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Lec Controlling

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MUHAMMAD YASIN
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0% found this document useful (0 votes)
25 views33 pages

Lec Controlling

Uploaded by

MUHAMMAD YASIN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Controlling

1
Controlling as a Management
Function
Controlling
A process of monitoring performance and
taking action to ensure desired results.
It sees to it that the right things happen, in the
right ways, and at the right time.

2
Controlling as a Management
Function
Controlling;
Controlling is the management function in
which managers establish and communicate
performance standards for people, processes,
and devices.
Done well, it ensures that the overall
directions of individuals and groups are
consistent with short and long range plans.
It helps ensure that objectives and
accomplishments are consistent with one
another throughout an organization.

3
Controlling as a Management
Function
Controlling
It helps maintain compliance with essential
organizational rules and policies.

4
The Control Process
Establish objectives and standards.
Measure actual performance.
Compare results with objectives and
standards.
Take necessary action.

5
Establish Objectives and Standards
The control process begins with planning and
the establishment of performance objectives.
Performance objectives are defined and the
standards for measuring them are set.

6
Establish Objectives and Standards

There are two types of standards:


Output Standards - measures performance
results in terms of quantity, quality, cost, or
time.
Input Standards - measures work efforts that
go into a performance task.

7
Measuring Actual Performance
Measurements must be accurate enough
to spot deviations or variances between
what really occurs and what is most
desired.
Without measurement, effective control is
not possible.

8
Comparing Results with Objectives
and Standards

The comparison of actual performance


with desired performance establishes the
need for action.
Ways of making such comparisons
include:
Historical / Relative / Engineering
Benchmarking

9
Taking Corrective Action

Taking any action necessary to correct


or improve things.
Management-by-Exception focuses
managerial attention on substantial
differences between actual and desired
performance.

10
Taking Corrective Action
Management-by Exception can save the
managers time, energy, and other resources,
and concentrates efforts on areas showing
the greatest need.
There are two types of exceptions:
Problems - below standard
Opportunities - above standard

11
Effective Controls
The Best Controls in Organizations
are
Strategic and results oriented
Understandable
Encourage self-control

12
Effective Controls
The Best Controls in Organizations are
Timely and exception oriented
Positive in nature
Fair and objective
Flexible

13
Types of Control
Preliminary
Sometimes called the feedforward
controls, they are accomplished before a
work activity begins.
They make sure that proper directions are
set and that the right resources are
available to accomplish them.

14
Types of Control
Concurrent
Focus on what happens during the work
process. Sometimes called steering controls,
they monitor ongoing operations and
activities to make sure that things are being
done correctly.

15
Types of Control
Postaction
Sometimes called feedback controls, they
take place after an action is completed.
They focus on end results, as opposed to
inputs and activities.

16
Types of Controls
Managers have two broad options with
respect to control.
They can rely on people to exercise self-
control (internal) over their own behavior.
Alternatively, managers can take direct
action (external) to control the behavior of
others.

17
Types of Control
Internal Controls
Allows motivated individuals to exercise
self-control in fulfilling job expectations.
The potential for self-control is enhanced
when capable people have clear
performance objectives and proper
resource support.

18
Types of Control
External Controls
It occurs through personal supervision
and the use of formal administrative
systems.
Performance appraisal systems, compensation
and benefit systems, employee discipline
systems, and management-by-objectives.

19
Organizational Control Systems
Management Processes
Strategy and objectives
Policies and procedures
Selection and training
Performance appraisal
Job design and work structures
Performance modeling, norms, and
organization culture

20
Organizational Control Systems
Compensation and Benefits
Attract talented people and retain them.
Motivate people to exert maximum effort
in their work.
Recognize the value of their performance
contributions.

21
Organizational Control Systems
Employee Discipline
Discipline is defined as influencing behavior
through reprimand.
Progressive Discipline ties reprimand to the
severity and frequency of the employee’s
infractions.
Positive Discipline tries to involve people
more positively and directly in making
decisions to improve their behavior.

22
The “Hot Stove Rule”
To be Effective Discipline Should be:
Immediate Informative
Focus on activity Occur in a
not personality supportive setting
Consistent Support realistic
rules

23
Organizational Control Systems
Information and Financial
Activity-based costing - the true cost of all
products and services.
Economic value added - examine the value
added by all activities.
Understand the implication of key financial
measures of (ratios) organizational
performance

24
Operations Management and
Control
Project Management
Program Evaluation and Review Technique
(PERT) - Identifies and controls the many
separate events in complex projects.

25
Operations Management and
Control
Statistical Quality Control
Based on the establishment of upper and
lower control limits, that can be graphically
and statistically monitored to ensure that
products meet standards.

26
Performance Appraisal
Performance Appraisal is a process that
helps organization to improve its human
resource’s productivity to achieve some
objectives and goals

27
Performance appraisal tools
Purposes:
The assessment of past effectiveness and setting of new Performance
targets
The assessment of present salary levels and setting of new levels or
relation of performance to pay
The assessment of training and development needs, and identification of
strategies for meeting them
The assessment of potential for promotion and development with
succession planning
The assessment of individual progress and assistance with career planning
decisions
The enhancement of motivation and communication

.

28
Methods of performance
appraisal
Rating scale: it is a method of rating a person
against a set standard, which may be the job
description, desired behaviors, or personal traits.
The rating scale is the most widely used of the
many available appraisal methods.
Traditional Methods: These methods are used by
organization since very long time. It appraises
employees on the bases of their traits. This type
includes several methods and related to self-
appraisal of employee. These are:

29
cntt
Essay Appraisal Method: This method used by
rater to explain employee’s strengths, weaknesses,
potentiality etc. also give suggestion for
improvement in written form (Cascio, 2006).

Straight Ranking Method: Rater rate employees


from top to bottom or best to worse on the bases of
performance behavior (Kreitner, 2008).

Critical Incident Method: Supervisor appraises


subjective behavior of employee in a particular
task or job (Cascio, 2006).
30
Check List Method: Appraiser appraise
employee by prepare a list of normal behavior and
check it according to once behavior (Cascio,
2006).

Graphic Rating Scale: In this method each


employee rated on the bases of characteristics
and it is a graphical representation (Denisi &
Griffin, 2005).
Forced Distribution: It make clear difference
between successful and unsuccessful performance
of employees (Denisi & Griffin, 2005).
31
 Modern Methods: This type of appraisal includes various
methods that are introduced from past few decades. It also called
results method.
These include:
Management by Objectives: It rates employees on the bases of
achievement of goals that are mutually decided by manager and
employees (Denisi & Griffin, 2005).

360 degree appraisal: appraise employee’s performance from 4


sides that mean manager, subordinate, peer group and customer
give feedback about an employee (Kreitner, 2008).

Interview Method: It provides a way to subordinate to discuss


about performance and areas of improvement with employee
(Denisi & Griffin, 2005).

32
Behaviorally Anchored Rating Scale (BARS).

Checklists
Job dimension scales
Essays

33

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