PRINCIPLES OF

MANAGEMENT, 7E
P C Tripathi I P N Reddy I Ashish Bajpai

Chapter
Organization

1
 What is an Organization?
➢ Characteristics of an Organization - Every organization has:
➢ a purpose, goal or goals
➢ clear concept of the major duties or activities
➢ classification of activities into jobs
➢ establishment of relationships between these jobs
➢ Typology of Organizations
➢ Organizations which benefit their owners
➢ Organizations which benefit their members
➢ Organizations which benefit their clients
➢ Organizations which benefit the whole society

2
 Process of Organizing

Organizing is designing a structure for work performance through

differentiation and integration.
Steps:
➢ Consideration of Objectives
➢ Deciding Organisational Boundaries
➢ Grouping of Activities into Departments
➢ Deciding which Departments will be Key Departments
➢ Determining Levels at which Various Types of Decisions are to be
Made
➢ Determining the Span of Management
➢ Setting up a Coordination Mechanism 3
 Principles of Organizing

➢ Objectives ➢ Authority
➢ Specialization ➢ Efficiency
➢ Span of Control ➢ Simplicity
➢ Management by Exception ➢ Flexibility
Principle
➢ Balance
➢ Scalar Principle
➢ Unity of Direction
➢ Unity of Command
➢ Personal Ability
➢ Delegation
➢ Acceptability
➢ Responsibility

4
 Span of Management

➢ Meaning and Importance

Decreasing the span of management increases the number of hierarchy

levels in organisation

5
 Span of Management

➢ What is an Appropriate Span?

▪ Direct one-to-one relationships
2𝑛
▪ Direct group relationships 𝑛 2
−1

▪ Cross-relationships 𝑛 𝑛 − 1
2𝑛
Total N𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑎𝑙𝑙 𝑟𝑒𝑙𝑎𝑡𝑖𝑜𝑛𝑠ℎ𝑖𝑝𝑠 = 𝑛 +𝑛−1
2

where n = number of subordinates.

➢ V.A.Graicunas’s formula:
▪ It ignores the frequency and importance of relationships
▪ The actual span of management is determined by a number of
factors which have not been taken into consideration while
framing the formula 6
 Span of Management
➢ Factors Governing the Span of Management (Contingency
Approach)
▪ Ability of the Manager
▪ Ability of the Employees
▪ Type of Work
▪ Well-defined Authority and Responsibility
▪ Geographic Location
▪ Sophisticated Information and Control System
▪ Level of Management
▪ Economic Considerations
7
 Departmentalization
Process Departmentalization
➢ Business or Organizational Function
Fosters sub-goal loyalties
Simple form of grouping activities Not a good training ground
Promotes excellence in performance Unsuitable for large organizations
Promotes economies of scale Evoke conflicting interpretations
Organizational arthritis
“common pot” accounting

➢ Technology
Feeling less responsible
Efficient use of costly equipment
Not a good training ground
Follows the principle of
specialization Sequential technology
Suitable for organizations with many Difficult to compare
processes Devote extra attention

Continued…
 Departmentalization
Purpose Departmentalization

➢ Products

➢ Customers ➢ Choice of a Suitable Base

➢ Regions, Territory or Location ➢ Specialization

➢ Division ➢ Coordination

➢ Time ➢ Economy

➢ Combined Base ➢ Whole Task

Continued…

9
 Departmentalization

President

Tractor Appliance Generator

Department Department Department

Eastern Southern Western

Plant Plant Plant

Production Sales Finance

A Combined Base Organization

Continued…
 Departmentalization

A Typical Matrix Organization

Continued…
11
 Departmentalization

Parallel Departmentalization

➢ When the organization of several retail outlets, branches

and plants doing similar work as the parent company use
the same departmental set-up as that of the parent
company it is called parallel departmentalization.

12
 Organization Structure
➢ Organization Chart

➢ Organization Manuals

➢ Mechanistic and Organic

Structures

Tall organization

Flat Organization
13
 What Type of Structure is Best?
(Contingency View)
➢ Environment ➢ Span of Control

➢ Culture and history ➢ Form

➢ Task ➢ Availability of Finance and

Personnel
➢ Technology
➢ Managerial Characteristics
➢ Strategy
➢ Employee Characteristics

Collateral Organizations: This concept says that a manager should develop a

collateral mode of functioning to which he should shift, to operate in tandem
with the problem without displacing the existing classical or behavioural formal
structure.

14
 Emerging Organization Structure
➢ Network Organizations
➢ Involves the blurring of boundaries
➢ Coordination between various firms
➢ Decision rights are pushed
➢ Control is exercised by market mechanisms

➢ Virtual Organizations
➢ Technology
➢ Opportunism
➢ No borders
➢ Trust
➢ Excellence

15
 International Organizational Structures
Important factors affecting an MNE’s choice of structure:
➢ Strategy
➢ Home and host country environments
➢ Nature and size of its business
➢ The human resources available
Many companies, which had earlier established their footholds in the host
countries by creating subsidiaries, later on shifting to international division
structures to look after their foreign operations, international division
structures shifting to global functional structures, global functional
structures to global geographic structures, global geographic structures to
global product structures and global product structures to matrix structures.

16
 PRINCIPLES OF
MANAGEMENT, 7E
P C Tripathi I P N Reddy I Ashish Bajpai

Chapter
Authority Delegation and Decentralization

17
 Formal Authority
➢ Organizational authority is the formal right of the superior to
command his subordinates to perform a certain act and also obtain
obedience of this command.

➢ Henri Fayol defines authority as “the right to give orders and

power to exact obedience.”

➢ According to Herbert A. Simon, authority:

▪ enforces obedience to norms
▪ secures expertise in the making of decisions
▪ permits centralization of decision-making and coordination of
activity

18
 Source of Formal Authority

➢ Classical View: authority originates at the top in the formal

structure of an organization and then flows downward to
subordinates. Managers at each level of the organization derive
their authority from the managers at the higher level.

➢ Human Relations View: authority of a superior originates in the

willingness of his subordinates to accept it. The authority becomes
somewhat meaningless unless those affected accept it and
respond to it.

19
 Power
➢ Power is the ability or the available potential of a person to
influence or to cause another person to perform an act or to
change his behavior or attitude.

➢ French and Raven have suggested that there are five bases of
power possessed by an individual :
▪ Reward
▪ Coercion
▪ Referent
▪ Expert
▪ Legitimate
➢ Three additional types of power:
▪ Charismatic power
▪ Reflected power
▪ Emotional power
20
 Difference between Authority and Power

Authority Power
It is narrower in scope It is wider in scope
It is the legitimate right of superior to It is the ability of one person to
command and get his subordinates to influence another person to act in a
perform a certain act certain way.
It rests in the chair (or the position).
With the change in position. The It rests in the individual. Hence even
authority of the person also changes. when his position has changed his
A traffic Policemen on duty has the power remains with him.
authority to control and direct the
traffic. But after retirement, he can no
longer do it since he has no authority
now.

Continued…
21
 Difference Between Authority and Power

Authority Power
It can be delegated to a subordinate It cannot be delegated. A manager who is
by his superior. A manager who has a very able decision-maker cannot hand
the power to purchase machine over his ability to his assistant.
worth INR 10 lakh on his own can
delegate his authority to his assistant.
It is mostly well defined conspicuous It is undefined, inconspicuous and
(shown in the organization chart.) and infinite. Its location cannot be known
finite (i.e., commensurate with from the formal organization chart. As a
responsibility). matter of fact, one may find it in
unspecified places.

Continued…

22
 Difference Between Authority and Power

Authority Power
It is what exists in the eye of the It is what exists in the fact. It is the de
rule , practise or law. It is a de jure facto concept. Some people in
concept. It is mostly nominal. We organisation exercise significant power
find many organisational figure far beyond the accepted borders of their
heads who are administrators in authority. They are the real wire pullers
name only. They may be regarded as behind the figure heads.
“reigning without ruling.”
It serves as a basis of formal It serves as a basis of informal
organization. organization.

23
 Responsibility
➢ Responsibility is the obligation of a subordinate to perform an assigned
and accepted task. When a superior assigns some work to a
subordinate, it becomes his responsibility to perform it.
➢ Responsibility has two dimensions:
i. Responsibility for
ii. Responsibility to
➢ Responsibility is divided into two parts at the time of delegation:
i. Operating responsibility
ii. Ultimate responsibility (also to be understood as
Accountability)
➢ Responsibility may be specific or continuing.

Continued…
24
 Responsibility
Authority should be commensurate with responsibility

➢ It means that the subordinate must have been delegated enough

authority to undertake all the duties which have been assigned to
him and for which he has accepted responsibility.

➢ The advocates of this parity principle say that authority and

responsibility should be exactly equal.

➢ Inequality between the two produces undesirable results.

25
 Line, Staff and Functional Authority

LINE AUTHORITY

In this, a superior exercises direct command over a subordinate.

It is represented by the standard chain of command that starts with

the board of directors and extends down through the various levels
in the hierarchy to the point where the basic activities of the
organization are carried out.

Continued…

26
 Line, Staff and Functional Authority
STAFF AUTHORITY
.
Its nature is advisory. In this, a staff officer has the ‘authority of ideas’ only.
There are four levels of authority of a staff man:
➢ Voluntary consultation HIGHEST

➢ Compulsory consultation
➢ Concurring authority
➢ Functional authority

LOWEST

Continued…
27
 Line, Staff and Functional Authority

FUNCTIONAL AUTHORITY

➢ In this, a staff officer can give direct orders to people in other

departments outside his formal chain of command instead of
making recommendations to them.

➢ Whenever functional authority is given to a line officer, it is

known as functional line authority, and whenever it is
conferred upon a staff man, it is known as functional staff
authority.

28
 Line and Staff Conflict
➢ Complaints of Line Departments
▪ The staff people encroach upon their authority and prerogatives.
▪ The advice given by staff people is mostly academic and unhelpful in
achieving production goals.
▪ When a project is unsuccessful, it is the line people who are blamed
and held responsible for its failure but when it is successful, the staff
people receive credit.
▪ Staff people fail to see the whole picture. They tend to operate in
terms of the limited objectives of their own specialty rather than in
the interests of the business as a whole.

Continued…

29
 Line and Staff Conflict
➢ Complaints of Staff Departments

▪ Line people are generally ignorant and bull-headed. They resist

new ideas. They fear that changes in methods may expose
forbidden practices and departmental inefficiency. They fear
that changes in methods may bring personnel changes.
▪ Line people distrust, non-cooperate and even sabotage staff
plans.
▪ Staff has not enough authority to translate its advice into
action.
▪ Line departments receive preferential treatment in matters of
staff allowances and other facilities on the basis of their being
earning departments.
Continued…
30
 Line and Staff Conflict

➢ Two ways to reduce the Line and Staff conflict:

i. Better understanding of the nature of the relationship

between line and staff

ii. Reducing the visibility of status symbols

31
 Delegation of Authority

Delegation of authority is a routine process of granting

formal authority to the subordinates for fulfilling a
responsibility given by the superior. However, superior
remains accountable for the said task or responsibility.

Continued…
32
 Advantages of Effective Delegation

➢ It relieves the manager of his heavy workload

➢ It leads to better decisions
➢ It speeds up decision-making
➢ It helps train subordinates and builds morale
➢ It serves as compensation to those employees who face the
prospect of limited advancement
➢ It helps create a formal organization structure

Continued…
33
 Barriers to Effective Delegation
(On the Manager’s Side)

➢ Fear of Loss of Power

➢ The “I Can Do it Better Myself’ Fallacy
➢ Lack of Confidence in Subordinates
➢ Fear of Being Exposed
➢ Difficulty in Briefing
➢ Inability to Establish and Exercise Proper Controls

Continued…
34
 Barriers to Effective Delegation
(On the Subordinate’s Side)
➢ They may refuse to accept authority because of their fear of criticism by
their superior in case they commit mistakes in decision-making.
➢ They may avoid accepting any authority if they feel that they lack mental
and physical ability, adequate information and resources to help them
discharge their duties properly.
➢ They may believe that the authority is inconsistent with the purposes of the
organization and this may be the cause for their unwillingness to accept it.
➢ They may avoid accepting any authority because there are no positive
personal gains to them for assuming extra responsibility.
➢ They may refuse to accept the authority because it is outside certain limits.

Continued…
35
 Guidelines to Effective Delegation

➢ Make sure that delegation is not loss of power or that you cannot
do it yourself.
➢ Remember that only two tasks in a list of ten tasks deserve topmost
priority.
➢ Select the subordinate in the light of the job.
➢ Before delegating authority, make the nature and the scope of the
task clear. Avoid overstepping the subordinate’s “area of
acceptance”.
➢ Assign authority proportionate to the task.
➢ Make the subordinate clearly understand the limits of his authority
and deadlines.
Continued…
36
 Guidelines to Effective Delegation

➢ Give the subordinate some positive incentives for accepting

responsibility.
➢ Train the subordinate properly.
➢ Create a climate of mutual trust and goodwill.
➢ Do not make the subordinate accountable to more than one
superior.
➢ Let there be no overlaps or splits in delegation which usually result
from the superior’s desire that the authority over a given situation
should be shared by individuals or units.
➢ Learn to manage time.

Continued…
37
 Guidelines to Effective Delegation

➢ Try to stretch the capacities of your second line in office for your
efficiency in future.

➢ Once a delegated job is done well, acknowledge and appreciate.

38
 Decentralization of Authority

➢ Decentralization is a relatively permanent structural

framework of an organization designed by organizational
policy.
➢ It indicates the distribution of authority ,responsibility and
accountability by the top management in favour of the lower
levels of organisation that are close to the points of action.

➢ A decentralized organization shows fewer tiers(levels) in the

organizational structure, wider span of control, and a bottom-
to-top flow of decision-making and flow of ideas.

Continued…
39
 Difference between Delegation and
Decentralization
Delegation Decentralization
Delegation is the process. It mainly Decentralization is dispersal of
refers to the granting of the authority authority. It is the system that exists as
and the creation of the responsibility as the result of the systematic delegation
between one individual and another of authority.

In this, the superior continues to be In this, the superior is relieved from his
accountable for the work delegated to accountability of the work and the
his subordinate. subordinate becomes liable.
Delegation is vital and essential to the Decentralization is optional in the
management process. Only through sense that it may not be followed
delegation, subordinates can be systematically.
involved in the organization and
management can get things done.
Continued…
40
 Decentralization - Advantages

➢ Decentralization reduces problem of communication and red tape.

➢ Decentralization permits quicker and better decision-making.
➢ Decentralization recognizes and actually capitalizes on the
importance of the human element. Under decentralization,
employees are able to exercise more autonomy.
➢ Decentralization leads to a competitive climate within the
organization.
➢ Decentralization ensures the development of employees.
➢ Decentralization facilitates diversification of products, activities and
markets.

Continued…
41
 Centralization - Advantages

➢ Coordination of activities of subordinates is better

achieved.
➢ There is no duplication of efforts or resources.
➢ Decisions take into account the interest of the entire
organization.
➢ Strong central leadership develops which may be required
in crisis.

42
 How Much Decentralization?
➢ Following situational factors are considered in determining the
amount of decentralization appropriate for an organization:
▪ Size of the Organisation
▪ History and Age of the Organisation
▪ Philosophy of Top Management
▪ Abilities of Lower-level Managers
▪ Strategy and the Organization's Environment
▪ Nature of Management Function
▪ Available Controls
▪ Costliness and Significance of Decisions

43
 PRINCIPLES OF
MANAGEMENT, 7E
P C Tripathi I P N Reddy I Ashish Bajpai

Chapter
Staffing

44
 Staffing Phase of Management Function

➢ Filling and keeping the positions provided for by the organisation

structure with the right human resource/people is the staffing
phase of the management function.
➢ It includes several sub-functions:
▪ Recruitment, or getting applicants for the jobs as they open up.
▪ Selection of the best qualified human resource.
▪ Training those who need further instructions to perform their work
effectively or to qualify for promotions.
▪ Performance appraisal.
▪ Administration of compensation plans.

45
 Importance and Need for Proper Staffing

➢ It helps in discovering talented and competent work force

➢ It ensures greater production/activity
➢ It helps to avoid a sudden disruption of an enterprise’s
production/activity run
➢ It helps to prevent under-utilization of personnel
➢ It provides information to management for the internal succession
of managerial personnel

46
 Manpower Planning
➢ Right Kind of People ➢ Right Number of People In
➢ Job Analysis ➢ Short-term Manpower
Planning
➢ Job Description
➢ Long-term Manpower Planning
➢ Job Specification

Demand and Supply Comparison and Action Plan

47
 Recruitment
Recruitment is identifying, attracting and prompting the
prospective candidates to apply for vacant positions.
➢ Sources of Recruitment ➢ Evaluation of Alternative
▪ Re-employing former
Sources
employees ▪ Time lag
▪ Friends and relatives of ▪ Recruitment ratio
present employees
▪ Employee attitude studies
▪ Applicants at the gate
▪ Correlation between different
▪ College and technical sources of recruitment and
institutions factors of success on the job
▪ Employment exchanges ▪ Data on turnover
▪ Advertising the vacancy ▪ Gross cost per hire
▪ Labour unions Continued…
48
 Recruitment

➢ Internal vs. External Sources of Recruitment

▪ From the point of view of its impact on motivation,

recruitment from external sources is not desirable, particularly
when an adequate number of qualified persons is already
available inside the organisation.
▪ On the other hand, when the internal candidates are too
advanced in age, it may become imperative for the
management to tap outside sources for recruitment.

49
 Selection And Its Procedure

Selection is the choosing the right person for a job.

➢ Application blank
➢ Initial interview of the candidate
➢ Employment tests
▪ Aptitude / Interest / Intelligence / Performance / Personality
test
➢ Checking references
➢ Physical or medical examination
➢ Final interview

50
 Placement and Induction (Orientation)

➢ The process of placing the right man on – Showing the newcomer around
the right job is called placement.
– Giving additional information
➢ In the first phase, induction is done by
the HR department which provides the – Explaining the importance of his job
employee all sorts of information
relating to the company. – Introducing the newcomer

➢ A 10-step programme is followed in the – Telling the newcomer his duties

second phase (buddy system):
– Selecting a person who can assist the
– Greeting the newcomer newcomer

– Displaying a personal interest – Following up frequently

– Reviewing terms of appointment

51
 Manpower Planning in India
➢ Focus on manpower planning

▪ Widespread organisational restructuring and rapid change in production technology

▪ Shortage of talented and skilled manpower

▪ Change in the profile of the work force

▪ Demand for change in recruitment procedures

▪ Enactment of new laws

▪ Enormous increase in the number of applicants per vacant post

▪ Number of misfits who unable to adjust

▪ Greater demand for internal promotions and career planning

▪ Incompetent employees cannot be easily dismissed

▪ Reducing employee costs/growth of contingent workforce

Continued…
52
 Manpower Planning in India

➢ Sources of Recruitment in India ▪ Labour contractors and

outsourcing
▪ Internal Sources: In many
organisations in India, at the time ▪ Technical and other institutes
of new vacancies, preference is
given to people from within the ▪ Relations of existing
organization employees

▪ External Sources ▪ Walk-in interviews

• Badli workers ▪ Employee referrals

• Employment exchanges ▪ Bureau of public enterprises

• Advertisement in ▪ Poaching or head-hunting

newspapers
▪ Advertisement on the net
Continued…
53
 Manpower planning in India
➢ Use of Trade and Psychological Tests by Indian Companies:
Psychological tests which are extensively used in the United States
are rarely applied in India.
▪ Few tests in use in the Indian industry which are standardised by
Indian psychologists.

▪ Tests are sometimes devised by persons who have inadequate

knowledge of psychology.

▪ There being an unusually high number of applicants for every vacancy,

the main problem facing an employer in India is how to reject a
majority of them without opening himself to the charge of favouritism.

▪ The rise of trade unions.

54
 Staffing from a Global Perspective
➢ An MNE can draw its rank and file employees either from the country in
which it is headquartered, or from the country where its overseas
operation is located, or from a third country.
➢ Most employees of MNEs are HCNs or foreign employees because they:
▪ Are most widely available
▪ Know more about the local environment
▪ Are cheaper than home country nationals
▪ Satisfy the local laws
➢ Expatriates Selection: Among the attributes that MNEs look for in an
expatriate are cultural empathy, adaptability and flexibility, language
skills, education, leadership, maturity and motivation.

55
 PRINCIPLES OF
MANAGEMENT, 7E
P C Tripathi I P N Reddy I Ashish Bajpai

Chapter
Direction and Supervision

56
 Nature of Motivation
Motivation is not an easily observed phenomenon. We observe an
individual’s actions and then interpret his observed behavior in terms of
underlying motivation.
➢ Individuals differ in their motives - The viewpoint (called “monistic
approach”) that there is only one “economic drive” which determines
behavior is untenable. There is no single motive that determines how all
workers will react to the same job and, therefore, there can be no single
strategy that will keep motivation and productivity high for everyone
everywhere.
➢ Sometimes the individual himself is unaware of his motive - The
presence of below-the-surface concept is unconscious motive which
explains why man cannot always verbalize his motive to attain certain
goals or even tell what his goals are.
Continued…

57
 Nature of Motivation
➢ Motives change - Hierarchy of motives of each individual called
“structure” is not fixed. It changes from time to time. An individual’s
primary motive today may not be primary tomorrow, even though he may
continue to behave in the same way.
➢ Motives are expressed differently - The ways in which motives are
eventually translated into actions also vary considerably between one
individual and another. One individual with a strong security motive may
play it safe and avoid accepting responsibility for fear of failing and being
fired. Another individual with the same security motive may seek out
responsibility for fear of being fired for low performance.
➢ Motives are complex - It is difficult to explain and predict the behavior of
workers. The introduction of an apparently favorable motivational device
may not necessarily achieve the desired ends if it brings opposing motives
into play.
Continued…
58
 Nature of Motivation
➢ Multiple motives make the choice of goals difficult for an individual -
Motives do not exist one at a time. This is hardly the case. The fact is that
multiple motives operate simultaneously to influence an individual’s
behavior.
➢ Furthermore, some of these motives are incompatible with one another.
This results in the following three types of motivational conflicts which
make the person’s choice of goal difficult:
i. Approach-approach conflict where the person has two motives which he
likes equally well, but it is possible to have only one.
ii. Avoidance-avoidance conflict where the person is forced to choose
between two motives, both of which are considered equally undesirable by
him.
iii. Approach-avoidance conflict where the person is attracted to the positive
characteristics of his motive, but wants to avoid its negative characteristics.

59
 Motivation Theories

We can classify motivation theories under three broad heads:

The content theories tell us what motivates an individual. They throw light
on the various needs and incentives which cause behavior.

The process theories, on the other hand, answer the question how behavior
is caused.

Reinforcement theory explains the ways in which behavior is learned, shaped

or modified.

Continued….
60
 Motivation Theories

➢ Content theories
Some important theories under each head are as under:
➢ Maslow’s Need Hierarchy Theory
➢ Alderfer’s ERG Theory
➢ Herzberg’s Two-Factor Theory
➢ McClelland’s Achievement Theory

➢ Process Theories
▪ Victor Vroom’s Expectancy Theory
▪ Adam’s Equity Theory

➢ Reinforcement Theory
▪ Skinner’s Behavior Modification Theory
61
 Motivation Theories

➢Maslow’s Need-Hierarchy Theory

▪ All people have a variety of needs.
▪ At any given time, some of these needs are satisfied and others are unsatisfied.
▪ An unsatisfied need is the starting point in the motivation process. It begins the chain of
events leading to behavior.
 Motivation Theories

5th Self-
Maslow’s Order of priority fulfillment
of human needs
4th
Esteem

3rd
Social

2nd Safety
security

1st Basic
Physiological
needs
Continued….

63
 Motivation Theories
Characteristics of Human Needs

Lower-order needs Higher-order needs

➢Being related to the physiology of an ➢Being related to the mind and spirit of an
individual, these needs are explicit and individual, these needs are hidden and nebulous. It
not hidden. It is, therefore, easy to is, therefore, very difficult for others, even for the
understand these needs. individual himself to understand them.
➢These needs are finite ➢These needs are infinite.
➢These needs are universal but vary in ➢These needs are not universal and may even
intensity from individual to individual. exist as opposites in two persons. One person may
➢These needs are conditioned by social find satisfaction in being aggressive, another in
practice, e.g., if it is customary to eat being submissive.
breakfast in the morning then the body ➢These needs are strongly conditioned by
comes to respond accordingly. experience, and maturity.
➢These needs are primarily satisfied ➢These needs are primarily satisfied through
through the economic symbolic behavior of the psychic and social
behavior, i.e., by earning more money. content.
Continued…
64
 Motivation Theories
➢ Herzberg’s Two-Factor Theory
▪ According to Herzberg, the absence of certain job factors tends to make
workers dissatisfied. However, the presence of these same factors in
themselves does not produce high levels of motivation.
▪ They merely help avoid dissatisfaction and the problems it creates, such as
absenteeism, turnover and grievances.
▪ Herzberg called these factors maintenance or hygiene factors since they are
necessary to maintain a reasonable level of satisfaction to serve as a take-off
point for motivation.
▪ A good relationship with one’s subordinates
▪ A fair salary
▪ Job security
▪ Personal life
▪ Good working conditions
▪ Status, i.e., relative ranking that a person holds in a group
Continued…
65
 Motivation Theories
▪ To build high levels of motivation, a different set of factors is necessary.
Herzberg called these as ‘motivators’ or ‘satisfiers’.
▪ These are six in number:
i. Opportunity to accomplish something significant
ii. Recognition for significant accomplishments
iii. Chance for advancement
iv. Opportunity to grow and develop on the job
v. Chance for increased responsibility
vi. The job itself

Continued…

66
McGregor's theory X&Y
Theory X: the assumption that employees dislike
work, are lazy, avoid responsibility, and must be
coerced to perform.

Theory Y: the assumption that employees are

creative, enjoy work, seek responsibility, and can
exercise self-direction.
 Performance Appraisal

• It is a systematic and objective way of judging the relative worth of

ability of an employee in performing his task.

Performance appraisal has a number of specific objectives:

• To review past performance.
• To assess training needs.
• To help develop individuals.
• To audit the skills within an organization.
• To set targets for future performance.
 Performance Appraisal Methods

• Free essay method

• Management by objectives

• 360 degree feedback

• Assessment centres
 Types of Appraisal Bias

• Halo effect
• Horn effect
• Central tendency
• Status effect
• First impression error
• Personal prejudice
• Similarity error/similar to me error.
 PRINCIPLES OF
MANAGEMENT, 7E
P C Tripathi I P N Reddy I Ashish Bajpai

Chapter
Direction and Supervision

71
 Nature of Motivation
Motivation is not an easily observed phenomenon. We observe an
individual’s actions and then interpret his observed behavior in terms of
underlying motivation.
➢ Individuals differ in their motives - The viewpoint (called “monistic
approach”) that there is only one “economic drive” which determines
behavior is untenable. There is no single motive that determines how all
workers will react to the same job and, therefore, there can be no single
strategy that will keep motivation and productivity high for everyone
everywhere.
➢ Sometimes the individual himself is unaware of his motive - The
presence of below-the-surface concept is unconscious motive which
explains why man cannot always verbalize his motive to attain certain
goals or even tell what his goals are.
Continued…

72
 Nature of Motivation
➢ Motives change - Hierarchy of motives of each individual called
“structure” is not fixed. It changes from time to time. An individual’s
primary motive today may not be primary tomorrow, even though he may
continue to behave in the same way.
➢ Motives are expressed differently - The ways in which motives are
eventually translated into actions also vary considerably between one
individual and another. One individual with a strong security motive may
play it safe and avoid accepting responsibility for fear of failing and being
fired. Another individual with the same security motive may seek out
responsibility for fear of being fired for low performance.
➢ Motives are complex - It is difficult to explain and predict the behavior of
workers. The introduction of an apparently favorable motivational device
may not necessarily achieve the desired ends if it brings opposing motives
into play.
Continued…
73
 Nature of Motivation
➢ Multiple motives make the choice of goals difficult for an individual -
Motives do not exist one at a time. This is hardly the case. The fact is that
multiple motives operate simultaneously to influence an individual’s
behavior.
➢ Furthermore, some of these motives are incompatible with one another.
This results in the following three types of motivational conflicts which
make the person’s choice of goal difficult:
i. Approach-approach conflict where the person has two motives which he
likes equally well, but it is possible to have only one.
ii. Avoidance-avoidance conflict where the person is forced to choose
between two motives, both of which are considered equally undesirable by
him.
iii. Approach-avoidance conflict where the person is attracted to the positive
characteristics of his motive, but wants to avoid its negative characteristics.

74
 Motivation Theories

We can classify motivation theories under three broad heads:

The content theories tell us what motivates an individual. They throw light
on the various needs and incentives which cause behavior.

The process theories, on the other hand, answer the question how behavior
is caused.

Reinforcement theory explains the ways in which behavior is learned, shaped

or modified.

Continued….
75
 Motivation Theories

➢ Content theories
Some important theories under each head are as under:
➢ Maslow’s Need Hierarchy Theory
➢ Alderfer’s ERG Theory
➢ Herzberg’s Two-Factor Theory
➢ McClelland’s Achievement Theory

➢ Process Theories
▪ Victor Vroom’s Expectancy Theory
▪ Adam’s Equity Theory

➢ Reinforcement Theory
▪ Skinner’s Behavior Modification Theory
76
 Motivation Theories

➢Maslow’s Need-Hierarchy Theory

▪ All people have a variety of needs.
▪ At any given time, some of these needs are satisfied and others are unsatisfied.
▪ An unsatisfied need is the starting point in the motivation process. It begins the chain of
events leading to behavior.
 Motivation Theories

5th Self-
Maslow’s Order of priority fulfillment
of human needs
4th
Esteem

3rd
Social

2nd Safety
security

1st Basic
Physiological
needs
Continued….

78
 Motivation Theories
Characteristics of Human Needs

Lower-order needs Higher-order needs

➢Being related to the physiology of an ➢Being related to the mind and spirit of an
individual, these needs are explicit and individual, these needs are hidden and nebulous. It
not hidden. It is, therefore, easy to is, therefore, very difficult for others, even for the
understand these needs. individual himself to understand them.
➢These needs are finite ➢These needs are infinite.
➢These needs are universal but vary in ➢These needs are not universal and may even
intensity from individual to individual. exist as opposites in two persons. One person may
➢These needs are conditioned by social find satisfaction in being aggressive, another in
practice, e.g., if it is customary to eat being submissive.
breakfast in the morning then the body ➢These needs are strongly conditioned by
comes to respond accordingly. experience, and maturity.
➢These needs are primarily satisfied ➢These needs are primarily satisfied through
through the economic symbolic behavior of the psychic and social
behavior, i.e., by earning more money. content.
Continued…
79
 Motivation Theories
➢ Herzberg’s Two-Factor Theory
▪ According to Herzberg, the absence of certain job factors tends to make
workers dissatisfied. However, the presence of these same factors in
themselves does not produce high levels of motivation.
▪ They merely help avoid dissatisfaction and the problems it creates, such as
absenteeism, turnover and grievances.
▪ Herzberg called these factors maintenance or hygiene factors since they are
necessary to maintain a reasonable level of satisfaction to serve as a take-off
point for motivation.
▪ A good relationship with one’s subordinates
▪ A fair salary
▪ Job security
▪ Personal life
▪ Good working conditions
▪ Status, i.e., relative ranking that a person holds in a group
Continued…
80
 Motivation Theories
▪ To build high levels of motivation, a different set of factors is necessary.
Herzberg called these as ‘motivators’ or ‘satisfiers’.
▪ These are six in number:
i. Opportunity to accomplish something significant
ii. Recognition for significant accomplishments
iii. Chance for advancement
iv. Opportunity to grow and develop on the job
v. Chance for increased responsibility
vi. The job itself

Continued…

81
McGregor's theory X&Y
Theory X: the assumption that employees dislike
work, are lazy, avoid responsibility, and must be
coerced to perform.

Theory Y: the assumption that employees are

creative, enjoy work, seek responsibility, and can
exercise self-direction.
 Performance Appraisal

• It is a systematic and objective way of judging the relative worth of

ability of an employee in performing his task.

Performance appraisal has a number of specific objectives:

• To review past performance.
• To assess training needs.
• To help develop individuals.
• To audit the skills within an organization.
• To set targets for future performance.
 Performance Appraisal Methods

• Free essay method

• Management by objectives

• 360 degree feedback

• Assessment centres
 Types of Appraisal Bias

• Halo effect
• Horn effect
• Central tendency
• Status effect
• First impression error
• Personal prejudice
• Similarity error/similar to me error.