Managerial performance predictors in small UK firms

¶ … Predictors of Managerial Performance

The definition of a manager is often incomplete without knowing the organization culture, and in many organizations there are owners who are directly involved with running the organization. It is useful to remember some brands launched by Ford Motors in this regard. This characteristic goes down the line and often a manger is delegated to just being a glorified order executor. We shall not look at those aspects, but view an ideal situation where a manager is given responsibility and expected to perform at a level to be able to match that responsibility.

The first question to be judged in this context is the expected level of performance of the manager, and then one needs to decide upon whether the manager will be in a position to meet the expectations which are being set. This is a problem that will have to be faced by the superiors to the managers. They will be the shareholders for a limited company or the owner for a smaller organization. There have been studies of small firms in the United Kingdom, which have explored the relations among managerial behaviors and these were focused on a competence model; entrepreneurial style which were focused on the theory of Covin and Slevin; and firm types which are measured on the basis of sales growth performance. Further analysis of management competence has found various broad categories of managerial behavior. There are also several measures relating to entrepreneurial style, and analysis on these behaviors have shown that managing culture and managing vision are linked to an entrepreneurial style, while managing of performance levels are being linked to a non-entrepreneurial style. (Sadler-Smith; Hampson; Chaston; Badger, 2003, p. 47)

Entrepreneurial operational style, even though is not directly linked to managerial behavior, was found to be linked with the possibility that a firm would be having an increased growth rate. This sort of an assessment is considered to be good from a point-of-view relating to knowledge growth, but it does not offer any guidance on selection of managers suitable for the organization. Finally, it needs to be understood that the nature of growth of any firm or organization would be based not on the manager, but on the other hand it would be on the proprietors or the owners of the organization. Again, if it is felt that a high-growth is always felt to be desired, it would be considered to be wrong from the angle of risk analysis as rapid amount of growth necessarily means taking the risks which are of higher levels rather than taking lower type of risks and accepting slower amount of growth. One of the basic principles of management is that equity should be to earn higher amount of return than that of loan, and in general it means that the investment in the nature of equity is only about half of the investment which is in the form of loan. Thus if an organization is really intending to take on high risks, and possibly grow at higher levels, then it should eschew the loan funds. How many organizations would be able to do that? Let us see what research says.

How to choose a manager?

Let us get back to the matter on hand, and that is the determination of the performance of a manager. It is clear that the final assessment is available in full and in a form which is not disputable after a point the manager has functioned. This is true not only in relation to the chief executives, but it also pertains to the junior managers, and this is in the nature of the results that the manager has been able to attain. This is seen in the operational capacity of the team for which the manager is considered to be the controller or director. If the team operates reasonably well, then it is considered to be due to the excellent performance of the manager. If a manager is not operating well, then it will be shown in terms of the excuses that will crop up among the rank and file of the organization. The first thing is that a manager needs to perform and this clear understanding is being sought from the time from which the manager joins the organization. The assessment of a manager begins right from the time the manager is being employed and even at that time the competence levels of the manager who has been recruited for the job has to be judged. The first criterion for any manager is an understanding the job. This is difficult for complex jobs but without a clear understanding of what is required for performance, it will be very difficult to make good decisions on the competence of the manager for the job. (Managerial Assessment in the 21st Century)

The second point is that the entire process of choosing a manager should be systematic. What this means is that hiring occurs through a systematic process in which several pieces of information are being collected and used for the process of decision making. This system must be able to account for the appropriate management of candidate information and also provide important data to those who have to make the decisions. The third point is of taking expert judgment. In many cases the hiring organization may not have managers capable of choosing the required manager and then experts are a good option. These experts allow organizations to take advantage of the value of their experience in selections for a wide variety of jobs than in the past for positions in that type of industry. This provides a great advantage for making sound hiring decisions for complex jobs. (Managerial Assessment in the 21st Century)

The fourth important factor is to always think of the human element. The use of experts to form a greatly detailed assessment report is an important factor for better managerial hiring, but it does not mean that it should be used as the only piece of information on which decisions are to be based upon. Effective decision making needs focusing on the expert judgment of hiring managers and recruiters who are experienced and who may not know much about the technicalities, but are able to understand the human qualities of the individual. Assessment results through technical methods and technical experts are meant to help provide these human experts with decision making support.

The fifth point is to relate assessment results to that of development. This is required for any kind of job and is particularly significant for managerial level jobs. Fewer organizations understand the significance of using assessment data collected at the time of the hiring process. These are meant to help create immediate developmental plans for new persons employed. The idea of hiring an employee at the managerial level who is perfect for the job is unlikely. The complexity of all managerial jobs needs the immediate determination of developmental requirements and providing ongoing coaching and performance planning in order to help development of new managers. (Managerial Assessment in the 21st Century) While there has been no clear indication or direct mention of qualities required for managerial performance, certain factors have been clearly mentioned. The first is that the manager has to meet the job expectations; the second is that the process of selections should be systematic since if it is not so, then the selectors may easily think that they have made a mistake; the third should be the evaluation of the manager for the technical knowledge required for the job; the fourth is the opinion of human relations experts as these qualities are not strictly quantifiable; and the last point is that managers have to be trained even after appointment.

The general rules

Among some reasons for managerial performance one can be thought to be intelligence, but what the management recruitment experts feel is that a good manager requires general intelligence. This is not the same as intelligence that is measured through intelligence tests. In the conventional intelligence, what is measured is the intelligence that is required for performance in examinations, and possibly education. This is available in the highest quantities among mathematics majors, and this can be seen in the Graduate Record Examination subject-matter tests. These are somewhat similar to the GRE aptitude examinations. The mathematics majors are generally on top, followed by physics and chemistry majors. The entire group of these individuals receives good marks in college. Yet while they are intelligent, there is no rush among the recruiting agencies to offer them positions as managers. (Sternberg, 1997, p. 51)

The type of intelligence which the managers require is not considered to be the same as are being measured in these tests and that should be viewed to be quite obvious -- none of these tests were being developed and formulated for the purpose of selecting and recruiting managers. There are however certain tests which are being used for selecting applicants into management colleges in some other countries where the availability of a management degree is a passport for a good life, but even those tests are not sufficient indications regarding as to how actually someone will actually perform if recruited as a manager. The tests of any type are being designed in order to choose individuals who will find it considerably easier to make way via the planned syllabus of study, and this is quite different from operating in the role of a manager in real life. This happens with several of the students and at certain stages in their lives, several students might find out that they are not being suited for the jobs for which they have been educated. This leads us to situations wherein we have nuclear physicists taking up totally different careers as painters or that of musicians. The personality of a student is considered to be very delicate and developing and still in its infancy stage and while the person is a student, there are many influences like from parents, from teachers, of the images of life which education might give to him. What most of the advisors forget is regarding that the individual has to be content with the career that he chooses. The result is that several managers are not happy and satisfied as managers and naturally they are not able to perform well as managers.

Development of psychological theories

The personality of managers had been studied by Boyatzis in 1982 and he also came out with certain theories like the famous theory X and Y. His description was more detailed and the first quality that he talked about was efficiency orientation and this was a concern for the task, high standards for inner work, motivation for high achievement along with challenging goals and deadlines, ability to develop action plans, finding out methods to overcome obstacles, ability to organize work efficiently and concentrating on performance in all discussions with followers. The second feature of such individuals was a direct and demonstrated impact on sub-ordinates with high power needs, concerns about the symbols of power, assertive behaviors with subordinates, repeated attempts to influence others, trying to reach high status positions and regularly expressed concerns about the reputation of the products and services of the organization. The third point mentioned by him was regarding a demonstration of strong belief in capabilities as an individual, and ability to control all action that is happening around. This consists of certain behavior like not waiting for things to happen, taking steps to get around difficulties, seeking help from a number of different sources and accepting responsibilities for success or failure. (Traits: The Journey from Will to Power to Will to Serve)

The fourth point was the need for having self-confidence among all managers and this is done by the managers through demonstrated actions of belief on their ideas and abilities, directly taking decisive action without hesitation or violation, making firm proposals for the subjects under his control and at the same time maintaining poise, bearing and with gestures as and when required. The details are fairly conclusive, but the question still remains as to how all this will be studied in practice as it is unlikely that the proprietors will be able to see him for enough time in action. The fifth point is regarding oral presentation skills and this should be done with the use of symbols, both verbal and non-verbal behavior and the capacity to use visual aids as and when required so that the total presentation becomes more convincing. The sixth point is regarding conceptualization which means the ability to identify patterns in information and events through inductive reasoning. This requires the conveying of meanings through concepts and models, or with themes using metaphors or analogies and the ability to develop creative solutions and new insights into problems. This is an important quality for all managers. (Traits: The Journey from Will to Power to Will to Serve)

The seventh point is also an inherent quality of all capable managers through the use of powers of reasoning. The reasoning capability permits interpretation of events and situations through reasoning and also separate important information from unimportant ones. This also makes it easy for them to find out deviations that have occurred from their plans and this in turn enables them to take corrective action. The eighth capacity is to be able to use the power of society for their own personal benefit and this is done through development of networks and coalitions so that they can get cooperation and resolve conflicts within their team and at the same time build up a spirit of working together. They also try to behave as a role model so that others are influenced by their behavior.

The ninth and final point is their ability to manage group processes and for this purpose on has to identify suitable individuals to be members of the team, build up team spirit, develop symbols of identity for the group, emphasize group identities and common interests, express the need for collaboration within the team, facilitate working together as a team and ultimately reward effective members of the team through public recognition. (Traits: The Journey from Will to Power to Will to Serve) The important matter is that this is the change to direct recognition of the importance of psychology as an element of group leadership. At the same time, while the characteristics defined may be accurate, it would be very difficult to separate successful managers from unsuccessful ones based on such criteria.

The important factor for any team leadership is to find out the motivation levels which are being passed on to towards the group for attaining the targets. There are always found to be problems which arise due to lack of commitment and interest and this can be considered to be solved by means of motivation of the individuals who are concerned and any applicable methods of motivation can be put to use. (The Human Factor) It is also important for individuals to know whether they are suitable managers and this can be determined through ten personality traits and the first of these is one's own knowledge of traits and talents. They should know how important it is for them to get different assignments as these are likely to develop responsibility and accountability. It can be viewed as passing through a hall of mirrors with views being reflected from all around, and thus being able to see different angles of one-self. A good leader is open to feedback as effective leaders develop important and different methods of getting this feedback on their behavior and performance. One of the easiest and trickiest methods of getting feedback is through the spouse. This is however liable to change from time to time. A good leader should also be keen to change and this can be done through asking people about their opinions and listening to them. This is how one will develop their talents and this will tell them what they are good at. In a way this can be viewed as a thirst for knowledge. (Traits: The Journey from Will to Power to Will to Serve)

The fourth quality of leaders is that they are willing to take required risks and this involves a spirit of adventure within them. The next point is to be able to concentrate, and though all would not be talking about it, they all work with concentration and persistence so that they succeed. The sixth point about leaders is their ability to get over situations of adversity, and like all other human beings, they also have situations when they face setbacks, crisis and failure. That is not important, but one has to get over it. The leaders also have to balance tradition and change and this is in terms of the set of values that they have. At the same time, they no know that there is always a requirement for revision and change. The eighth point is to be reflective of actions taken and aware of any criticism. In today's world, the leaders have to understand that they cannot get over all situations with their own capacities and thus they should be able to rely on others to get them around problems and difficulties. Finally, all leaders have to serve as models and mentors, and teach their subordinates also to learn and develop on the model of others. (Traits: The Journey from Will to Power to Will to Serve)

Continued importance of psychology

The efforts to use psychology for development of evaluation of managers has continued for a few decades now and during the last two of them, the general efforts of the research individuals among them has been to concentrate on the five-factor model. This is now a regularly used method and many names are used for the elements, but in real terms the five factors consist of extraversion or being gregarious, active, assertive, sociable and talkative; agreeable temperament which means being flexible, tolerant, courteous, forgiving, good natured, cooperative; conscientiousness or being responsible, careful, persevering, organized nature and dependable; having built in emotional instability which means having insecurity, embarrassment, depression, anger, anxiety; and finally a general sense of openness to experience which involves being curious, broadminded, imaginative as well as being artistically sensitive. (The Role of Individualism and the Big Five in the Prediction of Performance in a Leaderless Group Discussion) These are now considered to be very important for being a good manager, and these qualities should be sought for in any manager.

This has in turn brought about new directions to what the managers should do to be good managers. The first action to be taken is to be open and this is expected to develop confidence and trust. This will keep people informed, set criteria through which they should take decisions, explain to them the logic behind the decisions, explain to the people concerned about the problems that come up when they come up and fully disclose all information. While this is no doubt a good practice, it does not mean that this will be reciprocated by others. The second point is of being fair and what that means is considering others. This involves giving credit where it is due and continuing the practice through equity in distribution of rewards. The biggest problem in this is to really accept that all human beings are equal. The next point is of expressing your feeling and this does not involve only giving out the cold facts as that seems to make individuals cold and distant. When feelings are expressed, then others will feel that the individual is a real and human individual. This again is a difficult task as expressions change with time and sometimes they change even within a period of five years. (Traits: The Journey from Will to Power to Will to Serve)

The fourth point is to be truthful in all communications and though this may initially cause some persons not to like what you say, yet they will build up a faith in the words of the manager, which is otherwise difficult to achieve. The fifth important characteristic is to be consistent and this also helps in making an individual trustworthy. The manager will remain predictable, consistent in decisions and values and thus the follow up action will also be expected. The next point is to fulfill the promises made as a manager, and this is again an essential part of being dependable. The seventh point is to maintain confidences that have been mentioned to one as a manager. This helps managers by getting more information to them. The last point is to demonstrate confidence as a manager and this is achieved by opening communication made by the manager to others. This will lead others to believe in the capabilities of the manager. (Traits: The Journey from Will to Power to Will to Serve) These can be checked for any manager and when his habits are roughly like this, and then it is likely that he is a good manager. Ultimately it is his psychology that makes him a good manager.

Conclusion:

With age there is a clear amount of change in relation to the characteristics of managers, and for both the personality traits of authority and dominance as well as exhibition that are being needed at assessment centers and being shown by the older managers and not by the younger managers. In spite of this, the received rankings on the basis of these characteristics were considered to be low for the older managers while comparing them to that of the younger managers. Thus it is clear that the expression of traits have variations with age for managers. Thus evaluating managers is a rather difficult task.