This case identifies the main challenges that managers of all organizations face when managing their people. These challenges can be from the external environment or arise internally within the organization. Managers need to clearly understand these issues and their impact on their ability to manage people. Managers can effectively deal with their staff only when the problems are well understood.
INTRODUCTION
One of the most important assets of an organization is its people. Without people the purpose of organization existence is meaningless. People can turn out to be a competitive edge for the organization. Employee involvement and empowerment is what managers must believe and practice in today’s working environment. (Koellner,2003)
EXTERNAL FACTORS
No organization exists in isolation. There are various forces that affect the operation of an organization. (IDRC) These forces influence how an organization operates and performs. One such force is the external environment. This encompasses factors outside the organizational boundary but that do determine the over all functioning of the organization. Thus managers must consider their outside environment when managing organization and its people. The external environment greatly affects the way people work in an organization and impacts the over all workforce atmosphere.
Managers must take into account the following external factors and identify issues in each of them to determine and plan the ways needed to tackle such issues and effectively manage people.
Labor Force Constitution
Since people are hired from outside organization, they are also considered to be the part of external environment. The composition of labor force largely determines the policies that managers need to adopt to manage their employees. Changes in the country’s labor force directly impacts the workforce constitution of an organization. These changes in labor force can occur due to changes in country’s laws and legislation.
For example any legislation that encourages female workforce will result in greater number of working women.(eCheat,2006) This managers need to especially consider their needs like providing child care facilities and protection against workplace harassment. Moreover the recent trend of globalization has resulted in the workforce becoming more diverse. People from different backgrounds and skills work together and this may results in conflicts and at extreme these conflicts can take the form of ethnic violence. Thus managers must ensure that the rights of every individual working under them are protected and they have the freedom to practice their values and religion. McDonald’s – the world famous food retail- operates on a global scale and thus has employees from diverse backgrounds. McDonald’s understands the local traditions, hire people from the communities in which it operates and offer food that suits the local taste. It has received numerous awards for integrating diversity into their company. (McDonald’s, 2005)
Legal
Laws and legislations provide the basic framework for the operations of an
organization. The law defines the boundaries of what is acceptable and what is not. (IDRC) Laws in some countries are more liberal and restrictive in others. Therefore managers need to ensure that their policies comply with prevailing rules and regulations. If an organization operates in more than one country then it should have separate policies for managing people, keeping in mind the current operating laws in each country.
Economic
The economic environment of the country including the economic policies and growth is an important factor that affects the workforce of an organization. During time of economic crisis when the company itself is in crucial situation, the managers need to motivate employees so that they keep working to further avoid the company from incurring losses due to low productivity. Also in case of economic boom when the organization is earning profits, the managers need to make employees feel the part of the success. The devaluing US dollar, high inflation and employment and the general economic turmoil has created uncertainty among people and they have highly unmotivated to work. In such situation managers need to exert more efforts to retain employees by assuring them job security. (Silverthorne, 2007)
Technology
New trends in technology appear very often. Organizations need to adapt to these changes as the old technology no longer benefits. For such technological changes, employees need to be trained to use the new technology. Employees usually oppose such changes as they fear losing jobs. The managers must ensure that they first train themselves in acquiring the new skills required and then hold appropriate training programs for the employees and tell them the benefits that they will get with the new technology. (eCheat,2006)
Labor Unions
Labor unions are formed by employees getting together for the fulfillment of common demands. Their demands might include higher wages, secure jobs and proper working conditions. (eCheat,2006) The power of such unions is so strong that not considering their demands might upset the over all functioning of an organization. Therefore managers need to work together with unions to avoid issues like labor strikes and other disputes. The decisions taken by the parties must favor both the organization and its workers.
Social and Cultural forces
Every organization must be socially responsible to protect and improve the interest of the society and the organization. If managers don’t work towards the betterment of their people and society then people voice their anger in public and this eventually results in bad reputation of the organization. (Neblett.2003) This leads to lack of motivation in employees to work for that company. Thus managers need to act socially responsible and work with the community for supporting causes like greener environment, safe working conditions, medical facilities to the employee and fund collection. (IBM) Moreover the culture of the country in which the organization is operating need to be considered. In some cultures like Saudi Arabia, the mingling of men and women is highly disliked. Thus managers need to ensure that they provide separate working places. Managers must understand the local values and then make decisions. (IDRC)
INTERNAL FACTORS
Apart from the forces from the external environment that affects the manager’s ability of managing people, there are some internal organization factors that influence managerial decisions. Firstly the structure of an organization itself is important in determining the roles and responsibilities of the managers. (Howard-Grenville, 2006) The structure also defines how people work and communicate, how information flows and how much authority the managers have to direct and supervise employees. According to Henry Mintezberg, there are six organization configurations:
1. Simple Structure
This type of organization is highly informal. The managerial hierarchy is not extendedly defined and decision making is very much centralized. The top management assigns tasks to ensure that all work is well coordinated (12Manage). Thus managing people in such organizations is relatively easy as everyone reports to their managers.
2. Machine Bureaucracy
This structure is highly formalized and standardized with centralized decision making. The rules and procedures are strictly defined (12manage). The decision making mainly lies with the top authorities but lower level management can also make decisions.
3. Professional Organization
This type includes highly skilled professionals who have considerable authority over their work. The professionals who run the operations of the organization have significant power to influence decisions. They are not welcoming towards any kind of change and practice the already learned skills.(12Manage) Therefore managers in such organizations need to carefully handle the skilled staff but cannot control them. Both managers and staff need to coordinate before taking any decision to avoid conflicts.
4. Divisionalized Form
In this type of organizational structure the decision making authority lies with middle managers. They have control over their respective departments. The management of people is relatively easy as each manager only has to manage people working under their division (12Manage). The kinds of problems that managers face tend to be similar and therefore can be easily handled. Supervision occurs at individual level and managers can monitor the performance of each individual.
5. Adhocracy
In this structure, the authority is not clearly defined. Various people within the organization have the decision making power. Informal communication takes place among people with similar skills. (12Manage)Information flows freely between various divisions and therefore it becomes easy for managers to coordinate activities.
Another important factor to consider is the organizational culture. Organizational culture comprises of beliefs, values, attitudes and behavior shared by the people working in the organization (McNamara, 2000). It defines how people work, their experiences and practices. The culture also specifies what is acceptable and what is not and is reflected by the organization’s reward and punishment policies. Moreover the organizational culture is greatly influenced by the higher authority and management because they are the key role players in any decision making and therefore are the leaders whose practices are followed by the people working under them. (Heithfield) One type of organizational culture is where employees are highly valued for their skills and are rewarded highly. Such employees need to be managed carefully by rewarding them for their knowledge so that they don’t leave the organization. In other types of culture, work and play is equally important. Employees are given immediate feedback and rewarded accordingly. An example of this is the “Best Buy” company which gives freedom to its employees regarding when and where they want to work. Managers at this company are only considered with results. Another example is of Google- the Google workplace depicts a culture that work is fun. (Blakely, 2008)
A third important internal issue that impacts people management is the organizational conflicts. These conflicts can be over goals or performance and can arise due to too much interdependence among working units. Managers must effectively resolve all disputes and take actions that benefit both the organization and its people. One essential task is to define discipline and grievances procedures for the organization. These procedures identify ways to resolve any kind of problems that arise in working relationships. Disciplinary procedures tell employees what is expected from them while grievance procedures define actions that are to be taken to resolve issues. (CIPD, 2009)
Also the policies and missions of an organization influence the way people are managed. Organizational policies define how employees should behave, how information flows and how work is done (Connor). Managers need to abide by the rules set up by their organizations, when managing people.
SUMMARY
It must be however noted that external and internal environment are not separated from each other. The trends in external environment eventually impact the internal organizational structure and culture. For example constitution of labor force in a country, which is external to the organization, determines the workforce within the organization. Also in times of changing economic conditions, organizations might have to consider transforming their structure. Any change within the organization is usually not welcomed by the employees and they generally fear loosing jobs and de motivated. Therefore employees need to understand the impact of each of the external forces on the internal workings of the organization and on the employees. Then only the managers can identify what actions they need to take to effectively manage people. If the employees are not taking interest in their work, then its cause might be the bad reputation of the organization in public rather than the organization’s low compensation to its staff.
CONCLUSION
Effective people management will help avoid conflicts, make operations efficient and motivate employees. Managers must understand the factors that will make their staff feel motivated. (Ball, 2003) All people are different and therefore might not require similar strategies to make them feel motivated. For some employees a word of appreciation might be enough while other may require additional benefits. Managers must build a strong reward system. A good reward system is easily understood, provides immediate feedback, gives equal treatment to everyone and helps organizations in hiring and retaining staff. (Ball 2003) Last but not the least the managers must take interest in their people and their work. A good manager is always a “leader” instead of a “boss”. (Maister, 2002)
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