Business Management: Managing People

BUSINESS MANAGEMENT
WEEK 6
MANAGING PEOPLE
Last Updated:30 March 2019 © LMS SEGi education group 1

LEARNING OBJECTIVES
 To explain about motivation and drive to

manage the people in motivate them to perform.
 To demonstrate the theories that help to

motivate people.
 To explain the benefits of change and to cope

with the changes in competitive environments.

LEARNING OUTCOMES
 Explain the motivation and theories of motivations.
 Explain the motivational process within organization.
 Discuss the organizational change and managing the

change.
 Describe the resistance to change techniques and

reducing stress and managing it.

Motivation
 Definition: The processes that account for an

individual’s willingness to exert high levels of
effort to reach organizational goals, conditioned
by the effort’s ability to satisfy some individual
needs.

Key Elements in Motivation
 Effort: measure of intensity or drive. A drive to

perform better.
 Organizational goals: directed towards and

consistent with organizational goals.
 Needs: internal state that makes certain

outcomes appear attractive.

Theories of Motivation
 Abraham Maslow’s Hierarchy of Needs
 McGregor’s Theory X and Y
 Herzberg’s Two Factor Theory
 McClelland’s Three Needs Theory

Abraham Maslow’s Hierarchy of Needs
Being True person

Needs
Self-
Actualization
Recognition,
glory & self-
Esteem Needs respect
Love &
Deficit Belongingness Needs affection
Needs Home &
Safety Needs protection
Food, water &

Physiological Needs movements

Motivational role declines
in importance once
a need has been
More ways satisfied
to satisfy higher
level than lower Maslow’s
Always strive to
level needs Needs Satisfy some needs
Hierarchy
Model Several
Lower level needs affecting
needs assumes…
behaviour at any
must be satisfied
one time
before
In emergency,
higher level
that need
dominates until it is
gratified
 Physiological needs: adequate wages, restrooms,

ventilation and comfortable temperatures.
 Safety needs: job continuity, adequate fringe benefits
schemes.
 Belongingness needs: friendships
 Esteem needs: job titles, choice offices, merit pay
increases, rewards and recognition.
 Self-actualization needs: avenues to make the most of
one’s potential.

 Evaluating this theory:

 5 levels of needs are not always present.
 Actual hierarchy of needs does not always conform

to Maslow’s model
 Need structures are more unstable and variable than

the theory would predict.

McGregor’s Theory X and Theory Y
 Theory X:
 Assumes that workers have little ambition, dislike

work, avoid responsibility and require close
supervision.
 Theory Y:
 Assumes that workers can be exercised self

direction, desire to responsibility and like to work.

McGregor’s Theory X and Theory Y
 McGregor proposed that participation in decision

making, responsible and challenging jobs and good
group relations would maximize job motivation.

Herzberg’s Motivation-Hygiene Theory
 He proposes that intrinsic factors are related to job

satisfaction and motivation, whereas extrinsic factors
are associated to job dissatisfaction.
 Motivating factors:
 Achievement, recognition, work, responsibility,
advancement and growth. No Satisfaction 
Satisfaction.
 Hygiene factors:
 Supervision, salary, working condition, status,
security, personal life. Dissatisfaction  No
Dissatisfaction.
Herzberg’s Motivation-Hygiene Theory
 Factors that led to job satisfaction were separate and

distinct from those led to job dissatisfaction.
 Managers who sought to eliminate factors that created
job dissatisfaction could bring workplace harmony but
not necessarily motivation.
 Because they do not motivate employees, the extrinsic
factors eliminate job dissatisfaction were called hygiene
factors.
 When these factors are adequate, people will not be
dissatisfied, but they will not be satisfied (or motivated)
either.
McClelland’s Three-Needs Theory
 There are three acquired needs that are the

major motives in work
 Need for achievement: the drive to excel and strive to
succeed.
 Need for power: the need to influence the behavior of

others.
 Need for affiliation: the desire for interpersonal

relationships.
Current Issues in Motivation
 Motivating diverse workforce

 Compressed workweek: longer daily hours but fewer days.
 Flexible work hours: specific weekly with varying arrival,

departure, lunch and break times around certain core hours
during which all employees must be present.
 Job sharing: two or more people split a full-time job.
 Telecommuting: employee work from home using computer

links.

 Designing appropriate rewards programs

 Open-book management: involving employees in workplace
decision by opening up the financial statements of the
employer.
 Employee recognition programs: giving personal attention

and expressing interest, approval and appreciation for a job well
done.

 Designing appropriate rewards programs

 Pay-for-performance: variable compensation plans that
reward employees on the basis of their performance. Examples:
piece rate, wage incentives, profit sharing and lump sum
bonuses.
 Stock options programs: using financial instruments that

gives employees the right to purchase shares of company stock
at a set (option) price.

Change Management
 What is change?
 Any alterations in people, structure or technology.
 Change is an organizational reality.
 Uncertainty exists in dynamic environment but predictable.
 Change creates threats and opportunities that is inevitable.
 Managing change is an integral part of managing

organization.

External Forces for Change
 Marketplace: changing consumer needs and wants. The

needs and wants that might relevant today, may not for
tomorrow.
 Government laws and regulations: new laws enacted

drive businesses to change.
 Technology: Microsoft constantly updating content to be

relevant from time to time.

External Forces for Change
 Fluctuation in labor markets: demand for

employees with internet expertise force
organization to have this people work for them.
 Economic changes: global recessions for

example force organizations to become more
cost efficient.

Internal Forces for Change
 Strategy: redefining strategy to be more

relevant to the current needs.
 Workforce: changes in composition.

Compensation and benefits system might need
to change.

Internal Forces for Change
 Equipment: new equipment needs job redesign

and training.
 Attitudes: changes in behaviors. Increased

dissatisfaction results in increased absenteeism
and resignations.
 Changes continue to take place.

Two Views of Change Process
 The calm waters metaphor: Organization like a large

ship crossing a calm sea. The captain and crews know
the destination and changes come in the form of
occasional storm.
 The white-water rapids metaphor: the organization is

seen as small raft navigating a raging river with
uninterrupted white water rapids. All of them are
unfamiliar with river and unknown with destination.

The Calm Waters Metaphors
 Kurt Lewin’s three-step description of change

process.
 Unfreezing of status quo
 Changing to a new state
 Refreezing to make the change permanent.

 Unfreezing; preparing the needed change by

achieving one of three ways:
 Increase the driving forces that direct behaviour away
from the status quo.
 Decrease the restraining forces that hinder behaviour

away from the status quo.
 Combine the two approaches.

 Once unfreezing done, change can be

implemented.
 New situations needs to be refrozen so that it

can sustained over time.
 The objective of refreezing is to stabilize the new

situation by reinforcing new behaviors.

The White-Water Rapids Metaphors
 Consistent with uncertain and dynamic

environments.
 The lack of environmental stability and

predictability requires that organizations
continually adapt (manage change actively) to
survive.

The Two Views at a time
 Today, organizations that treats change as

occasional disturbance in an otherwise calm and
stable world runs a great risk.
 Most competitive advantages last a short time

only.
 Business managers must be ready to manage

the changes efficiently and effectively.
Managing Change
 Business managers should be motivated to

initiate change because they are committed to
improve organization’s performance.
 Initiating change involves identifying what areas

of organization need the change.

Types of Change
 Changing structure: includes any alteration in authority

relations, coordination mechanism, degree of centralization,
job redesign etc.
 Changing technology: modifications in the way work is

performed or the methods and equipments that used.
Computers and internet technology have been very helpful.
 Changing people: changes in employee attitudes,

expectations, perceptions and behaviours.

Managing Resistance to Change
 Change can be seen as threat to people.
 Why people resist to change?

 The ambiguity and uncertainty that change
introduces. Fear to cope with new ways or methods.
 The comfort of old habits. Changing things makes

new things may seemed difficult to do and might be
burdensome.

Managing Resistance to Change
 Why people resist to change?

 A concern over personal loss of status, money,
authority, friendships and personal convenience.
 The perception that change is incompatible with goals

and best interests of the organization. Example: an
employee who believes that a proposed new job
procedure will reduce product quality or productivity
can be expected to resist change.
Techniques to Reduce Resistance
 Education and communication

 Communicate with employees to embrace the logic.
 Discussions, meetings and information sharing.
 Participation
 Participate in decision and need everyone's input to
contribute so the understand the need to change.
 Commitment needed to assure the change decision.

 Facilitation and support

 Employee counseling, training or team building
efforts.
 Negotiation
 Exchange views and opinions.
 Evaluate the pros and cons the change can bring.
 Gain support as everyone should work collectively.

 Manipulation and co-optation

 Manipulation is covert attempts to influence such as
twisting or distorting facts, withholding damaging
information or creating false rumors.
 Co-optation is a form manipulation.
 Coercion
 Using direct threats or force.

Issues in Managing Change
 Changing organizational cultures.

 A culture takes a long time to form and once
established it tends to become entrenched.
 Strong cultures are particularly resistant to change

because employees have become committed to
them.
 Cultural changes have to be viewed in years and not

weeks or even months.

 Cultural change is more likely to take place when
most or all of the conditions exist:
 A dramatic crisis occurs. People start thinking the
relevance of current culture. Examples of crisis
surprising financial setback, loss of major customer etc.
 Leadership changes hands. New people bring in new

set of key values.


 Cultural change is more likely to take place when
most or all of the conditions exist:
 The organization is young and small. Easier for
management to communicate new values as it less
entrenched.
 Existing culture is weak. May accept new ways of

doing things to progress.

 How can cultural change be accomplished?

 Conduct a cultural analysis to identify cultural
elements needing change.
 Make it clear to employees that the organization’s

survival is genuinely threatened if change is not
forthcoming.
 Appoint new leadership with new vision.
 Initiate a reorganization.
 How can cultural change be accomplished?

 Introduce new stories and rituals to convey the new
vision.
 Change the selection and socialization processes and

the evaluation and reward systems to support the
new values.

 Handling employee stress

 Stress: adverse reaction people have to excessive
pressure placed on them from extraordinary
demands, constraints or opportunities.
 Stress is not necessarily bad but functional stress has

positive effect on performance.

 Reducing stress
 Engage in proper employee selection
 Provide counseling programs
 Offer time planning management assistance.
 Sponsor wellness programs

REFERENCES
 Robbins at el, 2009, Management, 5th Ed. Pearson Australia.
 Griffin, R. W & Elbert, R. J. 2006, Business, 8th Ed., Pearson –

Prentice Hall.
 Ritson N (2005). Organization Management. Butterworth-

Heinemann.
 Buchanan & Huczinski (2006). Organizational Behavior: An

Introductory Text, FT Prentice Hall.
 Bratton J and Gold G (2006). Human Resource Management:

Theory and Practice. Macmillan Gowthorpe, C.
 Campbell, D & Craig, T, (2008), Organisation and the Business

Environment, 2nd Edition, Elsevier Butterworth Heinemann.

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BUSINESS MANAGEMENT

Last Updated:30 March 2019 © LMS SEGi education group 1

 To explain about motivation and drive to

 To demonstrate the theories that help to

 To explain the benefits of change and to cope

Last Updated:30 March 2019 © LMS SEGi education group 2

 Explain the motivation and theories of motivations.

 Explain the motivational process within organization.

 Discuss the organizational change and managing the

 Describe the resistance to change techniques and

Last Updated:30 March 2019 © LMS SEGi education group 3

 Definition: The processes that account for an

Last Updated:30 March 2019 © LMS SEGi education group 4

 Effort: measure of intensity or drive. A drive to

 Organizational goals: directed towards and

 Needs: internal state that makes certain

Last Updated:30 March 2019 © LMS SEGi education group 5

 Abraham Maslow’s Hierarchy of Needs

 McGregor’s Theory X and Y

 Herzberg’s Two Factor Theory

 McClelland’s Three Needs Theory

Last Updated:30 March 2019 © LMS SEGi education group 6

Being True person

Food, water &

Last Updated:30 March 2019 © LMS SEGi education group 7

 Physiological needs: adequate wages, restrooms,

Last Updated:30 March 2019 © LMS SEGi education group 9

 Evaluating this theory:

 Actual hierarchy of needs does not always conform

 Need structures are more unstable and variable than

Last Updated:30 March 2019 © LMS SEGi education group 10

 Assumes that workers have little ambition, dislike

 Assumes that workers can be exercised self

Last Updated:30 March 2019 © LMS SEGi education group 11

 McGregor proposed that participation in decision

Last Updated:30 March 2019 © LMS SEGi education group 12

 He proposes that intrinsic factors are related to job

 Factors that led to job satisfaction were separate and

 There are three acquired needs that are the

 Need for power: the need to influence the behavior of

 Need for affiliation: the desire for interpersonal

 Motivating diverse workforce

 Flexible work hours: specific weekly with varying arrival,

 Job sharing: two or more people split a full-time job.

 Telecommuting: employee work from home using computer

Last Updated:30 March 2019 © LMS SEGi education group 16

 Designing appropriate rewards programs

 Employee recognition programs: giving personal attention

Last Updated:30 March 2019 © LMS SEGi education group 17

 Designing appropriate rewards programs

 Stock options programs: using financial instruments that

Last Updated:30 March 2019 © LMS SEGi education group 18

 Change is an organizational reality.

 Uncertainty exists in dynamic environment but predictable.

 Change creates threats and opportunities that is inevitable.

 Managing change is an integral part of managing

Last Updated:30 March 2019 © LMS SEGi education group 19

 Marketplace: changing consumer needs and wants. The

 Government laws and regulations: new laws enacted

 Technology: Microsoft constantly updating content to be

Last Updated:30 March 2019 © LMS SEGi education group 20

 Fluctuation in labor markets: demand for

 Economic changes: global recessions for