Tuesday, December 30, 2008

Do not change job during Recession

At a time of recession, the thumb rule would be to. No matter how dissatisfied you may be with your portfolio at work, bothered by irate client, poked by nosy colleagues, or tired of pleasing your boss, a word of caution do not move on. The regular flow of income can be a blessing at such a time when only change is constant.

If you do happen to be looking for a job, work with a reputed brand, an organization with a strong balance sheet and acclaimed credentials. You must seize such an opportunity even if the remuneration is not as expected. There will always be a dearth of good talent and organizations will undoubtedly take notice and give due to those who stand out, at such time. If you are getting a job, do not insist for a high salary since the ongoing phase in the job markets are not aspiration but survival. Once you have gained a foothold rectification can be made when the correction phase comes along.

Save for a rainy day is mantra. Keep at least three to four months salary in your bank account, liquid at all times. This would help cover you at unexpected times, and reduce one of the major fears unemployment brings within.

Mr.P was always passionate about music and has been playing the guitar since he was a child. Unfortunately he could not take it up as a career, however alongside my work, he teaches a few students every Sunday. It gives him immense personal satisfaction totally disconnects me from my desk job, and also brings with it a decent amount of money which accounts for weekend expenses. So if you always had an eye for fashion and beauty or an interest in teaching or for that matter in the occult, it’s time you seriously explored it.

If you have any kind of certification say if you are part of the financial sector you can even build your own career as a direct agent for a mutual fund. Whatever be the certification you have, depending on your ability and knowledge you can do the role of a consultant to a company.

‘Stay positive’ though easier said than done, at such a time it is absolutely essential to keep the energy going with a smile on your face. At such a time worrying is not going to help. If you are constantly tense, your concentration will inevitably reduce, thus resulting in a lack of focus on the current task at hand. This could put you at a risk of losing your job. As a consequence you could be on the edge considering low performers in addition to newcomers are direct targets of the current job-cuts. This is a time when companies recognizes talent so deliver and you will always shine.

Come to terms with the worst possible out come and thus realize it is not the end of the world. Try and find ways to reduce its negative effect, and turn it into a win-win situation. Do not forget to remain in good humor and have a positive frame of mind. Looking at what the future beholds. This might be the onset of new labor laws in our country which already exist in the United States. To sum up, India Inc., may be hit by the worldwide slump, however a few necessary and precautionary steps can keep the ball rolling for you. Pursuing a hobby on the weekends can be the much needed stress buster, smart investments can make your money plant grow faster, and positivity will always be the jargon to staying alive. There is always a silver lining you just need to take notice.

Saying NO at workplace politely

There may be several occasions for any one at work place when his or her boss or superiors or even peers or subordinates approaching you with work or any other request when you just wish you could suddenly vanish, crawl under your table or hold a signboard that read ‘NO’. We know your plate is already more than full, but that is not going to deter your boss from handling out more work. And we bet, you are too scared to take recourse to the magic word that can put an end to all your woes. So we tell you how to say it without offending anyone:

1. I’m not inspired enough. Well, if you are not inspired, you can’t possibly do a good job. Inspiration should be the driving force behind every task you undertake, and you need to make your colleagues realize that. After all, if your heart and soul aren’t in the job, it can be quite hazardous for the company.
2. Right now I’m working on blah blah blah, can I get so-and-so to help me with it? As soon as you have your boss’ permission, you can happily brief your colleague on the task at hand and get back to what you were doing.
3. Sure, but I won’t be able to meet the deadline. Will cross it by xxx (whatever seems unreasonable in light of the task.) No one is going to let you work on a project indefinitely. In today’s competitive world, everything works on deadlines. If you are going to be taking your own sweet time to complete a task, you might as well not do it. Moreover, no boss is going to let you lay your hands on a job that might never be completed.
4. You will have to pay me overtime. Well, you can’t try this with your boss, but there’s no harm pulling it off with a colleague. Say it as though you are cracking a joke. A good sense of humor is the best way of wriggling out of difficult situations.
5. I would love to do it, but frankly you (or name some other colleague) would do more justice to this job. You better have a great reason for saying this, though figuring out one shouldn’t be that hard. Stress on why the person assigning you the job/your colleagues is a fantastic team person and superb at ‘this’ aspect of the job. Praise him/her sky high and you will have one more friend in office.

When we talk o the tact above it also goes with coping with office politics:

For most of us, politics means conniving and backstabbing. And when it enters the office atmosphere, it can be pretty stifling. But it is human tendency to form ‘gangs’ and ‘groups’. One can see it even in kindergarten.

So what is it that makes office politics so unsavory? Essentially when one encourages ‘politics’ in the organization, s/he creates an air of secrecy. Sometimes vital information could be withheld from other members of the team which affects productivity. The senior management ends up spending a lot of time and energy in resolving issues created by office politics, which in turn affects the overall performance of the firm. Many employees prefer to quit the organization rather than coping with tension, and this way the firm loses its valued employees. No matter how amiable any office may be, there would always be undercurrents of politics. So, it is best to learn to deal with it positively. Here are some coping mechanisms to manage office politics:
Never share personal details: Never reveal the exact details of your pay or perks package, this could create a feeling of animosity amongst other colleagues who earn less as compared to you and this may encourage them to gang up against you.

Do not isolate, join the group gossiping, but never participate in the gossip or make any comments or react to the talk or take sides.

Think before you decide to quit

This is a time when employees are being handed pink slips. So don’t rush to type up that resignation-give your job one more chance. Here are some tips on changing your job from “boring” to “interesting”. Everybody gets the blues sometimes, and that’s as true at one’s job as it is outside the office. When the ennui sets in, it gets harder to retain the spring in your step as you head out to work each morning. The stress begins to show. You start coming up with reasons why your job is not right for you. It has become harder to assume that the “right job” is waiting for you just around the corner.

This really is the first step to any change. List the problems you are having, and the possible solutions to them. Think about them, and you will find there are many small and big changes that could improve your situation. List those changes and start working to implement them. But the effort will has to come from you.

It’s all in the mind, change your perspective say psychologists. Recall the reasons why, during your first few months on the job, you thought it was a great one. Unless your work situation has changed drastically, some of those reasons probably still hold true. For instance, an operator in a call centre back office, hated the extended working hours at her workplace, yet spent a good five years at it simply because her colleagues were like an extended family.

Go back to that list of the positive changes you can make. Now is the time to bring them about. Bring about real changes. Often, the reason an employee wants to quit her job is that she feels she hasn’t got what she deserves from her seniors. If you think you have been denied the promotion you deserve for instance, consider talking it out with your seniors. But before marching into your boss’s office waving your list of demands, review your own work critically-from the boss’s point of view. Of course, keep in mind that talking it out is best done only when you are on a strong footing.

A good way to bring freshness to the same old job is to find new ways to do it better than before. It is this innovative outlook that has resulted in newer and improved versions of products and services in the market. Besides, at a personal level, being creatively involved will keep away the negative thoughts.

A good number of people have quit their well-paying jobs simply because they feel their hard work is not appreciated. Often, this gives some people reason to blame their boss. But there is always the possibility that the oversight was not deliberate. Too often, employees keep rather low profiles, and thus remain unnoticed. If you are feeling overlooked, consider that it may be time to get out of the shadows. There is no call to brag about yourself; you can handle the situation in a subtle manner. When the opportunity say a regular feedback session-presents itself, take it to ensure that your boss is well aware of the efforts you have been putting in.

Often, the real reason people lose interest in their job is not the work itself, but the people at work. If there isn’t a single person in your office with whom you can get along professionally, it is possible that the problem is yours, and not theirs. In today’s corporate scenario, the inability to work in a team is considered a weakness. Therefore learn to tackle difficult colleagues to get along and get the work done.

But assuming the problem is not with you, and a problem colleague really is proving detrimental to your work, consider asking your supervisor to move you to another department, where you can meet new people, although you would also have to be ready to possibly do somewhat different work. Looking for a change within your existing corporate environment may be easier, if minor irritations are the issue.

Giving in to the impulse to quit may seem the easy way out, but life may actually be easier if the problem can be reduced or fixed without giving up the job.

Defining Multiculturalism

Multiculturalism as it applies to management can be defined as the view that there are many different cultural backgrounds and factors that are important to organizations, and that people from different backgrounds can coexist and flourish within an organization. Usually multiculturalism refers to cultural factors such as ethnicity, race, gender, physical ability and sexual orientation, but sometimes age and other factors added. Multiculturalism is a basic premise of American society Contrary to those who claim that concern with multiculturalism is the foundation or the current emphasis on political correctness. The belief that people from many different backgrounds can work together is fundamental to democracy and the American way of life.

The Workforce 2000 Report

While many of the issues surrounding multiculturalism ad diversity have been around for a long time, many organizations adopted a renewed concern with the publication of the Hudson Institute’s 1987 report, entitled Work force 2000. The report identified four key trends expected to become more important as the 20th century draws to a close. First, the report predicted that renewed productivity growth will lead to a healthier US economy. Second, manufacturing will become a smaller part of that economy as service jobs become a bigger factor in creating wealth and new jobs. Third, these new service industry jobs will require a high level of skill, leading to employment for the educated and unemployment for the uneducated. Finally, the demographic composition of the workforce in the US will become older more female, and more disadvantaged. The percentage of white males in the workforce was 47 percent in 1987 when the report was issued, but the report predicted the percentage of new white males entering the workforce will be greatly reduced. Estimates have varied from 15 to 30 percent.
Six policy initiatives are suggested to cope with these changes:

1. Stimulate balanced world economic growth.
2. Increase efforts to stimulate productivity in service industries.
3. Maintain the adaptability and flexibility of the aging workforce
4. Help resolve the often conflicting needs of women in relation to work and family.
5. Work to integrate African American and Hispanic American workers more fully into the economy.
6. Improve the education of all workers

Concurrent with the release of the “Workplace 2000” report, many organizations began to worry more than ever about how to manage such a diverse workforce. How could women, Hispanic Americans, African Americans and others with cultural heritages different from white males be integrated into the workforce? Many organizations began to have ‘diversity programs’ or ‘multiculturalism programs.

In a more recent study, it was concluded that the labor supply is becoming more global. This will ensure that any particular company has an even more diverse labor pool from which to draw its workers. Most of the population growth is occurring in developing economies where the workforce is relatively young and the educational level is rapidly improving. Over 570 million of the 600 million new workers entering the workforce will come from these developing economies such as Mexico, Indonesia, Philippines, etc. Although the statistics on women in the workforce vary widely by country, many more women will enter the workforce all over the world. Organizations will have more choices about where to locate their facilities to take advantage of particular labor markets, and will thus be forced to learn to accommodate many different cultural factors into their individual organizational cultures.

Gender Issues in Multiculturalism:

One important dimension of diversity in organizations is gender diversity. The Workforce 2000 studies point out that the workforce is rapidly moving from being male-dominated to one of equality in numbers between men and women. Nevertheless there remain many barriers for women seeking equal treatment in most organizations.

Glass ceiling: While there are more women in the workforce than ever before, they are still in junior positions. Only a handful of women are chief executives of large companies Studies estimate that men hold 97 percent of the top positions, and women comprise fewer tan 0.5 percent of the highest-paid officers and Directors’ positions in the top 1000 US companies. Now after the year 2006 the position has changed and is continuously changing globally including Asian countries and there are considerable women CEOs of leading companies. There are cases where women of Indian origin are heading even U.S companies.

Power and Politics

Power refers to a capacity that A has to influence the behavior of B so that B acts in accordance with A’s wishes. This definition implies a potential that need not be actualized to be effective and a dependency relationship.

Power may exist but not be used. It is, therefore a capacity or potential. One can have power but not impose it. Probably the most important aspect of power is that it is a function of dependency. The greater B’s dependence on A, the greater is A’s power in the relationship.

A case:

At Merrill Lynch, the huge securities firm, the message is clear: Don’t try to usurp the boss’s authority. Two high-level executives Thomas Patrick and Arshad Zakaria tried it and found themselves out on the street.

The boss in this case is Stan O’Neal the chairman and CEO at Merrill Lynch. And what makes these actions newsworthy is that Patrick and Zakaria were two of O’Neal’s closest confidants. Patrick was executive vice chairman and the second most senior executive in the firm. Zakaria was chairman of global markets and investment banking and a protégé of Patrick. Both Patrick and Zakaria played an active role in persuading Merill’s board of directors that the firm needed major cost cutting and that the O’Neal was the best person to do it.

Chairman O’Neal was named president and chief executive-in-waiting in July 2001. He soon began purging the company of top executives he had seen as potential threats. Patrick and Zakaria were major players in helping O’Neal cut 23,000 jobs and dramatically improve the firm’s profitability. His success led to his official appointment as CEO and chairman in December 2002.

According to insiders, Patrick and Zakaria’s fatal mistake was secretly lobbying board members in the summer of 2003 to have 41 year old Zakaria made successor designate to the 51 year old O’Neal. O’Neal had only been CEO less than a year and he thought the appointment of a successor was certainly premature. When Patrick told O’Neal that he thought Zakaria should be installed as president and heir apparent, O’Neal had had enough. He forced the 60-year-old Patrick to retire. A week later, he fired Zakaria. The message this has sent throughout Merrill Lynch was loud and clear: O’Neal was in power and he was not going to tolerate any challenges to his authority.

In 2004, Fortune magazine noted that O’Neal my be the toughest and some say the most ruthless CEO in America while commenting that he has done much to enhance Merrill Lynch’s reputation and financial standing.

In conclusion, it is easier for most of us to talk about sex or money than it is to talk about power. People who have it deny it, people who want it try not to appear to be seeking it, and those who are good at getting it are secretive about how they got it.

A major theme of this article is that power is a natural process in any group or organization. As such, you need to know how it’s acquired and exercised if you’re going to fully understand organizational behavior. Although you may have heard the phrase that “power corrupts, and absolute power corrupts absolutely”, power is not always bad. Most medicines can kill if taken in the wrong amount and thousands die each year in automobile accidents, but we don’t abandon chemicals or cars because of the dangers associated with them. Rather, we consider danger an incentive to get training and information that will help us these forces productively. The same applies to power. It’s a reality of organizational life and it’s not going to go away Moreover, by learning how power works in organizations, you’ll be better able to use your knowledge to help you be a more effective manager.

Get paid for your performance

These days during workshops we encounter people under a lot of stress and insecurity. The greatest fear that is moving around in the corporate world is of people losing their jobs as the economy is further crunching. If you can justify your salary to your performance then you are safe. But in today’s time you have to over perform to continue being an asset to the company, for the company will only fire people who are a liability. Being ‘fired’ is not in your control. So, here are some tips about what you ‘can do’ to ensure that you stay afloat in your career:

* You get paid for your performance and not your potential: Now is the time to convert that potential into outstanding performance. Things that were taken lightly before will now become big issues. Constantly seek to work more and deliver more.
* You get paid to finish your work: Instead of spending time in worry and anticipation, get going to have the work done. If you can complete tasks with efficiency and excellence, you immediately become an asset to the company.
* You get paid to deliver results: Markets and the economy will always be complex. Times have and always will continue to be tough and it is the survival of the fittest in the corporate world. Find innovative ways to deliver results, because there definitely is a way. You just have to be alert enough to explore it.
* You get paid to add value: Add value to your work place over and beyond your work. It will give you an edge over those who do not. Be a great team player and do all you can to create a positive work environment. Be an encouragement to others and add to the creative growth of the company.

The corporate scenario reflects the process of house cleaning. You only discard those items that are obsolete or no longer add value. If you follow the above tips, your value will be visible and much needed.

Giving out performance you may also need cooperation of many in the organization or work place. To get cooperation and acceptability you can adopt the following:

Do not isolate yourself. Sure gossip is bad and you are not comfortable playing politics, but if you distance yourself, you are in danger of being isolated. You do not need to actively participate but at least remain on the periphery and get all the information you can.

You may often find yourself at the receiving end of petty politics. It’s best not to show any immediate reaction. Consider the source and what brought it on. If possible have a word with the person and if all else fails and you feel that you are being unnecessarily targeted then speak with the concerned HR person. Do not react.

There may be two strong individuals who do not get along. Instead of deciding who should you follow, ensure that you create open communication channels and find a way of having complete transparency in functioning, so that in the end you do not wind up as the fall guy. Do not take sides.

One has to accept the good with the bad. Lastly, remember office politics will always be the down side of any ‘great’ job you take up. But you need to make sure you have the right attitude and do not participate in office politics.

Impression Management Techniques

Conformity: Agreeing with someone else’s opinion in order to gain his or her approval.
Example: A manager tells his boss, ‘You are absolutely right on your reorganizations plan for the western regional office. I couldn’t agree with you more’.

Excuses: Explanations of a predicament creating event aimed at minimizing the apparent severity to the predicament.

Examples: Sales manager to boss. ‘We failed to get the ad in the paper on time, but no one responds to those ads anyway’.

Apologies: Admitting responsibility for an undesirable event and simultaneously seeking to get a pardon for the section

Example: Employee to boss, ‘I’m sorry I made a mistake on the report Please forgive me’.

Self-Promotion: Highlighting one’s best qualities downplaying one’s deficits and calling attention to one’s achievements.

Example: A salesperson tells his boss: ‘Matt worked unsuccessfully for three years to try to get that account I sewed it up in six weeks. I’m the best closer this company has’.

Flattery: Complementing others about their virtues in an effort to make one self appear perceptive and likeable.

Example: New sales trainee to peer. ‘You handled that client’s complaint so tactfully! I could never have handled that as well as you did’.

Favors: Doing nice for someone to gain that person’s approval.

Example: Sales person to prospective client, ‘I’ve got two tickets to the theater tonight that I can’t use. Take them. Consider it a thank you for taking the time to talk with me’.

Association: Enhancing or protecting one’s image by managing information about people and things with which one is associated.

Example: A job applicant says to an interviewer, “What a coincidence. Your boss and I were roommates in college”.

In terms of performance ratings, the picture is quite different. Ingratiation is positively related to performance rations, meaning that those who ingratiate with their supervisors get higher performance evaluations. However, self promotion appears to backfire – those who self promote actually seem to receive lower performance evaluations.

What explains these results? If you think about them, they make sense. Ingratiating always works because everyone likes to be treated nicely, whether it is the interviewer or the supervisor. However, self promotion may work only in interviews and backfire on the job because whereas the interviewer has little idea whether you are blowing smoke about your accomplishments, the supervisor knows because it is his or her job to observe you. Thus, if you are going to self promote, remember that what works in the interview will not always work once you are on the job.

The Ethics of Behaving Politically:

We conclude our discussion of politics by providing some ethical guidelines for political behavior. Although there are no clear cut ways to differentiate ethical from unethical politicking, there are some questions you should consider. Ask yourself: what is the utility of engaging in the behavior? Sometimes we engage in political behaviors for little good reason. For example, Major League Baseball player Al Martin claimed he played football at USC when in fact he never did. Because Martin was playing baseball there was little to be gained buy his lie. Outright lies like this may be a rather extreme example of impression management, but many of us have distorted information to make a favorable impression. The point is that before we do so, one thing to keep in mind is whether it is really worth the risk. Another question to ask is an ethical one how does the utility of engaging in the political behavior balance out any harm (or potential harm) it will do to others? For example, complementing a supervisor on his or her appearance to curry favor is probably much less harmful than grabbing credit for a project that is deserved by others.

Our point is that immoral people can justify almost any behavior. Those who are powerful, articulate and persuasive are most vulnerable because they are likely to be able to get away with unethical practices successfully. When faced with an ethical dilemma regarding organizational politics try to consider the preceding issues (is playing politics worth the risk and will others be harmed in the process). If you have a strong power base, recognize the ability of power to corrupt. Remember, it’s a lot easier for the powerless to act ethically, if for no to her reason than they radically have very little political discretion to exploit.

Write a CV to differentiate you from the pack

Thinking of changing jobs? And to the point CV really does count, says the experts. But how does one ensure that his/her CV is exact? How does one ably sum up all that needs to be there on the results before it reaches headhunters or prospective employers? How does one ensure that the resume conveys the current role with brevity?

Whichever vacancy you have chosen to apply bear in mind hundreds of others will have he same goal. You need to write a CV to differentiate you from the pack. A CV demands you not only to think about your future, but also think about your past. Does it sound confusing? Your resume should answer a lot of questions namely: What have been the turning points in your career? What have you really contributed? What will each organization remember you for? What new experience did you gain in each role? Remember your CV needs to be a good list.

Another issue is how many CVs do you need? If you are considering very diverse roles, for example, telemarketer versus front office executive you may need two CVs. Both will, of course preset the facts but each will have a different slant and will emphasize different aspects of your career. What you leave in or out will determine the whole flavor of the CV and ultimately the perception the reader will have of you. You need to analyses that first and then decide on the elements of your broad experience to highlight. Start with the easy bits; clearly laid out personal and contacts details. If your education is a highlight mention it first, or put it at then end. Next write a short punchy profile and this should include no subjective knowledge. If in doubt, it is safe to remove all references to interpersonal skills or your views on your own abilities. A good job profile should only consist of objectives facts that clearly differentiate you from the others. You may choose to include information as diverse as:

1. International experience
2. leadership of very large teams
3. Management of large budgets
4. Delivery of business transformation.

How to pen you Employment History?

Employers want it see how your experience will be useful to them, so be brief about it that are totally different from the one you are applying for. Relevant jobs should be listed in more detail showing not only main duties and responsibilities but giving examples of the skills you used and what you achieved. Relate your skills and experience to the job description and what the employer is looking for. Also include any relevant temporary or unpaid work. Avoid unexplained gaps in your employment history as employers may think you have something to hide! If you have worked in a number of well known companies, it is advisable to put a summary of the company date and role. However, if you have hopped from one role to another don’t rub in the eyes of the employer by including their summary. Remember your next role will probably be an evolution from your current one. So be careful in adding details about your past work experiences. It is a thumb rule to avoid too much detail since if you are long winded, it’s impossible to make an impact.

The best way to judge your own CV is to read the whole document and ask yourself. Is this an honestly written document that will grab attention and immediately compel the reader to call me? If your answer is in the affirmative you have a winner. If not, you need to re-look at ways in which you can make it more appealing.

Imparting skills through training

Most training is directed at upgrading and improving an employee’s technica skills. Technical training has become increasingly important today for two reasons – new technology and new structural designs in the organization.

Jobs change as a result if new technologies and improved methods. For instance, many auto repair personnel have had to undergo extensive training to fix and maintain rennet models with computer monitored engines, electronic stabilizing systems, GPS, keyless entry, and other innovation. Similarly computer controlled equipment has required millions of production employees to learn a whole new set of skills.

In addition, technical training has become increasingly important because of changes in organizations design. As organization flatten their structures expand their use of teams, and break down traditional departmental barriers, employees need mastery of a wider variety of tasks and increased knowledge of how their organization operates. For instance, the restructuring of jobs at Miller Brewing Co. around empowered teams has led management to introduce a comprehensive business literacy program to help employees better understand competition, the state of the beer industry, where the company’s revenues come from how costs are calculated, and where employees fit into the company’s value chain.

Interpersonal skills: Almost all employees belong to a work unit, and their work performance depends to some degree on their ability to effectively interact with their coworkers and their boss. Some employees have excellent interpersonal skills, but others require training to improve theirs. This includes learning how to be a better listener how to communicate ideas more clearly and how to be a more effective team player.

Problem Solving Skills: Managers, as well as many employees who perform non-routine tasks, have to solve problems in their jobs. When people require these skills but are deficient in them, they can participate in problem solving training. This can include activities to sharpen their logic, reasoning and problem defining skills as well as their abilities to assess causation, develop and analyze alternatives, and select solutions. Problem-solving training has become a basic part of almost every organizational effort to introduce self managed teams or implement quality management programs.

Ethics Training: A recent survey finds that about 75 percent of employees working in the 1,000 largest US corporations receive ethics training. This training may be included in a newly hired employee’s orientation program, made part of an ongoing developmental training program, or provided to all employees as a periodic reinforcement of ethical principles. But the jury is still out on whether you can actually teach ethics.

Critics argue that ethics are based on values, and value systems are fixed at an early age. By the time employers hire people their ethical values have already been established. The critics also claim that ethics cannot be formally taught but must be learned by example.

Supporters of ethics training argue that value can be learned and changed after early childhood. And even if they couldn’t ethics training would be effective because it helps employees to recognize ethical dilemmas and become more aware of the ethical issues underlying their actions. Another argument is that ethics training reaffirms an organization’s expectations that embers will act ethically.

Cultural training:

In global economy, employee training is no longer limited to the specific tasks of the job. As more and more position in the information technology and service industries move to India from the United States, any companies are training their Indian employees to improve their cultural skills when dealing with American clients.

Some companies are benefiting from cultural training. Sierra Atlantic’s offices in Hyderabad, for example won a bid with an American firm over an Indian competitor because the Sierra employees were viewed as a better cultural fit. Such successes make it likely that companies with foreign clients will either adopt or continue to use cultural training.

Consequences of stress

Stress shows itself in a number of ways. For instance, an individual who is experiencing a high level of stress may develop high blood pressure, ulcers, irritability, difficulty in making routine decisions, loss of appetite, accident proneness, and the like. These can be subsumed under three general categories: physiological, psychological, and behavioral symptoms.

Physiological Symptoms:

Most of the early concern with stress was directed to physiological symptoms. This was predominantly due to the fact that the topic was researched by specialists in the health and medical sciences. This research led to the conclusion that stress could create changes in metabolism, increase heart and breathing rates, increase blood pressure, bring on headaches, and induce heart attacks.

The link between stress and particular physiological symptoms is not clear. There are few, if any, consistent relationships. This is attributed to the complexity of the symptoms and the difficulty of objectively measuring them. But of greater relevance is the fact that physiological symptoms have the least direct relevance to students. Our concern is with attitudes and behaviors. Therefore, the two other categories of symptoms are more important to us.

Psychological Symptoms:

Stress can cause dissatisfaction. Job-related stress can cause job-related dissatisfaction, in fact, is “the simplest and most obvious psychological effect” of stress. But stress shows itself in other psychological states for instance, tension, anxiety, irritability, boredom, and procrastination.

The evidence indicates that when people are placed in jobs that make multiple and conflicting demands or in which there is a lack of clarity about the incumbent’s duties, authority, and responsibilities, both stress and dissatisfaction are increased. Similarly, the less control people have over the pace of their work, the greater the stress and dissatisfaction. While more research is needed to clarify the relationship, the evidence suggests that jobs that provide a low level of variety, significance, autonomy, feedback, and identity to incumbents create stress and reduce satisfaction and involvement in the job.

Behavioral symptoms:

But moderate levels of stress experienced continually over long periods, as typified by the emergency room staff in a large urban hospital can result in lower performance. This may explain why emergency room staffs at such hospitals are frequently rotated and why it is unusual to find individuals who have spent the bulk of their career in such an environment. In effect, to do so would expose the individual to the risk of “career burnout”.

Behavior related stress symptoms include changes in productivity, absence, and turnover, as well as changes in eating habits, increased smoking or consumption of alcohol, rapid speech, fidgeting and sleep disorders.

There has been a significant amount of research investigating the stress performance relationship. The most widely studied pattern in the stress performance literature is the inverted-U relationship.

The logic underlying the inverted U is that low to moderate levels of stress stimulate the body and increase its ability to react. Individuals then often perform their tasks better, more intensely or more rapidly .But too much stress places unattainable demands on a person, which result in lower performance. This inverted U pattern may also describe the reaction to stress over time as well as to changes in stress intensity. That is even moderate levels of stress can have a negative influence on performance over the long term as the continued intensity of the stress wears down the individual and saps energy resources. An athlete may be able to use the positive effects of stress to obtain a higher performance during every Saturday’s game in the fall season, or a sales executive may be able to psych herself up for her presentation at the annual national meeting.

In spite of the popularity and initiative appeal of the inverted U model, it doesn’t get a lot of empirical support. At this time, managers should be careful in assuming that this model accurately depicts the stress-performance relationship.

The Rational Model of Decision making

Managers who weigh their options and calculate optimal levels of risk are using the rational model of decision making. This model is especially useful in making non-programmed decisions. It helps managers go beyond a priority reasoning the assumption that there is an obvious solution already existing and simply waiting to be found.

No approach to decision making can guarantee that manager will always make the right decision. But managers who use a rational, intelligence and systematic approach are more likely than other mangers to come up with high quality solutions. This belief has guided managers for many, many years. It is an article of faith that we can trace to the managerial approaches of Henry Ford, Henri Fayol, and Chester Barnard.

Investigate the situation:

A thorough investigation has three aspects: Problem definition, diagnosis and identification of objectives.

Define the problem: Confusion in problem definition arises in part because the events or issues that attract the manager’s attention may be symptoms of another more fundamental and pervasive difficulty. A manager may be concerned about an upsurge in employee resignation, but this is not a problem unless it interferes with the achievement of organizational objectives. If the individuals resigning are relatively low performers, and more qualified replacement can be readily found, the resignation may represent an opportunity rather than a problem. Curing the turnover problem, then, may be the last thing the managers should do. Defining the problems in terms of the organizational objectives that are being blocked helps to avoid confusing symptoms with problems.

Diagnose the causes: All this underscores the importance of diagnosing the causers of the problems. Managers can ask a number of diagnostic questions. Each involves, in some way, human relationships: What changes inside or outside the organization may have contributed to the problem? What people are most involved with the problem situation? Do they have insights or perspectives that may clarify the problem? Do their actions contribute to the problem?

Causes unlike symptoms are seldom apparent and managers sometimes have to rely on intuition to identify tem. Different individuals, whose views of the situation are inevitably shaped by their own experience and responsibilities may perceive very different causes for the problem. It is up to the manager to put all the pieces together and come up with as clear a picture as possible.

At Ruiz Foods, a California based Mexican food company founder and CEO Fred Ruiz realized that one cause of difficulty for immigrant employees was the language barriers. His solution, offering classes in English literacy, is just part of larger picture of concern for employees and employee development.

Ruiz started his small, family run business with his mother’s recipes, her freezer and Mixmaster, and a small commercial stove that he built. His is a family oriented business that he tries to run as a Mexican American role model for its employees, other minority owned businesses, and the community. Embracing the concept of familia (family) the company actively encourages the recruitment and hiring of family, members both members of the Ruiz family and those of current employees. English literacy classes (80 percent of the employees speak Spanish) are just part of the training offered to Ruiz employees, who are encouraged to grow both personally and professionally. Training in math skills, computer skills, and management development has not only benefited the employees, but has helped Ruiz Foods more than triple its sales.

Sunday, December 28, 2008

Organizational Commitment

In the fields of Organizational Behavior and Industrial/Organizational Psychology, organizational commitment is, in a general sense, the employee's psychological attachment to the organization. It can be contrasted with other work-related attitudes, such as Job Satisfaction, defined as an employee's feelings about their job, and Organizational Identification, defined as the degree to which an employee experiences a 'sense of oneness' with their organization.

Beyond this general sense, Organizational scientists have developed many nuanced definitions of organizational commitment, and numerous scales to measure them. Exemplary of this work is Meyer & Allen's model of commitment, which was developed to integrate numerous definitions of commitment that had proliferated in the literature. According to Meyer and Allen's (1991) three-component model of commitment, prior research indicated that there are three "mind sets" which can characterize an employee's commitment to the organization:

* Affective Commitment: AC is defined as the employee's positive emotional attachment to the organization. An employee who is affectively committed strongly identifies with the goals of the organization and desires to remain a part of the organization. This employee commits to the organization because he/she "wants to". In developing this concept, Meyer and Allen drew largely on Mowday, Porter, and Steers's (1982) concept of commitment, which in turn drew on earlier work by Kanter (1968).

* Continuance Commitment: The individual commits to the organization because he/she perceives high costs of losing organizational membership (cf. Becker's 1960 "side bet theory"), including economic costs (such as pension accruals) and social costs (friendship ties with co-workers) that would be incurred. The employee remains a member of the organization because he/she "has to".

* Normative Commitment: The individual commits to and remains with an organization because of feelings of obligation. These feelings may derive from many sources. For example, the organization may have invested resources in training an employee who then feels a 'moral' obligation to put forth effort on the job and stay with the organization to 'repay the debt.' It may also reflect an internalized norm, developed before the person joins the organization through family or other socialization processes, that one should be loyal to one's organization. The employee stays with the organization because he/she "ought to".

Note that according to Meyer and Allen, these components of commitment are not mutually exclusive: an employee can simultaneously be committed to the organization in an affective, normative, and continuance sense, at varying levels of intensity. This idea led Meyer and Herscovitch (2001) to argue that at any point in time, an employee has a "commitment profile" that reflects high or low levels of all three of these mind-sets, and that different profiles have different effects on workplace behavior such as job performance, absenteeism, and the chance that the organization member will quit.

Meyer and Allen developed the Affective Commitment Scale (ACS), the Normative Commitment Scale (NCS) and the Continuance Commitment Scale (CCS) to measure these components of commitment. Many researchers have used them to determine what impact an employee's level of commitment has on outcomes such as quitting behavior, job performance, and absenteeism. However, some researchers have questioned how well they actually assess an employee's commitment, and efforts to improve the validity of these scales, and similar commitment scales such as Mowday, Porter, and Steers' Organizational Commitment Questionnaire (OCQ), continues.

In addition to methodological investigations of the validity and reliability of these scales, recent research has focused on determining the cross-cultural validity of Meyer and Allen's measures (do employees in other countries/cultures experience commitment the same way as employees in the USA?), and on expanding the three-component model to other work-related foci (such as commitment to one's occupation, department, organization change initiatives, and work team).

The Rational Model of decisions making

In this article let us begin by describing, at least in theory, how individuals should behave in order to maximize or optimize a certain outcome. We call this the rational decision making process.

The Rational Decisions making process:

We often think that the best decision maker is rational. That is, he or she makes consistent, value maximizing choices within specified constraints. These choices are made following a six step rational decision making model. Moreover, specific assumptions underlie this model.

The six steps in the rational decision making model are listed below. The model begins by defining problem. As noted previously, a problem exists when there is a discrepancy between an existing and a desired state of affairs. If you calculate your monthly expenses and find you’re spending $100 more than you allocated in your budget, you have defined a problem. Many poor decisions can be traced to the decision maker overlooking a problem or defining the wrong problem.

Steps in the rational Decision making Model

1. Define the problem
2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop the alternatives.
5. Evaluate the alternatives
6. Select the best alternatives

Once a decision maker has defined the problem, he or she needs to identify the decision criteria that will be important in solving the problem. In this step, the decision maker determines what is relevant in making the decision. This step rings the decision maker’s interests, values and similar personal preferences into the process. Identifying criteria is important because what one person thinks is relevant, another person may not. Also keep in mind that any factors not identified in this step are considered irrelevant to the decision maker.

The criteria identified are rarely all equal in importance. So, the third step requires the decision maker to weight the previously identified criteria in order to give them the correct priority in the decision.

The fourth step requires the decision maker to generate possible alternatives that could succeed in resolving the problem. No attempt is made in this step to appraise these alternatives only to list them.

Once the alternatives have been generated, the decision maker must critically analyze and evaluate each one. This is done by rating alternative on each criterion. The strengths and weaknesses of each alternative become evident as they are compared with the criteria and weights established in the second and third steps.

The final step in this model requires computing the optimal decision. This is done by evaluating each alternative against the weighted criteria and selecting the alternative with higher total score.

Assumptions of the Model: The rational decision-making we just described contains a number of assumptions. Let’s briefly outline those assumptions:

1. Problem clarity. The problem is clear and unambiguous. The decision maker is assumed to have complete information regarding the decision situation.
2. Known options; It is assumed the decision maker can identify all the relevant criteria and can list all the viable alternatives. Furthermore, the decision maker and can list all the viable alternatives. Furthermore, the decision maker is aware of all the possible consequences of each alternative.
3. Clear preference: Rationality assumes that the criteria and alternatives can be raked and weighted to reflect their importance.
4. Constant preferences: It’s assumed that the specific decision criteria are constant and that the weights assigned to them stable over time.
5. No time or cost constraints: the rational decision maker can obtain full information about criteria and alternatives because it’s assumed that there are on time or cost constraints.
6. Maximum payoff: The rational decision maker will choose the alternative that yields the highest perceived value.

Organization Development vs Organization Behaviour

WHEN YOU LOOK AT OD/OB,

YOU MUST UNDERSTAND THE 4 ELEMENTS

-OD

-OB

-ORG. CLIMATE

-ORG. CULTURE

AS THEY ARE INTEGRATED SUBJECTS.
==================================

WHAT IS ORGANIZATION DEVELOPMENT?

Organization Development

Organization Development (OD) is the systematic application of behavioral science knowledge at various levels, such as group, inter-group, organization, etc., to bring about planned change. Its objectives is a higher quality of work-life, productivity, adaptability, and effectiveness. It accomplishes this by changing attitudes, behaviors, values, strategies, procedures, and structures so that the organization can adapt to competitive actions, technological advances, and the fast pace of change within the environment.



Organization Development (OD) is the process of improving organizations. The process is carefully planned and implemented to benefit the organization, its employees and its stakeholders. The client organization may be an entire company, public agency, non-profit organization, volunteer group - or a smaller part of a larger organization.

The change process supports improvement of the organization or group as a whole. The client and consultant work together to gather data, define issues and determine a suitable course of action. The organization is assessed to create an understanding of the current situation and to identify opportunities for change that will meet business objectives.

OD differs from traditional consulting because client involvement is encouraged throughout the entire process. The ways in which people communicate and work together are addressed concurrently with technical or procedural issues that need resolution.

WHY IS ORGANIZATION DEVELOPMENT IMPORTANT?

Profitability, productivity, morale and quality of work life are of concern to most organizations because they impact achievement of organization goals. There is an increasing trend to maximize an organization's investment in its employees. Jobs that previously required physical dexterity now require more mental effort. Organizations need to "work smarter" and apply creative ideas.

The work force has also changed. Employees expect more from a day's work than simply a day's pay. They want challenge, recognition, a sense of accomplishment, worthwhile tasks and meaningful relationships with their managers and co-workers. When these needs are not met, performance declines.

Today's customers demand continually improving quality, rapid product or service delivery; fast turn-around time on changes, competitive pricing and other features that are best achieved in complex environments by innovative organizational practices.

The effective organization must be able to meet today's and tomorrow's challenges. Adaptability and responsiveness are essential to survive and thrive.

There are seven characteristics of OD:

Humanistic Values: Positive beliefs about the potential of employees .

Systems Orientation: All parts of the organization, to include structure, technology, and people, must work together.

Experiential Learning: The learners' experiences in the training environment should be the kind of human problems they encounter at work. The training should NOT be all theory and lecture.

Problem Solving: Problems are identified, data is gathered, corrective action is taken, progress is assessed, and adjustments in the problem solving process are made as needed. This process is known as Action Research.

Contingency Orientation: Actions are selected and adapted to fit the need.

Change Agent: Stimulate, facilitate, and coordinate change.

Levels of Interventions: Problems can occur at one or more level in the organization so the strategy will require one or more interventions.


WHAT DO ORGANIZATION DEVELOPMENT INVOLVES ?

OD consultants custom tailor established social science theory and methods to organizations seeking to improve profitability, productivity, morale and/or quality of work life. Examples of activities which are facilitated by OD consultants are:

Teambuilding
Goal Setting
Group Facilitation
Creative Problem solving
Strategic Planning
Leadership Development
Management Development
Career Management
Conflict Resolution
Developmental Education
Interpersonal Communication
Human Resources Management
Managing Workforce Diversity
Organization Restructuring
High Involvement Work Teams
Sociotechnical Systems Design
Technical Training
Total Quality Management

Often described as "change agents," OD consultants come from varied backgrounds with experience and training in organization development, organization behavior, psychology, education, management and/or human resources. Many have advanced degrees and most have experience in a variety of organizational settings.

There are both internal and external OD consultants. An internal OD consultant is a full-time employee with a given organization. External consultants may be self-employed or on the staff of a consulting firm. "Externals" work with one or more clients contracting for specific projects.

================================================== ===================
ORGANIZATIONAL BEHAVIOR


Organizational Behavior is the study and application of knowledge about how people, individuals, and groups act in organizations. It does this by taking a system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system. Its purpose is to build better relationships by achieving human objectives, organizational objectives, and social objectives.

As you can see from the definition above, organizational behavior encompasses a wide range of topics, such as human behavior, change, leadership, teams, etc. Since these many of these topics are discussed in other sections of this leadership guide, this section will not go into topics previously discussed.



Elements of Organizational Behavior

The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcome are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.



Models of Organizational Behavior

There are four major models or frameworks that organizations operate out of:
1.Autocratic - The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

2.Custodial - The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.

3.Supportive - The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.

4.Collegial - The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and self-discipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

Although there are four separate models, almost no organization operates exclusively in one. There will usually be a predominate one, with one or more areas over-lapping in the other models.

Social Systems, Culture, and Individualization

A social system is a complex set of human relationships interacting in many ways. Within an organization, the social system includes all the people in it and their relationships to each other and to the outside world. The behavior of one member can have an impact, either directly or indirectly, on the behavior of others. Also, the social system does not have boundaries...it exchanges goods, ideas, culture, etc. with the environment around it.

Culture is the conventional behavior of an organization that encompasses beliefs, customs, knowledge, and practices. It influences human behavior, even though it seldom enters into their conscious thought. People depend on culture as it gives them stability, security, understanding, and the ability to respond to a given situation. This is why people fear change. They fear the system will become unstable, their security will be lost, they will not understand the new process, and they will not know how to respond to the new situations.

Individualization is when employees successfully exert influence on the social system by challenging the culture.

================================================== ======
ORGANIZATION CLIMATE
The Climate of your Organization is the State of its Health

How your employees feel about their jobs, their supervisors, their peers, top management, and many other factors affects their individual productivity, and collectively the ability of the organization to achieve its objectives.

Without a formal process, finding out about employee attitudes usually relies on the manager's instincts or the employee's own willingness to communicate upward. But managerial instinct rarely provides the kind of hard data needed for decision ‑ making. And most employees are hesitant to communicate anything but positive information to their supervisors.

The formal process generally involves using a climate survey or questionnaire, and you have probably learned that there are lots of them out there.



Organizational climate measures attempts to assess organizations in terms of dimensions that are thought to capture or describe perceptions about the climate.


1. Structure ‑ feelings about constraints and freedom to act and the degree of formality or informality in the working atmosphere.

2. Responsibility ‑ the feeling of being trusted to carry out important work.

3. Risk ‑ the sense of riskiness and challenge in the job and in the organization; the relative emphasis on taking calculated risks or playing it safe.

4. Warmth ‑ the existence of friendly and informal social groups.

5. Support ‑ the perceived helpfulness of managers and co‑workers; the emphasis (or lack of emphasis) on mutual support.

6. Standards ‑ the perceived importance of implicit and explicit goals and performance standards; the emphasis on doing a good job; the challenge represented in personal and team goals.

7. Conflict ‑ the feeling that managers and other workers want to hear different opinions; the emphasis on getting problems out into the open rather than smoothing them over or ignoring them.
8. Identity ‑ the feeling that you belong to a company; that you are a valuable member of a working team.

9.autonomy ‑ the perception of self‑determination with respect to work procedures, goals and priorities;

10.cohesion ‑ the perception of togetherness or sharing within the organization setting, including the willingness of members to provide material risk;

11.trust ‑ the perception of freedom to communicate openly with members at higher organizational levels about sensitive or personal issues, with the expectation that the integrity of such communications will not be violated;

12.resource ‑ the perception of time demands with respect to task competition and performance standards;

13.support ‑ the perception of the degree to which superiors tolerate members' behaviour, including willingness to let members learn from their mistakes without fear of reprisal;

14. recognition ‑ the perception that members' contributions to the organization are acknowledged;

15.fairness ‑ the perception that organizational policies are non‑arbitrary or capri*cious;

16.innovation ‑ the perception that change and creativity are encouraged, including
risk‑taking into new areas where the member has little or no prior experience.

================================================== =====================

ORGANIZATION CULTURE

HOW AN ORGANIZATION's CULTURE CAN BE KNOWN ?

Organization culture can be a set of key values , assumptions,
understandings and norms that is shared by members of an
organization.

Organization values are fundamental beliefs that an organization
considers to be important , that are relatively stable over time,
and they have an impact on employees behaviors and attitudes.

Organization Norms are shared standards that define what
behaviors are acceptable and desirable within organization.

Shared assumptions are about how things are done
in an organization.

Understandings are coping with internal / external problems
uniformly.
=================================================
LEVELS OF ORGANIZATION CULTURE

LEVEL 1---VISIBLE, that can be seen at the surface level
-dress codes
-office layout [ open office]
-symbols
-slogans
-ceremonies[ monthly / annual awards/long service/birthdays etc.
etc etc

LEVEL 2- INVISIBLE , that can be cannot be seen but only felt.
-stories about people performance
-symbols [ flag, trademark, logos, etc]
-corporate mission statements
-recruitment/selection [ methods used]
-fairness in treatment
-social equality
-risk taking in business deals
-formality in approach
-discipline
-autonomy for departments
-responsiveness to communication
-empowerment of staff.
etc etc.

Understanding of Organizational Behavior

Introduction
Organizational Behavior (OB) is the study and application of
knowledge about how people, individuals, and groups act in
organizations. It does this by taking a system approach. That is, it
interprets people-organization relationships in terms of the whole
person, whole group, whole organization, and whole social system.
Its purpose is to build better relationships by achieving human
objectives, organizational objectives, and social objectives.
As you can see from the definition above, organizational behavior
encompasses a wide range of topics, such as human behavior, change,
leadership, teams, etc. Since many of these topics are covered
elsewhere in the leadership guide, this paper will focus on a few
parts of OB: elements, models, social systems, OD, work life, action
learning, and change.

Elements of Organizational Behavior

The organization's base rests on management's philosophy, values,
vision and goals. This in turn drives the organizational culture
which is composed of the formal organization, informal organization,
and the social environment. The culture determines the type of
leadership, communication, and group dynamics within the
organization. The workers perceive this as the quality of work life
which directs their degree of motivation. The final outcome are
performance, individual satisfaction, and personal growth and
development. All these elements combine to build the model or
framework that the organization operates from.
Models of Organizational Behavior
There are four major models or frameworks that organizations operate
out of:

o Autocratic - The basis of this model is power with a
managerial orientation of authority. The employees in turn are
oriented towards obedience and dependence on the boss. The employee
need that is met is subsistence. The performance result is minimal.
o Custodial - The basis of this model is economic resources
with a managerial orientation of money. The employees in turn are
oriented towards security and benefits and dependence on the
organization. The employee need that is met is security. The
performance result is passive cooperation.
o Supportive - The basis of this model is leadership with a
managerial orientation of support. The employees in turn are
oriented towards job performance and participation. The employee
need that is met is status and recognition. The performance result
is awakened drives.
o Collegial - The basis of this model is partnership with a
managerial orientation of teamwork. The employees in turn are
oriented towards responsible behavior and self-discipline. The
employee need that is met is self-actualization. The performance
result is moderate enthusiasm.

Although there are four separate models, almost no organization
operates exclusively in one. There will usually be a predominate
one, with one or more areas over-lapping in the other models.
The first model, autocratic, has its roots in the industrial
revolution. The managers of this type of organization operate out of
McGregor's Theory X. The next three models begin to build on
McGregor's Theory Y. They have each evolved over a period of time
and there is no one "best" model. The collegial model should not be
thought as the last or best model, but the beginning of a new model
or paradigm.

Social Systems, Culture, and Individualization
A social system is a complex set of human relationships interacting
in many ways. Within an organization, the social system includes all
the people in it and their relationships to each other and to the
outside world. The behavior of one member can have an impact, either
directly or indirectly, on the behavior of others. Also, the social
system does not have boundaries...it exchanges goods, ideas,
culture, etc. with the environment around it.
Culture is the conventional behavior of a society that encompasses
beliefs, customs, knowledge, and practices. It influences human
behavior, even though it seldom enters into their conscious thought.
People depend on culture as it gives them stability, security,
understanding, and the ability to respond to a given situation. This
is why people fear change. They fear the system will become
unstable, their security will be lost, they will not understand the
new process, and they will not know how to respond to the new
situations.
Individualization is when employees successfully exert influence on
the social system by challenging the culture.


Impact Of Individualization
On A Organization
_______________________________
High | | |
| | |
| | |
| Conformity | Creative |
| | Individualism |
| | |
Socialization |_______________|_______________|
| | |
| | |
| | |
| Isolation | Rebellion |
| | |
| | |
Low |_______________|_______________|
Low Individualization High

The chart above shows how individualization affects different
organizations:
o Too little socialization and too little individualization
creates isolation.
o Too high socialization and too little individualization
creates conformity.
o Too little socialization and too high individualization
creates rebellion.
o While the match that organizations want to create is high
socialization and high individualization for a creative environment.

This is what it takes to survive in a very competitive
environment. . . having people grow with the organization, but doing
the right thing when others want to follow the easy path.
This can become quite a balancing act. Individualism favors
individual rights, loosely knit social networks, self respect, and
personal rewards and careers. It becomes look out for number 1!
Socialization or collectivism favors the group, harmony, and
asks "What is best for the organization?" Organizations need people
to challenge, question, and experiment while still maintaining the
culture that binds them into a social system.
Organization Development

Organization Development (OD) is the systematic application of
behavioral science knowledge at various levels, such as group, inter-
group, organization, etc., to bring about planned change. Its
objectives is a higher quality of work-life, productivity,
adaptability, and effectiveness. It accomplishes this by changing
attitudes, behaviors, values, strategies, procedures, and structures
so that the organization can adapt to competitive actions,
technological advances, and the fast pace of change within the
environment.

There are seven characteristics of OD:
1. Humanistic Values: Positive beliefs about the potential of
employees (McGregor's Theory Y).
2. Systems Orientation: All parts of the organization, to
include structure, technology, and people, must work together.
3. Experiential Learning: The learners' experiences in the
training environment should be the kind of human problems they
encounter at work. The training should NOT be all theory and
lecture.
4. Problem Solving: Problems are identified, data is gathered,
corrective action is taken, progress is assessed, and adjustments in
the problem solving process are made as needed. This process is
known as Action Research.
5. Contingency Orientation: Actions are selected and adapted to
fit the need.
6. Change Agent: Stimulate, facilitate, and coordinate change.
7. Levels of Interventions: Problems can occur at one or more
level in the organization so the strategy will require one or more
interventions.

Quality of Work Life

Quality of Work Life (QWL) is the favorableness or unfavorableness
of the job environment. Its purpose is to develop jobs and working
conditions that are excellent for both the employees and the
organization. One of the ways of accomplishing QWL is through job
design. Some of the options available for improving job design are:
o Leave the job as is but employ only people who like the
rigid environment or routine work. Some people do enjoy the security
and task support of these kinds of jobs.
o Leave the job as is, but pay the employees more.
o Mechanize and automate the routine jobs.
o And the area that OD loves - redesign the job.

When redesigning jobs there are two spectrums to follow - job
enlargement and job enrichment. Job enlargement adds a more variety
of tasks and duties to the job so that it is not as monotonous. This
takes in the breadth of the job. That is, the number of different
tasks that an employee performs. This can also be accomplished by
job rotation.

Job enrichment, on the other hand, adds additional motivators. It
adds depth to the job - more control, responsibility, and discretion
to how the job is performed. This gives higher order needs to the
employee, as opposed to job enlargement which simply gives more
variety. The chart below illustrates the differences:

Job Enrichment and Job Performance
_______________________________
Higher | | |
Order | | Job |
| Job | Enrichment |
| Enrichment | and |
| | Enlargement |
| | |
Accent on |_______________|_______________|
Needs | | |
| | |
| Routine | Job |
| Job | Enlargement |
| | |
Lower | | |
Order |_______________|_______________|
Few Many
Variety of Tasks

The benefits of enriching jobs include:
o Growth of the individual
o Individuals have better job satisfaction
o Self-actualization of the individual
o Better employee performance for the organization
o Organization gets intrinsically motivated employees
o Less absenteeism, turnover, and grievances for the
organization
o Full use of human resources for society
o Society gains more effective organizations
There are a variety of methods for improving job enrichment:
o Skill Variety: Perform different tasks that require
different skill. This differs from job enlargement which might
require the employee to perform more tasks, but require the same set
of skills.
o Task Identity: Create or perform a complete piece of work.
This gives a sense of completion and responsibility for the product.
o Task Significant: This is the amount of impact that the work
has on other people as the employee perceives.
o Autonomy: This gives employees discretion and control over
job related decisions.
o Feedback: Information that tells workers how well they are
performing. It can come directly from the job (task feedback) or
verbally form someone else.

Action Learning

An unheralded British academic was invited to try out his theories
in Belgium -- it led to an upturn in the Belgian economy. "Unless
your ideas are ridiculed by experts they are worth nothing," says
the British academic Reg Revans, creator of action learning [L = P +

Q] -- learning occurs through a combination of programmed knowledge
(P) and the ability to ask insightful questions (Q).
Action learning has been widely used in Europe for combining formal
management training with learning from experience. A typical program
is conducted over a period of 6 to 9 months. Teams of learners with
diverse backgrounds conduct field projects on complex organizational
problems requiring use of skills learned in formal training
sessions. The learning teams then meet periodically with a skilled
instructor to discuss, analyze, and learn from their experiences.
Revans basis his learning method on a theory called "System Beta,"
in that the learning process should closely approximate
the "scientific method." The model is cyclical - you proceed through
the steps and when you reach the last step you relate the analysis
to the original hypothesis and if need be, start the process again.

The six steps are:
o Formulate Hypothesis (an idea or concept)
o Design Experiment (consider ways of testing truth or
validity of idea or concept)
o Apply in Practice (put into effect, test of validity or
truth)
o Observe Results (collect and process data on outcomes of
test)
o Analyze Results (make sense of data)
o Compare Analysis (relate analysis to original hypothesis)

Note that you do not always have to enter this process at step 1,
but you do have to complete the process.
Revans suggest that all human learning at the individual level
occurs through this process. Note that it covers what Jim Stewart
(Managing Change Through Training and Development, 1991) calls the
levels of existence:

o We think - cognitive domain
o We feel - affective domain
o We do - action domain

All three levels are interconnected -- e.g. what we think influences
and is influenced by what we do and feel.
Change
In its simplest form, discontinuity in the work place is "change." A
popular change framework is Knoster, Villa, & Thousand:
Vision -> Skills -> Incentives -> Resources -> Action Plan = Change

o A vision is the starting point for goals it provides
provides the launch pad for action and the parameters for problem-
solving.
o Once a vision is established, it is necessary to build
skills needed to realize the vision.
o Incentives help to motivate the workforce to acquire and
maintain new skills. Building "buy-in" engages them -- it means they
are now stake-holders.

o Adequate resources allows the vision to be achieved.
o Action Planning is a continuous thread across all phases --
it is change process. Although presented as the final component of
the change framework, it should be viewed as the foundation of the
systems change process.
Missing Steps
What happens if you miss a step?

o Vision -> Skills -> Incentives -> Resources -> Action Plan =
Confusion
o Vision -> Skills -> Incentives -> Resources -> Action Plan =
Anxiety
o Vision -> Skills -> Incentives -> Resources -> Action Plan =
Gradual Change
o Vision -> Skills -> Incentives -> Resources -> Action Plan =
Frustration
o Vision -> Skills -> Incentives -> Resources -> Action Plan =
Treadmill Effect (false starts)

Developing OB model

A model is an abstraction of reality, a simplified representation of some real-world phenomenon. A mannequin in a retail store is a model. So, too, is the accountant’s formula: Assets + Liabilities = Owner’s Equity. The information below shows the Basic OB model and its levels on which it is constructed.

Basic OB Model

Organization Systems level
Group level
Individual level

It proposes that there are three levels of analysis in OB and that, as we move from the individual level to the organization system level, we add systematically to our understanding of behavior in organizations. The three basic levels are analogous to building blocks; each level is constructed on the previous level. Group concepts grow out of the foundation laid in the individual section; we overlay structural constraints on the individual and group in order to arrive at organizational behavior.

The Dependent Variables

A dependent variable is the key factor that you want to explain or predict and that is affected by some other factor. What are the primary dependent variables in OB? Scholars have historically tended to emphasize productivity, absenteeism, turnover, and job satisfaction. More recently, a fifth variable—organizational citizenship— has been added to this list. Let’s briefly review each of these variables to ensure that we understand what they mean and why they’ve achieved their level of distinction.

Productivity

An organization is productive if it achieves its goals and does so by transferring inputs to outputs at the lowest cost. As such, productivity implies a concern for both effectiveness and efficiency.

A hospital is effective when it successfully meets the needs of its clientele. It is efficient when it can do so at a low cost. If a hospital manages to achieve higher output by reducing the average number of days a patient is confined to the bed or by increasing the number of staff-patient contacts per day that is productive efficiency.

Popular measures of organizational efficiency include return on investment, profit per dollar of sales, and output per hour of labor. We can also look at productivity from the perspective of the individual employee.

Organizations in service industries also need to include “attention to customer needs and requirements� in assessing their effectiveness. Why? Because, there is a clear chain of cause-and-effect running from employee attitudes and behavior to customer attitudes and behavior to an organization’s revenues and profits. Sears, in fact, has carefully documented this chain. The company’s management found that a 5% improvement in employee attitudes leads to a 1.3 % increase in customer satisfaction, which in turn translates into a 0.5 % improvement in revenue growth. More specifically, Sears found that by training employees to improve the employee—customer interaction, it was able to improve customer satisfaction by 4% over a 12-month period, which generated an estimated $200 million in additional revenues.

In summary, one of OB’s major concerns is productivity. We want to know what factors will influence the effectiveness and efficiency of individuals, of groups, and of the overall organization.

Wednesday, November 19, 2008

Monetary Policy

The responsibility for the control of money supply, bank credit, and interest rates lies with the central bank of the country, viz. the Reserve Bank of India.

The money in circulation with the public cossets of currency and coins issued by the central bank plus deposits with banks and some other depository institutions. Depending upon which deposits are being included we get different monetary aggregates which are termed M1, M2, M3 and so forth. M3 is the so called broad money and includes demand and fixed deposits along with currency and coin. Bank credit is also a measure of liquidity in the economy since banks’ ability to extend credit depends upon their ability to mobilize deposits and the cash reserves they have to maintain against these deposits. The stock of currency together with the reserves maintained in the banking system of the central bank constitutes the monetary base or high powered money. Changes in this are magnified and lead to changes in the total money stock or bank credit.

The central bank can use a variety of policy instruments to regulate the volume and cost of credit in the economy. It can lower or raise the cash reserve ratio (CRR) within specified limits to make it easier or more difficult for banks to extend credit. By engaging in open market purchases or sales of securities from its portfolio it can inject or suck out reserves enabling banks to expand or contract credit as also lowering or raising the cost of credit. It can use the discount rate – the rate it charges banks for refinancing facility and discretionary limits on refinancing facilities to influence the volume of bank credit. At times it can impose administrative controls to alter the volume and select oral composition of outstanding bank credit. Lately, the Reserve Bank of India has more or less dispensed with such administrative controls on credit and interest rates and has been relying more on open market operations and the market mechanism.

The RBI has adopted inflation control as the primary objective of monetary policy. From time to time it must also deploy the policy tools under its control to address other targets such as exchange rate and employment. Often, these objectives can conflict with each other. Thus massive capital inflows into the economy which is already awash with liquidity pose a dilemma for the central bank. If the central bank does nothing, the exchange rate would appreciate which may hurt exports; if it intervenes and buys foreign exchange to prevent this, it would have to inject additional liquidity into the system. At such times, it must trade off one target against another.

The degree of autonomy enjoyed by the central bank is an important determinant of its ability to conduct effective monetary policy and achieve credibility with financial markets. If it has to play second fiddle to the Finance ministry and accommodate government’s borrowing requirements irrespective of the resulting impact on money supply, interest rates and inflation, it loses its ability to conduct effective monetary policy. Similarly, excessive reliance on opaque administrative control mechanisms reduces its credibility with financial markets and makes it difficult to implement anti-inflationary policies or appropriate exchange rate policies. In recent years, there has been a gradual move towards granting more and more operational independence.

Some financial terms:

Macroeconomics focuses on aggregate variables such as Gross National Product, aggregate investment and saving, total employment wholesale and consumer price indices money supply and bank credit and key financial variables like interest rates and exchange rates.

Gross Domestic Product (GDP) and Gross National Product (GNP) are two widely used measures of the level of economic activity.

Per capita GDP is widely used as a measure of living standards. The World Bank classifies countries into: ‘Low Income, ‘Middle income’ and ‘High Income’. The low income countries are often referred to as the Third World.

Depreciation

Depreciation is an important item on the profit and loss account, its nature is often not properly understood by non-finance managers.

This article clarifies what deprecation is, explains the manner in which the depreciation schedule is prepared, presents information on the methods and rates of depreciation under the Companies Act and the Income Tax Act, and dispels some of the myths surrounding depreciation.

Nature of Depreciation

A fixed asset is used over a number accounting periods. So it is necessary to allocate its costs to various accounting periods that benefit from its use. Such an allocation is called depreciation. Accountants normally allocate the cost of an asset over its useful life using a well-defined procedure.

Depreciation Schedule:

Three steps are involved in calculating the depreciation schedule.

1. Determine the depreciable base.
2. Estimate the useful life of the asset
3. Choose the depreciation method

Depreciable Base: The depreciable base is the cost of the asset less its residual value.

The cost of the asset is equal to:

List price less discount
+
Taxes
+
Insurance, freight and handling
+
Installation charges
+
Interest during the construction period

The residual value (or salvage value) is the amount expected from the disposal of the asset after its useful life. Since it may not be much or difficult to estimate, it may be put at 5 per cent or so of the original cost or even completely ignored.

Useful Life: The useful life of an asset is the period over which it is expected to be used. Often it is less than the physical life of the asset because of factors such as technological obsolescence, fall in demand and legal restrictions. Estimating the useful life is largely a matter of managerial judgment.

Depreciation method: There are several methods of depreciation. The two most commonly used depreciation methods in India are the straight line method and the written down value method.

Under the straight line method the depreciable amount of the asset is allocated equally over the useful life of the asset. To illustrate, assume that a car costs Rs 500,000 and is expected to fetch a salvage of Rs 80,000 after a useful life of 7 years. The annual depreciation charge is:

Cost – Salvage value / Useful Life
= Rs 500,000 – Rs 80,000/6 = Rs 70,000
Under the written down value method, the depreciation charge for an accounting period is equal to a fixed percentage of the book value at the beginning of the period. To illustrate, assume that the cost of an asset is Rs 100,000 and the depreciation rate applicable to it under the written down method is 40 per cent. The depreciation schedule for the asset will be as follows.

Year Original Depreciation Accumulated Book value
Cost depreciation at year end

1 100,000 40,000 40,000 60,000
2 100,000 24,000 64,000 36,000
3 100,000 14,400 78,400 21,600
4 100,000 8,640 87,040 12,960
5 100,000 5,184 92,224 7,776

Depreciation for company Law and Income Tax Purposes

Unlike most other countries the methods and rates for depreciation are prescribed by law India.

Depreciation under the Companies Act; The Companies Act requires that a company that tends to pay dividend must provide depreciation in accordance with Schedule XIV of the Act. This schedule gives the rates under the straight line method and the written down value method for various classes of assets. For assets used in multiple shifts, extra depreciation has to be provided. The key rates presently are as follows:

Straight line method Writeen Down Value

Building (other than 1.63% 5.00%
factory Buildings)

Factory buildings 3.34% 10.00%

Temporary Structure 100.00% 100.00%

Furniture & Fittings 6.33% 18.10%

One shift Three shifts One shift Three shifts
Plant & Machinery 4.75% 10.34% 13.91% 27.82%
(Gen)

Note that the above rates are the legal minimum rates for determining divisible profit. The purpose of the Companies Act is to protect the creditors. It tries it ensure that companies do not overstate profits to pay large dividends to the detriment of creditors.

Depreciation for income Tax Purposes: For income tax purposes, tax payers have no choice but to follow the written down value method. The rates permitted for various assets presently are as follows:

Buildings: 5%
Plant and machinery: 25%
Vehicles on hire: 40%
Computers: 60%
Pollution control equipment: 100%

There is no concept of higher depreciation for multiple shifts under the Income Tax Act. Note that the rates prescribed under the Income Tax Act are the maximum rates that a company can claim whereas the rates prescribed under the Companies Act are the minimum rates that a company must charge.

Grow along with your manager and organization

Success always comes to people who really want to succeed in life, particularly for those who can think big. So, please don’t sit down doing nothing thinking that success will come your way. You need to take some efforts and get into action to achieve it.

A lot of people keep cribbing about why they are not able to succeed in their career. The most common reason they come up with is that their manager is not helping them to succeed. But then if that is the real issue, why don’t you raise the issue with the manager? In most cases people don’t thinking that it might spoil their relation with the manager.

But it is important for you to understand that if something is unsaid, it is highly probable that its not communicated. Only you know what you want, but for everyone else it has to be communicated. Also, sit down and decide on your career plan. Only you can decide on that and execute it, not your boss.

The best way to grow in a firm is to force your manager to grow upwards. Once he grows, there is a vacancy created and then it’s in your manager’s interest to pull you up rather than appointing someone from outside because, you are the person who he understands best. So, if someone has to grow it has to be your manager first and then you.

Learn to face challenges instead of running away from them or they will run after you. Some challenges may be tough and some may come disguised as simple tasks. It’s important for you to overcome both.

Never keep anything to yourself. Till you complain, no one will even think over the issue. The solution will follow only when the issue is raised. So, if you have any issues with people around you at work, be bold enough to raise it and be clear about it. If you don’t, you are going to end up feeling frustrated.

People grow only when the company grows. It is very hard for people to grow in an organization that’s in a great loss. So everybody needs to put in equal efforts and avoid any kind of actions that may affect company’s growth.

The bottom line is that negative publicity will harm you as much as your company and also damage your professional image in front of others in the industry, making you less employable.

Management The Personal Touch – A case

Anita Roddick, founder and managing director of The Body Shop international demonstrates how much a manager’s personality and values can actually define the manager’s role and help to shape an organization The Body Shop sells products that cleanse and polish the skin and while it may appear to be a boutiques cosmetics company. It is really quite different.

The Body Shop was founded in 1976 by Roddick and her husband Gordon. At that time, the couple formed the business so Anita would have a means of supporting herself and their two children while her husband Gordon fulfilled his dream of riding on horseback from Buenos Aires to New York City. When Gordon left, Anita was operating a single shop in England; when he returned ten months later there were two shops with another one soon to follow.

By the early 1990s, The Body Shop had blossomed into a financial success. In 1992 The Body Shop boasted earnings of $265 million worldwide and enjoyed a 23 percent growth rate for the first half of 1993. As of November 1993, nearly 1000 Body shop stores were located around the world in 43 countries.

Many of Roddick’s personal values have influenced the Body Shop’s corporate culture. Indeed, the company is driven by her intense commitment – what she calls electricity and passion – that can’t help but engender enthusiasm and boost employee, customer, and community morale. At the same time, Roddick also focuses on her specific managerial responsibilities, primarily (thought not exclusively) product development and marketing.

Roddick’s use of marketing tends to distinguish The Body Shop not only from direct competitors but also from most other conies. The Body Shop does not spend money on consumer advertising. The organization is premised upon the belief that consumers are under-whelmed by the commercial hype already clouding the marketplace. The Body Shop therefore allocates promotional money to social activism instead of consumer advertising the old days we couldn’t afford (to advertise) recalled Roddick. Now we would be deeply embarrassed to. In a way, the organization’s refusal to advertise has become an element of the corporate culture.

Roddick does not market the company in a traditional way. Instead she aggressively pursues avenues through which the company can enjoy media coverage for free. In this way, the marketing of The Body resembles a political campaign I’m always available to the press, noted Roddick. I fervently believe that passion persuades, and I emit a lot of enthusiasm. Clearly Roddick recognizes the value of media coverage of The Body Shop. If I put our poster for coloring [a line of market] in the shop window that creates sales and profits, asserted Roddick. A poster to stop the burning of the rain forest doesn’t. It creates a banner of values. It links us to the community but it will not increase sales. What increases sale is boring Glamour magazine saying Princess Diana uses Body Shop products. Then we will get 7,000 phone calls asking for our catalog. You can measure the effect.

Roddick has also found that she must market herself as well as the company, and that the image she conveys is one that falls in line with the values she articulates. The staff doesn’t want me in fur coats or in big cars or acting like I’ve got the million dollars that I have said Roddick. They want me to be as I am. Other people, the City London’s Wall Street want me to be respectable. So you are dealing with multitudes of different people. There are so many planks in the platform of running a business.

It is Roddick who controls the press coverage, though not the other way around. She demonstrated her ability to create favorable coverage early on when The Body Shop first opened. Roddick opened the first store next door to a funeral home. When he received a formal letter of complaint from the neighboring undertaken, she leaked it to the press that they were ganging up on her – a struggling, female shopkeeper.

Attention to communication has played a major role in Roddick’s management of The Body Shop’s success. In the early days, Roddick felt it necessary to hide her true financial woes. I used to have friends call me when a potential franchises was arriving so I could have an absolutely ridiculous conversation. Ring, Ring Oh yes this is where you’d like the franchisee, Barry Street Edmonds? No, I don’t think it’s the right town for that. Besides we’ve already had 14 other applications. That went on all the time. This image of success that she fabricated soon turned into reality.