Midterm Exam Reviewer

NATURE AND CONCEPT OF

MANAGEMENT

Management

- Is the process of coordinating and overseeing the work performance of individuals working
together in organization
- Is done to efficiently and effectively accomplish their chosen aims or goals

Organization

- A collection of people or groups of people working together to achieve a common goal

Productivity

- Producing something efficiently

Weihrich and Koontz (2005)

- Defined management as the process of designing and maintain an environment for

efficiently accomplishing selected items

FUNCTIONS OF MANAGEMENT:

 Planning – determining the organization’s goals or performance objectives, defining

strategic actions, and developing coordination and integration activities
 Organizing – assigning tasks, allocating resources, and coordinating work activities
 Staffing – filling in the different job positions and keeping these filled
 Leading – influencing or inspiring subordinates to achieve a common goal
 Managing – working with and through others to achieve organizational objectives
efficiently and ethically amidst constant change
 Controlling – ensuring that the work performance of the organization’s members are
aligned with the organization’s values and standards through monitoring, comparing, and
correcting

PRACTICES OF SUCCESSFUL ORGANIZATIONS:

 Coordination – harmonious, integrated action of the various parts and processes of an

organization; ensures harmonious relations
 Efficiency – being able to yield the maximum output from a minimum amount of input;
refers to the optimal use of scarce resources
 Effectiveness – to produce an effect or do things correctly
 Management theories

Evolution

- Usually defined as slow stages of growth and development

Evolutionary Change

- Is incremental and takes place gradually

Revolution

- Is a sudden, radical, or complete change

Revolutionary Change

- Is profound and envisions complete overhaul, renovation, and reconstruction

Scientific Management Theory

- Step-by-step, scientific methods for finding out the single best way for doing a job; improves
productivity

Frederick W. Taylor

- Is known as the Father of Scientific Management

SCIENTIFIC MANAGEMENT PRINCIPLES:

1. Develop a science for each element of an individual’s work to replace the old rule of thumb
method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers – ensure that all work is done in accordance with
the principles in science.
4. Divide work and responsibility almost equally between management and workers.

General Administrative Theory

- Concentrates on the manager’s functions and what makes up good management

practice or implementation

Henri Fayol

- Concerned with managerial activities

Max Weber

- Concerned with authority structures and coordination

 HENRI FAYOL’S PRINCIPLES MAX WEBER’S BUREAUCRACY
 Work division or specialization  Division of labor
 Authority  Hierarchical identification of job
 Discipline positions
 Unity of command  Detailed rules and regulations
 Unity of direction  Impersonal connections with one
 Subordination of individual interest to another
general interest
 Remuneration/pay
 Centralization
 Scalar chain of authority
 Maintenance of order
 Equity/fairness
 Stability/security of tenure of workers
 Employee initiative
 Promotion of team spirit or esprit de
corps

Total Quality Management (TQM)

- A management philosophy that focuses on the satisfaction of customers, their needs, and
expectations

W. Edwards Deming and Joseph M. Juran

- Quality experts who came up with TQM

Americans

- Did not immediately take to the idea due to their enjoyment of supremacy in the global
market

Japanese

- Took notice of it and enthusiastically experimented on its application

 DEMING’S POINTS JURAN FITNESS OF QUALITY
 Create constancy of purpose  Quality of Design – through market
 Adopt the new TQM philosophy research, product, and concept
 Cease dependence on mass inspection  Quality of Conformance – through
 End the practice of awarding business management, manpower, and
 Constantly improve the system of technology
production and services  Availability – through reliability,
 Institute training maintainability, and logistic support

 Adopt and institute leadership  Full Service – through promptness,

 Drive out fear
 Break down barriers between staff areas
 Eliminate slogan and focus on correction
of defects
 Eliminate numerical quota for the work
force
 Remove barriers that rob people of
competence, and integrity
JURAN’S QUALITY PLANNING ROADMAP
1. Identify your customers.
2. Determine their needs.
3. Translate them into one’s language.
4. Develop a product that can respond to
needs.
5. Develop processes which are able to

“pride of workmanship” produce those product features.

 Encourage education and self- 6. Prove that the process can produce the

improvement product.

 Take action to accomplish the 7. Transfer the resulting plans to the

transformation operating forces.

Organizational Behavior (OB) Approach

- Involves the study of conduct, demeanor, or action of people at work

EARLY SUPPORTERS OF OB APPROACH:

 Robert Owen – noticed the lamentable conditions in workplaces and proposed ideal
ways to improve the said conditions
 Mary Parker Follett – introduced the idea that individual or group behavior must be
considered in organizational management
 Hugo Munsterberg – proposed the administering of psychological tests for the selection
of would-be employees in companies

 Chester Barnard – suggested that cooperation is required in organizations

 Functions, Roles, and
Skills of a Manager
Manager

- An individual engaged in management activities

- Supervise, sustain, uphold, and assume responsibility for the work of others in his or her
work group, team, department, or the organization

Organizational Success

- Is dependent on managers who practice optimal utilization of their human and material
resources

Top-level Managers (Corporate)

- Set general direction by designing strategies and controlling various resources

- Act as organizational guides who must elaborate on the wider purpose of their organization
existence (for subordinate’s identification of and commitment to success)

Middle-level Managers (Tactical)

- Act as go-betweens between higher and lower levels of the organization

- They announce and interpret top management priorities to human resources

Frontline or Lower-level Managers (Operational)

- Are responsible for supervising the organization’s day-to-day activities

- Are the bridges between management and nonmanagement employees
- Are encouraged to be more creative and intuitive

MANAGERIAL ROLES ACCORDING TO HENRY MINTZBERG:

 Interpersonal – leader, liaison, figurehead

 Informational – spokesperson, monitor, disseminator
 Decisional or Decision-making – disturbance handler, resource allocator, negotiator,
entrepreneur

MANAGERIAL SKILLS:

 Conceptual Skills – enable managers to think of possible solutions to complex problems

 Human Skills – enable managers to relate well with people
 Technical Skills – enable managers to perform their tasks with proficiency with the use
of their expertise
 THE FIRM AND ITS
ENVIRONMENT
Environmental Forces and
Scanning
Environmental Scanning

- Seeking for and sorting through data about the environment

External Business Environment

- Refers to the factors/elements outside the organization which may affect, either positively
or negatively, the performance of the organization

Internal Business Environment

- Refers to the factor/elements within the organization which may affect, either positively or
negatively, the performance of the organization

Systematic Monitoring

- Is necessary to improve the management of companies

COMPONENTS OF THE EXTERNAL BUSINESS ENVIRONMENT:

 Economic Situations – inflation, rates of interest, changing options in stock markets, and
people’s spending habits
 Sociocultural Situations – include the customers’ changing values and preferences
 Politicolegal Situations – refer to national or local news, international laws, and rules and
regulations that influence organizational management
 Demographic Situations – gender, age, education level, income, number of family
members, geographic origin, etc.
 Technological Situations – involve the use of various types of electronic gadgets
 World and Ecological Situations – are related to the increasing number of global
competitors and markets; the nature and conditions of the changing natural environment
 Stakeholders – are parties likely to be affected by the activities of the organization
o Customers – are those who patronize the organization’s product and services
 Suppliers – are those who ensure the organization’s continuous flow of needed and
reasonably priced inputs or materials required for producing their goods and rendering
their services
 Pressure Groups – are special-interest groups that try to exert influence on the
organization’s decisions or actions
  Investors or Owners – provide the company with the financial support it needs
 Employees – are comprised of those who work for another or for an employer in
exchange of salaries/wages or other considerations

COMPONENTS OF INTERNAL BUSINESS ENVIRONMENT:

 Resources
 Research and Development
 Production
 Procurement of Supplies
 Products and Services

COMPONENTS OF ENVIRONMENTAL SCANNING:

 Competitive Mindset
- Refers to the disposition to always win
 Future Business Scenarios
- Realistic consideration of both worst-case scenario or unfavorable future conditions and
best-case scenario or favorable future conditions
 Business Prediction
- Is a method of predicting how variables in the environment will alter the future of the
business
- Used in making decisions regarding offshoring, branching out locally, expanding or
downsizing the company
 Benchmarking
- Gauging the performance of the organization in relation to those of others
- The process of measuring or comparing one’s own products, services, and practices with
those of the recognized industry leaders in order to identify areas for improvement
 THE LOCAL AND INTERNATIONAL

BUSINESS ENVIRONMENT

Cultural Intelligence

- Is an individual’s ability to favorably receive and adjust to an unfamiliar way of doing things

Edward T. Hall and Schermerhorn (2008)

- Noted that the way people approach and deal with time varies across cultures

Monochromatic Cultures

- Refer to cultures wherein people tend to do one thing at a time

- Emphasize punctuality and sticking to set rules

Polychromatic Cultures

- Refers to cultures wherein people tend to do many things at a time

- Emphasize flexibility

HOW IMPORTANT IS CULTURAL INTELLIGENCE TO DOING BUSINESS GLOBALLY:

 It is very important for the adjustment of one to the location of the business, the preparation
for future business scenarios with adaptation to the culture’s practices, and for
awareness

Geer Hoftede

- Showed how selected countries ranked on the five cultural dimensions he studies

HOFTEDE’S CULTURAL DIMENSIONS THEORY:

 Power Distance – the degree to which a society accepts or rejects unequal distribution
of power among people in organizations and the institutions of society
 Uncertainty Avoidance – the degree to which society is uncomfortable with risk, change,
and situational uncertainty
 Individualism-Collectivism – the degree to which a society emphasizes individual
accomplishments versus collective accomplishments
 Masculinity-Femininity – the degree to which a society values assertiveness and feelings
of material success versus concern for relationships
 Time Orientation – the degree to which a society emphasizes short-term thinking versus
greater concern for the future or long-term thinking
Cultural Environments

- Are rooted in their history, religion, traditions, beliefs, and deep-seated values

Politicolegal Environments

- Refer to the laws and political climate of different countries

Economic Environments

- Refer to the economic issues of countries where the organization intend to establish
business

Economic Development

- Is a total process which includes not only economic growth but also considers the social,
political, cultural, and spiritual aspects of the country’s growth

Sustainable Economic Development

- Ensures that the present needs of a particular generation are met in full without
endangering the ability of a future generations to fully meet their own needs

ECONOMIC DEVELOPMENT PHASES:

 Economic Growth – the increase in the given amount of goods and services produced
by the country’s economy
 Human Development Index – an index measuring a country’s socioeconomic
development based on data regarding life expectancy at birth, educational attainment,
literacy, and adjusted real income per capita
 Availability of Benefits provided by Science and Technology
 Societal Improvement of Opportunities and General Welfare of its Members

TYPES OF BUSINESS PLANS

Pestle Analysis

- Is used as a tool by companies to track the environment they’re operating in or planning to

launch a new project, product or services in
- More comprehensive version of the SWOT Analysis

FACTORS OF PESTLE ANALYSIS:

 Political – determine the extent to which a government may influence the economy or a
certain industry
 Economic – are determinants of an economy’s performance that directly impacts a
company and have resonating long term effects
 Social – scrutinize the social environment of the market, and gauge determinants like
cultural trends, demographics, population analytics, etc.
 Technological – pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably
 Legal – talks about the laws that affect the business environment in a certain country
 Environmental – include all those that influence
or are determined by the surrounding
environment

SWOT Analysis or Matrix

- Is one of the most structured and used planning

method to evaluate a business venture

Porter Model

- Used to analyze an industry’s attractiveness and likely profitability

FACTORS OF PORTER MODEL:

 New Entrants – establishments that

‘enter’ a given industry to compete with
existing firms
 Rival Firms (or Industry Participants) –
existing establishments in a given
industry that compete with each other
 Substitutes – establishments with faster,
more accessible and/or cheaper
products and services that may serve as
alternatives
 Suppliers – establishments that supply a
given industry’s requirements
 Buyers – the population, whether industrial or customer, that purchases a given
industry’s product and services

FACTORS OF INTERNAL ANALYSIS:

 Resources
 Production
 Procurement of Supplies

FORMS OF BUSINESS ORGANIZATIONS

Business Organization

- A collection of people working together to achieve a common purpose in relation to

their organization’s mission, vision, goals, and objectives, sharing a common organizational
culture
Organizational Culture

- The set of beliefs and values shared by organization members which guide them

Simple Business Organizations

- Business organizations with few departments, centralized authority with a wide span of
control, and with few formal rules and regulations; are easy to manage

Functional Business Organizations

- Business organizations that group together those with similar or related specialized
duties that introduce the concept of delegation of authority to functional managers

Divisional Business Organizations

- Business organizations made up of separate business units that are semiautonomous or

semi-independent, with a division head responsible for his or her unit’s performance

Profit Business Organizations

- Business organizations designed for the purpose of achieving their organizations’ mission,
vision, goals, and objectives maintaining their organizational stability through income

Nonprofit Organizations

- Business organizations designed for the purpose of achieving their organizations’ mission,
vision, goals, and objectives, providing service to clients without expecting monetary gains
or financial benefits for their endeavors

Open/Flexible Business Organizations

- Formed to meet today’s changing work environment

Planning

- A process that involves the setting of the organization’s goals, establishing strategies
for accomplishing those goals, and developing plans of action or means that managers
intend to use to achieve organizational goals

IMPORTANCE OF PLANNING:

 Provides direction
  Reduces uncertainty
 Minimizes wastes
 Helps in controlling

RELATIONSHIP BETWEEN PLANNING AND PERFORMANCE:

 Mainly due to systematic planning’s association with excellent financial status of the
organization
 Associated with the time spent in preparing and executing a formal organizational or
individual plan

Goals

- Are targets or desired ends that management wants to reach

Plans

- Are the actions or means that are intended to achieve goals

TYPES OF PLANS:

 Comprehensiveness – refers to the completeness of planning coverage

o Strategic – plans that establish the organization’s overall goals and apply to the
entire firm; are broad in scope and are the responsibility of the top-level managers
o Operational – plans that apply to a particular unit area only; their scope is narrow
and are the responsibility of the lower level managers
o Tactical – plans that are needed in one portion of the organization; are focused on
major actions that must be done by a unit and are the responsibility of the middle
level managers
 Length of Time – refers to the duration of the plan
o Long-term – plans that go beyond three years; are for strategic plans
o Short-term – plans that cover less than a year; are for operational plans
 Specificity – refers to very detailed, clearly defined plans
o Directional – plans that are flexible or give general guidelines; are done to achieve
strategic plans
o Specific – plans that are clearly stated and which have no room for interpretation;
are done in operational plans
 Frequency – refers to the number of times or instances a plan may be used
o Single-use – plans used or stated once only; refer to the strategic plans
o Standing – plans that are ongoing and provide guidance for different activities done
repeatedly; refer to the operational plans
Planning techniques and tools

Trigger Point

- Change in an attribute, condition, factor, parameter, or value that represents crossing a

threshold and actuates or initiates a mechanism or reaction that may lead to a radically
different state of affairs

Gantt Chart

- A type of bar chart devised by Henry Gantt used as a management tool to properly
schedule production processes and allocate resources

Karol Adamiecki

- Was actually the first person to devise the Gantt chart in the 1890s

Forecasting

- Is an attempt to predict what may happen in the future but must be treated with caution
- Can be qualitative and quantitative

Contingency Planning

- A plan devised for an outcome other than in the usual (expected) plan
- Are indicated by trigger points for immediate action and implementation

Scenario Planning

- Planning for future state of affairs

- Allows organizations to plan ahead and make necessary adjustments

Benchmarking

- External comparisons of a company’s practices and technologies with those of the other
companies
o External – is to search for best practices used by other organizations
o Internal – to share one another’s best practices

Participatory Planning

- Is a planning process that includes the people who will be affected by the plans and
those who will be asked to implement them in all planning steps

Decision-making
 - A process which begins with problem identification and ends with the evaluation of
implemented solutions

Decision

- Is a choice among possible alternative actions

TYPES OF DECISIONS:

 Structured or Programmed – a decision that is repetitive and can be handled by using a

routine approach
 Unstructured or Nonprogrammed – applied to the resolution of problems that are new or
unusual and for which information is incomplete

TYPES OF DECISION-MAKING CONDITIONS:

 Certainty – ideal conditions; are situations which make precise decisions because the
results of all alternatives are known
 Uncertainty or Risk – a more common condition; for the resolution of new problems to
which information is incomplete

Organizing

- Involves assigning tasks, allocating resources, and coordinating work activities in order
to achieve a common purpose

Organization

- A collection of people working together to achieve a common goal

DIFFERENTIATION IN ORGANIZATION:

 Division of Labor – involves assigning different tasks to different people

 Specialization – the process in which different individuals and units perform different tasks
Integration

- Involves the collaboration and coordination of different work units or work divisions

Coordination

- Refers to the procedures that connect work activities to achieve its overall goal

Organizational Chart

- A visual representation of the organization’s structure showing the different job positions
in the firm and their hierarchical arrangement for the purpose of dividing labor and
providing a picture of the reporting structure

Organization Structure

- Is a system made up of tasks to be accomplished, work movements from one work level
to another, reporting relationships, and communication passageways

THE TYPES OF ORGANIZATIONAL STRUCTURE:

 Vertical – clears out issues related to authority rights, responsibilities, and reporting
relationships

 Horizontal – refers to the departmentalization of an organization into smaller work units

as tasks become increasingly varied and numerous

 Network – is a collection of independent, usually single function

organizations/companies that work together in order to produce a product or service
TWO TYPES OF DEPARTMENTS:

 Line Departments – deal directly with the firm’s primary goods and services; responsible
for manufacturing, selling, providing services
 Staff Departments – support the activities of the line departments by doing research,
attending to legal matters, performing public relations duties, etc.

TYPES OF DEPARTMENTALIZATION:

 Functional Approach – where the subdivisions are formed based on specialized

activities such as marketing, production, financial management, and human resources
management
 Divisional Approach – where departments are formed based on the management of
their products, customers, or geographic areas covered
 Matrix Approach – is a hybrid form of departmentalization where managers and staff
personnel report to the superiors

Organization theories and

applications
Organizational Design
 - The manner in which a management achieves the right combination of differentiation and
integration of the organization’s operations in response to the level uncertainty in its
external environment

TWO MAIN ORGANIZATIONAL THEORIES

 Traditional – pertains to usual or old-fashioned ways

o Simple – wide spans of control or a big number of subordinates directly reporting
to a manager; centralized authority figure and very little formalization of work
o Functional – groups together similar or related specialties
o Divisional – is made up of separate business divisions or units where the parent
corporation acts as overseer
 Modern – refers to contemporary or new design theories
o Team Design – the entire organization is made up of work groups or teams
o Matrix-Project Design – specialists from different departments work on projects
supervised by a project manager
o Project Design – employees continuously work on a project
o Boundary-less Design – is not defined by vertical, horizontal, and external
boundaries; there are no hierarchical levels that separate employees

Simple Organizational Design

ADVANTAGES DISADVANTAGES
 Flexible  Risk overdependence on a single person
 Fast decision-making and results  No longer appropriate as the company
 Clear accountability grows

Functional Organizational Design

ADVANTAGES DISADVANTAGES
 Cost-saving advantages  Managers have little knowledge of other
 Management is facilitated units’ functions

Divisional Organizational Design

ADVANTAGES DISADVANTAGES
 Focused on results  Possible duplication of activities and
 Managers are responsible for products resources
and services  Increased cost, reduced efficiency
 Team Design
ADVANTAGES DISADVANTAGES
 Empowerment of team members  Clear chain of command
 Reduced barriers among functional  Great pressure on teams to perform
areas

Matrix-Project Design
ADVANTAGES DISADVANTAGES
 Specialists are involved  Task and personality conflicts

Project Design
ADVANTAGES DISADVANTAGES
 Flexible designs  Complexity of assigning people to
 Fast decision-making projects
 Task and personality conflicts

Boundary-less Design
ADVANTAGES DISADVANTAGES
 Highly flexible  Lack of control
 Responsive  Problems in communication

Delegation

- Refers to assigning a new or additional task to a subordinate

- Getting work done through others by giving them the right to make decisions and take
action
 ADVANTAGES DISADVANTAGES
 Prevents work overload  May cause laziness
 Provides opportunities for employees to  May encourage too much dependence
fully utilize their talents on the job on others
 Leads to empowerment  May cause lack of control
 Increases job satisfaction  May cause low self-confidence

Formal and informal

organizations
Formal Organizations

- Organizations formed by the company owner or manager to help the firm accomplish its
goals

ADVANTAGES DISADVANTAGES
 Accomplish goals that require  Delay in feedback and action
cooperation or collaboration  Ignores the psychological and social
 Produce new and creative ideas and needs of employees
solutions to company problems  Emphasis on work only
 Coordinate interdepartmental activities
 Implement company rules/regulations
 Orient/train new employees

Informal Organizations

- Organizations that exist because of friendship or common interests

- Exist for the members’ needs for social affiliation

ADVANTAGES DISADVANTAGES
  Satisfy members’ needs for social  More susceptible to rumor mongering
affiliation  No systematic workflow in place
 Give the individual members a chance to  Difficulty in implementing new rules and
develop their self-esteem policies
 Give individual members an opportunity  More emphasis on the individual
to share their ideas interests of each employee rather than
 Lessen individual members’ insecurities the overall goal of the company
 Provide a mechanism to solve members’
personal and interpersonal problems

STAFFING

- Refers to filling in all organizational job positions and keeping these filled

Management Succession/Replacement Chart (Inventory Chart)

- Accomplishes the awareness of the management potential within an organization

- Is similar to the general organization chart used by the company but limited to
managerial positions and the names of potential successors

(NOTE: Recruitment by external means may follow if there are no qualified successors.)
EXTERNAL FORCES AFFECTING PRESENT AND FUTURE NEEDS FOR HUMAN
RESOURCES:

 Economic
 Technological
 Social
 Political
 Legal Factors

INTERNAL FORCES AFFECTING PRESENT AND FUTURE NEEDS FOR HUMAN

RESOURCES:

 Firm’s Goal and Objectives

 Technology
 The Types of Work
 Salary Scales
 The Kinds of People Employed by the Company

RECRUITMENT

- A set of activities designed to attract qualified applicants for job position vacancies in an
organization

TWO TYPES OF RECRUITMENT:

 External – outside sources are considered in the process of locating potential individuals
 Internal – can be done through promotions or transfer of employees

METHODS OF EXTERNAL RECRUITMENT:

 Advertisements – through websites, newspapers, trade journals, radio, television,

billboards, posters, e-mails, and others
 Unsolicited Applications – received by employers from individuals who may or may not
be qualified for the job openings
 Internet Recruiting – independent job boards on the Web commonly used by job seekers
and recruiters
 Employees Referrals – are recommendations from the organization’s present
employees who usually refer friends and relatives
  Executive Search Firms – known as “head hunters”; help employers find the right person
for a job
 Educational Institutions – good sources of young applicants or new graduates (even
alumni) who have formal training but with very little work experience; for technical and
managerial positions
 Professional Associations – may offer placement services to their members who seek
employment
 Labor Unions – possible sources of applicants for blue-collar and professional jobs
 Public Employment Agencies – usually offer free services
 Private Employment Agencies – charge fees from both the job applicant and the
employers soliciting referrals from them

METHODS OF INTERNAL RECRUITMENT:

 Bulletin Boards
 Company Intranet
 Company Newsletters
 Recommendations from Department or Unit Heads

Department of Labor and Employment (DOLE)

- Is the national government agency mandated to formulate policies and implement programs
in the field of labor and employment

EXTERNAL RECRUITMENT ADVANTAGES:

 Advertising and recruiting through the Internet reach a larger number of possible
applicants  increase the possibility of being able to recruit applicants suited for the job
 Applicants who submit applications and resumes through their own initiative are believed
to be better employees because of their seriousness
 Employee referrals are believed to be high quality applicants because employees are
generally hesitant to recommend persons who are not qualified
 Executive search firms usually refer highly qualified applicants because they make an
effort to check applicants’ qualifications before recommending them to client firms
 Educational institutions know the capabilities and qualifications of their graduates 
increase the chances of their ability to refer qualified applicants to potential employers

EXTERNAL RECRUITMENT DISADVANTAGES:

 The cost and time required are a disadvantage

  The possibility of practicing bias or entertaining self-serving motives in the referral of
friends and relative by current employees and in the recommendation of private employment
agencies of job applicants

INTERNAL RECRUITMENT ADVANTAGES:

 Less expenses are required for advertising

 Training and orientation of newly promoted or transferred current employees are less
expensive and do not take too much time because of their familiarity with company
policies
 The process of recruitment and selection is faster because the candidate is already part
of the organization

INTERNAL RECRUITMENT DISADVANTAGES:

 The number of applicants choose from is limited

 Favoritism may influence a manager to recommend a current employee for promotion
 May result in jealousy among other employees who were not considered

SELECTION

- The process of choosing individuals who have the required qualifications to fill present
and expected job openings

TYPES OF JOB INTERVIEWS:

 Structured – the interviewer asks the applicant to answer a set of prepared questions
 Unstructured – the interviewer has no interview guide and may ask questions freely
 One-on-one – one interviewer Is assigned to interview the applicant
 Panel – several interviewers may conduct the interview of applicants; taking of turns in the
questions

TYPES OF EMPLOYMENT TESTS:

 Intelligence – designed to measure the applicant’s mental capacity; tests his or her
cognitive capacity
 Proficiency and Aptitude – tests his or her present skis and potential for learning
 Personality – designed to reveal the applicant’s personal characteristics
 Vocational – tests to show the occupation best suited to applicant

LIMITATION OF THE SELECTION PROCESS:

  There is no perfect way to select a firm’s human resources
 Predicting performance is difficult

TRAINING AND DEVELOPMENT

- Learning given by organizations to its employees that concentrates on short-term job

performance and acquisition or improvement of job-related skills

LEARNING PRINCIPLES:

 Modeling – the use of personal behavior to demonstrate the desired behavior or method
to be learned
 Feedback and Reinforcement – learning by getting comments from trainees themselves,
from trainers, or fellow trainees
 Massed vs. Distributed Learning – learning by giving training through either few, long
hours of training (massed) or series of short hours of training (distributed)
 Goal-setting – learning through the explanation of training objectives by trainers to trainees
 Individual Differences – training programs that take into account and accommodate the
individual differences of the trainees
 Active Practice and Repetition – learning through the giving of frequent opportunities
to trainees to do their job tasks properly

Development

- Learning given by organizations to its employees that is geared toward the individual’s
acquisition and expansion of his or her skills in preparation for future job appointments
and responsibilities

COMPENSATION

- All forms of pay given by employers to their employees for the performance of their jobs

TYPES OF COMPENSATION:

 Direct – includes workers’ salaries, incentive pays, bonuses, and commissions

 Indirect – includes benefits given by employers other than financial remunerations: travel,
educational, health, etc.
 Nonfinancial – includes recognition programs, being assigned to do rewarding jobs, or
enjoying management support, ideal work environment, and convenient work hours
CONNECTING COMPENSATION TO ORGANIZATIONAL GOALS:

 Before – Compensation = Job Position or Title

 Now – Compensation = how much contribution one has made to the company’s success

COMPENSATION AS A MOTIVATIONAL FACTOR FOR EMPLOYEES:

 Reward for good performance

Equity Theory

- A motivation theory focusing on employee’s response to the pay that they receive and the
feeling that they receive less or more that they deserve
- Employee’s pay must be commensurate to his or her effort

Expectancy Theory

- A motivation theory which predicts that employees are motivated to work well because of
the attractiveness of the rewards and benefits that they may possibly receive from a job
assignment

BASES FOR COMPENSATION:

 Piecework – when pay is computed according to the number of units produced

 Hourly – when pay is computed according to the number of work hours rendered
 Daily – when pay is computed according to the number of work days rendered
 Weekly – when pay is computed according to the number of work weeks rendered
 Monthly – when pay is computed according to the number of work months rendered

Performance Evaluation

- A process undertaken by the organization, usually done once a year, designed to measure
employee’s work performance

PURPOSE OF PERFORMANCE EVALUATION:

 Administrative – fulfilled through evaluation programs that provide information that may
be used as basis for compensation decisions, promotions, transfers, and terminations; may
be used for recruitment and selection
 Developmental – fulfilled through evaluation programs that provide information about
employees’ performance and their strengths and weaknesses that may be used as basis
for identifying their training and development needs
METHODS OF PERFORMANCE EVALUATION:

 Trait Methods – to find out if the employee possesses important work characteristics
 Graphic Rating Scales – each characteristic to be evaluated is represented by a scale on
which the evaluator or rater indicates the degree to which an employee possesses the
characteristic
 Forced-choice Method – requires the rater to choose from two statements purposely
designed to distinguish between positive or negative performance
 Behaviorally Anchored Rating Scale (BARS) – a behavioral approach that includes five
to ten vertical scales, one for each important strategy for doing the job and numbered
according to importance
 Behavior Observation Scale (BOS) – measures the frequency of observed behavior

EMPLOYEE RELATIONS

- The connection created among employees/workers as they go about their assigned tasks
for the organization to which they belong

Social Support

- The sum total of perceived assistance or benefits that may result from effective social
employee relationships

(NOTE: Without social support, effective employee relations is not possible.)

THREE TYPES OF EMPLOYEES:

 Engaged – employees who work with passion and feel a deep connection with their
company; drive innovation and move the organization forward
 Not Engaged – employees who are essentially “checked out”; put time but not energy or
passion into their work
 Actively Disengaged – employees who are not only unhappy at work, but also act out their
unhappiness; undermine what their engaged coworkers accomplish

BARRIERS TO GOOD EMPLOYEE RELATIONS:

 Anti-social Personality
 Lack of Trust in Others
  Selfish Attitude
 Lack of Good Self-Esteem
 Not a Team Player
 Being Conceited
 Cultural/Subcultural Differences
 Lack of Cooperation
 Communication Problems
 Lack of Concern for Others

TO OVERCOME THESE BARRIERS:

 Develop a Healthy Personality

 Find Time to Socialize with Co-Workers
 Don’t be Too Dependent on Electronic Gadgets
 Develop Good Communication Skills and be Open to Other’s Opinion
 Minimize Cultural/Subcultural Tension

EMPLOYEE MOVEMENTS

- A series of actions initiated by employee groups tending toward an end or specific goal

Labor Union

- A formal union of employees/workers that deals with employers, representing workers in

their pursuit of justice and fairness and in their fight for their collective or common interest

REASONS WHY EMPLOYEES/WORKERS UNIONIZE:

 Financial Needs – complaints regarding wages or salaries and benefits given to them by
the management
 Unfair Management Practices – perceptions of employees regarding biased managerial
actions
 Social and Leadership Concerns – some join unions for the satisfaction of their need for
affiliation with a group and for the recognition of one’s leadership qualities

STEPS IN UNION ORGANIZING:

1. Employee/union contact
2. Initial organizational meeting
3. Formation of in-house organizing committee
4. Request for representation election or certification election
 5. End of union organizing
a. Prepare for negotiations
b. Develop strategies
c. Conduct negotiations
d. Formalize agreements

Grievance Procedure

- A formal procedure that authorizes the union to represent its members in processing a
grievance or complaint

REWARDS SYSTEM

- A form of strategy done by the company to attract knowledgeable and skilled people and
to keep them motivated and satisfied once employed in the company

Reward

- Something given or done in return, especially in the form of salary, a gift, prize, incentive
pay, benefits, or recompense for merit, service or achievement  motivating effect

TYPES OF REWARD:

 Monetary – rewards which pertain to money

 Nonmonetary – rewards which do not pertain to money

TYPES OF MONETARY REWARDS:

 Pay/ Salary – financial remuneration given in exchange for work performance that will
help the organization attain its goals
 Benefits – indirect forms of compensation given to employees/ worker for the purpose of
improving the quality of their work and personal lives
 Incentives – rewards that are based upon a pay-for-performance philosophy
 Executive Pay – a compensation package for executives of organizations
 Stock Options – are plans that grant employees the right to buy a specific number of
shares the organization’s stock at guaranteed price during a selected period of time

TYPES OF NONMONETARY REWARDS:

 Award – may be given to individual employees or groups/ teams for meritorious service or
outstanding performance (trophies, medals, or certificate of recognition)
 Praise – intrinsic reward given by superiors to their subordinates when they express oral
or verbal appreciation for excellent job performance