Abstract The different business and organization environment has helped to evolve different management styles. Each of the styles has its own advantages and disadvantages. As the business environment is changing, some management styles are getting more relevant and effective.
Micromanagement has been effective in the past, but does not hold good for the knowledge based industry. It restricts innovation, initiative and reduces team motivation. There are different scenarios in which micromanagement can cause harm to the organization.The critical effect of micromanagement is employee turnover.
With the increasing emphasis on intellectual property, it becomes critical that organizations reduce employee turnover as much as possible. Moving from micromanagement to other management styles can help in achieving this. This paper looks at why micromanagement causes employee turnover and recommends ways in which effects of micromanagement can be reduced in an organization.1.
IntroductionEmployees are the easily the biggest asset of any company. As the markets become more and more competitive, it is essential to retain the best employees to keep the competitive advantage of the organization. While there are several reasons for employees to turnover, one of the major reasons is the immediate manager. Moreover, the productivity of the employee also depends on the managers.
Hence it is critical that the interaction between the employee and the manager is best suited to the organization. It thus becomes fitting to analyze the affects of different managerial styles and its effectiveness in the modern corporate word.Micromanagement is one of the management style and has been followed in traditional business environment. This style has its merits and can be applied effectively in certain types of environments.
However in a general corporate environment, it generally creates unwanted impact on the employees. This thesis is based on the negative effects of micromanagement and how it affects the productivity and retention.1.1.
Study EnvironmentThe study environment is based on the enterprise organizations involving companies involved in industries such as information technology, banking, construction, manufacturing etc. The study also involves organizations of various sizes and operational footprint in terms of different countries. It looks at organizations that have multi-cultural and multi-regional operational environments.The environment does not cover the management aspects of fields like defense, military and other special industries where specialized management principles are followed.
1.2. MethodologyThe following is the methodology adopted for arriving at the conclusion of the thesis1. Analyze cases where micromanagement are generally found2.
Study of various cases in managerial styles and its affect3. Identify the key factors for employees to perform or turnover4. Identify how micromanagement affects the performance or turnover factors for an employee.2.
Literature ReviewThe following sections focuses on the different issues and perspectives of micromanagement. It could be looked from the perspective of leadership, role or effectiveness of a manager. Each of the perspective brings out cases and areas where micromanagement can become stumbling blocks in an organization’s growth.2.
1. Managing companies – Contrasting stylesWarren Buffet and Bill Gates are two individuals who have redefined business success and wealth creation in the past few decades. However both of them followed different styles of management at least during their initial period of time.Bill Gates has been heavily involved in the activities of Microsoft and very closely in the initial period.
He also reviewed the actions and decisions of his delegates very closely. In addition, he was characterized by constant and fierce interrogations of his subordinates often reversed their decisions.Warren Buffet on the other hand reserves only two functions for himself. One is allocating Berkshire Hathaway’s capital which he loves to do.
Another is helping 15 or 20 senior managers to keep a group of people enthused about that what they do when they do not have any financial need to perform these activities.Control is basic to Gate’s nature and his management practice. He has an obsession with detail and with checking up. It is also reported that he even used to sign expenses for Steve Ballmer.
The degree of control however decreased with the time. Gate’s control almost cost Microsoft the entry into Internet. Further this also to a large extend led them to anti-trust case. Gradually the company was split into multiple groups, but tight controls were enforced.
This made all decisions large and small to be funneled to the top and it became a bottleneck in the functioning of the company. It also undermined the confidence of the managers below.Under the scheme of ‘Vision Version Two’, Microsoft split into eight new, customer-oriented divisions, each under a top manager who is supposed to exercise delegated autonomous power. Further Gates moved from day-to-day operations into strategy.
This freed Microsoft from bureaucracy to more free organization.In contrast Warren Buffet wanted managers to think like owners. Manu of his chief executives actually owned the businesses. Buffet ensure that he left significant stakes (10 to 20%) to make the ownership practical as well as theoretical.
Their achievements are tied exclusively to the achievements of their own businesses.While Microsoft was notorious for its failure to get people to work with each other across boundaries in its initial phases, Warren Buffett always ensures that managers had the freedom. They only have to follow some elementary simple rules. In Microsoft, the managers were responsible only for their own results that easily encouraged them to ignore other divisions losing the potential benefits of cooperation.
Buffets superior system nurtured a climate of confidence and freedom. Suspicion and control have ruled Microsoft for a long time. Although Microsoft had the financial success, grueling deadlines, frustration over the bureaucracy, dozens of Microsoft’s most capable leaders, around 50 opted out of the company. Microsoft’s response was to reduce Gate’s span of command and gave the new business managers more autonomy.
Trust distinguishes the styles between Buffett and Gates. Subordinates are treated as equals, as grown-ups who can be trusted with anything from accounting to succession plan in Buffett’s scheme of thing. This is has enabled him to have his associates work harder for him that they did for themselves. (Heller, 2006)2.
2. From analytical mind-set to collaborative mind-set – moving away from micromanagementMany organizations are faced a similar problem in their growth path – they know how to execute, but they are not adept at stepping back to reflect on their situation and to analyze and find out the best path forward. The focus is on thinking and solving problems that are currently being faced. This prevents from acting fast and responding to the market conditions.
In such situations, what is required from a manager is to both focus on the action as well as reflect. It is this reflection that enables the manager to ensure that the team is ready to accept new challenges and respond to the market fast. However this environment calls for a different working environment. As managers it is now necessary to abstract from the day-to-day activities at periodic intervals so that they can spend time on both action and reflection.
This also has implication on the way managers work. It is no longer possible for managers to rely on their own abilities. The focus now is on extending the analytic mind-set that allowed managers to perform the actions to a collaborative mind-set where he/she can effectively utilize the capability of the team. It is no longer possible for the managers to perform all the activities by themselves.
Moving to a collaborative mind-set means that working with people is no longer about working as bosses and subordinates. It is now about working as colleagues and partners. This is in contrast to the principle of micromanagement. In micromanagement, the manager believes that he/she is the best person to perform the activities and closely monitors the activities to ensure that everything is being performed according to his/her plan.
But in a collaborative mind-set, it is necessary to use the capabilities and expertise of each member of the team. This means that managers have to do away with monitoring the small tasks closely, but now focus on how to get the best out of each of the team member. Manager has to now distribute responsibility to whoever can take the initiative and pull things together. This translates to self-managing teams.
(Gosling, Mintzberg, Henry, 53-60)2.3. Overachievers and micromanagementOverachievers are characterized by too intense a focus on achievement. This can severely damage trust, undermine morale, reducing workplace productivity and eroding confidence in the management.
Some of the overachievers put tremendous strain on the system, team and of course on themselves. This creates burnout in the long run leading to employee turnover.It is interesting to note the behavior of managers in such situations. Overachievers have high ambition and drive to attain their goals.
They often try to meet or surpass their self-imposed standards. Often the drive is to accomplish something new and unconquered. However the rest of the organization as well as the team may not be able to catch up with the speed and agility of such individuals. This creates a feeling of under-performance of the team who are not as talented as these people.
This is sometimes coupled with arrogance, aloofness and demanding nature.When the manager is not in synchronization with the team on the goals and the path to achieve the goals, it is a natural tendency for the mangers to micromanage. This derives from the fact that these individuals want to drive and control the pace of the organization or the team. This results in dictation and monitoring of the tasks closely.
Further there may be tendencies to be easily impatient with the poor performers or average performers. This creates employee dissatisfaction as there are no clear ways to address the situation.As the individuals fail more and more to catch up with the high achievers, they tend to micromanage more and more. The style of management tends to be commanding and controlling.
The managers tend to tell people what to do, when to do it and what will happen if they fail. The focus is now on the goals and outcome rather than people. This creates a threatening environment to the employees. This can result in getting less out of the team than they are capable of and stifles creativity and initiative.
It creates a sense of insecurity among the team members who are unable to match to the requirement. This may lead to rapid turnover of employees severely affecting the organization. 3. Discussion of Problems3.
1. Why it is important for companies to retain employees?Retention of employees is important for companies for variety of reasons. However if we were to pick up the top three reasons, the it would include the following:1. The growing importance of intellectual capital: In the current era of knowledge, competitive edge of companies is determined to a large extend by the intellectual property.
Intellectual property is directly linked to the people in the company. This means that any turnover of contributing and high performing employees takes away the market edge of the company. This may compound if the employee joins a competitor company. In certain cases, valuable set of knowledge goes out of the company.
(Luecke, 60)2. Link between employee turnover and customer satisfaction: Various studies have indicated link between customer satisfaction and turnover rate of employees. High employee turnover reduced satisfaction. Also to a great extend, employee attachment predicts customer attachment.
When employees feel an attachment to the firm, they are more likely to share their positive images and feelings about the firm with customers. (Luecke, 61)3. High cost of employee turnover: Employee turnover affects three types of costs that drain away company’s bottom-lines. These are direct expenses, indirect costs and opportunity costs.
Direct expenses include the cost of recruiting, interviewing and training replacements. Indirect costs include morale of the employees, customer satisfaction, time and cost of recovery to attain the same level of effectiveness of the new employee. The opportunity costs include lost knowledge base, best practices followed by the individual. (Luecke, 63)3.
2. Why people stay in companies?There are different reasons for which people stay in companies. Given a situation that it is not very difficult to find another job, the major motivations for staying in a company would be:· Pride in the organization: People pride in working for well-managed companies headed by skilled, resourceful leaders who can create vision and motivate others to realize that vision.· A respected supervisor: This is the most important reason why people are likely to stay, if there is a supervisor whom they respect and who is supportive of them.
· Fair compensation: People want to work for companies that offer fair and competitive compensation.· Affiliation: Collegues who are respected and compatible is another important reason.· Meaningful work: People would want to work for companies that let them do the work that appeals to their interest. Also satisfying and simulating work makes people productive.
Several surveys on what people look for in a job indicates that work content, well managed company and good relations with superior are the critical factors that determine which company they look for and stay with. (Luecke, 75-77).3.3.
Why people leave companies?Although there may be several reasons why people leave organizations, the key ones are:· Immediate supervisors: People leave organizations when the relationship with their superiors becomes stressful or problematic and they do not see any other options.· Change in job content: People find it difficult to adjust to new conditions, if the organization does not provide sufficient support and security.· The company’s direction or leadership changes: Usually employees leave when there is there is a change in the quality of the top management, its decision or lack of trust in the new management and direction.· Close colleagues leave: When one or more colleagues whom the employee is particularly attached to and shares relationships, leaves it usual for them to leave too.
(Luecke, 77).One of the important reasons of employees leaving is lack of communication that provides assurance to employees when changes occur in the organization. Most of the communication that employees require is from the immediate managers. Hence the relationship between employees and managers is critical to ensure that employees are retained in the organization in different conditions.
3.4. MotivationIf there is one element that significantly affects the performance of an individual or a team, it is motivation. F.
Herzberg’s work on motivation “Motivational Hygiene theory” identifies several factors that can positively motivate a person. The positive motivators that Herzberg identified are: achievement, recognition, the work itself, responsibility and advancement. (Blair)Achievement refers the target that the manager sets for the team. If it is made unreachable, the team can sense the failure right from the beginning.
If the target is too easy, the team can feel unenthusiastic about it.Recognition is the feeling of being appreciated. Positive feedbacks to the team can motivate the team to achieve higher the next time. It also assures them that their performance has contributed and would encourage them to deliver more.
Work being interesting and challenging for the team members is a big motivator. However there are situations when the work content cannot be changed or made to suit the team member. However an innovative manager can help reducing the mundane nature by adding new aspects or improving the ways. Work provides a sense of personal achievement.
Responsibility is possibly the most effective motivator in most cases. This also provides a sense of personal achievement and can help the individuals and team to put in more effort and attention. Delegation is aAdvancement is the opportunity provided by the organization to the individual. This could be in the form of promotions, pay, perks etc.
3.5. Management StylesManagement style defines how the management interacts, organize and involve individuals and members in the operations of the organization. Each management style has its own characteristics and how it influences the working of the organization and how people interact with each other.
In addition, there is perceptible difference in the scale of authority and responsibility is divided in each of the styles.The different styles of management that are:Autocrat: This management style believes that all decisions, no matter how minor they may be, must be rendered by the manager. The manager retains full control of the organization almost solely, as a result of charisma, position within the system and the forceful personality of the manager.Advantages of this style are fast decision making and is particularly useful in case of time critical situations.
This is required in cases such as military where quick decisions have to be taken. In special situations such as emergency, where a decision needs to be taken quickly, this style is suitable.The disadvantage of this style is lack of participation by the subordinates and hence lack of motivation. It also misses any contribution and value addition that the subordinates can bring in and fails to take advantage of the collective expertise and resources available.
Authoritarian: This manager also insists that he/she fulfills the major role in the whole decision-making process. However there is a difference with the autocrat that the autocrat imposes the decision on the organization while the authoritarian will try to convince others to accept the decision. This requires more understanding of the organization.The advantages of this style, is again the speed of action and decision-making and is particularly useful in time critical and emergency situations.
It is also useful when the organization is scarce of resources of quality who can contribute.The disadvantage of this style is again lack of participation. Although there are more chances of diverse opinion, it is less likely to be taken into consideration. Over a longer period, this style will also introduce lack of motivation.
Micro-Management: In this managerial style the manager closely controls the work of the subordinates. The manager constantly reviews each tasks and steps. In this style, the subordinates get opportunity to contribute in terms of planning and details. However the manager constantly overlooks and monitors the details.
The advantage of this style is close monitoring and closes tracking. This method is suitable for critical projects and where the subordinates do not have enough expertise and capabilities. This is more useful in cases where subordinates are not qualified well enough for the job.However this style has disadvantages when the subordinates are capable and possess the expertise.
It restricts creativity as the employees does not get the freedom to experiment or use their own ideas. Employees does not feel participative and is usually not motivated to give their best.Democratic: This manager draws strength from the majority of the team members. In this style the decision is always the majority opinion.
The modus of operation is to post the problem to the group and openly solicit suggestions from them. A majority vote then establishes the outcome and decision.In this case, the advantage is greater participation of the then entire group. Also equal opportunities are provided to each member of the team.
Communication is of high importance in this style.The disadvantage of this style is typical delays in decision especially in case of unclear areas which require great deal of discussion. Innovativeness that is not accepted by the majority of the team may easily get sidelined.Participative: Participative style relies heavily on the groups and individuals for decisions and outcomes.
There is a high degree of autonomy among the team members. The method of arrival at decision is not of significance to the manager. This style works well with people with expertise.The advantage of this style is fostering of innovativeness.
It also grooms future managers by providing them autonomy to choose the methodology and final decisions.The disadvantage of this style is that the individuals within a group gradually gain power over the wishes of the group as a whole.Conflict management: This management style is focused on avoiding conflicts and organizing to resolve conflict where it occurs. It is characterized by negotiation, taking hard decisions and dealing with the impact of the decisions.
This style is suitable for situations that are prone to conflicts and often allows problems and issues to come out and find resolution. In addition, it can energize the team if conflicts are managed.This style may cause low morale, stress, situations where resolution is difficult.3.
6. Other Management stylesMcGregor suggests that two contrasting styles of management are preferred attitudinal styles of individual managers (White, 2007).McGregor defines Theory X as the conventional view of management; one which is practiced by the majority of the managers. It provides broad justification for managers to pursue those patterns associated with either the autocratic or authoritarian styles.
(Duft)The principles of Theory X are:1. The average human being has an inherent dislike of work and will avoid it if possible.2. Because of this dislike, most people will have to be controlled, coerced, directed, and threatened with punishment to get them to put forth effort toward the achievement of organizational objectives.
3. The average human being prefers to avoid responsibility, needs to be directed, has little ambition, and wants security above all.Theory Y requires a more participative management style rather than an authoritative one. McGregor believes that managers can change their style and doubts the effectiveness of Theory X in achieving organizational objectives.
(White, 2007).McGregor argues that Theory Y is the better way of management. Theory Y is consistent with the participative management style and is the most successful means for satisfying the individual’s needs. Its components are as follows.
1. The expenditure of physical and mental effort in work is as natural as play or rest.2. External control and the trust of punishment are not the only means for spurring effort organizational objectives.
3. Many will exercise self-direction and control in pursuit of objectives to which they are committed. Commitment to objectives is a function of the rewards associated with their achievement.4.
The average person learns under proper conditions not only to accept but to seek responsibility.5. The capacity to exercise a high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed among people.6.
Under conditions of modern industrial life, the intellectual potentialities of the average human being are only partly utilized (Duft).3.7. Micromanagement and its effectsMicromanagement can be advantageous in certain short-term situations, such aswhile training new employees,increasing productivity of underperforming employees,controlling high-risk issues, andwhen there can be no question of the leadership.
However, the costs associated with long-term micromanagement can be exorbitant. Symptoms such as low employee morale, high staff turnover, reduction of productivity and patient dissatisfaction can be associated with micromanagement. The negative impacts are so intense that it is labeled among the top three reasons employees resign. The negative effect can be for both the manager as well as the subordinate.
Ultimately, micromanagement leads to decreased growth potential in a department.Managers who put too much emphasis on daily operational details can miss the broader picture and fail to plan for departmental expansion. Eventually, many micromanagers find themselves at considerable risk of burnout. Changing behavior associated with micromanagement can be a lengthy and difficult process.
3.8. Handling micromanagementThe first step is to realize that there is behavior that needs to be changed and to understand how it negatively impacts the department. Conducting a self-assessment of one’s leadership style can be advantageous in this process.
The true task is to find a balance between effectively performing daily obligations and strategically planning for the future. This task typically involves proper delegation of duties. Proper delegation of tasks may be the primary key to combating micromanaging behavior, however, some other suggestions include:1. Develop a vision of what the department will look like in the future.
2. Hire people with the right skills for the job.3. Develop a policy and procedures manual.
4. Develop solid lines of communication between managers and subordinates.5. Expect some employee errors.
Mistakes are an important process in the learning experience and should be viewed as a training expense.Employees who are allowed to be self-directed will be motivated to be more productive. Staffing issues such as low morale and high turnover will decrease; patient satisfaction will increase simultaneously (Collins, Collins, 24(6)).3.
9. Causes of negative effects of micromanagementMotivation is the key for people to work continuously with the desired productivity. There are several factors contribute to motivation as explained in section 3.4.
These factors directly affect day-to-day activities of a person. On a long-term it is important that few or all of these factors are favorable to the employee in an organization. As a manager, one of the foremost responsibilities is to ensure that these factors are favorable to the employee.As a manager, the key factors in ensuring favorability of these factors are:§ Participation: Participation ensures that employees contribute to the organization.
This contribution further ensures that the employee feels sense of achievement, get recognition for the good work done, feel more responsible for the outcome and hence can result in advancements.§ Decision-making: With greater decision-making opportunities or ability to contribute to decision-making process, employee feels sense of involvement and hence responsibility for the outcome. This can result in greater sense of achievement, better work-content and greater recognition if the outcome is successful.§ Respect: The respect that any employee commands in the eyes of the manager or peers directly affects the individual.
Greater respect can result in sense of recognition and achievement for the individual. Fig.1. Relationships of motivation with other factors in organizations Micromanagement has the following effect on the above parameters:§ Participation: Due to excessive involvement from the manager, the employee gets restricted.
This can cause reduced participation and involvement. Over a long-term this definitely affects the individual. The individuality, innovativeness and initiative is not promoted in this environment.Also micromanagers generally give little positive feedback.
This can further reduce the participation from the team members.§ Decision-making: In micromanagement, decision-making is primarily with the manager. Individual team members seldom get a say in the decision process. This cause again causes lack of involvement.
§ Respect: Due to the close monitoring, the employee does not feel respected for his skills, thoughts, ideas and initiative. This can cause the employee to feel low on morale, less on self-confidence. Micromanagers generally try to do things and set pace themselves. Hence they express impatience with poor performers.
By taking into consideration the above factors, it is clear how micromanagement can result in reduced motivation among the employees. And motivation being the key to employee retention, it contributes negatively to the overall satisfaction of the employee by a great degree. This will cause employees to leave the organization.4.
Conclusions & RecommendationsEmployee turnover is proving more and more costly for employers as we move into the knowledge based industry age. As intellectual property gets more value by day, it is important to retain all the critical employees for longer periods and also get maximum benefit of them working for the company.Motivation is the key to get the best out of the employees. It holds the key to employee’s interest in associating with a company.
Micromanagement has a severe negative impact on motivation due to various reasons such as participation, decision-making and respect.Micromanagement can be addressed among managers by adopting the following steps:1. Making managers realize that they are micromanaging: Often managers are unable distinguish between micromanagement and more participative management. Training for managers on these aspects are critical.
2. Vision and mission for activities: It is important that all the managers and team members are fully conversant with the vision and mission. This gives the direction for the activities.3.
Plan: Proactive planning, delegation of tasks, segregation of roles and responsibilities allow managers to be more hands-off on detailed tasks.4. Recruiting the right people5. Facilitate effective communication between the manager and the teams especially in multi-cultural environment.
6. Understanding the level of micromanagement that is acceptable in each cultures involved. Some cultures have greater degree of acceptance of micromanagement compared to others. It is important for managers to realize this and act accordingly.
7. Encourage managers to identify their motives and ambitions. This must be compared with that of the team.8.
Make activities more collaborative including goal setting. This creates participation among the team.9. Create environment for easy communication and transfer of information.
This makes sure that success and failures are communicated to the team in a timely manner providing feedback that is useful.10. Rewards for making the organization a better place for everyone to work.11.
Create an environment of equality where the relationship is not a boss and subordinates but colleagues and co-workers.12. Encourage informal interaction between teams and managers.Micromanagement can be effectively reduced in organizations by consciously adopting measures.
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