chapter 10 MQM 220
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This 10 page Class Notes was uploaded by Lydia on Thursday October 1, 2015. The Class Notes belongs to MQM 220 at Illinois State University taught by Heather Jia in Fall 2015. Since its upload, it has received 50 views. For similar materials see Business Organization and Management in Business, management at Illinois State University.
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Date Created: 10/01/15
Managerial ControlsChapter 10 its closely tied with planning which is what you39re going to be doing and how you39re going to be doing it Controlling is whether or not you did it and if did not why not if you did great how can you improve What Is Controlling Controlling the process of monitoring comparing and correcting work performance looking to see what has happened and deciding if it s a good or a bad thing monitoring comparing checking to see if people have preformed their work appropriately and ifthey have not introduce mechanisms by which to correct that The Purpose of Control To ensure that activities are completed in ways that lead to the accomplishment of organizational goals To ensure that the activities that you laid out in the planning faze to see whether or not those were good plans Did you meet your goals You adjust your plans going forward based the outcome of your controllingIt s the last step before you start planning again Why Is Controlling Important As the final link in management functions Planning controls let managers know whether their goals and plans are on target and what future actions to take helps determine your plan going fonNard Empowering employees control systems provide managers with information and feedback on employee performance These control systems direct or enable managers to know what they39re supposed to be looking for when their managing their employee It also lets them know what their looking for from me Protecting the workplace controls enhance physical security and help minimize workplace disruptions setting rules expectations standards policies practices that employee handbook that s what people look to to know what to do if somebody has misbehaved The Control Process Measuring Step 139 Actual Performance 39 GOALS AND OBJECTIVES quot l Comparing Actual Performance Step 2 Organizational Against Standard Divisional Departmental Individual Step 3 Step 1 Measuring Actual Performance Ex If taking attendance on class today only and used that info to decide what grades people got those in the room would be thrilled right now The people that missed for the first time and her grade depended on being here today How We Measure o Personalobservations Doing really well in yourjob and then you screwed up and that was the time that your boss saw and now he39s going to think that you screw up all the time So not taking just that one incident and using that to generalize This is what39s called inaccurate measuring You want to have multiple sample multiple piece of evidence to demonstrate whether people are reaching their performance 0 statisticalreports sales figure etc o oral reports asking other people about how someone39s performing and 0 written reports Feedback from customers such as comments or complaints and those can then lead to indications of how well you perform What We Measure what is measured is probably more critical to the control process than how it s measured you get the behavior that you measure and that you either punish or reward for What that means is if a behavior is important to you you need to clearly articulate that will be watching for it and you need to tie that to some kind of rewardpunishment mechanism If you don t measure it you39re not going to get that kind of performance Ex The professionalism component being here on time not stepping out not using your phone if your engaging in those activities your loosing points how do I emphasize what39s important to me I attach measurement to it If it39s important I make sure you recognize it and that it39s on your mind Step 2 Comparing Actual Performance Against the Standard Determining the degree of variation between actual performance and the standard Reward system Punishment for good behavior for bad behavior 3 3qtr 100 bonus 3 6qtr written up i 3 yr 250 bonus 3 10 yr suspension lt 3yr 1000 bonus 3 15yr terminated Range of variation the acceptable parameters of variance between actual performance and the standard this is what we want but what are we willing to accept what is the tolerance that we have for not meeting are expectations and if we find that people fall outside those expectations what do we do Step 3 Taking Managerial Action Goal target 10k Bill a 98k 2 Sally a 8k 20 Immediate corrective action corrective action that corrects problems at once in order to get performance back on track Ex Sally is being called into the office and being told to turn it around and if she doesn t she may find herself out of a job and she has 60 days to fix it 2 employees are having an argument and 1 employee slashes the other employees tires because of that argument that is not a bring into office to discuss what happened that employee is immediately terminated Basic corrective action corrective action that looks at how and why performance deviated before correcting the source of deviation Ex For Bill you just missed it what can we do to push you over what are some ofthe things that we can do to help you get that last little bit so you39re at least meeting your targets it39s on your radar to be fixed but it doesn t need to be fixed today it39s not a huge problem 2 employees having a fight and being pulled into the office for a meeting and being warned not to do it again Revise the Standard if performance consistently exceeds the goal then a manager should look at whetherthe goal is too easy and needs to be raised if we say you have to sell 10k a month and no one makes that number everyone sells in the 8k range is it the problem with the expectation or is there something wrong with the sale people So if you find that there39s a problem with the standard then you adjust the standard Of what if you set the standard for 10k and your lowest performer was at 15k per month is your standard okay then Managers must be cautious about revising a standard downward or upwardthe first exam normally people average between 7275 average but our class averaged 80 which is like a full 5 higher than what was expected So now instead of using the normal grading scale were going to be using a different one where 100 95 A 9485 B because our class is doing 5 better so it makes sense to adjust the scale accordingly If there doing better than you expected they would perform then maybe you should raise your expectations ofthem because it sends a message to people What Is Organizational Performance Performance the end result of an activity the outcome essentially can be measured on a team or individual level Organizational performance the accumulated results of all the organization s work activities the outputs ofthe entire organization measured by the all of the organization Measures of Organizational Performance Productivity the amount of goods or services produced divided by the inputs needed to generate that output Ex uptime what percentage of the time was the machinery up and running and what was missused If you39re in a baking situation and the computer systems are down one day out ofthe week that s going to affect your ability to successfully do yourjobthere can be an explanation as to why controlling standards did or did not get met Organizational effectiveness a measure of how appropriate organizational goals are and how well those goals are being met did you meet your goals Yes or no Controlling for Employee Performance Disciplinary actions actions taken by a manager to enforce the organization s work standards and regulations also called corrective behaviors Delivering Effective Performance Feedback managers need to provide their employees with feedback so that the employees know where they stand in terms oftheir work is delivered consistently and often times if it39s possible immediate after the action is observedif you get brand new information in your evaluation that s your managers fault because they should be giving you feedback Tyges of Discipline Problems and Examples of Each Attendance Absenteeism tardiness abuse ref sielk leave Onmtheieltt Behaviers lnsuberdinatien failure tel use safetyr devises aleehel er drug abuse Di h w Theft lying te supervisers falsifying infermatien err emnleyment alpplieatien er err ether erganizatienal ferrns Outside Activities Criminal aetivities unautl rerizeel strike aetirrities werking fer a eernpeting erganizatien if ne eempete elause is part ef empleyment Financial Controls Traditional Controls Ratio analysis Liquidity Leverage Activity Profitability Budget Analysis Quantitative standards Deviations DTI Debt to Income Popular Financial Ratios Objective Fistie C sleulstien Mes ing iiuiditr Current retie Current assets Tests the ergiehizstieh s Current Iiabmi eg ehiiitvr te meet sheirt term ehhgehehs Aeid test Current assets less ihvehteries Tests iicwi ditvr mere urreht iisbiiities Hewraieh when ihvehteries turn ever siewiv er ere diffieuit te selil Leverage De ht te assets 39Ii39etei debt The higher the Iretie Tmm aggetg the mere ievereged the ergisnizetien Activity inventerv Sales The higher the mtie the turheveir muenmw mere eiiieiei itlvr ihvehterv essets ere used Tetei asset Sales The iewer assets used to F39r efite hi Ilitvr turheveir iF Irefit margin eh seies iFietuirh en investment Total assets Net ereiit after taxes Tetei ssies Net erieiit after taxes 39ll39etel essets eehieve e give it ievei ef seiesj the mere effieiehtiv mehegiemeht uses the ergisnizstien s tetei essets Identifies the ereiits that are giEiiEi39 iEd Measures the eifieiehev ei essets te gehelrete profits Benchmarking of Best Practices Benchmarking the search for the best practices among competitors or noncompetitors that lead to their superior performance comparing your results to other people Benchmark the standard of excellence to measure and compare against Contemporam Issues in Control Adjusting Controls for CrossCultural Differences and Global Turmoil Ex When 911 happened changed our airport protocol but other countries did it as well because they recognized that they were just as vulnerable to something that happen in the USA as they were locally Control techniques can be quite different for different countries Differences are primarily in the measurement and corrective action steps of the control process how you discipline your employees varies In Japan its almost unheard of to fire employees it39s not as long as you want them to work for you but it39s about how long they want to work for you Managers in foreign countries also need to be aware of constraints on corrective actions they can take Workpla ce privacy If you use their systems in any way they own whatever you do on those systemsthey can only monitor you if you are using there wifi or your cellular data Employers can and do read your email tap your telephone monitor your work by computer store and review computer files monitor you in an employee bathroom or dressing room track your whereabouts in a company vehicle Employee theft any unauthorized taking of company property by employees for their personal use manipulating time sheets or expense reports Workplace Violence the US National Institute of Occupational Safety and Health still says that each year some 2 million American workers are victims of some form of workplace violence it goes from actual fist fighting to putting laxatives in homemade brownies