1. Needed: People-Centered Managers and Workplaces
Chapter One
Needed: People-Centered Managers and Workplaces
McGraw-Hill/Irwin
Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.

2. After reading the material in this chapter, you should be able to:
Identify at least four of Pfeffer’s people-centered practices, and define the term management.
Contrast McGregor’s Theory X and Theory Y assumptions about employees.
Explain the managerial significance of Deming’s rule, and identify the four principles of total quality management (TQM).

3. After reading the material in this chapter, you should be able to:
Contrast human capital and social capital, and identify five measurable outcomes when building human capital.
Explain the impact of the positive psychology movement on the field of organizational behavior (OB).
Define the term e-business, and explain at least three practical lessons about effective e-leadership in a virtual organization.

4. Pfeffer’s Seven People-Centered Practices
Job security
Careful hiring
Power to the people
Generous pay for performance
Lots of training
Less emphasis on status
Trust building

5. Question?
Jeremy, CEO of JNJ Computers, wants to build his company around the people-centered practices. Based on Pfeffer's research, which of these practice(s) should he adopt?
Less emphasis on status
Generous pay for performance
Power to the people
All of these.
The correct answer is   ”E” AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application Difficulty:  Hard Page:  5

6. How Important are People
Factors are a package deal – need to be installed in a coordinated and systematic manner
Too many managers act counter to their declarations that people are their most important asset
Undue emphasis on short-term profit

7. The 4-P Cycle of Continuous Improvement
Figure 1-1

8. Managers Get Results Management
process of working with and through others to achieve organizational objectives efficiently and ethically
Today’s manager needs to creatively envision and actively sell bold new directions in an ethical and sensitive manner

9. A Skills Profile for Managers
Typical manager’s day is a fragmented collection of brief episodes
Interruptions are commonplace while large blocks of time for planning are not

10. Skills & Best Practices: The Effective Manager’s Skill Profile
Clarifies goals and objectives for everyone involved.
Encourages participation, upward communication, and suggestions.
Plans and organizes for an orderly workflow.

11. Skills & Best Practices: The Effective Manager’s Skill Profile
Has technical and administrative expertise to answer organization-related questions.
Facilitates work through team building, training, coaching, and support.
Provides feedback honestly and constructively.
Keeps things moving by relying on schedules, deadlines, and helpful reminders.

12. Skills & Best Practices: The Effective Manager’s Skill Profile
Controls details without being overbearing.
Applies reasonable pressure for goal accomplishment.
Empowers and delegates key duties to others while maintaining goal clarity and commitment.
Recognizes good performance with rewards and positive reinforcement.

13. Three Lessons for Managers
Dealing effectively with people is what management is all about.
Managers with high skills mastery tend to have better subunit performance and employee morale
Effective female and male managers do not have significantly different skill profiles

14. 21st-Century Managers Teams are pushing aside the individual
Command-and-control management is giving way to participative management and empowerment
Ego-centered leaders are being replaced by customer-centered leaders
Employees are being viewed as internal customers

15. Evolution of 21st Century Managers

16. The Field of Organizational Behavior
Interdisciplinary field dedicated to better understanding and managing people at work

17. The Human Relations Movement
Legalization of union-management collective bargaining
Behavioral scientist called more attention to the human factor
Elton Mayo – Western Electric Hawthorne study

18. The Hawthorne Legacy
Interviews do not support initial conclusions about positive effect of supportive supervision
Money, fear of unemployment, managerial discipline and high quality raw materials were responsible for high output

19. McGregor’s Theory Y Theory X assumptions
pessimistic and negative, typical of how managers traditionally perceived employees

20. McGregor’s Theory Y Theory Y
believed managers could accomplish more through others by viewing them as self-energized, committed, responsible, and creative beings

21. Question?
As a production manager of Great Golf Products (GGP), Lorena believes that her employees are capable of self-direction and self-control. She also believes that they are committed to Titanium's objectives since they are rewarded for doing so. Lorena can be described as a:
Theory X manager.
Theory Z manager.
Futuristic manager.
Theory Y manager.
The correct answer is “D” AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application Difficulty:  Hard Page:  10

22. What is TQM? Total Quality Management
An organizational culture dedicated to training, continuous improvement, and customer satisfaction

23. The Deming Legacy
Formal training in statistical process control and techniques
Helpful leadership, rather than order giving and punishment
Elimination of fear so employees will feel free to ask questions
Teamwork
Elimination of barriers to good workmanship

24. What is TQM? Principles of TQM
Do it right the first time to eliminate costly rework.
Listen to and learn from customers and employees.
Make continuous improvement an everyday matter.
Build teamwork, trust and mutual respect.

25. Question?
John tries to make continuous improvement on his production process each week. This follows the philosophy of _________.
Administrative management
Bureaucracy
Total quality management
Contingency management
The correct answer is “C” – total quality management. See previous slide.

26. The Contingency Approach to Management
Using management concepts and techniques in a situationally appropriate manner, instead of trying to rely on “one best way”

27. Figure 1-2

28. The Age of Human and Social Capital
Human Capital
The productive potential of one’s knowledge and actions
A present or future employee with the right combination of knowledge, skills, and motivation to excel

29. Five Human Capital Outcomes Defined
SOURCE: L Bassi and D McMurrer, “Developing Measurement Systems for Managing in the Knowledge Era,” Organizational Dynamics, no. 2, 2005, Table 2, p 190.

30. Question?
Terry supervises the stamping department for Elkay. He has a great reputation for developing and training people. This is an example of __________.
Learning capacity
Workforce optimization
Talent engagement
Knowledge accessibility
The correct answer is “B” – workforce optimization. See previous slide.

31. The Age of Human and Social Capital
The productive potential of strong, trusting, and cooperative relationships

32. The Positive Psychology Movement
Recommends focusing on human strengths and potential as a way to prevent mental and behavioral problems and to improve the general quality of life

33. Positive Organizational Behavior
Positive Organizational Behavior (POB)
the study and improvement of employees’ positive attributes and capabilities
Read Jean-Pierre Neveu’s article on Positive Organizational Behavior

34. Luthans’s CHOSE Model Of Key POB Dimensions
SOURCE: From The Academy of Management Executive: The Thinking Manager’s Source by F. Luthans. Copyright © 2002 by Academy of Management. Reproduced with permission of Academy of Management via Copyright Clearance Center.

35. Question?
Griff believes that he can successfully perform any assignment that his supervisor gives him. What POB dimension does he exhibit?
Confidence
Hope
Optimism
Emotional intelligence
The correct answer is “A” – confidence. See previous slide.

36. The Internet and E-Business Revolution
running the entire business via the Internet
Employees can collaborate online, whether developing new products, creating marketing plans, or resolving billing problems

37. Question?
Thinkgeek.com only has a business presence on the web. This is an example of a(n) __________.
“Brick & Click”
“Click & Mortar”
E-business
Retailer
The correct answer is “C” – e-business. See previous slide.

38. Supplemental Slides
Slides contain extra non-text examples to integrate and enhance instructor lectures
Slide 39: The Value of Management
Slides 40-41: People-Centered Examples
Slide 42-43: Tips for Becoming a People Developer
Slide 44-45: Video discussion slide

39. The Value of Management
"The success of an organization is dependent upon the competence of senior management and the morale of the workforce,“ ~ David Sirota, founder Sirota Research
“How do you keep management from destroying the workforce?”
Source: Study Sees Link Between Morale and Stock Price, HR Executive Online, March 6, 2006
Stock prices of 11 high-morale companies increased an average of 19.4 percent in 2005, outpacing the 8 percent rise attained by competitors in their industry, according to a recent study by Sirota Survey Intelligence. Conversely, the stocks of 13 companies with medium or low morale increased only 10 percent, or 9 percentage points less than their peers
In the study, a company was defined as having high morale if more than 70 percent of its employees expressed overall job satisfaction. At medium- and low-morale companies, the figure was below 70 percent. In Sirota’s formula, high morale results when employees are treated fairly, they’re proud of what they do and they have camaraderie with their colleagues.
Problems occur when companies practice "transactional management," in which employees are paid but not nurtured, Sirota says. Motivation also declines when employers fail to recognize achievement, treat employees "like children or criminals" or fail to give them the resources they need to do their jobs.
"It’s not ‘How do you motivate people?’ It’s ‘How do you keep management from destroying the workforce?’ " Sirota says. "The lack of loyalty one sees now (from employees) is due to the lack of loyalty by management. If you treat people as if they’re part of the solution and not part of the problem, you get tremendous results
But needs to be a two-way street: companies need to provide a value propositions, career development, competitive salaries, challenging work, autonomy. But the employees need to commit and give 100% everyday
High Morale Companies:
Intuit, Bank of America, American Express, Barron’s magazine and the Mayo Clinic were among the high-morale companies in the survey.
Source: Study Sees Link Between Morale and Stock Price, HR Executive Online, March 6, 2006

40. People-Centered Examples
Herb Kelleher, Southwest Airlines
“Respect people for who they are, not for what their titles are.”
Clayton Christensen, Harvard Business School
“You can learn from anyone.”
From Fortune March 21, 2005
Herb Kelleher, Southwest Airlines
“Respect people for who they are, not for what their titles are.”
“I’d say my mother made more of a difference to me than anyone else did…. One piece of advice that always stuck in my mind is that people should be respected and trusted as people, not because of their position or title. Frequently, position or title did not reflect the true merits of a person.”
Clayton Christensen, Harvard Business School professor
“You can learn from anyone.”
“I realized that a lot of us, when we’re in school, believe that you can learn only from people who are smarter than you. But if you move toward the top of that hill and maintain that belief, then our opportunities for learning become progressively more constricted. So what you need is a fundamental humility – the belief that you can learn from anyone.”
From Business Week 11/1/2004
George Zimmer, Men’s Wearhouse (CEO)
“Behind the scenes, Zimmer stretches the boundaries of traditional management practices, especially when it comes to managing people. He’s adamant that happy employees attract loyal customers. Unlike most retailers, Men’s Wearhouse doesn’t perform drug tests or criminal background checks on job candidates. Every 5 years full time employees receive a three-week paid sabbatical on top of their regular vacations – virtually unheard of in the retail industry.
Also “most employees get some stock. And the average store manager, who earns %50,000 a year , gets the same number of shares from the company as higher-paid managers do. Turnover among store managers is only about 10% annually, according to the company – far below the industry average of 25.1%
Inc. Magazine April, 2005
Jim Sinegal, Costco
Good starting pay, 94% health care costs
Costco’s Warehouse stores have a CEO who cares about their employees and shows it through his compensation and benefits programs. Starting wages are $10.00, covers 94% of healthcare costs for full and part-timers and donates from 3% to 9% of their pay to their 401(k) plans. The company has little turnover, an astoundingly low 5.5% for workers who have been with Costco for a year or more.

41. People-Centered Examples
George Zimmer, Men’s Wearhouse
Happy employees attract loyal customers.
Every 5 years full time employees receive a three-week paid sabbatical on top of their regular vacations
Jim Sinegal, Costco
Good starting pay, 94% health care costs
From Fortune March 21, 2005
Herb Kelleher, Southwest Airlines
“Respect people for who they are, not for what their titles are.”
“I’d say my mother made more of a difference to me than anyone else did…. One piece of advice that always stuck in my mind is that people should be respected and trusted as people, not because of their position or title. Frequently, position or title did not reflect the true merits of a person.”
Clayton Christensen, Harvard Business School professor
“You can learn from anyone.”
“I realized that a lot of us, when we’re in school, believe that you can learn only from people who are smarter than you. But if you move toward the top of that hill and maintain that belief, then our opportunities for learning become progressively more constricted. So what you need is a fundamental humility – the belief that you can learn from anyone.”
From Business Week 11/1/2004
George Zimmer, Men’s Wearhouse (CEO)
“Behind the scenes, Zimmer stretches the boundaries of traditional management practices, especially when it comes to managing people. He’s adamant that happy employees attract loyal customers. Unlike most retailers, Men’s Wearhouse doesn’t perform drug tests or criminal background checks on job candidates. Every 5 years full time employees receive a three-week paid sabbatical on top of their regular vacations – virtually unheard of in the retail industry.
Also “most employees get some stock. And the average store manager, who earns %50,000 a year , gets the same number of shares from the company as higher-paid managers do. Turnover among store managers is only about 10% annually, according to the company – far below the industry average of 25.1%
Inc. Magazine April, 2005
Jim Sinegal, Costco
Good starting pay, 94% health care costs
Costco’s Warehouse stores have a CEO who cares about their employees and shows it through his compensation and benefits programs. Starting wages are $10.00, covers 94% of healthcare costs for full and part-timers and donates from 3% to 9% of their pay to their 401(k) plans. The company has little turnover, an astoundingly low 5.5% for workers who have been with Costco for a year or more.

42. Tips for Becoming a People Developer
Motivate people by convincing them to take charge of their own development
Integrate the individual’s development plan with the formal performance-improvement process
Rely on more training for developing your people
Delegate whenever possible to both lighten your load and to challenge and develop your people
Notes:
Topic: Management skills
Fact: in a recent study by a consulting firm, “managers and employees ranked ‘developing direct reports’ dead last out of all 67 competencies in its bi-annual study of leadership skills. That’s right—67th out of 67. So out of all 67 competencies, managers are viewed and view themselves ‘worst’ at developing their direct reports compared to all other skills in their toolbox.”
Motivate people by convincing them to take charge of their own development
Make sure they have a written development plan with both long and short-term goals
Don’t be their Mom by building an unhealthy dependence
Integrate the individual’s development plan with the formal performance-improvement process
Rely on more training for developing your people
Special assignments, job rotation, reading assignments, mentoring, and coaching also are helpful
Delegate whenever possible to both lighten your load and to challenge and develop your people
Really get to know your people and their career aspirations
Have at least a three-year development path in mind when interviewing new people
Make sure people who take charge of their own development are creatively rewarded
For discussion: what other “people development” advice do you have? How do the above tips relate to building human capital?
Source: Excerpted and adapted from R N Llewellyn, “The Power in being a People Developer,” HR Magazine, July 2002, pp

43. Tips for Becoming a People Developer
Really get to know your people and their career aspirations
Have at least a three-year development path in mind when interviewing new people
Make sure people who take charge of their own development are creatively rewarded
Notes:
Topic: Management skills
Fact: in a recent study by a consulting firm, “managers and employees ranked ‘developing direct reports’ dead last out of all 67 competencies in its bi-annual study of leadership skills. That’s right—67th out of 67. So out of all 67 competencies, managers are viewed and view themselves ‘worst’ at developing their direct reports compared to all other skills in their toolbox.”
Motivate people by convincing them to take charge of their own development
Make sure they have a written development plan with both long and short-term goals
Don’t be their Mom by building an unhealthy dependence
Integrate the individual’s development plan with the formal performance-improvement process
Rely on more training for developing your people
Special assignments, job rotation, reading assignments, mentoring, and coaching also are helpful
Delegate whenever possible to both lighten your load and to challenge and develop your people
Really get to know your people and their career aspirations
Have at least a three-year development path in mind when interviewing new people
Make sure people who take charge of their own development are creatively rewarded
For discussion: what other “people development” advice do you have? How do the above tips relate to building human capital?
Source: Excerpted and adapted from R N Llewellyn, “The Power in being a People Developer,” HR Magazine, July 2002, pp

44. Video Case: Starbucks
Why does Starbucks view its social responsibility activities not as an expense or requirement, but rather as an “enlightened self-interest”?
What is the benefit for Starbucks in assisting Latin American farmers in obtaining financing to pay their pickers?
Why is Starbucks so interested in protecting the interests of the farmers who supply their coffee - aren’t there others they could buy from?
Starbucks interest in its growers and the regions of the world they purchase coffee in most certainly could be viewed as simply being socially responsible. However, Starbucks takes the long-term view of protecting their suppliers and their lands as an investment of sorts in the future - they can rest assured that farmers will be willing to sell them their coffee, and that there will be growers who they can foster long-term relationships with for years to come.
By aiding farmers and protecting the regions they purchase coffee from, Starbucks knows that there will be producers there year after year. It truly is an example of a win-win situation - Starbucks has suppliers, and the farmers stay in business and have a market for their products.

45. Video: Pike Place Fish Market
What does it mean at Pike Place Fish to be world famous? Why does it take some new employees months to understand this concept?
What role does organizational culture play in Pike Place Fish’s quest to be world famous? Why are other firms such as Coffee Bean & Tea Leaf adopting the “fish” philosophy?
How does Pike Place Fish create the context for workers to reach their maximum potential? What role does socialization and mentoring play in creating and nurturing this atmosphere?
At Pike Place Fish Market, being world famous means making a difference in the lives of their customers. Providing this experience takes total commitment on the part of employees.
A hands-off management style allows each employee the opportunity to contribute to his or her fullest potential. Other companies are adopting the “fish” philosophy because it has proven so successful at Pike Place. Socialization and mentoring play a significant role in the atmosphere at Pike Place. Anyone can be a coach/mentor and everyone is allowed to coach others. When coaching is needed, everyone has the responsibility to step up and contribute their talents.
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