reaching goals: plans and controls today’s smart supervisor relies on collaboration to get the job...

Reaching Goals:

Plans and Controls

Today’s smart supervisor relies on collaboration to get the job done. The more difficult or impossible the job or the time constraints, the more important it is to get your people involved in creating a plan to get it done.

—Edward J. Felten,Former president (former), First

Supply Group

Chapter 6

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives

1. Describe types of planning that take place in organizations.

2. Identify characteristics of effective objectives.

3. Define management by objectives (MBO) and discuss its use.

4. Discuss the supervisor’s role in the planning process.

5. Explain the purpose of using controls.

6. Identify the steps in the control process.

7. Describe types of control and tools for controlling.

8. List characteristics of effective controls.6-2

Planning in Organizations

• Planning – management function of setting goals and

determining how to meet them.

• For supervisors– figuring out what tasks the department needs

to complete to achieve its goals– how and when to perform those tasks

6-3

Why Supervisors and Managers Plan

• Knowing what the organization is trying to accomplish helps them set priorities and make decisions aimed at accomplishing their goals.

• Planning forces managers to spend time focusing on the future and establishes a fair way for evaluating performance.

• Planning helps managers use resources efficiently.

• The functions that managers perform all depend on good planning.

6-4

Objectives

• Objectives – specify the desired accomplishments of the

organization as a whole or as a part of it.

• Goals – objectives with a broad focus.– identify what people should be striving toward.

6-5

Strategic Objectives

• Strategic planning – creation of long-term goals for the

organization. – typically include the type and quality of goods

or services the organization is to provide – the level of profits it is to earn

6-6

Operational Objectives

• Operational planning– The development of objectives that specify

how divisions, departments, and work groups will support organizational goals

6-7

Characteristics of Strategic andOperational Planning

6-8

Characteristics ofEffective Objectives

6-9

Policies, Procedures, and Rules

• Policies– Broad guidelines for how to act

• Procedures– Steps that must be completed to achieve a

specific purpose

• Rules– Specific statements of what to do or not do in

a given situation

6-10

Action Plans

The supervisor creates an action plan by answering the following questions:

• What actions need to be taken?

• Who will take the necessary steps?

• When must each step be completed?

• Where will the work take place?

• How will the work be done?

6-11

Contingency Planning

• Contingency planning– Planning what to do if the original plans don’t

work out. – Does not have to be

formal or written down.

6-12

Contingency Planning

• Review all objectives

• Look for areas where something might go wrong

• Determine how to respond if those problems do arise

6-13

Management by Objectives

• Management by objectives (MBO)– formal system for planning known as a

process in which managers and employees at all levels set objectives for what they are to accomplish.

– performance then is measured against those objectives

6-14

Management by Objectives

1. All individuals in the organization work with their managers to set objectives, specifying what they are to do in the next operating period.

2. Each individual’s manager periodically reviews the individual’s performance to whether he or she is meeting the objectives.

3. The organization rewards the individuals based on how close they come to fulfilling the objectives.

6-15

The Supervisor as a Planner

• In most organizations, supervisors are responsible for the creation of plans that specify:– Goals– Tasks– Resources– Responsibilities

6-16

The Supervisor as a Planner

• Providing information and estimates– Higher management relies on supervisors to

provide estimates of the personnel and other resources they will need to accomplish their work.

6-17

Allocating Resources

• Allocating human resources– Determining how many and what kind of

employees the department will need• Allocating equipment resources

– Determining how much equipment is needed to get the job done

• Allocating money resources– Developing a budget

• Scheduling– Gantt charts– PERT networks

6-18

Involving Employees

• Employees who are involved in the process tend to feel more committed to the objectives, and they may be able to introduce ideas that the supervisor has not considered.

• To get employees involved:– Set objectives and have employees write down what

they think they can accomplish in the coming year.– Hold a meeting of the entire work group at which

employees and supervisors develop objectives as a group.

6-19

Planning with a Team and Updating Objectives

• Many times teams, not individual managers, are charged with planning.– Supervisors should clearly communicate the scope of

the plan and encourage team members to cooperate

• After objectives have been set, the supervisor should monitor performance and compare it with the objectives and update objectives as necessary.– Organizations with a regular procedure for planning

will specify when supervisors must review and update their objectives.

6-20

The Supervisor as a Controller

• Supervisors need to know what is going on in the area they supervise.– Do employees understand what they are

supposed to do, and can they do it?– Is all equipment operating properly?– Is work getting out correctly and on time?

• Detection of problems is at the heart of the control function.

6-21

The Control Process

6-22

The Process of Controlling

• Establish performance standards– Effective performance standards should be

written, measurable, clear, specific, and challenging but achievable.

• Monitor performance and compare with standards– The supervisor should focus on how actual

performance compares with the standards he or she has set.

• Variance• Exception principle

6-23

The Process of Controlling

• Reinforce successes and fix problems– If performance is satisfactory or better, the

supervisor needs to encourage this.– If performance is unacceptable, the

supervisor needs to make changes that either improve performance or adjust the standard.

6-24

The Process of Controlling

• Reinforcement – encouraging the

behavior by associating it with a reward

6-25

The Process of Controlling

• Positive reinforcement – involves the presentation of something

pleasant after a desired behavior has occurred

• Negative reinforcement– involves the removal of something unpleasant

after a desired behavior has occurred

6-26

The Process of Controlling

• Problem – some factor in the organization that is a

barrier to improvement.

• Symptom – an indication of an underlying problem.

6-27

Tools for Fixing Performance Problems

6-28

Types of Control

• Feedback control– Control that focuses on past performance

• Concurrent control– Refers to work that is being done

• Precontrol– Refers to efforts aimed at preventing behavior

that may lead to undesirable results

6-29

Tools for Control

• Budgets– A plan for spending money

• Performance reports– Summarize performance and compare it with

performance standards

• Personal observation

6-30

Characteristics of Effective Controls

• Timeliness– Timely controls enable the supervisor to

correct problems in time to improve results

• Cost-effectiveness– The cost of using the controls should be less

than the benefit derived from using them

6-31

Characteristics of Effective Controls

• Acceptability– The controls should be acceptable to

supervisors and employees

• Flexibility– Supervisors should be able to ignore a

variance if doing so is in the best interest of the organization

6-32