McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved 1 - 1

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved 1 - 2ChapterChapter 1 Understanding Behavior, Human Relations, and Performance

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Human relations Human relations means interactions with people.

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Goal of Human Relations Create a win-win situation by: satisfying employee needs while achieving organizational objectives Win-win situation: occurs when the organization and the employees get what they want

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Four Myths of Human Relations Myth 1: Myth 1: Technical skills are more important than human relations skills Myth 2: Myth 2: Human relations is just common sense Myth 3: Myth 3: Diversity is overemphasized Myth 4: Myth 4: Leaders are born not made

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Total Person Approach Realizes that an organization employs the whole person, not just his or her job skills People play many roles throughout their lives throughout each day Organizations view employees as total people Organizations are trying to give employees a better quality of work life

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Levels of Behavior Individual Group Organizational Human relations take place at the group and organizational levels

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Individual and Group Level Behavior Group behavior – consists of the things two or more people do and say as they interact Individual behavior – influences group behavior

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Organizational Level Behavior Organization – a group of people working to achieve an objective Created to produce goods and services for the larger society Organizational behavior – the collective behavior of an organization’s individuals and groups

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Human relations Human relations has an effect on performance

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Performance (1 of 2) Performance – the extent to which expectations or objectives have been met Performance is absolute when objectives are set Performance is a relative term

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Performance (2 of 2) Performance levels are more meaningful when compared to: past performance or, the performance of others within and / or outside the organization

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Systems Effect (1 of 2) A system is a set of two or more interactive elements The systems approach focuses on the whole system emphasis is on the relationship between its parts Systems effect – all people in the organization are affected by at least one other person each person affects the whole group/organization

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Systems Effect (2 of 2) The organization’s performance is based on the combined performance of each individual and group The destructive behavior of one individual hurts the group and other departments The destructive behavior of one department affects the other departments and the organization’s performance

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Relationship Between Individual and Group Behavior and Organizational Performance Organization Individual Group Individual Organization Ineffective individuals Ineffective groups

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Systems thinking Systems thinking is needed to understand performance

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Relationship Between Behavior, Human Relations, and Performance Performance Behavior Human Relations Behavior Behavior Performance Performance Ineffective behavior Ineffective human relations

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The 1980s The 1990s 21 st Century Challenges Elton Mayo and the Hawthorne Studies The 1930s to the 1970s The Early Years: Frederick Taylor and Robert Owen Human Relations: Past, Present, and Future

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The Early Years: Frederick Taylor and Robert Owen Frederick Taylor Father of Scientific Management Focused on production, not people Assumed workers always acted rationally and were motivated simply by money Robert Owen Father of personnel administration Believed that profit would be increased if employees: worked shorter hours were paid adequately were provided with sufficient food and housing

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Elton Mayo (1 of 2) The father of human relations Conducted research at the Western Electric Hawthorne Plant Hawthorne effect – refers to an increase in performance caused by the special attention given to employees, rather than tangible changes in work

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Elton Mayo (2 of 2) Other key conclusions from his studies: Employees have many needs beyond those satisfied by money Informal work groups have a powerful influence within the organization Supervisor-employee human relations affects the quality and quantity employee output Many employee needs are satisfied off the job Employee relations affect employee performance

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The 1930s to the 1970s Growth of labor unions Leadership and motivation studies Management-by-objectives Theory X and Theory Y Transactional analysis (TA) and sensitivity training Quality circles The term human relations replaced by the term organizational behavior

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The 1980s Theory Z Peters & Waterman In Search of Excellence

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Peters & Waterman: Characteristics of Successful Organizations 1. They have a bias for action 2. They are close to the customer 3. They use autonomy and entrepreneurship 4. They attain high productivity through people 5. They are hands-on and value driven 6. They stick to their knitting and do not diversify greatly 7. They use a simple organization form with a lean staff 8. They have simultaneous loose-tight properties

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved The 1990s Trend toward increased participation of employees to improve human relations and organization performance continued Movement from participative management to high-involvement management Use of groups and teams increased

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Current and Future Challenges in the 21 st Century Change, innovation, and speed Knowledge is the key resource Ethics Globalization, productivity, quality, and teams Diversity: aging, gender, and work-family issues Technology: Internet and e-business and the virtual office

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Human Relations Guidelines 1. Be optimistic 3. Be genuinely interested in others 5. Call people by name 7. Help others 9. Create a win-win situation 8. Think before you act 6. Listen to others 2. Be positive 4. Smile and develop a sense of humor

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Handling Human Relations Problems (1 of 2) Psychological contract – the shared expectations between people Human relations problems often occur when the psychological contract is not met

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved Handling Human Relations Problems (2 of 2) Three alternatives to resolving human relations problems: Change the other person Change the situation Change yourself