Mechanistic and Organic Organizational Structures, Informal Organizations, Line and Staff Organizations

Mechanistic and Organic Organizational Structures

The five structural factors just discussed give rise to numerous organizational possibilities. Mechanistic and organic structures are two possibilities at opposite ends of the organizational spectrum. They give shape to the concept of the factors of organizational structure. A mechanistic organization is characterized by the following structural factors:

. Degree of work specialization is high.

. Departmentalization is rigid.

. Managerial hierarchy has many layers.

. Span of control is narrow.

. Decision making is centralized.

. Chain of command is long.

. Organizational structure is very tall.

An organic organization is characterized by the following factors:

. Degree of work specialization is low.

. Departmentalization is loose.

. Managerial hierarchy has few layers.

. Span of control is wide.

. Decision making is decentralized.

. Chain of command is short.

. Organizational structure is flat.

Informal Organizations

A formal organizational structure, represented by an organizational chart or written job descriptions, is not the only structure that exists within an organization. Between different departments and levels of hierarchy, various informal organizations exist within an organizational structure. An informal organization consists of a network of channels of communication based on informal relationships between individuals within a firm. These networks are often based on friendships and social contacts. In addition to providing information and a sense of control over the work environment, they can also be a source of recognition and status. Informal organizations can be examined more closely through social network analysis. This process maps the social relationships between individuals within an organization. Once they are recognized and understood, informal organizations can be utilized within an existing organizational structure in order to increase communication and overall effectiveness and efficiency.

Line and Staff Organizations

The factors related to organizational structures also help describe different positions for individuals within a firm. Two examples of this are line positions and staff positions. Organizational structures often involve the interrelation between these two types of positions.

Line positions are directly related to the production of goods and services. They are common in firms that involve production, manufacturing, or providing financial services.

Staff positions are supportive in nature, helping those in line positions and top management more effectively achieve the firm’s goals and objectives. Staff positions provide, for example, legal, public relations, human resources, and technology support services.

Five Structural Factors

Whether you are in the beginning stages of starting your own business or you are looking for ways to improve an existing business, it is important to think about the firm’s organizational structure. Examining organizational structure will help answer questions about the ways in which a firm conducts business. Who is responsible for accomplishing various tasks within the firm? How are these individuals grouped? Who manages these individuals or groups? How do they manage them?

Five Structural Factors

In essence, the primary goal of an organizational structure is to coordinate and allocate a firm’s resources so that the firm can carry out its plans and achieve its goals and objectives. The fundamentals of organizational structure revolve around five factors: the division of labor, departmentalization, the nature of the managerial hierarchy, the managerial span of control, and the amount of centralization or decentralization in the organization.

Division of Labor. The division of labor involves two steps: dividing work into separate tasks and assigning these tasks to workers. What are the different tasks carried out by your firm? Who is responsible for accomplishing these tasks?


Departmentalization. Departmentalization is the process of grouping similar types of jobs together so that they can be accomplished more efficiently and effectively. There are five different ways in which to departmentalize business activities. Different types of departmentalization can exist to varying degrees within a business. What types of departmentalization exist within your firm? Could your firm be departmentalized differently?

1. Function. An example of functional departmentalization would be a firm that has a marketing and finance department. It involves grouping tasks based on the function that the organizational unit accomplishes within a firm.
2. Product. A consumer electronics firm that has separate departments for camera and MP3 players is using product-based departmentalization. In this case departments are based on the
goods or services that an organizational unit sells or provides.
3. Process. A manufacturing firm that includes separate departments for assembly and shipping is an example of a firm with process-based departmentalization. In this case departmentalization revolves around the production process used by the organizational unit.
4. Customer. A bank with separate departments for its business
customers and individual customers is using customer-based departmentalization. Its departmentalization is based on the type of customer served.
5. Geographic. An example of a firm using geographic departmentalization is an automobile manufacturing company that has different departments for each country in which it sells cars. In this case departmentalization is based on the geographic segmentation of organizational units.

Managerial hierarchy relates to the way in which management is layered. It usually includes three levels—upper or top management, middle management, and supervisory roles. The higher levels of management generally have fewer employees, but more power.


Span of Control. Span of control is closely related to managerial hierarchy. At each level of management within a firm an individual is responsible for a different number of employees. Span of control relates to the number of employees that a manager directly supervises. Span of control is determined by a number of factors, including the type of activity, the location of the workers, a manager’s ability to delegate tasks, the amount and nature of communication between the manager and the individuals being supervised, and the skill level and motivation of the individuals being supervised.

Centralization versus Decentralization. Centralization is the degree to which formal authority is centralized within a unit or level of an organization. Decentralization is the process of actively shifting authority lower in a firm’s hierarchical structure. This effectively gives more decision-making power and responsibility to those in supervisory roles. Centralization and decentralization have their benefits and costs. While centralization provides top-level managers with a better overview of operations and allows for tighter fiscal control, it can result in slower decision making and limit innovation and motivation. Decentralization, by contrast, can speed up decision making and increase motivation and innovation, but this is done at the expense of a top manager’s view of the firm and financial control.

Flexible Work Schedules, Employee Involvement Programs, Measuring Job Satisfaction

Flexible Work Schedules

In today’s time-pressed world, many employees view time away from work as an important factor shaping their at-work motivation and on-job productivity. There are several methods for allowing flexible work schedules that meet the needs of employees seeking greater home/work flexibility. One of the more common is a compressed workweek. This system lets an employee work the same number of hours over the course of fewer days. Instead of working five eight-hour days, an employee might work four ten-hour days. Other examples of flexible work schedules include job sharing where two or more people share a certain work schedule.

Employee Involvement Programs

Employee involvement programs seek to motivate employees by increasing their responsibilities or getting them more involved in decision-making processes. There are several types of employee involvement programs; the more basic programs include job enlargement, job rotation, and teamwork. More ambitious programs include open-book management and worker empowerment.

Job Enlargement. Job enlargement is a direct way to increase job responsibility. It involves expanding a position and giving an employee a greater variety of tasks.

Job Rotation. A job rotation program periodically reassigns employees to new positions. In addition to increasing employees’ involvement in the firm and adjusting their responsibilities, job rotation can also improve employees’ skill sets, thereby increasing their job security. In addition, it can also relieve the boredom in the workplace associated with doing the same job over a long period of time.


Teamwork. This program attempts to increase motivation by putting individuals with different positions onto a team and setting them the task of achieving a specific goal. Teamwork serves to increase an employee’s responsibilities and involvement in the firm. The best types of teams are self-directed. This provides the team with the authority to make decisions regarding planning, accomplishing, and evaluating the task they are working on.

Open-Book Management. Open-book management is a challenging, but direct way of increasing employee involvement and responsibility. It involves allowing employees to see how their job performance affects key performance indicators important to the firm. In order to institute this program a firm needs to make key indicators available to employees and educate them on how to interpret key performance measures. Employees also need to be empowered to make decisions related to their positions and training and be given the opportunity to see how these decisions affect the rest of the firm. Open-book management also necessitates an adequate compensation program whereby compensation is tied to performance.

Worker Empowerment. Worker empowerment attempts to increase employee job responsibility as well as employee involvement. It does this by giving employees more authority and involving them in the decision-making process. Employees who are empowered can often make better and more informed decisions than can a manager who is not directly involved in the process. Participative management is similar to worker empowerment. Although it does not provide employees with direct decision-making power, it encourages managers to consult closely with workers before making decisions. Another type of participatory management is management by objective. This approach allows employees to set their own goals and provides them with the freedom to decide how they can best achieve these goals.

Measuring Job Satisfaction

How do managers know that after gaining an understanding of the theories of motivation and applying different approaches to increase job satisfaction that their efforts have been successful? In practice a manager must draw conclusions on a daily basis from social observations and interactions in the workplace. Sometimes, however, it is a good idea to conduct a more formal survey. This can be accomplished through either interviews, surveys, or focus groups that often involve only a specific group of employees. Two useful surveys are the Minnesota Satisfaction Questionnaire and the Job Descriptive Index. Both of these surveys address areas of employee satisfaction in regard to different aspects of an organization and provide managers with useful information. They cover work, working conditions, rewards, opportunities for advancement, and the quality of relationships with managers and coworkers.

Motivation: from theory to practice

The insights drawn from the discussion of motivational theory highlight the importance of assessing needs, compensation, and rewards when creating an organizational structure that will increase an employee’s job satisfaction and motivation and direct organizational behavior; some of these actions include implementing an adequate compensation program, increasing job security, allowing for flexible work schedules, and establishing employee involvement programs.

Adequate Compensation Program

Before determining how compensation should be set, it is necessary to align the compensation program with several elements of the business.

. Business goals. A compensation plan should be developed in light of a firm’s business goals. Employees should be compensated to the degree that their efforts help the business accomplish its goals.

. Employee goals. A compensation plan should be clear in stating individual employee goals. In order to effectively motivate employees, they need to know what goals they will be expected to achieve.

. Achievable goals. The goals that individual employees are expected to accomplish must be realistic and achievable. If employees feel that the goals associated with their positions are
unreachable, they will not be motivated to work. If a supervisor can set reasonable goals and make the employee aware that numerous achievable bonuses will be given if these goals are met, the employee will be motivated.

. Employee input. Employees will be more satisfied with their jobs if they are consulted about the compensation plan before it is put into effect.

An adequate compensation program, taking these issues into account, will affect employee motivation; a compensation plan should give the highest relative raises to the individuals who achieve the highest levels of performance. This type of system is referred to as a merit-based pay system and bases pay on performance. It can be effectively implemented in conjunction with an incentive plan that rewards employees for achieving specific performance goals. These plans stand in contrast to a system that provides across-the-board pay raises, which will not motivate workers to put extra effort into achieving set goals.

Job Security

Employees who feel they are in danger of losing their jobs may not
show high work productivity. Worker satisfaction can, and productivity may, be increased by providing job security. One way firms can increase job security is by providing cross-training in other functions. This will give employees the versatility to accomplish new tasks if their
current positions change or are no longer available.

Conclusions from Motivational Theories

In shaping and directing an organization’s behavior, the seven theories discussed previously provide some insight into the organization’s behavior. Several conclusions can be drawn from these theories.

Needs. Employees have needs. In order to motivate employees, supervisors should attempt to understand the breadth of their employees’ needs. This is not always an easy task and requires open and frequent communication between managers and employees. By structuring a job so that it meets these needs a supervisor can increase an employee’s motivation.

Compensation. Compensation is an important part of motivation, with a goal to compensate employees according to the contribution each employee makes to the firm. Employees will be dissatisfied if they feel that they are getting less than they deserve. In order to decrease the likelihood of perceived inequities, a manager needs to be proactive and informative regarding reward structures.

Rewards. Employees need to know that the goal they are working toward is achievable and that when they accomplish this goal that they will be rewarded in an appropriate and timely manner.

Equity Theory., Reinforcement Theory.

Equity Theory.

Equity theory was a result of the work of J. Stacy Adams and states that when individuals determine whether the compensation they receive is fair compared to their coworkers’ compensation, any perceived inequity will affect their motivation. This sense of inequity can either be felt as negative inequity, when employees feel they have received less than others who performed the same task, or felt as positive inequity, when workers feel they have received more than others who performed the same task. Either type of inequity can motivate a worker to act in a way that restores the sense of equity. Examples of employee behavior may include not working as hard, asking for a raise, quitting, comparing themselves to a different coworker, rationalizing that the inequity will be only temporary, or getting a coworker to accept more work. To limit a perceived sense of inequity, employees should be compensated to the degree that their efforts contribute to the firm. This theory, however, is difficult to implement given the differences of opinion that might arise between an employee and a supervisor regarding what constitutes equitable pay. To apply this theory successfully it is important to address the employee’s perceptions. This can be accomplished first by recognizing and anticipating that inequities can and will exist. It is then important to communicate clear evaluations of any rewards given and an appraisal of the performance on which these rewards are based. There may also be comparison points that are appropriate to share.

Reinforcement Theory.

A carrot-and-stick approach to motivational behavior, the reinforcement theory is concerned with positive and negative reinforcement. It applies consequences to certain behaviors. There are four basic reinforcement strategies: positive reinforcement, negative reinforcement, punishment, and extinction. Positive reinforcement motivates workers by providing them with rewards for desirable behavior. To be effective a reward must be delivered only if the desired behavior is displayed. It should also be delivered as quickly as possible after the desired behavior is exhibited. Negative reinforcement, in contrast, involves withdrawing negative consequences if the desired behavior is displayed. This method of reinforcement is sometimes called “avoidance” because its aim is to have the individual avoid the negative consequences by performing the desired behavior. Unlike positive and negative reinforcement, punishment is not designed to inspire positive behavior, but to discourage negative behavior. Extinction is the withdrawal of reinforcing consequences for a desired behavior. Its intent is to eliminate undesirable behavior.

McGregor’s Theory X and Theory Y, Theory Z., Expectancy Theory

McGregor’s Theory X and Theory Y.

Douglas McGregor’s theories focus less on employee needs and more on the nature of managerial behavior. These theories are based on the assumption that a supervisor’s perceptions of her employees will strongly influence the way in which she attempts to motivate her employees. McGregor created two theories based on his studies, called Theory X and Theory Y.

In the case of Theory X, a supervisor assumes that her employees are adverse to work and will do everything they can to avoid it. Acting on this assumption, the supervisor will exert tight control over employees, monitor their work closely, and hesitantly delegate authority.

In this case of Theory Y, a supervisor assumes that, contrary to Theory X, workers are willing to work and would be willing to accept increased responsibilities. In light of these assumptions, the supervisor will provide employees with more freedom and creativity in the workplace and will be more willing to delegate authority.

Managers will seek to motivate their employees based on their perceptions of the employees’ interests. This theory brings to light the variation in practice that can exist depending on the assumptions that managers make about their employees.

Theory Z.

Theory Z emerged in the 1980s. It attempts to motivate workers by giving them more responsibility and making them feel more appreciated. It was developed, in part, in the light of Japanese management practices, which allowed for more worker participation in decision making and provided for less specialized career paths.

Expectancy Theory.

Developed by Victor Vroom, this concept assumes that the quality of employees’ efforts is influenced by the outcomes they will receive for their efforts. They will be motivated to the degree that they feel that their efforts will result in an acceptable performance, that that performance will be rewarded, and that the value of the reward will be highly positive. In order for managers to practically apply the theories associated with expectancy theory, they need to define the desired behaviors clearly. Once this is accomplished, the manager should think about rewards that could serve as possible reinforcers and how these rewards will have different values for different individuals. Employees must then be informed about what must be done to receive these rewards, and managers need to provide feedback on employee performance. If a desired behavior is achieved, the reward must be given immediately.

Maslow’s Hierarchy of Needs, Herzberg’s Factors.

Maslow’s Hierarchy of Needs.

In 1943 Abraham Maslow developed a theory about human motivation called the hierarchy of needs. This theory has been popular in the United States and describes human needs in five general categories. According to Maslow, once an individual has met his needs in one category, he is motivated to seek needs in the next higher level. Maslow’s hierarchy of needs consists of the following general categories:

Physiological needs. These are the first and lowest level of needs. They relate to the most basic needs for survival and include the need for food and shelter.

Safety needs. The second level of needs involves an individual’s need for security, protection, and safety in the physical and interpersonal events of daily life.

Social needs. The third level of needs is associated with social behavior. It is based on an individual’s desire to be accepted as part of a group and includes a desire for love and affection.

Esteem needs. The fourth level of needs relates to an individual’s need for respect, recognition, and prestige and involves a personal sense of competence.

Self-actualization. This is the fifth and highest level of needs. Needs of this level are associated with an individual’s desire to reach his full potential by growing and using his abilities to the fullest and most creative extent.

As individuals move higher in the corporate hierarchy, they may see higher-order needs as being more important than those of lower orders. Needs may also vary based on career stage, organizational structure, and geographic location. The hierarchy of needs could also lack effective application in different cultural contexts. Certain cultures may value social needs over psychological and safety needs. In addition, the theory necessitates that a manager be able to identify and understand an employee’s needs. This is not always easy and can lead to inaccurate assumptions. Taken in the proper context, however, recognizing the importance of needs is a useful method for conceptualizing factors of employee motivation and thus being able to direct an organization’s behavior.

Herzberg’s Factors.

In the 1950s Frederick Herzberg studied the characteristics of a job in order to determine which factors served to increase or decrease workers’ satisfaction. His study identified two factors related to job satisfaction: “hygiene” factors and motivational factors.

Hygiene factors are those that must be maintained at adequate levels. They are related more to the environment in which an employee is working rather than the nature of the work itself. Important hygiene factors include organizational policies, quality of supervision, working conditions, relationships with peers and subordinates, status, job security, and salary. Adequate levels of these factors are necessary to prevent dissatisfaction; improving these factors beyond adequate levels, however, does not necessarily lead to an increase in job satisfaction.

A different set of factors, identified as motivational factors, is associated with having a direct effect on increasing job satisfaction. These factors include achievement, recognition, responsibility, growth, the work itself, and the opportunity for advancement.

Like Maslow’s hierarchy of needs, Herzberg’s factors must be tempered by sensitivity to individual and cultural differences and require that managers identify what employees consider to be “adequate levels.” Managers sometimes simplify both of these theories and inappropriately assume that they know what their employees need.

Emotional Intelligence and the Manager, Motivation

Emotional Intelligence and the Manager

Daniel Goleman defined an important aspect of human skills in his work on emotional intelligence. Emotional intelligence is tied closely to management effectiveness and ultimately organizational behavior; it suggests that a manager’s performance may be influenced by several factors:

. Self-awareness—understanding your moods and emotions.
. Self-regulation—thinking about your actions and controlling destructive ones.
. Motivation—working hard to accomplish your goals.
. Empathy—understanding the emotions of others.
. Social skills—developing good connections and relationships with others.

Understanding emotional intelligence is especially important in light of changes in organizational structures, which have created firms with less hierarchy and closer peer contact.

Motivation

Motivation is an important driver in an organization and is crucial to the management of intellectual capital. Motivation underlies what employees choose to do (quality and/or quantity), how much effort they will put into accomplishing the task, and how long they will work in order to accomplish it. Employees who are motivated will work more effectively and efficiently and shape an organization’s behavior. A motivated workforce will have a strong effect on an organization’s bottom line. Motivation is strongly tied to job satisfaction. Job satisfaction is how individuals feel about the tasks they are supposed to accomplish and may also be influenced by the physical and social nature of the workplace. The more satisfied employees are with their jobs, the more motivated they will be to do their jobs well.

There are several important studies relating to motivation. These include Abraham Maslow’s hierarchy of needs, Frederick Herzberg’s study of hygiene and motivational factors, Douglas McGregor’s Theory X and Theory Y, Theory Z, Victor Vroom’s Expectancy Theory, J. Stacy Adams’ Equity Theory, and Reinforcement Theory.

Organizational Behavior, management.

An organization consists of individuals with different tasks attempting to accomplish a common purpose. (For a business, this purpose is the creation and delivery of goods or services for its customers.) Organizational behavior is the study of how individuals and groups perform together within an organization. It focuses on the best way to manage individuals, groups, organizations, and processes. Organizational behavior is an extensive topic and includes management, theories and practices of motivation, and the fundamentals of organizational structure and design.

From the smallest nonprofit to the largest multinational conglomerate, firms and organizations all have to deal with the concept of organizational behavior. Knowledge about organizational behavior can provide managers with a better understanding of how their firm or organization attempts to accomplish its goals. This knowledge may also lead to ways in which a firm or organization can make its processes more effective and efficient, thus allowing the firm or organization to successfully adapt to changing circumstances.

This chapter will help you better understand the theories and structures of organizational behavior. The chapter begins by discussing some of the basic characteristics of managers and management. It then describes some of the popular theories and practical applications related to motivation and helps answer the question “What motivates employees and why does it motivate them?” The chapter then examines some of the fundamentals of organizational structure and describes ways in which organizational structures differ from one another. Finally it discusses a few methods by which organizations can control processes and outcomes.

MANAGEMENT

As discussed in the next chapter, “Leadership and Team Building,” management used to be focused on direction and control. Now it is more involved with support and facilitation and the evolving notion of the manager as “coach.” In conjunction with this role as a supportive facilitator, managers are now focusing on efficiently and effectively utilizing the intellectual capital of an organization. Intellectual capital consists of the knowledge, expertise, and dedication of an organization’s workforce. The management of intellectual capital is necessary in order to get the most out of an organization’s material resources and achieve organizational goals.

In practice, managers accomplish organizational goals through the process of defining goals, organizing structures, motivating employees, and monitoring performance and outcomes. In performing these processes a manager often takes on several different roles. These roles were described by Henry Mintzberg and include interpersonal roles, informational roles, and decisional roles. Interpersonal roles are ways in which a manager works and communicates with others. Informational roles are ways in which a manager acquires, processes, and shares information. Decisional roles are how a manager uses information to make decisions, which involves identifying opportunities and problems and acting on them appropriately, allocating resources, handling conflicts, and negotiating.

In order to fill these roles effectively managers use skills that allow them to translate knowledge into action. Robert Katz describes three different sets of skills that managers use, including technical, human, and conceptual skills. Technical skills are used to perform a specialized task. They are learned both from experience and from education, and they can involve using a specific type of technology or process. Human skills are used when working with others and include, among other things, basic communications skills, persuasive ability, and conflict resolution. Conceptual skills are used in analyzing and solving complex interrelated problems. They require having a good understanding of the organization as a whole and understanding how the interrelated parts work together—for example, a good understanding of an organization’s behavioral attributes, its weaknesses, and actions needed to achieve its goals and objectives.

Human resources management as a competitive tool

Human resources planning has evolved over time from a basic tool used by companies to identify personnel needs to an integral part of an organization’s strategy for making the most of its “human capital.”

Increasingly, companies are finding that the strategic management of human resources can actually be a source of competitive advantage. For example, one company that has clearly used its human resources as the key driver of its competitive advantage is Southwest Airlines.

In the airline industry, competitors are using essentially the same kind of equipment, maintenance, and aircraft, and also utilize the same physical locations (i.e., airports), yet Southwest consistently outperforms its competition, using the very same hard assets as its competitors. The main, telltale variable explaining the difference in relative performance between Southwest and its less profitable competitors is its focus on the human side of its business model. Southwest has focused a great deal of its energy in developing a highly productive organizational culture by crafting a human resources strategy that has driven its sustainable competitive advantage.

Additionally, companies like Whole Foods Market, SAS Institute, and Men’s Warehouse proactively address personnel issues in order to keep their employees happy with their jobs. It has been proven time and again that when organizations take care of their employees, the employees will take care of the organization.

Men’s Warehouse, for example, has a corporate philosophy to uncover untapped human capital in all of its employees. It operates under well-defined values and believes the employees are the organization. They provide training for all levels and, as an added bonus, provide very low-interest loans to employees. As a result, Men’s Warehouse has reaped unprecedented growth of more than 30 percent annually in recent years in an industry that is very competitive with very low margins. The company also benefits from low-to-zero employee theft and does not use any devices to try to prevent employee theft.

The Men’s Warehouse model can be transferred to any industry. It starts with well-defined goals and values to make human capital a competitive advantage for the organization. In the Men’s Warehouse example, the company’s goal was to develop every employee to his/her fullest potential. Then once the goals and values are decided on, programs are developed to make them attainable and a reality.


Human resource planning, recruitment, and selection are the initial steps in effecting the company’s strategy by maximizing its investment in human capital. Think of the recruitment and selection like a funnel, with the wide part of the funnel collecting a wide assortment of candidates, and the selection process sorting the candidate pool into a smaller group of qualified candidates, both in terms of the skills needed for the job and from the standpoint of their fit with the organizational culture of the company. Both kinds of suitability are needed to effectively advance the company strategy via its human resources capabilities.

The 360-Degree Assessment

The 360-degree assessment is a commonly used tool in organizations as a way of giving and receiving feedback at all levels within the organization. Simply put, a 360-degree assessment is a system used to gather input on individual employees’ performance, not only from managers and supervisors, but from coworkers and from direct reports as well. Some companies also involve customers in a 360-degree assessment, especially in the case of customer-contact personnel. More traditional feedback tools, in which only the direct manager provides feedback, can very easily lead to a one-sided and incomplete employee review. The 360-degree assessment is much more likely to provide an accurate review and assessment of an employee’s performance.

Almost all large companies today use a form of the 360-degree assessment for their employees; sometimes it takes on a different name, such as full-circle or multisource assessment. Here’s how it works.

Typically all employees are given the opportunity to rate and give comments on all employees they work with on a regular basis, including managers, peers, and subordinates. Each assessment includes several different categories for employee assessment—for example, leadership, performance management, communication, teamwork, integrity, quality, problem solving, vision, trust, adaptability, and reliability. Each organization develops the assessment criteria based on what it feels is important.

Once the assessment is complete, employees have the opportunity to view how their coworkers assessed their performance, and managers get to see how they are generally viewed by their subordinates.

Dell, the U.S.-based computer manufacturer, has used 360-degree assessment, and the results have led to substantial management policy changes, including forcing upper management to be more in touch with the daily operations and allowing for routine opportunities for management to interact with subordinates.

Implementing the 360-degree assessment can sometimes be very difficult and can cause more harm than good if management is not careful. Giving feedback has to be done with caution given the sensitive nature of the data and the possible defensiveness of the employees who receive it. Some employees will not be comfortable giving frank feedback to their peers. An organization needs to have a very high level of trust among the employees for this assessment to work effectively. If the level of trust is not established prior to the 360-degree evaluation, human tendencies such as protectiveness, revenge, and development of hierarchies take precedence and will skew the results, creating even more distrust within the ranks. If this trust level cannot be established, the 360-degree evaluation should be postponed to a later date.

Steps for Implementation of 360-Degree Evaluation. If a 360-degree evaluation has not been used previously in the organization, it might be wise to introduce the program as an internal program for personal improvement, not for management decisions. This will take the pressure off employees and allow for a more relaxed environment during the process. It may even be wise for upper management not to have access to the company-wide results the first time in order for employees to feel comfortable with the process. Many large companies have the 360-degree assessment in place for more than a year before they are able to see any benefits from the program and use it to make decisions. Employees need to feel comfortable with the system before they will actually use it as a learning tool.

Start out with a test group. When first implementing the 360degree evaluation, start out with one department or a small group of employees. The time and resources needed for a company-wide implementation could end up being substantial. Starting with a test group will provide insight on issues and problems that likely will arise and will limit the cost if the 360-degree evaluation does not work within the organization.

Link the 360-degree evaluation’s goals with the overall company goals. The 360-degree evaluation needs full cooperation from all employees along with a significant business reason for the implementation. If the program is linked to the overall goals, individual employees will have an easier time accepting and providing value.

Train employees. The 360-degree evaluation may include hiring an outside firm to handle the process, or if it is handled internally, there need to be assigned roles and responsibilities. The employees who are responsible need to be trained on all aspects of the evaluation; they must ensure that complete trust is held throughout the process.

Turn the results into an action plan. Once the evaluation is complete, request ideas for an action plan from all employees. Hold meetings if necessary or provide other means for feedback opportunities. Ongoing goals and objectives need to be set for the future in order for everyone involved to feel that the program is effective and useful.

Questions that should be answered prior to implementing a 360degree evaluation program include:

. How ready is the organization for the 360-degree evaluation?
. Who is going to be involved?
. Is this a mandatory or voluntary project?
. What criteria will be evaluated?
. How will the information be collected, compiled, and distributed?
. Who is going to be responsible for each activity, including planning, assessing, compiling the information, distributing the results, developing the action plan, and following through?

The 360-degree evaluation, if used correctly can be a valuable organizational tool that will provide a path for personal and organizational development. It can help direct and mold the corporate culture, define and set goals, and create camaraderie among employees.

Orientation, Skill Training, Professional Development and Leadership Training

Orientation.

Training should begin on day one of employment, with every employee given an orientation. Getting employees off to the right start is a very easy way to build a company that embraces learning and development. Most small companies do not have formal orientation programs, but rely on individuals finding their way when they first get hired. This seems to work fine in smaller organizations when there is more informal means of communication, but as organizations grow most have found that formal orientation programs are necessary to get employees up to speed and productive in a timely fashion.

Formal orientation programs can range from an hour to several days, and the level of orientation usually depends on the level of the positions. Whereas entry-level or unskilled labor will need very little orientation, experienced professionals will need quite a bit more to get up to speed with the organization. Each organization needs to define its own orientation needs and programs. Assigning mentors is often done in place of an orientation program to give new employees a helping hand during the first few weeks on the job. At a minimum for small or large organizations, orientation programs should include:

. Detailed company history and overview of the current structure and products.
. Overview of employment policies and handbook (if applicable).
. Basics of compensation, benefits, and all other legal issues that arise.
. Health and safety issues.
. Information about business systems such as phone, e-mail, voice mail, and office equipment.
. Employee rewards and incentives.

Skill Training.

Skill training is exactly what it says—training employees on new skill sets. This could take many forms, including training on new software, accounting, customer service techniques, or even team-building exercises. Skill training has two main goals: (1) to maintain employees’ current skill level with ever-advancing technology and business practices, and (2) to give employees the necessary skills to advance through the organization.

Every organization is going to have a unique set of skills required of its employees. Of course many skills transfer from organization to organization very easily, but the scope of skills is usually unique for every organization. Prior to implementing training, organizations need to follow a few basic steps:

1. Conduct complete skill assessments, involve all levels of employees, develop core skill competencies for each position, and assess current gaps in the skill set.
2. Choose the training source. Whether you choose outside consultants, assign internal trainers, or devise online training, the source has to be effective for the given skill set.
3. Align training with the broad goals and objectives of the organization. This will help employees see the importance and be more likely to jump on board with the training.
4. Conduct training during work hours; this will help keep a positive attitude toward the training.
5. Conduct training in suitable facilities. Sticking a class in a dirty warehouse is not likely to be very effective.
6. Plan for feedback and assessment of all training programs.


Professional Development and Leadership Training

As organizations grow, adapt, and mature, there comes a time when existing managers and leaders will begin to think about stepping down and looking for replacements either inside the organization or out. When this situation arises, very often managers find themselves not being able to find qualified candidates with the right experience and who will be a good fit with the current organization.

Managers typically find that internal candidates are very good at their current jobs but do not have the breadth of experiences it takes to manage multiple departments successfully. External candidates are also very experienced, but the right fit is very hard to find. One way to ensure that suitable replacements for top managers and leaders are available is to have a program or plan to develop leaders internally.

Leadership development programs are very common in today’s business world; the risk of not planning for the succession of current leaders is too high for most organizations to bear. One common measurement tool used by organizations is to ask the question “Would the organization be able to survive successfully if the CEO or head manager was the victim of a fatal accident?” If the answer to this question is no, it would be wise for management to address this issue.

Leadership development programs take many forms, but they all have similar goals of providing certain employees with the necessary skills and experience to fill the shoes of top management in the future. The programs can be formal or informal, usually span several years, and should be a recurring program that is well accepted within the organization. Leadership development programs usually involve scheduled job rotations with increased responsibility with every step. High-potential individuals are usually hired into the programs, mentors are assigned, and their progress is measured regularly. Of course, every individual who enters the program is not guaranteed a top management position. All program participants will have to prove themselves and take a proactive approach to develop themselves professionally; and hopefully when the time comes for management succession, there will be qualified candidates to choose from.

Selection, Interviewing, Employee Training and Development

Selection

The recruitment process just described will result in a pool from which to select the right employee—and this usually involves a combination of different selection methods in order to make the best employee selection decision.

Interviews and reference checks are the most commonly used, but other methods are available depending on the specific demands of the position. For example, background checks are appropriate when a position requires that the employee have significant customer interaction or if the prospective employee has a fiduciary involvement or responsibility with the company. Other selection methods include:

. Skill performance tests/work samples—for example, a graphic artist may bring in a portfolio of past projects, or a data entry candidate may be given a simulated work assignment.

. Personality tests—used especially in customer contact recruitment and selection (e.g., salespersons and customer service candidates).

. Physical abilities tests—used in many job requirements where physical condition is an essential element in job productivity or success (e.g., a product installation or delivery job).

. Drug tests—an increasingly used tool to ensure selection of candidates who do not involve themselves in chemical or substance dependency.


Interviewing.

Face-to-face interviews can be extremely revealing but must be well prepared. The goal of an interview should be to learn whether the candidate has the competencies and technical skills that are most critical to the job, and questions should be prepared for each area. The interviewer’s questions should focus on behaviors, not opinions, and may involve asking applicants to provide examples from their past experiences. Interviews provide an opportunity to read body language and the applicants’ ability to “think on their feet,” often replicating the realities of life on the job. Additionally, to ensure good fit with the culture of the company, an initial interview is often followed up by several more representing the other employees with whom the potential hire may work, as well as company representatives at different levels and areas within the company. An important step in the interview process is to check on a prospective employee’s past performances by making inquiries to former employers and references. Four rules for more effective reference checks:

1. Ask the applicant to inform prior employers that you intend to contact them. Former managers are much more likely to provide useful information if they are aware beforehand that they will be contacted.
2. Open the call by describing the corporate culture of the organization. This provides some context for the previous employer’s comments on the previous employee.
3. Reassure the previous employers that the information they provide will not determine the final hiring decision, but that your goal is to learn how best to manage the prospective hire.
4. Save formal questions such as dates of employment and title until the end of the call.

Employee Training and Development

It is one thing to be able to recruit and hire good employees, but to
tap into and help them attain their full potential is just as or even
more important. Training and development is an essential part of all organizations today. Themain benefits of employee development and training:

. Increases the value and capacity of the human assets of the company.
. Provides an alternative to recruiting, by having qualified personnel to fill vacant positions.
. Creates potential future leaders of the company.
. Helps reduce employee turnover by keeping individuals motivated and interested in their positions with the possibility for advancement.

Recruitment, Employee Leasing and Outsourcing, Recruitment: Inside versus Outside the Company.

Once the planning part of the process is complete, the firm will set forth to implement that plan through the next set of human resource concepts and tactics: recruitment, selection, appraisal, rewards, and employee personal and professional development.

Recruitment

Recruitment is the process by which companies attract candidates to fill present and future positions, and the appropriate method varies from company to company. In most cases, the human resources department in the company will work together with managers in departments throughout the company or with others familiar with the personnel needs to determine a recruitment method and approach.

Many recruitment methods are available, including Internet and print advertisements, employee referrals, and outsourced agencies (“headhunter” executive placement firms, job placement agencies, that perform recruitment services for the company, either on a fixed-fee arrangement, much like a consulting relationship, or on a performance-based basis where the fee is a percentage of the employee’s salary. In some cases, the employee will pay the fees associated with such outsourced services, but more often the company will pay these fees. Other recruitment tactics include job fairs and college recruiting and might involve a combination of several methods.

Employee Leasing and Outsourcing.

In the past decade, the use of “employee leasing” and temporary, or project-based, outsourcing of human resource needs has become more prevalent. In this scenario, the company contracts with another company that provides the employees for a specific need or project. The contracted worker is an employee of the provider company, with the provider company responsible for payroll, employee taxes, benefits, and other employee-related expenses. The company hiring these contract employees is thus free of the associated bookkeeping and administrative costs of maintaining these employees on its payroll—it makes a single payment to the company from which it is leasing the employees, rather than paying the workers individually.
These leasing or outsourcing arrangements are attractive to new or emerging companies or mature companies that may be experiencing an unusual spike in demand, or some other kind of nonrecurring event, presenting a solution for a company that needs to modify its workforce capacity with some upside or downside flexibility.

Recruitment: Inside versus Outside the Company.

One of the first questions the company’s human resources department is likely to ask is whether to fill job needs internally or to look outside the company. Hiring internally allows the manager to choose from a known pool of talent and can minimize misperceptions among candidates about the actual requirements of the position. In addition, hiring from within can be cost-effective and provide motivation for existing employees.

Generally, it is advisable to look outside the company when specific skills are required for the position and existing employees may
not be reasonably expected to train for or learn these skills. The decision to look outside the company tends to be more appropriate when there is a specific need to fill, such as technical requirements. Hiring from outside also helps to avoid the ripple effect of frequent internal staffing changes and the employee “musical chairs” syndrome that does not give staff time to mature into their respective jobs. (Though sometimes well-planned cross-training for different jobs within a company is a productive long-term strategy.)

Finally, recruiting outside the company can be an effective way to import experience and creativity or new ways of doing things. This infusion of outsider perspectives and approaches can infuse the company with a fresh look at its processes and systems.

Human Resources: planning and strategy

The process of recruiting, hiring, and retaining competent employees has always been an important part of any business. In the business world today, this function has become ever more complex and important. The business environment is forever changing, and managers and human resources departments must be flexible enough to adapt to these changes, including the evolving laws, demographics, and business strategies.

Just like any other aspect of business management, planning and strategy development are the first items on the agenda when tackling a project. Managers, professionals, and entrepreneurs are often faced with the task of developing a plan for how human resources will be needed to meet short- and long-term goals and objectives. For example, a company is interested in expanding its production capacity with a new plant to serve its western U.S. markets. As part of the strategic planning for this new facility, a human resources component of this expansion will be essential.

In its simplest form, human resources planning starts by conducting an analysis of staffing needs throughout the organization. This could mean either assessing the current staffing requirements or projecting future requirements if changes are expected. In either situation there are several questions that need to be answered and fully understood prior to the analysis.

1. What is the organization’s strategic vision?
2. What are the short-term and long-term goals?
3. Are there any major changes in the market that will impact the organization’s future?
4. What changes in staffing requirements, if any, are needed to support the strategic vision of the organization?
5. If changes are needed within the organization, what type of resistance can be expected to the changes? Once these questions are answered, assessing the staffing requirements can be completed.

Assessing the staffing plans involves evaluating the human capacity needed to meet the goals and objectives of the organization, estimating the number of people needed for each department or role, and making adjustments as needed. This process does take a lot of experience and understanding of the specific business, but experienced managers should be able to make good assessments. If the managers are new to the industry, a good benchmark would be comparing the number of employees needed in similar organizations.

Signs that the current staffing needs are not in line with the condition of the organization:

. Regular breakdowns in the process flows, which jeopardize relationships with clients and customers. These include missed
deadlines, increased returns, decreased customer loyalty, and regular administration mistakes.

. Frequent employee absenteeism and turnover caused by employees being overstressed, having poor morale, or looking for other employment.

. Regularly occurring overtime caused by employees being overworked or given too much responsibility. Overworking employees can lead to burnouts and increased costs in the long run.

Once the staffing plan is developed that meets the current and future plans for the organization, job descriptions can be created. This process involves analyzing each job in the organization in order to generate a job description and job specifications, and then these are aggregated at a company-wide level. Job descriptions can be a very important management tool in some organizations. Some thought should be put into them due to the nature of employees using job descriptions to define and defend their actions or inactions. Job descriptions can be either a restraint or an open door for employees or teams.

The job analysis involves collecting sufficient information to form a complete understanding of what is entailed to perform the job. A job description lists the activities that the employee performs, as well as the skills and qualities that are needed to successfully meet the job objectives. Think of this stage of human resources planning as if you were a newly appointed coach of an expansion football franchise. You would identify first the positions you would need to complete the roster, then the qualities you would like for each player, specific to each position.

Once the job analysis and job descriptions are determined, this information can then be aggregated to form a human resource inventory to track what skills and capabilities need to be filled in to complete the human resources requirements.

When completed correctly, job descriptions can be a very important tool and can be used inmany different functions, including:

. Giving employees a gauge of how they will be evaluated within the organization.
. Helping determine the compensation level for individual positions.
. Establishing hiring criteria for specific positions, and giving candidates responsibility expectations.


A typical outline of a job description:

Job Title: Specific title that would be included in an organizational chart.
Overall Description: A brief description of the responsibilities an individual holding this position would have.

Reporting To: List of person(s) to whom this position reports, and any subordinate positions.
Duties: A detailed list of regular duties this position would be expected to perform.

Requirements: A list of mandatory or preferred requirements for the position, including number of years of experience, certifica tions, and licenses.

Criteria: A list of standards that will be used to evaluate the possible candidates, including specific skills, experience, or knowledge.