FS10321: Business Management Week #3: Chapter 5: (Finish) Organizing Chapter 6: Staffing Chapter 7: Change, Stress, And Innovation

Types of Organizational Authority Line authority Direct the work of operative employees Staff authority Support, assist, and advise the holders of line authority EXHIBIT 5.3

Centralization Where in org. is decision-making authority? More centralized Decisions are made at higher levels Decentralized Decisions can be made at lower levels

Mechanistic versus Organic Organizations Rigid hierarchical relationships Fixed duties Many rules Formalized communication channels Centralized decision authority Taller structures Collaboration (both vertical and horizontal) Adaptable duties Few rules Informal communication Decentralized decision authority Flatter structures EXHIBIT 5.7

Which is better? Larger size leads to more mechanistic Up to 2,000 employees Changing environment: More organic needed Structure follows strategy!

Organization Culture A system of shared meaning Determines, mostly, how employees act Shared values are shown in cultural elements: Stories, rituals, material symbols, and language unique to the organization Results from the interaction between: The founders’ biases and assumptions What initial employees learn from experiences

Chapter 6 Staffing

Human Resources Management (HRM) Getting, training, motivating, and keeping competent employees Balancing employee supply with employee demand. Matching the talents and skills with requirements Creating a high performance work environment Meeting employees’ pay and benefits needs Often internal, can be outsourced

Employment Planning Right number and kinds of people Right places at the right time Help organization achieve goals Steps: Assess current human resources. Assess future human resources needs. Developing a program to meet those needs.

Job Analysis Components Job description Tasks, duties and responsibilities that the job entails Job specification Knowledge, skills, and abilities required of the job holder

Downsizing Options Firing Layoffs Attrition Transfers Reduced workweeks Early retirements Job sharing EXHIBIT 6.4

Recruitment And Selection The process of locating, identifying, and attracting capable applicants Selection process The process of screening job applicants to ensure that the most appropriate candidates are hired

Traditional Recruiting Sources Internal searches Advertisements Employee referrals Public employment agencies Private employment agencies School placement Temporary help services Employee leasing and independent contractors EXHIBIT 6.3

Selection Devices Written tests Performance-simulation tests Intelligence, aptitude, ability, interest Out of favor in mid-20th century Used more often now Performance-simulation tests Based on actual job behaviors Work sampling and assessment centers

Selection Devices Interviews Realistic job preview (RJP) Subject to biases Effective if conducted correctly Realistic job preview (RJP) Positive and negative info about job, company During the job interview

Potential Biases in Interviews Prior knowledge about the applicant Interviewer’s stereotype of a good applicant. Favoring those who share own attitudes. Order in which applicants are interviewed Order in which information is gathered Negative information is given unduly high weight. Decision made within first 4-5 minutes May forget much of the content within minutes

Employee Orientation Orientation Objectives of orientation Introduce new employee to job & organization Objectives of orientation Reduce initial anxiety new employees feel Familiarize new employees Job Work unit Organization as a whole Facilitate transition from outsider to insider

Employee Training Learning experience Seeks a relatively permanent change Ability to perform on the job improves. Changes What employees know Skills How they work Attitudes toward jobs, co-workers, managers, organization.

On-the-Job Training Methods Job rotation Lateral transfers to learn variety of tasks Understudy assignments Learn directly from experienced person

Off-the-Job Training Methods Classroom lectures Films and videos Simulation exercises Vestibule training Learn on same equipment, but simulated environment

Performance Assessment Performance management system Establishing performance standards Evaluating performance Objective human resource decisions Provide documentation to support actions. Adjective rating scales Rating each job factor on an incremental scale. 360-degree appraisal Seeks feedback from a variety of sources MBO

When Performance Falls Short Possible performance impediments Mismatched skills Inadequate training Personal problems Discipline Actions taken to enforce standards and regulations Warnings Suspensions Termination

Compensation And Benefits Compensation administration Determining a cost-effective pay structure Attract and retain competent employees Provide an incentive for them to work hard Ensure that pay levels will be perceived as fair Factors influencing pay levels Employee’s job Kind of business Environment surrounding the job Geographic location Employee performance levels and seniority Company compensation philosophy

Benefits Employee benefits Types of benefits Nonfinancial rewards, to enrich employees’ lives Types of benefits Social Security Workers’ and unemployment compensations Paid time off from work Life and disability insurance Retirement programs Health insurance ESOP (Employee Stock Option Plan)

Sexual Harassment More than 15,000 complaints each year 20% of women, 7% of men Can be very expensive Estimated to be largest financial risk faced Can lose significant stock value Perhaps most important, lowers productivity

Sexual Harassment Anything that Such as: Creates intimidating, offensive, or hostile environment; Unreasonably interferes with individual’s work; or Adversely affects employment opportunities. Such as: Sexually suggestive remarks Unwanted touching and sexual advances Requests for sexual favors Other verbal and physical conduct of a sexual nature

Sexual Harassment Protecting the organization Educate employees about sexual harassment Foster sensitive environment Have sexual harassment policy in place Enforced fairly Take action on the first instance of a complaint

Change, Stress, and Innovation Chapter 7 Change, Stress, and Innovation

In Search of Excellence Tom Peters and Robert Waterman Studied “Excellent” companies Found eight consistent attributes: A Bias for Action Close to the Customer Autonomy and Entrepreneurship Productivity through People Hands-on, Value-driven Stick to the Knitting Simple Form, Lean Staff Simultaneous loose-tight Properties.

…Within a few years, some “excellent” companies weren’t so excellent… One Problem… …Within a few years, some “excellent” companies weren’t so excellent… What happened?

What Is Change? Alteration of A constant force Environment Structure Technology People A constant force An organizational reality An opportunity or a threat

Forces For Change External forces Internal forces Competition Laws and regulations New technologies Labor market shifts Cycles in the economy Social change Internal forces Strategy modifications New equipment New processes Workforce composition Restructured jobs Compensation and benefits Labor surpluses and shortages Employee attitudes

Why People Resist Change EXHIBIT 7.3

Reducing Resistance to Change TECHNIQUE WHEN USED Education and When resistance is due to misinformation communication Participation When resisters have the expertise to make a contribution Facilitation and When resisters are fearful and anxiety-ridden support Negotiation Necessary when resistance comes from a powerful group Manipulation When a powerful group’s cooperation and an endorsement is is needed Coercion When a powerful group’s endorsement is needed EXHIBIT 7.4