B415 POB Magement lecture 1

1. Introduction to Management 1
Lecture 1: What is Management
Stage 2 Session 2

2. Overview
• Introduction to the ‘management’ of others, what is different
from being an individual contributor
• The key employee: manager interfaces and their implications
for effectiveness
• What is ‘Performance Management’ (PM) - definition, origins
– the key task of the manager above all else
• Stretch goals and expectancy theory
• The process that is true performance management – beyond
the theory
• Goal setting practice – theory and reality
2

3. Learning Outcomes of this lecture
• To be able to understand what does it mean to be a manager,
how this differs from being an individual, and how the role
changes with the scope of the responsibility
• To understand in depth what is meant by managing the
performance of others – what ‘performance management’ is
and how to apply it in organisations

4. What is ‘management’
• Question 1 – what is meant by management?
• Question 2 – is it an art or a science? (creative and free or
governed by certain rules and principles?)
• Question 3 – what does it involve?

5. Summary
Management is the process of achieving
organizational objectives through people and other
resources.

6. The role of the Manager

7. PASSSAGE 1
The Pipeline Model
PASSAGE 4
PASSAGE 5
PASSAGE 3
PASSAGE 2
In each passage the role has similar issues applied very differently
PASSAGE 6

8. | 8
Defining The Six Passages
• Individual contributors, responsible for one’s own contributions
• Skills : Primarily technical or professional skills
• Time : Focuses on completing own tasks
• Values : Accepts the company rules and practices, exhibits professional
• pride and makes prudent use of resources
Managing
Self
• First line supervision of others, responsible for others’ contributions
• Skills : Management skills including planning, assigning work,
coaching and counselling, and measuring work of others
• Time : Ensures others are working at full capacity, developing their
skills and adopting the values of the corporation
• Values : Values managerial work and makes commitment to acquiring
• and building new skills
Managing
Others

9. | 9
Defining The Six Passages
•Responsible for providing strategy and direction, integrating with other functions
• Skills : new communication skills to penetrate additional management layers
•Time : participating in business team meetings ; day-to-day operations are delegated
to subordinate managers
• Values : values work that is new and different from one’s own experience
Manage
Managers
•Responsible for providing strategy and direction to a function, integrating with
other functions
• Skills : understanding and managing work outside of one’s own skill area, developing
functional strategy
• Time : focuses on communicating with other functional managers, securing
resources
• Values : values work that is new and different from one’s own experience
Functional

10. | 10
Defining The Six Passages
•Most have management responsibility of all functions of P&L
• Skills : Must be able to learn enough about all functions to make trade-offs
decisions and integrate the plans and programs of diverse functions
into one effective business plan ; develop business strategies
• Time : Spends time working with functions perhaps not understood or
valued in the past
• Values : Changes mindset from a functional perspective (‘can we do it ?’)
to a profit perspective (‘should we do this ? Will we make money ? Does it
fit our strategy ?’)
Business
Managers
•Manager of several businesses
• Skills : Evaluate business strategy to determine how to allocate resources across
businesses ; determine what businesses the Group should be in and which to exit ;
build programs that will produce functional managers who can grow to general
business managers ; must be ‘maze-bright’ and able to effectively interact with total
organisation, community, industry, governmental representatives
• Time : Same as business manager but time spans are longer, decisions are bigger and
risks and uncertainties are greater
•Values : Values other’s successes and gains satisfaction in developing the
organisation beyond personal success
Functional
Managers

11. | 11
Defining The Six Passages
• Responsible for managing a conglomerate, multi-business company
• Skills : Create strategic framework that sets appropriate boundaries for
group and business strategy ; integrate group activities to create a
complete global business ; connect group to corporation ; change in self-concept
as a leader of an enterprise
• Time : Spends significant time on corporate issues ; focuses on long term
(5-10 yrs.) and immediate results ; makes decisions in the context of
long-term policy implications
• Values: Embodies corporate values ; focuses on building long term
infrastructure, global positioning and achievement ; focuses on a few but
significant strategic decisions
Enterprise
Manager

12. The role of the manager: key interfaces
• Managing is primarily concerned with the effectiveness of others
• There are critical interfaces that will enable or disable a manager in their role:
 Managing the performance of others
 Directing others – and how to direct, or coach to meet objectives
 How to address conflict that arise between others
 How to motivate others to do what is required of them by the organisation
 How to develop others and also how to develop the self

13. Managing the performance of others
Daniels:
"In simplest terms, it's a way of getting people to do what you
want them to do and to like doing it."

14. Managing the performance of others
A formal definition:
• Performance Management is a scientifically based, data-oriented
management system.
• It consists of three primary elements:
1. Measurement
2. Feedback
3. Positive reinforcement.
Although each of these three elements can exist alone, all three must be
present before you have true Performance Management. And they must be
implemented systematically and in sequence

15. The Performance Management Life Cycle: a
case study
WillACHIEVE is the way we manage, and want you to manage, our business performance
It is comprised six key elements:
5. Rating your
Associates at the year
end
1.Understanding your business
2.Setting Objectives with your Associates
3.Reviewing the objectives mid year
4.Undertaking a year end review
5.Rating your Associates at the year end
6.Paying your Associates to their performance rating
4. Undertaking a year end review
1. Understanding your
business
Q1
Q2
Q3
Q4
2. Setting Objectives
with your Associates
3. Reviewing the
objectives mid year
6. Paying your
Associates to their
performance rating

16. Objectives should cascade from the business

17. “Expectancy theory”
• Expectancy theory has been researched by many, but
is attributed to Victor Vroom.
• It appears to hold up well to experiment – many
theories of motivation don’t.
• It also seems pertinent to sales situations, business
situations, particularly how well the motivation of
the seller matches the motivation of the buyer, and
performance managment more generally

18. What the theory says
• We create for ourselves expectations about future outcomes, e.g. “Having
a villa in France would probably make me happy”.
• We weigh up considerations about those expectations before taking
action:
– How much do I value the outcome? What’s in it for me? Is it worth
the effort? How does it stack up against other outcomes I want?
– Is there any way of achieving those outcomes? Can I see a clear path
of actions that would lead to that outcome? How do other people do
it?
– Am I, personally, capable of taking those actions? Do I have the
knowledge and skills? Resources?
• If the answers to all three questions are positive, I am likely to be
motivated into action.
• If the answer to any one of the three questions is negative, I am unlikely
to take any action at all.

19. What about SMART (Doran)
• Specific
• Measurable
• Achievable
• Realistic
• Time bound
The traditional model of setting objectives – entrenched in MBO (Drucker)
But what is less good about it?

20. Think SIMple
The SIMple model of objective setting:
 Specific – Clarity on what and when. Effective objectives are very clear
about the outcome required. What do you want to see happen?
 Important – A few important goals, critical for the company to achieve its
results and motivational for the individual.
 Measurable – Think impact. What real impact does the goal have on what
we value? Ensure that the impact is expressed with a number or numbers.

21. Stretch objectives: Clear, simple rules to
follow
Using SIMple rules, stretch objectives should be:
1.Within the scope of the accountabilities of the role.
2.Agreed by both parties.
3.Balanced across a number of impactful areas, but not too many (three to six
maximum).
4.Stretching and motivating. Stretching does not mean unrealistic; it means with
ambition.
5.Adaptable to changing circumstances. Things change, and so will objectives throughout
the year.
6.Delivered through performing the job – by your efforts in your role, not those of
others, or by ‘lucky’ events or happy circumstances.
7.Results are based on outcomes: outputs, not inputs. Measure by what happens: the
impact.

22. Good objectives or not?
1. Improve retention rate by 1 % in BU by end of 2014
2. Develop more accounts
3. Achieve year over year growth of 8%
4. Develop a bench of 2 ready successors for my XX role by end of 2014
5. Raise morale in my team
6. Connect more with my colleagues in RE
7. Role model completion of performance reviews targeting all my direct
reports and their directs reports by end of February 2014.

23. Rating Scales in Performance Management
Who should undertake a rating?
How should they do it?
What issues should you consider in designing a rating
scale?
Question 2

24. Rating Scales
A rating scale
- needs enough points to extract meaningful data.
- Needs to be able to differentiate performance
- Needs considerable ‘face validity’
BLOOM’s 5-point approach to performance reviews
5 – Exceptional performance. The employee changed the way the company operates and has
provided great value to customer experience and profitability.
4 – Above average performance. The employee excels over others in a talent area.
3 – Performance meets expectations. Every job has tasks that need to be done consistently
well.
2 – Needs improvement. Without this rating there is no opportunity to convey areas where
an employee seems to be slipping and needs support. 1 – Poor performance. Behaviour
exists where an employee is experiencing apathy over a period of time even after
developmental interventions.

25. The Willis Rating Scale
Exceeded
Expectations
3.1 3.2 3.3 3.4 3.5
Fully Met
Expectations
2.1 2.2 2.3 2.4 2.5
Partially Met
Expectations
1.1 1.2 1.2 1.4 1.5
A serious
issue
Some
weakness,
needs
work
Objectives
“What”
Values
“How”
But what do
we mean?
Effective
, skilled,
solid
Towering
strength,
outstanding
role model
Talented,
exceeds
expectati
ons

26. How to Decide a Rating – The ‘What’
3
2
1
Exceeded
Expectations
Fully Met
Expectations
Partially Met
Expectations
Objectives
“What”
3
Superior performance which demonstrably
stretched beyond expectations.
Fully met on all objectives, overachieved on
the most important objectives,
Consistently delivered more than expected
2
Good solid and effective performance.
Fully met on the majority of the most important
objectives
Occasionally exceeded expectations
1
Partially Met Expectations’ means
performance fell short and was below
expectations. Did not meet on the most
important objectives

27. Measuring the ‘how’
Rating Guidance
1.1 A serious issue Behaves independently, with little reference to
Willis Values.
Poor Corporate ‘citizen’ ‘nods no’
1.2 Some weakness, need work Behaves according to some Values, but ignores
others, and shows limited desire to fully participate
1.3 Effective, skilled, solid Solid display of most Values, probably not all but
working on it, and shows awareness and willingness
to do so
1.4 Talented exceeds expectations Displays most of the values very well, working at
improving
1.5 Towering strength, outstanding role model Absolute Willis Role Model, others look to them,
aspire to their skill levels

28. Rating Values: Practice
Watch this short video’s and assess the team working:
– Team working – what do we mean before we view the video?
– http://www.youtube.co/watch?v=qfVRzc3yA1U

29. What Can Go Wrong?
At times ‘wrong’ ratings are applied, not deliberately, but
because managers:
Want to be nice
Want to support colleagues inappropriately
Want to get the process over with as quickly as
possible
Apply the ‘wrong’ criteria
Why does it matter?
Wrong
Rating
Wrong
Reward
Halo Effect
Tendency Bias
Primacy/Recency
Contrast Effect
Personal Bias
Wrong
Performance

30. ‘Best Practice’ Performance Management: McKinsey
• The performance review is split into two parts:
1. Peer review:
– you ask for feedback from the colleagues you have worked with on a
particular project.
– It is in the form of a questionnaire and even a phone call. These reviews are
on a scale of 1-3
• An independent review of how well you have progressed with the professional
development plan you decided on earlier in the year. Someone senior in the firm
who can guide the career. He/she bases his opinion on the feedback received from
peers and seniors. Not the line manager.
• Promotion:
Once these two reviews are done, the DGL presents your case in front of the
evaluation committee. The evaluation committee consists of other leaders,
seniors, partners etc. Everyone gives their opinion once the case is presented. On
the basis of this discussion, your promotion is decided.

31. End of Lecture
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© Pearson College 2013