should I work harder if we all get the same pay?”). And what happens to the CEO’s motivation—would Price himself lose the incen- tive to want to grow the company? Then, there’s also the question of what happens if the company’s profitability starts to fall. Only time will tell if such issues are even relevant.
Based on: L. Dishman, “Can a $70,000 Minimum Wage Work?,” FastCompany.com, April 20, 2015, http:// www.fastcompany.com/3045138/the-future-of-work/ can-a-70000-minimum-wage-work (accessed February 17, 2017); and P. Cohen, “One Company’s New Mini- mum Wage: $70,000 a Year,” New York Times Online, April 13, 2015.
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HOW CAN SUPERVISORS USE EMPLOYEE RECOGNITION PROGRAMS? Employee recognition programs consist of personal attention and expressions of interest, approval, and appreciation for a job well done.42 They can take numerous forms. For instance, Kelly Services introduced a new version of its points-based incentive system to better promote productivity and retention among its employees. The program, called Kelly Kudos, gives employees more choices of awards and allows them to accumulate points over a longer time period.43 And it’s working. Participants generate three times more revenue and hours than employees not receiving points. Most supervisors, how- ever, use a far more informal approach. For example, when Julia Stewart—currently chairman and CEO of DineEquity, Inc.—was president of Applebee’s Restaurants, she would frequently leave sealed notes on the chairs of employees after everyone had gone home.44 These notes explained how important Stewart thought the person’s work was or how much she appreciated the completion of a project. Stewart also relied heavily on voice mail messages left after office hours to tell employees how appreciative she was for a job well done.
And recognition doesn’t have to come only from supervisors. Some 35 percent of companies encourage coworkers to recognize peers for outstanding work efforts.45 For instance, supervisors at Yum Brands Inc. (the Kentucky-based parent of food chains Taco Bell, KFC, and Pizza Hut) were looking for ways to reduce employee turnover. They found a successful customer-service program involving peer recognition at KFC restaurants in Australia. Workers there spontaneously rewarded fellow workers with “Champs cards, an acronym for attributes such as cleanliness, hospitality, and accuracy.” Yum imple- mented the program in other restaurants around the world, and credits the peer recogni- tion with reducing hourly employee turnover from 181 percent to 109 percent.46
A survey of organizations found that 84 percent had some type of program to rec- ognize worker achievements.47 And do employees think these programs are important? You bet! A survey of a wide range of employees asked them what they considered the most powerful workplace motivator. Their response? Recognition, recognition, and more recognition!48
Consistent with reinforcement theory, rewarding a behavior with recognition imme- diately following that behavior is likely to encourage its repetition. Supervisors can personally congratulate an employee in private for a good job. They can send a hand- written note or e-mail message acknowledging something positive that the employee has done. For employees with a strong need for social acceptance, accomplishments can be publicly recognized accomplishments. To enhance group cohesiveness and motivation, supervisors can celebrate team successes by throwing a pizza party to celebrate their accomplishments. These things may seem simple, but they can go a long way in showing employees they’re valued.
During times of economic and financial uncertainty, supervisors’ abilities to recog- nize and reward employees are often severely constrained. It’s not surprising, then, that employees feel less connected to their work. In fact, a recent study by the Corporate Executive Board found that declining employee engagement has decreased overall
42J. Singer, “Healing Your Workplace,” Supervision, March 2011, 11–13; P. Hart, “Benefits of Employee Recognition in the Workplace: Reduced Risk and Raised Revenues,” EHS Today, February 2011, 49–52; and F. Luthans and A. D. Stajkovic, “Provide Recognition for Performance Improvement,” in E. A. Locke (ed.), Principles of Organizational Behavior (Oxford, England: Blackwell, 2000), 166–80. 43C. Huff, “Recognition That Resonates,” Workforce Management Online, April 1, 2008. 44J. Stewart, “I’m Standing up for the Industry. Are You?” Restaurant Business, February 2011, 36–37; and M. Littman, “Best Bosses Tell All,” Working Woman, October 2000, 54. 45E. White, “Praise from Peers Goes a Long Way,” Wall Street Journal, December 19, 2005, B3. 46E. White, “Praise from Peers Goes a Long Way,” Wall Street Journal, December 19, 2005, B3. 47K. J. Dunham, “Amid Sinking Workplace Morale, Employers Turn to Recognition,” Wall Street Journal, November 19, 2002, B8. 48See B. Nelson, “Try Praise,” Inc., September 1996, 115; and J. Wiscombe, “Rewards Get Results,” Workforce, April 2002, 42–48. Cited in S. Caudron, “The Top 20 Ways to Motivate Employees,” Industry Week, April 3, 1995, 15–16.
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productivity by 3 to 5 percent.49 But there are actions supervisors can take to maintain and maybe even increase employees’ motivation levels. One is to clarify each person’s role in the organization. Show them how their efforts are contributing to improving the company’s overall situation. It’s also important to keep communication lines open and use two-way exchanges between top-level managers and employees to soothe fears and concerns. The key with taking any actions is continuing to show workers that the com- pany cares about them. The value in companies comes from employees who are moti- vated to be there. Supervisors have to give employees a reason to want to be there.
HOW CAN EMPLOYEE STOCK OWNERSHIP PLANS AFFECT MOTIVATION? Many companies are using employee stock ownership plans for improving and moti- vating employee performance. An employee stock ownership plan (ESOP) is a compensation program in which employees become part owners of the organization by receiving stock as a performance incentive. Also, many ESOPs allow employees to purchase additional stocks at attractive, below-market prices. Under an ESOP, employees often are moti- vated to give more effort because it makes them owners who will share in any gains and losses. The fruits of their labors are no longer just going into the pockets of some unknown owners—the employees are the owners! Do ESOPs positively affect produc- tivity and employee satisfaction?50 The answer appears to be yes.
49E. Frauenheim, “Downturn Puts New Emphasis on Engagement,” Workforce Management Online, July 21, 2009; S. D. Friedman, “Dial Down the Stress Level,” Harvard Business Review, December 2008, pp. 28–29; and S. E. Needleman, “Allaying Workers’ Fears During Uncertain Times,” Wall Street Journal, October 6, 2008. 50J. L. Ripperger, “How Employee Ownership Benefits Executives, Companies, and Employees.” American Management Association. N.p., 21 July 2014, http://www.amanet.org/training/articles/How-Employee- Ownership-Benefits-Executives-Companies-and-Employees.aspx (accessed February 19, 2017).
employee stock ownership plan (ESOP) A compensation program that allows employees to become part owners of an organization by receiving stock as a performance incentive.
Comprehension Check 8-2
5. A person who has a compelling drive to succeed, to do something better than others, has a high .
a. need for esteem b. need for achievement c. need for people d. equity need
6. Which one of the following is not a direct linkage in expectancy theory? a. Effort–performance b. Rewards–personal goals c. Effort–personal goals d. Performance–rewards
7. Which one of the following is not a component of the core dimensions of a job? a. Skill variety b. Feedback c. Autonomy d. Role identity
8. A compensation plan that pays employees on the basis of the work they did is called:
a. competency-based compensation. b. pay-for-performance. c. compensation administration. d. none of the above.
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solutions to problems, where they can receive rapid and unambiguous feedback on their performance, and where they can set moderately challenging goals.
5. Identify the three relationships in expectancy theory that determine an individual’s level of effort. The three relationships in expectancy theory that determine an individual’s level of effort are effort–performance, per- formance–rewards, and rewards–personal goals. The effort–performance linkage implies that an employee who puts forth the effort has a greater likelihood that he or she will successfully perform the job. The per- formance–rewards linkage implies that if the perfor- mance is successful, the employee will receive a reward. Finally, the rewards–personal goals linkage implies that the rewards received are something the employee wants and finds value in—it helps fulfill an individual need.
6. List actions a supervisor can take to maximize employee motivation. To maximize employee motivation, super- visors should recognize individual differences, match people to jobs, set challenging goals, encourage partici- pation, individualize rewards, link rewards to perfor- mance, check for equity, and not ignore money.
7. Describe how supervisors can design individual jobs to maximize employee performance. Supervisors can design individual jobs to maximize employee perfor- mance by offering skill variety, task identity, task sig- nificance, and autonomy and by providing feedback. These five elements have been identified as key char- acteristics that define a job.
8. Explain the effect of workforce diversity on motivat- ing employees. Maximizing motivation in contempo- rary organizations requires that supervisors be flexible in their practices. They must recognize that employees have different personal needs and goals that they are attempting to satisfy through work. Supervisors must also recognize that cultural differences may play a role. Various types of rewards must be developed to meet and motivate people with these diverse needs.
1. Define motivation. Motivation is the willingness to do something and is conditioned by this action’s abil- ity to satisfy some need for the individual.
2. Identify and define five personality characteristics rel- evant to understanding the behavior of employees at work. Five personality characteristics are (1) locus of control—the degree to which people believe they are masters of their own fate, (2) Machiavellianism—the degree to which an individual is manipulative and believes that ends can justify means, (3) self-esteem— an individual’s degree of liking or disliking himself or herself, (4) self-monitoring—an individual’s ability to adjust his or her behavior to external, situational factors, and (5) risk propensity—the degree of an indi- vidual’s willingness to take chances.
3. Explain the elements and the focus of the three early theories of motivation. Maslow focused on the self. Maslow’s hierarchy of needs proposes that there are five needs—physiological, safety, social, esteem, and self-actualization—and as each need is sequentially satisfied, the next need becomes dominant. McGregor focused on management’s perception of the self. The- ory X–Theory Y proposes two views of human nature and then argues that employees are essentially hard- working, committed, and responsible. Therefore, to maximize motivation, employees should be allowed to participate in decision-making and should be given responsible and challenging jobs, and supervisors should strive to achieve good group relations among employees. Herzberg focused on the organization’s effect on the self. According to motivation-hygiene theory, if you want to motivate employees, you have to emphasize achievement, recognition, the work itself, responsibility, and growth. These are the char- acteristics that people find intrinsically rewarding.
4. Identify the characteristics that stimulate the achieve- ment drive in high achievers. High achievers prefer jobs that give them personal responsibility for finding
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
8-3. Compare the assumptions of Theory X with those of Theory Y. Do you believe that there are types of jobs that require one focus or another? Explain.
8-1. How does an unsatisfied need create motivation? 8-2. Contrast behavioral predictions about people with
an internal versus an external locus of control.
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
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2. McGregor's motivation theory 7. a compensation plan that allows employees to become part owners in the organization 8. the degree to which an individual likes or dislikes himself or herself 11. Herzberg's motivation theory 13. a motivation theory that looks at the e�ort– performance–reward linkages 14. a willingness to take chances 15. Herzberg's terms for such things as working conditions and salary 17. compensation plans that compensate employees based on tasks completed 18. a compelling drive to succeed 19. the ability to adjust behavior to external situational factors
1. combining tasks to form complete jobs 3. a motivation theory that states that employees' inputs equal outcomes 4. a compensation program in which payments and rewards are based on skills, knowledge, and abilities 5. the degree to which a worker controls the planning, execution, and evaluation of his or her work 6. the willingness to do something to satisfy a need 9. a source of the power over an individual's behavior 10. manipulative behavior based on the belief that the ends justify the means 12. Maslow's motivation theory 16. a deficiency that makes certain outcomes attractive
8-4. What is the importance of the dual continuum in the motivation-hygiene theory?
8-5. What does a supervisor need to do to motivate a high achiever?
8-6. What role would money play in (a) the hierarchy- of-needs theory, (b) motivation-hygiene theory, (c) equity theory, (d) expectancy theory, and (e) the case of employees with a high nAch?
8-7. Describe expectancy theory. What are the critical linkages?
8-8. What motivational challenges does a diversified workforce create for supervisors?
8-9. Identify and explain the five core dimensions in a job.
8-10. How can a supervisor enrich a job?
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• What’s My View on the Nature of People? • What Motivates Me? • What’s My Attitude toward Achievement?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• What Do I Value? • What Rewards Do I Value Most?
GETTING TO KNOW YOURSELF
Developing Your Supervisory Skills
is required to be certified to operate it. Take time to interview incumbent job holders and get their perspec- tive on the job.
STEP 2: Visualize the job redesigned. Take time to considering how an employee could efficiently accom- plish the job while remaining cognitively satisfied and not bored. This is a good time to consider the working hours required by the job and the organizational sched- ule as you look for opportunities to introduce flexibility into the job requirements. Draw upon the suggestions of employees as you review the working conditions and physical environment of the organization in terms of the ergonomics of equipment that must be able to accom- modate differences in worker size, height, and reach.
As a supervisor, what can you do regarding job design to maximize the performance of your employees? Can the job itself provide motivation to the employee? Keeping in mind no two employees are alike in expectations and no job is perfect, we suggest the following research-based steps to help you design jobs that have the potential to motivate your employees to achieve their highest potential.
STEPS IN PRACTICING THE SKILL
STEP 1: Identify specific requirements of the job. Take time to analyze the duties, tasks, and activities of the job holder. Consider the specific knowledge, skill, and abilities the job holder must possess to be suc- cessful. Think about all equipment and what training
DESIGNING JOBS THAT MOTIVATE
Task 3: As an employee, list the factors that would most effectively motivate you. Again, be as specific as possible.
Task 4: Rank (from highest to lowest) all the factors listed in Task 3.
STEP 2: Each member should share his or her priori- tized lists (the lists from Tasks 2 and 4) with the other members of the group.
STEP 3: After each member has presented his or her lists, the group should respond to the following questions:
A. Are each individual’s lists (Task 2 and Task 4) similar or dissimilar? What do the differences or similarities suggest to you?
B. What have you learned about how and why you motivate others, and how can you apply these data?
8-11. An Experiential Exercise: Motivating Others
BUILDING A TEAM
This exercise is designed to help increase your awareness of how and why you motivate others, and to help focus on the needs of those you are attempting to motivate.
STEP 1: Break into groups of five to seven people. Each group member is to individually respond to the following: Situation 1: You are the supervisor of eleven em-
ployees. Your goal is to motivate all eleven em- ployees to their highest effort level. Task 1: On a separate piece of paper, list the fac-
tors you would use to motivate your employ- ees. Avoid general statements such as “give them a raise.” Rather, be as specific as possible.
Task 2: Rank (from highest to lowest) all the factors listed in Task 1.
Situation 2: Consider now that you are one of the eleven employees who has been given insight as to what motivates you.
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high-level employee. Look for ways to build feedback on performance into the job and enhance communica- tions with supervisors through an open door policy. Stress job enrichment through tasks that require train- ing to meet the challenge of becoming an expert.
Sources: Based on ASTD Staff, “Job Characteristics Key to Motivating Federal Employees,” Association for Talent Development, Wednesday, January 09, 2013, https://www. td.org/Publications/Blogs/GovLearning-Blog/2013/01/ Job- Characteristics-Key-to-Motivating-Federal-Employees (accessed February 19, 2017); “Designing jobs that moti- vate and challenge dairy employees,” Progressive Dairy- man, October 16, 2008, http://www.progressivedairy.com/ topics/management/1508-pd-designing-jobs-that-motivate- and-challenge-employees (accessed February 19, 2017); E. A. Locke and G. P. Latham, A Theory of Goal Setting and Task Performance (Englewood Cliffs, NJ: Prentice Hall, 1990); F. I. Herzberg, “One more time: How do you motivate employees?,” Harvard Business Review, Sep/ Oct87, Vol. 65 Issue 5, 109–120; J. R. Hackman and G. R. Oldham, “Motivation through the design of work: Test of a theory,” Organizational Behavior and Human Per- formance, August 1976, 250–279; J. S. Adams, “Inequity in social exchange,” in L. Berkowitz, ed., Advances in Ex- perimental Social Psychology (New York: Academic Press, 1965), 276–299; K. Sundheim, “What Really Motivates Employees?,” Forbes, 11-26-2013, http://www.forbes. com/sites/kensundheim/2013/11/26/what-really-motivates- employees/#688adbbb5297 (accessed February 19, 2017); McGregor, DV, The Human Side of Enterprise, New York: McGraw- Hill, (1964).
STEP 3: Consider the employer/employee relation- ship. Determine the employee’s perspective on the aspects of the job they like and dislike. Ask the employee how they could do the job better, and what special training they would need to be successful. Use this discussion to help identify anything about the job that provides the job holder with a sense of self-worth.
STEP 4: Consider the intrinsic and extrinsic reward opportunities of the job. Determine if employees doing this job need, or would like, to interact with customers and clients internal or external to the orga- nization. Determine the types of reward and recogni- tion valued by your employees and engage them in a discovery process to help determine their career goals. Many employees are enthusiastic about the opportunity to exercise creativity and are motivated by the joy of dis- covery and challenge of creation provided by a job that offers autonomy. Let Equity Theory and Expectancy Theory guide the discussion of supervisors and workers.
STEP 5: Identify opportunities for the job to provide motivation. Specifically think about the skill variety required for success and whether there is the prospect for the worker to do the entire job from start to fin- ish. Establish a sense of the importance of the job and the high organizational expectations that accompany the delegation of responsibility and autonomy to the worker performing the job. Stress the need for individ- ual accountability and responsibility as hallmarks of a
8-13. Go to http://www.chartcourse.com/happy-employees- make-productive-employees/. Review the article “Happy Employees Make Productive Employees.” Summarize the key points of the article and relate the focus to motivating minimum-wage employees.
8-12. Develop a two- to three-page paper that answers the following questions: What motivates me? What rewards can an employer provide that will make me give the extra effort at work?
COMMUNICATING EFFECTIVELY
An easy one-block walk from the Pacific Ocean, employees’ surfboards are lined up by the cafeteria, ready at a moment’s notice to catch some waves. (Current wave reports are noted on a whiteboard in the lobby.) After surfing or jogging or biking, employees can freshen up in the showers found in the restrooms. And no one has a private office. If an
➤ Case 8-A: Naturally Motivated At its headquarters in Ventura, California, Patagonia’s office space feels more like a national park lodge than the main office of a $600 million retailer.51 The facility has a Douglas fir staircase and a portrait of Yosemite’s El Capitan. The company’s café serves organic food and drinks. There’s an infant and toddler child-care room for employees’ children.
51B. Schulte, “A Company That Profits as It Pampers Workers,” http://www.washingtonpost.com/business/a-company-that-profits-as-it-pampers- workers/2014/10/22/d3321b34-4818-11e4-b72e-d60a9229cc10_story.html, October 25, 2014; D. Baer, “How Patagonia’s New CEO Is Increasing Profits While Trying to Save the World,” http://www.washingtonpost.com/business/a-company-that-profits-as-it-pampers-workers/2014/10/22/ d3321b34-4818-11e4-b72e-d60a9229cc10_story.html, February 28, 2014; “Patagonia CEO & President Casey Sheahan Talks Business, Conserva- tion & Compassion,” offyonder.com, February 13, 2012; T. Henneman, “Patagonia Fills Payroll with People Who Are Passionate,” www.work- force.com, November 4, 2011; M. Hanel, “Surf’s Up at Patagonia,” Bloomberg BusinessWeek, September 5–11, 2011, 88–89; J. Wang, “Patagonia, From the Ground Up,” Entrepreneur, June 2010, 26–32; and J. Laabs, “Mixing Business with Pleasure,” Workforce, March 2000, 80–85.
THINKING CRITICALLY
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employee doesn’t want to be disturbed, he or she wears headphones. Visitors are evident by the business attire they wear. The company encourages celebrations to boost employee morale. For instance, at the Reno store, the “Fun Patrol” organizes parties throughout the year.
Patagonia has long been recognized as a great work- place for mothers. And it’s also earned a reputation for loyal employees, something with which many retailers struggle. Its combined voluntary and involuntary turnover in its retail stores was around 25 percent, while it was only 7 percent at headquarters. (The industry average for retail is around 44 percent.) Patagonia’s CEO Casey Sheahan says the company’s culture, camaraderie, and way of doing busi- ness is very meaningful to employees, and they know that their work activities are helping protect and preserve the outdoors that they all love and enjoy. Managers are coached to define expectations, communicate deadlines, and then let employees figure out the best way to meet those.
Founded by Yvon Chouinard, an avid advocate of the natural environment, Patagonia’s first and strongest passion is for the outdoors and the environment. That attracts employees who are also passionate about those things. But Patagonia’s executives do realize that they are first and foremost a business and, even though they’re committed to doing the right thing, the company needs to remain profitable to be able to continue to do the things it’s passionate about. But that hasn’t seemed to be an issue since the recession in the early 1990s, when the company had to make its only large-scale layoffs in its history.
RESPONDING TO THE CASE
8-14. What would it be like to work at Patagonia? (Hint: Go to Patagonia’s website and find the section on jobs in Company Info.) What’s your assessment of the company’s work environment?
8-15. Using what you’ve learned from studying the vari- ous motivation theories, what does Patagonia’s situation tell you about employee motivation?
8-16. What do you think might be Patagonia’s biggest challenge in keeping employees motivated?
➤ Case 8-B: Doldrums in the Dental Office Caroline was happy to achieve her Associate Degree in Dental Hygiene with an emphasis in children’s prophylaxis. At the very least, she had a job that made her family happy and got them off her back about a career. Her mom and dad constantly pointed out that even during hard times, children would still need to have their teeth cleaned and parents would work to ensure the health of their children, so her job was recession proof. Additionally, her family felt that a job in the medical profession gave her more status and others would see her as someone important.
After working with the placement service of the university, Caroline found a job at a large family dental
practice in the valley. She wanted to appear as profes- sional as possible, so she joined all of the local, state, and national dental hygienist organizations she could find, even though she had no real intention of participating or assuming a leadership role in any of the organizations.
After a two-week orientation period at the dental practice, Caroline was assigned to her own room and began to receive new clients. Her work focused on chil- dren and she worked hard to build their confidence in her and overcome their fear of going to the dentist. Caroline thought it was strange that she and the other hygienists did most of the work on the patients, with the dentists doing a cursory once over at the end of the cleaning session, yet the dentists were paid much more of the per-patient fees.
One weekend while working out at the local gym she had joined for exercise and networking opportuni- ties, Caroline ran into Julia, one of her former classmates. After exchanging some idle chit chat, Julia asked her how she liked her new job. Caroline explained to her that the job was boring and terribly repetitious. She explained that she received little satisfaction from the job other than see- ing the smiles of the children with whom she worked, and she realized now that it was a job, just like any other.
One evening, Caroline was waiting in line to place her order at a local carry-out diner. In front of her was Chrystal, the accounts manager for the dental practice. Chrystal invited Caroline to sit with her in the dining room after they paid the cashier. As they ate their dinner, Chrystal remarked to Caroline that she had some feedback she would like to share with her. Caroline remarked that she hoped it was not a problem with the insurance billing she had completed for a family earlier in the week.
Chrystal assured her it had nothing to do with the insurance. She went on to tell Caroline that she had over- heard several of the dentists in the practice referring to her as automatic and emotionless when dealing with the children who were her patients. They were concerned that Caroline had no passion for her job and could make a critical mistake because of her blasé attitude.
Caroline became defensive and angry, telling Chrystal she loved the children and would never do anything to hurt them. She went on to tell her that if she were paid a little more, she might be more inclined to be more passion- ate about the job. But, as it was, well . . .
RESPONDING TO THE CASE
8-17. What can Caroline do to become more motivated about her work and overcome the reputation of being passionless about her job?
8-18. What motivational opportunities could Caroline expect from her bosses at the dentist office?
8-19. Explain Caroline’s behavior using the equity theory. 8-20. How would Herzberg explain Caroline’s lack of
passion for her job?
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■■ autocratic leader
■■ charismatic leader
■■ consultative-participative leadership
■■ credibility
■■ democratic-participative leadership
■■ free-rein leader
■■ leadership
■■ leadership traits
■■ participative leadership
■■ people-centered leader
■■ readiness
■■ situational leadership
■■ task-centered leader
■■ transactional leader
■■ transformational leader
■■ trust
■■ visionary leadership
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Leading Followers9 C
H A
P T
ER
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Shannon Fagan/123RF.com
9-1. Define leadership and describe the difference between a leader and a supervisor.
9-2. Identify the traits that may help you become a successful leader.
9-3. Define charisma and its key components.
9-4. Describe the skills of a visionary leader.
9-5. Differentiate between task-centered and people-centered leadership behaviors.
9-6. Identify and describe three types of participative leadership styles.
9-7. Explain situational leadership.
9-8. Describe situations in which leadership is irrelevant.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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240 Part 3 Motivating, Leading, Communicating, and Developing
Responding to a Supervisory Dilemma
How do you lead people who are physically separated from you and with whom your interactions are primarily written digital commu- nications? That’s the challenge of being a virtual leader. Leadership research has been directed mostly at face-to-face and verbal situa- tions, but we can’t ignore the real- ity that today’s supervisors and their employees are increasingly being linked by technology rather than by geographic proximity. So what guid- ance would be helpful to leaders who must inspire and motivate dispersed employees?
It’s easy to soften harsh words in face-to-face communication with nonverbal action. A smile or a com- forting gesture can go a long way in lessening the blow behind strong words such as disappointed, unsatisfactory, inadequate, or below expectations. That nonverbal component doesn’t exist in online interactions. The structure of words in a digital communication also has the power to motivate or demotivate the receiver. A supervisor who inad- vertently sends a message in short phrases or in ALL CAPS may get a different response than if the mes- sage had been sent in full sentences using appropriate punctuation.
To be an effective virtual leader, supervisors must recognize that they have choices in the words and struc- ture of their digital communications. They also need to
develop the skill of “reading between the lines” in the messages they receive. It’s important to try and decipher the emotional content of a message as well as the written content. Also, virtual leaders need to think carefully about what actions they want their digital messages to initiate. Be clear about what’s expected, and follow up on messages.
For an increasing number of supervisors, good interpersonal skills may include the abilities to communicate support and leader- ship through digital communication and to read emotions in others’ mes- sages. In this “new world” of com- munication, writing skills are likely to become an extension of interpersonal skills.
So what do you think? What challenges does a “virtual” leader face? How can virtual supervisors use technology to help them be more effective leaders? What should be more important to a virtual leader: focusing on the task or focusing on the people? Would you want to be a virtual leader or would you prefer to supervise face to face?
Sources: Vignette based on K. D. Strang, “Leadership Substitutes and Personality Impact on Time and Quality in Virtual New Product Development Projects,” Project Management Journal (February 2011).......B. J. Avolio and S. S. Kahai, “Adding the ‘E’ to E- Leadership: How It May Impact Your Leadership,” Organizational Dynamics, January 2003, pp. 325–338.
Wavebreak Media Ltd/123RF.com
T he activities ongoing in an organization tell us something about leadership. On one hand, it’s the leaders who make things happen and are the difference between success and failure. On the other hand, the way they do this may differ widely. The
potential for success and the different ways it is achieved are addressed in this important chapter on leadership.
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Chapter 9 Leading Followers 241
Understanding Leadership Leadership is the ability you demonstrate when you influence others to act in a particular way. Through direction, encouragement, sensitivity, consideration, and support, you inspire your followers to accept challenges and achieve goals that may be viewed as dif- ficult to achieve. As a leader, you help followers develop a sense of personal and profes- sional accomplishment. Being a leader means building a commitment to goal attainment among those being led, as well as a strong desire for them to continue following.
You may think of leaders as individuals who are in charge of others. These would include you, as an authority over your employees; your boss; and anyone else who holds a position of power over you—such as your professor in this class. Obviously, through a variety of actions, you and the others have the ability to influence. Yet leadership frequently goes beyond formal positions. In fact, sometimes this person of power isn’t around, yet leadership may still exist.
The words leader and supervisor are frequently used to mean the same thing, but they do not. Those who supervise others are appointed by the organization. They have legitimate power that allows them to reward and punish their employees. Their ability to influence employees is based on the formal authority inherent in their positions. In contrast, leaders may either be appointed or emerge from within a group. Leaders can influence others to perform beyond the actions dictated by formal authority.
Because no one yet has been able to demonstrate through research or logical argu- ment that leadership ability is a hindrance to those who supervise, we can state that anyone who supervises employees should ideally be a leader. However, not all leaders necessarily have the capabilities in other supervisory functions, and thus not all should have formal authority. Therefore, when we refer to a leader in this chapter, we are talking about anyone who can influence others.
Are Leaders Born or Made? Ask the average person on the street what comes to mind when they think of leadership. You’re likely to get a list of qualities such as intelligence, charm, decisiveness, enthusiasm, strength, bravery, integrity, and self- confidence. The responses that we get, in essence, represent leadership traits. The search for traits or characteristics that separate leaders from non- leaders dominated early research efforts in the study of leadership.
Is it possible to isolate one or more traits in individuals who are gener- ally acknowledged to be able to influence others—such as Nikki Haley, Ken Chenault, Irene Rosenfeld, Mark Zuckerberg, Indra Nooyi, and Ginni Rometty—that non-leaders do not possess? You may agree that these indi- viduals meet the fundamental definition of a leader, but they have completely different characteristics. If the concept of leadership traits is to prove valid, there must be identifiable characteristics with which all leaders are born.
WHAT ARE THE TRAITS OF SUCCESSFUL LEADERS? Research efforts at isolating specific leadership traits resulted in a number of dead ends. Attempts failed to identify a set of traits that would always differentiate leaders from followers, and effective leaders from ineffective leaders. Perhaps it was a bit optimistic to believe that a set of consistent and unique personality traits could apply across the board to effective leaders in widely diverse organizations.
Attempts to identify traits consistently associated with those who are successful in influencing others have been more promising. For example, eight traits on which leaders are seen to differ from non-leaders are drive,
OBJECTIVE 9.1 Define leadership and describe the difference between a leader and a supervisor.
leadership The ability an individual demonstrates to influence others to act in a particular way through direction, encouragement, sensitivity, consideration, and support.
OBJECTIVE 9.2 Identify the traits that may help you become a successful leader.
leadership traits Qualities such as intelligence, charm, decisiveness, enthusiasm, strength, bravery, integrity, and self-confidence.
Jim Watson/Newscom
What is it about Mark Zuckerberg that makes him a visionary leader? Research tells us it’s his ability to explain the vision, express the vision, and extend the vision. In doing so, he helps his employees look at problems in new ways and inspires them to put in extra effort.
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242 Part 3 Motivating, Leading, Communicating, and Developing
the desire to influence others, honesty and moral charac- ter, self-confidence, intelligence, relevant knowledge, extraversion, and proneness to guilt (see Exhibit 9-1).1
A person’s drive reflects their desire to exert a high level of effort to complete a task. This type of individual often has a strong need to achieve and excel in what they do. Ambitious, this leader demonstrates high energy levels in their endless persistence in all activities. Furthermore, a person who has this drive frequently shows a willingness to take initiative.
Leaders have a clear desire to influence others. Often this desire to lead is viewed as a willingness to accept responsibility for a variety of tasks. Leaders also build trusting relationships with those they influence by being truthful and by showing a high consistency between spo-
ken words and actions. In other words, people are more apt to be influenced by someone whom they view as exhibiting honesty and moral character.
A person who leads also shows self-confidence to convince others of the correctness of goals and decisions. Employees prefer to be influenced by individuals who are free of self-doubt, and are influenced more by a supervisor who has a strong belief as opposed to one who frequently waffles on decisions made.
Influencing others requires a level of intelligence, as well. To influence others suc- cessfully, one needs to be able to gather, synthesize, and interpret a lot of information. One must also be able to create a vision (a plan), communicate it in such a way that others understand it, solve problems, and make good decisions. Many of these intel- lectual abilities come from education and experience.
An effective leader has a high degree of relevant knowledge about the department and the unit’s employees. This in-depth knowledge helps the supervisor make well-informed decisions and understand the implications those decisions have on others in the department.
Followers value a leader who displays the trait of extraversion in their interactions. Followers want their leader to be an energetic, lively individual who is sociable and assertive—rarely silent or withdrawn.
Finally, effective leaders benefit from having a proneness to guilt. Oddly enough, guilt proneness is positively related to leadership effectiveness because it produces a strong sense of responsibility for others.
WHAT IS THIS THING CALLED CHARISMA? What do people like Jimmy Fallon, Andrew Luck, Suze Orman, and Oprah Winfrey have in common? They all have something in their personality construct called charisma. Each of these individuals is what we call a charismatic leader—an enthusiastic, self- confident leader whose personality and actions influence people to behave in certain ways. Charisma is a magnetism that inspires followers to go the “extra mile” to reach goals that are perceived as difficult or unpopular. Being charismatic, however, is not attributed to a single factor. Instead, it evolves from one’s possession of several characteristics.2
1S. A. Kirkpatrick and E. A. Locke, “Leadership: Do Traits Really Matter?” Academy of Management Executive, May 1991, 48–60; T. A. Judge, J. E. Bono, R. Ilies, and M. W. Gerhardt, “Personality and Lead- ership: A Qualitative and Quantitative Review,” Journal of Applied Psychology (August 2002): 765–80.
OBJECTIVE 9.3 Define charisma and its key components.
2J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998). See also, A. M. O’Roark, The Quest for Executive Effectiveness: Turning Inside-Out Charismatic- Participatory Leadership (Nevada City, CA: Symposium, 2000); C. G. Emrich, H. H. Brower, J. M. Feld- man, and H. Garland, “Images in Words: Presidential Rhetoric, Charisma, and Greatness,” Administrative Science Quarterly 46, no. 3 (September 2001), 527–561; and J. J. Sosik, “The Role of Personal Meaning in Charismatic Leadership,” Journal of Leadership Studies 7, no. 2 (Spring 2000), 60–75.
charismatic leader An individual with a compelling vision or sense of purpose, an ability to com- municate that vision in clear terms that followers can understand, a demon- strated consistency and focus in pur- suit of the vision, and an understanding of their own strengths.
Exhibit 9-1 Six traits of effective leaders.
Honesty and Moral Character
Drive
Intelligence
Self-Confidence
Desire to Influence Others
ExtraversionProneness
Relevant Knowledge
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Chapter 9 Leading Followers 243
Several authors have attempted to identify personal characteristics of the charis- matic leader.3 The most comprehensive analysis identified five such characteristics: they have a vision, the ability to articulate that vision, willingness to take risks to achieve that vision, sensitivity to both environmental constraints and follower needs, and behav- iors that are out of the ordinary.4
There’s an increasing body of evidence that shows impressive correlations between charismatic leadership and high performance and satisfaction among followers.5 If cha- risma is desirable, can people learn to be charismatic leaders? Or are charismatic leaders born with their qualities? Although some experts still think that charisma can’t be learned, most believe that individuals can be trained to exhibit charismatic behaviors.6 Researchers have succeeded in teaching undergraduate students to be “charismatic” by teaching them to articulate a far-reaching goal, communicate high performance expecta- tions, exhibit confidence in the ability of subordinates to meet those expectations, and empathize with the needs of their subordinates. These students learned to project a powerful, confident, and dynamic presence, and they practiced using a captivating and engaging voice tone. The researchers also trained the student leaders to use charismatic nonverbal behaviors including leaning toward the follower when communicating, main- taining direct eye contact, and having a relaxed posture and animated facial expressions. In groups with these “trained” charismatic leaders, members had higher task perfor- mance, higher task adjustment, and better adjustment to the leader and to the group than did group members who worked in groups led by noncharismatic leaders.
Earlier in Chapter 8, we introduced the personality dimension called self-moni- toring, and we described high self-monitors as individuals who can easily adjust their behavior to different situations. They can read verbal and nonverbal social cues and alter their behavior accordingly. This ability to be a “good actor” has been found to be associated with charismatic leadership. Because high self-monitors can accurately read a situation, understand the feelings of employees, and then exhibit behaviors that match employees’ expectations, they tend to emerge as effective and charismatic supervisors.
3J. M. Crant and T. S. Bateman, “Charismatic Leadership Viewed from Above: The Impact of Proactive Personality,” Journal of Organizational Behavior 21, no. 1 (February 2000), 63–75; G. Yukl and J. M. Howell, “Organizational and Contextual Influences on the Emergence and Effectiveness of Charismatic Leadership,” Leadership Quarterly 10, no. 2 (Summer 1999), 257–283; and J. A. Conger and R. N. Kanungo, “Behavioral Dimensions of Charismatic Leadership,” in J. A. Conger, R. N. Kanungo and Asso- ciates (eds.), Charismatic Leadership (San Francisco, CA: Jossey-Bass, 1988), 78–97. 4J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998). 5K. S. Groves, “Linking Leader Skills, Follower Attitudes, and Contextual Variables via an Integrated Model of Charismatic Leadership,” Journal of Management 31, no. 2 (April 2005), 255–277; J. J. Sosik, “The Role of Personal Values in the Charismatic Leadership of Corporate Managers: A Model and Preliminary Field Study,” Leadership Quarterly 16, no. 2 (April 2005), 221–244; A. H. B. deHoogh, D. N. den Hartog, P. L. Koopman, H. Thierry, P. T. van den Berg, J. G. van der Weide, and C. P. M. Wilderom, “Leader Motives, Charismatic Leadership, and Subordinates’ Work Attitudes in the Profit and Voluntary Sector,” Leadership Quarterly 16 (February 2005), 17–38; J. M. Howell and B. Shamir, “The Role of Followers in the Charismatic Leadership Process: Relationships and Their Consequences,” Academy of Management Review 30, no. 1 ( January 2005), 96–112; J. Paul, D. L. Costley, J. P. Howell, P. W. Dorfman, and D. Trafimow, “The Effects of Charismatic Leadership on Followers’ Self-Concept Accessibility,” Journal of Applied Social Psychology 31, no. 9 ( September 2001), 1821–1844; J. A. Conger, R. N. Kanungo, and S. T. Menon, “Charismatic Leadership and Follower Effects,” Journal of Organiza- tional Behavior 21, no. 7 (2000), 747–767; R. W. Rowden, “The Relationship Between Charismatic Lead- ership Behaviors and Organizational Commitment,” Leadership & Organization Development Journal 21, no. 1 (January 2000), 30–35; G. P. Shea and C. M. Howell, “ Charismatic Leadership and Task Feedback: A Laboratory Study of Their Effects on Self-Efficacy,” Leadership Quarterly 10 (Fall 1999), 375–396; S. A. Kirkpatrick and E. A. Locke, “Direct and Indirect Effects of Three Core Charismatic Leadership Components on Performance and Attitudes,” Journal of Applied Psychology 81, no. 1 (February 1996), 36–51; D. A. Waldman, B. M. Bass, and F. J. Yammarino, “Adding to Contingent-Reward Behavior: The Augmenting Effect of Charismatic Leadership,” Group & Organization Studies 15, no. 4 (December 1990), 381–394; and R. J. House, J. Woycke, and E. M. Fodor, “Charismatic and Noncharismatic Leaders: Differ- ences in Behavior and Effectiveness,” in Conger and Kanungo, Charismatic Leadership, 103–104. 6R. Birchfield, “Creating Charismatic Leaders,” Management (June 2000), 30–31; S. Caudron, “ Growing Charisma,” IndustryWeek, May 4, 1998, 54–55; and J. A. Conger and R. N. Kanungo, “ Training Charismatic Leadership: A Risky and Critical Task,” in J. A. Conger and R. N. Kanungo (eds.), Charismatic Leadership (San Francisco, CA: Jossey-Bass, 1988), 309–323.
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One last thing about charismatic leadership is that it may not always be necessary to achieve high levels of employee performance. It may be most appropriate when the fol- lower’s task has an ideological purpose or when the environment involves a high degree of stress and uncertainty.7 This may explain why, when charismatic leaders surface, it’s more likely to be in politics, religion, or wartime, or when a business firm is starting up or facing a survival crisis. For example, Martin Luther King Jr. used his charisma to bring about social equality through nonviolent means, and Steve Jobs achieved unwavering loyalty and commitment from Apple’s technical staff in the early 1980s by articulating a vision of personal computers that would dramatically change the way people lived.
What can be said about the charismatic leader’s effect on their followers? There is increasing support for the idea of a strong link between charismatic leadership and high performance and satisfaction among followers. People working for charismatic leaders are motivated to exert extra work effort, and because they like their leader, express greater satisfaction.8 Although one study found that charismatic CEOs had no impact on subsequent organizational performance, charisma is still believed to be a desirable leadership quality.9
Although traits of successful leaders have been identified over the years, these traits alone are not adequate for entirely explaining leadership effectiveness. The problem with focusing solely on traits is that it ignores the skills leaders must have, as well as the behaviors they must demonstrate in a number of situations. Fortunately, these latter two—skills and behaviors—can both be learned! Therefore, it is more correct to say that leaders are made.
WHAT IS VISIONARY LEADERSHIP? The term vision appeared a few paragraphs ago in our discussion of charismatic lead- ership. But visionary leadership goes beyond charisma. In this section, we will review recent revelations about the importance of visionary leadership.
Visionary leadership is the ability to create and articulate a realistic, credible, attractive vision of the future for an organization or organizational unit—a vision that grows out of and improves on the present.10 This vision, if properly selected and implemented, is so energizing that it “in effect jump-starts the future by calling forth the skills, talents, and resources to make it happen.”11
The key properties of a vision seem to be inspirational possibilities that are value- centered, attainable, and well-articulated. Visions should be able to create possibilities that are inspirational and unique and offer a new order that can produce organizational distinction. A vision is likely to fail if it doesn’t offer a view of the future that is clearly and demonstrably better for the organization and its members. Desirable visions fit the times and circumstances and reflect the uniqueness of the organization. People in the organization must also believe that the vision is attainable. The vision should be perceived as challenging, yet doable. Visions that have clear articulation and powerful imagery are more easily grasped and accepted.
7J. G. Hunt, K. B. Boal, and G. E. Dodge, “The Effects of Visionary and Crisis-Responsive Charisma on Followers: An Experimental Examination,” Leadership Quarterly (Fall 1999), 423–448; R. J. House and R. N. Aditya, “The Social Scientific Study of Leadership: Quo Vadis?” Journal of Management 23, no. 3 (1997), 316–323; and House, “A 1976 Theory of Charismatic Leadership.” 8Conger, J. and Kanungo, R. (1988) Behavioral Dimensions of Charismatic Leadership. In: Conger, J.A., Kanungo, R.N. and Associates, Eds., Charismatic Leadership: The Elusive Factor in Organizational Effec- tiveness, Jossey Bass, San Fransico, 78–97. 9B. R. Agle, N. J. Nagarajan, J. A. Sonnenfeld, and D. Srinivasan, “Does CEO Charisma Matter? An Empirical Analysis of the Relationships Among Organizational Performance, Environmental Uncertainty, and Top Management Team Perceptions of CEO Charisma,” Academy of Management Journal 49 ( February 2006), 161–174.
OBJECTIVE 9.4 Describe the skills of a visionary leader.
10This definition is based on M. Sashkin, “The Visionary Leader,” in Charismatic Leadership: The Elusive Factor in Organizational Effectiveness, ed. J. A. Conger, R. N. Kanungo, et al. (San Francisco: Jossey-Bass, 1988), 124–125; B. Nanus, Visionary Leadership (New York: Free Press, 1992), 8; N. H. Snyder and M. Graves, “Leadership and Vision,” Business Horizons 37, no. 1 (January–February 1994), 1; J. R. Lucas, “Anatomy of a Vision Statement,” Management Review 87, no. 2 (February 1998), 22–26; and S. Marino, “Where There Is No Visionary, Companies Falter,” Industry Week, March 15, 1999, 20. 11Nanus, Visionary Leadership, 8.
visionary leadership The ability to create and articulate a realistic, credible, attractive vision of the future that grows out of, and improves on, the present.
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Chapter 9 Leading Followers 245
What are some examples of visions? Sir Richard Branson is the visionary founder and president of Virgin Group, one of the world’s most recognized and respected brands in aviation, hospitality and leisure, telecommunications, financial services, health and wellness, and clean energy. The late Mary Kay Ash’s vision of women as entrepreneurs selling products that improved their self-image gave impetus to her cosmetics company. Michael Dell created a vision of a business that allows Dell Computer to sell and deliver a finished PC directly to a customer in fewer than eight days. And Elon Musk, founder and CEO of SpaceX, has an unworldly vision—to colonize Mars: “If things go according to plan, we should be able to launch people in 2024, with arrival in 2025.”12
What skills do visionary leaders exhibit? Once the vision is identified, these leaders appear to have three qualities that are related to effectiveness in their visionary roles.13 First is the ability to explain the vision to others—making the vision clear in terms of required actions and aims through clear oral and written communication. President Ronald Reagan, the so-called “Great Communicator,” articulated a simple vision for his presidency: a return to happier and more prosperous times through less government, lower taxes, and a strong military.
Second is the ability to express the vision not just verbally but through the leader’s behavior. This requires behaving in ways that continually convey and rein- force the vision. Herb Kelleher, when at the helm of Southwest Airlines, lived and breathed his commitment to customer service by doing anything needed to make the customer’s experience more pleasant. The third skill is the ability to extend the vision
12B. Stelter, “Musk: SpaceX Could Take Humans to Mars in 9 Years,” CNN Money online, www.money. cnn.com, June 2, 2016. 13J. R. Baum, E. A. Locke, and S. A. Kirkpatrick, “A Longitudinal Study of the Relation of Vision and Vision Communication to Venture Growth in Entrepreneurial Firms,” Journal of Applied Psychology 83, no. 1 (February 1998), 43–54.
Comprehension Check 9-1
1. The ability to influence others to act in a particular way is called:
a. supervision. b. leadership. c. motivation. d. all of the above.
2. Which one of the following is not regarded as a leadership trait? a. Drive b. Self-confidence c. Honesty d. Vision
3. An individual with a compelling sense of purpose that is communicated so that followers can understand is often regarded as a(n):
a. charismatic leader. b. transactional leader. c. autocratic leader. d. participative leader.
4. The ability to create and articulate a realistic and credible view of the future of the organi- zation is called:
a. participative leadership. b. visionary leadership. c. charismatic leadership. d. none of the above.
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to different leadership contexts. This is the ability to sequence activities so that the vision can be applied in a variety of situations.
How Do You Become a Leader? Becoming a leader requires certain skills (as well as many of the traits described previ- ously): technical, conceptual, networking, and human relations skills. You’re probably thinking you’ve heard these before—and you have! Some of these are the competencies that effective supervisors need, as discussed in Chapter 1. Because of their importance to leadership, let’s look at them again—this time with an eye on leadership!
WHY DOES A LEADER NEED TECHNICAL SKILLS? Although people may respect you as a person, when it comes to influencing them, they would like to believe you have the experience to make recommendations. This experi- ence generally comes from your technical skills.
Technical skills are the tools, procedures, and techniques unique to your special- ized situation. You need to master your job in your attempt to be viewed as an expert source of help. Others generally won’t come to you unless they need assistance. Often they can’t handle the exceptions and they’ll look to you for guidance. If you did not have the technical skills you’d constantly have to ask someone else for the information. When you got it, you might be unable to adequately explain it to the employee who requested it. Eventually employees might go around you and talk directly to the source of the technical information. When that happens, you’ve lost some of your influence!
The need for knowledge of technical skills related to your job cannot be overstated. Those “in the know” do influence others. If you want followers to have confidence in your advice and the direction you give, they’ve got to perceive you as a technically competent supervisor.
HOW DO CONCEPTUAL SKILLS AFFECT YOUR LEADERSHIP? Conceptual skills are your mental ability to coordinate a variety of interests and activi- ties. It means having the ability to think in the abstract, analyze lots of information, and make connections between the data. An effective leader creates a vision by thinking critically and conceptualizing things and how they could be.
To think conceptually, you must look at the infamous “big picture.” Too many times, we get caught up in the daily grind, focusing our attention on the minute details. This is not to say that focusing on the details isn’t important; without it, little may be accomplished. But setting long-term directions requires you to think about the future and to deal with the uncertainty and the risks of the unknown. To be a good leader, you must be able to make some sense out of this chaos and envision what can be.
HOW DO NETWORKING SKILLS MAKE YOU A BETTER LEADER? Networking skills are your ability to socialize and interact with outsiders (those not associated with your unit). As a leader, it’s understood that you cannot do everything by yourself. Therefore, you need to know where to go to get the things your followers need. This may mean “fighting” for more resources or establishing relationships outside your area that will provide some benefit to your followers. Networking means you must have good political skills—a point that shouldn’t be overlooked.
Your employees will look to you to provide them what they need to do an excellent job. When you prove they can depend on you for tools (or running the interference) they need, you’ll inspire confidence in them. They will respond better because they know you’re willing to fight for them. Instead of finding a hundred reasons why they
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can’t do something, they can come to you for help in finding the one way that will work. You muster the necessary resources and defend what “your people” are doing. In challenging employees to push their limits, you know that mistakes will be made. When they are, you view them as a learning experience and something from which to grow.
WHAT ROLE DO HUMAN RELATIONS SKILLS PLAY IN EFFECTIVE LEADERSHIP? Human relations skills focus on your ability to work with, understand, and motivate those around you. Good human relations skills require you to communicate effectively— especially your vision—with your employees and those outside your unit. It also means listening to what they have to say. A good leader is not a know-it-all, but rather someone who freely accepts and encourages involvement from his or her followers.
Human relations skills are the “people skills” frequently mentioned in today’s dis- cussion of effective supervision. It’s coaching, facilitating, and supporting others around you. It’s understanding yourself and being confident in your abilities. It’s your honesty in dealing with others and the values by which you live. It’s your confidence in knowing that by helping others succeed—and letting them get the credit—you’re doing the right thing for them, the organization, and yourself.
A coach helps people grow, improve, and perform better. However, a supervisor acting as coach to employees has to deal with the dynamics of the organization as well as the relationship with the employee. Their relationship is more than a coaching one because the supervisor is in a position to know the requirements of the job, the perfor- mance of the employee, and the expectations of the organization. In his classic book A Passion for Excellence, Tom Peters writes about leaders using coaching as a methodol- ogy for leading. He states, “Coaching is face-to-face leadership that pulls together peo- ple with diverse backgrounds, talents, experiences and interests, encourages them to step up to responsibility and continued achievement, and treats them as full-scale partners and contributors. Coaching is not about memorizing techniques or devising the perfect game plan. It is about really paying attention to people—really believing them, really caring about them, really involving them.”14
If an employee’s low performance is related to a skill deficiency, training methods may be used to correct the behavior. If substandard performance is not the result of a skill deficiency, then coaching may be the appropriate response. The dynamic process of coach- ing requires the supervisor to monitor the employee’s performance while reacting to changes in organizational needs and all the while adjusting their approach to the employee. Peters goes on to state, “Coaching is the process of enabling others to act, of building on their strengths. It’s counting on people to use their own special skill and competence, and then giving them enough room and enough time to do it. Coaching at its heart involves caring enough about people to take the time to build a personal relationship with them.”15 The coaching process is heavily leveraged by the trust that has been developed between the supervisor and the employee. In all coaching situations, supervisors play active roles in the success and improvement of the employee(s) supervised.
There’s one aspect that’s almost a guarantee with respect to leadership; that is, if you fail as a leader, it most likely won’t be because you lack technical skills. Rather, it’s more likely that your followers, as well as others, have lost respect for you because of your lack of human relations skills. If that ever happens, your ability to influence others will be seriously impaired.
One of the interesting aspects of leadership is that traits and skills are difficult for followers to detect. As a result, followers define your leadership by the behaviors they see in you. As the adage goes, actions speak louder than words. It’s what you do that matters. Therefore, you need to understand leadership behaviors.
14T. Peters and N. Austin, A Passion for Excellence: The Leadership Difference (New York: Random House, 1985), 325–326. 15Ibid, p. 328.
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Something to Think About (and promote class discussion)
GROWING NEW LEADERS How important are excellent leaders to organizations? Well, the answer, in theory of course, would be that excellent leaders are very important. However, the answer as practiced by countless organizations might indicate otherwise. Only 38 percent of organizations have a formal frontline leadership develop- ment program in place.16 It’s important for organizations to commit to strong leadership development, and it’s particularly important for organizations to begin grooming their Gen Y employees to move into critical leadership positions. Why? By 2025 these Millennials are set to comprise 75 percent of the global workforce. That’s why organizational leadership development programs are absolutely essential.17 Let’s look at what some companies are doing to prepare the next generation for leadership.
3M’s leadership development program is so effective that it has been one of the “Top 20 Companies for Leadership” in six of the last seven years and ranks as one of the top 25 companies for grooming leadership talent according to consultant Hay Group.18 What is 3M’s leadership program all about? A few years ago, the company’s former CEO and his top team spent 18 months developing a leadership model for the company. After numerous brainstorming sessions and much heated debate, the group finally agreed on six “leadership attributes” that they believed were essential for supervisors to have in order for the company to become skilled at executing strategy and being accountable. Those six attributes included the ability to: 1) develop a plan and implement that plan; 2) motivate and rouse others; 3) be ethical and trustworthy and abide by the rules; 4) achieve outcomes; 5) strive for excellence; and 6) be a capable and creative innovator. The company has continued to reinforce its pursuit of leadership excel- lence with these six attributes.
Other companies, such as Ernst & Young, start early in recruiting and investing in future leaders, often going after talented college freshmen who have leadership potential. They take the best talent and involve them in various leadership development programs both while in school and after graduation.19 Deloitte, another company rated high for its leadership development programs, is deeply committed to helping its Millennial employees learn and absorb the leadership skills they will need to lead the company in the future.20 It starts with a very specific recruiting strategy for hiring Millennials and continues with a yearlong “Welcome to Deloitte” program. This program is all about teaching this age group client management skills and team-building skills, and offering professional development opportunities. Not surprisingly, it’s done largely through social media using interactive experiences such as role-plays, simu- lations, games, and a tool to help these employees track their first-year tasks.
At Facebook, the first Millennial-run organization to become a Fortune 500 company, leadership development is designed around the needs of a fast-moving, fast-growing company.21 The head of leader- ship development at Facebook says that the only way leadership development works there is by making it consistent with the types of engineering tech types that comprise the company. Engineers are concerned only with “what works.” And it’s the same for any type of leadership development to be successful here; the focus has to be on what works. Also, since Facebook is an extremely flat organization with few levels of management, employees find out early on that in order to get anything done, they’re going to have to be able to influence and inspire people. That’s why leaders at Facebook don’t have to be convinced of the need for people skills. They won’t survive long without them.
16 L. Patel, “Preparing Tomorrow’s Executives,” T&D, March 2014, 20. 17 A. Harjani, “From Brats to Bosses—Gen Y to Dominate by 2025,” CNBC, January 22, 2014, http://www.cnbc.com/2014/01/22/ to-bosses--gen-y-to-dominate-by-2025.html (accessed February 25, 2017). 18 Best Companies for Leadership 2014, Hay Group, 2014, http://www.haygroup.com/bestcompaniesforleadership/downloads/ Best_Companies_for_Leadership_2014_Executive_summary.pdf (accessed February 25, 2017). 19 L. Lykins and A. Pace, “Mastering Millennial Leadership Development,” T&D, May 2013, 42–45. 20 H. Stevens, “How Top-Ranked Companies Develop Leaders,” August 6, 2014, http://www.clomedia.com/2014/08/06/how- top-ranked-companies-develop-leaders/ (accessed February 25, 2017). 21 D. Livermore, “What Facebook Tells Us about the Future of Leadership,” Management.Issues, October 15, 2013, http://www. management-issues.com/opinion/6776/what-facebook-tells-us-about-the-future-of-leadership/ (accessed February 25, 2017).
(continued)
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Knowing you want to advance through the ranks in your organization and become a leader in your own right, what are some reasons that companies might not be addressing Gen Y leadership develop- ment programs? Take each of the six leadership attributes that 3M feels is important. Explain what you think each one involves. Then discuss how those attributes might be developed and measured. Would any of those six leadership attributes be appropriate for any of the other companies mentioned? Three different types of organizations are described here: 3M is primarily a manufacturing organization. Ernst & Young and Deloitte are professional services organizations. Facebook is a tech company. Compare and contrast their differing approaches to Gen Y leadership development. What did you learn about leadership from this discussion?
Continued
Leadership Behaviors and Styles The inability to explain leadership solely from traits and skills has led researchers to look at the behaviors and styles that specific leaders have exhibited. Researchers wonder whether there is something unique in the behavior of effective leaders and the style in which they practice their craft. For example, do leaders tend to be more participative than autocratic?
A number of studies have looked at behavioral styles. The most comprehensive and most replicated of the behavioral theories resulted from research that began at Ohio State University in the late 1940s.22 This study (as well as others) sought to identify independent dimensions of leader behavior. Beginning with more than a thousand dimensions, researchers eventually narrowed the list down to two categories that accounted for most of the leadership behavior described by employees. These are best identified as task-centered and employee-centered behaviors (see Exhibit 9-2).23
OBJECTIVE 9.5 Differentiate between task-centered and people-centered leadership behaviors.
22R. M. Stodgill and A. E. Coons, eds., Leader Behavior: Its Description and Measurement, Research Monograph No. 88 (Columbus: Ohio State University, Bureau of Business Research, 1951). 23Stodgill and Coons, Leader Behavior; and R. Kahn and D. Katz, “Leadership Practices in Relation to Productivity and Morale,” in Group Dynamics: Research and Theory, 2nd ed., ed. D. Cartwright and A. Zander (Elmsford, NY: Row, Paterson, 1960), 41.
Exhibit 9-2 Supervisory leadership behaviors.
Consultative Democratic
ParticipativeAutocratic
Leader/Supervisor in Total Control
Free-Rein
Employees in Control of Those
Things that Affect Them
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WHAT IS TASK-CENTERED BEHAVIOR? A task-centered leader has a strong tendency to emphasize the technical or task aspects of the job. This individual’s major concern is ensuring that employees know precisely what is expected of them and providing any guidance necessary for goals to be met. Employees, as viewed by this leader, are a means to an end. That is, to achieve goals, employees have to do their jobs. As long as they do what is expected, this leader is happy. Calling a production-oriented person a leader may be somewhat of a misnomer. This individual may not lead in the classic sense, but simply ensures compliance with stated rules, regulations, and production goals. In motivational terms, a production- oriented leader frequently exhibits a Theory X orientation (see Chapter 8) or an auto- cratic/authoritarian leadership style.
An autocratic leader can best be described as a taskmaster. This individual leaves no doubt as to who’s in charge and who has the authority and power in the group. They make all the decisions affecting the group, and tell others what to do. This frequently takes place in the form of orders—mandates that are expected to be followed. Failure to obey these orders usually results in some negative reinforcement at the hands of the authoritarian leader. Although counter to contemporary leadership philosophy, there are leaders in all types of organizations—business, government, and the military—for whom the autocratic style works best.
WHAT ARE PEOPLE-CENTERED BEHAVIORS? A people-centered leader emphasizes interpersonal relations with those they lead. This leader takes a personal interest in the needs of their employees. A people-centered leader is concerned for employees’ welfare. Interactions between this leader and their employees are characterized as trusting, friendly, and supportive. This leader is sensitive to the concerns and feelings of employees. From a motivational point of view, a people- centered leader exhibits more Theory Y orientations (see Chapter 8). As a result, this individual often exhibits a participative (or democratic) leadership style.
In a participative leadership style, the leader actively seeks input from followers for many of the activities in the organization. The entire workgroup participates in establish- ing plans, solving problems, and making decisions. Participative leadership can be viewed from two perspectives. The first is where the leader seeks input and hears the concerns and issues of the followers, but makes the final decision. In this capacity, the leader is using the input as an information-seeking exercise and practices consultative-participative leadership. From the second perspective, a participative leader may allow the followers to have a say in what’s decided, thereby practicing democratic-participative leadership.
Finally, one other behavioral leadership style is often referred to as free-reining. A free-rein leader (or laissez-faire leader) gives employees total autonomy to make the deci- sions that will affect them. After the leader establishes overall objectives and general guidelines, the employees are free to establish their own plans for achieving their goals. This implies that the leader is removed from the day-to-day activities of the employees, but is always available to deal with the exceptions.
WHAT BEHAVIOR SHOULD YOU EXHIBIT? In today’s organizations, many employees appear to prefer to work for a supervisor with a people-centered leadership style. However, just because this style appears “friendlier” to employees, we cannot make a sweeping generalization that a people-centered leadership style will make you a more effective supervisor. There has actually been very little success in identifying consistent relationships between patterns of leadership behavior and success- ful organizational performance. Results vary. In some cases, people- centered styles gener- ate both high productivity and high follower satisfaction. However, in others, followers are happy but productivity suffers. What sometimes is overlooked in trying to pinpoint one style over the other are the situational factors that influence effective leadership. Our advice is that a supervisor should be prepared to use any style the situation calls for.
task-centered leader An individual with a strong tendency to emphasize the technical or task aspects of a job.
autocratic leader A taskmaster who leaves no doubt as to who’s in charge, and who has the authority and power in the group.
OBJECTIVE 9.6 Identify and describe three types of participative leadership styles.
people-centered leader An individual who emphasizes interper- sonal relations with those they lead.
participative leadership The leadership style of an individual who actively seeks input from follow- ers for many of the activities in the organization.
consultative-participative leadership The leadership style of an individual who seeks input and hears the concerns and issues of followers but makes the final decision using input as an information-seeking exercise.
democratic-participative leadership A leadership behavior whereby the leader offers followers a say in what is decided; decisions are made by the group.
free-rein leader An individual who gives employees total autonomy to make decisions that will affect them.
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Effective Leadership It became increasingly clear to those studying leadership that predicting leadership suc- cess involved something more complex than isolating a few traits or preferable behav- iors. The failure to find answers led to a new focus on situational influences. The relationship between leadership style and effectiveness suggested that under Condi- tion A, Style X would be appropriate, whereas Style Y would be more suitable for Condition B, and Style Z for Condition C. But what were the Conditions A, B, C, and so forth? It was one thing to say that leadership effectiveness depended on the situation and another to be able to isolate those situational conditions. The key to many of these situational theories was their inclusion of followers.
Paul Hersey and Kenneth Blanchard proposed a leadership model called situational leadership. They emphasize that leadership styles must adjust to specific situations.24 Given that without employees there is no leader, situational leadership shows how you should adjust your leadership style to reflect employees’ needs.
Situational leadership focuses attention on the readiness of employees. Readiness in this context reflects how able and willing an employee is to do a job. Hersey and Blanchard identified four stages of follower readiness:
■■ R1: An employee is both unable and unwilling to do a job. ■■ R2: An employee is unable to do the job but is willing to perform the necessary tasks. ■■ R3: An employee is able to do the job but is unwilling to do so. ■■ R4: An employee is both able and willing to do the job.
A point should be made here concerning willingness. For example, as defined in R1, an employee is unwilling to do something. This is not the same unwillingness that you would associate with being insubordinate. Rather, it’s unwillingness because that individual is not confident or competent to do a job.
A second component of the model focuses on leader behavior. Leaders must behave in a given way contingent on where an employee is in terms of readiness. Leader behavior in this model reflects the leader–employee communications taking place. Task behavior is viewed as one-way communication—from the leader to the employee. Relationship behavior reflects two-way communication—between the leader and the employee. Given that high and low degrees of these two behaviors can exist, Hersey and Blanchard identified four specific leadership styles based on the maturity of the fol- lower (see Exhibit 9-3).
The Telling leadership style is appropriate with a new employee (R1) uncertain about the job responsibilities and the tasks required. Communication between you and the employee, at this point, needs to be one-way. You need to tell her what to do and give her specific directions on how to do it. The employee will not remain at this stage for long, and after being provided with ample directions and getting more familiar with the job, she’ll move to stage R2.
The Selling leadership style works well with an employee at the R2 stage of work development. The employee is more involved in her job, but still lacks some ability and is not fully trained. The R2 employee asks questions about things not fully understood and may question why certain things have to be done as you have asked. There may be a need to sell your ideas to get this employee to accept what you feel is necessary. High degrees of both one-way and two-way communication are taking place simultaneously.
OBJECTIVE 9.7 Explain situational leadership.
24P. Hersey and K. Blanchard, Management of Organization Behavior: Utilizing Human Resources, 5th ed. (Upper Saddle River, NJ: Prentice Hall, 1988).
situational leadership Adjustment of a leadership style to specific situations to reflect employee needs.
readiness The ability and willingness of an employee to complete a task.
Exhibit 9-3 Situational leadership.
Selling
H
L L H
R e la
ti o
n sh
ip B
e h
a v io
r
Telling
R4 R3 R2 R1
Task Behavior
Readiness of Employee
Delegating
R4
R3 R2
R1
Participating
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The Participating leadership style comes into play after the employee has become expert on her job (R3). Knowing her duties better than anybody, she’s beginning to put her special mark on things. You no longer need to tell her what to do, but you still need to be involved in what she’s doing. She’s not to the point yet where you feel comfortable leaving her totally alone, and you recognize this employee still has some developing to do. This leadership style is supportive and not overly task-centered.
The Delegating leadership style emerges when the employee has fully developed. She has your trust and can carry out her duties with little, if any, direction (R4). She basically needs to be left alone, and you simply assign the tasks and let her do her job. After appraising her performance, you know she can and will get the job done. If she needs help, you’re always available to deal with the exceptions.
An important aspect of situational leadership is that an employee can be in all four quadrants at the same time. To lead properly, you must be able to exhibit the correct leadership style given what each employee needs. You also need to demonstrate a lead- ership style that’s consistent with your employees’ abilities (see “News Flash! National Culture Could Affect Your Leadership Style”).
NATIONAL CULTURE COULD AFFECT YOUR LEADERSHIP STYLE
NEWS FLASH!
One general conclusion that surfaces from learning about leadership is that you shouldn’t use any single leadership style in every case. Instead, you should adjust your style to the situation. Although not mentioned specifically in any of the theories we’ve presented, national culture is clearly an important situational variable in determining which leader- ship style will be most effective for you.
National culture affects leadership by way of your employees. You cannot choose your leader- ship styles at will. Rather, you are constrained by the cultural conditions your employees come to expect. For example, an autocratic leadership style is more compatible with cultures where power is unequal, such as those found in Arab, Far East- ern, and Latin American countries. This cultural “power” ranking should be a good indicator of employees’ willingness to accept participative lead- ership. Participation is likely to be most effective
in cultures in which power is more equally distrib- uted, such as those in Norway, Finland, Denmark, and Sweden.
Remember that most leadership theories were developed by North American researchers using North American subjects. The United States, Can- ada, and the Scandinavian countries all rate below average on “power” criteria. This realization may help explain why our theories tend to favor more participative and empowering styles of leadership. Accordingly, you need to consider national culture as yet another contingency variable in determining your most effective leadership style.
Sources: Based On G. Hofstede, “Motivation, Leader- ship, and Organization: Do American Theories Apply Abroad?” Organizational Dynamics 9, no. 1 (Summer 1980), 57; and A. Ede, “Leadership and Decision Mak- ing: Management Styles and Culture,” Journal of Mana- gerial Psychology, July 1992, 28–31.
Contemporary Leadership Roles Let’s turn our attention to important issues that every effective supervisor must consider. Specifically, how do you build credibility and trust with your employees, and how can you become a more empowering supervisor?
DO CREDIBILITY AND TRUST REALLY MATTER? The central component of credibility is honesty. Surveys show that honesty is consistently singled out as the number-one characteristic of admired supervisors. “Honesty is abso- lutely essential to leadership. If people are going to follow someone willingly, whether it be into battle or into the boardroom, they first want to assure themselves that the person
credibility Honesty, competence, and the ability to inspire.
trust The belief in the integrity, character, and ability of a leader.
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is worthy of their trust.”25 In addition to being honest, credible supervisors are competent and inspiring. They need to appear capable and they can be effectively communicating confidence and enthusiasm to their employees. Employees judge their supervisors’ credibil- ity in terms of their honesty, competence, and ability to inspire. Ultimately, a supervisor’s credibility separates supervisors with followers from supervisors with subordinates, and is built on the quality of relationships that exist between the supervisors and their employees.
Trust, closely connected with the concept of credibility, is defined as the belief in the integrity, character, and ability of a leader. When employees trust their supervisor, they’re willing to be vulnerable to their supervisor’s actions because they’re confident that their rights and interests won’t be abused.26 Research has identified five dimensions that make up the concept of trust:27
■■ Integrity: honesty and truthfulness ■■ Competence: technical and interpersonal knowledge and skills ■■ Consistency: reliability, predictability, and good judgment in handling situations ■■ Loyalty: willingness to protect a person, physically and emotionally ■■ Openness: willingness to share ideas and information freely
Of these five dimensions, integrity seems to be the most critical when someone assesses another’s trustworthiness.28 Additionally, both integrity and competence are leadership traits consistently associated with successful supervisors.
WHY ARE CREDIBILITY AND TRUST IMPORTANT? The top rating of honesty as an identifying characteristic of admired supervisors indi- cates the importance of credibility and trust to leadership effectiveness.29 This has prob- ably always been true. However, recent changes in the workplace have reignited interest and concern about supervisors building trust.
The trend toward empowering employees and creating self-managed work teams has reduced or removed many of the traditional control mechanisms used to monitor employees. As employees become increasingly free to schedule their own work, evaluate their own performance, and in some cases, even make their own team hiring decisions, trust becomes critical. Employees have to trust supervisors to treat them fairly, and supervisors have to trust employees to fulfill their responsibilities conscientiously.
Supervisors must increasingly lead others who are not in their direct line of authority—members of project teams, individuals who work for suppliers, customers, and people who represent other organizations through such arrangements as corporate partnerships. These situations don’t allow supervisors to fall back on their formal posi- tions to exact compliance. Many of the relationships, in fact, are dynamic. The ability to develop trust quickly may be crucial to the success of such relationships (see the section titled “Building Trust” at the end of this chapter).
Now, more than ever, supervisory leadership effectiveness depends on the ability to gain the trust of followers.30 Downsizing, corporate financial misrepresentations, and the increased use of temporary employees have undermined employees’ trust in their leaders and shaken the confidence of investors, suppliers, and customers. A survey found
25J. M. Kouzes and B. Z. Posner, Credibility: How Leaders Gain and Lose It, and Why People Demand It (San Francisco: Jossey-Bass, 1993), 14. 26J. D. Lewis and A. Weigert, “Trust as a Social Reality,” Social Forces, June 1985, 970. 27P. L. Schindler and C. C. Thomas, “The Structure of Interpersonal Trust in the Workplace,” Psychologi- cal Reports, October 1993, 563–573. 28H. H. Tan and C. S. F. Tan, “Toward the Differentiation of Trust in Supervisor and Trust in Organiza- tion,” Genetic, Social, and General Psychology Monographs 126, no. 2 (May 2000), 241–260. 29J. M. Kouzes and B. Z. Posner, Credibility: How Leaders Gain and Lose It, and Why People Demand It (San Francisco: Jossey-Bass, 1993), 14. 30R. Zemke, “The Confidence Crisis,” Training (June 2004), 22–30; J.A. Byrne, “Restoring Trust in Corporate America,” Business Week, June 24, 2002, 30–35; S. Armour, “Employees’ New Motto: Trust No One,” USA Today, February 5, 2002, 1B; J. Scott, “Once Bitten, Twice Shy: A World of Eroding Trust,” New York Times, April 21, 2002, WK5; J. Brockner, P. A. Siegel, J. P. Daly, T. Tyler, and C. Martin, “When Trust Matters: The Moderating Effect of Outcome Favorability,” Administrative Science Quarterly 42 (September 1997), 558.
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that only 39 percent of US employees and 51 percent of Canadian employees trusted their executive leaders.31 Today’s supervisors have the challenge of rebuilding and restoring trust with their employees.
WHAT IF YOU PLAY FAVORITES? You would think that one way to undermine employees’ trust in you would be for you to be seen as someone who plays favorites. In many cases you would be right. But appar- ently many supervisors play favorites. That is, they do not treat all their employees in the same manner. You’re likely to have favorite employees who make up your “in-group.” You’ll have a special relationship with this small group. You’ll trust them, give them a lot of your attention, and often give them special privileges. Not surprisingly, they’ll perceive themselves as having preferred status. Be aware that this creation of a favored in-group can undermine your credibility, especially among employees outside this in-group.
Be cautious of this tendency to create favorites in your department. You’re human, so you’ll naturally find some employees to whom you feel closer and with whom you’ll want to be more open. What you need to think through is whether you want this favoritism to show. When this favored-employee status is granted to someone based on nonperformance criteria—for example, because you share similar interests or common personality traits—it is likely to lessen your leadership effectiveness. However, it may have a place when you favor employees who are high performers. In such cases, you are rewarding a behavior that you want to reinforce. Be careful when you follow this practice. Unless performance measures are objective and widely visible, you may be seen as arbitrary and unfair.
HOW CAN YOU LEAD THROUGH EMPOWERMENT? Several times in different sections of this text, we’ve stated that supervisors increasingly lead by empowering their employees. Millions of individual employees and teams of employees are making key operating decisions that directly affect their work. They are developing budgets, scheduling workloads, controlling inventories, solving quality problems, evaluating their own performance, and so on; activities that until very recently were viewed exclusively as part of the supervisor’s job.
The increased use of empowerment is being driven by two forces. First is the need for quick decisions by people who are most knowledgeable about the issues. This requires, at times, moving decisions to employee levels. If organizations are to compete successfully in a dynamic global village, they have to be able to make decisions and implement changes quickly. Second is the reality that the downsizing and restructuring of organizations left many supervisors with considerably larger spans of control than they had before. To cope with the demands of an increased workload, supervisors have to empower their people. As a result, they are sharing power and responsibility with their employees. This means their role is to show trust in, provide vision to, remove performance-blocking barriers from the path of, offer encouragement to, motivate, and coach employees.
Does this wholesale support of shared leadership appear strange, given the atten- tion paid previously to contingency theories of leadership? If it doesn’t, it should. Why? Because empowerment proponents are essentially advocating a noncontingent approach to leadership. That means they claim that empowerment will work anywhere. So, direc- tive, task-oriented, autocratic leadership is out.
The problem with this kind of thinking is that the current empowerment movement ignores the extent to which leadership can be shared and the conditions facilitating suc- cessful shared leadership. Because of factors such as downsizing—which results in the need for higher-level employee skills, continuous employee training, implementation of continuous-improvement programs, and introduction of self-managed teams—the need for shared leadership is increasing. But that is not true in all situations. Blanket accep- tance of empowerment or any universal approach to leadership is inconsistent with the best and most current evidence we have on leadership.
31“Weathering the Storm: A Study of Employee Attitudes and Opinions,” WorkUSA 2002 Study, Watson Wyatt, http://www.watsonwyatt.com/research/printable.asp?id=w-557 (accessed August 1, 2011).
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WHY SHOULD SUPERVISORS ENGAGE THEIR EMPLOYEES? Gallup’s State of the Global Workplace Report reveals only 13 percent of employees worldwide are engaged at work. New Zealand has one of the highest levels of engaged employees among the countries surveyed at 23 percent. Australia’s engagement rate is similar, at 24 percent. Both countries fall short of the United States, where 30 percent of employees are engaged at work.32
Why do supervisors need to engage their employees? Engaged employees are pas- sionate about their job, put forth the extra effort, and are connected to the organization. Engaged employees are innovators with drive and the ambition to propel the organiza- tion forward. Conversely, unengaged employees have “left the building” and are merely going through the motions at work. They no longer have passion or energy for their work. Finally, disengaged employees are busy acting out their unhappiness, wasting time while undermining the efforts of engaged coworkers.
There are five strategies organizations can use to help build their constituency of engaged employees.33 First, use employee surveys to collect data that are specific, rel- evant, and actionable for any team at any organizational level; then use the data to impact organizational performance metrics. Second, organizations should encourage supervisors and their employees to participate in engagement initiatives by including them as performance expectations; help them identify barriers to engagement as well as opportunities to effect positive change. Third, select supervisors based on their will- ingness to empower their employees, recognize their contributions, and seek their input; selecting supervisors with these qualities increases the odds for employee engagement. Fourth, provide coaching for supervisors so they can take an active role in working with employees to develop personal engagement plans; encourage supervisors to main- tain an ongoing focus on engagement. Finally, encourage supervisors to combine engagement goals with regular meetings, planning sessions, and individual face-to-face employee interactions; continuous reinforcement will build commitment to engagement practices.
Supervisors are in a position to communicate and share employee engagement best practices throughout the organization. Converting unengaged employees into engaged workers is one of the most cost-effective strategies a company can implement to increase performance of the workforce.
Leadership Issues Today We will finish this chapter by looking at two current debates surrounding leadership: the movement from transactional to transformational leadership, and team leadership. The section will end with a discussion on leadership relevance.
WHAT ARE TRANSACTIONAL AND TRANSFORMATIONAL LEADERS? It is important to differentiate between transactional leaders and transformational leaders.34 As you’ll see, because transformational leaders are also charismatic, there is some overlap between this topic and the preceding discussion on charismatic traits.
Most leadership models address transactional leaders. These leaders guide or moti- vate their employees in the direction of established goals by clarifying role and task requirements. Another type of leader inspires followers to transcend their own self- interests for the good of the organization. These leaders are capable of having a
32Source: Based on R. Reilly, “Five Ways to Improve Employee Engagement Now,” GALLUP Business Journal (January 07, 2014), http://businessjournal.gallup.com (accessed February 26, 2017); State of the Global Workplace: Employee Engagement Insights for Business Leaders Worldwide, 2013, Gallup, Inc., http://www.gallup.com (accessed April 9, 2014). 33R. Reilly, “Five Ways to Improve Employee Engagement Now,” GALLUP Business Journal (January 07, 2014), http://businessjournal.gallup.com (accessed February 26, 2017) 34B. M. Bass, “From Transactional to Transformational Leadership: Learning to Share the Vision,” Orga- nizational Dynamics 18, no. 3 (Winter 1990), 19–31.
transactional leader A leader who guides or motivates employees in the direction of estab- lished goals by clarifying role and task requirements.
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profound and extraordinary effect on their followers. These are called transformational leaders. They pay attention to the concerns and developmental needs of employees; they change employees’ awareness of issues by helping them look at old problems in new ways; and they excite, arouse, and inspire followers to put out extra effort to achieve group goals.
Transactional and transformational supervision should not be viewed as opposing approaches to getting things done. Transformational supervision is built on top of trans- actional supervision. Transformational supervision produces levels of employee effort and performance that go beyond what would occur with a transactional approach alone. Moreover, transformational supervision is more than charisma. “The purely charismatic [leader] may want employees to adopt the charismatic’s world view and go no further. The transformational supervisor will attempt to instill in employees the ability to ques- tion not only established views but eventually those established by the leader.”35
The evidence supporting the superiority of transformational supervision over the transactional variety is overwhelmingly impressive. In summary, it indicates that trans- formational supervision leads to lower turnover rates, higher productivity, and higher employee satisfaction.
WHAT IS TEAM LEADERSHIP? Leadership is increasingly taking place within a team context. As teams grow in popu- larity, the role of the leader in guiding team members takes on heightened importance. And the role of team leader is different from the traditional leadership role performed by first-line supervisors. J. D. Bryant, a supervisor at Texas Instruments’ Forest Lane plant in Dallas, found that out.36 One day he was happily overseeing a staff of fifteen circuit-board assemblers. The next day he was informed that the company was moving to teams and that he was to become a “facilitator.” “I’m supposed to teach the teams everything I know and then let them make their own decisions,” he said. Confused about his new role, he admitted, “There was no clear plan on what I was supposed to do.” In this section, we will consider the challenge of being a team leader, review the new roles that team leaders take on, and offer some tips on how to increase the likelihood that you can perform effectively in this position.
Many leaders are not equipped to handle the change to teams. As one prominent consultant noted, “Even the most capable managers have trouble making the transition because all the command-and-control-type things they were encouraged to do before are no longer appropriate. There’s no reason to have any skill or sense of this.” This same consultant estimated that “probably 15 percent of managers are natural team leaders; another 15 percent could never lead a team because it runs counter to their personality—that is, they’re unable to sublimate their dominating style for the good of the team. Then there’s that huge group in the middle: Team leadership doesn’t come naturally to them, but they can learn it.”37
The challenge for most supervisors, then, is to learn how to become an effective team leader. They have to learn skills such as the patience to share information, to trust others, to give up authority, and to understand when to intervene. Effective leaders have mastered the difficult balancing act of knowing when to leave their teams alone and when to intercede. New team leaders may try to retain too much control at a time when team members need more autonomy, or they may abandon their teams at times when the teams need support and help.38
transformational leader A leader who inspires followers to transcend self-interests for the good of the organization and who is capable of having a profound and extraordinary effect on followers.
35B. J. Avolio and B. M. Bass, “Transformational Leadership: Charisma and Beyond,” working paper, School of Management, State University of New York, Binghamton (1995), 14. 36S. Caminiti, “What Team Leaders Need to Know,” Fortune, February 20, 1995, 93–100. 37Ibid. 38W. H. Decker and D. M. Rotondo, “Relationships Among Gender, Types of Humor, and Perceived Leader Effectiveness,” Journal of Managerial Issues 13, no. 4 (Winter 2001), 450–466; and S. Simsarian, “Leadership and Trust Facilitating Cross-Functional Team Success,” Journal of Management Development 21, no. 3 (March–April 2002), 201–215.
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WHAT IS E-LEADERSHIP? Leading employees in a dispersed environment is a challenge for supervisors in the twenty-first century. Generally, leadership is viewed as an interaction between personnel in a collocated environment—where workers are physically present in the organization and able to receive face-to-face communication. This face-to-face communication can easily take place around the water cooler, in hallways, and parking lots whereas there are myriad challenges for an e-leader attempting to maintain unity and wholeness in a dispersed environment. A poll conducted by the ASTD Forum to determine the leader- ship skills necessary for success in a dispersed environment compared to a collocated environment found that four critical skills for the virtual leader are the ability to use process facilitation skills for meetings, monitor team progress over time, balance work and life based on 24/7 accessibility, and establish and maintain trust in a diverse envi- ronment with multiple cultures.39 All these skills require intentionality in communica- tion if trust and relationships are to develop between leaders and followers in a virtual environment.
Because e-leadership is a relatively new phenomenon in the business world, there is a paucity of information regarding motivation techniques for dispersed employees. However, it is important for leaders to consider their behavior in situations defined by online interactions. Communication lacking the support of nonverbal behavior can easily be misunderstood and terse messages in an all caps format may be misin- terpreted as aggressive regardless of the use of emoticons in an attempt to soften the message.
Effective e-leadership requires supervisors to be judicious in their choice of words while monitoring their messages for anything that may appear to have subliminal mean- ing to the reader. E-leaders must consider what they want their readers to perceive and keep in mind that the development of trust in long-distance leadership situations may be difficult to achieve. The writing ability of the e-leader will be a necessary component of effective interpersonal leadership skills as more supervisors find themselves managing widely geographically dispersed employees.40
IS LEADERSHIP ALWAYS RELEVANT? We conclude this section by offering this opinion: The belief that a particular leadership style will always be effective regardless of the situation may not be true. Leadership may not always be important. Data from numerous studies demonstrate that, in many situ- ations, any behaviors a leader exhibits are irrelevant. Certain individual, job, and orga- nizational variables can act as substitutes for leadership or neutralize the leader’s ability to influence followers.41 These things make it impossible for leader behavior to make any difference in follower outcomes. They negate the leader’s influence.
39D. Dennis, D. Meola and M. J. Hall, “Effective Leadership in a Virtual Workforce,” Association for Talent Development, February 8, 2013, https://www.td.org/Publications/Magazines/TD/TD- Archive/2013/02/Effective-Leadership-in-a-Virtual-Workforce (accessed February 26, 2107). 40S. Robbins and T. Judge, Organizational Behavior, 13th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 431–432, and K. Ferrazzi, “Getting Virtual Teams Right,” Harvard Business Review, December 2014, https://hbr.org/2014/12/getting-virtual-teams-right (accessed February 26, 2017).
OBJECTIVE 9.8 Describe situations in which leadership is irrelevant.
41See, for example, S. Kerr and J. M. Jermier, “Substitutes for Leadership: Their Meaning and Measure- ment,” Organization Behavior and Human Performance 22, no. 3 (December 1978), 375–403; J. P. Howell and P. W. Dorfman, “Substitutes for Leadership: Test of a Construct,” Academy of Management Journal 24, no. 4 (December 1981), 714–728; J. P. Howell, P. W. Dorfman, and S. Kerr, “Leadership and Substitutes for Leadership,” Journal of Applied Behavioral Science 22, no. 1 (1986), 29–46; J. P. Howell, D. E. Bowen, P. W. Dorfman, S. Kerr, and P. M. Podsakoff, “Substitutes for Leadership: Effective Alter- natives to Ineffective Leadership,” Organizational Dynamics, 19, no. 1 (Summer 1990), 21–38; P. M. Podsakoff, S. B. MacKenzie, and W. H. Bommer, “Meta-Analysis of the Relationships between Kerr and Jermier’s Substitutes for Leadership and Employee Attitudes, Role Perceptions, and Performance,” Jour- nal of Applied Psychology 81 (August 1996), 380–399; and J. M. Jermier and S. Kerr, “Substitutes for Leadership: Their Meaning and Measurement—Contextual Recollections and Current Observations,” Leadership Quarterly 8, no. 2 (1997), 95–101.
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Substitutes, on the other hand, make a leader’s influence not only impossible but also unnecessary. They act as a replacement for the leader’s influence. For instance, characteristics of employees such as experience, training, professional orientation, or indifference toward organizational matters can substitute for, or neutralize, the effect of leadership. Experience and training, for instance, can replace the need for a leader to organize jobs and reduce task ambiguity. Jobs that are inherently unambiguous and routine (e.g., working on an assembly line) or that are intrinsically satisfying (e.g., a research scientist) may place fewer demands on the leadership variable. Organizational characteristics such as explicit formalized goals, rigid rules and procedures, and cohesive workgroups can also substitute for leadership.
This realization that leaders don’t always have an effect on those they are supposed to lead should not be that alarming. After all, factors such as attitudes, personality, ability, and group norms have been documented as having an effect on employee per- formance and satisfaction. Yet supporters of the leadership concept have tended to place an undue burden on leadership for explaining and predicting behavior. It is too sim- plistic to state that employees are guided to goal accomplishment solely by the actions of a leader. It’s important, therefore, to recognize that leadership is another variable in organizational effectiveness. In some situations, it may contribute a lot to employee productivity, absence, turnover, citizenship, and satisfaction. But in other situations, it may contribute little toward those ends.
Comprehension Check 9-2
5. A taskmaster is often referred to as a(n) ____ leader.
a. task-centered b. autocratic c. people-centered d. participative
6. A person who gives employees total autonomy to make decisions that will affect them is called a ____ leader.
a. participative b. democratic c. free-reign d. people-centered
7. An employee who is able to do the job, but unwilling to be told by a leader what to do, would be classified at which readiness level in the situational leadership model?
a. R-4 b. R-3 c. R-2 d. R-1
8. Which one of the following is not a dimension of trust? a. Consistency b. Loyalty c. Openness d. Risk taking
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Chapter 9 Leading Followers 259
verbally and in writing, the vision to others in a way that is clear in terms of required actions; (2) the ability to express the vision through one’s behavior so that it reinforces to organizational members the importance of the vision; and (3) the ability to extend the vision to different leadership contexts, gaining commitment and understanding from organizational members regard- less of their department affiliation or location.
5. Differentiate between task-centered and people- centered leadership behaviors. Task-centered leader- ship behaviors focus on the technical or task aspects of a job. People-centered leadership behaviors focus on interpersonal relations with employees.
6. Identify and describe three types of participative leader- ship styles. The three types of participative leadership styles are consultative (seeking input from employees), democratic (giving employees a role in making deci- sions), and free-rein (giving employees total autonomy to make the decisions that affect them).
7. Explain situational leadership. Situational leadership involves adjusting one’s leadership style to the readi- ness level of the employee for a given set of tasks. Given an employee’s ability and willingness to do a specific job, a situational leader will use one of four leadership styles—telling, selling, participating, or delegating.
8. Describe situations in which leadership is irrele- vant. Leadership may be irrelevant in situations in which certain individual, job, or organizational vari- ables substitute for a leader. These situations may involve experience, professional orientation, routine jobs, or formalized rules and procedures.
1. Define leadership and describe the difference between a leader and a supervisor. Leadership is the ability to influence others. The main difference between a leader and a supervisor is that a supervisor is appointed. A supervisor has legitimate power that allows him or her to reward and punish. A supervisor’s ability to influence is founded on the formal authority inherent in their position. In contrast, a leader may either be appointed or emerge from within a group. A leader can influence others to perform beyond the actions dictated by formal authority.
2. Identify the traits that may help you become a suc- cessful leader. Six traits have been found on which leaders differ from non-leaders: drive, the desire to influence others, honesty and moral character, self- confidence, intelligence, and relevant knowledge. Yet possession of these traits is no guarantee of leadership because they ignore situational factors.
3. Define charisma and its key components. Charisma is a magnetism that inspires employees to reach goals that are perceived as difficult or unpopular. Charis- matic leaders are self-confident, possess a vision of a better future, have a strong belief in that vision, engage in unconventional behaviors, have a high degree of self-monitoring, and are perceived as agents of radical change.
4. Describe the skills of a visionary leader. Several skills are associated with visionary leaders. Although pos- sessing these skills is not a guarantee that someone will be a visionary leader, those who are visionary leaders frequently exhibit them: (1) the ability to explain, both
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
9-4. How are technical, conceptual, networking, and human relations skills linked to effective leadership?
9-5. What are the differences between a task-centered and a people-centered supervisor? For which do you believe employees would rather work? Why? For which would you prefer to work? Explain.
9-1. “All supervisors should be leaders, but not all leaders should be supervisors.” Do you agree or disagree? Support your position.
9-2. How is intelligence related to leadership? 9-3. What is charismatic leadership? Why might high
self-monitors be more effective leaders? Discuss.
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
1 2
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3 4
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DOWNACROSS
1. a leader who seeks input from followers but makes the final decision 6. a leader who guides or motivates employees in the direction of established goals 7. the belief in the integrity and character of a leader 8. the ability to influence others to act in a particular way 9. a leadership style of an individual who actively seeks input from followers 10. the adjustment of leadership type based on employee needs 14. the ability and willingness of an employee to complete a task 15. an individual with a compelling vision or sense of purpose 16. a leader who o ers followers a say in what is decided and the group makes the decision 17. a leader who inspires followers to transcend their self- interests for the good of the organization
2. qualities such as intelligence, charm, decisiveness, and enthusiasm 3. a leader who emphasizes interpersonal relations with those he or she leads 4. honesty, competency, and the ability to inspire 5. the ability to create and articulate a realistic, credible, attractive picture of the future 11. a leader with a strong tendency to emphasize the technical aspects of a job 12. a leader who is characterized as a taskmaster 13. a leader who gives employees total autonomy to make decisions that will a ect them
9-6. Compare and contrast consultative, democratic, and free-rein styles of participative leadership.
9-7. How can supervisors be both flexible and consistent in their leadership styles? Aren’t these contradictory? Explain.
9-8. How could a professor apply situational leadership with students in a classroom setting?
9-9. What role do credibility and trust play in leadership? 9-10. “Given the emphasis on caring for employees,
women may be more effective supervisors.” Do you agree or disagree? Support your position.
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• How Willing Am I to Delegate? • How Charismatic Am I? • Do I Trust Others?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• What’s My Leadership Style? • Do Others See Me as Trusting?
GETTING TO KNOW YOURSELF
Developing Your Supervisory Skills
credit is due, be objective and impartial in perfor- mance appraisals, and pay attention to equity per- ceptions in reward distributions.
STEP 3: Speak your feelings. Leaders who convey only hard facts come across as cold and distant. When you share your feelings, others will see you as real and human. They will know who you are and their respect for you will increase.
STEP 4: Tell the truth. If honesty is critical to cred- ibility, you must be perceived as someone who tells the truth. Followers are more tolerant of learning something they “don’t want to hear” than of finding out that their leader lied to them.
STEP 5: Be consistent. People want predictability. Mistrust comes from not knowing what to expect. Take the time to think about your values and beliefs. Then, let them consistently guide your decisions.
BUILDING TRUST
Given the importance trust plays in the leadership equa- tion, today’s leaders should actively seek to build trust with their followers. Here are some suggestions for achiev- ing that goal.
STEPS IN PRACTICING THE SKILL
STEP 1: Practice openness. Mistrust comes as much from what people don’t know as from what they do know. Openness leads to confidence and trust. So, keep people informed, make clear the criteria on how decisions are made, explain the rationale for your decisions, be candid about problems, and fully dis- close relevant information.
STEP 2: Be fair. Before making decisions or taking actions, consider how others will perceive them in terms of objectivity and fairness. Give credit where
MENTORING OTHERS
write down the traits. When all students have shared their lists, class discussion will focus on the following questions:
A. Which characteristics consistently appeared on stu- dents’ lists?
B. Were these characteristics more trait-oriented or behavior-oriented?
C. In which situations were these characteristics useful? D. What, if anything, does this exercise suggest about
leadership attributes?
9-11. An Experiential Exercise: Leadership Characteristics
BUILDING A TEAM
Objective: To compare characteristics intuitively related to leadership with characteristics found in leadership theory.
Procedure: Identify three people (friends, relatives, previous supervisors, public figures, etc.) whom you con- sider to be outstanding leaders. For each individual, list why you feel he or she is a good leader. Compare your lists of the three individuals. Which traits, if any, are common to all three?
Your instructor will lead the class in a discussion of leadership characteristics based on your lists. Students will call out what they identified, and your instructor will
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Pick one of the contemporary leadership theories in this chapter and relate your list to the model, explaining how your “leader” demonstrated the attributes of your selected theory.
9-12. Think about a person in your life (a parent, a supervisor, a teacher, etc.) who influenced you to the extent that you enthusiastically gave 110 per- cent. Describe the characteristics of this individual.
COMMUNICATING EFFECTIVELY
“violated every rule of management. He was not a consen- sus builder but a dictator who listened mainly to his own intuition. He was a maniacal micromanager . . . . He could be absolutely brutal in meetings.”43
His verbal assaults on staff could be terrifying. The story is told that when Apple launched its first version of the iPhone that worked on 3G mobile networks, it included MobileMe, an e-mail application that was sup- posed to provide seamless synchronization features similar to those used by the fanatical corporate users of Black- Berry phones. What was the problem? MobileMe didn’t work well at all, and product reviews were quite critical. Since “Steve Jobs doesn’t tolerate duds,”44 it wasn’t long after the launch when he gathered the MobileMe team in
43J. Nocera, “What Makes Steve Jobs Great,” New York Times Online, August 26, 2011, http://www.nytimes.com/2011/08/27/opinion/nocera- what-makes-steve-jobs-great.html (accessed February 26, 2017). 44A. Lashinsky, “How Apple Works: Inside the World’s Biggest Startup,” Fortune.com, May 9, 2011, http://fortune.com/2011/05/09/inside- apple/ (accessed February 26, 2017).
■➤ Case 9-A: Insane Leadership Legacy A great deal has been written about the late Steve Jobs.42 How he took Apple, a niche business, and turned it into the most valuable company in the world as measured by mar- ket capitalization. How he was extremely charismatic and extremely compelling in getting people to join with him and believe in his vision. But also how he was despotic, tyran- nical, abrasive, uncompromising, and a perfectionist. So what is his leadership legacy?
Everything Jobs did and how he did it was motivated by his desire to have Apple make innovative products— products that were “insanely great”—“insanely” being one of his favorite descriptors. That singular focus shaped his leadership style, which has been described as auto- cratic and yet persuasive. As one reporter said, Jobs
42D. Archer and A. Cameron, “Collaborative Leadership,” www.trainingjournal.com, June 2012, 35–38; J. Katzenbach, “The Steve Jobs Way,” Strategy+Business Online, April 23, 2012; W. Isaacson, “The Real Leadership Lessons of Steve Jobs,” Harvard Business Review, April 2012, 93–102; R. Williams, “Why Steve Jobs Was Not a Leader,” www.psychologytoday.com, April 7, 2012; R. Foroohar, “The Leadership Lessons of Steve Jobs,” business.time.com, February 16, 2012; R. Foroohar, “What Would Steve Do?” www.time.com, February 27, 2012; F. E. Allen, “Steve Jobs Broke Every Leadership Rule. Don’t Try It,” www.forbes.com, August 27, 2011; J. Nocera, “What Makes Steve Jobs Great,” New York Times Online, August 26, 2011; A. Sharma and D. Grant, “The Stagecraft of Steve Jobs,” Strategy+Business Online, June 10, 2011; and A. Lashinsky, “How Apple Works: Inside the World’s Biggest Startup,” http://fortune.com/2011/05/09/inside-apple/, May 9, 2011.
THINKING CRITICALLY
When you know your central purpose, your actions will follow accordingly, and you will project a consis- tency that earns trust.
STEP 6: Fulfill your promises. Trust requires that people believe that you are dependable. So, you need to keep your word. Promises made must be promises kept.
STEP 7: Maintain confidences. You trust those whom you believe to be discreet and whom you can rely on. If people make themselves vulnerable by telling you something in confidence, they need to feel assured that you won’t discuss it with others or betray that confidence. If people perceive you as someone who leaks personal confidences or someone
who can’t be depended on, you won’t be perceived as trustworthy.
STEP 8: Demonstrate confidence. Develop the admi- ration and respect of others by demonstrating techni- cal and professional ability. Pay particular attention to developing and displaying your communication, negotiating, and other interpersonal skills.
Sources: Based on F. Bartolome, “Nobody Trusts the Boss Completely—Now What?” Harvard Business Review 67 (March–April 1989), 135–142; J. K. Butler, Jr., “Toward Understanding and Measuring Conditions of Trust: Evolu- tion of a Condition of Trust Inventory,” Journal of Man- agement 17 (September 1991), 643–663; and J. Finegan, “Ready, Aim, Focus,” Inc., March 1997, 53.
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an auditorium on Apple’s campus. According to a partici- pant in that meeting, Jobs walked in—in his trademark black mock turtleneck and jeans—and simply asked if anyone could tell him what MobileMe was designed to do. When he finally got an acceptable answer, Jobs asked plainly why the *#$% it didn’t do that. Then, for the next 30 minutes, Jobs blasted criticisms at the team. “You’ve tarnished Apple’s reputation. You should hate each other for having let each other down.”45 Ouch. And this wasn’t the only example of his taking employees to task. He was tough on the people around him. When asked about his tendency to be rough on people, Jobs responded, “Look at the results. These are all smart people I work with, and any of them could get a top job at another place if they were truly feeling brutalized. But they don’t.”46
On the other hand, Steve Jobs could be thoughtful, passionate, and “insanely” charismatic. He could encour- age and get people to do what they didn’t think was pos- sible. And there’s no arguing with the fact that the results from the company he co-founded have been market-chang- ing. From Macs and iPods to iPhones and iPads, Apple’s products have revolutionized industries and created a fan base of consumers who are very loyal to the Apple brand, and employees who are very loyal to the company.
RESPONDING TO THE CASE
9-13. Think about what you thought you knew about Steve Jobs prior to reading this case. How would you have described his leadership style?
9-14. After reading this case, how would you describe his leadership style?
9-15. Discuss whether or not Steve Jobs’ leadership approach would work for others and in other orga- nizational environments.
■➤ Case 9-B: Order Up! As chief executive chef of a national themed restaurant chain hoping to go international in the next five years, Koptra Galwal worked hard to inspire the restaurant’s employees. He planned to expand the number of restau- rants, improve profitability, and enhance all aspects of
45A. Lashinsky, “How Apple Works: Inside the World’s Biggest Startup,” Fortune.com, May 9, 2011, http://fortune.com/2011/05/09/inside- apple/ (accessed February 26, 2017). 46W. Isaacson, “The Real Leadership Lessons of Steve Jobs,” Harvard Business Review, April 2012, https://hbr.org/2012/04/the-real-leadership- lessons-of-steve-jobs (accessed February 26, 2017).
customer service. His active leadership style matches his big plans, but many have commented on his ability to lead from both directions. That is, he inspires people from the top down, and from the bottom up.
Galwal’s top-down style was evident in his approach to assessment of organizational decisions. His bottom-up approach was shown as he recruited from the nationwide chain of restaurants to find employees willing to partici- pate in and report on benchmarking customer service, menu items, and competitive advantages. He knew in his heart that employees working in the company’s restau- rants were the ones who innovated on a daily basis, as he once had while working as a chef in the back of the house.
Galwal is confident working simultaneously in mul- tiple directions, but not all of his supervisory manage- ment team was. It took awhile for everyone to adjust to information flowing in from far-flung locations and from the bottom up as well as the top down, but eventually the culture took hold in the organization. His supervisors were also encouraged to develop and implement new ideas to add to the corporate body of knowledge. He sets the direction but he believes in the process he has developed and so he lets his people run with their ideas.
Galwal is also a stickler for detail. He reviewed com- panywide training procedures for front-of-the-house employees and found wide variation in the normative behaviors of multiple locations of the restaurant chain. He sought input then designed the menu as well as the script for hosts and hostesses in his restaurants in an attempt to provide a feeling of familiarity for customers regardless of where in the country they dined. He established back- of-the-house procedures for cooks and food prep and sanitation employees based on his considerable personal experience in the food service industry.
RESPONDING TO THE CASE
9-16. How would you describe Galwal’s leadership style? Why?
9-17. Do you think these leadership styles were beneficial for this organization? Why or why not?
9-18. How would his style influence your behavior as a leader? Is he transformative or transactional?
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■■ active listening
■■ assertiveness training
■■ body language
■■ channel
■■ communication
■■ decoding
■■ encoding
■■ feedback loop
■■ formal communication
■■ grapevine
■■ informal communication
■■ message
■■ nonverbal communication
■■ richness of information
■■ roles
■■ verbal intonation
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Communicating Effectively10 C
H A
P T
ER
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10-1. Define communication and the communication process.
10-2. Contrast formal and informal communication.
10-3. Explain how electronic communication affects the supervisor’s job.
10-4. List barriers to effective communication.
10-5. Describe techniques for overcoming communication barriers.
10-6. List the requirements for active listening.
10-7. Explain the behaviors necessary for providing effective feedback.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
Auremar/123RF.com
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Responding to a Supervisory Dilemma
Communication takes place every day in every organization, in all areas, and between all organizational mem- bers. Most communication tends to be work-related, but as the follow- ing story shows, sometimes com- munication doesn’t lead to positive outcomes.
Sixty percent of respondents in a recent employee survey said that gos- sip was their biggest pet peeve about their jobs. Most gossip centers on the workplace and the personal lives of coworkers. How often have you gossiped at work— either as a sender or as a receiver? Although you may think workplace gossip is harmless, it can have some pretty serious consequences. First, spreading rumors can damage morale and increase anxiety. Second, it can hamper productivity and impact performance. And it can lead to something you might not even have consid- ered, as it did for four former employees of the town of Hooksett, New Hampshire. Fired by the city council for gossiping about their boss, they learned the hard way that gossip can cost you your job.*
The longtime employees were fired because one of the women had used derogatory terms to describe the town administrator, and because all of them had discussed a rumor that he was having an affair with a female subordinate. All four of the women acknowledged feeling resentment toward the subor- dinate in question, who worked in a specially created position and was paid more than two of the gossip- ing employees, despite having less experience and seniority.
Despite an appeal of their dismissal by the four employees, the Hooksett council didn’t budge and stated, “These employees do not represent the best interests of the town of Hooksett and the false rumors,
gossip and derogatory statements have contributed to a negative work- ing environment and malcontent among their fellow employees.” Despite national media attention and a petition signed by 419 resi- dents asking for the women to be reinstated, the city council didn’t waver on its decision. An attorney for the four women said that his cli-
ents were “legitimately questioning the conduct of their supervisor, and whether the female subordinate was getting preferential treatment. It almost cheapens it to call it gossip. It might have been idle, not particularly thoughtful, talk. But there was no harm intended.”
Although the four women represented nearly fifty years of combined service to the city and all had posi- tive performance reviews, the town council believed that the women’s actions were “insubordinate” and “dishonest.” All four received a settlement for being fired, which cost the town a total of $330,000. The settlement agreement also stipulated, however, that two of the women can never apply for a job with the town again.
What do you think? Gossip is interpersonal com- munication, but it presents an ethical dilemma relat- ing to the distortion of information. Is it okay for employees to openly gossip about others in the organi- zation? Do you agree with the action of the city coun- cil? If the women in this story had taken their concerns to management regarding the alleged affair, how do you think it would have changed the outcome? Viewed in a different context, does the story shift from one of malicious gossip to one of concern over a potential sex- ual harassment situation? What guidelines would you suggest for supervisors who want guidance in deciding when it is appropriate to control workplace gossip?
*J. McGregor, “Mining the Office Chatter,” BusinessWeek, May 19, 2008, 54; E. Zimmerman, “Gossip Is Information by Another Name,” New York Times Online, February 3, 2008; A. Fisher, “Harmless Office Chitchat or Poisonous Gossip?” CNNMoney.com, November 12, 2007; S. Armour, “Did You Hear the Story About Office Gossip?” USA Today, September 10, 2007, 1B+; “Women Lose Jobs over Office Scuttlebutt,” AARP Bulletin, July–August 2007, 11; G. Cuyler, “Hooksett 4 to Seek Judge’s Aid in Getting Jobs Back,” New Hampshire Union Leader, June 25, 2007; and P. B. Erickson, “Drawing the Line Between Gossip, Watercooler Chat,” NewsOK.com, June 15, 2007.
Sean Locke Photography/Shutterstock
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T he following episodes occurred in one 8-hour day at a large Marriott hotel in Phoenix, Arizona:
Episode 1: The supervisor of convention sales, Ronnie Barnes, was reviewing last quarter’s sales report in preparation for a performance review with each of her three employees. Concerned particularly about Patti Williams’s performance, Ronnie called Patti into her office. “Patti, I just saw your last quarter’s sales numbers. I thought we had agreed on a goal of six major conventions [defined as 1,000 or more room nights] for the quarter. Now I’m looking at the data and it says you booked only four. What happened?” “I don’t understand the problem,” Patti responded. “Six was our goal—my target. It was something we were trying to reach. I didn’t understand that to mean that it was a do-or-die proposi- tion.” Patti was noticeably upset, and Ronnie was trying to control her frustration. “Patti, six was our goal all right. But it wasn’t some ‘pie-in-the-sky’ number. It was the minimum number of bookings we were counting on you to make. You’re responsible for getting us the big conventions. Robin and Carlos handle the smaller ones. You know we rely on the big conventions to keep our occupancy rates up. I told Liz [the hotel’s general manager and Ronnie’s immediate boss] we’d book at least six big conventions in the second quarter. Now I’ve got to explain why we missed our goal!”
Episode 2: A memo had gone out a number of months previously from the hotel’s director of human resources to all managers and supervisors. The topic of the memo was a change in the hotel’s leave-without-pay policy. A complaint from the buyer in the food and beverage department had just been received by the director of human resources. The employee’s complaint was that his request for a two-week leave without pay to handle personal and financial problems related to the death of his mother had been denied by his supervisor. He felt his request was reasonable and should have been approved. Interestingly, the memo in question specifically stated that leaves of up to three weeks because of a death in the family were to be uniformly approved. When the human resource director called the food and beverage supervisor to follow up on the employee complaint, she was told by the supervisor, “I never knew there was a change of policy on leaves without pay.”
Episode 3: The following conversation took place between two bellhops. “Did you hear the latest? The general manager’s daughter is marrying some guy from New Jersey who’s serving a five-year sentence for some offense he committed in his franchise. Heard it involved millions of dollars.” “You’re kidding!” responded the other. “No, I’m not kidding! I heard it this morning from Larry in maintenance. Can you imagine how the family must feel?” This rumor had some basis in fact, but was far from accurate. The truth was that the previous week, the general manager had announced the engagement of her daughter to a football player with the New York Jets—an offensive lineman who just happened to have the “franchise player” label put on him—and had just signed a new five-year multimillion-dollar contract.
These three episodes demonstrate three facts about communication. First, words mean different things to different people. In the first instance, to Ronnie Barnes, a goal meant a minimum level of attainment, whereas to Patti Williams, it meant a maximum target that one tried to reach. Second, the initiation of a message is no assurance that it is received or understood as intended. Third, communications often become distorted as they are transmitted from person to person. As the marriage rumor illustrates, “facts” in messages can lose much of their accuracy as they are transmitted and translated.
These episodes illustrate potential communication problems for supervisors. The importance of effective communication for supervisors can’t be overemphasized, for one specific reason: Everything a supervisor does involves communicating. You can’t make a decision without information, and that information has to be communicated. Once a decision is made, communication must again take place. Otherwise, no one will know you’ve made a decision. The best idea, the most creative suggestion, or the finest plan cannot take form without communication. Supervisors work with their employees, peers, immediate managers, people in other departments, customers, and others to get their own departments’ objectives accomplished; the interactions with these various
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individuals all require communication of some type. The successful supervisor needs effective communication skills, but good communication skills alone don’t make a suc- cessful supervisor. However, ineffective communication skills can lead to a continuous stream of problems for the supervisor.
What is Communication? Communication involves the transfer of meaning. If no information or ideas have been conveyed, communication has not taken place. However, for communication to be suc- cessful, the meaning must not only be imparted but also understood. A memo addressed to us in a foreign language cannot be considered a communication until we have it trans- lated. Therefore, communication is the transference and understanding of meaning.
Finally, effective communication is often erroneously defined by the communicator as “agreement” instead of “clarity of understanding.” If someone disagrees with us, many of us assume the person just didn’t fully understand our position. We may define good communication as having someone accept our views. But a person can clearly understand what you mean and not agree with what you say. In fact, a supervisor concluding that a lack of communication is the cause of a long-term conflict between two employees may find there is plenty of effective communication going on. Each fully understands the other’s position. The problem is one of equating effective communication with agreement.
The Communication Process Communication can be thought of as a process or flow. Communication problems occur when there are deviations or blockages in that flow. Before communication can take place, a purpose, expressed as a message to be conveyed, is needed. It passes between a source (the sender) and a receiver. The message is encoded (converted to symbolic form) and is passed by way of some medium (channel) to the receiver, who retranslates (decodes) the message initiated by the sender. The result is transference of meaning from one person to another.1
Exhibit 10-1 depicts the communication process. This model is made up of seven parts: (1) the sender, (2) encoding, (3) the message, (4) the channel, (5) decoding, (6) the receiver, and (7) feedback.
OBJECTIVE 10.1 Define communication and the communication process.
communication The transference and understanding of meaning.
1D. K. Berlo, The Process of Communication (New York: Holt, Rinehart & Winston, 1960), 30–32.
Exhibit 10-1 The communication process.
Sender ReceiverChannel
Feedback Message
Message Encoding Decoding
Message Message Message
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The sender initiates a message by encoding a thought. Three primary conditions affect the encoded message: skill, knowledge, and the social-cultural system.
Part of communication depends on writing skills. If writers don’t have the requisite writing skills, their messages will not reach readers in the form desired. One’s com- municative success includes speaking, reading, listening, and reasoning skills as well. Restricted in our communicative activity by the extent of our knowledge of the particu- lar topic, we cannot communicate what we don’t know. Should our knowledge be too extensive, it’s possible that our receiver will not understand our message. The amount of knowledge the sender holds about their subject will affect the message they seek to transfer. Finally, as knowledge influences our behavior, so does our position in the social-cultural system in which we exist. Beliefs and values, all part of our culture, act to influence us as a communicative source.
The message is the actual physical product from the sender’s encoding. “When we speak, the speech is the message. When we write, the writing is the message. When we paint, the picture is the message. When we gesture, the movements of our arms and the expressions on our faces are the message.”2 Our message is affected by the code or group of symbols we use to transfer meaning, the content of the message itself, and the deci- sions that we make in selecting and arranging both codes and content.
The channel is the medium through which the message travels. This channel is selected by the sender, who must determine which channel is formal and which one is informal. Formal channels are established by the organization and transmit messages pertaining to the job-related activities of members. They traditionally follow the author- ity network within the organization. Personal or social messages typically follow the informal channels in the organization.
The receiver is the person to whom the message is directed. They must translate message symbols into an understandable form. This is the decoding of the message. Just as the encoder was limited by their skills, attitudes, knowledge, and social-cultural sys- tem, the receiver is equally restricted. The sender must be skillful in writing or speaking, the receiver must be skillful in reading or listening, and both must be able to reason. One’s knowledge, attitudes, and cultural background influence one’s ability to receive, just as they do the ability to send.
The final link in the communication process is a feedback loop. Feedback is the check on how successful we have been in transferring our messages as originally intended. It determines whether understanding has been achieved.
Methods of Communication Supervisors participate in two types of communication. One type is formal communication. It addresses task-related issues and tends to follow the organization’s authority chain. When supervisors give directions, provide advice to a departmental team, receive sug- gestions from employees, interact with other supervisors, or respond to a request from their boss, they are engaged in formal communication. Supervisors engage in formal communication through speech, written documents, electronic media, and nonverbal behavior (see “Something to Think About”). The other type is informal communication. This type of communication moves in any direction, skips authority levels, and is as likely to satisfy social needs as it is to facilitate task accomplishments.
HOW DO YOU COMMUNICATE ORALLY? Supervisors rely heavily on oral communication. Examples are when you meet one-on- one with an employee, give a speech to your department, engage in a problem-solving session with a group of employees, or talk on the phone to a disgruntled customer.
encoding The conversion of a message into symbolic form.
2Ibid.
message Information that is sent.
channel The medium by which a message travels.
decoding A receiver’s translation of a sender’s message.
feedback loop Information received by the sender from a receiver regarding a message that was sent.
OBJECTIVE 10.2 Contrast formal and informal communication.
formal communication Communication that addresses task- related issues and tends to follow the organization’s authority chain.
informal communication Communication that moves in any direction, skips authority levels, and is as likely to satisfy social needs as it is to facilitate task accomplishments.
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The advantages to oral communication are that you can transmit information quickly through the spoken word, and oral communication includes a nonverbal com- ponent that can enhance the message. A phone call conveys not only words, but also tone and mood. Conversation in a one-on-one meeting further includes gestures and facial expressions. Today’s supervisors are becoming increasingly aware that oral com- munication not only is an effective means for quickly conveying information but also has positive symbolic value. In contrast to a memo or electronic message, the spoken word is more personal, conveying more intimacy and caring. Care of the best supervisors rely extensively on oral communication even when the use of written or electronic channels would seem to be as effective. Their experience shows that reliance on oral communica- tion tends to build trust with employees and creates a climate of openness and support.
WHY DO YOU USE WRITTEN COMMUNICATION? When your message is intended to be official, if it has long-term implications, or if it is highly complex, you’ll want to convey it in written form. Introductions of new procedures should be conveyed in writing so there is a permanent record to which all employees can refer. Providing a written summary of employee performance reviews helps reduce mis- understandings and creates a formal record of what was discussed. Departmental reports that contain lots of metrics are best conveyed in writing because of their complexity.
Something to Think About (and promote class discussion)
WHAT IS THE BEST METHOD TO COMMUNICATE BAD NEWS? One responsibility that’s always difficult for those in a leadership position is to deliver bad news to employees.3 However, that’s all the more reason to be sure to think through those decisions. And not every leader has done that! Here are some recent examples. See what you think.
■■ IBM CEO Ginni Rometty, after a disappointing earnings report, publicly reprimanded all the com- pany’s 434,000 employees through a five-minute internal video message. She specifically pointed to the sales staff for missing out on several large deals. When the press heard about it, many referred to it as a public spanking.4
■■ AOL’s CEO, Tim Armstrong, broke the news about the company’s decision to cut employee 401k benefits on television network CNBC.
■■ Only after informing Wall Street did Armstrong hold a companywide conference call with employees to discuss the announcement and explain the rationale. Employees complained about “secret” cuts on Twitter and other social media websites. Armstrong only added fuel to the fire after he tried to blame the change on the new federal health-care law and medical expenses associated with two “distressed babies” of AOL employees. After a week of bad publicity, Armstrong informed employees through e-mail that he was reversing his decision and apologized for his controversial comments.
■■ Some 90 workers at Ford Motor Company’s Chicago assembly plant got an automated phone mes- sage announcing they had just been laid off.6
3A. Gallo, “How to Deliver Bad News to Your Employees,” https://hbr.org/2015/03/how-to-deliver-bad-news-to-your-employees, March 30, 2015; and C. Suddath, “I’m Sorry to Have to Say This,” Bloomberg BusinessWeek, May 13, 2013, 80. 4C. Suddath, “I’m Sorry to Have to Say This”; S. E. Ante, “IBM’s Chief to Employees: Think Fast, Move Faster,” Wall Street Journal Online, April 24, 2013. 5G. Kratsas, “AOL Firestorm Grows Despite CEO Apology,” USA Today, February 10, 2014, 1B; N. Singer, “Revelations by AOL Boss Raise Fears over Privacy,” New York Times Online, February 10, 2014; L. Kaufman, “Facing Criticism after Remarks, AOL Chief Reverses 401(K) Changes,” New York Times Online, February 9, 2014; and A.-M. Squeo, “AOL 401K Blow-Up: Worst Way to Deliver Bad News to Employees,” www.forbes.com, February 9, 2014. 6M. Martinez, “Ford Lays Off 90 at Chicago Assembly with -Robocall,” www.detroitnews.com, November 4, 2014.
(continued)
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DO WOMEN AND MEN COMMUNICATE DIFFERENTLY? We know the leadership styles of men and women differ. So, can we conclude that men and women communicate differently, too? The answer is yes! The differences in com- munication styles between men and women may lead to some interesting insights. When men talk, they do so to emphasize status and independence, whereas women talk to cre- ate connections and intimacy. For instance, men frequently complain that women talk on and on about their problems. Women, however, criticize men for not listening. What’s happening is that when a man hears a woman talking about a problem, he frequently asserts his desire for independence and control by providing solutions. Many women, in contrast, view conversing about a problem as a means to promote closeness. The woman presents the problem to gain support and connection—not to get the male’s advice.
Because effective communication between the sexes is important to all supervisors for meeting departmental goals, how can you manage the differences in communication style? To keep gender differences from becoming persistent barriers to effective com- munication requires acceptance, understanding, and a commitment to communicate adaptively across gender lines. Both men and women need to acknowledge there are differences in communication styles, that one style isn’t better than the other, and that it takes real effort to talk with each other successfully.7
IS ELECTRONIC COMMUNICATION MORE EFFICIENT? Computers, microchips, and digitalization are dramatically increasing a supervisor’s communication options. Today, you can rely on a number of sophisticated electronic media to carry your communications.8 These include e-mail, text messaging, voice mail, electronic paging, cellular telephones, videoconferencing, modem-based transmissions, Internet and intranet communications, and other forms of network-related communica- tion. Whatever electronic media is selected, limit liability risks and improve the overall effectiveness of the organization’s e-communications by requiring employees to use appropriate, businesslike language in e-mail and other electronic documents. Be sure to avoid shouting in ALL CAPS!
7J. Langdon, “Differences between Males and Females at Work,” USA Today, www.usatoday.com (February 5, 2001); J. Manion, “He Said, She Said,” Materials Management in Health Care, November 1998, 52–62; G. Franzwa and C. Lockhart, “The Social Origins and Maintenance of Gender Communication Styles, Per- sonality Types, and Grid-Group Theory,” Sociological Perspectives 41, no. 1 (1998): 185–208; and D. Tan- nen, Talking From 9 to 5: Women and Men in the Workplace (New York: Avon Books, 1995).
OBJECTIVE 10.3 Explain how electronic communication affects the supervisor’s job.
8“Technology Can Enhance Employee Communications, Help Attract and Retain Workers,” Employee Benefit Plan Review, June 2000, 24–28.
The fact that written communications provide better documentation than the spoken word is both a plus and a minus. On the plus side, written documents provide a reliable “paper trail” for decisions or actions that are later called into question. They also reduce ambiguity for recipients. On the nega- tive side, obsessive concern with documenting everything “in writing” leads to risk avoidance, decision paralysis, and creation of a highly politicized work environment. At the extreme, task accomplishment becomes subordinated to writing documents that “cover your rear” and make sure that no one person is held responsible for any questionable decision.
Although each of the leaders involved in these communications probably thought they were doing the right thing, the choices they made led to an outcome they weren’t expecting. What’s your impression of what took place in these scenarios? Did the leaders in each of these scenarios communicate effectively? Why or why not? For each of the scenarios, discuss what might have been a better way to communicate the message. What could other leaders learn from this about communication or miscommunication?
Continued
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Supervisors are increasingly using many of these technological advances. E-mail and voice mail allow people to transmit messages twenty-four hours a day. For important and complex communications, a permanent record of e-mail messages can be obtained by merely printing out a hard copy. Cellular phones have dramatically changed the role of the telephone as a communication device. Previously, telephone numbers were attached to physical locations, but now the phone number is attached to a mobile device. You can be in constant contact with employees, supervisors, and key organizational members regardless of where they are physically located. Networked communication allows you to monitor the work of employees whose jobs are done on computers in remote locations, to participate in electronic meetings, and to communicate with sup- pliers and customers on both interorganizational and intraorganizational networks.
WHAT ISSUES ARE CREATED BY INSTANT MESSAGING AND TEXT MESSAGING? A technology designed initially for conducting one-on-one personal chats has permeated the workplace. Many employees are choosing text-based instant messaging (IM) over phone calls and e-mail. IM is essentially the text version of a phone call. Immediate, streamlined, and real-time, it often serves as a backstop for e-mail problems.
How well do you know Net lingo?9 If you received an e-mail or text message with GFTD (gone for the day) written in it, would you know what that meant? What about NSFW, FYEO (for your eyes only), BTW (by the way), or BIL (boss is listening)? When an employee received an e-mail at work from a friend with an attached slideshow titled “Awkward Family Photos,” she clicked through it and saw some pretty unusual—and yes, awkward—photos. Looking back at the e-mail, that’s when she also saw the abbreviation “NSFW” written at the bottom. Not knowing what that was, she looked the abbreviation up on netlingo.com and verified it on internetslang.com (websites that translate Internet and texting abbreviations). Come to find out, she should have paid more attention to the abbreviation because NSFW stands for “not safe for work.”
Text-messaging shorthand is widespread in e-mails, text messages, and Tweets, so people need to be aware of what it means. At many workplaces, a working knowledge of Net lingo is becoming necessary. As employees use social media websites such as Twitter and Facebook and even text messaging to communicate with colleagues and customers, the shorthand abbreviations are often necessary to stay within message length limits. However, as the NSFW example illustrated, not knowing or even misunderstanding the lingo can lead to surprises, inappropriate responses, or miscommunications.
IM benefits businesses that work in teams or on projects because it enhances col- laboration. Be aware that along with time and cost savings, there are risks and down- sides to its use. Here are ten IM dos and don’ts:10
1. DO adopt a user policy containing at least general guidelines for IM between employees, customers, or business partners.
2. DON’T use IM to communicate confidential or sensitive information. Leave the IM for quick information about project status, meeting times, or a person’s whereabouts.
3. DO organize your contact lists to separate business contacts from family and friends to eliminate the possibility that a social contact could be included in a business chat with employees, customers, or business partners.
4. DON’T allow excessive personal messaging at work; instead urge that personal chats be done during breaks or the lunch hour or that the chats generate new cus- tomers or revenue to the business.
9S. Raposo, “Quick! Tell Us What KUTGW Means,” Wall Street Journal, August 5, 2009, D1+; and C. Tuna, “Corporate Blogs and Tweets Must Keep SEC in Mind,” Wall Street Journal, April 27, 2009, B4. 10M. Enbysk, “10 Tips for Using Instant Messaging for Business,” 2011, Microsoft Corporation, Microsoft Business, http://www.microsoft.com/business/en-us/resources/ArticleReader/website/default.aspx?Print=1& ArticleId=tipsforusinginstantmessagingforbusiness&fbid=W5j9HZ3WlNn (accessed May 24, 2011).
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5. DO be aware that instant messages can be saved and the record is not always wiped when users are done. Parties to conversations can copy and paste the chat onto a Notepad or Word document and some IM services allow users to archive entire messages. Be careful what is written, just as you would in an e-mail!
6. DON’T compromise the company’s liability or individual reputation by making statements that could damage personal, or company, integrity or credibility. Again, be careful about what is written.
7. DO be aware of virus infections and related security risks. Because most IM services allow file transfer with messages, learn about the organization’s quality of firewall protection and decide whether or not to restrict transferring files through IM.
8. DON’T share personal data or information through IM because the chat text is relayed to a Web server en route to your contact and IM providers or hackers can see it. Send critical info through an encrypted e-mail only.
9. DO keep instant messages simple by limiting the inquiry, getting to the point, and knowing when to say goodbye.
10. DON’T confuse contacts with a misleading user name or status; update status through- out the day so contacts know whether users are available for messages or offline.
HOW DOES NONVERBAL COMMUNICATION AFFECT YOUR COMMUNICATION? Some of the most meaningful communication is not spoken, written, or transmitted on a computer. This is nonverbal communication. A loud siren or a red light at an intersection tells you something without words. When you are conducting a training session, you don’t need words to tell you that employees are bored when their eyes get glassy or they fall asleep. Similarly, generally you can tell by body language and verbal intonations whether the boss is angry, upbeat, anxious, or distracted.
Body language refers to gestures, facial configurations, and other movements of the body. Narrowed eyes, a clenched jaw, or a beet-red face, for example, say something different from a smile. Hand motions, facial expressions, and other gestures can com- municate emotions or temperaments such as aggression, fear, shyness, arrogance, joy, and anger.11
Verbal intonation refers to the emphasis one gives to words or phrases. To illustrate, consider the supervisor who asks a colleague a question. The colleague replies, “What do you mean by that?” The supervisor’s reaction will vary, depending on the tone of the colleague’s response. A soft, smooth tone creates a different meaning from one that is abrasive and puts a strong emphasis on the last word. Most of us would view the first intonation as coming from someone who sincerely seeks clarification, whereas the sec- ond suggests the person is aggressive or defensive.
Because the nonverbal component is likely to carry the greatest impact, the fact that every oral communication also has a nonverbal message cannot be overemphasized. Most of us know that animals respond to how we say something rather than what we say. Apparently, people aren’t much different.
WHAT IS THE GRAPEVINE? The grapevine is active in almost all organizations. In fact, studies typically find that the grapevine is the means of communication by which most operative employees first hear about important changes introduced by organizational leaders. It rates ahead of all other formal sources.
Is the information that flows along the grapevine accurate? Sometimes, the conditions that foster an active grapevine need to be considered. Rumors have at least four purposes:
nonverbal communication Communication that is not spoken, written, or transmitted on a computer.
11M. Fulfer, “Nonverbal Communication: How to Read What’s Plain as the Nose . . . or Eyelid . . . or Chin . . . on Their Faces,” Journal of Occupational Excellence 20, no. 2 (Spring 2001), 19–38.
body language Gestures, facial configurations, and other movements of the body that communicate emotions or tempera- ments such as aggression, fear, shy- ness, arrogance, joy, and anger.
verbal intonation The emphasis an individual gives to words or phrases through speech.
grapevine The means of communication by which most operative employees first hear about important changes introduced by organizational leaders; the rumor mill.
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to structure and reduce anxiety; to make sense of limited or fragmented information; to serve as a vehicle to organize group members, and possibly outsiders, into coalitions; and to signal a sender’s status (“I’m an insider, and you’re not”) or power (“I have the power to make you an insider”). Studies have found that rumors emerge in response to situations that are important to us, where there is ambiguity, or under conditions that arouse anxiety. Work situations frequently contain these three elements, and that’s why rumors flourish in organizations. The secrecy and competition that typically prevail in large organizations— around such issues as the appointment of new bosses, relocation of offices, realignment of work assignments, and layoffs—create conditions that encourage and sustain rumors on the grapevine. A rumor will persist either until the wants and expectations creating the uncertainty underlying the rumor are fulfilled or until the anxiety is reduced.
One of the most famous studies of the grapevine was conducted by management researcher Keith Davis who investigated the communication patterns among 67 manage- rial personnel.12 The approach he used was to learn from each communication recipient how he or she first received a given piece of information, then trace it back to its source. It was found that, while the grapevine was an important source of information, only 10 percent of the recipients acted as liaison individuals (that is, passed the information on to more than one other person). For example, when one recipient decided to resign to enter the insurance business, 81 percent of the other recipients knew about it, but only 11 percent transmitted this information to others. At the time, this study was interesting because of what it found, but more importantly because of what it showed about how the communication network functioned.
We can conclude that the grapevine is an important part of any group’s or organi- zation’s communication system and well worth understanding. Moreover, it will never be eliminated, so supervisors should use it in beneficial ways. Given that only a small set of employees typically pass information to more than one other person, you can analyze grapevine information and predict its flow. Certain messages are likely to fol- low predictable patterns. Consider using the grapevine informally to transmit informa- tion to specific individuals by planting messages with key people who are active on the grapevine and are likely to find a given message worthy of passing on.
The grapevine is also valuable for identifying issues that employees consider impor- tant as well as issues that create anxiety among them. It acts as both a filter and a feed- back mechanism, picking up issues employees consider relevant, and planting messages employees want passed on to those “running” the organization. For instance, if the grapevine is hopping with a rumor of a mass layoff, and if you know the rumor is totally false, the message still has meaning. It reflects the fears and concerns of employees and, hence, should not be ignored.
Electronic communication affects everything, and the grapevine is no exception. Cor- porate blogs are reshaping the grapevine. Blogs are used internally to disseminate informa- tion to employees or externally to aid in marketing and public relations; corporate blogs are being used to reach corporate goals. Blogs display information in reverse chronological order, allowing participants to ask questions, make comments, and receive comments from a variety of sources in a logical evolving fashion, similar to an ongoing conversation around the water cooler. Because the blog is available to a wide audience, many organizations institute a code of ethics that is applied to all postings. Internal blogs allow individuals in multiple locations and time zones to participate in discussions of concern to employees and management so that the blog becomes an electronic grapevine!13
12S. Baker, “Putting a Price on Social Connections,” BusinessWeek Online, April 8, 2009; and K. Davis, “Management Communication and the Grapevine,” Harvard Business Review, September–October 1953, 43–49. 13“Corporate Blog,” Wikipedia, June 18, 2008, en.wikipedia.org/wiki/Corporate_blog; “Is Blogging Really Good for My Company? Or Just a Buzz Word?” Intra Focus, January 18, 2007, intrafocus.wordpress. com/2007/01/18/is-blogging-really-good-for-my-company-or-just-a-buzz-word (accessed March 4, 2017); “GM Blogger’s Code of Ethics,” GM FastLane Blog, June 18, 2008, fastlane.gmblogs.com/about.html (accessed June 19, 2008); and J. Sessum, “Why CEOs Should Blog,” Global PR Blog Week 2.0, September 19, 2005, www.globalprblogweek.com/2005/09/19/sessum-why-ceos-should-blog (accessed June 19, 2008).
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Barriers to Effective Communication As noted previously, the goal of perfect communication is to transmit a thought or idea from a sender to a receiver so it is perceived by the receiver exactly the same as it was envisioned by the sender. That goal is almost never achieved because of distortions and other barriers. In this section, we will describe some of the more serious barriers that hinder effective communication (see Exhibit 10-2). In the following section, we will offer some suggestions for how to overcome these barriers.
HOW DOES LANGUAGE AFFECT COMMUNICATION? Words mean different things to different people. Age, education, and cultural back- ground are three of the most obvious variables that influence the language people use and the definitions they give to words. In an organization, employees usually come from diverse backgrounds. Furthermore, horizontal differentiation creates specialists who develop their own jargon or technical language. In large organizations, members are often widely dispersed geographically, and those in each locale use terms and phrases that are unique to their area. Vertical differentiation can also cause language problems. For instance, differences in the meaning of words such as incentives and quotas occur at different levels of managerial personnel. Senior managers, for example, often speak about the need for incentives and quotas. Yet these terms have been found to imply manipulation and create resentment among supervisors.
Although we may speak the same language (e.g., English), our use of that lan- guage is far from uniform. Knowledge of how each of us modifies the language would minimize communication difficulties. The problem is that you don’t know how various employees, peers, superiors, customers, and others with whom you interact have modi- fied the language. A sender tends to assume the words and terms chosen have the same meaning to the receiver as they do to the sender. This is often incorrect, and creates communication difficulties.
OBJECTIVE 10.4 List barriers to effective communication.
Exhibit 10-2 Barriers to effective communication.
Language
Emotions
Listening Habits
Lack of Feedback
Perception
Role Requirements
Information Medium
Lack of Honesty
The Message as Envisioned by
the Sender
The Message as Interpreted by the Receiver
The Barriers
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WHAT DID YOU SAY? Most of us hear, but we don’t listen! Hearing is merely picking up sound vibrations. Listening is making sense of what we hear and requires paying attention, interpreting, and remembering what is being said.
Many of us are poor listeners, and it suffices to say that if you don’t have good listening skills, you’re not going to get the full message as the sender meant to convey it. We share common flaws regarding listening. We get distracted and end up hearing only parts of a message. Instead of listening for meaning, we listen to determine whether we agree or disagree with what’s being said. We begin thinking about our response to what’s being said rather than listening for the complete message. Each of these flaws in listening contributes to messages being received differently from what the sender intended.
DID YOU GET MY MESSAGE? Effective communication means the transference and understanding of meaning. Feed- back lets you know whether someone has received your message and comprehended it in the way that you meant. When you request that each member of your staff submit a specific report, receipt of the report is feedback. Likewise, when your instructor tests you on the material in this book, you’re getting feedback on your understanding of the material. Lack of feedback creates the potential for inaccuracies and distortions.
DO YOU SEE WHAT I SEE? Your attitudes, interests, past experiences, and expectations determine how you orga- nize and interpret your surroundings. This explains how you can look at the same thing as someone else and perceive it differently (see Exhibit 10-3). In the communication process, the receiver selectively sees and hears messages based on their background and personal characteristics. They also project their interests and expectations into com- munications when interpreting them. Because senders and receivers of communications each bring their own set of perceptual biases, the messages they seek to transfer often are subject to distortions.
Exhibit 10-3 What do you see—an old woman or a young lady?
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WHAT DO ROLES HAVE TO DO WITH COMMUNICATION? People in organizations play roles. They engage in behavior patterns that go with the positions they occupy in the organization. Supervisory jobs come with role identities. Supervisors know they are supposed to be loyal to and defend their boss and the orga- nization. Union leaders’ roles require loyalty to union goals such as improving employee security. Marketing roles demand efforts to increase sales, whereas the roles of people working in the credit department emphasize minimizing losses from bad debts.
As organizations impose different role requirements on different members, they create communication barriers. Each role comes with its own jargon that sets the role off from others. Additionally, fulfilling role requirements often requires individuals to selectively interpret events. People in different roles often have difficulty communicating with each other because they hear and see the world consistent with their role requirements. Market- ing people say they want to “increase sales.” So do the people in the credit department, except the marketing people want to sell everything to anybody, whereas those in the credit department want to sell only to those who are creditworthy. Labor and company representatives sometimes have difficulty negotiating because their roles encompass dif- ferent language and interests. Many internal communication breakdowns in organizations are merely individuals enacting behaviors consistent with the roles they are playing.
IS THERE A PREFERRED INFORMATION MEDIUM? The amount of information transmitted in a face-to-face conversation is considerably greater than that received from a flyer posted on an organization’s bulletin board. The former offers multiple information cues (words, posture, facial expressions, gestures, intonations), immediate feedback, and the personal touch of “being there” that the flyer doesn’t. All media differ in the richness of information they transmit. Exhibit 10-4 illus- trates a hierarchy of information richness. The higher a medium rates in richness, the
roles Behavior patterns that correspond to the positions individuals occupy in an organization.
richness of information A measure of the amount of informa- tion that is transmitted based on multiple information cues (words, posture, facial expressions, gestures, intonations), immediate feedback, and the personal touch.Comprehension Check 10-1
1. Effective communication does not include:
a. transference of meaning. b. agreement. c. a sender and a receiver. d. feedback.
2. The conversion of a message into symbolic form is commonly referred to as:
a. the message. b. feedback. c. encoding. d. a symbol.
3. The emphasis one gives to words or phrases is called:
a. verbal intonation. b. body language. c. the grapevine. d. feedback.
4. Which one of the following is not regarded as a barrier to effective communication? a. Agreement b. Language c. Perception d. Emotions
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more information it is capable of transmitting. If the message is ambiguous and com- plicated, the sender should rely on a rich communication medium.
High-performing supervisors tend to be media sensitive, and their selection of a com- munication channel targets the use of a rich medium to overcome ambiguity in their message. Using face-to-face meetings, as well as opportunities arising from supervising by walking around, supervisors are engaging in rich communication with employees. Rich- ness comes from the ability of the channel to handle multiple cues at the same time while providing rapid feedback in a personal manner. Face-to-face meetings, videoconferences, and phone conversations provide supervisors the opportunity to maximize the information they transmit, and the medium is especially appropriate for messages needing great clarity.
If you want to share with your employees a major new product line that your com- pany will be introducing—and that will affect everyone in your department—your com- munication is more likely to be effective in a face-to-face departmental meeting than through use of a memo. Bulletins, memos, prerecorded speeches, and e-mail lack the
richness of personal communication, but they are effective in transmitting routine messages with a minimum of ambiguity. Modest changes in tomor- row’s departmental production schedule can be effectively communicated in a memo or with an e-mail. Unfortunately, people in organizations don’t always match the medium to the message, and thereby create communication problems.14
HOW DOES HONESTY AFFECT COMMUNICATION? A good deal of what is passed off as “poor com- munication” is nothing other than individuals pur-
posely avoiding honesty and openness. To avoid confrontations and hurting others’ feelings, we frequently engage in practices such as conveying ambiguous messages, say- ing what we think others want to hear, or cutting off communication altogether.
Some people run from confrontation. They want everyone to like them. As such, they avoid communicating any messages they think might be displeasing to the
14S. Robbins and T. Judge, Organizational Behavior, 13th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 367–368.
Exhibit 10-4 Hierarchy of information richness.
Leanest Simple Clear
Richest Complex/
Ambiguous
Level of Richness
Type of Message
Information Medium
Face-to-face talk
Telephone
Memos, letters
Flyers, bulletins, general reports
Iakov Filimonov/Shutterstock
Doctors and nurses need to adjust their language constantly. Using medical terminology is required when communicating with other healthcare profession- als but is usually not appropriate when talking to a patient unless accompanied by an explanation in “lay terms.”
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receiver. What they end up doing is increasing tension and further hindering effective communication.
How the receiver feels at the time of receipt of a message will influence how they interpret it. The same message received when you’re angry or distraught is likely to be interpreted differently when you’re in a neutral disposition. Extreme emotions such as jubilation or depression are most likely to hinder effective communication. In such instances, we are most prone to disregard our rational and objective thinking processes and substitute emotional judgments. These are also the times we’re most likely to use inflammatory words or language we later regret.
HOW CAN YOU IMPROVE YOUR COMMUNICATION EFFECTIVENESS? A few barriers are part of organizational life and will never be fully eliminated. Perceptual and role differences should be recognized as barriers, but are not easily corrected. How- ever, most barriers to effective communication can be overcome. The following provides some guidance:
Think First Think before you speak! Before you speak or write, ask yourself “What message am I trying to convey?” Then ask “How can I organize and present my mes- sage so that it will achieve the desired outcome?” Most of us follow the “Think first” dictum when writing a message. The formal and deliberate process of writing encour- ages thinking through what we want to say and how best to say it. The concept of working on a draft implies that the written document will be edited and revised. Few of us give anywhere near the same attention to our verbal communications. That’s a mistake. Before you speak, make sure you know what you want to say. Then, present your message in a logical and organized fashion so it is clear and can be understood by your receiver.
Constrain Emotions It is naive to assume you always communicate in a fully rational manner. You know emotions can severely cloud and distort the transference of meaning. If you are emotionally upset over an issue, you’re more likely to misconstrue incoming messages and fail to clearly and accurately express your outgoing messages. We recom- mend you discontinue further communication until you have regained composure.
Learn to Listen Most of us are poor listeners, but that doesn’t mean we can’t improve our listening skills. Some specific behaviors have been found to be related to effective listening. We will present those skills in the section titled “Active Listening” at the end of this chapter.
Tailor Language to the Receiver Choose words and structure your messages in ways that will be clear and understandable to the receiver. Simplify your language and consider the audience to whom the message is directed so that the language is tailored to the receiv- ers. Remember, effective communication is achieved when a message is both received and understood (see “News Flash! Twitter . . . Social Benefit or Social Disaster?” later in this chapter). Understanding is improved by simplifying the language used in relation to the audience intended. For example, a nursing supervisor should always communicate to the staff in clear and easily understood terms. However, the language used in messages to a patient should be purposely different from that used with the medical staff. Jargon can facilitate understanding when used with those who know what it means, but it can cause innumerable problems when used outside that group.
Match Words and Actions Actions speak louder than words. Watch your actions to make sure they align with and reinforce the words that go along with them. Because nonverbal messages carry a great deal of weight, effective supervisors watch their nonverbal cues to ensure those cues also convey the message desired. Remember that as a supervisor, your employees will look at your behavior as a model. If your verbal comments are backed
OBJECTIVE 10.5 Describe techniques for overcoming communication barriers.
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TWITTER . . . SOCIAL BENEFIT OR SOCIAL DISASTER?
NEWS FLASH!
Tweets and twittering. Prior to 2006, the only definition we would have known for these words would have involved birds and the sounds they make. Now, practically everyone knows Twitter is also an online service—with 500 million registered users, 400 million tweets daily, and 1.6 billion daily search queries—used to trade short messages via the Web, cell phones, and other devices. According to its founders (Jack Dorsey, Biz Stone, and Evan Williams), Twitter is many things: a messaging ser- vice, a customer-service tool to reach customers, real-time search, and microblogging. And as the numbers show, it’s quite popular!
One place where Twitter has caught on is the sports world, especially in college sports. For instance, Les Miles, head football coach at Loui- siana State University, calls himself “a Twittering kind of guy.” He understands the power of instant communication. Miles wants to stay ahead of the competition, especially when it comes to recruiting and keeping fans informed. He’s discovered that tweeting is an easy and fun way to communicate quick tidbits of information to fans, alumni boost- ers, and other interested people who subscribe. And it’s a convenient way for football recruiting prospects to communicate with the coaching staff. On game days, he tweets (via a staff assistant) before games, at halftime, and after games. If it’s okay for coaches to tweet, what about the student athletes? That’s often a different story.
Many universities and college coaches are monitoring and, in some cases, banning athletes’ use of social media. A potentially precarious issue can arise if an athlete tweets some comment that could put the university in a negative light, offend boosters, or possibly violate an NCAA regulation. Here are a few tweeting slip-ups: A Western Ken- tucky running back was suspended after he tweeted critical comments about the team’s fans; the NCAA pulled fifteen football scholarships after an inves- tigation based on a player’s tweet; and a Lehigh University wide receiver was suspended for re- tweeting a racial slur. We even saw how tweeting backfired during the London Olympics. The first “casualty”—a Greek triple jumper—was banned from the Games over some racially charged tweets. That seems to be good reason for the managers
(i.e., coaches and administrators) of these pro- grams to attempt to control the information flow.
But is banning the answer? Some analysts say no. They argue that those setting up rules and regu- lations don’t understand what social media is all about or the value it provides as a marketing and recruiting tool, and they argue that it’s necessary to understand First Amendment rights (part of which includes freedom of speech). Rather than banning the use of social media, many universities are hir- ing companies to monitor athletes’ posts. This, however, requires athletes to give access to their accounts, which some call an invasion of privacy.
Sources: Based on R. W. Ahrens, “Tweets Per Day,” USA Today, March 20, 2013, p. 2A; M. Lopresti, “Elimination by Twitter,” USA Today, July 26, 2012, p. 1C; K. Paulson, “College Athlete Tweet Ban? Free Speech Sacks That Idea,” USA Today, April 16, 2012, p. 9A; P. Thamel, “Tracking Twitter, Rais- ing Red Flags,” New York Times Online, March 30, 2012, http://www.nytimes.com/2012/03/31/sports/ universities-track-athletes-online-raising-legal-concerns. html?pagewanted=2&n=Top/Reference/Times%20Top- ics/Organizations/T/Twitter?ref=twitter&_r=0 (accessed June 3, 2014); L. Dugan, “Twitter To Surpass 500 Million Registered Users on Wednesday,” www.mediabistro .com, February 21, 2012, http://www.mediabistro. com/alltwitter/500-million-registered-users_b18842 (accessed June 3, 2014); C. Ho, “Companies Tracking College Athletes’ Tweets, Facebook Posts Go After Local Universities,” WashingtonPost Online, October 16, 2011, http://www.washingtonpost.com/business/capit- albusiness/companies-tracking-college-athletes-tweets- facebook-posts-go-after-local-universities/2011/10/10/ gIQAyHZ9oL_story.html (accessed June 3, 2014); D. Rovell, “Coaches Ban of Twitter Proves College Sports Isn’t About Education,” CNBC Sports Busi- ness Online, August 8, 2011, http://www.cnbc.com/ id/44058540 (accessed June 3, 2014); Staff of Corporate Executive Board, “Corporate Confidential: How Twit- ter Changes Everything,” BusinessWeek Online, Septem- ber 4, 2009, http://www.businessweek.com/managing/ content/sep2009/ca2009094_460379.htm (accessed June 3, 2014); S. Johnson, “How Twitter Will Change the Way We Live,” Time, June 15, 2009, pp. 30–37; J. Swartz, “A World That’s All a-Twitter,” USA Today, May 26, 2009, pp. 1B+; and K. Whiteside, “College Coaches Are Chirping About Twitter!” USA Today, April 29, 2009, pp. 1C+.
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up by your actions, you will gain credibility and build trust. But if you say one thing and do another, your employees will ignore what you say and model their behavior on what you do. At the extreme, people stop listening because they no longer believe that your words have credibility.
Use Feedback Many communication problems can be directly attributed to misun- derstandings and inaccuracies. These are less likely to occur if you use feedback. This feedback can be verbal or nonverbal. If you ask someone, “Did you understand what I said?” the response represents feedback. But feedback should include more than yes and no answers. You can ask a set of questions about a message to determine whether the message was received as intended. Better yet, you can ask the receiver to restate the message in their own words. If you don’t hear what was intended, understanding and accuracy should be enhanced.
Feedback also includes subtler things than asking direct questions or summarizing messages. General comments can give you a sense of the receiver’s reaction to a mes- sage. Of course, performance appraisals, salary reviews, and promotions also represent forms of feedback. Feedback does not have to be conveyed in words. The sales supervi- sor who sends out a staff directive describing a new monthly sales report that all sales personnel will need to complete receives feedback if some of the salespeople fail to turn in the new report. This feedback suggests that they need to clarify further the initial directive. Similarly, when you give a speech to a group of people, watch their eyes and look for other nonverbal clues to tell you whether they are getting your message. This may explain why television performers on comedy shows prefer to tape their programs in front of a live audience. Immediate laughter and applause—or their absence—convey to the performer whether the message is getting across as intended.
Participate in Assertiveness Training Many people have no trouble asserting them- selves. Being open and honest comes naturally to them. Some, in fact, are too assertive. They cross the line and become aggressive and abrasive. Other individuals suffer from a constant fear of upsetting others and fall back on avoidance or ambiguous communi- cation when they need to be open and assertive. Such people would benefit from partici- pation in assertiveness training. An effective supervisor needn’t always be assertive but should be capable of being so when it’s needed.
Assertiveness training is designed to make people more open and self-expressive. They confront issues in a straightforward manner. They say what they mean, with- out being rude or thoughtless. Individuals who take assertiveness training learn verbal and nonverbal behaviors that enhance their ability to communicate openly and unam- biguously. These behaviors include direct and unambiguous language; the use of “I” statements and cooperative “we” statements; a strong, steady, audible voice; good eye contact; facial expressions matched to the message; an appropriately serious tone; and a comfortable but firm posture.
Help Immigrant Workers Assimilate into the Culture Immigrant workers have a respon- sibility to learn English and adapt to the cultural norms in the US workplace, but this can take time and employers can gain a lot by helping their workers bridge the cultural divide. Many employers, however, have the “sink or swim” attitude and expect immi- grant workers to figure things out for themselves. This does not work in many cases, and it is not a wise business decision. Employers benefit by investing in helping immigrant workers adapt to the workplace. When help is supplied by the employer, it results in increased productivity, higher performance, improved safety, greater trust, and more loyalty among workers. All of these things impact the bottom line in terms of higher business profits in the long term. Human resources professionals offer these tips for employers who want to enhance and retain their immigrant workforce:
■■ Explore the culture of your immigrant workforce. ■■ Be aware of ethnic diversity that exists among members of the same ethnic group.
assertiveness training A technique designed to make people more open and self-expressive, saying what they mean without being rude or thoughtless.
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■■ Show respect for the individual by learning about their culture as you get to know them.
■■ Orient new hires in a culturally appropriate manner. ■■ Establish a coworker mentor program to help new hires adapt to the workplace
culture. ■■ Don’t use workplace jargon or slang that may not be understandable to immigrants. ■■ Emphasize the importance of training materials and its usefulness to immigrant
employees. ■■ Always ask for a paraphrase of important instructions or a demonstration of a
procedure to verify that employees with limited English abilities understand their assignment.
■■ Do not be impatient with immigrant workers who have difficulty expressing themselves.
■■ Encourage employees and supervisors who are bilingual to become communication links or translators in the workplace.
■■ Build trust and loyalty among new immigrant employees by providing a safe envi- ronment at the work site to offer English-as-a-second-language courses.
■■ Establish in-house forums to help workers with transportation, credit issues, appli- cations, and tax forms.
■■ Establish cultural sensitivity training for native employees interested in learning more about the cultures of the immigrant workforce
■■ Advance qualified immigrants to positions of responsibility to show the immigrant workforce that opportunity for promotion exists within the organization.
■■ Read the INS Handbook for Employers to ensure you are up to date on immigration regulations and all required immigration employment forms.15
A Special Communication Skill: Active Listening Effective listening is active rather than passive. In passive listening, you’re like a tape recorder. You absorb the information given. If the speaker provides a clear message and makes their delivery interesting enough to keep your attention, you’ll probably get most of what the speaker is trying to communicate. But active listening requires you to “get inside” the speaker’s mind so you can understand the communication from their point of view. As you’ll see, active listening is hard work.16 You have to concentrate, and you have to want to fully understand what a speaker is saying (see the section titled “Active Listening” at the end of this chapter). Students who use active listening techniques for an entire lecture are as tired as their instructor when the lecture is over because they’ve put as much energy into listening as the instructor puts into speaking.
There are four requirements for active listening: You need to listen with (1) inten- sity, (2) empathy, (3) acceptance, and (4) a willingness to take responsibility for com- pleteness. Because listening presents the opportunity for the mind to wander, the active listener concentrates intensely on what the speaker is saying and tunes out thousands of miscellaneous thoughts (work deadlines, money, and personal problems) that create distractions. What do active listeners do with their idle brain time? They summarize and integrate what has been said! They put each new bit of information into the context of what has preceded it.
Empathy requires you to put yourself in the speaker’s shoes. Try to understand what the speaker wants to communicate rather than what you want to understand. Notice
15Based on: Charlotte-Mecklenburg Workforce Development Board, “Cultural and Language Barriers in the Workplace,” February 2002, https://efegroupb2011.wikispaces.com/file/view/clbpositionpaper.pdf (accessed March 4, 2017).
OBJECTIVE 10.6 List the requirements for active listening.
16R. B. Cousins, “Active Listening Is More Than Just Hearing,” Supervision 61, no. 9 (September 2000), 14.
active listening A technique that requires an individual to “get inside” a speaker’s mind to understand the communication from the speaker’s point of view.
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that empathy demands both knowledge of the speaker and flexibility on your part. Sus- pend your own thoughts and feelings and adjust what you see and feel to your speaker’s world. In that way, you increase the likelihood that you will interpret the message being spoken in the way the speaker intended.
An active listener demonstrates acceptance. You listen objectively without judg- ing content. This is no easy task. It is natural to be distracted by the content of what a speaker says, especially when you disagree with it. When you hear something you disagree with, you have a tendency to begin formulating mental arguments to counter what is being said. Of course, in doing so, you often miss the rest of the message. The challenge is to absorb what is being said and to withhold judgment on content until the speaker is finished.
The final ingredient of active listening is taking responsibility for completeness. That is, as an active listener, you do whatever is necessary to get the intended meaning from the speaker’s communication.17
The Importance of Feedback Skills Ask a supervisor about the feedback they give to employees, and you’re likely to get a qualified answer. If the feedback is positive, it’s likely to be given promptly and enthu- siastically. Feedback for improvement commonly referred to as negative feedback is often treated differently.18 Like most of us, supervisors don’t particularly enjoy com- municating bad news. They fear offending or having to deal with the receiver’s defen- siveness. The result is that feedback for improvement may be avoided, delayed, or distorted. The purposes of this section are to show you the importance of providing both positive feedback and feedback for improvement and to identify specific techniques to help make your feedback more effective.
WHAT’S THE DIFFERENCE BETWEEN POSITIVE FEEDBACK AND FEEDBACK FOR IMPROVEMENT? We said that supervisors treat positive feedback and feedback for improvement differ- ently. So, too, do receivers. You need to understand this fact and adjust your feedback style accordingly. Positive feedback is more readily and accurately perceived than is feedback for improvement. Furthermore, although positive feedback is almost always accepted, you can expect feedback for improvement to meet resistance. Why? The logi- cal answer appears to be that people want to hear good news and block out the rest. Positive feedback fits what most people wish to hear and already believe about them- selves. Does this mean, then, that you should avoid giving feedback for improvement? No! What it means is that you need to be aware of potential resistance and learn to use feedback for improvement in situations in which it’s most likely to be accepted. That is, feedback for improvement should be used when it’s supported by hard data—numbers, specific examples, and the like.
HOW DO YOU GIVE EFFECTIVE FEEDBACK? We have six specific suggestions to help you become more effective in providing feed- back. We discuss them here and summarize them in Exhibit 10-5.
17See, for instance, K. Fracaro, “Two Ears and One Mouth,” Supervision, February 2001, 3–5.
OBJECTIVE 10.7 Explain the behaviors necessary for providing effective feedback.
18See, for example, K. Leung, S. Su, and M. W. Morris, “When Is Criticism Not Constructive? The Roles of Fairness Perceptions and Dispositional Attributions in Employee Acceptance of Critical Supervisory Feedback,” Human Relations 54, no. 1 (September 2001), 1155; and C. A. Walker, “Saving Your Rookie Managers from Themselves,” Harvard Business Review 80, no. 4 (April 2002), 97–103.
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Focus on Specific Behaviors Feedback should be specific rather than general. Avoid such statements as, “You have a bad attitude” or “I’m really impressed with the good job you did.” They’re vague and, although they provide information, they don’t tell the receiver enough to correct the “bad attitude” or to know on what basis you concluded that a “good job” has been done so that the person knows what behaviors to repeat.
Keep Feedback Impersonal Feedback, particularly for improvement, should be descrip- tive rather than judgmental or evaluative. No matter how upset you are, keep the feed- back focused on job-related behaviors and never criticize someone personally because of an inappropriate action. Telling people they’re incompetent, lazy, or the like is almost always counterproductive. It provokes such an emotional reaction that the performance deviation itself is apt to be overlooked. When you’re criticizing, remember that you’re censuring job-related behavior, not the person. You might be tempted to tell some- one they are rude and insensitive (which might just be true); however, that’s hardly impersonal. It’s better to say something more specific, such as, “You’ve interrupted me three times with questions that weren’t urgent when you knew I was talking long- distance to a customer in Brazil.”
Keep Feedback Goal Oriented Feedback should not be given primarily to “dump” or “unload” on another person. If you have to provide feedback for improvement, make sure it’s directed toward the receiver’s goals. Ask yourself who the feedback is supposed to help. If the answer is essentially you—“I’ve got something I just want to get off my chest”—bite your tongue and hold the comment. Such feedback undermines your cred- ibility and lessens the meaning and influence of future feedback sessions.
Make Feedback Well-Timed Feedback is most meaningful to a receiver when there is a short interval between their behavior and the receipt of feedback about that behavior. For example, a new employee who makes a mistake is more likely to respond to sug- gestions for improving right after the mistake or at the end of the workday—rather than during a performance review session six months later. If you have to spend time recreating a situation and refreshing someone’s memory of it, the feedback you’re pro- viding is likely to be ineffective. Moreover, if you’re particularly concerned with chang- ing behavior, delays in providing timely feedback on the undesirable actions lessen the likelihood that the feedback will be effective in bringing about the desired change. Of course, making feedback prompt merely for promptness’s sake can backfire if you have insufficient information or if you’re otherwise emotionally upset. In such instances, “well-timed” could mean “somewhat delayed.”
Ensure Understanding Is your feedback concise and complete enough that the receiver clearly and fully understands your communication? Remember that every successful communication requires both transference and understanding of meaning. If feedback is to be effective, you need to ensure that the receiver understands it. Consistent with our discussion of listening techniques, you should have the receiver rephrase the content of your feedback to find out whether it fully captured the meaning you intended.
Exhibit 10-5 Suggestions for effective feedback.
• Focus on specific behaviors
• Keep feedback impersonal
• Keep feedback goal-oriented
• Make feedback well timed
• Ensure understanding
• Direct feedback for improvement toward
behavior that the receiver can control
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Direct Feedback for Improvement Feedback for improvement should be directed toward behavior the receiver can do something about. There’s little value in reminding a per- son of some shortcoming over which they have no control. For instance, to criticize an employee who’s late for work because she forgot to set her alarm clock is valid. To criticize her for being late for work when the subway she takes to work every day had a power failure, stranding her for ninety minutes, is pointless. There’s nothing she could have done to correct what happened—short of finding a different means of traveling to work, which may be unrealistic.
In addition, when feedback for improvement is given concerning something that the receiver can control, it might be a good idea to indicate specifically what can be done to improve the situation. This takes some of the sting out of the criticism and offers guidance to employees who understand the problem, but don’t know how to resolve it.
Comprehension Check 10-2
5. Active listening is best described as:
a. agreeing with what the sender communicates. b. asking lots of questions. c. concentrating on what’s being communicated. d. providing a lot of feedback.
6. The most crucial linkage in communications is:
a. agreement. b. constraining emotions. c. feedback. d. tailoring language to the receiver.
7. Which one of the following is not a recommendation on giving effective feedback? a. Keep feedback personal b. Focus on specific behavior c. Keep feedback goal-oriented d. Make feedback well timed
8. A technique to make people more open and self-expressive is called:
a. feedback training. b. assertiveness training. c. grapevine training. d. communications training.
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After reading this chapter, I can:
SUMMARY
Enhancing Understanding
1. Define communication and the communication pro- cess. Communication is the transference and under- standing of meaning. Effective communication, however, does not imply agreement. The communi- cation process begins with a communication sender (a source) who has a message to convey. The message is converted to symbolic form (encoding) and passed by way of a channel to the receiver, who decodes the message. To ensure accuracy, the receiver should pro- vide the sender with feedback as a check on whether understanding has been achieved.
2. Contrast formal and informal communication. For- mal communication addresses task-related issues and tends to follow the organization’s authority chain. Informal communication moves in any direction, skips authority levels, and is as likely to satisfy social needs as it is to facilitate task accomplishments.
3. Explain how electronic communication affects the supervisor’s job. Electronic communication allows supervisors to transmit messages twenty-four hours a day and stay in constant contact with department members, other supervisors, and key members of the organization regardless of where they are physically located. Networks also allow supervisors to partici- pate in electronic meetings and interact with key peo- ple outside the organization.
4. List barriers to effective communication. Barriers to effective communication include language differences, poor listening habits, lack of feedback, differences in perception, role requirements, poor choice of infor- mation medium, lack of honesty, and emotions.
5. Describe techniques for overcoming communication barriers. Techniques for overcoming communication barriers include thinking through what you want to say before communicating, constraining emotions, learning to listen, tailoring language to the receiver, matching words and actions, using feedback, and par- ticipating in assertiveness training.
6. List the requirements for active listening. The require- ments for active listening are: (1) intensity, (2) empa- thy, (3) acceptance, and (4) a willingness to take responsibility for completeness.
7. Explain the behaviors necessary for providing effective feedback. Behaviors that are necessary for providing effective feedback include focusing on specific behav- iors; keeping feedback impersonal, goal- oriented, and well-timed; ensuring understanding; and directing feedback for improvement toward behavior that the recipient can control.
and in terms of its effect on credibility and trust among the supervisor’s employees.
10-6. How can nonverbal messages be powerful com- municators? How can supervisors use nonverbal messages to their advantage?
10-7. What use, if any, can the grapevine serve? Provide a specific example.
10-8. Do you believe that supervisors can control the grapevine? Explain your position.
10-9. Contrast passive and active listening. 10-10. Why are feedback skills so important to a supervi-
sor’s success?
10-1. “Everything a supervisor does involves communicat- ing.” Build an argument to support this statement.
10-2. Why isn’t agreement necessarily a part of good communication?
10-3. When is a written communication preferable to an oral one? When is it not preferred?
10-4. Which type of communication method do you pre- fer to use at work when sending a message to some- one else? Why? Do you have the same preference when messages are being sent to you? Explain.
10-5. “Do as I say, not as I do.” Analyze this phrase in terms of supervisors being effective communicators,
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
2
5
3 4
6
7
8
9
10 11
12
15
1413
16
1
DOWNACROSS
2. the emphasis an individual gives to words or phrases in a speech 6. communication that is not spoken, written, or transmitted on a computer 7. the rumor mill in an organization 10. a receiver's translation of a sender's message 12. communication that addresses task-related issues 13. transference of meaning 16. training that focuses on making people more open and self-expressive
1. communication that moves in any direction and skips authority levels 3. a measure of the amount of information that is transmitted 4. a technique that requires an individual to concentrate on what is being said 5. information received by the sender from a receiver regarding a message that had been sent 8. gestures and other personal movements that communicate emotions or temperaments 9. the conversion of a message into symbolic form 11. the medium by which a message travels 14. information that is being sent 15. behavior patterns that correspond to the positions people occupy in an organization
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Developing Your Supervisory Skills
• How Good Are My Listening Skills? • What’s My Face-to-Face Communications Style?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
GETTING TO KNOW YOURSELF
Situiaton Preliminary interview (in a college placement center) for a marketing management trainee position with Hershey Chocolate. A brief job description and Lee’s résumé follow.
Abbreviated Résumé Name: Lee Pleasant Education: B.S. in Business; GPA 3.6 (out of 4.0). Major: Marketing. Minor: Economics. Work Experience: Worked fifteen hours a week during semesters and full-time during summer vacations at Barnes
& Noble bookstore. Honors: Dean’s list (ranked in top 5 percent of business class). Other: Intercollegiate tennis team (two-year letter winner); vice-president, College Marketing Club.
directly out of college, and went through the company’s marketing management training program.
The third person in the group will take the role of Lee Pleasant. Lee is a college senior, graduating at the end of the semester.
Note to the role players: The role descriptions in this exercise establish each character. Follow the guidelines. Don’t make up or change the facts you’re given, but try to involve yourself in the character within the guidelines.
10-11. An Experiential Exercise: Practicing Listening Skills
BUILDING A TEAM
This is a role-play exercise to practice listening skills. Break into groups of three. One person will be the observer. They will evaluate the two other role players and provide feedback on their listening skills using the eight points listed in the section titled “Active Listening,” which follows.
The second person will take the role of Chris Humphries. Chris is a regional sales supervisor with Her- shey Chocolate who is spending the month recruiting on college campuses. Chris joined Hershey three years ago,
Abbreviated Job Description ■■ Distributes sales promotion materials ■■ Stocks and arranges shelves in stores ■■ Takes sales orders ■■ Follows up on complaints or problems ■■ Completes all necessary sales reports
Title: Marketing Management Trainee—Chocolate Division Reports To: Regional Sales Supervisor Duties and Responsibilities: Completes formal training program at headquarters in Hershey, Pennsylvania. After training:
■■ Calls on retail stores ■■ Introduces new products to store personnel
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begin the exercise. You have up to fifteen minutes. When completed, the observer should provide feedback to both of the role players.
Stop! The observer should read both Chris’s and Lee’s roles. The people playing Chris and Lee, however, should read only their own roles. After all have read their appropriate roles,
office. The compensation to start is $37,500 a year plus use of a company car. You are to improvise other infor- mation as needed. Examples of questions you might ask include the following: Where do you expect to be in five years? What’s important to you in a job? What courses did you like best in college? Which did you like least? What makes you think you would do well in this job?
Chris Humphries’s Role You will be interviewing approximately 150 students over the next six weeks to fill four trainee positions. You’re looking for candidates who are bright, articulate, ambi- tious, and have management potential. The Hershey train- ing program is eighteen months long. Trainees will be sales representatives calling on retail stores and will spend the first six weeks taking formal classes at Hershey’s head
during the summers. This is your first interview with Her- shey, but you’re very interested in their training program. Fill in any voids in information as you see fit.
Lee Pleasant’s Role Review your résumé. You are a very good student whose previous work experience has been limited to selling in retail stores part-time while going to school and full-time
ACTIVE LISTENING
Active listening requires you to concentrate on what is being said. It’s more than just hearing the words—it involves a concerted effort to understand and interpret the speaker’s message.
STEPS IN PRACTICING THE SKILL
STEP 1: Make eye contact. How do you feel when someone doesn’t look at you when you’re speaking? If you’re like most people, you’re likely to interpret this behavior as aloofness or disinterest. Making eye con- tact with the speaker focuses your attention, reduces the likelihood that you will become distracted, and encourages the speaker.
STEP 2: Exhibit affirmative nods and appropri- ate facial expressions. The effective listener shows interest in what is being said through nonverbal sig- nals. Affirmative nods and appropriate facial expres- sions, when added to good eye contact, convey to the speaker that you’re listening.
STEP 3: Avoid distracting actions or gestures that sug- gest boredom. The other side of showing interest is avoiding actions that suggest your mind is somewhere else. When listening, don’t look at your watch, shuffle papers, play with your pencil, or engage in similar distractions. They make the speaker feel that you’re bored or disinterested or indicate that you aren’t fully attentive.
STEP 4: Ask questions. The critical listener analyzes what they hear and asks questions. This behavior
provides clarification, ensures understanding, and assures the speaker that you’re listening.
STEP 5: Paraphrase using your own words. The effective listener uses phrases such as, “What I hear you saying is . . . ” or “Do you mean . . . ?” Paraphras- ing is an excellent control device to check on whether you’re listening carefully, and to verify that what you heard is accurate.
STEP 6: Avoid interrupting the speaker. Let the speaker complete their thought before you try to respond. Don’t try to second-guess where the speak- er’s thoughts are going. When the speaker is finished, you’ll know it.
STEP 7: Don’t overtalk. Most of us would rather speak our own ideas than listen to what someone else says. Talking might be more fun and silence might be uncomfortable, but you can’t talk and listen at the same time. The good listener recognizes this fact and doesn’t overtalk.
STEP 8: Make smooth transitions between the roles of speaker and listener. The effective listener makes transitions smoothly from speaker to listener and back to speaker. From a listening perspective this means concentrating on what a speaker has to say and practicing not thinking about what you’re going to say as soon as you get your chance.
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acronyms and describe what they mean. How and when would these acronyms be used appropri- ately? What barriers might these acronyms create for a user? A receiver? Someone unfamiliar with texting?
10-12. Develop a two to three-page report describing what you can do to improve the likelihood that your verbal communications will be received and understood as you intended them to be.
10-13. List the common communication shortcuts you use in text messaging or e-mails. Identify fifteen
COMMUNICATING EFFECTIVELY
two hours of production time to replace a unit that could have waited for maintenance.”
Paul is shocked. He thought he had done the right thing. “Look, Sam,” he says, “you told me to get rid of the problem and I did. You didn’t say anything about preven- tive maintenance or not stopping the line.”
Sam realizes that the discussion is beginning to get out of hand. “Look, let’s stand back and quietly discuss this matter.” With that, the two men start discussing the matter from the beginning.
RESPONDING TO THE CASE
10-14. Analyze the communication between the lead supervisor, Sam Case, and the new supervisor in Section A, Paul Banks. What did Sam do wrong?
10-15. How could the problem have been prevented? In your answer, discuss the requirement for active listening.
10-16. Discuss the barriers to effective communication. What should Sam and Paul learn from this experi- ence that will make them better communicators and more effective supervisors?
■➤ Case 10-B: A Pinch of This and a Dash of That How do you combine two packaged-food companies, both with well-known household brand names, and make it work? That’s the challenge managers at General Mills faced when it acquired Pillsbury. The company’s chief learning officer, Kevin Wilde, said, “Let’s get the best out of both of our marketing organizations. And let’s not stop there.” So they decided to identify, share, and integrate the best practices from both companies. And employee teams played a major role in how the company proceeded.
An intensive training program called “Brand Cham- pions” was created and launched. The program was
■➤ Case 10-A: Communication Problems at Ozark Corporation
THINKING CRITICALLY
March is the busiest time of the year at Ozark Corporation. Thus, when the production line in Section A has trouble for the second time in a week, Sam Case decides he’d better get it straightened out immediately. As the lead supervisor, Sam is directly in charge of Sections A and B.
Sam calls in Paul Banks, the new supervisor in Sec- tion A. Their conversation is as follows:
Sam: Paul, we seem to be having some problems in your section. The line has been down twice in the last three days. This is our busiest time of the year. We can’t afford to have recurring problems of this type. I want you to stop that quality-control project I have you working on, find out what the problem is out on the line, and get rid of it.
Paul: Okay, I’ll get out there, find out what’s causing the problem, and get rid of it.
Sam: Fine.
A quick check of the line reveals that there was a problem with the automatic control unit. Paul checks and finds that it would take four hours to replace the unit. “If you put in a new one,” the maintenance man tells him, “you won’t have a problem with it for at least sixteen months. It’s up to you. I’ll do whatever you tell me.” Paul tells the man to replace the automatic control unit.
By late afternoon, the new unit is installed and the line is operating at full speed. However, the next morn- ing, after Sam receives the previous day’s production fig- ures, he calls Paul in. “What happened in your section? I thought you were going to fix the problem.”
“I did,” Paul tells him. “The automatic control unit was giving us trouble, so I replaced it.”
Sam’s voice indicates that he is not happy with this decision. “You pulled the unit in the middle of a workday? Why didn’t you wait until the shift was over and have the unit pulled then? You could have done preventive main- tenance to get through the rest of the day. You gave up
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cake mixes, but less so for cookie mixes. Inspired by input from the group, the cookie-mix team decided to go after scratch bakers. (These are people who bake from scratch rather than from a boxed mix. As one person said, they were “taking on grandma.”) The cookie mixes were refor- mulated, and now the brand owns 90 percent of the dry cookie mix category.
RESPONDING TO THE CASE
10-17. What barriers were there to communication between the employees of General Mills and Pillsbury?
10-18. Although not a “different language” per se, how might the language of the functional areas within the organization have interfered with communication?
10-19. How did the employee roles from the combined organizations impact the communication process?
10-20. As a supervisor, what suggestions would you offer to improve the communication between groups?
Sources: Based on L. Gratton and T. J. Erickson, “8 Ways to Build Collaborative Teams,” Harvard Business Review, November 2007, 100–109; and J. Gordon, “Building Brand Champions,” Training January/February 2007, 14–17.
designed not just for marketing specialists, but for all employees from different functional areas who worked on particular brands. These cross-functional teams attended the in-house training together as a unified group. Accord- ing to one of the program developers, Beth Gunderson, specific benefits of including these teams soon became evident. “A person from human resources, for instance, would ask a provocative question precisely because she wasn’t a marketer. And you’d see the look on the marketers’ faces: Whoa, I never thought of that.” It helped employees understand and appreciate different perspectives.
Another benefit of including people from different functions was improved communication throughout the company. People were no longer griping about what other functional areas were doing. Employees began to under- stand how the other functional areas worked and how each area’s contribution was important to the overall suc- cess of the company.
The training program has been so successful that now General Mills’ production plants have asked for a mini- version of the course. “They want to understand the lan- guage marketers speak and why things are done as they are.” Another example of how successful the program has been follows. Betty Crocker is well-known for packaged
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■■ cohesiveness
■■ cross-functional team
■■ emergent leader
■■ formal group
■■ group
■■ informal group
■■ problem-solving team
■■ self-managed work team
■■ social loafing
■■ team
■■ virtual team
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Developing Groups11 C
H A
P T
ER
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11-1. Contrast a group and a team.
11-2. Define norms.
11-3. Explain the relationship between cohesiveness and group productivity.
11-4. Describe who is likely to become an emergent leader in an informal group.
11-5. Explain what a supervisor can do when group norms are hindering department performance.
11-6. Identify three categories of teams.
11-7. List the characteristics of real teams.
11-8. List actions a supervisor can take to improve team performance.
11-9. Describe the role of teams in continuous-improvement programs.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
Cathy Yeulet/123RF.com
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Responding to a Supervisory Dilemma
For more than six decades, Toy- ota Motor Corporation has been a shining example of employee collaboration and teamwork. Although many companies proudly proclaim their team cul- ture, at Toyota, the endorsement seems well-deserved and sincere.
Teamwork is one of Toyota’s core values, along with trust, continuous improvement, long- term thinking, standardization, innovation, and problem solv- ing. In addition, four management principles (the 4P model) guide employees: problem solving, people and partners, process, and philosophy. The idea behind these principles is that “Good Thinking Means Good Product.” Another interesting detail about Toyota is its belief that efficiency alone cannot guarantee suc- cess. The company recognizes that teams of employees are more than several pairs of hands but also repre- sent chie—the wisdom of experience. For supervisors the question is, “How does Toyota’s culture reflect its emphasis on teamwork?”
First, individualism, a prominent value in Western culture, is deemphasized. Instead, Toyota emphasizes systems in which people and processes and products are seen as intertwined value streams. Employees are trained to be problem solvers with an important responsibility to make the production system leaner and better.
Second, Toyota’s hiring process “weeds out” those who aren’t oriented to teamwork. Job applicants must not only be competent and possess technical skills, but must exhibit strong teamwork capabilities such as being able to trust their team, comfortable with solv- ing problems collaboratively, and motivated to achieve collective outcomes.
Third, Toyota structures its work around teams. Every Toy- ota employee knows the adage, “All of us are smarter than any of us.” Teams are used not only in production, but at every level and in every function. For instance, in the aftermath of the devastating tsunami, employees at Toyota GB (the corporate sales and mar- keting arm of Toyota and Lexus brands in the United Kingdom) all pulled together with a “team
spirit of personal sacrifice to guarantee the stable employment of the collective.”
Finally, Toyota considers employee teams to be the power center of the organization. The leader serves the team, not the other way around. When asked whether he would feature himself in an advertisement, the for- mer CEO of Toyota USA said, “No. We want to show everybody in the company. The heroes. Not one single person.”
What do you think? Has Toyota succeeded because of its team-oriented culture, or could it have succeeded without it? How does Toyota empha- size teamwork throughout the organization? How would the way supervisors manage be different in this team-based organization? Would you be comfort- able working in such an environment as this? Why or why not?
Sources: Based on W. Shul Shim and R. M. Steers, “Symmetric and Asymmetric Leadership Cultures: A Comparative Study of Leader- ship and Organizational Culture at Hyundai and Toyota,” Journal of World Business, October 2012.......Harvard Business Review, June 2008, pp. 96–104; and J. K. Liker and M. Hoseus, Toyota Culture: The Heart and Soul of the Toyota Way (New York: McGraw-Hill, 2008).
ZUMA Press, Inc./Alamy Stock Photo
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What Is a Group? A group is defined as two or more interacting and interdependent individuals who come together to achieve particular objectives. Formal groups are workgroups established by the organization that have designated work assignments and established tasks. The behaviors in which one should engage are stipulated by and directed toward organiza- tional goals. Formal groups include committees, group meetings, task forces, and work teams.
Formal groups can be either permanent or temporary. At Cedars-Sinai Hospital in New York, a permanent committee of nursing supervisors from the surgical unit meets every Monday morning on a planned and regular basis. At the same facility, a temporary formal group of supervisors and employees who study ways to continually improve patient services will dissolve after finishing their work and presenting their recommendations to the hospital’s administrators.
Informal groups are of a social nature, appearing naturally in the work environment in response to the need for social contact. These groups tend to form around friendships and common interests. Carpool groups, shared interest groups, lunch buddies, or grief support groups are all examples of informal groups.
Formal workgroups are not the same as teams. Many formal workgroups are merely individuals who sporadically interact but who have no collective commitment that requires joint efforts. That is, the group’s total performance is merely the summation of the individual group members’ performance.
A team has members who are committed to a common purpose, has a set of specific performance goals, and holds itself mutually accountable for the team’s results. Teams, in other words, are greater than the sum of their parts.
Why Do People Join Groups? People belong to a number of groups for a variety of reasons, and it’s obvious that different groups provide different benefits to their members. Most people join a group out of need for security, status, self-esteem, affiliation, power, or goal achievement (see Exhibit 11-1).
By joining a group, individuals can reduce the insecurity of “standing alone.” The group helps the individual to feel stronger, have fewer self-doubts, and be more resistant to threats. Inclusion in a group that others view as important provides recognition and
OBJECTIVE 11.1 Contrast a group and a team.
group Two or more interacting and interde- pendent individuals who come together to achieve particular objectives.
formal group A workgroup established by the orga- nization and given designated work assignments and established tasks.
informal group A social group that forms naturally in the work environment in response to the need for social contact.
team A workgroup whose members are committed to a common purpose, have a set of specific performance goals, and hold themselves mutually account- able for the team’s results.
Exhibit 11-1 Reasons people join groups.
REASON PERCEIVED BENEFIT
Security Gaining strength in numbers; reducing the insecurity of standing alone
Status Achieving some level of prestige from belonging to a particular group
Self-esteem Enhancing one's feeling of self-worth—especially membership in a highly valued group
Affiliation Satisfying one's social needs through social interaction
Power Achieving something through a group action not possible individually; protecting group members from unreasonable demands of others
Goal achievement Providing an opportunity to accomplish a particular task when it takes more than one person's talents, knowledge, or power to complete the job
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status for its members. In addition to conveying status to those outside the group, mem- bership can also raise feelings of self-esteem—being accepted into a highly valued group.
Affiliation with groups can fulfill one’s social needs for regular interaction. For many people, on-the-job interactions are their primary means of fulfilling their need for affiliation. Workgroups contribute significantly to fulfilling their need for friendships and social relations. One appealing aspect of groups is that they represent power. What cannot be achieved individually often becomes possible through group action. This power might be used to make demands on others or it might be desired as a countermea- sure. To protect themselves from unreasonable demands by supervisors, individuals may align with others. For individuals who desire to influence others, informal groups can offer power without a formal position of authority in the organization. A group leader might be able to make requests of group members and obtain compliance without any of the responsibilities that go with formal managerial positions. For people with a high power need, groups can be a vehicle for fulfillment. Finally, people may join a group for goal achievement, combining forces to accomplish a particular task when there is a need to pool talents, knowledge, or power to get a job completed.
Understanding Informal Workgroups Supervisors must live with the fact that informal workgroups emerge naturally in organi- zations and must expect that employees will be members of many informal workgroups. You should be interested in the workings of informal groups because they can shape the behavior of employees and affect productivity in your department.
To begin our understanding of informal workgroups, we need to look at three fac- tors: norms, cohesiveness, and emergent leadership.
What Are Norms And How Do They Affect Work Behavior? Did you ever notice that golfers don’t speak while their partners are putting on the green, or that employees generally don’t criticize their bosses in public? This is because of norms. All groups have established norms, or acceptable standards that are shared by the group’s members. Norms dictate things such as output levels, absenteeism rates, promptness or tardiness, and the amount of socializing allowed on the job.
Although each group has its own unique set of norms, common classes of norms appear in most organizations. These focus on effort and performance, dress, and loyalty. The most widespread norms are related to levels of effort and performance. Workgroups typically provide their members with explicit cues on how hard to work, what level of output to have, when to look busy, when it’s acceptable to goof off, and the like. These norms affect an individual employee’s performance. They are so powerful that perfor- mance predictions based solely on an employee’s ability and level of personal motivation often prove to be wrong.
Some organizations have formal dress codes. However, even in their absence, norms frequently develop to dictate the kind of clothing that should be worn to work. Col- lege seniors, interviewing for their first postgraduate job, pick up this norm quickly; students who are interviewing for jobs can usually be spotted walking around in dark gray or blue suits. Of course, what connotes acceptable dress in one organization may be different from the norms in another.
Few supervisors appreciate employees who ridicule the organization and they view employees who actively look for another job unfavorably. Unhappy employees know they should keep their job searches secret. These examples demonstrate that loyalty norms are widespread in organizations. This loyalty norm often explains why ambi- tious candidates to positions of greater authority in an organization willingly take work home at night, come in on weekends, and accept transfers to cities where they would otherwise not prefer to live.
OBJECTIVE 11.2 Define norms.
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Individuals desirous of acceptance by the groups to which they belong are suscep- tible to conformity pressures (see “News Flash! Solomon Asch and Group Conformity”). The impact that group pressures for conformity can have on an individual member’s judgment and attitudes was demonstrated in the now-classic studies by Solomon Asch. Asch’s results suggest that there are group norms that press us toward conformity.1 We desire to be one of the group and avoid being visibly different. When an individual’s opinion of objective data differs significantly from that of others in the group, they feel extensive pressure to align their opinion to conform to those of the others.
1S. E. Asch, “Effects of Group Pressure upon the Modification and Distortion of Judgements,” in H. Guetz- kow (ed.), Groups, Leadership and Men (Pittsburgh, PA: Carnegie Press, 1951), pp. 177–190.
SOLOMON ASCH AND GROUP CONFORMITY
NEWS FLASH!
Does one’s desire to be accepted as part of a group leave him or her susceptible to conforming to the group’s norms? Will the group place strong enough pressure to change a member’s attitude and behav- ior? In the research by Solomon Asch, the answer appears to be yes.
Asch’s study involved groups of seven or eight people who sat in a classroom and were asked to compare two cards held by an investigator. One card had one line; the other had three lines of varying length. As shown in Exhibit 11-2, one of the lines on the three-line card was identical to the line on the one-line card. Also, as shown in Exhibit 11-2, the difference in line length was quite obvious; under ordinary conditions, subjects made fewer than 1 per- cent errors. The object was to announce aloud which of the three lines matched the single line. But what happens if all the other members of the group begin to give incorrect answers? Will the pressure to con- form cause the unsuspecting subject (USS) to alter their answers to align to those of the others? That was what Asch wanted to know. He arranged the group so only the USS was unaware that the experi- ment was fixed. The seating was prearranged so the USS was the last to announce their decision.
The experiment began with two sets of matching exercises. All the subjects gave the right answers. On the third set, however, the first subject gave an obviously wrong answer—for example, saying C in Exhibit 11-2. The next subject gave the same wrong answer, and so did the others, until it got to the USS. They knew that B was the same as X, but everyone else had said C. The deci- sion confronting the USS was this: Do you publicly state a perception that differs from the announced position of the others? Or do you give an answer that you strongly believe is incorrect to have your response agree with the other group members? Asch’s subjects conformed in about 35 percent of many experiments and many trials. That is, the subjects gave answers that they knew were wrong but that were consistent with the replies of other group members.
For supervisors, the Asch study provides con- siderable insight into workgroup behaviors. The tendency, as Asch showed, is for individual mem- bers to go along with the “pack.” To diminish the negative aspects of conformity, supervisors should create a climate of openness in which employees are free to discuss problems without fear of retaliation.
Exhibit 11-2 Examples of cards used in the Asch study.
X A B C
Source: S. E. Asch, “Effects of Group Pressure upon the Modification and Distortion of Judgments,” in H. Guetzkow (ed.), Groups, Leadership and Men (Pittsburgh: Carnegie Press, 1951), 177–190.
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Are Cohesive Groups More Effective? Cohesiveness is the degree to which members are attracted to each other and are moti- vated to stay in the group. For instance, some workgroups are more cohesive because the members have spent a long time together; the group is small with high interaction; the group has survived threats, which brought them closer together; or the group has a history of previous success. Cohesiveness is important because it’s related to the group’s productivity.
Studies consistently show a group’s cohesiveness and productivity depend on the performance-related norms they establish. The more cohesive the group, the more its members will follow its goals. With performance-related norms of high output, qual- ity work, and cooperation with individuals outside the group, a cohesive group is more productive than a less cohesive group. But if cohesiveness is high and performance norms are low, productivity will be low. If cohesiveness is low and performance norms are high, productivity will increase, but less than in the high cohesiveness–high norms situation. And where cohesiveness and performance-related norms are both low, productivity will tend to fall into the low to moderate range. These conclusions are summarized in Exhibit 11-3.
What Is An Emergent Leader? Leaders frequently emerge within workgroups, yet they have no formal authority in the organization. Despite their lack of formal authority, these emergent leaders are a force that supervisors with which must be prepared to reckon.
Emergent leaders are leaders people like and gravitate towards. Others listen when they speak, and they are often spokespersons for their groups. Tending to be central links in the informal communication chain, important information reaches them early, and they pass information on to others. They may have become informal leaders because of their contacts in the organization and their ability to use those contacts to access important information.
Identify the emergent leaders within workgroups and build ties with them. Recog- nize that they have influence over their group members. By respecting their leadership positions and gaining their cooperation, you can turn potential enemies into allies. Remember to use the grapevine to identify needs that the formal system isn’t fulfilling. This way you are able to identify fairly accurately which individuals and groups are gaining and losing influence.
People with charismatic traits and those with important but scarce knowledge about the organization or technical aspects of the group’s work may be emergent leaders. Followers are attracted to those with self-confidence and the ability to articulate goals.
Groups often project leadership status onto individuals who possess knowledge that group members believe they need to function well.
Remember that emergent leaders change over time. As issues, problems, and people change within a department and the organiza- tion, new leaders will arise. Ongoing monitor- ing of the grapevine will typically signal those changes to you. It is important to keep track because different leaders seek to impose differ- ent agendas on their groups.
How Can Informal Groups Be Helpful? Every organization—no matter how well it’s structured—has voids. Despite well-designed
formal communication paths, departmental designations, and job descriptions, there will always be gaps. Informal groups fill these holes. For instance, in stressful occupa- tions, informal groups often develop as a means for stressed employees to share their
OBJECTIVE 11.3 Explain the relationship between cohesiveness and group productivity.
cohesiveness The degree to which group members are attracted to each other and are motivated to stay in the group.
OBJECTIVE 11.4 Describe who is likely to become an emergent leader in an informal group.
emergent leader A leader who emerges within a work- group without having formal authority in the organization.
Exhibit 11-3 Relationship among group cohesiveness, performance norms, and productivity.
High productivity
Cohesiveness
High
High Low
Low
P e rf
o rm
a n
ce N
o rm
s
Moderate productivity
Moderate to low productivity
Low productivity
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frustrations and let off steam. In jobs where everyone essentially does similar tasks, informal groups can fulfill the need for status, recognition, and prestige. And in depart- ments or organizational units where formal communication with employees is limited, informal groups typically arise to fill the information void.
Are There Ways To Influence The Informal Workgroup? Some facts of informal groups are beyond a supervisor’s control. But there are also some actions that supervisors can take to manage these groups and turn them into an asset for the department and the organization. Let’s look at some of these.
Group Norms If performance-related norms are low, and hindering your department’s performance, you can consider doing a few things. You can request transfers for one or more of the group’s members. Physical separation can undermine the group’s influ- ence by reducing cohesiveness. Also consider rewarding departmental members who act against the dysfunctional norms. For example, give preferred work assignments, paid time off, or praise to employees who don’t restrict their work output to satisfy the group’s modest performance norms.
Department Goals When supervisors fail to make their department goals clear, or allow employees to lose sight of those goals, employee behaviors that hinder those goals aren’t as visible. In contrast, when supervisors consistently reiterate formal departmental goals and make clear which behaviors are consistent with achieving those goals, dysfunctional behaviors become more readily evident (and employees are discouraged from engaging in those dysfunctional behaviors).
To overcome the low-performance-related norms of informal groups in your depart- ment, you should emphasize quality, cooperation, customer satisfaction, safety, and respect for minority employees. This will make the department’s formal goals clear and drive home what the department values and wishes to accomplish.
OBJECTIVE 11.5 Explain what a supervisor can do when group norms are hindering department performance.
Comprehension Check 11-1
1. Two or more interacting and interdependent individuals who come together to achieve a particular objective are called a: a. team. b. group. c. task force. d. all of the above.
2. Acceptable standards that are shared by team members are called: a. behaviors. b. organization culture. c. norms. d. work rules.
3. Which one of the following is not a reason people join groups? a. Self-esteem b. Security c. Money d. Power
4. An emergent leader is one who: a. develops group norms for the group to follow. b. establishes group goals to be achieved. c. develops group cohesiveness. d. leads without having formal authority in the organization.
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The Increasing Use of Teams Because teams typically outperform individuals when the tasks being done require multiple skills, judgment, and experience, teams are becoming the prime vehicle around which work is being designed. As organizations restructure, they are turning to teams as a way to use employee talents better. Teams are more flexible and responsive to chang- ing events than other forms of permanent groupings. They can be quickly assembled, deployed, refocused, and disbanded.
Teams fall into three categories. Some organizations use teams to provide advice. For instance, they create temporary task forces to recommend ways to cut costs, improve quality, or select a site for a new plant. Some organizations use teams to manage— introduce management teams at various levels in the organization to run things. How- ever, supervisors are most likely to be involved with teams that are created to make or do things including production teams, design teams, and office teams that handle administrative work.
Many organizations have restructured work processes around teams because super- visors are looking for the positive synergy that will help the organization improve its performance.2 The extensive use of teams creates the potential for an organization to generate greater outputs with no increase in inputs. However, it is important to remem- ber that such increases are simply “potential.” There is nothing inherent in the creation of work teams guaranteeing this positive synergy and its accompanying productivity will occur. Just calling a group a team doesn’t automatically increase its performance.3
In organizations that are reorganizing work around work teams, supervisors must learn how to coordinate team activity effectively. In many cases, management’s emphasis has been on creating self-managed teams, and this is redefining the supervisor’s mana- gerial role.
What Are The Different Types Of Work Teams? When work teams first became popular, most were problem-solving teams. These are teams from the same department or functional area involved in efforts to improve work activities or to solve specific problems. Team members share ideas or offer suggestions on how work processes and methods can be improved, but these teams are rarely given the authority to implement any of their suggested actions.
To get employees involved in work-related decisions and processes, organizations came up with the idea of a self-managed work team. This is a formal group of employees operating without a manager, but with responsibility for a complete work process or segment. This type of team is responsible for getting the work done and for managing themselves, and usually includes planning and scheduling of work, assigning tasks to members, collective control over the pace of work, making operating decisions, and taking action on problems. It’s estimated that about 30 percent of US employers now use this form of team; among large firms, the number is probably closer to 50 percent.4 Most organizations that use self-managed teams find them to be effective.5
OBJECTIVE 11.6 Identify three categories of teams.
2S. Adams and L. Kydoniefs, “Making Teams Work: Bureau of Labor Statistics Learns What Works and What Doesn’t,” Quality Progress (January 2000), pp. 43–49. 3T. Capozzoli, “How to Succeed with Self-Directed Work Teams,” Supervision (February 2002), pp. 25–27.
problem-solving teams A team from the same department or functional area that’s involved in efforts to improve work activities or to solve specific problems.
4C. Joinson, “Teams at Work,” p. 30; and “Teams,” Training (October 1996), p. 69. 5J. P. Millikin, P. W. Hom, and C. C. Manz, “Self-Management Competencies in Self-Managing Teams: Their Impact on Multi-Team System Productivity,” Leadership Quarterly, October 2010, pp. 687–702; O. Turel and Y. Zhang, “Does Virtual Team Composition Matter? Trait and Problem-Solving Configura- tion Effects on Team Performance,” Behavior & Information Technology, July–August 2010, pp. 363–375; J. S. Bunderson and P. Boumgarden, “Structure and Learning in Self-Managed Teams: Why ‘Bureaucratic’ Teams Can Be Better Learners,” Organization Science, May–June 2010, pp. 609–624; and G. M. Spreitzer, S. G. Cohen, and G. E. Ledford, Jr., “Developing Effective Self-Managing Work Teams in Service Organi- zations,” Group & Organization Management, September 1999, pp. 340–366.
self-managed work team A type of work team that operates without a manager and is respon- sible for a complete work process or segment.
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Another type of team is the cross-functional team, which is a work team composed of individuals from various specialties. Many organizations use cross-functional teams. For example, ArcelorMittal, the world’s leading steel and mining company, uses cross- functional teams of scientists, plant managers, and salespeople to review and monitor product innovations.6
The virtual team uses technology to link physically dispersed members to achieve a common goal. In a virtual team, members collaborate online with tools such as wide- area networks, videoconferencing, fax, e-mail, or websites where the team can hold online conferences.7 Virtual teams can do all the things that other teams can—share information, make decisions, and complete tasks; however, they lack the normal give- and-take of face-to-face discussions. That’s why virtual teams tend to be more task- oriented, especially if the team members have never personally met.
Turning Groups Into Teams Groups and teams are not necessarily the same thing. Exhibit 11-4 illustrates how a workgroup evolves into a real team. The primary force that moves a workgroup toward being a real high-performing team is its emphasis on performance.
A working group is merely a group of individuals who interact primarily to share information and to make decisions to help each other perform within a given area of responsibility. There is no need or opportunity to engage in collective work that requires joint effort, so performance is merely the summation of each group member’s individual contribution.
A pseudo team is the product of negative synergy. The sum of the whole is less than the potential of the individual parts because of factors such as poor communication, antagonistic conflicts, and avoidance of responsibilities. This is not a team, because it doesn’t focus on collective performance and members have no interest in shaping a common purpose.
A potential team is going in the right direction. It recognizes the need for higher performance and is really trying hard to achieve it, but its purpose and goals need greater clarity or the team may need better coordination. The result is that it has not yet established a sense of col- lective accountability.
A real team is the ultimate goal. This is a unit with a set of common characteristics that lead to consistently high performance.
The Five-Stage Model Of Group Development Groups tend to pass through developmental stages as they mature. One popular model of group development was formulated by Tuckman and Jensen in 1977.
Their model proposes five distinct stages of group development, and the suggestion is that groups must experience the first four stages to achieve their maximum development. The five stages are Forming, Storming, Norming, Performing, and Adjourning. Supervisors with knowledge of the stages can facilitate their group, thereby speeding progress to the performing stage.
6“Meet the New Steel,” Fortune, October 1, 2007, pp. 68–71.
cross-functional team A work team composed of individuals from various specialties.
7“Virtual Team Collaboration and Innovation in Organizations,” Team Performance Management, March 2011, pp. 109–119; M. Flammia, Y. Cleary, and D. M. Slattery, “Leadership Roles, Socioemotional Strate- gies, and Technology Use of Irish and US Students in Virtual Teams,” IEEE Transactions on Professional Communication, June 2010, pp. 89–101; P. Evans, “The Wiki Factor,” BizEd, January–February 2006, pp. 28–32; and M. McCafferty, “A Human Inventory,” CFO, April 2005, pp. 83–85.
virtual team A type of work team that uses technol- ogy to link physically dispersed mem- bers to achieve a common goal.
OBJECTIVE 11.7 List the characteristics of real teams.
Exhibit 11-4 Comparing groups and teams.
E m
p h
a si
s o
n P
e rf
o rm
a n
ce
Working Group
Real Team
Potential Team
Pseudo Team
Team Effectiveness
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Stage 1: Forming In the Forming stage, individuals know little about the other members of the group, and even though they display independent behavior, they are on their best behavior because they want to be accepted by others and avoid conflict. Individuals are motivated but unclear or uncertain about what they are supposed to do in the group. Individuals focus on the duties of group members and what needs to be done while simul- taneously gathering information and forming impressions of each other and the task of the group. Mature, experienced group members model appropriate group behavior. This stage is important because members get to know one another and make new friends.
This stage is directed by the supervisor, and the leader sets goals while providing guidance and direction. Supervisors can learn how individuals work and respond to pressure while they spend time explaining the purpose, objectives, and external rela- tionships. Group members learn about the opportunity and challenges, agree on goals, and begin to tackle the tasks. Sharing group development information with the group members is helpful during this stage, but there is not much task accomplishment.
Stage 2: Storming In the Storming stage, supervisors direct and guide decision-making while modeling professional behavior. Supervisors must focus the group on its goals to keep members from becoming distracted by relationship and emotional issues. The supervisor helps the group address issues surrounding the problems they are supposed to solve, determine how to function independently and together, and define the leader- ship model they are willing to accept. The supervisor uses this stage to coach the group members and sell them on the importance of the task.
The Storming stage can be destructive for the group and can lower motivation if allowed to get out of control. Occasionally groups never leave this stage. Decisions are dif- ficult, with individuals remaining cordial only if issues are addressed. Uncertainties related to the work or to roles and responsibilities within the group may require compromise to enable progress. This stage will be contentious and even painful to group members averse to conflict, and some people’s patience may break early. Minor confrontations will arise and be dealt with or glossed over, but some team members may continue to focus on minutiae to evade real issues. Many group members may feel relieved to be getting into the real issues, whereas others will prefer to remain in the comfort and security of Stage 1.
The tolerance of each team member and their differences needs to be emphasized to avert failure. Group members will confront the ideas and perspectives of others as they vie for position in an attempt to establish themselves within the group. In-groups and factions often form, and power struggles may arise as members challenge the leader. Many group members look for structure and rules to end emerging conflict. Although group conflict may appear to be suppressed it often exists under the surface. Individual maturity is a factor in determining whether the group will move out of this stage. Imma- ture members of the group may act out to demonstrate their knowledge and convince others their ideas are correct.
Stage 3: Norming The Norming stage begins after the group members have worked through their arguments and learned to understand each other better. Appreciating each other’s skills and experience, they listen, appreciate, and support and are prepared to change preconceived views. In this stage, cohesion grows, effectiveness increases, commitment and unity is strong, and roles and responsibilities clear and accepted. The scope of the group’s tasks or responsibilities is clear and agreed on. Big decisions are made by group consensus, but smaller decisions may be delegated to individuals or small teams within the group.
Now the group may become more gregarious, often engaging in social activities as they discuss and develop their processes and working style. Group members change behaviors and develop work habits that make group work seem easier. Agreement on rules, values, professional behavior, shared methods, working tools, and even taboos occurs. Trust develops and individual motivation increases as the group gets more acquainted with the project.
Respect for the leader increases with group members beginning to take responsibil- ity for making decisions and for their professional behavior. Supervisors become more
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participative, often doing more facilitating and empowering the group to make deci- sions. Because group members have worked hard to attain this stage, they may resist internal and external pressure to change because they fear the group might break up or revert to a storm. Groups in this phase may lose their creativity if the norming behaviors are so strong that they begin to stifle healthy dissent and exhibit groupthink.
Stage 4: Performing The Performing stage is marked by the flexibility of the group as it works toward the accomplishment of its tasks. The group appears strategically aware and knows why it is doing what it is doing. This shared vision, coupled with the motivation and knowledge of the group, results in autonomous behavior and the ability to work through the decision-making process without supervision. Extremely task-oriented, the group works to achieve goals and makes most task-related decisions by judging against criteria agreed on with the leader.
Dissent is expected, and when disagreements occur, they are resolved in a positive manner with changes to processes and structure made by the group. The group is in a high-performance mode and functions as a unit to get the job done smoothly and effec- tively. The group also attends to relationship, style, and process issues along the way. There is a high level of group identity, loyalty, and morale with everyone trusting each other enough to allow independent activity. This high comfort level results in all of the group’s energy being directed toward the task(s).
The group requires supervisor-delegated tasks and projects but does not need to be instructed or assisted. However, the group may ask the leader for assistance with per- sonal and interpersonal development. Be aware that even high-performing groups will revert to previous stages, going through the stages many times as a reaction to changing circumstances. For example, if a new supervisor challenges existing norms and dynamics of the group, the group can revert to storming.
Stage 5: Adjourning The Adjourning stage addresses the group from a perspective beyond the purpose of the first four stages, and is relevant to the people in the group and their well-being. In this stage, group members recognize the task is completed and begin to disengage from each other. Group members should recognize what they have done and consciously prepare to move on. Supervisors should encourage group members to be proud of their achievements and of having the opportunity to be part of such a productive group. However, there may be a sense of loss felt by group members, and there is the potential for group members to feel vulnerable, often feeling a sense of insecurity or threat from adjournment of the group.
The five-stage model assumes that groups progress through the stages and become more effective as they persist to completion of a task, but groups do not always move cleanly from one stage to the next. Groups may be in several stages simultaneously and may regress and move ahead unpredictably. Remember that the process is dynamic rather than static, and that even though progression through the stages appears linear, groups can move back and forth between stages as group membership changes. Experienced supervi- sors always strive to lead groups back to the performance stage, while remaining aware that groups may become comfortable with a particular stage and resist moving to a new stage.8
A Model Of Development For Deadline-Driven Ad Hoc Groups Ad hoc groups facing tight deadlines appear to have a two-phase development cycle all their own. This cycle is referred to as the punctuated-equilibrium model.9 The first phase
8S. Robbins and T. Judge, Organizational Behavior, 13th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 286–287; B. Tuckman, “Developmental Sequences in Small Groups,” Psychological Bulletin 63, no. 6 (June 1965), 384–399; and B. Tuckman and M. Jensen, “Stages of Small-Group Development Revisited,” Group and Organizational Studies 2, no. 4 (December 1977), 419–427. 9C. Gersick, “Time and Transition in Work Teams: Toward a New Model of Group Development,” Acad- emy of Management Journal, 1988, Vol. 31, No. 1, 9–41. http://isites.harvard.edu/fs/docs/icb.topic626718. files/03_Gersick_1988.pdf (accessed March 5, 2017).
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includes the initial meeting of the group and determines the direction of the group. In this initial period, many norms of behavior as well as assumptions regarding the process of the group are established. Even though these norms may be dysfunctional, they usually continue to guide the group during the project. During this period, the group is locked into a process that resists change even if new information is discovered. The group con- tinues to operate this way until it reaches the midpoint of the time allotted for the exis- tence of the group (for student groups this could be halfway through the semester).
At the halfway point in the existence of the group, a crisis of personality conflict, dissatisfaction with the progress or direction of the project, or some other internal or external force results in a wake-up call of awareness that something needs to be accom- plished, and soon! This crisis is the beginning of the second phase of the cycle. During the second phase, the group becomes highly effective, functioning as a team instead of a group of disconnected individuals. This heightened effort continues until the last meet- ing of the group when there is usually a last-minute burst of frenzied effort to complete the task.
Supervisors must realize this model is limited to deadline-driven ad hoc groups, and they should pay attention to the task and behavior tone set during the startup phase of the project. Because groups reach the crisis point halfway through the duration of the project, supervisors must plan for it, monitor for signs of it, and outline steps for a posi- tive transition out of the crisis. Because group members are often frustrated by an appar- ent lack of progress, supervisors should periodically apprise the group of its progress toward the goal.10
How Do You Build Effective Teams? Studies of effective teams find they contain a small number of people with complemen- tary skills who are equally committed to a common purpose, common goals, and a common working approach for which they hold themselves mutually accountable.11
Small Size The best teams tend to be small. Teams with more than ten members can have difficulty getting anything done. Large numbers of people usually cannot develop the common purpose, goals, approach, and mutual accountability of a real team. They tend to go merely through the motions. In designing effective teams, keep them to ten or fewer people. If the natural working unit is larger, and you want a team effort, break the group into subteams.
Complementary Skills To perform effectively, a team requires three types of skills. First, it needs people with technical expertise. Second, it needs people with problem- solving and decision-making skills to identify problems, generate alternatives, evaluate those alternatives, and make competent choices. Finally, teams need people with good interpersonal skills (listening, feedback, conflict resolution). No team can achieve its performance potential without developing all three types of skills. However, too much of one at the expense of others results in lower team performance. Incidentally, teams don’t need to have all the complementary skills at the beginning; they can be developed.
Common Purpose Does the team have a vision? Broader than any specific goals, high- performing teams have a common and meaningful purpose that provides direction, momentum, and commitment for members.
10Robbins and Judge, Organizational Behavior, 287–288; C. Gersick, “Time and Transition in Work Teams: Toward a New Model of Group Development,” Academy of Management Journal 31, no. 1 (March 1998), 9–41; and A. Seers and S. Woodruff, “Temporal Pacing in Task Forces: Group Develop- ment or Deadline Pressure?” Journal of Management 23, no. 2 (March–April 1997), 169–187, findarticles. com/p/articles/mi_m4256/is_n2_v23/ai_19498953 (accessed June 21, 2008). 11P. Strozniak, “Teams at Work,” Industry Week, September 18, 2000, 47–50.
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Members of successful teams put a tremendous amount of time and effort into discussing, shaping, and agreeing on a purpose that belongs to them collectively and individually. This common purpose, when accepted by the team, becomes the equivalent of what navigation is to a ship captain—it provides direction and guidance under any and all conditions.
Specific Goals Successful teams translate their common purpose into specific, measur- able, and realistic performance goals. Specific goals facilitate clear communication and help teams maintain their focus on getting results. Examples of specific team goals might be responding to all customers within twenty-four hours; cutting production-cycle time by 30 percent over the next six months; or maintaining equipment at a level of zero downtime every month.
Common Approach Goals are the ends a team strives to attain. Defining and agreeing on a common approach ensures that the team is unified on the means for achieving those ends.
Team members must contribute equally in sharing the workload, and agree on who is to do which task. Additionally, the team needs to determine how schedules will be set, what skills need to be developed, how conflicts will be resolved, and how decisions will be made and modified. Integrating individual skills to further the team’s performance is the essence of shaping a common approach.
Mutual Accountability The final characteristic of high-performing teams is accountability at both the individual and group levels. Successful teams make members individually and jointly accountable for the team’s purpose, goals, and approach. Members understand what they are individually responsible for and what they are jointly responsible for.
Studies have shown that when teams focus only on group-level performance targets, and ignore individual contributions and responsibilities, team members often engage in social loafing.12 They reduce their efforts because their individual contributions can’t be identified. In effect, they become “free riders” and coast on the group’s effort. The result is that the team’s overall performance suffers. This reaffirms the importance of measuring individual contributions to the team as well as the team’s overall performance. Successful teams have members who collectively feel responsible for their team’s performance.
Team Challenges for Supervisors Teams have long been popular in Japan. When US managers began to broadly introduce them into the United States in the late 1980s, critics warned that they were destined to fail: Japan is a collectivist society. US culture is based on the values of individualism. US workers won’t sublimate their needs for individual responsibility and recognition to be anonymous parts of a team. Although the introduction of work teams in some organiza- tions has met with resistance and disappointment, the overall picture has been encourag- ing. When teams are properly used in organizations and when the organization’s internal climate is consistent with a team approach, the results have been largely positive.
What Obstacles Exist In Creating Effective Teams? The following critical obstacles can prevent your teams from becoming high performers:
A Weak Sense of Direction Teams perform poorly when members are not sure of their purpose, goals, and approach. Nothing undermines enthusiasm for the team concept as quickly as the frustration of being an involuntary member of a team that has no focus.
12R. Albanese and D. D. Van Fleet, “Rational Behavior in Groups: The Free Riding Tendency,” Academy of Management Review 10, no. 2 (April 1985), 244–255.
social loafing Becoming a free rider in a group because individual contributions to the group effort cannot be identified. As a result, the overall team’s performance suffers.
OBJECTIVE 11.8 List actions a supervisor can take to improve team performance.
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Infighting When team members are spending time bickering and undermining their colleagues, energy is being misdirected. Effective teams must have members who respect each other and are willing to put aside petty differences to facilitate goal achievement.
Shirking of Responsibilities Members may exhibit a lack of commitment to the team, maneuver to have others do part of their job, or be quick to blame colleagues or man- agement for any personal or team failures. The result is a pseudo team—a team in name only, and one that consistently underperforms even what the members could accomplish independently.
Lack of Trust When there is trust, team members believe in each other’s integrity, char- acter, and ability. When this is lacking, members cannot depend on each other and their trust tends to be short lived.
Critical Skill Gaps When skill gaps occur and the team doesn’t fill those gaps, the team flounders. Members have trouble communicating with each other, destructive conflicts aren’t resolved, decisions are never made, or technical problems overwhelm the team.
Lack of External Support Existing within the larger organization, teams rely on that larger organization for a variety of resources—money, people, equipment—and if those resources aren’t there, it’s difficult for teams to reach their potential. For example, if the employee selection process, formal rules and regulations, budgeting procedures, and compensation system are inconsistent with the team’s needs and goals, the team suffers.
Something to Think About (and promote class discussion)
FAST TIMES! Imagine working for an organization that employs more than 2,700 individuals with each one having the identical focus.* Imagine, too, that company supervisors in this organization want you to work hard and be the best at what you do. If you’re employed by Ferrari N.V., such realities aren’t hard to imagine.
When most people hear the name Ferrari, they think of expensive, super-fast sports cars. That reputa- tion for speed is why Ferraris continue to be well-known and respected in racing groups around the world. The Italian company was founded by Enzo Ferrari in 1928, and even in its early days, racing was an impor- tant part of the Ferrari legend. Today, Sergio Marchionne, president and managing director of the company, believes his employees truly make a difference in producing one of the world’s greatest sports cars. He rec- ognizes that to be the best, he needs employees who understand how to work together and how to achieve common goals. At Ferrari, employee teams combine their efforts to produce an outstanding automobile, with quality befitting its iconic reputation. You won’t find traditional assembly lines in the Ferrari factory, nor will you find production quotas. With prices for a Ferrari starting at $140,000, auto assembly time isn’t measured in seconds. Rather, team tasks often last more than ninety minutes for each portion of a car. Then the team proudly passes its finished work to the next team so its work can begin. The average time to manufacture one car is three days. The company produces around 7,000 Ferraris in any one year, although the company hopes to boost that number in the future. To achieve that goal, the company is expanding current capacity, although its singular focus on quality and teamwork won’t change.
* “Ferrari London Store Opening Stops Traffic,” License Magazine Online, June 2009; S. Oster, “Open a Bank Account and Test Drive a Ferrari,” Wall Street Journal, June 1, 2007, B3; N. Joseph, “Paradise: Ferrari named Best Place to Work,” Autob- log, May 3, 2007, http://www.autoblog.com/2007/05/03/paradise-ferrari-named-best-place-to-work (accessed March 5, 2017); M. Moskowitz and R. Levering, “100 Best Companies to Work For,” “10 Great Companies to Work for in Europe,” “Ferrari: Good Food, Good People, Lots of Fun—Sound Like a European Holiday? No, It’s a Great Job,” Fortune, January 7, 2003; A. Petroff, “It pays to work at Ferrari,” CNN Money, April 10, 2014, http://money.cnn.com/2014/04/10/news/companies/ferrari- worker-bonus/ (accessed March 5, 2017); and “Ferrari Full Year 2016 Results,” Ferrari N.V., February 2, 2016, http://corporate. ferrari.com/sites/ferrari15ipo/files/2017_02_02_-_ferrari_-_full_year_2016_results_presentation_1.pdf (accessed March 5, 2017).
(continued)
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Exhibit 11-5 Creating effective teams.
Obstacles
Weak sense of direction
Suggested Actions
Create a clear purpose and goals
Encourage small wins
Build mutual trust
Provide necessary external support
Offer team-building training
Change the team’s membership
Infighting
Shirking of responsibilities
Lack of trust
Critical skill gaps
Lack of external support
Appraise both group and individual performance
Continued Employees at Ferrari truly enjoy being part of a team. They say that working toward a common
goal is one of the most satisfying elements in their jobs. They also appreciate what the company does for them. They enjoy a state-of-the-art fitness center, annual physicals at the company’s on-site clinic, an employee cafeteria, and home-based training for employees to learn English. They feel as if Marchionne and his team treat them as associates, not just as cogs in the Ferrari wheel. As one employee stated, “For many of us, working for Ferrari is like working in the Vatican.” Recently, the company won an award for Best Place to Work in Europe. The prize resulted from the company’s “Formula One inspired workplace initiative called Formula Uomo,” which took the principles of Ferrari’s success in Formula One racing and applied them to the workplace. The main thrust was recognizing its people as the “fulcrum of the company’s work system.”
Is the team concept at Ferrari working? By all accounts, yes. In 2016, the company achieved net revenues of $3,105 million. And more importantly, the car still retains its appeal as one of the best and most desired in the world. Although profits have been nominal during the global economic downturn, there are always going to be customers who want to own the car with the rearing-horse logo.
Like company executives at Ferrari, many supervisors today believe the use of teams allows their organizations to increase sales or manufacture better products faster and at lower costs. Although the effort to create teams isn’t always successful, well-planned teams can reinvigorate productivity and better position an organization to deal with a rapidly changing environment.
How Can Team Obstacles Be Overcome? Supervisors can do a number of things to overcome the obstacles mentioned and help teams to reach their full potential. These are listed in Exhibit 11-5.
Create a Clear Purpose and Goals High-performance teams have both a clear understand- ing of their goals and a belief that the goals embody a worthwhile or important result. These goals encourage individuals to sublimate personal concerns to the team goals. In
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effective teams, members are committed to the team’s goals, know what they are expected to accomplish, and understand how they will work together to achieve these goals.
Encourage Small Wins Building a real team takes time. Team members have to learn to think and work as a team. Help the team to identify and set attainable goals. Large goals can be reduced to smaller and more easily attainable goals. As the smaller goals are attained, the team’s success is reinforced. Cohesiveness is increased and morale improves. Confidence builds. Success breeds success, but it’s easier for young teams to reach their goals if they start with small wins.
Build Mutual Trust Trust is fragile. It takes a long time to build, and can be easily destroyed. There are things a supervisor can do to create a climate of mutual trust.13
Keep team members informed by explaining upper-management decisions and poli- cies and by providing accurate feedback. Create a climate of openness where employees are free to discuss problems without fear of retaliation. Be candid about your own problems and limitations. Make sure you’re available and approachable when employ- ees need support. Be respectful and listen to team members’ ideas. Develop a reputa- tion for being fair, objective, and impartial in your treatment of team members. Show consistency in your actions, and avoid erratic and unpredictable behavior. Coach team members as needed. Finally, be dependable and honest and follow through on all explicit and implied promises.
Appraise Both Group and Individual Performance Team members should all share in the glory when their team succeeds, and they should share in the blame when it fails. So, a large measure of each member’s performance appraisal should be based on the overall team’s performance. But members need to know that they can’t ride on the backs of others. Therefore, each member’s individual contribution should be identified and made part of their overall performance appraisal.
Provide Necessary External Support Supervisors link teams and upper management. It’s your responsibility to make sure teams have the necessary organizational resources to accomplish their goals. You should be prepared to make the case to your boss and other key decision makers in the organization for tools, equipment, training, personnel, physical space, or other resources that teams may require.
Offer Team-Building Training Teams need training to build their skills. Typically, these include problem-solving, communication, negotiation, conflict resolution, and group- processing skills. If you can’t provide this skill training for your team members, look to specialists in your organization who can, or secure funds to bring in outside facilitators who specialize in this kind of training.
Change the Team’s Membership When teams get bogged down in their own inertia or internal fighting, allow them to rotate members. Manage this change by considering how certain personalities mesh and re-forming teams in ways that better complement skills. If lack of leadership is the problem, use your knowledge of the people involved to create teams in which there is a high probability that a leader will emerge.
Contemporary Team Issues As we close this chapter, we will address several issues related to supervising teams: continuous-improvement programs, diversity, global teams, and understanding when teams are not the answer.
13K. T. Dirks, “The Effects of Interpersonal Trust on Work Group Performance,” Journal of Applied Psy- chology 54, no. 3 (June 1999), 445–455.
OBJECTIVE 11.9 Describe the role of teams in continuous-improvement programs.
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Why Are Teams Central To Continuous-Improvement Programs? The essence of continuous improvement is process improvement, and employee partici- pation is the linchpin of process improvement. In other words, continuous improvement requires management to encourage employees to share ideas and to act on what the employees suggest.
Teams provide the natural vehicle for employees to share ideas and implement improvements. For example, at BASF SE, the world’s largest chemical company, a pro- cess called Verbund permits all of the company’s 385 facilities and more than 100,000 employees worldwide to be connected to each other. One project team tested thirteen different production factors using thirty-two experiments. As a result of their work, more than $700,000 was cut from annual production costs, and nearly $1 million for a one-time capital improvement expenditure was eliminated. On a global scale, BASF realizes annual savings of around 1 billion through its Verbund concept.14
How Does Workforce Diversity Affect Teams? Managing diversity on teams is a balancing act. Diversity typically provides fresh per- spectives on issues, but it makes it more difficult to unify the team and reach agreements. Although many of us hold the optimistic view that diversity is desirable, research seems to show the opposite. “Studies on diversity in teams from the last fifty years have shown that surface-level social-category differences such as race/ethnicity, gender, and age tend to . . . have negative effects” on the performance of teams.15 Some evidence does show that the disruptive effects of diversity decline over time, but does not confirm that diverse teams perform better eventually.
The strongest case for diversity is when teams are engaged in problem-solving and decision-making tasks. Heterogeneous teams bring multiple perspectives to the discus- sion, thus increasing the likelihood that the team will identify creative or unique solu- tions. The lack of a common perspective usually means that diverse teams spend more time discussing issues, which decreases the chances that a weak alternative will be chosen. However, the positive contribution that diversity makes to decision-making teams undoubtedly declines over time. Diverse groups have more difficulty working together and solving problems, but this dissipates with time.16
Studies tell us that members of cohesive teams have greater satisfaction, lower absenteeism, and lower attrition from the group.17 Yet cohesiveness is likely to be lower on diverse teams. So, here is a potential negative of diversity: It may be detri- mental to group cohesiveness.18 However, if the norms of the team support diversity, a team can maximize the value of heterogeneity while also achieving the benefits of high cohesiveness.19 This makes a strong case for team members to participate in diversity training.
14See BASF’s website (www.basf.com); and D. Drickhamer, “BASF Breaks Through with Statistics,” Indus- try Week, June 2002, 81–82. 15K. H. T. Yu and D. M. Cable, “Unpacking Cooperation in Diverse Teams,” Team Performance Manage- ment, March 2011, pp. 63–82; A. Nederveen Pieterse, D. van Knippenberg, and W. P. van Ginkel, “Diver- sity in Goal Orientation, Team Reflexivity, and Team Performance,” Organizational Behavior and Human Performance, March 2011, pp. 153–164; M.-E. Roberge and R. van Dick, “Recognizing the Benefits of Diversity: When and How Does Diversity Increase Group Performance,” Human Resource Management Review, December 2010, pp. 295–208; and E. Mannix and M. A. Neale, “What Differences Make a Dif- ference: The Promise and Reality of Diverse Teams in Organizations,” Psychological Science in the Public Interest, October 2005, pp. 31–55. 16“Diversity Enhances Decision-Making,” Industry Week, April 2, 2001, 9. 17See S. G. Barsade, A. J. Ward, J. D. F. Turner, and J. A. Sonnenfeld, “To Your Heart’s Content: A Model of Effective Diversity in Top Management Teams,” Administrative Science Quarterly 45 (December 2000), 802. 18L. H. Pelled, K. M. Eisenhardt, and K. R. Xin, “Exploring the Black Box: An Analysis of Work Group Diversity, Conflict, and Performance,” Administrative Science Quarterly 46, no. 2 (March 1999), 128. 19H. E. Joy, D. Joyendu, and M. Bhadury, “Maximizing Workforce Diversity in Project Teams: A Network Flow Approach,” Omega 28, no. 2 (April 2000), 143–155.
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What Challenges Exist When Supervising Global Teams? Today’s organizations are global, and any supervisor is likely to have to manage a global team. So, in addition to recognizing team members’ abilities, skills, knowledge, and personality, supervisors need to be familiar with and clearly understand the cultural characteristics of the groups and the group members they manage.20 Some of the areas where there are differences in supervising global teams include conformity, status, social loafing, cohesiveness, communication, and conflict.
Research on conformity suggests that Asch’s findings are culture-bound.21 For instance, as might be expected, conformity to social norms tends to be higher in col- lectivistic cultures than in individualistic cultures. However, groupthink tends to be less of a problem in global teams because members are less likely to feel pressured to con- form to the ideas, conclusions, and decisions of the group.22
The importance of status varies between cultures. The French are extremely status conscious; in Latin America and Asia, status tends to come from family position and formal roles held in organizations; in the United States and Australia, status tends to be less “in your face” and based more on accomplishments. Supervisors must understand who and what holds status when interacting with people from a culture different from their own. A supervisor who doesn’t understand that is likely to unintentionally offend others and lessen their interpersonal effectiveness.
Social loafing is consistent with individualistic cultures, which are dominated by self-interest. It’s not consistent with collectivistic societies in which individuals are moti- vated by group goals. Compared to employees from the United States, the Chinese and Israelis showed no propensity to engage in social loafing. In fact, they actually per- formed better in a group than when working alone.23
Cohesive groups may create special challenges for supervisors because members are unified and “act as one.” There’s a great deal of camaraderie and group identity is high. In global teams, however, cohesiveness is often more difficult to achieve because of higher levels of “mistrust, miscommunication, and stress.”24
Communication issues often arise because team members lack fluency in the team’s working language, which can lead to inaccuracies, misunderstandings, and inefficiencies.25 On the other hand, research also shows that a multicultural global team is better able to capitalize on the diversity of ideas represented if a wide range of information is used.26
Finally, dealing with conflict in global teams isn’t easy. Conflict can interfere with how information is used by the team. However, research shows that in collectivistic cultures, a collaborative conflict management style can be most effective.27
20F. Niederman and F. B. Tan, “Emerging Markets Managing Global IT Teams: Considering Cultural Dynam- ics,” Communications of the ACM, April 2011, pp. 24–27; R. M. B. Boyle and S. Nicholas, “Cross-Cultural Group Performance,” The Learning Organization, March 2011, pp. 94–101; G. K. Stahl, M. L. Maznevski, A. Voigt, and K. Jonsen, “Unraveling the Effects of Cultural Diversity in Teams: A Meta- Analysis of Research on Multicultural Work Groups,” Journal of International Business Studies (May 2010), pp. 690–709; and M. R. Haas, “The Double-Edged Sword of Autonomy and External Knowledge: Analyzing Team Effectiveness in a Multinational Organization,” Academy of Management Journal ( October 2010), 53:5, pp. 989–1008. 21R. Bond and P. B. Smith, “Culture and Conformity: A Meta-Analysis of Studies Using Asch’s [1952, 1956] Line Judgment Task,” Psychological Bulletin, January 1996, pp. 111–137. 22I. L. Janis, Groupthink, 2nd ed. (New York: Houghton Mifflin Company, 1982), p. 175. 23See P. C. Earley, “Social Loafing and Collectivism: A Comparison of the United States and the People’s Republic of China,” Administrative Science Quarterly, December 1989, pp. 565–581; and P. C. Earley, “East Meets West Meets Mideast: Further Explorations of Collectivistic and Individualistic Work Groups,” Academy of Management Journal (April 1993), pp. 319–348. 24N. J. Adler, International Dimensions of Organizational Behavior, 4th ed. (Cincinnati: Southwestern, 2002), p. 142. 25K. B. Dahlin, L. R. Weingart, and P. J. Hinds, “Team Diversity and Information Use,” Academy of Man- agement Journal (December 2005), pp. 1107–1123. 26Adler, International Dimensions of Organizational Behavior, p. 142. 27S. Paul, I. M. Samarah, P. Seetharaman, and P. P. Mykytyn, “An Empirical Investigation of Collaborative Conflict Management Style in Group Support System-Based Global Virtual Teams,” Journal of Manage- ment Information Systems (Winter 2005), pp. 185–222.
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When Are Teams Not The Answer? Teamwork takes more time and often more resources than individual work.28 Because teams require supervisors to communicate more, manage conflicts, and run meetings, the benefits of using teams need to exceed the costs, but that’s not always the case.29 Some supervisors have introduced teams into situations where it would have been better to have individuals do the work. Before implementing teams, super- visors should carefully evaluate whether the work requires or will benefit from a collective effort.
Three “tests” have been suggested to determine whether work is better done indi- vidually or by a group.30 First, can the work be done better by more than one person? Task complexity would be a good indicator of a need for different perspectives. Simple tasks are probably better done by individuals. Second, does the work create a common purpose or set of goals for the people in the group that’s more than the sum of individual goals? Finally, supervisors assess whether teams or individuals are better suited for doing work by looking at the interdependence of the individuals. Using teams makes sense when there’s interdependence between tasks.
28S. P. Robbins and T. A. Judge, Organizational Behavior, 14th ed. (Upper Saddle River, NJ: Pearson Pren- tice Hall, 2011). 29C. E. Naquin and R. O. Tynan, “The Team Halo Effect: Why Teams Are Not Blamed for Their Failures,” Journal of Applied Psychology (April 2003), pp. 332–340. 30A. B. Drexler and R. Forrester, “Teamwork—Not Necessarily the Answer,” HR Magazine, January 1998, pp. 55–58. See also R. Saavedra, P. C. Earley, and L. Van Dyne, “Complex Interdependence in Task- Performing Groups,” Journal of Applied Psychology (February 1993), pp. 61–72; and K. A. Jehn, G. B. Northcraft, and M. A. Neale, “Why Differences Make a Difference: A Field Study of Diversity, Conflict, and Performance in Work Groups,” Administrative Science Quarterly (December 1999), pp. 741–763.
Comprehension Check 11-2
5. A potential team is one that:
a. represents a group of individuals who interact primarily to share information and make decisions.
b. is heavily influenced by negative synergy. c. is moving in the right direction but is not quite there yet. d. has a set of common characteristics that lead to consistently high performance.
6. Becoming a “free rider” in a group is frequently called:
a. social loafing. b. social norming. c. social work teams. d. none of the above.
7. Which one of the following is not an obstacle to effective teams? a. Lack of trust b. Lack of infighting c. Lack of external support d. Weak sense of direction
8. Why are teams central to continuous-improvement programs?
a. Teams allow for specific goals to be set. b. Teams provide a natural vehicle for employees to share ideas and implement
improvements. c. Teams allow for greater efficiencies and better use of resources. d. Teams promote workforce diversity.
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5. Explain what a supervisor can do when group norms are hindering department performance. When norms are hindering department performance, the supervi- sor can transfer one or more group members, physi- cally separate members, or reward members who act against dysfunctional norms.
6. Identify three categories of teams. Teams can be cat- egorized in three ways: teams that provide advice, teams that manage things, and teams that make or do things.
7. List the characteristics of real teams. Real teams are characterized by a small number of people with complementary skills who are equally committed to a common purpose, common goals, and a common working approach for which they hold themselves mutually accountable.
8. List actions a supervisor can take to improve team per- formance. Supervisors can improve team performance by creating a clear purpose and goals, encouraging small wins, building mutual trust, appraising both group and individual performance, providing neces- sary external support, offering team-building training, and changing the team’s membership.
9. Describe the role of teams in continuous-improvement programs. Continuous-improvement programs pro- vide a natural vehicle for employees to share ideas and to implement improvements as part of the process. Teams are particularly effective for resolving complex problems.
1. Contrast a group and a team. A group is merely two or more people who come together to achieve a par- ticular objective. A team is a formal workgroup com- posed of individuals who are committed to a common purpose, who have a set of performance goals, and who hold themselves mutually accountable for the team’s results. In contrast to formal workgroups, teams achieve positive synergy by producing a whole that is greater than the sum of its parts through joint effort.
2. Define norms. Norms are acceptable standards of behavior within a group that are shared by the group’s members.
3. Explain the relationship between cohesiveness and group productivity. Whether cohesiveness affects productivity depends on the group’s performance- related norms. If performance-related norms are high, a more cohesive group will be more productive than a less cohesive group will. If cohesiveness is high and performance norms are low, productivity will be low. If cohesiveness is low and performance norms are high, productivity increases modestly. If cohesiveness and performance-related norms are both low, produc- tivity will tend to be low to moderate.
4. Describe who is likely to become an emergent leader in an informal group. Emergent leaders tend to be people with charismatic traits and those with impor- tant but scarce knowledge about the organization or technical aspects of the group’s work.
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
11-6. Compare a pseudo team with a real team. 11-7. What skills do all teams need to perform effectively? 11-8. Contrast a team’s purpose and its goals. 11-9. How do you build trust in a team? 11-10. What is the supervisor’s role in gaining external
support for teams?
11-1. How do norms affect the behavior of employees? 11-2. Give examples of low performance-related norms. 11-3. Do cohesive groups always outperform less cohe-
sive groups? Explain. 11-4. Why can’t formal systems be designed to com-
pletely eliminate the need for informal groups? 11-5. Explain the increasing popularity of teams.
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
2
5
7
6
1
3
4
DOWNACROSS
2. the degree to which group members are attracted to each other and are motivated to stay in a group 4. a type of work group established by the organization and given specific work assignments 5. a leader who arises within a work group without having formal authority in the organization 7. becoming a free rider in a group
1. two or more individuals interacting interdependently to achieve a particular objective 3. a type of work group that forms naturally in the work environment in response to the need for social contact 6. a work group whose members are committed to a common purpose
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• How Good Am I at Building and Leading a Team?
Finally, after you complete any self-assessment, we suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
GETTING TO KNOW YOURSELF
Developing Your Supervisory Skills
m. a test tube n. a pack of gum o. a college catalog
D. After forty-five minutes, all teams are to be back in the classroom. (A penalty, determined by the instruc- tor, will be imposed on late teams.) The team with the most items on the list will be declared the winner. The class and instructor will determine whether the items meet the requirements of the exercise.
E. Debriefing will begin by having each team engage in self-evaluation. Specifically, it should answer the fol- lowing questions: a. What was the team’s strategy? b. What roles did individual members perform? c. How effective was the team? d. What could the team have done to be more
effective? F. Full class discussion will focus on issues such as the
following: a. What differentiated the more effective teams from
the less effective teams? b. What did you learn from this experience that is
relevant to the design of effective teams?
Source: Adapted from M. R. Manning and P. J. Schmidt, “Building Effective Work Teams: A Quick Exercise Based on a Scavenger Hunt,” Journal of Management Education 19, no. 3 (August 1995), 392–398.
11-11. An Experiential Exercise: Building Effective Work Teams
BUILDING A TEAM
Objective: This exercise is designed to allow class mem- bers to (a) experience working together as a team on a specific task and (b) analyze this experience.
Time: Teams will have forty-five minutes to engage in Steps 2 and 3, which follow. Another thirty minutes will be used in class to critique and evaluate the exercise.
Procedure
A. Class members are assigned to teams of about six people.
B. Each team may be required to: a. determine a team name. b. compose a team song.
C. Each team is to try to find the following items on its scavenger hunt: a. a picture of a team b. a newspaper article about a group or team c. a piece of apparel with the college name or logo d. a drinking straw e. a ball of cotton f. a piece of stationery from a college department g. a pad of sticky notes h. a flash drive i. a beverage cup from a fast-food restaurant j. a pet leash k. a book by Ernest Hemingway l. an ad brochure for a Ford product
STEPS IN PRACTICING THE SKILL
STEP 1: Analyze ways to improve the team’s perfor- mance and capabilities. A coach looks for opportu- nities for team members to expand their capabilities
Effective supervisors are increasingly being described as coaches rather than bosses. Just like coaches they are expected to provide instruction, guidance, advice, and encouragement to help team members improve their job performance.
DEVELOPING YOUR COACHING SKILLS
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11-13. In two to three pages, explain whether you would prefer to work alone or as part of a team.
11-12. Describe why work teams are more acceptable in Japan than in the United States or Canada.
COMMUNICATING EFFECTIVELY
helping manage chronic diseases (for example, teaching someone diagnosed with diabetes how to take blood sugar counts and to administer insulin), and other routine tasks are now done by a team of health-care providers.
For instance, at Kaiser Permanente, one of the largest not-for-profit managed health-care companies in the United States, a new program model called “complete care” was designed to enable health-care staffers to work together to make sure that no patient concern, need, pre- ventive action, or matter was missed or overlooked.32 As one individual described, staffers often literally chased patients down hallways to get them to schedule needed screenings. But the team approach is working. After a number of years using this model, research on Kaiser’s team model showed significant gains in patient medical care across a wide range of standardized measures. Getting to that outcome wasn’t easy, however. Departments that were accustomed to working on their own now had to work together. Instead of focusing on their own specialties, a team of specialists now worked together to provide patients with a well-rounded health-care experience.
32L. Landro, “The Teamwork Approach to Medical Care,” Wall Street Journal, June 9, 2014, R3.
■➤ Case 11-A: An Rx for Improved Teamwork in the Health-Care industry
THINKING CRITICALLY
The health-care industry is the fastest growing sector of the US economy, with annual revenues projected at over $1.6 trillion (that’s 12 zeroes!) and employing over 18 million workers31. Many challenges face the health-care industry, including changing laws/regulations, changing technolo- gies, an aging population and increase in chronic disease, and labor shortages (physicians and nurses). But the goal is still the same—to efficiently and effectively provide quality (appropriate and timely) health-care to patients. Given the challenges, health-care organizations are looking for better ways to do this. And one way is through using a “team- based care” approach, which research studies have shown can improve patient outcomes and reduce costs.
Many hospitals, clinics, and medical practices have adopted this team-care approach. What does that entail? A patient receives care from a team of medical profes- sionals who divide up responsibilities for performing tasks that traditionally would have been done by a person’s primary physician. Although supervising physicians still manage (oversee) patient care, tasks such as completing prescription refill requests, adjusting medication dosages,
31“Health Care Industry Statistics,” www.statisticbrain.com/health-care-industry-statistics/ (accessed March 5, 2017); and “Healthcare Workers,” www.cdc.gov/niosh/topics/healthcare/ (accessed March 5, 2017).
and improve performance. Observe your team mem- bers’ behavior on a day-to-day basis. Ask questions of them: Why do you do a task this way? Can it be improved? What other approaches might be used? Show genuine interest in team members as individu- als, not merely as employees. Respect them individu- ally. Listen to the employee.
STEP 2: Create a supportive climate. It’s the coach’s responsibility to reduce barriers to development and to facilitate a climate that encourages personal perfor- mance improvement. Create a climate that contributes to a free and open exchange of ideas. Offer help and assistance. Give guidance and advice when asked. Encourage your team. Be positive and upbeat. Don’t use threats. Ask, what did we learn from this that can help us in the future? Reduce obstacles. Express to team members that you value their contribution to the team’s goals. Take personal responsibility for
the outcome, but don’t rob team members of their full responsibility. Validate the team members’ efforts when they succeed. Point to what was missing when they fail. Never blame team members for poor results.
STEP 3: Influence team members to change their behavior. The ultimate test of coaching effectiveness is whether an employee’s performance improves. The concern is with ongoing growth and development. Recognize and reward small improvements and treat coaching as a way of helping employees continually work toward improvement. Use a collaborative style by allowing team members to participate in identify- ing and choosing among improvement ideas. Break difficult tasks down into simpler ones. Model the qualities that you expect from your team. If you want openness, dedication, commitment, and responsibil- ity from your team members, you must demonstrate these qualities yourself.
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316 Part 3 Motivating, Leading, Communicating, and Developing
Physicians had to be retrained to view themselves as part of a team, supported by other professionals such as nurses, assistants, and other staff. As the health-care environment continues to be challenging, is teamwork the Rx?
RESPONDING TO THE CASE
11-14. What challenges are managers of health-care orga- nizations facing and how would the way health- care organization managers manage be different in a team-based model?
11-15. Explain how norms, status systems, and group cohesiveness might influence the success of a team- based model?
11-16. What are some reasons you think a team-based model has led to improved patient outcomes and reduced costs?
■➤ Case 11-B: Bullying in the Locker Room The team locker room was a tough place for everyone, but especially for new players like Thomas. As part of a culture designed to “toughen up” players, every player felt free to harass every other member of the team. Slurs and taunts were hurled openly on the field and in the locker room with seemingly no topic being off limits. To an outsider, it would appear that many of the players were being bullied by stron- ger, more senior members of the team. However, these same players often commented that although “things were done in a humorous and maybe off-color way, they were not intended to make anyone feel bullied or abused or anything of that nature” and actually stemmed from the desire to develop a culture of locker-room “brotherhood,” not bullying.
Thomas felt differently, and even though the teasing and vulgar banter went on between him and all the play- ers, with references to sex, drugs, violence, and bawdy behavior often in a jocular tone, he still felt uncomfort- able. Often complaining to his parents and friends that bullying and harassment at the hands of his teammates caused him “significant emotional distress,” everyone was surprised when he abruptly left the team, was briefly hos- pitalized, then underwent counseling for emotional issues.
His teammates commented that Thomas should have toughened up and not let the “sticks and stones” break his bones. They felt that as far as some of the words that were used toward him, he should have been more con- fident and secure in his sexuality, not letting anything that anybody called him or said to him affect his need to go about his business and do the best he could for the
team. Teammates went on to say that, “bullying was not the appropriate term for what happened because nobody physically harmed him or made him do anything and he always had an option to say yes or no. It was never like he got bullied and was in fear for his life.”
Privately, some of his coaches commented that he shouldn’t have kept the situation to himself and should have let others know how he felt. The coaches and even some of his teammates felt completely blindsided because no one was aware of the extent of the taunting. In fact, since Thomas was also sending messages back and forth and kind of joking with them, everyone thought he was in on the joking and they didn’t view the situation for what it was.
RESPONDING TO THE CASE
11-17. Thomas’ coach survived the fallout but was heav- ily criticized for claiming he was unaware of the fraternity-house behavior happening in the locker room. Is it reasonable to believe a coach or any supervisor responsible for creating and monitor- ing the workplace environment could not know what was happening in their organization? Why or why not?
11-18. Discuss the topic of group norms as related to this case. How might revising the group norms improve this situation?
11-19. Is it reasonable to assume that regardless of your relationship with your teammates, or coworkers, you will still show them respect in the workplace? Why or why not?
11-20. Should an organization be expected to moni- tor and discipline employees engaged in abusive “locker room behavior” intended to toughen up fellow workers and develop an organizational “brotherhood?” Why or why not?
11-21. Is the concept of a team bonding through the subjugation and humiliation of some of its junior members valid or do these behaviors exist primar- ily for the amusement of the more senior members of the group? What does this behavior say about organizational values?
Source: Based on R. Maquinana, “Bryant McKinnie, Player A’s agent refute ‘bullying’ in Wells report,” Feb. 18, 2014, NFL. com, http://www.nfl.com/news/story/0ap2000000326262/ article/bryant-mckinnie-player-as-agent-refute-bullying-in-wells- report (accessed March 5, 2017).
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PART
If there is one thing common to most supervisors’ jobs, it’s the
fact that things will never remain calm—at least not for a long
period of time. Supervisors know that they must evaluate their
employees as well as deal with problems that may arise. So, too,
must supervisors work to ensure that the work environment is safe
and healthy, and they must be prepared to deal with the dynamic
change that takes place in organizations. All of these areas are
subjects of Part 4.
Chapter 12 ■ Performance Appraisal
Chapter 13 ■ Workplace Health and Safety
Chapter 14 ■ Conflict, Politics, Discipline, and Negotiation
Chapter 15 ■ Change Management
Chapter 16 ■ Supervision and Labor
Appraisal, Safety, Negotiation, Change, and Labor Relations 4
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Performance Appraisal
■ adjective rating scale
■ appraisal process
■ behaviorally anchored rating scale (BARS)
■ central tendency error
■ checklist
■ critical incidents
■ employee counseling
■ extrinsic feedback
■ group-order ranking
■ halo error
■ individual ranking
■ intrinsic feedback
■ leniency error
■ paired comparison
■ performance appraisal
■ performance feedback
■ recency error
■ similarity error
■ written essay
■ 360-degree appraisal
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
12 C
H A
P T
ER
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Michal Kowalski/Shutterstock
12-1. Describe the three purposes of the performance appraisal.
12-2. Differentiate formal and informal performance appraisals.
12-3. Describe key legal concerns in performance appraisals.
12-4. Identify the three most popular sets of criteria that supervisors appraise.
12-5. Contrast absolute and relative standards.
12-6. List human errors that can distort performance appraisal ratings.
12-7. Describe what is meant by the term 360-degree appraisal.
12-8. Describe the purpose of employee counseling.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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320 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Responding to a Supervisory Dilemma
Two-thirds of surveyed organizations felt they had inefficient performance management processes in place.1 This is scary because supervisors need to know whether their employees are performing their jobs efficiently and effectively. More than 70 percent of supervisors admit they have trouble giving a critical performance review to an underachieving employee.2 It’s par- ticularly challenging when supervisors and employees alike sense these reviews are not benefi- cial.3 A review of the topic of employee performance appraisals finds that it is almost universally disliked. Supervisors do not like to give them and employees do not like to receive them. So why do organizations even bother to do them? “ . . . Jim Heskett, writing in the Harvard Business Review, argues that the debate over the utility of performance reviews centers around a ‘forced ranking’ system, made popular by GE, which not only purports to identify the top performers, but also the underperformers . . . ”* The notion of identi- fying overachievers and subpar performers in order to deal with them in an appropriate fashion appears to drive the continued use of performance appraisal.
Performance appraisal may be defined as a structured formal interaction between an employee and a supervi- sor that usually takes the form of a periodic interview (annual or semiannual), in which the work performance of the employee is examined and discussed, with a view to identifying weaknesses and strengths as well as oppor- tunities for improvement and skills development. The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for the further development of skills and strengths. A per- formance appraisal may stimulate an employee’s interest and improve their job performance. The real potential of appraisal is as a tool for motivation and development.
Fortunate or not, supervisors are likely be the ones doing the review/appraisal. Most supervisors recognize the importance of effective performance management systems in an organization. They know that employee performance is essential to a company’s success or failure, and that a unified system for performance
evaluations should be in place for organizations to give feedback to their employees. The larger the company, the more likely there is a standardized appraisal form and for- mal procedures to follow. The pro- cedures are critical to ensure equal opportunities are given, and most supervisors would agree that perfor- mance appraisals must meet equal employment opportunity (EEO)
requirements. That is, appraisals must be administered in such a way that they result in a fair and equitable treatment of all employees in today’s diverse workforce.
The performance appraisal should contain stan- dards that are measurable, understandable, verifiable, equitable, and achievable. The performance appraisal should tell employees what they have to do and how well they have to do it. Performance standards should be set and reviewed with each employee so they know what is expected of them. Used effectively, appraisals can be beneficial working documents available for dis- cussion, and not merely paperwork filed in a drawer to be seen only when ratings are required. Additionally, the standards must describe work assignments and responsi- bilities that are significantly influenced by an employee’s work effort and within the employee’s control.
Embedded in the document should be statements of quality intended to address how well the employee is expected to perform the work or the accuracy or effec- tiveness of the final product. The standards for quantity must address how much work the employee is expected to produce, and the indicators for timeliness should be in place to address how quickly, when, or by what date the employee is expected to produce the work. Supervi- sors should remember that a performance appraisal is a review and discussion of an employee’s performance of assigned duties and responsibilities. The appraisal must be based on results obtained by the employee in his or her job, not on the employee’s personality characteristics.
Supervisors should plan to provide ongoing feed- back to their employees. Designing effective feedback into a performance management program will improve individual performance and make the organization more
1A. Pace, “The Performance Management Dilemma,” T&D, July 2011, p. 22. 2K. Sulkowicz, “Straight Talk at Review Time,” BusinessWeek, September 10, 2007, p. 16. 3D. Wilke, “Is the Annual Performance Review Dead?,” Society for Human Resource Management online, www.shrm.org, August 19, 2015; J. Pfeffer, “Low Grades for Performance Appraisals,” BusinessWeek, August 3, 2009, p. 68.
Radius Images/Alamy Stock Photo
*Ray Williams, “Why CEOs need to scrap employee performance reviews,” Wired for Success, May 17, 2011, Psychology Today, http:// www.psychologytoday.com/blog/wired-success/201105/why-ceos-need-scrap-employee-performance-reviews (accessed May 25, 2011).
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Chapter 12 Performance Appraisal 321
effective. With effective feedback processes, employees can see their progress and this may motivate them to reach their performance goals. Feedback works best when it relates to a specific goal, and employees should receive information about how they are doing in as timely a fashion as possible. Feedback should be given in a manner that will best help improve performance. In some cases an employee’s peers, who work with the employee on a day-to-day basis, are going to know their job performance and may assist in providing feedback.
No legislative regulations, such as EEO laws, exist to enforce ethical standards in performance appraisal. Thus, the evaluation process may be, and frequently is, lacking in ethical practice. Because of this, there are many who believe that organizations should do away with performance appraisals and evaluations. Some companies—about 6 percent of Fortune 500 compa- nies— are eliminating the formal performance review entirely.4 Because there are gray areas when it comes to evaluations, they may meet legal requirements but verge on questionable practices.
There are many reputable sources—researchers, management commentators, and psychometricians— who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it.† Indeed, even though many supervisors believe the appraisal is
an effective tool to evaluate performance and provide feedback that will aid employees in developing their career goals, they acknowledge that many employees focus on their ranking in the metric instead of the rec- ommendations for improvement of their workplace performance. It appears that many employees disre- gard the teachable moment provided by the appraisal process, and either ignore the feedback or defend their performance.‡
So what is the answer? Why do supervisors use performance appraisals? Do you feel employee apprais- als are a valuable tool in assisting supervisors in under- standing how their employees are performing? Do they accomplish their intended goals? What are their real effects? Do supervisors really need performance appraisals? Are there other ways to accomplish these goals? Do you believe an organization can have an effective performance appraisal process without sincer- ity and honesty dominating the system? How would you handle employee evaluations as the supervisor?
Additional Sources: See T. Juncaj, “Do Appraisals Work?” Quality Progress 35, no. 11 (November 2002), 45–50; M. Brown and J. Ben- son, “Rated to Exhaustion? Reaction to Performance Appraisal Pro- cess,” Industrial Relations Journal 34, no. 1 (March 2003), 67–81; and B. Erdogan, M. L. Kraimer, and R. C. Liden, “Procedural Jus- tice as a Two-Dimensional Construct: An Examination in the Perfor- mance Appraisal Context,” Journal of Applied Behavioral Science (June 2001), 205–223.
4B. Kropp, “Want to Do Away with Performance Reviews? Think Again,” CEB Blogs, www.cebglobal.com, August 11, 2015.
I know it’s wrong,” remarked Ron Connors. “I know I should do more in terms of performance appraisals with my employees, but I don’t. As long as my boss doesn’t get on my case, I sort of ignore them. The reason is that when I do appraisals and
give people feedback, we almost never agree. Everybody thinks they’re doing an above- average job. How can everybody be above-average? If I believed their self-appraisals, I’d have only three kinds of people working for me—stars, all-stars, and superstars!”
Ron Connors’s comments suggest why a lot of supervisors find appraising employee performance one of their most difficult tasks. In this chapter, we will review the per- formance appraisal and provide you with some techniques that can make the appraisal and performance review a less traumatic experience.
The Purpose of Employee Performance Appraisals Thirty-five years ago, the typical supervisor would sit down annually with their employ- ees individually and critique their job performance. Employees who failed to achieve their goals found that performance appraisals resulted in little more than their super- visor documenting a list of their shortcomings. Because the performance appraisal is a key determinant in pay adjustments and promotion decisions, anything to do with appraising job performance struck fear into the hearts of employees. Not surprisingly, supervisors often wanted to avoid the whole appraisal process.
OBJECTIVE 12.1 Describe the three purposes of the performance appraisal.
“
†M. G. Derven, “The Paradox of Performance Appraisals,” Personnel Journal 69 (February, 1990), 107–111. ‡T. Coens and M. Jenkins, Abolishing Performance Appraisals: Why They Backfire and What to Do Instead (San Francisco: Berrett-Koehler Publishers, 2000), http://www.bkconnection.com/static/Abolishing_Performance_Appraisals_EXCERPT.pdf (accessed May 25, 2011).
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322 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Today, effective supervisors treat the performance appraisal as an evaluation and development tool, as well as a formal legal document. It emphasizes positive accomplish- ments as well as deficiencies. Supervisors also use the performance appraisal to help employees improve future performance. If deficiencies are found, the supervisor can help employees draft a detailed plan to correct the situation. By emphasizing the future as well as the past, employees are less likely to respond defensively to performance feed- back, and the appraisal process is more likely to motivate employees to correct their performance deficiencies. Finally, remember the issue of employee discrimination from Chapter 5. Taking action against an employee for poor performance can create a prob- lem if the problem is not well-documented. The performance evaluation serves a vital purpose in providing the documentation necessary for any personnel action that is taken.5
WHEN SHOULD APPRAISALS OCCUR? The performance appraisal is both a formal and an informal activity. Formal perfor- mance reviews should be conducted once a year at a minimum. Twice a year may even be better. Just as students don’t like to have their entire course grade hanging on the results of one final exam, employees don’t want their careers to depend on an annual review. Two formal reviews a year means that less “performance” will be appraised at each one, and lessens the tension employees often associate with the formal review.
Proactive supervisors may establish the practice of having periodic informal reviews instead of waiting for the annual or biannual review. Informal performance appraisal is the day-to-day assessment a supervisor makes of an employee’s performance and the ongoing feedback the supervisor gives the employee about that performance. The effec- tive supervisor continually provides informal information to employees—commenting on the positive aspects of their work and pointing out problems when they surface. So, whereas formal reviews may occur only once or twice a year, informal reviews should be taking place all the time. Moreover, when the informal feedback has been open and honest, the formal reviews will probably be less threatening to the employee and won’t present any great surprises. When reviews indicate deficiencies or goals have not been achieved, supervisors may use a coaching process to analyze why and to aid the employee in developing an internal locus of personal accountability. A supervisor may find that employees with an external locus will blame a poor performance evaluation on their boss’s prejudice, their coworkers, or other events outside their control, whereas employees with an internal locus of control will explain the same evaluation in terms of their own actions.
What is Your Role in Performance Appraisals? The larger your organization, the more likely it is that there will be standardized appraisal forms and formal procedures for you to follow. Even small companies tend to standardize some appraisal procedures to ensure that equal employment opportunity requirements are met.
Will You Be the Sole Appraiser? Most employee performance appraisals are conducted by supervisors. However, in recent years, some organizations have added self-evalua- tions and peer evaluations to supplement those made by supervisors. Employees them- selves often have valuable insights to provide. So, too, do their peers.
Self-evaluations get high marks from employees themselves. They tend to lessen employees’ defensiveness about the appraisal process, and they make excellent vehicles
5Material in this chapter is derived from D. A. DeCenzo and S. P. Robbins, Fundamentals of Human Resource Management, 8th ed. (Hoboken, NJ: John Wiley & Sons, 2005), Chapter 10.
performance appraisal A review of past performance that emphasizes positive accomplishments as well as deficiencies; a means for helping employees improve future performance.
OBJECTIVE 12.2 Differentiate formal and informal per- formance appraisals.
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Chapter 12 Performance Appraisal 323
for stimulating the job performance discussion. Self-evaluations tend to suffer from inflated assessments, so they should be used to enhance your evaluation rather than to replace it. The use of self-evaluations, however, is fully consistent with viewing perfor- mance appraisal as a developmental tool rather than for purely evaluative purposes.
There are some elements of an employee’s job that peers are better at judging than you are as a supervisor. In some jobs, you don’t regularly observe an employee’s work because your span of control is quite large or because of physical separation. When work is built largely around teams, team members are often better at evaluating each other because they have a more comprehensive view of each member’s job performance. In such instances, supplementing your appraisals with peer evaluations can increase the accuracy of the appraisal process.
What Forms or Documentation Does the Organization Provide? Usually organizations require supervisors to use a standardized form to guide them in doing performance appraisals. In some cases, top management or the human resource department provides an abbreviated form and allows considerable freedom in identifying and assessing job performance factors. At the other extreme, organizations provide detailed forms and instructions that all supervisors must follow (see Exhibit 12-1).
Our point is that you rarely have complete discretion in evaluating your employees. Begin by reviewing any standard forms that your organization uses for appraisals. Familiarize yourself with the information you’ll be expected to provide and make sure all of the people reporting to you—especially new employees—understand how and on what criteria they will be evaluated.
How Do You Set Performance Expectations? As a supervisor, you should be involved in determining performance standards for your employees. This relates to the discussion of goal setting in Chapter 3. Ideally, you and each employee should jointly review the employ- ee’s job, identify the processes and results needed, then determine performance standards that will define how well the results are accomplished. Remember, before an employee’s performance can be appraised, some standard must exist against which the appraisal can be made. You must ensure that performance expectations have been defined for every employee, and that employees fully understand these expectations.
What Is Performance Feedback? Employees can receive performance feedback in one of two forms. It can be provided intrinsically by the work itself, or it can be given extrinsi- cally by a supervisor or some other external source (see the section titled “Conducting a Performance Evaluation” at the end of this chapter).
In some jobs, the feedback is built into the job. For example, freight clerks in a shipping department at a trucking company keep an ongoing tally of the number of boxes they pack and the weight of each box. At the end of the day, they total the num- bers and compare them to daily goals. These calculations provide them with self-gener- ated or intrinsic feedback on how they did that day.
Extrinsic feedback is provided to an employee by an outside source. If the freight clerks’ shipping totals are calculated each day by the supervisor and posted on the department’s bulletin board, their performance feedback is also extrinsic.
Provide your employees with ongoing extrinsic feedback through informal perfor- mance reviews—ongoing comments that let an employee know how they are doing— and through formal performance reviews on a semiannual or annual basis.
WHAT ARE THE LEGAL ISSUES IN PERFORMANCE APPRAISALS? A great many lawsuits have arisen because supervisors said or did something that their employees believed adversely affected them. One supervisor told an employee that he had downgraded the employee’s evaluation because he had taken off work for religious holidays. An employee argued that her supervisor’s appraisals were arbitrary and based
appraisal process The elements of a performance appraisal as defined by the organiza- tion; may involve self-evaluation and peer evaluation in addition to a super- visor’s input.
performance feedback Information that lets an employee know how well they are performing a job; may be intrinsic (provided by the work itself) or extrinsic (provided by a supervisor or some other source).
intrinsic feedback Self-generated feedback. See also per- formance feedback.
extrinsic feedback Feedback provided to an employee by an outside source. See also perfor- mance feedback.
OBJECTIVE 12.3 Describe key legal concerns in perfor- mance appraisals.
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324 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Exhibit 12-1 Examples of employee appraisal forms.
Month/Year
EMPLOYEE NAME:
NONEXEMPT PERFORMANCE APPRAISAL
TITLE:
REVIEW PERIOD: Month/Year
TITLE:SUPERVISOR'S NAME:
Writing the Appraisal Performance Ratings
ExceptionalE
Improvement RecommendedI
Consistently exceeds expectations in major areas of responsibility.
Performs the job as it is defined and exceeds expectations in some of the major areas of responsibility.
Meets minimum requirements in most areas, but needs improvement in select areas of responsibility.
Does not meet minimum performance requirements. Must improve if present position is to be maintained.
CommendableC
UnsatisfactoryU
PERFORMANCE FACTORS
Rate employee in each performance category. Include supporting examples for each performance factor.
E = EXCEPTIONAL C = COMMENDABLE
I = IMPROVEMENT RECOMMENDED U = UNSATISFACTORY
Performance Factors E C I U Comments and Supporting Examples
Quality Consider accuracy, comprehensive- ness and orderliness of work
Quantity Consider speed and volume of work produced
Initiative Consider the ability to think independ- ently with minimal direction and apply new concepts and techniques
Judgment Consider the ability to make logical and sound decisions and to know when to act independently or to seek assistance
Job Knowledge Consider the understanding of the job and the ability to apply knowledge and skills effectively
Problem Solving / Decision Making Consider the ability to identify, analyze and solve problems, suggest viable alternatives, and analyze impact of decisions before executing them
OVERALL PERFORMANCE RATING
IPerformance Factors E C U Comments and Supporting Examples
Punctuality Consider adherence to the work schedule and promptness in notifying supervisor of absence
Job Skills Consider skills in areas such as typing/word processing, computer, telephone, etc.
Dependability Consider adherence to the work schedule, the ability to maintain confidentiality, complete work under deadlines, follow through on assign- ments, and be reliable and flexible
Exceptional Commendable Unsatisfactory
Interpersonal Skills Consider the ability to interact diplomatically and tactfully with internal and external contacts
Planning and Organizational Skills Consider the ability to establish priorities, maintain schedules, and manage time effectively
Communication Consider the ability to express oneself clearly, both verbally and in writing, and to listen well
Improvement Recommended
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Chapter 12 Performance Appraisal 325
PERFORMANCE SUMMARY
I.—Performance vs. Goals for Past Year:
—Describe how the employee met stated goals for past year and met additional goals if applicable.
II.—Goals for Upcoming Year:
—List quantifiable goals with timetables for completion.
PERFORMANCE SUMMARY
V.—Personal Growth and Development
—Describe activities to be undertaken that will maximize the employee's career development. —These may include educational programs, counseling, on-the-job training, etc.
EMPLOYEE'S COMMENTS Your comments are beneficial to the performance appraisal process. Additional comments may be attached on a separate page if desired.
THE EVALUATION AND COMMENTS WERE DISCUSSED WITH THE EMPLOYEE
Employee's signature and date
Supervisor's signature and date Title
Supervisor's Signature Date
PERFORMANCE SUMMARY
III.—Strengths
—Identify employee unique strengths in relation to performance factors previously listed.
IV.—Areas for Improvement
—Identify areas in which employee can focus to achieve improved performance.
Exhibit 12-1 (continued )
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326 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
on subjective judgments. Another employee was awarded damages because his supervi- sor failed to follow the company’s performance appraisal policies and procedures.
Maybe the two most important legal facts you need to keep in mind concerning performance appraisals are the following: (1) Performance appraisal policies and pro- cedures, as set forth in organizational handbooks, are being increasingly construed by the courts as binding unilateral contracts; and (2) you must do everything possible to avoid the appearance of prejudice and discrimination.
If your company has a published handbook describing its performance appraisal procedures be sure you fully understand its contents. The courts, in most states, consider it a binding contract. The organization can be held accountable if those procedures are ignored or followed improperly. If the handbook states that appraisals must be per- formed annually or that managers will counsel employees to correct deficiencies, then you are obligated to fulfill these commitments. However, the courts have generally supported giving supervisors a wide range of discretion, as long as fairness and equity are not com- promised, when their organizations have no published performance appraisal policies.
The second point is a reminder that EEO laws require that all human resource practices be bias-free. The appraisal criteria, methods, and documentation must be designed to ensure they are job-related and must not create a different effect on women or minorities. Appraisal judgments must be neutral regarding an employee’s race, color, religion, age, gender, or national origin. An increasing number of organizations are providing supervisory training in the mechanics of performance appraisal to minimize the likelihood that discrimination might occur in the process.
ARE THERE APPROPRIATE CRITERIA FOR APPRAISING PERFORMANCE? The criteria that you choose to appraise performance will have a major influence on what employees do. In a public employment agency that served workers seeking employ- ment and employers seeking workers, employment interviewers were appraised by the number of interviews they conducted. Consistent with the thesis that the evaluating criteria influence behavior, employees emphasized the number of interviews conducted rather than the placement of clients in jobs.6
The preceding example demonstrates the importance of criteria in performance appraisal. What should you appraise? The three most popular sets of criteria are indi- vidual task outcomes, behaviors, and traits.
What Are Individual Task Outcomes? If ends count, rather than means, you should evalu- ate an employee’s task outcomes. Using task outcomes, carpet cleaners might be judged on the number of square yards they were able to clean per day. Salespeople could be assessed on overall sales volume in their territory, dollar increase in sales, and number of new accounts established.
Which Behaviors Matter? Evaluating employees on behavior requires the opportunity to observe employees or devising a system for reporting on specific behavior criteria. Using the previous examples, behaviors of a carpet cleaner that could be used for performance appraisal purposes might include promptness in reporting to work sites or thorough- ness in cleaning equipment at the end of the workday. Pertinent salesperson behaviors could be the average number of contact calls made per day or sick days used per year.
Often, it is difficult to identify specific outcomes that are directly attributable to an employee’s actions. This is true of personnel in staff positions and individuals whose work assignments are part of a group effort. In the latter case, the group’s performance may be readily evaluated, but the contribution of each group member may be difficult or impossible to identify clearly. In such instances, it is not unusual to appraise the employee’s behavior.
Is Evaluating Traits Useful? When you rate people on the degree to which they are depend- able, confident, aggressive, loyal, cooperative, and other characteristics, you are judging
OBJECTIVE 12.4 Identify the three most popular sets of criteria that supervisors appraise.
6P. M. Blau, The Dynamics of Bureaucracy, rev. ed. (Chicago: University of Chicago Press, 1963).
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Chapter 12 Performance Appraisal 327
traits. Traits are considered inferior to both task outcomes and behaviors as appraisal criteria. Traits refer to potential predictors of performance, not performance itself, and the link between traits and job performance is often weak. Additionally, traits typically have a strong subjective component, and your evaluation of someone on a particular trait is largely determined by what the term means to you. Despite the drawbacks of traits as a criterion, they are still widely used in organizations for appraising employee performance.
HOW DO YOU GATHER PERFORMANCE DATA? The best approach is for a supervisor to gather performance data on a continual basis. Don’t wait until a week or so before you are due to formally evaluate an employee to begin gathering your information. You should keep an ongoing file for each of your employees in which you record actual incidents (behaviors or outcomes) that affect their job success or failure. Such documentation reduces the potential for errors caused by overreliance on your recall of events and provides supportive evidence to back up your eventual ratings. Remember, too, that frequency of observation will improve the quality of the data you gather. The more opportunities you have to observe your employees’ performance firsthand, the more accurate your performance appraisals are likely to be.
Performance Appraisal Methods Once you have your data, you can begin your actual performance appraisals. If avail- able, use the forms provided by the organization; otherwise, develop your own rating forms. The object is to replace the “global impression” each of us creates about someone else’s overall performance with a systematic procedure for assessing performance. This systematic procedure increases the accuracy and consistency of results.
There are three different approaches for doing appraisals. Employees can be appraised against (1) absolute standards, (2) relative standards, or (3) objectives. No one approach is always best; each has its strengths and weaknesses. Your choice may be dictated, or at least limited, by the human resource policies and procedures in your organization.
What are the Absolute-Standards Measurements? The absolute-standards measurement means that employees are not compared against any other person. Included in this group are the following methods: written essays, criti- cal incidents, checklists, adjective rating scales, and behaviorally anchored rating scales.
Written Essays The simplest method of appraisal is to write a narrative describing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. The written essay requires no complex forms or extensive training to complete. A drawback is that the results tend to reflect the ability of the writer. A good or bad appraisal may be determined as much by your writing style as by the employee’s actual level of performance.
Critical Incidents Critical incidents focus attention on employee behaviors that make the dif- ference between executing a job effectively and executing it ineffectively. That is, you write down anecdotes that describe what the employee did that was especially effective or inef- fective. The key here is that only specific behaviors, not vaguely defined personality traits, are cited. A list of critical incidents provides a rich set of examples from which the employee can be shown those behaviors that are desirable and those that call for improvement.
Checklists With a checklist, you use a list of behavioral descriptions and check off behaviors that apply to the employee. As Exhibit 12-2 illustrates, you merely go down the list and check off “Yes” or “No” to each question. Checklists are quick and relatively
OBJECTIVE 12.5 Contrast absolute and relative standards.
written essay A written narrative describing an employee’s strengths, weaknesses, past performance, potential, and sug- gestions for improvement.
critical incidents Incidents that focus attention on employee behaviors that are key in making the difference between execut- ing a job effectively and executing it ineffectively.
checklist A list of behavioral descriptions that are checked off when they apply to an employee.
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easy to administer. However, they have drawbacks, one of which is their cost. Organiza- tions with a number of job categories must develop checklist items for each category. Second, simply checking yes or no provides few data for employees—especially if you expect them to improve their work.
Adjective Rating Scales One of the oldest and most popular methods of appraisal is the adjective rating scale. An example of some adjective rating scale items is shown in Exhibit 12-3.
Adjective rating scales can be used to assess factors such as quantity and quality of work, job knowledge, cooperation, loyalty, dependability, attendance, honesty, integ- rity, attitudes, and initiative. This method is most valid when subjective traits such as loyalty or integrity are avoided, unless they can be defined in specific behavioral terms.
With the adjective rating scale, you go down the list of factors and note the point along the scale or continuum that best describes the employee. There are typically five to ten points on the continuum. In the design of the rating scale, the challenge is to ensure that both the factors evaluated and the scale points are clearly understood by the supervisor doing the rating.
Adjective rating scales are popular because they have a number of advantages. They are less time consuming to develop and administer; they provide for quantitative aggre- gation and comparison; and in contrast to the checklist, there is greater standardization of items so that comparison with other employees in diverse job categories is possible. Furthermore, having this quantifiable assessment helps supervisors support or defend their personnel decisions when challenged.
Behaviorally Anchored Rating Scales Behaviorally anchored rating scales (BARS) combine major elements from the critical incident and adjective rating scale approaches. You rate your employees based on items along a continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits.
BARS specify definite, observable, and measurable job behaviors. Examples of job- related behaviors and performance dimensions are found by obtaining specific illus- trations of effective and ineffective behavior for each performance dimension. These behavioral examples are then translated into a set of performance dimensions, each dimension having varying levels of performance. The results of this process are behav- ioral descriptions, such as anticipates, plans, executes, solves immediate problems, car- ries out orders, and handles emergency situations Exhibit 12-4 provides an example of a BARS for a frontline supervisor.
adjective rating scale A method of appraisal that uses a scale or continuum that best describes the employee using factors such as quan- tity and quality of work, job knowledge, cooperation, loyalty, dependability, attendance, honesty, integrity, atti- tudes, and initiative.
behaviorally anchored rating scale (BARS) A scale that helps a supervisor rate an employee based on items along a con- tinuum; points are examples of actual behavior on a given job rather than general descriptions or traits.
Exhibit 12-2 Sample items from a checklist appraisal form.
1. Are the supervisor’s orders usually followed?
2. Does the individual approach customers promptly?
3. Does the individual suggest additional merchandise to customers?
4. Does the individual keep busy when not servicing a customer?
5. Does the individual lose his or her temper in public?
6. Does the individual volunteer to help other employees?
Yes No
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Exhibit 12-3 Example of adjective rating scale items.
Performance Factor Performance Rating
Quality of work is the accuracy, skill, and completeness of work.
Quantity of work is the volume of work done in a normal workday.
Job knowledge is in- formation pertinent to the job that an individual should have for satisfactory job performance.
Dependability is fol- lowing directions and company poli- cies without super- vision.
Consistently unsatisfactory
Consistently unsatisfactory
Poorly informed
about work duties
Requires constant
supervision
1
1
1
1
Occasionally unsatisfactory
Occasionally unsatisfactory
Occasionally unsatisfactory
Requires occasional follow-up
2
2
2
2
Consistently satisfactory
Consistently satisfactory
Can answer most ques- tions about
the job
Usually can be counted
on
3
3
3
3
Sometimes superior
Sometimes superior
Understands all phases of the job
Requires very little
supervision
4
4
4
4
Consistently superior
Consistently superior
Has complete
mastery of all phases of
the job
Requires absolute
minimum of supervision
5
5
5
5
Studies conducted using the BARS method indicate that they tend to reduce rating errors. But this tool’s biggest plus may stem from the dimensions a BARS generates rather than from any particular superiority of behavior anchors over trait anchors. The process of developing the behavioral scales is valuable in and of itself for clarifying to both the employee and the supervisor which behaviors mean good performance and which mean poor performance.
However, the BARS method is not without its drawbacks. It, too, suffers from the dis- tortions inherent in most rating methods. A BARS is also costly to develop and maintain.
HOW DO YOU USE RELATIVE STANDARDS? In the second category of performance appraisals—relative standards—employees are compared against other employees in evaluating their performance. We discuss three relative methods: group-order ranking, individual ranking, and paired comparison.
Group-Order Ranking Group-order ranking requires you to place your employees into par- ticular classifications, such as “top one-fifth” or “second one-fifth.” If you have twenty employees, and you’re using the group-order ranking method, only four of your employees can be in the top fifth—and of course, four also must be relegated to the bottom fifth (see Exhibit 12-5).
The advantage of group ordering is that it prevents you from inflating employee evaluations so that everyone looks good or equalizing the evaluations so that everyone is rated near the average—outcomes that are not unusual with the graphic rating scale. The predominant disadvantages surface when the number of employees being compared is small. At the extreme, if you are looking at only four employees, all of whom may actually be excellent, you are forced to rank them into top quarter, second quarter, third quarter, and bottom quarter. Of course, as the sample size increases, the validity of relative scores as an accurate measure increases.
Another disadvantage, which plagues all relative measures, is the zero-sum consid- eration which means that any change must add up to zero. If there are twelve employees
group-order ranking Placing employees into classifications, such as “top one-fifth” or “second one-fifth.” This method prevents a supervisor from inflating or equalizing employee evaluations.
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Exhibit 12-5 Group-order ranking distribution.
Top 1/5th
Bottom 1/5th
2nd 1/5th
4th 1/5th
Low Ratings
Performance Appraisal Range High Ratings
Median
N u
m b
e r
o f
E m
p lo
y e e s
3rd 1/5th
BARS for frontline supervisor
This performance dimension scale is designed to measure the ability of the frontline supervisor to focus and guide follow- ers to achieve work objectives.
This frontline supervisor can be expected to:
Rank Behavioral Description
14 Consistently provide needed feedback to maximize performance of individuals and teams
13 Establish high performance expectations for individuals and teams while creating high levels of commitment and buy-in for results
12 Take action to find resources, training, tools, etc. to support staff needs while remaining accessible to and approachable by staff
11 Consistently emphasize the importance of high-quality work while holding subordinates accountable for marginal quality work
10 Coach followers and work with them to create developmental opportunities to expand their knowledge and skill level by providing positive feedback and guidance for career development
9 Monitor employee performance and provide timely, objective, and specific feedback to supplement the annual performance review
8 Work with followers to generate performance goals that are specific, measurable, and time-bound and establish a process to monitor their progress
7 Find opportunities to leverage strengths of team members and manage limitations to facilitate delivery of strong team results
6 Identify appropriate rewards and recognize follower excellence in ways that motivate others
5 Be unwilling or unable to provide followers with regular feedback on work performance
4 Be unable to define and describe expectations of work success
3 Be unapproachable to staff who have questions
2 Be inconsistent in emphasizing the importance of high-quality work
1 View the organizational performance appraisal/rating system as an obstacle to completing the work
Exhibit 12-4 Sample BARS for frontline supervisor. in your department performing at different levels of effectiveness, by definition, three
are in the top quarter, three are in the second quarter, and so forth. The sixth-best employee, for instance, would be in the second quarter. Ironically, if two of the work- ers in the third or fourth quarters leave the department and are not replaced, then the sixth-best employee now falls into the third quarter. Because comparisons are relative, an employee who is mediocre may score high only because they are the “best of the worst.” In contrast, an excellent performer who is matched against tough competition may be evaluated poorly, when in absolute terms their performance is outstanding.
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Individual Ranking The individual ranking method requires you to list all of your employees, in order, from the highest to lowest performer. In this method, only one can be “best.” This method also assumes differences between people are uniform. That is, in appraising thirty employees, it is assumed the difference between the first and second employee is the same as that between the twenty-first and the twenty-second. This method allows for no ties, which can be an advantage because it doesn’t allow you to avoid confronting differences in performance levels. But its major drawback is that in situations where differences are small or nonexistent, this method magnifies and over- emphasizes differences.
Paired Comparison In the paired comparison approach, each employee is compared with every other employee in the comparison group and rated as either the superior or weaker member of the pair. After all paired comparisons are made, each employee is assigned a summary ranking based on the number of superior scores they achieved. Each employee is compared against every other employee—an arduous task when assessing large numbers of employees.
OBJECTIVES The final method for appraising performance is by using objectives. This is essentially an application of goal setting, introduced in Chapter 3.
Once you and your employee have established a set of tangible, verifiable, and measurable goals that encompass the key results they are expected to achieve, you have the standard in place against which the employee’s performance can be assessed. At the end of the goal-setting period—which might be monthly, quarterly, semiannually, or annually—you and your employee can sit down and appraise how well they performed. If the goals were carefully chosen to capture the essential performance dimensions in
individual ranking A method that requires supervisors to list all employees in order from the highest to lowest performer.
paired comparison An approach in which each employee is compared with every other employee in the comparison group and rated as either the superior or weaker member of the pair.
Comprehension Check 12-1
1. Which one of the following is not a component of an effective performance appraisal system?
a. Feedback b. Development c. Salary increase d. Documentation
2. Self-generated feedback about one’s performance is best referred to as:
a. extrinsic feedback. b. supervisory feedback. c. intrinsic feedback. d. self-performance feedback.
3. The type of appraisal method that involves a narrative of an employee’s strengths, weak- nesses, past performance, potential, and suggestions for improvement is the:
a. critical incident. b. written essay. c. checklist. d. behaviorally anchored rating scale.
4. Which one of the following is not an absolute-standards measurement? a. Group-order ranking b. Critical incident c. Checklist d. Adjective rating scale
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the employee’s job and written so they can be readily measured, they should provide you with a fairly accurate appraisal of the employee’s overall job performance.
Potential Problems in Performance Appraisals Although you and your employer may seek to make the performance appraisal process free from personal biases, prejudices, and idiosyncrasies, a number of potential problems can creep into the process. To the degree that the following factors are prevalent, an employee’s performance appraisal is likely to be distorted.
WHAT IS LENIENCY ERROR? Every appraiser has their own value system that acts as a standard against which apprais- als are made. Relative to the true or actual performance an individual exhibits, some appraisers mark high and others low. The former is referred to as positive leniency error, and the latter as negative leniency error. When appraisers are positively lenient in their evaluations, an employee’s performance becomes overstated—that is, rated higher than it actually should be. Similarly, a negative leniency error understates performance, giving the individual a lower appraisal than deserved.
If all employees in an organization were appraised by the same person, there would be no problem. Although there would be an error factor, it would be applied equally to everyone. The difficulty arises when we have different raters with different leniency errors making judgments. For example, assume that Jean and Steven are performing the same job for different supervisors, but they have absolutely identical job performance. If Jean’s supervisor tends to err toward positive leniency, whereas Steven’s supervisor errs toward negative leniency, we might be confronted with two dramatically different performance appraisals.
HOW DO HALO ERRORS AFFECT APPRAISALS? The halo error is a tendency to rate an individual high or low on all factors as a result of the impression of a high or low rating on some specific factor. For example, if an employee tends to be dependable, you might become biased toward that individual to the extent that you rate them high on many desirable traits.
People who design teaching appraisal forms for college students to fill out to evalu- ate the effectiveness of their instructors each semester must confront the halo error.
Students tend to rate a faculty member as outstanding on all criteria when they are particularly appreciative of a few things they do in the classroom. Similarly, a few bad habits—such as showing up late for lectures, being slow in returning papers, or assigning an extremely demanding read- ing assignment—might result in students evaluating the instructor as “lousy” across the board.
WHAT IS SIMILARITY ERROR? When appraisers rate other people by giv- ing special consideration to qualities that they perceive in themselves, they are mak- ing a similarity error. The supervisor who perceives himself as aggressive may
OBJECTIVE 12.6 List human errors that can distort per- formance appraisal ratings.
leniency error Positive or negative leniency that overstates or understates performance, giving an individual a higher or lower appraisal than deserved.
halo error A tendency to rate an individual high or low on all factors as a result of the impression of a high or low rating on some specific factor.
similarity error Rating others in a way that gives special consideration to qualities that appraisers perceive in themselves.
As a supervisor appraising this individual’s classroom perfor- mance, if you give him a positive rating based on his ability to entertain rather than his ability to teach, you may be allow- ing the halo effect to bias your appraisal.
Sirtravelalot/Shutterstock
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evaluate others by looking for aggressiveness. Those who demonstrate this characteristic tend to benefit, whereas others are penalized.
Again, this error would tend to wash out if the same evaluator appraised all the people in the organization. However, multiple-rater reliability obviously suffers when various evaluators use their own similarity criteria.
WHAT IS RECENCY ERROR? For most of us, it’s easier to vividly remember what happened yesterday than recall what happened six months ago. This creates the potential for recency error to surface in performance appraisals.
Recency error results when evaluators recall, and then give greater importance to, employee job behaviors that have occurred near the end of the performance-measuring period. If you have to complete an appraisal form on each of your employees every June 1, accomplishments and mistakes that took place in May might tend to be remem- bered, whereas behaviors exhibited during the previous November tend to be forgot- ten. Given the reality that we all have good and bad days—even good and bad months—and that they don’t occur at the same time for all employees, a semiannual or annual review may be significantly biased by employee behaviors that occurred just prior to the review.
recency error An error that occurs when appraisers recall and give greater importance to employee job behaviors that have occurred near the end of the perfor- mance-measuring period.
Something to Think About (and promote class discussion)
AN UNFAIR PERFORMANCE REVIEW A recent survey of 1,000 full-time employees, all born after 1980, found a great deal of frustration with their performance reviews. Sixty-two percent, for instance, felt “blindsided” by their reviews; 74 percent frequently felt unsure as to what their managers thought of their performance; 22 percent called in sick because they were anxious about their reviews; and 28 percent reacted to their reviews by looking for another job. Our conclusion is that it’s very possible that sometime in your career, you’ll experience frustration as a result of your performance review.
You might be surprised to learn that most supervisors actually dislike performance reviews. Why? First, managers are often uncomfortable discussing performance weaknesses directly with employees because they fear a confrontation when presenting negative feedback. Second, many employees become defensive when their weaknesses are pointed out. It’s not uncommon for employees to challenge the evaluation by criticizing the manager or redirecting blame to someone else. Finally, employees tend to have an inflated assessment of their own performance. Statistically speaking, half of all employees must be below-average performers. But the evidence indicates that the average employee’s estimate of his or her performance level generally falls around the 75th percentile. So even when managers are providing good news, employees are likely to perceive it as not good enough!
What recommendations do you have regarding how best to handle a performance evaluation that you feel isn’t fair? Should you be prepared to accept that there might be truth in some or all of the nega- tive comments? What about asking for suggestions on what you might do to improve . . . is it a good approach? If you’re convinced your boss’s evaluation is unfair, do you let the evaluation go? Or do you challenge it?
Sources: Based on S.P. Robbins, The Truth About Managing People, 3rd ed. (Upper Saddle River, NJ: Pearson Education, 2013), pp. 199–201; “How to Handle an Unfair or Negative Performance Review at Work,” hubpages.com, November 5, 2014; “Survey: Performance Reviews Drive One in Four Millennials to Search for a New Job or Call in Sick,” Newstex Finance & Accounting Blogs, October 28, 2015; and “How to Write a Rebuttal to Unfair Performance Review,” arkadylaw.com, November 16, 2015.
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HOW DOES CENTRAL TENDENCY ERROR AFFECT APPRAISALS? It’s possible that, regardless of whom the appraiser evaluates and what characteristics are used, the pattern of evaluation remains the same. A supervisor’s ability to appraise objec- tively and accurately can be impeded by a failure to use the extremes of the appraising scale. This reluctance to assign extreme ratings, in either direction, is the central tendency error.
Raters who are prone to the central tendency error avoid the “excellent” category as well as the “unacceptable” category and assign all ratings around the “average” or midpoint range. For example, if you rate all employees as 3 on a scale of 1 to 5, then no differentiation among them exists. Suppressing differences makes employees’ work performances appear considerably more homogeneous than they really are.
ARE YOU INCLINED TO USE INFLATIONARY PRESSURES? A clerical employee at a large insurance company was disappointed by the small salary increase she received following her recent performance review. After all, her supervisor had given her an overall rating of 86. She knew that the company’s appraisal system defined “outstanding performance” as 90 and above, “good” as 80 to 89, “average” as 70 to 79, and “unacceptable” performance as anything below 70. This employee was really bewildered when she heard from some friends at work that her pay increase was below the company average. You can imagine her surprise when, after meeting with the assistant director of human resources, she learned that the “average” rating of clerical personnel in the company was 92!
This example illustrates a potential problem in appraisals—inflationary pressures. Here, you as a supervisor minimize differences among your employees and push all evalua- tions into the upper range of the rating scale. Inflationary pressures have always existed but have become more of a problem over the past three decades. As equality values have grown in importance, as well as fear of retribution from disgruntled employees who fail to achieve excellent appraisals, evaluators have tended to be less rigorous and to reduce the negative repercussions from the appraisal process by generally inflating or upgrading evaluations.
HOW CAN YOU OVERCOME THE HURDLES? Just because there are potential hurdles to effective appraisals doesn’t mean that you should give up on the process. There are some things you can do to help overcome these hurdles.
Continually Document Employee Performance Keep a file for each of your employees and continually put notes into these files describing specific incidents of accomplishments and behaviors. Include dates and details. When the time comes for you to conduct formal employee appraisals, you’ll have a comprehensive history of each employee’s performance record during the appraisal period. This will minimize the recency error, increase the accuracy of your ratings, and provide specific documentation to support your assessments.
Use Behaviorally Based Measures Behaviorally-based measures are superior to those developed around traits. Many traits often considered related to good performance may in fact have little or no performance relationship. Traits such as loyalty, initiative, cour- age, and reliability are intuitively appealing as desirable characteristics in employees. But the relevant question is, “Are employees who are evaluated as high on these traits better performers than those who rate low?” We can’t answer that question. We know that some employees rate high on these characteristics and are poor performers. We can find others who are excellent performers but don’t score well on traits such as these. Our conclusion is that traits such as loyalty and initiative may be prized by organiza- tions, but there is no evidence to support that certain traits will be adequate substitutes for performance in a large cross-section of jobs. Additionally, traits suffer from weak agreement among multiple raters. What you consider loyalty, I may not.
central tendency error Appraisers’ tendency to avoid the “excellent” category as well as the “unacceptable” category and assign all ratings around the “average” or midpoint range.
OBJECTIVE 12.7 Describe what is meant by the term 360-degree appraisal.
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Behaviorally-based measures can deal with both of these objections. Because they deal with specific examples of performance—both good and bad—you avoid the prob- lem of using inappropriate substitutes. Moreover, because you’re evaluating specific behaviors, you increase the likelihood that two or more evaluators will see the same thing. You might consider a given employee friendly, whereas another rates her as stand- offish. But when asked to rate her in terms of specific behaviors, you might both agree that she frequently says “Good morning” to customers, rarely gives advice or assistance to coworkers, and almost always avoids idle chatter with coworkers.
Combine Absolute and Relative Standards A major drawback to absolute standards is that they tend to be biased by inflationary pressures—evaluators lean toward packing their subjects into the high part of the rankings. On the other hand, relative standards suffer when there is little actual variability among the subjects.
The obvious solution is to consider using appraisal methods that combine absolute and relative standards. For example, you might want to use the adjective rating scale and the individual ranking method. Comparing two employees’ performance records is much more meaningful when you know that Supervisor A gave Bob Carter an overall rating of 86, which ranked fourth in a department of seventeen, whereas Supervisor B also gave Tina Blackstone an 86 rating, but ranked her twelfth in a department of fourteen. It’s pos- sible that Supervisor B has higher-performing employees than Supervisor A. Supervisor B’s ratings may also suffer from inflationary pressures. By providing both absolute and rela- tive assessments, it is easier to more accurately compare employees across departments.
Use Multiple Raters The probability of attaining more accurate information increases as more raters are involved. If rater error tends to follow a normal curve, an increase in the number of appraisers will tend to find the majority congregating about the middle. You see this approach being used in athletic competitions in such sports as diving, gymnas- tics, and figure skating. A set of evaluators judges a performance, the highest and lowest scores are dropped, and the final performance appraisal is made up from the cumulative scores of those remaining. The logic of multiple raters applies to organizations as well.
If an employee has had ten supervisors, with nine having rated her as excellent and one as poor, the lone poor appraisal takes on less importance. Multiple raters increase the reliability of results by tending to lessen the importance of rater personal biases such as leniency, similarity, and central tendency errors.
A special case of multiple raters involves a trend in today’s organizations referred to as the 360-degree appraisal. The 360-degree appraisal seeks performance feedback from such sources as oneself, bosses, peers, team members, customers, and suppliers and has become very popular in contemporary organizations.7
In today’s dynamic organizations, traditional performance evaluations systems may be archaic. Downsizing has resulted in supervisors having greater work responsibility and more employees reporting directly to them. Accordingly, in some instances, it’s nearly impossible for supervisors to have extensive job knowledge of each of their employees. Furthermore, the growth of project teams and employee involvement in today’s companies places the responsibility of evaluation where people are better able to make an accurate assessment.8 The 360-degree appraisal process also has some posi- tive benefits for development concerns. Many supervisors simply do not know how their employees truly view them and the work they have done.
Research studies into the effectiveness of 360-degree performance appraisals are reporting positive results. These stem from having more accurate feedback, empowering employees, reducing the subjective factors in the evaluation process, and developing
7T. J. Maurer, D. R. D. Mitchell, and F. G. Barbeite, “Predictors of Attitudes Toward a 360-Degree Feed- back System and Involvement in Post-Feedback Management Development Activity,” Journal of Occupa- tional and Organizational Psychology 75 (March 2002), 87–107.
360-degree appraisal Performance feedback provided by supervisors, employees, peers, and possibly others.
8C. Hymowitz, “In the Lead: Do 360 Job Reviews by Colleagues Promote Honesty or Insults?” Wall Street Journal, December 12, 2000, B-1.
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leadership in an organization.9 Moreover, to enhance honesty and efficiency in feed- back, some companies have put their 360-degree appraisal on the Internet.
Rate Selectively As an employee’s direct supervisor, you may not always be in a position to comprehensively appraise all the key aspects of that employee’s performance. You should rate only in areas in which you have significant job knowledge and have been able to observe firsthand the employee’s job performance. If you appraise only the dimensions that you are in a good position to rate, you make the performance appraisal a more valid process.
If there are important parts of an employee’s job in which you aren’t able to make accurate judgments, you should supplement your appraisal with self-appraisals, peer evaluations, or even customer appraisals, if that’s more appropriate. A number of sales supervisors use customer input as part of their evaluation of sales representatives. Supervisors who frequently have to be away from their work areas, which limits their opportunities to observe their employees’ job behavior, use peer reviews to improve the validity of the appraisal process.
Participate in Appraisal Training Good appraisers aren’t necessarily born. If your appraisal skills are deficient, you should participate in performance appraisal training because there is evidence that training can make you a more accurate rater.
Common errors such as leniency and halo have been minimized or eliminated in workshops where supervisors practice observing and rating behaviors. These workshops typically run from one to three days, but allocating many hours to training may not always be necessary. One case has been cited in which both halo and leniency errors were decreased immediately after exposing evaluators to explanatory training sessions lasting only five minutes.10 However, the effects of training appear to diminish over time, which suggests the need for regular refresher sessions.
Conduct Performance Appraisals of Teams Performance appraisal concepts have been developed almost exclusively with the individual employee as the focus point. This reflects the historic belief that individuals are the core building block around which organizations are built. Recently, as we’ve noted a number of times in this book, more and more organizations are restructuring themselves around teams.
In team-based departments, job performance is a function of each individual’s con- tribution to the team and their ability to be a good team player. Both of these perfor- mance dimensions are often better assessed by the team’s members than by the team’s supervisor. We suggest, therefore, that you include peer evaluations from team members in the performance appraisals of those whose jobs are inherently designed around team- work. This enhances the autonomy of the team, reinforces the importance of cooperation, and increases the validity of the appraisal process. Additionally, consider the benefits of downplaying individual contributions by substituting group performance measures. When teams have clear responsibilities for achieving specific objectives, it makes more sense to appraise the team’s overall performance than to focus on its individual members.
RESPONDING TO PERFORMANCE PROBLEMS Whenever one of your employees exhibits work behaviors that are inconsistent with the work environment (e.g., fighting, stealing, or unexcused absences) or is unable to per- form their job satisfactorily, you must intervene. But before any intervention can begin, it is imperative for you to identify the problem. If you realize that the performance problem is ability-related, your emphasis becomes one of encouraging training and
9J. S. Miller, P. W. Hom, and L. R. Gomez-Mejia, “The High Cost of Low Wages: Does Maquiladora Compensation Reduce Turnover?” Journal of International Business Studies 32, no. 3 (Third Quarter 2001), 585–595. 10C. P. Neck, G. L. Stewart, and C. C. Manz, “Thought Self-Leadership as a Framework for Enhancing the Performance of Performance Appraisers,” Journal of Applied Behavior Science 31, no. 3 (September 1995), 278–302.
OBJECTIVE 12.8 Describe the purpose of employee counseling.
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development efforts. However, when the performance problem is desire-related, whether the unwillingness to correct the problem is voluntary or involuntary, employee counseling is the next logical approach.11
WHAT DO YOU NEED TO KNOW ABOUT COUNSELING EMPLOYEES? Although employee counseling processes differ, some fundamental steps should be fol- lowed when counseling an employee (see Exhibit 12-6).
11M. Scott, “7 Pitfalls for Managers When Handling Poor Performers and How to Overcome Them,” Manage, February 2000, 12–13.
employee counseling An emphasis on encouraging training and development efforts in a situation in which an employee’s unwilling- ness or inability to perform their job satisfactorily is either voluntary or involuntary.
THE ANYTIME FEEDBACK TOOL AT AMAZON
NEWS FLASH!
Founded by Jeff Bezos in 1994, Amazon is the world’s largest retailer based on market value. Many credit the organization’s work environment and culture for motivating employees to create innovations such as the Kindle and drone delivery. Like others in the technology sector, Amazon is known for an uncon- ventional workplace. However, unlike the “perk” heavy, country club-style workplace that character- izes many tech companies, Amazon’s workplace cul- ture emphasizes hard work and competition.
Supervisors at Amazon are data driven and focused on productivity. Some say that the envi- ronment can be harsh because employees who don’t make the grade are eliminated through the annual performance review process. Competi- tion is encouraged, and workplace conflict often occurs. Amazon’s culture is reinforced by 14 prin- ciples that guide employee behavior. Number 13, “disagree and commit,” reflects Bezos’s belief that harmony in the workplace is overvalued and it can stifle honest critique. Feedback on performance is encouraged, and many Amazon employees claim the competitive work environment helps them thrive as it pushes them past their limits.
Not everyone at Amazon agrees with the way feedback is delivered. Some employees report that feedback is sometimes very blunt and interpreted as confrontational or even painful. Furthermore, sometimes supervisors deliver feedback to employ- ees on performance that they did not observe first- hand. Supervisors often receive reviews of their employees’ performance via a controversial online feedback tool. The Anytime Feedback Tool is a wid- get in the company directory that allows employees to easily send feedback about coworkers to manage- ment. The bosses know who sends the feedback, but in practice, they keep feedback anonymous when shared back to employees. Amazon claims this is
just another tool to send feedback to supervisors, similar to e-mail. However, some claim that the anonymous use of this tool, coupled with its ease of use, creates problems. Given the competitive nature of the organization, some Amazonians claim that the tool is often used to sabotage others. Employees can send false or misleading feedback via the tool, and those getting the feedback are unable to defend themselves from the anonymous feedback.
Jeff Bezos claims that while the organization is competitive, reports of such callous behavior do not reflect the Amazon he knows. He noted in a letter to shareholders that organizational cul- ture evolves over time, and people self-select into an organization. While Amazon does see a high level of employee turnover, in the more than two decades since the company was founded, they have collected a significant number of employees who thrive in their feedback-rich environment.
Sources: Based on S. Pettypiece, “Amazon Passes Wal- Mart as Biggest Retailer by Market Value,” Bloomberg, July 23, 2015, https://www.bloomberg.com/news/arti- cles/2015-07-23/amazon-surpasses-wal-mart-as-biggest- retailer-by-market-value (accessed March 12, 2017); C. Myers, “Don’t Try This At Home: Why Amazon’s Culture Isn’t Right for Your Business,” Forbes, August 16, 2015, https://www.forbes.com/sites/chrismyers/2015/08/16/ dont-try-this-at-home-why-amazons-culture-isnt-right- for-your-business/#1789ad191378 (accessed March 12, 2017; J. Kantor and D. Streitfeld, “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace,” The New York Times, August 15, 2015, https://www.nytimes. com/2015/08/16/technology/inside-amazon-wrestling- big-ideas-in-a-bruising-workplace.html?_r=0 (accessed March 12, 2017; J. McGregor, “Amazon CEO Jeff Bezos Shares Thoughts on Corporate Culture, Decision-making and Failure,” Los Angeles Times, April 10, 2016, http:// www.latimes.com/business/la-fi-0410-on-leadership- bezos-20160410-story.html (accessed March 12, 2017).
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Listen to What the Employee Has to Say You can’t effectively counsel others unless you listen to what they have to say. Your actions should be tailored to the needs, demands, and personality of your employee. These factors can’t be accurately assessed without active listening.
When you sit down with your employee, demonstrate your willingness and desire to be helpful. Then, listen to what they have to say. Also listen to what is not being said. How is the employee framing the problem? Who does the employee think is to blame? Are their emotions driving out rational thinking? Don’t make judgments too quickly. Try to grasp the employee’s perception of the situation without agreeing or disagreeing with that perception. At this point, it’s not so important to determine whether the employee is right or wrong as it is to try to fully understand the problem from their point of view.
Identify the Problem After you’ve listened to your employee’s initial assessment of the situation, begin the search to identify the problem and its causes. What does the employee think is the problem? Who or what is the cause? How is this problem affecting the employee? What, if any, responsibility is your employee taking for the problem? You must remember, though, you’re attacking some behavior, not the employee!
Clarify Alternatives Problems come with options. In most cases, a number of alterna- tives can correct the problem. These need to be explored and clarified. This is a point at which a participative approach can be particularly valuable because you may see and know things that escape the employee’s perception. As a result, merging your insights and the employee’s can result in a greater number of quality options.
Once alternatives are identified, they need to be evaluated. What are the strengths and weaknesses of each? Again, two heads are better than one. Your goal should be to have the employee weigh the pluses and minuses of each course of action.
Come to a Resolution What’s the best option for the employee? Remember, the best option for one employee is not necessarily the best option for another. The solution should reflect the unique characteristics of the employee. Ideally, both you and the employee will agree on the solution. You want to be sure the employee buys into the final choice, whether that final choice was made by you, by the employee, or by both of you jointly. A terrific solution that’s not accepted by the employee is unlikely to result in any meaningful change.
Agree on an Action Plan Finally, the employee needs to develop a concrete plan of action for implementing the solution. What, specifically, is the employee going to do? When will they do it? What resources, if any, will be needed?
Ending a counseling session with the employee summarizing what has taken place and the specific actions they plan on taking is usually a good idea. Establish a follow- up point at some specific date in the future for reassessing the employee’s progress. If a formal meeting isn’t needed, request a short memo from the employee updating you on their progress. This can be effective as a reminder to the employee that progress is expected, and as a control device for you to assess the employee’s progress.
IS YOUR ACTION ETHICAL? What business do you have delving into an employee’s personal life? That’s a valid ques- tion and requires us to look at the ethics of counseling. Employees bring a multitude of problems and frustrations from their personal lives to their jobs. They have difficulty finding quality day care for infants. A teenage child is expelled from high school. They have fights with their spouses. A family member suffers a nervous breakdown. They get
Exhibit 12-6 The counseling process.
1. Listen
4. Come to a resolution
3. Clarify alternatives
5. Agree on an action plan
2. Identify the problem
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behind in their bills and they’re harassed by creditors. A close friend is seriously hurt in an automobile accident. A parent is diagnosed with Alzheimer’s disease.
It may seem wise to keep your nose out of your employees’ personal lives, but that is often unreasonable. Why? Because there is no clear demarcation that separates personal and work lives. Consider the following scenario involving one of your employees, Denise. Denise’s son was arrested last night for possession of drugs. She spent most of the night with police and lawyers. Today, at work, she is tired and psychologically distant. She has trouble concentrating. Her mind is not on her job. It’s naive to believe that employees can somehow leave their personal problems at the door when they come to work each morning.
Do employees have a right to privacy? Absolutely! However, when personal prob- lems interfere with work performance, you should not consider it beyond your jurisdic- tion to inquire about the problem, offer yourself as an open ear, and genuinely seek to help with the problem. If your offer is rejected, don’t push. If the employee understands how his or her personal problem is affecting work performance, and you make clear what the consequences will be if the work performance doesn’t improve, you’ve reached the ethical limit of your involvement. If the employee is protective of their personal life, your rights as a supervisor don’t extend to helping solve their personal problems. However, you do have the right and the obligation to make sure employees understand that if personal problems interfere with their work, they need to solve those personal problems—and you’re there to help, if asked.
Comprehension Check 12-2
5. The type of performance appraisal error that overstates or understates performance based on the rater’s value system is called:
a. similarity error. b. recency error. c. halo error. d. leniency error.
6. Central tendency is:
a. rating others in a way that gives special consideration to qualities that appraisers perceive in themselves.
b. a tendency to rate an individual high or low based on the impression of some specific factor.
c. assigning all ratings as average. d. none of the above.
7. Which one of the following is not a recommendation for overcoming performance appraisal hurdles?
a. Use single raters b. Use behaviorally-based measures c. Rate selectively d. Train appraisers
8. An emphasis on encouraging training and development efforts in a situation in which an employee’s unwillingness or inability to perform their job satisfactorily is either voluntary or involuntary is descriptive of:
a. performance feedback. b. employee counseling. c. 360-degree appraisal. d. discipline.
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340 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
After reading this chapter, I can:
SUMMARY
criteria used by supervisors in appraisals are individ- ual task outcomes, behaviors, and traits. The first two are almost always preferred to the third.
5. Contrast absolute and relative standards. Abso- lute standards compare the employee’s performance against specific tasks, behaviors, or traits rather than against other employees. In contrast, relative stan- dards compare employee performance against that of other employees.
6. List human errors that can distort performance appraisal ratings. Common human errors that can distort appraisals include leniency error, halo error, similarity error, recency error, central tendency error, and inflationary pressures.
7. Describe what is meant by the term 360-degree appraisal. In 360-degree performance apprais- als, evaluations are made by the employee being appraised, supervisors, other employees, team mem- bers, customers, suppliers, and the like. In doing so, a complete picture of performance can be assessed.
8. Describe the purpose of employee counseling. The purpose of employee counseling is to address per- formance problems when the deficiencies are desire related.
1. Describe the three purposes of the performance appraisal. The performance appraisal is both an eval- uation and development tool and a legal document. It reviews past performance to identify accomplishments and deficiencies; it offers a detailed plan to improve future performance through training and develop- ment; and it also becomes a legal document that can be used to support and justify personnel actions.
2. Differentiate formal and informal performance appraisals. Formal performance appraisals are reg- ular, planned meetings where the supervisor and employee discuss and review the latter’s work perfor- mance. Informal performance appraisal is the day-to- day assessment a supervisor makes of an employee’s performance and the ongoing feedback the supervisor gives the employee about that performance.
3. Describe key legal concerns in performance apprais- als. To minimize legal problems, supervisors should make sure that they carefully follow all performance appraisal policies and procedures set forth in the orga- nization’s employee handbook (if it exists) and make every effort to avoid prejudice and discrimination.
4. Identify the three most popular sets of criteria that supervisors appraise. The three most popular sets of
Enhancing Understanding
12-6. Compare written essay appraisals with BARS appraisals.
12-7. Would human errors in the appraisal process be eliminated in small organizations where one person does all the appraisals? Explain.
12-8. What can a supervisor do to minimize distortions in the appraisal process?
12-9. What is a 360-degree appraisal? What are the advantages and disadvantages of using this method of appraising?
12-10. Do you believe employee counseling is preferable to disciplining employees? Support your position.
12-1. Why, in your opinion, do many supervisors dis- like or even avoid giving employees performance feedback?
12-2. Contrast the advantages of supervisor-conducted appraisals, self-evaluations, and peer evaluations.
12-3. What is the relationship between goal setting and performance appraisal?
12-4. Contrast intrinsic and extrinsic feedback. 12-5. If appraising behaviors are superior to appraising
traits, why do you think so many organizations evaluate their employees on criteria such as effort, loyalty, and dependability?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
5
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10 11
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DOWNACROSS
5. elements of performance evaluation as defined by the organization 7. a type of performance evaluation whereby information is obtained from supervisors, employees, peers, and maybe others 11. ranking employees into such classifications as top fifth, second fifth, etc. 15. key behaviors that make a di erence in an employee's job e ectiveness 16. an emphasis on encouraging training and development when an employee's performance problem is desire related 17. a ranking method of listing employees from highest to lowest 18. an evaluation scale that combines major elements of critical incidents and adjective rating scales 19. a type of feedback that is provided by an outside source
1. a type of performance evaluation error in which the most current behaviors influence the evaluation 2. a type of performance evaluation error whereby someone's rating is related to how appraisers perceive themselves 3. a type of performance evaluation error whereby one is evaluated high or low based on some specific factor 4. a review of past performance that emphasizes accomplishments and deficiencies 6. information that lets an employee know how well he or she performed 8. an evaluation method involving behavioral descriptions that are either present or not 9. an appraisal method that uses a scale or continuum that describes the degree to which an employee performed his or her work 10. a type of performance evaluation error in which all ratings end up average 12. a type of performance evaluation error that overstates or understates one's performance 13. a type of feedback that is self-generated 14. a type of employee evaluation involving a narrative description of an employee's performance
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Developing Your Supervisory Skills
• What Are My Course Performance Goals? Finally, after you complete any self-assessment, we
suggest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• How Good Am I at Giving Performance Feedback?
GETTING TO KNOW YOURSELF
implications for pay increases or other personnel decisions? If so, make sure employees understand exactly how the appraisal process works, and its consequences.
STEP 4: Involve the employee in the appraisal dis- cussion, including a self-evaluation. Performance appraisals should not be a one-way communication event. Although as supervisor, you may believe that you have to talk more in the meeting, that needn’t be the case. Instead, employees should have ample opportunity to discuss their performance, raise ques- tions about the facts you raise, and add their own data/perceptions about their work. One means of ensuring that two-way communication occurs is to have employees conduct a self-evaluation. You should actively listen to their assessment. This involvement helps create an environment of participation.12
STEP 5: Focus discussion on work behaviors, not on the employee. One way of creating emotional diffi- culties is to attack the employee. Keep your discussion on the behaviors you’ve observed. For instance, telling
12 See W. R. Boswell and J. W. Boudreau, “Employee Satisfaction with Performance Appraisals and Appraisers: The Role of Perceived Appraisal Use,” Human Resource Development Quarterly 11, no. 3 (Fall 2000), 283–299.
How does one properly conduct the performance appraisal process? We offer the following steps that can assist in this endeavor:
STEP 1: Prepare for, and schedule, the appraisal in advance. Before meeting with employees, some pre- liminary activities should be performed. You should, at a minimum, review employee job descriptions, period goals that may have been set, and performance data you may have on employees. Furthermore, you should schedule the appraisal well in advance to give employees the opportunity to prepare their own data for the meeting.
STEP 2: Create a supportive environment to put employees at ease. Performance appraisals conjure up several emotions. As such, every effort should be made to make employees comfortable during the meeting so that they are receptive to constructive feedback.
STEP 3: Describe the purpose of the appraisal to employees. Make sure employees know precisely for what the appraisal is to be used. Will it have
CONDUCTING A PERFORMANCE EVALUATION
12-11. An Experiential Exercise: The 360-Degree Appraisal
Develop a fifteen-minute presentation about the purposes of the performance management systems, who benefits, the basic six steps, the difference between rela- tive and absolute standards, possible distortions, and the 360-degree appraisal system.
As a student in a supervision class, you and your class team have been asked to conduct a fifteen-minute presen- tation for ten to fifteen supervisors at the next supervi- sors’ meeting because supervisors have not adapted as well as desired by management to a change in the appraisal system.
BUILDING A TEAM
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was not up to the quality you expected, the employee did do the work and completed the report in a timely fashion. That’s behavior that deserves some positive reinforcement.
STEP 8: Ensure that employees understand what was discussed in the appraisal. At the end of the appraisal, especially when some improvement is war- ranted, you should ask employees to summarize what was discussed in the meeting. This will help ensure that you have gotten your information through to the employee.
STEP 9: Generate a development plan. Most of the performance appraisal revolves around feedback and documentation. But another component is needed. When development efforts are encouraged, a plan should be developed to describe what is to be done, by when, and what support you as the supervisor will provide to aid in the improvement/enhancement effort.
Source: Based on P. Peters, “7 Tips for Delivering Perfor- mance Feedback,” Supervision 61, no. 5 (May 2000), 12–14.
an employee that his or her report stinks doesn’t do a thing. That’s not focusing on behaviors. Instead, indicating that you believe that not enough time was devoted to proofreading the report describes the behavior with which you may be having a problem.
STEP 6: Support your evaluation with specific exam- ples. Specific performance behaviors help clarify to employees the issues you raise. Rather than saying something wasn’t good (subjective evaluation), be as specific as possible in your explanations. So, for the employee who failed to proof the work, describing that the report had five grammatical mistakes in the first two pages alone would be a specific example.
STEP 7: Give both positive feedback and feedback for improvement. Performance appraisals needn’t be all negative. Although there is a perception that this process focuses on the negative, it should also be used to compliment and recognize good work. Posi- tive feedback, as well as feedback for improvement, helps employees to gain a better understanding of their performance. For example, although the report
12-13. Conduct an Internet search for articles providing data on the pros and cons of using a 360-degree performance appraisal in an organization. Sum- marize the articles and end the paper with your beliefs on whether 360-degree evaluations should be used in all organizations.
12-12. Develop a two to three-page paper describing the relationship that exists between the job analysis and the performance evaluation. Cite specific examples where appropriate.
COMMUNICATING EFFECTIVELY
➤ Case 12-A: Stop and Go at J.C. Penney Company
the company for success in a very challenging and diffi- cult industry. His plans included a “stores within a store” concept, no sales or promotions, and a three-tiered pric- ing plan. He suggested that “Penney needed a little bit of Apple’s magic.” From the start, analysts and experts
Things haven’t been looking so good for J.C. Penney Co. and its new CEO, Ron Johnson.13 Johnson arrived with much acclaim from being the head of Apple’s successful retail operations. At Penney’s, he immediately began one of retailing’s most ambitious overhauls trying to position
13 Source: based on “Latest Layoffs at Penney Hit Back Office, District Office Workers,” Reuters, www.reuters.com, March 7, 2013, http:// www.reuters.com/article/2013/03/07/us-jcpenney-layoffs-idUSBRE92610620130307 (accessed June 7, 2014); K. Bhasin, “JCPenney Is Firing More Store Employees After a ‘Secret Broadcast,”’ businessinsider.com, March 7, 2013, http://www.businessinsider.com/jcpenney-layoffs-2013-3 (accessed June 7, 2014); M. Wilson, “JC Penney’s Traffic-Light System Under Fire,” www.ragan.com, March 7, 2013, http://ragan.com/Main/ Articles/JC_Penneys_trafficlight_layoff_system_under_fire_46330.aspx# (accessed June 7, 2014); D. Mattioli, “Board’s Patience With CEO Wears Thin at J.C. Penney,” Wall Street Journal, March 6, 2013, p. B1; D. Mattioli, “J.C. Penney’s Losses Snowball,” Wall Street Journal, Feb- ruary 28, 2013, pp. B1+; S. Clifford, “Chief Talks of Mistakes and Big Losses at J. C. Penney,” New York Times Online, February 27, 2013, http://www.nytimes.com/2013/02/28/business/jc-penneys-chief-says-his-mistakes-led-to-big-loss.html?_r=0 (accessed June 7, 2014); D. Mattioli, “For Penney’s Heralded Boss, The Shine Is Off the Apple,” Wall Street Journal, February 25, 2013, pp. A1+; and K. Bhasin, “Inside JCPenney: Widespread Fear, Anxiety, and Distrust of Ron Johnson and His New Management Team,” businessinsider.com, February 22, 2013, http://www. businessinsider.com/inside-jcpenney-2013-2 (accessed June 7, 2014).
THINKING CRITICALLY
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RESPONDING TO THE CASE
12-14. Many supervisors say that evaluating an employ- ee’s performance is one of their most difficult tasks. Why do you think they feel that way?
12-15. What can supervisors do to make performance appraisal an effective process?
12-16. What could J.C. Penney leadership have done to make this process more effective?
➤ Case 12-B: Accentuate the Positive! Controlling employee performance is a vitally important responsibility of supervisors. After all, it’s your employ- ees who are working to accomplish established goals, and you want to see that those goals are being accomplished as planned. So wouldn’t it seem that supervising employees’ performance would cover the good and the not-so-good? Well, some organizations are encouraging supervisors to lighten up on the harsh feedback and focus only on the positive.14*
At the Boston Consulting Group, supervisors now frequently praise employees, encourage them to cel- ebrate even small victories, and conduct performance reviews focusing on an individual employee’s strengths instead of any mistakes that may have happened. And supervisors are to bring up only one or two areas that require improvement and development. It never used to be this way. When employees didn’t do a good job with a client’s assignment, supervisors would focus on what went wrong and where and how the employee needed to improve and develop their skills. This shift towards more positive feedback occurred after the company noticed some employees leaving the company and other employees who were still upset for a period of time after a negative performance review. And BCG isn’t the only company taking this approach. Others are increasing the use of positive feedback and minimizing any discus- sion of the areas that need improvement. At Pricewater- houseCoopers LLP, for instance, supervisors are asked to have discussions with employees about their future with the organization. These “career outlook” discussions focus more on where an employee fits in, rather than on where they screwed up. The company also encour- ages its staff to send shout-outs via e-cards praising
14Source: Based on R. Feintzeig, “Everything Is Awesome! Why You Can’t Tell Employees They’re Doing a Bad Job,” Wall Street Journal, February 10, 2015, https://www.wsj.com/articles/everything-is-awesome-why-you-cant-tell-employees-theyre-doing-a-bad-job-1423613936 (accessed March 12, 2017); TciiStrategic and Management Consultants, “Why Positive Feedback Is Crucial to High Performance,” Business Zone, May 13, 2013, http://www.businesszone.co.uk/blogs/tcii/tcii-strategic-and-management-consultants/why-positive-feedback-crucial-high- performance (accessed March 12, 2017); and C. M. Phoel, “Feedback That Works,” Harvard Business Review, April 27, 2009, https:// hbr.org/2009/04/feedback-that-works/ (accessed March 12, 2017).
questioned whether Penney’s customers, who were used to sales and coupons, would accept this new approach. Long story short . . . customers didn’t. For the full fiscal year of 2012, Penney had a loss of $985 million (com- pared to a loss of $152 million in 2011). Now, you may be asking yourself, what does this story have to do with human resources management? Well, a lot it turns out! When a company is struggling financially, it is going to impact its people.
And for J.C. Penney employees, that impact came in the form of a “traffic light” color-coded performance appraisal system. In a companywide broadcast, supervi- sors were told that they should categorize their employees by one of three colors: Green, their performance is okay; Yellow, they need some coaching to improve performance; and Red, their performance is not up-to-par and they need to leave. Many employees weren’t even aware of the sys- tem and supervisors were given no guidance one way or the other regarding whether to tell them about it, although company headquarters chose not to disclose the light sys- tem to employees.
Although the uncertainties over how to inform or even whether to inform employees about this human resources (HR) initiative is troubling, communication and HR experts say there are other problems with this green/yellow/red approach. One is that it’s insensitive to “approach the livelihoods of human beings” this way. The easy-to-understand simplistic nature of green, yellow, and red colors doesn’t translate well to what will be a tremen- dously personal and difficult situation for many employ- ees, especially those with a “red” appraisal. Another problem is that labeling employees can create difficult interpersonal situations. The labels can become a source of humor and teasing, which can deteriorate into hurt feel- ings and even feelings of being discriminated against. “No matter how benign a color-coding system may seem, it’s never going to work.” This doesn’t mean that employers don’t evaluate employees. But companies should be open about it. Employees should know that they’re being rated, what the criteria are, and if they have a poor rating, what options they have for improving. There should also be a fair process of appeal or protest if an employee feels the rating was unfair.
Epilogue: Ron Johnson stepped down as CEO of J.C. Penney in April 2013.
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RESPONDING TO THE CASE
12-17. Is controlling employee performance an impor- tant responsibility of supervisors? Discuss.
12-18. Why should supervisors focus on positive feed- back?
12-19. What are the risks associated with providing em- ployees only positive feedback and limiting feed- back on areas of improvement?
12-20. Where would you be more comfortable? An or- ganization with a performance review approach more like the Boston Consulting Group, or with an approach more like Netflix? Why?
colleagues or subordinates for work done. Supervisors have also allocated money to further reward positive accomplishments.
But there are companies not following this positiv- ism trend. These companies take a more “tough-love” approach and don’t shy away from giving negative feed- back. For instance, at Netflix, CEO Reed Hasting’s view is that they’re a “pro sports team, not a Little League squad,” noting that “adequate performance gets a gener- ous severance package.” Not everyone in the company is going to get a trophy. There’s little doubt as to what that company’s performance expectations are.
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■■ carpal tunnel syndrome
■■ employee assistance program (EAP)
■■ imminent danger
■■ incidence rate
■■ karoshi
■■ musculoskeletal disorders (MSDs)
■■ National Institute for Occupational Safety and Health (NIOSH)
■■ Occupational Safety and Health Act
■■ repetitive stress injuries
■■ sick buildings
■■ stress
■■ stressors
■■ wellness program
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Workplace Health and Safety13
C H
A P
T ER
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13-1. Discuss the supervisory effects of the Occupational Safety and Health Act.
13-2. List the enforcement priorities of the Occupational Safety and Health Administration (OSHA).
13-3. Describe what supervisors must do to comply with OSHA record-keeping requirements.
13-4. Explain what punitive actions OSHA can impose on an organization.
13-5. Describe the leading causes of safety and health accidents.
13-6. Explain what supervisors can do to prevent workplace violence.
13-7. Explain how a supervisor can create a healthy work site.
13-8. Define stress.
13-9. Describe the purposes of employee assistance and wellness programs.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
Image Source/InStock/Alamy Stock Photo
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Responding to a Supervisory Dilemma
A trend occurring in organi- zations today continues to raise important questions for a number of people. HR costs are skyrocketing, especially those associated with employee health care. Organizations are looking for ways to control these costs.
Employees at Paychex who undergo a confidential health screening and risk assessment, and those who smoke and agree to enroll in a smoking cessation program can get free annual physicals, colonoscopies, and 100 percent cov- erage of preventive care as well as lower deductibles and costs. At Black and Decker Corporation, employ- ees and dependents who certify in an honor system that they have been tobacco-free for at least six months pay $75 less per month for their medical and dental cover- age. At AmeriGas Propane, employees were given an ultimatum: get their medical checkups or lose their health insurance. Some 67 percent of employers are concerned about the effects of obesity on medical claims expenses.1
All these examples illustrate how companies are trying to control skyrocketing employee health-care costs. Since 2002, health-care costs have risen, hitting $3.8 trillion in 2013. The actual dollar amounts for 2014 were not available, but increased by 5 percent over the previous year.2 Two areas of concern for orga- nizations are employees who smoke and obese employ- ees. Smokers cost companies an estimated $6,000 a
year, with about a third of that being health-care costs.3 The biggest health-care cost for com- panies, however, is obesity. Morbidly obese individuals cost employers more than $8,000 a year.4 A study of manufacturing organizations found that presen- teeism, which is defined as an ill employee coming to work and not performing at full capacity, was 1.8 percent higher for work- ers with moderate to severe obe-
sity than for all other employees. The reason for the lost productivity is likely the result of reduced mobility because of body size, or pain problems such as arthritis. Another study found that injuries sustained by obese workers often required substantially more medical care and were more likely to lead to permanent disabilities than similar injuries suffered by employees who were not obese.5
Is it any wonder that organizations are looking for ways to control their health-care costs? How? First, many organizations are providing opportunities for employees to lead healthy lifestyles. From financial incentives to company-sponsored health and wellness programs, the goal is to limit rising health-care costs. About 43 percent of companies use some type of posi- tive incentives aimed at encouraging healthy behavior, up from 34 percent in 1996.6 Another study indicated that nearly 90 percent of surveyed companies planned to aggressively promote healthy lifestyles to their employees during the next three to five years.7 Many
1These examples taken from S. J. Wells, “Does Work Make You Fat?” HR Magazine, October 2010, 26–32; R. King, “Slimming Down Employees to Cut Costs”; C. Tkaczyk, “Lowering Health-Care Costs,” Fortune, November 23, 2009, 16; and A. W. Matthews, “When All Else Fails: Forcing Workers into Healthy Habits,” Wall Street Journal, July 8, 2009, D1+. 2J. Tozzi, “U.S. Health-Care Spending Is on the Rise Again,” Bloomberg, February 18, 2015, https://www.bloomberg.com/news/ articles/2015-02-18/u-s-health-care-spending-is-on-the-rise-again (accessed March 13, 2017); and D. Munro, “Annual U.S. Healthcare Spending Hits $3.8 Trillion,” Forbes, February 2, 2014, https://www.forbes.com/sites/danmunro/2014/02/02/annual-u-s-healthcare- spending-hits-3-8-trillion/#63eb421f76a9 (accessed March 13, 2017). 3S. Adams, “Every Smoker Costs an Employer $6,000 a Year. Really?,” Forbes, June 5, 2013, https://www.forbes.com/sites/ susanadams/2013/06/05/every-smoker-costs-an-employer-6000-a-year-really/#7eed012f4520 (accessed March 13, 2017). 4K. Kahn, “Obese Employees Cost Employers Thousands in Extra Medical Costs,” Center for Advancing Health, May 13, 2014, http:// www.cfah.org/hbns/2014/obese-employees-cost-employers-thousands-in-extra-medical-costs (accessed March 13, 2017). 5R. Ceniceros, “Obesity Can Exacerbate Workplace Injuries, Study Notes,” Workforce Management Online, December 15, 2010; and J. Katz, “Obesity Weighs Down Production,” Industry Week, February 9, 2008, http://www.industryweek.com/workforce/obesity-weighs- down-production (accessed March 13, 2017).
are starting sooner: Google, Yamaha Corporation of America, Caterpillar, and others are putting health food in company break rooms, cafeterias, and vending machines; providing deliveries of fresh organic fruit; and putting “calorie taxes” on fatty foods. At Weg- mans Food Markets, employees are challenged to eat five cups of fruits and vegetables and walk 10,000 steps a day. And the “competition” between departments and stores has proved to be very popular and effective.8 In the case of smokers, however, some companies have taken a more aggressive stance by increasing the amount smokers pay for health insurance, or by firing them if they refuse to stop smoking.
6A. R. Carey and P. Trap, “Changes in Wellness Programs,” USA Today, July 17, 2014, 1A.
7G. Kranz, “Prognosis Positive: Companies Aim to Get Workers Healthy,” Workforce Management, www.work-force.com (April 15, 2008). 8S. J. Wells, “Does Work Make You Fat?” and M. Conlin, “Hide the Doritos! Here Comes HR,” BusinessWeek, April 28, 2008, 94–96.
ColorBlind/The Image Bank/Getty Images
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are starting sooner: Google, Yamaha Corporation of America, Caterpillar, and others are putting health food in company break rooms, cafeterias, and vending machines; providing deliveries of fresh organic fruit; and putting “calorie taxes” on fatty foods. At Weg- mans Food Markets, employees are challenged to eat five cups of fruits and vegetables and walk 10,000 steps a day. And the “competition” between departments and stores has proved to be very popular and effective.8 In the case of smokers, however, some companies have taken a more aggressive stance by increasing the amount smokers pay for health insurance, or by firing them if they refuse to stop smoking.
So, do you believe companies have the right to dic- tate what employees do outside of work? If an organiza- tion can take action against employees for smoking, and justify it on the grounds that it creates a health problem, what about other things we do? Should employees be disciplined for eating too much fatty food? Should they be fired for having a glass of wine with dinner, or drink- ing a beer at a sporting event? If these are the policies you must abide by as a supervisor in the organization, would you be willing to discipline or even terminate an employee you saw violating rules outside of the work- place? What do you think? How far should we go in regulating “health” in our organizations?
6A. R. Carey and P. Trap, “Changes in Wellness Programs,” USA Today, July 17, 2014, 1A.
7G. Kranz, “Prognosis Positive: Companies Aim to Get Workers Healthy,” Workforce Management, www.work-force.com (April 15, 2008). 8S. J. Wells, “Does Work Make You Fat?” and M. Conlin, “Hide the Doritos! Here Comes HR,” BusinessWeek, April 28, 2008, 94–96.
S upervisors have a legal responsibility, if not a moral one, to ensure that the work- place is free from unnecessary hazards, and that conditions surrounding the work- place are not hazardous to their employees’ physical or mental health. Of course,
accidents can and do occur. A preliminary total of 4,836 fatal work injuries were recorded in the United States in 2015, according to results from the Census of Fatal Occupational Injuries (CFOI) conducted by the US Bureau of Labor Statistics.9 Nearly 2.9 million nonfatal workplace injuries and illnesses were reported by private industry employers in 2015.10 The medical costs associated with occupational disease and injury ($67 billion) are very large, but are exceeded by the productivity costs ($183 billion), which include current and future lost earnings, fringe benefits, and home production (e.g., cooking, cleaning, rearing children and doing home repairs).11 Heart- less as it sounds, supervisors must be concerned about their employees’ health and safety if for no other reason than that accidents cost money.
From the turn of the last century through the late 1960s, remarkable progress was made in reducing the rate and severity of job-related accidents and illnesses. Yet the most significant piece of legislation in the area of employee health and safety was not enacted until 1970. This law is called the Occupational Safety and Health Act.12
The Occupational Safety and Health Act The passage of the Occupational Safety and Health Act (OSH Act) dramatically changed the role that supervisors must play in ensuring that physical working conditions meet adequate standards.
OSH Act legislation established comprehensive and specific health standards, autho- rized inspections to ensure that standards are met, empowered the Occupational Safety and Health Administration (OSHA) to police organizations’ compliance, and required
9US Bureau of Labor Statistics, “Census of Fatal Occupational Injuries Summary, 2015,” December 16, 2016, https://www.bls.gov/news.release/cfoi.nr0.htm (accessed March 13, 2017). 10US Bureau of Labor Statistics, “Employer-Reported Workplace Injuries and Illnesses--2015,” October 27, 2016, https://www.bls.gov/news.release/osh.nr0.htm (accessed March 13, 2017). 11J. P. Leigh, “At $250B, costs of occupational injury and illness exceed costs of cancer,” The Economic Policy Institute Blog, January 3, 2013, http://www.epi.org/blog/250b-costs-occupational-injury-illness- exceed/ (accessed March 13, 2017). 12The material in this chapter is adapted from D. A. DeCenzo and S. P. Robbins, Fundamentals of Human Resource Management, 8th ed. (Hoboken, NJ: John Wiley & Sons, 2005), Chapter 13.
OBJECTIVE 13.1 Discuss The Supervisory Effects Of The Occupational Safety And Health Act.
Occupational Safety and Health Act A law that enforces, through standards and regulations, healthful working conditions and preservation of human resources.
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employers to keep records of illnesses and injuries and to calculate accident ratios. The act applies to almost every US business engaged in interstate commerce. Organizations not meeting the interstate commerce criteria of the OSH Act are generally covered by state occupational safety and health laws.
The safety and health standards the OSH Act established are quite com- plex. Standards exist for such diverse conditions as noise levels, air impuri- ties, physical protection equipment, the height of toilet partitions, and the correct size of ladders. Furthermore, OSHA researches repetitive stress (or motion) injuries, problems associated with the eyestrain that accompanies video display terminal use, problems of needle-sticks in health-care activi- ties, and developing training and education programs for businesses.
The initial OSH Act standards took up 350 pages in the Federal Regis- ter, and some of the annual revisions and interpretations are equally exten- sive. Nevertheless, supervisors are responsible for knowing these standards and ensuring that those that apply to them are followed (see Exhibit 13-1).
WHAT ARE THE OSHA ENFORCEMENT PRIORITIES? Enforcement procedures of OSHA standards vary depending on the nature of the event and the organization. Typically, OSHA enforces the standards based on a five-item priority listing. These are, in descending priority, as fol- lows: imminent danger; serious accidents that have occurred within the past eight hours; a current employee complaint; inspections of target industries with a high injury ratio; and random inspections.
Imminent danger refers to a condition in which an accident is about to occur. Although this is given top priority and acts as a preventive measure,
imminent danger situations are hard to define. In fact, in some cases, the definition of imminent danger appears to be an accident in progress, and interpretation leaves much to the imagination. For example, suppose you were withdrawing cash at an ATM. As you remove your cash, you are grabbed by an individual who places a gun in your face and angrily demands your cash. Are you in imminent danger? Of course, most of us would say “Absolutely!” But according to one interpretation of imminent danger, you may not be in “imminent” danger. That state would not exist until the assailant pulled the trigger of the weapon, and the bullet was rifling through the barrel. Tragically, by that time, it is likely too late to worry about imminent danger. One’s safety has already been threatened.
This has given rise to priority-two accidents—those that have led to serious injuries or death. Under the law, a supervisor must report these serious accidents to the OSHA field office within eight hours of occurrence. This permits the investigators to review the scene and try to determine the cause of the accident.
Priority three, employee complaints, is a major concern for any supervisor. If an employee sees a violation of OSHA standards, that employee has the right to call OSHA and request an investigation. The worker may even refuse to work on the task in ques- tion until OSHA has investigated the complaint. This is especially true when there is a union. For instance, in some union contracts, workers may legally refuse to work if they believe they are in significant danger. Accordingly, they may stay off the job with pay until OSHA arrives and either finds the complaint invalid or cites the company and mandates compliance.
Next in the priority of enforcement is the inspection of targeted industries. With several million workplaces in the United States, inspecting each would require several hundred thousand full-time inspectors. OSHA, however, has limited resources, and its budget has been significantly cut in the past decade. So, to have the largest effect, OSHA began to partner with state health and safety agencies, who together direct their atten- tion to industries with the highest injury rates—industries such as chemical processing, roofing and sheet metal, meat processing, lumber and wood products, mobile homes and campers, and stevedoring.
OBJECTIVE 13.2 List the enforcement priorities of the Occupational Safety and Health Admin- istration (OSHA).
imminent danger A condition under which an accident is about to occur.
Exhibit 13-1 OSHA poster. Note: Original poster is available as PDF file at https://www .osha.gov/Publications/poster.html.
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A new rule established in 1990 also requires supervisors whose employees handle hazardous waste (e.g., chemicals and medical waste) to follow strict operating proce- dures. Such supervisors are required to monitor employee exposure to hazardous materi- als, develop and communicate safety plans, and provide necessary protective equipment.
The final OSHA priority is the random inspection. Originally, OSHA inspectors were authorized to enter any work area premise, without notice, to ensure that the workplace is in compliance. In 1978, however, the Supreme Court ruled in Marshall v. Barlow’s Inc.13 that a supervisor and his or her organization are not required to let OSHA inspectors enter the premises unless the inspectors have a search warrant. This decision, although not destroying OSHA’s ability to conduct inspections, does force inspectors to justify their choice of inspection sites more rigorously. But don’t let the warrant requirement mislead you into a false sense of security. If needed, an OSHA inspector will obtain the necessary legal document. For example, when inspectors attempted to evaluate conditions at the Hotel Diplomat construction site in Hollywood, Florida, the general contractor would not let them in. A few days later, however, the OSHA inspectors returned with warrant in hand.14
Attorneys who deal with OSHA suggest that supervisors cooperate rather than viewing this event as confrontational. This cooperation focuses on permitting the inspec- tion, but only after reaching consensus on the inspection process. That’s not to say, how- ever, that you can keep inspectors from finding violations. If they are found, inspectors can take the necessary action. Finally, it is recommended that any information regarding the company’s safety program be discussed with the OSHA inspector, emphasizing how the program is communicated to employees and how it is enforced.
Should supervisors feel that the fine levied is unjust or too harsh, the law permits the supervisor and the organization to file an appeal. This appeal is reviewed by the Occupational Safety and Health Review Commission, an independently operating safety and health board. Although this commission’s decisions are generally final, employers may still appeal commission decisions through the federal courts.
HOW DOES A SUPERVISOR KEEP OSHA RECORDS? To fulfill part of the requirements established under the OSH Act, supervisors in indus- tries where a high percentage of accidents and injuries occur must maintain safety and health records. It’s important to note, however, that organizations that are exempt from record-keeping requirements—such as universities and retail establishments—still must comply with the law itself; their only exception is the reduction of time spent on maintaining safety records. The basis of record keeping for the OSH Act is the comple- tion of OSHA Form 300 (see Exhibit 13-2). Employers are required to keep these safety records for five years. In complying with OSHA record-keeping requirements, one issue arises—just what is a reportable accident or illness? According to the act, any work- related illness (no matter how insignificant) must be reported on Form 300. Injuries, on the other hand, are reported only when they require medical treatment (besides first aid), involve loss of consciousness or restriction of work or motion, or require transfer to another job.
Supervisors can decide whether an event should be recorded by following the OSHA schematic diagram (see Exhibit 13-3). If so, the supervisor must record it under one of three areas: fatality, lost workdays, or neither fatality nor lost workdays. Part of this information is then used to determine an organization’s incidence rate. An incidence rate reflects the “number of injuries, illnesses, or (lost) workdays related to a common expo- sure base rate of 100 full-time workers.” This rate is then used by OSHA for determining industries and organizations that are more susceptible to injury. Let’s look at the inci- dence rate formula and use it in an example.
13Marshall v. Barlow’s Inc., 436 US 307 (1978). 14“OSHA Inspection Delay Is Legal,” Engineering News-Record, May 3, 1999, 21.
OBJECTIVE 13.3 Describe what supervisors must do to comply with OSHA record-keeping requirements.
incidence rate A measure of the number of injuries, illnesses, or lost workdays as it relates to a common base rate of 100 full-time employees.
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Exhibit 13-2 OSHA’s Forms 300 and 300A. Source: www.osha.gov/recordkeeping/new-osha300form1-1-04.pdf.
To determine the incidence rate, the formula (N/EH) × 200,000 is used, where
■■ N is the number of injuries or illnesses or lost workdays. ■■ EH is the total hours worked by all employees during the year. ■■ 200,000 is the base hour rate equivalent (100 workers × 40 hours per week × 50
weeks per year).
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In using the formula and calculating an organization’s incidence rate, assume we have an organization with 1,800 employees that experienced 195 reported accidents over the past year. We would calculate the incidence rate as follows: (195/3,600,000) × 200,000.15 The incidence rate, then, is 10.8. What does that 10.8 represent? That depends on a number of factors. If the organization is in the meatpacking industry, where the industry average incidence rate is 32.1, then they are doing well. If, however, it is in the oil and gas extraction industry, where the industry incidence rate is 4.1, then a 10.8 indicates a major concern.
WHAT ARE THE OSHA PUNITIVE ACTIONS? An OSHA inspector has the right to levy a fine against an organization for noncompli- ance. Although levying the fine is more complicated than described here, if supervisors and their organizations do not bring a “red-flagged” item into compliance, they can be assessed a severe penalty.
As originally passed in 1970, the maximum penalty was $10,000 per occurrence per day. However, with the Omnibus Budget Reconciliation Act of 1990, that $10,000 penalty could increase to $70,000 if the violation was severe, willful, and repetitive. More recently, on Aug. 2, 2016, the 2015 Federal Civil Penalties Inflation Adjustment Act Improvements Act passed by Congress allowed OSHA to increase fines to advance the effectiveness of civil monetary penalties and to maintain their deterrent effect. The new law directs agen- cies to adjust their penalties for inflation each year, thereby allowing the maximum OSHA fine for a serious violation to rise to $12,500, and the maximum fine for a repeat or willful violation to $125,000.16* But fines are not for safety violations alone. A company that fails to keep its OSH Act records properly can also be subjected to stiff penalties, or under certain circumstances, company executives can be held criminally liable.
15The number 3,600,000 is determined as follows: 1,800 employees, working 40-hour weeks, for 50 weeks a year [1,800 × 40 × 50].
OBJECTIVE 13.4 Explain what punitive actions OSHA can impose on an organization.
16A. Berzon, “OSHA Fines to Rise for First Time Since 1990,” November 3, 2015, The Wall Street Journal, https://www.wsj.com/articles/osha-fines-to-rise-for-first-time-since-1990-1446603819 (accessed March 14, 2017).
Exhibit 13-3 Determining the recordability of cases under the OSH Act.
Results from a work accident or
from an exposure in the work
environment and is
Does not result from a work
accident or from an exposure in the work environment
An illness An injury that involves
If a case
A death
Medical treatment (other than
first aid)
Loss of consciousness
Restriction of work or motion
Transfer to another job
None of these
Then case must be recorded
Then case is not to be recorded
Note: A case must involve a death, or an illness, or an injury to an employee
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Although in the first twenty years of OSHA, questions arose regarding the value of the OSH Act to workers’ health and safety, such questions appear to be abating. Inroads have been made by the director of OSHA in redirecting OSHA’s efforts. The agency has increased inspections and has been viewed as taking a tougher stance on workplace health and safety issues—and a number of companies have seen what that focus can mean.
Since 2005, OSHA issued more egregious enforcement actions and higher fines than in previous fiscal years. This reflects the Labor Department commitment to focus OSHA’s priorities on enforcing standards to protect workers.17 One of these egregious enforcement actions included the largest total penalty in OSHA’s history. The penalty, $81,340,000, was issued to BP Products North America Inc. for the company’s failure to correct potential hazards faced by employees. The prior largest total penalty, $21 million, was issued in 2005, also against BP. Other egregious enforcement actions have included fines for significant hazards at a cement and asphalt bagging plant in Scotia, New York, and more than $1.6 million following the death of a teen worker at a grain storage site.
In 2015, OSHA conducted a total of 35,820 inspections.18 This number comprises 123 significant enforcement actions, including eight egregious (instance-by-instance) cases. In addition, OSHA conducted 16,527 programmed inspections (aimed at specific high-hazard industries, workplaces, occupations, or health substances or other indus- tries identified in OSHA’s current inspection procedures). These inspections indicate that OSHA continues to devote resources to proactively target the industries and employers that experienced the greatest number of workplace injuries and illnesses. During 2015, OSHA also conducted 19,293 unprogrammed inspections (based on com- plaints, accidents, referrals, reports of imminent danger, reports of fatality/catastrophe, or follow-up). OSHA dedicated more resources responding to unprogrammed activities, due in large part to the new severe injury reporting requirements, which became effective January 1, 2015.
DOES OSHA WORK? The OSH Act has had a direct and significant effect on almost every organization and every supervisor in the United States. In some of the largest organizations, an additional administrator has been created who is solely responsible for safety. The impact of the OSH Act standards has made organizations more aware of health and safety.
Over the next decade, OSHA will continue to concentrate on safety and health violations in organizations. OSHA will focus on problems associated with contemporary organizations, concentrating its efforts through the National Institute for Occupational Safety and Health (NIOSH) for research and setting standards in such areas as blood-borne patho- gens and chemical process safety. These measures are also intent on preventing Lyme disease in workers who work in areas where exposure to ticks carrying the disease is high. Similarly, OSHA continues to explore motor vehicle safety, as well as focusing on fitting the work environment to the individual.
Setting standards for blood-borne pathogens is designed to protect individuals, such as medical personnel from becoming infected with diseases such as AIDS and hepatitis. In doing so, OSHA has established guidelines regarding protective equipment (e.g., latex gloves and eye shields), and in cases where a vaccine is available, it ensures that exposed workers have access to it. Chemical processing standards reflect specific guidelines that
17US Department of Labor, Occupational Safety and Health Administration, “OSHA Enforcement: Ensur- ing Safe and Healthy Workplaces,” http://www.osha.gov/dep/2009_enforcement_summary.html (accessed March 14, 2017) and US Department of Labor, Occupational Safety and Health Administration, “OSHA Enforcement: Committed to Safe and Healthful Workplaces,” http://www.osha.gov/dep/2010_enforce- ment_summary.html (accessed March 14, 2017). 18US Department of Labor, “OSHA Enforcement: 2015 Enforcement Summary,” https://www.osha.gov/ dep/2015_enforcement_summary.html (accessed March 14, 2017).
National Institute for Occupational Safety and Health (NIOSH) The government agency that researches and sets OSHA standards.
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must be adhered to when employees work with chemicals or other hazardous toxic substances. This requires supervisors to perform hazard analyses and take any correc- tive action required.
These concerns over chemical hazards led to a number of states passing right-to- know laws. These laws helped identify hazardous chemicals in the workplace and required supervisors to inform employees of the chemicals to which they might be exposed, the health risk associated with that exposure, and other policies guiding their use. Although these state laws made progress in providing information regarding work- place toxins, there were variations among the states—and some states didn’t have these laws at all. Consequently, to provide some uniformity in protection, OSHA developed the Hazard Communication Standard in 1983. This policy “requires supervisors to communicate chemical hazards to their employees by labeling containers, and by dis- tributing data information (called Material Safety Data Sheets) provided by the manu- facturer” to employees. In addition, employees exposed to various hazardous chemicals must be trained in their safe handling. As enacted in 1983, this standard applied only to manufacturing industries. But by the middle of 1989, meeting the requirements of the Hazard Communication Standard became the responsibility of all industries.19
The third area, motor vehicle safety, reflects OSHA’s interest in addressing the problems associated with workers who drive extensively as part of their job duties. This interest exists, in part, because nearly half of all worker deaths in any given year are attributed to motor vehicle accidents. Accordingly, emphasis is placed on substance- abuse testing of drivers, safety equipment, and driver’s education.
Fourth, OSHA has been continuing its efforts in studying the proper design of the work environment such that it is conducive to productive work, called ergonomics. OSHA has established a website (https://www.osha.gov/SLTC/ergonomics) that helps organizations understand how ergonomics operates and how it can help. We will come back to ergonomics later in this chapter.
Finally, OSHA is interested in employee training and has basic requirements for employees based on the job in question. General training categories may pertain to mul- tiple jobs. However, most requirements pertain to general safety and health provisions, medical services and first aid, gases, vapors, fumes, dusts and mists, fire protection, fall protection, general protection requirements, ladders, electrical equipment, as well as hand and power tools. Some occupations require additional training. For example, construction positions demand training on demolition, scaffolding, and excavations. In general, OSHA requirements demand employers to establish and supervise programs for the education and training of employees. Employees are expected to be able to recognize, avoid, and prevent unsafe conditions. Supervisors should be trained in all areas demanded of the employee before instructing them. Employees require training in regulations applicable to their work environments to control or eliminate potential hazards or exposure to possible illness or injury. OSHA’s training guidelines follow a model that consists of the following steps:
1. Determine if training is needed. 2. Identify training needs. 3. Identify goals and objectives. 4. Develop learning activities. 5. Conduct the training. 6. Assess and evaluate training program effectiveness. 7. Improve the program based on the assessment.20
19See US Department of Labor, Occupational Safety and Health Administration, Hazard Communication Guidelines for Compliance (Washington, DC: Government Printing Office, 2000). 20 US Department of Labor, Occupational Safety and Health Administration, “Training Requirements in OSHA Standards and Training Guidelines,” 1998.
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Job Safety Programs Businesses are concerned with efficiency and profits, and they spend money to create safe conditions exceeding those required by law because of the profit motive. The cost of accidents can be, and for many organizations is, a substantial additional cost of doing business. The direct cost of an accident to an employer shows itself in the organization’s workers’ compensation premium. This cost is largely determined by the insured’s acci- dent history. Indirect costs also must be paid by the employer. These costs include wages paid for time lost as a result of injury, damage to equipment and materials, personnel to investigate and report on accidents, and lost production as a result of work stoppages and personnel changeover. The impact of these indirect costs can be seen in statistics that describe the costs of accidents for US industry as a whole.
As we mentioned at the beginning of this chapter, accidents cost employers addi- tional billions of dollars in wages and lost production. The significance of this latter figure is emphasized when we note that this cost is approximately ten times greater than losses caused by strikes.
WHAT CAUSES WORK-RELATED ACCIDENTS? The cause of an accident can be generally classified as either human or environmental. Human causes are directly attributable to human error brought about by careless- ness, intoxication, daydreaming, inability to do the job, or other human deficiency. Environmental causes, in contrast, are attributable to the workplace and include the tools, equipment, physical plant, and general work environment. However, in terms of
OBJECTIVE 13.5 Describe the leading causes of safety and health accidents.
Comprehension Check 13-1
1. A condition in which an accident is about to happen is called:
a. an OSHA violation. b. imminent danger. c. serious injury or death. d. none of the above.
2. A “standard” metric used to compare injuries, illness, or lost workdays in organizations is the:
a. incidence rate. b. work-related injury log. c. recordability metric. d. OSHA Form 100.
3. The maximum fine imposed by OSHA on an organization should the violation be severe, willful, and repetitive is:
a. $10,000. b. $25,000. c. $55,000. d. $70,000.
4. Laws that help to identify hazardous chemicals in the workplace and require organizations to inform employees of potential exposures are called:
a. right-to-work laws. b. right-to-know laws. c. right-to-life laws. d. rights and ethics laws.
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numbers, the human factor is responsible for the vast majority of accidents. No matter how much effort is made to create an accident-free work environment, a low accident rate record can be achieved only by concentrating on the human element.
One of the main objectives of safety engineers is to scrutinize the work environment to locate sources of potential accidents. In addition to looking for such obvious factors as loose steps or carpets, oil on walkways, or a sharp protrusion on a piece of equipment at eye level, safety engineers seek those that are less obvious. Standards established by OSHA provide an excellent guide in the search for potential hazards.
HOW CAN ACCIDENTS BE PREVENTED? What traditional measures can supervisors look to for preventing accidents? The answer lies in education, skills training, engineering, protective devices, and regulation enforce- ment. We have summarized these in Exhibit 13-4.
HOW DO SUPERVISORS ENSURE JOB SAFETY? One way supervisors can be assured that rules and regulations are being enforced is to develop some type of feedback system. This system can be provided by inspecting the work surroundings. Supervisors can rely on oral or written reports for information on enforcement. Another approach is to get firsthand information by periodically walking through the work areas to make observations.
Although safety is everyone’s responsibility, safety should also be part of the orga- nization’s culture. Top management must show its commitment to safety by providing resources to purchase safety devices and maintaining equipment. Furthermore, safety should become part of every employee’s performance goals. As we mentioned previously in Chapter 12 on performance evaluations, if something isn’t included, there’s a tendency to diminish its importance. Holding employees accountable for safety issues by evaluat- ing their performance sends the message that the company is serious about safety. Many organizations emphasize safety through formation of employee groups called safety com- mittees. Although prevalent chiefly in unionized settings, these committees serve a vital role in helping the company and its employees implement and maintain a good safety program.
Another means of promoting safety is to empower the employees so they can take action. Employees at DuPont’s facility in Uberaba, Brazil, planted trees to commemorate
Exhibit 13-4 Accident prevention mechanisms.
Education Create safety awareness by posting highly visible signs that proclaim safety slogans, placing articles on accident prevention in organization newsletters, or exhibiting a sign proclaiming the number of days the plant has operated without a lost-day accident.
Skills Training Incorporate accident prevention measures into the learning process.
Engineering Prevent accidents through both the design of the equip- ment and the design of the jobs themselves. This may also include eliminating factors that promote operator fatigue, boredom, and daydreaming.
Protection Provide protective equipment where necessary. This may include safety shoes, gloves, hard hats, safety glasses, and noise mufflers. Protection also includes performing preven tive maintenance on machinery.
-
Regulation Enforcement
The best safety rules and regulations will be ineffective in reducing accidents if they are not enforced. Additionally, if such rules are not enforced, the employer may be liable for any injuries that occur.
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the site’s 10th anniversary. Although they had several things to celebrate, one of the most important was the fact that since production began, the facility has had zero envi- ronmental incidents and no recordable safety violations. The primary reason for this achievement was the company’s implementation of STOP (Safety Training Observation Program)—a program in which empowered employees were responsible for observing one another, correcting improper procedures, and encouraging safe procedures.21
21T. Vinas, “DuPont: Safety Starts at the Top,” Industry Week, July 2002, p. 55.
CAUSES OF WORKPLACE VIOLENCE
NEWS FLASH!
Undoubtedly, employee stress caused by job uncertainties, declining value of retirement accounts, long hours, information overload, other daily interruptions, unrealistic deadlines, and uncaring managers play a role. Even office layout designs with small cubicles where employees work amidst the noise and commotion from those around them have been cited as contributing to the problem.22 Other experts have described danger- ously dysfunctional work environments character- ized by the following as primary contributors to the problem:23
■■ Employee work driven by TNC (time, num- bers, and crises)
■■ Rapid and unpredictable change in which instability and uncertainty plague employees
■■ Destructive communication style in which managers communicate in excessively aggres- sive, condescending, explosive, or passive- aggressive styles; excessive workplace teasing, or scapegoating
■■ Authoritarian leadership with a rigid, milita- ristic mind set of managers versus employees; employees not allowed to challenge ideas, par- ticipate in decision-making, or engage in team- building efforts
■■ Defensive attitude with little or no perfor- mance feedback given; only numbers count; and yelling, intimidation, or avoidance as the preferred ways of handling conflict
■■ Double standards in terms of policies, proce- dures, and training opportunities for managers and employees
■■ Unresolved grievances because of an absence of mechanisms or only adversarial ones in place for resolving them; dysfunctional individuals protected or ignored because of long-standing rules, union contract provisions, or reluctance to take care of problems
■■ Emotionally troubled employees and no attempt by managers to get help for these people
■■ Repetitive, boring work and little chance for doing something else or for new people coming in
■■ Faulty or unsafe equipment or deficient train- ing, which keeps employees from being able to work efficiently or effectively
■■ Hazardous work environment in terms of temperature, air quality, repetitive motions, overcrowded spaces, noise levels, excessive overtime, and so forth; to minimize costs, a failure to hire additional employees when workload becomes excessive leading to potentially dangerous work expectations and conditions
■■ Culture of violence perpetuated by a history of individual violence or abuse, violent or explo- sive role models, or tolerance of on-the-job alcohol or drug abuse
Reading through this list, you surely hope that workplaces where you’ll spend your professional life won’t be like this. However, the competitive demands of succeeding in a twenty-four/seven global economy put pressure on organizations and employees in many ways. What can supervisors do to deter or reduce possible workplace violence?
22C. Cosh, “Keep a Close Eye Out for the Signs,” Macleans, December 27, 2010, p. 24; and R. McNatt, “Desk Rage,” BusinessWeek, November 27, 2000, p. 12. 23M. Gorkin, “Key Components of a Dangerously Dysfunctional Work Environment,” Workforce Online, November 1, 1999, http://www.workforce.com/1999/11/01/key-components-of-a-dangerously-dysfunc- tional-work-environment/ (accessed March 14, 20017).
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A Special Case of Safety: Workplace Violence Growing concern for the job safety of workers has resulted in a greater emphasis being placed on the increasing violence that has erupted on the job. No organization is immune from it, and the problem appears to be getting worse.24 In January 2015, a cardiologist at Boston’s Brigham and Women’s Hospital was gunned down by a man whose mother had been operated on by the doctor and subsequently died. After killing the cardiologist, the man shot himself. In September 2014, a man who was recently fired walked into the UPS where he had worked and killed two individuals then took his own life. In April 2014, an individual who worked as a baggage handler opened fire at a FedEx facility near Atlanta, injuring six employees. In August 2010, a driver about to lose his job at Hartford Distributors in Hartford, Connecticut, opened fire, killing eight other employ- ees then himself. In July 2010, a former employee at a solar products manufacturer in Albuquerque, New Mexico, walked into the business and opened fire, killing two people and wounding four others. On November 6, 2009, in Orlando, Florida, an engineer who had been dismissed from his job for poor performance returned and shot and killed one person while wounding five others. This incident happened only one day after a US Army psychiatrist went on a shooting rampage at Fort Hood Army post, killing 13 and wounding 27.25
These are just a few of the deadly workplace attacks in recent years. Is workplace violence really an issue for managers? Yes. The latest data available on workplace vio- lence showed workplace homicides rose by 2 percent to 417 cases in 2015, with shoot- ings increasing by 15 percent, the first increase since 2012.26 But workplace violence doesn’t just include homicides. NIOSH says that each year some 2 million US workers are victims of some form of workplace violence such as verbal abuse, yelling at coworkers, purposeful damage of machines or furniture, or assaulting coworkers. In an average week, one employee is killed and at least twenty-five are seriously injured in violent assaults by current or former coworkers. According to a Department of Labor survey, 58 percent of firms reported that supervisors received verbal threats from work- ers.27 Anger, rage, and violence in the workplace are intimidating to coworkers and adversely affect their productivity. The annual cost to US businesses is more than $120 billion a year, according to estimates by the National Institute for Occupational Safety and Health (NIOSH).28,29 And office rage isn’t a uniquely American problem. A survey
OBJECTIVE 13.6 Explain what supervisors can do to prevent workplace violence.
24D. Costello, “Stressed Out: Can Workplace Stress Get Worse? Incidents of ‘Desk Rage’ Disrupt Amer- ica’s Offices—Long Hours, Cramped Quarters Produce Some Short Fuses; Flinging Phones at the Wall,” Wall Street Journal, January 16, 2001, B-1. 25T. K. Garrett, “Subduing Violence at Work: Setting Policies to Help Safeguard the Workplace,” http:// www.workforce.com/articles/21201-subduing-violence-at-work-setting-policies-to-help-safeguard-the- workplace, March 18, 2015; G. Botelho, “Workplace Violence: Know the Numbers, Risk Factors and Possible Warning Signs,” http://www.cnn.com/2014/09/27/us/workplace-violence-questions-answers/, September 28, 2014; L. Copeland and D. Stanglin, “‘Rambo’ Gunman Injures 6 at FedEx Facility,” USA Today Online, April 29, 2014; R. Rivera and L. Robbins, “Troubles Preceded Connecticut Workplace Killing,” New York Times Online, August 3, 2010; J. Griffin, “Workplace Violence News” [www.work- placeviolencenews.com], July 16, 2010; and J. Smerd, “Workplace Shootings in Florida, Texas Again Put Focus on Violence on the Job,” Workforce Management Online, November 6, 2009. 26BLS News Release, “National Census of Fatal Occupational Injuries in 2015 (Preliminary Results),” Bureau of Labor Statistics, December 16, 2016, https://www.bls.gov/news.release/pdf/cfoi.pdf (accessed March 14, 2017). 27J. McCafferty, “Verbal Chills,” CFO, June 2005, p. 17; S. Armour, “Managers Not Prepared for Work- place Violence,” July 15, 2004, pp. 1B+; and “OSHA Fact Sheet: Workplace Violence,” US Department of Labor, 2002, https://www.osha.gov/OshDoc/data_General_Facts/factsheet-workplace-violence.pdf (accessed March 14, 2017). 28“Workplace Violence Prevention Strategies for Employers Fact Sheet,” Texas Department of Insurance, February 2006, http://www.tdi.texas.gov/pubs/videoresource/fswvpstrat.pdf (accessed March 14, 2017). 29“Ten Tips on Recognizing and Minimizing Violence,” Workforce Management Online, December 3, 2000.
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of aggressive behavior in Britain’s workplaces found that 18 percent of managers say they have personally experienced harassment or verbal bullying, and 9 percent claim to have experienced physical attacks.30 The issue for supervisors, then, is how to prevent violence from occurring on the job and to reduce their organization’s liability should an unfortunate event occur.
Circumstances vary, so a specific plan of action for companies to follow is diffi- cult to detail. However, several suggestions can be made. First, the organization must develop a plan to deal with the issue. This may mean reviewing all corporate policies to ensure that they are not adversely affecting employees. In fact, in many cases where violent individuals caused mayhem in an office setting and didn’t commit suicide, one common factor arose: These employees were not treated with respect or dignity. They were laid off without any warning, or they perceived that they were being treated too harshly in the discipline process. Sound human resource management practices can help ensure that respect and dignity exist for employees, even in the most difficult issues such as terminations.
Supervisors must also be trained to identify troubled employees before the problem results in violence.31 Employee assistance programs (EAPs) can be designed specifically to help these individuals. Furthermore, if supervisors are better able to spot the types of demonstrated behaviors that may lead to violence, those who cannot be helped through the EAP can be removed from the organization before others are harmed. Organizations and their supervisors should also implement stronger security mecha- nisms. For example, many women who are killed at work following a domestic dispute die at the hands of someone who didn’t belong on company premises. These individu- als, as well as violence paraphernalia, must be kept from entering the facilities altogether.
Sadly, no matter how careful the organization is, and how much it attempts to pre- vent workplace violence, some will occur. In those cases, supervisors must be prepared to deal with the situation and, together with their company leaders, offer whatever assistance they can to deal with the aftermath.
Maintaining a Healthy Work Environment Unhealthy work environments are a concern for every supervisor. If workers cannot function properly at their jobs because of constant headaches, watering eyes, breathing difficulties, or fear of exposure to materials that may cause long-term health problems, productivity will decrease. Creating a healthy work environment not only is the proper thing to do but also benefits the organization. Often referred to as sick buildings, office environments that contain harmful airborne chemicals, asbestos, or indoor pollution (possibly caused by smoking) have forced employers to take drastic steps. For many, it has meant the removal of asbestos from their buildings. Because extended exposure to asbestos has been linked to lung cancer, companies are required by various federal agen- cies such as the Environmental Protection Agency (EPA) to remove the asbestos alto- gether, or at least seal it so it cannot escape into the air. Germs, fungi, mold, and a variety of synthetic pollutants cause problems as well.
30J. McCafferty, “Verbal Chills,” CFO, June 2005, 17; S. Armour, “Managers Not Prepared for Work- place Violence,” July 15, 2004, 1B+; and “Workplace Violence,” OSHA Fact Sheet, US Department of Labor, Occupational Safety and Health Administration, 2002. 31P. Falcone, “Dealing with Employees in Crisis: Use This Blueprint for Proactive Management Interven- tion,” HR Magazine, May 2003, 117–122. For another insight into this matter, see E. Roche, “Do Some- thing—He’s About to Snap,” Harvard Business Review, July 2003, 23–30.
OBJECTIVE 13.7 Explain How A Supervisor Can Create A Healthy Work Site.
sick building An unhealthy work environment.
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Although specific problems and their elimination go beyond the scope of this text, here are some suggestions for keeping the workplace healthy:32
■■ Make sure workers get enough fresh air. One simple tactic is unsealing vents closed in overzealous efforts to conserve energy.
■■ Avoid suspect building materials and furnishings. A general rule is that if it stinks, it may be unhealthy. For instance, substitute tacks for smelly carpet glue or natural wood for chemically treated plywood.
■■ Test new buildings for toxins before occupancy. Most consultants say that letting a new building sit temporarily vacant allows the worst fumes to dissipate.
■■ Provide a smoke-free environment. If you don’t want to ban smoking entirely, establish an area for smokers that has its own ventilation system.
■■ Keep air ducts clean and dry. Water in air ducts is a fertile breeding ground for fungi. Servicing the air ducts periodically can help eliminate the fungi before they cause harm.
■■ Pay attention to workers’ complaints. Have a designated employee record dates and particulars. Because employees are often closest to the problems, they are a valuable source of information.
Whereas these suggestions are important to follow, one in particular is noteworthy for us to explore a bit further: the smoke-free environment.
HOW DO YOU CREATE A SMOKE-FREE ENVIRONMENT? Should smoking be prohibited in a public place of business? The dangers and health problems associated with smoking have been well-documented, and this has been trans- lating into increased health insurance costs. Furthermore, smokers have been found to be absent more than nonsmokers, to lose productivity as a result of smoke breaks, to damage property with cigarette burns, to require more routine maintenance (ash/butt cleanup), and to create problems for other employees through secondhand smoke. Rec- ognized as a means to control these maladies associated with smoking, in conjunction with society’s emphasis on wellness, smoke-free policies have appeared. In fact, most US organizations have banned smoking altogether, or significantly restrict smoking to designated areas.
Although many nonsmokers would agree that a total ban on smoking in the work- place is the most desirable, it may not be the most practical. For employees who smoke, quitting immediately may be practically impossible because of their nicotine addic- tion. Accordingly, a total ban on smoking should be viewed as a phased-in approach. This gradual process may begin with the involvement of representative employees to determine what the organization’s smoke-free goals and timetables should be. Will the organization ban smoking altogether over a period of time, or will special areas be designated as smoking rooms? Smoking rooms must be properly ventilated to keep the smoke fumes from permeating other parts of the facility.
Consequently, the organization needs to look at incentives for getting people not to smoke. Because health care premiums and the costs of life insurance policies for smokers are significantly higher than those for nonsmokers, employers may decide to pay only the nonsmoking premium, and pass the additional premium costs on to the smokers. Companies also need to offer various options for individuals to seek help, including wellness programs and smoking-cessation classes. These efforts show the organization is making a deliberate commitment to eliminate the problems associated with smoking in the workplace.
32See M. Conlin and J. Carey, “Is Your Office Killing You?” BusinessWeek, June 5, 2000, 114–128; R. Schneider, “Sick Buildings Threaten Health of Those Who Inhabit Them,” Indianapolis Star, September 23, 2000, A-1; and F. Rice, “Do You Work in a Sick Building?” Fortune, July 2, 1990, 88.
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Something to Think About (and promote class discussion)
SAVE LIVES, SAVE MONEY: MAKE YOUR BUSINESS SMOKE-FREE Think of a lit cigarette as a miniature toxic waste dump. Secondhand smoke contains more than fifty cancer-causing chemicals, and the toxins in secondhand smoke can cause heart disease and lung cancer in nonsmokers. In fact, breathing secondhand smoke for even a short time could have immediate effects on blood and blood vessels, potentially increasing the risk of a heart attack.
The American Productivity Audit, a national survey of more than 29,000 workers, found that tobacco use was a leading cause of workers’ lost production time, even greater than alcohol abuse or family emergencies. One large company found that their employees who smoked had more hospital admissions (124 versus 76 admissions per 1,000 workers) and a higher average insured payment for health care ($1,145 versus $762) than their nonsmoking employees in an eleven-month period. However, quitting smoking, or even just cutting back, improves a worker’s productivity.
Going smoke-free lowers the risk of fires and accidental injuries, which can reduce insurance costs. Many smoke-free businesses have negotiated for lower fire and property insurance premiums, with some businesses winning reductions of 25–30 percent.
Going smoke-free also reduces cleaning and maintenance costs. The Building Owners and Managers Association, a national trade group, reports that indoor smoking increases cleaning costs and states “secondhand smoke does not belong in buildings.” Unigard Insurance, in Seattle, WA, saved $500 a month after going smoke-free when its maintenance contractor reduced its monthly fee because the staff no longer had to clean ashtrays, dust desks, and clean carpets or furniture as often.
Going smoke-free reduces potential legal liability. Nonsmokers harmed by secondhand smoke at work have won lawsuits and disability claims against their employers under a variety of legal remedies. Everyone benefits when the air is cleared of secondhand smoke, including smokers, some of whom will quit or at least cut back. In a smoke-free environment, workers become healthier, and healthier workers miss less work, are more productive, and have lower health care costs.
Sources: Centers for Disease Control and Prevention, “Save Lives, Save Money: Make Your Business Smoke-Free,” Atlanta, Geor- gia: US Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, June 2006, http://www.cdc.gov/tobacco/basic_infor- mation/secondhand_smoke/guides/business/pdfs/save_lives_save_money.pdf (accessed March 14, 2017).
WHAT ARE REPETITIVE STRESS INJURIES? Whenever workers are subjected to a continuous motion such as typing, without proper workstation design (seat and keyboard height adjustments), they run the risk of develop- ing repetitive stress injuries. This phenomenon is referred to as musculoskeletal disorders (MSDs). These disorders, which account for nearly 40 percent of annual workplace ill- nesses, result in headaches, swollen feet, back pain, or nerve damage and cost US companies several billion dollars annually. The most frequent form of this disorder, found in the wrist, is called carpal tunnel syndrome and affects thousands of workers. Given the magnitude of problems associated with MSDs, OSHA issued its final ergo- nomics standards in late 2000 to combat this workplace problem; standards that will hopefully save nearly $10 billion in reduced work-related injuries.33
One chief means of reducing the potential effects of repetitive stress injuries for an organization is through the use of ergonomics. Ergonomics involves fitting the work environment to the individual. Reality tells us that every employee is different—-different
repetitive stress injuries Injuries sustained by continuous and repetitive movements of a body part.
musculoskeletal disorders (MSDs) Continuous-motion disorders caused by repetitive stress injuries.
33See Occupational Safety and Health Administration, OSHA’s Ergonomics Enforcement Plan (Washing- ton, DC: Government Printing Office, March 6, 2003); and OSHA, “Protecting Workers from Ergonomic Injuries,” Job Safety and Health Quarterly, https://www.osha.gov/Publications/JSHQ/spring2002/prot- work.htm (accessed March 14, 2017).
carpal tunnel syndrome A repetitive stress injury of the wrist
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shape, size, height, and so on. Expecting each worker to adjust to “standard” office furnishings is just not practical. Instead, by recognizing and acting on these differences, ergonomics looks at customizing the work environment so it not only is conducive to productive work but also keeps the employee healthy.
When we speak of ergonomics, we are primarily addressing two main areas: the office environment, and the office furniture. Organizations are reviewing their office settings, their work environment, and their space utilization in an effort to provide more produc- tive atmospheres. This means new furniture designed to reduce back strain and fatigue is being purchased. Properly designed and fitted office equipment can also help reduce repetitive stress injuries. Furthermore, companies are using colors such as mauves and grays, which are more pleasing to the eye, and experimenting with lighting brightness as a means of lessening employee exposure to harmful eyestrain associated with today’s video display terminals.
Stress Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what they desire, and for which the outcome is per- ceived to be both uncertain and important. Stress is a complex issue and can manifest itself in both positive and negative ways. Stress is said to be positive when the situation offers an opportunity for one to gain something; for example, the “psyching up” that an athlete goes through can be stressful, but this can lead to maximum performance. But when constraints or demands are placed on us, stress can become negative. Let us explore these two features—constraints and demands.
Constraints are barriers that keep us from doing what we desire. Purchasing a hybrid sport utility vehicle (SUV) may be your desire, but if you cannot afford the $38,000 price, you are constrained from purchasing it. Accordingly, constraints inhibit you in ways that take control of a situation out of your hands. If you cannot afford the hybrid SUV, you cannot get it. Demands, on the other hand, may cause you to give up something you desire. If you wish to go to a movie with friends on Tuesday night but have a major exam on Wednesday, the exam may take precedence. Thus, demands preoccupy your time and force you to shift priorities.
Constraints and demands can lead to potential stress. When they are coupled with uncertainty about the outcome and importance of the outcome, potential stress becomes actual stress. Regardless of the situation, if you remove the uncertainty or the importance, you remove stress. However, when constraints or demands have an effect on an important event and the outcome is unknown, pressure is added—result- ing in stress.
Whereas we are not attempting to minimize stress in people’s lives, it is important to recognize that both good and bad personal factors may cause stress. Of course, when you consider the changes, such as restructuring, that are occurring in US companies, it is little wonder that stress is so rampant in today’s companies. Just how rampant? Stress-related problems cost US companies hundreds of billions of dollars annually! And stress on the job knows no boundaries. In Japan, worker stress has been identified in nearly three-fourths of workers. In fact, in Japan there is a concept called karoshi, which literally means “death from overwork,” and as Japanese multinational companies expand operations to China, Korea, and Taiwan, it’s feared that the karoshi culture may follow.
OBJECTIVE 13.8 Define stress.
stress Something an individual feels when faced with opportunities, constraints, or demands perceived to be both uncertain and important. Stress can show itself in both positive and nega- tive ways.
karoshi A Japanese term for sudden death caused by overwork.
Donna Cuic/Shutterstock
Repetitive stress injuries and re- lated musculoskeletal disorders caused by improper worksta- tion design have been reduced by adherence to OSHA-issued ergonomic standards.
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ARE THERE COMMON CAUSES OF STRESS? Stress can be caused by a number of factors called stressors. Factors that create stress can be grouped into two major categories—organizational and personal (see Exhibit 13-5). Both directly affect employees, and ultimately their jobs.
We asked several dozen recent college graduates whether they had experienced job stress and, if so, what was the source.34 Almost all said they had. Here are a few of their responses: “I’ve got ridiculous deadlines to meet;” “They let several people in my depart- ment go, and two of us had to absorb their work;” “Business is slow and there are rumors of layoffs;” and “I hoped to take my two-week vacation next month but I can’t. Too much work to do.”
These recent graduates don’t appear to be unusual. Numerous studies indicate that job stress is by far the most prevalent source of stress for American adults. For instance, a recent survey found that 83 percent of American workers said they were stressed at work. And what was stressing them out? Their answers included unreasonable work- loads, poor compensation, frustration with coworkers, commuting, working in a job that was not their first choice, poor work-life balance, lack of opportunity for advance- ment, and fear of being fired or laid off. Interestingly, those aged 18 to 29 indicated the highest stress levels due largely, they said, to work and job stability concerns.
WHAT ARE THE SYMPTOMS OF STRESS? What signs indicate that an employee’s stress level might be too high? Stress reveals itself in three general ways: physiological, psychological, and behavioral symptoms.
Most of the early interest in stress focused heavily on health-related or physiological concerns. High stress levels result in changes in metabolism, increased heart and breath- ing rates, increased blood pressure, headaches, and increased risk of heart attacks. Because detecting many of these requires the skills of trained medical personnel, their immediate and direct relevance to the supervisor is negligible.
stressors Conditions that cause stress in an individual.
34M. Clayton, Brilliant Stress Management: How to Manage Stress in Any Situation (New York: FT Press, 2012); “Work Stress on the Rise: 8 in 10 Americans Are Stressed About Their Jobs, Survey Finds,” Huff- ingtonPost Healthy Living, April 10, 2013; H. Hanna, Stressaholic: 5 Steps to Transform Your Relation- ship with Stress (Hoboken, NJ: Wiley, 2014); and H. Anisman, Stress and Your Health: From Vulnerability to Resilence (Hoboken, NJ: Wiley-Blackwell, 2015).
Exhibit 13-5 Potential sources of stress.
Organizational Factors
- Task demands - Role demands - Interpersonal demands - Organizational structure - Organizational leadership
Physiological Symptoms
- Headaches - High blood pressure - Heart disease
Individual Differences
- Perception - Job experience - Social support - Hostility
Experienced Stress
Psychological Symptoms
- Anxiety - Depression - Decreased job satisfaction
Behavioral Symptoms
- Decreased productivity - Increased absenteeism - Increased turnover
Personal Factors
- Family problems - Economic problems - Personality
Potential Sources Consequences
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Of greater importance to supervisors are psychological and behavioral symptoms of stress—symptoms that can be witnessed in the person. The psychological symptoms can be seen as increased tension and anxiety, boredom, and procrastination—which can all lead to productivity decreases. So too can behavioral symptoms—changes in eating habits, increased smoking or substance consumption, rapid speech, or sleep disorders.
HOW CAN STRESS BE REDUCED? Reducing stress presents a dilemma for supervisors. Some stress in organizations is absolutely necessary. Without it, people have no energy. Accordingly, whenever one considers stress reduction, what is at issue is reducing its dysfunctional aspects.
One of the first means of reducing stress is to make sure that employees are properly matched to their jobs, and that they understand the extent of their “authority.” Further- more, letting employees know precisely what is expected of them can reduce ambiguity. Redesigning jobs can also help ease work overload–related stressors. Employees should have some input in those things that affect them. Their involvement and participation have been found to lessen stress.
Supervisors must recognize that no matter what they do to eliminate organizational stressors, some employees will still be “stressed out.” Supervisors simply have little or no control over the employee’s personal factors. Supervisors also face an ethical issue when personal factors cause stress—just how far can one intrude on an employee’s personal life? To help deal with this issue, many companies have started employee assistance and wellness programs. These employer-offered programs are designed to assist employees in areas where they may be having difficulties, such as financial plan- ning, legal matters, health, fitness, and handling stress.35
Helping the Whole Employee No matter what kind of organization or industry one works in, one thing is certain: At times, employees will have personal problems. Whether that problem is job stress, legal, marital, financial, or health-related, one commonality exists: If an employee experiences a personal problem, sooner or later it will manifest itself at the workplace in terms of lowered productivity, increased absenteeism, or turnover (behavioral symptoms of stress). To help employees deal with these personal problems, more and more companies are implementing employee assistance programs (EAPs).
WHERE DID EAPS COME FROM? EAPs, as they exist today in about half of US organizations, are extensions of programs that had their birth in US companies in the 1940s.36 Companies such as DuPont, Stan- dard Oil, and Kodak recognized that a number of their employees were experiencing problems with alcohol. To help these employees, formalized programs were imple- mented on the company’s site to educate these workers on the dangers of alcohol and to help them overcome their addiction. The premise behind these programs, which still holds today, is getting a productive employee back on the job as swiftly as possible. Let’s examine this for a moment.
Suppose you have a worker, Robert, who has been with you for a number of years. Robert has been a solid performer for several years, but lately something has happened.
35See Institute for Management Excellence, “Reducing Stress in the Workplace,” October 2002. www. itstime.com/oct2002.htm (accessed June 22, 2008).
OBJECTIVE 13.9 Describe the purposes of employee assistance and wellness programs.
employee assistance program (EAP) A program designed to act as a first stop for individuals seeking help with the goal of getting productive employees back on the job as swiftly as possible.
36F. Hansen, “Employee Assistance Programs (EAPs) Grow and Expand Their Reach,” Compensation and Benefits Review, March/April 2000, 13; “EAPs with the Most,” Managing Benefits Plans, March 2003, 8; and K. Tyler, “Helping Employees Cope with Grief,” HR Magazine, September 2003, 55–58.
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You notice his performance declining. The quality of his work is diminishing, he has been late three times in the past five weeks, and rumor has it that Robert is having mari- tal problems. You could, and would have every right to, discipline Robert according to the organization’s discipline process. But it is doubtful that discipline alone would help. Consequently, after a period of time, you may end up firing him. You’ve now lost a once good performer and must fill the position with another—a process that may take eighteen months to finally achieve the productivity level Robert had. However, instead of firing him, you decide to refer this individual to the organization’s EAP. This confidential program works with Robert to determine the cause(s) of the problems and seeks to help him overcome them. Although Robert meets more frequently at first with the EAP counselor, you notice that after a short period of time Robert is back on the job, and his performance is improving. After four months, he is performing at the level prior to the problem getting out of hand. In this scenario, you now have your fully productive employee back in four months, as opposed to possibly eighteen months had you fired and replaced Robert.
WHY PROVIDE WELLNESS PROGRAMS? When we mention wellness programs in any organization, we are talking about any type of program that is designed to keep employees healthy. These programs are varied and may focus on such things as smoking cessation, weight control, stress management, physical fitness, nutrition education, blood pressure control, violence protection, and work team problem intervention. Wellness programs are designed to help cut employer health costs and to lower absenteeism and turnover by preventing health-related problems.37
It is interesting to note that, similar to EAPs, wellness programs don’t work unless employees view them as having some value. Unfortunately for wellness, the num- bers across the United States are not as promising. Less than one-fourth of all employees use them. To help combat this low turnout, a number of key criteria must exist. First of all, there must be top supervisory support. Without supervisors’ support in terms of resources and in personally using the programs, the wrong message may be sent to employees. Second, there is a need to have the programs serve the family as well as the employees themselves. This not only provides an atmosphere where families can get healthy together, but it also reduces possible medical costs for the dependents. And finally there is the issue of employee input. If programs are designed without considering employees’ needs, even the best ones may fail. Supervisors need to invite participation by asking employees what they’d use if available. Although many supervisors know that exercise is beneficial, few initially addressed how to get employees involved, but after finding out that employees would like such things as on-site exercise facilities or aerobics, they were able to begin appropriate program development.
37C. Petersen, “Value of Complementary Care Rises, But Poses Challenges,” Managed Healthcare, Novem- ber 2000, 47–48.
wellness program Any type of program that is designed to keep employees healthy, focusing on such things as smoking cessation, weight control, stress management, physical fitness, nutrition education, blood pressure control, and so on.
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Comprehension Check 13-2
5. Which one of the following is not an accident prevention mechanism? a. Skills training b. Protection c. Valid selection criteria d. Regulation enforcement
6. Workplace homicide is the number cause of work-related deaths in the United States.
a. four b. three c. two d. one
7. An unhealthy work environment is best described as a(n):
a. OSHA violation. b. sick building. c. imminent danger. d. none of the above.
8. Injuries sustained by continuous movements of a body part are called:
a. musculoskeletal problems. b. carpal tunnel syndrome. c. eye–hand coordination disease. d. none of the above.
9. What two factors must be present for stress to exist?
a. Importance and uncertainty b. Importance and certainty c. Unimportance and certainty d. Unimportance and uncertainty
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environmental factors. Human factors include care- lessness, intoxication, daydreaming, inability to do the job, and other human deficiencies. Environmental factors include tools, equipment, the physical plant, and the general work environment.
6. Explain what supervisors can do to prevent work- place violence. A supervisor can help prevent work- place violence by ensuring that organizational policies are not adversely affecting employees, by developing a plan to deal with the issue, and by being trained in identifying troubled employees.
7. Explain how a supervisor can create a healthy work site. A supervisor can assist in creating a healthy work site by removing harmful substances such as asbestos, germs, mold, fungi, and cigarette smoke, thus limiting employee exposure.
8. Define stress. Stress is a dynamic condition in which an individual is confronted with an opportunity, con- straint, or demand for which the outcome is perceived as important and uncertain.
9. Describe the purposes of employee assistance and wellness programs. Employee assistance and wellness programs are designed to offer employees a variety of services that will help them become mentally and physically healthy, which in turn helps contain the organization’s health care costs.
1. Discuss the supervisory effects of the Occupational Safety and Health Act. The Occupational Safety and Health Act (OSH Act) outlines comprehensive and specific safety and health standards for organizations. These standards are usually translated into organi- zational policies, which are enforced by supervisors.
2. List the enforcement priorities of the Occupational Safety and Health Administration (OSHA). OSHA has an established five-step priority enforcement pro- cess consisting of imminent danger, serious accidents, employee complaints, inspection of targeted indus- tries, and random inspections.
3. Describe what supervisors must do to comply with OSHA record-keeping requirements. Supervisors in selected industries must complete OSHA Form 300 to record accidents, injuries, and illnesses that are job- related. This information is then used to calculate the organization’s incidence rate.
4. Explain what punitive actions OSHA can impose on an organization. OSHA can fine an organization up to a maximum penalty of $125,000 if the violation is severe, willful, and repetitive. For violations not meeting those criteria, the maximum fine is $12,500. OSHA may, at its discretion, seek criminal or civil charges against an organization’s management if they willfully violate health and safety regulations.
5. Describe the leading causes of safety and health acci- dents. The leading causes of accidents are human and
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
13-7. “Supervisors should be concerned with helping their employees cope with both job-related stress and off-the-job stress.” Do you agree or disagree? Discuss.
13-8. Some medical experts believe that regular daily exercise results in better health, improved condi- tioning, and greater tolerance of stressful situa- tions. What would you think about being employed by a company that required you to work out daily on company time? Do you think this would help or hurt the company’s recruiting ability? Explain your position.
13-1. What are the objectives of the Occupational Safety and Health Act?
13-2. Describe the priority of OSHA investigations. 13-3. Identify three methods of preventing accidents.
How can supervisors assist in ensuring that acci- dents are prevented?
13-4. How are incidence rates calculated? Give an example.
13-5. What is stress? How can it be positive? 13-6. Differentiate among physiological, psychological,
and behavioral stress symptoms. Which are the greatest concerns for supervisors?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
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ACROSS
2. a type of program designed to keep employees healthy 5. a repetitive stress injury of the wrist 7. part one of the law that enforces healthy working conditions and the preservation of human resources 8. injuries sustained by continuous movements of a body part 10. a continuous motion disorder caused by repetitive stress injuries 11. a condition under which an accident is about to happen 12. conditions that cause stress in an individual 13. part two of the law that enforces healthy working conditions and preservation of human resources 14. a measure of the number of illnesses, injuries, and lost days as it relates to a common base of one hundred full-time employees
DOWN
1. a term referring to an unhealthy work environment 3. a program designed to act as a first stop for individuals in an organization seeking help with a personal problem 4. the government agency that researches and sets OSHA standards 6. something an individual feels when faced with an opportunity or constraint that is perceived to be both uncertain and important 9. a Japanese term for sudden death caused by overwork
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Developing Your Supervisory Skills
• Am I Burned Out? • How Stressful Is My Life? Finally, after you complete any self-assessment, we sug- gest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must understand your present strengths and areas in need of development. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
GETTING TO KNOW YOURSELF
At lunch, Chris overhears an argument between Dana and a coworker, Terry, each blaming the other for a part being rejected by quality assurance. Dana threatens Terry to “stay out of the way” and “the next time we’ll settle it outside,” poking Terry in the chest with a finger. Dana then slams a $250 gauge down on the floor, shouts pro- fanities, and adds, “I don’t care if the part falls off or if this place burns to the ground anymore, I’ve about had all I can take of you and this place! You know my spouse left me for my best friend last week, left me with a two- year-old to raise by myself, and my other kid got expelled for possession. It just doesn’t much matter to me what you think; so I’d leave me alone if I were you!”
Chris is unsure how to proceed.
GROUP QUESTIONS
A. What should Chris do? B. What advice would you give Chris? C. How should Chris respond to the immediate
situation? D. What advice can you give Chris regarding work-
place violence to help her handle future situations more effectively?
13-9. An Experiential Exercise: Health and Safety Your team may wish to role-play this case for the class, and then discuss what the supervisor should do and how the supervisor should respond.
The Situation Dana Robbins has been a machinist for Minneo Tool and Die, a manufacturer of engine parts for large motors, for sixteen years. Lately, more of Dana’s parts have been rejected for errors; Dana seems preoccupied with outside matters—leaving early, asking to take days beyond sick days allowed, and so on. Dana has missed work three days in two weeks, and Chris Lynch, Dana’s supervisor, wonders if that was alcohol on Dana’s breath after lunch yesterday. Chris hasn’t said anything yet. She doesn’t want to invade Dana’s privacy. Chris thinks Dana may just be going through a tough time because Dana has been cooperative, positive, highly productive, and rarely sick or absent in the past. Besides, it has been difficult in the last month because a major shipment has required overtime, and all machinists have been asked to work eighty to ninety-five hours a week until the shipment is complete.
BUILDING A TEAM
DEVELOPING SAFETY SKILLS
Several steps can be recommended for developing an orga- nization’s safety and health program. Whether or not such programs are chiefly the responsibility of one individual, every supervisor must work to ensure that the work envi- ronment is safe for all employees.
STEPS IN PRACTICING THE SKILL
STEP 1: Involve supervisors and employees in the development of a safety and health plan. If neither group can see the usefulness and the benefit of such a plan, even the best plan will fail.
STEP 2: Hold someone accountable for implement- ing the plan. Plans do not work by themselves. They need someone to champion the cause. This per- son must be given the resources to put the plan in place, but also must be held accountable for what it’s intended to accomplish.
STEP 3: Determine the safety and health requirements for your work site. Just as each individual is dif- ferent, so too is each workplace. Understanding the specific needs of the facility will help you determine what safety and health requirements will be necessary.
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STEP 4: Assess what workplace hazards exist in the facility. Identify the potential health and safety problems that may exist on the job. By understand- ing what exists, you can develop preventive measures.
STEP 5: Correct hazards that exist. If certain haz- ards were identified in the assessment, fix or elimi- nate them. This may mean decreasing the effect of the hazard or controlling it through other means (e.g., protective clothing).
STEP 6: Train employees in safety and health tech- niques. Make safety and health training mandatory for all employees. Employees should be instructed how to do their jobs in the safest manner and understand that any protective equipment provided must be used.
STEP 7: Develop the mind-set in employees that the organization is to be kept hazard-free. Often employees are the first to witness problems. Establish a means for them to report their findings, including having emergency procedures in place, if necessary. Ensuring that preventive maintenance of equipment follows a recommended schedule can also prevent breakdowns from becoming a hazard.
STEP 8: Continually update and refine the safety and health program. Once the program has been implemented, it must continually be evaluated, and necessary changes must be made. Documenting the progress of the program is necessary for use in this analysis.
programs are just a few of the wellness offerings of today’s organizations. In a two- or three-page paper discuss what a supervisor can do to encour- age employee participation in wellness programs and whether organizations even have an ethical responsibility to help employees deal with health and wellness issues. Source: Based on L. Berry, A. Mirabito, and W. Baun, “What’s the Hard Return on Employee Wellness Programs?,” Harvard Business Review, December 2010, https://hbr.org/2010/12/whats- the-hard-return-on-employee-wellness-programs (accessed May 31, 2017).
13-10. Visit OSHA’s website (www.osha.gov). Go to a page that discusses a news release on something OSHA is doing. Provide a two- to three-page sum- mary of the news release, focusing on what OSHA is intending to do, its effect on workers, and its effect on supervisors.
13-11. Many organizations provide some form of work- place wellness program but is there a return on investment that makes sense for organizations? Are wellness programs a strategic need or just a nice enticement for new hires? Weight loss, stress reduction, smoking cessation, exercise pro- grams, and repetitive-stress-injury prevention
COMMUNICATING EFFECTIVELY
profoundly insecure in the face of globalization, with many complaining about being pushed beyond their lim- its.” France isn’t the only country dealing with worker suicides. Workplace conditions at China’s Foxconn, the world’s largest maker of electronic components (including the iPhone, iPod, and iPad), were strongly criticized after 11 Foxconn employees committed suicide.
Here is what recent surveys are telling us about employee stress:
• 75 percent of Americans say their stress levels are high or moderate.
• 44 percent of Americans say their stress levels have gone up in the last five years.
• 81 percent of HR managers say that employee fatigue is a bigger problem than in past years.
■➤ Case 13-A: When Stress Kills We know that too much stress can be bad for our health and well-being. That connection proved itself painfully and tragically at France Télécom. Over the last seven years, there have been more than 50 suicides of people who worked for the company. The situation captured the attention of the worldwide media, the public, and the French government because many of the suicides and more than a dozen failed suicide attempts were attributed to work-related problems. Masks worn by protesting Telecom employees say “Lom- bard has killed me.” Didier Lombard was the chairman of the board and chief executive officer of France Télécom when the suicides took place. Although France has a higher suicide rate than any other large Western country, this sce- nario was particularly troublesome. The spate of suicides highlighted a quirk at the heart of French society: “Even with robust labor protection, workers see themselves as
THINKING CRITICALLY
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measures, another France Télécom worker committed suicide. A union official suggested that “the man had struggled with being made to frequently change jobs.” The worker had written to management on several occa- sions about the situation and was believed to have had no reply. France Télécom’s CEO, Stéphane Richard, prom- ised a thorough investigation into the suicide. “We need to analyze in great depth and detail what happened. It is my intention that this investigation will be particularly painstaking and transparent.”
RESPONDING TO THE CASE
13-12. What is your reaction to the situation described in this case? What factors, both inside the company and externally, appear to have contributed to this situation?
13-13. What appeared to be happening in France Télé- com’s workplace? What stress symptoms might supervisors have looked for to be alerted to a problem?
13-14. Should supervisors be free to make decisions that are in the best interests of the company without worrying about employee reactions? Discuss. What are the implications for managing work- place stressors?
Source: Based on K. Dunn, “Employee Turnover and Suicide: It Turns out the Response to Either Is the Same,” HR Capi- talist Online, May 9, 2011; S. Mahoney, “Stress Less, Accom- plish More,” Good Housekeeping, May 2010, 57; A. Chrisafis, “France Telecom Worker Kills Himself in Office Car Park,” www.guardian.co.uk (April 27, 2011); Reuters, “France Tele- com to Probe Employee Suicide by Fire,” www.trust.org (April 27, 2011); A. R. Carey and P. Trap, “Aspect of the Job That Workers Find the Most Stressful,” USA Today, April 20, 2011, 1A; “Survey,” Shape, April 2011, 48; M. V. Rafter, “The Yawn- ing of New Era,” Workforce Management Online, December 2010; C. Hausman, “Millions of U.K. Workers Lie to Bosses about Stress-Induced Days,” Global Ethics Online, November 8, 2010; E. Holbrook, “Beneath the Bell Jar: Companies Con- front a Rise in Workplace Suicides,” Risk Management, Novem- ber 2010, 6–8; “Survey: 30 Percent of Managers under More Stress,” Workforce Management Online, September 22, 2010; M. Colchester, “France Télécom Faces Inquiry over Suicides,” New York Times Online, April 12, 2010; M. Saltmarsh, “France Télécom Suicides Prompt an Investigation,” New York Times Online, April 9, 2010; E. Frauenheim, “Suicides Spur Manage- ment Shake-Up at France Télécom,” Workforce Management, March 2010, 6–8; C. Stievenard, “France’s Approach to Work- place ‘Bullying,”’ Workforce Management Online, www.work- force.com (March 2010); R. Bender and M. Colchester, “Morale Is Priority for France Télécom,” Wall Street Journal, February 4, 2010, B2; R. Bender and M. Colchester, “France Télécom Focuses on Morale,” Wall Street Journal Online, online.wsj. com, February 4, 2010; The Associated Press, “Executive Quits after Suicides at France Télécom,” New York Times Online, October 6, 2009; J. Lichfield and A. Mauviel, The Independent,
• More than 50 percent of US and Canadian workers say they feel fatigued at the end of a workday. At least 40 percent of those workers say their jobs made them depressed.
• 20 percent of UK workers say they have taken sick leave brought on by stress, but 90 percent have lied about the real reason for staying home.
• 30 percent of supervisors say they’re more stressed at work today than a year ago.
• Reasons employees find work stressful: low pay, com- muting, excessive workload, fear of being fired/laid off, annoying coworkers, and difficult bosses.
As you can see, stress and its effects on workers are (and should be) a serious concern for employers. When excessive pressure is placed on people from overwhelm- ing demands or constraints, they often feel they’ve got no choices or options. At France Télécom, the wave of employee suicides was cause for concern. Trade union leaders blamed “the allegedly brutal management culture of a company which has transformed itself over a decade from a ponderous state utility to a leading telecommunica- tions company.” However, for months, France Télécom management “dismissed the suicides as a contagious fad among its workforce.” Unions then criticized the company for its poor choice of language.
The Paris prosecutor’s office opened an investigation of the company over accusations of psychological harass- ment. The judicial inquiry stemmed from a complaint by the union Solidares Unitaires Démocratiques against France Télécom’s former chief executive and two mem- bers of his top management team. The complaint accused management of conducting a “pathogenic restructuring.” Excerpts of the inspector’s report, although not made public, were published in the French media. The report described a situation in which the company used various forms of psychological pressure in an effort to eliminate 22,000 jobs over a two-year period. Company doctors alerted management about the possible psychological dangers of the stress that could accompany such drastic change. Despite these findings, a company lawyer denied that France Télécom had systematically pressured employ- ees to leave.
Company executives realized that they needed to take drastic measures to address the issue. One of the first changes was a new CEO, Stéphane Richard, who said his priority “would be to rebuild the morale of staff who have been through trauma, suffering and much worse.” The company also halted some workplace practices identified as being particularly disruptive, like involuntary transfers. It is also encouraging more supportive practices, includ- ing working from home. A company spokesperson says the company has completed two of six agreements with unions that cover a wide range of workplace issues like mobility and work/life balance and stress. Despite these
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put Joe’s department further behind and definitely out of the running in the contest. Joe also knows that Tim was only thinking of his department when he tried to repair the machine. Suspending him will be considered by the others as a penalty for loyalty to the company and to his fellow workers. Joe decides to wait for Tim’s return before making a decision. He leaves work that day without filing the report of the accident, as required by both company policy and OSHA standards.
The following afternoon, Tim returns with a bandage around his hand. All the workers gather around to wel- come him back. After much good-natured kidding and sincere welcomes, Joe decides to join the group. After welcoming Tim back, he tells him that what he did was wrong. Joe explains his appreciation for Tim’s efforts to save time, and he tells Tim that he will waive the three- day suspension this time because of the circumstances, but that if a similar incident occurs in the future, the suspen- sion will be doubled. Joe turns to the assembled group and makes this statement: “The next time, I will have no choice but to suspend the person according to the rules. I trust that Tim’s experience is warning enough. Now get back to work, all of you.” Joe returns to his office and begins to fill out the accident report. In the space pro- vided for an explanation of the causes of the accident Joe writes, “Operator’s machine malfunctioned, causing a minor injury to the worker’s right index finger.”
RESPONDING TO THE CASE
13-15. Do you think Joe would have handled the situ- ation differently if Tim had been a less valued worker? Why?
13-16. What is the probable outcome of not filing the accident report on time and with complete honesty?
13-17. If you had been the supervisor in the case, what would you have done to deal with Tim and your workgroup?
13-18. What does this case suggest about a supervisor’s responsibilities for safety and his or her efforts to achieve higher production levels?
www.independent.co.uk, September 30, 2009; and D. Jolly and M. Saltmarsh, “Suicides in France Put Focus on Workplace,” New York Times Online, September 30, 2009.
■➤ Case 13-B: Safety First at the Samson Company The Samson Company is in the middle of a contest to boost production. Joe Miller’s and Al Scott’s departments have been running neck and neck, with Joe’s team currently in the lead. However, last week Joe had some machine down- time, and it looked as though his department might finish behind schedule and be pushed out of first place. There was some good-natured heckling about it between departments, and the machine operators in Joe’s department decided they were not going to give up without a struggle. That fact is obvious when Joe arrives at the plant on Monday morning. He is about fifteen minutes early, but most of his people are already at their machines waiting for the starting bell.
That’s the way it goes all week. Joe’s people work at peak performance, and by Thursday it looks as if they have a good chance of being on top again. Then, Thursday afternoon, one of the machines jams. The operator, Tim Hanley, one of Joe’s best workers, tries to save time by fixing it himself. He reaches in to free the jammed part and one of his fingers is severely gashed. Another worker gets the first-aid kit and fixes a temporary bandage. Then, Joe rushes Tim to the infirmary.
“How is he?” the others ask when Joe returns. “The nurse did what he could and sent Tim to the
hospital,” Joe answers. “Tim really meant it when he said we’d lose over his
dead body,” one of the workers says admiringly. Several others make similar comments, and Joe realizes that Tim is regarded as a hero by his coworkers.
What Tim did was stupid, Joe thinks, as well as a violation of a basic safety rule. What troubles Joe most, however, is the admiration shown by other members of the group for Tim’s actions.
Joe is at a loss as to what he can do to handle the situation. Tim is a top-flight worker, but he did violate a safety procedure when he reached into the jammed machine with the power still on. Also, he is not autho- rized to make repairs. The normal punishment for such a safety violation is a three-day suspension, but this will
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■■ accommodation
■■ avoidance
■■ collaboration
■■ compromise
■■ conflict
■■ conflict management
■■ culture
■■ devil’s advocate
■■ discipline
■■ dismissal
■■ distributive bargaining
■■ employment at will
■■ forcing
■■ “hot stove” rule
■■ integrative bargaining
■■ negotiation
■■ paper trail
■■ politicking
■■ progressive discipline
■■ status
■■ suspension
■■ verbal warning
■■ written warning
■■ wrongful discharge
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Conflict, Politics, Discipline, and Negotiation14
C H
A P
T ER
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14-1. Define conflict.
14-2. Identify the three general sources of conflict.
14-3. List the five basic techniques for resolving conflict.
14-4. Describe how a supervisor could stimulate conflict.
14-5. Define politicking.
14-6. Explain the existence of politics in organizations.
14-7. Define discipline and the four most common types of discipline problems.
14-8. List the typical steps in progressive discipline.
14-9. Contrast distributive and integrative bargaining.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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Responding to a Supervisory Dilemma
Hostage and supervisor. These are not two words that you would usually expect to hear spoken in the same breath. However, dur- ing the first few months of 2009, workers at manufacturing facilities of 3M Company, Sony Corpora- tion, and Caterpillar Inc. in France took supervisors hostage. Why? To negotiate better severance packages and benefits for laid-off employees.
French workers have long been known for their aggressive and radical responses to what they feel is wrong or oppressive treat- ment. Says one French executive, “Protest is inscribed in the genes of French culture. In the past, peas- ants protested against their lords. Today, the difference is that the lords are chief executives.” Pro- testing French workers have been known to burn piles of tires in city streets or tie up traffic with caravans of farm tractors. In one instance, striking truckers blockaded roads and highways to highlight their campaign for retirement at age fifty-five. The labor blockade worked because the French govern- ment relented when food supplies started to run out. And the tactic of taking the boss hostage has been used previously, as well. For instance, in 1997, workers at the state-run mortgage bank Crédit Foncier de France took their boss hostage for five days to try and pre- vent the bank’s closing even though it had been losing money. Although kidnapping your boss isn’t legal, a French sociologist who surveyed 3,000 companies in 2004 found that 18 of them had experienced an “exec- utive detention” in the prior three years.
The actions being taken by workers, which have been peaceful and more of a symbolic protest, were in response to a continued economic downturn. Although France isn’t in any worse shape than the other big indus- trialized economies, the country’s “strong tradition of egalitarianism triggers strong reactions when people think they are being mistreated or when better-off people
appear to flaunt their wealth at a time of general hardship.” At Caterpillar Inc.’s French facility near Grenoble, unhappy workers first went on strike for a day. The next day, they detained the plant director and four other supervi- sors for about twenty-four hours. The supervisors were released only after the company agreed to resume talks with unions and a government mediator on “how to improve com- pensation for workers being laid off.” The incident at Caterpillar followed others at Sony and 3M, where supervisors also were held captive by workers who were angry over being laid off. Although all the hostage-taking incidents were resolved peacefully, some analysts wonder if more violent actions may be in store especially if workers feel they have nothing to lose.
What’s your reaction to these events? Do you think your reaction is influenced by the culture, values, and traditions of the country in which you find yourself? Explain. Review Hofstede’s findings ( Chapter 2) and use it to explain these workers’ actions. How important is it for supervisors to be aware of external environ- mental forces? Discuss this in light of these events.
What might the French supervisors have done dif- ferently in this situation, especially prior to the point where workers felt they had to make their point by taking them hostage? Explain.
Do you think something like this could happen in the United States? Why or why not?
Sources: Based on J. Marquez, “French Hostage Situations Have Some Wondering If U.S. Is Next,” Workforce Management Online, April 3, 2009; D. Gauthier-Villars and L. Abboud, “In France, Boss Can Become a Hostage,” Wall Street Journal, April 3, 2009, B1+; L. Abboud and M. Colchester, “French Bosses Besieged as Worker Anger Rises,” Wall Street Journal, April 1, 2009, B1+; D. Gauthier- Villars, “French Business Leaders Vow to Give Up ‘Abusive’ Ben- efits,” Wall Street Journal, October 8, 2008, A14; and F. Coleman, “Take A Hostage, Save Your Job,” U.S. News & World Report, February 3, 1997, 43.
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Chapter 14 Conflict, Politics, Discipline, and Negotiation 377
D ealing with conflicts and political issues is a part of every supervisor’s job. Those who learn how to handle these matters are likely to reap significant benefits.
In this chapter, we will define conflict, explore what brings it about, and examine the various ways you can handle it. Then, we discuss organizational politics and why understanding politics is important for all supervisors and how you can make politics work for you. We will then look at one of the more difficult issues facing a supervisor, disciplining employees, and the conflict it causes. Finally, we conclude with some sug- gestions on how to be more successful at negotiation.
What is Conflict? Conflict is a process in which one party consciously interferes in the goal-achievement efforts of another party. This interference can be between a supervisor and a member of their department or between two operatives within a department. It also might exist between a supervisor and their boss, or it might involve interdepartmental parties, such as two supervisors in separate departments.
IS ALL CONFLICT BAD? Most of us have grown up with the idea that all conflicts are bad. We were told not to argue with our parents or teachers, to get along with our brothers and sisters, and that countries spend billions of dollars on military outlays to preserve peace. But conflicts aren’t all bad, especially in organizations.1
Conflict is a natural phenomenon of organizational life.2 It can’t be completely elimi- nated. Why? Because (1) organizational members have different goals; (2) there are scarce resources, such as budget allocations, that various people want and are willing to fight over; and (3) people in organizations don’t all see things alike, as a result of their diverse backgrounds, education, experiences, and interests. However, the existence of conflict in organizations has a positive side: it stimulates creativity, innovation, and change, and only through change can an organization adapt and survive (see Exhibit 14-1). A positive level of conflict in an organization supports disagreements, open questioning of others, and challenging the status quo. If organizations were completely devoid of conflict, they would become apathetic, stagnant, and unresponsive to change.
You should look at conflict as having an upside as well as a downside. You should encourage enough conflict to keep your department viable, self-critical, and creative. Of course, too much conflict is bad and should be reduced. Your goal should be to have enough conflict in your department to keep the unit responsive and innovative, but not so much as to hinder departmental performance.
OBJECTIVE 14.1 Define conflict.
conflict A process in which one party consciously interferes in the goal- achievement efforts of another party.
OBJECTIVE 14.2 Identify the three general sources of conflict.
1See S. P. Robbins, Managing Organizational Conflict: A Non-Traditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974). 2See, for example, C. Noble, “Resolving Co-Worker Disputes through ‘Coaching Conflict Management,”’ Canadian HR Reporter, September 24, 2001, 18–20.
Exhibit 14-1 The positive role of conflict.
Conflict AdaptationChange Survival
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WHERE DO CONFLICTS COME FROM? Conflicts don’t pop out of thin air. They have causes. These causes can be separated into three general categories: communication differences, structural differentiation, and personal differences. Let’s briefly look at each of these.
Communication Differences Communication differences encompass conflicts arising from misunderstandings and different meanings attached to words. One of the major myths that most of us carry around with us is that poor communication is the reason for all conflicts—“If we could just communicate with each other, we could eliminate our differences.” Such a conclusion is not unreasonable, given the amount of time each of us spends communicating. Poor communication is certainly not the source of all conflicts, though there is considerable evidence to suggest that problems in the communication process act to retard collaboration and stimulate misunderstanding.
Structural Differentiation As we explained previously in Chapter 4, organizations are horizontally and vertically differentiated. Company officials divide up tasks, group com- mon tasks into departments, and establish rules and regulations to facilitate standard- ized practices among departments.
This structural differentiation often causes conflicts. Individuals may disagree over goals, decision alternatives, performance criteria, and resource allocations. These con- flicts, however, are not caused by poor communication or personal hostility. Rather, they are rooted in the structure of the organization itself. The “goodies” that supervisors want—budgets, promotions, pay increases, additions to staff, office space, and influence on decisions—are scarce resources that must be divided up. The creation of horizon- tal units (departments) and vertical levels (the organizational hierarchy) brings about efficiencies through specialization and coordination, but at the same time produces the potential for structural conflicts.
Personal Differences The third source of conflict is personal differences. These include value systems and personality characteristics that account for individual idiosyncrasies and differences.
Imagine the following situations. Your values emphasize developing close family ties; your boss’s focus on acquiring material possessions. An employee in your depart- ment thinks salary increases should be based on seniority; you think the criterion should be job performance. These value differences stimulate conflicts. Similarly, the chemistry between some people makes it hard for them to work together. Factors such as back- ground, education, experience, and training mold each individual into a unique person- ality. Some personality types are attracted to each other, whereas some types are like the proverbial oil and water—they just don’t mix. The result is that some people may be perceived by others as abrasive, hard to work with, untrustworthy, or strange. This creates interpersonal conflicts.
HOW DO YOU MANAGE CONFLICT? As a supervisor, you want to have the optimal level of conflict in your department. That means you need to manage it. You want to resolve conflict when it’s too high and dis- rupting your department’s performance. You want to stimulate conflict when it’s too low. So, conflict management is the application of resolution and stimulation techniques to achieve the optimal level of departmental conflict.
WHAT RESOLUTION TECHNIQUES CAN YOU USE? What options do you have available to eliminate or reduce conflicts? There are five basic approaches or techniques for resolving conflict: avoidance, accommodation, forcing, compromise, and collaboration. As shown in Exhibit 14-2, they differ in terms of the
conflict management A method of identifying and resolving conflicts in a reasonable, equitable, competent manner.
OBJECTIVE 14.3 List the five basic techniques for resolving conflict.
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emphasis they place on concern for others versus con- cern for oneself. Each technique has particular strengths and weaknesses, and no one technique is ideal for every situation. You should consider each technique as a tool in your conflict management portfolio. Although you may be better at using some tools than others, the skilled supervisor knows what each tool can do and when it is likely to be most effective.
Avoidance Sometimes avoidance is the best solution for you—just withdrawing from the conflict or ignoring it. When would that be? When the conflict you face is triv- ial, when emotions are running high and time can help cool things down, or when the potential disruption from a more assertive action outweighs the benefits of resolu- tion, avoidance can work best. The thing to be concerned about this approach is that some supervisors believe that all conflicts can be ignored. These conflict avoiders are often poor supervisors. They frustrate their employees and usually lose their respect. There are times when the best action is no action, but that shouldn’t be the way you respond to every conflict.
Accommodation The goal of accommodation is to maintain harmonious relationships by placing another’s needs and concerns above your own. You might, for example, yield to another person’s position on an issue or try to defuse a conflict by focusing on points of agreement. This approach is most viable when the issue under dispute isn’t that important to you or when you want to build up credits for later issues.
Forcing With forcing, you attempt to satisfy your own needs at the expense of the other party. In organizations, this is most often illustrated by supervisors using their formal authority to resolve a dispute. The use of intimidation, majority-rule voting, or stubbornly refusing to give in on your position are other examples of force. Force works well (1) when you need a quick resolution, (2) on important issues for which unpopular actions must be taken, and (3) when commitment by others to your solution is not critical.
Compromise A compromise approach requires each party to give up something of value. This approach is typically taken by management personnel and labor unions in negotiating a new labor contract. Supervisors also often use compromise to deal with interpersonal conflicts. For instance, a supervisor in a small printing company wanted one of his employees to come in over a weekend to finish an important project. The employee didn’t want to spend his whole weekend at work. After considerable discus- sion, they arrived at a compromise solution: The employee would come in on Saturday, the supervisor would also come in and help out, and the employee would get eight hours of overtime pay plus the following Friday off.
When should you look to compromise as an option? You do so when the party with whom you have the conflict has power about equal to yours, when it is desirable to achieve a temporary solution to a complex issue, or when time pressures demand an expedient solution.
Collaboration The ultimate win–win solution is collaboration. All parties to the conflict seek to satisfy their interests. This technique is typically characterized by open and honest discussion among the parties, intensive listening to understand differences and identify areas of mutual agreement, and careful deliberation over a full range of alterna- tives to find a solution that is advantageous to all.
When is collaboration the best conflict approach for you? Collaboration is best used when time pressures are minimal, when all parties in the conflict seriously want a solution, and when the issue is too important to be compromised.
avoidance Intentionally keeping away from places, people, thoughts, feelings, or conversations related to a conflict situation.
accommodation A method of maintaining harmonious relationships by placing others’ needs and concerns above one’s own.
forcing Attempting to satisfy one’s own needs at the expense of the other party.
compromise An approach to conflict that requires each party to give up something of value.
collaboration An approach to conflict in which all parties seek to satisfy their interests.
Exhibit 14-2 Basic techniques for resolving conflicts.
C o
n ce
rn f
o r
O th
e rs
High
Low
Accommodation Collaboration
ForcingAvoidance
Compromise
Low High Concern for Self
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WHICH CONFLICTS DO YOU HANDLE? Not every conflict justifies your attention. Some might not be worth the effort; others might be unmanageable. Although avoidance might appear to be a “cop-out,” it can sometimes be the most appropriate response. You can improve your overall supervi- sory effectiveness and your conflict management skills in particular, by avoiding trivial conflicts. Choose your battles judiciously, saving your efforts for the ones that count.
Regardless of our desires, some conflicts may be unmanageable. When antagonisms are deeply rooted, when one or both parties wish to prolong a conflict, or when emotions run so high that constructive interaction is impossible, your efforts to manage the conflict are unlikely to meet with much success. Don’t be lured into the naïve belief that a good supervisor can resolve every conflict effectively. Some aren’t worth the effort. Some are out- side your realm of influence. Still others may be functional and, as such, are best left alone. Those you choose to handle, you need to know how to handle in the best way possible.
HOW DO YOU CHOOSE THE APPROPRIATE RESOLUTION TECHNIQUE? Given that you’re familiar with your options, how should you proceed if you find you have a conflict that needs resolving? We summarize your options in Exhibit 14-3, and we describe them in this section. Start by considering your preferred conflict-handling style. Each of us has a basic approach to handling conflict with which we feel most comfortable. Do you try to postpone dealing with conflicts, hoping they’ll go away (avoidance)? Do you prefer soothing the other party’s feelings so that the disagreement doesn’t damage your relationship (accommodation)? Are you stubborn and determined to get your way (forcing)? Do you look for middle-ground solutions (compromise)? Or maybe you prefer to sit down and discuss differences to find a solution that will make everybody happy (collaboration).
Everyone has a basic resolution approach that reflects his or her personality. You should understand what yours is. Most people aren’t held prisoner to their basic approach. They’re flexible and can use different approaches if they need to. Unfortu- nately, some people are extremely rigid and incapable of adjusting their styles. These people are at a severe disadvantage because they can’t use all of the resolution options. You should know your basic resolution style and try to show flexibility in using others. However, keep in mind that when push comes to shove, most of us fall back on our basic approach because it’s the one we know best and with which we feel most comfortable.
Exhibit 14-3 Choosing the appropriate resolution technique: A guideline.
What's my preferred conflict-handling style?
Avoidance?
Accommodation?
Forcing?
Compromise?
Collaboration?
What are my goals?
How important is the conflict?
Is sustaining supportive relationships important?
Is a speedy resolution important?
What's the source of the conflict?
Communication differences?
Structural differentiation?
Personal differences?
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The next thing you should look at is your goals. The best solution is closely inter- twined with your definition of best. Three goals seemed to dominate our discussion of resolution approaches: the importance of the conflict, concern over maintaining long- term interpersonal relations, and the speed with which you need to resolve the conflict. All other things held constant, if the issue is critical to your unit’s success, collaboration is preferred. If sustaining supportive relationships is important, the best approaches, in order of preference, are accommodation, collaboration, compromise, and avoidance. If it’s crucial to resolve the conflict as quickly as possible, force, accommodation, and compromise—in that order—are preferred.
Finally, you need to consider the source of the conflict. What works best depends, to a large degree, on the cause of the conflict. Communication-based conflicts revolve around misinformation and misunderstandings. Such conflicts lend themselves to col- laboration. In contrast, conflicts based on personal differences arise out of dispari- ties between the parties’ values and personalities. Such conflicts are most susceptible to avoidance because these differences are often deeply entrenched. When you have to resolve conflicts rooted in personal differences, you’ll frequently rely on force—not so much because it placates everyone involved, but because it works! The third category, structural conflicts, offers opportunities to use most of the conflict approaches.
This process of blending your personal style, your goals, and the source of the conflict should result in identifying the approach or set of approaches most likely to be effective for you in any specific conflict.
HOW DO YOU STIMULATE CONFLICT? What about the other side of conflict management, that is, situations that require super- visors to stimulate conflict? The notion of stimulating conflict is often difficult to accept. For almost all of us, the term conflict has a negative connotation, and the idea of purposely creating conflict seems to be counter to good supervisory practices. Few of us personally enjoy being in conflictive situations. Yet there are situations in which an increase in conflict is constructive.
To determine whether a situation might justify conflict stimulation ask yourself if you are surrounded by overly agreeable co-workers who are afraid to admit what they don’t know. Then consider if the culture of your organization is focused on compromise to the point where co-workers are willing to forsake the values, objectives, and welfare of the organization. After that determine if the organizational culture favors harmony at all costs to the point where no one wishes to hurt the feelings of others. Continue by deciding if career advancement is based more on popularity than competence and ability to meet performance goals. Take a moment to observe organizational decision mak- ing to see if the need for consensus is contributing to a lack of development and a resis- tance to change. Finally, look for evidence of employees who are retired on the job and unwilling to leave. The existence of one or more of these situations suggest that an increase in conflict might help your unit’s performance.3
We know a lot more about resolving conflict than stimulating it. However, the fol- lowing are some suggestions you might want to consider if you find your department needs an increased level of conflict.
Use Communication As far back as Franklin Roosevelt’s administration, and probably before, the White House has consistently used communication to stimulate conflict. Senior officials float trial balloons by “planting” possible decisions with the media through the infamous “reliable source” route. For example, the name of a prominent judge is leaked as a possible Supreme Court appointment. If the candidate survives the public scrutiny, their appointment is announced by the President. However, if the
OBJECTIVE 14.4 Describe how a supervisor could stimulate conflict.
3M. Saskin and K. J. Kiser, Putting Total Quality Management to Work (San Francisco: Berret-Koehler, 1993)
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candidate is found lacking by the media and public, the President’s Press Secretary or other high-level official will make a formal statement such as, “At no time was this individual under consideration.”
You can use rumors and ambiguous messages to stimulate conflict in your depart- ment. Information that some employees might be transferred, that serious budget cuts are coming, or that a layoff is possible can reduce apathy, stimulate new ideas, and force reevaluation, which are all positive outcomes as a result of increased conflict.
Bring in Outsiders One method for shaking up a stagnant department is to bring in— either by hiring from outside or by internal transfer—individuals whose backgrounds, values, attitudes, or personalities differ from those of present members. One of the major benefits of the diversity movement (encouraging the hiring and promotion of people who are different) is that it can stimulate conflict and improve an organization’s performance.
Restructure the Department Structural variables are a source of conflict and it is only logical to look to structure as a conflict stimulation device. Centralizing decisions, realigning workgroups, and increasing formalization are examples of structural devices that disrupt the status quo and act to increase conflict levels.
Appoint a Devil’s Advocate A devil’s advocate is a person who purposely presents argu- ments that run counter to those proposed by the majority or against current practices. They play the role of the critic, even to the point of arguing against positions with which they actually agree.
A devil’s advocate acts as a check against groupthink and practices that have no bet- ter justification than “that’s the way we’ve always done it around here.” When thought- fully listened to, the advocate can improve the quality of group decision-making. On the other hand, others in the group often view advocates as time wasters; appointment of an advocate is almost certain to delay any decision process.
HOW CAUTIOUSLY SHOULD YOU PROCEED IN STIMULATING CONFLICT? Even though there are situations in which departmental performance can be enhanced through conflict stimulation, it may not be in your best career interests to use stimula- tion techniques.
If your organizational culture or your immediate superior views any kind of con- flict in your department as a negative reflection on your supervisory performance, think twice before stimulating conflict or even allowing low levels of conflict to exist. When company officials believe that all conflicts are bad, it’s not uncommon for you to be evaluated on how peaceful and harmonious conditions are in your department. Although a conflict-free climate tends to create stagnant and apathetic organizations, and eventually lower performance, it is important for your survival to adopt a conflict management style that’s compatible with your organization. In some cases, that might mean using only resolution techniques.
devil’s advocate A person who purposely presents arguments that run counter to those proposed by the majority or against current practices.
Comprehension Check 14-1
1. True or false? All conflict is bad.
2. The conflict management technique involving withdrawing from or ignoring the conflict is referred to as:
a. accommodation. b. avoidance. c. compromise. d. forcing.
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Understanding Organizational Politics Don’t use conflict stimulation techniques if your organization’s senior management views all conflicts as bad. This summary of the previous paragraph acknowledges the political nature of organizations. You’re not always rewarded for doing the right things. In the real world of organizations, the good guys don’t always win. Demonstrating openness, trust, objectivity, support, and similar humane qualities in relationships with others doesn’t always lead to improved supervisory performance. There will be times when, to get things done or to protect your interests against the maneuvering of others, you’ll have to engage in politicking. Effective supervisors understand the political nature of organizations and adjust their actions accordingly.
WHAT IS POLITICS? Politics relates to who gets what, when, and how. Politicking consists of the actions you can take to influence, or attempt to influence, the distribution of advantages and disad- vantages within your organization. Some examples of political behavior include with- holding key information from decision-makers, whistle-blowing, spreading rumors, leaking confidential information about organizational activities to the media, exchang- ing favors with others in the organization for mutual benefit, and lobbying for or against a particular individual or decision alternative.4
One of the most interesting insights about politics is that what constitutes a politi- cal action is almost entirely a judgment call. Like beauty, politics is in the eye of the beholder. A behavior that one person labels “organizational politics” is very likely to be characterized as an instance of “effective supervision” by another. Effective supervision is not necessarily political, though in some cases it might be. Rather, a person’s reference point determines what they classify as organizational politics. Take a look at the labels in Exhibit 14-4 that are used to describe the same activities.
WHY DOES POLITICS EXIST IN ORGANIZATIONS? Organizations are made up of individuals and groups with different values, goals, and interests. This sets up the potential for conflict over resources. Departmental budgets, space allocations, project responsibilities, and salary adjustments are just a few examples of the resources about which organizational members will disagree.
OBJECTIVE 14.5 Define politicking.
4See, for example, D. A. DeCenzo and B. Silhanek, Human Relations: Personal and Professional Develop- ment (Upper Saddle River, NJ: Prentice Hall, 2002), 177–179.
politicking The actions one can take to influence, or attempt to influence, the distribu- tion of advantages and disadvantages within an organization.
OBJECTIVE 14.6 Explain the existence of politics in organizations.
3. When you need a quick resolution to an important issue and when commitment to your solution is not critical, the style of conflict resolution works best.
a. compromise b. avoidance c. forcing d. accommodation
4. Conflict can occur for all of the following reasons except:
a. communication differences. b. personal differences. c. structural differences. d. strategic differences.
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Resources in organizations are limited. This often turns potential conflict into real conflict. If resources were abundant, all the various interests within the organization could satisfy their goals. Because resources are limited, not everyone’s interests can be provided for. Unfortunately, gains by one individual or group are often perceived as being at the expense of others within the organization. These forces create competition among members for the organization’s limited resources.
Maybe the most important factor leading to politics within organizations is the realization that most of the “facts” that are used to allocate limited resources are open to interpretation. What, for instance, is “good” performance? What’s a “good” job? What’s an “adequate” improvement? The coach of any National Football League team knows that a quarterback like Andrew Luck, with a consistently high rating, is a high performer, and one with a low rating is a poor performer. You don’t need to be a football genius to know you should play the top quarterback and keep the lower-rated one on the bench. But what if you have to choose between two quarterbacks who have similarly high ratings? Then, other factors—less objective ones—come into play: atti- tude, potential, ability to perform in the clutch, and so on.
Most supervisory decisions in organizations more closely resemble choosing between two fairly equally rated quarterbacks than deciding between a superstar and a bench warmer. In this large and ambiguous middle ground of organizational life—where the facts don’t speak for themselves—politics takes place.
Finally, because most decisions have to be made in a climate of ambiguity (where facts are rarely fully objective, and thus are open to interpretation), people within the organization will use whatever influence they can to taint the facts to support their goals and interests. That, of course, creates motivation for the activities we call politicking.
CAN YOU PLAY POLITICS AND STILL BE ETHICAL? Not all political actions are necessarily unethical. To help guide you in differentiat- ing ethical from unethical politicking, there are some questions you should consider. Exhibit 14-5 illustrates a decision tree to guide ethical actions. The first question you need to answer addresses self-interest versus organizational goals. Ethical actions are consistent with the organization’s goals. Spreading untrue rumors about the safety of a new product introduced by your company, to make that product’s design group look
Exhibit 14-4 Is it politics or effective supervision?
POLITICAL LABEL
1. Blaming others
2. Kissing up
3. Apple polishing
4. Passing the buck
5. Covering your rear
6. Creating conflict
7. Forming coalitions
8. Whistle-blowing
9. Nitpicking
10. Scheming
Fixing responsibility
Developing working relationships
Demonstrating loyalty
Delegating authority
Documenting decisions
Encouraging change and innovation
Facilitating teamwork
Improving efficiency
Meticulous attention to detail
Planning ahead
or
or
or
or
or
or
or
or
or
or
EFFECTIVE SUPERVISION LABEL
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bad, is unethical. However, there may be nothing unethical if you, as a department head, exchange favors with your division’s purchasing supervisor to get a critical contract processed quickly.
The second question concerns the rights of other parties. If you went down to the mail room during your lunch hour and read through the mail directed to the purchasing supervisor (described in the previous paragraph) with the intent of “getting something on him” so he’d expedite your contract, you’d be acting unethically. You would have violated the purchasing supervisor’s right to privacy.
The final question relates to whether the political activity conforms to standards of equity and justice. If you inflate the performance evaluation of a favored employee and deflate the evaluation of a disfavored employee, and then use these evaluations to justify giving the former a big raise and nothing to the latter, you have treated the disfavored employee unfairly and acted unethically.
HOW DO YOU KNOW WHEN YOU SHOULD PLAY POLITICS? Before you consider your political options in any situation, you need to evaluate that situation. The key situational factors are your organization’s culture, the power of others, and your own power.
Your Organization’s Culture The place to begin is with assessing your organization’s culture to determine which behaviors are desirable and which aren’t.
Every organization has a system of shared meaning called its culture. This culture is a set of unwritten norms that members of the organization accept and understand and that guide their actions. For example, some organizations’ cultures encourage risk taking, accept conflicts and disagreements, allow employees a great deal of autonomy, and reward members according to performance criteria. Other organizations’ cultures differ by 180 degrees: They punish risk-taking, seek harmony and cooperation at any price, minimize opportunities for employees to show initiative, and allocate rewards to people according to such criteria as seniority, effort, or loyalty. The point is that every organization’s culture is somewhat different, and if a political strategy is to succeed, it must be compatible with the culture (see “News Flash! Status in Organizations”).
The Power of Others Either people are powerful or they’re not, right? Wrong! Power is differential. On some issues, a person may be very powerful. Yet that same person may be relatively powerless on other issues. What you need to do, therefore, is determine which individuals or groups will be powerful in a given situation.
Some people have influence as a result of their formal position in the organization. That is probably the best place to begin your power assessment. What decision or issue do you want to influence? Who has formal authority to affect that issue? The answer to that is only the beginning. After determining who has formal authority, consider others—individuals, coalitions, departments—who may have a vested interest in the decision’s outcome. Who might gain or lose as a result of one choice being selected over
culture A set of unwritten norms that members of the organization accept and under- stand, and that guide their actions.
Exhibit 14-5 Is a political action ethical?
YesQuestion 1
Is the political action motivated by self-serving interests to the exclusion of the organization's goals?
No Question 2
Does the political action respect the rights of the indi- viduals affected?
Unethical Question 3
Is the political activity fair and equitable?Yes
Unethical No
EthicalYes
Unethical No
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another? This helps identify the power players, those motivated to engage in politicking. It also pinpoints your likely adversaries.
Now you need to specifically assess the power of each player or group of players. In addition to each one’s formal authority, evaluate the resources each controls and their location in the organization. The control of scarce and important resources is a source of power in organizations. Control and access to key information, expert knowledge, and possession of special skills are examples of resources that may be scarce and important to the organization; hence, they become potential means of influencing organizational deci- sions. In addition, being in the right place in the organization can be a source of power. This explains, for example, the frequent power of administrative assistants. They are often in the direct flow of key information and control the access of others to their bosses.
Assess your boss’s influence in any power analysis. What is their position on the issue under concern—for, against, or neutral? If it’s for or against, how intense is your boss’s stand? What is your boss’s power status in the organization? Strong or weak? Answers to these questions can help you assess whether the support or opposition of your boss will be relevant.
STATUS IN ORGANIZATIONS
NEWS FLASH!
Traditionally in organizations, individuals who are politically shrewd often have the trimmings that go along with it. These things are grouped under the heading of status. Status is a social rank or the importance one has in a group. Status is not something people give to themselves. Although an individual may have worked hard to achieve some- thing, having status requires at least two people. That is, someone else must view that individual as having a higher ranking (in some capacity) than they do. A supervisor’s status may come from a number of sources. Generally, these sources are grouped in two ways: formal and informal. Much of the discussion on power and politics, as well as authority, focuses on the formal aspects of status. For instance, the title supervisor carries a certain level of prestige with it—implies that you have the ability to direct others and affect their work lives.
On the other hand, status may be informally conferred on a supervisor by characteristics such as education, age, skill, or experience. Anything a supervisor has can have status value if others evaluate it as such. Of course, just because status is informal does not mean that it is less important to a supervisor or that there is less agreement on whether one has it.
It is especially important in organizations to believe that the formal status system is fitting. That is, there should be fairness between perceived
ranking and the status “symbols” given. If it is lacking, problems can arise between people in organizations.* Consider a situation in which the supervisor of the quality-control department has an office that is smaller, is located in a more iso- lated part of the organization, and is not as well- furnished as that of a new employee just joining the unit. If one views importance in terms of the office and its furnishings, one might come to the conclusion that the new employee is more highly regarded than the supervisor is. That’s probably not the case! Yet inconsistencies in status ranking have sent the wrong message.
Status may also affect employees’ willingness to work hard. For instance, imagine the potential for conflict if employees earn more than their supervisor—and that’s not as unrealistic as one might think! That may happen because the supervi- sor is paid a fixed salary and is ineligible for over- time pay. The employees, on the other hand, are paid on an hourly basis and, after working more than forty hours in a week, earn time-and-a-half. If an employee works a lot of overtime, they could conceivably be making more money than the super- visor does. That can easily be controlled if the supervisor simply stops overtime outright. How- ever, in doing so, the supervisor may be losing sight of the goals of the department. In such a case, sta- tus gets in the way of goal attainment!
status A social rank or the importance one has in a group.
*W. F. Whyte, “The Social Structure of the Restaurant,” American Journal of Sociology 54 (January 1954), 302–308.
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Your Own Power After looking at others’ power, assess your own power base. What’s your personal power? What power does your supervisory position in the organization provide? Where do you stand relative to oth- ers who hold power?
Your power can come from several sources. If you’ve got a charismatic personality, for instance, you can exert power because others will want to know your position on issues, your arguments will often be perceived as persuasive, and your position is likely to carry considerable weight in oth- ers’ decisions. Another frequent source of power for supervisors is access to important information that others in the organization need.
The Disciplinary Process The phrase conflict in an organization conjures up some of the more emo- tional elements in any organization. But at no other time is conflict more evident that when a supervisor has to discipline an employee.
The purpose of this section is to help you understand why you may have to discipline an employee, how to do it properly, and how to mini- mize any potential and undue conflict that may arise. That’s because any form of discipline can create fear or anger in employees. The supervisor who makes the discipline process less painful for the employee, behaves with compas- sion, and treats the employee with dignity is likely to find that more severe forms of disciplinary action become unnecessary. In cases in which termination does occur, the employee is better able to handle it.
What specifically do we mean when we use the term discipline in the workplace? It refers to actions taken by a supervisor to enforce the organization’s standards and regu- lations. It generally follows a typical sequence of four steps: verbal warning, written warning, suspension, and dismissal (see Exhibit 14-6).
The mildest form of discipline is the documented verbal warning. A verbal warning is a temporary record of a reprimand that a supervisor keeps. This verbal warning typi- cally states the purpose, date, and outcome of the feedback session. If the verbal warning is effective, no further disciplinary action is needed. However, an employee who fails to improve their performance encounters more severe action—the written warning. The written warning is the first formal stage of the disciplinary procedure. This is because the written warning becomes part of an employee’s official personnel file. In all other ways, however, the written warning is similar to the verbal warning. That is, the employee is advised in private of the violation, its effects, and potential consequences of future violations. Also, if no further disciplinary problems arise after a period of time, the warning is removed from the employee’s file.
A suspension, or time off without pay, may be the next disciplinary step, usually taken only if the prior two steps have not achieved the desired results, although excep- tions do exist where suspension may be given without any prior verbal or written warn- ing if the infraction is of a serious nature. Why would you suspend an employee? One reason is that a short layoff, without pay, is potentially a rude awakening. It may con- vince the employee that you are serious and help them to fully understand and accept responsibility for following the organization’s rules.
Your ultimate disciplinary punishment is terminating employment. Dismissal is often used for the most serious offenses, and it may be the only feasible alternative if your employee’s behavior seriously interferes with a department’s or the organization’s operation.
Although many organizations may follow the process described here, recognize that it may be bypassed if an employee’s behavior is extremely severe. For example, stealing or attacking another employee with intent to inflict serious harm may result in immediate suspension or dismissal. Regardless of any action taken, however, discipline
OBJECTIVE 14.7 Define discipline and the four most common types of discipline problems.
discipline Actions taken by supervisors to enforce an organization’s standards and regulations.
verbal warning A reprimand, a temporary record of which is kept by the supervisor.
written warning The first formal stage of the disciplin- ary procedure; the warning becomes part of an employee’s official person- nel file.
suspension Time off without pay; this step is usually taken only if neither verbal nor written warnings have achieved desired results.
dismissal Termination of employment.
Rob Wilson/Shutterstock
What should a disciplinary process be? It should be reason- able and fair, and it should deal with the issues at hand. Deci- sions shouldn’t be made until the appropriate behavior has been investigated and the alleged wrongdoer has their say. As this symbol of justice typifies, an employee should be considered “innocent until proven guilty.”
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should be fair and consistent. That is, the punishment an employee receives should be appropriate for what they did, and others doing the same thing should be disciplined in a like manner.
WHAT TYPES OF DISCIPLINE PROBLEMS MIGHT YOU FACE? With very little difficulty, we could list several dozen or more infractions that supervi- sors might believe require disciplinary action. Basically, if the problem is associated with an employee’s lack of desire to do the job, not with ability, it becomes a discipline problem. For simplicity’s sake, we have classified the more frequent violations into four categories: attendance, on-the-job behaviors, dishonesty, and outside activities.
Attendance The most frequent disciplinary problems facing supervisors undoubtedly involve attendance. Attendance problems appear to be even more widespread than those related to productivity (carelessness in doing work, neglect of duty, and not following established procedures).
On-the-Job Behaviors The second category of discipline problems covers on-the-job behaviors. This blanket label includes insubordination, horseplay, fighting, gambling, failure to use safety devices, carelessness, and two of the most widely discussed problems in organizations today—alcohol and drug abuse.
Dishonesty Although it is not one of the more widespread employee problems con- fronting supervisors, dishonesty has traditionally resulted in the most severe disciplinary actions. It’s a matter of trust. As a supervisor, you need to be able to trust your employ- ees to do certain things or to handle information properly. Lying, cheating, or other aspects of dishonesty simply destroy an employee’s credibility—and your trust in them.
Outside Activities This final problem category covers activities that employees engage in outside of work, but that either affect their on-the-job performance or generally reflect negatively on the organization’s image. Included here are unauthorized strike activity, outside criminal activities, and working for a competing organization.
IS DISCIPLINE ALWAYS THE SOLUTION? Just because you have a problem with an employee, don’t assume that discipline is the automatic answer. Before you consider disciplining an employee, be sure the employee has both the ability and the influence to correct their behavior.
Exhibit 14-6 The discipline process.
Suspension Written warning
Verbal warning
Formal Steps
Severity
Dismissal
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If an employee doesn’t have the ability—that is, they can’t perform—disciplinary action is not the answer. Some employee coaching is! Employee coaching is a process designed to help employees overcome performance-related problems. Rather than view- ing the performance problem from a punitive standpoint (discipline), employee coaching attempts to uncover why employees have lost their desire or ability to work produc- tively. More importantly, it’s designed to find ways to fix the problem. The premise behind employee coaching is fairly simple: It’s beneficial to both the organization and the employee. Just as it’s costly to have an employee quit shortly after being hired, it’s costly to fire someone. But make no mistake about it, employee coaching is not intended to lessen the effect of an employee’s poor performance, nor is it intended to reduce their responsibility to change inappropriate work behavior. If the employee can’t or won’t accept coaching help, then disciplinary actions must be taken.
Similarly, if there are external factors that block goal attainment and are beyond the employee’s control—such as inadequate equipment, disruptive colleagues, or exces- sive noise—discipline doesn’t make much sense. If an employee can perform but won’t, disciplinary action is called for. However, ability problems should be responded to with solutions such as skill training, job redesign, or a job transfer. Serious personal problems that interfere with work performance are typically best met with professional counsel- ing, a medical referral, or employee assistance programs. Of course, if there are external obstacles in the employee’s way, you should act to remove them. The point is that if the cause of an employee’s problem is outside their control, discipline is not the answer.
BASIC TENETS OF DISCIPLINE Based on decades of experience, supervisors have learned what works best when admin- istering discipline. In the following sections, we review some of the lessons learned. We present the basic groundwork that needs to be laid prior to any punitive action, the importance of making discipline progressive, and how the “hot stove” rule can guide your actions (see the section titled “Disciplining an Employee” at the end of this chapter).
HOW DO YOU LAY THE GROUNDWORK FOR DISCIPLINE? Any disciplinary action you take should be perceived as fair and reasonable. This increases the likelihood that employees will change their behavior to align with the organization’s standards. Such action also prevents unnecessary legal entanglements. The foundation of a fair and reasonable disciplinary climate is created by ensuring that employees are given adequate advance notice of disciplining rules and that a proper investigation precedes any action.
Advance Notice “The best surprise is no surprise.” This phrase, used a number of years ago by a national hotel chain to describe its rooms and service, is a valid guide for super- visors when considering discipline. Employees have a right to know what is expected of them and the probable consequences should they fail to meet those expectations. They should also understand just how serious different types of offenses are. This informa- tion can be communicated in employee handbooks, company newsletters, posted rules, or labor contracts. It is always preferable to have these expectations in writing. This provides protection for you, the organization, and your employees.
Paper Trail A paper trail is extremely important when disciplinary action is taken. Employees and supervisors may be asked to explain what happened in detail. A supervi- sor can be protected if careful documentation is done. If an employee tries to refute the claim leading to discipline, a supervisor can use the paper trail to prove that appropriate steps were taken in the disciplinary process.
A paper trail begins with providing the supervisor with written job descriptions that establish expectations for each specific job. Employees should be aware of and sign their job description. Also, the organization should have written employee policies that
paper trail Documentary written evidence that documents an employee’s disciplinary issues over a given period of time.
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establish expectations for all employees along with written acknowledgements of receipt. Poor performance, behavior, attitude, and so on should never be allowed to continue without comment because failing to do so implies acceptance. Supervisors should keep a log of observations and conversations, and after a number of conversations, a note should be written to the employee’s personnel file. Employee training or coaching where appropriate along with training completion certificates and file memos to document what transpired are all part of the paper trail. If the complaint involves attendance issues, all written notes or e-mails regarding absences should be retained. Verbal warn- ings should be documented when given, and a file memo drafted to document what transpired. Written warnings should include copies to the personnel file and employee. An attempt should be made to have the employee sign the file copy of the warning or the supervisor should write “refused to sign.” Supervisors should also create a separate file memo to document any conversation occurring when the warning was given. Always remember to have employees sign written acknowledgements of policies received and similar other things. Accurate annual performance appraisals should never include inap- propriate “satisfactory” ratings when the performance is not acceptable. Finally, the employee’s file should include evidence of all communication of employee expectations, as well as evidence of employee’s ability, or inability, to meet those expectations, and finally, evidence of any coaching, counseling, or discipline given the employee.5
Proper Investigation Fair treatment of employees demands that a proper investigation precede any decision. Just as in the US legal system, employees should be treated as innocent until proven guilty. Also important is that no judgment can occur before all the relevant facts have been gathered.
As the employee’s supervisor, you will typically be responsible for conducting the investigation. However, if the problem includes an interpersonal conflict between you and the employee, a neutral third party should be chosen to conduct the investigation.
The investigation should focus not only on the event that might lead to discipline but also on any related matters. This is important because these related concerns may reveal extenuating factors that will need to be considered. Of course, the employee must be notified of the offense with which they are being charged so that a defense can be prepared. Remember, you have an obligation to listen objectively to the employee’s inter- pretation and explanation of the offense. A fair and objective investigation includes iden- tifying and interviewing any witnesses and documenting all evidence that is uncovered.
Failure to conduct a full and impartial investigation can carry high costs. A good employee may be unjustly punished, the trust of other employees may be severely jeop- ardized, and you may place your organization under risk for financial damages should the employee file a lawsuit.
HOW DO YOU MAKE DISCIPLINE PROGRESSIVE? Punishment should be applied in steps. That is, penalties should get progressively stron- ger if, or when, an offense is repeated. As we mentioned previously (see Exhibit 14-6), progressive disciplinary action begins with a verbal warning, and then proceeds through written reprimands, suspension, and finally, in the most serious cases, dismissal.
The logic underlying progressive discipline is twofold. First, stronger penalties for repeated offenses discourage repetition. Second, progressive discipline is consistent with court and arbitration rulings that mitigating factors (e.g., length of service, past perfor- mance record, or ambiguous organizational policies) be considered when taking disci- plinary action.6
5D. Lindeman, “Creating a Paper Trail Supports Discipline and Discharge Decisions,” Human Resouces IQ, July 2008, http://www.humanresourcesiq.com/employment-law/columns/creating-a-paper-trail-sup- ports-discipline-and-dis (accessed March 19, 2017).
OBJECTIVE 14.8 List the typical steps in progressive discipline.
6S. Bahls and J. E. Bahls, “Fire Proof,” Entrepreneur, July 2002, 70.
progressive discipline Action that begins with a verbal warn- ing, and then proceeds through written reprimands, suspension, and finally, in the most serious cases, dismissal.
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The “hot stove” rule is a frequently suggested set of principles that can guide you in effectively disciplining an employee. The name comes from the similarities between touching a hot stove and receiving discipline (see Exhibit 14-7).
Both are painful, but the analogy goes further. When you touch a hot stove, you get an immediate response. The burn you receive is instantaneous, leaving no doubt in your mind about the cause and the effect. You have ample warning. You know what happens if you touch a red-hot stove. Further, the result is consistent. Every time you touch a hot stove, you get the same response—you get burned. Finally, the result is impartial. Regardless of who you are, if you touch a hot stove, you will be burned. The analogy with discipline should be apparent, but let’s briefly expand on each of these four points because they are central tenets in developing your disciplining skills.
Immediacy The impact of a disciplinary action is reduced as the time between the infraction and the penalty’s implementation lengthens. The more quickly the discipline follows the offense, the more likely that the employee will associate the discipline with the offense rather than with you as the imposer of the discipline. Therefore, it is best to begin the disciplinary process as soon as possible after you notice a violation. Of course, the immediacy requirement should not result in undue haste. Fair and objective treatment should not be compromised for expediency.
Advance Warning As noted previously, you have an obligation to give advance warn- ing before initiating formal disciplinary action. This means that the employee must be aware of the organization’s rules and accept its standards of behavior. Disciplinary action is more likely to be interpreted as fair by employees when they have received clear warning that a given violation will lead to discipline and when they know what that discipline will be.
Consistency Fair treatment of employees demands that disciplinary action be consis- tent. If you enforce rule violations in an inconsistent manner, the rules will lose their impact. Morale will decline and employees will question your competence. Productivity will suffer as a result of employee insecurity and anxiety. Your employees want to know the limits of permissible behavior, and they look to your actions for guidance. If Cindy is reprimanded today for something that she also did last week when nothing was said, these limits become blurry. Similarly, if Sam and John are both goofing around at their desks and only Sam is reprimanded, Sam is likely to question the fairness of the action. The point, then, is that discipline should be consistent. This need not result in treating everyone exactly alike because that ignores mitigating circum- stances. It does put the responsibility on you to clearly justify disciplinary actions that may appear inconsistent to employees.
Impartiality The last guideline that flows from the hot stove rule is to keep the discipline impartial. Penalties should be connected with a given violation, not with the personality of the violator. That is, discipline should be directed at what the employee has done, not at the employee personally. As a supervisor, you should make it clear that you are avoiding personal judgments about the employee’s character. You are penalizing the rule viola- tion, not the individual. All employees committing the vio- lation can expect to be penalized. Further, once the penalty has been imposed, you must make every effort to forget the incident. You should attempt to treat the employee in the same manner that you did prior to the infraction.
“hot stove” rule A set of principles for effectively disci- plining an employee that demonstrates the analogy between touching a hot stove and receiving discipline.
Exhibit 14-7 The “hot stove” rule.
Advance warning
Consistency
Impartiality Immediacy
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WHAT FACTORS SHOULD YOU CONSIDER IN DISCIPLINE? Defining what is “reasonable in relation to the offense” is one of the most challeng- ing aspects of the discipline process. Why? Because infractions vary greatly in terms of severity. Suspending an employee is considerably more stringent than issuing a verbal warning. Similarly, firing someone—the organizational equivalent of the death pen- alty—is dramatically more punitive than a two-week suspension without pay. If you fail to recognize relevant extenuating factors and make the proper adjustments in the severity of penalties, you risk having your action perceived as unfair. The factors sum- marized in Exhibit 14-8 should be taken into consideration when applying discipline.
WHAT ABOUT THE LAW? Making a mistake in disciplining an employee can have very serious repercussions for an organization. As a result, most large organizations have specific procedures that supervisors are required to follow. Supervisors typically are trained in how to handle the discipline process.
Beginning in the late 1800s, the major legal doctrine that defined an employer’s right to discipline or discharge an employee was the concept of employment at will. The employment-at-will doctrine permitted employers to discipline or discharge employees at their discretion. The premise behind this doctrine is to equalize the playing field. If employees can resign at any time they want, shouldn’t an employer have the same right to terminate the relationship?
The employment-at-will doctrine impacts employees not protected by a specific employment contract stating they can only be fired for good cause. So called “good cause” language is usually part of a collective bargaining agreement and non-union workers typi- cally do not have this protection 7 Of course, even so, you can’t fire on the basis of race, religion, sex, national origin, age, or disability. Although this doctrine has existed for more than a hundred years, the courts, labor unions, and legislation have attempted to lessen its use. In these instances, jobs are being likened to private property. That is, individuals have a right to these jobs unless the organization has specified otherwise. Employees today are challenging the legality of their discharge more frequently. Employees fired without cause may seek the assistance of the courts to address their wrongful discharge. Most states permit employees to sue their employers if they believe their termination was unjust. At issue in these suits is whether, through some action on the part of the employer, excep- tions to the employment-at-will doctrine exist. Today, should you fire an employee, you
and your employer may end up in court defending yourselves against claims of wrongful discharge or improperly terminating the employee.
As the courts have moved to protect an employee’s right to their job, most organizations have responded by tighten- ing up their hiring and discipline practices. They are care- fully reviewing their hiring processes to remove any implied employment contracts. In the past, employment handbooks, interviewers, and supervisors often gave implied guarantees or promises about continued employment. The courts have inter- preted such written and verbal statements as implied contracts that protect employees against termination. So, as a supervi- sor, you should be careful not to make any statement to an employee such as “we never lay people off here” or “you’ll have a place with this company as long as you do your job.”
The courts have also become increasingly concerned with ensuring that when an employee is terminated, the employee’s
employment at will A legal doctrine that defines an employer’s rights to discipline or dis- charge an employee.
7“Employment at Will,” The Free Dictionary, thefreedictionary.com, http://legal-dictionary.thefreediction- ary.com/Employment+at+Will (accessed May 31, 2017); J. Scheid, “Pros and Cons of the Employment- At-Will Doctrine,” Bright Hub, brighthub.com, http://www.brighthub.com/office/human-resources/ articles/104220.aspx (accessed May 31, 2017).
wrongful discharge Improper or unjust termination of an employee.
Exhibit 14-8 Relevant factors determining the severity of penalties.
• Seriousness of the problem
• Duration of the problem
• Frequency and nature of the problem
• Employee's work history
• Extenuating circumstances
• Degree of warning
• History of the organization's discipline practices
• Implications for other employees
• Upper-management support
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rights have not been abused and discipline has been fairly imposed. Proper documen- tation of all disciplinary action is the best protection against employees who claim, “I never knew there was any problem,” or “I was treated unfairly.” In addition, you will want to obey due process when taking any disciplinary action. This includes (1) a presumption of innocence until reasonable proof of an employee’s role in an offense is substantiated; (2) the right of the employee to be heard, and in some cases to be repre- sented by another person; and (3) discipline that is reasonable in relation to the offense involved.
Negotiation We know that lawyers and auto salespeople spend a significant amount of time on their jobs negotiating. So, too, do supervisors. They have to negotiate salaries for incoming employees, cut deals with their bosses, work out differences with their peers, and resolve conflicts with employees. For our purposes, we define negotiation as a process in which two or more parties who have different preferences must make a joint decision and come to an agreement. To achieve this goal, both parties typically use a bargaining strategy.
HOW DO BARGAINING STRATEGIES DIFFER? There are two general approaches to negotiation—distributive bargaining and integra- tive bargaining.8 Let’s see what’s involved in each of these approaches.
Suppose you see a used car advertised for sale in the newspaper. It appears to be just what you’ve been looking for. You go out to see the car. The car is great and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you then negotiate over the price. The negotiating process you are engaging in is called distributive bargaining. Its most identifying feature is that it operates under zero- sum conditions. That is, any gain you make is at the expense of the other person, and vice versa. Referring to the used car example, every dollar you can get the seller to cut from the car’s price is a dollar you save. Conversely, every dollar more they can get from you comes at your expense. Thus, the essence of distributive bargaining is negotiating over who gets what share of a fixed pie.
Probably the most widely cited example of distributive bargaining is in labor- management negotiations over wages and benefits (see Chapter 16). Typically, labor’s representatives come to the bargaining table determined to get as much as they can from management. Because every cent more that labor negotiates increases or decreases management’s costs, each party bargains aggressively and often treats the other as an opponent who must be defeated. In distributive bargaining, each party has a target point that defines what it would like to achieve. Each also has a resistance point that marks the lowest outcome that’s acceptable (see Exhibit 14-9). The area between their resistance points is the settlement range. As long as there is some overlap in their aspiration ranges, there exists a settlement area where each one’s aspirations can be met.
When you are engaged in distributive bargaining, your tactics should focus on trying to get your opponent to agree to your specific target point or to get as close to it as pos- sible. Examples of such tactics are persuading your opponent of the impossibility of getting to their target point and the advisability of accepting a settlement near yours; arguing that your target is fair, while your opponent’s isn’t; and attempting to get your opponent to feel emotionally generous toward you and thus accept an outcome close to your target point.
Suppose a sales representative for a women’s sportswear manufacturer has just closed a $35,000 order from a small clothing retailer. The sales rep calls in the order to her firm’s credit department. She is told that the firm can’t approve credit to this customer because of a past slow-pay record. The next day, the sales rep and the firm’s
negotiation A process in which two or more parties who have different preferences and priorities must make a joint decision and come to an agreement.
OBJECTIVE 14.9 Contrast distributive and integrative bargaining.
8R. E. Walton and R. B. McKersie, Behavioral Theory of Labor Relations: An Analysis of a Social Interac- tion System (New York: McGraw-Hill, 1965).
distributive bargaining A negotiating process that operates under zero-sum conditions; any gain made is at the expense of the other person, and vice versa.
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credit supervisor meet to discuss the problem. The sales rep doesn’t want to lose the business. Neither does the credit supervisor, but he also doesn’t want to get stuck with an uncollectible debt. The two openly review their options. After considerable discus- sion, they agree on a solution that meets both their needs. The credit supervisor will approve the sale, but the clothing store’s owner must provide a bank guarantee that assures payment if the bill isn’t paid within sixty days.
The sales credit negotiation is an example of integrative bargaining. In contrast to dis- tributive bargaining, integrative problem solving operates under the assumption that there is at least one settlement that can create a win–win solution. In general, integrative bargain- ing is preferable to distributive bargaining. Why? Because the former builds long-term relationships and facilitates working together in the future. It bonds negotiators and allows each to leave the bargaining table feeling that they have achieved a victory. Distributive bargaining, on the other hand, leaves one party a potential loser. It tends to build animosi- ties and deepen divisions between people who have to work together on an ongoing basis.
Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for this type of negotiation to succeed. These conditions include openness with information and frankness between parties; sensitivity by each party to the other’s needs; the ability to trust one another; and a willingness by both parties to maintain flexibility.9 Because many organizational cultures and intraorgani- zational relationships are not characterized by openness, trust, and flexibility, it isn’t surprising that negotiations often take on a win-at-any-cost dynamic. With that in mind, let’s look at some suggestions for negotiating successfully.
HOW DO YOU DEVELOP EFFECTIVE NEGOTIATION SKILLS? The essence of effective negotiation can be summarized in the following six recommendations.10
Consider the Other Party’s Situation Acquire as much information as you can about your opponent’s interests and goals. What constituencies must they appease? What is their strategy? This information will help you understand your opponent’s behavior, predict responses to your offers, and frame solutions in terms of the opponent’s interests. Addi- tionally, when you can anticipate your opponent’s position, you are better equipped to counter their arguments with the facts and figures that support your position.
Have a Concrete Strategy Treat negotiation like a chess match. Expert chess players have a strategy. They know ahead of time how they will respond to any given situa- tion. How strong is your situation and how important is the issue? Are you willing to
integrative bargaining A negotiating process that operates under the assumption that there is at least one settlement that can create a win–win solution.
9K. W. Thomas, “Conflict and Negotiation Processes in Organizations,” in M. D. Dunnette and L. M. Hough (ed.), Handbook of Industrial and Organizational Psychology, 2nd ed., vol. 3 (Palo Alto, CA: Con- sulting Psychologists Press, 1992), 651–717. 10Based on R. Fisher and W. Ury, Getting to Yes: Negotiating Agreement without Giving In (Boston: Hough- ton Mifflin, 1981); J. A. Wall, Jr., and M. W. Blum, “Negotiations,” Journal of Management, 17, no. 2 (June 1991), 295–296; and M. H. Bazerman and M. A. Neale, Negotiating Rationally (New York: Free Press, 1992).
Exhibit 14-9 Staking out the bargaining zone, or settlement range.
Settlement Range
Party A's Aspiration Range Party B's Aspiration Range
Party A's Resistance Point
Party A's Target Point
Party B's Resistance Point
Party B's Target Point
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split differences to achieve an early solution? If the issue is very important to you, is your position strong enough to let you play hardball and show little or no willingness to compromise? These are questions you should address before you begin bargaining.
Begin with a Positive Overture Studies on negotiation show that concessions tend to be reciprocated and lead to agreements. Thus, you should begin bargaining with a positive overture—perhaps a small concession—then reciprocate your opponent’s concessions.
Address Problems, Not Personalities Concentrate on the negotiation issues, not on the per- sonal characteristics of your opponent. When negotiations get tough, avoid the tendency to attack your opponent. It’s your opponent’s ideas or position that you disagree with, not them personally. Separate the people from the problem, and don’t personalize differences.
Pay Little Attention to Initial Offers Treat an initial offer as merely a point of departure. Everyone has to have an initial position. These initial offers tend to be extreme and idealistic. Treat them as such.
Emphasize Win–Win Solutions Bargainers often assume that their gain must come at the expense of the other party. As noted with integrative bargaining, that needn’t be the case. There are often win–win solutions. If you assume a zero-sum game, you may miss opportunities for trade-offs that could benefit both sides. So, if conditions are support- ive, look for an integrative solution. Frame options in terms of your opponent’s interests and look for solutions that can allow your opponent, as well as you, to declare a victory.
Something to Think About (and promote class discussion)
HAND ME A TOWEL Like many revolts, it began with something simple.* At Microsoft, it was the vanishing towels. For employees who biked to work through the often-drizzly weather in Seattle, the provided towels had become an entitlement. However, one day when employees came to work, the towels were gone—pulled without notice from the locker rooms in the company’s underground garage. The company’s human resources (HR) manager thought removing the towels, which had been done as a cost-saving measure, “wouldn’t even be a blip.” But it was. Irate employees waged war on company message boards and blogs. One post fumed, “It is a dark and dreary day at One Microsoft Way. Do yourself a favor and stay away.” The intensity of the comments shocked senior executives. The towel fiasco, in conjunction with a languishing stock price and a little bit of “Google envy,” suggested a serious morale problem and a need to bring in a new face to HR. Lisa Brummel, a successful Microsoft product development manager with no HR experience, was tapped to become the new HR chief. Her mandate: Improve the mood around here. And Lisa, who had always been a strong people leader, stepped up to do just that.
In addition to reinstating the towels (a no-brainer), Lisa looked for other ways that the company could reshape HR at Microsoft. And in doing so, she brought a unique and insightful understanding of human behavior. One thing she did was to introduce innovative office designs that allowed employees to reconfigure their workspaces for the task on which they were working. The customized workspaces included options such as sliding doors, movable walls, and features that made the space seem more like an urban loft than an office. When beginning a workspace redesign, “employees are first divided into four worker types: providers (the godfathers of work groups), travelers (the types who work anywhere
*M. Conlin, “Making the Case for Unequal Pay and Perks,” BusinessWeek Online, March 12, 2009; S. Bing, “Good Job, Microsoft,” Fortune, February 24, 2009, http://fortune.com/2009/02/24/good-job-microsoft (accessed March 19, 2017); M. Conlin and J. Greene, “How to Make a Microserf Smile,” BusinessWeek, September 10, 2007, 56–59; M. Conlin, “Online Extra: Microsoft’s Meet-My-Mood Offices,” BusinessWeek Online, September 10, 2007, http://www.businessweek.com/ stories/2007-09-09/online-extra-microsofts-meet-my-mood-offices (accessed March 19, 2017); and M. Conlin and J. Greene, “Online Extra: Reshaping Microsoft’s HR Agenda,” BusinessWeek Online, September 10, 2007, http://www.businessweek.com/ stories/2007-09-09/online-extra-reshaping-microsofts-hr-agenda (accessed March 19, 2017).
(Continued)
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Continued but work), concentrators (head-down, always-at-work types), and orchestrators (the company’s natural diplomats).” Based on their “type,” employees then pick the kind of workspace that works best for them. By allowing their creative, quirky, and talented people freedom to design their workspaces, the company was able to give them some control over their chaotic and often hectic environment.
With Lisa at the helm of HR, the company has made progress in its people policies. Yet, sometimes a decision coming out of One Microsoft Way (company headquarters) still makes you scratch your head and wonder why. The most recent was when twenty-five recently laid-off employees were asked to return an overpayment of severance pay. The amount, a small sum, came to about $5,000 per employee. But by asking for this money back, this billion-dollar organization didn’t send a very good message, especially when trying to improve morale and keep employees excited and engaged with their work. Once again, Lisa stepped up. She made the calls to the employees involved and said that the company hadn’t handled the situation in a “thoughtful manner” and the money was theirs to keep. Like any successful manager, Lisa recognizes the importance of people skills.
What do you think? Should Microsoft have stayed firm in its resolve to cut costs, even at the risk of upsetting the corporate culture? Did the employees have any bargaining power in this situation? Was the original towel resolution an example of distributive or integrative bargaining? How would you classify Lisa’s solution—distributive or integrative bargaining? Why? What makes it one or the other? Did this conflict result in a creative outcome? Why or why not?
Comprehension Check 14-2
5. Actions taken to influence the distribution of advantages and disadvantages in the organi- zation are called:
a. power. b. influence. c. politicking. d. all of the above.
6. A set of unwritten norms that organizational members accept and understand is called:
a. a code of ethics. b. a culture. c. influence. d. supervision.
7. One’s social rank in an organization reflects one’s:
a. position. b. influence. c. authority. d. status.
8. The first formal step in the disciplinary process is the:
a. suspension. b. written warning. c. verbal warning. d. none of the above.
9. Which one of the following is not a characteristic of the “hot stove” rule? a. Advance warning b. Flexibility c. Impartiality d. Immediacy
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resources are limited; the criteria for allocating the limited resources are ambiguous; and individuals seek influence so that they can shape the criteria to support their goals and interests.
7. Define discipline and the four most common types of discipline problems. Discipline refers to actions taken to enforce the organization’s rules and standards. The four most common types of discipline problems facing a supervisor are (1) attendance issues such as absen- teeism, tardiness, and abuse of sick leave; (2) on-the- job behaviors such as insubordination and substance abuse; (3) dishonesty; and (4) outside activities that affect on-the-job performance or reflect poorly on the organization.
8. List the typical steps in progressive discipline. The typical steps in a progressive disciplinary process are (1) a verbal warning that is documented, (2) a written reprimand, (3) suspension, and (4) dismissal.
9. Contrast distributive and integrative bargaining. Dis- tributive bargaining creates a win–lose situation because the object of negotiation is treated as fixed in amount. Integrative bargaining treats available resources as variable, and hence creates the potential for win–win solutions.
1. Define conflict. Conflict is a process in which one party consciously interferes with the goal-achievement efforts of another party.
2. Identify the three general sources of conflict. Con- flicts generally come from one of three sources: com- munication differences, structural differentiation, or personal differences.
3. List the five basic techniques for resolving con- flict. The five basic techniques for resolving conflict are avoidance, accommodation, forcing, compromise, and collaboration.
4. Describe how a supervisor could stimulate conflict. A supervisor could stimulate conflict by communicating ambiguous messages or planting rumors, bringing in outsiders with different backgrounds or personalities, restructuring the department, or appointing a devil’s advocate.
5. Define politicking. Politicking consists of the actions you can take to influence, or attempt to influence, the distribution of advantages and disadvantages within your department.
6. Explain the existence of politics in organizations. Pol- itics exist in organizations because individuals have different values, goals, and interests; organizational
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
14-7. “A good supervisor will never have to use discipline.” Do you agree or disagree with this statement? Discuss.
14-8. Why is it important to document any disciplinary action you take against an employee?
14-9. Why is discipline not always the best solution? 14-10. Assume you found an apartment that you wanted
to rent and the ad said: “$550/month negotiable.” What could you do to improve the likelihood that you would negotiate the lowest possible price?
14-1. How can conflict benefit an organization? 14-2. What is conflict management? 14-3. When should you avoid conflict? When should you
seek compromise? 14-4. What is a devil’s advocate? How does a devil’s
advocate produce conflict in a department? 14-5. Can an organization be free of politics? Explain. 14-6. How do you assess another person’s power in an
organization?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
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2. improper or unjust termination of an employee 6. an approach to conflict in which all parties seek to satisfy their interests 8. an approach to conflict that requires each party to give up something of value 11. a set of unwritten norms that members of the organization accept and understand, and that guide their actions 12. termination of employment 14. time o� without pay 15. an approach to conflict in which one attempts to satisfy one's own needs at the expense of the other party 16. a legal doctrine that defines an employer's rights to discipline or discharge an employee 18. the actions one can take to influence the distribution of advantages 19. a bargaining process that operates under the assumption that there is at least one settlement that can create a win–win situation 20. a process in which one part consciously interferes in the e�orts of another party 21. a method of maintaining harmonious relationships by placing others' needs above one's own 22. an application of techniques designed to achieve the optimum level of departmental conflict 23. an oral reprimand
1. an analogy for a set of principles for e�ectively disciplining an employee 3. an approach to conflict whereby one withdraws from a conflict 4. a social rank of the importance one has in a group 5. a type of discipline that begins with a verbal warning and may end in dismissal 7. a process in which two or more parties who have di�erent preferences come together to reach an agreement 9. a bargaining process that operates under the zero-sum premise 10. a person who purposely presents arguments that runs counter to those proposed by the majority 13. the first formal stage of the disciplinary process 17. actions taken by a supervisor to enforce an organization's standards
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Developing Your Supervisory Skills
• How Good Am I at Playing Politics? • How Well Do I Manage Impressions? • How Good Am I at Disciplining Others?
Finally, after you complete any self-assessment, we sug- gest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• What’s My Preferred Conflict-Handling Style? • What’s My Negotiating Style? • How Creative Am I?
GETTING TO KNOW YOURSELF
$36,400 to $61,350. The lowest salary is a recent hire with a bachelor’s degree in physics. The two people that Terry has rated above Barbara earn base salaries of $49,700 and $53,350. They’re both thirty-one years old and have been at Nike for three and four years, respectively. The median salary in Terry’s department is $52,660.
Terry’s Role You want to give Barbara a big raise. Although she’s been with your unit only eleven months, she has proven to be an excellent addition to the department. You don’t want to lose her. More important, she knows in general what other people in the department are earning and she thinks she’s underpaid. The company typically gives one-year raises of 5 percent, although 10 percent is not unusual and 20 to 30 percent increases have been approved on occasion. You’d like to get Barbara as large an increase as Dale will approve.
Dale’s Role All your supervisors typically try to squeeze you for as much money as they can for their people. You understand this because you did the same thing when you were a supervisor. However, your boss wants to keep a lid on costs. He wants you to keep raises for recent hires gener- ally in the 5 to 8 percent range. In fact, he’s sent a memo to all managers and supervisors saying this. However, your boss is also very concerned with equity and paying people what they’re worth. You feel assured that he will support any salary recommendation you make, as long as it can be justified. Your goal, consistent with cost reduction, is to keep salary increases as low as possible.
Terry has a meeting scheduled with Dale to discuss Barbara’s performance review and salary adjustment. Take up to fifteen minutes to conduct your negotiation. When your negotiation is complete, the class will compare the various negotiation strategies used and compare outcomes.
14-11. An Experiential Exercise: Negotiating a Raise Break into pairs for this role-play exercise. One person will play the role of Terry, the department supervisor. The other person will play Dale, Terry’s boss.
The Situation Terry and Dale work for Nike in Portland, Oregon. They are both former college runners who have worked for Nike for more than six years. Terry supervises a research laboratory. Dale is the manager of research and develop- ment (R&D). Dale has been Terry’s boss for two years.
One of Terry’s employees, Barbara, has greatly impressed Terry. Barbara was hired eleven months ago. She is twenty-six years old and holds a master’s degree in mechanical engineering. Her entry-level salary was $42,500 a year. Terry told her that, in accordance with corporate policy, she would receive an initial performance evaluation at six months and a comprehensive review after one year. Based on her performance record, Barbara was told she could expect a salary adjustment at the time of the one-year evaluation.
Terry’s evaluation of Barbara after six months was very positive. Terry commented on the long hours Barbara was putting in, her cooperative spirit, the fact that others in the lab enjoyed working with her, and that she was making an immediate positive impact on the project she had been assigned. Now that Barbara’s first anniversary is coming up, Terry has again reviewed Barbara’s performance. Terry thinks Barbara may be the best new person the R&D group has ever hired. After only a year, Terry has rated Barbara as the number-three-ranked performer in a department of eleven. Salaries in the department vary greatly. Terry, for instance, has a basic salary of $67,000, plus eligibility for a bonus that might add another $8,000 to $11,000 a year. The salary range of the eleven department members is
BUILDING A TEAM
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experience your own emotional reaction to the issue before you interact with the involved parties.
5. Meet to resolve the issue. You have two goals in this step. First, you want to make the other person aware of your problem by engaging in a conversation regarding the issues, but you must control your anger and remember to send I-messages. Second, you must engage in conflict resolution by offering and agreeing to options acceptable to you and the other party.
6. Follow through and follow up. After implementing the resolution, you must continuously monitor the situation to ensure that the agreement is being hon- ored, and you must look for unforeseen problems that may have been created.
Source: Goodwin, Cliff B.; Griffith, Daniel B., Conflict Survival Kit, The: Tools For Resolving Conflict At Work, 1st Ed., (C)2007. Reprinted And Electronically Reproduced By Permission Of Pearson Education, Inc., Upper Saddle River, New Jersey.
Conflict often results from unmet needs, disruptive behav- iors of others, and circumstances arising as the result of the behavior of others. The most effective conflict resolu- tion strategies depend on communication of the problem to the parties involved. A simple strategy to resolve con- flict follows six steps:
1. Identify problem ownership. You may own the prob- lem because you are the one bothered, or someone else may own the problem because your behavior is offensive to him or her.
2. Research and reflect. Gather information related to the problem as you check your facts and test your assumptions and perceptions by self-reflecting on the problem.
3. Select an alternative to follow. When a conflict results from a behavior or an unacceptable situation, you can choose one of three alternatives. You can (1) change your attitude, (2) change your environment, or (3) confront the person regarding their behavior.
4. Rehearse. Get someone to role-play the situation with you and rehearse multiple scenarios so that you can
SIX STEPS TO RESOLVE CONFLICT
determined that these punitive actions could not be readily anticipated by the employee.
STEP 3: Act in a timely fashion. When you become aware of an infraction and it has been supported by your investigation, do something and do it quickly. Delay weakens the linkage between actions and con- sequences, sends the wrong message to others, under- mines your credibility with your subordinates, creates doubt that any action will be taken, and invites repeti- tion of the problem.
STEP 4: Conduct the discipline session in private. Praise employees in public but keep punishment private. Your objective is not to humiliate the violator. Public rep- rimands embarrass an employee and are unlikely to produce the change in behavior you desire.
STEP 5: Adopt a calm and serious tone. Many inter- personal situations are facilitated by a loose, informal, and relaxed manner on the part of a supervisor. The idea in such situations is to put the employee at ease. Administering discipline is not one of those situations. Avoid anger or other emotional responses, but convey your comments in a calm and serious tone. Do not try to lessen the tension by cracking jokes or making
Disciplining an employee is not an easy task. It is often painful for both parties involved. The following dozen principles, however, should guide you when you have to discipline an employee.
STEPS IN PRACTICING THE SKILL
STEP 1: Before you accuse anyone, do your home- work. What happened? If you didn’t personally see the infraction, investigate and verify any accusations made by others. Was it completely the employee’s fault? If not, who or what else was involved? Did the employee know and understand the rule or regulation that was broken? Document the facts: date, time, place, individ- uals involved, mitigating circumstances, and the like.
STEP 2: Was ample warning provided? Before you take formal action, be sure you’ve provided the employee with reasonable previous warnings and that those warnings have been documented. Ask yourself: If challenged, will my action be defensible? Did I provide ample warning to the employee before taking formal action? It’s likely that applying stiffer punitive actions later on will be judged as unjust by the employee, an arbitrator, and the courts if it is
DISCIPLINING AN EMPLOYEE
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small talk. Such actions are only likely to confuse the employee because they send out conflicting signals.
STEP 6: Be specific about the problem. When you sit down with the employee, indicate that you have documentation and be specific about the problem. Define the violation in exact terms instead of just cit- ing company regulations or the union contract. It’s not the breaking of the rules per se that you want to convey concern over. It’s the effect that the rule vio- lation has on the work unit’s performance. Explain why the behavior can’t be continued by showing how it specifically affects the employee’s job perfor- mance, the unit’s effectiveness, and the employee’s coworkers.
STEP 7: Keep it impersonal. Criticism should be focused on the employee’s behavior rather than on the individual personally. For instance, if an employee has been late for work several times, point out how this behavior has increased the workload of others or has lowered departmental morale. Don’t criticize the person for being thoughtless or irresponsible.
STEP 8: Get the employee’s side of the story. Regard- less of what your investigation has revealed, and even if you have the proverbial “smoking gun” to support your accusations, due process demands you give the employee the opportunity to explain their position. From the employee’s perspective, what happened? Why did it happen? What was their perception of the rules, regulations, and circumstances? If there are significant discrepancies between your version of the violation and the employee’s version, you may need to do more investigating. Of course, you’ll want to document your employee’s response for the record.
STEP 9: Keep control of the discussion. In most interpersonal exchanges with employees, you want to encourage open dialogue. You want to give up con- trol and create a climate of communication between equals. This won’t work in administering discipline.
Why? Violators are prone to use any allowed egali- tarianism to put you on the defensive. In other words, if you don’t take control, they will. Discipline, by defi- nition, is an authority-based act. You are enforcing the organization’s standards and regulations. So take control. Ask the employee for their side of the story. Get the facts. But don’t let the employee interrupt you or divert you from your objective.
STEP 10: Agree on how mistakes can be prevented next time. Discipline should include guidance and direction for correcting the problem. Let the employee state what they plan to do in the future to ensure that the violation isn’t repeated. For serious viola- tions, have the employee draft a step-by-step plan to change the problem behavior. Then, set a timetable, with follow-up meetings in which progress can be evaluated.
STEP 11: Select progressive disciplinary action and consider mitigating circumstances. Choose a punish- ment that is appropriate to the crime. The punishment you select should be viewed as fair and consistent. Once you’ve arrived at your decision, tell the employee what the action will be, your reasons for taking it, and when it will be carried out.
STEP 12: Fully document the disciplinary session. To complete your disciplinary action, make sure that your ongoing documentation (what occurred, the results of your investigation, your initial warnings, the employ- ee’s explanation and responses, the discipline decision, and the consequences of further misconduct) is com- plete and accurate. This full documentation should be made part of the employee’s permanent file. In addi- tion, it’s a good idea to give the employee a formal letter that highlights what was resolved during your discussion, specifics about the punishment, future expectations, and what actions you are prepared to take if the behavior isn’t corrected or the violation is repeated.
14-13. Develop a paper arguing the pros and cons of the employment-at-will doctrine from the supervisor’s perspective. After presenting both sides of the issue, select the side you support and describe why.
14-12. Do some research on typical male conflict-han- dling styles compared to those typically utilized by females. Provide a two- to three-page summary of what you’ve found. Here are two guiding ques- tions: Do women and men handle conflict dif- ferently? If so, what are the implications of your findings for supervisors?
COMMUNICATING EFFECTIVELY
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14-15. If you were the supervisor who received the infor- mation regarding the social networking site post- ings, what would your reaction have been?
14-16. Was this case an example of effective discipline? Why or why not?
■➤ Case 14-B: Dealing with Conflict at Nomura Holdings Inc. It’s not always easy to do business globally, as executives at Japanese brokerage firm Nomura Holdings Inc. have dis- covered.* Nomura acquired Lehman’s international opera- tions after Lehman’s parent company sought Chapter 11 bankruptcy protection—an action that added about 8,000 non-Japanese workers. For Nomura, the time seemed right to strengthen its global expansion strategy. However, since the acquisition, cultural and business differences between the two organizations have been a major stumbling block. Although blending two diverse cultures requires intentional efforts when different organizations merge or are acquired, it’s particularly challenging when the key assets in the cross- border acquisition are the people employed by the organiza- tion being acquired.
Workplace conflict arose over executive compensa- tion, how quickly decisions were made, and how women were treated. For instance, during Nomura’s initial train- ing session for new hires, the men and women were sepa- rated. The women—many of whom had earned prestigious degrees from the likes of Harvard—were taught how to wear their hair, serve tea, and choose their clothing according to the season. The company’s dress code for women was also strictly interpreted. Women from Lehman were told to remove highlights from their hair, to wear sleeves no shorter than mid-bicep, and to avoid brightly colored clothing. Several women were sent home from the trading floor for dressing “inappropriately.” One said, “I was sent home for wearing a short-sleeve dress, even though I was wearing a jacket.” A Nomura spokesperson said, “The dress code is displayed on the company’s intranet and is intended to ensure that clients and col- leagues don’t feel uncomfortable.”
Adding to the tension, Lehman bankers also said they found the process for getting approval on deals was “slower and more difficult than it was at Lehman.” Also, at Lehman, clients were categorized, in large part, by the
*Source: Based on “Nomura Falls Out of Love with Lehman Dream Team,” Euroweek, January 13, 2012, 108; A. House and K. Johnson, “Delivering Integrated Global Training,” Chief Learning Officer, December 2011, 68–72; A. Tudor, “Bhattal’s Goal; Keep Lehman Talent,” Wall Street Journal, April 19, 2010, C5; A. Tudor, “Lehman Defections Continue at Nomura,” Wall Street Journal, March 23, 2010, C5; A. Tudor, “Nomura Turns to a Foreigner from Lehman,” Wall Street Journal, March 18, 2010, C1; A. Or, “More Quit Nomura as Bonuses Lapse,” Wall Street Journal, March 12, 2010, C2; A. Rozens, “The Return of Nomura,” Investment Dealers’ Digest, February 12, 2010, 1+; “Nomura Set for Fight on All Fronts,” Euroweek, December 4, 2009, 49; L. Peacock, untitled, Personnel Today, November 10, 2009, 25; and A. Tudor, “Nomura Stumbles in New Global Push,” Wall Street Journal, July 29, 2009, A1+.
■➤ Case 14-A: Social Networking Gone Wrong A young doctor at a local community hospital was upset by content posted by other doctors, nurses, and interns on a popular social networking site. These doctors and nurses discussed their work, including specific cases they had. Their postings included derogatory comments and slurs about the economically disadvantaged, mentally dis- turbed, and homosexual clients they treated on a regular basis. They also commented that the upper-class citizenry and politicians of the city deigned not to use the services of the hospital, preferring instead to go to a large privately owned hospital outside of town. Photos of these doctors and nurses on their pages showed them in hospital uniforms with the logo and name of the hospital clearly visible.
The young doctor who was upset by the material view- able on the website reported the content to his supervising physician. The supervisor worked with hospital adminis- tration to pursue the complaints. The hospital made sure to work with the city’s legal department to respect the First Amendment rights of the doctors and nurses involved. A hospital review board met behind closed doors to examine the complaint and the behavior of the doctors and nurses to recommend discipline in the matter.
Ultimately, the review board recommended written censure of the doctors and nurses involved along with their loss of hospital privileges for six months, during which time they were to work in the local poverty health center. They were also to participate in extensive sensi- tivity training programs. The hospital administration accepted the recommendations and presented them to the doctors and nurses.
The doctors and nurses accepted their discipline with the stipulation that after completing the six-month they were to return to full hospital status. The expectation of hospital administration was that the doctors and nurses would be committed to moving ahead and working to get the incident behind them, while the hospital would work to improve relationships with the community.
RESPONDING TO THE CASE
14-14. Was it appropriate for hospital administration to discipline the doctors and nurses for behavior that occurred outside the hospital environment? Why or why not?
THINKING CRITICALLY
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operating officer, Takumi Shibata, said, “When your busi- ness is global, management needs to be global.” Two years later, however, unable to garner support from Tokyo for an overhaul of the global wholesale-banking operations, Bhattal resigned as Nomura’s highest-ranking foreign executive.
RESPONDING TO THE CASE
14-17. From where did this conflict come, and how?
14-18. What type of conflict resolution techniques would be appropriate for this situation?
14-19. What do you think the statement, “When your business is global, supervision needs to be global,” is saying? In your opinion is Nomura achieving this? Explain.
fees they paid. At Nomura, more emphasis was placed on other factors, such as the length of the relationship. The bankers at Nomura said “their new colleagues were too willing to dump loyal clients for a quick profit.”
In its defense, Nomura has tried to blend the two cul- tures. At offices in Europe and in Asia outside of Japan, there’s a mix of nationalities. Also, the company has promoted a handful of non-Japanese employees to high- ranking positions. “To reduce the Tokyo-centric nature of the company, Hiromi Yamaji, head of global investment banking, moved to London, and Naoki Matsuba, global head of equities, moved to New York.” Until March 2010, Nomura’s executive committee was all Japanese men. However, in an attempt to make the company more globally oriented, an ex-Lehman executive and foreigner, Jasjit “Jesse” Bhattal, a native of India, was promoted to the committee. Nomura’s deputy president and chief
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■■ attitudes
■■ change
■■ change agent
■■ change process
■■ creativity
■■ innovation
■■ organization development (OD)
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Change Management15 C
H A
P T
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15-1. Describe the traditional and contemporary views of change.
15-2. Explain why employees resist change.
15-3. Identify ways that supervisors can reduce resistance to change.
15-4. List the steps a supervisor can use in changing negative employee attitudes.
15-5. Differentiate between creativity and innovation.
15-6. Explain how supervisors can foster innovation.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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Responding to a Supervisory Dilemma
“There is nothing so practi- cal as a good theory.”
“If you want truly to understand something, try to change it.”
These two quotes by Kurt Lewin provide unique insights into who he was and how he approached studying supervision.* Lewin, who’s often called the father of modern social psychology, made his name in supervi- sion circles through his stud- ies of group dynamics. His approach was based on the belief that “group behavior is an intricate set of symbolic interactions and forces that not only affect group structure but also modify individual behavior.”
One of his research studies that looked at modify- ing family food habits during World War II provided new and important insights into introducing change. He found that “changes were more easily induced through group decision-making than through lectures and individual appeals.” So what did this mean? His findings suggested that changes would be more readily accepted when people felt they had an opportunity to be involved and participate in the change rather than when they were simply asked or told to change. That’s an important lesson for any supervisor, even today, to learn and apply.
Another of Lewin’s major contributions was the idea of force field analysis, which is a framework for looking at the factors (forces) that influenced a situa- tion. Those forces could either be driving movement toward a goal or blocking movement toward a goal. When you view this idea in terms of managing change, you can see how this process also could contribute to understanding the dynamics of what makes change
work and how supervisors can overcome resistance to change, that is, increase the driving forces, decrease the blocking forces, or both.
When supervisors, in cooperation with company officials, make sweeping changes in departments to produce positive change, that effort is termed organi- zation development. Because organization development interventions often rely on the participation of organi-
zation members, they can foster an atmosphere of open- ness, trust, and respect among coworkers. Interventions can also empower employees and encourage them to take risks. The hope is that these characteristics will lead to better organizational performance.
Based on what Lewin suggested, active participa- tion can cause employees to speak their minds. But doing so carries some risk. For example, imagine an employee questioning a supervisor’s reason for change in the workplace. This employee fully believes the super- visor’s reasoning is detrimental to the work unit. But voicing such a concern could lead to retaliation from the supervisor. Although the supervisor might appear to be receptive to the feedback at first, they may strike back later. In either case, employees could be hurt.
Should supervisors be involved in change initia- tives such as organization development interventions? Should they involve their employees? When they do— even with the assistance of someone outside the depart- ment—do you think coworkers can be too participative as they drive or impede movement toward an orga- nization development intervention goal? What can a supervisor do to ensure that employees who participate in the change process will be protected?
*Based on D. A. Wren and A. G. Bedeian, The Evolution of Management Thought, 6th ed. (New York: John Wiley & Sons, Inc., 2009); “Biography and Quotes of Kurt Lewin,” About.com, http://psychology.about.com (accessed July 15, 2009); and K. T. Lewin, “The Dynamics of Group Action,” Educational Leadership 1, no. 4 (January 1944), 195–200.
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C hange is an alteration of an organization’s environment, structure, technology, or people. If it weren’t for change, the supervisor’s job would be easier. Planning would be problem free, there would be no need to adapt, and the outcome of each
alternative could be predicted with almost certain accuracy. It would simplify the super- visor’s job if no new products were introduced, government regulations were never modified, technology never changed, or the needs of employees didn’t shift.
However, change is an organizational reality. Handling change is an integral part of every supervisor’s job. The forces that are “out there” simply demand it (see “News Flash! This Changes Everything”).
change An alteration of an organization’s environment, structure, technology, or people.
THIS CHANGES EVERYTHING
NEWS FLASH!
In early 2007, after 30 years as a computer com- pany, Apple Computers, Inc. became Apple, Inc., dropping “Computer” from the company name. Apple would still make computers, but with the introduction of the iPhone, Apple became more than just a computer company. The iPhone, which further developed the iPod by merging it with a cell phone, was about to disrupt the entire personal computing industry. The introduction of the iPhone clearly threatened the smartphones on the market at the time; however, the iPhone’s impact was ultimately broader than anyone could have predicted. Essentially, the iPhone was a game changer, creating a new mobile comput- ing market.
The iPhone initially competed with smart- phones such as the BlackBerry, and was immedi- ately successful because it was a better product. However, the iPhone moved on to create competi- tion in the laptop computer market due to a key feature—a new way to access the Internet. Far easier and more convenient than the laptop, the iPhone connected users to the Internet on the go with simple, touchscreen technology. Ultimately, the iPhone was the catalyst for a new mobile com- puting market as the product merged cell phone and Internet services into a single device.
Within a year of the launch of the iPhone, there were 5.4 million users, and developers cre- ated more than 17,000 “mobile applications” now known as “apps.” This new app market changed the way we looked at software. Instead of soft- ware created by a small number of large software development companies, the evolution of the app created a new mini-economy of individual software developers and smaller companies. This new mar- ket led to a new group of entrepreneurs creating businesses around mobile applications. Before the
iPhone, companies such as Twitter and Snapchat could not have existed.
The introduction of apps allowed consumers to create a customized product with their iPhone as users could download apps based on their own needs and preferences. The demand for customiza- tion and easy access prompted technology compa- nies to respond, essentially shifting and changing the direction of the personal computing industry. The iPhone led to the development of the iPad, and essentially the entire tablet market. The laptop market also responded by integrating the features that consumers preferred, such as the ability to install apps and allow touchscreen access.
The iPhone created a disruption in the technol- ogy world through its innovative business model that created a new market for access to the Internet. App developers and phone users were connected and the impact shifted not only the cellphone indus- try, but also challenged the laptop market. Apple isn’t finished yet. With the company’s innovations, the mobile computing market continues to change and evolve, most recently with the introduction of the Apple Watch. What’s next? Sources: Based on “What’s in a Name Change? Look at Apple,” Forbes online, www.forbes.com, January 27, 2007; C. Christensen, M. Raynor, & R. McDon- ald, “What Is Disruptive Innovation?,”Harvard Busi- ness Review online, www.hbr.org, December 2015; M. Wilson, “The Apple Effect: Nine Ways the Apple Changed the World with the iPhone,” Fast Company, Dec 2015/Jan 2016, no. 201, p62–63; H. Kelly, “5 Ways the iPhone Changed the World,” CNN, www.cnn.com, June 30, 2012; K. Martin & B. Pon, “Structuring the Smartphone Industry: Is the Mobile Internet OS Platform the Key?,”Journal of Industry, Competition, and Trade, Sept. 2011, 11 no. 3, p239–261; J. Scanlon, “Moving to the Mobile Web,” Bloomberg Business online, www. bloomberg.com, June 23, 2008.
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The Forces for Change External and internal forces constrain supervisors, but these same forces bring about the need for change. Let’s look at the factors that can create the need for change (see Exhibit 15-1).
WHAT ARE THE EXTERNAL FORCES CREATING A NEED FOR CHANGE? The external forces that create the need for change come from vari- ous sources. In recent years, the marketplace has affected companies by introducing new competition. Government laws and regulations are a frequent impetus for change. In 1990, the passage of the Ameri- cans with Disabilities Act required thousands of businesses to widen doorways, reconfigure restrooms, add ramps, and take other actions to improve accessibility. In the mid-1990s, the Internet became a
multifaceted vehicle for getting information and selling products. Technology also creates the need for change. Recent developments in sophisticated
equipment have created significant economies of scale for many organizations. At bro- kerage firms, new technology has provided the ability to process thousands of mutual fund trades a day. The assembly line in many industries is undergoing dramatic changes as employers replace human labor with technologically advanced mechanical robots, and the fluctuation in labor markets is forcing managers to initiate changes.
Economic changes affect all of us. Supervisors must respond to changes in economic forces. Consider the impact of an economic recession. According to the US Bureau of Labor Statistics, recessions are characterized by a general slowdown in economic activity, a downturn in the business cycle, and a reduction in the amount of goods and services produced and sold.1 The so-called Great Recession (2007–2009) was consid- ered to be one of the more severe recessions felt worldwide. In the United States, the unemployment rate jumped from 5 percent to 10.8 percent. In response, executives in many organizations sought to protect profits by cutting costs, which often included mass employee layoffs. Although unavoidable, these practices contributed to the severity of the recession because unemployed individuals are less able to purchase discretionary goods and services. Ironically, the increase in unemployment and subsequent drop in sales often led organizations to implement further cost-cutting practices.
WHAT ARE THE INTERNAL FORCES CREATING A NEED FOR CHANGE? In addition to external forces, internal forces can also stimulate the need for change. These internal forces tend to originate primarily from the internal operations of the organization, or from the impact of external changes.
When company officials redefine or modify the organization’s strategy, they often introduce a host of changes. For example, when Herman Miller, Inc., developed a new strategy of competing more aggressively in the office furniture market, organizational members had to change how they performed their jobs: Marketing efforts shifted dra- matically, and manufacturing processes were revamped.2 The introduction of new equipment represents another internal force for change. Employees may have their jobs redesigned, need to undergo training to operate the new equipment, or be required to establish new interaction patterns within their formal group.
An organization’s workforce is rarely static. Its composition changes in terms of age, education, gender, nationality, and so forth. In a stable organization where supervisors
1US Bureau of Labor Statistics, “The Recession of 2007–2009,” Spotlight on Statistics, February 2012, https://www.bls.gov/spotlight/2012/recession/pdf/recession_bls_spotlight.pdf (accessed March 26, 2017). 2D. Rocks, “Reinventing Herman Miller,” BusinessWeek E.Biz, April 3, 2000, EB89–EB96.
Exhibit 15-1 Forces of change.
At tit
ud es
C o
m p
e n
sa tio
n
W orkforce
New
Lo ng
-
R egulations
Technology Forc es
Em pl
oy ee
a n
d
Equipment Ra
ng e
M a rk
e tp
la ce
G overnm
ent
Econo mic
B e n
e fi
ts
Pl an
s Internal
Ex te
rn al
Forces of
Change
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have been in their positions for years, there might be a need to restructure jobs to retain more ambitious employees, affording them more scheduling flexibility and possibly some upward mobility. The compensation and benefits systems might also need to be reworked to reflect the needs of a diverse workforce—and market forces where certain skills are in short supply. Where change is happening, the largest differences are in atti- tudes toward company leadership and company image. A recent survey revealed that the attitudes of employees at organizations going through significant changes tend to be less favorable than at more stable companies. Employee attitudes such as increased job dissatisfaction may lead to increased absenteeism, more voluntary resignations, and even strikes. Such events will, in turn, often lead to changes in company policies and practices.
HOW CAN SUPERVISORS SERVE AS CHANGE AGENTS? Changes within an organization need a catalyst. People who act as catalysts and assume the responsibility for overseeing the change process are called change agents. They do so in a process called organization development (OD).
Anyone can be a change agent—for example, an internal staff specialist or out- side consultant whose expertise is in change implementation. For major system-wide changes, company officials often hire outside consultants to provide advice and assis- tance. Because they are from the outside, they often can offer an objective perspective usually lacking from insiders. However, outside consultants may be at a disadvantage because they have an inadequate understanding of the organization’s history, culture, operating procedures, and personnel. Outside consultants are also prone to initiate more drastic changes than insiders are because they do not have to live with the repercussions after the change is implemented. In contrast, supervisors who act as change agents may be more thoughtful because they must live with the consequences of their actions.
Two Views of the Change Process There are different ways to view the change process. The traditional way is to view the organization as a large ship crossing a calm sea. The ship’s captain and crew know exactly where they’re going because they’ve made the trip many times before. Change sur- faces as the occasional storm—a brief distraction in an otherwise calm and predictable trip. The contempo- rary view sees the organization as a small raft, with an inexperienced crew, navigating a raging river with uninterrupted whitewater rapids, unsure of the desti- nation and . . . traveling in the dark of night. In the contemporary view, change is a natural state, and directing change is a continual process. These two ways of viewing change present different approaches to understanding and responding to change. Let’s take a closer look at each one.
WHAT IS THE TRADITIONAL VIEW OF CHANGE? The traditional view of change is best illustrated in Kurt Lewin’s three-step description of the change process3 (see Exhibit 15-2).
His model indicates that successful change requires unfreezing the status quo, changing to a new state, and refreezing the new state to make it permanent. The status
OBJECTIVE 15.1 Describe the traditional and contempo- rary views of change.
change agent A person who acts as a catalyst and assumes the responsibility for oversee- ing the change process.
organization development (OD) The process of making systematic change in an organization.
change process A model that allows for successful change by requiring unfreezing of the status quo (equilibrium state), chang- ing to a new state, and refreezing the new change to make it permanent. Unfreezing the equilibrium state is achieved by (1) increasing driving forces, (2) decreasing restraining forces, or (3) combining these two approaches.
3K. Lewin, Field Theory in Social Science (New York: Harper & Row, 1951).
Ammit Jack/Shutterstock
Change in a dynamic environ- ment is typically filled with uncertainty. Just as these white- water rafters have to deal with “rapid” changes, so too must supervisors as they react to unexpected events.
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quo can be considered an equilibrium state. To move from this equilibrium, unfreezing is necessary. It can be achieved in one of three ways:
1. The driving forces, which direct behavior away from the status quo, can be increased. 2. The restraining forces, which hinder movement from the existing equilibrium, can
be decreased. 3. The two approaches can be combined.
Once unfreezing has been accomplished, the change itself can be implemented. However, mere introduction of change does not ensure that it will take hold. The new situation needs to be refrozen so it can be sustained over time. Unless this last step is tended to, there is a strong chance that the change will be short-lived, and employees will revert to the previous equilibrium state. The objective of refreezing is to stabilize the new situation by balancing the driving and restraining forces.
This three-step process treats change as a break in the organization’s equilibrium state. The status quo has been disturbed, and change is necessary to establish a new equilibrium state. This view might have been appropriate to the relatively calm environ- ment that most organizations faced in the late twentieth century, but it is increasingly obsolete as a way to describe the situation managers currently face.
WHAT IS THE CONTEMPORARY VIEW OF CHANGE? The contemporary view of change realizes environments are both uncertain and dynamic. To get a feeling for what directing change might be like when you have to continually maneuver in uncertain situations, consider going on a ski trip and facing the following: Ski slopes that are open vary in length and difficulty. Unfortunately, when you start a “run,” you don’t know what the ski course will be. It might be a simple course, or one that is challenging. Furthermore, you’ve planned your ski vacation assuming the slopes will be open. After all, it’s January—and that is prime ski time at the resort. But the course does not always open. If that is not bad enough, on some days, the slopes are closed for no apparent reason at all. Oh yes, there is one more thing: Lift ticket prices can change dramatically on the hour. And there is no apparent pattern to the price fluc- tuations. To succeed under these conditions, you would have to be incredibly flexible and be able to respond quickly to every changing condition. Those who are too slow or too structured will have difficulty—and clearly no fun!
A growing number of supervisors are coming to accept that their job is much like what one might face on such a ski vacation. The stability and predictability of the traditional view of change may not exist. Disruptions in the status quo are not occasional and tem- porary, followed by a return to calm waters. Many of today’s supervisors face constant change, bordering on chaos. These supervisors are being forced to play a game they’ve never played before, which is governed by rules that are created as the game progresses.
WILL YOU FACE A WORLD OF CONSTANT AND CHAOTIC CHANGE? Few supervisors today can treat change as an occasional disturbance in an otherwise peaceful world. Doing so can put you at great risk. Too much is changing too fast for anyone to be complacent. As business writer Tom Peters aptly noted, the old saying “If it ain’t broke, don’t fix it” no longer applies. In its place, he suggested, “If it ain’t broke, you just haven’t looked hard enough. Fix it anyway.”4
4T. Peters, Thriving on Chaos (New York: Knopf, 1987).
Exhibit 15-2 The three-step traditional view of the change process.
Changing RefreezingUnfreezing
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WHY DO PEOPLE RESIST CHANGE? One of the best-documented findings in the study of people at work is that individuals resist change. As one person once put it, “Most people hate any change that doesn’t jingle in their pockets.”
Resistance to change surfaces in many forms, and it can be overt, implicit, immediate, or deferred. It is easiest for supervisors to deal with resistance when it is overt and imme- diate. The greater challenge is managing resistance that is implicit or deferred. Implicit resistance efforts are more subtle, and hence more difficult to recognize. Similarly, deferred actions cloud the link between the source of the resistance and the reaction to it. A change may produce what appears to be only a minimal reaction at the time it is initiated, but then resistance surfaces weeks, months, or even years later. A single change that in and of itself might have little impact can become the straw that breaks the camel’s back. Reactions to change can build up then explode in some response that seems totally out of proportion to the change action it follows. The resistance, of course, has merely been deferred and stockpiled. What surfaces is a response to an accumulation of previous changes.
People resist change for a number of reasons, as listed in Exhibit 15-3 and described in the following section.
Habit As human beings, we’re creatures of habit. Life is complex and to cope with this complexity, we all rely on habits or programmed responses. When we are confronted with change, this tendency to respond in our accustomed ways becomes a source of resistance. So, when your department is moved to a new office building across town, it means your employees are likely to have to change many habits: waking up ten minutes earlier, taking a new route to work, finding a new parking place, adjusting to the new office layout, developing a new lunchtime routine, and so on.
Threat to Job and Income Employees often fear any change that may reduce their job security or income. New labor-saving equipment, for instance, may be interpreted as the forerunner of layoffs. People are also often threatened by changes in job tasks or established work routines if they fear that they won’t be able to perform them success- fully. This is particularly threatening where pay is closely tied to productivity.
Fear of the Unknown Changes substitute ambiguity and uncertainty for the known, and human beings don’t like ambiguity. If the introduction of a desktop publishing system means that editorial staffers will have to learn to do their entire jobs on computers, some of these people may fear that they will be unable to learn the intricacies of the system. They may, therefore, develop a negative attitude toward working with desktop publish- ing, or behave dysfunctionally if required to use the system.
Selective Perception Individuals shape the world through their perceptions and their per- ception resists change. So, individuals are guilty of selectively processing what they see and hear to keep their perceptions intact. They often hear what they want to hear. They ignore informa- tion that challenges the world they’ve created.
Threat to Expertise Changes in organizational policies and practices may threaten the exper- tise of specialized groups and departments. The introduction of personal computers, which give supervisors access to information directly from a company’s mainframe, was strongly resisted by many information systems departments in the early 1980s because the proliferation of computer technology was a threat to the spe- cialized skills held by those in the centralized information systems departments.
OBJECTIVE 15.2 Explain why employees resist change.
Exhibit 15-3 Why people resist change.
Threat to interpersonal relationships
Habit
Fear of the unknown
Selective perception
Threat to job or income
Threat to established
power relationships
Threat to expertise
Resistance to
Change
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Threat to Established Power Relationships Redistribution of decision-making authority can threaten long-established power relationships within an organization. Efforts by company officials to empower operating employees or to introduce self-directed work teams have frequently been met with resistance from supervisors who are threatened by a redistribution of power.
Threat to Interpersonal Relationships The interpersonal relationships that are part of a per- son’s job often play an important role in satisfying the individual’s social needs. We look forward to going to work to interact with coworkers and make friends. Change can be a threat to those relationships. Reorganizations, transfers, and restructuring of work layouts change the people with whom employees work, to whom they report, and with whom they regularly interact. Because such changes are often seen as threats, they tend to be resisted.
HOW CAN YOU OVERCOME RESISTANCE TO CHANGE? Resistance to change can be overcome. We offer five specific techniques. Resistance is most likely to be eliminated when you implement all five techniques.
Build Trust If employees trust and have confidence in you, they’re less likely to be threatened by changes you propose. The implementation of self-directed work teams at Ocean Spray’s processing plant in Vero Beach, Florida, initially met with considerable resistance because employees didn’t trust supervisors. For years, supervisors hadn’t trusted their employees to make decisions; then, all of a sudden, these same supervi- sors were telling workers to make their own decisions. It took more than a year for employees to accept responsibility for solving their own problems. Trust takes a long time to develop—it’s also fragile, and can be easily destroyed.
Open Channels of Communication Resistance can be reduced through communicating with employees to help them see the logic of a change. When employees receive the full facts and get misunderstandings cleared up, resistance often fades.
Opening communication channels, however, will be effective only when there is a climate of trust and when the organization is truly concerned with the welfare of its employees. Improved communication is particularly effective in reducing threats created by ambiguity. For instance, when the grapevine is active with rumors of cutbacks and layoffs, honest and open communication of the true facts can be a calming force. When communication is ambiguous and people are threatened, they often contrive scenarios that are considerably worse than the actual “bad news.”
Involve Your Employees Many organizations are asking employees to help plan major change programs because it is difficult for individuals to resist a change decision in which they participated. When affected employees have been involved in a change from its beginning, they will usually actively support the change. No one wants to oppose something they helped develop.
Provide Incentives Make sure people see how supporting a change is in their best interests. Provide them with new skills training or maybe a short paid leave of absence so they’ll have time to rethink their fears, calm down, and come to the realization their concerns are unfounded.
Layoffs can become opportunities for those who remain. Jobs can be redesigned to provide new challenges and responsibilities. A pay increase, a new title, flexible work hours, or increased job autonomy are additional examples of incentives that can help reduce resistance.
Deal with Employee Feelings “I hate my job.” “My boss is insensitive to women.” “I think the medical products we’re producing make a real difference in people’s lives.” These employee statements are examples of attitudes, and they reflect how people feel about something. What can you do, as a supervisor, to change negative employee atti- tudes? First, identify the attitude you want to change. Then, determine what sustains that attitude. Next, unfreeze the attitude and offer an alternative attitude. Finally, rein- force and support the new attitude (see Exhibit 15-2).
OBJECTIVE 15.3 Identify ways that supervisors can reduce resistance to change.
attitudes Evaluative statements or judgments concerning objects, people, or events.
OBJECTIVE 15.4 List the steps a supervisor can use in changing negative employee attitudes.
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Something to Think About (and promote class discussion)
ROBOT DOC Imagine lying as a patient in a hospital bed and being visited by a five-foot robot.* You might attribute such a “vision” to too many medications or too little sleep. But in Methodist Hospital in Houston, that five-foot robot isn’t a vision. It’s real. The robot, which looks like “an oversize carpet cleaner with a computer monitor stuck on top,” visits patients, being guided remotely by a patient’s doctor from a com- mand center on another floor. With this type of technology, especially in a critical care unit, a medical team can do its rounds and “read” vital signs and “see” how patients are doing without disturbing or distressing them.
Robots roaming hospital hallways aren’t the only technological advancements transforming how medical centers and healthcare systems work. Radio-frequency ID tags keep track of doctors, nurses, and pieces of equipment in real time, leading to faster emergency response times. “Smart beds automati- cally transfer patients’ breathing and heart rates to their charts,” quickly alerting nurses to potential or developing problems. And one of the biggest technological changes is in medical records information keeping. Rather than having massive numbers of paper-based files, healthcare organizations are mov- ing toward completely digital medical records. But the rate of change has been slow. Currently, only 1.5 percent of private hospitals have a comprehensive electronic medical records system in all clinical units. Only 7.6 percent have a basic system in at least one unit. Yet, it’s a major change with significant promise. “Putting patient records into digital form . . . can provide a wealth of information about which treatments work and which don’t, and speed diagnosis and medical care.”
The investment that hospitals and other healthcare organizations are making in technology has basi- cally two goals: (1) to improve medical care and reduce error rates and (2) to minimize patient stress, which encourages healing. “Ironically, one of the most anticipated developments is that technology will allow hospitals to keep people out of them.” When it comes to the future, the vice-president of the inno- vation and technology group at Kaiser Permanente’s Sidney R. Garfield Health Care Innovation Center says, “ . . . the home will be the hub of health care.” And such changes are already taking place. In many rural areas of the United States where specialized medical care is scarce, telemedicine is in place to cover the gaps. For instance, thirty-one hospitals in remote locations in Michigan use robots, similar to the one described previously, for diagnosis and follow-up. Robots are even found in operating rooms—the “assembly line” of a healthcare system—just as they are in other organization’s assembly lines, and for the same reasons: quality control and cost control.
In an industry where you’d expect up-to-date technology, the changes in the way healthcare orga- nizations do their work haven’t been occurring as rapidly as you might think. However, technological changes will continue to transform the industry and the organizations and the people who make it work.
What do you think? Will employees and the general population embrace this type of technological change or feel threatened by it? Why or why not? Will supervisors be expected to evaluate and appraise their employees on their ability to communicate via the robot doc? As a supervisor, how would you approach the introduction of this new technology to your employees?
*M. Andrews, “The Hospital of the Future,” U.S. News & World Report, August 2009, 68–74; C. Salter, “The Doctor of the Future,” Fast Company, May 2009, 64–70; L. Landro, “An Affordable Fix for Modernizing Medical Records,” Wall Street Journal, April 30, 2009, A11; and J. Ioffe, “Tech Rx for Health Care,”Fortune, March 16, 2009.
Comprehension Check 15-1
1. The alteration of an organization’s environment, structure, technology, or people is called: a. change. b. strategic planning. c. conflict management. d. none of the above.
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2. Which one of the following is not an internal force for change? a. New environment b. Workforce c. Employee attitudes d. Marketplace
3. The person who acts as a catalyst for change and assumes the responsibility for that change is called a: a. manager. b. change agent. c. top-level manager. d. consultant.
4. Which one of the following items is not associated with the traditional view of change? a. Refreezing b. Changing c. Chaos d. Freezing
5. People resist change for all of the following reasons except: a. threat to job and income. b. habit. c. fear of the unknown. d. threat to building trust.
Stimulating Innovation “Innovate or die!” These harsh words are increasingly becoming the rallying cry of today’s supervisors. In the dynamic world of global competition, organizations must create new products and services and adopt state-of-the-art technology if they are to compete success- fully.5 The standard of innovation to which many organizations strive is that achieved by such companies as DuPont, Sharp, Eastman Chemical, and 3M.6 One of 3M’s stated objectives is that 25 percent of each division’s profits are to come from products less than five years old. Toward that end, 3M typically launches more than two hundred new prod- ucts each year. During one recent five-year period, 3M generated better than 30 percent of its $13 billion in revenues from products introduced during the previous five years.
HOW ARE CREATIVITY AND INNOVATION RELATED? In general usage, creativity means the ability to combine ideas in a unique way or to make unusual associations between ideas. At Mattel, company officials have introduced Proj- ect Platypus. This special division brings people from all disciplines—such as engineer- ing, marketing, design, and sales—to get employees to “think outside the box” to “understand the sociology and psychology behind children’s play patterns.” To help make this happen, team members embark on such activities as imagination exercises, group crying, and stuffed-bunny throwing.7 The first Project Platypus product, Ello, hit the market in 2002 after two years in development.
Innovation is the process of taking a creative idea and turning it into a useful product, service, or method of operation.8 The innovative organization is characterized by the ability to channel its creative juices into useful outcomes. When managers talk about
5J. Benditt, “Lessons from Innovation,” Technology Review, July–August 2002, 9. 6K. H. Hammonds, “How to Design the Perfect Product Start with Craig Vogel and Jonathan Cagan: Inte- grate Style and Technology with a Dash of Fantasy. Apply Everything from Toasters to Cars,” Fast Com- pany, July 2002, 122–127.
OBJECTIVE 15.5 Differentiate between creativity and innovation.
creativity The ability to combine ideas in a unique way or to make unusual associations between ideas.
7L. Bannon, “Think Tank in Toyland,” Wall Street Journal, June 6, 2002, B1, B3. 8 “Learning from Leading Innovators,” The Futurist, May 2002, 62.
innovation The process of turning a creative idea into a useful product, service, or method of operation.
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changing an organization to make it more creative, they usually mean that they want to stimulate innovation. 3M is aptly described as innovative because it has taken novel ideas and turned them into profitable products such as cellophane tape, Scotchgard™ protective coat- ings, Post-It® notepads, and diapers with elastic waist- bands. Intel Corporation is considered to be innovative. According to Intel CEO Brian Krzanich, “Intel is a global manufacturing and technology company, yet we think of ourselves as a leading American innovation enterprise.” Intel is America’s largest high-technology capital expenditure investor, investing $5.1 billion in the US in 2015, and its third largest investor in global R&D investing $12.1 billion in 2015. In early 2017 Intel Corporation announced plans to invest more than $7 billion to complete Fab 42, which is expected to be the most advanced semiconductor factory in the world.9
WHAT IS INVOLVED IN INNOVATION? Some people believe that creativity is inborn; others believe that with training, anyone can be creative. In this latter view, creativity can be viewed as a fourfold process consist- ing of perception, incubation, inspiration, and innovation.10
Perception involves how you see things. Being creative means seeing things from a unique perspective. That is, an employee may see solutions to a problem that oth- ers cannot or will not see at all. Going from perception to reality, however, doesn’t occur instantaneously. Instead, ideas go through a process of incubation. Sometimes, employees need to “sit” on their ideas. This doesn’t mean sitting and doing nothing. Rather, during this incubation period, employees should collect massive data that they store, retrieve, study, reshape, and finally mold into something new. This period can sometimes take years.
Think for a moment about a time you struggled for an answer on a test. Although you tried hard to jog your memory, nothing worked. Then, suddenly, like a flash of light, the answer popped into your head. You found it! Inspiration in the creative process is similar. Inspiration is the moment when all your prior efforts come together successfully.
Although inspiration leads to euphoria, the creative work is not complete. It requires an innovative effort. Innovation involves taking that inspiration and turning it into a useful product, service, or way of doing things. Thomas Edison is often credited with saying that “creativity is 1 percent inspiration and 99 percent perspiration.” That 99 percent, or the innovation, involves testing, evaluating, and retesting what the inspira- tion found. It is usually at this stage that individuals involve others more in what they had been working on. That involvement is critical because even the greatest invention may be delayed, or lost, if an individual cannot effectively deal with others in commu- nicating and achieving what the creative idea is supposed to do!
WHAT IS DISRUPTIVE INNOVATION? Years ago, every Main Street and shopping mall in the United States had a bookstore. Chains like Borders and Barnes & Noble had hundreds of locations. In addition, there were literally thousands of small bookstores scattered across America. Then along came Amazon.com. Amazon offered book buyers a million-plus titles at super-low prices, all
9“Intel Supports American Innovation with $7 Billion Investment in Next-Generation Semiconductor Factory in Arizona,” Intel Newsroom, February 8, 2017, https://newsroom.intel.com/news-releases/ intel-supports-american-innovation-7-billion-investment-next-generation-semiconductor-factory-arizona/ (accessed March 26, 2017) and “Intel 2015 annual report,” Intel, 2016, https://s21.q4cdn.com/600692695/ files/doc_financials/2015/annual/2015_Intel_Annual_Report_web.pdf (accessed March 26, 2017). 10C. Vogel and J. Cagan, Creating Breakthrough Products: Innovation from Product Planning to Program Approval (Upper Saddle River, NJ: Prentice Hall, 2002).
Albert H. Teich/Shutterstock
Often operating as organiza- tional change agents, corporate human resource managers spe- cializing in training recognize change as one of the biggest challenges faced by supervisors. Constant change in organiza- tions struggling to remain profit- able often interrupts the normal responsibility of employees. At such times, a supervisor must be masterful in communicating the need for change.
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accessible without leaving the comfort of home. Amazon single-handedly disrupted the brick-and-mortar bookstore market.
Disruptive innovation describes innovations in products, services or processes that radically change an industry’s rules of the game.11 Oftentimes, a smaller company with fewer resources successfully challenges established companies.12 Those smaller compa- nies prove themselves to be disruptive by serving overlooked segments of possible con- sumers with products or services at relatively low prices. Although the term “disruptive innovation” is relatively new, the concept isn’t. For instance, economist Joseph Schum- peter used the term “creative destruction” more than 70 years ago to describe how capi- talism builds on processes that destroy old technologies but replaces them with new and better ones.13 That, in essence, is disruptive innovation.
It’s helpful to distinguish disruptive innovation from sustaining innovation. When most of us think of innovations, we tend to think of things such as the introduction of the high-definition television, back-up cameras on cars, fingerprint technology on smart- phones, or Double Stuf Oreos. These are examples of sustaining innovation because they sustain the status quo. They represent small and incremental changes in established products rather than dramatic breakthroughs. While the original television set disrupted the radio industry, high-def TV just improved the quality of the TV picture.
HOW CAN A SUPERVISOR FOSTER INNOVATION? Three sets of variables have been found to stimulate innovation. They pertain to the organization’s structure, culture, and human resource practices.
Structural Variables On the basis of extensive research, we can make three statements regarding the effect of structural variables on innovation. First, less formalized struc- tures positively influence innovation. Because they are lower in work specialization, have fewer rules, and are more decentralized than bureaucracies, they facilitate the flexibility, adaptation, and cross-fertilization that make the adoption of innovations easier. Second, easy availability of plentiful resources provides a key building block for innovation. An abundance of resources allows supervisors to afford to purchase inno- vations, bear the cost of instituting innovations, and absorb failures. Finally, frequent inter-unit communication helps break down possible barriers to innovation by facilitat- ing interaction across departmental lines.
Cultural Variables Innovative organizations tend to have similar cultures.14 They encourage experimentation. They reward successes and failures. They celebrate mis- takes. For example, at Sony, employees are encouraged and rewarded for experimenting with new products in the marketplace. Unlike other organizations, Sony takes many products to market knowing that not all of them will be market successes. Their culture, therefore, promotes this risk-taking behavior. An innovative culture is likely to have the following seven characteristics:
■■ Acceptance of ambiguity. Too much emphasis on objectivity and specificity con- strains creativity.
■■ Tolerance of the impractical. Individuals who offer impractical, even foolish, answers to “what if” questions are not stifled. What seems impractical at first might lead to innovative solutions.
11See C. M. Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business Review Press, 1997); and “What Disruptive Innovation Means: The Economist Explains,” The Economist online, www.economist.com, January 25, 2015. 12C. M. Christensen, M. Raynor, and R. McDonald, “What is Disruptive Innovation?,” Harvard Business Review, December 2015, pp. 44–53. 13J. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper & Row, 1942).
disruptive innovation Innovations in products, services or processes that radically change an industry’s rules of the game.
sustaining innovation Small and incremental changes in established products rather than dra- matic breakthroughs.
OBJECTIVE 15.6 Explain how supervisors can foster innovation.
14Ibid., p. 63.
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■■ Low external controls. Rules, regulations, policies, and similar controls are kept to a minimum.
■■ Tolerance of risk. Employees are encouraged to experiment without fear of conse- quences should they fail. Mistakes are treated as learning opportunities.
■■ Tolerance of conflict. Diversity of opinions is encouraged. Harmony and agreement between individuals or units are not assumed to be evidence of high performance.
■■ Focus on ends rather than on means. Goals are made clear, and individuals are encouraged to consider alternative routes to their attainment. Focusing on ends suggests that there might be several right answers to any given problem.
■■ Open systems focus. The organization closely monitors the environment and responds rapidly to changes as they occur.
Human Resource Variables Within the human resource category, we find that innova- tive organizations actively promote the training and development of their members so their knowledge remains current, offer their employees high job security to reduce the fear of getting fired for making mistakes, and encourage individuals to become champions of change. Once a new idea is developed, champions of change actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the innovation is implemented.
Research finds that champions have common personality characteristics: extremely high self-confidence, persistence, energy, and a tendency to take risks. Champions also display characteristics associated with dynamic leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong per- sonal conviction in their mission. Champions are also good at gaining the commitment of others to support their mission. In addition, they have jobs that provide consider- able decision-making discretion. This autonomy helps them introduce and implement innovations.
Comprehension Check 15-2
6. The ability to combine ideas in a unique way is called: a. creativity. b. innovation. c. work process engineering. d. all of the above.
7. Taking a new idea and turning it into a useful product, service, or method of operation is called: a. creativity. b. innovation. c. work process engineering. d. all of the above.
8. Keeping rules, regulations, and policies to a minimum is what type of cultural variable? a. Tolerance of conflict b. Tolerance of the impractical c. Low external controls d. Tolerance of risks
9. Encouraging employees to experiment without fear of consequences should they fail is what type of cultural variable? a. Tolerance of risk b. Tolerance of conflict c. Focus on ends rather than on means d. Open system focus
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418 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
attitudes are (1) identifying the attitude you want to change, (2) determining what sustains the attitude, (3) unfreezing the attitude, (4) offering an alternative attitude, and (5) refreezing the new attitude.
5. Differentiate between creativity and innovation. Cre- ativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. Inno- vation is the process of taking creative ideas and turn- ing them into a useful product, service, or method of operation.
6. Explain how supervisors can foster innovation. Supervisors can stimulate innovation through structures that are flexible, provide easy access to resources, and have fluid communication; a culture that is relaxed, supports new ideas, and encourages monitoring of the environment; and creative people who are well-trained, current in their fields, and secure in their jobs.
1. Describe the traditional and contemporary views of change. The traditional view of change treats change as a break in the organization’s equilibrium state. Change is initiated and then stabilized at a new equi- librium. The contemporary view of change is that it is constant. Disequilibrium is the natural state.
2. Explain why employees resist change. Employees resist change because of habit, fear of the unknown, or selective perception, or if they perceive the change as a threat to their job, income, expertise, established power relationships, or interpersonal relationships.
3. Identify ways that supervisors can reduce resistance to change. Supervisors can reduce resistance by building trust, opening channels of communication, involving employees in change decisions, providing incentives to employees for accepting change, and helping employees change their attitudes.
4. List the steps a supervisor can use in changing nega- tive employee attitudes. The five steps in changing
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
15-6. Why should supervisors be concerned with an employee’s work-related attitudes?
15-7. What happens if an attitude change is not refrozen? 15-8. How do creativity and innovation differ? Give an
example of each. 15-9. How does an innovative culture make an organi-
zation more effective? Do you think such an inno- vative culture could make an organization less effective? Why or why not?
15-10. Do you think changes can occur in an organization without a champion to foster new and innovative ways of doing things? Explain.
15-1. Give several examples of environmental forces that might affect supervisors and require changes in a department.
15-2. Describe the traditional model of the change pro- cess. How does it differ from the contemporary view of change?
15-3. What signals or cues might tell you that an employee is resistant to a change you’re planning to implement?
15-4. How does an employee’s perception relate to his or her resistance to change?
15-5. How can building trust lessen change resistance?
COMPREHENSION: Review and Discussion Questions
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Chapter 15 Change Management 419
KEY CONCEPT CROSSWORD
2
8
5
3
1
4
6
7
10
11
9
DOWNACROSS
7. an alteration of the organization 8. the process of making systematic change in an organization 9. forces that direct behavior away from the status quo 10. a person who acts as a catalyst for change in an organization 11. a model that allows for successful change through unfreezing, changing, and refreezing
1. forces that hinder movement from the existing equilibrium 2. the process of turning a creative idea into a useful product 3. how one sees things 4. evaluative statements concerning objects, people, or events 5. the ability to combine ideas in a unique way to make an unusual association 6. the moment when all one's prior e�orts successfully come together
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420 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Developing Your Supervisory Skills
• How Well Do I Respond to Turbulent Change?
Finally, after you complete any self-assessment, we sug- gest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• Am I a Type A? • How Creative Am I?
GETTING TO KNOW YOURSELF
took more time to obtain necessary assistance, but also created problems in establishing stable relationships with functional staff members. Because these problems affected their services to customers, project supervisors demanded a change in the organizational structure. Faced with these complaints and demands from project supervisors, senior management is pondering yet another reorganization for the division. They have requested an outside consultant (you) to help them in their reorganization plan—one that will provide some stability in the structure, address their issues, and help the organization succeed in achieving its strategic goals.
A. Divide into groups of five to seven and take the role of consultants.
B. Each group should identify the forces necessitating the change and the resistance to that change found in the company.
C. Each group should develop a set of strategies for deal- ing with the resistance to change and for implement- ing those strategies.
D. Reassemble the class and hear each group’s recom- mendations and explanations.
E. After each group has presented, probing questions should be posed by other “consulting groups” about the presenting group’s recommendations.
15-11. An Experiential Exercise: The Space Cowboys Company
Objectives
■■ To illustrate how forces for change and stability must be addressed in organizations.
■■ To illustrate the effects of alternative change tech- niques on the relative strength of forces for change and forces for stability.
The Situation The marketing division of the Space Cowboys Company (SCC) has gone through two major reorganizations in the past seven years. Initially, the structure changed from a functional to a matrix form. But the matrix form did not satisfy some functional area supervisors, and neither did it lead to organizational improvements. They complained that the structure confused the authority and responsibil- ity relationships. In reaction to these complaints, senior management revised the structure back to the functional form. This “new” structure maintained market and proj- ect teams, which were managed by project supervisors with a few general staff personnel. But no functional spe- cialists were assigned to these groups.
After the change, some problems began to surface. Project supervisors complained that they could not obtain necessary assistance from functional staffs. It not only
BUILDING A TEAM
Dunham offer, and describe in detail, eight personal prac- tices that all successful innovators perform. They point out that employing these practices can lift an inexperi- enced innovator to success, but neglecting these practices will block innovation.
In The Innovator’s Way, innovation experts Peter Denning and Robert Dunham suggest we can significantly increase the odds of innovation success. In their view innovation is a personal skill that can be learned, developed through practice, and extended into organizations. Denning and
INNOVATION IN THE WORKPLACE
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Chapter 15 Change Management 421
15-13. Business programs have traditionally focused on developing rationality. They haven’t emphasized creativity. That may be a mistake. In two to three pages, describe how you would change the busi- ness curriculum to promote student creativity. Specify the kinds of courses or activities that you think should be included in business school classes that would foster creativity and innovation.
15-12. Describe a significant change event you experienced (going from high school to college, changing jobs, etc.). How did you prepare for the change? What fears did you encounter and how did you overcome those fears? Knowing what you know now about the change, what would you do differently today that you didn’t do then? How can you apply these “should haves” to changes you’ll face in the future?
COMMUNICATING EFFECTIVELY
STEPS IN PRACTICING THE SKILL
STEP 1: Sensing. Develop your ability to detect and describe emerging opportunities and their value in your community of practice. Look for new possibili- ties that may exist in, and arise from, breakdowns and disharmonies in the current product, service, or process.
STEP 2: Envisioning. Articulate a persuasive, appeal- ing vision of the benefit that will accrue from the new possibility you identify. Venture a new view of a situ- ation in which an opportunity has been acted on and describe how it might actually be achieved.
STEP 3: Offering. Propose a new practice, rule, or strategy based on the emerging opportunity by describing its benefits to the leadership of the com- munity. Establish credibility by soliciting feedback and modifying the proposal to better fit and reflect the concerns of the community.
STEP 4: Adopting. Get the commitment of leadership to participate in a trial run, while retaining the option of dismissing the idea if it does not live up to expecta- tions. Use this opportunity to show the value of the new proposal and gain the commitment of interested parties. Align the proposal with existing practices in an attempt to overcome resistance as you develop a strategy for marketing the idea more broadly.
STEP 5: Sustaining. Get long-term commitment to the new opportunity in order to afford enough time to integrate it into other existing practices, stan- dards, incentives, and processes. Demonstrate how the innovation will be developed and how it can be integrated into current situations to support exist- ing infrastructure. During this process, be alert for
related innovations harboring negative consequences and abandon them as appropriate.
STEP 6: Executing. Develop the necessary infrastruc- ture and processes for reliable, sustainable implemen- tation of the innovation. During this time it will be necessary to manage actions and plans essential to gaining the commitment of individuals and teams in support of the adoption of the innovation.
STEP 7: Leading. Demonstrate care, courage, value, power, focus, and a sense of larger purpose as you work to communicate your vision. During this step you are working proactively to communicate new possibilities to gain the trust and commitment of fol- lowers. Remain cognizant of your impact in articulat- ing and communicating the vision of change.
STEP 8: Embodying. Perform the first seven practices until they become automatic, requiring no thought, and help your followers embrace the innovation to the point it becomes an accepted practice in the com- munity. At this point, the innovation becomes so ingrained that the organization develops the feeling that the new practice is natural and it is actually what they had been doing all along.
The reality is that these practices are not sequential and the innovator will move constantly among them, refining the results of previous ones after seeing their con- sequences later. It is better to view these practices as being accomplished in parallel rather than in sequential order.
Source: Based on P. Denning and R. Dunham, The Innovator’s Way: Essential Practices for Successful Innovation (Cambridge, MA: The MIT Press, 2010).
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422 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
the works since 2009. Avon had initiated a massive soft- ware upgrade that would make tracking orders and com- pensation easier for its reps. However, the program was scrapped in 2013 after a trial rollout in Canada. A filing with the SEC said that the pilot program caused “a signifi- cant business disruption in that market, and did not show a clear return on investment.” The issue: the technology worked, but it was so difficult for Avon’s salespeople to use that many reps left the company. Although Avon finally completed the first major overhaul of its website in 10 years, it now finds itself competing against more nimble e-commerce competitors such as Birchbox, Cult Beauty, Bliss, Doobop, and even Chanel and Clinique. In addi- tion to struggling to compete in online sales and lacking a cohesive social media strategy, Avon is being pummeled by other industry giants including L’Oreal, Unilever, and Coty, all of whom have increased their efforts to hold on to market share domestically and have made new forays into profitable developing markets where Avon has long had its strongest sales.
Changing an organization involves looking at external market conditions as well as the internal aspects. Avon’s CEO, Sherilyn McCoy, who was brought on board from Johnson & Johnson in 2012, has been struggling to find the keys to a successful turnaround. Her attempts to shape up things at Avon have revolved around overhauling the company’s top management through firing, hiring, and reassignments; addressing declining sales, especially in the North American market through expanding the range of products sold; getting more sales representatives into the system quickly; and trying to pinpoint who and what Avon wants to be.
The world has changed. Now Avon has to try to find the right combination of people, products, and technology to once again prosper.
■➤ Case 15-A: Poor Performance Forces a Make Over at Avon
THINKING CRITICALLY
Have you heard of Avon products? Have you purchased Avon products? We’re guessing that you’ve likely heard of Avon, but not as likely to have purchased any Avon prod- ucts, especially if you’re young and you live in North America.15
As the world’s top direct seller of cosmetics and beauty-related items, Avon Products has built a global brand and a portfolio of products that are marketed pri- marily through direct selling. Despite being based in the United States, the company’s North American revenues have continued to decline. Currently, 86 percent of Avon’s sales come from other global regions. The company’s CEO is looking at what organizational changes need to be made to address the performance problems.
Avon, founded in 1886 (yes, you read that right!), has been quite successful, up until the last five years. It was a company that got its start by recruiting women as door- to-door sellers of perfume and branching out from there. Today, there are some 6 million active sales representa- tives in 60 countries or territories around the world. Brazil is the company’s biggest market. However, as the industry has changed, as competitors have become more aggressive, and as technology has drastically changed the sales model, Avon has been struggling. One sticky problem with which the company dealt was an expensive bribery probe cen- tered on the company’s Chinese operations. The company voluntarily reported itself in 2008 to the Securities and Exchange Commission and the US Justice Department. It took some six years for Avon to finally resolve the inves- tigation into payments and gifts provided to government officials in China, and in late 2014, Avon agreed to pay $135 million in fines and civil penalties related to violating the Foreign Corrupt Practices Act.
Another problem concerned the global rollout of a sophisticated order management system that had been in
15N. Turner and L. Coleman-Lochner, “Avon Shares Fall on Report That Buyers Haven’t Materialized,” Bloomberg, May 5, 2015, https://www. bloomberg.com/news/articles/2015-05-05/avon-shares-plummet-on-report-that-bidders-haven-t-materialized (accessed March 26, 2017); L. Rupp and L. Coleman-Lochner, “Avon Profit Misses Estimates as North American Sales Suffer,” Bloomberg, April 30, 2015, https://www.bloomberg. com/news/articles/2015-04-30/avon-misses-earnings-estimates-as-north-american-sales-suffer (accessed March 26, 2017); E. Byron and J. S. Lublin, “Lackluster Avon Explores Makeover,” Wall Street Journal, April 27, 2015, https://www.wsj.com/articles/lackluster-avon-explores-make- over-1430188201 (accessed march 26, 2017); B. Sutherland, “Overhaul of Avon U.S. May Be Better Than Selling the Unit,” Bloomberg, April 15, 2015, https://www.bloomberg.com/news/articles/2015-04-16/avon-u-s-overhaul-may-be-better-path-than-unit-sale-real-m-a (accessed March 26, 2017); J. S. Lublin and E. Byron, “Avon Explores Strategic Alternatives,” Wall Street Journal, April 14, 2015, https://www.wsj.com/articles/ avon-explores-strategic-alternatives-1429030371 (accessed March 26, 2017); P. Wahba, “Avon’s in a Ding-Dong Battle to Stay in Business,” Fortune, April 14, 2015, http://fortune.com/2015/04/14/avon-battle-for-future/ (accessed March 26, 2017); P. J. Henning, “Foreign Bribery Cases That Can Drag On and On,” New York Times Online, December 22, 2014, https://dealbook.nytimes.com/2014/12/22/foreign-bribery-cases-that- can-drag-on-and-on/?_r=0 (accessed March 26, 2017); D. Henschen, “Avon Pulls Plug on $125 Million SAP Project,” Information Week, Decem- ber 12, 2013, http://www.informationweek.com/software/enterprise-applications/avon-pulls-plug-on-125-million-sap-project/d/d-id/1113061 (accessed March 26, 2017); and A. Martin, “Avon Chairwoman to Quit Earlier Than Expected,” New York Times Online, October 5, 2012, http://www.nytimes.com/2012/10/06/business/avon-chairwoman-to-step-down.html (accessed March 26, 2017).
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Chapter 15 Change Management 423
RESPONDING TO THE CASE
15-14. What external forces for change do you see described in this case? Would you describe Avon’s environment as more “calm waters” or “white- water rapids?” Explain.
15-15. Why would it be important for the CEO to look at those external forces when planning organiza- tional change?
15-16. Why might it be difficult to change a global com- pany that’s over 130 years old?
■➤ Case 15-B: Moving Changes for Introl Systems, Inc. Nearly from its beginning, Introl Systems, Inc. (the com- pany that produces computer chips used in desktop and notebook computers), was located in Englewood Cliffs, New Jersey. This location was convenient for a wide range of employees. Those who lived in New York City had only a twenty-minute commute to work. Those who preferred to live in the suburban areas had more than a dozen small New Jersey communities from which to choose. Even those who preferred a rural lifestyle could find that within a forty- five-minute commute to work.
In 2003, however, company officials determined that the organization had outgrown its facility in Englewood Cliffs. Attempts to obtain permits from local government offices to expand the facility met with resistance. As a result, the company bought the former headquarters of Eastern Union in Morris Plains, New Jersey. After some remodeling to fit company needs, Introl Systems began operating in Morris Plains in June 2003.
The biggest issue facing supervisors concerning the move was the realization that hiring and retaining employ- ees might be affected—especially in the engineering and design departments. That’s because many of these employ- ees lived in New York City. What was once a twenty-minute commute from the city would now take nearly an hour each way. Further compounding this change was the realization that no public transportation was available. Going to work would require employees to have access to automobiles.
Kathy Wilson supervised a small group at Introl Systems that worked exclusively on designing computer chips. All six of her employees lived in New York City. When Kathy learned of the move to Morris Plains, she immediately informed her employees. Initially, news of the move appeared to have little effect. But as the date of the move drew nearer, rumors were rampant that almost all of her staff were looking for jobs in New York City.
RESPONDING TO THE CASE
15-17. Why do you believe most of Kathy Wilson’s employees were resistant to the move? Describe the factors leading to this resistance.
15-18. Assume you are Kathy Wilson and it is spring of 2003. You don’t want to lose any of the skilled and talented people you have on your staff. What specific steps will you take to ensure that your employees remain at Introl Systems?
15-19. Do you believe that company officials could have avoided some of the resistance to change—espe- cially for those employees who lived in New York City? Explain.
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■■ agency shop
■■ authorization cards
■■ collective bargaining
■■ dues checkoff
■■ economic strike
■■ fact-finding
■■ Federal Mediation and Conciliation Service (FMCS)
■■ grievance procedures
■■ grievance (rights) arbitration
■■ interest arbitration
■■ labor relations
■■ Landrum-Griffin Act
■■ lockout
■■ maintenance of membership
■■ National Labor Relations Board (NLRB)
■■ open shop
■■ Racketeering Influenced and Corrupt Organizations (RICO) Act
■■ representation certification (RC) election
■■ representation decertification (RD) election
■■ secondary boycott
■■ Taft-Hartley Act
■■ union
■■ union shop
■■ Wagner Act
■■ wildcat strike
Key Concepts After completing this chapter, you will be able to define these supervisory terms:
Supervision and Labor16 C
H A
P T
ER
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Jon Feingersh/Blend Images/Getty Images
16-1. Define union.
16-2. Explain the various types of union security arrangements.
16-3. Discuss the effect the Wagner and Taft-Hartley acts had on labor–management relations.
16-4. Describe the union-organizing process.
16-5. Describe the components of collective bargaining.
16-6. Identify the steps in the collective bargaining process.
16-7. Describe the role of a grievance procedure in collective bargaining.
16-8. Identify the various impasse resolution techniques.
Chapter Outcomes and Learning Objectives After reading this chapter, you will be able to:
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426 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Responding to a Supervisory Dilemma
Inherent in collective bargain- ing negotiations is an opportunity for either side to generate a power base that may sway negotiations in its favor. For example, when labor shortages exist or when inventories are in short supply, a strike by the union could have serious ramifica- tions for the company. Likewise, when the situation is reversed, the company has the upper hand and could easily lock out the union to achieve its negotiation goals. In fact, two primary labor–manage- ment pieces of legislation attempted to make the playing field as level as possible by requiring both sides to negotiate in good faith and permit impasses if they should be warranted.
For decades, this scenario played itself out over and over again. Timing of a contract’s expi- ration proved critical for both sides. For example, in the coal industry, having a contract expire just before the winter months—when coal is needed in greater sup- ply for heating and electricity—worked to the union’s advantage, unless the coal companies stockpiled enough coal to carry them through a lengthy winter strike. This game, although serious to both sides, never appeared to be anything more than a bargaining strategy—one that could show how serious both sides were. And even though a Supreme Court case from 1938, NLRB v. MacKay Radio, gave employers the right to hire replace- ment workers for those engaged in an economic strike,
seldom was that used. In fact, to set- tle a strike, and for the organization to get back its skilled workforce, one stipulation would often be that all replacement workers be let go.
But in the early 1980s, the situation began to change. When then-President Ronald Reagan fired striking air traffic controllers and hired their replacements, busi- nesses began to realize the weapon they had at their disposal. As their union-busting attempts succeeded, some organizations, such as Cat- erpillar, the National Football League, and John Deere, realized that using replacement workers could be to their advantage. The union members either came back to work on company officials’ terms, or they lost their jobs—period.
Undoubtedly, in any strike situ- ation, a company has the right to keep its doors open and to keep producing what it sells. Often, that may mean using supervisory personnel in place of striking workers, or in some cases bringing in replacements. But does a law that permits replacement workers undermine the intent of national labor laws? Does it create an unfair advantage for companies, who can play hardball just to break the union? Should a striker replacement bill (which would prevent permanent replacement workers from being hired) be passed? Should striking workers’ jobs be pro- tected while they exercise their rights under federal law? What’s your opinion?
Sheldon Levis/Alamy Stock Photo
I n this chapter, we discuss the unique supervisory elements that exist when a labor union is present. We look at what unions are, the laws regulating this process, why employees join unions, and the unique role supervisors play in the labor relations process.
What is Labor Relations? Labor relations is a term used to include all activities within a company that involve deal- ing with a union and its membership.1 The key component in this definition is a union.
A union is an organization of workers, acting collectively, seeking to promote and protect its mutual interests through collective bargaining. However, before we can
OBJECTIVE 16.1 Define union.
1Material in this chapter is adapted from D. A. DeCenzo and S. P. Robbins, Human Resource Manage- ment, 8th ed. (Hoboken, NJ: John Wiley & Sons, 2005), Chapter 16.
labor relations All activities within a company that involve dealing with a union and its members.
union An organization that represents workers and seeks to protect their interests through collective bargaining.
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Chapter 16 Supervision and Labor 427
examine the activities surrounding the collective bargain- ing process, it is important to understand the laws that govern the labor–management process, what unions are, and how employees unionize. Although it is true that just less than 8 percent of the private-sector workforce is unionized, the successes and failures of organized labor’s activities affect most segments of the workforce in two important ways. First, because major industries in the United States—such as automobile, steel, and electrical manufacturers, as well as all branches of transportation— are unionized, unions have a major effect on some of the important sectors of the economy (see Exhibit 16-1). Sec- ond, gains made by unions often spill over into other non- unionized sectors of the economy. So, the wages, hours, and working conditions of nonunion employees at a lum- beryard in Linden, New Jersey may be affected by collec- tive bargaining between the United Auto Workers and General Motors at one of the latter’s North American assembly plants.
The union membership rate, the percentage of wage and salary workers who were members of a union, reported by the US Bureau of Labor Statistics, was 10.7 percent, down 0.4 percentage point from 2015. The number of wage and salary workers belonging to unions, at 14.6 million in 2016, declined by 240,000 from 2015. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers.
According to the 2016 data, the union membership rate for public sector workers (34.4 percent) is more than five times higher than that of private-sector workers (6.4 percent). Workers in education, training, and library occupations, and in pro- tective service occupations had the highest unionization rate, at 34.6 percent and 34.5 percent, respectively. Black workers were more likely to be union members than were white, Asian, or Hispanic workers. Among states, New York continued to have the highest union membership rate (23.6 percent), and North Carolina had the lowest rate (1.6 percent).2
For many supervisors, activities in a unionized organization consist chiefly of fol- lowing procedures and policies laid out in the labor contract. This labor contract was agreed to by both management and the labor union, stipulating, among other things, the wage rate, the hours of work, and the terms and conditions of employment for those covered by the negotiated agreement. Decisions about how to select and compensate employees, employee benefits offered, procedures for overtime, and so on are no longer unilateral prerogatives of management for jobs that fall under the union’s jurisdiction. Such decisions are generally made at the time the labor contract is negotiated.
The concept of labor relations and the collective bargaining process may mean dif- ferent things to different individuals depending on their experience, background, and so on. One means of providing some focus in these areas is to understand why people join unions and the laws that serve as the foundation of labor–management relationships.
WHY DO EMPLOYEES JOIN UNIONS? The reasons people join unions are as diverse as the people themselves. Just what are they seeking to gain when they join a union? The answer to this question varies with the individual and the union contract, but the following discussion captures the most common reasons.
2United States Department of Labor, U.S. Bureau of Labor Statistics, Division of Labor Force Statistics, “Union Members Summary,” Economic News Release, January 26, 2017, https://www.bls.gov/news. release/union2.nr0.htm (accessed April 2, 2017).
OBJECTIVE 16.2 Explain the various types of union security arrangements.
Exhibit 16-1 Union membership by industry concentration. Source: Based on Bureau of Labor Statistics, “Table 3. Union Affiliation of Employed Wage and Salary Workers by Occupation and Industry,” January 26, 2017, https://www.bls.gov/news.release/ union2.t03.htm (accessed April 2, 2017).
Manufacturing 9.1%
Wholesale and
Retail Trade 4.8%
Financial Activities
3.1%
Government Workers
37.9%
Transportation and
Utilities 20.5%
Agriculture and Related
Industries 2.1%
Percentage Unionized
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428 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
Higher Wages and Benefits There are power and strength in numbers. As a result, unions sometimes are able to obtain higher wages and benefits packages for their mem- bers than employees would be able to negotiate individually.3 One or two employees walking off the job over a wage dispute is unlikely to significantly affect most businesses, but hundreds of workers going out on strike can temporarily disrupt or even close down a company. Additionally, professional bargainers employed by the union may be able to negotiate more skillfully than any individual could on his or her own behalf.
Greater Job Security Unions provide their members with a sense of independence from the supervisor’s power to arbitrarily hire, promote, or fire. The collective bargaining contract stipulates rules that apply to all members, thus providing fairer and more uniform treatment.
Influence on Work Rules Where a union exists, workers can participate in determining the conditions under which they work and have an effective channel through which they can protest conditions that they believe are unfair. Grievance procedures and rights to third-party arbitration of disputes are examples of practices that are typically defined and regulated as a result of union efforts.
Compulsory Membership Many labor agreements contain statements that are com- monly referred to as union security clauses. When one considers the importance of security arrangements to unions—importance brought about in terms of numbers and guaranteed income—it is no wonder that such emphasis is placed on achieving a union security arrangement that best suits their goals. Such arrangements range from compul- sory membership in the union to giving employees the freedom in choosing to join the union. The various types of union security arrangements—the union shop, the agency shop, and the right-to-work shop, as well as some special provisions under the realm of union security arrangements—are briefly discussed in this section and summarized in Exhibit 16-2.
The most powerful relationship legally available (not legally available in right-to- work states4) to a union is a union shop. This arrangement stipulates that employers, although free to hire whomever they choose, may retain only union members. That is, all employees hired into positions covered under the terms of a collective bargaining agreement must, after a specified probationary period of typically thirty to sixty days, join the union or forfeit their jobs.
An agreement that requires nonunion employees to pay the union a sum of money equal to union fees and dues as a condition of continuing employment is referred to as an agency shop. This arrangement was designed as a compromise between the union’s desire to eliminate the “free rider” and the organization’s desire to make union member- ship voluntary. In such a case, if for whatever reason workers decide not to join the union (religious beliefs, values, etc.), they still must pay dues. Because workers will receive the benefits negotiated by the union, they must pay their fair share. However, in a 1988 Supreme Court decision involving union dues, the Court ruled that a union may be violating rights of nonmembers who are required to pay “agency fees” for union representation if it uses those fees for political and other activities not directly related to collective bargaining.
The least desirable form of union security from a union perspective is the open shop. This is an arrangement in which joining a union is totally voluntary. Those who do not join are not required to pay union dues or any associated fees. For workers who do join, there is typically a maintenance-of-membership clause in the existing contract that dictates certain provisions. Specifically, the agreement of a maintenance-of-membership states that should employees join the union, they are compelled to remain in the union
3Find out more at AFL-CIO, available online at www.aflcio.org/joinaunion. 4Currently, twenty-eight states are right-to-work states. See National Right to Work Legal Defense Foundation, Inc., Right to Work States, http://www.nrtw.org/right-to-work-states (accessed April 2, 2017).
union shop An arrangement that stipulates that employers, although free to hire whomever they choose, may retain only union members.
agency shop An agreement that requires nonunion employees to pay the union a sum of money equal to union fees and dues as a condition of continuing employment.
open shop An arrangement in which joining a union is totally voluntary.
maintenance-of-membership An agreement that should employees join the union, they are compelled to remain in the union for the duration of the existing contract. Such an agree- ment often provides an escape clause when the contract expires in which employees may choose to withdraw their membership from the union without penalty.
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for the duration of the existing contract. When the contract expires, most maintenance- of-membership agreements provide an escape clause—a short interval of time, usually ten days to two weeks—in which employees may choose to withdraw their membership from the union without penalty.
A common provision in union security arrangements is a process called the dues checkoff. A dues checkoff occurs when the employer withholds union dues from the members’ paychecks. Similar to other pay withholdings, the employer collects the dues money and sends it to the union. There are a number of reasons employers provide this service, and a reason the union would permit them to do so. Collecting dues takes time. A dues checkoff reduces the “downtime” by eliminating the need for the shop steward to go around to collect dues. Furthermore, recognizing that union dues are the primary source of income for the union, knowing how much money is in the union treasury can tell the company whether a union is financially strong enough to endure a strike. Unions agree to these procedures because it guarantees their revenues. By letting the company deduct dues from a member’s paycheck, the union is assured of receiving its monies.
Being Upset with the Supervisor One of the many reasons employees join a union appears to be management. If employees are upset with the way their supervisor handles problems, upset over how a coworker has been disciplined, and so on, they are likely to seek help from a union. It is reasonable to believe that when employees vote to union- ize, it’s often a vote against their immediate supervisor rather than a vote in support of a particular union.5
dues checkoff A provision that often exists in union security arrangements whereby an employer withholds union dues from members’ paychecks.
5See, for instance, M. Romano, “Hospital Accused of Iron-Fist Tactics,” Modern Hospital, January 8, 2001, 16
Exhibit 16-2 Union security arrangements (and related elements).
Union Shop Strongest of the union security arrangements. Mandates that employees join the union within a specified period of time–or forfeit their jobs. Union shops are illegal in right-to-work states.
Agency Shop Union membership is not compulsory, but nonunion workers in the bargaining unit must still pay
union dues. These workers do have the right to demand that their monies be used for collective bargaining purposes only. Like the union shop, the agency shop is illegal in right-to-work states.
Open Shop The weakest form of union security. Workers are free to choose to join the union or not. Those who do join must pay union dues. Those who do not join do not have to pay dues. Leaving the union typically can occur only during an escape period at the expiration of a contract. In right-to-work states, the open shop is the only permissible union security arrangement.
Maintenance In an open shop, membership is required for the of Membership duration of an existing contract.
Dues Checkoff Involves the employer deducting union dues directly from a union member’s paycheck. The employer collects the money and forwards a check to the union treasurer. Management typically offers this service free of charge to the union.
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Labor Legislation The legal framework for labor–management relationships has played a crucial role in their development. In this section, therefore, major developments in labor law are dis- cussed. An exhaustive analysis of these laws and their legal and practical repercussions is not possible within the scope of this book. However, we focus our discussion on two important laws that have shaped much of the labor relations process. We then briefly summarize other laws that have helped shape labor–management activities.
THE WAGNER ACT The National Labor Relations Act of 1935, commonly referred to as the Wagner Act, is the basic “bill of rights” for unions. This law guarantees workers the right to organize and join unions, to bargain collectively, and to act in concert to pursue their objectives. In terms of labor relations, the Wagner Act specifically requires employers to bargain in good faith over mandatory bargaining issues—wages, hours, and terms and condi- tions of employment.
The Wagner Act is cited as shifting the pendulum of power to favor unions for the first time in US labor history. This was achieved, in part, through the establishment of the National Labor Relations Board (NLRB). This administrative body, consisting of five mem- bers appointed by the president of the United States, was given the responsibility for determining appropriate bargaining units, conducting elections to determine union rep- resentation, and preventing or correcting employer actions that can lead to unfair labor practice charges. The NLRB, however, has only remedial and no punitive powers.
Unfair labor practices (Section 8[a] of the Wagner Act) include any employer tactics that:
■■ interfere with, restrain, or coerce employees in the exercise of the rights to join unions and to bargain collectively
■■ dominate or interfere with the formation or administration of any labor organization ■■ discriminate against anyone because of union activity ■■ discharge or otherwise discriminate against any employee because he or she filed or
gave testimony under the act ■■ refuse to bargain collectively with the representatives chosen by the employees
Although the Wagner Act provided the legal recognition of unions as legitimate interest groups in US society, many employers opposed its purposes. Some employers, too, failed to live up to the requirements of its provisions. That’s because employers recognized that the Wagner Act didn’t provide protection for them from unfair union labor practices. Thus, the belief that the balance of power had swung too far to labor’s side, and the public outcry stemming from post–World War II strikes, led to the passage of the Taft-Hartley Act (Labor–Management Relations Act) in 1947.
THE TAFT-HARTLEY ACT The major purpose of the Taft-Hartley Act was to amend the Wagner Act by addressing employers’ concerns in terms of specifying unfair union labor practices. Under Section 8(b), Taft-Hartley states that it is an unfair labor practice for unions to:
■■ restrain or coerce employees in joining the union, or coerce the employer in selecting bargaining or grievance representatives
■■ discriminate against an employee to whom union membership has been denied, or cause an employer to discriminate against an employee
■■ refuse to bargain collectively ■■ engage in strikes and boycotts for purposes deemed illegal by the act ■■ charge excessive or discriminatory fees or dues under union-shop contracts ■■ obtain compensation for services not performed or not to be performed
OBJECTIVE 16.3 Discuss the effect the Wagner and Taft- Hartley acts had on labor–management relations.
Wagner Act Also known as the National Labor Relations Act, this act gave employees the legitimate right to form and join unions and to engage in collective bargaining.
National Labor Relations Board (NLRB) A group that has primary responsibility for conducting elections to determine union representation and to interpret and apply the law against unfair labor practices.
Taft-Hartley Act A law passed in 1947 that specified unfair union labor practices and declared the closed shop to be illegal.
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In addition, Taft-Hartley declared illegal one type of union security arrangement: the closed shop. Until Taft-Hartley’s passage, the closed shop was dominant in labor contracts. The closed shop was an arrangement in which a union “controlled” the source of labor. Under this arrangement, an individual would join the union, be trained by the union, and sent to work for an employer by the union. In essence, the union acted as a clearinghouse of employees. When an employer needed a number of employees— for whatever duration—the employer would contact the union and request that these employees start work. When the job was completed and the employees were no longer needed on the job by the employer, they were sent back to the union.
By declaring the closed shop illegal, Taft-Hartley began to shift the pendulum of power away from unions. Furthermore, in doing so, the act enabled states to enact laws that would further reduce compulsory union membership. Taft-Hartley also included provisions that forbade secondary boycotts and gave the president of the United States the power to issue an eighty-day cooling-off period when labor–management disputes affect national security. A secondary boycott occurs when a union strikes against Employer A (a primary and legal strike), and then strikes and pickets against Employer B (an employer against which the union has no complaint) because of a relationship that exists between Employers A and B, such as Employer B handling goods made by Employer A. Taft-Hartley also set forth procedures for workers to decertify, or vote out, their union representatives.
Whereas the Wagner Act required only employers to bargain in good faith, Taft- Hartley imposed the same obligation on unions. Although the negotiation process is described later in this chapter, it is important to understand what is meant by the term bargaining in good faith. This does not mean that the parties must reach agreement, but rather that they must come to the bargaining table ready, willing, and able to meet and deal, open to proposals made by the other party, and with the intent to reach a mutually acceptable agreement.
Realizing that unions and employers might not reach agreement and that work stoppages might occur, Taft-Hartley also created the Federal Mediation and Conciliation Service (FMCS) as an independent agency separate from the Department of Labor. The FMCS’s mission is to send a trained representative to assist in negotiations. Both employer and union are responsible for notifying the FMCS when other attempts to settle the dispute have failed or contract expiration is pending. An FMCS mediator is not empowered to force parties to reach an agreement, but he or she can use persuasion and other means of diplomacy to help them reach their own resolution of differences.
OTHER LAWS AFFECTING LABOR–MANAGEMENT RELATIONS Whereas the Wagner and Taft-Hartley acts are the most important laws influencing labor– management relationships in the United States, some other items are pertinent to our dis- cussion: the Landrum-Griffin Act of 1959, and the Racketeering Influenced and Corrupt Organizations Act of 1970. Let’s briefly review the notable aspects of these two laws.
Landrum-Griffin Act The Landrum-Griffin Act of 1959 (Labor and Management Reporting and Disclosure Act) was passed to address the public outcry over misuse of union funds and corruption in the labor movement. This act, like Taft-Hartley, was an amendment to the Wagner Act.
The thrust of the Landrum-Griffin Act is to monitor internal union activity by mak- ing officials and those affiliated with unions (union members, trustees, etc.) accountable for union funds, elections, and other business and representational matters. Restrictions are also placed on trusteeships imposed by national or international unions, and conduct during a union election is regulated. Much of this act is part of an ongoing effort to prevent corrupt practices and to keep organized crime from gaining control of the labor movement. The mechanisms used to achieve this goal are requirements for unions and individuals employed by unions to file annual reports to the Department of Labor regarding administrative matters—reports such as their constitutions and bylaws, administrative policies, elected officials, and finances. This information, filed under
secondary boycott A union strikes against Employer A (a primary and legal strike) and then strikes and pickets against Employer B (an employer against which the union has no complaint) because of a rela- tionship that exists between Employers A and B, such as Employer B handling goods made by Employer A.
Federal Mediation and Conciliation Service (FMCS) A government agency that assists labor and management in settling their disputes.
Landrum-Griffin Act Also known as the Labor and Manage- ment Reporting and Disclosure Act, this legislation protects union members from possible wrongdoing on the part of their unions. Its thrust is to require all unions to disclose their financial statements.
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forms L-M 2, L-M 3, or L-M 46 with the Department of Labor, is available to the public. Furthermore, Landrum-Griffin includes a provision that allows all members of a union to vote irrespective of their race, sex, national origin, and so forth. This provision gave union members certain rights that were not available to the general public for another five years until the passage of the Civil Rights Act of 1964. Landrum-Griffin also requires that all who vote on union matters do so in a secret ballot, especially when the vote concerns the election of union officers.
Racketeering Influenced and Corrupt Organizations (RICO) Act Although this act has far- reaching implications, the Racketeering Influenced and Corrupt Organizations (RICO) Act of 1970 serves a vital purpose in labor relations. RICO’s primary emphasis with respect to labor unions is to eliminate any influence exerted on unions by members of organized crime. Over the past decade, RICO has been used to oust a number of labor officials in unions who were alleged to have organized crime ties.
6L-M 2 reports are required of unions that have annual revenues of $200,000 or more and those in trustee- ship. L-M 3 reports are a simplified annual report that may be filed by unions with total revenues of less than $200,000 if the union is not in trusteeship. L-M 4 is an abbreviated form and may be used by unions with less than $10,000 in total annual revenues if the union is not in trusteeship. These reports are due within ninety days after the end of the union’s fiscal year.
Racketeering Influenced and Corrupt Organizations (RICO) Act Legislation whose primary emphasis with respect to labor unions is to eliminate any influence exerted on unions by members of organized crime.
Comprehension Check 16-1
1. An organization of workers acting collectively, seeking to promote their mutual interests is called a: a. workgroup. b. work team. c. union. d. labor group.
2. Approximately what percentage of the workforce is unionized? a. 12 b. 16 c. 17 d. 21
3. Which one of the following is not a reason people join unions? a. Seeking increased wages and benefits b. Seeking an individual voice with employers c. Seeking to influence work rules d. Seeking to create greater job security
4. A union shop: a. requires nonunion employees to pay a sum of money equal to union dues. b. stipulates that an employer may retain only union members. c. makes union membership voluntary. d. is illegal.
5. Which labor act gives employees the legitimate right to join a union? a. Wagner Act b. Taft-Hartley Act c. Landrum-Griffin Act d. Labor–Management Relations Act
6. Which one of the following is not an unfair labor practice for unions? a. Restraining employees in joining the union b. Charging excessive union dues c. Refusing to bargain collectively with employee representatives d. None of the above
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How are Employees Unionized? Employees are unionized after an extensive and sometimes lengthy process called the organizing campaign. Exhibit 16-3 contains a simple model of how the process typically flows in the private sector. Let’s look at these elements.
Efforts to organize a group of employees may begin with employee representatives requesting a union to visit the employees’ organization and solicit members; or the union itself might initiate the membership drive. In some cases, unions are using the Internet to promote their benefits to workers. Regardless of how, as established by the NLRB, the union must secure signed authorization cards from at least 30 percent of the employees it wishes to represent. Employees who sign the cards indicate that they wish the particu- lar union to be their representative in negotiating with the employer.
Although at least 30 percent of the potential union members must sign the authoriza- tion card prior to an election, unions are seldom interested in bringing to vote situations in which they merely meet the NLRB minimum. Why? The answer is simply a matter of mathematics and business: To become the certified bargaining unit, the union must be accepted by a majority of those eligible voting workers. Acceptance in this case is deter- mined by a secret-ballot election. This election held by the NLRB, called a representation certification (RC) election, can occur only once in a twelve-month period; thus, the more signatures on the authorization cards, the greater the chances for a victory.
Even when a sizable proportion of the workers signs authorization cards, the victory is by no means guaranteed. The company often is not passive during the organization drive (see “News Flash! When the Union Arrives”). Although laws govern what super- visors can and cannot do, supervisors in the organization may attempt to persuade the potential members to vote no. Union organizers realize that some initial signers might be persuaded to vote no, and thus unions usually require a much higher percentage of authorization cards so they can increase their odds of obtaining a majority.
When that majority vote is received, the NLRB certifies the union and recognizes it as the exclusive bargaining unit. Irrespective of whether the individual in the certified bargaining union voted for or against the union, each worker is covered by the negotiated contract and must abide by its governance. Once a union has been certified, is it there for life? Certainly not. On some occasions, union members may become so dissatisfied with the union’s actions in representing them that they want to turn to another union or return to their nonunion status. In either case, the rank-and-file members petition the NLRB to conduct a representation decertification (RD) election. Once again, if a majority of the mem- bers vote the union out, it is gone. However, once the election has been held, no other action can occur for another twelve-month period. This grace period protects the employer from employees decertifying one union today and certifying another tomorrow.
Even more rare than an RD is a representation decertification election initiated by management, or RM. The guidelines for the RM are the same as for the RD, except that the employer is leading the drive. Although RDs and RMs are ways of decertifying
OBJECTIVE 16.4 Describe the union-organizing process.
authorization card A card signed by prospective union members indicating that they are interested in having a union election held at their work site.
representation certification (RC) election The election process whereby union members vote in a union as their representative.
representation decertification (RD) election The election process whereby union members vote out their union as their representative.
Exhibit 16-3 The labor relations process.
No
No
No No union vote for one year
O rg
a n
iz in
g c
a m
p a
ig n
Unorganized
Certification and recognition
Vote taken: Did union receive a majority vote?
Petition NLRB for election: Are authorization cards in order?
Authorization card campaign: Did union get 30% or more?
Yes
Yes
Yes
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434 Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
WHEN THE UNION ARRIVES
NEWS FLASH!
What can company representatives do when they learn that a union-organizing drive has begun in their organization? Under labor laws, although they are permitted to “defend” against the union campaign, they must do so properly. Here are some suggested guidelines for what to do and what not to do during the organizing drive.
■■ If your employees ask for your opinion on unionization, respond in a neutral manner. For example, “I really have no position on the issue. Do what you think is best.”
■■ If contacted directly by a union representative, you should not look at any list of employees they may attempt to give you, or any cards or letters with names on them, or any papers employees may attempt to hand you.
■■ You can prohibit union-organizing activities in your workplace during work hours only if they interfere with work operations. This may apply to the organization’s e-mail, too.
■■ You can prohibit outside union organizers from distributing union information in the workplace.
■■ Employees have the right to distribute union information to other employees during breaks and lunch periods.
■■ Don’t discriminate against any employee who is involved in the unionization effort.
■■ Be on the lookout for efforts by the union to coerce employees to join its ranks. This activ- ity by unions is an unfair labor practice. If you see this occurring, report it to your boss or to human resources. Your organization may also want to consider filing a complaint against the union with the NLRB.
■■ Supervisors should remember TIPS at all times. TIPS reminds supervisors not to do the following:
T—Threaten. Don’t make any threats that are related to the possibility of unionization—for example, “If this union effort succeeds, upper management is seriously thinking about closing down this plant. But if it’s defeated, they may push through an immediate wage increase.” I—Interrogate. Don’t question employees publicly or privately about union-organizing activities—for example, “Are you planning to go to that union rally this weekend?” But if an employee freely tells you about the activities, you may listen. P—Promise. Don’t promise incentives to any who refrain from joining the union or who may oppose organizing activities. S—Spy. Don’t spy on employees’ union activ- ities—for example, by standing in the cafeteria to see who is distributing pro-union literature.
Sources: Based on M. K. Zachary, “Labor Law for Supervisors: Union Campaigns Prove Sensitive for Super- visory Employees,” Supervision, May 2000, 23–26; S. Greenhouse, “A Potent, Illegal Weapon against Unions: Employers Know It Costs Them to Fire Orga- nizers,” New York Times, October 24, 2000, A-10; J. E. Lyncheski and L. D. Heller, “Cyber Speech Cops,” HR Magazine, January 2001, 145–150; J. A. Mello, “Rede- fining the Rights of Union Organizers and Responsibili- ties of Employers in Union Organizing Drives,” SAM Advanced Management Journal, Spring 1998, 4; and S. Quisenberry, “Union Awareness and Maintaining Union-Free Status,” SHRM white paper, September 1997, www.shrm.org/hrresources/whitepapers_pub- lished/CMS_000223.asp (accessed June 25, 2008).
unions, it should be pointed out that most labor agreements bar the use of either decer- tification election during the term of the contract.
Organizing drives may be unsuccessful, but when unions do achieve their goal to become the exclusive bargaining agent, the next step is to negotiate the contract. In the next section, we look at the specific issues surrounding collective bargaining.
Collective Bargaining The term collective bargaining typically refers to the negotiation, administration, and inter- pretation of a written agreement between two parties that covers a specific period of time. This agreement, or contract, lays out in specific terms the conditions of employment; that
OBJECTIVE 16.5 Describe the components of collective bargaining.
collective bargaining A process for developing a union contract, which includes preparing to negotiate the contract, negotiating the contract, and administering the con- tract after it has been ratified.
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is, what is expected of employees and the limits in management’s authority. In the fol- lowing discussion, we will take a somewhat larger perspective—we will also consider the organizing, certification, and preparation efforts that precede actual negotiation.
Most of us hear or read about collective bargaining only when a contract is about to expire or when negotiations break down. When a railroad contract is about to expire, we may be aware that collective bargaining exists in the transportation industry. Simi- larly, teachers’ strikes in Chicago, or professional athletes striking against leagues and owners, remind us that organized labor deals with management collectively. In fact, collective bargaining agreements cover about half of all state and local government employees, and one-ninth of employees in the private sector. The wages, hours, and working conditions of these unionized employees are usually negotiated for periods of two or three years at a time. Only when these contracts expire, and company represen- tatives and the union are unable to agree on a new contract, are most of us aware that collective bargaining is a very important part of a supervisor’s job.
WHAT ARE THE OBJECTIVE AND SCOPE OF COLLECTIVE BARGAINING? The objective of collective bargaining is to agree on an acceptable contract—acceptable to management, union representatives, and the union membership. The final agreement reflects the problems of the particular workplace and industry in which the contract is negotiated.
Four issues appear consistently throughout all labor contracts. Three of the four are mandatory bargaining issues, which means that management and the union must negotiate in good faith over these issues. These mandatory issues were defined by the Wagner Act as wages, hours, and terms and conditions of employment. The fourth issue covered in almost all labor contracts is the grievance procedure, which is designed to permit the adjudication of complaints.
WHAT IS THE COLLECTIVE BARGAINING PROCESS? Exhibit 16-4 contains a simple model of how the collective bargaining process typically flows in the private sector—which includes preparing to negotiate, actual negotiations, and administering the contract after it has been ratified.
OBJECTIVE 16.6 Identify the steps in the collective bargaining process.
Exhibit 16-4 The collective bargaining process.
No
Contract administration
Contract approved
Rank-and-file members vote to approve/disapprove
Contract submitted for ratification
Contract agreement made
Negotiation
Preparation for negotiation
Yes
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Preparing to Negotiate Once a union has been certified as the bargaining unit, both union and company representatives begin the ongoing activity of preparing for negotia- tions. We refer to this as an ongoing activity, because ideally it should begin as soon as the previous contract is agreed on, or union certification is achieved. Realistically, it probably begins anywhere from one to six months before the current contract expires. We can consider the preparation for negotiation as composed of three activities: fact gathering, goal setting, and strategy development.
Information is acquired from both internal and external sources. Internal data include grievance and accident records; employee performance reports; overtime fig- ures; and reports on transfers, turnover, and absenteeism. External information should include statistics on the current economy, both at local and national levels; economic forecasts for the short and intermediate terms; copies of recently negotiated contracts by the adversary union to determine which issues the union considers important; data on the communities in which the company operates (cost of living, changes in cost of living, terms of recently negotiated labor contracts, and statistics on the labor market); and industry labor statistics to see which terms other organizations, employing similar types of personnel, are negotiating.
With homework done, information in hand, and tentative goals established, both union and management must put together the most difficult part of the bargaining preparation activities—a strategy for negotiations. This includes assessing the other side’s power and specific tactics.
Negotiating at the Bargaining Table Negotiation customarily begins with the union delivering to company officials a list of “demands.” By presenting many demands, the union creates significant room for trading in later stages of the negotiation; it also dis- guises the union’s real position, leaving management to determine which demands are adamantly sought, which are moderately sought, and which the union is prepared to quickly abandon. A long list of demands, too, often fulfills the internal political needs of the union. By seeming to back numerous wishes of the union’s members, union admin- istrators appear to be satisfying the needs of the many factions within the membership.
Although both union and company representatives may publicly accentuate their differences, the real negotiations typically go on behind closed doors. Each party tries to assess the relative priorities of the other’s demands, and each begins to combine pro- posals into viable packages. What takes place, then, is the attempt to get management’s highest offer to approximate the lowest demands that the union is willing to accept. Hence, negotiation is a form of compromise. When an oral agreement is achieved, it is converted into a written contract. Negotiation finally concludes with the union representatives submitting the contract for ratification or approval from rank-and-file members. Unless the rank-and-file members vote to approve the contract, negotiations must resume.
Contract Administration Once a contract is agreed on and ratified, it must be adminis- tered. Four stages of contract administration must be carried out: (1) getting the contract terms out to all union members and management personnel; (2) implementing the contract; (3) interpreting the contract and grievance resolution; and (4) monitoring activities during the contract period.7
When providing information to all concerned, both parties must ensure that changes in contract language are spelled out. For example, the most obvious would be hourly rate changes; company officials must make sure that the payroll system is adjusted to the new rates as set in the contract. But it goes beyond just pay: Changes in work rules, hours, and the like must be communicated. If both sides agree to mandatory overtime, something that was not in existence before, all must be informed of how it will work. Neither the union nor the company can simply hand a copy of the contract to each
7M. H. Bowers and D. A. DeCenzo, Essentials of Labor Relations (Upper Saddle River, NJ: Prentice Hall, 1992), 101.
OBJECTIVE 16.7 Describe the role of a grievance procedure in collective bargaining.
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organization member and expect it to be understood. It is necessary to hold meetings to explain the new terms of the agreement.
The next stage of contract administration is ensuring that the agreement is imple- mented. All communicated changes now take effect, and both sides are expected to comply with the contract terms. One concept to recognize during this phase is manage- ment rights. Typically, management is guaranteed the right to allocate organizational resources in the most efficient manner; to create reasonable rules; to hire, promote, transfer, and discharge employees; to determine work methods and assign work; to cre- ate, eliminate, and classify jobs; to lay off employees when necessary; to close or relocate facilities with a sixty-day notice; and to institute technological changes.
Probably the most important element of contract administration relates to spell- ing out a procedure for handling contractual disputes. Almost all collective bargain- ing agreements contain formal procedures to be used in resolving grievances about the interpretation and application of the contract. These contracts have provisions for resolving specific, formally initiated grievances by employees concerning dissatisfaction with job-related issues.
Grievance procedures are typically designed to resolve grievances as quickly as pos- sible and at the lowest level possible in the organization (see Exhibit 16-5).8 The first step almost always has the employee attempt to resolve the grievance with his or her immediate supervisor. If it cannot be resolved at this stage, it is typically discussed with the union steward and the supervisor. Failure at this stage usually brings in the individu- als from the organization’s industrial relations department and the chief union steward. If the grievance still cannot be resolved, the complaint passes to the facilities manager, who typically discusses it with the union grievance com- mittee. Unsuccessful efforts at this level give way to the organization’s senior management and typically a repre- sentative from the national union. Finally, if those efforts are unsuccessful in resolving the grievance, the final step is to go to arbitration—called grievance (rights) arbitration.
In practice, we find that almost all collective bargaining agreements provide for grievance (rights) arbitration as the final step to an impasse. Of course, in small organizations the five steps described tend to be condensed, possibly mov- ing from discussing the grievance with the union steward to taking the grievance directly to the organization’s senior executive or owner, and then to arbitration, if necessary.
Finally, in our discussion of preparation for negotia- tions, we stated that both company and union need to gather various data. One of the most bountiful databases for both sides is information kept on a current contract. By monitoring activities, company and union can assess how effective the current contract was, when problem areas or conflicts arose, and what changes might need to be made in subsequent negotiations.
What Happens When Agreement Cannot Be Reached? Although the goal of contract negotiations is to achieve an agreement that is acceptable to all concerned par- ties, sometimes that goal is not achieved. Negotiations do break down, and an impasse occurs. Sometimes these
8See also M. I. Lurie, “The 8 Essential Steps in Grievance Processing,” Dispute Resolution Journal 54, no. 4 (November 1999), 61–65.
grievance procedures Procedures designed to resolve disputes as quickly as possible and at the lowest level possible in the organization.
grievance (rights) arbitration The final step used to settle a labor and management dispute.
OBJECTIVE 16.8 Identify the various impasse resolution techniques.
Exhibit 16-5 A typical grievance procedure.
Grievance (Rights) Arbitration
Supervisor
Supervisor and Labor Specialist
Union Grievance Committee and
Representative from National Union
Union Grievance Committee
Chief Steward or
Union Grievance Committee
Step 5
Step 4
Step 3
Step 2
Step 1
Management representatives
Union representatives
Employee with
Grievance
Union Steward
Organization’s Top Management
Facilities Manager and
Labor Specialist
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events are triggered by internal issues in the union, the union’s desire to strike against the company, the company’s desire to lock out the union, or the company’s knowledge that striking workers can be replaced. Let’s explore some of these areas.
Strikes versus Lockouts Negotiations have only three possible preliminary outcomes. First, and obvi- ously preferable, is agreement. The other alternative, when no viable solution can be found to the parties’ differences, is a strike or a lockout.
There are several types of strikes. The most rel- evant to contract negotiations is the economic strike. An economic strike occurs when the two parties can- not reach a satisfactory agreement before the con- tract expires. When that deadline passes, the union leadership will typically instruct its members not to
work—thus leaving their jobs.9 Although in today’s legal climate replacement workers can be hired, no disciplinary action can be taken against workers who participate in economic strike activities.
Another form of strike is the wildcat strike. A wildcat strike generally occurs when workers walk off the job because of something management has done. For example, if a union employee is disciplined for failure to call in sick according to provisions of the contract, fellow union members may walk off the job to demonstrate their dissatisfac- tion with management’s action. It is important to note that these strikes happen while a contract is in force—an agreement that usually prohibits such union activity. Conse- quently, wildcat strikers can be severely disciplined or terminated. In the past, the most powerful weapon unions in the private sector had was the economic strike. By striking, the union was, in essence, withholding labor from the employer, thus causing the employer financial hardships.
After the strike is underway, a form of protest referred to as picketing usually begins in an attempt to prevent dissident members of the union, members of other unions, and nonunionized workers from crossing the picket line to work. Picketers congregate out- side a place of work to draw public attention to their cause and pressure the company to meet their demands. The pressure comes from harm caused to the business through loss of customers and negative publicity that prevent it from operating normally.
A strikebreaker is someone who crosses the picket line and works despite the strike. Strikebreakers may also be referred to as scabs or rats and are usually individuals who are not employed by the company prior to the strike, but rather hired prior to or during the strike to keep production or services going. Strikebreakers must be willing to deal with taunts, threats, and even violence from strikers. The most effective union action is a strike, and strikebreakers render a strike useless. Employers focused on breaking the union consider strikebreakers as one of their best tools.
In contemporary times, we have witnessed an increase in company officials’ use of the lockout. A lockout, as the name implies, occurs when the organization denies union- ized workers access to their jobs during an impasse. A lockout, in some cases, is the company’s predecessor to hiring replacement workers. In others, it’s the company offi- cials’ effort to protect their facilities and machinery and other employees at the work site.
In either case, the strategy is the same. Both sides are attempting to apply economic pressure on their “opponent” in an effort to sway negotiations in their direction. And when the strategy doesn’t work, negotiations are said to have reached an impasse. When that happens, impasse resolution techniques are designed to help.
9To be accurate, a strike vote is generally held at the local union level, in which the members authorize their union leadership to call the strike.
economic strike An impasse that results from labor and management’s inability to agree on the wages, hours, and terms and condi- tions of a new contract.
wildcat strike An illegal strike in which employees refuse to work during the term of a binding contract, often as a result of ambiguities in the current contract.
lockout A company action equivalent to a strike; when management denies unionized employees access to their jobs.
These workers are walking the picket line over a labor dispute. Unable to reach an agreement in contract negotiations, they decided to withhold their labor in the form of a strike.
Marmaduke St. John/Alamy Stock Photo
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Impasse Resolution Techniques When labor and management in the private sector cannot reach a satisfactory agreement themselves, they may need the assistance of an objective third-party individual. This assistance comes in the form of conciliation and mediation, fact-finding, and interest arbitration.
Conciliation and mediation are two very closely related impasse resolution tech- niques in which a neutral third party attempts to get labor and management to resolve their differences. Under conciliation, however, the role of the third party is to keep the negotiations ongoing. In other words, this individual is a go-between—advocating a voluntary means through which both sides can continue negotiating. Mediation, on the other hand, goes one step further. The mediator attempts to pull together the common ground that exists and make settlement recommendations for overcoming the barriers that exist between the two sides. A mediator’s suggestions, however, are only advisory. That means that the suggestions are not binding on either party.
Fact-finding is a technique whereby a neutral third-party individual conducts a hearing to gather evidence from both labor and management. The fact finder then renders a deci- sion as to how he or she views an appropriate settlement. Similar to mediation, the fact finder’s recommendations are only suggestions; they, too, are not binding on either party.
The final impasse resolution technique is called interest arbitration. Under interest arbi- tration, generally a panel of three individuals—one neutral, and one each from the union and management—hears testimony from both sides. After the hearing, the panel renders a decision on how to settle the current contract negotiation dispute. If the three members of the panel are unanimous in their decision, that decision may be binding on both parties.
In public-sector impasse resolution techniques, some notable differences do exist. For instance, in many states that permit public-sector employee strikes, some form of arbitration is typically required. The decisions rendered through arbitration are binding on both parties. Moreover, in the public sector, a particular form of arbitration, called final-offer arbitration, is witnessed. Both sides present their recommendations, and the arbitrator is required to select one party’s offer in its entirety over the other. There is no attempt in final-offer arbitration to seek compromise.
fact-finding A technique whereby a neutral third- party individual conducts a hearing to gather evidence from both labor and management.
interest arbitration Arbitration in which a panel of three individuals hears testimony from both sides and renders a decision on how to settle a contract negotiation dispute.
Something to Think About (and promote class discussion)
A BITTER TASTE AT THE COFFE HOUSE Since the beginning, Starbucks has strived to be an employer that nurtured employees and gave them opportunities to grow and be challenged. The company says it is “pro-partner” and has always been com- mitted to providing a flexible and progressive work environment and treating one another with respect and dignity. However, as Starbucks continues its expansion both in the United States and internationally, it needs to make sure it has the right number of the right people in the right place at the right time. One human resource issue that has haunted Starbucks is its position on labor unions. The company takes the position that the fair and respectful “direct employment relationship” it has with its partners—not a third party that acts on behalf of the partners—is the best way to help ensure a great work environ- ment. Starbucks prides itself on how it treats its employees. However, the company did settle a complaint issued by the National Labor Relations Board that contained more than two dozen unfair labor practice allegations brought against the company by the union Industrial Workers of the World. This settlement arose from disputes at three stores in New York City.
In 2011, a strike by partners in Chile—which is the only country where the company has a sizable union presence—over low wages led baristas in other countries to call for a “global week of solidar- ity” in support of the strikers. The Chilean workers eventually abandoned that strike without reaching an agreement with the company. As Starbucks continues to expand globally, it will face challenges in new markets where local labor groups and government requirements honor collective bargaining. And Starbucks realizes it needs to be cautious so that its “we care” image isn’t diminished by labor woes.
(continued)
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Comprehension Check 16-2
7. The labor act that attempted to address the public outcry over the misuse of union funds was the
a. Wagner Act. b. Taft-Hartley Act. c. Landrum-Griffin Act. d. RICO Act.
8. The election process whereby union members vote in a union is called a
a. representation decertification election. b. representation certification election. c. representation verification election. d. representation NLRB election.
9. The first step in contract negotiations for labor management is
a. contract agreement. b. negotiations. c. contract ratification. d. none of the above.
10. The process to settle an employee complaint is called
a. grievance (rights) arbitration. b. contract administration. c. interest arbitration. d. labor–management cooperation.
11. An illegal strike in which employees refuse to work during the term of a binding contract is called
a. an economic strike. b. a wildcat strike. c. a secondary boycott. d. a lockout.
12. A technique whereby a neutral third-party individual conducts a hearing to gather evidence from both labor and management is called
a. interest arbitration. b. fact-finding. c. rights arbitration. d. grievance arbitration.
Continued What do you think? Does Starbucks treat its workers fairly? Should Starbucks be forced to bargain
with labor unions? Should the government intervene in the decisions of business such as Starbucks? Do workers have the expectation of fair treatment and living wages even if they are not in a union?
Sources: Based on Chile Fines, Blacklists Starbucks, Wal-Mart Over Labor Practices,” www.reuters.com, August 9, 2012; J. Jargon, “Baristas Put Pressure on Starbucks,” Wall Street Journal, July 26, 2011, ............. The New York Times, September 23, 2015, https://www.nytimes.com/2015/09/24/business/starbucks-falls-short-after-pledging-better-labor-practices.html (accessed April 2, 2017).
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a union by signing the authorization card, the NLRB will hold an election. If 50 percent plus one of those voting votes for the union, the union is certified to be the bargaining unit.
5. Describe the components of collective bargaining. Collective bargaining typically refers to the negotia- tion, administration, and interpretation of a written agreement between two parties that covers a specific period of time.
6. Identify the steps in the collective bargaining pro- cess. The collective bargaining process comprises the following steps: preparation for negotiations, negotia- tions, and contract administration.
7. Describe the role of a grievance procedure in collec- tive bargaining. The role of the grievance procedure is to provide a formal mechanism in labor contracts for resolving issues over the interpretation and applica- tion of a contract.
8. Identify the various impasse resolution tech- niques. The most popular impasse resolution tech- niques include conciliation and mediation (a neutral third party informally attempts to get the parties to reach an agreement); fact-finding (a neutral third party conducts a hearing to gather evidence from both sides); and interest arbitration (a panel of individuals hears testimony from both sides and renders a decision).
1. Define union. A union is an organization of workers, acting collectively, seeking to promote and protect its mutual interests through collective bargaining.
2. Explain the various types of union security arrange- ments. The various union security arrangements are the closed shop (made illegal by the Taft-Hartley Act); the union shop, which requires compulsory union membership; the agency shop, which requires compulsory union dues; and the open shop, which enforces workers’ freedom of choice to select union membership or not.
3. Discuss the effect the Wagner and Taft-Hartley acts had on labor–management relations. The Wagner (National Labor Relations) Act of 1935 and the Taft-Hartley (Labor–Management Relations) Act of 1947 represent the most direct legislation affecting collective bargaining. The Wagner Act gave unions the freedom to exist and identified unfair employer labor practices. The Taft-Hartley Act balanced the power between unions and management by identify- ing unfair union labor practices.
4. Describe the union-organizing process. The union- organizing process officially begins with the comple- tion of an authorization. If the required percentage of potential union members shows their intent to vote on
After reading this chapter, I can:
SUMMARY
Enhancing Understanding
16-6. Given your career aspirations, might you join a union? Why or why not? Explain.
16-7. What is collective bargaining? How widely is it practiced?
16-8. Describe the collective bargaining process. 16-9. What is the objective of collective bargaining? 16-10. “An employer might not want to stifle a union-
organizing effort. In fact, an employer might want to encourage employees to join a union.” Do you agree or disagree with this statement? Explain your position.
16-1. What three pieces of legislation have been most important in defining the rights of management and unions? Provide the highlights of each.
16-2. Explain the appeal of unions to employees. 16-3. What is the process for establishing a union as
the legal collective bargaining representative for employees?
16-4. “All that is required for successful labor–manage- ment relations is common sense, sound business judgment, and good listening skills.” Do you agree or disagree with this statement? Explain.
16-5. How do union shops and agency shops differ?
COMPREHENSION: Review and Discussion Questions
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KEY CONCEPT CROSSWORD
6
1
7
8 9 10
13
15
20
17
21
18
19
22
23
24
25
11
12
14
16
2 3
4 5
ACROSS 6. the election process whereby union members vote out their union as their
representative 11. an act passed in 1947 that specified unfair union labor practices 16. legislation whose primary emphasis with respect to labor unions is to eliminate
any influence exerted on unions by organized crime 19. an impasse that results from labor and management’s inability to agree to a
contract 20. a group that has the primary responsibility for conducting elections and
applying laws against unfair labor practices 21. an arrangement in which joining a union is totally voluntary 22. a govt. agency that assists labor and management in settling their disputes 23. an agreement that requires nonunion employees to pay a sum of money equal
to union dues 24. an agreement that employees who join a union are compelled to remain in the
union for the duration of the existing contract 25. a signed document by prospective union members indicating that they are
interested in holding a union election
DOWN 1. a provision in a labor contract in which the employer withholds union dues
from members’ paychecks 2. steps designed to resolve labor–management disputes as quickly as possible
and at the lowest levels in the organization
3. the final step used to settle a labor and management dispute 4. an act that was passed to address the misuse of union funds and corruption
in the labor movement 5. an organization that represents workers’ interests through collective
bargaining 7. the election process whereby union members elect a union as their
representative 8. a union strike against another employer because the employer has a
relationship with an employer with whom the union has a disagreement 9. all activities within a company that involve dealing with a union 10. this act gave employees the legitimate right to form and join a union 12. an illegal strike whereby employees refuse to work during the term of a
binding contract 13. a process for developing a union contract, from negotiation to administration 14. a company action equivalent to a strike when management denies unionized
employees access to their jobs 15. a three-member panel that hears labor–management testimony and renders a
decision on how to settle a dispute 17. an arrangement that stipulates that employers may retain only union members 18. a technique whereby a neutral third-party individual conducts a hearing to
gather evidence from both labor and management
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Chapter 16 Supervision and Labor 443
Developing Your Supervisory Skills
Finally, after you complete any self-assessment, we sug- gest you retain the results, and store them as part of your “portfolio of learning about yourself.”
Before you can effectively supervise others, you must under- stand your present strengths and areas in need of develop- ment. To assist in this learning process, we encourage you to complete self-assessments that may help determine:
• How Well Do I Handle Ambiguity?
GETTING TO KNOW YOURSELF
unable to address the issue satisfactorily with Pat’s supervi- sor, Pat and the union steward, C. J., have set up this meet- ing with the human resources director, Chris.
Chris wishes to enforce the supervisor’s decision to terminate Pat and justify the reason for it. C. J. and Pat, on the other hand, claim that this action is a violation of the union contract.
Relevant Contract Language The following is excerpted from the labor agreement:
An employee who fails to maintain proper standards of conduct at all times, or who violates any of the follow- ing rules, shall be subject to disciplinary action.
Rule 4: Bringing illegal substances, firearms, or intoxi- cating liquors onto company premises, using or pos- sessing these on company property, or reporting to work under the influence of a substance is strictly prohibited.
Rule 11: Refusal to follow supervisory orders, or acting in any way insubordinate to any company agent, is strictly prohibited.
Role for Chris To handle this grievance, listen to the employee’s com- plaint, investigate the facts as best you can, and make your decision and explain it clearly.
16-11. An Experiential Exercise: Handling a Grievance Break into teams of three. This role-play requires one per- son to play the role of the HR director (Chris), another to play the role of the employee (Pat), and a third to play the role of the union steward (C. J.).
Each team member should read the following scenario and the excerpt from the union contract. Then, you are to role-play a meeting in Chris’s office. This role-play should take no more than fifteen minutes.
Scenario The head of security for your company has recently been focusing attention on the removal of illegal substances from the company’s workplace. One morning last week, a guard suspected the possession of a controlled substance by an employee, Pat. The guard noticed Pat placing a bag in a personal locker and subsequently searched the locker. The guard found a variety of pills, some of which he thought were nonprescription types. As Pat was leaving work for the day, the security guard stopped Pat and asked to see the contents of Pat’s bag. Pat was not told why the request was being made. Pat refused to honor the request and stormed out the door, leaving the company premises. Pat was termi- nated the next morning for refusing to obey the legitimate order of a building security guard. Feeling that they were
BUILDING A TEAM
first contact point in the process that represents the organization. Calmly listen to the employee’s com- plaint. Keep an open mind. It is very important at this stage not to argue with the employee. You want to gain understanding.
STEP 2: Investigate to get the facts. You want to sep- arate facts from opinions. Is the situation as presented
As the first person involved in a dispute, you can take certain actions to help resolve the problem.
STEPS IN PRACTICING THE SKILL
STEP 1: Listen to the employee’s complaint. Don’t be defensive and don’t take the complaint personally. Employees regularly have grievances, and you’re the
RESOLVING A GRIEVANCE
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16-13. Visit the AFL-CIO’s website (www.aflcio.org). Research and summarize two current union issues the AFL-CIO is working on/supporting legisla- tion for. End your report with your support for or against the union perspective.
16-12. In a two to three-page report, discuss the pros, cons, and class perceptions of what it would be like to work in a unionized environment. Would you consider working in such an environment? Why or why not?
COMMUNICATING EFFECTIVELY
past five Olympics, the men’s team has been largely filled with well-paid professionals from the NHL. The disparity in compensation becomes even more suspicious when you realize that USA Hockey’s most recent 990 filing (2015) with the IRS shows the organization had $42 million in annual income in 2015. In fact, USA Hockey spends $3.5 million supporting its under-20 men’s team while spend- ing only about $1 million each year supporting the wom- en’s national team.
But it wasn’t just about compensation, the women were also subjected to a number of petty disrespects. For example, the USAH flew the men’s team in business class while the women flew in coach; the women’s team was not invited to the unveiling of the Olympic uniforms for the 2014 Winter games while the men were guests at the press
■➤ Case 16-A: A Slap Shot at USA Hockey After winning silver in the 2010 and 2014 Olympics, along with seven of the last nine world championships, the threatened boycott by the US women’s ice hockey team of the upcoming 2017 IIHF Women’s World Championship in Plymouth, Michigan mattered for the future of women’s hockey.
What sparked the threat of boycott? The women asked USA Hockey (USAH) for equitable support as required by the Ted Stevens Amateur Sports Act. At issue for the team were financial compensation, funding for youth team development, equipment costs, travel expenses, hotel accommodations, meals, staffing, transportation, market- ing and publicity. USA Hockey doesn’t pay the women at all in non-Olympic years, and in the year before an Olympics pays them $6,000 each. In comparison, for the
THINKING CRITICALLY
by the employee complete and factual? Interview any key people who may be able to verify the employee’s claims. Review all pertinent documents. Go over the clauses in the labor contract that apply to the employ- ee’s complaint. If you’re unsure about the contract’s language or how a relevant clause should be inter- preted, get counsel from a labor specialist in your human resource department.
STEP 3: Make your decision and explain it clearly. You need to complete your investigation promptly so that you can reach your decision within the definite time period in which a grievance must be answered. If you determine that the grievance is unfounded, verbally give the employee and union steward your interpretation. Back up your decision with specific reasons for denying the grievance, citing evidence from your investigation or language from the contract. You should then follow up the verbal answer with a written response. If the grievance has merit, provide a written response to the employee and union steward stating this fact. Additionally, you should describe the corrective action you plan to take. Before you write this response, be sure that your remedy is consistent with established practices, doesn’t set any
new precedents, and is within your authority. When in doubt, get approval from your boss or a manager in human resources. You want to be careful about making individual exceptions to past practices. You do not want to set a precedent that might seriously hurt the organization in future contract negotiations or in future arbitration decisions.
STEP 4: Keep records and documents. Document everything you do relating to a grievance. Remember that the labor agreement is a binding legal contract and formality is important. You have to follow the language of the contract. To protect yourself and the organization against charges that you have not fol- lowed the contract as intended, you must keep all the records that you’ve accumulated on every grievance.
STEP 5: Be prepared for appeals. If you rule against the employee, expect the employee or the union stew- ard to appeal your decision to a higher level. Be pre- pared to be questioned by union officials and various labor specialists from your organization’s human resource group. Don’t let this shake you, and don’t let an employee’s or union representative’s threat of appeal influence your decision.
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agreement other than financial that were important to the women in terms of kind of laying the foundation or building the framework for the women’s program for the years ahead and particularly the next four years of this agreement.”
Source: Based on D. Zirin, “Here’s Why the US Women’s National Hockey Team Is Going on Strike,” The Nation, The Nation.com, March 16, 2017, https://www.thenation.com/arti- cle/heres-why-the-us-womens-national-hockey-team-is-going- on-strike/ (accessed April 5, 2017); D. Zirin, “The US Women’s Ice Hockey Team Is on Strike—and the Solidarity Is Stunning,” The Nation, The Nation.com, March 20, 2017, https://www. thenation.com/article/the-us-womens-ice-hockey-team-is-on- strike-and-the-solidarity-is-stunning/ (accessed April 5, 2017); D. Zirin, “Victory! USA Women’s Hockey Team Just Won Their Strike,” The Nation, The Nation.com, March 29, 2017, https://www.thenation.com/article/victory-usa-womens-hockey- team-just-won-their-strike/ (accessed April 5, 2017); W. Hob- son, “Why the United States’ best women’s hockey players are threatening to strike,” The Washington Post, March 17, 2017, https://www.washingtonpost.com/news/sports/wp/2017/03/17/ why-the-united-states-best-womens-hockey-players-are-threat- ening-to-strike/?utm_term=.f9f913881562 (accessed April 5, 2017); “USA Hockey strikes deal with women’s national team, will play in world championships,” SIWire, Sports Illustrated, March 28, 2017, https://www.si.com/more-sports/2017/03/28/ usa-hockey-womens-national-team-strike-world-champion- ships-resolution (accessed April 5, 2017); A. Garcia, “While the U.S. men’s hockey team sat in business class, the women sat in coach,” CNNMoney Sport, March 24, 2017, http://money. cnn.com/2017/03/24/news/companies/usa-hockey-womens-pay- dispute/index.html (accessed April 5, 2017); and “USA Hockey, women’s national team strike deal, avoid worlds boycott,” Asso- ciated Press, NBCSports.com, March 28, 2017, http://olympics. nbcsports.com/2017/03/28/usa-hockey-womens-boycott-world- championship/ (accessed April 5, 2017).
RESPONDING TO THE CASE
16-14. Dave Ogrean must respond to the US Women’s National Team’s demands. He wishes to avoid a boycott of the 2017 IIHF Women’s World Cham- pionship. What does he need to know about labor relations and the collective bargaining process?
16-15. What did USA Hockey learn when they attempted to recruit scabs to replace team members? What is your reaction to the willingness of other players and unions to say “No” to USAH and support #BeBoldForChange?
■➤ Case 16-B: Faragut Services Faces a Union Challenge Ari Ainge is the manufacturing supervisor for Faragut Ser- vices, an eight-year-old company that produces memory chips for the digital camera industry. The company has grown from eight employees working on a government con- tract to a 150-person company that is a leading supplier to
conference; and, most egregiously, USAH did not include the storied 1998 gold medal won by these very women on the list of Team USA’s historic honors printed on the 2014 Olympic jerseys.
The response from USA Hockey and their $440,000-a-year executive director Dave Ogrean was an attempt to hire scabs and field a “replacement team” for the World Championships. Did it work? According to Anya Battaglino, the head of the National Women’s Hockey League Players’ Association as well as a player for Connecticut Whale, “What it basically came down to for us is, ‘How do we foster the continued growth and development of women’s hockey if we’re willing to play at worlds as scabs? We’re basically taking the position that if you’re not for us, you’re against us. I don’t know of any player who told USA Hockey, yes.” Indeed, offered the opportunity to be scabs, Twitter filled with messages from women players who said, “ . . . I said no to USAH and will not play in the 2017WC. #BeBoldForChange.”
The women’s team was willing to sacrifice everything for the basic idea that being a full-time athlete and being paid like a part time employee was no longer going to be acceptable. However, according to the team it was more than money, it was about women in every sport standing up for themselves and being recognized as athletes and workers. And, after going public with their demands, the team skated on a groundswell of support. They garnered solidarity from the NHL, NFL, NBA and Major League Baseball unions, as well as 16 US Senators. In addition, NHL player’s agent Allan Walsh tweeted that men’s play- ers were considering boycotting their world championship in solidarity if a deal didn’t get done.
So what happened? The team went on strike, stopping all services for USAH, holding out until less than three days before the March 31st opening of the World Champion- ships. Ultimately the US national women’s hockey team signed a new four-year deal with USA Hockey to end its threatened boycott of the world championships. Their new agreement with USAH includes compensation of $70,000 per year with bonus opportunities for Olympic and World Championship victories; potential for back pay from previous years; a commitment from the United States Olym- pic Committee (USOC) to provide a monthly contribution based on a player’s experience; additionally, their per diem, travel accommodations, and insurance will now be equal to the men’s; and finally, USAH will have a committee specifi- cally dedicated to developing youth hockey for girls, as well as greater promotion for the women’s game.
So who really won? “Our sport is the big winner today,” US Women’s National Team Captain Meghan Duggan said. “We stood up for what we thought was right and USA Hockey’s leadership listened. In the end, both sides came together.” Dave Ogrean felt confident about stabilizing the relationship between USA Hockey and the women’s national team saying, “That’s the crux of the whole deal. I think there are a lot of things in this
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two of the industry leaders in the digital camera world. Fara- gut’s product is known to be high quality and exceptionally well engineered. Ari has been with the company for six years, and one hundred employees work for him on two manufac- turing shifts. Ari has introduced most of the manufacturing systems and controls. He has always considered himself a people person, and values his relationship with employees.
In the past eighteen months, the company has been driven to meet the demand from its two major customers. To do this, the company has increased the manufacturing shifts from forty hours per week to an average of forty- eight hours per week. Three times in the last quarter the manufacturing department created a third shift filled with experienced people from the other two shifts and tem- porary workers. In all cases, the workers have been paid overtime and received performance bonuses that averaged an extra week’s pay. Ari has prided himself on the way the manufacturing department has been able to produce extraordinary amounts of product.
Ari has heard some mild complaining about the increase in hours and the need to work the third shift from some of the employees. He considers this to be normal and usually tries to remind people how exciting it is to work in a growing company with the opportunity for overtime and bonuses.
In June, the company president tells Ari that a local union affiliate will be conducting an organizing campaign at Faragut starting in two weeks. Ari is shocked!
RESPONDING TO THE CASE
16-16. What are some of the reasons that a union is attempting to organize at Faragut Services?
16-17. What things might Faragut Services do to prepare for the organizing effort?
16-18. If you were a supervisor at Faragut Services, what would you do? Explain.
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Introduction Career development is important to us all. We know that people sometimes have difficulty achieving their career goals. This reflects the new and unexpected complexities that super- visors must now confront in their efforts to mobilize and supervise their employees and themselves. The historical beliefs that any- one would jump at the chance for a promo- tion, that competent people will somehow emerge within the organization to fill arising vacancies, and that a valuable employee will always be a valuable employee are no longer true. Lifestyles are changing as well. We are becoming increasingly aware of our different needs and aspirations.
Some drastic changes have occurred over the past forty years. Years ago, career devel- opment programs in organizations were designed to help employees advance in their work lives by giving them the information and assessments they needed to realize their career goals. Career development was also a way for an organization to attract and retain highly-talented personnel. But those days have all but disappeared in today’s dynamic work environment—and so, too, are jobs as we have known them for the past several decades.1 Downsizing, restructuring, work process engineering, globalization, contingent workers, and so forth have drawn us to one
significant conclusion about managing careers: You, the individual, are responsible for your career.2 It’s not the organization’s obligation! Sadly, millions of employees have learned this the hard way over the past few years.3 Therefore, you must be prepared to do whatever is necessary to advance your career.
What, if any, responsibility does the orga- nization have for career development under the “new rules” in today’s contemporary organization? Basically the organization’s responsibility is to build employee self-reli- ance and to help employees maintain their marketability through continual learning.4 The essence of a contemporary career devel- opment program is providing support so employees can continually add to their skills, abilities, and knowledge. This support includes the following:
■■ Clearly communicate the organization’s goals and future strategies. When people know where the organization is headed, they’re better able to develop a personal plan to share in that future.
1L. T. Eby, M. Butts, and A. Lockwood, “Predictors of Success in the Era of the Boundaryless Career,” Jour- nal of Organizational Behavior 24 (September 2003), 689–709.
2D. C. Feldman and C. R. Leana, “What Ever Hap- pened to Laid-Off Executives? A Study of Re-employ- ment Challenges After Downsizing.” Organizational Dynamics 29, no. 1 (Summer 2000), 64–75. 3K. Heim, “With Layoffs Up and Stock Prices Down at High-Tech Firms, Unions Step Up Their Quest for Power in the New Economy,” San Jose Mercury News (December 28, 2000), A-1. 4See “Career Development Ranks Among the Most Demanded Content Areas Across Industries World- wide,” Training and Development (September 2003), 18.
Postscript: Personal Development
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■■ Create growth opportunities. Employees should have access to new, interesting, and professionally challenging work experiences.
■■ Offer financial assistance. The organization should offer tuition reimbursement to help employees keep current.
■■ Provide the time for employees to learn. Organiza- tions should be generous in providing paid time off from work for off-the-job training. Additionally, workloads should not be so demanding that they preclude employees from having the time to develop new skills, abilities, and knowledge.
WHAT IS A CAREER? The term career has a number of meanings. In popular usage, it can mean advancement (“He’s moving up in his career.”), a profession (“She has chosen a career in medi- cine.”), or stability over time (career military).5 We will define career as “the pattern of work-related experiences that span the course of a person’s life.”6 Using this defini- tion, it is apparent that we all have or will have careers. The concept is as relevant to transient, unskilled laborers as it is to engineers and physicians. Therefore, any work, paid or unpaid, pursued over an extended period of time can constitute a career. Careers can also include school- work, homemaking, and volunteer work. Furthermore, career success is defined not only objectively, in terms of promotion, but also subjectively, in terms of satisfaction.
Effective career development is also important for each individual. Because the definitions of career and what constitutes success have changed, the value of individual career development programs has expanded. Career success may no longer be measured merely by your income or hierarchical level in an organization. Career success may now include using your skills and abilities to face expanded challenges, or having greater responsibilities and increased autonomy in your chosen profession. Intrinsic career development, or “psychic income,” is desired by many contemporary workers who are seeking more than salary and security from their jobs. Contemporary workers seek interesting and meaningful work and often derive it from a sense of being the archi- tect of their own careers.
A good career match, then, is one in which you are able to develop a positive self-concept, to do work that
5D. T. Hall, Careers in Organizations (Santa Monica, CA: Goodyear Publishing, 1976); and J. Van Maanen and E. H. Schein, “Career Development,” in J. R. Hackman and J. L. Suttle (eds.), Improving Life at Work: Behavioral Sciences Approaches to Organizational Change (Santa Monica, CA: Goodyear Publishing, 1977), 341–355. 6J. H. Greenhaus, Career Management (New York: Dryden Press, 1987), 6.
you think is important, and to lead the kind of life you desire. In a recent survey by Capital One Financial Cor- poration, 66 percent of college graduates said that a com- prehensive benefits package (including, for example, health care, 401(k) program, child care, and domestic partner benefits) was the most important factor in their job search. Starting salary ranked second at 64 percent, with job location ranked third at 60 percent.7 Today’s college grads are also looking to be rewarded or compen- sated (with comp time or matching donations, for instance) for their volunteer and philanthropic activities.
HOW DO I MAKE A CAREER DECISION? Good career choice outcomes for any of us should result in a series of positions that give us an opportunity for good performance, make us want to maintain our com- mitment to the field, and give us high work satisfaction. A good career match, then, is one in which we are able to develop a positive self-concept and to do work that we think is important.8
Career planning is designed to assist you in becoming more knowledgeable about your needs, values, and per- sonal goals. This knowledge can be achieved through a three-step self-assessment process.9
■■ Identify and organize your skills, interests, work- related needs, and values. The best place to begin is by drawing up a profile of your educational record. What courses do you remember liking most and least? In what courses did you score highest and lowest? In what extracurricular activities did you participate? Did you acquire any specific skills? Did you gain proficiency in other skills? Next, assess your occupational experience. List each job you have held, the organization you worked for, your overall level of satisfaction, what you liked most and least about the job, and why you left. Be honest in covering each of these points.
■■ Convert this information into general career fields and specific job goals. Now that you have some insights into your interests and abilities you need to look at how they can be converted into the kind of organizational setting or field of endeavor that will be a good match for you. What fields are available?
7“Capital One Survey Highlights What Today’s College Graduates Want from Employers,” www.businesswire.com, June 10, 2008, http://www.businesswire.com/news/home/20080610006130/en/ Capital-Survey-Highlights-Todays-College-Graduates-Employers#. U5oDOLGCp8E (accessed June 12, 2014). 8D. E. Super, “A Life-Span Life Space Approach to Career Develop- ment,” Journal of Vocational Behavior 16 (Spring 1980), 282–298. 9I. R. Schwartz, “Self-Assessment and Career Planning: Matching Individuals and Organizational Goals,” Personnel (January–February 1979), 48.
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Postscript: Personal Development 449
In business? In government? In nonprofit organiza- tions? Your answer can be broken down further into areas such as education, financial, manufacturing, social services, or health services. Identifying areas of interest is usually far easier than pinpointing spe- cific occupations. When you are able to identify a limited set of occupations that interest you, you can start to align them with your abilities and skills. Will the job require you to move? Would you be okay with the new location? Do you have the educational requirements necessary for the job or will you need additional schooling? Does the job offer the status and earning potential to which you aspire? What is the long-term outlook for jobs in this field? Does the field suffer from cyclical employment? Have you seri- ously considered all of the negative aspects of the job? When you have fully answered questions such as these, you should have a relatively short list of specific job goals.
■■ Test your career possibilities against the realities of the organization or the job market by talking with knowledgeable people in the fields, organizations, or jobs you desire. These informational interviews should provide reliable feedback as to the accuracy of your self-assessment and the opportunities available in the fields and jobs that interest you.
CAN I INCREASE MY CHANCES FOR GETTING INTO THE ORGANIZATION? One of the most stressful situations you will face happens when you apply for a job. This occurs because generally there are no specific guidelines to follow to guarantee suc- cess. However, several tips may increase your chances of finding employment. Even though getting a job interview should be one of your major goals in the hiring process, procuring an interview requires hard work. You should view getting a job as your job of the moment.
WHERE CAN I FIND JOBS ADVERTISED ON THE INTERNET? Internet recruiting is putting an end to newspapers and employment agencies as primary sources of information about job openings and finding job candidates. Nearly four out of five companies currently use the Internet to recruit new employees by adding a recruitment section to their websites.10 Organizations planning to do a lot of Internet recruiting develop sites specifically designed for recruitment. They have the typical information you might find in an employment advertisement—qualifications
sought, experience required, benefits provided. But they also allow the organization to showcase its products, ser- vices, corporate philosophy, and mission statement. This information increases the quality of applicants because those whose values don’t mesh with those of the organi- zation tend to self-select out. The best designed of those websites include an online response form so applicants don’t need to send a separate résumé by mail, e-mail, or fax. Applicants need only fill in a résumé page and hit the “Submit” button. Facilitating the growth of Internet recruitment are commercial job-posting services that essentially provide electronic classified ads.11
PREPARING A RÉSUMÉ No matter where you are in your career, you should have a current résumé. Your résumé is typically the primary information source used in determining whether to grant you an interview. Your résumé must give key information that supports your candidacy, highlights your strengths, and differentiates you from other job applicants. Any- thing positive that distinguishes you from other appli- cants should be included. For example, things such as volunteer or community service show that you are well- rounded, committed to your community, and willing to help others.
Write content that means something to the prospec- tive employer and use a unique perspective, not a one- size-fits-all approach, for each employer you contact. When talking about your employment experience, be
10M. N. Martinez, “Get Job Seekers to Come to You,” HR Magazine (August 2000), 42–52.
11See, for example, B. Leonard, “Online and Overwhelmed,” HR Magazine (August 2000), 37–42; P. Curry, “Log on for Recruits,” Industry Week (October 16, 2000), 46–54; R. E. Silverman, “Your Career Matters: Raiding Talent Via the Web—Personal Pages, Firms’ Sites Are Troves of Information for Shrewd Headhunters,” Wall Street Journal (October 3, 2000), B1; and M. N. Martinez, “Get Job Seekers to Come to You,” HR Magazine (August 2000), 45–52. Additional Sources: “Managing Your Career Module” based on: J. H. Greenhaus, V. M. Godstalk, and G. A. Callahan, Career Manage- ment, 3rd ed. (Cincinnati: South–Western, 2000); K. A. Ericsson, “Deliberate Practice and the Modifiability of Body and Mind,” International Journal of Sports Psychology 38 (January–March 2007), 4–34; J. P. Newport, “Mastery, Just 10,000 Hours Away,” Wall Street Journal, March 14–15, 2009, W6; “Capital One Survey Highlights What Today’s College Graduates Want from Employers,” www.businesswire.com, June 10, 2008, http://www.businesswire. com/news/home/20080610006130/en/Capital-Survey-Highlights- Todays-College-Graduates-Employers#.U5oDOLGCp8E (accessed June 12, 2014); M. Gladwell, Outliers: The Story of Success (New York: Little, Brown, 2008); R. N. Boles, What Color Is Your Para- chute? 2009: A Practical Manual for Job-Hunters and Career-Chang- ers (Berkeley: Ten Speed Press, 2009); D. E. Super and D. T. Hall, “Career Development: Exploration and Planning,” in M. R. Rosenz- weig and L.W. Porter (eds.), Annual Review of Psychology 29 (Palo Alto, CA: Annual Reviews, 1978), 334; and M. B. Arthur and D. M. Rousseau, The Boundaryless Career: A New Employment Principle for a New Organizational Era (New York: Oxford Univer- sity Press, 1996).
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sure to describe your performance on a previous job, not just your job. Remember to tell what you have done, tell whom you have worked for, and tell how successful you have been. Don’t lie on your résumé; it will come back to haunt you later.
It’s important to pinpoint a few key themes regarding résumés that may seem like common sense, but are fre- quently ignored. The style of font should be easy to read (e.g., Courier or Times New Roman type fonts). Avoid any style that may be hard on the eyes, such as a script or italic font. Use a clean, visually appealing format without distracting layouts. If you are making a paper copy of your résumé, it should be printed on high-quality white or off-white paper (no off-the-wall colors). In certain types of jobs—such as a creative artist position—this suggestion may be inappropriate, but these are the exceptions. You can’t go wrong using a twenty-weight bond paper that has some cotton content (about 20 percent). By all means, don’t send standard duplicating paper—it may look as though you are mass-mailing résumés (even if you are).
Many large companies process all their incoming résumés electronically using an automated applicant tracking system. The information contained on the résumés is entered into a relational database. When the need arises to hire new talent, the database is searched for potential candidates. Résumés matching a specified score for keywords identified by the hiring manager are then selected for human review. An electronic résumé is a plain text (ASCII), PDF or HTML document that provides an employer with specific information such as key job elements, experience, work history, education, or technical expertise, and is meant to be read by a computer program instead of by a human being. This has created two important aspects of résumé writing of which you need to be aware. The computer matches key words in a job description. Thus, in creating a résumé, you should use standard job description phraseology. Second, the font should be easily read by the scanner; if it isn’t, your résumé may be put in the rejection file. Whether or not an electronic résumé is required will often be designated in the advertisement you’ve read, or provided as direc- tion on the Internet recruiting site where you saw the job opening. Since computers read résumés differently than humans, you should prepare two versions of your résumé. Prepare a simple, electronic one for talent analyt- ics programs. Develop a creative one especially for hand- delivery to someone in the organization, or to bring to an interview.
Finally, regardless of whether your résumé is elec- tronic or on paper, be sure to proofread it carefully. Because the résumé is the only representation of you the recruiter has, a sloppy résumé can be deadly. If it con- tains misspelled words or is grammatically incorrect, your chances for an interview will be significantly reduced. Proofread your résumé several times and, if possible, let others proofread it.
EXCELLING AT THE INTERVIEW Interviews play a critical role in determining whether you will get the job. Up to now, all the recruiter has seen is your well-polished cover letter and résumé. Remember, however, that few people, if any, get a job without an interview. No matter how qualified you are for a position, if you perform poorly in the interview, you’re not likely to be hired!
The reason interviews are so popular is that they help the recruiter determine whether you are a “good fit” for the organization, in terms of your level of motivation and interpersonal skills. The following suggestions can help make your interview experience successful.
First, do some homework. Do a search for the company on the Internet (or visit your library) and get as much information as possible on the organization. Develop a solid grounding in the company, its history, markets, financial situation, and the industry in which it competes.
The night before the interview, get a good night’s rest. As you prepare for the interview, keep in mind that your appearance is going to be the first impres- sion you make. Dress appropriately. Incorrect attire can result in a negative impression. Arrive at the interview location about fifteen minutes ahead of your sched- uled interview. It’s better to have to wait than to con- tend with something unexpected, such as a traffic jam, which could make you late. Arriving early also gives you an opportunity to survey the office environment and gather clues about the organization. Pay atten- tion to the layout of the waiting room, the formality of the receptionist, and anything else that can give you insights into what the organization may be like.
When you meet the recruiter, give them a firm handshake. Make good eye contact and maintain it throughout the interview. Remember, your body lan- guage may be giving away secrets about you that you don’t want an interviewer to pick up. Sit erect and maintain good posture. Although you’ll undoubtedly be nervous, try your best to relax. Recruiters know that you’ll be anxious, and a good one will try to put you at ease. Being prepared for an interview can also help build your confidence and reduce the nervousness.
Many structured interviews start with a question such as “Tell me about yourself.” The interviewer doesn’t really want you to go back to grade school and talk about your childhood. This is a specific question with a right answer. So develop an elevator pitch that will help the interviewer understand your background, your accomplishments, why you want to work at their company, and what your future goals are. Keep it between 30 seconds and two minutes. Have the basics of it in mind but learn to improvise depending on to whom you’re talking. Practice your elevator pitch out loud on someone who can give you feedback.
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Build confidence by reviewing a set of questions most frequently asked by interviewers. You can usually get a copy of these from the career center at your college. Develop rough responses to these questions beforehand so you’re not caught off guard. But our best advice is to be yourself. Don’t go into an interview with a pre- pared text and recite it from memory. Have an idea of what you would like to say, but don’t rely on rehearsed responses. Experienced interviewers will see through this “overpreparedness” and are likely to downgrade you on their evaluation.
If possible, go through several “practice” interviews. Universities often have career days on campus, when recruiters from companies are on site to interview stu- dents. Take advantage of them. Even if a job doesn’t match what you want, the practice will help you become more skilled at dealing with interviews. You can also practice with family, friends, career counselors, student groups, or your faculty adviser.
When the interview ends, thank the interviewer for his or her time and for giving you the opportunity to talk about your qualifications. But don’t think that “selling” yourself has stopped there. As soon as you get home, send a thank-you letter to the recruiter for taking the time to interview you and giving you the opportunity to discuss your job candidacy. This little act of courtesy has a posi- tive effect—use it to your advantage.
SOME SUGGESTIONS FOR DEVELOPING A SUC- CESSFUL CAREER What can you do to improve your chances for career success? You’re already doing the most important thing: You’re getting a college education! It’s the surest way to increase your lifetime earnings. According to data from the US Bureau of Labor Statistics, earnings increase and unemployment decreases as educational attainment rises. Those with more education have higher earnings and lower rates of unemployment than those with less education. For example, workers with a Bachelor’s degree had median weekly earnings of $1,155 in 2016. Compare that to workers with a high school diploma whose median weekly earnings are $679.12 The truth is that college graduates earn much more than high school graduates over their working career. Investing in your education and training is one of the best investments you’ll make in your lifetime. What else can you do? Here
12 D. Vilorio, “Data on display: Education matters,” Career Outlook, U.S. Bureau of Labor Statistics, U.S. Department of Labor, March 2016, https://www.bls.gov/careeroutlook/2016/data-on-display/ education-matters.htm (accessed April, 22, 2017) and Bureau of Labor Statistics, “Weekly earnings by educational attainment in first quarter 2016,” The Economics Daily, U.S. Department of Labor, https://www.bls.gov/opub/ted/2016/weekly-earnings-by-educational- attainment-in-first-quarter-2016.htm (accessed April, 22, 2017)
are some suggestions based on extensive research into career management:
Assess Your Personal Strengths and Weaknesses Where do your natural talents lie? What can you do, relative to others, that gives you a competitive advantage? Are you particularly good with numbers? Have strong people skills? Good with your hands? Write better than most people? Everyone has some things that they do better than others and some areas where they’re weak. Play to your strengths.
Identify Market Opportunities Where are tomorrow’s job opportunities? Regardless of your strengths, certain job categories are likely to decline in the coming decades—for instance, bank tellers, small farmers, movie projection- ists, travel agents, and secretaries. In contrast, there are likely to be abundant opportunities created by an increas- ingly aging society, continued emphasis on technology, increased spending on education and training, and con- cern with personal security. This is likely to create excel- lent opportunities for jobs in gerontological counseling, network administration, training consultants, and secu- rity-alarm installers.
Take Responsibility for Managing Your Own Career Histori- cally, companies tended to assume responsibility for their employees’ careers. Today, this is the exception rather than the rule. Employees are increasingly expected to take responsibility for their own careers.
Think of your career as your business and you’re its chief executive officer. To survive, you have to monitor market forces, head off competitors, and be ready to quickly take advantage of opportunities when they sur- face. You have to protect your career from harm and posi- tion yourself to benefit from changes in the environment.
Develop Your Interpersonal Skills Interpersonal skills, especially the ability to communicate, top the list of almost every employer’s “must have” skills. Whether it’s getting a new job or a promotion, strong interpersonal skills are likely to give you a competitive edge.
Practice Makes Perfect There is an increasing amount of evidence indicating that super-high achievers aren’t fun- damentally different from the rest of us. They just work harder and smarter. Based on studies of world-class per- formers in music, sports, chess, science, and business, people like Tiger Woods, Mozart, and Bill Gates put in about 10,000 hours (or ten years at 1,000 hours a year) of persistent, focused training and experience before they hit their peak performance level. If you want to excel in any field, you should expect to have to put in a lot of deliberate practice—consistently engaging in repeated activity specifically designed to improve performance beyond your current comfort and ability level.
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452 Postscript: Personal Development
Stay Up to Date In today’s dynamic world, skills can become obsolete quickly. To keep your career on track, you need to make learning a lifetime commitment. You should be continually “going to school”—if not taking formal courses, then reading books and journals to ensure you don’t get caught with obsolete skills.
Network Networking refers to creating and maintain- ing beneficial relationships with others to accomplish your goals. It helps to have friends in high places. It also helps to have contacts who can keep you informed of changes that are going on in your organization and in your industry. Go to conferences. Maintain contact with former college friends and alumni. Get involved in com- munity activities. Cultivate a broad set of relationships. And in today’s increasingly interconnected world, join online business networking groups such as LinkedIn, Spoke, and Talkbiznow.
Stay Visible Networking can increase your visibility. So can writing articles in professional journals, teaching classes or giving talks in your area of expertise, attend- ing conferences and professional meetings, and making sure your accomplishments are properly promoted. You increase your mobility and value in the marketplace by keeping visible.
Leverage Your Competitive Advantage Develop skills that will give you a competitive advantage in the marketplace. Especially focus on skills that are important to employers, skills that are scarce, and areas where you have limited competition. Try to avoid a worst-case scenario: You have a job that anyone can learn in thirty minutes. Remember the harder it is for you to learn and develop a highly prized skill, the harder it will be for others to acquire it as well. Generally speaking, the more training necessary to do a job, and the fewer people who have that training, the greater your security and influence.
Here’s an insight from many years as students and professors: To succeed in school, you have to be a gen- eralist and excel at everything. For instance, to earn a 4.0 GPA, you need to be a star in English, math, science, geography, languages, and so on. The “real world,” on the other hand, rewards specialization. You don’t have to be good at everything. You just need to be good at some- thing that others aren’t, and that society values. The secret to life success is identifying your comparative advantage and then developing it. And, as we’ve noted previously, you need to invest approximately 10,000 hours in honing your skills to achieve optimum proficiency.
Don’t Shun Risks Don’t be afraid to take risks, especially when you’re young and you don’t have much to lose. Going back to school, moving to a new state or coun- try, or quitting a job to start your own business can be the decision that will set your life in a completely new
direction. Great accomplishments almost always require taking the path less traveled; and the road to nowhere is paved with fears of the unknown.
It’s OK to Change Jobs Past generations often believed “You don’t leave a good job.” That advice no longer applies. In today’s fast-changing job market, staying put often means that you’re staying behind. Employers no longer expect long-term loyalty. And to keep your skills fresh, your income increasing, and your job tasks interest- ing, it will be increasingly likely that you’ll need to change employers.
Opportunities, Preparation, and Luck Equal Success Successful people are typically ambitious, intelligent, and hardworking. But they are also lucky. It’s not by hap- penstance that many of the biggest technology success stories—Bill Gates and Paul Allen at Microsoft, Steve Jobs at Apple, Scott McNealy at Sun Microsystems, and Eric Schmidt at Novell and Goggle—were born in a narrow three-year period between June 1953 and March 1956. They were smart. They were interested in computers and technology. But they were also lucky. They reached their teens and early 20s in 1975—at the dawn of the personal computer age. Those people with similar interests and tal- ents but born in the mid-1940s were likely to have joined a firm like IBM out of college and been enamored with mainframe computers. Had they been born in the early 1960s, they would have missed getting in on the ground floor of the revolution.
ONCE YOU GET A JOB BE PROACTIVE AND FIND YOURSELF A MENTOR What do you want from your career? If your goal is to “move up the organizational ladder” to higher and more challenging positions of responsibility, then con- sider finding influential people who believe in you and will work with you to help you get ahead. These indi- viduals—called sponsors or mentors—can be a wonder- ful source of career support. How? By advocating for your career path/promotion; assisting you in dealing with problems/conflicts; expanding your perception of what you can do; helping you “connect” with senior execu- tives and other influential people; and advising you on “how” to be promotable. Employees with mentors are likely to have enhanced mobility, increased knowledge of the inside workings of the organization, greater access to senior executives, increased satisfaction, and increased visibility. For women and minorities, having mentors has been shown to be particularly helpful in promoting career advancement and success.
Now that you know what they’re called . . . what are you called? The term for the other person in this rela- tionship is protégé, which comes from a French word
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meaning “to protect”. As someone with a lot of knowl- edge and experience, the sponsor/mentor “protects” the protégé by helping prepare (groom) that person for more challenging job responsibilities. A key to success in man- agement and in your career is knowing how to find a great sponsor/mentor, and how to be a great protégé.
Here’s what you need to know to have active and effective sponsor/protégé relationships:
■■ Absolutely, positively, always DO GREAT WORK. Be sure that your work performance is stellar. Dem- onstrate that you can and will deliver outstanding performance. Realize that doesn’t mean that you won’t ever make mistakes. But if you do make mis- takes, learn quickly from those mistakes. Seek out new challenges and be enthusiastic when you get them. And remember, doing great work is absolutely essential!
■■ TRUSTWORTHINESS and LOYALTY and DEPENDABILITY are absolutely critical. Sponsors/ mentors want to know that you can be trusted in all ways and in all things. Be loyal. Keep your sponsor “in the know.” Your sponsor wants to know that you can be depended on totally to do the right thing. Make your sponsor look good and look smart for taking you on as a protégé. Ideally, you and your sponsor(s) should work together to accomplish results that can help each of you fast track your careers. A mentor/protégé relationship can—and should—be mutually beneficial.
■■ BE SELECTIVE in seeking out your sponsor(s)/ mentor(s). Look for individuals who are compatible and complement your work style/approach and who can help you reach your goals. Although you may start off with just one, don’t be content with that.
Target leaders (inside and outside your organization) whose expertise and networks you think you learn from. It’s helpful to think of these individuals as your own personal “board of advisors” who are helping you develop your skills and abilities.
■■ NURTURE the relationship. Have regular meet- ings—face-to-face, by phone, or by e-mail. Prove you are worth the investment by meeting deadlines, exceeding targets, and advancing the organization’s mission. Look for ways to support your sponsors and help them build their careers. Also, remember at some point to become a sponsor/mentor yourself. When you harness and help develop other talent, that’s a great demonstration of leadership!
A FINAL WORD Success is a matter of matching up opportunities with preparation. It’s been suggested that few of us get more than a couple of special opportunities in our lifetime. If you’re proactive, you will recognize those opportunities, have made the proper preparations, and then act on them.
You can’t control when you were born, where you were born, your parents’ finances, or the like. But what you can control is your preparation and willingness to act when opportunity knocks.
Succeeding in tomorrow’s organizations needn’t be a hopeless cause. You must recognize that yesterday’s career paths don’t exist everywhere. But with proper preparation and a positive mind set, you can open doors to career growth. Now, however, it will be solely your responsibility.
Good luck, and we hope that some of the material we presented in this book helps you reach your career goals.
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Comprehension Check 1-1 1. b 2. a 3. d 4. b
Comprehension Check 1-2 5. False 6. b 7. c 8. c
Solutions
ANSWERS TO COMPREHENSION CHECKS
ANSWERS TO COMPREHENSION CHECKS AND CROSSWORD PUZZLES
➤➤ CHAPTER 1
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A AP L N N N G
G
I T
V EE F F I IC N C Y Z
N SF CUM MA A G E C H N I IP
R O C E S S
O L LC AT C A O O N N
N
I
I
R G A N I IZ A T L
T E
G
E P T U A LO N
N T
MA A G E EN N TI D D L E
454
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455
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 3-1 1. c 2. b 3. a 4. c
Comprehension Check 3-2 5. b 6. d 7. b 8. a
➤➤ CHAPTER 3
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 2-1 1. b 2. c 3. a 4. d
Comprehension Check 2-2 5. c 6. d 7. a 8. c
➤➤ CHAPTER 2
S O C U
U R RR K P
R O N M E N T S
A L E D N V I I T Y
L E T H
T
C H N O L O G Y
I C S O
O
O N
B L I
I
G
C
A
A T
L
T
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M M E R C E E C O M M U T I GT L
W R K F O R RC CE ED VO
O V E E N TO N T I N PU RO M MU IC
E N ES C I A L R IE VS S S S
W N SO I I GZ
P N
B A B Y SB O RO E
O
C B E R L O A F E EB U S S SI
C SH I AP A R O ML
I GY
C O C O O FD
W O O C E E E EN N NG GI IS S
E E H I C S
I I I T YIB LA L R E S SP O N
M MA A G E E N T B B J E
E P N T SS
I
V E SC T I V
TP E R
R A M
O G
Y O
I N E N
U EG L
N
N
E S S
U L E
P L A
S T R A C T TV S T E G I C
EB N H M A R K I N
R E P R E N
S C H
G
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T A
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C
C
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I N T E R
C T
R S H I P
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E
C D I A T E
G A N
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E
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T E R M
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N
R P O U C T I V T YD
P O L I
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I C T HA L PR I
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I X S I I I G M A
S U D TG E
N
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456
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 5-1 1. d (affirmative action) 2. b 3. c 4. True
Comprehension Check 5-2 5. a 6. d 7. d 8. True
➤➤ CHAPTER 5
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 4-1 1. b 2. a 3. d 4. c
Comprehension Check 4-2 5. b 6. a 7. c 8. b
➤➤ CHAPTER 4 D E E G A T I O NL
I N E
E A M A T R I X B A S E S S
S
M P L E
D
CP R O D U T
F U N NC T O A L
NB U D A R Y L
REG G A P H I C
IOP S B I L I T Y
ED P A R T M E
UC S T O M E R
N
P R I T Y
O C E S S
A L I Z
C
H A
A
I N
NER S D
O
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T
C E N
A Z
A L I
N
T I O
M E
M R
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F A
C O N
N O F FATS
L O
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INU T O F C O M A N DM
A I O NT
L E A I N GR
R
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L I Z
T R A
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N C T
F U
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K
W O
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T I O
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B D
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E B NE E F I T SM P L O Y
C S A T OI N A D M A
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IO M P E N N T I O NI S T R A
M A N ER S O U R CH U
H A R SA S M N TA LX US E
E T O R YI
O R EI N T T I O N
N V E N
A F F RI M A I V E NA C T I O
P E R OF R M A N C E A T I O NS
W E B S O
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N
N T
A
C R
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A
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457
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 7-1 1. d (identifying the problem) 2. a 3. b 4. c
Comprehension Check 7-2 5. c 6. a 7. b 8. d
➤➤ CHAPTER 7
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 6-1 1. b 2. c 3. a 4. c
Comprehension Check 6-2 5. b 6. c 7. c 8. True
➤➤ CHAPTER 6
C
A US P P L Y C H I N
R A N G O F
S E
E F F E
C T
V A
L U
E V R IA I OT C
K A
N B
A
N
I M E DM T EA C O R R C T I V E
C O N R O L C H A R T
F L W C H A R T
H A
I
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B A
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C C O R
R E C T I
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C TO N YBO L CXE TP NOI
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M A R G I N A L A N A L Y S I S
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G R O U P T H I N K
O M M E D
M I T M E
R E SR E P E N T A T I V
M I NN T
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458
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 9-1 1. b 2. d 3. a 4. b
Comprehension Check 9-2 5. b 6. c 7. b 8. d
➤➤ CHAPTER 9
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 8-1 1. a 2. c 3. c 4. b
Comprehension Check 8-2 5. b 6. c 7. d 8. b
➤➤ CHAPTER 8 T H E
Q U I
Y T H E
R Y
O R Y T H E O R Y YX
E S T O CP LE
J O B D
N
S I G
M O J
B
N R
C H M E N T
L
C U S O F C O N T R O L
M
C H I A V E L L I A V I S M
Y E K
E S E ES E L F M
W N E R S H I PO
E X E C T A N C Y T H E O R YP
R C H
R A
I K P R O P E N S I T YS
H Y O
N
I E N E
D
E F A C T O R SG
Y FP A R P E R F O R M A N C EO
N E E
D D F O R A C H I E V E M E N TE
S L F M O N I T O R I N GE
T I O
C O
P E T E
C
M
N
D
B
M
T I V A
I
O
T
N A
E S
N H I
O TM I V A Y I E N EG
C O N S U L E
T TA I V E EP A R IT
T R A D
R S H I P T R A I T
N AS C T
A DL E E
E
P
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T E R E D
LR HS I P
S T AU T I NO A L
I O R
D
B
L
T Y
I
I
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AP R T I I P A T I V E
C
C
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R A T I C
N
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T A
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L E
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P
R
F R E E
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G E D
H A R A S M TA I C L E A D RE
R E A I N S SE
I P A T
T AR N S F O R M TA I O N A L
VI
TT R U
ED E M O RC A T I VC P A TR I C I P A IT
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459
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 11-1 1. b 2. c 3. c 4. d
Comprehension Check 11-2 5. c 6. a 7. b 8. b
➤➤ CHAPTER 11
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 10-1 1. b 2. c 3. a 4. a
Comprehension Check 10-2 5. c 6. c 7. a 8. b
➤➤ CHAPTER 10
V E R B A L I N T O N
I
O
F
M
R
L
A
A T I O N
C O M M U N I C A T I O N D OF R M A L C
G N I
E
L Y
U G
G A
N
O B
A S S E R T I V E N E S E L O R
G A S S E
S
N N V E R B A L
RG P E V I
OCED
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G N I
I L
S
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T C
I
L K
P O
A B
C
D E
F E
S S E N
C I
H
D I N
N
H
L E N
CG
N E
G R OC EH I
N F O R M A L
S EV EN SS
RO AM L
S CO I LL AO IF GN
ME E EG T E
M
N
U P
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460
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 13-1 1. b 2. a 3. d 4. b
Comprehension Check 13-2 5. c 6. c 7. b 8. d (repetitive stress injuries) 9. a
➤➤ CHAPTER 13
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 12-1 1. c 2. c 3. b 4. a
Comprehension Check 12-2 5. d 6. c 7. a 8. b
➤➤ CHAPTER 12
A P E R F OPUORG REDR R M A N C E
C H E C K L I S T
F
L E N I E N T C Y
E E D B
I N
R I N S I C
A C
A D J E C T I V E R A T I N G
Y
W R I T T E
E S S A
K
C E N T R A L T
N D E N C Y
O R M A
P E RT H E S X T Y F
C Y
E R
C E N
A R
I S
M I L
N
I T Y
C E A
P R A I S A L
P PR R O C EA H
L O
A LS S S
I V I D UN DI L
I
A EL I DCNC R I I
L I N
A R S
GC O U SLM O Y E E
SR I N IE X T
E P
T
N I O S H
K A R O S T R E S S O R S
C C P A T I O
H I
S I C K B U N A L A F E T YS
C A R A L T N N E LU
W L L N S SE
M U C U L S K E L E T A LO
ER P T I T V E S T R E S SI
M M I E N T D A N G E RN
I N I D E T R A T EN
I L D I N G
M E
P L
Y E
R
S T
E S
E A S S I
T A N C
N D E A L H A C TTH
E
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461
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 15-1 1. a 2. d 3. b 4. c 5. d
Comprehension Check 15-2 6. a 7. b 8. c 9. a
➤➤ CHAPTER 15
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 14-1 1. False 2. b 3. c 4. d
Comprehension Check 14-2 5. c 6. b 7. d 8. b 9. b
➤➤ CHAPTER 14
D E V I L S A D V OP IL IT KC I GN
OC FN RT SECI
C NO LF TC
C A T E
D
S C I P L IT NOULO
CA OM DMOC
V RE AW NR I GNLAB I N E
E T
N W
R W
I T
V I
E
B I
U T
T S
R
D I
A IT O N
O N
L TN AEMYME P
SM I
IW
ULU TC E
A N
I D
T I
G O
T I
A
N E
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G R
I V
S
R P
OPO
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M RC
A LIS M SID
O NNP E SSUS
A V
S
T U
S T
ER
L L
BLL AOC RO A T
DUF LGNO T S T
E V
RW EGRSI C H
I V E
F O IC N G
NI T RG A T I E
R
I
G
I N
N
N O
O R G A N I Z A
D R I V N G
T I O N D E V E L O P M E
C H A N G E
N T
C H A N G E G E N T
A NC H G E P R C E S S
V A T I
V
C R E A T
T Y
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P E
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462
ANSWERS TO COMPREHENSION CHECKS Comprehension Check 16-1 1. c 2. a 3. b 4. b 5. a 6. c
Comprehension Check 16-2 7. c 8. b 9. d (preparation for negotiations) 10. a 11. b 12. b
➤➤ CHAPTER 16 D U ER RP SE NE AT IT NO E C E R T I F I C A T I O ND
T TF R T L E YH
S C H E C K O F F
E P R E S E N T A T I O N C E C R T
S E C O N D A R I O Y B O Y
L O C K O U T
C O N
M C S
O M
Y S H O PE NA
I C T
L A B O R R E L A
W A G N E R A C T
T I O N S K EI
W I L D C A T S T R I K EPO HS PON
T T
I F I C
F A C T F I N D I N G
E N A N CI NM A A T M B E R S H I
N G
A I N
A R G
V E B
C T I
L L
C O
E
R E S
E D U
R O C
C E P
V A N
R G
E
T I O N L B
T R A
R B I
S T A R
E R E
I N T
I O N
R A T
B I T
C E A
V A N
R G
E O N
U
I
I N
I F F
M G R
D R U
L
N
O
N S H
N I O
U
PF ME O E
S I Z A TT HA U R DN CI O A I O N
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Glossary 360-degree appraisal Performance feedback provided by
supervisors, employees, peers, and possibly others.
A accommodation A method of maintaining harmonious
relationships by placing others’ needs and concerns above one’s own.
active listening A technique that requires an individual to “get inside” a speaker’s mind to understand the commu- nication from the speaker’s point of view.
activities The time or resources required to progress from one event to another.
adjective rating scale A method of appraisal that uses a scale or continuum that best describes the employee using factors such as quantity and quality of work, job knowl- edge, cooperation, loyalty, dependability, attendance, honesty, integrity, attitudes, and initiative.
affirmative action An active effort to recruit, select, train, and promote members of protected groups.
agency shop An agreement that requires nonunion employees to pay the union a sum of money equal to union fees and dues as a condition of continuing employment.
appraisal process The elements of a performance appraisal as defined by the organization; may involve self- evaluation and peer evaluation in addition to a supervisor’s input.
assertiveness training A technique designed to make people more open and self-expressive, saying what they mean without being rude or thoughtless.
attitudes Evaluative statements or judgments concerning objects, people, or events.
authority Rights inherent in a supervisory position to give orders and expect those orders to be obeyed.
authorization card A card signed by prospective union members indicating that they are interested in having a union election held at their work site.
autocratic leader A taskmaster who leaves no doubt as to who’s in charge and who has the authority and power in the group.
availability heuristic The tendency of people to base their judgments on information that is readily available to them.
avoidance Withdrawing from a conflict or ignoring it.
B baby boomers The largest group in the workforce; they are
regarded as the career climbers—at the right place at the right time. Mature workers view them as unrealistic in their views and workaholics.
balanced scorecard A strategic planning and management system used to translate and align business activities to
the vision statement of a business after review of the com- pany’s financial processes, customer processes, internal processes, and innovation/growth processes.
basic corrective action Action that gets to the source of a deviation and seeks to adjust the differences permanently.
behaviorally anchored rating scale (BARS) A scale that helps a supervisor rate an employee based on items along a continuum; points are examples of actual behavior on a given job rather than general descriptions or traits.
benchmarking The search for the best practices among competitors or noncompetitors that lead to their superior performance.
big data The vast amount of quantifiable information that can be analyzed by highly sophisticated data processing.
body language Gestures, facial configurations, and other movements of the body that communicate emotions or temperaments such as aggression, fear, shyness, arrogance, joy, and anger.
boundaryless organization An organization that is not defined or limited by boundaries or categories imposed by traditional structures.
brainstorming A technique for overcoming pressures for conformity that retard the development of creative alternatives; an idea- generating process that specifically encourages alternatives while withholding criticism of those alternatives.
budget A numerical plan that expresses anticipated results in dollar terms for a specific time period; used as a planning guide as well as a control device.
business plan A document that identifies the business founder’s vision and describes the strategy and operations of that business.
C carpal tunnel syndrome A repetitive stress injury of the wrist.
cause-effect diagram A depiction of the causes of a problem that groups the causes according to common categories such as machinery, methods, personnel, finances, or management.
central tendency error Appraisers’ tendency to avoid the “excellent” category as well as the “unacceptable” category and assign all ratings around the “average” or midpoint range.
centralization Decision-making responsibility in the hands of top management.
chain of command The continuous line of authority in an organization.
change An alteration of an organization’s environment, structure, technology, or people.
463
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464 Glossary
continuous improvement Activities in an organization that enhance processes that result in the improved quality of goods and services produced.
control by exception A system that ensures that one is not overwhelmed by information on variations from standard.
control chart A statistical technique used to measure variation in a system to produce an average standard with statistically determined upper and lower limits.
control process A three-step process that consists of (1) measuring actual performance, (2) comparing results with standards, and (3) taking corrective action.
controlling Monitoring an organization’s performance and comparing performance with previously set goals. If significant deviations exist, getting the organization back on track.
corrective control A type of control that provides feedback after an activity is finished to prevent future deviations.
creativity The ability to combine ideas in a unique way or to make unusual associations between ideas.
credibility Honesty, competence, and the ability to inspire.
critical incidents Incidents that focus attention on employee behaviors that are key in making the difference between executing a job effectively and executing it ineffectively.
critical path The longest or most time-consuming sequence of events and activities in a PERT chart.
cross-functional team A work team composed of individuals from various specialties.
cultural environments Values, morals, customs, and laws of countries.
culture A set of unwritten norms that members of the organization accept and understand, and that guide their actions.
customer departmentalization Grouping activities around common customer categories.
cyberloafing Lost productivity time as a result of an employee using the Internet at work for personal reasons.
D decentralization The pushing down of decision-making
authority to those closest to the problems.
decision tree A diagram that analyzes hiring, marketing, investment, equipment purchases, pricing, and similar decisions that involve a progression of decisions. Decision trees assign probabilities to each possible outcome and calculate payoffs for each decision path.
decision-making process A seven-step process that provides a rational and analytical way of looking at decisions. The steps include identification of the problem, collection of relevant information, development of alternatives, evalua- tion of alternatives, selection of the best alternative, imple- mentation of the decision, and follow-up and evaluation.
decoding A receiver’s translation of a sender’s message.
delegation Allocation of duties, assignment of authority, assignment of responsibility, and creation of accountability.
change agent A person who acts as a catalyst and assumes the responsibility for overseeing the change process.
change process A model that allows for successful change by requiring unfreezing of the status quo (equilibrium state), changing to a new state, and refreezing the new change to make it permanent. Unfreezing the equilibrium state is achieved by (1) increasing driving forces, (2) decreasing restraining forces, or (3) combining these two approaches.
channel The medium by which a message travels.
charismatic leader An individual with a compelling vision or sense of purpose, an ability to communicate that vision in clear terms that followers can understand, a demonstrated consistency and focus in pursuit of the vision, and an understanding of his or her own strengths.
checklist A list of behavioral descriptions that are checked off when they apply to an employee.
code of ethics A formal document that states an organization’s primary values and the ethical rules it expects employees to follow.
cohesiveness The degree to which group members are attracted to each other and are motivated to stay in the group.
collaboration An approach to conflict in which all parties seek to satisfy their interests.
collective bargaining A process for developing a union contract, which includes preparing to negotiate the contract, negotiating the contract, and administering the contract after it has been ratified.
collectivism A view holding that the group above the indi- vidual in terms of politics, society, and economic issues trumps the claim of any individual. This view stresses interdependence over independence.
communication The transference and understanding of meaning.
compensation administration The process of determining a cost-effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard, and ensure that pay levels will be perceived as fair.
competency-based compensation Payments and rewards to employees on the basis of skills, knowledge, and behaviors.
compromise An approach to conflict that requires each party to give up something of value.
conceptual competence The mental ability to analyze and diagnose complex situations.
concurrent control A type of control that takes place while an activity is in progress.
conflict A process in which one party consciously interferes in the goal-achieving efforts of another party.
conflict management The application of resolution and stimulation techniques to achieve the optimal level of departmental conflict.
consultative-participative leadership The leadership style of an individual who seeks input and hears the concerns and issues of followers, but makes the final decision using input as an information-seeking exercise.
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Glossary 465
employee counseling An emphasis on encouraging training and development efforts in a situation in which an employee’s unwillingness or inability to perform his or her job satisfactorily is either voluntary or involuntary.
employee engagement When employees are connected to, satisfied with, and enthusiastic about their jobs.
employee stock ownership plan (ESOP) A compensation program that allows employees to become part owners of an organization by receiving stock as a performance incentive.
employee training Changing the skills, knowledge, attitudes, or behavior of employees. Determination of training needs is made by supervisors.
employment planning Assessing current human resources and future human resource needs; developing a program to meet future human resource needs.
employment at will A legal doctrine that defines an employer’s rights to discipline or discharge an employee.
empowerment An increase in the decision-making discretion of workers.
encoding The conversion of a message into symbolic form.
entrepreneurial Willing to use initiative and take risks to make a profit.
entrepreneurship The process of initiating a business venture, organizing the necessary resources, and assuming the risks and rewards.
equity theory The concept that employees perceive what they can get from a job situation (outcomes) in relation to what they put into it (inputs), and then compare their input– outcome ratio with the input–outcome ratio of others.
escalation of commitment An increased commitment to a previous decision despite negative information.
ethics Rules or principles that define right and wrong conduct.
events Endpoints that represent completion of major activities.
expectancy theory A theory that individuals analyze effort–performance, performance–rewards, and rewards– personal goals relationships, and their level of effort depends on the strengths of their expectations that these relationships can be achieved.
expected value analysis A procedure that permits decision makers to place a monetary value on various consequenc- es likely to result from the selection of a particular course of action.
extrinsic feedback Feedback provided to an employee by an outside source. See also performance feedback.
F fact-finding A technique whereby a neutral third-party
individual conducts a hearing to gather evidence from both labor and management.
Federal Mediation and Conciliation Service (FMCS) A government agency that assists labor and management in settling their disputes.
feedback loop Information received by the sender from a receiver regarding a message that was sent.
democratic-participative leadership A leadership behavior whereby the leader offers followers a say in what is decided; decisions are made by the group.
departmentalization Grouping departments based on work functions, product or service, target customer or client, geographic territory, or the process used to turn inputs into outputs.
design thinking Approaching management problems as designers approach design problems.
devil’s advocate A person who purposely presents arguments that run counter to those proposed by the majority or against current practices.
discipline Actions taken by supervisors to enforce an organi- zation’s standards and regulations.
dismissal Termination of employment.
distributive bargaining A negotiating process that operates under zero-sum conditions; any gain made is at the expense of the other person, and vice versa.
divisional structure An organization made up of self- contained units.
downsizing A reduction in workforce and reshaping of operations to create “lean and mean” organizations. The goals of organizational downsizing are greater efficiency and reduced costs.
dues checkoff A provision that often exists in union security arrangements whereby an employer withholds union dues from members’ paychecks.
E e-business A comprehensive term describing the way an
organization does its work by using electronic linkages with its key constituents to achieve its goals efficiently and effectively.
e-commerce The online buying and selling of products or services.
economic strike An impasse that results from labor and management’s inability to agree on the wages, hours, and terms and conditions of a new contract.
effectiveness Doing the right task; goal attainment.
efficiency Doing a task right; also refers to the relationship between inputs and outputs.
electronic meeting A group decision-making technique in which participants are positioned in front of computer terminals as issues are presented. Participants type responses onto computer screens as their anonymous comments and aggregate votes are displayed on the projection screen in the room.
emergent leader A leader who emerges within a workgroup without having formal authority in the organization.
employee assistance program (EAP) A program designed to act as a first stop for individuals seeking help with the goal of getting productive employees back on the job as swiftly as possible.
employee benefits Nonfinancial rewards designed to enrich employees’ lives.
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466 Glossary
hierarchy-of-needs theory A theory of Abraham Maslow that states that a satisfied need no longer creates tension and therefore doesn’t motivate. Maslow believed that the key to motivation is to determine where an individual is along the needs hierarchy and to focus motivation efforts at the point where needs become essentially unfulfilled.
“hot stove” rule A set of principles for effectively disciplining an employee that demonstrates the analogy between touching a hot stove and receiving discipline.
human resource inventory A database listing name, education, training, prior employer, languages spoken, and other infor- mation for each employee in the organization.
human resource management (HRM) The process of finding, hiring, training, and keeping employees in the organization.
hygiene factors Herzberg’s term for factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction.
I ill-structured problems New problems about which informa-
tion is ambiguous or incomplete.
immediate corrective action Action that adjusts something right now and gets things back on track.
imminent danger A condition under which an accident is about to occur.
incidence rate A measure of the number of injuries, illnesses, or lost workdays as it relates to a common base rate of 100 full-time employees.
individual ranking A method that requires supervisors to list all employees in order from the highest to lowest performer.
individualism A view holding the individual above the group with the expectation that individuals will stand up for them- selves and choose their own affiliations rather than blindly obeying external forces of politics, society, and economic issues. This view stresses independence over interdependence.
informal communication Communication that moves in any direction, skips authority levels, and is as likely to satisfy social needs as it is to facilitate task accomplishments.
informal group A social group that forms naturally in the work environment in response to the need for social contact.
innovation The process of turning a creative idea into a useful product, service, or method of operation.
integrative bargaining A negotiating process that operates under the assumption that there is at least one settlement that can create a win–win solution.
interest arbitration Arbitration in which a panel of three individuals hears testimony from both sides and renders a decision on how to settle a contract negotiation dispute.
intermediate-term plan A plan that covers a period of one to five years.
interpersonal competence The ability to work with, under- stand, communicate with, and motivate other people, both individually and in groups.
intrapreneurs A supervisor within an organization who promotes innovative product development and marketing
first-level managers Managers who represent the first level in the management hierarchy. See also supervisors.
flowchart Visual representation of the sequence of events for a particular process that clarifies how things are being done so that inefficiencies can be identified and the pro- cess can be improved.
forcing Attempting to satisfy one’s own needs at the expense of the other party.
formal communication Communication that addresses task-related issues and tends to follow the organization’s authority chain.
formal group A workgroup established by the organization and given designated work assignments and established tasks.
free-rein leader An individual who gives employees total autonomy to make decisions that will affect them.
functional authority Control over individuals outside one’s own direct areas of responsibility.
functional departmentalization Grouping activities into independent units based on functions performed.
functional structure An organization in which similar and related occupational specialties are grouped together.
G Gantt chart A bar chart with time on the horizontal axis
and activities to be scheduled on the vertical axis; shows when tasks are supposed to be done and compares actual progress on each task.
geographic departmentalization Grouping activities into independent units based on geography or territory.
goal setting A system by which employees jointly determine specific performance goals with their supervisors. Progress toward goals is periodically reviewed, and rewards are allocated on the basis of this progress.
grapevine The means of communication by which most operative employees first hear about important changes introduced by organizational leaders; the rumor mill.
grievance (rights) arbitration The final step used to settle a labor and management dispute.
grievance procedures Procedures designed to resolve disputes as quickly as possible and at the lowest level possible in the organization.
group Two or more interacting and interdependent individuals who come together to achieve particular objectives.
group-order ranking Placing employees into classifications, such as “top one-fifth” or “second one-fifth.” This method prevents a supervisor from inflating or equalizing employee evaluations.
groupthink Withholding of differing views by group mem- bers to appear to be in agreement.
H halo error A tendency to rate an individual high or low on all
factors as a result of the impression of a high or low rating on some specific factor.
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Glossary 467
learning organization An organization that has developed the capacity to adapt and change continuously.
leniency error Positive or negative leniency that overstates or understates performance, giving an individual a higher or lower appraisal than deserved.
line authority The authority that entitles a supervisor to direct the work of his or her employees and to make certain decisions without consulting others.
lockout A company action equivalent to a strike; when man- agement denies unionized employees access to their jobs.
locus of control The source of control over an individual’s behavior.
long-term plan A plan that covers a period in excess of five years.
M Machiavellianism Manipulative behavior based on the belief
that the ends can justify the means.
maintenance-of-membership An agreement that should employees join the union, they are compelled to remain in the union for the duration of the existing contract. Such an agreement often provides an escape clause when the contract expires in which employees may choose to with- draw their membership from the union without penalty.
management The process of getting things done, effectively and efficiently, through and with other people.
management functions Planning, organizing, leading, and controlling.
marginal analysis A method that helps decision makers optimize returns or minimize costs by dealing with the additional cost in a particular decision, rather than the average cost.
matrix A structure that weaves together elements of func- tional and product departmentalization, creating a dual chain of command.
message Information that is sent.
middle managers All employees below the top management level who manage other managers; responsible for estab- lishing and meeting specific departmental or unit goals set by top management.
motivation The willingness to do something conditioned on the action’s ability to satisfy some need for the individual.
motivation-hygiene theory A theory of Frederick Herzberg that the opposite of satisfaction is not “dissatisfaction” but “no satisfaction” and the opposite of dissatisfaction is not “satisfaction” but “no dissatisfaction.”
musculoskeletal disorders (MSDs) Continuous-motion disor- ders caused by repetitive stress injuries.
N National Institute for Occupational Safety and Health
(NIOSH) The government agency that researches and sets OSHA standards.
National Labor Relations Board (NLRB) A group that has primary responsibility for conducting elections to
approaches and behaves similar to the risk-taking style of an entrepreneur.
intrinsic feedback Self-generated feedback. See also perfor- mance feedback.
ISO 9000 series Standards designed by the International Organization for Standardization that reflect a process whereby independent auditors attest that a company’s factory, laboratory, or office has met quality management standards.
J job description A written statement of job duties, working
conditions, and operating responsibilities.
job design Combining tasks to form complete jobs.
job enrichment The degree to which a worker controls the planning, execution, and evaluation of his or her work.
justice view of ethics A view that requires individuals to impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs.
just-in-time (JIT) inventory systems A system in which inven- tory items arrive when they are needed in the production process instead of being stored in stock. See also kanban.
K kaizen Japanese term for an organization committed to con-
tinuous improvement.
it kanban In Japanese, a “card” or “sign.” Shipped in a container, a kanban is returned to the supplier when the container is opened, initiating the shipment of a second container that arrives just as the first container is emptied.
it karoshi A Japanese term for sudden death caused by overwork.
L labor relations All activities within a company that involve
dealing with a union and its members.
Landrum-Griffin Act Also known as the Labor and Management Reporting and Disclosure Act, this legisla- tion protects union members from possible wrongdoing on the part of their unions. Its thrust is to require all unions to disclose their financial statements.
layoff-survivor sickness A set of attitudes, perceptions, and behaviors of employees who survive involuntary staff reductions.
leadership The ability an individual demonstrates to influ- ence others to act in a particular way through direction, encouragement, sensitivity, consideration, and support.
leadership traits Qualities such as intelligence, charm, decisiveness, enthusiasm, strength, bravery, integrity, and self-confidence.
leading Motivating employees, directing activities of others, selecting the most effective communication channel, and resolving conflicts among members.
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468 Glossary
pay-for-performance programs Compensation plans that pay employees on the basis of some performance measure.
people-centered leader An individual who emphasizes inter- personal relations with those he or she leads.
performance appraisal A review of past performance that emphasizes positive accomplishments as well as defi- ciencies; a means for helping employees improve future performance.
performance feedback Information that lets an employee know how well he or she is performing a job; may be intrinsic (provided by the work itself) or extrinsic ( provided by a supervisor or some other source).
performance-simulation tests Selection devices based on actual job behaviors, work sampling, and assessment centers.
PERT chart A diagram that depicts the sequence of activities needed to complete a project and the time or costs associ- ated with each activity.
planning Defining an organization’s goals, establishing an overall strategy for achieving these goals, and developing a comprehensive hierarchy of plans to integrate and coor- dinate activities.
policies Broad guidelines for supervisory action.
political competence A supervisor’s ability to enhance his or her power, build a power base, and establish the “right” connections in the organization.
politicking The actions one can take to influence, or attempt to influence, the distribution of advantages and disadvan- tages within an organization.
power distance Extent to which the less powerful members of institutions and organizations expect and accept the idea that power is distributed unequally. Belief in small power distance results in expectance of power relations that are more consultative or democratic, with people relat- ing to one another more as equal regardless of terminal positions. Belief in large power distance results in the less powerful accepting power relations that are more auto- cratic and paternalistic, wherein subordinates acknowl- edge the power of others based simply on their position in certain formal hierarchical positions.
preventive control A type of control that anticipates and prevents undesirable outcomes.
problem A discrepancy between an existing and a desired state of affairs.
problem-solving team A team from the same department or functional area that’s involved in efforts to improve work activities or to solve specific problems.
procedure A standardized way of responding to repetitive problems; a definition of the limits within which supervi- sors must stay as decisions are made.
process The primary activities supervisors perform.
process departmentalization Grouping activities around a process; this method provides a basis for the homogeneous categorizing of activities.
product departmentalization Grouping activities into inde- pendent units based on problems or issues relating to a product.
determine union representation and to interpret and apply the law against unfair labor practices.
need A physiological or psychological deficiency that makes certain outcomes seem attractive.
need for achievement A compelling drive to succeed; an intrinsic motivation to do something better or more efficiently than it has been done before.
negotiation A process in which two or more parties who have different preferences and priorities must make a joint decision and come to an agreement.
network organization Uses its own employees to do some work activities and networks of outside suppliers to provide other needed product components or work processes.
nominal group technique A technique that restricts discussion during the decision-making process.
nonprogrammed decision A decision that must be custom- made to solve a unique and nonrecurring problem.
nonverbal communication Communication that is not spoken, written, or transmitted on a computer.
O Occupational Safety and Health Act A law that enforces,
through standards and regulations, healthful working conditions and preservation of human resources.
open shop An arrangement in which joining a union is totally voluntary.
operative employees Employees who physically produce an organization’s goods and services by working on specific tasks.
organization A systematic grouping of people brought together to accomplish some specific purpose.
organization development (OD) The process of making systematic change in an organization.
organizing Arranging and grouping jobs, allocating resources, and assigning work so that activities can be accomplished as planned; determining which tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and when decisions are to be made.
orientation An expansion on information a new employee obtained during the recruitment and selection stages; an attempt to familiarize new employees with the job, the work unit, and the organization as a whole.
P paired comparison An approach in which each employee is
compared with every other employee in the comparison group and rated as either the superior or weaker member of the pair.
parochialism Seeing things solely through one’s own eyes and from one’s own perspective; believing that one’s own way is the best.
participative leadership The leadership style of an individual who actively seeks input from followers for many of the activities in the organization.
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Glossary 469
responsibility Supervisory obligations such as achieving a unit’s goals, keeping costs within budget, following orga- nizational policies, and motivating employees.
richness of information A measure of the amount of infor- mation that is transmitted based on multiple information cues (words, posture, facial expressions, gestures, intona- tions), immediate feedback, and the personal touch.
rights view of ethics A view that calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights.
ringisei In Japanese organizations, consensus-forming decision-making groups.
risk propensity A willingness to take chances, characterized by rapid decision making with the use of less information.
roles Behavior patterns that correspond to the positions indi- viduals occupy in an organization.
rule An explicit statement that tells employees what they ought or ought not to do.
S scatter diagram An illustration of the relationship between
two variables that shows correlations and possible cause and effect.
scheduling Detailed planning of activities to be done, the order in which they are to be done, who is to do each activity, and when the activities are to be completed.
secondary boycott A union strikes against Employer A (a primary and legal strike), and then strikes and pickets against Employer B (an employer against which the union has no complaint) because of a relationship that exists between Employers A and B, such as Employer B handling goods made by Employer A.
selection process The hiring process, designed to expand the organization’s knowledge about an applicant’s back- ground, abilities, and motivation.
self-esteem The degree to which an individual likes or dislikes himself or herself.
self-managed work team A type of work team that operates without a manager and is responsible for a complete work process or segment.
self-monitoring The ability to adjust behavior to external situational factors. High self-monitors adapt easily and are capable of presenting striking contradictions between public personas and private selves; low self-monitors tend to display their true feelings and beliefs in almost every situation.
sexual harassment Anything of a sexual nature that is required for getting a job, has an employment conse- quence, or creates an offensive or hostile environment, including sexually suggestive remarks, unwanted touching, sexual advances, requests for sexual favors, and other verbal and physical conduct of a sexual nature.
short-term plan A plan that covers a period of less than one year.
sick building An unhealthy work environment.
productivity Output per labor hour, best expressed by the formula Productivity = Output/(Labor + Capital + Materials). Productivity measures can be applied to the individual, the group, and the total organization.
program A single-use set of plans for a specific major under- taking within an organization’s overall goals. Programs may be designed and overseen by top management or supervisors.
programmed decision A repetitive decision that can be handled by a routine approach.
progressive discipline Action that begins with a verbal warning, and then proceeds through written reprimands, suspension, and finally, in the most serious cases, dismissal.
Q quality control Identification of mistakes that may have
occurred; monitoring quality to ensure that (it) meets some pre-established standard.
quality of life Belief that places more value on relationships and overall worth of one’s life in society.
quantity of life Belief that values competitiveness, assertive- ness, ambition, and the accumulation of wealth and material possessions.
R Racketeering Influenced and Corrupt Organizations Act
(RICO) Legislation whose primary emphasis with respect to labor unions is to eliminate any influence exerted on unions by members of organized crime.
range of variation Variation in performance that can be expected in all activities.
readiness The ability and willingness of an employee to complete a task.
realistic job preview (RJP) A job interview that provides both positive and negative information about the job and the company.
recency error An error that occurs when appraisers recall and give greater importance to employee job behaviors that have occurred near the end of the performance-measuring period.
recruitment The process of locating, identifying, and attracting capable applicants.
reliability An indication of whether a test or device measures the same thing consistently.
repetitive stress injuries Injuries sustained by continuous and repetitive movements of a body part.
representation certification (RC) election The election process whereby union members vote in a union as their represen- tative.
representation decertification (RD) election The election process whereby union members vote out their union as their representative.
representative heuristic The tendency of people to match the likelihood of an occurrence with something they are familiar with.
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470 Glossary
suspension Time off without pay; this step is usually taken only if neither verbal nor written warnings have achieved desired results.
sustainability A company’s ability to achieve its business goals and increase long-term shareholder value by inte- grating economic, environmental, and social opportunities into its business strategies.
T tactical planning Organizational planning that provides
specific details on how overall goals are to be achieved.
Taft-Hartley Act A law, also known as the Labor–Management Act, passed in 1947 that specified unfair union labor practices and declared the closed shop to be illegal.
task-centered leader An individual with a strong tendency to emphasize the technical or task aspects of a job.
team A workgroup whose members are committed to a common purpose, have a set of specific performance goals, and hold themselves mutually accountable for the team’s results.
team-based structure An organization that consists entirely of workgroups, or teams.
technical competence The ability to apply specialized knowl- edge or expertise.
technology Any equipment, tool, or operating method designed to make work more efficient.
telecommuting Linking a worker’s remote computer and modem with those of coworkers and management at an office.
Theory X–Theory Y A theory of Douglas McGregor that a supervisor’s view of human nature is based on a certain grouping of assumptions and that he or she tends to mold behavior toward subordinates according to those assumptions.
top management A group of people responsible for establish- ing an organization’s overall objectives and developing the policies to achieve those objectives.
transactional leader A leader who guides or motivates employees in the direction of established goals by clarify- ing role and task requirements.
transformational leader A leader who inspires followers to transcend self-interests for the good of the organization and who is capable of having a profound and extraordi- nary effect on followers.
trust The belief in the integrity, character, and ability of a leader.
U uncertainty avoidance The extent to which members of
a society attempt to cope with anxiety by minimizing ambiguity. Cultures with high uncertainty avoidance prefer rules and structured circumstances, whereas low uncertainty avoidance cultures operate effectively in the absence of clear-cut rules, policies, and procedures.
similarity error Rating others in a way that gives special consideration to qualities that appraisers perceive in themselves.
simple structure A nonelaborate structure, low in complexity, with little formalization, and with authority centralized in a single person; a “flat” organization with only two or three levels.
single-use plan A detailed course of action used once or only occasionally to deal with a problem that doesn’t occur repeatedly.
situational leadership Adjustment of a leadership style to specific situations to reflect employee needs.
Six Sigma A philosophy and measurement process that attempts to “design in” quality as a product is being made.
skill The ability to demonstrate a system and sequence of behavior that is functionally related to attaining a perfor- mance goal.
social loafing Becoming a free-rider in a group because individual contributions to the group effort cannot be identified. As a result, the overall team’s performance suffers.
social obligation The foundation of a business’s social involvement. An organization’s social obligation is fulfilled when it meets its economic and legal responsibilities.
social responsibility An obligation that organizations have to pursue long-term goals that are good for society.
social responsiveness A process guided by social norms that requires businesses to determine what is right or wrong and thus seek fundamental truths; an attempt to do those things that make society better and not to do those things that could make it worse.
span of control The number of employees a supervisor can efficiently and effectively direct.
staff authority A limited authority that supports line authority by advising, servicing, and assisting.
standing plan A plan that can be used over and over again by managers faced with recurring situations.
status A social rank or the importance one has in a group.
strategic planning Organizational planning that includes the establishment of overall goals and positioning an organi- zation’s products or services against the competition.
stress Something an individual feels when faced with opportunities, constraints, or demands perceived to be both uncertain and important. Stress can show itself in both positive and negative ways.
stressors Conditions that cause stress in an individual.
supervisors Part of an organization’s management team, supervisors oversee the work of operative employees and are the only managers who don’t manage other managers. See also first-level managers.
supervisory competencies Conceptual, interpersonal, technical, and political competencies.
supply chain management An internally oriented process that focuses on the efficient flow of incoming materials to the organization.
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Glossary 471
W Wagner Act Also known as the National Labor Relations
Act, this act gave employees the legitimate right to form and join unions and to engage in collective bargaining.
websumé A web page used as a résumé.
wellness program Any type of program that is designed to keep employees healthy, focusing on such things as smoking cessation, weight control, stress management, physical fitness, nutrition education, blood pressure control, and so on.
well-structured problems Straightforward, familiar, easily defined problems.
wildcat strike An illegal strike in which employees refuse to work during the term of a binding contract, often as a result of ambiguities in the current contract.
work process engineering Radical or quantum change in an organization.
work specialization The process of breaking down a job into a number of steps, with each step being completed by a different individual.
workforce diversity The composition of the workforce to include men, women, whites, blacks, Hispanics, Asians, American Indians, people with disabilities, people with diverse sexual preferences, the elderly, and so on.
written essay A written narrative describing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement.
written warning The first formal stage of the disciplinary procedure; the warning becomes part of an employee’s official personnel file.
wrongful discharge Improper or unjust termination of an employee.
union An organization that represents workers and seeks to protect their interests through collective bargaining.
union shop An arrangement that stipulates that employers, although free to hire whomever they choose, may retain only union members.
unity of command A principle that states that an employee should have one and only one supervisor to whom he or she is directly responsible.
utilitarian view of ethics A view in which decisions are made solely on the basis of their outcomes or consequences.
V validity A proven relationship between a selection device and
some relevant criterion.
value chain management The process of managing the entire sequence of integrated activities and information about product flows from start to finish—when the product is in the hands of the ultimate user.
verbal intonation The emphasis an individual gives to words or phrases through speech.
verbal warning A reprimand, a temporary record of which is kept by the supervisor.
virtual organization Consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects.
virtual team A type of work team that uses technology to link physically dispersed members to achieve a common goal.
visionary leadership The ability to create and articulate a realistic, credible, attractive vision of the future that grows out of, and improves upon, the present.
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Index
Abdication vs. delegation, 110 Absenteeism
collective bargaining, 436 discipline and, 397 downsizing and, 45 employee satisfaction, 152 job dissatisfaction, 409 motivation and, 222 norms and, 296 personal problems, 365, 366 rules about, 70 sexual harassment, 139 work specialization, 92 workforce diversity, 309
Absolute standards measurements, 327–332, 328ex, 329ex, 330ex, 335
Acceptable range in measures, 153 Accident-prevention programs, 9 Accommodation and conflict, 379 Accountability
appraisals, 322 delegation and, 109, 110, 112,
114–115 motivation and, 236 in organizations, 11, 102, 103 relationships at work, 138 teamwork, 301, 304, 305
Actions and words, 279 Active listening, 282–283, 289 Activities, 73 Adjective rating scales, 328, 329ex Adjourning stage of groups, 303 Administrative duties, 13 Advance notice, 389 Advance warning of discipline, 391 Advanced Cell Technology, 180 Advanced training of supervisors, 16 Advisors, 8 Aetna Life, 64, 160 Affirmative action, 124 Agency shop, 428 Alcohol abuse, 358, 362, 365,
370, 388 Alternatives in decision-making,
182–183, 183ex Amazon, 197, 337, 415–416 Ambiguity acceptance, 416 Ambiguous responsibility, 192 American Airlines, 70–71 American Community Survey, 95 American Express, 150 American Productivity Audit, 362 Americans with Disabilities Act
(ADA), 408 Analytic style, 187 Apple, Inc., 196–197, 262–263, 407 Appraisal process, 323 Arbitration, 439 Arkadium, 168 Arnold, Mark, 70–71 Asch, Solomon (Asch study), 297,
297ex Ash, Mary Kay, 245 Assembly-line production, 92 Assertiveness training, 281 Attendance problems, 388 Attitudes, 412 Authority, defined, 96–98, 98ex Authorization cards, 433 Autocratic leader, 250
Autonomy of supervisors, 16 AutoZone, 197 Availability heuristic, 187 Avoidance and conflict, 379 Avon, 422–423
Baby boomers, 41 Balanced scorecard, 78 Bargaining strategies, 393–394,
394ex Barrier-free corporations, 106 Barriers to communication,
275–282, 275ex, 276ex, 278ex Basic corrective action, 155 Bass Pro Shops, 184–185 Behavioral style, 187 Behavioral symptoms of stress, 365 Behaviorally anchored rating scales
(BARS), 328–329, 330ex Benchmarking, 67–68 Benefits programs, 41, 428 Bezos, Jeff, 337 Big data in decision-making,
197–198 BIL (boss is listening), 272 Black & Decker, 7 Blackjack strategy, 188 Blanchard, Kenneth, 251 Blogs, 30, 274, 395 Body language, 273 Boeing, 9, 161 Boiled frog phenomenon, 47 Bombardier Ltd., 99 Boston Consulting Group, 344 Boundaryless organization,
105–107 Boycotts, 444–445 Brainstorming, 192–195 Branson, Richard, 245 Brundtland Commission Report
(1987), 10 BTW (by the way), 272 Budgets, 71–72, 72ex, 174–175 Building Owners and Managers
Association, 362 Bureau of Labor Standards, 41 Bureaucracy, 102 Bush, George W., 169, 180 Business plans, 80 “Buy American,” 31
Candidate recruitment, 125–127, 126ex
Capitalism, 224 Career, defined, 448 Career development
applying for jobs, 449 career, defined, 448 decision-making, 448–449 improving chances for, 451–452 interview preparation, 450–451 introduction to, 447–448 job mentors, 452–453 résumé preparation, 449–450
Career planning, 41, 448 Caterpillar Inc., 349, 376, 426 Cause-effect diagram, 154, 154ex Census of Fatal Occupational
Injuries (CFOI), 349 Center for American Progress, 228 Central tendency error, 334
Centralization, 98 Cerberus Capital Management, 31 Chain of command, 95–96 Change
contemporary view of, 410 defined, 407 forces for, 408–409 innovation, 414–417, 420–421 innovation and, 414–417 performance and, 422–423 process of, 409–412, 410ex,
411ex resistance to, 411–412, 411ex supervisors and, 406 traditional view of, 409–410,
410ex Change agents, 409 Channels of communication, 269 Chaos and supervision, 46–48 Charisma, defined, 242–244 Checklists, 327–328, 328ex Chenault, Ken, 241 Chrysler, 31 Circle City Chevrolet/Buick,
153–154, 153ex, 157, 161 Citicorp, 32 Coaches/coaching
appraisals and, 322, 344 developing skills, 314–315 discipline vs., 389–390 football, 280 leaders, 247, 255 supervisors, 8, 11–12, 26
Coca-Cola, 32, 100–101, 204–205 Codes of ethics, 50–51 Cohesive groups, 298 Collaboration in conflict, 379 Collective bargaining, 426, 427,
434–439, 435ex, 437ex Collectivism, 34 College graduates, 12 Common approach to teams, 305 Common purpose of teams,
304–305 Communication
active listening, 282–283, 289 barriers to, 275–282, 275ex,
276ex, 278ex change and, 412 channels of, 269 conflict of differences in, 378 controlling, 175 decision-making and, 204 defined, 268 e-business and, 38–39 effectiveness of, 56, 115, 279 electronic communication,
271–273 emotions and, 279 empathy in, 282–283 feedback skills, 278, 281,
283–285, 284ex formal communication, 269 gender differences, 271 grapevine, 273–274 honesty and, 278–279 informal communication, 269 language and, 275, 275ex leadership and, 262 listening and, 276, 279, 288–289 methods of, 269–274
motivation by, 236 nonverbal communication, 273 oral communication, 269–270 personal development, 447–448 problems with, 290–291 process of, 268–269, 268ex stimulation of conflict, 381–382 supervisory dilemma, 266 written communication, 270
Compensation administration, 136 Compensation/benefits of employees,
136–137 Competencies of supervisors,
14–18, 18ex Competency-based compensation,
226 Competitive advantage, 452 Competitive Advantage: Creating
and Sustaining Superior Per- formance ( Porter), 162–163
Complementary skills in teams, 304
Compound annual growth rate (CAGR), 36
Compromise in conflict, 379 Compulsory membership in
unions, 428 Computer monitoring, 166–167 Concepts to skills, 18–20 Conceptual competence, 17 Conceptual skills, 246 Conceptual style, 187 Conciliation negotiation, 439 Concurrent controls, 157 Conflict
causes of, 378 defined, 377 nature of, 377, 377ex resolution techniques, 378–381,
379ex, 380ex, 400 stimulation of, 381–382 supervisor hostages, 376
Conflict management, 378 Conformity within groups, 297,
297ex Connors, Roy, 321 Consistency of discipline, 391 Consultative-participative leadership,
250 Contemporary control issues,
167–171 Contemporary leadership roles,
252–255 Contingency workers, 45–46, 226 Continuous-improvement
programs, 43–44, 46 planning/goal setting and,
67–69, 69ex team-building and, 309
Contract administration, 436–437 Control
concurrent controls, 157 contemporary control issues,
167–171 control process, 151–157 cost controls, 158–161, 158ex cultural differences, 170–171 defined, 7, 150 effectiveness, 164–165, 164ex focus of, 158–167 inventory controls, 161–162
Note: The locators followed by italicized ‘ex’ denotes ‘exhibits’ cited in the text.
472
Z04_ROBB0356_09_SE_IDX.indd 472 10/20/17 3:51 PM
Index 473
measuring performance, 151–152, 151ex
preventive controls, 157 problems, 165–167 quality control, 163–164 Sarbanes–Oxley Act, 169–170 types of controls, 157–158, 157ex value chain management, 162–163
Control by exception, 164–165 Control charts, 155, 156ex Control process, 151–157 Corporate blogs, 274 Corporate downsizing, 42–43 Corporate scandals, 169–170 Corrective controls, 158 Cost controls, 158–161, 158ex Cost reduction programs, 161 Counseling
bullying, 316 of employees, 140, 337–338,
338ex, 340 gerontological counseling, 451 personal problems and, 389, 390 supervisor challenges, 13
Creativity and decision-making, 203–204
Creativity and innovation, 414–415 Credibility, 252–254 Critical incidents, 327 Critical path, 73 Critical placement controls, 164 Cross-functional team, 301 Cultural variables, 416–417 Culture, defined, 385 Culture in organizations
controlling, 170–171 defined, 385 karoshi culture, 363 motivation of diverse workforce,
224–225 national culture and leadership,
252 power in, 385–387 supervisors and, 32–33, 33ex team-oriented culture, 294
Customer departmentalization, 100, 100ex
Cyberloafing, 30, 38–39
Daimler-Benz, 31 Dana Corporation, 162 Davis, Keith, 274 Deadline-driven ad hoc groups,
303–304 Decentralization, 98 Decision-making
big data in, 197–198 brainstorming, 192–195 career development, 448–449 creativity and, 203–204 design thinking, 196–197 ethics in, 198–199, 199ex global diversity, 195–196 group decision making, 191–195,
192ex, 203 organizing, 98–99 participatory decision-making, 81 problems vs., 189–191 styles of, 18ex, 186–188
Decision-making process, 181–184, 181ex, 183ex
Decision tools, 184–186, 185ex Decision trees, 185–186, 185ex Decoding, defined, 269 Delegation, 108–110, 114–115 Dell, Michael (Dell Computer), 245 Deming, W. Edwards, 43 Democratic-participative leadership,
250
Denning, Peter, 420–421 Department goals, 299 Departmentalization, 99–101,
99ex, 100ex, 101ex, 102–105 Design thinking, 196–197 “Develop-the-alternatives” stage, 191 Devil’s advocate, 382 Direct employment relationship,
439–440 Direct labor costs, 160 Directive style, 186 Disciplinary process
basic tenets, 389 discipline, defined, 387 factors in, 392 groundwork for, 389–390 introduction to, 387–388, 388ex legal aspects of, 392–393, 393ex progressiveness of, 390–391,
391ex solutions, 388–389 steps in, 400–401 types of problems, 388
Discipline, defined, 387 Discrimination in workplace, 62 Dishonesty problems, 388 Dismissal, 387–388 Disruptive innovation, 415–416 Dissatisfaction theory, 215, 215ex Distributive bargaining, 393 Diversity
global diversity, 195–196 impact on supervisors, 41–42,
42ex introduction to, 40 motivation workforce, 224–225 workforce diversity, 40–41, 55,
137, 309 Divisional structure, 103 Documentation for performance
appraisals, 323 Downsizing
absenteeism and, 45 candidates for, 52, 143 career development, 447 corporate downsizing, 42–43 defined, 43 HRM process, 121–122 impact of, 16, 94, 253, 335 motivation and, 210 performance appraisals and, 335 productivity and, 65 recruitment, 125, 142 span of control, 93, 254 supervisor implications of,
44–46, 127 Drug abuse, 358, 388 Dual-career couples, 229 Dues checkoff, 429 Dunham, Robert, 420–421
E-business, 36–39 E-commerce, 36–37 E-commuting, 93 E-leadership, 257 E-mail control, 166, 168 E-work, 93 Economic controls, 164 Economic strikes, 438 Edison, Thomas, 415 Effectiveness, 6, 56, 115, 279 Efficiency, defined, 6 Electronic communication, 271–273 Electronic meetings, 195 Emergent leaders, 296, 298, 312 Emotional intelligence, 213 Emotions and communication, 279 Empathy in communication,
282–283
Employee assessment, 125 Employee assistance programs
(EAPs), 360, 365–366 Employee benefits, 137 Employee counseling, 337–338,
338iex Employee engagement, 10 Employee recognition programs,
231–232 Employee resistance, 165 Employee stock ownership plans
(ESOP), 232 Employees. See also Staffing/
recruiting change and, 412 contingency workers, 45–46, 226 entrepreneurial supervisor and,
80–81 favored-employee status, 254 layoffs, 140–141, 144 loyalty and engagement, 46 organizing of, 107–108 recruitment/selection of,
125–132, 126ex stress of, 363–365, 364ex,
371–373 theft concerns, 167–169 training of, 9–10, 134–135,
134ex, 135ex transitions to supervisors, 11–14 work distractions, 30
Employment-at-will doctrine, 392 Employment planning, 125 Empowerment in leadership, 254 Encoding, defined, 269 Entrepreneurs/entrepreneurship
characteristics of, 79–80 defined, 79 employees and, 80–81 entrepreneurship, defined, 79 introduction to, 78–80 supervisory issues, 81, 82ex traditional supervisors vs., 81,
82ex Environmental Protection Agency
(EPA), 360 Equal Employment Opportunity
Commission (EEOC), 62, 138 Equity theory, 217–218, 217ex, 221 Ergonomics, 16, 235, 355, 362–363 Escalation of commitment, 189 Esteem needs, 213 Ethics
codes of ethics, 50–51 in control systems, 166 in decision-making, 198–199,
199ex defined, 50 guidelines for, 55–56, 200 incentives, 57 justice view of, 199 organizational politics, 384–385,
385ex performance appraisal, 338–339 of privacy, 199 of productivity, 166, 181, 199 rights view of, 199 telecommuting and, 94 utilitarian view of, 199 views on, 199, 199ex in workplace, 50–51
Events, 73 Expectancy theory, 218–221,
218ex Expected value analysis, 184–185 Expertise and change, 411 Extranets, 37 Extrinsic feedback, 323 Exxon-Mobil, 32
Facebook, 30, 38, 90, 146–147, 168, 248, 272
Facilitators, 8 Fact-finding, 439 Family-friendly benefits, 229 Faragut Services, 445–446 Favored-employee status, 254 Fayol, Henri, 7 Fear and change, 411 Federal Mediation and Conciliation
Service (FMCS), 431 Fee surveys, 26 Feedback
for autonomy, 18, 222 in communication, 278, 281,
283–285, 284ex corrective controls, 158 delegation, 110, 115 discipline, 387 extrinsic feedback, 323 goal setting, 86, 220–221 intrinsic feedback, 323 lack of, 276 motivation and, 221–222, 226,
233, 236 oral reports, 152 performance feedback, 75–77,
83, 323 skills, 283–285, 284ex surveys for, 26 teams, 308 on training, 135
Feedback loop, 269, 337 Feelings and change, 412 Ferrari, Enzo, 306–307 Final-offer arbitration, 439 Financial motivation, 221 First-level managers, 5 Fishbone diagrams, 154, 154ex Five-Stage Model of groups, 301–303 “Flat” organization, 102 Flexible controls, 164 Flextime, 229 Flow in workplace, 223 Flowcharts, 154, 155ex Forcing conflict, 379 Ford, 31, 44 Ford Motor Company, 150 Formal communication, 269 Formal group, 295 Formal planning, 63–66, 65ex Forming stage of groups, 302 4P Model of management, 294 France Télécom, 371–372 Free-rein leader, 250 Front-line supervisor, 16 Functional authority, 97 Functional departmentalization, 99,
99ex, 103 Functional structure, 103 FYEO (for your eyes only), 272
Gallup Organization, 10 Gantt chart, 72–73, 73ex Gender differences
communication, 271 inequality in workforce, 49 workforce demographics, 41 workplace discrimination, 62
General Electric (GE), 35, 43, 69, 105–107, 161
General Motors (GM), 9, 30–31, 44, 427
Generation X, 55 Generational differences, 42 Geographic departmentalization,
100, 101ex Gerontological counseling, 451 GFTD (gone for the day), 272
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474 Index
Global issues boundaryless organization,
105–107 challenges for supervisors, 32–33 competiveness, 30–33 diversity, 195–196 leadership, 255–258 teams, 310
Global Workplace Analytics, 95 Global Workplace Report, 255 Globe Metallurgical, Inc., 44 Goal setting
defined, 76 effectiveness of, 76–77 exercise in, 85–86 feedback, 86, 220–221 motivation and, 220–221 natural evolution of, 78 self-fulfilling prophecies, 77 traditional role of, 76, 76ex
Goal specificity, 76–77 Google, 4, 90, 146–147, 219–220 Grapevine, 273–274 Gravity Payments, 230 Grievance (rights) arbitration, 437,
437ex, 443–444 Group decision making, 191–195,
192ex, 203 Group-order ranking, 329–331,
330ex Groups. See also Teams
cohesive groups, 298 conformity within, 297, 297ex deadline-driven ad hoc groups,
303–304 defined, 295 emergent leader, 298 Five-Stage Model of groups,
301–303 informal workgroups, 296–299,
298ex norms, 296–297, 299 reasons to join, 295–296, 295ex team-oriented culture, 294 turning into teams, 301, 301ex
Groupthink, 192
Habits and change, 411 Hallmark Cards, 71 Halo error, 332 Hazard Communication Standard,
355 Health and safety concerns
cost control, 348–349 employee assistance programs,
360, 365–366 job safety programs, 356–358,
357ex Occupational Safety and Health
Act, 349–355 repetitive stress injuries, 362–363 robot technology, 413 safety skills, 370–371 smoke-free environments, 361–362 stress of employees, 363–365,
364ex, 371–373 wellness programs, 366 work environments, 360–363 workplace violence, 358–360
Healthcare industry teams, 315–316 Herman Miller, Inc., 408 Hersey, Paul, 251 Hershey Foods, 103 Herzberg, Frederick, 214 Hierarchy-of-needs theory, 213–214 Hofstede, Geert, 32–33, 34 Honesty and communication,
278–279 Hot stove rule, 391, 391ex Human cloning, 180
Human relations skills, 247 Human resource inventory, 125 Human resource management
(HRM). See also Interviews; Staffing/recruiting
current issues, 137–141 introduction to, 121–122, 121ex legal environment of, 122–124,
122ex–123ex romance in workplace, 137–138 Sarbanes-Oxley Act, 170 sexual harassment, 138–140 workforce diversity, 137
Human resource variables, 417 Hygiene factors, 215
Ill-structured problems, 190 Immediacy of discipline, 391 Immediate corrective action, 155 Immigrant workers, 281–282 Imminent danger, 350 Impartiality of discipline, 391 Impasse resolution techniques, 439 Incentives
change and, 412, 418 ethics and, 57 health and safety, 361 meaning of, 275 performance-based wage
increases, 221–222 unions and, 434 work process, 46
Incidence rates, 351–353 Income and change, 411 Indirect labor costs, 160 Individual decision making, 203 Individual differences, 211–213,
211ex, 220 Individual ranking, 331 Individual task outcomes, 326 Individualism, 34, 224, 294 Individualizing rewards, 221 Industrial Revolution, 94 Industrial Workers of the World, 439 Inflationary pressures, 334 Informal communication, 269 Informal group, 295 Informal workgroups, 296–299,
298ex Innovation, 414–417, 420–421 The Innovator’s Way (Denning,
Dunham), 420–421 Inspiration and innovation, 415 Instant messaging, 272–273 Integrative bargaining, 394 Intel Corporation, 415 Interest arbitration, 439 Intermediate-term plans, 66 International Organization for
Standardization, 68 Internet-based enterprise, 37 Internet recruiting, 126–127 Interpersonal competencies, 17 Interpersonal relationships and
change, 412 Interpersonal skills, 451 Interviews
effectiveness of, 130, 145 introduction to, 129–131 preparation for, 131, 450–451 questions not to ask, 132 questions to ask, 132
Intranets, 37 Intrapreneurs, 79 Intrinsic feedback, 323 Introl Systems, Inc., 423 Inventory controls, 161–162 iPhone, 407 ISO 9000 series, 68 Ive, Jonathan “Jony,” 196
Jargon, 275, 277, 279, 282 J.C. Penney Co., 343–344 Job Characteristics Model (JCM),
222, 223ex Job enrichment, 222 Job matching, 220 Job sharing, 230 Jobs
applying for, 449 change and, 411 descriptions of, 107–108, 108ex design for motivation, 222–223,
223ex, 235–236 mentors, 452–453 online searching, 449 realistic preview, 131 résumé preparation, 449–450 safety programs, 356–358, 357ex security of, 428
Jobs, Steve, 244, 262–263 Juran, Joseph, 43 Just-in-time (JIT) inventory systems,
161–162 Justice view of ethics, 199
Kaizen, 43 Kanban, 161–162 Karoshi culture, 363 Katz, Robert, 14 Kauffman Index of Entrepreneurial
Activity, 79 Kelleher, Herb, 245 King, Martin Luther, Jr., 244
L.A. Gear, 100 Labor relations
collective bargaining, 426, 427, 434–439, 435ex, 437ex
defined, 426–427 grievance (rights) arbitration,
437, 437ex, 443–444 legislation, 430–432 strikes vs. lockouts, 438 unions, 426–429, 427ex, 429ex
Laissez-faire leadership, 250 Landrum-Griffin Act (1959), 431–432 Language and communication, 275,
275ex Layoff-survivor sickness, 140–141,
144 Leadership
behaviors and styles, 249–250, 249ex
charisma, defined, 242–244 contemporary roles, 252–255 current issues, 255–258 defined, 241 development programs for,
248–249 e-leadership, 257 effectiveness of, 251–252 emergent leader, 298 human relations skills, 247 national culture, 252 networking skills, 246–247 relevance of, 257–258 self-monitoring leadership, 243 successful traits of, 241–242,
242ex supervisory dilemma, 240 team leadership, 256 technical skills, 246 visionary leadership, 244–246
Leading, defined, 7 Learning organizations, 106, 107 Legal issues
employee discipline, 392–393, 393ex
human resource management, 122–124, 122ex–123ex
labor relations, 430–432 performance appraisal, 321–322,
323–326, 324ex–325ex, 340 right-to-know laws, 355
Leniency error, 332 Lewin, Kurt, 406 Line authority, 97 Listening and communication, 276,
279, 288–289 Lockouts, 438 Locus of control, 212 Long-term plans, 66 Low external controls, 417 Loyalty, 46
Machiavelli, Niccolo, 212 Machiavellianism, 212 Maintenance costs, 160 Maintenance of membership, 428 Management. See also Human
resource management change management, 406 competence of, 17–18, 18ex conflict management, 378 defined, 6–7, 6ex 4P Model of management, 294 functions of, 7–8, 7ex middle managers/management,
4–5 process of, 6–8 self-management work teams, 300 supply chain management, 163 value chain management, 162–163
Management by objectives (MBO), 75
Management by walking around (MBWA), 151
Manager as boss, 13 Marginal analysis, 186 Market opportunities, 451 Marriott hotels, 267–268 Marshall v. Barlow’s Inc. (1978),
351 Maslow, Abraham, 213–214 Maslow’s theory of needs, 213–214 Matrix structure, 103–104, 104ex Mattel, 414 Maximum effort, 218–219 Mayer, Marissa, 90 McDonald’s, 31, 115, 161, 226 McGregor, Douglas, 214 Measuring performance, 151–152,
151ex Mediation negotiation, 439 Medical Leave Act (1993), 62 Mentors, 8, 452–453 Message, defined, 269 Michelin, 31 Microsoft, 395–396 Middle managers/management, 4–5 Minimum-wage employees, 226 Minority dominion decisions, 192 Misdirection of effort, 165–166 Modular organizations, 106 Monitoring, 166–167, 243 Monsanto, 11 Motivation
contemporary theories of, 216–218, 217ex
contingency workers, 226 defined, 211 designing jobs for, 222–223,
223ex early theories of, 213–215, 215ex emotional intelligence, 213 employee recognition programs,
231–232 employee stock ownership plans,
232 expectancy theory, 218–221, 218ex
Z04_ROBB0356_09_SE_IDX.indd 474 10/20/17 3:51 PM
Index 475
individual differences, 211–213, 211ex
job design for, 222–223, 223ex, 235–236
minimum-wage employees, 226 natural motivation, 236–237 organization impact on,
214–215, 215ex personality measures, 212 professional vs. technical employ-
ees, 227–228 supervisors and, 210–211 supervisory challenges, 224–232 Theory X–Theory Y view of, 214 work-life balance, 228–230
Motivation-hygiene theory, 215 Motorola, 68 Musculoskeletal disorders (MSDs),
362, 363 Musk, Elon, 245 Mutual accountability of teams, 305
National Association of Manufac- turers award for Workforce Excellence, 162
National Collegiate Athletic Association (NCAA), 157
National Cooperative Bank, 105 National culture and leadership, 252 National Football League, 384, 426 National Institute for Occupational
Safety and Health (NIOSH), 354, 359
National Labor Relations Act (1935), 430
National Labor Relations Board (NLRB), 430, 439
Natural motivation, 236–237 Naumann, Alan, 37 Need, defined, 211 Need for achievement (nAch),
216–217 Negotiation
bargaining strategies, 393–394, 394ex
case study, 395–396 in collective bargaining, 436 conciliation negotiation, 439 defined, 393 development of skills, 394–395 of employee raises, 399 mediation negotiation, 439 wage negotiations, 428
Network organizations, 106 Networking skills, 246–247, 452 NLRB v. MacKay Radio (1938), 426 Nominal group technique, 195 Nomura Holdings Inc., 402–403 Non-programmed decision, 191 Nonverbal communication, 273 Nooyi, Indra, 241 Norming stage of groups, 302–303 Norms, 296–297, 299 NSFW (not safe for work), 272
Obama, Barack, 180 Occupational Safety and Health Act
(OSH Act), 349–350 Occupational Safety and Health
Administration (OSHA) enforcement priorities, 350–351 introduction to, 349–350 overview of, 354–355 punitive actions, 353–354 supervisor records, 351–353,
352ex, 353ex Omnibus Budget Reconciliation Act
(1990), 353 Online recruiting, 126–127 On(off)-the-job behaviors, 388
Open shop, 428 Open system focus, 417 Operative employees, 4, 5 Oral communication, 269–270 Oral reports, 152 Organization development (OD), 409 Organizational culture. See Culture
in organizations Organizational politics
defined, 383 engaging in, 385–387 ethics of, 384–385, 385ex introduction to, 383 reasons for, 383–384, 384ex
Organizational pyramid, 4, 5ex Organizational structure
boundaryless organization, 105–107
divisional structure, 103 functional structure, 103 introduction to, 92, 102 learning organization, 107 matrix structure, 103–104, 104ex project structure, 104–105 simple structure, 102–107 team-based structure, 105
Organizations common characteristics, 5, 5ex defined, 4 impact on motivation, 214–215,
215ex planning/goal setting, 66–69,
67ex, 69ex role in performance appraisal,
322–327, 324ex–325ex supervisor role in, 15–16 supervisory dilemma, 4 supervisory levels, 4–6
Organizing authority, defined, 96–98, 98ex basic concepts, 92–102 chain of command, 95–96 decision-making, 98–99 defined, 7, 92 delegation, 108–110, 114–115 departmentalization, 99–101,
99ex, 100ex, 101ex, 102–105 of employees, 107–108 introduction to, 91 span of control, 92–95, 93ex work specialization, 92–93
Organizing campaign, 433, 434 Orientation of employees, 133–134 ORION algorithm, 190 Outside activity problems, 388 Ozark Corporation, 290–291
Paired comparison approach, 331 Paper trail, 389–390 Parochialism, 32–33 Participation and motivation, 221 Participation in goal setting, 77 Participative leadership, 250–252 Participatory decision-making, 81 A Passion for Excellence (Peters),
247 Pay-for-performance programs,
225–226 Pay levels, 136 Penske Truck Leasing, 106 People-centered leader, 250 People challenges, 13 People skills, 17, 247, 248, 396, 451 PepsiCo, 103 Perception and innovation, 415 Performance appraisal
absolute standards measure- ments, 327–332, 328ex, 329ex, 330ex, 335
conducting of, 342–343
criteria for, 326–327 employee frustration with, 333 ethics, 338–339 legal issues in, 323–326,
324ex–325ex methods for, 327 objectives, 331–332 organizational role in, 322–327,
324ex–325ex potential problems, 332–339 purpose of, 136, 321–322 relative standards, 329–331,
330ex, 335 rewards from, 219 supervisory dilemma, 320–321 of teams, 336
Performance expectations, 323 Performance feedback, 75–77, 83,
323 Performance-simulation tests, 129 Performing stage of groups, 303 Personal benefits of supervisors, 16 Personal development, 447–448 Personal differences and conflict,
378 Personal observation, 151–152 Personality measures, 212 Personality profiles, 129 PERT (Program Evaluation and
Review Technique) chart, 73–74, 73ex
Peters, Tom, 247 Physiological concerns, 364–365,
364ex Physiological needs, 213 Picketing at strikes, 438 Planning
defined, 7 downsides of, 63–64 establishment of, 86–87 formal planning, 63–66, 65ex organizational level, 66–69,
67ex, 69ex single-use plans, 70–74, 72ex,
73ex, 74ex standing plans, 69–70
Policies, 69–70 Political competence, 17 Politics. See Organizational politics Porter, Michael, 162–163 Potential team, 301 Power
autocratic leader, 250 change and, 412 cultural differences, 385–387 grapevine and, 273–274 groups and, 295–296, 295ex Machiavellianism, 212 matrix structure, 103–104, 104ex in organizational culture, 385–387 political competence, 17 of praise, 226 unions and, 433–434, 433ex
Power distance, 34, 80, 195–196 Pregnancy Discrimination Act
(1978), 62 Pressure to confirm, 192 Preventive controls, 157 PricewaterhouseCoopers LLP,
344–345 Prince, Carol, 181–182 Privacy
employee rights, 339, 385 ethics of, 199 invasion of, 280 worker/workplace privacy, 150,
165–166, 172 Proactive personality, 79–80 Problem-solving teams, 300 Procedures, 70
Process, 6, 181 Process departmentalization, 101,
101ex Product departmentalization, 99,
100ex, 102–103 Productivity
change and, 411 communication and, 266 control process, 151 defined, 63 discipline and, 388, 391 downsizing, 44 e-business, 36–39 employees and, 45, 50, 52 environmental impact on, 337 ethics of, 166, 181, 199 groups and, 296, 298, 298ex, 300 health and safety, 348, 349,
359–362, 365 immigrant workers, 281 importance of, 65–66 inventory, 161 leadership and, 250, 256, 258 motivation for, 210, 221–222,
225, 229–232 organizations and, 90–92, 93,
105, 108 overview of, 63–65 sexual harassment, 138 supervisors and, 9–10, 15, 38, 62 technology and, 150 training and, 134, 139, 140 work specialization, 92–93
Profession employee motivation, 227–228
Programmed decision, 191 Programs, 70–71 Progressive discipline, 390–391,
391ex Project structure, 104–105 Proper investigation, 390 Pseudo team, 301 Psychological symptoms of stress,
365 Punctuated-equilibrium model, 303
Quality control, 11, 163–164 Quantity vs. quality of life, 34 Queen of the North ferry, 159
Race, 49, 52, 124, 309, 326, 392, 432
Racketeering Influenced and Corrupt Organizations (RICO) Act (1970), 432
Rats, defined, 438 Raw materials costs, 160 Readiness, 251 Reagan, Ronald, 245, 426 Real team, 301 Reasonable criteria controls, 164 Recruitment. See Staffing/recruiting Regency error, 333 Relative standards, 329–331,
330ex, 335 Reliability, 128–129 Repetitive stress injuries, 362–363 Representation certification (RC)
election, 433 Representation decertification (RD)
election, 433 Representative heuristic, 187–188 Resistance to change, 411–412,
411ex Resolution techniques for conflict,
378–381, 379ex, 380ex, 400 Responsibility, defined, 98 Résumé preparation, 449–450 Reward-performance link, 221 Rewards for motivation, 219
Z04_ROBB0356_09_SE_IDX.indd 475 10/20/17 3:51 PM
476 Index
Richness of information, 277–278, 278ex
Right-to-know laws, 355 Rights view of ethics, 199 Ringisei, 196 Risk propensity, 212, 233 Robot technology, 413 Roles and communication, 277 Rometty, Ginni, 241 Roosevelt, Franklin, 381 Rosenfeld, Irene, 241 Rovello, Jessica, 168 Royal Dutch Shell, 228 Rules, 70 Rumors, 266, 273–274, 364,
382–384, 412
Safety needs, 213 Safety skills, 370–371 Sales performance, 98, 153ex Samson Company, 373 Sarbanes–Oxley Act (2002),
169–170 Satisfaction theory, 215, 215ex Scabs, defined, 438 Scatter diagram, 155, 156ex Schedules/scheduling, 72–74, 73ex Scott, Jeff, 205–206 Secondary boycott, 431 Selection process, 125–132, 126ex,
128ex Selective perception and change, 411 Self-actualization needs, 213 Self-awareness, 213 Self-esteem, 212, 296 Self-evaluations, 314, 322–323,
340, 342 Self-fulfilling prophecies, 77 Self-management, 213, 300 Self-monitoring leadership, 243 Self-motivation, 213 Selling leadership style, 251 Sexual harassment, 138–140 Short-term plans, 66 Sick buildings, 360 Similarity error, 332–333 Single-use plans, 70–74, 72ex,
73ex, 74ex Singleton, Frank, 153–154, 157, 161 Situational leadership, 251, 251ex Six Sigma concept, 68–69, 69ex Skills
concepts to, 18–20 conceptual skills, 246 defined, 19 development of, 314–315 feedback skills, 278, 281,
283–285, 284ex human relations skills, 247 interpersonal skills, 451 networking skills, 246–247, 452 people skills, 17, 247, 248, 396,
451 safety skills, 370–371 of supervisors, 18–20 supervisory development, 24–26 technical skills, 246
Small teams, 304 Smoke-free environments, 361–362 Social loafing, 305 Social needs, 213 Social networking, 402–403 Social obligation, 49, 49ex Social responsibility, 48–49 Social responsiveness, 49 Society for Human Resource
Management (SHRM), 138 Southwest Airlines, 245 SpaceX, 245
Span of control, 92–95, 93ex Staff authority, 97 Staffing/recruiting. See also
Interviews compensation/benefits, 136–137 employee training, 134–135,
134ex, 135ex employment planning, 125 introduction to, 120–121 orientation, 133–134 performance appraisals, 136 selection of employees, 125–132,
126ex tests, 129–130
Standing plans, 69–70 Starbucks, 439–440 Statistical reports, 152 Status, 254, 385–386 Stewart, Julia, 231 Stimulation of conflict, 381–382 STOP (Safety Training Observation
Program), 358 Storming stage of groups, 302 Strategic planning, 66 Stress interview, 120 Stress of employees, 363–365,
364ex, 371–373 Stress-reduction programs, 9 Stressors, 364 Strikes, 438 Structural differentiation, 378 Structural variables, 416 Subjective measures, 152 Supervision, 20–21, 22, 46–48 Supervisors
change management, 406 changing expectations of, 8–11 as coaches, 8, 11–12 communication dilemma, 266 competencies of, 14–18, 18ex concepts to skills, 18–20 contingent workforces, 45–46 continuous-improvement
programs, 43–44, 46 defined, 5 development of skills, 24–26 diversity impact on, 41–42, 42ex downsizing and, 45 e-business impact on, 37–39 employee assessment, 125 employee loyalty and
engagement, 46 employee transitions to, 11–14 entrepreneurial supervisor vs.,
81, 82ex globalization impact on, 32–33 as hostages, 376 importance of, 9–10 leadership dilemma, 240 linking of plans, 66–67 major sources of, 12 management process, 6–8 motivation and, 210–211,
224–232 organizational levels, 4–6 role in modern organizations,
15–16 scope of job, 14 sustainability importance, 10 team challenges for, 305–308,
307ex technology impact on, 35–36, 150 titles of, 6 transition difficulties, 12–13 unions and, 429 work process engineering, 44, 46 workplace discrimination, 62
Supervisory competencies, 14–18, 18ex
Supply chain management, 163 Supportive supplies costs, 160 Surveys, 26 Suspension, 387 Sustainability, 10 Sustaining innovation, 416
Tactical planning, 66 Taft-Hartley Act (1947), 6,
430–431 Task-centered leader, 250 Tata Motors, 31 Team-based structure, 105 Team-building, 114 Team-oriented culture, 294 Teams. See also Groups
building of, 420 challenges for supervisors,
305–308, 307ex contemporary issues, 308–311 defined, 295 effective teams, 304–306,
314–315 healthcare industry teams,
315–316 increasing use of, 300 leadership of, 256 performance appraisals of, 336 turning groups into, 301, 301ex types of, 300–301
Technical competence, 15 Technical employee motivation,
227–228 Technical expertise, 13 Technical skills in leadership, 246 Technology
controlling and, 166 defined, 35 e-business, 36–39 e-commerce, 36–37 enhancements to, 33–35 impact on supervisor, 35–36, 150 robot technology, 413 as tool, 30 videoconferencing technology,
195, 271, 278, 301 Telecommuting, 36, 94 Teleworking, 94–95 Telling leadership style, 251 Tests, 129–130 Text messaging, 272–273 Theory X–Theory Y view of
motivation, 214 Thinking and communication, 279 360-degree appraisal, 335–336, 342 Time-consuming decisions, 192 Time limits in goal setting, 77 Timeliness controls, 164 Timken, 155 Tolerance and innovation, 416–417 Top management, 5 Toyota Motor Corporation, 294 Training
advanced training of supervisors, 16
assertiveness training, 281 of employees, 9–10, 134–135,
134ex, 135ex feedback on, 135 introduction to, 8 productivity and, 134, 139, 140 staffing/recruiting, 134–135,
134ex, 135ex Traits, 326–327 Transactional leaders, 255–256 Transformational leaders, 256 Transport Canada, 159 Trust, 252–254, 261–262, 308, 412 Twitter, 30, 38, 90, 168, 272, 280
Uncertainty avoidance, 34 Understandable controls, 164 Unigard Insurance, 362 Union shop, 428 Unions
compulsory membership, 428 labor relations overview,
426–429, 427ex, 429ex organization of, 433–434, 433ex
United Airlines, 124 United Auto Workers (UAW), 31, 427 United Nations, 10 United Parcel Service (UPS),
189–190 Unity of command, 96, 97 Unsuspecting subject (USS), 297 U.S. Bureau of Labor Statistics,
65, 427 U.S. Cellular, 168 U.S. Congress, 6 U.S. Internal Revenue Service, 150 U.S. Navy ARIES biodiesel plant, 63 USA Hockey (USAH), 444–445 Utilitarian view of ethics, 199
Validity, 129 Value chain management, 162–163 Varian Medical Systems, Inc., 44 Verbal intonation, 273 Verbal warning, 387 Verbund process, 309 Vertical differentiation, 275 Videoconferencing technology, 195,
271, 278, 301 Violence in workplace, 359 Virgin Group, 245 Virtual organizations, 106 Virtual team, 301 Visionary leadership, 244–246 Voice mail control, 168
Wage negotiations, 428 Wagner Act, 430, 435, 441 Walmart, 10 Waste costs, 160 Web surfing, 30 Websumés, 127 Welch, Jack, 105 Well-structured problems, 190 Wellness programs, 366 Wendy’s, 226 Wildcat strikes, 438 Work-life balance, 228–230 Work process engineering, 44, 46 Work-related accidents, 356–358,
357ex Work rules, 428 Work specialization, 92–93 Worker/workplace privacy, 150,
165–166, 172 Workforce diversity, 40–41, 55,
137, 309 Workgroups, 296 Working at home (WAH), 93 Working from home (WFH),
90–91, 93 Working groups, 301 Workplace discrimination, 62 Workplace violence, 358–360 Writing blogs, 30 Written communication, 270 Written essays, 327 Written reports, 152 Written warning, 387 Wrongful discharge, 392
Yahoo!, 90
Zuckerberg, Mark, 241
Z04_ROBB0356_09_SE_IDX.indd 476 10/20/17 3:51 PM
- Cover
- Title Page
- Copyright Page
- About the Authors
- Brief Contents
- Contents
- Preface
- Acknowledgements
- PART 1 Defining Supervision and Supervisory Challenges
- Chapter 1 Supervision Fundamentals
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- Organizations and Their Levels
- What Common Characteristics Do All Organizations Have?
- What Are the Organizational Levels?
- The Management Process
- What Is Management?
- What Are the Four Management Functions?
- Do Management Functions Differ By Organizational Levels?
- Changing Expectations of Supervisors
- What Roles Do Supervisors Play?
- Are Supervisors More Important in Today’s Organizations?
- Comprehension Check 1‐1
- Is Sustainability Important to a Supervisor?
- Does a Supervisor Need to Be a Coach?
- Transition from Employee to Supervisor
- Where Do Supervisors Come From?
- Is the Transition to Supervisor Difficult?
- Do You Really Want to Be a Supervisor?
- Supervisory Competencies
- Something to Think About (and Promote Class Discussion) Becoming a Supervisor
- News Flash! The Supervisor’s Role in Modern Organizations
- What Is Technical Competence?
- How Do Interpersonal Competencies Help?
- What Is Conceptual Competence?
- Why Must One Have Political Competence?
- How Do Competencies Shift By Managerial Level?
- From Concepts to Skills
- What Is a Skill?
- What Else Is Critical for Me to Know About Supervising?
- Why Study Supervision?
- Comprehension Check 1‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Mentoring Others
- Communicating Effectively
- Thinking Critically
- Chapter 2 Supervision Challenges
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- Global Competitiveness
- Is There Such a Thing As “Buy American”?
- How Does Globalization Affect Supervisors?
- Something to Think About (and Promote Class Discussion) Who Owns What?
- Technology Enhancements
- News Flash! The Cultural Variables
- What Is Technology?
- How Does Technology Change the Supervisor’s Job?
- E‐Business at Work
- What Is an E‐Business?
- What Changes Can Supervisors Expect From E‐Business?
- Comprehension Check 2‐1
- Working in a Diverse Organization
- What Is Workforce Diversity?
- How Does Diversity Affect Supervisors?
- Changing How Business Operates
- Why Are Organizations Doing More with Less?
- Why the Emphasis on Continuous‐Improvement Programs?
- How Does Work Process Engineering Differ From Continuous Improvement?
- What Are the Supervisory Implications of Downsizing, Contingent Workforces, ‐Continuous‐Improvement Programs, and Work Process Engineering?
- Thriving on Chaos
- From Chaos to Crisis
- The Good and Profitable Organization
- What Is a Socially Responsible Organization?
- How Do We Act Responsibly?
- What Is Ethics?
- Comprehension Check 2‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Guidelines for Acting Ethically
- Communicating Effectively
- Thinking Critically
- ANSWERS TO “SOMETHING TO THINK ABOUT: WHO OWNS WHAT?”
- Part 2 Planning, Organizing, Staffing, ‐Controlling, and Decision Making
- Chapter 3 Planning and Goal Setting
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Formal Planning?
- Productivity
- What Is Productivity?
- News Flash! The Downsides of Planning
- Why Is Productivity Important to the United States?
- Planning and Level in the Organization
- What Is the Breadth of Planning?
- How Do Planning Time Frames Differ?
- How Are Plans and Supervisory Levels Linked?
- Can Continuous‐Improvement Programs Be a Help in Planning?
- Key Planning Guides
- What Are Standing Plans?
- What Are Single‐Use Plans?
- Comprehension Check 3‐1
- Something to Think About (and Promote Class Discussion) From the Past to the Present
- Goal Setting
- How Were Goals Set in Years Past?
- What Is the Key to Making Goal Setting Effective?
- Why Might Goal Setting Work for You?
- Self‐Fulfilling Prophecy for Your Followers
- Balanced Scorecard: The Natural Evolution of Goal Setting?
- A Special Case of Planning: The Entrepreneurial Supervisor
- What Is Entrepreneurship?
- Do Entrepreneurs Possess Similar Characteristics?
- How Do Entrepreneurs Recruit and Retain Employees?
- What Supervisory Issues Are Faced By Entrepreneurs?
- How Do Entrepreneurs Compare with Traditional Supervisors?
- Comprehension Check 3‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Setting Goals
- Communicating Effectively
- Thinking Critically
- Chapter 4 Organizing
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Organizing?
- Basic Organizing Concepts
- What Is Work Specialization?
- What Is the Span of Control?
- Something to Think About (and Promote Class Discussion) Return to Yesteryear
- What Is the Chain of Command?
- What Is Authority?
- News Flash! Obeying Authority
- Where Are Decisions Made?
- What Are the Five Ways to Departmentalize?
- Comprehension Check 4‐1
- From Departmentalization to Structure
- A Simple Structure
- The Functional Structure
- The Divisional Structure
- Matrix Structure
- Project Structure
- Team‐Based Structure
- The Boundaryless Organization
- The Learning Organization
- Organizing Your Employees
- How Do You Identify the Tasks to Be Done?
- What Is the Purpose of Job Descriptions?
- Empowering Others Through Delegation
- What Is Delegation?
- Isn’t Delegation Abdication?
- Comprehension Check 4‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Delegating
- Communicating Effectively
- Thinking Critically
- Chapter 5 Staffing and Recruiting
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- The Human Resource Management Process
- The Legal Environment of Hrm
- Something to Think About (and Promote Class Discussion) Is It Safe?
- Employment Planning
- How Does a Supervisor Conduct an Employee Assessment?
- How Are Future Employee Needs Determined?
- Recruitment and Selection
- Where Do Supervisors Look to Recruit Candidates?
- How Does a Supervisor Handle Layoffs?
- Is There a Basic Premise to Selecting Job Candidates?
- How Effective Are Tests and Interviews As Selection Devices?
- News Flash! The Realistic Job Preview
- Preparation for the Interview
- Interview Questions You Shouldn’t Ask
- Interview Questions You Should Ask
- Comprehension Check 5‐1
- Orientation, Training, and Development
- How Do You Introduce New Hires to the Organization?
- What Is Employee Training?
- Performance Appraisals
- Compensation and Benefits
- How Are Pay Levels Determined?
- Why Do Organizations Offer Employee Benefits?
- Current Issues in Human Resource Management
- Workforce Diversity
- The Workplace: Reasonable Grounds for Romance?
- What Is Sexual Harassment?
- How Do “Survivors” Respond to Layoffs?
- Comprehension Check 5‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Interviewing
- Communicating Effectively
- Thinking Critically
- Chapter 6 Controlling
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- The Control Process
- How Do You Measure Actual Performance?
- How Do You Compare Results with Standards?
- When Should Corrective Action be Taken?
- Types of Controls
- What Is Preventive Control?
- When Are Concurrent Controls Used?
- What Is Corrective Control?
- The Focus of Control
- What Costs Should You Control?
- News Flash! On the Rocks
- Comprehension Check 6‐1
- Why Pay Attention to Inventories?
- What Is Value Chain Management?
- Why the Focus on Quality?
- What Are the Characteristics of Effective Controls?
- Can Controls Create Problems?
- Contemporary Control Issues
- Is Employee Theft Increasing?
- Something to Think About (and Promote Class Discussion) Out with E‐Mail
- What Is the Sarbanes–Oxley Act?
- Do Controls Need to Be Adjusted for Cultural Differences?
- Comprehension Check 6‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Establishing Budgets
- Communicating Effectively
- Thinking Critically
- Chapter 7 Problem Analysis and Decision Making
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- The Decision‐Making Process
- How Do You Identify the Problem?
- How Do You Collect Relevant Information?
- How Do You Develop Alternatives?
- How Do You Evaluate Each Alternative?
- How Do You Select the Best Alternative?
- How Do You Implement the Decision?
- How Do You Follow Up and Evaluate?
- Decision Tools
- What Are the Conditions of Decision Making?
- What Is the Expected Value Analysis?
- How Are Decision Trees Useful?
- What Is Marginal Analysis?
- Decision‐Making Styles
- What Are the Four Decision‐Making Styles?
- What’s the Point of These Four Decision‐Making Styles?
- What Common Errors Are Committed in the Decision‐Making Process?
- Comprehension Check 7‐1
- Problems Versus Decisions
- News Flash! Daily Delivery Decisions at Ups
- How Do Problems Differ?
- What Is the Difference Between Programmed and Non‐Programmed Decisions?
- Group Decision Making
- What Are the Advantages of Group Decisions?
- Are There Disadvantages to Group Decision‐Making?
- Is There a Guide for When to Use Group Decision‐Making?
- How Can You Improve Group Decision‐Making?
- Something to Think About (and Promote Class Discussion) Making Good Decisions
- Global Diversity in Decision‐Making
- Design Thinking in Decision‐Making
- Big Data in Decision‐Making
- Ethics in Decision‐Making
- What Are Common Rationalizations?
- What Are the Three Views on Ethics?
- Is There a Guide to Acting Ethically?
- Comprehension Check 7‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Becoming More Creative
- Communicating Effectively
- Thinking Critically
- Part 3 Motivating, Leading, Communicating, and Developing
- Chapter 8 Motivating Followers
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Motivation?
- Understanding Individual Differences
- Can Personality Measures Predict Practical Work‐Related Behaviors?
- Do You Need to Develop Your Emotional Intelligence to Improve Your Supervision Skills?
- The Early Theories of Motivation
- How Do You Focus on Needs?
- Do Supervisors Focus on the Nature of People?
- What Effect Does the Organization Have on Motivation?
- Comprehension Check 8‐1
- Contemporary Theories of Motivation
- What Is a Focus on Achievement?
- How Important Is Equity?
- Do Employees Really Get What They Expect?
- Something to Think About (and Promote Class Discussion) Motivated to Do What?
- How Do You Create an Atmosphere in Which Employees Really Want to Work?
- Designing Motivating Jobs
- Motivation Challenges for Today’s Supervisors
- What Is the Key to Motivating a Diverse Workforce?
- Should Employees Be Paid for Performance Or Time on the Job?
- How Can Supervisors Motivate Minimum‐Wage Employees?
- How Are Contingent Workers Motivated?
- What’s Different in Motivating Professional and Technical Employees?
- What Can a Supervisor Do to Improve Employees’ Work–Life Balance?
- News Flash! Making It Rain . . . at Gravity
- How Can Supervisors Use Employee Recognition Programs?
- How Can Employee Stock Ownership Plans Affect Motivation?
- Comprehension Check 8‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Designing Jobs That Motivate
- Communicating Effectively
- Thinking Critically
- Chapter 9 Leading Followers
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- Understanding Leadership
- Are Leaders Born or Made?
- What Are the Traits of Successful Leaders?
- What Is This Thing Called Charisma?
- What Is Visionary Leadership?
- Comprehension Check 9‐1
- How Do You Become a Leader?
- Why Does a Leader Need Technical Skills?
- How Do Conceptual Skills Affect Your Leadership?
- How Do Networking Skills Make You a Better Leader?
- What Role Do Human Relations Skills Play in Effective Leadership?
- Something to Think About (and Promote Class Discussion) Growing New Leaders
- Leadership Behaviors and Styles
- What Is Task‐Centered Behavior?
- What Are People‐Centered Behaviors?
- What Behavior Should You Exhibit?
- Effective Leadership
- News Flash! National Culture Could Affect Your Leadership Style
- Contemporary Leadership Roles
- Do Credibility and Trust Really Matter?
- Why Are Credibility and Trust Important?
- What If You Play Favorites?
- How Can You Lead Through Empowerment?
- Why Should Supervisors Engage Their Employees?
- Leadership Issues Today
- What Are Transactional and Transformational Leaders?
- What Is Team Leadership?
- What Is E‐Leadership?
- Is Leadership Always Relevant?
- Comprehension Check 9‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Mentoring Others
- Communicating Effectively
- Thinking Critically
- Chapter 10 Communicating Effectively
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Communication?
- The Communication Process
- Methods of Communication
- How Do You Communicate Orally?
- Why Do You Use Written Communication?
- Something to Think About (and Promote Class Discussion) What Is the Best Method to Communicate Bad News?
- Do Women and Men Communicate Differently?
- Is Electronic Communication More Efficient?
- What Issues Are Created By Instant Messaging and Text Messaging?
- How Does Nonverbal Communication Affect Your Communication?
- What Is the Grapevine?
- Barriers to Effective Communication
- How Does Language Affect Communication?
- What Did you Say?
- Did You Get My Message?
- Do You See What I See?
- What Do Roles Have to Do with Communication?
- Is There a Preferred Information Medium?
- Comprehension Check 10‐1
- How Does Honesty Affect Communication?
- How Can You Improve Your Communication Effectiveness?
- News Flash! Twitter . . . Social Benefit Or Social Disaster?
- A Special Communication Skill: Active Listening
- The Importance of Feedback Skills
- What’s the Difference Between Positive Feedback and Feedback for Improvement?
- How Do You Give Effective Feedback?
- Comprehension Check 10‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Active Listening
- Communicating Effectively
- Thinking Critically
- Chapter 11 Developing Groups
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is a Group?
- Why Do People Join Groups?
- Understanding Informal Workgroups
- What Are Norms and How Do They Affect Work Behavior?
- News Flash! Solomon Asch and Group Conformity
- Are Cohesive Groups More Effective?
- What Is an Emergent Leader?
- How Can Informal Groups Be Helpful?
- Are There Ways to Influence the Informal Workgroup?
- Comprehension Check 11‐1
- The Increasing Use of Teams
- What Are the Different Types of Work Teams?
- Turning Groups into Teams
- The Five‐Stage Model of Group Development
- A Model of Development for Deadline‐Driven Ad Hoc Groups
- How Do You Build Effective Teams?
- Team Challenges for Supervisors
- What Obstacles Exist in Creating Effective Teams?
- Something to Think About (and Promote Class Discussion) Fast Times!
- How Can Team Obstacles Be Overcome?
- Contemporary Team Issues
- Why Are Teams Central to Continuous‐Improvement Programs?
- How Does Workforce Diversity Affect Teams?
- What Challenges Exist When Supervising Global Teams?
- When Are Teams Not the Answer?
- Comprehension Check 11‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Developing Your Coaching Skills
- Communicating Effectively
- Thinking Critically
- Part 4 Appraisal, Safety, Negotiation, Change, and Labor Relations
- Chapter 12 Performance Appraisal
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- The Purpose of Employee Performance Appraisals
- When Should Appraisals Occur?
- What Is Your Role in Performance Appraisals?
- What Are the Legal Issues in Performance Appraisals?
- Are There Appropriate Criteria for Appraising Performance?
- How Do You Gather Performance Data?
- Performance Appraisal Methods
- What Are the Absolute‐Standards Measurements?
- How Do You Use Relative Standards?
- Comprehension Check 12‐1
- Objectives
- Potential Problems in Performance Appraisals
- What Is Leniency Error?
- How do Halo Errors Affect Appraisals?
- What Is Similarity Error?
- What Is Recency Error?
- Something to Think About (and Promote Class Discussion) an Unfair Performance Review
- How Does Central Tendency Error Affect Appraisals?
- Are You Inclined to Use Inflationary Pressures?
- How Can You Overcome the Hurdles?
- Responding to Performance Problems
- What Do You Need to Know About Counseling Employees?
- News Flash! The Anytime Feedback Tool at Amazon
- Is Your Action Ethical?
- Comprehension Check 12‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Conducting a Performance Evaluation
- Communicating Effectively
- Thinking Critically
- Chapter 13 Workplace Health and Safety
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- The Occupational Safety and Health Act
- What Are the Osha Enforcement Priorities?
- How Does a Supervisor Keep Osha Records?
- What Are the Osha Punitive Actions?
- Does Osha Work?
- Comprehension Check 13‐1
- Job Safety Programs
- What Causes Work‐Related Accidents?
- How Can Accidents Be Prevented?
- How Do Supervisors Ensure Job Safety?
- News Flash! Causes Of Workplace Violence
- A Special Case of Safety: Workplace Violence
- Maintaining a Healthy Work Environment
- How Do You Create a Smoke‐Free Environment?
- Something to Think About (and Promote Class Discussion) Save Lives, Save Money: Make Your Business Smoke‐Free
- What Are Repetitive Stress Injuries?
- Stress
- Are There Common Causes of Stress?
- What Are the Symptoms of Stress?
- How Can Stress Be Reduced?
- Helping the Whole Employee
- Where Did Eaps Come From?
- Why Provide Wellness Programs?
- Comprehension Check 13‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Developing Safety Skills
- Communicating Effectively
- Thinking Critically
- Chapter 14 Conflict, Politics, Discipline, and Negotiation
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Conflict?
- Is All Conflict Bad?
- Where Do Conflicts Come From?
- How Do You Manage Conflict?
- What Resolution Techniques Can You Use?
- Which Conflicts Do You Handle?
- How Do You Choose the Appropriate Resolution Technique?
- How Do You Stimulate Conflict?
- How Cautiously Should You Proceed in Stimulating Conflict?
- Comprehension Check 14‐1
- Understanding Organizational Politics
- What Is Politics?
- Why Does Politics Exist in Organizations?
- Can You Play Politics and Still Be Ethical?
- How Do You Know When You Should Play Politics?
- News Flash! Status in Organizations
- The Disciplinary Process
- What Types of Discipline Problems Might You Face?
- Is Discipline Always the Solution?
- Basic Tenets of Discipline
- How Do You Lay the Groundwork for Discipline?
- How Do You Make Discipline Progressive?
- What Factors Should You Consider in Discipline?
- What About the Law?
- Negotiation
- How Do Bargaining Strategies Differ?
- How Do You Develop Effective Negotiation Skills?
- Something to Think About (and Promote Class Discussion) Hand Me a Towel
- Comprehension Check 14‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Six Steps to Resolve Conflict
- Disciplining an Employee
- Communicating Effectively
- Thinking Critically
- Chapter 15 Change Management
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- News Flash! This Changes Everything
- The Forces for Change
- What Are the External Forces Creating a Need for Change?
- What Are the Internal Forces Creating a Need for Change?
- How Can Supervisors Serve as Change Agents?
- Two Views of the Change Process
- What Is the Traditional View of Change?
- What Is the Contemporary View of Change?
- Will You Face a World of Constant and Chaotic Change?
- Why Do People Resist Change?
- How Can You Overcome Resistance to Change?
- Something to Think About (and Promote Class Discussion) Robot Doc
- Comprehension Check 15‐1
- Stimulating Innovation
- How Are Creativity and Innovation Related?
- What Is Involved in Innovation?
- What Is Disruptive Innovation?
- How Can a Supervisor Foster Innovation?
- Comprehension Check 15‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Innovation in the Workplace
- Communicating Effectively
- Thinking Critically
- Chapter 16 Supervision and Labor
- Key Concepts
- Chapter Outcomes and Learning Objectives
- Responding to a Supervisory Dilemma
- What Is Labor Relations?
- Why Do Employees Join Unions?
- Labor Legislation
- The Wagner Act
- The Taft‐Hartley Act
- Other Laws Affecting Labor–Management Relations
- Comprehension Check 16‐1
- How Are Employees Unionized?
- News Flash! When the Union Arrives
- Collective Bargaining
- What Are the Objective and Scope of Collective Bargaining?
- What Is the Collective Bargaining Process?
- What Happens When Agreement Cannot Be Reached?
- Something to Think About (and Promote Class Discussion) A Bitter Taste at the Coffe House
- Comprehension Check 16‐2
- Enhancing Understanding
- Summary
- Comprehension: Review and Discussion Questions
- Key Concept Crossword
- Developing Your Supervisory Skills
- Getting to Know Yourself
- Building a Team
- Resolving a Grievance
- Communicating Effectively
- Thinking Critically
- Postscript Personal Development
- Introduction
- What Is a Career?
- How Do I Make a Career Decision?
- Can I Increase My Chances for Getting into the Organization?
- Where Can I Find Jobs Advertised on the Internet?
- Preparing a Résumé
- Excelling at the Interview
- Some Suggestions for Developing a Successful Career
- Once You Get a Job Be Proactive and Find Yourself a Mentor
- A Final Word
- ANSWERS TO COMPREHENSION CHECKS AND CROSSWOrD PUZZLES
- GLOSSARY
- INDEX
