Lecture - 3 Human Relations Management Theory

7/30/2019 Lecture - 3 Human Relations Management Theory

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Human Relations Management

Theory

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Chandrasen Kumar,

Faculty, Institute of Food Security

Food Corporation of India

11/11/2012

Lecture 3 : 06.10.2012


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OVERVIEW

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Review of discussions from Lecture2 : 09.09.2012

Overview of todays lecture:

Discussion on remaining part of the lecture

Experience sharing

If time permit we shall discuss Human relations

Management Theory which is an important

aspecvt of Management theory


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WHATIS MANAGEMENT?

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Management is the process of designing and

maintaining an environment in which individuals,

working together in groups, accomplish efficiently

selected aims.

Everybody (all managers) carries out managerial functions of

planning, organizing, staffing, staffing and leading

Applies to all kind of organizations

Applies to managers at all levels

All managers aim is to create surplus

It is concerned with productivity that implies effectiveness and

efficiency


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FUNCTIONSOF MANAGEMENT

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Staffing


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THE DEVELOPMENTOF

MANAGEMENT THEORY

Up to the 20th century (pre-modern era)

Adam smiths contribution to the field of management

Industrial revolutions influence on management practices

In the early 20th century

Scientific management

General administrative theory

The human resources approach

The quantitative approach

From the later 20th century to the present

The process approach

The systems approach

The contingency approach 11/11/2012

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ADAM SMITHS CONTRIBUTION

TOTHE FIELDOF MANAGEMENT

The general popularity today ofjob

specialization is undoubtedly due to Smiths

view about division of labor.

Division of labor is the breakdown of jobs

into narrow, repetitive tasks.

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INDUSTRIAL REVOLUTIONS

INFLUENCEON MANAGEMENT

PRACTICES Industrial Revolution has originated in late-18th-

century Great Britain, and crossed the Atlantic to

America by the end of the Civil War.

Because of the Industrial Revolution, machine

power was rapidly substituted for human power,

which made it economical to manufacture goods in

factories.

With the development of big organizations, a formal

theory to guide managers running these

organizations efficiently and effectively was

needed.

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THE DEVELOPMENTOF

MANAGEMENT THEORY

Up to the 20th century



In the early 20th century Scientific management








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SCIENTIFIC MANAGEMENT

Frederick Taylor

Frederick Taylor was called as the father of Scientific

management. His bookThe Principles of Scientific

management was published in 1911. Immediately,its contents became widely accepted by managers

throughout the world.

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BACKGROUNDOF THAT

TIME

There were no clear concepts ofresponsibilities to workers and managers.

No effective workstandards existed.

Management decisions were based on hunch andintuition.

Workers were placed on jobs with little or no concern

for matching their abilities and aptitudeswith the tasks required.

Managers and workers considered themselves to be incontinual conflictany gain by one would be at theexpense of the other.

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TAYLORS FOUR PRINCIPLESOF

MANAGEMENT

Develop a scientific way for each element of an

individuals work, which replaces the old rule-of-

thumb method.

Scientifically select and then train, teach, and develop

the worker.

Heartily cooperate with the workers so as to ensure

that all work is done in accordance with the scientificway that has been developed.

Divide work and responsibility almost equally

between managers and workers. Managers take over

all work for which it is better fitted than the workers.11/11/2012

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THE DEVELOPMENTOF

MANAGEMENT THEORY

Up to the 20th century



In the early 20th century Scientific management



The quantitative approach From the later 20th century to the present




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GENERAL ADMINISTRATIVETHEORY

Herial Fayols contributions

He argued that management was an activity common to all

human undertakings in business, in government, and even in the

home. He stated 14 principles of managementfundamentalor universal truths.

Max Webers contributions

Weber developed a theory of authority structures and described

organizational activity on the basis of authority relations. He

described an ideal type of organization that he called a

bureaucracy, characterized by division of labor, a clearly

defined hierarchy, detailed rules and regulations, and

impersonal relationships.

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FAYOLS 14 PRINCIPLESOF

MANAGEMENT

1. Division of Work

2. Authority

3. Discipline

4. Unity of Command

5. Unity of Direction

6. Subordination of

Individual Interests to the

General Interest

7. Remuneration

8. Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of Tenure of

Personnel

13. Initiative

14. Esprit de corps

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WEBERS IDEAL BUREAUCRACY

Division of labor

Authority hierarchy

Formal selection

Formal rules and regulations

Impersonality

Career orientation

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THE DEVELOPMENTOF

MANAGEMENT THEORY













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THE HUMAN RESOURCES

APPROACH

Hawthorne Studies

Human Relations Movement

Dale Carnegie

Abraham Maslow

Douglas McGregor

Behavior Science

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HAWTHORNE STUDIES

Time: 1924the early 1930s

Place: Hawthorne plant in the Western Electric Company

Designer: Western Electric industrial engineers

Elton Mayo and his associates

Mayos Finding:

Behavior and sentiments are closely related.

Group influences significantly affect individual behavior.

Group standards establish individual worker output.

Money is less a factor in determining output than are

group standards, group sentiments, and security.

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THE DEVELOPMENTOF

MANAGEMENT THEORY













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THE QUANTITATIVE APPROACH

What are quantitative approaches?

The quantitative approach to management,

sometimes referred to as operations research

(OR) or management science. It includes

applications ofstatistics, optimization models,

information models, and computer

simulations, linear programming, and so on,

which can be used to solve management

problems.11/11/2012

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THE QUANTITATIVE APPROACH

How have they contributed to current

management practice?

In general, the quantitative approaches

have contributed directly to management

decision making, particularly to planning

and control decisions.

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THINKING PROBLEMS

What stimulated the classical approach

(scientific management and general

administrative theory)?

What stimulated the human resource

approach?

What stimulated the quantitative approach?

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THE DEVELOPMENTOF

MANAGEMENT THEORY













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THE SYSTEMS APPROACH

Whats the system approach?

Two basic types of the system: closed and open

Closed systems are not influenced by and do not interactwith their environment. In contrast, an open systemdynamically interacts with its environment.

An organization is an open system

The operating model in organizational systems

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WHATSTHE SYSTEM

APPROACH?

The system approach defines a system as a

set of interrelated and interdependent parts

arranged in a manner that produces a unifiedwhole. Societies are systems and so, too, are

computers, automobiles, organizations, and

animal and human bodies.

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AN ORGANIZATION ISAN

OPEN SYSTEM

An organization is a system that interacts

with and depends upon its environment.

Organizations stakeholders:any group that isaffected by organizational decisions and

policies. The managers job is to coordinate all

stakeholders to achieve the organizations goals.

Organizational survival often depends onsuccessful interactions with the external

environment.

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THE OPERATING MODELIN

ORGANIZATIONAL SYSTEM

Input Transformation Output

Feedback

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THESYSTEMSAPPROACH

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THE DEVELOPMENTOF

MANAGEMENT THEORY













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FOUR POPULARCONTINGENCY

VARIABLES:

Organization size

Routineness of task technology

Environmental uncertainty

Individual differences

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PRACTICES

Whats the Taylors four principles of management?

Whats the 14-principles of management?

Whats the Mayos Finding? What are stakeholders?

Which critical contingency variables organizations have?

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PREVIEW

Review Classical Theories of Organizations Taylors Theory of Scientific Management

Fayols Administrative Theory

Webers Theory of Bureaucracy

Humanistic Theories of Organizations

Human Relations Theory

The Hawthorne Studies

Chester Barnard

McGregors Theory X and Theory Y

Human Resources Theory

Likerts Systems Theory (Four Systems ofManagement)

Blake and Moutons (Blake and McCanse) ManagerialGrid


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CLASSICAL THEORIES REVIEWED

Classical Theories of Organizations (p. 36)

Taylors Theory of Scientific Management (tasks)

Fayols Administrative Theory (mgmt)

Webers Theory of Bureaucracy (org structure)

All 3 theories attempt to enhance managements

ability to predict and control the behavior of their

workers

Considered only the task function of communication

(ignored relational and maintenance functions of

communication)

Designed to predict and control behavior in

organizations


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CLASSICALVS. HUMANISTIC

Classical theories emphasized coercion, control, and punishment(FOCUS ON TASKS /PRODUCTION).

Maintain predictability and control

Decision-making power at top of hierarchy

Minimize input from lower-level employees

Rely on science and rules to guide behavior

Regulate communication to increase predictability and decreasemisunderstandings

Result:

Workers feel they have no control over their work situation

Management does not care about their ideas

Feelings and ideas of workers are unimportant

Humanistic theories were developed to promote the CONCERNSof the individual worker in an atmosphere that was too focusedon production (FOCUS ON RELATIONAL & MAINTENANCE

FUNCTIONS)


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PRINCIPLESOF HUMAN RELATIONS

THEORY

Human relations theory is characterized by a shift in emphasis

from TASK to WORKER

Go beyond physical contributions to include creative, cognitive,

and emotional aspects of workers

Based on a more dyadic (two-way) conceptualization ofcommunication.

SOCIAL RELATIONSHIPS are at the heart of organizational

behavior--effectiveness is contingent on the social well-being of

workers

Workers communicate opinions, complaints, suggestions, andfeelings to increase satisfaction and production

Origins (Hawthorne Studies & work of Chester Barnard)

Human Relations School of Management - Elton Mayo (Harvard


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ORIGINSOF HUMAN RELATIONS THEORY


Hawthorne Works of Western Electric Company

1924 - Chicago

Research focus: Relation of quality and quantity of illumination

to efficiency in industry

Four Important Studies


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THE HAWTHORNE STUDIES

Illumination Study (November 1924)

Designed to test the effect of lighting intensity on worker productivity

Heuristic value: influence of human relations on work behavior

Relay Assembly Test Room Study (1927-1932)

Assembly of telephone relays (35 parts - 4 machine screws)

Production and satisfaction increased regardless of IV manipulation Workers increased production and satisfaction related to supervisory practices

Human interrelationships are important contributing factors to worker productivity

Bottom Line: Supervisory practices increase employee morale AND productivity

Interviewing Program (1928-1930)

Investigate connection between supervisory practices and employee morale

Employees expressed their ideas and feelings (e.g., likes and dislikes) Process more important than actual results

Bank Wiring Room Observation Study (November 1931 - May 1932)

Social groups can influence production and individual work behavior

RQ: How is social control manifested on the shop floor?

Informal organization constrains employee behavior within formal organizational structure


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HAWTHORNE STUDIES - IMPLICATIONS

Illumination Study (November 1924)

The mere practice of observing peoples behavior tends to alter their behavior(Hawthorne Effect)

Relay Assembly Test Room Study (1927-1932)

Relationships between workers and their supervisors are powerful

Human interrelationships increase the amount and quality of worker participationin decision making

Interviewing Program (1928-1930)

Demonstrated powerful influence of upward communication

Workers were asked for opinions, told they mattered, and positive attitudes towardcompany increased

Bank Wiring Room Observation Study (November 1931 - May 1932)

Led future theorists to account for the existence of informal communication


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HAWTHORNE STUDIES - CRITICISMS

Not conducted with the appropriate scientific rigor necessary

Too few subjects (N=5)

No control groups

Subjects replaced with more cooperative participants

WORTHLESS

GROSS ERRORS

INCOMPETENCE


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THE EMERGENCEOF COMMUNICATION

Chester Barnard

Considered a bridge between classical and human relations theories

The Functions of the Executive (1938)

Argues for . . .

strict lines of communication - classical theory a human-based system of organization

The potential of every worker and the centrality of communicationto the organizing process

Six Issues Relevant to Organizational Communication

Formal vs. Informal Organization

Cooperation

Communication

Incentives

Authority

Zone of Indifference


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S IX ISSUES RELEVANTTO ORGANIZATIONAL

COMMUNICATION

Formal vs. Informal Organization

Formal Organization - a system of consciously coordinated activities or forces of two or more persons.(definite, structured, common purpose)

Persons are able to communicate with one another

Willing to contribute action

To accomplish a common purpose

Informal Organization - based on myriad interactions that take place throughout an organizations

history. Indefinite

Structure less

No definite subdivisions of personnel

Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organization

Cooperation

Necessary component of formal organization

The expression of the net satisfactions or dissatisfactions experienced or anticipated by each individualin comparison with those experienced or anticipated through alternative opportunities

Communication

Critical to cooperation

The most universal form of human cooperation, and perhaps the most complex, is speech

The most likely reason for the success of cooperation and the reason for its failure

System of communication: known, formal channels which are as direct (short) as possible, where the

complete line of communication is used, the supervisory heads must be competent, the line ofcommunication should not be interrupted, and every communication should be authenticated.


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S IX ISSUES RELEVANTTO ORGANIZATIONAL

COMMUNICATION

Incentives

Should be available

Not discussed in detail

Authority

Associated with securing cooperation for organizational members

The interrelationship among the originator of the communication, thecommunication itself, and the receiver

Authority of position OVER Authority of Leadership (knowledge & ability).

Zone of Indifference - orders followed

Marks the boundaries of what employees will consider doing without question,based on expectations developed on entering the organization.

Barnard drew attention away from formal organizational structures towardcommunication, cooperation, and the informal organization. His work wasintegrated by other theorists in the human relations movement.


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THEORY X AND THEORY Y: DOUGLAS

MCGREGOR

Douglas McGregor (1906-1964)

Articulated basic principles of human relations theory

The Human Side of Enterprise (1960, 1985)

To understand human behavior, one must discover the theoreticalassumptions upon which behavior is based

Especially interested in the behavior of managers toward workers

Every managerial act rests on assumptions, generalizations, andhypotheses--that is to say, on theory . . . Theory and practice areinseparable.

Two Objectives:

Predict and control behavior

Tap Unrealized potential

Theory X - Classical Theory

Theory Y - Human Relations Theory

FOCUS: Managers assumptions about HUMAN NATURE


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THEORY X AND THEORY Y: DOUGLAS

MCGREGOR

Theory X - Classical Theory

Three Assumptions

The average human being has an inherent dislike of work and will avoid it.

Most people must be coerced, controlled, directed, and threatened with punishment

The average human being prefers to be directed, wishes to avoid responsibility, has relativelylittle ambition, wants security.

Neither explains nor describes human nature

Theory Y - Human Relations Theory

Assumptions

Physical and mental effort in work is similar to play / rest.

External control and the threat of punishment are not the only strategies

Commitment to objectives is a function of the rewards associated with their achievement

The average human being learns, under proper conditions, not only to accept but to seekresponsibility

The capacity to exercise a high degree of imagination, ingenuity, and creativity in thesolution of organizational problems is widely distributed in the population

Intellectual potentialities of the average human being are underutilized

A more positive perspective of human nature

The KEY to control and quality production is commitment to organizational

objectives


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THEORY Y PROTOTYPE: THE SCANLON

PLAN

Participative Management

Two Central Features

Cost-reduction sharing for organizational members - sharing the economic gains fromimprovements in organizational performance

Effective participation - a formal means of providing opportunities to every member ofthe organization to contribute ideas for improving organizational effectiveness.

Must be implemented appropriately

Wastes time and undermines managerial power?

Magic formula for every organizational problem?

CONCERN for RELATIONSHIPS in the organization.

As the need to increase commitment grows, so does the need to develop strong,communication-based relationships among organizational members, particularly betweensupervisor and subordinate.


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MILES HUMAN RESOURCES THEORY

Difficult to adopt principles of human relations theory -- misapplications andmisunderstandings of both classical theory and human relations theory led toHuman Resources Theory

The key element to Human Relations Theory, participation, was used only tomake workersfeel as if they were part of the organizational decision-making

processes

Key to classical and human relations theory is compliance with managerialauthority

Workers are told that they are important but were not treated as such

Major Distinctions between Human Resources and Human Relations Theory

All people (not just managers) are reservoirs of untapped resources - manager responsibility to tapphysical and creative resources

Many decisions can be made more effectively and efficiently by workers most directly involved withtheir consequences

Relationship between employee satisfaction and performance - improved satisfaction and morale

contribute back to improved decision making and control


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MILES HUMAN RESOURCES THEORY

Increased satisfaction is related to the improved decision making and self-controlthat occurs due to participation that is genuinely solicited and heard

Two prevalent Human Resources Theories

Rensis Liker

Blake & Mouton (Blake & McCanse)

Four Systems of Management: Rensis Likert (Figure 3.2, p. 56)

Management is crticial to all organizational activities and outcomes

Continuum that ranges from more classically oriented system to one based on humanresources theory

Of all the tasks of management, managing the human component is the central and

most important task

High producing departments and organizations tend toward System IV; low producingunits favor System I

System I - Exploitative Authoritative

System II - Benevolent Authoritative

System III - Consultative

System IV - Participative


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BLAKEAND MOUTONS MANAGERIAL GRID

Stresses interrelationship between production (task) and people

Managements main purpose is to promote a culture in the organization thatallows for high production at the same time that employees are fostered intheir professional and personal development

Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59)

FOCUS: Mangers Assumptions about CONCERN for PEOPLE and CONCERN forPRODUCTION

Concern for PEOPLE

Degree of personal commitment to ones job

Trust-based accountability (vs. obedience-based accountability)

Self-esteem for the individual

Interpersonal relationships with co-workers

Concern for PRODUCTION

Use of people and technology to accomplish organizational tasks

Concern for is not about quantity or quality

Assessment instrument does not represent personality traits of the manager --instead, indicate a specific orientation to production and people


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BLAKEAND MOUTONS MANAGERIAL GRID

Authority Compliance (9,1)

Classical theory

Country Club (1,9)

Informal grapevine

Impoverished (1,1)

Laissez-faire

Middle-of-the-Road (5,5)

Compromise (carrot & stick)

Team (9,9)Human Resources Approach

Promote the conditions that

integrate creativity, high

productivity, and high morale

through concerted team action


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SUMMARY

Humanistic Theories of Organizations

Human Relations Theory


Chester Barnard

McGregors Theory X and Theory Y

Human Resources Theory

Likerts Systems Theory (Four Systems of Management)

Blake and Moutons (Blake and McCanse) Managerial Grid

The principles of human resources theory attemptto integrate the concern for production fromclassical theory with the concern for the workerfrom human relations theory -- more effective andsatisfying!

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Lecture - 3 Human Relations Management Theory

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