Reaching Goals: Plans and Controls Chapter 6 Reaching Goals: Plans and Controls Today’s smart supervisor relies on collaboration to get the job done. The more difficult or impossible the job or the time constraints, the more important it is to get your people involved in creating a plan to get it done. —Edward J. Felten, Former president (former), First Supply Group McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Describe types of planning that take place in organizations. Identify characteristics of effective objectives. Define management by objectives (MBO) and discuss its use. Discuss the supervisor’s role in the planning process. Explain the purpose of using controls. Identify the steps in the control process. Describe types of control and tools for controlling. List characteristics of effective controls. See text page: 138

Planning in Organizations management function of setting goals and determining how to meet them. For supervisors figuring out what tasks the department needs to complete to achieve its goals how and when to perform those tasks

Why Supervisors and Managers Plan Knowing what the organization is trying to accomplish helps them set priorities and make decisions aimed at accomplishing their goals. Planning forces managers to spend time focusing on the future and establishes a fair way for evaluating performance. Planning helps managers use resources efficiently. The functions that managers perform all depend on good planning. See Learning Objective 1: Describe types of planning that take place in organizations. See text pages: 140-141

Objectives Objectives Goals specify the desired accomplishments of the organization as a whole or as a part of it. Goals objectives with a broad focus. identify what people should be striving toward. See Learning Objective 2: Identify characteristics of effective objectives. See text page: 141

Strategic Objectives Strategic planning creation of long-term goals for the organization. typically include the type and quality of goods or services the organization is to provide the level of profits it is to earn

Operational Objectives Operational planning The development of objectives that specify how divisions, departments, and work groups will support organizational goals

Characteristics of Strategic and Operational Planning

Characteristics of Effective Objectives

Policies, Procedures, and Rules Broad guidelines for how to act Procedures Steps that must be completed to achieve a specific purpose Rules Specific statements of what to do or not do in a given situation See Learning Objective 2: Identify characteristics of effective objectives. See text pages: 144-145

Action Plans The supervisor creates an action plan by answering the following questions: What actions need to be taken? Who will take the necessary steps? When must each step be completed? Where will the work take place? How will the work be done? See Learning Objective 2: Identify characteristics of effective objectives. See text pages: 145-146

Contingency Planning Contingency planning Planning what to do if the original plans don’t work out. Does not have to be formal or written down. See Learning Objective 2: Identify characteristics of effective objectives. See text page: 146

Contingency Planning Review all objectives Look for areas where something might go wrong Determine how to respond if those problems do arise See Learning Objective 2: Identify characteristics of effective objectives. See text page: 146

Management by Objectives Management by objectives (MBO) formal system for planning known as a process in which managers and employees at all levels set objectives for what they are to accomplish. performance then is measured against those objectives

Management by Objectives All individuals in the organization work with their managers to set objectives, specifying what they are to do in the next operating period. Each individual’s manager periodically reviews the individual’s performance to whether he or she is meeting the objectives. The organization rewards the individuals based on how close they come to fulfilling the objectives. See Learning Objective 3: Define management by objectives (MBO) and discuss its use. See text page: 147

The Supervisor as a Planner In most organizations, supervisors are responsible for the creation of plans that specify: Goals Tasks Resources Responsibilities See Learning Objective 4: Discuss the supervisor’s role in the planning process. See text page: 148

The Supervisor as a Planner Providing information and estimates Higher management relies on supervisors to provide estimates of the personnel and other resources they will need to accomplish their work.

Allocating Resources Allocating human resources Determining how many and what kind of employees the department will need Allocating equipment resources Determining how much equipment is needed to get the job done Allocating money resources Developing a budget Scheduling Gantt charts PERT networks See Learning Objective 4: Discuss the supervisor’s role in the planning process. See text pages: 148-151

Involving Employees Employees who are involved in the process tend to feel more committed to the objectives, and they may be able to introduce ideas that the supervisor has not considered. To get employees involved: Set objectives and have employees write down what they think they can accomplish in the coming year. Hold a meeting of the entire work group at which employees and supervisors develop objectives as a group. See Learning Objective 4: Discuss the supervisor’s role in the planning process. See text pages: 152-153

Planning with a Team and Updating Objectives Many times teams, not individual managers, are charged with planning. Supervisors should clearly communicate the scope of the plan and encourage team members to cooperate After objectives have been set, the supervisor should monitor performance and compare it with the objectives and update objectives as necessary. Organizations with a regular procedure for planning will specify when supervisors must review and update their objectives. See Learning Objective 4: Discuss the supervisor’s role in the planning process. See text page: 153

The Supervisor as a Controller Supervisors need to know what is going on in the area they supervise. Do employees understand what they are supposed to do, and can they do it? Is all equipment operating properly? Is work getting out correctly and on time? Detection of problems is at the heart of the control function. See Learning Objective 5: Explain the purpose of using controls. See text page: 154

The Control Process 6-22

The Process of Controlling Establish performance standards Effective performance standards should be written, measurable, clear, specific, and challenging but achievable. Monitor performance and compare with standards The supervisor should focus on how actual performance compares with the standards he or she has set. Variance Exception principle See Learning Objective 6: Identify the steps in the control process. variance refers to the size of the difference between actual performance and the standard to be met. When setting standards, the supervisor should decide how much variance is meaningful for control purposes exception principle The control principle stating that a supervisor should take action only when variance is meaningful

The Process of Controlling Reinforce successes and fix problems If performance is satisfactory or better, the supervisor needs to encourage this. If performance is unacceptable, the supervisor needs to make changes that either improve performance or adjust the standard. See Learning Objective 6: Identify the steps in the control process. See text pages: 158-159

The Process of Controlling Reinforcement encouraging the behavior by associating it with a reward 6-25

The Process of Controlling Positive reinforcement involves the presentation of something pleasant after a desired behavior has occurred Negative reinforcement involves the removal of something unpleasant after a desired behavior has occurred

The Process of Controlling Problem some factor in the organization that is a barrier to improvement. Symptom an indication of an underlying problem.

Tools for Fixing Performance Problems 6-28

Types of Control Feedback control Concurrent control Precontrol Control that focuses on past performance Concurrent control Refers to work that is being done Precontrol Refers to efforts aimed at preventing behavior that may lead to undesirable results See Learning Objective 7: Describe types of control and tools for controlling. See text page: 160

Tools for Control Budgets Performance reports Personal observation A plan for spending money Performance reports Summarize performance and compare it with performance standards Personal observation See Learning Objective 7: Describe types of control and tools for controlling. See text pages: 160-163

Characteristics of Effective Controls Timeliness Timely controls enable the supervisor to correct problems in time to improve results Cost-effectiveness The cost of using the controls should be less than the benefit derived from using them See Learning Objective 8: List characteristics of effective controls. See text pages: 163-164

Characteristics of Effective Controls Acceptability The controls should be acceptable to supervisors and employees Flexibility Supervisors should be able to ignore a variance if doing so is in the best interest of the organization