Human relation theory_l5

Human Relations Theory

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Human Relations Theory• 2nd approach to organizational

analysis. Reflects different period.• Human relations (HR) research

began in 1930s as a reaction to classical assumption about people in the work environment.

• HR stresses on the Social & Emotional aspects of the organization i.e Employee orientation

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Human Relations Theory…• Says CT ignores Human Element as

it treats people as ‘cog’ in an organization machine. Dehumanization in Taylor’s SM & Weber’s Ideal Type.

• Strive to harmonize workplace through such things as:– (a) employee counseling program– (b) group-based wage incentives, and– (c) leadership training

Stanley BK Kiai - unimas 3

Human Relations Theory…• Focuses on small groups & social

norms within them, and informal & unplanned pattern of behavior.

• Accepts efficiency & productivity as the legitimate values of an organization.

• Seeks to maximize efficiency & productivity through elimination of dysfunctions caused by:

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Human Relations Theory…– (a) overspecialization– (b) alienating hierarchical arrangements, and– (c) general dehumanization

• Attracts attention from social scientists.• HR theorists condemns the Evils of

Structure. Relates industrial jobs to mental illness & accepts participative mgt

• Replaces by organizational behavior in the 1960s.

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Human Relations Theory…• Discusses 4 HR:

– Abraham Maslow’s Hierarchy of Needs.– Hawthorne’s Research– Douglas McGregor’s Theory X and

Theory Y– Frederick Herzberg's Motivation-

Hygienic Theory

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HR – Abraham Maslow’s Hierarchy of Needs

Self-Actualization

EsteemBelongingness

Safety

Physiological7

HR – Abraham Maslow’s Hierarchy of Needs• The pyramid illustrates the hierarchy of

needs. After one’s need is met, the individual will move on to the next need.

• Five basic needs:(a) Physiological (for food, drink, shelter, sex

and sleep). (b) Safety (security, stability, freedom from

fear). (c) Belongingness & Love (social –relate to

others; about friendship, love and members of the community.

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HR – Abraham Maslow’s Hierarchy of Needs

(d) Esteem/self-respect (achievement, competence, independence, prestige, status)(e) Self-actualization (self-fulfillment,

attaining ultimate goal in life, able to achieve

full potential.

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HR – Abraham Maslow’s Hierarchy of Needs• Maslow’s contention – no ‘best way’ to

motivate workers.• But management must be sensitive to

the fact that workers have variety of needs.

• Implication of the theory: (a) Needs change so motivation change. (b) What motivate people may also

change.

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HR – Abraham Maslow’s Hierarchy of Needs (c) Managers to be aware of the

different needs & recognize the stage the individuals have reached.

(d) Motivation is a reflection of individual’s role in the organization. People at the bottom just want to satisfy their physiological needs, for instance.

(e) satisfaction of needs does not say any thing about improved performance.

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HR – Abraham Maslow’s Hierarchy of Needs• Critics:(a) Individual needs may be satisfied

outside the organization (by family & friendship ties)

(b) People may want to satisfy their needs at the same time.

(c) Self-actualization is hard to explain. Full potential may be realized elsewhere like in sports or hobbies.

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HRHawthorne’s Research• Conducted in the Western Electric

Company in Chicago from 1927-30.• Headed by Elton Mayo.• Experiment begins with a premise

that the physical conditions at work directly affects productivity.

• Hypothesis – increase illumination increases productivity of the worker

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HRHawthorne’s Research• Experiment proceeded by reducing the

lighting – but productivity remain higher.• Experiment concludes that workers

actually respond to the experiment itself, i.e. physical factor.

• Phenomenon called the ‘Hawthorne Effect’

• In the context of the organization – it stands for the premise that social & psychological factors determine workers productivity.

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HRHawthorne’s Research• Departure from the dehumanizing

SM as it sees human factors as key to efficiency.

• Researchers also observe that workers socialize with one another & form an informal group.

• Workers respond to changes in the environment as groups rather than individuals.

• Important conclusion from Hawthorne’s Experiment:

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HRHawthorne’s Research(a) Productivity – strongly affected by

social and psychological factors, not simply by physical ability and stamina.

(b) Non-economic rewards and sanctions significant in determining workers’ motivation and their level of satisfaction.

(c) Highest degree of specialization not necessarily the most efficient approach to dividing labour.

(d) Workers may react to mgt, the organization, and work itself as members of the groups rather than as individuals.

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HRHawthorne’s Research• HRT puts emphasis on:(a) Both the economic and non0economic

needs of the workers.(b) Designing jobs that make workers

socially and psychologically satisfying.(c) Work-management communication in

decision-making.(d) Worker participation in decision-

making.

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Douglas McGregor’s Theory X and Theory Y

• In his book ‘Human Side of the Enterprise’ (New York: McGraw-Hill, 1960) McGregor developed two contrasting approaches to management: Theory X and Theory Y.

• Theory X represents management’s assumptions about employees. Assumption is about human nature.

• The theory leads to establishing a coercive, authoritarian classical structure.

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Douglas McGregor’s Theory X and Theory Y

• Theory Y focuses on employees’ higher order needs. This leads to the design of more human organizations.

• Specialization, close supervision and bureaucratic controls are replaced by job enlargement, participative leadership and self-control.

• Theory X assumes average worker as:(a) Indolent (i.e. disinclined to work).

Workers dislike works. All rational people will do as little as possible. Lazy

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HRDouglas McGregor’s Theory X and Theory Y(b) So workers need to be cajoled (persuaded) or threatened in order to

persuade them to work.(c) Lack ambition.(d) Lack creativity.(e) Largely indifferent to organizational needs, and(f) In favor of close and continuous

supervision.

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HRDouglas McGregor’s Theory X and Theory Y• Theory Y assumes people:(a) Find work natural (as rest and

recreation) and enjoyable. Work activities are great sources of satisfaction. No threat needed.

(b) Have high degree of creativity.(c) Will increase self-control and self-

direction.(d) Highly motivated.

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HRDouglas McGregor’s Theory X and Theory Y

(e) Have potential for development.(f) Have the capacity to assume responsibility (if given the right

direction).(g) Have the readiness to direct behavior towards organizational goals (committed to organizational objectives.

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• “The human system is made up of interlocking work groups with a high degree of group loyalty among members and favourable attitudes and trust between supervisors and subordinates. Sensitivity to others and relatively high levels of skill in personal interaction and functioning of groups also are present. These skills permit active participation in decisions on common problems.. Responsibility for the organisation’s success is felt individually by the members and each initiates action, when necessary, to assure that the organisation accomplishes its objectives. Communication is efficient and effective…The leadership in the organisation has developed what might be called a highly effective social system for interaction and mutual influence”

• (Rinsis Likert, “Human Organisational Measurements: Key to Financial Success,” in Natemeyer, ed., Classic of Organisational Behaviour, pp. 293-97).

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• Importance of McGregor’s theory is about perception.• Critics of organizational humanism approach argue that:(a) Many workers fit the assumption of Theory X more than Theory Y.(b) Organizational humanism lacks empirical groundings.(c) Theory Y is too ideological.(d) Production-conscious managers think it is too employee-centered.(but then both ideologies & technological and scientific development have the potential to change relationship in the workplace)

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HRFrederick Herzberg's Motivation Theory• Argued (1966) that we need to take into account:

(a) The environment where the workers work.(b) Not only the needs and the motivation of the workers

• Developed a theory of 2 sets of factors at work(a) first with the content of work & amount of job satisfaction that an individual receives i.e. the motivation factor which includes:

i. The sense of achievementii. The sense of responsibilityiii. The sense of recognitioniv. Advancement of workv. the content of the job itself

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HRFrederick Herzberg's Motivation Theory

– Called motivation factor because of its highly positive effect on people’s feeling about their job

• (b) Second concerns with the context of work & environment– Herzberg called this the ‘hygienic’ or

maintenance factor– Hygienic factors because “they act in a

manner analogous to the principle of medical hygiene where hygiene operates to remove health hazard from the environment of man. Not curative but preventive.

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– Argument: if job environment can be maintained at an acceptable level then feelings of dissatisfaction among workers can be avoided.

– Hygiene factor includes:• The level of salary• The quality of supervision• Working conditions• Interpersonal relations with supervisors• Company policy & administration

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• Herzberg's theory concerns with both the content & the context of

• Hygiene factor relates to the general environment• Motivation factor is intrinsic to the nature of job• Job satisfaction achieved through job enrichment

through increase responsibility & more challenging task

• Job satisfaction lead to motivation to work harder• Poor ‘hygiene factor’ like poor working environment,

poor salary and poor supervision - demonization

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HRFrederick Herzberg's Motivation Theory• Weakness:

– Oversimplification• Satisfies one worker may not satisfy the next

worker• Some individuals not interested in the job

content of their work• Good job context like good working relations

& a pleasant environment increase morale but individuals may not be motivated to seek responsibility

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HRFrederick Herzberg's Motivation Theory• Implication

– General work environment pleasant enough to avoid dissatisfaction

– But major improvements in motivation achieve through changes in the nature of the job itself

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Herzberg's Motivation-Hygiene Theory

Presence of Presence of Motivation Motivation

FactorFactor

Absence of Absence of Motivation Motivation

FactorFactorPresence of Presence of

Hygiene FactorHygiene FactorSituation 1Situation 1

Happy &Happy &InterestedInterested

Situation 2Situation 2Happy &Happy &

Not InterestedNot Interested

Absence of Absence of Hygiene FactorHygiene Factor

Situation 3Situation 3Interested but Interested but

Not HappyNot Happy

Situation 4Situation 4Not happy & Not Not happy & Not

InterestedInterested31

Contingency Theory• Developed systematically in 1960s• Basic Premise – “there is no best

way to organize” but any way of organizing is not equally effective”

• Contingent on a number of factors affecting organization

(a) Task environment of the organization(b) Technology used within the

organization(c) Organization's size

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Contingency Theory…• “Organisation with highly predictable tasks

perform better with organisation characterized by the highly formalised procedures and management hierachies of the classical approach. With highly uncertain tasks that require more extensive problem solving, on the other hand, organisations that less formalised and emphasise self-control and member participation in decision making are more effective. In essence, according to these newer studies, managers must design and develop organisations so that the organisational characteristics fit the nature of the tasks to be done”(quoted from Kernaghan and Siegel, 1999:80)

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Contingency Theory…• The task environment of an

organization consists of:(a) Clients or customers(b) Competitors(c) Suppliers(d) Regulatory agencies(e) Legislature (in public organization).

Legislature establishes the organization & provides its funding)

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• ie Contingency theory recognizes external environment affecting organizational structure

• Example of things that affect structure:

(a) Market uncertainties(b) Government regulations(c) Technical changes

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Contingency Theory…• Those organizations are flexible &

have the ability to change rapidly in line with changes in the environment

• Often organizations adapt the environment

• Sometimes organizations want to change the environment to make it less troublesome

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Contingency Theory…• Technology• Importance of technology to

organizational structure discovered in England– Different production techniques matched

different structural designs

• Woodward (1965) identifies 3 types of technology– Small (tailor, photo shop, hair saloon)– Big (car factory)– Continuous production process (oil-refinery &

electricity)

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Contingency Theory…• The process by which an organization

converts inputs into outputs• Example – assembly line in

production of finished products• Assembly line

– Routine & repetitive matter– Broad span of control as problems not

likely to occur– Pre-arranged solutions for problems

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Contingency Theory…• Production process less specified as

in a policy advice unit• Smaller span of control – new task

differs from previous ones• Superiors & subordinates need to

work closely together

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Contingency Theory…• Size of Organization

(a) Impact of size on organization has classical origins – links primarily with Weber – links size with structural components.

(b) Small organization• CEO in daily contact with subordinates –

understand own responsibility, task (what is to be done)

• Example – small family-owned restaurants• Less formal• Use fewer rules• Retain employees longer• Depends on top management to make decisions

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Contingency Theory…• Large Organization

– Hierarchy– Written job description– Example – large restaurant chains

• Use formal rules extensively• Tolerate more employees turnover• Most decisions programmed or

predetermined by standards operating decisions

• Decision can be delegated to lower-level personnel

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Contingency Theory…• Studies

– Result mixed– Morse & Lorsch examined 4 firms: 2

engaged in predictable manufacturing tasks & 2 in unpredictable research & development tasks

• Results supported CT. Firm with congruence between tasks & organisational structure more effective performer

– Findings of some recent studies not as concrete as Morse & Lorsch

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Contingency Theory…• Discrepancies – look more at other

variables or refine measurement techniques

• CT has some value• Basically CT tries to predict

performance & effectiveness• Level of effectiveness depends on an

organization's design matching the contingency like size

• Strength – Dynamic (manager should realize that

there is no ‘one best way’43

Contingency Theory…• Weakness

– Overemphasis on differences between organization – so exclude similarities

– Treat every situation as unique (should strike a balance between prescriptions & the statement that all situations are different)

– Some people see CT fares better than classical school because:

• It defines variables ignored in earlier works• Set forth testable prepositions about these

variables, and• Yields an increasing amount of empirical

research.

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Contingency Theory…• Also carries implicit design

implications as:– Directs mgt attention to the

contingencies that must be considered in organization design

– Prescribes a match between designs & contingencies

– Correct match leads to successful organization

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Contingency Theory… Contingency

Small Size Large Size

Few rules or Effective Ineffective

Procedures performance performance

Organization

design

Existing rules Ineffective Effective

& procedures performance performance

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Organization TheoryOpen Systems Approach• Proponents (mostly psychologists

such as Robert Merton, Talcott Parsons, Daniel Katz & Robert Kahn) of this approach dissatisfy with earlier theories. Emphasize (too much): (a) activities of individuals within organisations. (b) activities of organisation as a monolithic body.

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Organization TheoryOpen Systems Approach• Argue that main concerns of those

theories – functioning of the component parts & their interrelations.

• Regard that kind of thinking as ‘close system’ approach. Not taking environment into consideration. Close system theory focuses on:(a) ability (equilibrium);(b) control mechanisms; and (c) predictable responses

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Organization TheoryOpen Systems Approach• Registration of a motor vehicle is a

close system:(a) registrant submit the required payment & document of insurance and inspection (inputs)(b) the bureau processes these (conversion); and(c) issues the registration (output)

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Organization TheoryOpen Systems Approach• Proponents of Open Systems approach

influence by biological models because:(a) internal organization of organism; and(b) how interacts with the environment.

• Explain the approach through ‘inputs-throughputs-outputs-feedback’ processes:(a) 1st, organism receives inputs from its environment;(b) then converts them into outputs; and(c) through feedbacks get more inputs

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Organization TheoryOpen Systems Approach• Human being operates in the same principle:

(a) need nourishment, shelter, and psychic encouragement;(b) convert to work effort [sold for cash or traded to satisfy such needs as food, shelter, and psychic encouragement

• Proponents think organization could be approach this way. Organized needs:(a) inputs like labor power, raw materials, capital etc.(b) convert to finished product sold for cash & purchased more inputs

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Organization TheoryOpen Systems Approach• Daniel Katz and Robert Kahn argue

organization must adopt the input-throughput-output process to reverse the normal entropy.

• EntropyIs the process through which organisms are subject to deteriorating. In complex physical systems, as the system becomes larger, the individual parts of the system become more disorganized until they are no longer able to sustain the organization as a whole. At this point, the system perishes. (Kernaghan and Siegel, 1999: 80)

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Organization TheoryOpen Systems Approach• Organization overcomes this process

by developing Negative Entropy. Defines as the “process of importing and storing more energy than it expands” (kernaghan and Siegel, 1999: 80)

• With negative entropy organization expands and survives in difficult times. Reason: it can draw on the stored reserves [e.g., cash, assets, also trust and goodwill of important people.

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Organization TheoryOpen Systems Approach• Lessons:

(a) Open system focuses greater attention on organizational environment.

(b) Organization cooperate with and adapt to its environment; adjust to pressures

(c) Suitable for public organizations as they are always required to take new functions.- In agriculture for example, inputs depend on

weather, pest control, consumer preferences, strength of national currency against other currencies, & trade preferences of other nations.

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Organization TheoryOpen Systems Approach

(d) Systems Approach suitable for analysis of the internal working of organizations, esp. that of their subsystems and their relationship with one another.

Katz and Kahn for example identify common subsystems like production subsystems, supportive subsystems (procurement etc), maintenance subsystems (personnel mgt), adaptive subsystems (concerned with organisational change) & managerial subsystems (controlling the other subsystems. Subsystems compete with each other (managerial seeks control while production seeks autonomy).

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Organization TheoryOpen Systems Approach• In public sector – program and policy

areas maybe regarded as production subsystems of organizations.

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Theory ZJapanese Management• Japan

– No resources– Firms produce high quality products at

competitive prices– Able to penetrate any markets– Success links to high productivity of

Japanese worker– Lead to interest in Japanese

management & see if it can be exported

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Theory ZJapanese Management…• Characteristic of Japanese Management(a) Lifetime Employment

- one-third of labor force guaranteed lifetime employment- recruitment done once a year from the crop of University graduatesNot recruited to fill specific position but hired because of having interests and temperament compatible with the milieu of the firm- Hired people for long run- once hired not to be fired or laid off (other than on criminal offence)- Good performance important for promotion

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Theory ZJapanese Management…(b) Non-specialized Career Paths

- orientation program for new recruits- involves rotation in different units. No one specializes in one function.- firm has workforce that understand the total operations of the organization & the problem faced in other operation units.- lead to concern for the total company

rather only one portion of it.59

Theory ZJapanese Management…(c) Slow Evaluating & Promotion

- after hiring, new employees move through a number of different assignments- progress with each new assignment like given new responsibility- But not getting formal evaluation or a promotion until he has been with the firm for 10 years.

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Theory ZJapanese Management…• Consequence of long term evaluation:

– “game playing” where managers play tricks to make themselves look good in a short term & win promotion

– Avoid the game if evaluation done in 10 years

– Managers can take risk of being innovative & experiencing with new ideas (one project fails doesn’t destroy their career)

– No evaluation doesn’t mean no added responsibility. Aspiring senior managers given scope to make decisions even though still in junior position.

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Theory ZJapanese Management…(d) Large Bonuses on Total Company

Performance- most significant aspect: all employees receive the same percentage on total company performance & not personal, or even divisional performance.- encourage managers to put the over all performance of the company above his.

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Theory ZJapanese Management…(e) Slow Collective Decision Making

- collective decision but not exactly participative- a small team is assigned to prepare a report: its members must consult widely in the organisations- system works in Japanese firm because all workers are socialise to show greater concern for the company than for their own unit.- decision slow

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Theory ZJapanese Management…• Off set by the speed of implementation

as every one understands the aim of the decision & is in agreement with it.

• Quality-circle consists of a small group of employees (volunteers)– Increasing output– Improving work procedure– Utilising equipment better– Improving product design– Discussing ways to improve job satisfaction

or morale

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Difference between Japanese and American Organisation

Japanese OrganisationJapanese Organisation American OrganisationAmerican Organisation

Long-termLong-term Short-termShort-term

Slow evaluation & promotionSlow evaluation & promotion Fast evaluation & promotionFast evaluation & promotion

No specialisationNo specialisation SpecialisationSpecialisation

Implicit control mechanismImplicit control mechanism Explicit control mechanismExplicit control mechanism

Collective decision makingCollective decision making Individual decision makingIndividual decision making

Collective responsibilityCollective responsibility Individual responsibilityIndividual responsibility

Total focus on the Total focus on the organisationorganisation

Focus on the particular Focus on the particular section of the organisationsection of the organisation

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