MANAGING PEOPLE & ORGANIZATIONS

D A G L GUNARATNE

GRADUATE DIPLOMA IN MANAGEMENT NVQ 6 GDM 102

An Assessment submitted to the BMS in partial fulfillment of the requirement for the Graduate Diploma in Management (Level NVQ 6)

ACKNOWLEDGEMENT I would like to first thank my family for the corporation extended to enable me on achieving the goal of completion of this course successfully. The financial support, encouragement, tolerance & guidance was really helpful and motivated me to attend classes regularly, pass all module exams, complete case studies and complete the Assessment. I acknowledge the contribution of the talented panel lectures of the Graduate Diploma in Management programme during the entire period. The support given by the staff members at the Institute and all at the Business School are remembered with gratitude and I wish to thank BMS Sri Lanka for facilitating the valuable course with great commitment and ensuring consistently met high standard. And especially I thank to BMS to their kindest support to students who are working in abroad. If not for the support given by them it would not have been practiced for me to finish this study within the timelines.

SUMMARY OF LEARNING OUTCOMES On successful completion of this assessment, the student will able to:

Identify the development of large industrial organizations and theories which attempted to provide solutions for various problems with best practices for efficient and effective organization.

Gain awareness of the design of the design choices various approaches available for work and technology.

Outline the elements that constitute an organizations culture and discuss how culture could be classified.

Discuss the role of power within organizations and examine various perspectives which attempt to explain how one organizational group is able to exert control over other.

Illustrate the complex nature of motivation; and recognize some of the problems that motivation poses for managers.

Describe the different types of groups, their purpose and how groups influence the behavior of organizations and the individual.

Provide a critique of HRM and question its role in contemporary organizations.

TABLE OF CONTENTS Page Acknowledgement Summary of learning outcomes Table of Contents List of Illustrations List of Tables List of Exhibits Abbreviations TASK I TASK II TASK III

REFERENCES

LIST OF ILLUSTRATIONS Page Figure 3.a

LIST OF TABLES Page Table 3.a

LIST OF EXHIBITS Page Exhibit 3.b..

ABBREVIATIONS HR - Human Resource HRM - Human Resource Management NSR - Net Sales Revenue NIBT - Net Income Before Tax CSI UN PF HDI OD - Customer Service Improvement - United Nations - Provident Funds - Human Development Index - Organization Development

PPP - Purchasing Power Parity USA - United States of America IDP HPI - Human Poverty Index

MNC - Multi National Company IHRM - International Human Resource Management

TASK I With reference to academic theories, describe and discuss the term organizational culture. How you would characterize the organizational culture of your organization or an organization of your choice.

What is an Organizational Culture?

The values and behaviors that contribute to the unique social and psychological environment of an organization. Organizational Culture is the sum total of an organization's past and current assumptions, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, express or implied contracts, and written and unwritten rules that the organization develops over time and that have worked well enough to be considered valid. Also called corporate culture, it manifests in (1) the ways the organization

conducts its business, treats its employees, customers, and the wider community, (2) the extent to which autonomy and freedom is allowed in decision making, developing new ideas, and personal expression, (3) how power and information flow through its hierarchy, and (4) the strength of employee commitment towards collective objectives. It is termed strong or weak to the extent it is diffused through the organization. It affects the organization's productivity and performance, and provides guidelines on customer care and service; product quality and safety; attendance and punctuality; and concern for the environment. It extends also to production-methods, marketing and advertising practices, and to new product creation. While there are many common elements in the large organizations of any country, organizational culture is unique for every organization and one of the hardest things to change.

Common Characteristics of an Organizational Culture

People Shape the Culture. Personalities and experiences of employees create the culture of an organization.

Culture is Negotiated. One person cannot create a culture alone. Employees must try to change the direction, the work environment, the way work is performed, or the manner in which decisions are made within the general norms of the workplace.

Culture is Difficult to Change. Culture change requires people to change their behaviors. It is often difficult for people to unlearn their old way of doing things, and to start performing the new behaviors consistently. Persistence, discipline, employee involvement, kindness and understanding, organization development work, and training can assist you to change a culture.

Work culture is often interpreted differently by diverse employees. Other events in peoples lives affect how they act and interact at work too. Although an organization has a common culture, each person may see that culture from a different perspective.

Culture may be strong or weak. When your work culture is strong, most people in the group agree on the culture. When your work culture is weak, people do not agree on the culture.

Ideally, organizational culture supports a positive, productive, environment. Happy employees are not necessarily productive employees. Productive employees are not necessarily happy employees. It is important to find aspects of the culture that will support each of these qualities for your employees. Culture is made up of the values, beliefs, underlying assumptions, attitudes, and behaviors shared by a group of people. Culture is the behavior that results when a group arrives at a set of - generally unspoken and unwritten rules for working together. Characterize the organizational culture of an organization of my choice Coca Cola Factor Culture

Coke side of life Performance based Value based Open door communication policy Employees are strategic partners of the business Equal treatment across the board Creating leaders within the system Creating a winning culture

Transformation History Prior to 2004 Today Conducive work environment A corporative work force Unions as strategic partners Right leadership in the top management Performance based environment Value based environment Right capability at all levels Increase of market share Hostile work force Highly unionized staff Regular work stoppages Regular decline of market share Lack of trust between the management and unions/employees Incapable managers Skill gaps at all levels

Future

Building and engaging teams with the right skills to deliver sustainable results within the context of a performance and values based culture. Created future 2010 South African Bottling Company Achieve NSR in excess of $1.5 billion Achieve NIBT in excess of $1.8 million Create a vibrant environment where all are passionate and excited about our jobs. Will significantly increase the investment in and quality of learning and development Grow still beverages profitably to at least 15% of NSR accelerating growth of the key sparkling business Will continuously improve product and package quality standards with a minimum acceptable level above system average Achieve significant improvement in customer service as measured by CSI Will be present at least in three more territories

Coca Beverages Sri Lanka Achieve NSR in excess of $41 million Achieve NIBT in excess of $1.8 million Creating a winning and a performance based culture Continuously invest behind learning and development to build capability Grow still beverages profitably to become 13% of NSR whilst growing sparkling beverages Achieve 97 product quality index and 70 package quality index Achieve above 90% customer service index

Performed Based Culture All executives/managers aligned with five objectives and three development areas Regular informal discussions Two formal evaluations per year Performance Ratings to be communicated to board of directors All rewards and recognitions to be tied up to the performance appraisal ratings Development plans for low performers Training needs identified Succession plans with talent pipe lines

Value Based Culture Living the values Commitment from the top management Awareness at all levels Walking the talk Way of life

Open Door Communication Policy Open office concept Regular communication on issues Easy access to top management Regular gatherings Internal news letter Effective induction process

Strategic Partners of Business Optimum level of employee engagement Involvement of unions and employees In decisions Reward and recognition Profit share Equal treatment Total Business Aquman Creating awareness

Creating Leaders Encourage new thinking/innovation Identifying potential leaders Creating leadership opportunities Thinking out of the bottle

TASK II a. Discuss different motivational organization. Motivational Theories Motivational theories are psychological ways of understanding what inspires human beings to extend their abilities and perform according to expectations. Primary motivational theories include Maslow's Hierarchy of Needs, Hertszberg's Motivation and Hygiene Theory, and Expectancy and Contingency theories. How Motivational Theories applicable to modern organization Apply Maslow's Hierarchy of Needs in the workplace. Abraham Maslow's theory of five psychological needs is used to motivate employees. Human resources departments train managers to identify employees' needs, determine what needs are satisfied and provide ways for needs that are unmet to be satisfied. When the hierarchy of needs is met, employees' performances improve. theories applicable to modern

Identify employees' needs, as defined by Hertszberg's Motivation and Hygiene Theory. For workers, Hertszberg's hygiene needs include working conditions, supervision and salary. Management resorts to meeting hygiene needs to stop unwanted behavior. Hygiene needs do not motivate. If a supervisor wants an employee to perform, the supervisor would work to meet motivational needs. These include recognition and promotion.

Encourage

employee

performance

according

to

Expectancy

and

Contingency motivational theories. When workers expect rewards and the rewards meet a worker's needs, the worker will perform according to set standards. Contingency motivational theories consider workplace culture, conflict resolution and personality assessment. When these social issues are resolved, employees are motivated to excel.

b. A small company recognizes the employee of the month, who is given an opportunity to have lunch with the Managing Director. What theories would explain the positive motivation associated with this policy?

Positive Reinforcement Theory

Reinforcement Theory Reinforcement theory of motivation was proposed by BF Skinner and his associates. It states that individuals behaviour is a function of its consequences. It is based on law of effect, other than individuals behaviour with positive consequences tends to be repeated, but individuals behaviour with negative consequences tends not to be repeated. Reinforcement theory of motivation overlooks the internal state of individual, other than the inner feelings and drives of individuals are

ignored by Skinner. This theory focuses totally on what happens to an individual when he takes some action. Thus, according to Skinner, the external environment of the organization must be designed effectively and positively so as to motivate the employee. This theory is a strong tool for analyzing controlling mechanism for individuals behaviour. However, it does not focus on the causes of individuals behaviour.

Positive Reinforcement This implies giving a positive response when an individual shows positive and required behaviour. For example - Immediately praising an employee for coming early for job. This will increase probability of outstanding behaviour occurring again. Reward is a positive reinforce, but not necessarily. If and only if the employees behaviour improves, reward can said to be a positive reinforcer. Positive reinforcement stimulates occurrence of a behaviour. It must be noted that more spontaneous is the giving of reward, the greater reinforcement value it has.

Implications of Reinforcement Theory Reinforcement theory explains in detail how an individual learns behaviour. Managers who are making attempt to motivate the employees must ensure that they do not reward all employees simultaneously. They must tell the employees what they are not doing correct. They must tell the employees how they can achieve positive reinforcement.

TASK III A good human relation is an integral part of the process of management and improved organizational performance. Indeed, HRM is no longer the function of the Personnel department, managers are required to facilitate the practices and policies of HRM. Discuss: a. Difference between Personnel Management and HRM

(Figure 3.a) What is Human Resource Management?

The human resources refer to the qualities possessed by the workforce or employees in an organization. These qualities include knowledge, values, skills, abilities, cognition, beliefs, commitment, etc., possessed by the employees, without which any organization cannot grow or achieve their objectives. In short, the efficiency and success of any administrative system depends upon the cooperation of the human resources. HRM directly deals with the human resources in a system. Human Resource Management is defined by Gray Dessler as - "The policies and practices involved in carrying out the people or human resources aspects of a management position, including recruiting, screening, training and appraising". Functions of Human Resource Management

Managing the workforce as assets, that are required to develop the organization. Aligning and developing the HR policies, according to the corporate strategies and other business management policies. Developing the skills of the employees through adequate training and by providing the necessary resources required to develop their knowledge pertaining to their job.

Creating an efficient Organization Development (OD) system.

What is Personnel Management? Personnel Management is the sub-system of the whole management system in an organization. The production and distribution of goods and services is managed by the Personnel department. This department evaluates the efficiency of the workers and also provides them incentives which can be either monetary or non-monetary. They also assign the departments such as sales and marketing, production, maintenance, etc., where the employee has to work, depending on the skills and knowledge possessed by the employee.

Functions of Personnel Management

Developing the organizational structure and planning. Managing the wage and salary of the employees and provide appraisals. Providing employee benefits and services such as insurance plans, pension plans, fringe benefits, Provident Funds (PF), etc. Negotiating on labor union activities like collective bargaining, trade union issues, contract agreements, grievance handling, etc., Auditing the employee policies and practices, to ensure the efficiency of those policies. Difference Between Human Resource Management and Personnel Management

Human Resource Personnel Management Management To improve Employment laws and Key Function organization's efficiency payroll management Key Focus Build dynamic culture Administer the workforce Job design Team work Division of Labor Standardization Low High Pay appraisals Performance related Job evaluation Wide range of Intervention Procedural methods strategies Management Transformational Transactional role Communication Direct Indirect Method Key Management Facilitation Negotiation Skill Contract Trade union or collective Individual contracts management bargaining contracts Managerial Nurturing Monitoring Task Business/line/general Personnel managers or Key Managers managers IR manager

Point of Difference

Nature of Relation Management Action Decisionmaking Conflict Key Relation

Unitarist Informal urge for Business-need Fast De-emphasized Customer (Table 3.a)

Pluralist Procedures Slow Institutionalized Labor

b. Fundamental HRM theories Definition HRM HRM may be defined as the organizational function of planning for Human Resource needs and recruitment, selection, development, compensation and evaluation of performance to fill those needs -Louis E. Boone & David L. Kurtz, Management Scope of Human Resource Management Motivation Job Satisfaction Managing people in informal groups Managing conflicts Personality development Building teams Managing change Leadership Communication Human relations in the organization Human Resource Management Process

Human Resource Planning

Recruitment Staffing Selection Training & Development

Performance Appraisal

Compensation

(Exibit 3.b)

Key Result Areas of Human Resource Management Functions Human Resource Planning Administration of compensation systems Performance Management Human Resource Development Employee welfare services Industrial Relations Formulation of personnel procedures & practices Strategic Human Resource Activities Policy Making Designing & developing Human Resource Strategies Contributing to the corporate plan of the organization Integrating Human Resource activities to the main purpose of the organization Operational Human Resource Activities Job Analysis Recruitment & Selection Job Evaluation Salary administration Incentives & benefits

Grievance handling Disciplinary procedure Communicating conditions of service Personal Records Advisory Human Resource Activities Training & Development Counseling Legal & Labour Laws

c. Key issues of International HRM What is International HRM? International HRM is the process of resourcing, allocating and effectively utilizing human resources in a multinational corporation. Global and National Issues Global Issues The Economic Meltdown: 100 million more people go to sleep hungry this year than one year ago Millions of jobs are lost every month, globally Most economies are shrinking. Sri Lankas is still growing but at a slower pace. Inequitable distribution of wealth and increasing global poverty. In the USA, the top 1% own as much wealth as the bottom 95% Green environment and the sustainable use of natural resources Good Governance Human Rights Global Issues and Sri Lanka

The United Nations (UN) Human Development Index (HDI) 2009 In order to assess this, the HDI combines measures of life expectancy, adult literacy, gross enrolment in education; Purchasing Power Parity (PPP) and per capita income. The HDI was calculated for 182 countries and territories. Sri Lanka Ranks 102 out of 182 countries. This put us in the lower half in terms of the Human Development Index. Sri Lankas Human Poverty Index in relation to the world Sri Lankas HPI value is 16.8%. We rank 67th among 135 countries for which the index has been calculated. Human Migration People migrate for better employment and life prospects Allowing people to migrate both within and between countries can increase peoples freedom and improve the lives of millions around the world Nearly one billion or one out of seven people are migrants Ration of internal immigrants to international immigrants is 4:1 Downsides- High financial outlays, uncertainty, separation from family, lack of information and resources in host country, physical danger Migrants typically boost economic output and give more than they take Migration is not a suitable for national development.

National Issues The recovery; reconstruction and development after the end of the 30 year terrorist war Physical and emotional rehabilitation of the IDPs, child soldiers, terrorist combatants and the armed forces and their families Overcoming the negative impact of the global economic meltdown Continuing to recover from the Tsunami including maintaining early warning systems and effective crisis management

Enabling a more equitable distribution of economic activity throughout the nation Strengthening good governance and human rights Forestalling future terrorism and destabilization Issues in strategic International HRM Who will lead your international organization better? The expatriate overseer from the parent company who can manage potential contradiction in the Companys best interests; or The local employee who understands the local culture and political and economic conditions, better? What are your lower level employees perceptions and values about their role in a MNC? This issue involves aligning MNC and national work values. Is it acceptable to enforce Strategic International HRM policy and practice in order to enforce the MNCs view of what constitutes an effective international organization and IHRM? Does globalization mean eliminating differences; imitating others, or allowing more developed nations to impose their models on others; or Does globalization mean integrating differences, putting together strengths, building from the differences and being able to join efforts for a win-win process?

REFERENCES

Reiche, B.S.; Harzing, A.W. (2011) International Assignments, in: Harzing, A.W.; Pinnington A. (2011) International Human Resource Management, 3rd edition, London: Sage Publications. Louis E. Boone & David L. Kurtz, Management