Management and Leadership

Functions of management – what managers are responsible for

1. Setting objectives and planning

   1. Future planning and creating departmental and individual objectives for each employee

2. Organising resources to meet objectives • They will ensure clear division of work and delegate tasks to keep everyone motivated

3. Directing and motivating staff

   1. Guiding, leading and overseeing people to ensure corporate objectives are met

4. Coordinating activities

   1. Encourage teamwork between departments and division to lower duplications

5. Controlling and measuring performance against targets

   1. Make sure targets are being met and if they are not, find solutions like training workers, buying better equipment

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Management roles

• According to Henry Mintzberg’s the nature of managerial work, there are 10 different roles of management.

• These 10 can be classified into 3 main groups:

  • Interpersonal roles – dealing with people

  • Informational roles – receiver, sender of information

  • Decisional roles – make decisions and allocate resources
    Interpersonal roles

1. Figurehead – symbolic leader of the company

2. Leader – motivating subordinates, selecting and training workers

3. Liaison – linking managers of one department with others
   Informational roles

4. Monitor – collecting data about the operations

5. Disseminator – sending information about internal and external factors to relevant people

6. Spokesperson – communicating information about the business
   Decisional roles

7. Entrepreneur – look out for new opportunities

8. Disturbance handler – flexible in responding to changes

9. Resource allocator – deciding on the spending of the business’s resources

10. Negotiator – representing the organisation at all negotiations

Leadership

• It involves setting a clear direction and vision for the company

• The best managers are also leaders

  • Qualities –

    • Desire to succeed

    • Self-confidence

    • Creative and innovative

    • Multitalented

    • Incisive mind

Important leadership positions in business

• Directors –

  • They are the senior managers elected by shareholders

  • Responsible for delegation, assist in recruitment, meeting objectives within their department

• Managers -

  • Responsible for people, resources and decision making

  • Have authority over people below them

  • Direct, motivate, discipline

• Supervisors –

  • Appointed my management

  • Not a decision-making role

  • Responsible for working towards pre-set goals

• Workers’ representatives –

  • Elected by the workforce

  • They discuss areas of common concern with managers

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Leadership styles

Autocratic

Democratic

Paternalistic

Laissez-faire

Decision-making at the centre

Promotes active participation of workers

Believes that manager is in a better position than the workers to know what’s best for the business.

It means, let them do it

Leader takes all decisions

Two-way communication

Some consultation, but end decision based on managers

Leaves the decision-making on workforce after the broad objectives are set

Little information given to staff

Full staff involvement

No true participation in decision-making

Very little input from management

Close supervision of workforce

Depends on the level of involvement

Workers maybe dissatisfied and demotivated

High level of delegation

One-way communication

Worker feedback is taken

Workers may not appreciate lack of structure and guidance

Faster decision making \n Good for unskilled workers

Better final decision \n Better motivation

Lack of feedback

May demotivate workers \n No staff input who have hands on experience

Time consuming \n Not helpful during emergencies

McGregor’s theory X and theory Y

• Douglas McGregor devised a theory on what factors determine the best leadership

• He found that the management attitude is the most important factor

• He identified 2 distinct approaches

• Theory X and theory Y managers 

• Theory X –

  • Theory X managers believed that workers are lazy, dislike work, will avoid responsibility, not creative

  • They need to be managed and controlled with close supervision

  • This encourages autocratic leadership

• Theory Y –

  • Theory Y managers believed that workers enjoy work, are creative, ready to accept responsibility

  • This led to democratic leadership style

• He suggested that theory X and Y are MANAGEMENT OPIONIONS not types of workers.

• He believed how managers thought will led to workers becoming like that description

Factors affecting the leadership style

• Training and experience of workforce

• Amount of time available for discussion

• Attitude of management

• Culture of firm

• Importance of issues

• In general, democratic is considered the best

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Informal leadership

• These are people who have no formal authority but are still respected in the firm

• They have the ability to lead due to their personality, experience, knowledge.

• Informal leaders help achieve the aims of a business

• Informal leaders are a key role of motivation

Emotional intelligence

• It is the ability of managers to understand their own emotions as well as others

• Daniel Goleman – 4 EI competencies

  • Self-awareness – knowing our own feeling, having self-confidence and realistic views in our abilities  

  • Self-management – recover quickly from stress and show self-control

  • Social awareness – sensing others feelings

  • Social skills – handling emotions in relationships well.

Motivation

What is motivation?

• It is the desire of workers to do a job quickly and efficiently. 

• They are the external and internal factors that stimulate people to take actions to meet a specific aim. 

Importance of motivation

• Help a business achieve its goals

• Help remain as cost-effective as possible (lower accidents and wastage)

• Helps maintain low labour turnover and absenteeism rates

• Impact the productivity and competitiveness of the business

• Well-motivated staff will be ready to accept responsibility and will make suggestions to improve customer service and satisfaction.

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F.W. Taylor – scientific management/theory of an economic man 

• His main purpose was to reduce inefficiencies

• His approach included 7 steps:

  • Select group of workers 

  • Observe them perform tasks 

  • Record time taken 

  • Identify the quickest method

  • Train all employees in that method 

  • Supervise them 

  • Pay them accordingly 

• He believed that people are only motivated by money 

• He believed piece rate method of payment should be used where worker’s output is directly linked to their wage rates

• He believed that autocratic leadership style should be used 

• Workers should be closely supervised and no discussion or feedback should be taken

• One-way communication 

• Theory X manager ideology is adopted

• Problems of this method –

• Not everyone is motivated by money

• Quantity over quality is encouraged – not acceptable in the long run

• In modern times, due to advanced education and training, worker participation should be encouraged and will help the business in the long run

Abraham Maslow – Hierarchy of human needs

• He categorised employee needs into 5 levels.

• Every employee starts at the lowest level

• Physical needs – food, shelter, water, rest

• Safety needs – job security, health and safety

• Social needs – trust, friendship, teamwork, acceptance

• Esteem needs – respect, status, recognition, achievement

• Self-actualisation – reach one’s full potential, challenging and creative work

• Regression is possible – once one need is satisfied, greater quantity of the same need will not motivate people

• Limitations-

  • Everyone has different needs

  • Difficult and impractical to identify for each worker and have separate measures for each

  • Self-actualisation is never permanently achieved

Frederick Herzberg – Two factor theory 

• He conducted interviews and surveys to know and identify factors which give good feelings and the ones that provide negative feelings 

• Job enrichment principles should be adopted 

• Complete units of work – workers should be allowed to produce a recognisable part of the product/service 

• Feedback on performance – workers must be given accurate feedback on their work. Good work must be recognised 

• A range of tasks – workers must be given challenging and beyond their current experience tasks 

• Team work should be encouraged and adopted

• He divided his results into 2 factors –

• Hygiene factors –

  • Salary, working conditions, supervision, social relations 

  • They DO NOT motivate employees, but their absence DEMOTIVATES them 

  • They just remove dissatisfaction 

• Motivators – 

  • Achievement, recognition, work itself, responsibility, advancement 

  • These factors MOTIVATE employees

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David McClelland – Motivational needs theory 

• He identified 3 types of motivational needs in his book – The achieving society 

1. Achievement motivation – 

   1. Have realistic goals 

   2. Seek opportunities of job enrichment and advancement 

   3. Have result driven attitudes

2. Authority motivation –

   1. Desire to control others 

   2. Need to be influential, effective, make an impact 

   3. Strong leadership instincts 

3. Affiliation motivation – 

   1. Need for friendly relations 

   2. Teamwork and interaction with others 

   3. Be liked and popular

• Achievement motivated people are the ones who give the business the best results.

Vroom – expectancy theory 

• Individuals will choose to behave in ways they believe will lead to the best outcome and rewards

• People can be motivated if they believe:

• There is a positive link between performance and effort

• Will result in a favourable reward

• Reward will help satisfy important needs

• Desire to satisfy the need is strong 

• 3 beliefs –

  • Valence – depth of the want of an employee for an extrinsic reward

  • Expectancy – degree to which people believe hard-work will lead to their desired reward 

  • Instrumentality – confidence of employees that they will receive the reward they desire 

• Even if any 1 belief is missing, motivation will not occur

Motivational theories – evaluation 

• They provide the starting point and a framework to defining motivational methods and issues 

• They are often criticized due to its lack of rigour and follow up work 

• Important to identify the most appropriate theory and identify their relevance in the business

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Motivators - Financial rewards

Time based wage rate

Piece rate

Salary

Payment to a worker made for each hour worked

Payment to worker for each unit produced.

Annual income, paid monthly

Mode of payment for manual, clerical and other blue collared workers

Reflects the difficulty of the job and the standard time.

Professional, supervisory and management staff

Time rate is present, usually paid weekly

Too low- demotivates, too high- reduces incentives (will be able to meet their target wage level easily)

Fixed each year and determines the status of job

Does not directly link to efforts put in

Encourages faster working and efforts

Job evaluation helps decide salary bands

Low security for workers

Requires output to be measurable

Security of income and helps in cost and price calculation

Little security for workers

Suitable for jobs where output is not measurable

Helps in price determination on the basis of labor costs.

Can lead to complacency as income is not related to effort

Quality and safety issues \n Leads to falling quality standards

Regular appraisal is necessary

Resistance from workers in the event of change of work

Commission

Bonus

Performance-related pay

Profit-sharing

Fringe Benefits

Proportion of the sales made

In addition to their wages/salary

A bonus scheme to reward staff for “above average work performance”

A bonus for staff based on the profits of the business- can be a proportion of the salary, issue of organizations shares

Non cash forms of reward

Maybe too persuasive, poor brand image

Given for work well done/efficiently

In addition to basic salary

Earns commitment from staff

Company cars, free insurance, pension schemes, loans.

Low security for workers

Requires regular target setting, annual appraisals against preset targets and paying bonuses

In case of issue of shares solves the problem of “us and them”

In addition to normal payment schemes

Teamwork is not encouraged

Often inadequate, short-term effect \n Problem of favouritism

Reduces retained profits and dividends for shareholders

Herzberg theory: it only moves, not motivates

Diluted share capital

Hawthorne effect: individual focus rather than team.

Workers may sell shares quickly, reducing its effect

Non-financial rewards

Job Rotation

Job Enlargement

Job Enrichment

Increasing flexibility of the workforce

Increasing the scope of job

Principle of organizing work

Giving variety of work- multi skills

Broadening the task, deepening

Encouraged to use full ability-not just physical effort

Switch from one job to another- avoids monotony

Includes both rotation and enrichment

Reduction of direct supervision, allowing decision making authority

Series of separate task

Usually happens in case of redundancies or shortage

Based on 3 principles from Herzberg's theory: \n - Complete units of work \n - Direct feedback \n - Challenging tasks

Doesn’t increase empowerment or responsibility

Horizontal enlargement

Adding tasks to avoid it from becoming boring but no power/authority is given

Doesn’t lead to long-term job satisfaction or enrichment

Job redesign

Training

Quality circles

Restructuring of a job with the agreement of the employee

Improving and developing the skills of employees

Originated in japan- Kaizen

Attempt to make work more interesting and challenging

Increases status and chances of promotion

Voluntary groups of workers meet regularly and discuss issues

Adding and removing certain tasks can lead to rewarding work

Greater sense of belonging

Employees have first hand experience with the problem

Similar to enrichment

Better and quicker solutions

Allows workers to gain a wider range of skills and increases chances of promotion

Provides a new perspective

Leads to job enrichment – Herzberg motivation

Worker participation

Team-working

Target setting

Delegation and Empowerment

Actively encouraged to become involved in decision making within the organization

Lower labor turnover

Management by objectives

Passing down of authority

Involvement in decisions on break times, job allocations, productivity

Better ideas, improved quality

Enables feedback and comparison

Delegating control over work

Improves productivity and lowers wastage

Maslow and Herzberg’s applications

Provides a sense of direction

Better decisions, new perspectives

Delayering

Time taking – appraisal every year

Can be time consuming

Not everyone is a team player

Autocratic managers find it difficult

Conflict with organizational values

Paternalistic leadership used – demotivating

Training costs

Financial and non-financial motivation – evaluation 

• Pay is not the only motivating factor 

• Managers must be flexible 

• Depends on:

  • Leadership style 

  • Culture of management 

  • Attitude of managers and workers 

• Usually, business use a mix 

• Non-financial methods are cheaper than financial

Human resource management

• It aims to recruit capable, flexible and committed people, managing and training them and rewarding them accordingly.

• HRM has a major impact on efficiency, flexibility and motivation

Purpose and roles of HRM

• Recruit and train workers to ensure maximum productivity so that all corporate objectives are met

• In the past, HRM was:

  • Bureaucratic and had inflexible approach

  • Focused solely on recruitment and selection rather than development and training

  • Reluctant to delegate

  • Not part of the strategic management team

• Roles of HRM include:

  • Workforce planning – identifying future needs in terms of number of employees and skills required

  • Recruitment and selection – recruiting the most suitable employees

  • Developing employees – training, appraisal and developing employees

  • Employment contracts – preparing employment contracts and ensure they are abided by

  • Ensuring HRM operates across the business – involving managers in development and training of employees

  • Employee morale and welfare – monitoring and improving employee morale. Giving guidance and advice and ensuring appropriate work-life balance

  • Incentive systems – paying appropriately

  • Monitoring -measuring and monitoring employee performance

  • Dismissing employees with inappropriate behaviour

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Recruitment

• It is necessary when a business is expanding or employees are leaving the organisation

Job analysis

• It involves identifying a vacant position, understanding its roles and responsibilities.

Job description

• It provides a complete picture of what the job will entail, its roles, rights and responsibilities.

• It helps attract the right type of people to the job

Person specification

• It includes analysis of the type of qualities, skills and characteristics needed by any person appointed to a job. It is based on the job description after assessing the complexity of the job. It is a ‘person profile’ for the job

Job advertisement

• It includes the requirements, personal qualities needed. It can be displayed within the organisation or outside, depending on the recruitment method chosen.

• If external, can advertise in online recruitment services, newspapers, magazines, government agencies, recruitment agencies, etc.

Types of recruitment

1. External – outside the organisation 

   1. Bring new ideas

   2. Wider choice of applicants 

   3. Avoids jealousy and resentment 

   4. Standard of applicants maybe higher 

2. Internal – from within the organisation

   1. Already known to the business, no need for induction training 

   2. Known to the selection team 

   3. Well aware of the organisational culture, ethical code of conduct, etc

   4. Quicker, less time consuming 

   5. Cheaper 

   6. Gives workers a chance to progress, motivates them, Herzberg, Maslow

   7. Management style already known

Selection process

Shortlisting applicants 

• After receiving carious applications, the business will shortlist them according to their CV’s, references, previous work, etc

Selecting between applicants 

• The shortlisted candidates are then selected through interviews, aptitude tests, psychometric tests, trail work, etc

• They often use a 7-point plan – achievement, intelligence, skills, interests, personal manner, physical appearance, personal circumstances

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Employment contracts 

• They are legally binding documents to ensure that all policies are fair and in accord with the current employment laws. 

• It includes workers responsibilities, working hours, holiday entitlement, wages, appraisal process, etc

• It imposes responsibility on both employers and employees to honour the contract.

Labour turnover 

• It measures the rate at which employees leave the organisation 

• Number of employees leaving in 1 year/average number of employees employed * 100

• High and increasing labour turnover indicates low moral and employee discontent 

• It increases costs of recruiting, selecting training new workers

• Customer service maybe compromised 

• Difficult to establish loyalty and team spirit

• Low skilled workers may be replaced by productive ones

• New ideas

• May reduce costs if business is planning redundancy and rationalisation

Training and development of employees

• It is work-related education given to employees to improve their efficient and productive 

• Types of training – 

  • Induction training –

    • It is an introduction training given to all new employees

    • It helps the worker understand the customs, procedure, layout of the organisation 

  • On-the-job training –

    • Instructions at the place of the work 

    • Done by watching and working closely with an experienced member 

    • It is cheaper 

  • Off-the-job training –

    • Instructions given away from the work place by experts

    • It is expensive but more productive 

    • Training is expensive

    • But it will increase morale amongst employees as they will feel more valued and secured as it will increase chances of promotion 

    • It may encourage poaching which acts as a disincentive for companies to set up expensive training programmes

    • Increases productivity and efficiency 

    • Makes the workforce more flexible 

    • Better customer service and lower accidents

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Development and appraisal of employees

• Development is a continuous process in the form of new challenges and opportunities

• It is to help an employee achieve self-actualisation and fulfilment levels 

• Appraisal is a process of assessing employee effectiveness. It is a part of the staff-development programme

• The performance is measured against pre-set goals.

• It encourages them to work harder

Discipline and dismissal of employees

• If a worker fails to meet obligations in the contract of employment, the HR department has to discipline them 

• They can even be dismissed. This is when a worker is asked to leave, due to parts of their job or behaviour being unsatisfactory 

• There maybe chances of unfair dismissal allegations if the organisation can not prove that the necessary steps have been take to avoid it. 

• These may include verbal warnings, written warnings, training sessions, etc

• An employee may reach out to an employment tribunal to claim unfair dismissal

Redundancies 

•  Redundancy is when a worker loses their job because the job is no longer necessary, through no fault to their own 

• This is done when there is a fall in demand, advances in technology, business is trying to rationalise and cut costs 

• Business must ensure these announcements are made efficiently as they have a major impact on other employee’s morale and job security.

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Employee morale and welfare

• HR departments are expected to offer advice, counselling and guidance to employees who are in need of it. 

• Increases morale and sense of loyalty

Work-life balance

•  It is where workers are not able to balance time between their work and their personal life.

• Workers expected to work long and unsociable hours leads to stress and poor health

• HR must work with employees to help them achieve good work-life balance to increase efficiency and productivity 

• Some methods to do this may include:

  • Flexible working 

  • Teleworking – work from home facility 

  • Job sharing – 2 people working as one full time employee

  • Sabbatical periods – extended period leave from work 

• This is mainly due to: 

  • Consumers expect access to goods and services 24/7

  • Globalisation and increased competition

Policies for diversity and equality

• Equality is when everyone is treated fairly and has equal chances to succeed

• Diversity is the process of creating a mixed workforce

• Benefits –

  • Higher reputation 

  • Higher morale 

  • Ability to recruit top talent 

  • Capture a greater consumer market 

  • Better ideas and greater creativity