firms have much to learn from the history of management thought and pioneering management theorists: An Essay
Organizational workforce management issues
The management concepts starting from early eras of 1950s up to 1990s are discussed in relation to their impact on the business and workforce management. The practices and management concepts evolved over a period of time based on various theories and frame works for effective human resources management. The discussed theories are McGregor's theory of X and Y, Maslow's Hierarchy of Needs theory, and Hawthorne's experimentation. The relevance of McGregor's theory is observed relevant for companies following forced staking performance appraisal system (Arslan & Staub 2013).
The traditional management concepts are based on the practices that were adopted in early 20th century. The Newton's mechanistic model and Fayol's analytical view were mostly followed in the organizations to manage their workforce. The evolution of management approaches can be described in relation to the dominant periods for 1950 up to 1960, 1070s, 1980s, and 1990s. The focus of businesses during 1950 -- 1960 was to follow budgets and concentrate on the growth planning through budgetary controls. The major organizations followed a formal structure and financial management was central for implementing plans. Similarly during the 1970s period companies were dominantly focusing on optimizing the corporate functions through balancing a portfolio of products, and synergy of resources. The functional organizations were practising these approaches for management. Portfolio planning and matrices were often used in the organizations. SWOT analysis was also a notable technique used by the businesses during 1970 (Leibold, Probst & Gibbert 2007).
The multidivisional structures and increasing market share through diversification was a popular concept adopted by the management during 1980s. The firms followed management positioning concepts for effective management including the industry, market, and product mix approaches. The major concerns of the business were to select an industry and markets for positioning and an environment that is relevant for growth strategy. The industry, 5 forces model, competitor's analysis, and Value chain analysis were dominant tools used to position the company and products in the market. The issues handed by the senior management were related to the industry restructuring, value chain configurations, and positioning evaluations. The changes occurring during 1990s were resources and capabilities based on the resources and gaining competitive advantages. The hyper completion in the market required the workforce to respond towards external hyper competition and becoming internally optimized. The business processes reengineering (BPR), total quality management (TQM), and balanced score card (BSC) were management techniques adopted during the era. The management and employees were observed focusing on the issues related to restructuring around the key competencies and development of core competitive advantage (Leibold et al. 2007).
Organizational workforce management issues:
The large organizations in United States used to adopt various techniques for human resources management. One of the workforce management concept used in the business included forced ranking, which is also denoted as stacked ranking in the HR practices. The organizations using the concept are Ford Motor Company, General Electric (GE), Microsoft, and Hewlett-Packard (HP). The human resources management technique was adopted extensively in Microsoft resulting into various law suits, downgraded employee morale, and as a result the company was also defamed due to these reasons (Hollenbeck, Gerhart & Wright 2004; Crim, Han, Jain, S & Sidhu 2013; Chattopadhayay & Ghosh 2012). The employees were also choosing to leave the company. The process of innovation also started to slow down and the company could not launch products that were highly marketable due to low employee engagement.
According to Hollenbeck et al. (2004) the companies using forced rankings started using the concept due to dire market circumstances. It required the businesses to reduce human resources costs. The example of General Motors is also relevant considering the facts that the business managers were required to force 20% employees into the top ranking, 70% in the middle, and 10% in the bottom. The bottom ranked employees were not gaining any economic raise as well as they were considered as ready to be terminated. The organization performance was lowering, cost of production, and other overhead increasing while market share of the businesses were also reducing. Furthermore, the payroll expenses of the business were also increasing at constant rate year after year. It was a solution that can help the business control payroll expenses.
The McGregor theory X and Y presents a view of management having a divergent view of the assumption regarding their organization. The theory further explains that managers X are influenced by the negative aspects of classical management theories. The four assertion s made about the theory X managers is regarded as nature of the average man where they are only willing to work less. The lack of ambition, does not like to take responsibility, self-centeredness is also asserted. The resistance to change is also associated with the manager X. On the other hand, manager Y has characteristics as following. The work input is great, self-direction is followed as an approach, and commitment to the objectives is also higher. Here the theory of hierarchy presented by Maslow is also applicable where the satisfaction of ego and self-actualization are relevant. The theory further defines that the manager Y has a capability to learn proper conditions. Similarly, the positive factors including that the human beings have a high degree of creativity, imagination, and ingenuity (Miller 2011).
Considering the facts presented in the theory of McGregor the X managers have a strong association with negativity and theory Y managers are more inclined towards a view that the human beings are self-motivated (Sorensen & Minahan 2011). They also assume that the human beings are focused to achieve self-actualization. Therefore, it is understood that the McGregor's theory is also related to Maslow's Hierarchy of Needs theory (Russ, 2011). In view of the needs theory the employees can be characterized as human beings with needs of attention, social interaction, and individual achievements. The employees are treated as having desires not only confined to the financial gains but they also need safety, and higher order needs in accordance with the Maslow's theories. Whereas the classical theorists also suggested a metaphor approach based on the family metaphor. The Hawthorne experimentation has enabled the human resources management to conceive the workforce management practices in accordance with the human relations theories. The classical conditioning theories were effectively replaced with the human relationship views of human resources management (miller 2011).
The current practices at Microsoft are based on the classical and financial management approaches handling the workforce with respect to the stacked ranking concepts. The profitability of the company is highly regarded while innovation and creatively is supressed through using the techniques. The businesses similar to Microsoft are in a highly volatile technology market. Therefore, the human capital is most important tool for effectively offering innovative and creative technology products. The fact that the company has developed various products prior to any other competitor but failed to launch prior to others are also rooted in the human resources policies. The management of the company failed to convenience the higher leadership that the business will need such technologies to improve its market share (Akindele & Afolabi 2013). The workers morale was also low as a result of the practices adopted in the company. The business not only requires an innovative and updated approach for human resources management but in order to nurture creativity in team members. The human resources practices should be improved.
The improvements required in Microsoft and Ford is related to McGregor's theory X and Y as well as Maslow's Needs theory. The theory presents that the trust and positive synergy in the workforce is can effectively increase performance (Cole 2004). The notion that market share is decreasing while workforce is becoming efficient cannot be accepted in case all other operational and strategic concepts of business management are aligned with the human resources policies. The businesses using forced ranking concepts are actually following the approach denoted as manager X in the work of McGregor. It is not only adopted to force termination of old employees since over a period of years they have become highly paid as compared with new employees. The improvements required should involve performance appraisal based on personal achievements and new skilled adopted to efficiently perform work (Taylor 2011). An appropriate performance appraisal system is required to replace existing practices.
The practices based on forced stalking in Microsoft and Ford motor Company have resulted in low morale and high turnover among the workforce (Sandhya & Kumar 2011). It is required to follow a human relationships approach to replace the existing practices. The replacement of practices is expected to boast employee morale and at the same time it will also provide the management with exceptional work performance. It is expected that an approach based on McGregor's theory Y managers is adopted for satisfactory results.