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| Controlling as a management function involves following steps: 1. 1. Establishment of standards- Standards are the plans or the targets which have to be achieved in the course of business function. They can also be called as the criterions for judging the performance. Standards generally are classified into two: · Measurable or tangible - Those standards which can be measured and expressed are called as measurable standards. They can be in form of cost, output, expenditure, time, profit, etc. · Non-measurable or intangible- There are standards which cannot be measured monetarily. For example- performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards. Controlling becomes easy through establishment of these standards because controlling is exercised on the basis of these standards. |
2. Measurement of performance- The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when performance of manager has to be measured. Performance of a manager cannot be measured in quantities. It can be measured only by-
a. Attitude of the workers,
b. Their morale to work,
c. The development in the attitudes regarding the physical environment, and
d. Their communication with the superiors.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.
3. Comparison of actual and standard performance- Comparison of actual performance with the planned targets is very important. Deviation can be defined as the gap between actual performance and the planned targets. The manager has to find out two things here- extent of deviation and cause of deviation. Extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. The managers have to exercise control by exception. He has to find out those deviations which are critical and important for business. Minor deviations have to be ignored. Major deviations like replacement of machinery, appointment of workers, quality of raw material, rate of profits, etc. should be looked upon consciously. Therefore it is said, “If a manager controls everything, he ends up controlling nothing.” For example, if stationery charges increase by a minor 5 to 10%, it can be called as a minor deviation. On the other hand, if monthly production decreases continuously, it is called as major deviation.
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Once the deviation is identified, a manager has to think about various causes which have led to deviation. The causes can be-
a. Erroneous planning,
b. Co-ordination loosens,
c. Implementation of plans is defective, and
d. Supervision and communication is ineffective, etc.
4. Taking remedial actions- Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives here-
a. Taking corrective measures for deviations which have occurred; and
b. After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow up is an important step because it is only through taking corrective measures, a manager can exercise controlling.
55. Organizational Reward Systems.
The organization's reward system is the basic structural mechanism that an organization uses to motivate workers. The reward system includes the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. An organization's primary purpose in giving rewards is to influence employee behavior.
Effects of organizational rewards:
Organizational rewards can affect individual attitudes, behaviors, and motivation. Edward Lawler describes four major generalizations about employee attitudes toward rewards.
Employee satisfaction is affected by comparison of the rewards they receive with those received by others.
Employees often misperceive the rewards received by others.
The system recognizes that different people have different needs and choose different ways to satisfy those needs.
Performance-based systems:
Organizational reward systems have traditionally either a fixed salary or hourly rate system or an incentive system. Fixed rewards can be tied directly to performance through merit pay systems, whereby people get different pay raises at the end of the year, depending on their overall job performance. Many organizations are experimenting with various kinds of incentive systems, which attempt to reward employees in proportion to their accomplishments. Four popular incentive systems include profit sharing, gain sharing, lump-sum bonuses, and pay for knowledge.
