Transcript management

MANAGEMENT
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
1. The organization
 Definition : ~ is a system which operates
through human activity.
 Determinative elments of the society, eg.:
cash income, entertainment, producing
products, services, etc.
 Theory: organizations are very complex
social formations, their links can’t be
described with only one theory.
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
 Particular theories – different viewpoints,
different characteristics :
3 levels
Macro : cooperation among different
organizations
Mezzo : structures of the organizations,
and influencing factors
Micro : behaviour of the members of the
organizations,motivation, conflicts
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
2. The management
 Definition : management is about planning,
organizing, leading, and controlling the
financial-, physical-, informational-, and
human resources.
 Management functions
4 areas
Planning: is the process of setting
objectives and then determining the
steps needed to attain them.
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
The planning process itself consists of five
steps : (1) awarness of the opportunity, (2)
establishment of the objectives,
(3)
determination and choice of alternative
courses of action, (4) formulation of derivative
plans, and (5) budgeting of the plan.
Organizing : is the process of assigning duties
to personnel and coordinating employee
efforts in order to ensure maximum efficiency.
The manager must consider both structure
and people !
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
Controlling : every organization needs to
control both operations and people. The
controlling process consists of three steps :
(1)
establishment
of
standards,
(2)
comparison of results against standards, and
(3) correction of deviations.
Leadership : is the process of influencing
people to direct their efforts toward the
achievement of some particular goal.
Managers must be knowledgeable about
human behavior, the concept of leadership,
and communication.
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
3. The Roles of Managers ( Mintzberg )
 Interpersonal roles : to keep the organization
running smoothly. As a Figurehead (1) :
manager meets important people, takes
customers to lunch, and simply lets people
know that he or she is the key person; As a
Leader (2) : the manager is responsible for
hiring, training, counseling, and directing
subordinates; As a Liaison (3) : the manager
interacts with people at the same level of the
hierarchy as well as with others outside the
organization .
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
 Informational roles : enable the manager to
gather and pass on information. As a Monitor
(1) : the manager talks to subordinates and
gathers information that is useful in running the
department. As a Disseminator (2) : he or she
passes information along to subordinates. As a
Spokesman (3) : the manager provides
information to people outside the department.
WHAT IS MANAGEMENT ALL
ABOUT ? – 1.
 Decisional roles : are the ones through which
the manager makes things happen. As an
Entrepreneur (1) : who seeks to improve the
unit and adapt it to changing conditions. As a
Disturbance Handler (2) : trying to resolve
problems before they become serious. As a
Resource Allocator (3) : the manager decides
who will get resources and how much they will
receive. As a Negotiator (4) : a role that varies
with the level of the organization.
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
1. Basic characteristics of the organizational
structures
 Division of labor : dividing work into small
components so that the workers become
specialists in their tasks. ( functional, product,
geographic – one dimension: functional-line
structure/multi dimensions: divisional, matrix
organizatons )
 Authority : the right to command.( one line:
line structure/ multi lines: funtional, matrix )
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Coordination : the synchronization of the
human efforts of individuals and groups for
the purpose of attaining organizational
efficiency. Coordination tools : Technocratic
– planning system, budgeting; Structural –
report system, teams, projects; Employee
oriented – individual/group motivations
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2. Organizational Structures
2.1. Line Structure
 Advantage : simple, well arranged, only one
boss, reports and orders following the official
way, if the quantity of tasks has changed this
structure can be easily modified.
 Disadvantage : the activity of top management
is very complex, not flexible, distorbed
information
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Application : at small organizations, in critical
situations
 Division of labor: according to the
accomplishing tasks, according to the
manager’s decision
 Authority : through the official way, centralized
decisions
 Coordination : vertically through the official way,
with the tools of power
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.2. Staff Structure
Complete the line structure, the goal is to
help the managers in their complex
tasks— includes experts on different fields
( eg.: sales, accounting, etc.) without
authority.
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.3. Functional-Line Structure
 Advantage : division of labor among top
managers -according to professions-high
efficiency, clear regulations, complicated tasks
could be accomplished
 Disadvantage : red tape, slow decision making
process, decisions are concentrated on the top
of the hierarchy, decrease the ability of
accommodation, can not use wide range of
products
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Application : stabil environments, a narrow
range of products
 Division of labor: according to functions, task
regulations according to job descriptions
 Authority : decision making according to
functions centralized, highly regulated decisions
 Coordination : vertically through the official way,
horizontally on the same level of hierarchy,
strong regulations, technocratic tools
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.4. Divisional Structure
2 faces of Janus : big organization - small
organization
 Advantage : division of labor according to
functions, big independency, motivation is
important, strategic and operational tasks are
seperated
 Disadvantage : paralell existing functional
organizations,increased number of staffdecentralization, divisions became selfishindependency
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Application : dynamic environments, a wide
range of products
 Division of labor: according to products,
customers or regions; strategic leading comes
mainly from the center, but one part of them
comes from the divisions.
 Authority : decentralized decisions between the
central unit and the divisions, centralized within
the divisions
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Coordination : horizontally hardly among
the divisions, technocratic tools
2.5. The Matrix Structure
 Advantage : horizontally functional groups,
vertically groups of products or projects,
dynamic and flexible structure, good
studying process at problem handlings,
mixed structure, accommodate to the
challenges
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Disadvantage : two way leading- conflicts are
always there, competition among the
managers, nobody dares to take the
responsibility for the decisions
 Application : dynamic environments, conflict
management skills within the organization, at
complex innovation claims
 Division of labor: horizontally functional
(technical, sales, etc. ) vertically products or
projects, well done conflict management are
highly suggested between the two divisions
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Authority : functional and project leaders
making the decisions together,
decentralized decisions, decisions are not
highly regulated
 Coordination : horizontally and vertically
because of the structure, employee
oriented tools
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.6. The Mechanical Structure
Accommodates to the stabil environment
 Division of labor : exact tasks, experts
 Hierarchy : coordination on top levels only,
Official way, regulation
 Loyalty, Obedience ( eg.: manufacturing )
 Concentrated authority
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.7. The Organical Structure
Accommodates to the dynamic environment
 No specialization, no experts
 Flexible
 Communication and interaction is in the
whole organization
 Decentralized authority
 Functions based on commitment( eg.:
Research & Development )
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
2.8. Patological Structure
Organizations which are not able to became
organical, because of the regulations of the
mechanical structure.
( New type of tasks )
2.9. Mintzberg
 Mechanical Bureaucracy : simple tasks, stabil
environment, centralized controlling, being
efficient in productivity is the most important
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Professional Bureaucracy :decrease
centralization, stabil environment, complicated
tasks, experts needed, independence is
required eg.: hospitals, universities
 Enterpreneur Structure : simple, flexible,
centralized, experts behind the enterpreneur
 Adhocracy : are founded for certain projects (
problems ), eg.: marketing, R&D
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
3. Organizational Cultures
 Definition : the system of accepted values
and beliefs by the members of the
organization.
3.1. William Ouchi ”Z” theory
How American business can meet the
Japenese challenge ? How could a Japenese
company function in the US, and in Japan ?
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 JAPAN : lifetime employment, guarantee of
job security, identical salary increases and
promotion appointments for those in the
same age group, career path that provide
each employee experience in every phase of
the organization’s operations-no specialized
careers, the boss knows well his
subordinates, collective decision making and
responsibilities
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 USA : unsecure job, not identical salary &
promotion at the same age group, quick
career path-quick failure, the boss doesn’t
know well his subordinates, specialized
career, individual decision making and
responibilities
 ”Z” Organization: long term plans, soft
methods, lots of information at decision
making, groups, trainings
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
3.2. Handy
 Power culture : the ” pater ”, who founded the
organization, is in the central; he makes all the
decisions, useful at small organizations, eg.:
financial crisis
 Role culture : stabil environment, rules &
regulations are the most important, bureaucratic
organizations, eg.: mass production
 Task culture : the goal is to solve the tasks,
regulations are not too important, matrix
organizations, eg.: R&D
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Personality culture : special organizations eg.:
attorney offices
3.3. Quinn
Margin
Regulation
oriented
Supportive
Goal
oriented
Innovation
oriented
Orientation
2 dimensions : Margin of movements ( level of flexibility /
controlling ), Orientation ( whether the organizations focus on
inside or outside of the company )
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Supportive : focus on human relations,
inside
 Regulation oriented : focus on regulations
and stability,
 Goal oriented : focus on goals, strong
regulations, outside
 Innovation oriented : accommodate to the
environment, creativity, development
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
3.4. Deal & Kennedy
2 dimensions : risk taking, feedback from the
market
High
Game Fellow
Make a bet for your company
Risk
taking
Work hard, play
hard
Process
Low
Fast
Feedback
Slow
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
 Game Fellow : risk lovers, high risk takers, fast
feedback about the good / bad decision, eg.:
PR companies
 Work hard,play hard : small risk, quick feedback
( eg.: bonus at big organization ), low risk
activities
 Make a bet for your company : serious
decisions eg.: new investments, very slow
feedback
 Process culture : low risk, eg.: banks, no
feedback, important : how to make it
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
3.5. Schein : organizational cultures according
to professions
 Operators : basic activities
 Engineers : experts in technical processes
 Executives : managers
Conflicts : operators-engineers
STRUCTURAL AND CULTURAL
CHARACTERISTICS OF THE
ORGANIZATIONS – 2.
3.6. Hofstede : cultural differences
 Power distance dimension : boss subordinates
 Uncertainity-Avoidance dimension : how
strong are the regulations eg.: risk or
security, hard work, etc.
 Individualism-Collectivism dimension : I-We
 Masculinity dimension : Feminine : equality Masculine : man dominates ( US-Japan )
MOTIVATION – 3.
1. What is motivation?
 How to manage subordinates to reach the
company’s goals and be satisfied at the same
time
 Motivation is concerned with the ”why” of
human behavior. Why do people do things?
 The person directs his/her behavior toward
important goals ( wishes, desires, etc.).
Unsatisfied needs Goal directed behavior
Need satisfaction
MOTIVATION – 3.
 An unsatisfied need is a starting point in the
process of motivation. This cause tension within
the individual, leading the individual to engage
in some kind of behavior to satisfy the need,
and therby reduce the tension.
 If the need couldn’t be satisfied, cause
frustration, and agressive behavior, such as
1. Rational behavior : always blame it on others
2. Regration : always give up trying
MOTIVATION – 3.
3. Complex : always behave the same
way, and never reach anything
4. Resignation : always escape from
reality, looses faith in life
MOTIVATION – 3.
2. The content theories of motivation
2.1. Maslow’s need theory : holds that an
individual strives for need satisfaction at a
particular level. When needs at one level
basically satisfied, they no longer serve as
motivators, and the individual moves on to the
next level of hierarchy.
5
4
3
2
1
MOTIVATION – 3.
 The Five Levels
1. Physiological needs : primary needs, eg.:
2.
3.
4.
5.
food, clothing, etc.
Safety needs : individual’s need for security or
protection
Social needs : individual’s need for love,
sense of belongingness
Esteem needs : the individual needs to feel
important, and power and status provide a
basis for this feeling
Self – Actualization needs : to fulfill one’s
desire
MOTIVATION – 3.
2.2. Alderfer’s need theory
E- Existence needs -1: are related to survival and
safety
R- Relatedness needs – 2: stress interpersonal
and social relationships
G- Growth needs – 3: are related to the
individual’s desire for personal development
2.3. Herzberg’s two-factor theory
When do people feel exceptionally good or bad
about their job. What kind of factors link to
satisfaction or dissatisfaction ?
MOTIVATION – 3.
 Motivators – some job conditions build
high levels of motivation and job
satisfaction, such as :
Achievement,
Recognition,
Advancement,
The work itself,
The possibility of personal growth,
Responsibility
MOTIVATION – 3.
 Maintenance factors : don’t build strong
motivation, but dissatisfy employees when they
are not present.
Salary,
Supervision,
Working conditions,
Interpersonal relations,
Company policies, and administrations
MOTIVATION – 3.
Motivators
No satisfaction
Satisfaction
Maintenance factors
No dissatisfaction
Dissatisfaction
MOTIVATION – 3.
2.4. McClelland : achievement motivation theory :
based on ”learned” needs
1. Affiliation Need: friendship, love, cooperation
2. Achievement Need: success, new challange
3. Need of Power: prestige, the desire to
influence people
2.5. Hunt : individual goals : the person own goals
direct his/her behavior at the workplace.
Welfare, Comfort, Cooperation, Relationships,
Power, Respect, Creativity
MOTIVATION – 3.
3. The process theories of motivation
3.1. Skinner – Reinforcement theory
considers the use of positive or negative
reinforces to motivate or create an environment
of motivation.
Positive : rewarding someone for certain
achievements
Negative : stops those consequences which the
subordinates don’t like ( disciplines ).
MOTIVATION – 3.
3.2. Theory of Objectives-Management by
Objectives ( MbO )
What are the goals and thoughts of the
subordinates ?
This method typically involves the
establishment of objectives to be
accomplished by the subordinate.
MOTIVATION – 3.
3.3. Vroom’s Expectancy Theory
Individuals will exert work effort to achieve
performance which will result in preferred
rewards. The management FOCUS that follows
is about rewarding workers in such a way that
increased effort occurs.
Individual effort to perform (tools, resources,
skills): results in Level of performance (this
effort will lead to reward): results in Outcomes
(Instrinsic reward : eg.: recognition, or Extrinsic
reward: eg.: job security )
LEADERSHIP – 4.
1. What is leadership all about?
The process of influencing people to direct
their efforts toward the attainment of some
particular goal or goals.
2. Personal –Behavioral Theories
2.1. Kurt Lewin - 3 styles of leadership :
1. Autocratic: makes all the decisions, has the
authorty, creates strict rules
2. Democratic: let the subordinates
participating in the decision makin process,
feedback- Lewin preferred this style
3. Laissez Faire : leave the organization
alone, doesn’t play the leader role
LEADERSHIP – 4.
2.2. Liker : leadership styles according to the
level of subordinate’s participations
1. Exploit-commanding : manager makes
decision, and announces it
2. Kindly-commanding : the communication
channels working on both way, but in a
paternalistic way; still the manager makes the
decision, but listen to the subordinates
LEADERSHIP – 4.
3. Consultative : manager presents problems,
gets suggestion, makes the decisions
4. Particiating groups : manager and
subordinates make the decision together
2.3. Tannenbaum – Schmidt
Boss centered
leadership
Subordinates centered
leadership
1
2
3
4
5
6
7
LEADERSHIP – 4.
1.
2.
3.
4.
Manager makes decision and announces it
Manager ”sells” decision
Manager presents ideas and invites questions
Manager presents tentative decision subject
to change
5. Manager presents problem, gets suggestions,
makes the decision
6. Managers defines limits; ask group to make
the decision
7. Manager permits subordinate to function
within limits defined by superior
LEADERSHIP – 4.
2.4. Blake – Mouton : managerial grid theory
Leadership style can be plotted on a two
dimensional grid
Concern for people
high
Team
Country Club
Middle of
the road
Impoverished
Task
low
Concern for high production
low
high
LEADERSHIP – 4.
Task ( hajcsár ): the leader concentrates on task
efficiency, but shows little regard for the
development and morale of the subordinates
Impoverished: low concern for people and
production
Country Club: the leader concentrates only on
subordinates, but not on task efficiency
Middle of the Road (Szervezeti ember ):
adequate task efficiency and satisfactory
morale are the goals of this style
Team: high concern for people and production at
the same time
LEADERSHIP – 4.
3. Contingency theories-Situational theories
3.1. Vroom-Yetton modell
Their theory attempts to identify the
appropriate leadership style for a given set of
circumstances, or situations. Five leadership
styles are suggested by them:
Autocrative I. (AI): the leader makes the
decision alone
Autocrative II. (AII): the leader obtains
information from followers, then decides on
the solution to the problem
LEADERSHIP – 4.
Consultative I. ( CI): The leader shares the
problem with subordinates individually, and
makes the decision with or without the opinion
of subordinates
Consultative II. ( CII): The leader shares
problems with subordinates as a group, and
makes the decision with or without the opinion
of subordinates
Group decision ( GII ): The leader and the
group solve the problems together
LEADERSHIP – 4.
3.2. Fiedler theory of leadership
Fiedler has developed a dynamic situational
theory of leadership. Four important situational
dimensions are assumed to influence the leader
effectiveness:
The leader: experience, thought, value,
confidence in subordinates, conflict and stress
handling, relationship
The subordinate: needs, the level of knowledge,
motivation at certain problems, tolerance
toward uncertainty
LEADERSHIP – 4.
The task : complexity, routine or non routine,
time factor, risk
The organization : structure, traditions and
habbits, environment ( inside )
Autocrative
The leader
The subordinate
The task
The organization
Consultative
LEADERSHIP – 4.
3.3. Hersey – Blanchard: situational leadership
modell
 Involves with leader-subordinates, leadertasks relations, and
 With the maturity of subordinates.
There are 4 leadership styles:
S1: Telling: high task, low relationship – the
leader controlls and makes the decision
S2: Selling: high task, high relationship – the
leader controlls and makes the decision – the
leader leads, but listen to the subordinates
LEADERSHIP – 4.
S3: Participating: low task, high relationship– the
leader communicates with the subordinates, but
leading and controlling are not important
S4: Delegating: low task, low relationship – tasks
are done by the subordinates
The maturity level of the subordinates:
R1: Unable, and not willing
R2: Unable, but willing
R3: Able, but not willing
R4: Able, and willing
LEADERSHIP – 4.
high
Participating
S3
Selling
S2
Relationship behavior
Delegating
Telling
S4
low
S1
low
high
Task behavior
R1
Unable, and not
wiling
R2
Unable, but willing
R3
Able, but not willing
R4
Able, and willing
LEADERSHIP – 4.
The Combinations of leadership styles and the
maturity level of the subordinates out of Rx-Sx:
 R1-S2 (unable, not willing-selling)
 R2-S1or S3 (unable, but willing-telling or
participating)
 R3-S2 or S4 (able, but not willing-selling, or
delegating)
 R4-S3 ( able, and willing, or participating)
What effects does surprise
management has on decision
making ?- 5.
1. What are the problems of setting up a
forecast ?
 What is somewhat predictable can be handled
by using scenario (forgatókönyv).
 The future circumstances of the environment
are not predictable---- this environment is
more complex than it was before---- we do not
have enough knowledge about it.
 What has happened ?
What effects does surprise
management has on decision
making ?- 5.
Obvious (tudható)
Predictable
(számítható)
Guessable (sejthető)
Unexpected (meglepő)
The changes of the environment are
so accelerated that even the weak
signals (homályos jelek ) are received
too late for the traditional
responses.These circumstances
triggered to existence the surprise
management. The surprise can’t be
forecasted by strong- ( világos ) or
weak signals; and a false respond
can result in a lots of losses, and the
lost of the opportunity.
What effects does surprise
management has on decision
making ?- 5.
2. How will the organization get ready for the fast
respond?
 Scenarios don’t apply in such circumstances,
because they are only appropriate for those
conditions which stands to imagination.
 We could prepare ourselves for the surprises by
learning, and keeping in shape our ability to
respond ( reagáló képesség) .
What effects does surprise
management has on decision
making ?- 5.
3. How can we adapt the changing circumstances
into the process of decision making?
 The modell of the decision making process is
dynamised by the surprise.
 The surprise effects on the expectations, and
on the search for new habitat– new rules
needed.
 Adapting the changing expectations requires
attention---changing aspects
What effects does surprise
management has on decision
making ?- 5.
 Viability: expectations-rules
 Seeking for new habitat : is the process of
adapting the function of the organization to
get closer to the expectations- learning is
the most important--- success : fast
mobilization of the resources
What effects does surprise
management has on decision
making ?- 5.
Expectations
viability ( életképesség)
Surprise
Seeking for habitat
(Keresés élettér )
Rules
Presentation
Moral / Normative leadership at the
expectations of the decision maker – 6.
1. How to lead the well- and bad structured
procedures
1.1. The well-structured task:
 We are able to controll the solution-eg. the
capital of Italy is Rome- one clear criteria- only
one solution
 The task could be well described
 No need for lots of searching or counting
 Getting from the starting state to the end state
we must consider all the relevant factors of
the environment
Moral / Normative leadership at the
expectations of the decision maker – 6.
1.2. The bad-structured task:
 The task could not be described, or
controlled
 We can not make rules for this
 We do not know what we are looking for—
lack of knowledge– we have to sculpture the
solution– which has to be based on having
self-confidence.
 Eg.: new technology
Moral / Normative leadership at the
expectations of the decision maker – 6.
2. What kind of effect does the confidence has on
the values of the organization?
 Create the balance between ”everything has to
be regulated” and ”nothing has to be regulated”the ratio of these defines the culture of the
organization!
 Eg.: Orwell-1984 : everybody observes
everyone, and everybody is observed by
everyone-absolute controll (normative)
Moral / Normative leadership at the
expectations of the decision maker – 6.
 Eg.: Lovers: people who are in love with each other –




absolute confidence (morale : we know what is good
or bad for the other),
BUT! Marriage settlement : rules and moral
Moral leadership: one strives to distinguish between
good and wrong
Moral leadership is based on ethics which has two
types
The ethics of intent (Szándéketika): excludes external
influence, and it is weighed in terms of the intent itself
rather than those of outside influence
Moral / Normative leadership at the
expectations of the decision maker – 6.
 The ethics of the consequences (success) :
what is benefitial is moral
 Moral pluralism: is not about rules, but the
struggle of values
 Everyone has their own view concerning the
right, but by the way of communication, they
must harmonize their opinion, which brings
about mutually acceptable values
Moral / Normative leadership at the
expectations of the decision maker – 6.
In a Changing
environment
STAKEHOLDERS
Reference
(Vonatkoztatási)
system
confidence
confidence
This area gives the
value
normative
rules
normative
rules
viability
leadership
habitat
Moral / Normative leadership at the
expectations of the decision maker – 6.
3. Who are regarded as stakeholders?
 The decisions accepted by the stakeholders
qualify as moral. The most difficult question is :
”Who is the stakeholder” ? Is everyone or
nobody is to be acknowledged? This is quite a
common dilemma. Neither extremes are
advisable
 Who is then to be acknowledged?
who
eventually can acknowledge us (perceive)
Moral / Normative leadership at the
expectations of the decision maker – 6.
 How long can you perceive another?
As
long as we intend to seek the infinity of the
other’s personality. This can also take an
infinitive amount of time.
 You have to will the perception ! The more you
want to, the more you will perceive the other’s
personality; and the more you get to know of it,
the more you long for more. This could only be
achieved through a peer dialogue. In this case
we can call each other stakeholder
Moral / Normative leadership at the
expectations of the decision maker – 6.
 If anyone does not qualify as a
stakeholder anymore, there is no point in
feeling guilt for them. It is easier said than
done though not to remove guilt for those
whom we had no intention of hurting, while
they acknowledge us
 One must find a subtle equilibrum between
self esteem and self sacrifice
How will the decision maker think in
insecure situations ? – 7.
1. What is the difference between insecurity and
risk?
0%
1-99%
100 %
Information about the environment
Insecurity
Risk
Security
How will the decision maker think in
insecure situations ? – 7.
 Everyone likes safe situations.
Very
comfortable. BUT! Life is not all about safety.
It’s impossible!!!
Security = when we know about everything =
we have all the information ( 100% ) about the
environment
We choose the optimal
solution (eg.:2 alternatives)
Sunny w.
Play tennis
10
Grab a beer
with a friend
6
How will the decision maker think in
insecure situations ? – 7.
 Risky situation = matching certain
environmental changes to a certain probability
level.
Quantitative methods: we choose
the maximum utility level
Probability level
40%
Possible alterations
Rainy w.
Tennis -1 (output)
Beer with a friend
6 (output)
60%
Expected value
Sunny w.
10 (output)
6 (output)
(-1*0.4)+(10*0.6)=5.6
(6 *0.4)+(6*0.6)= 6
How will the decision maker think in
insecure situations ? – 7.
 Insecurity = no (0%) information about the
environment. This is very realistic nowadays,
when everything is changing too fast.
So, what can we do?
We can try to guess
”If…….then” rules
But there is a lot to lose!!!
Rainy w.
Tennis -1
Beer with my friend 6
Sunny w.
10
6
How will the decision maker think in
insecure situations ? – 7.
So, how should we make a decision?
2. The optimist, the pessimist and the minimum
regret principals
Everyone thinks in a different way:
 The optimist: just the best thing can happen to
me: which situation brings me the maximum
utility? Tennis: 10, Beer: 6
 The pessimist: just the worst thing can happen
to me: Tennis: -1, Beer: 6
How will the decision maker think in
insecure situations ? – 7.
 The minimum regret principal: whether I make a
decision this way or another, the point is: not to
have to be sorry for the consequences of my
decision. (How much can I loose?)
Rainy w.
7
Tennis -1
7
0
Beer with my friend 6
Sunny w.
10
6
0
4
3. The meta decision: it is about the decision how
to make a decision
Decision making methods: optimist, pessimist, minimum regret level
Meta decision making: HIGHER Level!!! : Eg. The pessimist will be optimist as
of tomorrow
He/she changes a part of his/her personality!
When and which type of knowledge is
required to make the right decision? - 8.
Knowledge-tudás
Skillügyesség
What is the knowledge all about?
3
Intuition
intuíció
1
Factstények
rules
2
action
explanation
clue measurement event
mesterségbeli cselekedet magyarázat
sejtés
(statikus (dinamikus
szabályok (dynamical(statikus (dinamikus járulékos)
fokális)
dinamikus
(staticaljárulékos)
fokális)
focal
statikus
additionaljárulékos)
fokális)
It can’t be put in words,
but can be experienced
It can be put in words,
and learned
szavakba önthetetlen és
Szavakba önthető
megtapasztalható
tanulható
When and which type of knowledge is
required to make the right decision? - 8.
1. How does the decision maker use his/her
intuition?
 Intuition is needed when a new dilemma is
there, and looking for the solution. It suddenly
happens. Intuition=picture ( eg.: the first kiss )
 Clue : The decision making process is based
on a clue, which can’t be put in words, but can
be experienced.
 Explanation: The decision maker explains how
he/she got this solution. Rules are not valid for
a new dilemma
When and which type of knowledge is
required to make the right decision? - 8.
2. How does the decision maker use the facts?
 Event : Something happens, which can’t be put
in words, but can be experienced. ( eg.: an
explosion)
 Measurement : what is the truth?
Truth=measurable? ( eg.: the radiation of the
explosion, do I have 10.000 Ft in the pocket,
are you in love?). True/false- Compromised
measure. If the truth is not measurable there
are no facts. The more the knowledge is
improved, the more uncertain it is
When and which type of knowledge is
required to make the right decision? - 8.
 The decision making process is not always
based on the improvable facts. The decision
maker is looking for the connections behind
the facts, where the personal knowledge is
needed. The decision maker uses the facts to
support his/her beliefs-decisions. The
decision maker is inseparable from his/her
decision. Rules are not valid for a new
dilemma.
When and which type of knowledge is
required to make the right decision? - 8.
3. How does the decision maker use his/her skills?
 The rules of profession : how well we know our
profession, how well we are able to imitate the
master. ( eg.: reading, speaking a language ) It can
be put in words, and learned
 Action: It can’t be put in words, but can be
experienced. ( eg.: reading, speaking a language)
The more you practice the better you be!
 The decision makers use their skills for
communication to have their decisions accepted
What are the problems with the
delegated original decisions? - 9.
1. Reflex, routine, original decisions
reflex
Executor-feladatelvégző
Instinctive action-ösztönös cselekvés
rutin
eredeti
manager
megtanult szabályokszabályok learned rules
Implicit knowledge
hallgatólagos
tudás
hallgatólagos tudás
Problem solver-problémamegoldó
Symbols, pictures-szimbólumok és képek
Implicit knowledge
hallgatólagos
tudás
hallgatólagos tudás
Explicit
knowledge
explicit tudás
explicit tudás
WC, c,
cigarettes
Stock-készlet, payement
Flower, car
Customer, product
divorce,
S&D-K+F, human-humán
Implicit knowledge: it can not be put in words. „ If….then” rules
Explicit knowledge : It can be put in words
What are the problems with the
delegated original decisions? - 9.
 The decision maker faces different kind of
dilemmas, where he/she has to decide which-,
and what level of his/her knowledge (explicit,
implicit) will be applied
 There are 3 types of dilemma:
1. Reflex decision: we do not think about it, we
just do it.- Instinctive actions. Eg.: WC, Paying
out the wages: you will be paid out for your
monthly work, buying cigarettes, etc.
What are the problems with the
delegated original decisions? - 9.
2. Routine decision: explicit knowledge- learned
rules. Eg.: buying flower for someone’s
birthday, writing a contract, buying a car which
satisfies our criterias, production according to
the technological description
3. Original decision: new situation - the decision
maker has to find the new solution- implicit
knowledge – symbols and pictures. Eg.: R&D,
divorce
What are the problems with the
delegated original decisions? - 9.
 Problems:
- Making a routine decision, as an original one
- Focus on simple solutions without
understanding the rules of routine
- Treat a new dilemma like another type of an old
dilemma
The organization is slow, if each dilemma is
handled as unique, and the organization can
not react in time if each dilemma is handled
from routine
What are the problems with the
delegated original decisions? - 9.
2. Why can’t the original decisions be
programmed?
 You can only reproduce phenomena, which are
familiar with at least to a certain extent
 Not knowing the original process of the
decision, there is no comperison between it and
its modell or caricature.
 The modell of the decision should resemble to
the function of the brain. Our knowledge
exceeds what can be described by signs
What are the problems with the
delegated original decisions? - 9.
 Thinking is an inner dialogue whose building
blocks are meaningful symbols. Therefore it is
not comprished of sign and does not stand to
logic
 The modelling of the decision making reject
todays techniques as it can not be described by
hard signs. The modell of the decisions
contains too many abstractions, which provides
a deformed picture. Therefore you can not
modell the dilemma of the decision.
What are the problems with the
delegated original decisions? - 9.
3. How subordinates relate to being delegated?
Original decision
leader (he is the coordinator )
The leader delegates
the routine decisions to
the manager
Routine decision
manager (he is the expert)
Reflex decision
executor
What are the problems with the
delegated original decisions? - 9.
 The empowerment ( felhatalmazás ) is not too
popular.
 The DILEMMA : If not tasks, but decisions are
delegated, people are afraid of the
responsibility; (but if tasks are delegated people
do not feel that they have the chance to think
independently)
Commitment is needed
What makes a difference between the
search for the adequate-, and the
search for the best solution ? – 10.
1. What are the reasons of the failure of the
optimalization ? Complete rationality=optimal
solution
 Why does the decision maker not looking for
the best solution?
the best solution =
optimum ( we suppose that we find the best
solution) is not existing. We are thinking
differently.
 What are the reasons?
1. We are not able to put our expectations in
words ( from implicit to explicit knowledge)
What makes a difference between the
search for the adequate-, and the
search for the best solution ? – 10.
2. Time – we don’t have enough time to learn our
expectations
3. Cognizability (megismerhetőség): eg.: the best
husband/wife – do we have time to get to know
all of the characteristics ?
2. The bounded rationality – adequate solution
 The decision maker has some concepts about
the adequate solution, which will satisfy his/her
expectations,
if he/she finds it, he/she will
stop looking for a new one. Eg.: a pair of shoes
What makes a difference between the
search for the adequate-, and the
search for the best solution ? – 10.
 Adequate = the best solution
 Adequate: satisfies the
expectations, ethical
 Quick decisions needed
expectations
ötletek
search
etika
kifogások
concepts
heurisztika
failure
kudarc
kudarc -siker
success
siker
evaluation
kezdetnek
kezdetnek
adequate
rossz
rossz
What makes a difference between the
search for the adequate-, and the
search for the best solution ? – 10.
3. How could we characterize the search in the
real world ? Intuitive rationality –
unimpeachable ( kifogástalan) solution
 Limited time
 Limited information processing
 Intuitive rationality: opportunist search: the
potential solutions help to develope the
concepts of the decision- the decision maker
compares the new possibility to the known
concepts.
What makes a difference between the
search for the adequate-, and the
search for the best solution ? – 10.
 Here the decision depends on the versions
of cognition’s succession
How will intuition affect the decision
making process?-11.
1. Intuitive rationality ( 10. )
concepts
ötletek
Eg.: buying a pair of shoes
Expectations:
Black, high heel, leather
In the shop we saw red
shoelaces
Heuristics
Ethic-scale
etika
of values
kifogások
objections
heurisztika
heuristic
failure
kudarc
kudarc -siker
success
siker
kezdetnek
kezdetnek
wrong start
rossz
rossz
How will intuition affect the decision
making process?-11.
2. Which heuristics appear in the decision making?
 We make complex decisions using patterns
deriving from previous experience. These
patterns call heuristics are sometimes very
useful or rather dangerous
 The catch of Status quo: we like to believe that
our decisions are rational and objective, but to
some extend everybody is prejudiced, which
influences their decisions
How will intuition affect the decision
making process?-11.
 The decision makers are strongly biased and
tend to make decisions in favour of status quo
Because we want to protect our ”ego”
from the trauma of disappointment
 Dristing apart from Status quo means that we
have to act. If we act, we take the
responsibilities, which leave us open to criticism
and pitty
 Status quo means security as opposed to
anything new which may bring incertainty
How will intuition affect the decision
making process?-11.
 Uncertain things are always open to criticism
 Wrong start : Making the most of decision,
making one had to rid with the idea of black and
white. White representing Status quo and black
anything undesirable. A good decision is made
in the grey range. This is referred to as a wrong
start.
 The master’s expectations are in the grey range
How will intuition affect the decision
making process ?-11.
3. What does the decision maker perceive during
browsing ?
The gaps of perception:
 Delusion, distortion ( over estimated strong
signs or status quo )
 Selective listening: the observer can not pick up
the sign, which he/she has previous knowledge
of. If you choose to ignore your previous
knowledge your listening is selective
How will intuition affect the decision
making process ?-11.
 Objection: if you want an objection you will find
the way
 Strong negative signs ( eg. Toothache )
override the positive ( eg.: being in love with
someone ) ones. Strong or familiar signs call
more our attention. We can only focus on one
thing at the same time. The master won’t pick
up every signs.
 The selective learning is defined by the new
concepts. The more you apply a rule in decision
making the more likely it is to prevail
Can you transform the manager’s
expectatons into leader’s
expectations? -12.
The leader = conductor of an orchestra,
creates global concepts and hands them out
to the managers to transform into wellstructured tasks
1. What connections does the manager
analyze ?
 The decision maker analyzes the logical
relations ( if-then rules ), and the manager
deals with arithmetical relations
Can you transform the manager’s
expectatons into leader’s
expectations?- 12.
2. The elements of the decision maker’s thinking :
 Concepts, Metaphores – tailored to the actual
need . (new concepts cannot be described with
old metaphores). Eg. An elephant-blind people
 The decision maker is able to see the whole
picture, and use the rules of logic- he/she thinks
in metaphores
Can you transform the manager’s
expectatons into leader’s
expectations?- 12.
3. How does the decision maker organize his/her
notions?
 The patterns he/she applies are independent
meaningful units of his/her thinking . Eg.:
telephone number or a whole poem
 The patterns shape the world, the world shapes
the pattern
 Rendering thoughts and perceptions into
patterns makes it easier for the decision maker
to filter a large amount of information
Can you transform the manager’s
expectatons into leader’s
expectations?- 12.
 Patterns help ineliminating redundant details or
substitute missing elements to complete the
picture: I believe what I see
I see what I
believe
 New patterns can only be comprehended on
the basis of the existing ones
 If the details do not add up to render a
meaningful picture on the basis of previous
experience, the answer is lost and you cannot
make the next logical move
Can you transform the manager’s
expectatons into leader’s
expectations?- 12.
 You cannot tell how your patterns will relate to
each other at a given moment, and what is the
outcome when the picture is complete, and your
intuition is justified
 Notions describing the objective world are
structured into a rigid hierarchy ( Eg.: animalbird-sparro)
 If you tamper with the order within the
hierarchy, confusion immediately follows ( Eg.:
animal-sparrow-bird)
Can you transform the manager’s
expectatons into leader’s
expectations?- 12.
 Bad news : it is not as simple as that
 In a less-than perfectly structured world as
ours, these clear-cut rules fail to apply every
time, you use them trying to describe categories
that are not clearly defined.Eg.: ”motivation”,
”loyalty”, ”success”, which may differently be
interpreted by different standards of individual
order of values
The characteristics of the levels of
knowledge -13.
1. How many patterns are there on certain
levels?
Level
Patterns
The quality of patterns
Solutions rendered
Preferences
Who sees what
The used language
amateur
advanced
expert
master
n*10
everyday
no
next step
sg. Different
common sense
false
n*100
simple
plenty
cook book
details
arithmetic
manneristic
n*1000
complicated
a lot
combination
connections
logic+arithmetic
professionals
n*10000
metasome
the point
the whole
logic
metaphores
The characteristics of the levels of
knowledge -13.
2. Whose knowledge can be modelled?
 Only the knowledge of the expert can be
modelled. This knowledge supports the
decision maker .
 Explicit knowledge : It can be put in words
 Special knowledge
 Discipline : some thousands of cognitive
patterns
 Do you know about it? And not : How much do
you know about it?
The characteristics of the levels of
knowledge -13.
 The amateur and advanced level coul be also
interesting, but they do not have an important
role in the decision making process – not too
many patterns- no connection among them
3. What makes a master?
 Patterns within their discipline : N*10000-meta
 Solution: some- but they are more valuable
than the solutions of the experts
The characteristics of the levels of
knowledge -13.
 Focuses only on the point, during the
problem solving process, use the
rules of logic, sees the whole picture,
language : metaphores
What are the problems of the problem
solver with securing acceptance of the
novum?-14
1. What is the difference between the knowledge




of the Problem Solver and the Decision
Maker?
The decision: we choose something from the
already existing alternatives
The problem: a new solution has to be
created, which is the knowledge of the novum
Novum : to create new expectations, new
connections
Intuitive thinking
What are the problems of the problem
solver with securing acceptance of the
novum?-14
 The decision maker is always looking for
something, and he/she has to find his/her
expectations in the solution
 The problem solver is able to see certain
things which have never happened before
What are the problems of the problem
solver with securing acceptance of the
novum?-14
2. How will be the novum accepted?
Interiorizál
Interiorisate
Azonosul
Authentic
Vonzó
Attractive
Fenyeget
Self-identification
EQ
Meggyőzés
Convincing
Hiteles
Behódol
subserve
Threat
IQ
Produktum
Output
Statikus
Statical
Dinamikus
Dynamical
What are the problems of the problem
solver with securing acceptance of the
novum?-14
 The layman believes that the quality of the
output is enough for securing acceptance of the
novum--- unfortunately this is not enough
 The solution of the output is a new knowledge (
a dynamical value ), which is known by the
problem solvers, but not known by the decision
makers
 Mistake : If the problem solver wants to
convince the decision maker with professional
arguments
What are the problems of the problem
solver with securing acceptance of the
novum?-14
 The problem solver has to influence the
decision maker with EQ instead of IQ
 Eg. : if the problem solver describes only the
profit of the output, the decision maker refuses
its acceptance. If the problem solver threatens
the decision maker: ” we are not able to keep
step with the competition” – the decision maker
will subserve
 If the decision maker likes the problem solver’s
performance– he/ she is able to identify oneself
with the output
What are the problems of the
problem solver with securing
acceptance of the novum?-14
 When the problem solver is able to change the
decision maker’s order of value-the decision
maker interorisate the output
 The problem solver with EQ knows exactly that
he/she has to influence the emotions of the
decision maker to be able to sell the product
(The decision makers are very sensitive for the
soft signs)
 The decision maker has to know who is the
swindler, and who is not
What are the problems of the
problem solver with securing
acceptance of the novum?-14
3. How will the Problem Solver influence the
Decision Maker?
 The output is already given, and it has to be a
good quality output
 If the problem solver wants to convince the
decision maker with IQ ( professional
arguments), can cause inferiority complex,
that is why
 The problem solver use the EQ ( 3 types:
authentic, attrective, threat ) to influence the
decision maker
What defines the quality of novum at
the profit-, and value oriented
companies? – 15.
1. What defines the quality of novum?
 There are a lot of so called „”high quality
products” ( eg.: Barbie doll, Tamagocchi,
Atomic bomb)- But are these good things?NO!
 High quality should come with the concept of
right-we have to make good things in high
quality
 There may be 2 different approaches to
quality :
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 ”Doing things well”-target oriented,”Producing
good things”- value oriented
 Neither the quality nor the human knowledge
can be comprehended by its elements ( eg.:
Grandmother’s cake, Mc Donalds hamburger)
 Quality cannot be unpersonal, universal, and
objective. Quality always come together with
the experience of the real world
 We are only able to experience the value, and
through the value we perceive the quality
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 The value of the product is defined purpose
rather than its elements
 The value of the output:
- we want something valuable,
- dynamic value: discovering new
materials, working out new methods
- static value: interpretation of the results
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 Static value ( standardization)
Sometimes you have to accept standards, but
that doesn’t mean that standards can be
applied in every situation
 The executors have to accept the expectations
of the manager, problem solvers are not bound
by them
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 Standardized expectations: you don’t have to
make a decision makes your life very
comfortable standardized needs ( eg.: Ads on
TV : certain products you’ll like, certain products
you won’t like )
You loose your freedom,
BUT that makes your life easier !
 Human relations should work by default and not
by standards
 The problem solver should not smile only
because he was trained to, but because he/she
has something to offer
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 Dynamic quality
There is always something good in everything,
which emerging suddenly without you being
able to forecast or repeat it
 The problem solver often has to go beyond the
static quality to be able to create something
new
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
2. Profit-oriented company: accepts static
values- (provincial) successful companies
 Fiscal reasoning dominates : positive financial
balance
 The target of development, and expected
results are clearly outlined
 The company wants to satisfy the customer’s
explicit needs
 Well structured, centralized task division
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 The static value (process) defines the
structure
 At the planning process precision is very
important
 Strict deadlines, budget
 The process is sensitive to changes and
interuptions
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
3. Value - oriented company: accepts dynamic
values: civilized companies
 Owners reasoning: the value of the
knowledge is not defined by a positive
balance, but the market price of a company
 The problem is circumscribable, but the
solution is not
 The stress is on creating new solutions, that
increase the value of the company
What defines the quality of novum
at the profit-, and value oriented
companies? – 15.
 Dynamic value (the response) determines
the structure
 New solutions quickly turn into static
value, which brings a fast change in
organizatinal structure, and production
organization
 Individual concepts are supported
 There are a number of ad hoc teams
working on the same issue.
Along which way does the problem
solver think?-16.
1. The weird idea
 During the problem solving process we are
not paying attention to the explanation
 If the weird idea is there (result of the intuition)
our sense starts to act as an inspector, and
tries to refute it.
 We compare the weird idea with our explicit
expectations.
Along which way does the problem
solver think?-16.
Szimat
furcsa ötlet
Ész
intuition
weird idea
sense
what
dinamic
Lépcsős
gradual
Visszautasít
refuse
Behódol
subserve
Azonosul
Interiorizál
Self-identification
Interiorisate
how
IQ
EQ
logical
Along which way does the problem
solver think?-16.
 Although we know that our explicit expectations
are not satisfied with it, we do feel that this is
the right solution, because we have satisfied
our implicit expectations
 Explanations help to reduce the contradictions
between our knowledge and our actions
 There are two possibilities to reduce the
contradictions: Either we don’t act against our
knowledge, or we change our knowledge
Along which way does the problem
solver think?-16.
 The knowledge of the novum’s users are
based on learned and experienced
patterns
Their knowledge is opposite
to the weird idea
The new solution
does not fit in their world
That is
why logical explanations are needed!
 We have to convince the novum’users
Along which way does the problem
solver think?-16.
2. How can you comprehend the weird idea Lateral thinking
 Normally you would think in a convergent way:
there is only one logical solution

Lateral thinking is different
 Lateral thinking - we change our reference
system to be able to understand the weird idea
 The new reference system shows things from
different aspects Eg.: jokes-punchlines: shows
the order
Along which way does the problem
solver think?-16.
 Changing our reference system is very difficult,
but if we want to change it, we have to turn
against our thinking, and our experience – at
this stage provocation is needed
 We agree only with those solutions which seem
logical afterwards
 Our conclusions are different from each other,
because we perceive certain problems
diversely
 Our experience defines the perception
Along which way does the problem
solver think?-16.
 Everyone can have weird idea, if he/she is able
to think laterally ( childhood-the child could
satisfy his/her desire in his/her room or not, eg.:
pictures on the wall )
3. How does the explanation work?
 Description of the solution: convergent thinkingthe one and only solution
 Convergent thinking: at the well-structured
world – where only one solution is good for
each problem, and the solution can be
controlled, and easily proved by the facts
Along which way does the problem
solver think?-16.
 People with convergent thinking have good
sense of direction in the hierarchy of a well
structured world. They are able to solve those
problems well, where all the steps and facts
are well known, but they are not able to solve
those problems well, where they have to
collect the missing details, and evaluate those
values. They do not like to get along with soft
things
What is HRM all about? – 17.
1. Each company needs the combination of the
following 3 factors to operate:
 M1-Money
 M2-Man
 M3-Manufacturing
Common features of these factors:
 a certain level of capacity and efficiency,
 they are available in the market,
 the price is determined by the relation of
supply/demand
What is HRM all about? – 17.
Special features of M2:
 Does not run out: permanent resource
 Not storable: the capacity which is not used
within a certain time frame is lost! It can’t be
reserved for next time!
 Innovative: always able to renew, creates new
solutions
 Makes decisions: resigns from position
 Is not owned by the company: although it is
not part of the equity, it can increase the value
of the company (capacity, performance )
What is HRM all about? – 17.
2.a. Definition : Human resource management is
the function performed in organizations that
facilitate the most effective use of people
(employees) to achieve organizational and
individual goals.
2.b. A brief history of HRM
Although no particular ideology can be
attributed to a complete group of people at any
given time, it is possible to show an outline
development of the personnel function by
suggesting a general self-image obtained at
different periods.
What is HRM all about? – 17.
 The
social reformer: before personnel
emerged as a specialist management activity,
there were those in the 19th century who tried
to intervene in industrial affairs to support the
position of the severely underprivileged factory
workers at the hands of a rapacious employer.
The Industrial Revolution had initially helped
people to move away from the poverty and
harshness of rural life, or from the
hopelessness of the orphanage, to the factories
and the cities, but the organisation of the work
soon degraded human life and dehumanised
working people.
What is HRM all about? – 17.
Free enterprise, the survival of the fittest and
the ruthless exploitation of the masses were
seen as laws of nature, and it was the social
reformers such as Lord Shaftesbury and Robert
Owen who produced some mitigation of this
hardship, mainly by standing outside the
organisation and the workplace, offering
criticism of employer behaviour within and
inducing some changes.
What is HRM all about? – 17.
 The acolyte of benevolence: the first people
to be appointed with specific responsibility for
improving the lot of employees were usually
known as welfare officers; they saw their role as
dispensing benefits to the deserving and
unfortunate employees. The motivation was the
Christian charity of the noble employer who was
prepared to provide these comforts, partly
because the employees deserved them, but
mainly because the employer was disposed to
provide them. There were certain companies,
which set up progressive schemes of
unemployment benefit, sick pay and subsidised
housing for their employees.(Paternalism)
What is HRM all about? – 17.
 The humane bureaucrat: we now come to the
stage where employing organisations were
taking the further step in increasing their size
and specialisation. This led to the growth of
personnel work on what is loosely called
staffing, with great concern about role
specification, careful selection, training and
placement. The personnel manager was
learning to operate within a bureaucracy,
serving organisational rather than paternalistemployer objectives, but still committed to a
basically humanitarian role. This activity was
influenced by the Human Relations school of
thought (Taylor,Fayol) and by Elton Mayo
What is HRM all about? – 17.
whose central idea was to emphasise informal
social relationships and employee moral as
contributors to organisational efficiency.
 The consensus negotiator: personnel
managers next added expertise in bargaining to
their repertoire of skills. The trend began during
the early 1940s but received a major boost
when the seller’s market of the immediate postwar period began to harden and international
competition made more urgent the development
of greater productive efficiency and the
elimination of restrictive (or protective)
What is HRM all about? – 17.
The personnel manager acquired bargaining
expertise to deploy in search of a lost
consensus.
 Organisation
man:
next
came
the
development of the humane bureaucracy phase
into a preoccupation with the effectiveness of
the organisation as a whole, with clear
objectives and a widespread commitment
among organisation members to those
objectives. There was an attempt to understand
the interaction of organisational structures
between, on the one hand, the people who
make up the organisation and, on the other, the
surrounding society in which it is set.
What is HRM all about? – 17.
The development was most clearly seen in the
late 1960s and is most significant because it
marks a change of focus among personnel
specialists, away from dealing with the rankand-file employee on behalf of the management
towards dealing with the management and
integration of managerial activity. Its most
recent manifestation has been in programmes
of organisation and management development,
as companies have sub-contracted much of
their routine work to peripheral employees, and
concentrated on developing and retaining an
elite core of people with specialist expertise on
whom the business depends for its future.
What is HRM all about? – 17.
• Manpower analyst: the last of our historical
stereotypes is that of manpower
analyst,
associated with the term ‘management of
human resources’. A development of the
general management anxiety to quantify
decisions has been a move towards regarding
people as manpower or human resources.
Although originally based on an assumption of
organisational expansion, manpower planning
was
reshaped
during
the
onset
of
organisational contraction to ensure the closest
possible fit between the number of people and
skills required and what was available.
What is HRM all about? – 17.
The activity was boosted by the advent of the
computer, which makes a range of
calculations and measurements possible
which were unrealistic earlier.
3. The Diagnostic Model for HRM
This model in HRM is a framework that can be
used to help managers focus on a set of
relevant factors. There are 3 main factors
included in the model: people; the internal and
external environment; and the organisation
itself.
What is HRM all about? – 17.
External
External
Environmental
Environmental
influences
forces
Economic
Economic
Conditions
Conditions
- Composition
The laborofof
market
the
Government
- Government
Government
requirements
requirements
and regulations
and regulations
regulations
The
- The
union
union
Economic
Conditions
Composition
thelabor
laborforce
force
requirements
and
The
union
Human Resource Management Program
HRM Activities
People
Results
Planning
Employees
Job analysis
- Abilities
Staff
Recruitment and selection
- Motivations
Performance
Performance evaluation
Career planning and development
Benefits and services
keep the
Scope of activities
employee
Attendance
Discipline
- Requirements
Satisfaction
Labor relations
- Compensation
Others
Internal Environmental influences
Organizational procedures
Rules of organization
Strategy
Work group
What is HRM all about? – 17.
 Results : can be influenced by the HRM
activities. A significant reason for the eventual
success of any HRM activity is that the
organization’s employees are the best qualified
and are performing jobs that suit their needs,
skills, and abilities. Having the right staff means
the future of the company. The goal is to make
the staff think, feel and behave positively
toward work and the place of work.
Satisfaction. Good reputation makes the
company easier to recruit new employees.
What is HRM all about? – 17.
There are other factors which could be
important for the organization, such as: safety
and health, stress handling, etc.
By studying the diagnostic model you should
see that in order to work effectively, a number
of HRM activities must be efficiently practiced.
E.g.: to encourage individuals to use their
abilities: it may not be sufficient to only have a
properly analyzed job. A sound performance
evaluation, equitable benefits and services, and
an attractive work schedule may also be
needed.
What is HRM all about? – 17.
HRM activities are all related to each other and
have a combined effect on people. The
objectives of the HRM functions must be
accomplished in order for the organization to
remain competitive and to survive in the
environment.
 Employees – Scope of activities: the basic
function of the HRM activity is to create
harmony between employees and scope of
activities.
What is HRM all about? – 17.
Some
differences
between
employee
performance affecting HRM programs are due
to the differences in abilities (mechanical, motor
coordination, mental or creative skills) and
motivation toward work and the place of work
(working hard, being on time). Generally it is
said that the performance of an organization is
brought about by the abilities and motivation of
the employees.
Each position has general requirements eg.:
level of education, and special requirements
like experience on a special field. Requirements
need to be rewarded with competitive salary
and other benefits, that motivate the employee.
What is HRM all about? – 17.
 HRM Activities
-Planning: Two steps: 1. To make a forecast,
based on the company’s business strategy
needs, about the quantity and quality of the
human resources 2. After the environmental
forecast, define the right tasks
-Job analysis: The process of defining a job in
terms of tasks or behaviors and specifying the
education, training, and responsibilities needed
to perform the task successfully
What is HRM all about? – 17.
-Recruitment and selection: The goal is to find the
right person for the right task.
Sources of recruits: two sources of applicants
can be used: internal ( present employees), and
external (those not presently affiliated with the
organization). External recruitment methods:
tests, interviews.
-Performance evaluation is a system set up by
the organization to regulary and systematically
evaluate employee performance.
What is HRM all about? – 17.
- Career planning and development: internal and
external trainings help the employees to reach
their dream positions
- Benefits and services are a part of the rewards
of employment that reinforce loyal service to the
employer. Major benefits and service programs
include payment for time not worked, insurance,
pension funds and services
What is HRM all about? – 17.
- Labor relations: the continuos relationship
between a defined group of employees
(represented by a union or association)
and an employer. The relationship
includes the negotiation of a written
contract concerning payment, working
hours and other conditions of employment.
What is HRM all about? – 17.
 Internal
environmental influences: involve
characteristics and factors that are found within
the organization.
- Organizational procedures: how the company
will change its activities /
the
human
resources / training
- Rules of organization: organizational structures
(centralized, decentralized)
coordination
of the human resources and the scope of
activities
What is HRM all about? – 17.
- Strategy: indicates what an organization’s key
-
-
executives hope to accomplish in the long run.
(Human strategy!)
Work group: labor relations
External environmental influences: involve
characteristics and factors that are found
external to the organization.
Economic Conditions: the general procedures
of macroeconomy influence the financial
stability of the micro organizations. Also
influence the human resources policy.
What is HRM all about? – 17.
( good economical conditions
more benefits
for the employees, poor economical
conditions
no benefits for the
employees)
- The labor market: the supply and demand
situations influence the HRM activities.
- Government requirements and regulations:
the government regulates and influences
some aspects of personnel more directly than
others (employees’ and employers’ rights).
Hungary: Code of Labour.
What is HRM all about? – 17.
- The union: the presence of a union affects most
aspects of HRM- recruiting, selection,
performance
evaluation,
promotion,
compensation, and benefits among others.
Human Resource Planning– 18.
1. Strategy and policy within the framework for
management action
Mission: What is the organization for? Where is it
going? It is general and visionary.
Strategy: The overriding mission is then
continuously implemented by developing a
programme of initiatives to define and achieve
the organization’s objectives
Policy: The overall mission and strategy are
guided by a series of policies to channel
decision and action, shaping the organization
and providing the direction that is needed
Human Resource Planning– 18.
Procedures: procedures are more familiar to
personnel managers than to most management
specialists as they form the substance of much
employee relations activity, but in our action
framework they have the more general meaning
of being the drills that implement the policy, so
that a policy decision to advertise all vacancies
within the organization before external
advertising begins is implemented by a
procedure to specify who does what, in what
order, when and with what authorisation, or
other trigger to action
Human Resource Planning– 18.
Planning: Strategy, policy and procedures can all
be co-ordinated and moved into action by
planning. Not only does each stage benefit from
planning, but a planning approach can ensure
that all three are thought through and put into
operation together
Practice: The final element is what actually
happens. No organization has a procedure for
everything, and no procedure is so
comprehensive as to rule out the need for
interpretation and judgement.
Human Resource Planning– 18.
Practice is a mixture of implemented
procedures , ad hoc decisions, reaction to
policy and the ebb and flow of interaction
between the organization and its
environment. The effectiveness of a policy
can only be determined by the practice
that ensues.
Human Resource Planning– 18.
Policy
Procedures
Strategy
Mission
Practice
Planning
Human Resource Planning– 18.
 What is human resource strategy? : A part of
the organizational strategy. Human resource
strategy involves a central philosophy of the
way that people in the organization are
managed and the translation of this into
personnel policies and practices.
 Elements:
1. Putting together the goals of human resource
strategy ( quantity-quality needs)
2. Working out the action plans
Human Resource Planning– 18.
3. Defining the activities (replacement, career
planning, trainings) which are needed for the
chosen strategy, and the way of the controlling
methods
 Human policy: is a framework within which
other people operate using their own discretion
and making their own decision. Human policy is
declared! Why managers try to use statements?
1. Clarification
2. Reducing dependence on individuals
3. Producing consistent management behaviour
Human Resource Planning– 18.
4. Knowing where we stand
5. Responding to legal and other external
pressure
As a policy is as good as the practice it produces!
To develop human strategy the methods of
business strategy is used. Eg.: brainstorming,
patterning, SWOT, STEP analyses
Human Resource Planning– 18.
The content of the strategical human resource planning
Strategic management decisions
Strategic HR decisions
HR planning
Define the HR for the future –
based on the goals of the
company
Investment planning
What are the goals of HR?
How can HRM contribute to
reach the company’s
goals?
Organizational, market
technological, planning to
change
Where are we now? What
Focus on the Human
are we doing at the moment resource supply forecast
to reach the company’s
goals?
How to change? What kind Where do we want to be?
of activities should be
How can we get there?
programmed? Action plans
Solve the problems which
were caused by the
difference between HR
supply and demand
When and how can we
What did we do? Results
What did we do? Results
Human Resource Planning– 18.
2. a. Types of staff number requirements
If adequate or shortage
If surplus
- Basic staff number requirement - Layoff
- Reserve staff number requirement - Retirement
-------------------------------------------Total staff number requirement
- Shortage: overtime, recruitment
Human Resource Planning– 18.
2.b Influencing factors
1. Task Identification: the complexity of the job
structure; type of service or product; scheduling
of the tasks, contribution proportions.
2. Work process: the level of the practice
(routine), cooperation with other systems
3. Technology: machines, tools
4. The person: qualification, performance of the
coworkers, job specification
5. The environment: company’s targets, rules,
development tendencies, worktime
Human Resource Planning– 18.
3. Employment forecasting techniques
1. Determining techniques: employees have to
accomplish certain tasks within a certain time
frame
1.a. Analytic requirements determination
- Index number technique: we match the
volume of the tasks to the time needed for
execution (objective)
- Workplace technique: it is not dependant of
the volume of the tasks; set plan for scope of
activities
Human Resource Planning– 18.
1.b. Summing requirements determination
- Plan for scope of activities: civil
service area: set plan for scope of
activities for different periods of time
Human Resource Planning– 18.
2. Stochastical techniques: based on a
mathematical procedure in which predictions of
the dependent variables are made through
knowledge factors known as independent
variables. Results must always be completed
by forecasts! Types: - Regression analysis,Correlation analysis, - Exponential finishing
Problems: past staff number records are often
incorrectly regarded as number requirement
data
Changes in production are often mistaken for
changes in work volume
The method requires too many figures from the
past years
Human Resource Planning– 18.
3. Econometrical technique: we examine statistic
figures from the economy to be able to forecast
the development in the future (use of
computers). This technique is suitable to make
medium and long term forecasts.
4. Simulation techniques : we model different
kinds of systems with a set of different
variables. (e.g.: standing in line)
Human Resource Planning– 18.
5. Estimate techniques
5.a. Simple estimate technique: the area
manager will forecast the employment needs
based on his/her decision, the result is based
on the manager’s judgement (subjective),
5.b. Expert-estimate technique: an ”expert” will
forecast the employment needs primarily based
on his/her decision, or expert group!
-Delphi techniques: intensive questioning of
each expert, through a series of questionnaires
to obtain data that can be used to make a
reliable forecast
Human Resource Planning– 18.
6. Creating new jobs: if the volume of the task,
and the certain time frame are not preciesly
outlined
6.a. Task analysis
- make a list of tasks
- structure the tasks
6.b. Task synthesis
- arrange the tasks according to quantity and
quality
Define the scope of activities for executives and
managers
Human Resource Planning– 18.
6.c. Jobs independent of staff number
- In cases none of the above is applicable: a)
the number of employees are determined by
business policy rather than actual need; b)
only one person is needed
Selection – 19.
1. Goals, criteria, problems
 Selection is the process to choose the best
available person or persons from a list of
applicants,
considering current
market
conditions
 This definition emphasizes the effectiveness
of selection, BUT! decisions taken to chose
from the selection must also be efficient. The
secondary purpose of selecting is to improve
the proportion of successful employees
chosen from the applicant list at the least
expense.
Selection – 19.
 The basic objective of selection is to obtain the
employees
most
likely
to
meet
the
organization’s standards of performance. The
employees’ satisfaction and skills improvement
prospects are also sought in this regard.
 Selection criteria: it will be difficult to select the
most appropriate procedure and approach, and
it will be difficult to realize the selection process.
Selection criteria are normally presented in the
form of a person specification representing the
ideal candidate. There is a wide range of
procedures for this purpose.
Selection – 19.
Lewis (1985) suggests that selection criteria can
be understood based on the following 3
aspects:
1. Organizational criteria: are those attributes
that an organization considers valuable in its
employees and that affect judgement about a
candidate’s potential to be successful within
an organization ( e.g.: flexibility)
2. Functional/department criteria: between the
generality of organizational criteria and the
preciseness of job criteria there are
departmental criteria
Selection – 19.
3. Individual job criteria: contained in job
descriptions and person specifications are
derived from the process of job analysis
Selection – 19.
2. Choosing selection methods: Testing
Selection methods: application forms, resumé,
references, tests, interviews
 Tests are to support selection decisions.
Questions have been raised as to relevance of
the tests to the job applied for and the
possibility of unfair discrimination and bias.
 Critical features of test use:
Reliability of a test is the degree to which the
test measures consistently whatever it is
intended to measure
Selection – 19.
Use and interpretation: tests need to be used
and interpreted by trained or qualified testers.
Context of test: test scores need to be
evaluated in the context of other information
about individuals
 Types of tests
1. Aptitude tests: these are tests that measure
specific abilities or aptitudes, such as spatial
abilities, perceptual abilities, verbal ability,
numerical ability, motor ability ( manual
dexterity), and so on. There is some debate
over the way that general intelligence and
special abilities are related
Selection – 19.
1.a. Special aptitude tests measure an
individual’s potential, attainment or
achievement, tests measureskills that have
been already required
2. Intelligence tests: sometimes called mental
ability tests, are designed to give an indication
of overall mental capacity. A variety of questions
are included in such tests, including vocabulary,
analogies, similarities, opposites, arithmetic,
number extension and general information.
Selection – 19.
3. On the job test: consist of the applicants
doing a practical task, or mechanical test, or
simulation
4. Personality tests: the least reliable of the
employment tests are those instruments that
attempt to measure a person’s personality or
temperament. The tests based on the person’s
honesty and reliability. Psychiatrists needed for
the tests! The problem with the use of
personality tests is that they rely on an
individual’s willingness to be honest, as socially
acceptable answer or the one best in terms of
the job are often easy to pick out.
Selection – 19.
3. The interview
 An interview is a goal oriented interpersonal
communication between an interviewer and an
interviewee
 Employment selection interviews eg.: provide
general information to potential applicants for a
specific job opening, determine whether a
particular applicant is the most suitable
candidate for the job
Selection – 19..
 Interview strategy
1. Frank and friendly strategy: here the
interviewer is concerned to establish and
maintain the rapport. This is done partly in the
belief that if interviewees do not feel
threatened, and are relaxed, they will be more
forthcoming in the information that they offer.
The potential advantage that the interviewees
will leave with a favourable impression of the
company.
Selection – 19.
2. Problem-solving strategy: a variation of
the frank and friendly strategy is the problemsolving approach. It is the method of
presenting the candidate with a hypothetical
problem and evaluating his or her answer.
These are sometimes called situational
interviews. The questionsa asked are derived
from the job description and candidates are
required to imagine themselves as the job
holder and describe what they would do in a
variety of hypothetical situations. This method
is most applicable to testing elementary
knowledge.
Selection – 19.
3. Stress strategy: in the stress approach the
interviewer become aggressive, disparages the
candidates, puts them on the defensive or
disconcerts them by strange behaviour. The
idea was used by some business organizations
on the premise that executive life was so
stressful, so a simulation of the stress would
determine whether or not the candidate could
cope. The advantage of the method is that it
may demonstrate a necessary strength or a
disqualifying weakness that would not be
apparent through other methods.
Selection – 19.
The disadvantages are that evaluating the
behaviour under stress is problematical, and
those who are not selected will think badly of
the employer.
 Number of interviews and interviewers
The decision about the number of the
interviewers are based on the traditions, and
the chosen strategy.
Selection – 19.
1. The individual interview: gives the greatest
chance of establishing rapport, developing
mutual trust and the most efficient deployment
of time in the face-to-face encounter, as each
participant has to compete with only one other
speaker. The disadvantages lie in the
dependence the organization places on the
judgement of one of its representatives, and
the ritual element is largely missing. The
individual interview is very popular in the
selection of blue-collar staff.
Selection – 19.
2. Group interview: two or more interviewers.
a. Two interviewers are still able to establish a
friendly atmosphere, but if there are more
than two:
b. Panel interview : this method has the
specious appeal of sharing judgement and
may appear to be a way of saving time in
interviewing as all panel members are
operating at once. They are not having a
conversation with the candidates, they are
sitting in judgement upon them and
assessing the evidence they are able to
present in response to their requests
Selection – 19.
 The selection interview sequence
1. Preparation: we assume that the
preliminaries of job analysis, recruitment and
shortlisting are complete and the interview is
now to take place. The first step in preparation
is for the interviewers to brief themselves.
They will collect and study a job description or
similar details of the post to be filled, a
personal specification or statement of required
competencies and the application forms or CV
of the candidates. If there are several people
to be interviewed the interview timetable
needs greater planning than it usually
receives.
Selection – 19.
2. Interview structure
Stage
Opening
Objectives
To put the candidate at
easy, develop rapport
and set the scene
Middle
To collect & provide information
Closing
To close the interview and
confirm future action
Activities
Greet candidate by name
Introduce yourself
Explain interview purpose
Outline how purpose will be
achieved
Obtain candidate assent to
outline
Asking questions within the
structure that makes sense to
the candidate, such as
biographical, areas of the
application form, or competencies
identified for the job; Listening
Answering questions
Summerize interview, Check
candidate has no more questions
Indicate what happen next and
when
Performance evaluation -. 20
1. Performance evaluation: is a system set up by
the organization to regulary and systematically
evaluate employee performance
 Performance evaluation serves several
purposes:
- Development purposes: it can determine
which employees need more training
- Reward purposes: it helps the organization
decide who should receive a raise and
promotion
Performance evaluation -. 20
- Motivational purposes : the presence of an
evaluation program has a motivational effect: it
encourages initiatives, develops a sense of
responsibility, and stimulates effort to perform
better
- Legal compliance: it serves as a legally
defensible reason for making promotion,
transfer, reward, and discharge decision
- Personnel and employment planning
purposes: it serves as a valuable input to skills
inventories and personnel planning
Performance evaluation -. 20
- Compensation: it provides information that can
be used to determine what to pay and what will
serve as an equitable monetary package
- Communications purposes: evaluation is a
basis for an ongoing discussion between
superior and subordinate about job related
matters. Through interaction, the parties get to
know each other better
- HRM research purposes: it can be used to
validate selection tools, such as a test program
Performance evaluation -. 20
There are further purposes, such as:
- According to Fletcher & Williams:
1. Evaluation of employees’ work
2. Evaluation of production in order to advance
improvement
- According to Randell:
1. Salary and wage adjustments
2. Promotion consideration
3. Improvement of performances
Performance evaluation -. 20
 Performance evaluation types
Judge
Developer
Past
Future
Objective
Performance increase
with reward
Performance increase
with training
Method
Classify, grade
Objective, career
planning
Supervisor
Judges, criticizes
Gives advice
Subordinate
Listen, reacts, defenses
Active participant
Performance evaluation -. 20
 What is appraised?
Personality
Knowledge of the job
Physical force
Eyes-hand coordination
Qualifications
Business knowledge
Ambition
Social skills
Reliability
Loyality
Morality
Creativity
Leadership skills
Behaviour/Performance
Accomplishment
Following orders
Reporting problems
Maintanance
To make notes
Keep the rules
Work attendance
Submitting proposals
Non smoking
Achievement of
goals
Turnover
Output
Product quality
Waste
Accidents
Repairs
Served customers
Number of satisfied
customers
Performance evaluation -. 20
2. a. Who contributes to the appraisal process?
1. Immediate manager: usually has the most
intimate knowledge of the tasks that an
individual carrying out and how well they have
been done. ( annual appraisal)
2. Manager’s manager: can be involved in the
appraisal process in one of two different ways.
First, they may be called upon to countersign
the manager’s appraisal of the employee in
order to give a seal of approval to indicate that
the process has been fairly and properly
carried out. Second, they make the evaluation
personally.
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3. Member of the HR department: this happens
when there is no logical ongoing immediate
manager.
4. Self-appraisal: there is a little doubt that
people are capable of rating themselves. When
employees were asked to compare themselves
with others they tended to overrate themselves;
however, when individuals prepared selfappraisals for appraisal interviews they were
more modest
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5.a. Appraisal by subordinates: is a less usual
approach. It is more limited in its value, as
subordinates are only acquainted with certain
aspects of their manager’s work
5.b. Appraisal by peers: peer ratings are both
acceptably reliable and valid and have the
advantage that peers have a more
comprehensive view of the appraisee’s job
performance. They note the problem, though,
that peers may be unwilling to appraise each
other as can be seen as ”grassing” on each
other.
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6. Assessment centers: can be used in the
appraisal of potential supervisors and
managers. The advantage of assessment
centers for this purpose is that ratings of
potential can be assessed on the basis of
factors other than current performance. Tests,
group exercises and interviews are used
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2.b. The methods
Appraisal systems can measure a variety of
things. They are sometimes designed to
measure personality, sometimes behaviour or
performance, and sometimes achievement of
goals. These areas may be measured either
qualitatively or quantitively.
1. Qualitative appraisal: often involves the
writing of an ustructured narrative on the
general performance of the appraisee.The
problem is that they may leave important areas
unappraised, and that they are not suitable for
comperison purposes
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2. Quantitative appraisal: when they are
measured quantitively some form of scale is
used, often comprising five categories of
measurement from ‘excellent’, or ‘always
exceeds requirements’ at one end to
‘inadequate’ at the other; with the mid-point
beeing seen as acceptable.
3. Avoidance of personality measures: much
traditional appraisal was based on measures of
personality traits that were felt to be important
to the job. These included traits such as
enthusiasm, drive, application and other traits
such as intelligence. One difficulty
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with these is that everyone defines them
differently, and that traits that are used are not
always mutually exclusive. Rates,therefore, are
often unsure of what they are rating.
4. a. Behaviourally Anchored Rating Scales
(BARS). The BARS approach relies on the use
of critical incidents to serve as anchor
statements on a scale. A BARS usually
contains the following features: 1. Six to 10
performance dimensions are identified and
defined by raters and ratees 2. The dimensions
are anchored with + and – critical incidents
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3. Each ratee is then rated on the
dimensions 4. Ratings are fed back using
the terms displayed on the form
4.b. Behavioural Observation Scales (BOS):
uses critical incident technique to identify a
series of behaviours that cover the domain of
the job.
5. Meeting objectives: is to use to set job
objectives for the coming year and, a year later
to measure the extent to which these objectives
have been met.
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6. Development of appraisal criteria: this is
include the use of the critical incident
techniques to identify particulary difficult
problems at work, content analysis of working
documents and performance questionnaires
whereby managers and potential appraisees
identify ( anonymously) what characterises the
most effective job holder and the least effective
job holder.
7. Evaluation based on job analysis
The comparison of the actual performance and
the initial job requirements. Used in small
companies with no need/possibility of complex
evaluation procedures.
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 The appraisel interview: provides job related
feedback to employees: open communication
between supervisor and subordinate,
overviewing formal goals- establishing future
goals, feedback to the employees regarding
career opportunities
Structure:
1. Purpose and rapport: agree purpose with
appraisee, agree structure for meeting, check
that pre-work is done
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2. Factual Review: review of known facts about
performance in previous period. Appraiser
reinforcement
3. Apraisee views: appraisee asked to comment
on performance over the last year. What has
gone well and what has gone less wee; what
could be improved; what they liked; what they
disliked; possible new objectives
4. Appraiser views: appraiser adds own
perspective, asks questions and disagrees, as
appropriate, with what appraisee has said
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5. Problem-solving: discussion of any
differences and how they can be resolved
6. Objective setting: agreeing what action
should be taken, and by whom
 3 types of evaluation interviews
1. Tell and sell:
-role of interviewer: Judge
- objective: to communicate evaluation, and
to persuade employee to improve
- assumptions: employee desires to correct
weaknesses if he knows them
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2. Tell and listen
-role of interviewer: Judge
- objective: to communicate evaluation, and
to release defensive feelings
- assumptions: people will change if
defensive feelings are removed
3. Problem solving
-role of interviewer: Helper
- objective: to stimulate growth and
development in employee
- assumptions: discussing job problems
leads to improved performance
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3. Key to a successful evaluation system
1. Clear objectives: what are the goals of the
evaluation? The employees have to have a
clear picture about the goals!
2. Commitment of the management:
management should participate! Evaluation
forms should remain at the departments!
3. Openess, participation: the system should be
open to providing more information about the
employee him/herself, so the employee can
accept these decisions easier.
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4.Acceptance of the evaluation criteria: the
involvement of both analysts and testees in the
identification of evaluation criteria
5. Training: analysts need training in how to
evaluate and how to conduct evaluation
interviews
6. Administrative effectiveness: form filling
should be kept at a minimum!
7. Follow-up: work plans that are agreed by
analyst and testee need to be monitored
8. Culture & Flexibility: the system should go
along with the organizational culture