Tuesday, September 22, 2009


Telecommuting or telecommunicating, does not necessarily involve geographic  relocation but symply involves working at home at least part of the time. In recent years, the number of workers who telecommunicate has increased dramatically. Telecommuting is thought to bring several benefits, including time saving from the avoidance of commuting as well as at-home child care, ease of working with multiple employers, access to jobs by disabled workers, ad lifestyle advantages.

The organizational benefits include recruiting advatages, lower costs in using part-time workers, increased ability to use skilled professionals on ad hoc basis, reduced likelihood of unionization, less need for office space, productivity improvements, better morale for those employees given the option of telecommuting, and employee retention. Some observers have asserted that telecommuters work more effeciently.

Nonetheless, there are potential problems with such arrangements, including control difficulties, career limitations related to lack of visibility, workers' concerns about missing opportunities, social isolation, less sense of belonging, and reduced loyalties to both employers and employee. There are other concerns about the security of confidential or competitive information when it is transmitted over telephone lines from to and from the telecommuter. Although encrypted technology may reduce such threats, security is a concern for some companies. Telecommuters also need remote-office and information technology support. In addition, some managers find it difficult to trust their employees to work at home without their supervision.

Source: Strategic Human Resource Management, second edition by Charles R. Greer

Monday, September 7, 2009

Compensation in a knowledge-based world

Today we live in a Political-Social-Economic world of capitalism. A critical factor underlying capitalism as an economic theory is that profit is OK. It is neither wicked nor unacceptable to make money. For capitalism’s success, there must be a strong, direct, and supportive relationship between work and the monitory rewards available through work.

In a capitalistic world, employees must respect money and the challenges of their work to gain satisfaction from work performed.The move of capitalism into knowledge-based world, centers attention on an enlightened society. To be successful in a knowledge-based capitalistic world, there must be a passion for learning that includes a recognition of the need for education.
The main issue here is increasing unacceptable differences between income of the and higher-paid members of society.  The growing disparity of income between the lower-income and higher-income members of society relates directly to the increasing influence of higher levels of knowledge and skills in pay determination.
Those members of society who do not have an adequate or acceptable level of education are going to find themselves in very unenviable position regarding current and future income opportunity. The pay compensation for those with acceptable level of knowledge and skills will rise, while those with minimal levels of required knowledge and skills will see their income opportunity stagnates, even decline.

The Re-engineering—that resulted in elimination of entire levels of management caused decreasing costs and increasing profitability of the organization. For some employees, it meant increased work load with minimal to no change in pay.To others, it has meant the loss of well-paying jobs. To assist their organization compete while functioning with these often conflicting requirements, compensation professionals have had to increase their knowledge and skills dramatically. Because of these advances in knowledge and skills , the importance of compensation profession has risen in the managerial-professional world.
Life Style and Compensation

Gone are the days when anyone would, or could think that money is NOT a motivator. John Milton said over three hundred years ago, “Money brings honor, friends, conquests and riches.” To better understand how t direct or influence human behavior with money, it is critical to recognize the relationship between lifestyle and social classes. The first step in understanding social class is to define it. A social class consists of a group of people of roughly equivalent status in an unequal society. Various criteria such as income, property, occupation, and education are normally used to measure status that differentiate s social classes.
Pay and Social Classes

Typically, today society is divided into three classes—upper, middle and lower.From the dawn of civilization, humanity has been divided into at least two social classes —HAVES and HAVE NOTS.
As families merged into tribes and tribes merged into governments, a small, insignificant social class emerged between the haves and the have-nots. Most members of this middle groups were government administrators, military officers, artists, entertainers, traders, and merchants.During the past five hundred years this middle social group moved from minority to a majority. Today, it is important to recognize the relationship among pay, earnings and income, and social structure within the country.

Today one criterion can be used to determine the class of an individual or family unit, that is INCOME. This results in a typical upper-, middle-, and lower-class division can be further separated into seven subsets. Each of these subsets defines a significantly different standards of living based on family income.

Life Style and Social Classes

To appreciate the importance of employer-provided pay, it is necessary to have an understanding of the lifestyle and standard of living dictated by pay, earnings, and income. Let’s understand this concept in the light of different classes:

The Poverty Class: Those who, unfortunately, are members of the lowest income group are not enjoying the “good life” available to majority. Most of the people in this income group do not have a full-time jobs. A large number of the individuals are illiterate and are school drop outs. Housing is a critical problem for this group. It is not unusual for families of this group to spend from 25 to 50 % of their income on rent and utilities.

The Working Poor: One feeble and fragile step away from complete destitution are the working poor. Many of these individuals hold part- and full-time jobs that pay a wage equal or close to government-established minimum wage.Few individuals in this group has any kind of estates, and major possessions are a well-used auto-mobile or truck, some furniture, and clothing. A major life-improvement goal of those in this group is to move into the lower-middle class.

Lower-Middle Class: Lower-middle class families do not have the luxury of wasting their money. When lower-middle class individuals spend their earnings on frivolous pastimes, they are only one short step away from returning to the lower-income class. They have little to no savings and any kind of financial problem can be disastrous. A major financial problem is loss of job. Without the earnings coming from one of the jobs, a two-wage earner, four member-family can become destitute quickly.

Middle-Middle Class: The individuals or families of this group has income good enough that  payment of monthly bills  does not require extensive manipulation of the family financial resources. At middle-middle class, a little reserve fuel for rainy days begins to develop. Individuals in this class can begin purchasing extra that makes life so enjoyable. A new car every four or five years is possible and no longer a dream. Money to pay for some fashionable clothes is available without cutting back on some other essentials. If anything  happens to eliminate the income of the major wage earner or even one of the wage earners, life style can revert to lower middle-class or even lower income class.

Upper-Middle Class: The individuals or families of this class can afford the comfortable homes in a well-kept secure section of the city. Financial investment becomes become of significant concern to these family members of society. For upper middle class parents public schools are no longer the sole option. Expensive private schools are  a possibility. House furnishings and clothing begin to have feel of luxury. A loss of job or change in job may reduce the family to middle-class status. This could be quite traumatic for those who enjoying the fruits of upper-middle class.

The Wealthy: The number and percentage of such category of people is very small, but they are growing. Successful businessman or professionals (attorneys, physicians, dentists, consultants), entertainers actors, artists, athletes, authors, writers, models, musicians) and sales personnel can expect to have extremely high incomes. With high level of income, these people can develop savings and investments that will ensure them good life for the remainder of their lives.For a wealthy, a second, or even third, home in exclusive vacation areas is easily affordable. Pursuit of distinctive household furnishing is commonplace. Eye catching designers clothing and sleek, high performance automobiles help identify a member’s place in the social order.
In this social class, it is possible to spend 25 percent of income on leisure activities. Luxury for wealthy is a way of life.

The Ultra-rich: Not a week goes by that the daily newspapers or television do not inform world of the pay of rich and famous. Going into the detail of lifestyle of ultra-rich people is beyond the purview of this post.

Friday, September 4, 2009

Learning Organizations

A learning organization has both the drive and the capabilities to modify or transform itself and improve its performance continuously. It learns from past experiences, it learns from customers, it learns from various parts of the company, and it learns from the other companies. In learning organizations, successful innovation and change aren't events with clear-cut beginnings and endings. Rather they are never-ending processes that have become part of the daily routine. Innovation and change are not infrequent and special--they are simply a way of organizational life. As one manager observed. this way of life helps a learning organization avoid organizational stupidity.
When an organization's environment is unstable, learning may require a lot of exploration. Failures may be frequent, but so are unexpected achievements. When an organization's environment is more stable. learning is more likely to occur through a systematic process of testing alternative approaches. In either situation, however, learning organizations change at a rate at least as fast as--or even faster than--the rate of change in their environments. Moreover, the learning process is managed systematically and professionally--it does not occur randomly. Though continuous innovation and change, a learning organization creates a sustainable competitive advantage in its industry. Five distinctive features of learning organizations are as follows:
  • shared leadership,
  • culture of innovation,
  • customer-focused strategy,
  • organic organization design, and
  • intensive use of information
Shared Leadership
In learning organizations, responsibility for making decisions, directing operations, and achieving organizational goals is shared among all employees. These leadership tasks aren't the responsibility of top-level managers alone. Everyone is encouraged to find ways to improve the organization and its products.Empowerment provides a way to integrate tasks and allow employees to buy into the organization's goals. The participatory leadership style encourages to employees to learn by allowing them to make their own mistakes. When peopl discuss better ways of doing their jobs, they see that their efforts do make a difference. That discovery in turn strengthens their involvement in making a better product and improving customer satisfaction.
Culture of Innovation
Shared leadership goes hand in hand with a culture of innovation. For learning organizations, successful innovation is a never-ending process that becomes part of daily routine. Instead of being an infrequent and special event that takes people's attention away from the central work of the organization, it is the central work of the organization.

Community: Learning organization nurtures a sense of community and trust. Everyone works together, respecting each other and being able to communicate openly and honestly. Problems can't be avoided or handled by just passing them along to another department or up the hierarchy. Conflict and debate are accepted as responsible forms of communication. People willingly share the information and knowledge they have, so others can benefit from it.

A sense of community also gives employees the feeling that they are important and are being treated fairly. Employees cooperate because they want to, not because they have to. When people feel they are part of community, they are more willing to make the extra effort needed to find and fix the problems. They also are more likely to share their solutions with the coworkers.

Continuous learning: A learning organization cannot succeed without employees who are willing to learn and change. Hence learning organizations encourage individual learning in numerous ways. One of the most successful ways is through empowerment, which places responsibility on employees for problem finding and problem solving. Empowerment requires more involvement and learning thean does simply having someone else make all the decisions.  For managers, in particular, continuous learning is essential to develop the competencies needed by generalists who are knowledgeable in several areas, as opposed to specialists who understand only finance, production, marketing, or some other function.

Customer-Focused Strategy

Learning organizations add value for customers by identifying needs--in some instances, even before customers have done so--and then developing ways to satisfy those needs. Customer-focused strategies reflect a clear understanding of how important customers are to the organization's long-term success and serve as the basis for aligning all of its major activities. At a time when many organizations and shareholders look no further than the next quarterly financial report, acceptance of the need for a long-term perspective is crucial for a learning organization.
Organic Organization Design
The design of learning organizations often reflects their emphasis on organic rather than mechanistic systems. In particular, they emphasis the use of teams, strategic alliances, and boundaryless networks.
Teams: In learning organizations, employees with dissimilar expertise form multidisciplinary teams. To encourage the free flow of ideas, these teams may be formed only as needed, on project-by-project basis. "Bosses" are particularly nonexistent. Team members have considerable autonomy to make key decisions and can take action without waiting for requests to crawl through a bureaucratic decision-making process. Compared to functional structures, team based structures are more flexible and fluid. Knowledge flows more easily among members of the organization, which contributes to learning and creates opportunities for innovation.
Strategic Alliances: In addition to experimenting on their own, may learning organizations use strategic alliance with suppliers, customers, and even competitors as a method of learning.
Boundaryless Networks: Network structures maximize the linkages among organizations. Such linkages in turn provide learning opportunities and generate innovation in goods and services. Network structures seem to work in part because they create a sense of community among a large pool of people who share their diverse knowledge and expertise, using it to find creative solutions to difficult problems.
Intensive Use of Information
Information is the lifeblood of learning organizations. To be effective they must undertake extensive scanning, be measurement oriented, and foster shared problem and solutions.
Scanning the Environment: In learning organizations, managers strive to be creators of change. Staying attuned to emerging trends in their passion. To ensure that they don't miss an important trend or change, learning organization aggressively scan both the external and internal environments for information. As a result, large amounts of information are obtained from external environment about how customers are reacting to current goods and services, how customers compare them to those of competitors, and whether new competitors may be on horizon. Such information is essential to judgments concerning the need to create to new products to meet customer demand. information obtained from internal environment indicates how employees feel about the organization, whether their attention is focused on customers, whether they feel energized to solve difficult problems, and whether key employees are likely to defect to competitors.
Measurement Oriented: Organizations learn in order to improve. To judge improvement, an organization needs to know where it was before and where it is now. Systematic measurement makes assessing improvement possible. In learning organizations, employees have access to data about customer satisfaction, profit, loss, market share, employee commitment, and competitors' strategies, among other things. Data gathered, monitored, disseminated, and use throughout the organization.
Pharmaceutical companies are good examples of learning organizations, because without continuous learning they would have no new products to offer the public. Furthermore, the process of developing new products and bringing to market take about eight years, on the average. Throughout this time, pharmaceutical companies typically measure their learning progress in a variety of ways. For example, they keep track of the expertise of their scientists and engineers, the number of scientific papers published  by their scientists, patent applications, and FDA drug approvals, among many other things. By monitoring measures such as these, pharmaceutical firms can better predict in advance how many new products they are likely to be able to introduce in future years.
Communication: Numerical data (measurement) aren't the only type of information considered important in learning organizations. "Soft" information--sometimes referred to as tacit knowledge or gossip--is valued too. Employees who serve customers day in and day out may not need to read the results of monthly customer satisfaction surveys to know where the problems lie. The anecdotal evidence they gather through dozens of service encounters may be enough to begin seeing a pattern of prices that all seem to fit together, make sense, and suggest needed improvement.

Source: Management: A Competency-Based Approach, tenth edition by Hellriegel, Jackson, Slocum

Tuesday, September 1, 2009

Why Is Human Resource Management Important to All Managers?

Why are these concepts and techniques important to all managers? Perhaps it's easier to answer this by listing some of the personnel mistakes you don't want to make while managing. For example, you don't want to:

  • Hire the wrong person for the job
  • Experience high turnover
  • Have your people not doing their best
  • Waste time with useless interviews
  • Have your company take to court because of discriminatory actions
  • Have your company cited under federal occupational safety laws for unsafe practices
  • Have some employees think their salaries are unfair and inequitable relative to others in the organization
  • Allow a lack of training to undermine your department's effectiveness
  • Commit any unfair labor practices
One can do everything else right as a manager--lay brilliant plans, draw clear organization charts, set up modern assembly lines, and use sophisticated accounting controls--but still fail, by hiring the right people or by not motivating subordinates. On the other hand, many managers--presidents, generals, governors, supervisors--have been successful even with inadequate plans, organizations, or controls. They were successful because they had the knack of hiring the right people for the right jobs and motivating, appraising, and developing them. 

What is manager?

A manager is a person who plans, organize, leads, and controls the allocation of human, material, financial, and information resources in pursuit of the organization's goals.

The many diferent types of managers include department managers, product managers, account managers, plant managers, division managers, district managers, and task force managers. What they all have in common is responsibility for the efforts of a group of people who share a goal and access to resources that the group can use in pursuing its goals.

You don't have to be called a manager to be a manager. Some managers have unique and creative titles, such as chief information officer (a person in charge of information systems) or team leader. People with the job titles of chief executive officer (CEO), president, managing director, supervisor, and coach also are responsible for helping group of people achieve a common goal, so they too are managers.

Most employees contribute to organizations through their own work, not by directing other employees. Journalists, computer programmers, insurance agents, machine operators, newscasters, graphic designers, sales associates, stockbrokers, accountants, and lawyers are essential to helping their organizations achieve their goals, but many people with these titles aren't managers.

What sets managers apart, if not their job titles? Simply put the difference between manager and individual contributes is that managers are evaluated on how well the people they direct do their jobs.

Source: Management: A Competency-Based Approach by Hellriegel, Jackson, Slocum, Edition 10.

Functions of Management

In all organizations the same essential managerial functions are carried out. These are:
  • planning
  • organizing
  • leading
  • controlling
All managers perform these functions. That's why we can call them general management functions. Let's define each one of them:

Planning: Planning involves determining organizational goals and means to reach them. Managers plan for three reasons: (1) to establish an overall direction for the organization's future, such as increased profit, expanded market share, and social responsibility (2) to identify and commit the organization resources to achieving its goals; and (3) to decide which tasks must be done to reach those goals.

Organizing: After managers have prepared plans, they must translate those relatively abstract ideas into reality. Sound organization is essential to this effort. Organizing is the process of deciding where decisions will be made, who will perform what jobs and tasks, and who will report to whom in the company. By organizing effectively, managers can better coordinate human, material, and information resources. An organization's success depends largely on management's ability to utilize those resources efficiently and effectively. Organizing involves creating a structure by setting up departments and job description.

Leading: After management has made plans, created a structure, and hired the right personnel, someone must lead the organization. Leading involves getting others to perform the necessary tasks by motivating them to achieve the organization's goals. Leading isn't done only after planning and organizing end; it is crucial element of those functions.

Controlling: The process by which a person, group, or organization consciously monitors performance and tasks corrective action is controlling. Just as a thermostat system sends signals to a heating system that the room temperature is too high or too low, so a management control system sends signals to managers that things aren't working out as planned and that corrective action is needed.

What Is management?

In everyday usage, people often refer to management as a group of managers in an organization. For example the CEO and other high level managers often referred to as top management. The managers under them are may be referred to as middle management, and so on.

The term can also be referred to the tasks that managers do. These tasks include planning, organizing, leading and controlling the work of an organization. Thus, in purely academic terms, management can be referred to as the tasks and activities involved in directing an organization or one of its units: planning, organizing, leading controlling.

Types of management

One of the distinction that can be made between different types of management is that between line and staff management. Because business is so complex, one person cannot hope to command the knowledge and skills required to carryout every management role effectively. Hence, it is necessary to for each manager to draw on skills, abilities and knowledge of others. Organizations therefore appoint specialists, called staff managers, who have competence and techniques and methods in their area of expertise.

Staff managers advise, counsel and assist line managers. Line managers are responsible for the achievement of the identified goals of the organization: they are responsible for results. Another useful distinction between staff and line managers is that staff manager is that staff managers advise on the most effective and efficient means of doing the work and achieving organizational goals, while line managers decide what will be done and supervise those who actually do the work.

Management-A Competency-Based Approach by Hellriegel
Human Resource management by Jeremy Seward