Performance management theory


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Performance management theory

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Performance management theory

  1. 1. Performance management theoryThe work of management theorists over the last hundred and fifty years can be used toargue the case for an in depth theoretical, as well as practical knowledge of manymanagement styles, including the positive and negative attributes of each. It is alsoimportant to examine the structure of different organisations to consider how it affects,and is affected by the management style of that organisation. Organisational Structure isessentially concerned with the allocation of authority and power. Managers need to makedecisions and need to have the authority to do so. A hierarchical organisation will havethe greatest power at the top of the organisation, and the command structure will be in adownward direction. In a flat organisation power is distributed more evenly, but therewill still be major differences in the level of power and authority between differentmembers of the company. Some organisations such as the armed forces or police havemany tiers (or levels) and are tall in their hierarchy. Universities, however would havefew levels between those at the bottom and those at the top and would be considered aflat hierarchy. The span of control (number of people an individual manages orsupervises directly) is closely linked to the type of organisational hierarchy that exists.Many of the new buzzwords and flavour of the month theories that Mr. Whiteheadmentions are no more than a current evaluation of the theories of yesteryear. The re-visiting of these theories will provide conclusive evidence that management theory iscentral to the modern managers education.The Work of Frederick Winslow Taylor (1856-1915)Frederick Taylor, whilst working as a gang boss in a lathe department in Midvale, USAbecame determined to eradicate systematic soldiering; an attempt by workers to do nomore than was necessary. Taylor developed a strategy where particular jobs were studied,then broken down into individual tasks, which had to be completed exactly as stated.Each task was allocated a time, based on the timed work of the quickest worker. Workerswere then allocated specific tasks, and were not allowed to deviate from that task at all.As Taylor believed that money was the main motivator, a payment was made for eachcompleted unit of output (piece rate)Many organisations and work methods are still influenced by Taylors concept ofScientific Management Methods This can be seen on factory assembly lines, and even inthe commercial kitchen, where each member of staff is allocated a small but specific taskin making up a completed gourmet meal. Piece rates may not be prevalent, but theallocation of boring, repetitive tasks is common. An article in The Sunday Times, 3rdApril 1983 tells of one workers plight, assembling the Maestro car at the Cowley Plant.He had just one hundred seconds to screw on two rubber buffers and fit three small platesto the rear wheel arch. He had been given one nights training, completed his task onexactly 246 vehicles per day, and had 46 minutes per shift of relaxation time.
  2. 2. Some of Taylors early followers achieved spectacular results in increasing output.However, the stringent and oppressive tactics that were employed often led to industrialunrest. After Scientific Management Methods were employed at the Watertown Arsenal,immediate strikes ensued. The American Congress eventually banned Taylors time andmotion studies in its defense industry.The use of such methods in the modern workplace can produce useful results in the shortterm, but for longer-term rewards they must be balanced against the effects on workforcemorale. To assume that everybody can work at the same rate as the fastest worker, andthat money is the only real motivator may not be borne out. Todays workers want to beempowered, and to take an active role in their organisations, not be treated like machineswhere only the end product is important.Henry Laurence GanttHenry Gantt worked for Taylor at the Bethlehem Steel Works. His ideas were broadlysupportive of Taylors ideas, but he added a more humanizing approach. He believed thatscientific management was used in an oppressive way by the unscrupulous. Gantt movedaway from the strict piece rate system of pay, instead offering a set wage plus 20% - 50%bonuses. If workers achieved the set objectives within the day a bonus would be paid.Supervisors were introduced who also received bonuses if targets were met by his team.Gantts less oppressive regime can be seen today in many organisations. In factoriesaround the globe workers receive bonuses for achieving daily, weekly or monthly targets.The Work of Henri Fayol (1841-1925)Henri Fayol, the Father of Modern Management Theory was interested in howmanagement worked, and could be applied on a universal basis. His theories focused onRules, Roles and Procedures.Fayols Five Elements of Management are:* Planning Setting objectives, and strategies, policies and procedures to achieve them.* Organising Setting tasks to achieve the objectives. Allocating the tasks to groups orindividuals, and empowering those responsible for that task.* Commanding Instructing those carrying out the given task.* Coordinating Ensuring a common approach by groups to meet the objectives of theorganisation.* Controlling Ensuring the performance of individuals and groups fits with the plans, andcorrecting as necessary.
  3. 3. Fayols theories are as relevant today as they ever were, and most, if not all managers usehis elements of management.The Work of Peter DruckerDruckers work in the 1950s followed on from that of Fayol. He had five categories ofManagement Operations* Setting Objectives Senior Managers organise objectives into targets. This is cascadeddown to more Junior Managers.* Organising The workload is divided into manageable activities and jobs.* Motivating This involves communicating and creating the right conditions for targets tobe achieved.* Measurement Comparing performance against targets.* Development Enabling people to use their talents.Fayol and Drucker had very different views on the role of workers within their theories.Fayols work has a distinct leaning towards workers having to be told what to do, theirwork checked and corrected, with managers delegating tasks and overseeing from a highlevel (a Tall Hierarchy?). Conversely, Druckers ethos is about the empowerment ofworkers, giving them the opportunity to utilise their talents, with managers occupying arole that is more about assisting and coaching workers.Fayols ideas fail to take into account the people within the workplace, whereas Druckertakes a somewhat more humanist approach.Elton Mayo - The Human Relations ApproachBy the 1930s there was evidence emerging that production could be raised by applyingmotivational methods within a workforce. These ideas were very different to thetechniques of F.W Taylor and, although concerned with profit, the human relationsapproach to management was also concerned with social relations in the organisation.The approach assumed that workers were genuinely committed to their companies andthat they had a desire to work towards achieving its goals.Elton Mayo had carried out experiments at the Hawthorne Plant, and these sought to findways to improve production by changing workers conditions and pay structures. Mayoworsened conditions for workers, then returning them to how they were. The rise inoutput was due to workers communicating more and working as a tighter team unit. Itwas also found that the effect of taking an interest in workers made them feel importantand that their opinions were valued.
  4. 4. Volvo and Honda have seen the development of work team in recent years, with thedifferences between workers and managers being far from obvious. People wear the sameuniforms, and the emphasis on communication is high. Developing cohesive teams whowork well together and share the same goals ensures a high level of motivation for thetasks required. The structure of this type of organisation could be considered a flathierarchy with a wide span of control for managers working over a skilled and competentworkforce. Subordinates are well trained and a good level of trust between managers andworkers exists.The Human Relations Approach is definitely a positive way of management for the 21stCentury, where personal empowerment and self-esteem should not be in question.Mr Whiteheads view that "Havent generations of managers done perfectly well bylearning on the job and applying a bit of common sense" cannot accurately be quantified.Within the Fire Service, promotion to managerial roles is based on internal qualificationsand interview alone. Virtually all managers have based their management style on exactlywhat Mr. Whitehead advises in his letter. Some are very good and are respected as such;however there are a large number who cannot manage people or their responsibilitieswithin the organisation. Respect for leadership within the fire service is essential, butoften rare in modern times. Managers who had an in depth knowledge of managementstrategy may well motivate the workforce to new heights. This type of tall hierarchicalorganisation has many tiers of command with spans of control for senior managers beingrelatively small, with the widest spans of control being at junior management level."An endless supply of new gurus spin off new batches of buzzwords which helpsuccessive generations of whiz kids to get promoted on the basis of slogans" is not anaccurate depiction of the modern manager. Its certainly true that there are managers who,even with the background of a management related education are ineffectual in theirroles. This is not a reflection on management theory. Studies of management styles allowone to make informed decisions, and to have an array of options at your disposal, and toadapt to the ever-changing pressures on the organisation, both internal and external."Meanwhile real managers just do what they have always done, maintaining disciplineand telling people what to do" The idea of a one style fits all manager is unrealistic, andone that has a proven track record of leading to unrest. Even within one organisation themanager or managers need to be flexible within their roles. Leadership is vital, but aleader who is flexible, approachable, and has the interest and aspirations of both workersand organisation at the forefront of their strategy will flourish. Conversely, the managerwhos only interest is the level of output and profit will not be supported by thoseproducing that output. Respect is most certainly a two-way avenue.My review of the theories of management gurus of the past is designed to show thatthese ideas are not new. One can look at any organisation and see many of these ideasworking in parallel. As far as organisational structure is concerned, one cannot makestereotypical assumptions based purely on the size of the organisation or the number ofemployees. The style of management and the systems of work employed all help to
  5. 5. define the structure. Most organisations employ many of the characteristics discussedabove, in different ways, and at different times dependent on the dynamics of thesituation. Most businesses are constantly evolving and redefining themselves to meet therequirements of the modern marketplace. There is no correct answer, or one style whichis superior to others. Each has its positive and negative points, but without fundamentalknowledge of them all, how can one possibly manage effectively? : Over 200 ebooks, templates, forms forperformance appraisal.