MODULE 5: CONTROLLING
Controlling is a primary goal-oriented function of • It is forward looking – effective control is not
management in an organization. It is a process of possible without the past being controlled.
comparing the actual performance with the set • It always looks to future – follow-up can be made
standards of the company to ensure that activities are whenever required.
performed according to the plans, and if not, then • It is a dynamic process – since it requires taking
taking corrective action. review methods, changes have to be made
wherever possible.
Controlling is an extension of the planning process that • It is related with planning – as established
ensures conformity to a planned agenda. previously, controlling and planning are
• Actions of individuals (job descriptions, inseparable.
qualification, responsibilities)
• Process (procedures, protocols, specifications) Process of Controlling
• Resources (time, budget, supplies/inventories)
Step 1: Establishment of Standards
Controlling as defined by: Standards are the plans or the targets which have to
• Brech: “Controlling is a systematic exercise which is be achieved in the course of business function. They
called as a process of checking actual can also be called as the criterions for judging the
performance against the standards or plans with a performance.
view to ensure adequate progress and also
recording such experience is gained as a Standards are generally classified into two:
contribution to possible future needs.” • Measurable or tangible - can be measured and
expressed quantitatively. They can be in the form
• Theo Haimann: “Controlling is the process of of cost, output, expenditure, time, profit, etc.
checking whether or not proper progress is being • Non-measurable or intangible - can be measured
made towards the objectives and goals and and expressed qualitatively. For example, a work
acting if necessary, to correct any deviation”. performance of an employee
• Koontz & O’Donell: “Controlling is the measurement Step 2: Measurement of Performance
& correction of performance activities of Finding out results and deviations becomes easy
subordinates in order to make sure that the through measuring the actual work performance. This
enterprise objectives and plans desired to obtain can be done through regular reports, be it weekly,
them as being accomplished” monthly, or yearly.
Relationship of Planning & Controlling Qualitative performance evaluation:
• Attitude of the workers
• Their morale to work
• The development in the attitudes regarding the
physical environment
• Their communication with the superiors
Planning precedes controlling and controlling
succeeds planning. Activities are put on rails by Step 3: Comparison of Actual & Standard Performance
planning, and they are kept at the right place through The gaps between the actual performance and the
controlling. planned targets or deviations should be determined.
6 Major Purposes of Control: Extent of deviation
• Make plans effective Is the deviation positive or negative? Did the actual
• Make sure that organizational activities are performance conform with the planned performance?
consistent Is the deviation critical and important for business?
• Make organizations effective
• Make organizations efficient Examples of major deviations are the replacement of
• Provide feedback on project status machinery, the appointment of workers, the quality of
• Aid in decision-making raw material, the rate of profits, etc.
Characteristics of Controlling: Step 4: Determine the Causes of Deviation
• It is an end function – it comes once the What lead the workers to provide this kind of
performances are made in conformities with plans. performance? Is the planning erroneous? Is
• It is pervasive (prevalent/persistent) function – it is coordination loose? Is supervision and communication
performed by managers at all levels and in all type ineffective?
of concerns.
Step 5: Taking Remedial Actions their finances, but also help them keep track of their
After determining the deviations, they should be overall spending.
addressed accordingly. While this signifies the end of
the controlling process, it is important to remember to Budget is both a planning tool and a control
always follow up to check if the remedial actions are mechanism. Budget development processes vary
working. among organizations according to who does the
budgeting and how the financial resources are
Corrective measures should be implemented for allocated.
negative deviations. For positive deviations, there can
be revision of plans to further improve performance. 2. Marketing Control
Helps monitor progress toward goals for customer
Types of Control satisfaction with products and services, prices, and
delivery. Customer retention and satisfaction are key
ingredients in the success of the business. The following
are examples of controls used to evaluate an
organization's marketing functions:
• Market research – gathers data to assess customer
needs, reflects how well an organization is meeting
customers' expectations, and helps identify
competitors
• Test marketing – small‐ scale product marketing to
assess customer acceptance by using surveys and
focus groups.
• Marketing statistics – measure performance by
• Feedforward control
compiling data and analyzing results.
Proactivity is the monitoring of problems in a way that
provides their timely prevention (rather than after the
Measure profitability, activity, and market shares, as
fact reaction). It addresses what to do ahead of time
well as progress toward sales goals.
to help the plan succeed.
3. Human Resource Control
Purpose: to see the problems coming in time to do
Human resource controls help managers regulate the
something about them.
quality of newly hired personnel, as well as monitor
current employees' developments and daily
Example: preventive maintenance on machinery and
performances.
equipment and due diligence on investments.
The manager makes sure that goals are clearly set and
• Concurrent control
understood. Managers can also institute policies and
The process of monitoring and adjusting on going
procedures to help guide workers' actions. Managers
activities and processes. Such controls are not
can consider past experiences when developing
necessarily proactive, but they can prevent problems
future strategies, objectives, policies, and procedures.
from becoming worse. For this reason, we often
describe concurrent control as real-time control
Performance Appraisal
because is deals with the present.
A common HR control type. A developmental phase
Example: adjusting the water temperature of the water
for personnel whereby his performance and inherent
while taking a shower.
capabilities are evaluated relative to his ability and
capacity to deliver the work assigned. An appraisal
• Feedback control
(evaluation) form is used in the process.
Gathering information about a completed activity.
Evaluating the information and taking steps to improve
Four Approaches of Appraising Current Performance:
the similar activities in the future.
• Appraisal by the superior himself
• Group appraisal
Organizational Control Systems or Techniques
• Self-appraisal
• Approval of potential for advancement
These control techniques provide managers with the
type and amount of information they need to measure
Performance counseling
and monitor performance.
Discussing appraisal findings with the person
concerned in order to help and guide him develop or
1. Budget Control
improve.
The budget depicts how much an organization
expects to spend (expenses) and earn (revenues) over
a time period. Budgets not only help managers plan
Factors that can be evaluated in an Appraisal
• Units of Output Done – within a time frame. • Job Knowledge – adequate knowledge on job
Measured through sales per week or prescriptions descriptions, pharmacy, and parent company
dispensed per day. policies.
• Quality of Work – seen via frequency of prescription • Ability and willingness to work with others –
errors, incorrect transactions, complaints, and unquantifiable factor that can only be assessed
other clerical mistakes that can compromise the through observing employee dynamics and
operations of the pharmacy. monitoring conflict.
• Dependability – unquantifiable factor that is • Initiative and ability to handle ambiguity – refers to
difficult to measure. A factor that is dependent on the degree to which employees can work on their
quality of work, punctuality, degree to which an own.
employee can be relied on to do tasks.
Appraisal Process
Approaches for Performance Appraisal:
Methods in Conducting Appraisals
• Traditional appraisal – manager discusses with the
employee the latter’s performance during the • Essay Appraisal
previous performance period. It is done based on • Ranking Method – employees are ranked and
observation and evaluation. compared to one another in terms of their work
performance.
• Upward feedback – delivering feedback from • Critical Incident Appraisal – superior describes
subordinates to superiors by increasing incidents, giving details on both positive and
management effectiveness. This appraisal is a two- negative behaviors of the employee.
way. • Management by Objectives – employees set their
own realistic performance goals.
• 360O/Multi-rater feedback – employees assess the • Personnel Compensation and benefits
manager and vice versa and feedback for • Graphic Rating Scale Measure
employees comes from self- assessment and
external sources like supervisors and customers. The
feedback for managers likewise comes.
• Self-appraisal approach – evaluation of own
performance 1-2 weeks before performance
review that gives a chance to compare their
impression of their performance with that of the
employer.
• Trait approach – based on observable dimensions
of personality like integrity, honesty, punctuality,
and dependability.
• Results approach – appraisal on work
achievements judged against goals set mutually
by the supervisor and the subordinate.
Employee Discipline improves, resigns or is terminated. The goal is to
The Hot Stove Rule states that: “To be effective, encourage and foster optimal behavior and Improve
discipline should be immediate, focused on activity not employee behavior. Disciplinary actions should be
personality, consistent, informative, occur in a prompt, commensurate with the violation, and clearly
supportive setting and support realistic rules.” explained.
As a manager, one must consider the following in Steps in Progressive Discipline:
grading employees: • Verbal warning
• Disregard your general impression and • Formal written warning
concentrate on a single factor at a time. • Final written warning
• Read all four specifications for each factor before • Suspension without pay – temporary release of an
determining which one closely fits the employee. employee from duty for a specified number of
• Make your judgement on instances that frequently days.
occur in his or her daily routine. Do not be swayed • Termination or dismissal – heads of the unit are
by isolated incidents that are not typical of his or authorized to initiate the dismissal and to set the
her work. effective date. Employee must be notified 2 weeks
• Do not let personal feelings govern your rating. prior.
Accomplish it carefully so that it represents your fair
and objective opinion. IMPROVING EMPLOYEE RELATIONS
Ways to improve employee relations:
Other Areas of Control • Quick Recognition
• Airing complaints
COMPUTERS AND INFORMATION CONTROL • Equitable Resolution
Almost all organizations have confidential and sensitive • Transfer
information that they do not want to become general • Promotion
knowledge. Controlling access to computer
databases is the key to this area. Computers are being
used to collect and store information for control
purposes. Managers must carefully weigh the benefits
against the costs—both human and financial—before
investing in and implementing computerized control
techniques.
Limitations of the use of Information Technology:
• Performance limitations
Replacing long‐time organizational employees with
information systems technology may result in the loss of
expert knowledge that these individuals hold.
Computerized information systems are expensive and
difficult to develop. Company may cut corners or install
the system carelessly to the detriment of the system's
performance and utility.
• Behavioral limitations
Information technology allows managers to access
more information than ever before. Too much
information can overwhelm employees that can cause
stress and slow decision making. Managing the quality
and amount of information available to avoid
information overload is important.
• Health risks
Health‐related issues associated with the use of
computers and other information technology like
carpal tunnel syndrome: a painful disorder in the hands
and wrists caused by repetitive movements (such as
those made on a keyboard).
PROGRESSIVE DISCIPLINE
Series of acts taken by the management to address
unacceptable actions committed by employees. It
becomes progressively severe until the employee
