C.1 Learning Modules - Quarter 2 Learning Information and Course Activity PDF

DISS |Page |1 NORTHLINK TECHNOLOGICAL COLLEGE LEARNING MODULE – Quarter 2 OrgMgt – Organization and Management...

DISS |Page |1 NORTHLINK TECHNOLOGICAL COLLEGE LEARNING MODULE – Quarter 2 OrgMgt – Organization and Management Learning Content 10: Staffing, Recruitment, Selection, and Training Staffing Staffing refers to determining the number of people with the right skills for specific units in the organization, getting the right applicants for the vacant job positions, and selecting the right candidate for the job. The Strategic Nature of Staffing Human resource planning is strategic because it is done to achieve the organization’s mission, vision, overall direction, and strategies. If the company has hired the right people to do the job, it can perform competitively in any environment. The Responsibility for Staffing As earlier mentioned, human resource planning is not entirely a responsibility of the Human Resource Department. Line or department managers also share in staffing responsibilities. The department manager and the Human Resource Department meet to discuss how they are going to forecast the human needs for their respective departments. After conducting a forecast of human resource needs, the human resource and the department manager try to match that information with an inventory of available current personnel. This personnel inventory covers an assessment of the skills, strengths and weaknesses of each personnel, their career aspirations, their potentials, and the possibilities for being promoted. The Foundation of Staffing: Job Analysis Job analysis refers to the collection and analysis of all relevant information and facets about a job that is done in a systematic and orderly manner. From the job analysis, the job description is generated. A job a description is a formal statement of the relevant tasks, duties, and responsibilities that a job entail. This also generates the job specification, which lists the qualifications needed for the job, such as skills, abilities, education, experience, and personality. The figure in the right depicts the relationships among staffing, job analysis, job description, and job specification: Recruitment Job Description Recruitment is the process of getting and (key responsibilities, reporting arrangements, attracting a pool of qualified applicants to fill a Job Analysis work environment) Staffing (recruitment vacant job position. Whenever needed, the and selection) (in-depth study of a job) human resource manager discusses with the top Job Specification (skills, education, management regarding policies on employment experience required) options and the potential strategic issues they might entail, which include the following: Hiring regular employees – management decides on gender and diversity issues, including the inclusion of persons with disabilities. Diversity is important as a recruitment policy. It includes the rights of indigenous groups or PWDs to apply for employment opportunities. Hiring fulltime or part-time employees – management decides on potential issues regarding contractualization, which is the temporary hiring of personnel for a given period. Hiring through an independent contractor or an employment agency – management may decide to identify some job positions which the company will not hire directly, but instead, will use an independent contractor or an employment agency to hire those specific personnel  DISS |Page |2 The following are the typical steps in recruitment process: Advertise the Job Vacancy The company may conduct a wide and extensive search for qualified candidates by using internal and/or external recruitment, depending on the recruitment policy of the organization. Internal recruitment – means giving priority to applicants from current personnel of the organization. External Recruitment – means opening the job position to applicants from outside the organization. Screen Applicants to Create a Short-list of Candidates After reviewing the application forms and résumés of applicants, the recruitment team separates those who meet the basic job requirements. This creates a short-list of job candidates which is a pool of applicants who have higher chances of getting the advertised job. Conduct a Background Check A reference and background check for the short-list candidates to trim the list of qualified applicants will follow. This helps to verify if the information given by the applicant is correct. Contact Potential Candidates for Preliminary Interviews Potential candidates will then be contacted and preliminary interviews will be arranged. This will help the recruited gauge the candidate’s communication skills and knowledge about the job and at the same time, the applicant gets a chance to know more about the job and the company. Refine the Short-list of Applicants Based on the results of the prelim interviews and background checks, the list of qualified candidates will be refined and narrowed down. This new list will undergo the selection process. Selection After creating the refined short-list, selection begins. This refers to the process of choosing the individual to hire from a pool or short-list of job applicants. It involves a “hire” or “no-hire” decision regarding each applicant for a job. The following are the steps under selection: Conduct Further Interviews The final list of applicants will be interviewed again. Persons who will conduct the interviews usually include the prospective immediate supervisor and a representative from the HR Department. Types of interviews that help gauge the applicant’s performance. Behavioral interviews - questions are about the applicant’s behavior in his previous company. Situational interviews - questions are about how applicant would react in a specific work situation. Administer Employment Tests Employment test will then be administered to applicants to gauge intelligence, aptitude, interests, personality, tendency to comply with rules, work ethics, and for any purpose deemed as job-relevant by the employer. Other types of employment testing are actual demonstrations of the skills relevant to the job. Another alternative is to ask the applicant to bring some of his or her work samples that illustrate his or her actual capabilities. Offer to Hire the Chosen Applicant At this stage, you have now chosen the candidate to hire. You should now be ready to offer the job to him or her. Discuss the compensation rate and other benefits to be provided by the company, the tenure of the job, the starting date for work, and other relevant work arrangements.  DISS |Page |3 Training Once the chosen candidate has been hired, the next step is training. It has several purposes: to orient new employees in the workplace, to develop the skills of employees, and to enhance teamwork in the job. Thus, training programs are designed according to the actual needs and requirements in the workplace. The following are the different forms of training. Employee Orientation Programs These programs aim to introduce the new employee to the job setting. Orientation is the first part of the overall training program for employees, also called as induction training. It is a planned program of adjustment of a new hire to his or new company, new job, new supervisor, and new coworkers. Skills Training and Competency Enhancement Programs These training programs focus on enabling employees to learn the necessary skills required to perform a job, or to enhance competencies to achieve a higher work performance. Training programs focusing on skills may be classified into basic training and advance training. These are necessary for the continuous development of skills and talents of employees especially in today’s highly competitive environment. Teambuilding Programs Managers need to develop the team spirit among employees and across units and departments of the company. Team building promotes group camaraderie and a greater sense of belongingness to the organization. Other Methods of Training and Development In addition to training seminars and workshops, other methods for developing employee skills and attitudes in the workplace can be planned and implemented. Coaching and Mentoring Coaching is a form of a one-on-one training wherein an experienced person provides professional advice to another person to improve the latter’s work performance. As such, a coach may not necessarily be directly involved in the day-to-day work of the learner. Mentoring is another form of coaching wherein a more senior or more experienced staff or manager gives regular training or learning advice to a younger or less experienced staff in the workplace. The mentor-mentee learning interactions in the workplace are done on a regular basis. Career Development Career development is a continuing process of developing the career of the personnel within a company. It includes long-term career planning and organizing of relevant training programs to improve skills and competencies and thereby upgrade the position of the personnel in the future. Succession Planning Succession planning is the process of identifying and developing the potentials of internal staff to fill leadership positions in the company. This involves a systematic review and development of skills and competencies of key personnel who can become potential successors for higher positions in the company. Thus, succession planning is usually for senior management positions, or those positions that are hard to fill.  DISS |Page |4 Written Works 10 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. MODIFIED TRUE OR FALSE Directions: Evaluate the following statements. Write TRUE if the statement is correct and FALSE if the statement is incorrect and change/modify the underline words to make the statement correct. ______________ 1. Staffing refers to determining the number of people with the right skills for specific units in the organization, getting the right applicants for the vacant job positions, and selecting the right candidate for the job. ______________ 2. Hiring is the process of getting and attracting a pool of qualified applicants to fill a vacant job position. ______________ 3. Screening helps to verify if the information given by the applicant is correct. ______________ 4. Selection refers to the process of choosing the individual to hire from a pool or short-list of job applicants. ______________ 5. Induction Training or orientation is the first part of the overall training program for employees. ______________ 6. Training and workshops promote group camaraderie and a greater sense of belongingness to the organization. ______________ 7. Coaching is a form of group training wherein an experienced person provides professional advice to another person to improve the latter’s work performance. ______________ 8. The mentor-mentee learning interactions in the workplace are done on a regular basis. ______________ 9. Career development is a continuing process of developing the career of the personnel within a company. ______________ 10. Reorganization is the process of identifying and developing the potential of internal staff to fill leadership positions in the company.  DISS |Page |5 Learning Content 11: Compensation and Rewards Compensation Policy and Its Importance Every organization must have an effective compensation policy, which is a set of general guidelines established by the top management of a company in paying and rewarding employees for the work they rendered. When employees perceive that they are well rewarded for their work, they would likely perform better. Lastly, an effective compensation policy helps to attract applicants to join the company. Job applicants tend to compare the compensation system among companies before they submit their applications. Management Considerations in a Compensation Policy Economic. Managers take into account and balance important factors when setting the company’s compensation policy. Economic is one of the important considerations. As discussed earlier, a compensation policy must have the ability to attract applicants, motivate employees, and retain them in the long run. However, managers must balance these employee considerations with the company’s budgetary limitations, or the cost structures for efficiently and effectively operating the company to survive amidst a competitive environment. Fairness. Fairness is another important consideration in setting the company’s compensation policy. That is, employees should feel that they are justly compensated relative to their coworkers, and also relative to other individuals who hold the same or comparable jobs in other organizations. This perception is in line with the equity theory of motivation which provides the view that workers compare their work inputs and compensation rewards with that of people’s work inputs and compensation rewards. Equity perceptions among employees pertaining to their compensations are of three types: Internal Equity – this is when an employee perceives fairness in pay differentials among the different jobs within their organizations. For instance, a clerical support staff working in a company’s Accounting Department might feel that his compensation is relatively low if he would compare it with the compensation of a clerical support staff working in the Marketing Department of their company. External Equity – this is when an employee perceives fairness in his or her compensation relative to others holding the same or comparable jobs outside the organization. Individual Equity – this is when an employee perceives fairness in pay differentials among coworkers holding identical jobs within their organization. The compensation policy of a company may include the following considerations: Market Competitiveness – a Link with Company Performance – company will adopt employee salary a company that continually levels based in the market rates experiences high financial growth for prevailing in the industry in order to many years is expected to increase provide a compensation package that the compensation of its employees. is attractive to current and potential employees.  DISS |Page |6 Components of a Compensation System Two components of Compensation System Direct compensation is a type of compensation given by the company to employees based on the extent of work actually rendered by the employee. Indirect compensation - refers to the other type of compensation given by the company to its employees either in compliance with the law or as optional benefits. The different components of compensation are further explained below: Base Pay (Direct Compensation) The first and largest component of employee compensation is the base pay, which forms part of the direct compensation. The base pay consists of salaries, which are compensations computed on a fixed monthly basis. Another form of base pay is wages, which are compensations computed on an hourly or daily basis. In the Philippines, the minimum daily wage is decided by representatives from government, private sector, and labor groups Incentives (Direct Compensation) Incentives are in the form of bonuses, commissions, profit-sharing, and stock options which are individually given to employees apart from the base pay. Employees receive these additional compensations based on individual, department, or organization-wide performances. Bonus – refers to an additional compensation given to employees, which may be monthly, quarterly, or semi-annually, depending on the policy of the company and its profitability status. Commissions – these are payments to employees as a percentage of a quantity of output that they have produced or sold. Profit-sharing arrangements – additional compensation given to employees based on the outcome of company profitability rates. Stock options – these are stock ownership arrangements given to employees as additional compensation or reward for a high performance. The shares of stocks of the company that are given to employees as part of their compensation is one of the attractive forms of employee incentives because they can increase in value depending on market trends. Merit Increases – additional compensations given to individuals who have performed exceptionally well. Legally Acquired Benefits (Indirect Compensation) This component of compensation system is called indirect benefits since they are not directly related to the job performance. It consists of legally acquired or government-mandated compensation, such as SSS, GSIS, Pag-IBIG, and PhilHealth. Optional Benefits (Indirect Compensation) The optional compensation pertains to additional benefits that the company provides, depending on the company policy or decision of the top management. Medical insurance, life insurance, retirement plans, car plans, etc. Incentives Based on Individual vs Group Performance Incentives are important to employees, the basis for granting them may be a source of motivation or demotivation for them. A company may choose to give individual performance-based incentives, or group performance-based incentives, or a combination of both. There are advantages and disadvantages for individual-based incentives and group-based incentives, depending on the type of employees. Direct Compensation Indirect Compensation Base Pay, Salaries and Wages Legally Acquired, Social Security, Pag-IBIG, PhilHealth Incentive Pay (Bonus, commission, profit sharing, stock Optional (Retirement, pension plans, life insurance, options, merit increase) educational plan)  DISS |Page |7 Rewards Giving rewards encourages the high performer employees to keep up with their good work, or to perform even much better. Employee rewards may be classified into intrinsic and extrinsic rewards which will be discussed in more detail below. Managers usually use a combination of these rewards to motivate employees. Extrinsic Rewards These rewards are monetary or material rewards. These may be in the form of bonuses, salary increases, merit increases, car plans, or other material incentives that serve to reward and motivate employees who have rendered good or exceptional performance. However, due to the psychological phenomenon of satiation that makes acquired goods gradually become less attractive in the long-run, money alone may not motivate an employee to perform at his best consistently. Intrinsic Rewards These are nonmonetary rewards given to employees who performed well. Examples of this are employee recognition programs such as giving the Employee of the Month or the Best Employee Awards. Other forms of intrinsic rewards may be remembering to greet employees on their birthdays, offering to assist them when they least expect it, finding time to join employees during informal gatherings, or just being nice to one’s coworker. Nevertheless, it is said that the real intrinsic reward pertains to an employee’s inherent liking for the job itself, with or without any rewards given. Some Implications for Rewarding Managers with Financial Incentives Employee motivation is important. Financial incentives such as bonuses and stock options often improve individual performance. But too much emphasis on financial rewards may lead to some possible unethical behavior in the workplace. For instance, a manager who is highly obsessed with material rewards may be tempted to hide any flaws that he has observed or realized in the operational systems for fear that errors will be a point against his performance. The point is that managers should develop and emphasize intrinsic rewards. They should encourage members of the organization to connect with their inner self for a greater awareness of what is going on in the workplace.  DISS |Page |8 Written Works 11 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. IDENTIFICATION Direction: Identify what is being ask. 1-2 What are the two management considerations in drafting the compensation policy? 3-8 Identify if it is direct or indirect compensation. 3. Commission 4. SSS Benefit 5. Philhealth Benefit 6. Basic Pay 7. Medical Insurance 8. Retirement Plan 9 Rewards which are monetary or materials rewards. 10 Rewards which are non-monetary.  DISS |Page |9 Learning Content 12: Performance Appraisal and Employee Relations Performance Appraisal Performance Appraisal refers to the evaluation of an employee’s performance to provide meaningful information to assess individual needs for improvement, and for the organization to plan for the future. Today, it is more frequently called performance feedback to emphasize that performance management systems should be well-understood and accepted by organizational employees. Performance appraisal appeared to connote a traditional “one-sided” approach dominated by a supervisor or manager with little involvement from employees. It is now seen as a mutual exchange of information between employees and supervisors for them to work together in achieving the organization ‘s strategic objectives. Purposes of Performance Appraisal There are several purposes of a performance appraisal. A policy on performance appraisal may focus on all or any of the following: Developmental Purposes – To facilitate employee development- by assessing the performance gaps or deficiencies as well as the limitations in the skills of the employee, an appropriate training and development strategy can be proposed. Strategic Purposes – To establish a link between the tasks and activities of an employee to the goals of the organization – The strategic goals of a company must be supported by the tasks and activities of an employee. Also, to undertake research – the appraisal is meant to validate or test an existing selection strategy. Administrative Purposes – To determine appropriate rewards and compensation-favorable results of the performance appraisal may lead to recommendations for employee rewards, such as promotion, retention, salary increase, or bonus. Characteristics of a Good Performance Appraisal A good performance appraisal is a culmination of thorough planning and preparation. Managers know that it consumes a lot of time and effort for those who are in charge of designing and implementing it. As such, if you are involved in preparing and conducting a performance appraisal, you must what makes it good by ensuring that it embodies the following characteristics: Clarity of Purpose – A performance appraisal must be clear on its objective. This should be well-communicated to the employees to avoid misunderstandings and false expectations on its process and outcome. Well-discussed Expectations for the Job – A performance appraisal should have a prior analysis of the job, including its duties and responsibilities. There should be a clear discussion between the manager and the employee on the expected performance standards of the job. These performance standards are also called key result areas (KRAs), which are key performance results and their respective indicators that can be used for monitoring and evaluating the performance of employees. Alignment of Performance Appraisal Goals with Organizational Goals is Understood – Performance appraisals are conducted to help achieve an organization’s objectives. But the alignment of the performance appraisal goal with the organization’s goal may sometimes be either assumed, taken for granted, or just simply unclear to the managers who plan and design performance appraisal. Hence, how the performance appraisal would benefit the organizational goal must be mapped out and be understood by all parties concerned. Policy Decisions in Performance Appraisal Top management lays down the policy in performance appraisal, which considers the following: Who Evaluates? Supervisors – traditionally, the immediate supervisor performs the appraisal of the employee. However, this approach has some setbacks and limitations. First, it does not permit feedback from the employee himself. Secondly, the supervisor may not know very well the day-to-day detailed technical work of the employee,  D I S S | P a g e | 10 compared with peers, customers, and external parties. Third, performance appraisal is inherently subjective and prone to human errors, such as halo effect and bias. o Halo effect – refers to when the rater allows a positive or a negative trait or outcome to influence his or her measures. o Bias – may enter into the appraisal when the rater has a personal bias that may turn out either favorably or unfavorably with respect to the employee being rated. Coworkers or Peers – this is a good source of feedback since the coworker spends more time with the employee. But, friendship bias may also occur. Self – the employee himself or herself is an important source for performance appraisal. Self-rating works well since no one knows better how the job was performed but the employee himself or herself. Subordinates – The employee’s subordinates can rate the employee. However, bias may occur especially when there too many subordinates involved who may be subjective in evaluation. Clients – customers and other external parties may provide data. 360 Degree Performance Appraisal Method – this is a type of employee performance method that involves an anonymous rating of an employee conducted by his or her subordinates, coworkers or peers, clients, and managers. What to Evaluate? Performance appraisals use specific categories for rating employees, such as outstanding/excellent, very good, average, or below average. It is important to define these ratings because they might have different meanings for different people. The specific areas to assess or measure may cover the following: Traits-based measures – focus on the traits of the employee essential to the job, such as industriousness, cheerfulness, and patience. Behavior-based measures – focus on what the employee does by examining specific behavior. For example, these may assess the employee’s willingness to take initiative, ability to get along with others, or ability to meet deadlines. Results-based measures – focus on the accomplishments of the employee. Examples are number of satisfied customers served, quality of outputs, and reduction in wastage. How to Evaluate? Performance appraisals can be administered using different methods. Formal methods may use written questionnaires, online surveys, or customer feedbacks. Informal methods may use interviews, group discussions, or telephone calls. Managers may also use a combination of these methods. There is what we call absolute measures, where they assess the employee performance based on a specific performance standard. When to Evaluate? It should be a part of the company’s appraisal policy to specify the time period, or a regular schedule for conducting performance appraisals of employees. With a clear regular schedule for performance appraisals, managers and employees can prepare adequately the activities involved. Managers usually conduct employee appraisals on an annual basis. This is to encourage regular feedback and to recommend improvements needed in an employee’s work. Employee Relations This refers to company efforts to enhance and maintain harmonious, peaceful, and productive relations between the management and its employees. It is also called labor-management relations, especially where workers form a union. Importance of Employee Relations Managers recognize the critical importance of employee relations for sustainability and growth of the company. They regard workers as partners in achieving the organizational objectives. Effective employee relations are important in accomplishing the some of the following purposes:  D I S S | P a g e | 11 To promote a spirit of partnership between management and employees that lead to business growth and human development. To establish systems and procedures for management and employees to freely discuss, negotiate, and settle issues that may arise, particularly those related to employee rights and benefits. To encourage workers’ participation in policy and decision-making on matters that concern their interests. Labor Unions and Collective Bargaining To promote effective labor-management relations some private companies and public organizations have workers’ union. These are called unionized organizations. Labor unions are formal associations formed by workers within an organization as a vehicle for promoting and protecting employees’ interest. Collective bargaining is a process in which the workers who are members of the union meet with representatives of management to discuss and negotiate the specific issues and proposals raised by the union concerning their compensation and work conditions. The bargaining process leads to a written agreement or contract which is signed by union and management representatives, called Collective Bargaining Agreement (CBA). This is related to the improvement in compensation and working conditions of employees. Employee Relations in Nonunionized Companies Based on PH statistics, majority of Filipino workers are not union members. In nonunionized companies, managers develop employee relations by having a proactive approach to promote workers’ welfare. For example, managers discuss and meet with employees on matters referring to compensation and benefits, job security, and working conditions. Managers also develop mechanisms to ensure employee health, safety, and wellness. Employee Movements Apart from adopting clear policies on employee appraisals and employee relations, managers also establish guidelines for employee movements. Employee movements refer to modifications in the status or nature of employment of personnel. They may occur as a result of employee performance appraisals, organizational restructuring, or certain operational requirements. Employee movements are related to employee promotion, separation, and retirement. Promotion This refers to upward or vertical movement of employees in the organization from lower level jobs to higher level jobs. It involves an increase in the employee’s rank or status in his or her job position. In job promotions, there is usually a corresponding increase in duties and responsibilities, higher pay, and privileges. But in other instances, promotion may only involve an increase in position and rank, and not necessarily an increase in pay. Separation This refers to the termination of employment of personnel by the employer. Separation may be involuntary or voluntary. Involuntary separation – is the termination by the employer of the work of the employee. A company may be forced to retrench or lay-off some workers, or close the establishment due to a prolonged downfall in business conditions. These are called economic grounds for termination, and they are legal. Termination is also classified as involuntary when the employee is dismissed due to committal of a grave act injurious to people and the company. Voluntary separation – refers to the voluntary job resignation by the employee. Usually, the employee resigns by citing personal reasons. An employee who resigns is required to submit his or her formal resignation to the company at least one month before the date separation. This would allow the company for look for the replacement so as not to disrupt the work schedules and affect work output in the group. A resignation letter must be submitted to the head officer.  D I S S | P a g e | 12 Retirement This refers to ending the employment of a regular personnel who reaches a retirement age. Under the Labor Code, regular employees are entitled to retirement benefits. Some private companies, such as banks, have a compulsory retirement age of 50 for its managers. If there is no retirement plan or agreement concerning retirement benefits, an employee who reaches the age of 60 or more, but not beyond age 65, may retire. The employee is entitled to a retirement pay equivalent to at least one half-month salary for every year of service, a fraction of at least six months that is considered as one whole year. It is important for the manager and the resigning employee to know the retirement benefits of the company. The employment package may be big enough that the employee feels well-compensated for his or her long stay with the company  D I S S | P a g e | 13 Written Works 12 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. IDENTIFICATION Directions: Identify what is being ask. 1 It refers to evaluation of employees’ performance. 2-4 What are the 3 purposes of performance appraisal? 5-8 Who can evaluate the employee's performance? 9 A written agreement or contract signed by the union and management. 10 An example of voluntary separation.  D I S S | P a g e | 14 Performance Task 5 Oral Questioning The teacher has a prerogative to change questions. Name: __________________________________ Scale: Level of Quality 5 – The student is EXCELLENT in delivering his/her answer. 4 – The student is VERY GOOD in delivering his/her answer. 3 – The student is GOOD in delivering his/her answer. 2 – The student is FAIR in delivering his/her answer. 1 – The student is POOR in delivering his/her answer. Questions 5 4 3 2 1 1. When setting the company’s compensation policy, why do you need to consider      economic and fairness? 2. Who can evaluate employees?      3. What to evaluate to employees?      4. How to conduct performance evaluation?      5. When should a company/organization conducts performance evaluation?       D I S S | P a g e | 15 Performance Task 6 Case Study The teacher may facilitate other case studies. GROUP ACTIVITY Direction: 1. Form a group of 4-5 members. Select a leader. 2. Perform a case analysis of the below scenario. The New Human Resource Manager The Prime Manufacturing Company is a garment factory that employs about 1,250 employees of varied skills. About 75 percent are women who are mostly in the production department. Men employees are assigned in the maintenance department and as operators of machines used in the garment production. Women are mostly in sewing department, packaging and quality control. Mister Rod Santos was hired to head the HR department. Prior to his assignment at Prime Manufacturing Company, Rod was in a construction firm, a medium-size organization. His main concern was preparing the payroll and handling employee’s record. The Human Resource Department is composed of 5 employees, a payroll clerk, a personnel assistant and two supervisors and Mr. Rod Santos as manager. The record of Rod Santos in his academic achievements is quite satisfactory. His bachelor’s degree is in the field of Engineering. Performance in the previous employment is quite satisfactory. The construction company of his previous employment closed due to an economic slowdown; this causes his separation from employment. The garment business is globally competitive, and customer satisfaction is of prime importance. Employees’ commitments to performance standard are high priority. In the three-month span of Mr. Rod Santos’ employment, 20 percent of women employees and 12 percent of male employees resigned for unknown reasons, as there was no exit interview conducted. Production schedule was delayed, and foreign customers were alarmed. The general manager, Mr. Mario Mabilangan, called Rod Santos regarding the problem. He noted Rod’s indecisive approach to the HR problem and actions that he failed to take. He pointed out to Rod Santos that he exactly did not know what to do regarding the current situation. His subordinates began to complain to Mr. Mabilangan about Rod Santos’ indecision. Mr. Rod Santos became more withdrawn from his subordinates and other managers in the plant. He showed little interest in his job and concentrated on mental jobs concerning the department. In general, he lost control of his job of managing the department.  D I S S | P a g e | 16 Case Analysis: What is the general problem? Case Facts Analysis / Hypotheses Alternative Course of Action Recommendation and Conclusion Submitted by: _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Date: _______________  D I S S | P a g e | 17 LEADING Learning Content 13: Leadership Leadership We encounter leaders in our everyday lives. We identify specific persons as leaders because of the way they act and relate with other people. Leadership can be defined as both the ability and the process of influencing others to make them understand what needs to be done and to work at their best to accomplish the shared objectives. The following are the two forms of leadership: Formal Leadership – refers to influence over other people because of a person’s appointed or elected position. Informal Leadership – refers to influence over other people not because of a person’s position, but due to his or her special skills or qualities as a person. The Nature of Directing After the completion of the planning and organizing functions in management, leading comes next as an important management function. A leader must be able to direct other people’s actions and behavior toward a specific objective. It is important to know the essential factors to successfully direct other people’s actions and behavior. Clear Vision and Objectives Before a leader can direct other people, he or she must have a clear vision of the direction where the organization should go. The manager clarifies the goal or set of objectives for the members to understand, maps out the path or strategy to reach the target goal or destination, and then he or she leads the members to focus their effort on reaching the target goal or destination. Leader-Follower Relationship Directing other people’s behaviors and actions requires developing and maintaining good working relationships between the leader and the member. With a positive working relationship established between leader and member, the member ultimately becomes a follower. This is why effective leadership does not happen overnight. A leader recognizes the individual differences among his members and he or she capitalizes on the individual strengths possessed by each member. Influence of Persuasive Power Directing involves having a persuasive power to influence other people to act in a certain way. Power is the ability to influence other people to do something that you want them to do. A leader’s persuasive power may rest on his or her skills, competence, or specialized knowledge. This is called expert power. For example, if you are a leader in a technical area, you should be able to guide your members on the technical aspects of the work in a professional way. Another type of power that come from his or her positive character or personality traits that the members admire is called referent power. The negative kind of power is the coercive power. In this case, a leader forces the others to follow him or her by the virtue of the power of his or her position. Coercive tactics are used to direct others, such as through intimidation or threat of punishment. Trait Perspective and Behavioral Perspective to Understanding Leadership In understanding and describing what really makes a leader, there are two types of perspectives that you can refer to and those are: Trait Perspectives on Leadership – according to the trait perspective, you can distinguish the leaders from the non-leaders by their key traits. The following are five key traits of a leader o Ambition – a clear sense of what one wants to achieve in one’s life o Motivation – an inner drive and energy to accomplish an objective o Honesty – a high sense for truth, transparency, and integrity o Self-confidence – a strong belief in one’s inner strengths and capabilities to get a job done or to achieve a target goal o High Need for Achievement – a commitment to excel or to reach a worthy goal  D I S S | P a g e | 18 Behavioral Perspectives on Leadership – Some people tend to think that traits are important in a leader, but actions are much more important as basis for leadership. These suggest that leaders can be best distinguished from the non-leaders in their actual behavior, or by the scope and extent of activities that they have accomplished. o High performing leaders – are more productive and have accomplished a greater number of concrete or project deliverables to the company. They measure their leadership success by achieving a high- performance record. o Low performing leaders – have produced concrete outputs, but they have not maximized opportunities to produce more for the company. Difference between Leading and Managing In the workplace, a leader may not necessarily be a manager. The opposite is also true – a manager may not necessarily be a leader. This is due to differences in mindsets, work orientations, and main responsibilities between a leader and a manager. These differences are listed in the table below: Leader Manager More concerned in setting a direction for the More concerned with short-term challenges in the organization in the long-term workplace Highly focused on crafting strategies Highly focused on implementing strategies Strives to empower others Strives to accomplish tasks Mostly inspires people Mostly directs people Leadership Styles Leadership styles refer to those recurring or relatively consistent patterns of behavior shown by leaders when they go about doing their work. High (1.9) (9,9) Concern for People (5,5) (1,1) (9,1) High Low Concern for Production The five resulting leadership styles are as follows: 1. Impoverished Management (1,1) – Managers with this approach are low on both dimensions and exercise minimum effort to get the work done from subordinates. The leader has low concern for employee satisfaction and work deadlines and as a result, disharmony and disorganization prevail within the organization. 2. Task Management (9,1) – also called dictatorial or perish style. Here, leaders are more concerned about production and have less concern for people. The employees’ needs are not taken care of and they are simply a means to end. The leader believes that efficiency can result only through proper organization of work systems and through elimination of people wherever possible. 3. Middle-of-the-road (5,5) – This is basically a compromising style wherein the leader tries to maintain a balance between goals of company and needs of people. The leader not push the boundaries of achievement resulting in average performance for organization. Hence, neither employee nor production needs are fully meet. 4. Country club (1,9) – this is a collegial style characterized by low task and high people orientation where the leader gives thoughtful attention to the needs of people, thus providing them with a friendly and comfortable environment. The leader feels that such a treatment with employees will lead to self-motivation and will find people working hard on their own.  D I S S | P a g e | 19 5. Team Management (9,9) – characterized by high people and task focus, the style has been termed as most effective style. The leader feels that empowerment, commitment, trust, and respect are the key elements in creating a team atmosphere that will automatically result in high employee satisfaction and production. Additional Types of Leadership These are the other types of leaderships that were not listed and described earlier: Charismatic leadership – this refers to those leadership of those exceptional figures whose personal qualities and abilities make them capable of having a profound and extraordinary effect on their followers. Transactional leadership – this refers to a leader-follower relationship borne out of routine accomplishment of tasks and activities in the workplace. This type of leadership describes the normal patterns of interactions and exchanges between a leader and a follower. Transformational leadership – this refers to a leader-follower relationship that goes beyond routine accomplishment of tasks and activities, but widens to a more meaningful relationship wherein the leader is able to successfully influence follower to go beyond their self-interests for the good of other people. Informal Leadership Informal leadership refers to leadership found in informal organizations, in which the highest amount of influence and status is ascribed to an informal leader. An informal leader emerges from a group because of his or her exceptional ability to relate well with other members of the group. He or she can explain better the rules and norms within the office because of his or her ability to communicate well with members of the group organization and understand their needs. He or she is looked upon by members as their confidant and protector of their interests. Informal leadership is important by ensuring workers have someone whom they could trust to explain what is going on the company, especially when there are major organizational changes, such as a merger. They are also important in broadening the interests and activities of the workers beyond work, such as engaging in sports activities, or in undertaking community service to outside barangays.  D I S S | P a g e | 20 Written Works 13 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. IDENTIFICATION Direction: Identify what is being ask. 1. A form of leadership in which the leader can influence others because of his position. 2. A form of leadership in which the leader can influence because of his skills and qualities. 3. A leader’s power because of his skills, competence, and specialized knowledge. 4. A leader’s power because of his character and personality traits that the members admire. 5. A leader’s power in which he can force others to follow him. 6-7 Give at least 3 traits of a leader. 8-10 Determine if it is a leader or a manager. 8. Strives to empower others 9. Strives to accomplish tasks 10. Inspires people  D I S S | P a g e | 21 LEADING Learning Content 14: Motivation Theories Motivation For a business to succeed, managers must know how to motivate the members of their organization for them to become self- driven to perform consistently well. Unlike in planning and in organizing wherein you operate with physical or tangible resources, in motivation you have to apply psychological concepts and behavioral principles to be able to understand, influence, and predict the attitudes and actions of people in relation to their work. Motivation refers to internal needs and drives of a person that gives direction to his behavior and determines the level of energy and effort that he puts in his work. The belief that each person is different from others is commonly referred as the law of individual differences. Because of these individual differences, a manager must approach employees as unique persons with different backgrounds, skills, personalities, attitudes, capabilities, and motivations. Individuals also vary in how they see, interpret, and organize things around them. This phenomenon by which a person’s views become filtered by his own beliefs, values, backgrounds, experiences, and expectations is called selective phenomenon. As a manager, you must learn how to manage the different motivations of people by using individual approaches and ways. The Nature of Motivation Motivation of people may come from intrinsic or extrinsic sources. Intrinsic - the work behavior is being performed for its own inherent values. Individuals expect some autonomy that would allow them flexibility and creativity to do things. They also look for opportunities to enhance their skills and talents which promotes self-growth and career development. Extrinsic – the work behavior is being performed to acquire some reward, which may be material or social in nature. An example of extrinsic motivation that is material in nature is monetary rewards. For instance, an employee may be motivated by the attractive salaries and perks that accompany his job. It is possible that employees may be both intrinsically and extrinsically motivated in their work. What is clear is that people come to work to derive certain outcomes that satisfy them. Theories of Motivation Several approaches to understanding internal drives and needs within employees can be examined through the use of models for understanding motivation. Models contribute to understanding motivation. All models share some similarities. In general, they encourage managers to consider minimizing the use of lower-order maintenance and the extrinsic factors, and maximizing the use of higher-order, motivational, and intrinsic factors. Needs Theories The Needs Theories on Motivation emphasize that people are motivated by their desire to satisfy their needs. The following discusses three theories that focus on satisfying people’s needs, namely: Maslow’s Hierarchy of Needs, Alderfer’s ERG Theory, and Herzberg’s Two Factor Theory. Maslow’s Hierarchy of Need - This theory assumes that individuals should satisfy first the physiological needs at the bottom of the hierarchy before proceeding to the next level of need. The hierarchy is illustrated in figure 14.1  D I S S | P a g e | 22 Maslow’s theory implies that human needs have different strengths. These human needs increase in importance in a predictable way. According to Maslow the lower-order needs (physiological needs, safety, and security) are considered as primary or basic needs. Only after individuals have satisfied their basic needs do they begin to seek the fulfilment of the higher-order needs. Alderfer’s ERG Theory Figure 14.1 Maslow’s Hierarchy of Needs On this theory, individuals have unfulfilled needs that form different levels – existence (physiological and safety needs), relatedness (interpersonal relationships), and growth (individual development needs). These needs are similar to Maslow’s types of human needs. However, unlike in Maslow’s theory, according to Alderfer, if individuals become frustrated in satisfying the higher-level needs, they can direct their efforts to satisfy the lower-level needs. Alderfer’s theory condensed Maslow’s categorization of needs to just simply three: existence, relatedness, and growth. However, Alderfer’s theory is more open-minded and it does not assume a progression of needs from one level to another level. As such, this theory responded to the main criticism raised against Maslow’s theory. Needs do not conform to a progression order. That is, an individual can choose to start from any level of needs based on what he likes. Herzberg’s Two-Factor Theory This theory states that there are two separate sets of factors that influence motivation. One set is called maintenance (or hygiene) factors because they must not be ignored. They are potent dissatisfiers and can cause negative feelings to employees. However, these factors are merely dissatisfiers and therefore, not strongly related to motivation. The other set of factors, called motivational factors, is compromised of the real satisfiers, and therefore, the ones that actually motivate people in the workplace. Based on Herzberg’s theory, the maintenance or hygiene factors are necessary, but are not critical to propel an individual to be fully motivated in his work. For instance, one can be either satisfied or dissatisfied with the basic essentials or the so-called maintenance factors, namely: pay, working conditions, job security, company policy and administration, relations with supervisors, peers and subordinates and status. These factors are not the real motivators per se in the workplace. The real factors that motivate an employee are recognition, advancement, responsibility, achievement and the work itself. Herzberg’s theory became the basis why companies put emphasis on the continuous development of their employees. This theory emphasizes that people seek more meaning and personal satisfaction in the nature of their work. Behavior Modification Model The behavior modification models focus on the external environment that influences employee behavior. The assumption is that behavior can be affected by manipulating their consequences, particularly by administering rewards and punishments. Behavior is therefore learned, modified, or reinforced through their potential consequences, which may be positive or negative on the part of the employee. Law of Effect The law of effect maintains that a person will likely repeat a certain behavior if it is accompanied by a favorable consequence, and that a person will likely not repeat a certain behavior if it is accompanied by an unfavorable consequence or lack of consequence. The law of effect implies that people will work their best when the conditions  D I S S | P a g e | 23 in the workplace are encouragingly pleasant and non-threatening. Managers should be aware that employees expect some form of reward for their good performance. Goal Setting Model Goals are targets of performance for people. They provide focus to the actions of individuals in the workplace. Goals, therefore, can motivate individuals based on the Goal Setting Model of Motivation. However, in order for goals to serve as motivational factors, the following should be present: Goal acceptance – employees should genuinely accept these goals assigned to them. Goal Specificity – in order for the employees to be motivated, goals should be specific, measurable, and clear. Goal Challenge – goals must be stimulating and challenging enough to motivate employees to work on them. An important concept in goal setting is self-efficacy or the belief of an individual in himself that he has the capabilities and competencies to do his work. This concept is important for managers to think about because given the same set of goals, some employees may have low self-efficacy, while others have high self-efficacy. Developing self-efficacy among employees will help motivate them to reach for the group goals. Expectancy Model Although employees may know how to set goals for what they do, they may vary in they way they expect that they will be successful in their work. The expectancy model is an approach to motivation by making employees aware of their work expectations. The expectancy model states that motivation is a product of how much one wants something, and the estimated probabilities of one’s effort will lead to task accomplishment and reward. There are three factors in the expectancy theory, and the formula is: Valence x Expectancy x Instrumentality = Motivation. Valence - the strength of a person’s preference for an outcome. For instance, a sales person wants a job promotion so badly this year. Expectancy – refers to the strength of belief that one’s effort will be successful in accomplishing a task. For instance, the sales person may expect a 90% probability that he will be able to generate a substantial increase in sales this year, and he therefore worked hard. Instrumentality – pertains to the belief that successful performance will be followed by a reward. For instance, the sales person has 100% probability that his dramatic increase in sales performance will lead to a job promotion. Given this probability in mind, he therefore, does everything possible to expand his sales performance knowing that there is a perfect chance that he will be promoted for his outstanding sales record. Many companies today use the expectancy theory in setting their performance objectives because it offers a more realistic view of the possible events that might happen. The Equity Model This theory relates to the employee’s intellectual processes for balancing his effort and the rewards that he gets for it. The model has a double comparison—a match between an employee’s perceived inputs and outcomes, coupled with a comparison with some referent person’s rewards for his input level. The following are implications of the Equity Model, which managers can use in motivating people in the workplace: Managers must ensure fairness in rewards and compensation systems. Managers must adopt transparent procedures in formulating policies on rewards and compensation systems. Managers must adopt an appropriate performance appraisal system. In summary, all the motivational models mentioned above have strengths and weaknesses, advocates, and critics. No model is perfect, but all of them add to your understanding of the motivational process.  D I S S | P a g e | 24 Written Works 14 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. SHORT ANSWER Directions: Answer what is asked. Limit your answers into 3-5 sentences only. (5 points each) 1. How does motivation affect employee’s performance in an organization? 2. What theory would you use to guide you in motivating your future employees? Why?  D I S S | P a g e | 25 CONTROLLING Learning Content 15: Management Control Methods and Systems Controlling This is a management function that refers to the design and implementation of systems, approaches, and procedures that measure performance against plans or standards, help solve problems and prevent them from occurring, and ensure that the desired objectives and results are achieved. You will recall in module 1 that there are four basic management functions— planning, organizing, leading, and controlling. While the three management functions of planning, organizing, and leading essentially dwell on setting objectives and carrying out actions to achieve those objectives, the function of controlling is critical in gauging whether objectives were fully and satisfactorily met. Therefore, controlling is knowing how well your organization has performed and taking necessary corrective actions to achieve your objective. The Link between Planning and Controlling The planning and controlling functions are intertwined because they both focus on the same set of target objectives. But while planning starts the management process of formulating the SMART objectives, controlling completes the management process by evaluating the achievement of those SMART objectives. If planning is like a ship sailing in the sea with a desired direction of where to go, controlling in that ship constantly maneuvering its course to reach its target destination. You need a tool, such as a compass, to guide you in steering the ship to its right course. In an organization, controlling consists of the policies, methods, systems and procedures, and techniques that serve as tools used to align and integrate the efforts of various groups toward a coherent and consistent goal and established standards. Managers supervise, lead, and oversee the entire operation and performance of the organization. Control Systems Control systems refer to systems used to gather information on the difference between an actual output and the desired output. Managers design a control system by following basic steps that is shown in the figure below: Establish the STANDARDS for Performance Performance standards are the criteria to measure the outcomes. They vary according to the specific function and responsibilities of the different departments or groups in an organization. Thus, different performance standards are set for the line departments such as the Human Resources Management Group, the Marketing Group, the Operations Group, the Finance and Accounting Group, and the Management and Information Systems Group.  D I S S | P a g e | 26 MONITOR the Performance Managers gather relevant data to monitor performance. They organize and synthesize the data into meaningful information. Monitoring systems nowadays use information technology for greater speed, efficiency, and accuracy in data collection, processing, and dissemination. EVALUATE the Performance As managers track activities, they analyze the results by comparing the information gathered with performance standards set earlier. The evaluation points our any gap in performance. The results of the evaluation guide managers in deciding on the best course of action to take. Do the Required ACTION or Intervention Based on the results of the evaluation of performance, managers undertake the necessary actions. Corrective or preventive actions must be done to address the performance gaps identified. This requires a timely response to prevent further complications arising from the gaps. Monitoring regularly and timely provides the basis for managerial interventions and corrective actions. COMMUNICATE the Performance Results Results of the performance evaluation are consolidated, summarized, and communicated to key officers, such as the production or operations manager and quality assurance manager for their decision-making and planning. This feedback information is useful in determining specific areas for further improvement in the control systems. Potential investment outlays to improve existing control measures or facilities are communicated to the finance manager. Control Methods Control methods refer to specific tools and techniques used to ensure that performance standards are met. In manufacturing firms, the Operations Department may use a control method called statistical process control (SPC), a tool in total quality management. Total quality management (TQM) refers to the adoption and application of quality principles throughout the organization. TQM approaches focus on continuous improvement, enhancement of product or service quality, and effective customer response. The quality movement evolved through the efforts of W. Edwards Deming, a staunch advocate of innovation and quality assurance. Deming championed quality principles using SPC. This control method involves carefully spotting the defects, tallying them, analyzing their causes, correcting the defects, and keeping a record of the results of the corrective actions taken. Applications of Control Methods Accounting Control: Accrual Method vs. Cash Method The accrual method recognizes both income and expenses at the time they are earned or incurred, and not when the cash is actually paid. As such, revenue is recorded when it is earned regardless of when the cash payment is actually received. This method is the opposite of the cash accounting method, which recognizes financial transactions only when there is cash actually paid or received by the company. Marketing Control: Customer Relationship Management (CRM) Today’s highly competitive environment calls for better management control systems in marketing. Many companies now use customer relationship management (CRM), an approach to better understand customer needs and desires, and maintaining close communication with customers to fulfill those needs and desires. A customer relationship management (CRM) system is supported by special software that track information on customer behavior, wants, and preferences. Relationship marketing is enhanced through advancements in information technology. CRM involves the following features: Gathering of accurate and up-to-date customer profiles Use of meaningful customer data for better interaction with customers  D I S S | P a g e | 27 Increased online services that provide information accessible to both the customers and the company, such as in tracking orders Multiple contact points by which customers can interact with the company through suitable distribution channels and media Use of marketing information to develop business strategy Developing better indicators for marketing performance, such as customer satisfaction, customer acquisition, customer retention Developing better market segmentation based on profitability Analysis of the company’s culture for delivering more value to customers Data gathering that contributes to relationship building with customers Anticipating future needs of customers Other Control Concepts and Approaches Apart from the different control methods presented earlier, there are other important concepts and approaches that managers use to ensure a successful implementation of programs and projects. Here are the additional concepts and approaches used in controlling: Feedforward, Concurrent, and Feedback Controls Improving performance through control systems may use other types of control systems. In the context of the stages in any kind of process – which may be referred to as “before-the-process” stage, followed by the “during-the-process” stage, and ended by the “after0tge0oricess” stage – the three types of controls that correspond to them respectively are feedforward, concurrent, and feedback controls. Feedforward controls are preventive controls that are established before the start of work activities. Because they are installed before the actual process has begun, they solve problems before they occur. Preliminary control is ensured in the system through the proper sourcing of inputs. Concurrent controls are established during the actual implementation of work activities. The key people in-charge of concurrent controls make sure to intervene immediately once they spot an error or a problem while the process is going on. Feedback controls are established after the work is completed. They allow people to evaluate the quality of the product or service after it is completed or served to the customer. Since the customer is the target user or consumer of a product or service, his or her feedback is important to the business. Supply Chain Management One important strategic approach in coordinating the efforts of key departments is supply chain management, which links all operations within the company that deal with suppliers, such as those employees involved in transportation, purchasing, manufacturing, and distributing the company products and services. Manuals Apart from the control systems mentioned above, another control mechanism is the use of documented manuals for instructions, procedures, or policies.  D I S S | P a g e | 28 Written Works 15 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. MATCHING TYPE. Identify what is being described in Column A. Select your answer in Column B (1 point each). COLUMN A COLUMN B 1. Works closely with top management and line departments to evaluate and modify a. ICT Management the organizational structure, recruitment, and other procedures for changes needed b. Financial Management to facilitate the firm’s execution of its competitive strategies. c. Materials and Procurement 2. Responsible for recruitment and selection, training and career development, Management compensation and rewards, performance appraisal, employee relations, employee d. Operations Management retention programs, and employee separation. e. Strategic Human Resource 3. Responsible in managing these three stages of production: (1) acquisition of Management inputs, (2) control of conversion processes, and (3) distribution of goods and f. Traditional Human Resource services. Management 4. This department estimates the capital requirements of the company, handles, and decides on the cash outlays and monitor and analyze of the financial health of the company. 5. It involves the planning, coordination, maintenance, and control of the computer usage for business operations. KNOWING THE PROCESS. Arrange the process in order. Basic Steps in Control Systems (5 points) A. Communicate the results B. Do the required action C. Establish standard for performance D. Evaluate the performance E. Monitor the performance ______________ 1. Step 1 ______________ 2. Step 2 ______________ 3. Step 3 ______________ 4. Step 4 ______________ 5. Step 5  D I S S | P a g e | 29 Learning Content 16: Introduction to the Different Functional Areas of Management In this section, you will be learning about the different functional areas of management. Also, in here, you will also be able to define and learn their different definitions and responsibilities. Human Resource Management This refers to the collection of programs, practices, and policies concerned with developing, motivating, transforming, and maintaining the workforce to achieve the organization’s objectives. The different tasks performed in human resource management are discussed in the following sections. The Traditional Human Resource Management In its traditional role, human resource management performs the administrative and clerical functions pertaining to all employee concerns. Human resource management is traditionally referred to as “personnel department.” Today, most companies call this unit as HR Department. Other companies also call it as Human Capital Department. The HR Department is responsible for recruitment and selection, training and career development, compensation and rewards, performance appraisal, employee relations, employee retention programs, and employee separation. The HR’s traditional role is basically to provide administrative support to the line departments. Strategic Human Resource Management The dynamic environment of business firms today shows an influx of changes happening in the labor market, customer preferences, societal expectations, shareholder demands, economic trends, and technological advancements. Firms compete with each other more intensely and aggressively. Amidst today’s growing competition among firms, human resource management has now evolved as a strategic partner of senior and line managers to facilitate the execution of the organization’s strategies, referred to as strategic human resource management. In this new approach, the HR manager works closely with top management and line departments to evaluate and modify the organizational structure, recruitment, and other HR procedures for changes needed to facilitate the firm’s execution of its competitive strategies. The HR department now plays a role of a change agent in transforming the workforce to be more responsive to customer needs. The strategic role of human resource management enables it to become a champion for increasing employee morale, engagement, and commitment. Morale is about the employee’s feelings and attitude toward his or her job. Engagement is about the employee’s extra effort to his or her work beyond the minimum level required. Commitment is about the employee’s sense of dedication to his or her work and to the organization. Marketing Management This refers to systematic and consistent efforts to attract customers and keep them through effective delivery and communication of the value of the product or service from the customers’ point of view. The role of marketing is to identify markets for products or services of the company and ensure the effective delivery of those goods and services to the target customers. Traditionally, the term market refers to the physical location where buyers and sellers are gathered to buy and sell products and services. In marketing management, markets refer to groupings of customers having similar wants. This functional area is overall in-charge of marketing management. The following paragraphs are a mere glimpse of the nature of marketing activities: Analysis of Target Market, Positioning, and Segmentation Market research is conducted to identify and analyze the potential buyers for the company’s products or services. Potential customers are divided into segments, which refer to distinct groups and profile people who prefer certain features of products and services. This is called market segmentation. After doing the segmentation, the next task is to identify which segment present greatest opportunity – called the target market. For instance, in selling bakery products, your target market could be housewives and students live in a certain area. Marketers focus their effort only on the target market or target customers. This is called market positioning.  D I S S | P a g e | 30 Analysis of Value Proposition for Products or Services A customer chooses a product or service that offers the most value to him or her, which can be tangible or intangible. Value proposition, therefore, refers to the benefits of the product or service that are communicated to the target customer. Examples are weather-resistant shoes, toys with safety protection features, or a condo unit overlooking the scenic Manila sunset, among others. The marketing department identifies and communicates the value proposition of the products and services that the company offers to the target markets. Design and Delivery of the Marketing Mix: 4 Ps Marketing efforts and strategies are directed towards identifying and delivering the 4 Ps – namely, product, price, place, and promotion. Product refers to offering the customers the specific features and qualities of the product or service that they prefer. Price refers to pricing decisions and strategies to market company products or services, such as offering at a lower cost or bundling a lower-cost item with a higher cost item. Place refers to locating the target market, choosing the marketing channels, and the mode and timings of delivery. Finally, promotions refer to marketing strategies to attract customers to buy the company products and services, such as advertising, offering product samples, and giving discounts. Analysis of Marketing Channels These are the means through which the target market is reached. Generally, they are classified into communication channels, distribution channels, and service channels. Communication channels may refer to newspapers, leaflets, television advertisements, billboards, posters, telephone, and websites. Distribution channels are used to display, sell, or distribute the products or services. Service channels may be transportation companies, banks, and insurance companies. Analysis of Competitors Marketing management involves a systematic program of strategies and activities for the timely delivery of right products and services to target customers so as to satisfy and keep them, thereby increasing sales and profit of the company. It is crucial to identify the main competitors of the company and their competitive advantage and strategies, and to anticipate their competitive moves. The analysis of competitors includes their market shares and geographic locations. Operations Management This refers to the processes, approaches, and strategies in the production system involving the transformation of inputs into finished goods and services. A production system is a system for acquitting inputs, converting them into outputs, and then distributing the outputs. The operation manager is responsible for managing the organization’s production system. He or she takes the lead in managing these three stages of production: (1) acquisition of inputs, (2) control of conversion processes, and (3) distribution of goods and services. The following are the tasks performed in the Operations Management Department: Design and Implement Production Systems to Improve Responsiveness to Customers Managers design production systems to produce goods or services that have the quality, cost, and features that customers want. These attributes provide competitive advantage to the company. To do this, the operations group adopts specific operations management techniques. One technique is flexible manufacturing system, which is reducing the time and costs for set-up of equipment to make a particular product. Another technique is just-in-time inventory system; wherein parts or supplies arrive at a production site when they are needed – not before – in order to reduce costs in warehouse stockpiling. Design and Implement Production System to Improve Quality and Efficiency Quality features for products or services depend on the needs and perceptions of customers. The common concept of quality is durability, reliability, and satisfying the unique needs of customers. Apart from satisfying customers, higher quality products can charge higher prices, which increase profits. Higher quality in production systems also increases operational efficiency, which boosts productivity and lowers operating costs. These are achieved through fewer defects, less waste, and less time spent to fix mistakes. The Operations Management Department uses various tools and techniques to improve quality and efficiency.  D I S S | P a g e | 31 Financial Management This refers to activities and strategies related to the procurement and utilization of funds that seek to maximize the profits of the company. This is a management function concerned with overall management of a firm’s financial resources. It is directly linked with other operations, such as marketing, human resource, and management information systems. The finance manager is responsible for managing the financial resources of a firm. He or she heads the Finance Department, which also includes the accounting staff. The following paragraphs are the different tasks performed in financial management: Capital Determination, Balanced Capital Structure, and Funds Sourcing The finance manager estimates the capital requirements of the company. This is done through analysis of programmed revenues, costs, and expected profits. A balanced capital structure is maintained through a combination of debt capital and equity capital. The finance manager also ensures a regular supply of funds to maintain the operations of the business. Additional funds may be raised from several sources, such as through loans taken from banks, company issuance of shares of stocks, deposits from bonds, or through private donations. The finance manager’s decisions on fund sourcing involve careful weighing of the cost of financing, period of financing, and expected returns. Management of Cash The finance manager handles and decides on the cash outlays of the company. Cash expenditures consist of salaries and benefits of employees, purchase of materials and equipment, overhead costs, marketing expenses, and many others. Financial Control Control over financial resources is a critical task of the finance manager. This is done through regular monitoring and analysis of the financial health of the company. Techniques used include financial ratios and profit-loss analyses. Profitability and Safety in Investment Decisions The finance manager makes decisions pertaining to investments in fixed assets, working capital, and investment funds. These investments must ensure long-term profitability and safety for the company. Material and Procurement Department This refers to the sourcing, planning, and management of the suppliers and the materials required by business activities or projects of the company. It ensures that the supplies and materials are regularly available and timely delivered for the business operations of the company. It also ensures that procurement of supplies and materials conforms to high quality standards. Moreover, purchasing should be made at lower costs to ensure efficiency in business operations. The following are its tasks: Materials Requirement Planning This involves identifying, quantifying, and scheduling the acquisition of materials and equipment needed at specified periods corresponding to the production schedules. The manager observes a lead time in the acquisition of materials. This serves as a safeguard in case of delays in the delivery of materials. MRP also involves searching for and identifying a pool of suppliers, fabricators, their affiliate companies, contact information, supply capacities, price ranges, product specifications, and logistics arrangement for delivery. Preparing Guidelines for Supplier Section The manager develops policies, procedures, and guidelines for selection of suppliers and procurement of materials. These documents on procedures and guidelines are formed into a manual to guide the activities of the material and procurement staff. It also ensures compliance to quality standards of the company. Purchasing Supplies and Materials Purchasing involves the actual procurement of specific supplies and materials for the identified project or business activity. It should be aligned with the specifications, schedule, and budget of the project. Purchasing activities include issuing the request for quotations, evaluating the bids, awarding the contract, and executing the purchase orders. The purchasing officer develops  D I S S | P a g e | 32 and maintains good business relationships with suppliers. This ensures sustainability of operations, and also promoted goodwill with external suppliers that may lead to the company to be considered as first preference by and important supplier. Office Management Office management is planning, coordination, management, and supervision of the administration office of the company. The office manager is in charge of the day-to-day administration of the business enterprise. He or she represents the image of the company to outside clients. The following are tasks that this management performs: Delineating Responsibilities and Work Load of Staff – the manager assigns the specific responsibilities of the administrative staff. He or she ensures that the workload is fairly distributed among the staff to ensure efficiency and fairness. Maintaining Orderliness – the manager makes sure that the office is well-maintained and in order. Proper procedures are clarified to the staff to perform their routing work efficiently. These include making phone calls, proper handling of office equipment, and other related functions. Customer Relations – The manager ensures that customers and guests who visit the office are greeted courteously and are well-attended. He or she must ensure that guests who encounter the office staff develop a positive image of the company. This helps the company not only in attracting clients, but also in instilling a sense of pride among employees. Information and Communication Technology Management This is management function that involves the planning, coordination, maintenance, and control of the computer usage for business operations. It involves managing the ICT staff, computer hardware, software, and use of information technologies. With the advancements in digital tech, the role of the ICT staff is critical. The manager handles the overall responsibility in the performance and delivery of ICT services to the company. The following are different tasks: Development of ICT Capabilities The manager leads in developing the capabilities for using ICT for business operations. These include developing the information technology systems for operations, such as with clients. It also includes the development of management and information systems for use by the Production/Operations Department, Marketing Department, Material and Procurement Department, Finance Department, and Human Resource Department. Maintenance of Computer Hardware & Software This involves the physical and technical maintenance of computer hardware and software, the operating systems, and their safety and recovery during emergency situations. Assessment of Staff Capabilities of Technology Systems This refers to the analysis of the company-wide staff capabilities and training required to enhance and update the company’s ICT systems. The manager identifies opportunities for learning and development in ICT across all departments of the company. This enhances greater adoption of ICT within the company and increases its efficiency and productivity.  D I S S | P a g e | 33 Written Works 16 The teacher may facilitate this activity either as a Short Quiz or Assignment. The teacher may change some of the items or he/she may facilitate other course activity. IDENTIFICATION Direction. Read each question ______________ 1. This refers to the collection of programs, practices, and policies concerned with developing, motivating, transforming, and maintaining the workforce to achieve the organization’s objectives. ______________ 2. Human resource management has now evolved as a strategic partner of senior and line managers to facilitate the execution of the organization’s strategies, referred to as ________________. ______________ 3. It is about the employee’s extra effort to his or her work beyond the minimum level required. ______________ 4. It is about the employee’s sense of dedication to his or her work and to the organization. ______________ 5. This refers to systematic and consistent efforts to attract customers and keep them through effective delivery and communication of the value of the product or service from the customers’ point of view. ______________ 6. This refers to the processes, approaches, and strategies in the production system involving the transformation of inputs into finished goods and services ______________ 7. This refers to activities and strategies related to the procurement and utilization of funds that seek to maximize the profits of the company. ______________ 8. This refers to the sourcing, planning, and management of the suppliers and the materials required by business activities or projects of the company. ______________ 9. This refers to planning, coordination, management, and supervision of the administration office of the company. ______________ 10. This is a management function that involves the planning, coordination, maintenance, and control of computer usage for business operations.  D I S S | P a g e | 34 Learning Content 17: Special Topic in Management: Family Business Enterprise Small Business Management and Entrepreneurship If you intend to go into a small business wherein you want to be your own boss, then being an entrepreneur is the right track for you. An entrepreneur is a person who establishes a business by identifying a need or opportunity to exploit, and takes on the responsibility and financial risk for owning and operating the business. If you wish to become an entrepreneur, you need to know the distinguishing features that set entrepreneurs apart from other working individuals. Identifies Business Operations An entrepreneur is someone who identifies business opportunities in the environment where he lives. To identify business opportunities, he must have an open and inquisitive mind about business and activities that earn money. He continuously searches for ideas on what people want—which may be a particular project or service. He finds out if people are willing to spend money for it. As an entrepreneur, he needs to meet new people to identify business opportunities. As such, he enjoys interacting with people. He does not hesitate to approach strangers, or wide array of people just to learn more about their lifestyles, habits, preferences, aspirations, and the like. Makes Plans and Decisions After selecting a business opportunity, an entrepreneur makes plans and decisions to organize resources in setting up his business enterprise. He performs managerial functions of planning, organizing, coordinating, staffing, motivating, and controlling his business enterprise. Moreover, he prepares an action plan which specifies, among other aspects, the quality features of his product or service to entire customers. Invests Time, Effort, and Money An entrepreneur is a very busy person. He invests time, effort, and money to manage his business. He makes vital decisions about the various aspects of his business. In addition, decision-making is a regular function for him. He weighs the pros (benefits, advantages) and cons (costs, disadvantages) of things and chooses the best alternative course of action. He sticks to plans and budgets, but keeps an open mind to adapt to new situations. Takes Calculated Risks An entrepreneur takes calculated risks, which may pertain to financial and operational risks of business. For example, some customers who paid on credit basis may be delinquent in their scheduled payments. Manufacturing equipment may suddenly break down due to a mechanical fault. A supplier may suddenly get sick and fail to deliver the raw materials required for the product. Therefore, an entrepreneur knows that he is not in full control over the behavior of other people and other institutions that he deals with. He should be willing to bear the risks and uncertainties of the business. To be able to take calculated risks, he must have courage, self-confidence, and prudence in his work. Introduces Innovation and Change An entrepreneur strives to succeed by being innovative., creative, and open to change. He tries out new approaches for implementing usual tasks and activities. He looks for new resources to create better products and services. He builds relationships and alliances with new business partners. Also, he networks with associations and organizations to leverage various kinds of support to his business. An entrepren