Organization Design and People Management in the Tourism Industry, Slide di Organizzazione Aziendale

Scarica Organization Design and People Management in the Tourism Industry e più Slide in PDF di Organizzazione Aziendale solo su Docsity! ORGANIZATION DESIGN AND PEOPLE MANAGEMENT 26/02 Organization is part of our lives. Being part of an organization shapes your perception and your image. Why studying organizations in the Tourism Industry? Three main reasons: 1. Economic Relevance 2. Specific characteristics of (and relevance in!) the labor market→ Labor intensive; low wages (“top of the scale” “end of the scale”); nature of workforce 3. Nature and scope of the industry Peculiarities: o diversity management o team orientation o some material is taken from general management since what has been written on tourism is not sufficient The industry is very complex: individual companies often straddle two or more sectors. The several sub-sectors (that define TT) are all linked and depend the one on the other (interdipendence) However, to separate the business into the various sectors is problematic. Significant differences as well similarities. For example a hotel can be related to various sub-sectors as accommodation, restaurants, catering, event management (overlapping)→ the employees are very different: a chef and an event manager for example. But sometimes the organization has to rely on other organizations of the sector, which can be very different from one another. What is hospitality? Walker suggests that hospitality includes ‘a wide range of businesses each of which is dedicated to the service of people away from home’. For Slattery, the purpose of the hospitality organization is commercial, to make a profit not primarily to be hospitable. From insights into the natural process of hospitality relating to modern commercial hospitality organizations Guerrier (1999) explains the provision of hospitality as: o providing “basic needs” for food and drink and somewhere to sleep (for people who are not regular members of the family) o rewarding hosts by enhanced prestige in the community if they provide lavish hospitality to guests o an exchange of mutual benefit of the host and the guest According to King hospitality has four attributes: 1. A relationship between individuals who take the roles of host and guest 2. Relationship may be commercial or private (social) 3. Key to successful hospitality includes knowledge of what would evoke pleasure in the guest 4. Hospitality includes arrival, providing comfort and fulfilment and departure King suggests that commercial hospitality has several key elements that must be included in a model of hospitality including host-employee and guest-customer who are involved in face-to-face interactions. The hospitality model This model can be applied to other tourism organizations (e.g. car rental, big travel agencies, catering services). The disciplines of tourism Tourism studies in management: o General Management Theory o Organization Studies o Service Management Studies The importance of general management theory: o Managers in hotels and catering tend to view the industry as unique, special and unlike any other industry o Authors claim that little progress has been made in terms of management attitudes, knowledge and thinking and there has been only limited translation of business and management theory from manufacturing to service industries generally and hotels in particular. o The HI differ since it is service related and labour-intesive and despite changes (e.g. technology) the essential nature of the industry remains unchanged Is HI still unique? The context appears to be as still unexplored by researchers despite it provides a wonderful environment in which to explore current issues in organizational studies and HRM. What common features HI shares with other industries? In what does it differ from other industries? Are those differences relevant in order to consider it as unique? The contribution of Service Management Studies Hotel operations combine both productive and service element. Despite hotel operations are not pure service organizations they exhibit many of the basic characteristics common to other service industries: • Consumer a participant in the process (present & part of the service) • Simultaneous production and consumption (no inventory!...) • Perishable capacity, cannot be stored… (time perishable) • Site selection determined by customer demands • Labor intensive (direct interaction employees-customers/attention and attributes of employees) It is the characteristics which collectively determine the distinctive nature of the hotel industry which in turn shape organizational design and structure, and largely determine managerial policies, procedures and behaviours. But, not all the characteristics listed before can be applied to every hotel: the importance of the organizational setting and hotels are not homogeneous grouping! Some criteria for classifying hotels: 1. nature and type, 2. goals and objectives, 3. external environment, 4. goods and services supplied, 5. customers 6. and the behavior of people who work in them. Example: two types of hotel→ small country hotel and large city-center hotel. Do they have different organizational settings? Do they belong to a homogeneous group? →Differences in procedures and methods of operations, structure, system and styles of management and orientation an behavior of members will differ considerably. 28/02 The ‘function’ of the industry and need for developing good managers Whatever one’s view of service industries, they still have some functions and purpose to fulfill as part of their role within society. Service industries are in need of management in order to operate effectively in the same way as any other industry-- Need for the development of good managers in the hospitality industry!! Key points to recall: o A major characteristic of this industry is the role of people and the direct contact and interaction between staff and customers o Service industries are in need of management in order to operate effectively in the same way as any other industry. o Need for the development of good managers in the hospitality industry! What is an organization? o Organization: “The Science of the Division of Labor” o Organization: “Science of coordination among diverse and interdependent activities” o Organization: “Cooperative System” o Organization: “Open System” The origins and essence of the organization Organization as “the Science of the Division of Labor”. In 1776 Adam Smith published "The Wealth of Nations" in which, among other things, he illustrated the advantages of the division of labor in a “pin factory”→ Adam Smith visits a pin factory and describes it… ‘One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands’. ‘I have seen a small manufactory […] where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day.’ ‘A workman not educated to this business nor acquainted with the use of the machinery employed in it could scarce, perhaps, with his utmost industry, make one pin in a day.’ Organization as a“Science of coordination among diverse and interdependent activities” Organization can be defined as the set of ways in which the division of labor into distinct tasks is carried out and then coordination between these tasks is achieved (Mintzberg, 1983). The two key concepts are “division of labor” (into distinct tasks) and “coordination”, indeed, the division of labor requests coordination. Organization as a “cooperative system” (Barnard, 1938) • Underlying the concept of organization is the need to cooperate to achieve a result not within the reach of the individual (Barnard, 1938). • «The Boulder Parable»→ A wayfarer with his cart while walking along a path comes across a large boulder at one point that blocks his path. On his own he is unable to move it. So he waits for someone else to pass with him so that together they can remove it. Despite the fact that four of them have to pass, they cannot move the boulder. Someone sees a farmer at work with his tractor in the distance. He has no common interests with the other four people. Until he is offered to help with his tractor to move the boulder in exchange for a sum of money. The farmer accepts. Only at this point does everyone's goal coincide. The organization as an “open system” An open system must interact with the environment to survive. The organization is a set of interacting elements that acquire inputs from the environment, transform them and return outputs to the external environment. Organizations are (R. Daft, 2007) (1) social entities (2) goal-directed (3) designed as deliberately structured and coordinated activity systems (4) linked to the external environment The organization as linked to the external environment →The Open System Theory: the open system model provides a useful basis of analysis. All business organizations can be seen as ‘open systems’ which take inputs from the external environment. Through a series of activities these inputs are transformed or converted and returned to the environment in various forms of outputs. The General System Theory A SYSTEM is a network of relationships. All systems contain smaller systems called SUBSYSTEMS. All systems are part of a larger external environment, the MACROSYSTEM. Interdependency: state of mutual dependence and independence existing at the same time. Example: the case of a hotel Another representation Objectives and policy are formulated within the framework of the corporate strategy. Importance of competition has lead to importance of corporate strategies. Managing means managing the entire context, if you skip out one element it won’t work. Effective management takes place within the total corporate context and involves established relationship and coordination among all levels of the organization. Organizational structure and design The organization is affected by external environmental influences (of all kinds) and in turn it influences the organizational structure which is developed to ensure the effective coordination of all activities and functions. Organizational performance is dependent upon the process of matching structure, strategy and environment. Organizational structure comes from organizational design activities. Organizational structure is the result of a long-term commitment to the effectiveness and efficiency of the service enterprise. (The only time of changes to the organizational chart is appropriate during phase of growth or reengineering). Effective organizational design is based on the principle that structures follows strategy. This allows potent co- ordination of activities and optimizes organizational direction. Miles and Snow’s Strategy Typology (1978) o Structure is the pattern of relationships among positions in the establishment and among members of the staff. o Structure creates a framework in order and command through which the work activities are planned, organized, directed and controlled. o Structure gives shape to the establishment and provides the basis for organizational processes and the execution of work. o The purpose of the structure is to define: • Division of work • Task and responsibilities • Work roles and relationship Structure and effective performance In order to achieve its goals and objectives the work of the establishment has to be divided among its members. Structure is necessary for the effective performance of key activities and to support the efforts of staff. It provides accountabilities for area of work undertaken by groups and individual members of staff. The correct design of a structure is a major determinant of effective organizational performance. The need for the “MATCHING” requires the continual review of the structure→ “Good organization structure does not by itself produce good performance. But a poor organization structure makes good performance impossible” (Drucker). Managers need to consider how structural design and methods of work organization influence the behaviour and performance of members of the establishment. Structure will affect: o Economic efficiency and performance o Morale and job satisfaction 4/03 Main approaches to organization structure design→ four-fold categorization: o Classical approach – including scientific management and bureaucracy o Human relations approach – including structuralist perspective o System approach o Contingency approach It is important to emphasize that no single approach provides all the answers. It is the comparative study of different approaches which yields benefit for the manager. The skill of organizational design lies in taking from the different approaches those ideas which suit best in the particular situation requirements. Some scholars in Organization Theory: o Adam Smith (economist) o Friederick Taylor (engineer) o Max Weber (sociologist) o Henry Fayol (political and administration science) The necessary plurality of theoretical approaches highlights two aspects: the impossibility of proving the superiority of one theory with respect to the others; the most recent theories do not replace the previous ones but they complete and enrich them. The classical approach o Early part of 20th century. o Taylor, Weber and Fayol. o Emphasis on purpose, structure and technical requirements. o Importance of set of principles. o Increase efficiency. o Focused on: division of work, reporting relationships, clear definition of duties and responsibilities, maintaining specialization and coordination Scientific management (Taylor, 1856-1917) o Emphasis on increased productivity form individual workers o Efficient methods and procedures for the coordination and control of work o Monetary incentives are the primary motivator The principles of scientific management: o The scientific selection, training and development of workers o The clear division of work and responsibilities between managers and workers o Close management control over the actual process of work All work processes could be analyzed into discrete tasks and that by scientific methods it was possible to find the ‘one best way’ to perform each task. Each job was broken down into component parts, each part timed, and the parts rearranged into the most efficient method of working. Criticism to scientific management: ➢ Instrumental view of human behavior ➢ Individuals as units of production to be handed ➢ Jobs repetitive, boring and requiring little skill ➢ Close management control over workers ➢ Removing decisions on how work is carried out (management control the process) Relevance to the hospitality industry→ Systematic approach to management (job analysis, systematic selection and training, payment by results, production control and management by exception); most efficient and productive methods of work (efficiency of ‘production areas’); standards (recipes, performance standard manuals, layout for each room, training based on procedures and standards) Bureaucracy (Weber)→ common form structure in large-scale establishment. NEGATIVE CONNOTATION! The Cambridge Dictionary says “bureaucratic” refers to something “involving complicated rules and processed that make something slow and difficult”. Max Weber (German sociologist) suggested that the main reason for the growth of “bureaucratic organization” was purely technical superiority over any other form of organization. The main characteristics of a bureaucracy: • Clear role definitions of duties and responsibilities • Division of labor and a high level of specialization • Hierarchical structure of authority • Uniformity of decisions • Elaborate system of rules, procedures and regulations • Employment based on technical qualifications and formally attested merit • Impartiality in undertaking duties and responsibilities What are the main disadvantages? ➢ Over emphasis on rules and procedures (means and ends) ➢ Members may develop a dependence upon bureaucratic status, symbols and rules ➢ Initiative may be stifled and there is lack of flexibility or adaptation to changing environment ➢ Impersonal relationships can lead to stereotyped behavior and lack of responsiveness to individual situations or problems Tourism Industry bureaucracy dilemma→ how do you think bureaucracy could be relevant to the tourism industry? Pros: o Increasing size and complexity of modern work organizations o Demand for effective operations and need for careful design of structure and the definition of individual duties and responsibilities So the contingency approach is based on the ‘if-then’ relationship. So, IF certain situational factors exist, THEN certain variables in organizational structure and systems of management are most appropriate. Important variables include: o Size: not easy to measure; most common is number of bedrooms for hotel associated with the number of staff employed. In other cases range of facilities… What about a very small hotel with six bedrooms and run by a husband and wife? o Technological processes: it is related to consider how the nature of the production technology process accounts for differences in the patterns of structure and systems of management. What about a family-run small country club hotel, compared to a fast-food chain? o Environmental influences: two important studies have focused on the effects of uncertainty and of a changing environment on organization, on its management and structure. These are: Burns and Stalker – mechanistic and organic organization – and Lawrence and Lorsh – differentiation and integration model Talking about technology: it is the set of principles, rules and technical processes that guide the transformation of input into output (making them suitable for specific purposes) to achieve a purpose, an objective. Exceptions: if we have few, then there is a routine technology so we talk about standardized services (e.g. Mc Donald’s). Environmental influences Burns and Stalker – Mechanistic and Organic organization The authors investigated the relationship between: o Pattern of structure o Nature of external environment o Economic performance Two ideal types (opposite extremes of a continuum). In practice most organizations are likely to be a mix of both two structures! The mechanistic organization→ rigid, hierarchical structure. Characterized by: closely defined duties, responsibilities and technical method, the specialization of tasks, knowledge centered at the top of the hierarchy, instructions from superiors and vertical interaction between superiors and subordinates. Drawnbacks: o No ability to deal with rapid change o More appropriate for stable environmental conditions Example: Traditional, high class and expensive hotel operating along classical lines and with established reputation and type of customer The organic organization→ flexible and fluid structure. Characterized by: network structure of control and authority, lateral communications based on information and advice, knowledge throughout the organization, continual redefinition of tasks and commitment to the common task of the organization. o Required when new problems and unforeseen circumstances arise constantly o More appropriate for uncertainty and changing environmental conditions Example: Country club hotel with different functions: wedding receptions, corporate sports days, meet particular requirements. Case 3M→Approximately 30% of the turnover came from products that did not exist in previous 4 years. In 3M the percentage of turnover obtained from new products, the growth rates of turnover, profitability rates are considered as the main indicators of their effectiveness. Group level - System that encourages communication - Cross-functional teams - Internal recruitment of members Individual level - 15% rule - Eleventh commandment: "you will not kill new product ideas" - Tolerance of ‘failure’ - Culture of time tolerance Organizational level - Higher degrees of decentralization - Divisional structure Mechanistic and organic organizations characteristics: Organizational design as a response to contingencies Mechanistic structures are appropriate in “placid” conditions where there are only minor and, usually, slow environmental change. According to Robbins (2001) mechanistic structures are best suited to the following strategy: “cost minimization”: tight control with extensive work specialization, high formalization and high centralization→ strategy: cost leadership (Porter) Organic structures work best where these conditions are dynamic and there is a need for continual flexibility to cope with fluctuating changes. According to Robbins (2001) organic structures are best suited to the following strategy: “innovation”: loose structure with low specialization, low formalization, and decentralization→ strategy: differentiation (Porter) Mechanistic organizational structures Characteristics: - Classical solution to the problem of structuring sizeable and complex operations - Many departments (horizontal differentiation) tasks are split up to make clearly defined specialized jobs - Several levels between higher and lower positions (vertical differentiation, tall organization) - Centralized (decision making in highest levels) - Formalized (standard) rules, policies and procedures Strengths and weaknesses: difficulty in adjustment to external change and problem with internal communication; coordination and control are easier that in the organic design. Organic organizational structures Characteristics: - Fewer levels of authority - Simpler structures - Less formality - Decentralized and employees with more discretion in decision-making - Employees with generalist skills (not highly differentiated) - Lateral communication and coordination are emphasized minimizing centralized management decision Main strengths and weaknesses: easy to adjust to external change; coordination and control might be more difficult than in the mechanic design. Lawrence and Lorsh studies→They studied ten firms in three industries: plastic, food and containers. The three industries were deliberately chosen as they differ significantly in the environmental uncertainty associated with each one. The underlying hypothesis was that: internal environments of the firms must match the external environmental requirements, so that the better the match the more successful the firm. Differentiation and Integration →differentiation: different departments may have their own distinctive form of structure according to the nature of their task, different demands of the environment and different levels of uncertainty. →integration: refers to the degree of coordination and cooperation between different departments and attempts to achieve unity of effort. They focused on the way in which specific departments were organized to meet different aspects of the external environment. The degree of differentiation and integration vary according to the demand of environment. Unstable environment leads to high degree of differentiation and integration. Structure and environment (Lawrence and Lorsh 1967)→ in the contingency model, the environment is characterized as a situational factor to be taken into account in designing the organization. The purpose of the structures is to coordinate, communicate, and control individual actions (the ones that the individuals can carry out. We know that in organizations, the most variable aspect is employees) to support the strategy, and to facilitate workflow, permit management control and create doable jobs. Dimensions used to characterize an organization’s structure→ Some dimensions may be used to characterize an organization’s structure. Each of these dimensions represents an organizational design decision, and these decisions have consequences with regard to organizational behavior. So that, conscious decisions are made regarding: the degree of specialization, formalization, professionalism, centralization and levels of authority necessary to operate an organization. Over time, decisions are redesigned to accommodate growth and changes. Organization basic dimensions: Contextual and structural Contextual dimension (contingency variables): characterizes the whole organization: o Size o Environment o Technology o Goals and Strategy o Culture Structural dimension: internal characteristics of the organization that create the basis for measuring and comparing organizations: o Hierarchy of authority: how tall the organization is o Span of control: how many subordinates there are under one supervisor. It is linked to the scalar chain (from the highest to the lowest level of the organization) o Centralization: where the decisions are taken (specific part of the organization or spread) o Formalization: how many written rules there are regarding the activities of the organization o Specialization: how many tasks a single individual has to carry out o Professionalism: related to the degree of education of the workforce All of these have to be consistent with each other. For example, the higher the centralization, probably the higher the formalization, and viceversa. Design of structure (Enz) and harmonization with objectives (Mullins & Dossor) «Structure must harmonize with the goals and objectives of the establishment. […] A clear definition of goals and objectives provide a basis for the division of work and grouping of activities in sub-units. The objective for the sub- units must be related to the overall strategy of the hotel in order that an appropriate pattern of organization structure is established”. So, after clearing the goal you have to divide the work, firstly in terms of job positions and then in organizational units. “Activities and people are usually subdivided into departments and groups so that employees may specialize in a limited number of activities and focus on a limited set of responsibilities. The formal structures specify how work is organized and identifies the number and types of departments or groups and provides the formal reporting relationships and lines of communication among internal stakeholder” There’s a need to establish a framework of order and command by which the activities of the establishment are accomplished successfully→hierarchy of authority: formal reporting relationships among levels and across functions and departments. Who reports to whom→this is linked to span of control: the number of direct reports to a single manager. When spans of control are narrow the hierarchy tends to be tall, wide would be shorter. The more direct reports, the wider the span of management. The average width of total spans of control is used to determine the height of the organization’s structure. Organizational structure ranges from tall to very flat across organizations. The current trend is to have more flat organization. Tall organization: a tall, narrow structure means that there are multiple levels between the CEO and the customer. Merits: close supervision, close control, fast, communication between subordinates and their superior. Demerits: superiors tend to get too involved in subordinates work, many levels of management, high cost due to many levels, distance between the top and the lowest level. Flat organization: a flat wide structure means fewer levels and wider span of control for managers (number of reports), so: higher use of cross-functional and self-management teams. Merits: superiors are forced to delegate, clear policies are made, subordinates are carefully selected. Demerits: tendency to overload superiors (to become decisions bottlenecks), danger of superior’s loss of control, requires exceptional quality of managers. Centralization and decentralization→ degree of centralization: where lies, within the organizational structure, the decision-making authority, in other words the hierarchical level who decides. A highly centralized organization is an organization where the decision-making authority is concentrated in one (or more) position (s) in the top management. A decentralized structure puts more decision-making authority in the hand of lower-levels managers, that is when decisions are delegated to lower organizational levels, or at least spread to various individuals. Example of centralized organization: Mc Donald’s Specialization→The degree to which the tasks of the organization are divided into separate jobs. Some organizations have highly specialized structure, with people focusing on one particular task or function (narrow range of tasks). The advantage is that people can get very good at what they do. Other organizations expect people to be skilled in a number of tasks (low specialization – wide range of tasks). Formalization→ Describes the extent to which formalized rules, policies, job description, regulations and procedures manuals exit within the organization and the extent to which people actually follow them. According to Daft it refers to “the amount of written documentation in the organization”. A high level of formalization can lead to efficiency but may reduce the flexibility that is sometimes required to satisfy consumers Professionalism/Configuration→ it refers to the level of formal education and training possessed by employees. All these dimensions are very related to the others. In the case of an accountant we have high professionalism and specialization, and low formalization; in the case of a manager, we have high professionalism and low specialization and formalization. Contingency factors (or contextual dimensions) encompass larger elements that influence structural dimensions, including the organization’s size, technology, environment, culture, and strategy. Structural dimensions provide labels to describe the internal characteristics of an organization, represent a basis for measuring and comparing organizations. Exercise in class Stable environment: o Formalization very high o Specialization very high o Centralization high o Configuration low Critical/dynamic environment o Formalization balance o Specialization low o Centralization low o Configuration high Routine technology o Formalization high o Specialization low o Centralization high o Configuration low Non-routine technology o Formalization low o Specialization low o Centralization low o Configuration high Small size o Formalization low o Specialization low o Centralization middle o Configuration high Big size o Formalization high o Specialization high o Centralization high o Configuration low 11/03 Organization design as a decision process STRUCTURAL CHARACTERITICS - BASICS IN ORGANIZATION DESIGN→ Internal characteristics of the organization that create the basis for measuring and comparing organizations. 1. Hierarchy of authority 2. Span of control, Scalar chain… 3. Centralization 4. Formalization 5. Specialization 6. Professionalism The six dimensions capture the formal arrangement of people, activities, decision making authority. Each dimension represents a decision, and each decision have an impact on individual and organizational behavior. Conscious decisions are made regarding the six dimensions. Over time decisions are revised and organizations are redesigned to accommodate changes. When a new strategy is formulated a new structure need to be established (needed to execute a strategy under the right system of coordination, communication and control). «Structure must harmonize with the goals and objectives of the establishment. A clear definition of goals and objectives provide a basis for the division of work and grouping of activities into sub-units. The objective for the sub- units must be related to the overall strategy of the hotel in order that an appropriate pattern of organization structure is established» «Activities and people are usually subdivided into departments and groups so that employees may in a limited number of activities and focus on a limited set of responsibilities. The formal structures specify how work is organized and identifies the number and types of departments or groups and provides the formal reporting relationships and lines of communication among internal stakeholder» and personnel analysts (including trainer or recruiters) who standardize skills. The staff support the functioning of the operating core indirectly (outside the basic flow of operating work). Examples are cafeteria, payroll, public relations, R&D. Task and element functions (Mullin and Dossor) Task functions= basic activities which are related to the actual completion of the ‘productive’ process, and directed towards specific and definable end-results. Element functions= those activities which are not directed towards specific and definable ends but are supportive of the task functions (planning, administrative support, quality control, maintenance). Structure should be centered around key activities which directly relate to PRODUCTS, SERVICES and FACILITIES. Element functions are service and supportive functions! How to design an organizational chart? A chart may show: o how work is divided, o the span of control, o the levels of authority, o formal relationships, o outline of the management structure and grouping criteria (departmentalization), o main positions (and sometimes names of senior holders). o Usually in the traditional vertical form The organizational chart is useful for: • Providing a pictorial presentation of the structural framework of the establishment and its main activities • Helpful for part of the staff induction manual • Basis for the analysis and review of structure • Training and management succession • Formulating changes But it has some limits: only a static view of the establishment; does not show lateral contacts; does not show delegation from superior to subordinate; relationships between staff and line positions→ does not show the informal structure! 14/03 The formal and informal organization →The formal organization is deliberately planned and created. It is hierarchically structured with the division of tasks, and defined relationships of authority and responsibilities. Within a formal structure an informal organization will always be present. People tend to modify the formal organization, methods of operations and actual working practices. What happens in practice may vary from the formal structure. An organization is a social entity with own social groupings and relationships, interactions of people, psychological needs… →Informal organization: a number of benefits as satisfaction of members’ social needs, motivation through status and social interaction, additional channels of communication, feeling of stability and security, may highlight weaknesses of formal organization. IMPORTANT TO RECOGNIZE THE EXISTENCE OF INFORMAL ORGANIZATION AND TO MANAGE IT (TAKING ADVANTEGE)!!! Division of labor brings to the need for managing interdependencies…how to do it? 1) Grouping activities (Departimentalization);2) Coordination mechanisms We have already seen the groupings. Now we see the coordination machanisms→ usually organizations do not have a single unique coordination mechanism. 18/03 Making decision on how to structure an organization→When making decisions about how to structure an organization, it is important to remember the following: o Structure is not an end; it is a means to an end. The end is successful organizational performance o There is no one best structure. A change in organizational strategy may require a corresponding change in structure to avoid administrative inefficiencies, but the organization’s size, strategies, external environment, stakeholder relationships, and management style all influence the appropriateness of a given structure. All structures embody trade - offs. o Once in place, the new structure becomes a characteristic of the organization that will serve as a constraint on future strategic choices. o Administrative inefficiencies, poor service to customers, communication problems, or employee frustrations may indicate a strategy – structure mismatch. The 6 types of organizational structure 1. Simple management structure 2. Functional structure 3. Geographic or customer (3.1) structure 4. Project structure 5. Matrix structure 6. Network structure 1. SIMPLE MANAGEMENT STRUCTURE It relies on the simplest management structure (the entrepreneurial structure), sometimes called the owner/manager structure. This form is common for smaller firms (e.g. small hotel and restaurant companies). • This form is common for smaller firms (e.g. small hotel and restaurant companies). • The owner is the top manager and makes all of the important decisions and directs the efforts of all employees, and does many of the tasks necessary to operate the business • Little degree of specialization • Reporting relationships are very informal • No or little formalization (no job descriptions or formal performance reviews exist) • Everyone in the company is par of a ‘family’ 2. FUNCTIONAL STRUCTURE The most common way in which companies are organized. Based on putting people in groups or departments based on their shared expertise (functions). Organized around the common activities or similar tasks performed by individuals. Most appropriate when a limited service or product line is offered to a particular market segment and when the needs of external stakeholders are relatively stable. The structure is: • centralized, • highly specialized, • oriented toward internal efficiency • appropriate in organizations that want to exploit economies of scale, efficiency, and learning effects from focused activities. ADVANTAGES DISADVANTAGES • Economies of scale within departments may lead to efficiency • Allows development of functional expertise and specialization • Best in organizations with few product services • Slow response time to environmental changes • Hierarchy overload from decisions collecting at the top • Poor coordination across departments • Restricts view of organizational goals 3. GEOGRAPHIC STRUCTURE Based on putting people in groups or departments based on ‘outputs’ so markets or customers we intend to reach. It is organized around a common goal to achieve. Also named M-Form (Multidivisional-Form) or Divisional Form. In the hotel and restaurant industry, organizations often grow by adding hotels or restaurants in new locations. Those corporations that organize on the basis of expanding into new locations are using a geographic structure. 3.1. CUSTOMER-BASED STRUCTURE If the organization structures its units’ design around the characteristics or types of customer, we have a customer-based structure. Firms that pursue growth through market development seek out new customer groups. If sales to a particular new type of customer reach sufficient volume, the organization may reorganize around customer groups. ADVANTAGES DISADVANTAGES • Suited to fast change in an unstable environment • High levels of client satisfaction (focus on unique needs or local market conditions) • High coordination across functions • Lose economies of scales • Some functions are redundant within the organization Advantages Disadvantages • Enables even small organizations to obtain talent and resources worldwide • Gives a company immediate scale and reach without huge investments in factories, equipments… • Enables the organization to be highly flexible and responsive • Reduces administrative overhead costs • • Managers do not have hands-on control over many activities and employees • Requires a great deal of time to manage relationships and potential conflicts with contract partners • There is a risk of organizational failure if a partner fails to deliver or goes out of business • Employees loyalty and corporate culture might be weak because employees feel they can be replaced by contract services 25/03 A quick reprise on terminology (by Nickson)→ corporate vs. organizational culture Legge (1994) cautions against uncritical use of the terms ‘organizational’ and ‘corporate’ culture. For example, she argues that ‘in using the term “corporate” culture, many writers seem to be imputing a culture created by senior management for the lower orders to swallow’ (p. 407). On the other hand, «organizational culture» reflects the manner in which the culture emerges from social interaction among members. → Can organizations use culture to create integration and cohesion? Organizational culture- some definitions There are a multiplicity of definitions of “organizational culture”: o Deal and Kennedy (1988: 4): ‘The way we do things around here.’ o Brown (1998: 9) ‘Organizational culture refer to the pattern of beliefs, values, and learned ways of coping with experience that have developed during the course of an organization’s history, and which tend to be manifested in its material arrangements and in the behaviors of its members.’ o Atkinson “what is acceptable and not acceptable” o McLean and Marshall (1983) ‘The collection of traditions, values, policies, beliefs, and attitudes that constitute pervasive context for everything we do and think in an organization’. o Schein: “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.” All organizations have their own culture. Organizations should use OC to unlocking commitment and enthusiasm of employees→ but it’s a contrasted process. We have to distinguish the subculture= in case all organizational members might not subscribe to the organizational vision. Another aspect to consider is the espoused culture: the positive view that is presented for public consumption (stated values and norms that are preferred by an organization); and also the culture in practice (enacted culture): may allow for a more critical reading of any given organizational culture (values and norms that are exhibited by employees). If you have a mismatch between these two what might happen? Tensions or misunderstandings with the outside. We also have these two concepts: subculture and counterculture Subcultures= located in different divisions, occupational groups, geographical areas, etc. Each individual subculture has its unique set of characteristics distinguishing it from others. But together they operate as a whole. Countercultures= they are a type of subculture that may disregard organizational norms and values thus creating new ones. They develop when people do not conform to the mainstream and have their own beliefs and own material culture. There are problems with cultural integration and counterculture is in opposition to the organization. Is culture manageable? Ogbonna and Harris (2002) categorize the range of work on organizational culture into three broad labels: o Optimists o Pessimists o Realists The optimists→ Scholars in 1970s-1980s say culture can be used as a mechanism to facilitate organizational unity and cohesion. The optimists’ view relies on a lot of assumptions: o Assumes unitary cultures in organizations o Cultural control by top management (possible and desirable) o Potentially positive relationship between organizational culture and business performance. The pessimists→Research and theorizing by academics from the 1980s developed the ‘explanatory power’ of the culture concept rather than in identifying its practical utility for managers and organizations (largely theoretical!!). The pessimists’ view: o Pessimist main concern is NOT in identifying OC practical utility (despite in the 1980s it was frequently questioned the extent to which organizations can manger culture successfully…) o Culture is a complex issue and it was oversimplified by the optimists; o Culture is located at the deepest level of human consciousness and neither researchers nor managers have sufficient knowledge to influence; o Critique to the unitary assumption cultures in organizations pessimist point to the potential for conflict and contradiction in organizations. The realists→Many researchers are increasingly seeking for a middle-way between optimist and pessimist that has led to the emergence of a realist research agenda. The realists’ view: o Recognize that potentially culture can be changed (they are neither in support nor against the management of organizational culture) o Eschew the idea that this process will always be controlled by top management o Realists are neither in support nor against the management of OC o They advocate fuller understanding about the application of the concept and the dynamic of cultural change (crisis, formation of the organization, turnover) o It aims at merging theoretical rigor with contributions to the practice How to study organizational culture? Wood’s vision: much of culture is invisible or at least unspoken. o Visible or manifest level. Slogans, ceremonies, myths, sagas and legends, uniforms, building design o Immediately not visible, at strategic level. Beliefs about strategic vision, product market expectations, internal approaches to management o Deeply submerged level, level of deep meaning. Values and assumptions that the organization operates. Schein’s three layers of organizational culture→ In his well-known model Schein describes three levels of cultural phenomenon in organizations that are visible manifestations, values and deepest level of basic underlying assumptions. • Artefacts and creation. The physical and social environment of the organization. The most superficial manifestation of OC and includes things like corporate logos, dress codes and written and spoken language used in the organization. • Values, beliefs and attitudes. Prominent in the manner in which individual members justify their actions n behaviors. The more the members hold these core values as unquestionable the more the culture is strong. • Basic assumptions. Basic and tacit which impact on how members perceive, think and feel. So taken for granted that members would find behavior based on any other premise as inconceivable. Brown (1998) has identified a number of aspects or elements of OC that are useful to study OC: o Material objects o Corporate architecture and corporate identity o Symbols o Language o Metaphors o Stories o Myths o Heroes o Ceremonies, rites and rituals o Norms of behavior o Values, beliefs and attitudes o Basic assumptions o Ethical codes o History Material objects, corporate architecture, corporate identity and symbols Visible and manifest way in which OC can be assessed! →Examples: o Mission statements (material objects) o Symbols and Artefacts (portray of brand image/materialize the concept of a company)… are symptoms of OC (like dress, pins, plaques, trophies, certificates, banners, posters etc.) and are defined as “those aspects of an organization’s culture used by its members to reveal or make more comprehensible the conscious and unconscious actions, values, and feelings inherent in the organization (Armenakis et al, 1996, p. 123)”. ➢ Influence the perception of people ➢ Add value ➢ Differentiate from other companies (making it appear unique). o Appearance of the staff, software services (use of uniforms, dress codes and appearance standards) Language and metaphors→Front-line tourism and hospitality employees should constantly be in a positive, joyful and even playful mood. Service organizations increasingly aim to create performativity through the use of perfomative labor, that is «the rendering of work by managements and employees alike as akin to a theatrical performance in which the workplace is constructed as similar to a stage». Language and methaphors aim at constructing a common understanding may further favor also the understanding of organization abstractions such as ‘good service’, ‘high quality’ and ‘excellence’. Stories, myths, and heroes→Stories are an important part of an organization’s culture due to their ability to transmit cultural values (exeplify core values in the organization). Heroes personify the organizational values and epitomize the streght of the organization (role models for employees to follow). Example: the Ritz-Carlton hotel uses stories to highlight how focused the company is on exceeding customer’s expectations. They share ‘wow stories’ that explain tales of staff members going above and beyond the call of duty for customers. OCAI Model The OCAI model by Cameron & Quinn's is based on competing values framework. The research revealed six key dimensions which formed the basis of their framework on organizational culture: dominant cultural characteristics, organizational leadership, management of employees, organizational glue, strategic emphasis and criteria for success. These categories yielded two key cultural dimensions, each with a competing value. The first dimension is determining if a company's culture is internally or externally focused. The second dimension is whether organizations acted with flexibility or with stability. When placed on two axes, these two dimensions form four quadrants, each representing a type of OC. An organization do not have only a single culture orientation but rather each organization have a mix of the four…!!! • Clan Culture “is characterized by a friendly place to work that feels like an extended family. Leaders are thought of as mentors and perhaps even as parent figures. The organization is held together by loyalty and tradition. Commitment is high. The organization emphasizes the long-term benefit of individual development, with high cohesion and morale being important. The organization places a premium on teamwork, participation, and consensus.” • Adhocracy Culture “is characterized by a dynamic, entrepreneurial, and creative workplace. People stick their necks out and take risks. Effective leadership is visionary, innovative, and risk-oriented. The glue that holds the organization together is commitment to experimentation and innovation. The emphasis is on being at the leading edge of new knowledge, products, and services. Readiness for change and meeting new challenges are important. The organization’s long-term emphasis is on rapid growth and acquiring new resources.” • Hierarchy Culture “is characterized by a formalized and structured place to work. Procedures govern what people do. Effective leaders are good coordinators and organizers. Maintaining a smooth-running organization is important. The long-term concerns of the organization are stability, predictability, and efficiency. Formal rules and policies hold the organization together.” • Market Culture “is a results-oriented workplace. Leaders are hard-driving producers and competitors. They are tough and demanding. The glue that holds the organization together is an emphasis on winning. The long-term concern is on competitive actions and achieving stretch goals and targets. Outpacing the competition and market leadership are important.” 4/04 Organizational climate Management has the responsibility for creating a climate in which people are motivated to work willingly and effectively. Organizational climate can be said to relate to the prevailing atmosphere surrounding the organization, the level of morale and strength of feelings of belonging, care and good will among members. Culture= “what an organization is about…” → Climate= employees’ feeling and beliefs on what the organization is about. Climate is based on perceptions of employees toward the quality of the internal working environment!!! The characteristics of a healthy climate→ Organizational Climate is characterized by the nature of people- organization relationship and the superior-subordinate relationship • Integration of organizational goals and personal goals • Democratic functioning • Justice in treatment with equitable practices • Mutual trust • Managerial behavior and leadership style appropriate • Recognition of people needs and expectations • Equitable systems of rewards • Concern for quality of working life • Opportunities for development • Sense of identity with the organization The management of Organizational climate→ The climate created by managers will have a significant influence on the motivation and behavior of employees, and is, therefore, an important mean of improving productivity and standards of work performance. Climate will influence levels of morale and attitude which members of organization bring to bear on their work performance and personal relationships. Measuring “climate”: the six dimensions of organizational climate (Mill) Despite morale is difficult to measure objectively there is a number of questionnaires (or attitude survey) that are developed to help to establish the true feelings of members on factors contributing to organizational climate. Management by objectives (MBO) aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees. According to motivational theories, having a say in goal setting and action plans encourages participation and commitment among employees, as well as aligning objectives across the organization. Organizational change Management of change→The ability to deal with change is a key attribute of successful organization (in general as well as in tourism!). Forces of change→ An organization can only perform effectively through interactions with the external environment of which is part. There are factors that create a volatile environment: - Uncertain economic conditions - Globalization and world competition - Government intervention and e.g. European Union legislation - Other sources: knowledge explosion, rapid product obsolescence, scarcity of natural resources, changing nature of the workforce, quality of working life, rapid development of technologies… To respond or anticipate the factors mentioned→ Planned change represents an intentional attempt to improve, in some important way, the operational effectiveness of the organization. The basic underlying objectives: • Modifying the behavioral patterns of members of the organization • Improving the ability of the organization to cope with changes in its environment. Initiating and maintaining a quality of working life change program. Some examples: ▪ A general sense that the organization could perform better ▪ The need to improve flexibility ▪ Sense that skills and abilities of people are under-utilized ▪ The need to introduce changes in technology ▪ Concerns about ineffective communication or poor performance indicators ▪ Poor relationship between managers and subordinates Resistance to change: 1. Individual: it’s “natural”. It appears as a common phenomenon and can take many forms and arise form a combination of factors: fear of unknown (uncertainty), habit, inconvenience or loss of freedom, economic implications, security in the past, threat to status, selective perception (stereotypes) 2. Managerial: changes may experience often resistance at the managerial level, despite the need for change. - Major change often requires large resources - Maintaining stability and predictability (same rules, roles, procedures, method of work…) - Feel comfortable within the «same way of doing things» «what worked well in the past would be good in the future!!!». Managers may set up defenses against change and prefer to concentrate on the routine things - Threat to the power or influence of management (eg., resistance of middle managers for quality circles because of increased empowerment of employees) Successful implementation of change→ Study on behavior modification by Lewin who developed a program of planned change and improve performance. Three phase process: 1. Unfreezing. Reducing those forces which maintain behavior in its present form, recognition of the need for change and improvement to occur. 2. Movement. Development of new attitudes and behavior and implementation of change. 3. Refreezing. Stabilizing change at the new level and reinforcement through supporting mechanisms (eg., new policies, structures and norms). Managing Change Managers must be responsive to change. Management in particular must take proper account of the importance of human and social factors of change. So… o Management need to create an environment of trust and shared commitment, involving staff in decisions o Maintain full and open communication o Emphasize benefits and opportunities of change o Encourage cooperative spirit o Give attention to job design, method of work o Provide suitable economic incentive schemes o Design an HRM action program directed to review strategies to reduce redundancies and other harmful effects on staff Sometimes it may be needed for management to use compulsion and hierarchical authority to impose change even if in most cases the introduction of change is more likely to be effective with participative style of management. 8/04 Job description 10/04 What makes up the tourism and hospitality workforce? A brief snapshot According to a report of ILO (2001) the tourism and hospitality industry largely relies on ‘marginal-workers’ (Wood, 1997) such as: women, young workers, casual employees, students, relatively high numbers of part-timers and migrant workers. - Gender segregation: 63% of chefs are men; 79% of travel agents are women - Young people are prominent: only 19% over the age of 50 (People 1st, 2010), students important segment (ILO, 2001). Work for low wages and be flexible in their working pattern. - Ethnic minority is 14%, higher than the economy as a whole which is 9% (People 1st, 2010). - Migrant labor one-fifth of the workforce were born overseas (Lucas and Mansfield, 2010). Human Resource Management We recognize HRM as being broadly about how organizations seek to manage their employees in the pursuit of organizational success. Storey (1995: 5) ‘HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.’ The challenge of HRM is on how to recruit, deploy, develop, reward and motivate staff leading to them being a source of competitive advantage. What are the HR departments’ main practices/activities? Functions of HR o Job Analysis o Recruitment: The process of generating qualified pools of applicants for positions. o Selection: The process of choosing the best applicant for each position. o Training: Provides knowledge and skills required for employees to perform in current positions. o Development: Provides abilities required for future promotional opportunities within the organization. o Employee Relations: Strategies aimed at improving the retention and lessening the turnover of employees. o Performance Management system: Clearly established expectations for performance and honest, objective feedback on how well an employee meets those expectations. Hard and Soft version of HRM There is more than one route to seeking competitive advantage and this point is further considered in examining the notion of ‘hard’ and ‘soft’ HRM. Storey (1987) outlined two ideal types of human resource management: Hard vs Soft version of HRM. - Instrumental/rational/hard version: Human resource management is driven by strategic considerations to gain competitive advantage, maximizing control while achieving the lowest possible labor cost. This approach is quantitative and calculative and labor is a commodity/resource, the same as any other. The focus is on the resource management aspects of HRM. - Humanistic/developmental/soft version: Human resource management is more consensual, based on a high level of managerial commitment to employees, which supposedly leads to high trust, high productivity and so on. Employees are seen as being proactive and capable of development and worthy of trust and collaboration. The focus is on the human aspects of HRM. According to hard-soft view employers will vary their people-management strategy. How organizations may engage in both hard and soft HRM approaches simultaneously? By contrasting approaches for pursuing a low cost business strategy in the airlines industry→ example Ryanair vs Southwest ‘Best fit’ vs. ‘Best Practice’ HRM - The ‘best fit’ school of thought→ argues for an approach to HRM that is fully integrated with the specific organizational and environmental context in which they operate - The ‘best practice’ school of thought→ argues for a universalistic approach to HRM in which all firms who adapt a range of agreed HR policies and practices are more likely to create a high-performance/commitment workplace as organizations aim to compete on the basis of high quality and productivity. The ‘Best fit’ School of Thought→ One of the earliest and most influential attempts to develop a model that recognized the need for a fit between the competitive strategy and HRM. Schuler and Jackson (1987) developed a series of typologies of needed role behaviors that enabled the link between competitive strategy and HRM practices: • Innovation strategy • Quality enhancement strategy • Cost reduction strategy The ‘best practice’ school of thought→ Pfeffer (1994; 1998) initially identified 16 practices that denote best practice, which were later refined to seven practices: 1. Employment security 2. Selective hiring 3. Self-managed teams/team-working 4. High compensation contingent on organizational performance 5. Extensive training 6. Reduction in status difference 7. Sharing information Redman and Matthews (1998) identify a ‘HRM bundle’ of key practices that support service organizations’ quality strategies, these being: - Recruitment and selection – recruiting and selecting staff with the correct attitudinal and behavioral characteristics. A range of assessments in the selection process should be utilized to evaluate the work values, personality, interpersonal skills and problem-solving abilities of potential employees to assess their ‘service orientation’. - Retention – and the need to avoid the development of a ‘turnover culture’, which may of course be particularly prevalent in tourism and hospitality. For example, the use of ‘retention bonuses’ to influence employees to stay. - Teamwork – the use of semi-autonomous, cross-process and multifunctional teams. - Training and development – the need to equip operative-level staff with team-working and interpersonal skills to develop their ‘service orientation’ and managers with a new leadership style, which encourages a move to a more facilitative and coaching style of managing. - Appraisal – moving away from traditional top-down approaches to appraisal and supporting things such as customer evaluation, peer review, team-based performance, and the appraisal of managers by subordinates. Generally, all of these performance appraisal systems should focus on the quality goals of the organization and the behaviors of employees needed to sustain these. - Rewarding quality – a need for a much more creative system of rewards and in particular the need for payment systems that reward employees for attaining quality goals - Job security – promises of job security are seen as an essential component of any overall quality approach. - Employee involvement and employee relations – by seeking greater involvement from employees, the emphasis is on offering autonomy, creativity, cooperation and self-control in work processes. The use of educative and participative mechanisms, such as team briefings and quality circles, are allied to changes in the organization of work that support an ‘empowered’ environment. The HRM circle 1. Attract an effective workforce → HR planning/labor markets + Recruitment and selection 2. Maintain an effective workforce → Rewards and welfare + Labor relations (e.g. the role of trade unions) + Grievance and disciplinary procedures 3. Develop an effective workforce → Training and development + Performance appraisal HRM approach Bluckburn and Rosen (1993) distinguish between two paradigms: “traditional paradigm” of HRM and “Total Quality Paradigm” of HRM. 11/03 Human resource planning: definition→ HRP is a planned analysis of the present and future (quantitative and qualitative) HR needs of an organization and implementation of action plans in order to ensure the adequate supply of HRs. It is an ongoing process. Reasons for HRP: - Put HR to strategic use - Avoid unnecessary risks - Adjustements as soon as the problem is «visualized» - Effective use of HR (both short and long term) - Develop high-level personnel - Upgrated workforce skills and abilities - Top management insight - HRM that complies with the legal requirements and labor unions - Quality of work life, security, trust, absenteeism, accidents, work quality and preventing intention to quit Application forms→ A low-cost way to gather basic data from many applicants. It ensures that the organization has certain standard categories of information: o Contact information o Work experience o Educational background o Technical experience o Memberships in professional or trade groups Backgrounds checks→ 8 out of 10 large companies and 2/3rds of smaller orgs report conducting background checks. Internet allows for faster and easier searching for convictions (60% of males have been arrested at some point). Requests for expunging police records has been on the rise so background checks may not be as complete as employers would prefer. Interview - Quick, convenient and effective - A ‘conversation with a purpose’: • Decide if an applicant is suitable for a job • Decide if a person fit into the existing work group or organization as a whole • Attract applicants to the job • Communicate essential expectation and requirements of the job - One-to-one - Phone-based - Certain «context» conditions required (noise, interruptions, interviewing way etc.) Interviewing effectively 1. Be prepared 2. Put the applicant at ease 3. Ask about past behaviors 4. Listen – let the candidate do most of the talking 5. Take notes – write down notes during and immediately after the interview 6. At the end of the interview, make sure the candidate knows what to expect next Common errors of interviewers (rating errors/assessment) - Contrast errors: the rater compares an individual, not against an objective standard, but against other employees. - Distributional errors: the rater tends to use only one part of a rating scale. • Leniency: the reviewer rates everyone near the top • Strictness: the rater favors lower rankings • Central tendency: the rater puts everyone near the middle of the scale - Rater bias: raters often let their opinion of one quality color their opinion of others. • Halo error: when the bias is in a favorable direction. This can mistakenly tell employees they don’t need to improve in any area. • Horns error: when the bias involves negative ratings. This can cause employees to feel frustrated and defensive Interviewing techniques 1. Non-directive interview. A selection interview in which the interviewer has great discretion in choosing questions to ask each candidate. 2. Structured interview. A selection interview that consists of a predetermined set of questions for the interviewer to ask. 3. Situational interview. A structured interview in which the interviewer describes a situation likely to arise in the job, then asks the candidate what her or she would do in that situation. 4. Behavior description interview (BDI). A structured interview in which the interviewer asks the candidate to describe how he/she handled a type of situation in the past. 5. Panel interview. Selection interview in which several members of the organization meet to interview each candidate. Advantages→ communication skills and interpersonal skills; personality; check accuracy of resume or job application Disadvantages→ costly, subjective (discrimination complaints) Testing - Physical Ability Tests e.g. muscular tension and power, cardiovascular endurance, coordination etc. - Cognitive Ability Tests (sometimes called ‘intelligence tests’) measure mental abilities such as verbal, quantitative & reasoning ability. - Job performance test and work samples. The organization administer tests of the skills necessary to excel in a specific task. Sometimes it involves a sample of work. - Personality inventories. It measures candidates’ personalities (eg. Extraversion, etc.) - Assessment Center. A wide variety of specific selection programs that use multiple selection methods to rate applicants or job incumbents on their management potential. An example of personality test: ‘THE BIG FIVE’ → Personality: Own way of thinking and acting, own unique style. The combination of table physical and mental characteristics that give the individual his or her own identity. How one looks, thinks, acts and feels. Communicating the decision When a candidate has been selected, the organization should communicate the offer to the candidate. The offer should include: - Job responsibilities - Work schedule - Rate of pay - Starting date - Other relevant details The Assessment Center→ An assessment center is a type of work sample test that is typically focused on assessing higher-level managerial and supervisory competencies. Candidates are asked to complete a series of exercises that simulate actual situations, problems and tasks that they would face on the job for which they are being considered, and they are asked to handle these as if they were in the real situation. They typically include role-play exercises, inbasket exercises, analytical exercises and group discussion exercises. Assessment centers may also include other types of assessment methods, such as cognitive ability, job knowledge and personality tests. - Assessment centers usually last at least a day and up to several days. - Trained assessors observe the performance of candidates during the assessment process and evaluate them on standardized rating. - It should be noted that assessment centers are not only used for selection purposes, but can also be used to provide comprehensive development feedback to participants (potential) Work sample tests→ they typically involve having job applicants perform the tasks of interest for the job, while their performance is observed and scored by trained evaluators. It is similar to job knowledge tests, work sample tests should only be used in situations where candidates are expected to know how to perform the tested job tasks prior to job entry Selection process exercise: 3. Get the resume 4. Test (100→50) 5. Group interview (5 groups- 2 exercises- 50→15/20) 6. Interview (15/20) 7. Choice (15/20→3) 29/04 Training and development Training it has an immediate focus on employees enhancing their performance in their current job by focusing on immediate improvement via the provision of certain skills. It enables individuals to achieve the levels of knowledge, skills and competence needed to carry out work effectively. Development seen as more about the growth or realization of a person’s ability and potential through conscious or unconscious learning. Development has a long- term focus and it prepares the individuals for further responsibilities. Some outcomes of good training and development programmes: 1. improve work performance and productivity 2. Quality: Better trained workers are less likely to make operational mistakes. 3. Organizational Climate: Training leads to improved production and product quality which enhances financial incentives and reduces turnover among new and established staff. 4. Health and Safety: Proper training prevents industrial accidents. 5. Personal Growth: Training gives employees a wider awareness, an enlarged skill 6. Attract good workers (talents) The three broad categories in which training can be located: - Socialization initiatives: in terms of induction and becoming familiar with the prevailing organizational culture - Development initiatives: concerned with developing individuals (preparing for promotion, copying with new technology or organizational change) • observation of courses • participation and discussion during the training • appraisal Step 9 – Planning further training After the training and its evaluation, the planning process can begin again. 6/05 Performance management: a set of regular, ongoing HR activities, beginning with careful design of work and clear sharing of performance expectation followed by regular feedback, carried out by managers and supervisors relative to their subordinates to enhance and maintain employee performance toward the achievement of desired performance objectives. Performance management process 1. Job Design 2. Agree on clear Job Performance Goals 3. Provide Direction, Immediate Performance Feedback, and Coaching 4. Monitor Job Progress 5. Conduct Performance Appraisal Performance Management is “a holistic processes which aims to bring together a number of aspects including appraisal” (Chartered Institute of Personnel and Development, 2011). A systematic process to improve organizational performance by developing the performance of individuals and teams. It is a means of getting better results by understanding and managing performance with an agreed framework of planned goals, standards and competency requirements. Performance Appraisal is operationally focused with attention to individual employees short to medium term performance and development. It is defined as “a process of reviewing individual performances against predetermined criteria, involving the gathering of information, one or more meetings and some form of report which may include a performance rating”. In a few works, the appraisal is a process that allows for an individual employee’s overall capabilities and potential to be assessed. Two perspective for appraisal→ There are two main perspective for employees appraisal: ➔ Evaluative perspective, which main aim is to make a judgement about an appraisee’s performance against aspects such as the job description and established objectives ➔ Developmental approach, is likely to have a different premise where the appraiser and appraisee aim to discuss progresses, hopes and fears of the appraise and the final aim is to develop performance by building on employees’ strengths. What factors? How to measure performance? Examples: - Behavioral observation scales allow raters to state the frequency with which they have observed specific job- related behaviors (1-5 scale from ‘never’ to ‘always) - Graphic rating scale - Categories are defined by adjectives such as outstanding, meets expectations or needs improvement. - Ranking method. - Forced distribution method Approaches to appraisal Conducting the Performance Interview - Explain the purpose of the interview. - Discuss self-appraisal. - Share ratings and explain rationale. - Discuss development plans. - Employee summary. - Rewards discussion (if appropriate). - Set follow-up meeting. - Employee signature. - Supervisor recap. - Appeals process. Performance Renewal and Re-Contracting → Final step in performance management process. Readjust based on insight from completed process. Plan for next performance management cycle. Reward strategies Reward composition Other benefits Indeed, organizations will seek to integrate via the use of (usually home-country) expatriate managers to spread the coordinating ‘glue’ of corporate culture to ensure that organizational practices and policies are correctly followed. Why managing international assignments? An expatriate assignment represents a costly investment, estimates range from $ 300.000 to $ 1 million annually; Risk of assignment failure; 10 to 20 percent of US expatriates return prematurely due to dissatisfaction and inability to adjust. Expatriate Preparation, Foreign Assignment, and Repatriation→ Following the thoughtful selection of an expatriate for an extended foreign assignment, a company must consider the importance of pre-departure , foreign experience and repatriation phases to optimize the company’s return on the expatriate assignment investment. - Pre-Departure Preparation Phase - Foreign Experience Phase o Initial International Adjustment o Ongoing Support - Repatriation phase The repatriation shock can be even greater than the initial culture shock of the foreign assignment: 20 to 50 percent leave their firms within a year of returning home. - Planning successful repatriation (well before e.g., six months). - Utilize expatriates new knowledge and expertise (new job or special activities) In understanding why HRM practices differ from country to country it is important to recognize the: • Country-of-origin of the MNC • Country-of-operation o Culturalist perspective o Institutionalist perspective Country-of-origin of the MNC 1) The nationality of ownership is a significant determinant of multinational companies behavior. An example of this would be the proposition that American and Japanese MNCs have in the past tended to be more ethnocentric and reliant on expatriate managers to ensure organizational practices and policies are ‘correctly’ followed (Nickson: “Imperial approach” concerned with close control over foreign subsidiaries, leading to greater formalization and centralization and reliance on formal systems, policies and standard in HR). 2) The extent of the possible national influence on multinational companies behavior manifests more in relation to some issues than others. For example, industrial relations practices are more likely to resemble the practices of local environment. Country-of-operation It is likely that multinational companies (MNCs) in overseas locations will be influenced, to a greater or lesser extent, by the ‘host country effect’. This effect may be manifested in one of two ways: - Culturalist perspective - Institutionalist perspective Culturalist perspective→ it’s important due to 3 reasons: 1. it recognizes the differences of cultural norms, values and attitudes from one society to another, such that people’s thinking is likely to be shaped by what is considered appropriate behavior within that society; 2. different cultural groups will behave differently under similar circumstances because of the differences in their values and attitudes; 3. culture will play a major part in shaping social institutions, work organizations, managerial behavior and personnel policies. In short national culture, at least in part, will have an impact in shaping the values, attitudes and behavior of managers and employees in organizations. Hofstede (1984: 21) sees culture as ‘The collective programming of the mind which distinguishes the members of one human group from another … culture in this sense, includes systems of values, and values are among the building blocks of culture’. Consequently he distinguishes four different layers of culture: • Symbols • Heroes • Rituals • Values What Is Culture? - The socially transmitted behavior patterns, norms, beliefs, and values of a given community. - A derivative of individual experience; something learned or created by individuals themselves or passed on to them by others. - A national and an organizational trait. Hofstede’s four dimensions model Hofstede (1980, 1991) studied 117,000 IBM staff across more than 50 countries and identified the following four basic dimensions of the differences in national culture. • Power distance – This is the extent to which inequalities among people are seen as normal. This dimension stretches from equal relations being seen as normal to wide inequalities being viewed as normal. • Uncertainty avoidance – This refers to a preference for structured situations versus unstructured situations. This dimension runs from being comfortable with flexibility and ambiguity to a need for extremely rigid and certain situations. • Individualism – This examines whether individuals are used to acting as individuals or as part of cohesive groups. This dimension ranges from collectivism to individualism. • Masculinity – Hofstede distinguishes ‘hard values’ such as assertiveness and competition and ‘soft’ or ‘feminine’ values of personal relations, quality of life and caring for others. Criticism – Based solely on IBM employees – Does not allow for existence of subcultures within a country based (e.g., social class, gender and religion) – Cultures remain unchanging over time However, Hofstede model is seen as an important and useful tool for discovering alien culture and it may be used as a practical framework for managers to understand potential cross-cultural differences. Institutional perspective Ferner (1994: 93) ‘There is more to national variation than some nebulous notion of “cultural difference”.’ As a result attention should also be paid to more concrete institutions factors. Tayeb (1994: 431) ‘The term “nation” refers not only to culture, but also to other social, economic and political institutions which have a significant bearing on the management style of organizations located in particular countries.’ The “harder” institutionalist argument is concerned with structural aspects within society and organizations, such as the division of labor and career, status and reward structures. These features generated by the institutions of the host country will affect elements such as education, training and employment/industrial relations systems. What HR practices can a MNC transfer? Ferner (1994; 1997) points to the ‘permissiveness’ or ‘permeability’ of a host country’s institutional and cultural framework, such that certain host countries will be more open to the transfer of the MNC’s home country policies and practices than others. Example: Often the employment/industrial relations system is most often cited as the least permeable aspect of a host-country environment as this may often be based on a state regulated legislative framework (tensions between MNC and national system of host country) The impact of both the culture and institutions means that MNCs has to consider carefully what HRM policies and practices they can transfer because: ‘... not all elements [of an MNCs human resource policies] are “exportable” being too rooted in native cultural assumptions; and second because to varying degrees host countries present obstacles to the “import” of elements of foreign business systems, and colour the operation of those which are transferred.’ Ferner (1997: 33) Schuler et al. (1993) suggests three ways in which MNCs may conform to local circumstances: • What is considered acceptable? • What is considered feasible? • What is legally legitimate? Approaches to corporate HR policies: o Exportive approach, sees central HR policies being exported to subsidiaries and is similar to the ethnocentric mind-set (similar to ethnocentric) o Adaptive approach, sees HR policies subsidiaries reflecting local conditions (similar to polycentric) o Integrative approach draws on best practice HR policies and practices from around the globe in an integrative manner while recognizing the local vocation(similar to geo-centrism)