Needed: People-Centered Managers and Workplaces

Chapter One

Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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After reading the material in this chapter, you should be able to:

• Identify at least four of Pfeffer’s people-centered practices, and define the term management.

• Contrast McGregor’s Theory X and Theory Y assumptions about employees.

• Explain the managerial significance of Deming’s 85-15 rule, and identify the four principles of total quality management (TQM).

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After reading the material in this chapter, you should be able to:

• Contrast human capital and social capital, and identify five measurable outcomes when building human capital.

• Explain the impact of the positive psychology movement on the field of organizational behavior (OB).

• Define the term e-business, and explain at least three practical lessons about effective e-leadership in a virtual organization.

Pfeffer’s Seven People-Centered Practices

• Job security• Careful hiring• Power to the people• Generous pay for performance

• Lots of training• Less emphasis on status

• Trust building 1-4

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Question?

Jeremy, CEO of JNJ Computers, wants to build his company around the people-centered practices. Based on Pfeffer's research, which of these practice(s) should he adopt?

A. Less emphasis on statusB. Generous pay for performanceC. Power to the peopleD. All of these.

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How Important are People

• Factors are a package deal – need to be installed in a coordinated and systematic manner

• Too many managers act counter to their declarations that people are their most important asset

• Undue emphasis on short-term profit

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The 4-P Cycle of Continuous Improvement

Figure 1-1

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Managers Get Results

• Management - process of working with and through others to

achieve organizational objectives efficiently and ethically

• Today’s manager needs to creatively envision and actively sell bold new directions in an ethical and sensitive manner

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A Skills Profile for Managers

• Typical manager’s day is a fragmented collection of brief episodes

• Interruptions are commonplace while large blocks of time for planning are not

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Skills & Best Practices: The Effective Manager’s Skill Profile

1. Clarifies goals and objectives for everyone involved.

2. Encourages participation, upward communication, and suggestions.

3. Plans and organizes for an orderly workflow.

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Skills & Best Practices: The Effective Manager’s Skill Profile

4. Has technical and administrative expertise to answer organization-related questions.

5. Facilitates work through team building, training, coaching, and support.

6. Provides feedback honestly and constructively.7. Keeps things moving by relying on schedules,

deadlines, and helpful reminders.

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Skills & Best Practices: The Effective Manager’s Skill Profile

8. Controls details without being overbearing.9. Applies reasonable pressure for goal

accomplishment.10. Empowers and delegates key duties to others

while maintaining goal clarity and commitment.11. Recognizes good performance with rewards

and positive reinforcement.

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Three Lessons for Managers

1. Dealing effectively with people is what management is all about.

2. Managers with high skills mastery tend to have better subunit performance and employee morale

3. Effective female and male managers do not have significantly different skill profiles

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21st-Century Managers

• Teams are pushing aside the individual• Command-and-control management is giving way to participative management and empowerment

• Ego-centered leaders are being replaced by customer-centered leaders

• Employees are being viewed as internal customers

Evolution of 21st Century Managers

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The Field of Organizational Behavior

• Organizational Behavior- Interdisciplinary field dedicated to better

understanding and managing people at work

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The Human Relations Movement

• Legalization of union-management collective bargaining

• Behavioral scientist called more attention to the human factor

• Elton Mayo – Western Electric Hawthorne study

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The Hawthorne Legacy

• Interviews do not support initial conclusions about positive effect of supportive supervision

• Money, fear of unemployment, managerial discipline and high quality raw materials were responsible for high output

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McGregor’s Theory Y

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• Theory X assumptions - pessimistic and negative, typical of how

managers traditionally perceived employees

McGregor’s Theory Y

• Theory Y - believed managers could accomplish more

through others by viewing them as self-energized, committed, responsible, and creative beings

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Question?

As a production manager of Great Golf Products (GGP), Lorena believes that her employees are capable of self-direction and self-control. She also believes that they are committed to Titanium's objectives since they are rewarded for doing so. Lorena can be described as a:

A. Theory X manager.B. Theory Z manager.C. Futuristic manager.D. Theory Y manager.

What is TQM?

• Total Quality Management- An organizational culture dedicated to training,

continuous improvement, and customer satisfaction

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The Deming Legacy

• Formal training in statistical process control and techniques

• Helpful leadership, rather than order giving and punishment

• Elimination of fear so employees will feel free to ask questions

• Teamwork• Elimination of barriers to good workmanship

What is TQM?

Principles of TQM1.Do it right the first time to eliminate costly rework.

2.Listen to and learn from customers and employees.

3.Make continuous improvement an everyday matter.

4.Build teamwork, trust and mutual respect.

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Question?

John tries to make continuous improvement on his production process each week. This follows the philosophy of _________.

A. Administrative managementB. BureaucracyC. Total quality managementD. Contingency management

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The Contingency Approach to Management

• Contingency Approach - Using management concepts and techniques

in a situationally appropriate manner, instead of trying to rely on “one best way”

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The Age of Human and Social Capital

• Human Capital- The productive potential of one’s knowledge

and actions- A present or future employee with the right

combination of knowledge, skills, and motivation to excel

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Five Human Capital Outcomes Defined

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SOURCE: L Bassi and D McMurrer, “Developing Measurement Systems for Managing in the Knowledge Era,” Organizational Dynamics, no. 2, 2005, Table 2, p 190.

Question?

• Terry supervises the stamping department for Elkay. He has a great reputation for developing and training people. This is an example of __________.

A. Learning capacityB. Workforce optimizationC. Talent engagementD. Knowledge accessibility

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The Age of Human and Social Capital

• Social capital- The productive potential of strong, trusting,

and cooperative relationships

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The Positive Psychology Movement

• Recommends focusing on human strengths and potential as a way to prevent mental and behavioral problems and to improve the general quality of life

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Positive Organizational Behavior

• Positive Organizational Behavior (POB) • the study and

improvement of employees’ positive attributes and capabilities Read Jean-Pierre Neveu’s

article on Positive Organizational Behavior

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Luthans’s CHOSE ModelOf Key POB Dimensions

SOURCE: From The Academy of Management Executive: The Thinking Manager’s Source by F. Luthans. Copyright © 2002 by Academy of Management. Reproduced with permission of Academy of Management via Copyright Clearance Center.

Question?

Griff believes that he can successfully perform any assignment that his supervisor gives him. What POB dimension does he exhibit?

A. ConfidenceB. HopeC. OptimismD. Emotional intelligence

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• E-business - running the entire business via the Internet

• Employees can collaborate online, whether developing new products, creating marketing plans, or resolving billing problems

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The Internet and E-Business Revolution

Question?

Thinkgeek.com only has a business presence on the web. This is an example of a(n) __________.

A. “Brick & Click”B. “Click & Mortar”C. E-businessD. Retailer

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Supplemental Slides

• Slides 39-45 contain extra non-text examples to integrate and enhance instructor lectures - Slide 39: The Value of Management- Slides 40-41: People-Centered Examples- Slide 42-43: Tips for Becoming a People

Developer - Slide 44-45: Video discussion slide

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The Value of Management

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% inc in stockprice

Hi Morale

Low/ModMorale

• "The success of an organization is dependent upon the competence of senior management and the morale of the workforce,“ ~ David Sirota, founder Sirota Research

• “How do you keep management from destroying the workforce?”

Source: Study Sees Link Between Morale and Stock Price, HR Executive Online, March 6, 2006

People-Centered Examples

• Herb Kelleher, Southwest Airlines- “Respect people for who they are, not for what

their titles are.”• Clayton Christensen, Harvard Business School- “You can learn from anyone.”

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People-Centered Examples

• George Zimmer, Men’s Wearhouse- Happy employees attract loyal customers.- Every 5 years full time employees receive a

three-week paid sabbatical on top of their regular vacations

• Jim Sinegal, Costco- Good starting pay, 94% health care costs

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Tips for Becoming a People Developer

1) Motivate people by convincing them to take charge of their own development

2) Integrate the individual’s development plan with the formal performance-improvement process

3) Rely on more training for developing your people

4) Delegate whenever possible to both lighten your load and to challenge and develop your people

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Tips for Becoming a People Developer

5) Really get to know your people and their career aspirations

6) Have at least a three-year development path in mind when interviewing new people

7) Make sure people who take charge of their own development are creatively rewarded

Video Case: Starbucks

• Why does Starbucks view its social responsibility activities not as an expense or requirement, but rather as an “enlightened self-interest”?

• What is the benefit for Starbucks in assisting Latin American farmers in obtaining financing to pay their pickers?

• Why is Starbucks so interested in protecting the interests of the farmers who supply their coffee - aren’t there others they could buy from?

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Video: Pike Place Fish Market

• What does it mean at Pike Place Fish to be world famous? Why does it take some new employees months to understand this concept?

• What role does organizational culture play in Pike Place Fish’s quest to be world famous? Why are other firms such as Coffee Bean & Tea Leaf adopting the “fish” philosophy?

• How does Pike Place Fish create the context for workers to reach their maximum potential? What role does socialization and mentoring play in creating and nurturing this atmosphere?

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