BME Topic 3

Organisational structure

an arrangement of tasks responsibilities and accountability.

Describe Organisational Structure

• A representation of the organisational hierarchy - pyramid.

• Upper management (executive) at the top, followed by middle and frontline workers at the bottom.

• Flat (few levels) or tall (lots of levels)

Features include:

• Chain of command - direction or line where decisions are passed down from top to bottom

• Span of control - number of subordinates

• Delegation - assigning responsibilities to a subordinate

Chain of Command

A feature of the organisational structure. The direction in which decisions, accountability and communication flows.

Describe Chain of Command

• Passes from upper levels of management in a downward direction.

• Can be delegated

Explain chain of command

• Clear chain of command can reduce conflict as everyone is aware of where they fit in (roles and responsibilities).

• Some responsibilities can be delegated, but accountability rests with those in authority.

Span of Control

A feature of organisational structure. The number of people who directly report to a manager with accountability or responsibility.

Describe Span of Control

• Narrow span of control - few staff with whom you are responsible for (subordinates)

• Wide span of control - large number of staff with whom you are responsible for (subordinates)

• The wider the span the more complicated and difficult to communicate and manage.

Explain Span of Control

It is influenced by:

• Level of expertise of the employees

• Level of experience of the employees

• Skill of the manager

• Type of tasks being done (higher risk = smaller span of control)

Delegation

A feature of the organisational structure. The act of passing responsibility of a task to a subordinate (staff within the span of control).

• Allows a team member to develop management skills for possible promotion and therefore increases motivation.

• Original manager is still held accountable for subordinates’ actions - must still monitor.

Explain Organisational Structure

Shows the relationships between staff within a business

• Authority

• Responsibility

• Accountability

• Communication

• Workflow

Explain Organisational Structure

Structure is dependent on:

• Size of the business - number of employees or the annual sales turnover

• Industry or type of business

• Market - competitiveness, how quickly it changes, flow of demand, etc.

Discuss organisational structure

• Restructuring - e.g. flattening an organisational structure, such as removing or combining multiple middle managements.

• Salary and wages of employees are one of the biggest expenses for an Australian business.

Leadership

Purpose is to guide or direct a group towards organisational goals.

Describe Leadership

• Roles of a leader includes to communicate the business goals, delegate work tasks and motivate workers.

• Styles of leadership depend on personality and levels of training. Businesses select leaders that fit into their internal culture.

Explain Leadership

Involves different types of styles such as autocratic, participatory and liassez faire.

Autocratic Leader

A leadership style where the leader has total control over all decisions.

• Task orientated

• Dominates team members

• Military, manufacturing, construction

It is used when there is:

• Little margin for error

• Dangerous conditions

• High level of respect for leader

• Dealing with inexperienced or unwilling employees.

Autocratic Leader Advantages

• Control: keeps control in dangerous situations or when dealing with inexperienced employees.

• Quick Decisions: all decisions made by one person, not required to consult which is time consuming.

• Streamlined: inefficiencies spotted quickly, all reporting to one person and changes can be implemented swiftly.

Autocratic Leader Disadvantages

• Increase Work Burden: taking responsibility for everything requires constant monitoring and direction.

• Dependence: highly dependent on leader being always present.

• Lack of Initiative: employees do not take initiative, rely on being told what to do and when.

• Low Morale: Skilled employees disengaged, high turnover and absenteeism.

• Communication: one way (top to bottom) one perspective

Participative Leader

The leader that involves the group in decision making

• Consults team members

• Encourages participation

• Makes final decisions

• Advertising, design, consult

When it is used:

• Highly trained/skilled employees

• Creative environments

• Problem solving required

• Professional

Issues:

• Need to create an environment where employees feel comfortable voicing opinions

• Employees need to have the knowledge or skill to effectively contribute to discussions.

Participative Leader Advantages

• Productivity: employees feel a strong feeling of association and assume responsibility to achieve goals.

• Job Satisfaction: is high, ideas are implemented with success.

• Reduced Costs: Employees do not require constant supervision.

• High Morale: Less absenteeism and staff turnover.

• Creativity & Initiative: Innovative solutions for competitive edge in markets

Participative Leader Disadvantages

• Slow decision making: Takes time because so many people are consulted.

• Information Security: Large amounts of information is needed to make good decisions.

• Lack of Knowledge/Skills: employees may lack knowledge or skills to participate in decision making and therefore feel alienated.

  It therefore only works with correct leader that is high level of people skills and training.

Situational Leader

Adjusts their leadership style according to the behaviour and skill level of employees. For Example:

• employees may have a low level of skill and motivation, which requires a leader to direct the workers = autocratic style,

• while some workers have high skills and are motivated to perform and can function with a hands-off leader such as a laissez faire.

• other leaders may also coach and support workers as they perform their duties use a participatory style.

It matches leadership styles

• telling/directing = autocratic style

• selling/coaching = participative style and

• delegating/observing = laissez faire style.

Situational Leader Advantages

• Recognises individuals, each with their own distinctive strengths and weaknesses

• acknowledges individual uniqueness (allows for cultural diversity

Situational Leader Disadvantages

• Requires a high level of social skills, and emotional intelligence.

• style may take years to develop.

• frequently shifting leadership style can confuse employees

Concept of Motivation

Enthusiasm of an employee which causes them to take actions at work toward organisational goals. 

DESCRIBE:

• Motivation is used in the workplace to encourage workers to work hard and be productive in order to achieve the business goals.

• A motivated workforce will remain with the organisation, saving time and money

  • selection is not required as staff turnover is low.

Extrinsic Motivation

INCENTIVE BASED - payment or concession to stimulate greater output. monetary and non-monetary, anything beyond the regular pay check.

RECOGNITION and REWARD - Acknowledging a job well done makes employees feel good and encourages them to do good things, the reward can be awards,  or promotion.

Intrinsic Motivation

• Self- motivated employees

• Reward comes from within

• feeling a sense of accomplishment

• Meeting standards or goals set for themselves

Financial Based Incentives

• Mainly used for non-managerial or low skilled workers

• Bonus pay

• Payment of allowances such as petrol, medical etc

Non-Financial Based Incentives

does not involve payment of money directly.

• Mainly used for managerial or skilled workers

• Job enrichment (interesting or more complex tasks which challenge worker)

• Recognition/Status such as bigger office, promotion, job security, more responsibility

Types of Financial Incentives

• Sales Bonuses - A one-off payments based on performance or business results. Must be clearly outlined to avoid disputes.

• Shares Schemes - Employees share in business profits. Encourages teamwork towards overall business goals.

Types of Non-Financial Incentives

• Skills improvement: Job enlargement/rotation for task variety.
  Job enrichment with complex, challenging tasks.

• Recognition: Intangible tokens of appreciation (e.g. praise, public acknowledgment). Empowerment through greater responsibility and decision-making authority.

• Reward: Tangible returns for performance (e.g. bigger office, promotion). Effective when specific, regular, and short-term.

Issues with Incentives

Not every worker wants the same thing.

• Depends on skilled or unskilled life stage

• Maslow’s hierarchy of needs: levels need to be fulfilled first to move up the pyramid.

Maslow’s Hierarchy of Needs

The theory explains human motivation through a hierarchy of needs.

• There are 5 interdependent levels of needs

• Each level of needs must be satisfied in sequence

• Once one level is satisfied, the same previous incentive of that level no longer fulfils employees needs, and they must move on to the next level.

Levels of Maslow’s Hierarchy of Needs

1. Basic Needs - Get a job and a decent wage, extrinsic bonuses such as bonus will work for employees at this level.

2. Safety Needs - Keeping the job so that employee can plan their future, permanent work.

3. Belonging Needs - Keeps the worker, higher employee retainment levels.

4. Esteem Needs - Use more non-financial incentives such as recognition, or job enrichment.

5. Self Actualisation - Intrinsic motivated employees, part of a successful team.

Importance of Maslow’s Hierarchy

Meeting each level of needs increases employee motivation.

• Motivation - Helps understand what drives employees at different stages

• Retention - Addressing needs reduces staff turnover

• Productivity - Satisfied employees are more productive

• Engagement - Employees feel more committed when their needs are met

Herzberg’s Motivation-Hygiene Theory

Explains the difference between job satisfaction and dissatisfaction. Includes two factors:

• Hygiene

• Motivation

Hygiene Factors

Related to business internal conditions. Prevent dissatisfaction and must be considered before employees can be motivated.

Examples:

• wages

• job security offered

• quality of supervision

• management styles

• company policies

Motivation Factors

Intrinsic aspects of the job that lead to employee satisfaction and motivation. Motivators directly influence an employee’s engagement and satisfaction because they address personal growth and the fulfilment of psychological needs.

Examples: opportunities for:

• achievement

• recognition

• responsibility

• promotion.

Vroom’s Expectancy Theory

Proposes employees are driven by the desire to maximise pleasure and minimise discomfort at work.

Suggests that individuals will only put effort into tasks when they believe that their effort will lead to a desired outcome, such as a promotion, a pay rise, or recognition.

Includes 3 Key Elements:

• Expectancy: Employees will work harder if they believe their effort will result in better performance.

• Instrumentality: Employees will be motivated if they believe their improved performance will lead to specific rewards.

• Valence: The motivation to work harder increases when the rewards are perceived to be valuable.

Adam’s Equity Theory

Theorises that employees naturally compare their efforts and rewards to others in the workplace, expecting fairness.

• Employees compare their inputs (efforts) to outputs (rewards).

Inputs: What employees contribute (hard work, skill, time, responsibility, etc.)

Outputs: What employees receive (pay, recognition, praise, etc.)

Workers are motivated when they believe the comparison of their inputs and outputs is fair.

Highlights how fairness perceptions influence employee motivation and performance.

• Fair balance of inputs and outputs leads to higher productivity and morale.

• Ensuring equity is critical to maintaining a motivated and loyal workforce.

• Inequity occurs when employees feel their inputs (effort) are not matched by equitable outputs (rewards)

Under-compensation: If workers are paid less compared to their efforts, demotivation occurs

Consequences: This can lead to absenteeism, high staff turnover, and reduced loyalty.

“Is it worth doing a good job? Will I be fairly rewarded for it?”