Notes Chapter 4 Managing Organisation...

Notes

Managing Organisation Effectiveness

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L E A R N I N G O U T C O M E S

After reading this chapter, you will be able to:

LO 4.1 Understand the general considerations and productivity improvement strategy

LO 4.2 Explain the basic structure of productivity improvementLO 4.3 Analyse the productivity improvement programmes (PIP)—concepts and key

elementsLO 4.4 Evaluate the organisational approaches to productivity improvement

programmesLO 4.5 Describe the major variations of productivity improvement programmes

introduction

Productivity improvement in any organisation is a combined result of all the departments, resources and management. In every organisation productivity is a major aspect of concern. To improve productivity, motivation and change is necessary. In any organisation it is mandatory to plan the things and coordinate them in a smooth manner so that the productivity can be enhanced. Technological changes also significantly affect the productivity so the human resources and management must be open to adopt the technological changes. The organisation culture also makes a significant impact on productivity. Increasing productivity is one of the most critical goals of an organisation.

Learning OutcOme 4.1

general conSiderationS for Productivity imProvement

The factors which are of general considerations for productivity improvement can be classified into the following categories:

1. High-performing and innovative employees are the foundation of productivity. The com-bined efforts of managers and other personnel can lead to hiring, developing, and retaining agile achievers and innovators.

2. A strategic plan that is well laid out improves the chances of productivity.3. Managers who can provide the direction and achieve goals are vital to productivity improve-

ment.

Chapter 4Managing Organisation Effectiveness

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Productivity Management

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4. Managers should communicate to their team about achievement of individuals and organisa-tional goals and the way to achieve it.

5. Allocation and prioritisation of resources in an efficient manner increases productivity. 6. Measuring activities and reporting feedback are essential for the improvement of perfor-

mance. 7. Imparting training to employees to update their skills and knowledge also increases produc-

tivity. 8. Productivity can also be improved by standardisation of processes and techniques.

Productivity imProvement Strategy

Stephen Moss has given a strategic approach for productivity improvement. The basic guidelines for this are as follows: 1. Identify the competitive requirements and analyse the strength and weaknesses of organisa-

tion. 2. Specify the goal as per the competitive requirements. 3. Review the inputs and available resources. 4. Analyse the ongoing change and adapt an innovative and flexible system. 5. Decide strategy with objectives, procedures and principal policies and plans for achieving

long-term productivity improvement goals.Some general considerations while planning strategy for the productivity improvement: 1. The objectives must be clear. 2. Objectives must be set for small groups and the performance must be assessed periodically. 3. Proper plan to achieve the objectives must be planned. 4. A time period must be set to analyse the performance towards achievement of objectives. 5. Objectives must be in favour of the organisation.


BaSic Structure of Productivity imProvement

Alan Lawlor suggests the following four general stages of any productivity improvement process: 1. Recognition: We have to recognise the need for change and improvement. 2. Decision: After convincing ourselves that we should improve, a decision must be

made to act. 3. Permission: There must be opportunities to implement decisions. 4. Action: Actually implementing plans for productivity improvement, which should

be the ultimate objective.


Productivity imProvement ProgrammeS (PiP)—concePtS and Key elementS

Improving productivity is a buzz word nowadays. It is a planning process for the improvement in total system involving top management, with the goals of increasing general organisation effectiveness and health, and helping in the accomplishment of specific organisation objectives and targets by means of planned interventions in the organisation’s structure and processes.

The basic objective of any PIP is improvement in problem solving skills, better teamwork, effective productivity information system, healthy organisation culture.


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Key elements of Productivity improvement Programmes

1. Involvement of top management in providing support and adequate resources to implement programs.

2. Innovative procedures should be created and goals should be set and communicated clearly. 3. Communication should be transparent; both from management to employees and employees

to management. 4. Employees should feel that they are an important part of the organisation they are associated

with. 5. Productivity must be measured by using worksheets, benchmark studies performed, and

formulas. Analysis should not distort the data. Measurement leads to analysis and ultimately feedback which leads to improved performance and productivity.


organisational approaches to Productivity improvement Programmes

The two major organisational approaches for productivity improvement programmes are: 1. The ILO organisation development/performance improvement planning approach 2. The ALA performance improvement program approach

ILO Organisation Development/Performance Improvement Planning ApproachThis approach is based on the experience and research of ILO management trainers and consultants. It is described in detail by Robert Abramson and Walter Halset. This approach is a circular approach comprised of five phases: 1. Preliminary diagnosis: In this phase, the health of organisation is assessed 2. Orientation to OD/PIP: After the assessment the approach is tested in this phase and a direct

exposure is given. 3. Organisation diagnosis and action planning: The workshop training is given according to the

objectives. 4. Implementation: The performance improvement plan, and its objectives and action pro-

grammes are converted into specific operational objectives and targets are set for organisa-tional units and individuals.

5. Review and revision: After implementation, review is done for further revision of plan.

ALA Performance Improvement ProgrammeIt is given by Action Learning Associates (ALA), United Kingdom, and is comprised of four stages:Stage 1: Identify where you are now and how you compare with othersStage 2: Identify the main productivity problemsStage 3: Decide where you want to beStage 4: Introduce action for improvement

These stages are based on the simple theory of analysis. Identify the strengths and weaknesses, then identify the main problem area, decide the targets and introduce the action to achieve the targets.


major variations of Productivity improvement Programmes

The major variations of productivity improvement programmes can be summarised in following approaches: 1. Action learning programmes 2. In-plant action learning 3. Productivity improvement circles (PIC)

Check Your Progress

Plan a produc-tivity improvement programme for a manufacturing firm.

Check Your Progress



Notes


4. Performance action team process (PAT) 5. The inter-firm comparison and business clinic approach IFC/BCA

Action Learning Programmes (ALP)Learning is very important for productivity improvement. Managers and all human resources of any organisation must be ready to learn new things so that they can do their work more effectively. Learning starts with problem identification. The problem action learning programme has various roles for learning. These roles are: 1. Nominator: The competent authority for payment of the program 2. Client: The person who knows about the problem 3. Fellow: This is the individual, or participant, or group actually working on the programme

and is affected by the problem. 4. Group or set: The group in which the participants learn 5. Group advisor: Problem solverThe client gives overall direction of the problem. Once the actual position on a particular project is clear, the fellow defines what action is to be taken before the next meeting. Some times group or subgroups are formed. Group advisor is the problem solver who guides the client and group to solve the problem.

In-plant Action LearningThis approach was developed by G. Boulden. It specifically focuses on organisation development. The basic features of this approach are as follows:

● It focuses on single organisation. ● It involves the entire management team ● It uses cross-functional groups working on common problems. ● It is concerned with solving specific, complex, cross-functional problems, particularly in the

area of productivity. ● It has a strong nominator, usually the managing director, who has a strong vested interest in

the success of the programme. ● There is an in-plant co-ordinator who monitors the programme and provides feedback to the

organisers.In-plant action learning involves the following five stages: 1. Stage 1: Set corporate goals 2. Stage 2: Develop goals by function 3. Stage 3: Analyse the problems 4. Stage 4: Make recommendations for action 5. Stage 5: Set up the action programme

Productivity Improvement CirclesThe concept of Productivity Improvement Circles (PIC) was developed in 1980 by the National Productivity and Development Centre (NPDC) of the Philippines as an adaptation of the Japanese Quality Control Circles (QCC).

A PIC is a small group of workers from the same workshop who are interested in self- and mutual development and in problem-solving activities. The aim is to enhance enterprise productivity. PICs have seven basic features:

● Voluntary nature: Every member has chosen to participate in PIC activities because they provide opportunities for further growth.

● Small size: A circle has somewhere between three and ten members. ● Homogeneous membership: Members come from the same workshop, perform similar or

related functions, and confront similar or related problems. ● Specific task and objectives: PIC projects are usually within the control of the circle and in

line with enterprise objectives. ● Systematic and scientific approach: In studying workshop problems the circles follow a

step-by-step sequence and use scientific tools and techniques in the process. ● Continuing activity: Circle activities progress from one project or activity to another. ● Universal application: The concept can be applied in diverse sectors, organisations and their

units (manufacturing, banking, transport, etc.).


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Productivity Improvement Circles ObjectivesThe general objectives of PICs are:

● To contribute to the productivity, stability and growth of the enterprise ● To make the workshop a better place to work in ● To develop human potential to the fullest. The specific objectives of PICs are to:

■ Increase the competitiveness of the enterprise through product improvement and lowering production costs

■ Improve leadership, first line supervisors’ skills and technical competence through mutual education and practice

■ Give the workers opportunities for job enrichment and enlargement, more responsibility, a greater sense of independence and some participation in decision-making

■ Develop management and workers’ productivity consciousness, discipline and skills through better communication.

Types of Problem for PICsThe general problem areas appropriate for PICs to deal with are:

● Reducing waste and costs ● Improving quality ● Improving methods ● Simplifying work ● Improving preventive maintenance ● Morale boosting (manpower turnover, discipline, complaints, etc.)

Performance Action Team process (PAT)The PAT process was first designed and developed in 1977 and later on developed and described in detail by D. Scott Sink.

Performance Action Team process (PAT) is an effective variation on many team-building techniques aiming at productivity improvement. It is a comprehensive, participatory management process implemented from the top down. It has two major components: 1. A strategic planning process that focuses on developing a consensus on two-to-five-year

developmental goals, objectives and action programmes at all levels of management 2. A structural, participatory problem-solving process at the primary group/work level

Objectives of PAT ● To encourage ‘proactivity’, i.e. anticipatory action rather than mere reaction to a given situation ● To facilitate, initiate and develop change and innovation ● To improve goal congruity between levels of management, functions, individuals and groups

at different levels of the hierarchy ● To ensure that planning drives the budget and not vice-versa ● To improve effectiveness, efficiency, quality, productivity, quality of working life and inno-

vation.

Basics of PAT ProcessThe concept of the PAT process includes:

● Management basics ● Change basics ● Behavioural and leadership control theory ● Motivational basics

The management process (planning, organising, controlling and adapting) is directed at such organisational components as strategy, strategic planning, structure, process and behaviour.

The Inter-Firm Comparison and Business Clinic Approach (IFC/BCA)The Inter-Firm Comparison and Business Clinic Approach (IFC/BCA) requires the services of an outside consultant. It uses inter-firm comparison techniques to help participating managers identify problems in their own organisations. The Inter-Firm Comparison (IFC) process was described in the earlier chapter.

Check Your Progress

Discuss the difference between PIC and ALP.

Check Your Progress



Notes


Business clinics discussion groups are groups where participants discuss their own problems and their progress in solving them. They are run by a consultant or management development institute.

As in ILO study IFC/BCA has three main stages:

1. Stage 1: Participants receive an IFC report which compares the performance of their indi-vidual enterprise with other similar enterprises.

2. Stage 2: Areas where improvement is needed are pointed out through comparison and analysis of the reports and performance of the other enterprises.

3. Stage 3: Follow-up action takes place in the form of business clinics.

One of the advantages of this approach is that it is especially attractive to small- and medium-scale entrepreneurs.

Key Terms

ALA: It is given by Action Learning Associates (ALA), United Kingdom.

ALP: It stands for Action Learning Programmes.

In-plant action learning: This approach was developed by G. Boulden. It specifically focuses on organisation development.

Productivity Improvement Circles (PIC): A PIC is a small group of workers from the same workshop who are interested in self- and mutual development and in problem-solving activities.

Performance Action Team (PAT) process: It is an effective variation on many team-building techniques aiming at productivity improvement. It is a comprehensive, participatory management process implemented from the top down.

In Review

High-performing and innovative employees are the foundation of productivity. Working together, managers and HR can attract, hire, develop, and retain individual employees who are agile, high-performing, continuous learners and innovators. Effective managers and leaders set direction and execute. A great manager/leader is the second-most important productivity factor. Leaders and managers play a critical role in defining the direction, purpose, priorities, goals, and roles of the workforce.

Improving productivity is a buzz word nowadays. It is a planning for the improvement in total system involving top management, with the goals of increasing general organisation effectiveness and health which helps in the accomplishment of specific organisation objectives and targets by means of planned interventions in the organisation’s structure and processes.

The basic objective of any PIP is improvement in problem-solving skills, better teamwork, effective productivity information system and healthy organisation culture.

Mult ip le Choice Quest ions

1. General considerations for productivity improvement include: (a) High performing employees (b) Effective managers (c) Competitive business strategy (d) All of these (e) None of these


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2. Which is correct? (a) Team and individual must have clear operational goals (b) A defined purpose for teams make roles clear. (c) Integration can increase productivity. (d) All of these (e) None of these 3. Alan Lawlor suggests _____ general stages of any productivity improvement process. (a) Six (b) Nine (c) Four (d) All of these (e) None of these 4. The ILO organisation development / performance improvement planning approach is based

on _______ phases. (a) Five (b) Six (c) Seven (d) All of these (e) None of these 5. PIC stands for ______________. (a) Productivity Improvement Cycle (b) Productivity Improvement Circles (c) Productivity Integration Circles (d) All of these (e) None of these 6. PAT stands for ________________. (a) Performance Action Team (b) Production Action Team (c) Productivity Action Team (d) All of these (e) None of these 7. Action learning program has _____________. (a) Client (b) Fellow (c) Nominator (d) All of these (e) None of these 8. In-plant action learning was developed by ____________: (a) G. Boulden (b) G. Stewart (c) G. Thomson (d) All of these (e) None of these 9. The general problem areas appropriate for PICs to deal with include: (a) Reducing waste and costs (b) Improving quality (c) Improving methods (d) All of these (e) None of these 10. The PAT process was first designed and developed in ______ (a) 1987 (b) 1977 (c) 1967 (d) All of these (e) None of these

Key to mcQs

1. (d) 2. (d) 3. (c) 4. (a) 5. (b) 6. (a) 7. (d) 8. (a)

9. (d) 10. (b)

Concept Quest ions

1. Discuss the general considerations for productivity improvement. 2. Discuss the basic structure of productivity improvement programme. 3. Discuss the ALA performance improvement programme. 4. Discuss the major variations of productivity improvement programmes 5. Discuss the ILO OD/PIP approach of performance improvement.



Notes


References

Alan Lawlor: Productivity improvement manual (Aldershot, United Kingdom, Gower, 1985), p. 95.

Prokopenko, J., productivity management, ILO, Geneva, 1992Robert Abramsom and Walter Halset: Planning for imporoved enterprise performance. A guide

for managers and consultants (Geneva, ILO, 1979), pp. 7-19.Stephen Moss: “A systems approach to productivity improvement”, in National Productivity

Review (New York, Executive Enterprises Publications), Summer 1982, pp. 270-279.


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