Chapter 8: Controlling PART II

Review Control  ository/ /BOH4MPU04/BOH4MP U04A07/mme/management/preloader.ht m ository/ /BOH4MPU04/BOH4MP U04A07/mme/management/preloader.ht m

Why Control? “Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information. Management by objectives works if you first think through your objectives. Ninety percent of the time you haven't. Objectives are not fate; they are direction. They are not commands; they are commitments. They do not determine the future; they are means to mobilize the resources and energies of the business for the making of the future.” - Peter Drucker

Forms of Managerial Control  Management By Objectives (MBO)

Forms of Managerial Control  Internal Control  Managers have two basic choices when it comes to control.  rely on employees to control their own behaviour  take action to control the behaviour of others.  Ideally, the first choice would suffice and the second choice would never be necessary.

Forms of Management Control  Internal Control continued  When it exists:  demonstrate self-discipline and self-control.  often meet or exceed their job expectations without the need for external control from managers because highly motivated.  More likely when employees understand and believe in the organization’s mission, know their own objectives, and have the resources to do their job well.

Forms of Management Control  External Control – the following may be used to motivate employees in the absence of internal/self control:  bonus pay  Employee Stock Ownership (ESOP); gain-sharing  profit-sharing  pay for performance (or merit pay)  skills-based pay (or pay for knowledge)  Compensation systems are effective in encouraging employees to meet standards and performance objectives AKA Control systems

Forms of Management Control  Progressive Discipline  When an employee’s behaviour at work is unacceptable, (e.g., absenteeism, lateness, lying, or sexual harassment), managers must address the behaviour.  some types of misbehaviour are more severe than others.  disciplinary action administered to an employee should vary according to how significant and how often the behaviour occurs.  “ultimate” penalty of being fired, should only be used in the case of the most severe infractions or for repeated occurrences of minor infractions.

Progressive Discipline  Each group will identify what they think the appropriate progressive discipline steps are for the following:  Stealing another student’s belongings  Plagiarism  Homophobic Slurs  Violence against another student  Talking back to a teacher

Douglas McGregor’s “hot stove” Rules of Discipline Here are the four “hot stove” rules of discipline:  Discipline immediately. The stove delivers an instant ‘BURN’ if you touch it.  Be consistent. Everyone who performs the same act will be penalized accordingly.  Penalize actions, not personality. Disciplinary action should be impersonal.  Provide a rationale and forewarning. Give advance warning that discipline will follow unacceptable behaviour. Make sure employees know what is expected of them.

Douglas McGregor’s “hot stove” Rules of Discipline  There are possible problems with “hot stove” rules and Progressive Discipline:  The focus is on past behaviour.  There is a risk that employees are disciplined in a punitive way.  They do not build commitment into their jobs.  Employees are not likely to feel better about the job or the company.