OPEN QUESTIONS OF THE FINAL EXAM

LESSON 3

Q1. Frederick Taylor.

His main interest was to increase productivity which would raise profits for the businessmen and
increase workers’ salaries and wages.
Taylor saw so many inefficiencies that he developed a scientific business administration method.

Four principles of Taylor:

1. Scientific study of every job, every task, and every process to develop the best method to
achieve the result/solution.
2. Select carefully the worker/employee.
3. Total cooperation with workers.
4. Divide work and planning, so managers will be in charge of planning and workers will do
their job.

Taylor gave some advice to use these principles, as they are too general.
The problem with Taylor’s theory is that it doesn’t take into account the needs of workers. Working
conditions are dehumanized.

Q2. Henry Fayol.

Fayol rationalizes the process from another perspective. The top manager's perspective, from top
to bottom (Taylor, however, rationalizes in the other way, from bottom to top).

Most important principles:

 One boss: Every worker needs 1 boss
 One goal: All the sacrifices/ efforts must be focused to achieve the objectives.
 Equality: Workers must be treated with respect and equally.

Q3. Max Weber.

He saw the ideal organization as a bureaucratic model. Bureaucracy is a closed system based on
relations of authority.
Weber didn`t want despotic bosses, he wanted formal rules and a hierarchical pyramid.

Characteristics of the Ideal Bureaucracy

 Relations between members must be impersonal and ruled by formal criteria, not by
friendship or social groups.
 Division of labor and specialization
 There has to be a hierarchy
 Detail description of every job
 Fixed/established proceedings, rules, procedures
 Hire the employees according to their ability
 Write down all the decisions
 Separate the property and the management.
Q4. Behavioralist school.

Elton Mayo:
 If one manager has an interest in his workers, the motivation and productivity will rise.
Ovid, metamorphoses, Pygmalion  Pygmalion effect
 The influence of the colleges is as important as the influence of the supervisor.

Abraham Maslow
 He developed the theory of motivation based on the theory of needs.
 When you satisfy one need you will have a higher one.
 Management can motivate workers by offering them a good environment to satisfy their
needs.
 For Maslow the salary only motivates to cover the basic needs of the lowest level, and once
they are satisfied, it loses its power. Non-monetary factors such as recognition or job
characteristics help to motivate employees.

Douglas McGregor
He developed a theory of managers and their relationship with their workers.
He distinguishes between:
 Managers that use X theory: They think that workers don´t like their jobs, so they punish
and reward the employees to lead them to the objectives. There is no initiative and
creativity. Inefficient theory, lose all the potential of the workers.
 Managers that use Y theory: They think that workers like their jobs, and give good ideas to
the organization. They encourage creativity, they share the power and responsibility with
the workers so they have a deeper commitment.
McGregor encourages to use of Y theory to maximize the potential of workers.

Q5. Planning. Concept, Mission, and Vision.

Concept:
 It´s a tool that companies use to predict the future and reduce uncertainty
 We have more reasons to plan:
o More commitment to the organization. Members will understand better who they
are and where they are going, their objectives.
o It makes the change process easier. As you know the objectives, and where you
should be, if there is any deviation you know it´s time to change
o Establishes rules and makes control easier

MISSION: Reason of the business, where are we and who are we?
VISION: Where do we want to be? Who do we want to be?

Planning process:
1. Identify opportunities and problems
2. Identify the objectives
3. Identify the alternatives
4. Analyse the alternatives
5. Choose an alternative
6. Choose an exit plan (Plan B)
7. Implement and control the plan
Q6. Types of planning.

According to their nature:

 FORMAL: It´s transmitted by formal courses, which means that it´s written. Ex: Budget
 INFORMAL: That means that is not written. Ex: Plan your week

According to the importance:

 STRATEGIC: It covers the entire company. It´s made by top managers. Long-term plan,
usually between 3 and 5 years.
 TACTICAL: Covers department it´s usually made by middle management. Medium-term,
between 1 and 3 years.
 OPERATIONAL: Covers one section. First-line managers. Short-term planning, less than 1
year.

According to the time:

 SHORT TERM: One year or less. They must be integrated into long-term plans.
 LONG TERM: Great variety of durations. Most usual is between 3 and 5 years. However,
some companies plan 2 years, and others 20 years

According to a general view:

 SPECIFIC: Clear objectives. Usually, it´s tactical and operational, and short-term.
 GENERAL: Not so clear objectives. Usually is a long-term strategy

According to frequency:
 ONE USE: You use one time only
 PERMANENT: They have a repetitive nature. You use them many times

Q7. Elements of the plans.

The great majority of the plans have:

 OBJECTIVES: Also called goals. They are the expected final result.
o There are 5 characteristics in every good objective (SMART)
 Specific: they try to be specific rather than general
 Measurable: You can measure them/quantify them.
 Attainable: Goals must be realistic. You can reach them.
 Results oriented
 Target-dates: You have deadlines, so you know if you are doing the work on
time.
 POLICIES: Guide the thoughts and the action. They create limits, so the different
departments know what to do
 PROCEDURES: Specific guides to act. They fix how to act in different activities
 RULES: They are more strict/severe than procedures. They say what you can do in very
specific situations
 BUDGETS: Give figures to the plans. There are different types of budgets such as cash
budgets (to see treasury needs), income and expense budgets, etc
Q8. Processes of Human Resource Management.

Human resource management is basic in a good organization.

There are different processes:
1. To plan and analyze the different jobs
2. Recruitment, and selection.
3. Training and development
4. Performance appraisal
5. Compensation

This process can be grouped into 3 phases:

1. Find the people/HR
a. Job description and analysis. Workforce planning. Once the needs are known, it will
start the recruitment process.
2. Preserve and develop the people/HR
a. Training plans, career plans
3. Performance and compensation of the people/HR.
a. Performance evaluation, remuneration

Q9. Internal sources of recruiting.

It´s one of the best ways of recruitment. Is to recruit a person that is already working in the
company.
Advertisements must include at least the following information: the name of the job position,
remuneration, and the qualification required.

Q10. External sources of recruiting.

Recruit external people. There is a great variety according to their cost and other circumstances.
We have:
 Candidates proposed by employees
 Advertisements in newspapers or web pages
 Private recruitment companies
 Public recruitment agencies
 Educational institutions
 Company website

Q11. Selection in Human Resource Management.

It´s a combination of techniques to find the most suitable person for a job. Process:
1. Application form
2. Interview; types:
a. Structured interview
b. Unstructured interview
c. Mixed interview
d. Stress interview
e. Panel interview
f. Group interview
g. Phone interview
 3. Employment test
4. Reference check

Q12. Training in Human Resource Management.

Development is used for managers in a specific way, training is used for the operational employees
training is used to improve the skills and knowledge of the workers.

All the training projects have different steps:

1. Identify training needs/necessities
2. Choose the method
3. Control the performance of the training

Training is effective if:

 It´s based on the needs of the company and the worker.
 It´s used to solve the problems.
 It uses appropriate methods.
 You control the final result.

Q13. Personal assessment and ranking of the employees.

Personal assessment:
 Is an evaluation using a rating of personal scales and professional scales.
 In this method employees can also evaluate the boss ( 360-degree assessment) or between
their colleagues and make comparisons.

Ranking of the employees:

 It tries to solve the problem of the assessment. You compare the different workers and rank
them. Put them in a ranking in order the ranking according to certain criteria.

Q14. Critical events and BARS method.

Critical events – 3 stages:

1. Define the behaviors (critical events) that you will use to evaluate the performance, and
inform the workers.
2. Then the managers will see and take notes of those events during the time that you
previously said to the workers.
3. You evaluate those critical events

BARS Method:
 It´s the mix between critical events and personal assessment (rating scales)
 When employee performance is evaluated there is subjectivity and it can lead to different
biases:
o Aura Effect: You evaluate one only characteristic/feature.
o Availability bias: You remember the most recent events
o Not all the bosses make the same assessments, which gives us:
 Indulgence effect
 Intolerance effect
o Other biases
Q15 Compensation in Human Resource Management: Internal equality and external equality.
Type of compensation.

You use the compensation as a tool to attract, retain, and motivate talented staff and
management.
The compensation is a combination of payments that one person receives because of his work.
To have a good salary climate in a company you have to take into account internal equality and
external equality.

Internal equality exists when there is a fair relation according to their work and their salaries.
The salaries are appropriate to/aligned with the market, the sector, to the competitors.

In compensation we have got to study:

 Relation between productivity and remuneration.
 Particular situations of the worker.

Types of compensation - > total compensation:

 Economic
o Monetary
o Non-monetary
 Nonfinancial

Q16. Salary level, salary structure, personal remuneration, payment methods, and incentives.

Salary level:
 In general how are the wages? Question of external equity and if you have competitive
salaries.
 Low  Low salaries  Lower cost but high rotation of your workers
 High  High salaries  High cost and no rotation

Salary structure:
 Relation of the different types of jobs and their salaries. It´s a matter of internal equity.
Salaries are also a way of recognition.

Personal remuneration:
 You must adapt the compensation to individual performance (a good job performance
variable remuneration: bonus and other incentives)

Payment methods:
 Remuneration by time: paid by hour, etc.
o The problem is that it doesn´t distinguish between good and bad employees
 Remuneration by production: paid by piece, etc.
o The workers produce more, the problem is that it is not accepted by trade unions
and workers
Q17. Controlling: General concept, advantages and disadvantages. Balance scorecard.

Planning and controlling are really close, planning without control is useless.
Controlling is to compare the results and the forecasts.
The main factor/element is the information.

Advantages:
 You discover errors, weakness
 You discover opportunities
 Decisions are decentralized, and there is more teamwork

The main disadvantage is the rejection/dislike of the employees because they may consider it an
intrusion into their privacy.

Concept/Idea: It´s a supervision process where results are measured and compared to forecasts to
identify deviations and correct them if it´s necessary.

Balanced scorecard - Summary of the most important information for managers

Q18. Controlling: Steps.

1. Establish standards
a. Normally you establish standards in the planning. The standards are different
analyses of ratios, budgets, and other financial measures. You decide the acceptable
variation of the deviations. You decide when the difference between results and
forecasts are real deviations.
2. Measure performance – several ways:
a. Personal observation
b. Statistic report
c. Oral report
d. Written report
3. Compare results and forecasts
a. Compare the result and the forecast
4. Take corrective action if necessary
a. If there is a deviation you can:
i. Do nothing
ii. Try to correct the result. There is a problem and you’ve got to solve it.
iii. Revise/review/change the standards: They are too high.
Q19. Types of control.

According to the time

 Preventive control: Before the implementation of the activity. Is the best of all the options.
 Contemporary control: You control the implementation of the activity. There is a direct
supervision.
 Corrective control: You solve a problem after it appears. Is the most usual but the damage
is done. Is the worst option.

According to the subject

 Top managers
 Middle managers
 First time managers
 Operational managers

According to the area of control

 The whole company
 A department or unit
 A person

According to the term/period

 Daily
 Weekly
 Monthly
 Annual