Planning: Decision-Making Processes PDF

**PLANNING** **WHAT IS PLANNING** - The act or process of making or carrying out plans. **WHY DO MANAGERS NEED TO PLAN?** 1\. Planning is a primary management functions that establishes the basis for all other management function. 2\. Planning establishes coordinate efforts 3\. Planning redu...

**PLANNING** **WHAT IS PLANNING** - The act or process of making or carrying out plans. **WHY DO MANAGERS NEED TO PLAN?** 1\. Planning is a primary management functions that establishes the basis for all other management function. 2\. Planning establishes coordinate efforts 3\. Planning reduce uncertainty 4\. Planning reduce overlapping and wasteful activities. 5\. Planning establishes goals and standard use and controlling. MANAGERS AS DECISION MAKERS Chapter 7 **7.1 THE DECISION -- MAKING PROCESS** Managers at all levels and in all areas of organizations make decisions And all managers would like to make good decisions because they're judged on the outcomes of those decisions. **7.2 MANAGERS MAKING DECISION** Decision making is particularly important to managers. And that's why managers when they plan, organize, lead, and control, are called decision makers. DECISION -- MAKING PROCESS **8 STEP IN DECISION- MAKING PROCESS** **STEP1: IDENTIFY A PROBLEM** Every decision starts with a problem, a discrepancy between an existing and a desired condition. Managers have to be cautious not to confuse problems with symptoms of the problem. Problem identification is subjective. **STEP 2: IDENTIFYING DECISION CRITERIA** Decision Criteria define what's Important or relevant to resolving a problem. **STEP 3: ALLOCATING WEIGHTS TO THE CRITERIA** Decision Criteria define what's important or relevant to resolving a problem. **STEP 4: DEVELOPING ALTERNATIVES** This step requires the decision maker to list viable alternatives that could resolve the problem.  **STEP 5: ANALYZING ALTERNATIVES** Once alternatives have been identified, a decision maker must evaluate each one. How? By using the criteria established in Step 2. Multiply each alternative (exhibit 7-3) by the assigned weight (exhibit 7-2) to get the weighted alternative. **STEP 6: SELECTING AN ALTERNATIVE** Once alternatives have been identified, a decision maker must evaluate each one. How? By using the criteria established in Step 2. Multiply each alternative (exhibit 7-3) by the assigned weight (exhibit 7.2) to get the weighted alternatives **STEP 7: IMPLEMENTING THE ALTERNATIVE** Putting the decision into action by conveying it to those affected and getting their commitment to it. Reassess the environment for any changes, especially if it's a long-term decision. **STEP 8: EVALUATING DECISION EFFECTIVENESS** Evaluating the outcome or result of the decision to see whether the problem was resolved. **FOUR PERSPECTIVES ON HOW MANAGERS MAKE DECISIONS** 1\. RATIONALITY A rational decision maker would be fully objective and logical. Selecting the alternative that maximizes the likelihood of achieving that goal. Decisions are made in the best interests of the organization. 2\. BOUNDED RATIONALITY Managers make decisions rationally, but are limited (bounded) by their ability to process information. Managers satisfice, rather than maximize. 3\. THE ROLE OF INTUITION Intuitive decision making is making decisions on the basis of experience, feelings, and accumulated judgment. 4\. THE ROLE OF EVIDENCE BASED MANAGEMENT Evidence-based management (EBMgt) is the "systematic use of the best available evidence to improve management practice".  TYPES OF PROBLEM AND DECISIONS 7.3 STRUCTURED PROBLEM situations that are straightforward, familiar, and easily defined. PROGRAMMED DECISION A repetitive decision that can be handled by a routine approach. **THREE TYPES OF PROGRAMMED DECISIONS:** PROCEDURE -- Series of sequencial steps a manager uses to respond to structured problem. RULE -- An explicit statement that tells a manager what can or cannot be done. POLICY -- A guide for making decision. **Characteristic** - Type of problem - Managerial level - Frequency - Information - Goals - Time frame for solution - Solution relies on Nonprogrammed Decisions - Unstructured - Upper levels - New, unusual - Ambiguous or incomplete - Vague - Relatively long - Judgement and Creativity Programmed Decisions - Structured - Lower levels - Repetitive, routine - Readily available - Clear, specific - Short - Procedures, rules , policies **DECISION MAKING CONDITIONS** THREE DIFFERENT CONDITIONS CERTAINTY -- a situation where a manager can make accurate decisions because the outcome of every alternative is known. RISK -- conditions in which the decision maker is able to estimate the likelihood of certain outcomes. UNCERTAINTY -- A situation in which a decision maker has neither certainty nor reasonable probability estimates available. DECISION MAKING STYLE 7.4 7.4 DECISION MAKING STYLE William D. Perez's tenure as Nike's CEO lasted a short and turbulent 13 months. Analysts attributed his abrupt dismissal to a difference in decisionmaking approaches between him and Nike co-founder Phil Knight. Perez tended to rely more on data and facts when making decisions, whereas Knight highly valued, and had always used, his judgment and feelings to make decisions. As this example clearly shows managers have different styles when it comes to making decisions. TWO MAIN DECISION -- MAKING STYLE\ Linear thinking style. Nonlinear thinking style DECISION MAKING BIASES AND ERRORS Twelve common decision errors that managers make: 1\. Overconfidence Bias 2\. Immediate Gratification Bias 3\. Anchoring Effect 4\. Selective Perception Bias 5\. Confirmation Bias 6\. Framing Bias 7\. Availability Bias 8\. Representation Bias 9\. Randomness Bias 10\. Sunk Costs Error 11\. Self-Serving Bias 12\. Hindsight Bias DECISION MAKING PROCESS Managers follow a process to make effective decisions: they identify and evaluate options, choose the best alternative, implement it, and then assess its effectiveness to make improvements. This ensures decisions are thoughtful and continuously refined. Influencing factors: 1\. Decision-Making Approach Rationality Bounded Rationality Intuition 2\. Types of Problems and Decisions Well-Structured (Programmed) Unstructured (Nonprogrammed) 3\. Decision-Making Conditions Certainty Risk Uncertainty 4\. Decision Maker's Style Linear Thinking Style. Nonlinear Thinking Style Outcome Factors: 1\. DecisionMaking Errors and Biases 2\. DECISION Choosing Best Alternative -Maximizing -Satisficing Implementing Evaluating OVERVIEW OF MANAGERIAL DECISION MAKING Managerial decision-making involves selecting, implementing, and evaluating the best alternative. The process is shaped by factors like the decision-making approach, problem type, conditions, and the manager's style, with errors and biases also influencing outcomes. EFFECTIVE DECISION MAKING IN TODAY'S WORLD 7.5 In today's fast-paced business world, managers often make high-stakes decisions with limited information under tight deadlines. To be effective, they should: 1\. Understand Cultural Differences 2\. Know When to Quit 3\. Use an Effective Decision-Making Process 4\. Build Adaptive Organizations FOUNDATION OF PLANNING CHAPTER 8 **The what and why of Planning 8.1** What is planning? Planning involves setting the organization's goals, developing strategies to achieve them, and creating plans to coordinate activities. In formal planning, specific, time-bound goals are clearly defined, documented, and communicated to ensure everyone understands what needs to be done and how to achieve it. Why do managers plan? Managers should plan because it provides direction, ensuring everyone works toward common goals. It reduces uncertainty by encouraging anticipation of changes and preparation of effective responses. GOALS AND PLANS Planning is often called the primary management function because it establishes the basis or all the other things managers do as they organize, lead, and control. It involves two important aspects: GOALS and PLANS. **PLANNING** - Defining the organization's goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activities **GOALS ( OBJECTIVES )** -- Desired outcome or target. **PLANS** -- Documents that outline how goals are going to be met. TYPES OF PLAN **STATED GOALS** Official statements of what an organization says. And what it wants its various stakeholders to believe its goals. **REAL GOALS** Goals that an organization actually pursues, as defined by the actions of its members. **STRATEGIC PLANS** Plans that apply to the entire organization and establish the organization's overall goals. **SHORT -- TERM PLAN** Plans covering one year or less **LONG -- TERM PLAN** Plans with a time frame beyond three years. **SPECIFIC PLANS** Plans that are clearly defined and leave no room for interpretation. **DIRECTIONAL PLANS** Plans that are flexible and set out general guidelines. SETTING GOALS AND DEVELOPING PLANS 8.3 **APPROACHES TO SETTING GOALS TRADITIONAL GOAL SETTING** In traditional goal setting, goals set by top managers flow down through the organization and become subgoals for each organizational area. **SINGLE -- USE PLAN** A one-time plan specifically designed to meet the needs of a unique situation. **STANDING PLAN** Ongoing plans that provide guidance for activities performed repeatedly. **MEANS-ENDS CHAIN** An integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level. **MANAGEMENT BY OBJECTIVES** A process of setting mutually agreed-upon goals and using those goals to evaluate employee performance. STEPS IN MBO 1\. The organization's overall objectives and strategies are formulated. 2\. Major objectives are allocated among divisional and departmental units. 3\. Unit managers collaboratively set specific objectives for their units with their managers. 4\. Specific objectives are collaboratively set with all department members. 5\. Action plans, defining how objectives are to be achieved, are specified and agreed upon by managers and employees. 6. The action plans are implemented. 7\. Progress toward objectives is periodically reviewed, and feedback is provided. 8\. Successful achievement of objectives is reinforced by performance-based rewards. DOES MBO WORK? - MBO uses goals to motivate them as well. The appeal is that it focuses on employees working to accomplish goals they've had a hand in setting. **STEPS IN GOAL SETTING** 1\. Review the organization's mission, or purpose. 2\. Evaluate available resources. 3\. Determine the goals individually or with input from others. 4.Write down the goals and communicate them to all who need to know. 5\. Review results and whether goals are being met. **DEVELOPING PLANS** - The process of developing plans is influenced by three contingency factors and by the planning approach followed. - The process of developing plans is influenced by three contingency factors and by the planning approach followed. 1\. ORGANIZATIONAL LEVEL Shows the relationship between a manager's level in the organization and the type of planning done. For the most part, lower-level managers do operational planning while upper-level managers do strategic planning 2\. The second contingency factor is environmental. 3\. The last contingency factor also is related to the time frame of plans. APPROACHES TO PLANNING - In the traditional approach, planning is done entirely by top -- level managers who often are assisted by a formal planning department, a group of planning specialist whose responsibility is to helps write the various organizational plan. Under this approach, plans developed by top-level managers flow down through other organizational level , much I like the traditional approaches to goal-setting. CONTEMPORARY ISSUES IN PLANNING 8.4 How can Managers plan Effectively in Dynamic Environment? - A Managers analysis of the external environment maybe improved by environmental scanning, which involves screening information to detect emerging trends. One of the fastest growing orms of environmental is scanning is competitor intelligence. - Managers do need to be careful about the way information, especially competitive intelligence, is gathered to prevent any concerns about whether it'slegal or ethical. The Human Resources Management Process 12.1 **Why do human resources is important?** Human Resources helps establish, reinforce, and alter a company's culture for the better. The primary role for Human resources is to improve employee performance, which makes the overall company function better and achieve more. **Why do human resources is important?** 1\. It can be significant source of controlling competitive advantages. 2\. Important part of organizational strategies. 3\. The way organization treat their people has been found to significantly impact organizational performance. CONTROLLING HR COSTS: HR cause are skyrocketing , especially employee health and employee pensions. Organizations are cooking for ways to control their cost: 1.) **EMPLOYEE HEALTH CARE COST** Employee at paycheck who undergo a conditional health screening and risk assessment, and for those who smoke who agree to enroll in smoking session program, can get free annual physical, Colonoscopies and 100% coverage of pension care as well as lower deductibles and cost. 2.) **EMPLOYEE PENSION PLAN COST** Corporate pension have been around since the 19th century. In fact, the corporate pension system has been described as "Fundamental broken" may companies no longer provide pension. **JOB ANALYSIS AND JOB DEVELOPMENT JOB DESCRIPTION** Written Statement that describe job content, environment conditions and duties. **JOB SPECIFICATION** Describe minimum qualifications, experience, skill required for job. EXTERNAL FACTORS THAT AFFECT THE HRM PROCESS 12-1 **HIGH PERFORMANCE WORK PRACTICES** Self manage teams Decentralized decision making Training programs to develop knowledge, skills and abilities Flexible job assignment Open communication Performance based compensation, Staffing based and person-job and person organization fit. Extensive employee involvement Giving employees are control over decision making increasing employee access to Information. 12-2. HRM PROCESS MAJOR HRM LAWS 12-3  HRM RESPONSIBILITIES 1· Promote the company's safety program 2· Oversee the hiring process 3\. Overseeing an assist and the execution of the plant's affirmative action plans. 4\. Ensure compliance with state and federal laws and regulations. 6· Develop and conduct employee training to minimize skills gaps 7· Address employee concerns and resolve complaints 8\. Implement ideas that will allow the HR department become a better strategic partner within deve. 12-4. RECRUITING SOURCES Internet Employees Referral Company Website Professional recruiting organization Identifying and Selecting Competent Employees **RECRUITMENT** - Some organization have interesting approach to finding employees. **DECRUITMENT** - The other approach to controlling labor supply is decruitment. **DECRUITMENT OPTIONS** Firing Reduce workweek layoffs Early retirements Attrition Job sharing Transfer SELECTION WHAT IS SELECTION? Once you have a pool of candidates, the next step in the HRM process is selection, screening job applicants to determine who is the best qualified for the job. Selection involves predicting which applicant will be successful if hired. SELECTION DECISION OUTCOME VALIDATION and RELIABILITY A valid selection device is characterized by a proven relationship between the selection device and some relevant criterion. A reliable selection device indicates that it measures the same thing consistently. TYPES OF SELECTION TOOLS Application form Written and performance simulation tests Interview Background investigation Physical exam Providing Employees with Needed Skills and Knowledge Miami International Airport, one of the busiest inthe nation, is pioneering a unique approach to training its employees to act as ambassadors for regional tourism. All airport workers undergo customer service and tourism training to address traveler issues. The airport ties this training to ID badge renewal to incentivize participation. Hiring competent individuals is crucial, but successful performance requires alignment with the organization's culture and goals. HRM employs orientation and training to acclimate new hires and improve the skills of current employees, mirroring Miami International Airport's efforts. **ORIENTATION** When starting a new job, employees need an introduction to their role and the organization, similar to a college orientation. This process is called orientation and comes in two types: work unit orientation, which focuses on the employee\'s specific team and job, and organization orientation, which covers the company. **EMPLOYEE TRAINING** Airline accidents are mostly caused by human errors or poor maintenance, not by the planes themselves. Better training can help prevent these issues, as demonstrated by the successful emergency landing of US Airways Flight 1549 in 2009, which was due to the pilots' extensive training. At Bearing Point, ethics training was made engaging through fictional films similar to "The Office," which employees enjoyed and actively sought out. Ruth's Chris Steak House uses simple 4x8- inch cards for all job-related information, from recipes to customer service, which has reduced employee turnover. TWO TYPES OF TRAINING **GENERAL** Communication skills, computer systems application and programming, customer service, executive development, management skills and development, personal growth, sales, supervisory skills, and technological skills and knowledge. **SPECIFIC** Basic life/work skills, creativity, customer education, diversity/cultural awareness, remedial writing, managing change, leadership, product knowledge, public speaking/presentation skills, safety, ethics, sexual harassment, team building, wellness, and others. TRADITIONAL TRAINING METHODS **On-the-job-Employees** Learn how to do tasks simply by performing them, usually after an initial introduction to the task. **Mentoring and Coaching** Employees work with an experienced worker who provides information, support, and encouragement; also called apprenticeships in certain industries. **Job Rotation** Employees work at different jobs in a particular area, getting exposure to a variety of tasks. **Experimental Exercise** Employees participate in role playing, simulations, or other faceto-face types of training **Workbooks/manuals** Employees refer to training workbooks and manuals for information. **Technology-Based Training Methods**. CDROM/DVD/videotapes/audiotape s/podcastsEmployees listen to or watch selected media that convey information or demonstrate certain techniques. **Classroom lectures** Employees attend lectures designed to convey specific information. **Videoconferencing/teleconferencing/ satellite TV** TV-Employees listen to or participate as information is conveyed or techniques demonstrated. RETAINING COMPETENT, HIGH-PERFORMING EMPLOYEES **Employee Performance Management** A performance management system established performance standards for managers to evaluate employee efficiency and effectiveness using various appraisal method to assist employee performance. There are many method to measure evaluate employee performance but most common use is Returned on Investment (ROI). **Return on investment (ROI)** HR can calculate a return on investment to evaluate the training, by determining the benefit of training and dividing it by the training experience expenses. For example after training, a delivery driver is able to make five additional deliveries each day. Each of those deliveries represent \$10 of the driver's time so the benefit to the employer is \$50 per day to each driver trained. Divide the benefit of the training by the cost of training and we can determine the ROI of the training. **PERFORMANCE APPRAISAL METHODS** Over 70% of managers struggle with critical performance reviews, so they use the seven different appraisal methods. **COMPENSATION AND BENEFITS** Discovery Communications Inc. faced a morale issue with top performers earning the same salaries as poorer ones, leading to an overhaul of the compensation program. An effective compensation system is crucial for HRM to attract and retain talent, impacting strategic performance and achieving mission goals. Performance Appraisal Methods **WRITTEN ESSAY** Based learning where employees participate in multimedia simulations or other interactive modules. Evaluator writes a description of employee's strengths and weaknesses, past performance, and potential; provides suggestions for improvement. **+ Simple to use** May be better measure of evaluator's writing ability than of employee's actual performance. Performance Appraisal Methods **CRITICAL INCIDENT** Evaluator focuses on critical behaviors that separate effective and ineffective performance. **+ Rich examples, behaviorally based** Time-consuming, lacks quantification **GRAPHIC RATING SCALE** Popular method that lists a set of performance factors and an incremental scale; evaluator goes down the list and rates employee on each factor. **+ Provides quantitative data; no timeconsuming** Doesn't provide in-depth information on job behavior **BARS (Behaviorally Anchored Rating Scale** Popular approach that combines elements from critical incident and graphic rating scale; evaluator uses a rating scale, but items are examples of actual job behaviors. **+ Focuses on specific and measurable job behaviors** Time-consuming; difficult to develop **MULTIPERSON COMPARISON** Employees are rated in comparison to others in work group. **+ Compares employees with one another** Difficult with large number of employees; legal concerns **MBO** Employees are evaluated on how well they accomplish specific goals. **+ Focuses on goals; results oriented** Time-consuming **360-DEGREE APPRAISAL** Utilizes feedback from supervisors, employees, and coworkers. **+ Thorough** Time-consuming **SKILL-BASED PAY** A pay system that rewards employees for the job skills they can demonstrate. **VARIABLE PAY** A pay system in which an individual's compensation is contingent on performance. Contemporary Issues in Managing Human Resources **MANAGING DOWNSIZING** This except from a human resources management textbook derives into the contemporary issue of downsizing, strategic process of producing an organization workforce to improve profitability. It highlight the historical shift in downsizing practices, the various reason behind it, and the potential why longterm consequences. **The Rise of Downsizing** The text emphasize the dramatic change in downsizing practices since the early 1980s. Before this period, permanent layoff were so infrequent that the bureau of labor statistic didn\'t even track them. Reasons Why organization result to Downsizing Economic Recession Declining market share Aggressive growth Poorly Manage Operations. **The human cost of downsizing short term gains and long term risk** While downsizing can offer short term benefit in terms of reduced cost and improve profitability, the text points to a growing concern among HR experts: the potential negative impact on long term growth prospect. Potential Long-term consequences of Downsizing lost of Institutional Knowledge Decreased Morale and Motivation Damage to employer Brand Increased Costs associations with hiring and training. Tips of managing downsizing Communicate openly and honestly: Inform those being let go as soon as possible. Tell surviving employees the new goals and expectations. Explain impact of layoffs. Follow any laws regulating severance pay or benefits. Remain involved and available Provide support/counseling for surviving (remaining) employees. Reassign roles according to individuals' talents and backgrounds. Focus on boosting morale: Offer individualized reassurance. Continue to communicate, especially one-on-one. Have a plan for the empty office spaces/cubicles so it isn't so depressing for surviving employees. Managing Sexual Harassment **WHAT IS SEXUAL HARASSMENT ?** It's defined as any unwanted action or activity of a sexual nature that explicitly or implicitly affects an individual's employment, performance, or work environment. And as we indicated earlier, it can occur between members of the opposite sex or of the same sex. **Managing Work--Life Balance** This excerpt from the human resources management textbook focuses on the growing importance of work life balance and the modern workplace. It highlights how organizations are recognizing the need to accommodate employees personal life and family responsibilities, having beyond traditional work structures to offer more flexibility and support. **Controlling HR Costs**: HR cause are skyrocketing , especially employee health and employee pensions. Organizations are cooking for ways to control their cost: 1.) Employee health care cost Employee at paycheck who undergo a conditional health screening and risk assessment, and for those who smoke who agree to enroll in smoking session program, can get free annual physical, Colonoscopies and 100% coverage of pension care as well as lower deductibles and cost. 2.) Employee Pension Plan Cost Corporate pension have been around since the 19th century. In fact, the corporate pension system has been described as "Fundamental broken" may companies no longer provide pension. The working world in 2020 The advancement and technology and the impact of globalization have blurred the boundaries between work and personal life. Professionals are not expected to be available 24/7 leading to a culture where work encroaches on personal life. That's it... Thank you! Members: ** Macalipay, Angelica** ** Quinanahan, Jillian Nicole** ** Lactuan, Hannah Grace** ** Soco, Jacob** ** Bering , Sheena Mae** ** Orque, Mc Cloud** ** Pejana, Lorenz Kurt** ** Escoton, Hiel Jane**