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ORGANIZATION AND MANAGEMENT

1ST SEMESTER – 2nd QUARTER
Module 1: STAFFING
STAFFING, according to Dyck and Neubert (2012), is the Human Resource function of
identifying, attracting, hiring, and retaining people with the necessary qualifications to fill the
responsibilities of current and future jobs in the organization.

The Staffing Process typically includes the following steps:

1. Human Resource Planning - to ensure that the personnel needs of the organization are met and
sustained.
2. Recruitment - This is the pooling of job candidates to match the human resource plan of the
organization.
3. Selection - evaluates job applicants which are among the best through a thorough analysis of their
qualifications by interviews, tests, reference checks and physical examination.
4. Orientation - The chosen applicants are introduced to their immediate superiors, officemates and make
them aware on the policies of the company.
5. Training and Development - This aims to improve the skills of employees for them to be more efficient
where it intends to educate the employees for additional responsibility and for promotion.
6. Performance Appraisal - to evaluate an individual’s job performance against job standards such as
responsibilities, accountabilities and measurements.
7. Transfer, Promotion, Demotion
*Transfer - This is a movement to a different job with similar pay and responsibility.
*Promotion - This is the advancement in position with higher pay and responsibility.
*Demotion - This is a movement to a lower-status position. In some cases, the
employee is given an impressive title, but with less responsibility.
8. Separation - This can be resignation which is voluntary separation or termination which is involuntary
separation.

Awareness of the management potential within an organization can be accomplished with the
use of an inventory chart, also called MANAGEMENT SUCCESSION/REPLACEMENT
CHART.

TWO MAIN COMPONENTS OF STAFFING :

1. RECRUITMENT is the process of identifying and attracting people with the
necessary qualifications.
2. SELECTION is choosing who to hire.

EXTERNAL AND INTERNAL FORCES AFFECTING PRESENT AND FUTURE

NEEDS FOR HUMAN RESOURCES
EXTERNAL FORCES - includes economic, technological, social, political, and legal factors.
INTERNAL FACTORS or FORCES includes the firm’s goal and objectives, technology, the
types of work that have to be done, salary scales, and the kinds of people employed by the
company.
RECRUITMENT is a set of activities designed to attract qualified applicants for job position
vacancies in an organization. Recruitment may either be EXTERNAL or INTERNAL.
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In EXTERNAL RECRUITMENT, outside sources are considered in the process of locating

potential individuals who might want to join the organization and encouraging them to apply
for actual or anticipated job vacancies.

In INTERNAL RECRUITMENT, filling job vacancies can be done through promotions or

transfer of employees who are already part of the organization. In other words, recruitment is
within the organization.

EXTERNAL RECRUITMENT METHODS :

1. ADVERTISEMENTS – through websites, newspapers, trade journals, radio, television,

billboards, posters, and e-mails among others.
2. UNSOLICITED APPLICATIONS - received by employers from individuals who may
or may not be qualified for the job openings.
3. INTERNET RECRUITING - independent job boards on the Web commonly used by
job seekers and recruiters to gather and disseminate job opening information.
4. EMPLOYEE REFERRALS – are recommendations from the organization’s present
employees who usually refer friends and relatives who they think are qualified for the
job.
5. EXECUTIVE SEARCH FIRMS – also known as “head hunters;” help employers find
the right person for a job.
6. EDUCATIONAL INSTITUTIONS - good sources of young applicants or new
graduates who have formal training but with very little work experience.
7. PROFESSIONAL ASSOCIATIONS - may offer placement services to their members
who seek employment.
8. LABOR UNIONS – possible sources of applicants for blue-collar and professional jobs.
9. PUBLIC AND PRIVATE EMPLOYMENT AGENCIES - may also be good sources
of applicants for different types of job vacancies for they usually offer free services while
private ones charge fees from both the job applicant and employers soliciting referrals
from them.

Staffing - refers to filling in all organizational job positions.

Systems approach to staffing - is the step-by-step way of filling of job positions in
organizations, considering values such as numbers and kinds of human resources needed, open
managerial and non-managerial positions, potential successors to open job positions, etc.
The Department of Labor and Employment (DOLE) - is the national government agency
mandated to formulate policies and implement programs in the field of labor and employment

SELECTION is the process of choosing individuals who have the required qualifications to fill
present and expected job openings.

THE SELECTION PROCESS TYPICALLY INCLUDES THE FOLLOWING STEPS:

1. Establishing the selection criteria.
2. Requesting applicants to complete the applicant form.
3. Screening by listing applicants who seem to meet the set criteria.
4. Screening interview to identify more promising applicants
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5. Interview by the supervisor/manager or panel interviews.

6. Verifying information provided by the applicant.
7. Requesting the applicant to undergo psychological and physical examination
8. Informing the applicant that he or she has been chosen for the position applied for.

STEPS IN HIRING EMPLOYEES EFFECTIVELY

 Step 1 – Determining a need Job analysis
 Step 2 – Application Search and selection
 Step 3 – Decision – making process
a. Making a decision
b. Notification and employment offer
 Step 4 – Adaptation to the workplace and Orientation

TYPES OF JOB INTERVIEWS:

1. STRUCTURED INTERVIEW – the interviewer asks the applicant to answer a set of
prepared questions – situational, job knowledge, job simulation, and worker requirement
questions.
2. UNSTRUCTURED INTERVIEW – the interview has no interview guide and may ask
questions freely.
3. ONE-ON-ONE INTERVIEW – one interviewer is assigned to interview the applicant.
4. PANEL INTERVIEW – several interviewers or a panel interview may conduct the
interview of applicants; three to five interviewers take turns in asking questions.

TYPES OF EMPLOYMENT TESTS

1. Intelligence Test - designed to measure the applicant’s mental capacity; tests his or her
cognitive capacity, speed of thinking, and ability to see relationships in problematic
situations.
2. Proficiency and aptitude tests - tests his or her presents skills and potential for learning
other skills.
3. Personality Tests – designed to reveal the applicant’s personal characteristics and ability
to relate with others.
4. Vocational Tests - tests that show the occupation best suited to an applicant.

MODULE 2: TRAINING AND DEVELOPMENT, COMPENSATION/WAGES AND

PERFORMANCE EVALUATION; AND EMPLOYEE RELATIONS

TRAINING - refers to learning given by organizations to its employees that concentrates on

short-term job performance and acquisition or improvement of job-related skills.
DEVELOPMENT - refers to learning given by organizations to its employees that is geared
toward the individual’s acquisition and expansion of his or her skills in preparation for future
job appointments and other responsibilities.
Training needs assessment must be done systematically in order to ascertain if there really is a
need for training.
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Examples of organization analyses include the analyses effects of downsizing, branching

out, conflicts with rival companies, and others that may require training or retraining of
employees.

TASK ANALYSIS involves, for example, a checking of job requirements to find out if all these
are being done to meet company goals.
PERSON ANALYSIS determines who among the employees need training or retraining. This
is to avoid spending for the training of employees who no longer need it.

DIFFERENT LEARNING PRINCIPLES

1. Modeling – the use of personal behavior to demonstrate the desired behavior or method
to be learned.
2. Feedback and reinforcement learning by getting comments or feedback from the
trainees themselves, from trainers, or fellow trainees, which can help the individual
realize what they are doing right or what they are doing wrong.
3. Massed vs. distributed learning – learning by giving training through either few, long
hours, of training(massed) or series of short hours of training(distributed).
4. Goal – setting – learning through the explanation of training goals and objectives by the
trainers to the trainees.
5. Individual differences – training programs that take into account and accommodate the
individual differences of the trainees in order to facilitate each person’s style and rate of
learning.
6. Active practice and repetition – learning through the giving of frequent opportunities to
trainees to do their job tasks properly.

Designing the Training Program - This phase involves stating the instructional objectives that
describe the knowledge, skills and attitudes that have to be acquired or enhanced to be able to
perform well.
Implementing the Training Program - Various types of training program implementation
include on-the-job training, apprenticeship training classroom instruction, audio-visual method,
simulation method and e-learning.
Evaluating the Training - The positive effects of the training program may be seen by
assessing the participants’ reactions, their acquired learnings and their behavior after
completing the said training, the effects of training may also be reflected by measuring the
return on investment (ROI) or through the benefits reaped by the organization, which were
about by their training investment.

Employee Development
- is a part of an organizations’ career management program and its goal is to match the
individual employee must know himself or herself well, identify his or her own knowledge,
skills, abilities, values and interests, so that he or she could also identify the career pathway that
he or she would like to take.
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COMPENSATION / WAGES – all forms of pay given by employers to their employees for
the performance of their jobs.
TYPES OF COMPENSATION
1. Direct Compensation – includes workers’ salaries, incentive pays, bonuses, and
commissions.

2. Indirect Compensation – includes benefits given by employers other than financial

remunerations; travel, educational and health benefits, and others.
3. Nonfinancial Compensation – includes recognition programs, being assigned to do
rewarding jobs, or enjoying management support, ideal work environment, and
convenient work hours.

Compensation pay represents a reward that an employee receives for good performance
that contributes to the company’s success. In relation to this, the following must be considered:

Pay equity – related to fairness

Equity Theory is a motivation theory focusing on employees’ response to the pay that they
receive and the feeling that they receive less or more than they deserve.
Expectancy Theory – another theory of motivation which predicts that employees are
motivated to work well because of the attractiveness of the rewards or benefits that they may
possibly receive from a job assignment.

Bases for Compensation Employees may be compensated based on the following:

1. Piecework basis – when pay is computed according to the number of units produced
2. Hourly basis – when pay is computed according to the number of work hours rendered
3. Daily basis – when pay is computed according to the number of work days rendered
4. Weekly basis – when pay is computed according to the number of work weeks
rendered
5. Monthly basis – when pay is computed according to the number of work months
rendered

PERFORMANCE EVALUATION - a process undertaken by the organizations, usually done

once a year, designed to measure employees’ work performance

There are purposes behind employee assessment that re beneficial to the company
and employees:
1. Administrative Purposes – These are fulfilled through appraisal/ evaluation programs that
provide information that may be used as a basis for compensation decisions, promotions,
transfers, and terminations.
2. Developmental Purposes – These are fulfilled through appraisal/ evaluation programs
that provide information about employees’ performance and their strengths and
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weaknesses that may be used as basis for identifying their training and development
needs.
Performance Appraisal Methods

Methods of evaluating workers have undergone development in order to adapt new legal
employment requirements and technical changes. Some appraisal methods used today are the
following:
1. Trait methods – performance evaluation method designed to find out if the employee
possesses important work characteristics such as conscientiousness, creativity,
emotional stability, and others
2. Graphic rating scales – performance appraisal method where each characteristic to be
evaluated is represented by a scale on which the evaluator or rater indicates the degree
to which an employee possesses that characteristic
3. Forced-choice method – performance evaluation that requires the rater to choose from
two statements purposely designed to distinguish between positive or negative
performance; for example: works seriously— works fast; shows leadership—has
initiative
4. Behaviorally anchored rating scale (BARS) – a behavioral approach to performance
appraisal that includes five to ten vertical scales, one for each important strategy for
doing the job and numbered according to its importance
5. Behavior observation scale (BOS) – a behavioral approach to performance appraisal
that measures the frequency of observed

Employee relations – the connection created among employees/workers as they do their

assigned tasks for the organization to which they belong.
Social support is the sum total of perceived assistance or benefits that may result from
effective social employee relationships.
The quantity and quality of an employee’s relationship with others determine social
support (esteem support, informational support, or financial support). In short, social support
and effective employee relations must always go together like “a horse and carriage,” where
one would be useless without the other. Therefore, without social support, effective employee
relations is not possible; and without effective social employee relationships, social support,
likewise, is not possible.
Below are some barriers to good employee relations:
1. Anti-social personality; refusal to share more about oneself to co-employees; being a
loner
2. Lack of trust in others
3. Selfish attitude; too many self-serving motives
4. Lack of good self-esteem
5. Not a team player
6. Being conceited
7. Cultural/subcultural differences
8. Lack of cooperation
9. Communication problems; refusal to listen to what others seek to communicate
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10.Lack of concern for others’ welfare

Here are some ways to overcome barriers to good employee relations:

1. Develop a healthy personality to overcome negative attitudes and behavior
2. Find time to socialize with coworkers.
3. Overcome tendencies of being too dependent on electronic gadgets
4. Develop good communication skills and be open to others’ opinions.
5. Minimize cultural/subcultural tension.
Three Types of Employees:
Engaged:
 employees who work with passion and feel a deep connection with their company
 they drive innovation and move the organization forward
Not Engaged:
 employees who are essentially “checked out”
 they put time, but not energy or passion, into their work
Actively Disengaged:
 employees who are not only unhappy at work, but also act out their unhappiness
 they undermine what their engaged coworkers accomplish.

Employee movements – series of actions initiated by employee groups toward an end or

specific goal
Unionism – the principle of combination for unity of purpose and action.
A labor union is a formal union of employees/workers that deals with employers, representing
workers in their pursuit of justice and fairness and in their fight for their collective or common
interests.
Employees or workers unionize because of financial needs, unfair management practices,
or social and leadership concerns.
a. Financial needs – complaints regarding wages or salaries and benefits given to them
by the management are the usual reasons why employees join labor unions
b. Unfair management practices – perceptions of employees regarding unfair or biased
managerial actions are also reasons why they join mass movements;
- examples of lack of fairness in management are favoritism related to promotion
and giving of training opportunities and exemption from disciplinary action
c. Social and leadership concerns – some join unions for the satisfaction of their need for
affiliation with a group and for the prestige associated with coworkers’ recognition of
one’s leadership qualities.
Steps in Union Organizing Terry Moser, an expert union organizer, was credited by Snell
and Bohlander (2011) for the following union-organizing steps:
Step 1. Employee/union contact
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Step 2. Initial organizational meeting

Step 3. Formation of in-house organizing
Step 4. If a sufficient number of employees support the union movement, the organizer requests
for a representation election or certification election
Step 5. End of union organizing
 Prepare for negotiations –The chief negotiator for the union is the union president
while the chief negotiator for management is the organization’s vice president or the
labor relations manager.
 Develop strategies
 Conduct negotiations - Mediation is the use of a neutral third party to reach a
compromise decision in employment disputes. Arbitration also uses a neutral third
party who resolves the labor dispute by issuing a final decision in the disagreement.
 Formalize agreement
Grievance Procedure is a formal procedure that authorizes the union to represent its members
in processing a grievance or complaint.
The National Labor Relations Commission (NLRC) is an attached agency of the DOLE. The
NLRC is a quasi-judicial body that is tasked to resolve disputes between the labor force and
management in order to preserve industrial peace.
Managements offer different types of rewards:
1. Monetary Rewards – rewards which pertain to money, finance, or currency.

 pay/salary – financial remuneration given in exchange for work performance that will
help the organization attain its goals;
examples: weekly, monthly, or hourly pay, piecework compensation, etc.
 benefits – indirect forms of compensation given to employees/ workers for the
purpose of improving the quality of their work and personal lives;
examples: health care benefits, retirement benefits, educational benefits, and others
 incentives – rewards that are based upon a pay-for-performance philosophy; it
establishes a baseline performance level that employees or groups of employees must
reach in order to be given such reward or payment;
examples: bonuses, merit pay, sales incentives, etc.
 executive pay – a compensation package for executives of organizations which
consists of five components:
examples:basic salary, bonuses, stock plans, benefits, and perquisites
 stock options – are plans that grant employees the right to buy a specific number of
shares of the organization’s stock at a guaranteed price during a selected period of
time
Reward – gift, prize or recompense for merit, service or achievement, which may
have a motivating effect on the employee
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2. Nonmonetary Rewards – rewards which do not pertain to money, finance, or currency;

refer to intrinsic rewards that are self-granted and which have a positive psychological
effect on the employee who receives them.

 award – nonmonetary reward that may be given to individual employees or

groups/teams for meritorious service or outstanding performance;
examples:trophies, medals, or certificates of recognition may be given instead of
cash or extrinsic rewards
 praise – a form of nonmonetary, intrinsic reward given by superiors to their
subordinates when they express oral or verbal appreciation for excellent job
performance

MODULE 3: ANALYZE MOTIVATION, LEADERSHIP AND COMMUNICATION

WORK IN AN ORGANIZATION
Leading – a management function that involves inspiring and influencing people in the
organization to achieve a common goal.
Managing – the process of working with and through others to achieve organizational
objectives efficiently and ethically amid constant change. It also deals with planning,
organizing, staffing, leading, and controlling
Personality pertains to the unique combination of physical and mental characteristics that affect
how individuals react to situations and interact with others, and if unhealthy or not fully
functioning could cause conflicts/problems among individuals.
A person is said to possess a healthy personality if he or she is fully functioning in mind, body,
and spirit; he or she is an optimal person functioning at the highest level
Big Five Personality Characteristics According to Robbins and Coulter (2009), “research has
shown that five basic personality dimensions underlie all others and encompass most of the
significant variation in human personality.”

The five personality traits in the Big Five Model are:

1. Extraversion – the degree to which someone is sociable, talkative, and assertive
2. Agreeableness – the degree to which someone is good natured, cooperative, and
trusting
3. Conscientiousness – the degree to which someone is responsible, dependable,
persistent, and achievement-oriented
4. Emotional Stability – the degree to which someone is calm, enthusiastic, and secure
(positive), or tense, nervous, depressed, and insecure (negative)
5. Openness to experience – the degree to which someone is imaginative, artistically
sensitive, and intellectual
The Big Five Model provides more than just a personality framework. Research has shown that
important relationships exist between these personality dimensions and job performance.
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Emotional intelligence (EI) pertains to the ability to manage one’s self and interact with others
in a positive way. Kreitner and Kinicki (2013) gave four key components of EI—self-
awareness, self management, social awareness, and relationship management—based on a
study by Daniel Goleman (1995) who tried to associate these characteristics with leadership
effectiveness.
Organizational Citizenship Behavior (OCB) – refers to employee behavior that exceeds work
role requirements and also behaviors that go beyond the call of duty.
Organizational Commitment – refers to the extent to which an individual employee identifies
with an organization and its goals.
Job Satisfaction and Productivity – job satisfaction refers to employees’ general attitude
toward their respective jobs.
According to the Hawthorne Studies, cited by Robbins and Coulter (2009), “Managers
believed that happy workers were productive workers.” Some researchers expressed doubts
about this statement; however, there were those who said that “the correlation between job
satisfaction and productivity is fairly strong. Organizations with more satisfied employees tend
to be more effective than organizations with fewer satisfied employees.” Therefore, managers
are advised to find ways and means to make their employees happy at work.

Motivation
Motivation – refers to psychological processes that arouse and direct goal-directed behavior
Theory – a body of fundamental principles verifiable by experiment or observation.
According to Kreitner and Kinicki (2013), early Theories of Motivation revolved around the
idea that motivation is brought about by the employees’ desire to fulfill their need, their work
habits, and their job satisfaction. Among these are:
 Maslow’s Hierarchy of Needs Theory – refers to Maslow’s Hierarchy of Five Human
Needs: physiological, safety, social, esteem, and self-actualization
 Physiological Needs refer to the human need for food, water, shelter, and other
physical necessities.
 Safety Needs refer to human needs for security and protection from physical
and psychological harm.
 Social Needs pertain to the human desire to be loved and to love, as well as the
need for affection and belongingness.
 Esteem Needs include the human need for self-respect, self-fulfillment, and
become the best according to one’s capability.
 Self-actualization Needs are the final needs in Maslow’s hierarchy.

 McGregor’s Theory X and Theory Y – refers to the theory that was proposed by
Douglas McGregor.
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 Theory X is a negative view of workers which assumes that workers have little
ambition, dislike work, and avoid responsibilities; they need to be closely
monitored or controlled in order for them to work effectively.
 Theory Y is a positive view of workers which assumes that employees enjoy
work, seek out and accept responsibility, and are self-directed.

 Herzberg’s Two Factor Theory – was proposed by Frederick Herzberg This theory is
also known as the Motivation-Hygiene Theory which states that intrinsic factors
(achievement, recognition, growth, and responsibility) are associated with job
satisfaction, while extrinsic factors (company policy, salary, security, and supervision)
are associated with job dissatisfaction. Intrinsic factors are the motivators while the
extrinsic factors are called hygiene factors.

 McClelland’s Three Needs Theory – was proposed by David McClelland and states
that individuals have three needs that serve as motivators at work. The three needs
McClelland referred to are:
 the need for achievement (nAch),
 the need for power (nPow), and
 the need for affiliation (nAff).

 Alderfer’s ERG Theory – was developed by Clayton Alderfer in the 1960s. For
Alderfer, a set of core needs explains behavior.
 E stands for existence needs,
 R refers to relatedness needs, and
 G pertains to growth needs.
The needs or desire for physiological and materialistic well-being, to have meaningful
relationships with others, and to grow as a human being are similar to the needs presented in
Maslow’s Theory.
Modern Theories of Motivation are process theories that focus on the notion that motivation
is a function of employees’ perceptions, thoughts, and beliefs. Among these are:
 Goal Setting Theory – a theory stating that specific goals motivate performance and
that more difficult goals, when accepted by employees, result in greater motivation to
perform well, as compared to easy goals.
 Reinforcement Theory – a theory which states that behavior is a function of its
consequences.
 Job Design Theory – a theory which states that employees are motivated to work well
by combining tasks to form complete jobs. Managers are advised to design jobs that
will meet the requirements of the ever-changing environment, the firm’s technology,
and the workers’ skills, abilities, and preferences. In doing so, employees are
motivated to perform well.
Examples are:
 job enlargement—the horizontal expansion of a job by increasing job scope;
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 job enrichment—the increasing of job depth by empowering employees to

assume some tasks usually done by their managers; and
 job characteristics model—where employees are motivated to perform well
because the task assigned to them have the five core job dimensions that serve
as motivators.

 Equity Theory – a theory developed by J. Stacey Adams which states that employees
assess job outcomes in relation to what they put into it and then compare these with
their co-workers.
 Expectancy Theory – states that an individual tends to act in a certain way, based on
the expectation that the act will be followed by an outcome which may be attractive or
unattractive to him or her.

Leadership Styles and Theories

Leadership – the process of inspiring and influencing a group of people to achieve a common
goal.
Trait Theory – a theory based on leader traits or personal characteristics that differentiate
leaders from followers. The Trait Theory of Leadership evolved from the earlier Great Man
Theory, which was based on the assumption that leaders were born with some innate ability to
lead.
Behavioral Theory – a theory that focuses on the behavior, action, conduct, demeanor, or
deportment of a leader instead of his or her personality traits.

Contemporary Theories of Leadership

Leadership theories evolved along with the development of management thought
throughout time, giving rise to contemporary theories such as follows:
 Fiedler Model –by Fred Fiedler. This theory is based on the assumption that a leader’s
effectiveness is contingent or dependent on the extent to which a leader’s style is
fitted to actual situations in the organization’s internal and external environment.
 Hersey-Blanchard Model –by Paul Hersey and Ken Blanchard. The theory focused on
subordinates’ readiness or extent to which the said subordinates have the ability and
willingness to accomplish a specific work assignment
Four Stages of Subordinate Readiness
 R1 Where the subordinates are both unable and unwilling to accomplish the
task
 R2 Where the subordinates are unable but willing to do the task
 R3 Where the subordinates are able but unwilling to do their assigned tasks
 R4 Where the subordinates are both able and willing to do what the leader
wants to complete the task
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Path-Goal Theory – a theory developed by Robert House which states that the leader’s task is
to lead his other followers or subordinates in achieving their goals by providing them direction
needed in order to ensure compatibility of these said goals with the organization’s goal
Effective leaders show their subordinates the path they must take to help them achieve their
work goals.

House identified four leadership behaviors:

1. directive leadership – where the leader gives specific guidelines to followers so that task
accomplishment would be easier;
2. supportive leadership – where the leader shows concern and friendliness to subordinates;
3. participative leadership – where the leader asks for suggestions from followers before
decision-making;
4. achievement-oriented leadership – where the leader sets the goals that subordinates must
try to achieve.
Modern Leadership Views Similarly, views on leadership evolved over time. Among the
modern views on and approaches to leadership are the following:
1. Transactional Leadership Model – a theoretical model which states that leaders guide
their subordinates toward the achievement of their organization’s goals by using social
exchange or transactions and by offering rewards in exchange for their productivity.
2. Transformational Leadership Model – a view that developed from transactional
leadership. It states that leaders inspire or transform followers to achieve extraordinary
outcomes.
3. Charismatic Leadership Theory – another modern theory of leadership which states that
leaders who have a charismatic personality are able to influence their subordinates to
follow them. Charismatic leaders pertain to leaders who are self-confident, enthusiastic,
and sensitive to both environmental constraints and subordinates’ needs.
4. Visionary Leadership Theory – is a theory which states that leaders are able to make their
subordinates follow because of their ability to create and articulate a realistic, credible,
and attractive vision that may improve present conditions or circumstances.
5. Team Leadership Theory – is a theory that emerged because of the fact that leadership is
increasingly taking place within a team context and that more companies are now
utilizing work teams led or guided by leaders.
6. Servant Leadership Theory – a theory proposed by Robert Greenleaf in 1970 stating that
servant-leaders must focus on increased service to others rather than to one’s self.

“Effective leadership is not about making speeches or being liked; leadership is defined
by results not attributes.”
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Servant-leaders focus on commitment to the growth of people, building community,

stewardship of the material resources and the people they lead, their ability to listen to
what others seek to communicate, their ability to empathize with others’ feelings and
emotions, and their ability to foresee future circumstances associated with present
courses of action and conditions.

Communication

Communication – the exchange of information and understanding.

Verbal communication – refers to oral and written communication.
Non-verbal communication – refers to communication through body movements, gestures,
facial expressions, eye contact, or body contact.

Communication is formal when the manager gives an assignment to a subordinate and

informal when employees talk to their friends in the office about a weekend party or a vacation
which they plan to take.

1. Vertical communication - involves communication flow between people belonging to

different organizational levels.
2. Upward communication - is the flow of information from an employee who belongs to a
lower hierarchical level to the boss/manager who belongs to a higher hierarchical level.
3. Downward communication - is the flow of information from the manager, who belongs
to a higher hierarchical level, to the subordinates/employees, who belong to lower
hierarchical levels.
Examples are when the boss gives orders to subordinates to finish certain tasks,
communicates organizational policies and practices, and comments about work
performance among others.
4. Horizontal/lateral communication takes place among employees belonging to the same
hierarchical level.
5. Diagonal communication entails communicating with someone or others who belong to
different departments/units and different hierarchical levels.

Types of communication networks include the following:

1. Chain network – where communication flows according to the usual formal chain of
command, downward and upward.
2. Wheel network – where communication flows between a leader and other members of
their group/team.
3. All-channel network – where communication flows freely among all members of a team.
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Barriers to Communication:

1. Filtering – the shaping of information communicated in order to make it look good or

advantageous to the receiver.
For example, a sales agent may report to his manager the big amount of sales that
he was able to make with one of their customers, but fails to report the complaints he
received from other customers regarding their products.
2. Emotions – the interpretation of communications which may be influenced by extreme
emotions felt by the receiver.
For example, a manager who is in a very bad mood and receives good news may
not see the positive aspect of it because his rational thinking process is affected by his
emotional judgment.
3. Information overload – another barrier to good communication since there are too many
pieces of information received by an individual may have a negative effect on a person’s
processing capacity.
For example, the hundreds of job applications received by human resource
managers through e-mail may be too many for them to read fully and respond to
accurately.
4. Defensiveness – the act of self-protection when people are threatened by something or
someone. Due to this feeling, people may resort to communicating lies in order to protect
themselves or to interpret communications differently to defend their interests, thus,
reducing mutual understanding.
5. Language – could also hamper good communications because words used may have
different meanings to different people belonging to different age, educational
background, or cultural group.
For example the word “hello” may just be an ordinary greeting to the older
members of an organization; but the same word, “hello” may have a negative connotation
to the younger group of employees depending on the context.
6. National culture – just like language, the prevailing national culture may also cause
problems in communication among members of an organization, especially if it is
multinational company.

Overcoming Communication Barriers:

1. Using feedback – This is usually done by asking questions about a memo sent to
subordinates or by asking them to give their comments or suggestions.
2. Using simple language – This is done by avoiding uncommon terms and flowery words
that may just cause misinterpretation. Language used must fit the level of understanding
of the intended recipients of the communication. Effective communication is achieved
when the message is understood by those who received it.
3. Active listening – This means listening well in order to grasp the full meaning of the
communication. Hearing without giving full attention to what others seek to
communicate usually results in misinterpretations and communication distortions.
4. Controlling emotions – This is another method of overcoming communication
misinterpretation. When the receiver is affected by extreme anger, his interpretation of a
message received may not be accurate. On the other hand, when the sender is affected by
extreme emotions, he/ she may also send or transmit inaccurate information.
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5. Observing body language – This also influences how communication is interpreted.

Actions of the message receiver, like throwing away a letter delivered to him, betrays his
negative feelings regarding its message, even if he says “yes” or “okay” to what is
requested.

MODULE 4: CONTROLLING METHODS AND

TECHNIQUES
Controlling – a management function involves ensuring the work performance of the
organization’s members are aligned with the organization’s values and standards through
monitoring, comparing, and correcting their actions
Standard – any established measure of extent quantity, quality, or value.

Control is a management task that helps identify errors and find solutions to improve, if not
totally eradicate the situation.

Harold Koontz defines Controlling as the measurement and correction of performance in

order to make sure that enterprise objectives and the plans devised to attain them is
accomplished.
Characteristics
Elements of a good Control System

An effective control system must have the necessary elements to work at its best. The absence
of any one of them will make the whole system less effective. Therefore, managers should see to
it that their control system should contain the following elements and considerations:

1. Feedback – The foundation of all control system.

There are two kinds of feedback:
 formal feedback - Financial statements, statistics and reports fall under the
formal category.
 informal feedback - includes personal opinions, informal discussions and an
individual observation.

2. Control must be objective – a control system must not be subjective at any point in
time.
3. Prompt Reporting of Deviations – A fast and quick reporting of any deviation and
discrepancy should be reported immediately to facilitate serving of the corrective action
immediately.
4. Control should be forward-looking – The managers should be able to predict or foresee
any arising possible deviation to enable to take course of action to avoid totally the
occurrence of such discrepancy and if possible prepare to respond in case it would come
their way.
5. Flexible Controls – A stiff and strict control system may not be as effective in every
situation possible. There are unpredictable situation that may arise. Managers should be
able to adjust their control system depending on the need of the situation.
6. Hierarchical Suitability – Every manager should have the necessary power to exercise
their authority and to decide on their own respective departments regarding any variance
that may arise in their respective post.
7. Economical Control – The benefits that can be derived from doing the corrective action
should be greater than its cost.
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8. Strategic Control Points – This means that the organization should not put an equal
priority to every deviation. Any discrepancy that could cause serious effect in the
organization should be given the priority as compared to the less serious ones.
9. Control must be simple to understand – Every employee should be able to comprehend
and understand the control system easily. This can be done through meetings,
announcements and memoranda
10. Control Should Focus on Workers – The main focus of every control system should be
the workers themselves. Workers are the implementers, so therefore, they should be able
to work with the system effectively.

Importance of Control
There are many benefits of an effective controlled system in both employees and Management
in a manufacturing setting. Some of these are:

1. Quality assurance: Quality is assured across all fields of production; Product quality is
very important especially if you have new customers. Existing customers also expect that
we will keep our quality. This is also important in attracting prospective customers.
2. Less wastage: Established production control system will help reduce scrap and wastage
materials. This will help the company save more money.
3. Lower operating costs: Efficient operation process will help save more cost in direct and
Indirect labor and also with the materials.
4. Assists decision-making: An established control system will help management make
business decision with regards to production quality and capacity and hence helping the
company to attract more customers and get more production orders.
5. Production planning: Since production is already established, It is easier for the
management to decide how much to produce and when to produce certain products. In
this way the management can make an efficient decision to control orders.
6. Production control: Since control system is already set, the usage of resources can be
optimized. Desired performance is also achievable.

There are many different techniques of managerial control. These can be classified into
two broad categories:
1. Traditional Techniques
2. Modern Techniques

1. Traditional Techniques – are those which are already been doing by the company for a
long time now. These includes:
a. Personal Observation – This is the most traditional method of control. The
Manager gathers information by way of observing the employee’s performance.
This creates psychological pressure on the part of the employees because they
know that they are being observed and they need to performed well. This is a very
time-consuming method and cannot effectively use for all kinds of job.
b. Statistical Data – Analysis of reports and data in the form of ratios, averages,
percentage and etc. This can be used to measure performance of the organization
in various areas. And through the use of chart or graph enables the manager to
measure performance as a whole by way of comparing the present data with that
of the previous one.
c. Break-even analysis – is a technique where managers study the relationship of
cost, volume and profit. In this state, the company does not incur loss or profit at
a given sales volume. The formula for computing break even analysis is:
Break-even point = Fixed Costs/Selling price per unit – variable cost per
unit
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Break-even point - The amount of sales at which there is no profit, nor loss is known as
the breakeven point.
Fixed Costs –are expenses that have to be paid by the company independent of any
specific business activities. This cost will not change even if you produce/sold more goods
in a specific accounting period.
Variable Cost – are expenses that changes when production output increases or decreases.
When the company produces more goods then variable cost will also increase. On the other
hand, if production output is low and so is variable cost.

In the table above please note that as raw materials, accessories and labor increase,
variable cost also increases. Fixed cost remain steady regardless of the increase in the
production factors.

Variable cost per Unit

How are we going to compute for variable cost per unit? Get the total variable cost
then divide it with the total yielded output. In the above case, the total variable cost is
Php900. Hence, 900/6 is equals to 150.
Therefore: Variable cost per unit is Php150

Selling Price
How much the customer is willing to pay for a certain product or service. We will
use the example above and this is calculated as:
Selling Price = Cost + Profit Margin
Cost per pc of bag = 200 + 40% profit margin
Therefore: SP = Php280/bag

Computation of Break Even points in units

Using the formula above:
Fixed cost = P300
Selling Price = 280
Variable Cost = 150
Break-even point = 300/(280-150)
Break-even point in units = 2 units
This means that you have to produce at least two back packs to meet the break- even
point.

d. Budgetary Control – is defined as a technique of Managerial control that requires

every department to prepare and plan in advance by way of making a budget.

Actual results are compared with the set budget standards. The usual type of
budgets used by an organization are as follows:
1. Sales Budget – is a plan made by the organization how many units of product
they have to sell within the budget period and how much are they going to sell.
2. Production Budget – This pertains how many products should the
organization plan to produce in a given period of time to meet the requirements
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of the sales department. How much the production is capable of producing has
a direct effect on the sales budget.
3. Material Budget – is the total of raw materials plan to purchase in order to
meet the production requirements. This is totally dependent on the order being
placed by the production to the purchasing department.
4. Cash Budget – This is the expected inflow and outflow of cash within the
budgeted period. The usual cash inflow in the budget depends on how many
cash sales are made and collection of receivables. The outflows on the other
hand are the expected expenses to be incurred within the accounting period
like salaries, utilities and payment of other payables.
5. Capital Budget – The amount of money to spend on major long-term assets
like a new factory or major equipment
6. Research & development budget – The amount of money to spend for the
development or refinement of products & processes

2. Modern Techniques of Managerial Control - are those techniques which are just
recently used and this provide a new way of dealing with the control system on the
various aspect of the organization.
a. Return on Investment – This (ROI) shows whether the invested capital has been
used effectively by the company to generate reasonable amount of return. It
measures the overall performance of the organization or its departments or
divisions.
b. Ratio Analysis – is use by the organization to analyze the financial statement of
the company. This process s shows the performance, financial health and
risks that the business have. This can be used by the organization and other
stakeholders to make economic decisions.

The following are the ratios most commonly used by the organization:
 Liquidity ratio – This shows how much current assets is available to pay
current liabilities.
 Solvency ratio – This will measure the ability of the company to pay its
obligations
 Profitability ratio – Is being done to find out the ability of the company to
generate income from the use of its assets and capital.
 Turn Over ratio – It measures the peso value of sales produced for every
peso of assets.

c. Responsibility Accounting – This system gives every department heads the

opportunity control and allocate expenses and cost based on what they need at a
particular time

 Cost center - is a department that incurs costs but doesn’t have any
revenues. This is one of the departments that uses company resources but
doesn’t contribute to the production, sales, or profitability of the business.
Examples are the Accounting and Legal departments.
 Revenue center – Incurs cost and expenses and produces revenue.
 Profit center – is a department that generates revenue and uses the
resources of the company. Example is the Sales department.
 Investment center – Their job is to analyze the department’s performance
by way of looking at the assets and resources and how they used these
assets and resources to produce revenues

d. Management Audit – a systematic evaluation of management performance, to find

out how well they are doing in managing the business. The purpose of the audit is
to review the efficiency and effectiveness of management and to look for possible
improvements of the system in the future.
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e. PERT & CPM - These will help perform the different functions of management in
planning, scheduling & implementing time-bound activities involving the
performance of a variety of complex, diverse and interrelated activities.

 PERT - Programmed Evaluation & Review Technique

 CPM – Critical Path Method

MODULE 5: The Different Functional Areas of Management

1. Human Resource Management – hire skilled employees needed in the different

departments of the organization. Other jobs include training of personnel in order to
acquire necessary skills needed to qualify and perform efficiently in the organization.
This is to ensure personal growth within the staff and also with the rank and file.

2. Marketing Management - is in charge of the sales, advertisements, and promotions of

new products being developed by the company. Aside from this, production is also one
of the concerns of marketing people, since the bulk of sales that the company make will
primarily depend on the output of production department.

Their primary duty is to find buyers/customers that will patronize the company
products. They see to it that existing customers are being taken care of. It means, any
complain the customers may have will immediately address and be given immediate
solution. Advertising is an effective tool to attract buyers and or customers.
Advertisements nowadays becomes easy because of social media.

3. Operations Management - Is responsible on crafting a blueprint and regulating

production output. This department has workers that collaborate to each other in order
to carry out the task they are assigned to do. The Production Manager is responsible
with the materials and services needed in the production process.

4. Financial Management - The finance department is responsible in managing the money

matters of the company. This is very important to ensure the smooth flow of operation.

The Finance manager - is responsible to raise fund and use it in an efficient way for the
business operation. He is also tasked to do life long and important investment activities
of the resources of the company and allocate the same in achieving the company’s goal
the best way possible.
A Treasurer - is in charge in the main financial areas of Investment (particularly short-
lived investments and checking it every day) Financing and Asset Management. He is
also responsible to watch over budget preparation and evaluate the investment chances
and the different hazard associated with it.

The Finance Manager handles the different tasks of the finance department with the
following scope of responsibility:
1. Investment decision
2. Financing decision
3. Asset Management decision

Classification of Finance Managers

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1. Credit Managers- responsible in the preparation of loan guidelines

and tracking payments of accounts.
2. Cash Managers – track and create control scheme on the incoming
and outgoing of cash.
3. Finance Managers – are workers of banks, credit companies and
other financial institutions to monitor lending, pledges, investment
and other undertakings related to financial

5. Materials and Procurement Management - in charge in purchasing materials and

other supplies needed in the production and other department of the organization. The
purchasing department is involved in monitoring Inventories. This way they can decide
which item is needed to be purchased.

6. Office Management - is a branch of the art and science of management which is

concerned with efficient performance of office work whenever and wherever that work is
to be done. It plays an important role in achieving the organization’s goal of success. Its
main purpose is to handle the clerical part of the different functional departments of the
business organization.

Importance of Office Management

4. Helps in achievement of targets
5. Optimum use of Resource
6. Minimization of Cost
7. Smooth flow of work
8. Provides leadership
9. Managing Change
10.Social benefits

7. Information and Technology Management - Pertains to the administration of

information using computer and modern technology to expedite the flow of
communication inside and outside the organization. This requires a system to be
established. In this way, the management can easily access customer’s record and
update information such as payment and purchases.
There are different information system in a business organization. Please refer to the
following:
1. Sales and Marketing information system - Involve in studying
prices of the product, Sales Projections, and handling of orders.
2. Finance and accounting information system - Check the
company’s properties (assets) cash flows, Essential in budgeting,
accounts receivable, and Financial planning
3. Human resource system - Monitors the records of the employees,
performance, skills and training and it is being used in analyzing of
remuneration (salaries), cultivation and advancement.

_______________________________ E N D OF 2nd Q U A R T E R _______________________________

Prepared by:

NELISA D. REBATO
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Subject Teacher