We reference in terms ofwide or narrow spans Wide span exists when one manager has large number of people reporting to them Nan'ow span when the manager has only a few people Organizational height- refers to the number layers or levels of management in the organizational structure (flat or tall) If span of management is wider than fewer levels needed and organizational height is considered at (many report to one manager) Ifspan is narrow then more levels and organizational height is considered tall (few report to one manager and there is a greater opportunity for advancement Note: Taller costs higher because more management is needed, and communication may be issue_ if company wants to cut costs? May decrease organizational height. Diagrams: See Diagrams PDF in Module 5 for visual ( and don't laugh ) FORMS OF ORGANIZATIONAL STRUCTURE FOUR BASIC TYPES: 1. Line 2. Line and staff 3. Matrix 4. Network Line - simplest and oldest form~ structure in which the chain of command goes directly from person to person throughout the org. straight line- owner- gm- asst manger. Line managers- manager in line structure who makes decisions and gives orders to subordinates to achieve company goals. Line and staff - utilizes chain of command from line structure and specialists referred to as staff managers who provide support, advice and expertise to line managers (legal, public affairs). In a diagram, the staff managers can be identified because the line that connects them is broken ( ----- ). Line authority make decisions relating to org goals Staff advisory or functional authority Advisory - line managers will consult staff manager functional authority sta' managers can make decisions pertaining to expertise. Diagram: See PDF-Organizational Structures for visual picture (still no laughing~l drew this one). There is one in your book as well. Matrix- combines vertical and horizontal lines of authority usually by combining product departmentalization with function departmentalization. [n this type of structure the employees report to more than one manager. Diagram: See PDF-Organizational Structures for visual picture (still no laughing~l drew this one). There is one in your book as well. TRAINING AND DEVELOPMENT Employee training process of teaching operations and technical employees how to do their present jobs more effectively and efficiently. Management development- process of preparing managers ad other professionals to assume increased responsibility in both present and future positions. Training and development methods: On the job, Simulations, Classroom teaching and lectures, Conferences and seminars, role playing. Role playing involves a situation where participates acts out the roles of others. This can be very effective because it allows an individual to see what it feels like to be the other party. PERFORMANCE APPRAISALS Performance appraisal is the evaluation of employees' current and potential levels of performance. 3 main objectives: 1. Let workers know how they are doing and how they can do better 2. Effective basis for raises and promotions. 3. Aids in monitoring selection, training and development. Common Evaluation Techniques: 1. Objective measurable quantity for assessing performance. ie- volume of sales, or output of units. 2. Judgmental - utilized more frequently manger judge, rates, estimates employees performance level. Rating scales are often used like the teacher evaluations you do in class statement is made and manager rates it on a scale of 1-5 \"strongly agree\" - \"strongly disagree". Regardless of method used results should be discussed with employee after evaluation is completed. Manager explains basis and discusses what employee can do different. Information provided to employee is know as PERFORMANCE FEEDBACK. 3 major approaches to Performance Feedback 1. Tell and sell 2. Tell and listen 3. Problem solving (Sometimes mixed approach is used) 2. Wage structure - determining pay levels for positions within rm. Wage structure is almost always based on job evaluation which is the process of determining the relative worth of various jobs. ( Lawyers paid more than secretaries. ) Various ways to do- Don't need to know ways. 3. Individual Wages - determine specic payments for each individual . a) initial pay rate b) increases based on performance and seniority Comparable Worth is a concept that seeks equal compensation for jobs that require about the same level of education, training and skill. TYPES OF COMPENSATION Lu Hourly wage- amount of money paid per hour. Paid overtime for hours in excess of 40 hours per week. (Not paid if don't work) Salary- sometimes based on annual rate (ie- $50,000 per year) but paid bi- weekly or at other intervals. salary is a specied amount of money paid for an employee's work during a calendar period regardless of number of hours worked. (No overtime) Commissions- payment that is a percentage of sales revenue. Incentive payments- payment in addition to wages, salary or commission-For instance an end of the year bonus. Lump sum salary increases- when raise is paid in one lump sum rather than over the course ofa year. IF paid in lump sum and leave company during the year then will have to repay portion of payment. Prot sharing - distribution ofa rm's prot among it's employees. Employee Benets reward in addition to regular compensation that is provided indirectly to employees. Types of benefits are as follows: Sick leave, paid vacation, paid holidays, insurance packages, pension and retirement plans, child care, exercise rooms, etc.. Flexible benet plans- an employee receives a predetermined amount of benet dollars and can apply to various categories of benets which suits needs. SOME BENEFITS ARE REQUIRED BY LAW: Worker's Compensation benets pays medical bills for injuries on the job and provides income for employees hurt in job related injuries. Also Unemployment Insurance and social security benets Selection: process of gathering information about applicants for a position and then using that information to choose the most appropriate applicant. (Not necessarily most qualied anymore- we will discuss) Ways to obtain info about employees: 1. Employment Applications-form completed to obtain info about potential employee (must comply with the law) ~ Resume one or two page summary of candidates background and qualications includes education, prior employment/responsibilities. (Often submitted by potential candidate to highlight abilities to potential employer) 2. Employment Tests - test given to applicant to determine skills, abilities, aptitude, or knowledge relevant to ajob. MUST comply with the law\" IF applicant believe they have been discriminated against they will file with EEOC\" Equal Employment Opportunity Commission (gov't agency that investigates claims ofdiscrimination). 3. Interviews - meeting with applicants and is most widely used selection technique (applicants should also question employer to see ifjob is a good t for them). Structured interview is when the only questions asked are a prepared set of questions. 4. References - people who can verify background info Biggest drawback because provided by candidate the people are very likely to say good things. People don't usually provide references they are unsure about. 5. Assessment Centers - used primarily to select current employees for promotion. Orientation: process or program for aequainting new employees with organization.- New employees at Disney World Orlando spend time learning what it means to be a \"cast member\"- This is orientation. COMPENSATION AND BENEFITS Compensation- payment to employees for their labor Compensation system policies and strategies utilized by an org to determine employee compensation. 1 must provide for employees needs while keeping labor costs reasonable for employer) 3 separate management decisions in reaching effective compensation system I. Wage level - that which is comparable in the industry~ Some rms use Wage surveys to determine. Wage survey is a collection of data on prevailing wage rates in an industry or geographic area. ( Practical Note: You can look up a wage survey to get info on income in a eld you are considering pursuing.) Examples assembly line manufautos need many people. Necessary in most orgs because -- 1. Most orgs the job is too big for one person. 2. When specic task learn it well and become procient. 3. A worker handling one task does not lose time changing operations. 4. More specialized the job easier to design equipment. 5. More specialized the job easier to the job training. So what are the problems with job specialization? Why don't all org have job specialization? l. Get's boring and employees become unmotivated and unsatised. leads to absences from work, failure to do a good job and may even sabotage \"quality of prod\" How do we cure the problem? Job rotation move periodically from station to station. Job enrichment and job enlargement are also alternatives but you don't need to know them. Once jobs designcd- must be grouped together into departments DEPARTMENTALIZATION - process of grouping jobs into manageable units. Most smaller and newer orgidepattmentalize based upon function 7 management easier because same activities and easier to coordinate efforts. Ways to departmentalize: 1. Function 2. Product 3. Location 4. Customer 5. Combination of bases (1-4 above) DEPARTMENTALIZATION By function jobs that relate to same organizational activity marketing, production, nances etc. Note: Utilized by most newer and smaller orgs. By product groups activities related to a particular good or service each dept handles its' own mkt., prod, n and human resource activities. GM has divisions for Cadillac, Chevrolet, Pontiac, Buick This is departmentalization by product. By location- groups activities according the dened geographic area in which they are performed. ie-northwest division, southeast division By Customer groups activities based upon the needs of various customer populations 2 CHAPTER 9 HUMAN RESOURCES HANDOUT Human resources (people) are an organizations most important resource. DEF: Human Resource Management (HRM) is all of the activities to acquire, maintain and develop an organizations human resources. Acquiring (obtaining new employees) involves five (5) activities: Planning (determining future needs) Job analysis (nature of positions- what is involved) Recruiting (attracting people to apply) Selection (choosing and hiring the most qualied applicant) Orientation (providing new employees with info about rm) 51'7\".\"wa Acquiring includes obtaining potential applicants from colleges. Maintaining (keeping employees and effective work) 1. Employee relations employee job satisfaction- utilize surveys, communication prog, exit interviews, fair treatment. 2. Compensation (money)- rewarding employees with money 3. Benetits- ensure employee well being through rewards. Development (improving skills/expanding capabilities)TWO important activities 1. Training and development - new skills, new jobs, effective ways to do job. 2. Performance Appraisal- assessing employees current and potential performance levels. Who is responsible for human resources management? Line Managers?- Work directly with employees Staff Managers'?- HRM Generally BOTH Why? HRM activities are assigned to the people in the best position to perform them. Example: Line Managers work directly with employee and therefore RECOMMEND PAY INCREASES AND PROMOTIONS (because they work with employee they are in best position to determine) Staff Managers (HRM speacialists) COMPENSATION SYSTEMS AND BENEFITS are designed by and administered by STAFF perspectives. Companies are now more aware of the importance of diversity. JOB ANALYSIS - is a procedure for studying jobs to determine elements or requirements. Job analysis for a particular position consists of TWO parts: 1. Job description- a list of the elements that make up a particular job (includes duties to be performed, working conditions, responsibilities, tools or equip. needed to perform job. 2. Job specification- list of qualifications required to perform a job (includes skills, abilities, education and experience) SO if I call the personnel department because I want to know what skills and experience are needed to qualify for a job, I will ask for a Job If I call and want to know what the job involves - what my duties will be- I will ask for a job NOTE: job analysis is used for recruiting and selecting employees and it is also utilized for evaluation and determining compensation levels. RECRUITING, SELECTION AND ORIENTATION Recruiting: Process of attracting qualified job applicants. (Outside of the firm and within the firm) External recruiting- attracting applicants from the outside. Ways: newspaper advertising, employment agencies, online employment sites, college campuses, soliciting recommendations from present employees* (employee referrals), and conducting open houses, job fairs. *Some organizations will offer monetary rewards to employees who recommend applicants who work out-(employee referrals) PRIMARY ADVANTAGE for external recruiting: Brings in people with new perspectives and varied backgrounds DISADV - can be expensive and may provoke resentment in current employees. Internal recruiting - considering present employees for available positions. Method: Job posting- when advise current employees of opening. ADV- motivates employees. DISADV- leaves another position open 3 ie corp sales} individual sales Combo ot'bases- ie customer then 3 categories mens, women's and children break off into operations and marketing (functional) DELEGATION, DECENTRALIZATION, AND CENTRALIZATION What we are referring to is distributing power in an organization. Delegation is when a manger assigns work and power to other workers - if fail to delegate a manager may find that workers have free time. Reasons to delegate? 1. Complete job 2. Develop skills and abilities of subordinates (allows for grooming to higher positions) Steps in delegation l. Assign responsibility - duty to do a job 2. Grant authority - power within org to accomplish task or job 3. Assign accountability - obligation of a worker to accomplish an assigned job or task. NOT 5- accountability can be created but not delegated what does that mean}? manager remains accountable even if delegates task if task is not completed. Barriers to delegation Why wouldn't a manager want to delegate? - Sometimes if a manager has delegated and been blamed for work not done they become reluctant to delegate because the person who delegates remains responsible. l. Reluctant because want to make sure work gets done; can monitor 2. Security- ifemployce does well worried may take job. 3. Lack oforganization some managers are so disorganized they can't plan and assign work effectively. Pattern of delegation will be determined by whether an org is decentralized or centralized Decentralized orgs mgt consciously attempts to spread authority widely across various org. levels. Centralized - works to concentrate authority at higher levels. If have a company that has to make serious or risky decisions quickly then you should have a centralized organization. Number of factors will determine whether centralized or decentralized: YOU don't need to know. THE SPAN OF MANAGEMENT (4Ill step in organizing) (or span ofeontrol) refers to the number of workers (subordinates) who report directly to one manager. no perfect number. CHAPTER 7- CREATING FLEXIBLE ORGANIZATIONS Basicsi What is an org'? 7 group oftwo or more people working together to achieve a common set of goals So let's say you have an idea (business) you will need people. you will need to know what each will do, and who will report to whom The picture that represents these ideas is an Organizational Chart which is basically a diagram that represents the positions and relationships within an organization. Google- Organization Chart and it will provide you with examples so you can see what they look like there is also one in the book. Chain of Command is the line of authority that extends from the highest to the lowest levels of the organization (org). Note: Chain ofcommand can be short or long IF YOU DO NOT KNOW WHO TO REPORT TO, THEN YOU DO NOT KNOW THE CHAIN OF COMMAND Who use org charts? Mostly smaller business- clarify pos and reporting relationships. Large Corps (remember SBA def- most businesses are considered small) don't have complete detailed charts Why? Difficult to chart and always changing. CONSIDERATIONS FOR ORGANIZING A BUSINESS Management must decide how to organize a business which will focus on the following: . Job design . Departmentalization . Delegation . Span of Management . Chain of Command U'IRMNI-I Job Design - basically how we establish job boundaries and effectively complete each job. There are 4 major steps in the organizing process Job specialization Departmentalization Delegation, Decentralization and Centralization The Span of Management. 5394!\"? JOB SPECIALIZATION separation of all organizational activities into distinct tasks and the assignment of different tasks to different people. Network - administration is the primary function and most other functions are contracted out to other firms. (Virtual structure) INFORMAL ORG AND GRAPEVINE essential part of business Informal org- pattern of behavior and interaction from personal rather than official relationships. Informal groups- people who gather or hang out together to do things other than accomplish org. goals. Grapevine - informal communication network. - can include gossip. HOW SHOULD MANAGERS DEAL with it? Leave it alone except if there is an inaccuracy that will effect the business such as, "Business cannot make payroll this week" - then management should make sure it is corrected.Therefore both are involved but have different aspects ofthe job assigned based upon best position Other examples ofStaffand Line working together - planning and job analysis done by staffbut with input from line. -recruiting and selection handled by staff but line has input on hiring. Human Resources Planning- the development ofstrategies to meet a rms lture human resources needs. HOW DO WE PLAN? FIRST- Forecast Demand- What human resources will the firm need? Will look at rms future plans to determine and will also look at past performance. It is essentially an educated guess. SECOND - Forecast Supply must look at present workforce and potential changes ie- have 50 designers and two years will need 100 designers. cannot just assume you will need to hire 50 more peoplei need to account for attrition which is the natural decrease in the work forcei ie- people quit, retire, get promoted. TWO USEFUL techniques for forecasting supply: 1. Replacement Charts list of key personnel and their possible replacements in the rm 2. Skills lnventory- computerized data bank containing information on all the skills and experience of present employees. THIRD- Need to match supply with demand by devising a course ofaction which will depend upon timing- when needs will arise or alternatively when supply exceeds demand. When supply (of people) exceed demand what are our options? I. Lay offs - dismissed from workforce until needed again ( common in seasonal businesses) For instance when sales drop each summer at Vail Mountain resorts a high quality ski destination. 2. Attrition regular reduction in workforce when employees leave the rm 3. Early retirement can retire early with full benets. (Company cuts costs) 4. Fired only done when necessary because of neg. impact- this is a last resort. Why? Because it sends a bad message about the state of the business. This is not about firing someone for poor performance but rather because we have too many people and not enough work. Cultural Diversity - differences among people in a workforce due to race ethnicity and gender. This is important from both a legal perspective and to obtain varying input and different 2