MANAGING PEOPLE IN ORGANIZATIONS
ASSIGNMENT 1
OCTOBER 2001
INTRODUCTION
This assignment consists of the following parts:
(A) The
Development of Management Theory
Much research has
been done over time regarding the factors that play a key role in the effective
running of a business. Here we will discuss two management theories, one from
Classical School and another from Human Relations School and examine how they
apply today.
Ø
Classical School – Frederick Taylor’s Theory
Taylor was the
father of scientific management, which was based on the efficiency of production
processes. He tried to establish what constituted a fair day’s work from
his scientific study of shoveling activities and output on lathes.
To improve productivity, Taylor examined the time and motion details of a job,
developed a better method for performing it and trained the worker.
Although Classical
writers have been criticized for not taking sufficient account of personality
factors, they in their work provide a useful starting point in attempting to
analyze the effectiveness of the design of organization structure.
For example, an
employee who knows exactly the task to achieve every day can be more productive
but on the other hand he/she will be unhappy for the pressure and lack of
personal attention.
Ø
Human Relations School – Elton Mayo’s Theory
The Human
Relations approach considers the human behavior in organizations, how and why
people behave the way they do. Mayo carried out the so-called “Hawthorne
Experiments” and he concluded that the role of management should be concerned
with providing an interesting and friendly environment for the worker focused
on work-groups, motivation, leadership, communications and job design. This definitely applies for all people, at
all times. For example, even if perfect planning and organizing exists,
according to the Classical Approach, if people do not feel comfortable and are
not well motivated, they won’t be as much productive as they would have been.
People today love to work in a friendly environment and feel that they are
important.
Ø
Application of Taylor’s and Mayo’s Theories today
Both Classical and
Human Relations School are useful today. According to Classical School, a good
planning, division of work and efficient methods should be used to make the work easier. Human Relations School considers the
human factor and makes the best out for the employee. So Classical School was
concerned about “organizations without people” and the Human Relations School
about “people without organizations”.
Even though they both cannot stand by themselves, combining the two we have a
good picture of the working conditions today and maybe of the future too. Of
course they both ignore basic factors, for example the role of an organization
in the society or the fact that people today like coming up with their own
ideas and ways to perform a task easier and quicker according to their style,
believes and character.
[502 words]
(B) Four Managerial Skills
Four of the most important managerial skills are
the following, as shown in the following cyclic diagram:
v
Planning
Planning involves action planning, objective setting, problem solving, etc. Effective planning helps an organization adapt to change by identifying opportunities and avoiding problems1. It also relates to forecasting, meaning that a manager has to decide for any future action that will be necessary to meet a target by using mainly proactive approaches rather than reactive. Several objectives have to be clearly set and any problems coming up should be dealt with and solved. Without the appropriate planning, even if employees may be perfectly trained and motivated, the job or task to be achieved has many chances to fail.
For example, a manager notices that the
exposure to risk of a bank’s portfolio is too high. Necessary planning needs to
be made regarding objective setting (to minimize risk), suggesting possible
solutions to the problem (e.g. buying a 10 year government bond) and forecast
how this will actually affect the portfolio (maybe consider future movement of
interest rates).
v
Organizing
Organizing
involves the organizing process, delegating, communicating, managing time, etc. The purpose of organizing is to make the best use of
the organization’s resources to achieve organizational goals1. Delegation enables transfer of authority
from manager to employees. Effective
communication is needed too, including feedback to ensure mutual understanding.
Time needs to be managed, to be able to meet certain objectives on time,
setting priorities and managing stress.
Without the appropriate
organization, technical problems may arise that can prevent the completion of a
particular task. Such problems may include not choosing the right people to do
the job, not collecting the right and up to date information because of bad
communication or even achieving a task but too late in time.
For example, a
bank employee who is preparing a monthly “liquidity report”, may spend many
hours trying to breakdown deposits into smaller categories but because of bad
communication, he is not aware that another employee has already done the job
for the preparation of the “gap report”.
v
Directing
Directing involves
teambuilding, motivating, leading, selecting, etc4. An effective manager must also be a leader who can
be able to influence people to achieve the goals of the organization1. A team must be built in an effective way
and also be motivated to higher levels of productivity. The right people should
be selected to achieve a well-planned task and it is very important that the
manager will make them feel that they are working within a very friendly
environment, which fulfills their basic needs and that he is there for them on
every step they make.
Even though this
category is mostly based on psychological effects, it is still of crucial
importance. People may have excellent skills, planning may have been done in
the best possible way as well as organizing but serious problems may arise
because employees may not feel happy with their conditions of work, co-workers,
manager or not motivated successfully.
For example, if an
employee knows that even if he works in a team, he has to do all the work
himself and his manager will reward the whole team, he will definitely not do
the job!
v
Empowerment
Empowerment allows
employees greater freedom, autonomy and self-control over the work and
responsibility for decision-making5. This
is very important because people like feeling free to come up with their own
ideas and ways to deal with various situations rather than being imposed what
to do by their managers. Empowerment enables employees to gain greater sense of
achievements hence greater job satisfaction, motivation and commitment5.
For example, an
empowered employee in the marketing department can develop his/her own ideas to
promote a new housing loan though a TV advertisement and feel very devoted to
the company for doing so, rather than being given the main points by the
manager and feel isolated from the work itself.
[657 words]
(C) Personal SMART Objectives
It is very
important that every manager sits down with his/her own employees and agrees a
set of targets. Objectives are set to be SMART if they are Specific, Measurable,
Acceptable, Realistic and Timed.
Two objectives
from my workplace are the following:
(a) The installation
and development of the “TREMA” computer program for the management of Treasury
operations by the end of 2001. This is a specific objective for the team of
Middle Office of Treasury. The whole team agreed that this will help the
department to work quicker and more efficiently and even if it is very
challenging, it can be reached within this time limit. The team should work
very hard and spend a significant amount of time for the training of the rest
of the employees in the Dealing Room and Back Office.
(b) We set a target
with my manager that, by the end of 2001, I should learn properly the jobs of
all six different sections of my department. We agreed the length of time I
should spend on each job, decided the dates I should move from one job to
another and found that by the end of the year the task will be accomplished.
For better results my manager instructed each section leader to report to him
regularly on my progress.
Many theories have
been evolved through time regarding management. A combination of Classical
School and Human Relations School gives a good picture of the working
conditions today. The key role for the successful running of the business is
allocated on managers who must use skills like planning, organizing, directing
and empowerment to manage their employees in the best possible way. It is also
very important for every employee to agree a set of objectives with his/her
manager, which they become more effective if they are SMART.
[310 words]
[TOTAL : 1469 words]
(1) http://ollie.dcccd.edu/mgmt1374/contents.html
,1998
(2) (2) Croft, Herin, Norton, Whyte, (2000), Management and Organization in Financial Services, Kent, Financial World Publishing
(3) (3) James D. (1999), Managing People in Organizations, Kent, Financial World Publishing
(4) (4) Carnegie D. & Associates, (1978), Managing Through People, New York, Simon and Schuster
(5) (5) Mullins L.J. (1999), Management and Organisational Behaviour, Prentice Hall