Session 3 Ppm

8/3/2019 Session 3 Ppm

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Session 3 Unit 2

Contributions of Management Thinkers:

Henry Fayol

FW Taylor

Elton Mayo



Henry Fayol-Background and Career Fayol spent his entire career in one company--

the French mining and metallurgical

combine Comentry-Fourchamboult-Decazeville.

He began as a mining engineer, was appointed

Director of a group of pits in 1872 and became Managing Director in 1888, a post

which he held until his retirement in 1918 .



When Fayol began his career, the financialhealth of the mining combine was poor.

By the time of his retirement, there had beena complete turnaround to a position of

prosperity. Fayol's success is often attributed to his

development and championing of the`functional principle'. This involved:



Preparing yearly and ten-yearly plans and acting on them;

Preparing organisation charts to demonstrate and encourageorder;

Careful recruitment and training to ensure each employee wasin the right place;

Adhering to the principle of the chain of command;

Meetings of heads of departments and heads of divisions toensure coordination.



Fayol firstly divided all organisationalactivities into six functions:

1. Technical: engineering, production, manufacture, adaptation.

2. Commercial: buying, selling, exchange.

3. Financial: the search for optimum use of capital.

4. Security: protection of assets and personnel.

5. Accounting: balance sheets, costs, statistics.

6. Managerial: planning, organising, commanding, coordinating,controlling.



Fayol further argued that to manage is

to: 1.) Plan: A good plan of action should be

flexible, continuous, relevant and accurate, as

it unifies the organisation by focusing on thenature, priorities and condition of the

business, longer-term predictions for the

industry and economy, the intuitions of keythinkers, and strategic sector analyses from

specialist staff groups.



2) OrganiseOrganising is as much about lines of responsibility and authority as it is aboutcommunication flow and the use of resources. Fayol lays down the following organisationduties for managers:

ensure the plan is judiciously

prepared and strictly carried out, see that human and material structures areconsistent with objectives,resources and general operating policies.

set up a single guiding authority and establish lines of communication throughout

the organisation

harmonise activities and coordinate efforts, formulate clear

distinct and precise decisions



* arrange for efficient personnel selection

* define duties clearly

* encourage a liking for initiative and responsibility

* offer fair and suitable recompense for services rendered, make use of sanctionsin cases of fault and error

* maintain discipline

* ensure that individual interests are subordinated to the general interest

* pay special attention to the authority of command

* supervise both material and human order

* have everything under control

* fight against an excess of regulations, red tape and paperwork.



3. Coordinate: Coordination involves determining the timing

and sequencing of activities so that they mesh

properly, allocating the appropriate proportions of resources, times and priority,

and adapting means to ends.



4.Command: Managers who have command should:

gain a thorough knowledge of their personnel

eliminate the incompetent

set a good example

conduct periodic audits of the organisation

bring together senior assistants to ensure unity of direction and focus of efforts

not become engrossed

in detail

aim at making energy, initiative, loyalty and unity prevail amongst staff.



5 ControlControlling means:

checking that everything occurs according to the plan

adopted, the principles established and the instructions issued

taking appropriate corrective action

periodically checking for weaknesses, errors and deviations

from the plan

checking that the plan is kept up to date (it is not cast in stone but adapts to changing developments).



Fayol¶s 14 Principles of

Management Division of work. Specialisation increases output by

making employees more efficient.

Authori ty and Responsibili ty . Both should go hand in hand.Excess authority leads to misuse and excess responsibilityleads to inefficiency



Discipline. Employeesmust obey and respect the rulesthat govern the organisation. Good disciplineis the result of effective leadership, a clear understanding between management andworkers regarding the organisation's rules,and the judicious use of penalties for

infractions of the rules.



U ni ty of command . Every employee shouldreceive orders from only one superior.

U ni ty of direct ion. Each group of organisational activities that have thesame objective should be directed by

one manager using one plan.



S ubordinat ion of individ ual int erest s t othe general int erest . The interests of any oneemployee or group of employees should not take

precedence over the interests of the organisation as awhole.

Remunerat ion. Workers must be paid a

fair wage for their services.



C ent ralisat ion. Centralisation refers to the degree to whichsubordinates are involved in decision making. Whether decision making is centralised (to management) or decentralised (to subordinates) is a question of

proper proportion. The task is to find the optimum degree of centralisation for each situation.

S calar chain. The line of authority from top management to

the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can

be allowed if agreed to by all parties and superiors are keptinformed.



Order. People and materials should be in the right place at the right time.

Equi ty . Managers should be kind and fair to their subordinates.

S t abili ty of t enure of personnel . High employee turnover is inefficient.Management should provide orderly personnel planning and ensure thatreplacements are available to fill vacancies.



I ni t iat ive. Employees who are allowedto originate and carry out plans will exert high levelsof effort.

E spri t de corps. Promoting team spirit will build harmony and unity within the organisation.



Criticisms Principles based on case studies, not

empirically tested.

Principles often stated as unconditionalstatements



Principles result into mechanistic organization

structure which are insensitive to employee¶s

social and psychological needs.

Principles are based on assumptions that

organizations are closed systems.



Frederick Winslow Taylor Frederick Winslow Taylor (20 March 1856±21 March

1915), widely known as F. W. Taylor, was

an American mechanical engineer who sought to

improve industrial efficiency. He is regarded as the father of scientific management, and was one of the

first management consultants.

Taylor was one of the intellectual leaders of the EfficiencyMovement and his ideas, broadly conceived, were highly

influential in the Progressive Era.



Scientific management

Taylor believed that the industrial management of

his day was amateurish, that management could be

formulated as an academic discipline, and that the best results would come from the partnership

between a trained and qualified management and a

cooperative and innovative workforce. Each side

needed the other, and there was no need for tradeunions.



Principles of Scientific

Management



Development of Science for each part of men¶s job (replacement of rule of thumb)

This principle suggests that work assigned to any employee should beobserved, analyzed with respect to each and every element and part and timeinvolved in it.

This means replacement of odd rule of thumb by the use of method of enquiry, investigation, data collection, analysis and framing of rules.

Under scientific management, decisions are made on the basis of facts and by the application of scientific decisions.

Scientific Selection, Training & Development of Workers There should be scientifically designed procedure for the selection of

workers.

Physical, mental & other requirement should be specified for each and every job.

Workers should be selected & trained to make them fit for the job.

The management has to provide opportunities for development of workershaving better capabilities.

According to Taylor efforts should be made to develop each employee to hisgreatest level and efficiency & prosperity.



Taylor believed in co-operation between management

and workersIt is only through co-operation that the goals of the enterprise

can be achieved efficiently.

There should be no conflict between managers & workers.

Taylor believed that interest of employer & employees should be fully

harmonized so as to secure mutually understanding relations betweenthem.

Division of Responsibility

This principle determines the concrete nature of roles to be played bydifferent level of managers & workers.

The management should assume the responsibility of planning thework whereas workers should be concerned with execution of task.

Thus planning is to be separated from execution.



Mental Revolution The workers and managers should have a complete change of outlook

towards their mutual relation and work effort. It requires that management should create suitable working condition

and solve all problems scientifically.

Similarly workers should attend their jobs with utmost attention,devotion and carefulness. They should not waste the resources of enterprise.

Handsome remuneration should be provided to workers to boost uptheir moral.

It will create a sense of belongingness among worker.

They will be disciplined, loyal and sincere in fulfilling the task assigned to them.

There will be more production and economical growth at a faster rate.



Maximum Prosperity for Employer & Employees

The aim of scientific management is to see maximum prosperity for employer and employees.

I

t is important only when there is opportunity for each worker toattain his highest efficiency.

Maximum output & optimum utilization of resources will bringhigher profits for the employer & better wages for the workers.

There should be maximum output in place of restricted output.

Both managers & workers should be paid handsomely.





Time and Motion Study Time and motion study (or time-motion study) is

a business efficiency technique combining the Time Study

work of Frederick Winslow Taylor with the Motion

Study work of Frank and Lillian Gilbreth



Systematic study of the time human motions used to perform an operation.

The purpose is to eliminate unnecessary motions and

to identify the best sequence of motions for maximum efficiency.

Therefore, time and motion study can be animportant source of productivity improvements



Time Study Time Study

It is a technique which enables the manager to ascertain standardtime taken for performing a specified job.

Every job or every part of it is studied in detail.

This technique is based on the study of an average worker havingreasonable skill and ability.

Average worker is selected and assigned the job and then with thehelp of a stop watch, time is ascertained for performing that particular job.

Taylor maintained that Fair day¶s work should be determined

through observations, experiment and analysis by keeping in view anaverage worker.Standard Time × Working Hours = Fair Day¶s Work



Motion Study Motion Study

In this study, movement of body and limbs required to perform a jobare closely observed.

In other words, it refers to the study of movement of an operator onmachine involved in a particular task.

The purpose of motion study is to eliminate useless motions anddetermine the best way of doing the job.

By undertaking motion study an attempt is made to know whether some elements of a job can be eliminated combined or their sequence

can be changed to achieve necessary rhythm. Motion study increases the efficiency and productivity of workers by

cutting down all wasteful motions.



Differential Payment F.W. Tavlor, founder of the scientific

management evolved this system of wag

payment. Under this system, there is noguarantee of minimum wages. Standard time

and standard work is determined on the basis

of time study.



This tech. of wage payment is based on efficiency of worker.

The efficient workers are paid more wages than inefficientone.

On the other hand, those workers who produce less thanstandard no. of pieces are paid wages at lower rate than

prevailing rate i.e. worker is penalized for his inefficiency.

This system is a source of incentive to workers whoimproving their efficiency in order to get more wages.

It also encourages inefficient workers to improve their performance and achieve their standards.

It leads to mass production which minimizes cost andmaximizes profits.



The main characteristics of this system is that two rates of wage one lower and one higher are fixed. Those who fail in attaining the standard, are paidat a lower rate and those exceeding the standard or just attaining thestandard get higher rate.

For example, the standard is fixed at 40 units per day and the piece rateare 40 P. and 50 P. per unit. If a worker produces 40 units or more in aday, he will get the wages at the rate of 50 P per unit and if he produces39 units he will get the wages at 40 paise per unit for the total output.Thus, the penalty is very severe and the worker at least tries to produce as

much as the standard output.



Under this system, a serve penalty is imposed on the

inefficient workers because they get the wages at lower rates.

The basic idea underlying in this scheme is to induce the

worker at least to attain the standard but at the same time if aworker is relatively less efficient, he will lose much.



Scientific Selection Taylor emphasized the need for scientific

selection and development of worker.



Functional Foremanship



Taylor advocated functional foremanship for achieving ultimate specification.

This technique was developed to improve the

quality of work as single supervisor may not be anexpert in all the aspects of the work.

Therefore workers are to be supervised by specialistforeman.

The scheme of functional foremanship is anextension of principle of specialization at thesupervisory level.



Taylor advocated appointment of 8 foramen, 4 at the planninglevel & other 4 at implementation level.

The names & function of these specialist foremen are: - Instruction card clerk concerned with tagging down of instructions

according to which workers are required to perform their job Time & cost clerk is concerned with setting a time table for doing a

job & specifying the material and labor cost involved in it.

Route clerk determines the route through which raw materials has to be passed.

Shop Disciplinarians are concerned with making rules and regulations

to ensure discipline in the organization.



Gang boss makes the arrangement of workers,machines, tools, workers etc.

Speed boss concerned with maintaining the speedand to remove delays in the production process.

Repair boss concerned with maintenance of machine, tools and equipments.

Inspector is concerned with maintaining thequality of product.



Standardization

It implies the physical attribute of products should be such that itmeets the requirements & needs of customers.

Taylor advocated that tools & equipments as well as workingconditions should be standardized to achieve standard output fromworkers.

Standardization is a means of achieving economics of production.

It seems to ensure ±

The line of product is restricted to predetermined type, form, design,size, weight, quality. Etc

There is manufacture of identical parts and components.

Quality & standards have been maintained.

Standard of performance are established for workers at all levels



CriticismsWorkers Viewpoint

Unemployment ± Workers feel that management reduces employmentopportunities from them through replacement of men by machines and byincreasing human productivity less workers are needed to do work leadingto chucking out from their jobs.

Exploitation ± Workers feel they are exploited as they are not given dueshare in increasing profits which is due to their increased productivity.Wages do not rise in proportion as rise in production. Wage paymentcreates uncertainty & insecurity (beyond a standard output, there is noincrease in wage rate).

Monotony ± Due to excessive specialization the workers are not able to

take initiative on their own. Their status is reduced to being mere cogs inwheel. Jobs become dull. Workers loose interest in jobs and derive little pleasure from work.



Weakening of Trade Union ± Everything is fixed & predetermined bymanagement. So it leaves no room for trade unions to bargain aseverything is standardized, standard output, standard working conditions,standard time etc. This further weakens trade unions, creates a rift between efficient & in efficient workers according to their wages.

Over speeding ± the scientific management lays standard output, time sothey have to rush up and finish the work in time. These have adverseeffect on health of workers. The workers speed up to that standard output,so scientific management drives the workers to rush towards output andfinish work in standard time.



Employer¶s Viewpoint

Expensive ± Scientific management is a costly system and ahuge investment is required in establishment of planningdept., standardization, work study, training of workers. It may

be beyond reach of small firms. Heavy food investment leads

to increase in overhead costs. Time Consuming ± Scientific management requires mental

revision and complete reorganizing of organization. A lot of time is required for work, study, standardization &specialization. During this overhauling of organization, thework suffers.

Deterioration of Quality



Taylor and Fayol Both the persons have contributed to development of science

of management. The contribution of these two pioneers in thefield of science of management has been reviewed as ³Thework of Taylor & Fayol was, of course, especially

complementary. They both realized that problem of personnel& its management at all levels is the key to individualsuccess. Both applied scientific method to this problem thatTaylor worked primarily from operative level, from bottom toupward, while Fayol concentrated on managing director andwork downwards, was merely a reflection of their very

different careers´. They both differ from each other infollowing aspects: -



Basis Taylor Fayol

Human

aspect

Taylor disregards human

elements and there is

more stress on improving

men, materials and

methods

Fayol pays due regards on human

element. E.g. Principle of initiative,

Espirit De¶ Corps and Equity

recognizes a need for human

relations

Status Father of scientific

management

Father of management principles

Efficiency &administratio

n

Stressed on efficiency Stressed on general administration

Approach It has micro-approach

because it is restricted to

factory only

It has macro-approach and discuses

general principles of management

which are applicable in every field of

management.

Scope of

principles

These principles are

restricted to production

activities

These are applicable in all kinds of

organization regarding their

management affairs

Achievement Scientific management Administrative management



ELTON MAYO:THE HAWTHORNE

STUDIESStudies carried out at the Hawthorne Plant of

the Western Electric Company in Chicago

between 1927 and 1932



HUMAN RELATIONS SCHOOL

Due to unrest caused by Taylor¶s scientific

principles in the 20¶s and 30¶s work was

carried out based in the µhuman side¶ of workers ± not focusing on money

Elton Mayo was one of the main theorists

involved.



Background on Mayo Born in Adelaide, South Australia in 1880

Died in Surrey in 1949

Worked in Australia, UK and the USA onvarious projects and lecturing



History of the Hawthorne StudiesBackground: Mayo wanted to find out what

effect fatigue and monotony had on job

productivity and how to control them throughvariables such as

Rest breaks

Work hours

Temperatures

Humidity



Experiments conducted By Elton Mayo1. Relay Assembly Test Room.

2. Illumination Experiments.

3. Bank Wiring Observation RoomExperiments.

4. Mass Interviewing Program.



Relay Assembly Test Room The next experiments beginning in 1927 focused on the

relay assembly department, where the electromagneticswitches that made telephone connections possible were

produced. The manufacture of relays required the repetitive assembly

of pins, springs, armatures, insulators, coils, and screws.Western Electric produced over 7 million relays annually.

As the speed of individual workers determined overall

production levels, the effects of factors like rest periodsand work hours in this department were of particular interest to the company.



The Experiment Selected 6 women from an assembly line

Segregated them from the rest of the factory

Put them under the eye of a supervisor (a friendly observer)

Made frequent changes to their working

conditions Always discussed and explained the changes in

advance



The changes Changed the hours in the working week and

in the working day

Increased and decreased the number of work breaks and the time of the lunch hour

Occasionally he would return the women to

their original, harder working conditions



The findings Under normal conditions with a 48 hour

week, including Saturdays and no rest pauses:

Team produced 2400 relays per week each



Findings during experiment They were put on piecework for 8 weeks

Output went up

Rest pauses were introduced for 5 weeks

Output went up



Rest pauses were lengthened to 10 minutes

Output went up

Six 5-min pauses were introduced and the

girls complained that their work rhythm

was broken

Output fell very slightly

Return to 2 rest pauses the first with a hotmeal supplied free of charge

Output went up



Group were dismissed at 4.30 pm instead of 5.00 pm

Output went up

They were dismissed at 4.00 pm

Output remained the same

Finally all improvements were taken awayand the team went back to the conditions at

the beginning of the experiment

Output was the highest ever recorded at 3000relays per week per person



What happened during the experiment?

The individuals became a team and the teamgave wholehearted co-operation with theexperiment

They were happy in the knowledge that theywere doing what they wanted to do

They felt they were working under less pressure than before

They were not pushed around or bossed by

anyone Under these conditions they developed an

increased sense of responsibility which camefrom within the group .



Mayo¶s Conclusions1. Productivity:

There is no direct relationship between production andworking conditions. Productivity is influenced more by other factors such as, recognition, group influence, cordial

relationship & quality of supervision .2. Group Influence:

Individual workers cannot be treated in isolation but must beseen as members of a group

Monetary incentives and good working conditions are less

important to the individual than the need to belong to a groupInformal or unofficial groups formed at work have stronginfluence on behaviour



3.Motivation:Workers are not merely motivated by money.

The fact that they make important

contribution to the organization success,motivates them more then any thing else.

4. Supervision:

Friendliness & Genuineness of the supervisor

effects productivity



5. Communication: detailed and timely

communication gives the employees a sense

of importance and thus improves the performance.

Session 3 Ppm

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