An expression often used in the international context is ‘going global. This refers to the potential scope for all of the organization's operations to be uniform around the world and its ability to compete on a worldwide basis.
There are two ways that a multinational corporation can direct its offering of products and services. The first of these is by standardization, where a company sees its market as a homogenized, uniform place for trade. It assumes that customer preferences are universal. On the other hand, companies may see a need for customization of goods and services and the adaptation of these according to national or regional preferences. The differences between the two are that the latter is customer driven rather than being product and production efficiency driven.
Companies will expand according to their resource availability and their core competencies. Management commitment and decision-making companies can position themselves as they wish along the value-adding chain. Hence, companies are also capable of organizational learning. That is, as managers gain experience in different types of international operations they can expand their activities according to the extent of that knowledge and experience. Managers don't have a script. Some may rely on facts and evidence. Others rely on intuition and ‘gut feeling’. All managers must make the effort to convert tacit knowledge that is in the heads and experience of their supply-chain participants into explicit recorded data that then can be analysed, debated and then plans decided upon. Chapters by Jones and also by Dawes in this volume debate tacit and explicit knowledge management issues and processes.
One useful device is known as a life cycle. We are familiar with this process from study of such things as marketing. Products are all fully developed in the domestic market and available for sale in that market. As a firm seeks expansion it will exploit that product to enter likely foreign markets. As the product succeeds in the host country markets, competitors will also start production of similar products. As the product matures in global markets, companies tend to seek to reduce costs and start a search procedure to reduce production costs. For example, if labour is a major cost of production a company may seek out lower labour wage countries and transfer production. They also benefit from tax holidays and other incentives when doing so. The key potential drawback is the increased downstream distribution time and the consequent increase in pipeline stock value, which is a risk to profit.
As mentioned above, the choices available for a company to expand its operations internationally will depend on the resources available to it and also its current operating position. These aspects are internal to the company and therefore controllable by the managers. Management should consider the resources and assets that managers currently have available and their effectiveness in acquiring extra resources and assets. These may be generated internally by sales revenue or else be acquired from shareholders and/or lenders, such as banks. Experience in international operations is also a variable asset. Managers acquire experience by actually doing business in foreign markets. However, companies can acquire experience by recruiting appropriately skilled personnel. The former method takes time, while the latter can provide a much quicker access to growth.
External to the company but still manageable are various industry drivers. These industry drivers include issues such as the nature of the market, government regulation, the nature of competition and industry cost structures.
The nature of the market will depend on the host country's level of industrialization. Companies from developed countries are more likely to trade with companies from other industrialized countries. As a result we see the highest levels of international business being conducted between Western Europe, Eastern Asia and North America. These are trading groups of countries that have high per capita income and large levels of disposable income. These markets also are highly sophisticated with very cosmopolitan tastes.
Governments in all countries are the major players in international business, whether they are taking part in business themselves or merely acting as regulators. There is international cooperation between countries under the auspices of organizations such as the WTO. Countries may go into partnership with others such as the European Union (EU) or the North America Free Trade Association (NAFTA). Markets that were once closed or centrally planned are opening up to be more market driven and provide many opportunities for foreign companies.
Putting these two issues together, managers have available to them a number of strategy levers. These include the nature of the product/service offerings. There are many ways in which managers can participate in the market. Managers can also make choices about the location of activities, whether it is production or sales. They also can make a choice about which competitors they choose to compete with and the nature of that competition.
Sunday, September 11, 2011
Supply Chain Management/Operations Management - Decision Tree
A decision model represents shows an evaluation situation. There are three types of nodes in a decision tree:
• Decision nodes represents by squares which are variables or actions that the decision maker controls.
• Chance event nodes, represented by circles, are variables or events that cannot be controlled by the decision maker.
• Terminal or end nodes, represented in a decision tree diagram by unconnected branches, are endpoints where outcome values are attached.
By convention, the tree is drawn chronologically from left to right and branches out, like a tree lying on its side. Decision tree analysis language includes colourful biological analogies. The starting (usually) decision node is called the root, and the radial lines are called branches (sometimes twigs). The terminal nodes are sometimes called leaves, and an overly complex tree bears the label, a bushy mess.
Tree Annotations:
We label the decision tree diagram with these numbers:
• Probabilities for each outcome branch emanating from chance nodes.
• Outcome values, representing present values (PVs) of the resulting cash flow stream, discounted to the date of the root decision. Sometimes, we may choose to place benefits and costs along branches as they are realized. More commonly, terminal node values represent the entire outcome.
• Node expected values, calculated during the process of solving the tree. When solving with a utility function as risk policy, I like to show expected monetary value (EMV), expected (value) utility (EU), and certainty equivalent (CE) for each node.
Tree Calculations
Solving a decision tree is a simple back-calculation process. This is sometimes called back-solving or folding back the tree. Starting from the terminal nodes at the right, moving left, we solve for the value of each node and label it with its EV. These EVs are EMVs or EV costs when we measure value in dollars or other currency.
Here are the three simple rules for solving a tree:
• At a chance node, calculate its EMV (or EV cost) from the probabilities and values of its branches. This becomes the value of the node and the branch leading to it.
• Replace a decision node with the value of its best alternative. We are applying the EMV decision rule.
• If a cost value lies along a branch, recognize that cost in passing from right to left. That is, subtract a cost when solving a tree to maximize EMV. Treat the rest of the cost as a "toll" to be paid when traversing the tree. (Sometimes a tree is designed to solve for EV costs, in which case, a cost along a branch is added.)
The decision tree is built with each possibility following a separate path in the tree with the final expected values at the end of the process. The drawing in below is a highly simplified version of a decision tree chart.
The interesting aspect of this type of decision process is that there is always the option to do nothing in reference to the other options. If none of the options look like they will produce the desired result, it may be better to do nothing at all or rethink the problem from a different point of view.
One critical aspect of decision tree analysis is that you are required to estimate the anticipated probability that an event will occur—these estimates are represented by numbers next to each “chance of success” phrase on the diagram. How well you perform these estimates will render the decision tree analysis either accurate or flawed. This is why it may be necessary to spin up the analysis multiple times, to determine what range of estimates will deliver the expected values in the analysis and achieve your desired results.
Basic concepts for the decision tree:
• Probability. Outside of throwing dice or some other activity in which the probability of a certain outcome can be estimated/calculated with fair accuracy, the probability of any given event occurring depends on your own experience and beliefs. Yet the decision stills boils down to your own personal experience and beliefs.
• Utility. This concept helps us compare unlike elements in a decision by using a common reference value that places a relative common value on the disparate elements (i.e., playing with your dog, buying a DVD, or mopping the kitchen floor might be commonly expressed in terms of time or dollars).
• Expected Value. This is the result of the decision tree analysis, on average, if we repeat the analysis numerous times. Expected value (EV) is calculated as follows:
• Decision Forks. There are two types of forks created in a decision tree analysis. The first is a decision fork, which is used to present the various alternatives in the decision tree (i.e., we could make or buy the product).
• Value of Information. This quantifies the value of obtaining additional information for a decision analysis, even if the quality of the information is variable.
• Sensitivity Analysis. Since the inputs to the decision tree are never known with absolute certainty, the sensitivity analysis can be used to bolster your confidence in your decision estimates.
• Conditional Probability. This refers to the probability of one event occurring after we know that another event has occurred. If you live in a busy city, you might hear ambulance sirens randomly throughout the day. However, the probability that you will hear an ambulance siren is usually less than the probability that you will hear an ambulance siren after witnessing a five-car collision at a busy intersection.
• State Variables. These allow the user to construct complex decision tree utility functions in which there are numerous inputs.
• Decision nodes represents by squares which are variables or actions that the decision maker controls.
• Chance event nodes, represented by circles, are variables or events that cannot be controlled by the decision maker.
• Terminal or end nodes, represented in a decision tree diagram by unconnected branches, are endpoints where outcome values are attached.
By convention, the tree is drawn chronologically from left to right and branches out, like a tree lying on its side. Decision tree analysis language includes colourful biological analogies. The starting (usually) decision node is called the root, and the radial lines are called branches (sometimes twigs). The terminal nodes are sometimes called leaves, and an overly complex tree bears the label, a bushy mess.
Tree Annotations:
We label the decision tree diagram with these numbers:
• Probabilities for each outcome branch emanating from chance nodes.
• Outcome values, representing present values (PVs) of the resulting cash flow stream, discounted to the date of the root decision. Sometimes, we may choose to place benefits and costs along branches as they are realized. More commonly, terminal node values represent the entire outcome.
• Node expected values, calculated during the process of solving the tree. When solving with a utility function as risk policy, I like to show expected monetary value (EMV), expected (value) utility (EU), and certainty equivalent (CE) for each node.
Tree Calculations
Solving a decision tree is a simple back-calculation process. This is sometimes called back-solving or folding back the tree. Starting from the terminal nodes at the right, moving left, we solve for the value of each node and label it with its EV. These EVs are EMVs or EV costs when we measure value in dollars or other currency.
Here are the three simple rules for solving a tree:
• At a chance node, calculate its EMV (or EV cost) from the probabilities and values of its branches. This becomes the value of the node and the branch leading to it.
• Replace a decision node with the value of its best alternative. We are applying the EMV decision rule.
• If a cost value lies along a branch, recognize that cost in passing from right to left. That is, subtract a cost when solving a tree to maximize EMV. Treat the rest of the cost as a "toll" to be paid when traversing the tree. (Sometimes a tree is designed to solve for EV costs, in which case, a cost along a branch is added.)
The decision tree is built with each possibility following a separate path in the tree with the final expected values at the end of the process. The drawing in below is a highly simplified version of a decision tree chart.
The interesting aspect of this type of decision process is that there is always the option to do nothing in reference to the other options. If none of the options look like they will produce the desired result, it may be better to do nothing at all or rethink the problem from a different point of view.
One critical aspect of decision tree analysis is that you are required to estimate the anticipated probability that an event will occur—these estimates are represented by numbers next to each “chance of success” phrase on the diagram. How well you perform these estimates will render the decision tree analysis either accurate or flawed. This is why it may be necessary to spin up the analysis multiple times, to determine what range of estimates will deliver the expected values in the analysis and achieve your desired results.
Basic concepts for the decision tree:
• Probability. Outside of throwing dice or some other activity in which the probability of a certain outcome can be estimated/calculated with fair accuracy, the probability of any given event occurring depends on your own experience and beliefs. Yet the decision stills boils down to your own personal experience and beliefs.
• Utility. This concept helps us compare unlike elements in a decision by using a common reference value that places a relative common value on the disparate elements (i.e., playing with your dog, buying a DVD, or mopping the kitchen floor might be commonly expressed in terms of time or dollars).
• Expected Value. This is the result of the decision tree analysis, on average, if we repeat the analysis numerous times. Expected value (EV) is calculated as follows:
• Decision Forks. There are two types of forks created in a decision tree analysis. The first is a decision fork, which is used to present the various alternatives in the decision tree (i.e., we could make or buy the product).
• Value of Information. This quantifies the value of obtaining additional information for a decision analysis, even if the quality of the information is variable.
• Sensitivity Analysis. Since the inputs to the decision tree are never known with absolute certainty, the sensitivity analysis can be used to bolster your confidence in your decision estimates.
• Conditional Probability. This refers to the probability of one event occurring after we know that another event has occurred. If you live in a busy city, you might hear ambulance sirens randomly throughout the day. However, the probability that you will hear an ambulance siren is usually less than the probability that you will hear an ambulance siren after witnessing a five-car collision at a busy intersection.
• State Variables. These allow the user to construct complex decision tree utility functions in which there are numerous inputs.
Perception
Perception is based on our sense organs - people behave in accordance with what they perceive. However, what one perceives can be substantially different from objective reality.Perception is defined as the process by which a person assimilates and makes use of sensory data and by which individuals organize and interpret their sensory perceives in order to give meaning to their environment.
Factors Influencing The Perception Process
• Habit
• Motivation and interest
• Learning
• Organizational and specialization
• Economic and social background
• Personality
The Steps in the Perceptual Process:
• The Environmental Stimulus
• The Attended Stimulus
• The Image on the Retina
• Transduction
• Neural Processing
• Perception
• Recognition
• Action
Although there are different ways to describe perception process stages, most psychologists describe it in terms of three stages:
• The first is sensory stimulation; for example, smelling a scent that reminds you of a childhood moment or hearing a song you haven't heard in a while that reminds you of something special.
• The second stage in the perception process is the organization of that stimulus in your brain; i.e., forming a positive or negative cerebral response to the stimulus.
• The third and final stage of the perception process involves interpreting and expressing the thoughts that have been elicited, often involving an emotional response such as smiling at the scent of apple pie, or perhaps becoming a bit choked up by the feelings evoked from hearing the song you've just heard.
Response to the Perpetual Process
The final step of the perceptual process involves some sort of action in response to the environmental stimulus. This could involve a variety of actions, such as turning your head for a closer look or turning away to look at something else.The action phase of perceptual development involves some type of motor action that occurs in response to the perceived and recognized stimulus. This might involve a major action, like running toward a person in distress, or something as subtle as blinking your eyes in response to a puff of dust blowing through the air.
Perceptual Distortion: It means the perceptual barriers and differences.
It includes Stereotyping means when we generalize. Think of a social group which you may have come across. we often feel that all the members of the group are alike. this is stereotyping. the marketing application of this perceptual distortion is that the marketer use umbrella branding. the benefit is that if one product of the brand does well then the others will too.
• Halo effect
• Physical appearence
• First impression
• Jumping to conclusion
Proper Understanding And Better Relationship-Having a better perception means developing a proper understanding of both inside and outside world and there by keeping good relationship with self and others.We should see that in no way our perception goes wrong.If we always have the right perception then we will excel in every field of life.Our relationship with others will become strong and we will be able to avoid any sort of misunderstanding.With a clear understanding we can better judge others and can have the dealings with them accordingly so as to improve our business by selling our products. Each human being wants to be clearly perceived by others so that he can be able to communicate in a better manner and express his ideas and views.We should understand this aspect of human mind and accordingly perceive them so as to make ourselves better individuals and march forward in pursuit of our dreams and hopes.
Factors Influencing The Perception Process
• Habit
• Motivation and interest
• Learning
• Organizational and specialization
• Economic and social background
• Personality
The Steps in the Perceptual Process:
• The Environmental Stimulus
• The Attended Stimulus
• The Image on the Retina
• Transduction
• Neural Processing
• Perception
• Recognition
• Action
Although there are different ways to describe perception process stages, most psychologists describe it in terms of three stages:
• The first is sensory stimulation; for example, smelling a scent that reminds you of a childhood moment or hearing a song you haven't heard in a while that reminds you of something special.
• The second stage in the perception process is the organization of that stimulus in your brain; i.e., forming a positive or negative cerebral response to the stimulus.
• The third and final stage of the perception process involves interpreting and expressing the thoughts that have been elicited, often involving an emotional response such as smiling at the scent of apple pie, or perhaps becoming a bit choked up by the feelings evoked from hearing the song you've just heard.
Response to the Perpetual Process
The final step of the perceptual process involves some sort of action in response to the environmental stimulus. This could involve a variety of actions, such as turning your head for a closer look or turning away to look at something else.The action phase of perceptual development involves some type of motor action that occurs in response to the perceived and recognized stimulus. This might involve a major action, like running toward a person in distress, or something as subtle as blinking your eyes in response to a puff of dust blowing through the air.
Perceptual Distortion: It means the perceptual barriers and differences.
It includes Stereotyping means when we generalize. Think of a social group which you may have come across. we often feel that all the members of the group are alike. this is stereotyping. the marketing application of this perceptual distortion is that the marketer use umbrella branding. the benefit is that if one product of the brand does well then the others will too.
• Halo effect
• Physical appearence
• First impression
• Jumping to conclusion
Proper Understanding And Better Relationship-Having a better perception means developing a proper understanding of both inside and outside world and there by keeping good relationship with self and others.We should see that in no way our perception goes wrong.If we always have the right perception then we will excel in every field of life.Our relationship with others will become strong and we will be able to avoid any sort of misunderstanding.With a clear understanding we can better judge others and can have the dealings with them accordingly so as to improve our business by selling our products. Each human being wants to be clearly perceived by others so that he can be able to communicate in a better manner and express his ideas and views.We should understand this aspect of human mind and accordingly perceive them so as to make ourselves better individuals and march forward in pursuit of our dreams and hopes.
Age Discrimination
The anti-discrimination legislation has been introduced in the UK since 1975 with the 2006 anti-Age Discrimination regulations completing the set of such laws. However, unlike all other anti-discrimination legislation, this latest requirement affects every employer and every employee. These effects must be managed effectively to avoid expensive compensation payments.
Recruitment
Only in relatively rare instances should words be used that contain any reference to age, or give an impression of a preferred age. Traditionally, copy for advertisements has included phrases such as 'young and dynamic', 'energetic', 'graduate', 'needs youthful outlook', 'mature', 'needs flexibility' – but use of these words is debatable.
Phrases and descriptions that are 'age-neutral' should be used or subjective descriptions should be avoided and the description should concentrate on the essentials of the job and the challenge. Age-neutral phrases could include, for example, 'able to deal with pressure', 'self-starter', 'educated to tertiary and so on. The staged age payments related to the National Minimum Wage are exempt from the discriminatory aspects of the new regulations but an employer's own age rates are not.
Person Descriptions (PDs) and Job Descriptions (JDs)
Very often PDs actually generate the very language and phrases such as those referred to above which are likely to be in breach of the legislation. By their nature JDs should not be age specific -other than reflecting any legal requirements- and thus may be less likely to require alteration however, it would be as well to check that this is the case.
Appointment — Contract Terms/Handbook Content
Sometimes terms can be used in both contracts and handbooks which are age discriminatory. Any benefit, or disbenefit, which is linked to the attainment or non-attainment of a particular age could be held to be discriminatory and should be revised to become age-neutral. However, benefits related to years of service may not breach the legislation unless they are manifestly unfair since only those of a particular age could qualify.
Appraisal
When completing 'appraisal' or 'performance review' documentation, all managers and supervisors should be trained to ensure they avoid any reference to age or phrases that generate the concept of a required, preferred or 'not preferred' age. During the appraisal interview whilst it should be acceptable to state: 'I think you need x months training'; stating instead 'we won't be able to promote you until you are 25' could be discriminatory. If Appraisal is linked to Training no age limits should applied to either aspect
Promotion
The test for promotion should be reduced to the simple assessment 'is this person — with the skill and experience they have — appropriate to perform the collection of duties which together comprise this job'. In this regard it might be acceptable to stipulate that, say, '3 years experience' was essential before a person could be considered provided this was an objective requirement.
Training
Almost inevitably when considering training personnel, the question of how long a person is likely to remain with the organisation — and thus for how long they will benefit from the training and the sponsoring organisation will obtain a return on its investment — is likely to be raised.
Bullying, Victimisation and Harassment
Employers should have become used to ensuring that such practices do not occur based on sex, race and disability, and more recently religion and religious belief and sexual orientation, they may perhaps have overlooked that such practices could be occurring on an 'ageist' basis. For example, words and phrases such as 'grey haired', 'wrinkles', 'long in the tooth', 'granddad', 'you coasting to the pension, then?', 'baby-faced', 'young 'un', 'immature', 'why aren't you retired' etc., are all arguably age discriminatory. Even sending an employee colleague a birthday card with some of the above comments might be held to be discriminatory!.Unfortunately it is very likely where employees continue working past their traditional retirement ages thereby occupying jobs that could have allowed promotion to younger employees that there could be a backlash from the latter employees.
Working Environment
As well as ensuring bullying etc on an ageist basis does not occur, employers will also have to ensure that they plan for the implications of people working longer than has been customary. Not only will this impact promotion prospects for younger employees, but also ultimately there could be a number of instances where an employee wishes to work past the time when their employer thinks they are ceasing to perform adequately. This could result in capability investigation/disputes. Since these could involve longer service employees this could be particularly unfortunate.
Recruitment
Only in relatively rare instances should words be used that contain any reference to age, or give an impression of a preferred age. Traditionally, copy for advertisements has included phrases such as 'young and dynamic', 'energetic', 'graduate', 'needs youthful outlook', 'mature', 'needs flexibility' – but use of these words is debatable.
Phrases and descriptions that are 'age-neutral' should be used or subjective descriptions should be avoided and the description should concentrate on the essentials of the job and the challenge. Age-neutral phrases could include, for example, 'able to deal with pressure', 'self-starter', 'educated to tertiary and so on. The staged age payments related to the National Minimum Wage are exempt from the discriminatory aspects of the new regulations but an employer's own age rates are not.
Person Descriptions (PDs) and Job Descriptions (JDs)
Very often PDs actually generate the very language and phrases such as those referred to above which are likely to be in breach of the legislation. By their nature JDs should not be age specific -other than reflecting any legal requirements- and thus may be less likely to require alteration however, it would be as well to check that this is the case.
Appointment — Contract Terms/Handbook Content
Sometimes terms can be used in both contracts and handbooks which are age discriminatory. Any benefit, or disbenefit, which is linked to the attainment or non-attainment of a particular age could be held to be discriminatory and should be revised to become age-neutral. However, benefits related to years of service may not breach the legislation unless they are manifestly unfair since only those of a particular age could qualify.
Appraisal
When completing 'appraisal' or 'performance review' documentation, all managers and supervisors should be trained to ensure they avoid any reference to age or phrases that generate the concept of a required, preferred or 'not preferred' age. During the appraisal interview whilst it should be acceptable to state: 'I think you need x months training'; stating instead 'we won't be able to promote you until you are 25' could be discriminatory. If Appraisal is linked to Training no age limits should applied to either aspect
Promotion
The test for promotion should be reduced to the simple assessment 'is this person — with the skill and experience they have — appropriate to perform the collection of duties which together comprise this job'. In this regard it might be acceptable to stipulate that, say, '3 years experience' was essential before a person could be considered provided this was an objective requirement.
Training
Almost inevitably when considering training personnel, the question of how long a person is likely to remain with the organisation — and thus for how long they will benefit from the training and the sponsoring organisation will obtain a return on its investment — is likely to be raised.
Bullying, Victimisation and Harassment
Employers should have become used to ensuring that such practices do not occur based on sex, race and disability, and more recently religion and religious belief and sexual orientation, they may perhaps have overlooked that such practices could be occurring on an 'ageist' basis. For example, words and phrases such as 'grey haired', 'wrinkles', 'long in the tooth', 'granddad', 'you coasting to the pension, then?', 'baby-faced', 'young 'un', 'immature', 'why aren't you retired' etc., are all arguably age discriminatory. Even sending an employee colleague a birthday card with some of the above comments might be held to be discriminatory!.Unfortunately it is very likely where employees continue working past their traditional retirement ages thereby occupying jobs that could have allowed promotion to younger employees that there could be a backlash from the latter employees.
Working Environment
As well as ensuring bullying etc on an ageist basis does not occur, employers will also have to ensure that they plan for the implications of people working longer than has been customary. Not only will this impact promotion prospects for younger employees, but also ultimately there could be a number of instances where an employee wishes to work past the time when their employer thinks they are ceasing to perform adequately. This could result in capability investigation/disputes. Since these could involve longer service employees this could be particularly unfortunate.
Conflict and Negotiation - Cognition
While personality relates to one’s behaviour as a whole, cognitive function relates more explicitly to mental information processing. Since the majority of system development work and IT work in general involves intellectual functioning, it is not difficult to see that how a person performs “mind work” is a relevant psychological factor in IT work. In fact, it is in the area of cognition that a majority of psychological research in computing/information systems has been carried out.
COGNITIVE STYLE
According to Hayes and Allinson (1998), cognitive style is “a person’s preferred way of gathering, processing, and evaluating information.” Streufert and Nogami (1989) identify cognitive style as a pervasive personality variable. It influences what information in one’s environment a person focuses on and how he/she interprets this information.
One main way of dichotomizing cognitive functioning is the analytic, sequential versus intuitive, holistic functioning. Some psychologists have referred to the former as “left-brain thinking” and the latter “right-brain thinking” (although other scholars may consider this an oversimplification). The former focuses on “trees,” and the latter sees the “forest” in solving problems and coming to conclusions.
The intuitive person integrates many perspectives, finds problems and discovers opportunities, and generates new visions. She is sensitive to both logical and emotional issues, viewing them as one. However, she may overlook important details, may not communicate precisely enough, and may put off decisions.
Adaptor-Innovator
One of the main theories on cognitive styles, along with an instrument to evaluate the style, is the Kirton Adaptation/Innovation theory. This theory of cognitive strategy relates to the amount of structure that a person feels appropriate within which to solve a problem or to embark on creativity.
The Adaptor (left-brained) prefers to work within current paradigms, focusing on doing things better, while the Innovator (right-brained) prefers to “color outside the lines,” constructing new paradigms, focusing on “doing things differently.”
The Innovator, on the other hand, cuts across and often invents new paradigms. He is more interdisciplinary, approaches tasks from unsuspected angles, and often treats accepted means with little regard. He tends to take control in unstructured situations, but is usually capable of detailed routine work for only short bursts of time. While an Adaptor has higher self-doubt and is vulnerable to social pressure and authority, an Innovator does not need consensus to maintain confidence in the face of opposition.
Cognitive Style in IT
It is not difficult to realize that there will be both Adaptors and Innovators in the IT profession. It is also easy to see that each style, if properly harnessed and managed, will provide significant contributions to the development and implementation of information systems, particularly Web-based multimedia applications.
FOR THE BEGINNER
Once cognitive style is recognized as a legitimate psychological factor relevant to IS work, the natural question arises how such consciousness can be used within the profession. The first step is for large numbers of IS professionals to begin to recognize their preferred style, quite possibly alongside their personality type. Areas of IS work in which cognitive style can have a significant effect can be identified. Management can then promote a “culture of awareness” that encourages open communication on effective synergy in different thinking styles. Once an IS developer becomes conscious of his strengths and likely “blind spots” related to his preferred cognitive functioning, he may actually seek input from a co-worker with a complementary style. Such an attitude can indeed reflect “professional wisdom” or “emotional intelligence.”
The issue of cognitive style is likely to be viewed by many IS professionals as the most “scientific” of the topics presented so far. Since so much of IS work involves thinking and learning, many people would likely not object to finding out more about how they think. Thus, most objections from IS workers would not come on philosophical grounds, but perhaps on grounds of a general uneasiness regarding self-examination.
COGNITIVE STYLE
According to Hayes and Allinson (1998), cognitive style is “a person’s preferred way of gathering, processing, and evaluating information.” Streufert and Nogami (1989) identify cognitive style as a pervasive personality variable. It influences what information in one’s environment a person focuses on and how he/she interprets this information.
One main way of dichotomizing cognitive functioning is the analytic, sequential versus intuitive, holistic functioning. Some psychologists have referred to the former as “left-brain thinking” and the latter “right-brain thinking” (although other scholars may consider this an oversimplification). The former focuses on “trees,” and the latter sees the “forest” in solving problems and coming to conclusions.
The intuitive person integrates many perspectives, finds problems and discovers opportunities, and generates new visions. She is sensitive to both logical and emotional issues, viewing them as one. However, she may overlook important details, may not communicate precisely enough, and may put off decisions.
Adaptor-Innovator
One of the main theories on cognitive styles, along with an instrument to evaluate the style, is the Kirton Adaptation/Innovation theory. This theory of cognitive strategy relates to the amount of structure that a person feels appropriate within which to solve a problem or to embark on creativity.
The Adaptor (left-brained) prefers to work within current paradigms, focusing on doing things better, while the Innovator (right-brained) prefers to “color outside the lines,” constructing new paradigms, focusing on “doing things differently.”
The Innovator, on the other hand, cuts across and often invents new paradigms. He is more interdisciplinary, approaches tasks from unsuspected angles, and often treats accepted means with little regard. He tends to take control in unstructured situations, but is usually capable of detailed routine work for only short bursts of time. While an Adaptor has higher self-doubt and is vulnerable to social pressure and authority, an Innovator does not need consensus to maintain confidence in the face of opposition.
Cognitive Style in IT
It is not difficult to realize that there will be both Adaptors and Innovators in the IT profession. It is also easy to see that each style, if properly harnessed and managed, will provide significant contributions to the development and implementation of information systems, particularly Web-based multimedia applications.
FOR THE BEGINNER
Once cognitive style is recognized as a legitimate psychological factor relevant to IS work, the natural question arises how such consciousness can be used within the profession. The first step is for large numbers of IS professionals to begin to recognize their preferred style, quite possibly alongside their personality type. Areas of IS work in which cognitive style can have a significant effect can be identified. Management can then promote a “culture of awareness” that encourages open communication on effective synergy in different thinking styles. Once an IS developer becomes conscious of his strengths and likely “blind spots” related to his preferred cognitive functioning, he may actually seek input from a co-worker with a complementary style. Such an attitude can indeed reflect “professional wisdom” or “emotional intelligence.”
The issue of cognitive style is likely to be viewed by many IS professionals as the most “scientific” of the topics presented so far. Since so much of IS work involves thinking and learning, many people would likely not object to finding out more about how they think. Thus, most objections from IS workers would not come on philosophical grounds, but perhaps on grounds of a general uneasiness regarding self-examination.
Employee Separation
All things must end, and employment is no different. Whether the separation is initiated by the employee or by the employer, HR representatives need to know how to handle the situation, and what laws may apply. Regardless of why employees leave, companies may have regulatory responsibilities, such as providing COBRA coverage and unemployment compensation.
Terminations
Employees whose work is not satisfactory should be notified of that fact as early as possible, both to allow for improvement and to prevent any later termination from being a total shock
Preparation
When planning an employee termination it's important to be prepared. HR must make a case for the termination. The detail needed may vary depending on the culture, employment relationship (i.e. contract versus employment-at-will), collective bargaining agreements, etc. The following list shows the factors that are likely to be considered if a termination is challenged.
1. The employee was made aware of your expectations.
2. The employee was warned of the possible consequences of his or her conduct (or failure to meet expectations).
3. The expectation or rule at issue is reasonably related to efficient and safe operation.
4. The employer investigated the matter fairly and objectively before administering discipline or termination.
5. The employee was given a chance to tell his or her side of the story.
6. The employer offered substantial evidence to support its decision.
7. The employer applied its rules even-handedly and without discrimination or retaliation.
8. The degree of discipline (or termination) is reasonably related to the seriousness of the issue, taking into consideration the employee's work record and length of service.
9. To put all this together, if an older employee is released for attendance problems, and a younger employee is hired as a replacement, the terminated employee might attempt to make a claim of age discrimination.
Gather the Facts
Collect the facts from all parties involved before determining if an employee should be discharged. Conduct the investigation as soon as possible. An employee's recollections of events can fade, and information shared between employees can taint the truth.
Check the Employee's File
Maintain a general file for every employee. (Remember, when the employee is eligible for health benefits, establish a separate file for protected health information.) Make a note in the file whenever the employee receives a verbal warning. A written record of verbal warnings serves as a reminder of actions taken, and is especially useful if an employee transfers to a position under another supervisor, or if the supervisor leaves and a new person is hired. If a termination is necessary, the employee file should already include documentation on the reason and justification. You should not need to "build" a file to justify termination.
Review the Facts
Before making a final decision on termination, review and analyze the findings to verify that they are accurate.
Consult with Supervisors
Supervisors should talk to HR about a potential termination. The supervisor should also follow company policy on who has the final decision to terminate, as well as how and where the termination should take place. Neither a supervisor nor HR personnel should perform the termination on his or her own.
Termination Procedure
Companies should have a detailed procedure for employee termination, and that procedure should be followed to avoid a possible wrongful termination suit.
Terminations
Employees whose work is not satisfactory should be notified of that fact as early as possible, both to allow for improvement and to prevent any later termination from being a total shock
Preparation
When planning an employee termination it's important to be prepared. HR must make a case for the termination. The detail needed may vary depending on the culture, employment relationship (i.e. contract versus employment-at-will), collective bargaining agreements, etc. The following list shows the factors that are likely to be considered if a termination is challenged.
1. The employee was made aware of your expectations.
2. The employee was warned of the possible consequences of his or her conduct (or failure to meet expectations).
3. The expectation or rule at issue is reasonably related to efficient and safe operation.
4. The employer investigated the matter fairly and objectively before administering discipline or termination.
5. The employee was given a chance to tell his or her side of the story.
6. The employer offered substantial evidence to support its decision.
7. The employer applied its rules even-handedly and without discrimination or retaliation.
8. The degree of discipline (or termination) is reasonably related to the seriousness of the issue, taking into consideration the employee's work record and length of service.
9. To put all this together, if an older employee is released for attendance problems, and a younger employee is hired as a replacement, the terminated employee might attempt to make a claim of age discrimination.
Gather the Facts
Collect the facts from all parties involved before determining if an employee should be discharged. Conduct the investigation as soon as possible. An employee's recollections of events can fade, and information shared between employees can taint the truth.
Check the Employee's File
Maintain a general file for every employee. (Remember, when the employee is eligible for health benefits, establish a separate file for protected health information.) Make a note in the file whenever the employee receives a verbal warning. A written record of verbal warnings serves as a reminder of actions taken, and is especially useful if an employee transfers to a position under another supervisor, or if the supervisor leaves and a new person is hired. If a termination is necessary, the employee file should already include documentation on the reason and justification. You should not need to "build" a file to justify termination.
Review the Facts
Before making a final decision on termination, review and analyze the findings to verify that they are accurate.
Consult with Supervisors
Supervisors should talk to HR about a potential termination. The supervisor should also follow company policy on who has the final decision to terminate, as well as how and where the termination should take place. Neither a supervisor nor HR personnel should perform the termination on his or her own.
Termination Procedure
Companies should have a detailed procedure for employee termination, and that procedure should be followed to avoid a possible wrongful termination suit.
Performance Management
Performance management can be defined as a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results from the organization, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements. Processes exist for establishing shared understanding about what is to be achieved, and for managing and developing people in a way that increases the probability that it will be achieved in the short and longer term. It is owned and driven by line management.
Other definitions
Performance management is: The development of individuals with competence and commitment, working towards the achievement of shared meaningful objectives within an organisation which supports and encourages their achievement
Performance management is managing the business
Performance management is: the process of ‘Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organisation
Performance management is a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors
AIMS OF PERFORMANCE MANAGEMENT
The overall aim of performance management is to establish a high-performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership. Its key purpose is to focus people on doing the right things by achieving goal clarity.
Specifically, performance management is about aligning individual objectives to organizational objectives and ensuring that individuals uphold corporate core values. It provides for expectations to be defined and agreed in terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and behaviours (expected to be). The aim is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organization. Importantly, performance management is concerned with ensuring that the support and guidance people need to develop and improve are readily available.
The following are the aims of performance management as expressed by a variety of organizations
Empowering, motivating and rewarding employees to do their best (Armstrong World Industries).
Focusing employees' tasks on the right things and doing them right. Aligning everyone's individual goals to the goals of the organization (Eli Lilly & Co).
Proactively managing and resourcing performance against agreed accountabilities and objective
Linking job performance to the achievement of the council's medium- term corporate strategy and service plans (Leicestershire County Council).
The alignment of personal/individual objectives with team, department/divisional and corporate plans. The presentation of objectives with clearly defined goals/targets using measures, both soft and numeric. The monitoring of performance and tasking of continuous action as required (Macmillan Cancer Relief).
All individuals being clear about what they need to achieve and expected standards, and how that contributes to the overall success of the organization; receiving regular, fair, accurate feedback and coaching to stretch and motivate them to achieve their best (Marks & Spencer Financial Services).Systematic approach to organizational performance aligning individual accountabilities to organizational targets and activity (Royal Berkshire and Battle Hospitals NHS Trust).The process and behaviours by which managers manage the performance of their people to deliver a high-achieving organization (Standard Chartered Bank).Maximizing the potential of individuals and teams to benefit themselves and the organization, focusing on achievement of their objectives (West Bromwich Building Society).
Other definitions
Performance management is: The development of individuals with competence and commitment, working towards the achievement of shared meaningful objectives within an organisation which supports and encourages their achievement
Performance management is managing the business
Performance management is: the process of ‘Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organisation
Performance management is a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors
AIMS OF PERFORMANCE MANAGEMENT
The overall aim of performance management is to establish a high-performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership. Its key purpose is to focus people on doing the right things by achieving goal clarity.
Specifically, performance management is about aligning individual objectives to organizational objectives and ensuring that individuals uphold corporate core values. It provides for expectations to be defined and agreed in terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and behaviours (expected to be). The aim is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organization. Importantly, performance management is concerned with ensuring that the support and guidance people need to develop and improve are readily available.
The following are the aims of performance management as expressed by a variety of organizations
Empowering, motivating and rewarding employees to do their best (Armstrong World Industries).
Focusing employees' tasks on the right things and doing them right. Aligning everyone's individual goals to the goals of the organization (Eli Lilly & Co).
Proactively managing and resourcing performance against agreed accountabilities and objective
Linking job performance to the achievement of the council's medium- term corporate strategy and service plans (Leicestershire County Council).
The alignment of personal/individual objectives with team, department/divisional and corporate plans. The presentation of objectives with clearly defined goals/targets using measures, both soft and numeric. The monitoring of performance and tasking of continuous action as required (Macmillan Cancer Relief).
All individuals being clear about what they need to achieve and expected standards, and how that contributes to the overall success of the organization; receiving regular, fair, accurate feedback and coaching to stretch and motivate them to achieve their best (Marks & Spencer Financial Services).Systematic approach to organizational performance aligning individual accountabilities to organizational targets and activity (Royal Berkshire and Battle Hospitals NHS Trust).The process and behaviours by which managers manage the performance of their people to deliver a high-achieving organization (Standard Chartered Bank).Maximizing the potential of individuals and teams to benefit themselves and the organization, focusing on achievement of their objectives (West Bromwich Building Society).
Job Satisfaction
An example from the retail sector is one that many people can probably recognize from their own empirical evidence of shop assistants who are happy in their roles and in the company of like-minded colleagues, but who perhaps are not always alert to the possibility of delighting the store’s customers. Moving on from those situations in which the intrinsic job-interest to an employee may cut across notions of service that are deemed acceptable to customers, an all-too-frequent cause of difficulties is an ill thought through system for targeting and possibly rewarding employees. A classic example of this is drawn from call centres, where the agents are paid according to the number of calls fielded. The superficial business logic is easily understood: that is, it is driven by a desire to eliminate waiting times on the telephone for customers. However the law of unintended consequences takes over, as can happen, and the agents make sure that they keep the length of the calls to a minimum so they can move on to the next one. Unfortunately, for many customers this means there is not enough time for their problems to be addressed, let alone solved, and it will probably result in them having to make further calls until they achieve a resolution.
There are many examples available that seek to demonstrate this ‘happy’ combination and IT is a fertile area. Where employees understand what matters to customers and use this intelligence to identify the problem, they can fix it and take the necessary action to prevent it from recurring. This significantly reduces the impact of IT failure on their clients’ businesses.
In ‘Managing and measuring for value: the case of call centre performance’, the Cranfield School of Management highlighted some notable examples of organizations adopting an approach that sought to capitalize on such intelligence. First, the European airline bmi took this approach, and reduced queues at ticket offices, check-ins and boarding gates. The airline’s IT director Richard Dawson is quoted as saying: ‘Over the last two years calls have been reduced by 40 per cent and time to fix by 70 per cent.’
Another instance comes from Fujitsu, the IT solutions provider, which had a self-imposed time limit on calls. When it got rid of this time limit staff were in effect given permission to fully resolve customer queries. This had the effect of reducing the number of unnecessary calls by as much as 60 per cent, and increasing customer satisfaction. Moreover, staff turnover fell sharply, from 42 per cent to 8 per cent, as staff gained more job satisfaction, while operating costs were reduced by 20 per cent.
Continuing with this theme, Joy LePree reported a case involving the Naval Air Depot at Cherry Point, North Carolina. The depot struggled to meet deadlines for getting aircraft repaired and back in service. When the situation was analysed it was found that the facility’s overall business philosophy of keeping a lid on costs was at the root of the problem. This was then changed so that the depot’s most important business metric became throughput, or the number of aircraft repaired and returned to service in a given time period. That number doubled in a year, clearly pleasing the depot’s customers. The employees and managers at the depot were also happy as they were able to improve customer service without a significant impact on their budgets. Above all else this is another demonstration of how important and interconnected the business strategy is to the happiness of employees and customers.
Despite the anecdotal evidence, for many it remained unclear whether there was a causal link between employee and customer satisfaction. In 1996 Ryan et al warned that there was ‘insufficient evidence for the popular wisdom that employee attitudes cause customer satisfaction’. They acknowledged the commonsense argument, and that some research testified to employee and customer attitudes influencing each other, but argued that this could be because one was reflective rather than predictive of the other.
There are many examples available that seek to demonstrate this ‘happy’ combination and IT is a fertile area. Where employees understand what matters to customers and use this intelligence to identify the problem, they can fix it and take the necessary action to prevent it from recurring. This significantly reduces the impact of IT failure on their clients’ businesses.
In ‘Managing and measuring for value: the case of call centre performance’, the Cranfield School of Management highlighted some notable examples of organizations adopting an approach that sought to capitalize on such intelligence. First, the European airline bmi took this approach, and reduced queues at ticket offices, check-ins and boarding gates. The airline’s IT director Richard Dawson is quoted as saying: ‘Over the last two years calls have been reduced by 40 per cent and time to fix by 70 per cent.’
Another instance comes from Fujitsu, the IT solutions provider, which had a self-imposed time limit on calls. When it got rid of this time limit staff were in effect given permission to fully resolve customer queries. This had the effect of reducing the number of unnecessary calls by as much as 60 per cent, and increasing customer satisfaction. Moreover, staff turnover fell sharply, from 42 per cent to 8 per cent, as staff gained more job satisfaction, while operating costs were reduced by 20 per cent.
Continuing with this theme, Joy LePree reported a case involving the Naval Air Depot at Cherry Point, North Carolina. The depot struggled to meet deadlines for getting aircraft repaired and back in service. When the situation was analysed it was found that the facility’s overall business philosophy of keeping a lid on costs was at the root of the problem. This was then changed so that the depot’s most important business metric became throughput, or the number of aircraft repaired and returned to service in a given time period. That number doubled in a year, clearly pleasing the depot’s customers. The employees and managers at the depot were also happy as they were able to improve customer service without a significant impact on their budgets. Above all else this is another demonstration of how important and interconnected the business strategy is to the happiness of employees and customers.
Despite the anecdotal evidence, for many it remained unclear whether there was a causal link between employee and customer satisfaction. In 1996 Ryan et al warned that there was ‘insufficient evidence for the popular wisdom that employee attitudes cause customer satisfaction’. They acknowledged the commonsense argument, and that some research testified to employee and customer attitudes influencing each other, but argued that this could be because one was reflective rather than predictive of the other.
Human resource Planning
Human resources planning (HRP) is not having a single definition with which everyone agrees. Many definitions and models of HRP exist. Many HRP practitioners focus on its technical side which is the mathematical and behavioural method of forecasting HR needs and others prefer the managerial side which is the way of decision-makers to tackle human resource issues affecting an organization. Still some distinguish between strategic HRP, undertaken to formulate and/or implement an organization's long-range plans, and operational HRP, undertaken to guide daily HR decisions. Some HR practitioners distinguish between HRP for an organization, which focuses on planning solely to meet organizational demands, and HRP for individuals, which focuses on the implications of such plans for individual career planning.
In spite of these HR practitioners agreed that Human Resources Planning focuses on analyzing an organization's HR needs as the organization's conditions change and then supplying strategies to help respond proactively to those changes over time. HRP helps ensure that the right numbers of the right kinds of people are available at the right times and in the right places to translate organizational plans into reality. This process becomes strategic when some attempt is made to anticipate long-term HR "supplies and demands" relative to changing conditions facing the organization, and then to use HR department programs in an effort to meet these identified HR needs.
The human resources (HR) planning manager is responsible for leading the human resources planning (HRP) department, unit, or function. The nature of this role varies widely, depending on how HRP is handled and where it is placed in the organization. It can also vary by corporate culture and by national culture.
The larger organizations often having specialized units that bear chief responsibility for HRP whether comprehensive or limited. A comprehensive HRP program encompasses all activities a limited program encompasses only some activities. The HR Planning Manager is the supervisor in charge of the HRP unit.
There is a third alternative as the person or position responsible for HRP is also responsible for some other activity, such as training, organization development, or recruitment. In these cases, there is usually less emphasis placed on formal HRP and more emphasis placed on the HR practice area with which it is paired.
Think of the manager as one who:
• Establishes goals and objectives of the HRP department or a specialized unit within the HR department.
• Creates structure for the department.
• Staffs the department.
• Issues orders.
• Resolves destructive conflicts.
• Communicates with those inside and outside the department.
• Plans for needed resources, particularly through budgeting.
• Deals with power and political issues.
The HRP manager interacts with those outside the unit and gears its activities to their needs, the role overlaps with the HR organizational coordinator. To the extent that the manager coordinates activities across HR practice areas and allocates work, the role overlaps with that of the integrator. Finally, the integrator, manager, and evaluator share interest in controlling and monitoring results against pre-established objectives and criteria.
The manager mobilizes departmental and unit resources and those of the organization in order to help implement HR Grand Strategy. To succeed in this process, he or she needs general management ability, technical knowledge of HRP, and expertise and must be future agile be able to react quickly when the need arises
Establishing HRP Department Goals and Objectives:
A major responsibility of the HRP manager is to establish department goals and objectives based on departmental purpose and HR Grand Strategy. Management by objectives (MBO) is at once a way of planning for implementation, evaluating employee performance and controlling operations. Our focus at present is on MBO in planning and, more particularly in managing.
MBO for a department involves eight steps:
• The top executive meets in a group setting with supervisors in charge of each HR practice area. The meeting focuses on two questions: What is the present status of the department? What should be the status of the department in the future?
• The top HR executive meets with each supervisor, one-on-one, to negotiate individual objectives. This process helps integrate such practice areas as career planning and management, training, recruitment, organization development (OD), job redesign, employee assistance, labor relations, and compensation/benefits.
• Each supervisor prepares goals to maintain the unit or practice area, deal with special problems, and improve operations of the unit.
• Supervisors in each unit meet with their subordinates to continue the process.
• The results of the meetings are formalized in writing and are expressed in measurable terms.
• Periodically, the top executive meets with each subordinate to review results and discuss problems encountered in trying to achieve objectives and take advantage of new opportunities.
• The process continues down the chain of command, with each supervisor meeting with each of the subordinates to review results and discuss problems/opportunities.
The results are evaluated at least once a year and then used as the basis for pay raises, bonuses, and determinations about individual promo ability. The original process is then repeated in order to establish new objectives for the next year.
In spite of these HR practitioners agreed that Human Resources Planning focuses on analyzing an organization's HR needs as the organization's conditions change and then supplying strategies to help respond proactively to those changes over time. HRP helps ensure that the right numbers of the right kinds of people are available at the right times and in the right places to translate organizational plans into reality. This process becomes strategic when some attempt is made to anticipate long-term HR "supplies and demands" relative to changing conditions facing the organization, and then to use HR department programs in an effort to meet these identified HR needs.
The human resources (HR) planning manager is responsible for leading the human resources planning (HRP) department, unit, or function. The nature of this role varies widely, depending on how HRP is handled and where it is placed in the organization. It can also vary by corporate culture and by national culture.
The larger organizations often having specialized units that bear chief responsibility for HRP whether comprehensive or limited. A comprehensive HRP program encompasses all activities a limited program encompasses only some activities. The HR Planning Manager is the supervisor in charge of the HRP unit.
There is a third alternative as the person or position responsible for HRP is also responsible for some other activity, such as training, organization development, or recruitment. In these cases, there is usually less emphasis placed on formal HRP and more emphasis placed on the HR practice area with which it is paired.
Think of the manager as one who:
• Establishes goals and objectives of the HRP department or a specialized unit within the HR department.
• Creates structure for the department.
• Staffs the department.
• Issues orders.
• Resolves destructive conflicts.
• Communicates with those inside and outside the department.
• Plans for needed resources, particularly through budgeting.
• Deals with power and political issues.
The HRP manager interacts with those outside the unit and gears its activities to their needs, the role overlaps with the HR organizational coordinator. To the extent that the manager coordinates activities across HR practice areas and allocates work, the role overlaps with that of the integrator. Finally, the integrator, manager, and evaluator share interest in controlling and monitoring results against pre-established objectives and criteria.
The manager mobilizes departmental and unit resources and those of the organization in order to help implement HR Grand Strategy. To succeed in this process, he or she needs general management ability, technical knowledge of HRP, and expertise and must be future agile be able to react quickly when the need arises
Establishing HRP Department Goals and Objectives:
A major responsibility of the HRP manager is to establish department goals and objectives based on departmental purpose and HR Grand Strategy. Management by objectives (MBO) is at once a way of planning for implementation, evaluating employee performance and controlling operations. Our focus at present is on MBO in planning and, more particularly in managing.
MBO for a department involves eight steps:
• The top executive meets in a group setting with supervisors in charge of each HR practice area. The meeting focuses on two questions: What is the present status of the department? What should be the status of the department in the future?
• The top HR executive meets with each supervisor, one-on-one, to negotiate individual objectives. This process helps integrate such practice areas as career planning and management, training, recruitment, organization development (OD), job redesign, employee assistance, labor relations, and compensation/benefits.
• Each supervisor prepares goals to maintain the unit or practice area, deal with special problems, and improve operations of the unit.
• Supervisors in each unit meet with their subordinates to continue the process.
• The results of the meetings are formalized in writing and are expressed in measurable terms.
• Periodically, the top executive meets with each subordinate to review results and discuss problems encountered in trying to achieve objectives and take advantage of new opportunities.
• The process continues down the chain of command, with each supervisor meeting with each of the subordinates to review results and discuss problems/opportunities.
The results are evaluated at least once a year and then used as the basis for pay raises, bonuses, and determinations about individual promo ability. The original process is then repeated in order to establish new objectives for the next year.
Decision Making
Decision Definition:
In many respects a business is a series of decisions linked by implementation. As a manager, you make decisions every day. Some are straightforward, such as determining which of your subordinates should be assigned to a particular project. Others are complex, such as selecting a new supplier. Consider these two examples:
The finance department is moving into new quarters, and Samantha, the department head, needs someone to represent finance on a companywide space-allocation team. For Samantha, this is a straightforward delegation decision: which of her subordinates will be most effective in representing her department? That person must be assertive, must know how to work effectively with others, and must understand the space requirements of the finance department. Samantha knows her people and their capabilities very well. She also knows who can take on added responsibility. So tapping George for the job is an easy decision, and he is eager to accept the assignment. There will be consequences, of course. George will have less time to carry out his regular duties, but neither he nor his manager sees this as a major problem.
Not all decisions are that easy. Some involve trade-offs, risks, and the interplay of various factors, such as the risk and cost of failure. Consider the following, more complex situation:
Precision Interiors designs and builds passenger seats and interiors for auto manufacturers in Europe and North America. To remain competitive, it must continually improve its designs and incorporate materials that improve passenger comfort and safety within cost and durability constraints. In that spirit, one of its teams has been talking with FiberFuture, a small supplier that has developed a new material called Zebutek, which resists flames, cushions impact, and absorbs road noise better than all available alternatives. “If we used Zebutek in the interior roof and door linings,” speculates one engineer,“it could give us a real advantage. It costs more than the material we’re now using, but customers would certainly recognize its value. ”
The decision to adopt the new material, however, is not simple. There are many trade-offs and risks. The engineer makes the following list:
• FiberFuture is a small, relatively new company. Will it be capable of delivering the volume of material we need? Can we count on it to deliver on schedule? Will quality be consistent?
• What will happen if FiberFuture goes out of business? We’d have to scramble to find a different supplier.
• Can our current manufacturing processes work with Zebutek, or will new equipment be needed?
• Our customers, the automakers, are struggling to hold the line on costs. Can we pass on the higher cost of this new material to them, or will they resist? Or should we absorb the additional cost and thereby gain market share?
• Our current supplier of interior materials has been a reliable and collaborative partner for many years. What will happen to that relation- ship if 20 to 30 percent of the business is shifted to FiberFuture?
• Is there some other supplier on the brink of developing a material that’s even better than Zebutek?
Business decisions are difficult when they involve uncertainty, present many alternatives, are complex, and raise interpersonal issues.
Alternative courses of action can be equally troubling when each alternative has its own uncertainties and unknowable outcomes. Complexity, too, makes decision making difficult. For example, the acquisition of another firm involves complex legal, accounting, and valuation issues. Decisions also involve interpersonal issues that are difficult to measure and assess but often determine the success or failure of the actions taken. Over the years, people have developed techniques for dealing with these difficulties, techniques that are part of a logical decision process. This chapter provides an overview of a five-step decision process.
The decision process
• Establish a context for success.
• Frame the issue properly.
• Generate alternatives.
• Evaluate the alternatives.
• Choose the alternative that appears best
In many respects a business is a series of decisions linked by implementation. As a manager, you make decisions every day. Some are straightforward, such as determining which of your subordinates should be assigned to a particular project. Others are complex, such as selecting a new supplier. Consider these two examples:
The finance department is moving into new quarters, and Samantha, the department head, needs someone to represent finance on a companywide space-allocation team. For Samantha, this is a straightforward delegation decision: which of her subordinates will be most effective in representing her department? That person must be assertive, must know how to work effectively with others, and must understand the space requirements of the finance department. Samantha knows her people and their capabilities very well. She also knows who can take on added responsibility. So tapping George for the job is an easy decision, and he is eager to accept the assignment. There will be consequences, of course. George will have less time to carry out his regular duties, but neither he nor his manager sees this as a major problem.
Not all decisions are that easy. Some involve trade-offs, risks, and the interplay of various factors, such as the risk and cost of failure. Consider the following, more complex situation:
Precision Interiors designs and builds passenger seats and interiors for auto manufacturers in Europe and North America. To remain competitive, it must continually improve its designs and incorporate materials that improve passenger comfort and safety within cost and durability constraints. In that spirit, one of its teams has been talking with FiberFuture, a small supplier that has developed a new material called Zebutek, which resists flames, cushions impact, and absorbs road noise better than all available alternatives. “If we used Zebutek in the interior roof and door linings,” speculates one engineer,“it could give us a real advantage. It costs more than the material we’re now using, but customers would certainly recognize its value. ”
The decision to adopt the new material, however, is not simple. There are many trade-offs and risks. The engineer makes the following list:
• FiberFuture is a small, relatively new company. Will it be capable of delivering the volume of material we need? Can we count on it to deliver on schedule? Will quality be consistent?
• What will happen if FiberFuture goes out of business? We’d have to scramble to find a different supplier.
• Can our current manufacturing processes work with Zebutek, or will new equipment be needed?
• Our customers, the automakers, are struggling to hold the line on costs. Can we pass on the higher cost of this new material to them, or will they resist? Or should we absorb the additional cost and thereby gain market share?
• Our current supplier of interior materials has been a reliable and collaborative partner for many years. What will happen to that relation- ship if 20 to 30 percent of the business is shifted to FiberFuture?
• Is there some other supplier on the brink of developing a material that’s even better than Zebutek?
Business decisions are difficult when they involve uncertainty, present many alternatives, are complex, and raise interpersonal issues.
Alternative courses of action can be equally troubling when each alternative has its own uncertainties and unknowable outcomes. Complexity, too, makes decision making difficult. For example, the acquisition of another firm involves complex legal, accounting, and valuation issues. Decisions also involve interpersonal issues that are difficult to measure and assess but often determine the success or failure of the actions taken. Over the years, people have developed techniques for dealing with these difficulties, techniques that are part of a logical decision process. This chapter provides an overview of a five-step decision process.
The decision process
• Establish a context for success.
• Frame the issue properly.
• Generate alternatives.
• Evaluate the alternatives.
• Choose the alternative that appears best
Authority
Authority Does Come from Title, but it is earned through actions. Inept executives fritter away their authority by their behaviour, taking the counsel of none but themselves and failing to listen and learn from others. Authority is what holds leadership promise together. With it, you can lead; without it, you might as well do something else.
Many leaders come to authority naturally; they embrace it totally and wield it like a sword to demonstrate their power. Others adopt it reluctantly, seemingly shirking from the responsibility. In truth, neither approach is wholly right nor wholly wrong. Leaders must embrace command, but they must recognize that their power stems from the people they lead.
There are five attributes of authority as it applies to leadership:
• Decisiveness. Leaders need to exert their ideas. The ability to make tough decisions is crucial to a leader’s ability to lead.
• Accomplishment. Leaders must, plain and simple, get things done. We want our leaders to do what they tell us they will do. When the CEO of a public company promises a new product or service as well as increased earnings and profits, he must deliver.
• Persuasiveness. Operating in a vacuum—or in a closed office—does not a leader make. No leader of an enterprise larger than a three-person operation can do much by him. Sometimes autocratic executives will get into trouble because their heavy-handed management style turns people off. Then when the heat is on and they need the support of others, they will often find no one standing behind them. All leaders need the cooperation and collaboration of others.
• Courage. Leaders must hold to the power of their beliefs and convictions, provided they are ethical, honest, and in keeping with organizational goals and beliefs. Standing up to bully bosses requires guts. Standing up to shareholders who want job cuts for short-term profits also takes guts. Standing up to public perceptions that seem reasonable but are unrealistic and uninformed also requires a measure of guts. But courage is essential to leadership.
• Inspiration. Entrepreneurial ventures have something of a moon-shot quality to them. These ventures, be it a new software company or a technology outfitter or a service provider, require a healthy dose of dreaming to succeed. People who work for those ventures feel jazzed when they come to work; they are inspired by doing something new, different, and beneficial for their customers and themselves.
• Decisiveness. Accomplishment. Persuasiveness. Courage. Inspiration. These attributes reinforce your authority to lead.
While authority is essential to leadership, it does not come automatically with rank or position. Authority, like trust, must be earned, but here’s the difference. Trust requires time to develop. Authority, especially in most hierarchies, is assumed. People will grant you permission to lead.
Authority is a divisible commodity that managers ration among work group members via the process of delegation. In this sense it is the basis for organizational order, logic, and control. It is the basis of status and hierarchy in the organization.
A view of power in authority terms connotes a system of dependencies, and, in this situation, distribution is the key issue. Each member of the organization relates to others in a power role relationship that constrains each member. If one gains power, it is at the expense of others in the group. If one gains, others lose. All of us can exercise authority over other people and, in turn, can be under another’s authority. It is part of all organized group activity that results in enhancement or limitation of our ability to do. Thus, power is a part of organizational concepts such as authority, control, direction, competition, conflict, coordination, planning, budgeting, staffing, and all other administrative functions.
Many leaders come to authority naturally; they embrace it totally and wield it like a sword to demonstrate their power. Others adopt it reluctantly, seemingly shirking from the responsibility. In truth, neither approach is wholly right nor wholly wrong. Leaders must embrace command, but they must recognize that their power stems from the people they lead.
There are five attributes of authority as it applies to leadership:
• Decisiveness. Leaders need to exert their ideas. The ability to make tough decisions is crucial to a leader’s ability to lead.
• Accomplishment. Leaders must, plain and simple, get things done. We want our leaders to do what they tell us they will do. When the CEO of a public company promises a new product or service as well as increased earnings and profits, he must deliver.
• Persuasiveness. Operating in a vacuum—or in a closed office—does not a leader make. No leader of an enterprise larger than a three-person operation can do much by him. Sometimes autocratic executives will get into trouble because their heavy-handed management style turns people off. Then when the heat is on and they need the support of others, they will often find no one standing behind them. All leaders need the cooperation and collaboration of others.
• Courage. Leaders must hold to the power of their beliefs and convictions, provided they are ethical, honest, and in keeping with organizational goals and beliefs. Standing up to bully bosses requires guts. Standing up to shareholders who want job cuts for short-term profits also takes guts. Standing up to public perceptions that seem reasonable but are unrealistic and uninformed also requires a measure of guts. But courage is essential to leadership.
• Inspiration. Entrepreneurial ventures have something of a moon-shot quality to them. These ventures, be it a new software company or a technology outfitter or a service provider, require a healthy dose of dreaming to succeed. People who work for those ventures feel jazzed when they come to work; they are inspired by doing something new, different, and beneficial for their customers and themselves.
• Decisiveness. Accomplishment. Persuasiveness. Courage. Inspiration. These attributes reinforce your authority to lead.
While authority is essential to leadership, it does not come automatically with rank or position. Authority, like trust, must be earned, but here’s the difference. Trust requires time to develop. Authority, especially in most hierarchies, is assumed. People will grant you permission to lead.
Authority is a divisible commodity that managers ration among work group members via the process of delegation. In this sense it is the basis for organizational order, logic, and control. It is the basis of status and hierarchy in the organization.
A view of power in authority terms connotes a system of dependencies, and, in this situation, distribution is the key issue. Each member of the organization relates to others in a power role relationship that constrains each member. If one gains power, it is at the expense of others in the group. If one gains, others lose. All of us can exercise authority over other people and, in turn, can be under another’s authority. It is part of all organized group activity that results in enhancement or limitation of our ability to do. Thus, power is a part of organizational concepts such as authority, control, direction, competition, conflict, coordination, planning, budgeting, staffing, and all other administrative functions.
Personal Power
Personal power resides in the individual and is independent of that individual's position within an organization. Personal power is important in many well-managed firms, as managers need to supplement the power of their formal positions. Four bases of personal power are expertise, rational persuasion, reference, and coalitions.
Expert power is the ability to control another person's behavior through the possession of knowledge, experience, or judgment that the other person does not have but needs. A subordinate obeys a supervisor possessing expert power because the latter usually knows more about what is to be done or how it is to be done than does the subordinate. Expert power is relative, not absolute. So if you are the best cook in the kitchen, you have expert power until a real chef enters. Then the chef has the expert power.
Rational persuasion is the ability to control another's behavior because, through the individual's efforts, the person accepts the desirability of an offered goal and a reasonable way of achieving it. Much of what a supervisor does on a day-to-day basis involves rational persuasion up, down, and across the organization. Rational persuasion involves both explaining the desirability of expected outcomes and showing how specific actions will achieve these outcomes. Relational persuasion relies on trust.
Referent power is the ability to control another's behavior because the person wants to identify with the power source. In this case, a subordinate obeys the manager because he or she wants to behave, perceive, or believe as the manager does. This obedience may occur, for example, because the subordinate likes the boss personally and therefore tries to do things the way the boss wants them done. In a sense, the subordinate attempts to avoid doing anything that would interfere with the boss-subordinate relationship.
A person's referent power can be enhanced when the individual taps into the morals held by another or shows a clearer long-term path to a morally desirable end. Individuals with the ability to tap into these more esoteric aspects of corporate life have "charisma" and "vision." Followership is not based on what the subordinate will get for specific actions or specific levels of performance, but on what the individual represents—a role model and a path to a morally desired future. For example, an employee can increase his or her referent power by showing subordinates how they can develop better relations with each other and how they can serve the greater good.
Coalition power is the ability to control another's behavior indirectly because the individual has an obligation to someone as part of a larger collective interest. Coalitions are often built around issues of common interest.To build a coalition, individuals negotiate trade-offs in order to arrive at a common position. Individuals may also trade across issues in granting support for one another. These trade-offs and trades represent informational obligations of support. To maintain the coalition, individuals may be asked to support a position on an issue and act in accordance with the desires of the supervisor. When they do, there is a reciprocal obligation to support them on their issues. For example, members of a department should support a budget increase.Developing Trust to Build Personal Power
The key to ethically developing power is to build trust. To build trust, I you should, at a minimum:
• Always honour implied and explicit social contracts.
• Seek to prevent, avoid, and rectify harm to others.
• Respect the unique needs of others.
These reciprocal obligations can extend to a network of individuals as well. A network of mutual support provides a powerful collective front to protect members and to accomplish shared interests. Think about all of the required courses you must take to graduate; the list was probably developed by a coalition of professors led by their department chairs. Faculty members who support a required course from another department expect help from the supported department in getting their course on the list.
Expert power is the ability to control another person's behavior through the possession of knowledge, experience, or judgment that the other person does not have but needs. A subordinate obeys a supervisor possessing expert power because the latter usually knows more about what is to be done or how it is to be done than does the subordinate. Expert power is relative, not absolute. So if you are the best cook in the kitchen, you have expert power until a real chef enters. Then the chef has the expert power.
Rational persuasion is the ability to control another's behavior because, through the individual's efforts, the person accepts the desirability of an offered goal and a reasonable way of achieving it. Much of what a supervisor does on a day-to-day basis involves rational persuasion up, down, and across the organization. Rational persuasion involves both explaining the desirability of expected outcomes and showing how specific actions will achieve these outcomes. Relational persuasion relies on trust.
Referent power is the ability to control another's behavior because the person wants to identify with the power source. In this case, a subordinate obeys the manager because he or she wants to behave, perceive, or believe as the manager does. This obedience may occur, for example, because the subordinate likes the boss personally and therefore tries to do things the way the boss wants them done. In a sense, the subordinate attempts to avoid doing anything that would interfere with the boss-subordinate relationship.
A person's referent power can be enhanced when the individual taps into the morals held by another or shows a clearer long-term path to a morally desirable end. Individuals with the ability to tap into these more esoteric aspects of corporate life have "charisma" and "vision." Followership is not based on what the subordinate will get for specific actions or specific levels of performance, but on what the individual represents—a role model and a path to a morally desired future. For example, an employee can increase his or her referent power by showing subordinates how they can develop better relations with each other and how they can serve the greater good.
Coalition power is the ability to control another's behavior indirectly because the individual has an obligation to someone as part of a larger collective interest. Coalitions are often built around issues of common interest.To build a coalition, individuals negotiate trade-offs in order to arrive at a common position. Individuals may also trade across issues in granting support for one another. These trade-offs and trades represent informational obligations of support. To maintain the coalition, individuals may be asked to support a position on an issue and act in accordance with the desires of the supervisor. When they do, there is a reciprocal obligation to support them on their issues. For example, members of a department should support a budget increase.Developing Trust to Build Personal Power
The key to ethically developing power is to build trust. To build trust, I you should, at a minimum:
• Always honour implied and explicit social contracts.
• Seek to prevent, avoid, and rectify harm to others.
• Respect the unique needs of others.
These reciprocal obligations can extend to a network of individuals as well. A network of mutual support provides a powerful collective front to protect members and to accomplish shared interests. Think about all of the required courses you must take to graduate; the list was probably developed by a coalition of professors led by their department chairs. Faculty members who support a required course from another department expect help from the supported department in getting their course on the list.
Graphic Rating Scale
A graphic scale is one presented which is used to respondents visually so that they can select a position on it that best represents their desired response. Basically it is a continuous bi-polar scale with fixed points verbally anchored at either end. It can simply be a line between the two anchor points and is is a form of graphic scale which has become known as a 'visual analog scale'.
The distance from the end points of the respondent's marks is measured to provide the score for each attitudinal dimension. This is a continuously rated semantic differential scale, which provides a greater degree of precision and avoids the issues of numbers of points on the scale. It is a simple way of measuring attitudes and image perceptions, but is impractical to use with paper questionnaires. Measuring the position marked on hundreds of paper questionnaires, with possibly dozens of scales on each one is not viable for most commercial projects. This technique cannot be used with telephone interviewing.
With CAPI interviewing to a greater degree with online web-based interviewing, the continuous graphic scale is a realistic option. Respondents can drag a cursor along the line to the exact position that they want it, and that position is then automatically recorded.
When the technique is being used to measure attitudes to brands or products, more than one cursor can be used to represent different brands, or brand logos can be used in place of cursors. Then each respondent can place a number of brands along the scale, so that they are positioned relative to each other as well as to the scale ends, according to the respondent's perceptions. This is quicker for respondents than rating each brand individually, is more interesting for them when logos are used, and provides better relative measures of the attitude variation between brands.
Though data collected are continuous, the measurements will be assigned to categories and treated as interval data for analysis purposes. It is possible to have a large number of very small intervals, but the researcher must decide at what level the apparent accuracy of the data becomes spurious depends on the length of the line used, the accuracy with which respondents are able to place the cursor, and the degree of accuracy to which respondents are likely to have tried to place the cursor.
The questionnaire writer may wish to apply labels to the scale. The scale can be labelled numerically, so that one end is 0 and the other 100. The position of the cursor can then be indicated as a number between 0 and 100, which allows the respondent to place the cursor accurately.
In web-based online surveys respondents found visual analog scales (VAS) as easy to complete as rating scales using fixed points denoted by radio buttons, and that they felt that VAS scales conveyed their responses with sufficient accuracy better than with a numeric box entry. Responses obtained from VAS and the fixed-point radio buttons were similar, and the respondents found the VAS approach more interesting than the radio buttons. As maintaining the interest and involvement of respondents is one of the objectives of the questionnaire writer, the use of VAS or graphic rating scales should always be considered as an alternative to radio buttons.
The distance from the end points of the respondent's marks is measured to provide the score for each attitudinal dimension. This is a continuously rated semantic differential scale, which provides a greater degree of precision and avoids the issues of numbers of points on the scale. It is a simple way of measuring attitudes and image perceptions, but is impractical to use with paper questionnaires. Measuring the position marked on hundreds of paper questionnaires, with possibly dozens of scales on each one is not viable for most commercial projects. This technique cannot be used with telephone interviewing.
With CAPI interviewing to a greater degree with online web-based interviewing, the continuous graphic scale is a realistic option. Respondents can drag a cursor along the line to the exact position that they want it, and that position is then automatically recorded.
When the technique is being used to measure attitudes to brands or products, more than one cursor can be used to represent different brands, or brand logos can be used in place of cursors. Then each respondent can place a number of brands along the scale, so that they are positioned relative to each other as well as to the scale ends, according to the respondent's perceptions. This is quicker for respondents than rating each brand individually, is more interesting for them when logos are used, and provides better relative measures of the attitude variation between brands.
Though data collected are continuous, the measurements will be assigned to categories and treated as interval data for analysis purposes. It is possible to have a large number of very small intervals, but the researcher must decide at what level the apparent accuracy of the data becomes spurious depends on the length of the line used, the accuracy with which respondents are able to place the cursor, and the degree of accuracy to which respondents are likely to have tried to place the cursor.
The questionnaire writer may wish to apply labels to the scale. The scale can be labelled numerically, so that one end is 0 and the other 100. The position of the cursor can then be indicated as a number between 0 and 100, which allows the respondent to place the cursor accurately.
In web-based online surveys respondents found visual analog scales (VAS) as easy to complete as rating scales using fixed points denoted by radio buttons, and that they felt that VAS scales conveyed their responses with sufficient accuracy better than with a numeric box entry. Responses obtained from VAS and the fixed-point radio buttons were similar, and the respondents found the VAS approach more interesting than the radio buttons. As maintaining the interest and involvement of respondents is one of the objectives of the questionnaire writer, the use of VAS or graphic rating scales should always be considered as an alternative to radio buttons.
Big Five Personality Traits
Perception can cloud our judgment, skew our notion of reality and warp our understanding of who we really are. To burrow beneath the flesh and bones that form our physical image we have to take an objective look into our spirit. As the misunderstood hero in the movie Shrek stated to his donkey companion during their journey to rescue the princess “an ogre has many layers” and it’s time for us to peel back the layers that cover up our personality—the core of our being.
Personality can be referred to as consistency in behaviour and how we react to events and situations. Debate continues regarding the degree to which our personality is determined by nature (heredity and genetics) or environmental factors such as culture, family, group membership, and life experiences (nurture). In addition to these two factors, a third dimension of personality focuses upon the interplay between the situation and the individual. Although, one’s personality tends to be stable and consistent—under different situations a particular aspect of an individual’s personality can dominate the behaviour of a person. For example, a non-violent individual placed in a life-threatening situation will probably become quite violent in order to survive. These three dimensions of personality (heredity, nurture, and the situation) form a complex web that drives our behaviour and provides important clues to examining our inner being.
The “Big Five” personality factors approach reduces the number of traits that are utilized to explain behaviour. According to this theory, an individual’s personality is encapsulated along a continuum derived from five primary factors (adjustment, sociability, conscientiousness, agreeableness, and intellectual openness).
It should be noted that personality traits are not only assessed via self-report inventories (though that is indeed the most common way of assessing them). Observation, situational tests, projective techniques and even objective measures can also serve as measures of personality, albeit not explicitly. The most commonly used forms of observation in personnel selection are interviews and biodata. Employers may not explicitly state that what they are assessing in an interview or looking for in biodata is indeed traces of personality, but there is longstanding evidence for the fact that candidates’/interviewees’ personality traits affect
Personality can be referred to as consistency in behaviour and how we react to events and situations. Debate continues regarding the degree to which our personality is determined by nature (heredity and genetics) or environmental factors such as culture, family, group membership, and life experiences (nurture). In addition to these two factors, a third dimension of personality focuses upon the interplay between the situation and the individual. Although, one’s personality tends to be stable and consistent—under different situations a particular aspect of an individual’s personality can dominate the behaviour of a person. For example, a non-violent individual placed in a life-threatening situation will probably become quite violent in order to survive. These three dimensions of personality (heredity, nurture, and the situation) form a complex web that drives our behaviour and provides important clues to examining our inner being.
The “Big Five” personality factors approach reduces the number of traits that are utilized to explain behaviour. According to this theory, an individual’s personality is encapsulated along a continuum derived from five primary factors (adjustment, sociability, conscientiousness, agreeableness, and intellectual openness).
It should be noted that personality traits are not only assessed via self-report inventories (though that is indeed the most common way of assessing them). Observation, situational tests, projective techniques and even objective measures can also serve as measures of personality, albeit not explicitly. The most commonly used forms of observation in personnel selection are interviews and biodata. Employers may not explicitly state that what they are assessing in an interview or looking for in biodata is indeed traces of personality, but there is longstanding evidence for the fact that candidates’/interviewees’ personality traits affect
Management
Professional Management concepts gained importance after the Industrial revolution and it is an ever-changing field and a very wide field of business studies and practices. Management is derived from the Italian manaeggio (a riding school), originating in the Latin word for hand, manus.
Any managerial action, especially dealing with people issues, requires three separate but interrelated abilities. First, a manager must learn how to clearly identify the problem or problems, which may be different from the presenting symptoms. Second, a manager must analyze the root causes for the behaviour observed, understanding fully that those problems have origins in both the person and the situation. Finally, a manager must generate and implement actions to address a problem.
Although there is no concise formula or model for managing people, there are eight principles from which to build:
1. Leadership starts at home. Self-awareness—knowing who you are and what you value—creates a strong foundation for managerial success. Your ability to learn is just as important as your ability to lead. Find ways to learn, be open to the feedback from others, and create a work environment that fosters everyone's best. Managing and leading are collaborative activities that require learning from others.
2. Communication with employees is central to the effective manager's job. In the absence of information, people will make up their own information. What a manager takes for granted may be new information to someone underneath. And because each individual is different, the style of that communication needs to be different. Managing is a time-intensive activity: one person at a time, one interaction at a time, all over time.
3. Effective managers know their personal managerial values and philosophy. What works to motivate employees also works to motivate managers. Many successful organizations simply start with some theory Y assumptions like "People really can be great and want to win." They don't differentiate between levels of employees in terms of their motivations. They drive a sense of ownership and egalitarianism about the company throughout the organization with the result that the company can become a means to meeting the needs of all employees in a fair and even handed manner.
4. Effective managers foster an environment that brings out the best in others. Seasoned managers know that you cannot make someone change or do something. However, you can change the context to increase the probability that you will get the behaviour that you want. Think of ways to bring out the best, not the worst, in others.
5. Effective managers are willing to engage in difficult conversations about difference. They foster an environment where everyone can fulfill their potential and seek to address issues such as gender, race, sexual orientation, ethnicity, age, and language. At Inland Steel, a number of African-American employees were frustrated and thinking of leaving the firm. They worked together and found someone to be a champion of starting a conversation about diversity. As a result, the company was singled out for a national award for its attention to creating a supportive and diverse workplace.
6. Effective managers understand how groups and teams work, and they focus on creating a culture of performance through teamwork and collaboration. With most of a company's work being done in teams, managers need to be aware of team dynamics and become more facilitators of team process than team leaders.
7. Effective managers are change leaders. Today, managers are not expected to administer—to follow bureaucratic and systematic processes that mean business as usual. Managers are expected to lead change—to propose ways to make the organization more competitive and more effective and then to marshal the resources to bring about that change.
8. Effective managers take time out to learn and reflect on the job. Performance and learning are both needed for success. Unfortunately, managers can spend most of their time performing and requiring performance from others when what is really needed is some time spent reflecting and learning.
Simply put, Management involves all the activities related recruitment, selection, assimilation, development, and retention of exceptional talent and integrate talent management efforts with organizational strategy with whatever limited resources you have.
Any managerial action, especially dealing with people issues, requires three separate but interrelated abilities. First, a manager must learn how to clearly identify the problem or problems, which may be different from the presenting symptoms. Second, a manager must analyze the root causes for the behaviour observed, understanding fully that those problems have origins in both the person and the situation. Finally, a manager must generate and implement actions to address a problem.
Although there is no concise formula or model for managing people, there are eight principles from which to build:
1. Leadership starts at home. Self-awareness—knowing who you are and what you value—creates a strong foundation for managerial success. Your ability to learn is just as important as your ability to lead. Find ways to learn, be open to the feedback from others, and create a work environment that fosters everyone's best. Managing and leading are collaborative activities that require learning from others.
2. Communication with employees is central to the effective manager's job. In the absence of information, people will make up their own information. What a manager takes for granted may be new information to someone underneath. And because each individual is different, the style of that communication needs to be different. Managing is a time-intensive activity: one person at a time, one interaction at a time, all over time.
3. Effective managers know their personal managerial values and philosophy. What works to motivate employees also works to motivate managers. Many successful organizations simply start with some theory Y assumptions like "People really can be great and want to win." They don't differentiate between levels of employees in terms of their motivations. They drive a sense of ownership and egalitarianism about the company throughout the organization with the result that the company can become a means to meeting the needs of all employees in a fair and even handed manner.
4. Effective managers foster an environment that brings out the best in others. Seasoned managers know that you cannot make someone change or do something. However, you can change the context to increase the probability that you will get the behaviour that you want. Think of ways to bring out the best, not the worst, in others.
5. Effective managers are willing to engage in difficult conversations about difference. They foster an environment where everyone can fulfill their potential and seek to address issues such as gender, race, sexual orientation, ethnicity, age, and language. At Inland Steel, a number of African-American employees were frustrated and thinking of leaving the firm. They worked together and found someone to be a champion of starting a conversation about diversity. As a result, the company was singled out for a national award for its attention to creating a supportive and diverse workplace.
6. Effective managers understand how groups and teams work, and they focus on creating a culture of performance through teamwork and collaboration. With most of a company's work being done in teams, managers need to be aware of team dynamics and become more facilitators of team process than team leaders.
7. Effective managers are change leaders. Today, managers are not expected to administer—to follow bureaucratic and systematic processes that mean business as usual. Managers are expected to lead change—to propose ways to make the organization more competitive and more effective and then to marshal the resources to bring about that change.
8. Effective managers take time out to learn and reflect on the job. Performance and learning are both needed for success. Unfortunately, managers can spend most of their time performing and requiring performance from others when what is really needed is some time spent reflecting and learning.
Simply put, Management involves all the activities related recruitment, selection, assimilation, development, and retention of exceptional talent and integrate talent management efforts with organizational strategy with whatever limited resources you have.
Trend Analysis
One commonly employed comparison technique is to compare a company’s figures over time; this method is often called trend analysis. By viewing the trends of various financial variables, an analyst is able to identify:
• Trends over time with a particular variable
• The high and low point of each analyzed variable
• Whether a variable is deteriorating or improving over time
• Whether a variable is consistent over time
IMPORTANCE OF FINANCIAL STATEMENT RATIO AND TREND ANALYSIS TO VALUATION
1. Cost of capital: In the income approach, ratios and trends for the subject company can help to estimate the risk and thus appropriate discount and capitalization rates relative to broad sources of cost of capital used as a starting point. The analysis also may help to quantify prospective growth to subtract from the cost of capital to develop a capitalization rate.
2. Valuation multiples: In the market approach, ratios and trends for the subject company as compared with the guideline companies can help to estimate appropriate valuation multiples for the subject company relative to valuation multiples observed for the guideline companies.
3. Excess assets or asset deficiencies: Ratios can help to identify the extent to which a company may have excess assets or asset deficiencies for which valuation adjustments may be appropriate.
Instead of looking at single-year changes, trend analysis compares changes over a longer period of time by comparing each year with a base year. The formula for a trend analysis is:
Trend Analysis a type of horizontal analysis that looks at changes in line items compared with a base year.
Applying this formula to operating income for the same 5-year period used to illustrate horizontal analysis yields
Thus, from 20X0 (the base year) to 20X4, operating income rose 37.9 percent. Note that the average annual increase of 9.5 percent (37.9 percent / 4 years) is different from that of simply averaging the increases or decreases each year.
• Trends over time with a particular variable
• The high and low point of each analyzed variable
• Whether a variable is deteriorating or improving over time
• Whether a variable is consistent over time
IMPORTANCE OF FINANCIAL STATEMENT RATIO AND TREND ANALYSIS TO VALUATION
1. Cost of capital: In the income approach, ratios and trends for the subject company can help to estimate the risk and thus appropriate discount and capitalization rates relative to broad sources of cost of capital used as a starting point. The analysis also may help to quantify prospective growth to subtract from the cost of capital to develop a capitalization rate.
2. Valuation multiples: In the market approach, ratios and trends for the subject company as compared with the guideline companies can help to estimate appropriate valuation multiples for the subject company relative to valuation multiples observed for the guideline companies.
3. Excess assets or asset deficiencies: Ratios can help to identify the extent to which a company may have excess assets or asset deficiencies for which valuation adjustments may be appropriate.
Instead of looking at single-year changes, trend analysis compares changes over a longer period of time by comparing each year with a base year. The formula for a trend analysis is:
Trend Analysis a type of horizontal analysis that looks at changes in line items compared with a base year.
Applying this formula to operating income for the same 5-year period used to illustrate horizontal analysis yields
Thus, from 20X0 (the base year) to 20X4, operating income rose 37.9 percent. Note that the average annual increase of 9.5 percent (37.9 percent / 4 years) is different from that of simply averaging the increases or decreases each year.
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