DIRECTING AND MANAGING CHANGE;

ADAPTING TO CHANGE, DECIDING WHAT NEEDS TO BE DONE;

PLANNING AHEAD, GETTING RESULTS, EVALUATING PROGRESS;

APPRAISAL INTERVIEWS AND TARGET-SETTING MEETINGS


by Manfred Davidmann

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Contents

Summary
Directing
The World in Which We Live
Adapting to Change
Forecasting and Planning
Deciding Policy
Implementing Policy
Effect of Style of Management
Setting Targets
Agreeing Targets
Evaluating Performance
Notes <..> and References {..}
Illustrations (Click illustration to see the full-size chart)
  1. Forecast Made in 1960 to Year 2000
  2. First 5-Year Forecast
  3. Actual Population and Population Forecasts
  4. Successive Assumed 5-Year Trends
  5. Systematic Approach for Deciding and Implementing Policy

Relevant Current and Associated Works

Relevant Subject Index Pages and Site Overview


Summary

There are effective ways of overcoming problems set by change. One adapts to change by seeing what is changing and how it is changing. One estimates what is likely to happen, plans ahead and acts accordingly.

Planning includes evaluating alternative strategies to find the best strategy. It is this best strategy which then becomes part of our forward plan.

This process has been developed to the point where it is both practical and straightforward. The steps are illustrated by Figure 5 'Systematic Approach for Deciding and Implementing Policy'.


And employees may be expected to work to targets which are set annually. The way targets are agreed, progress monitored and individuals rewarded is crucial for the success of the organisation or enterprise.

Where attempts are made to introduce a system of procedures and reports to take the place of responsible person-to-person management and delegated work, where attempts are made to impose a system of tougher management direction and control in terms of employment, then costs are high and benefits uncertain and even unlikely.

Success depends to a large extent on commitment of employees towards the organisation's aims and on cooperation between them. This means identifying with the company. What benefits the company needs to be seen and felt by the employees as also benefiting them.

To achieve commitment of employees toward's the organisation's aims, appraisal and target-setting meetings can be carried out in accordance with the proved and effective technique described in this report.


We see how important the style of management is in achieving results. It affects in a fundamental way the interview between manager and subordinate when they agree the targets for the subordinate.


And this report is one of a series of seven reports which cover, and underlie, the field of General Management, for middle, senior and top management. See

  1. Directing and Managing Change
    Includes: Adapting to Change, Deciding What Needs to be Done;
    Planning Ahead, Getting Results, Evaluating Progress;
    Appraisal Interviews and Target-setting Meetings.

  2. Style of Management and Leadership

  3. Organising

  4. Work and Pay, Incomes and Differentials: Employer, Employee, Community

  5. The Will to Work: What People Struggle to Achieve
    Includes: Remuneration, Job Satisfaction and Motivation

  6. Inflation, Balance of Payments and Currency Exchange Rates

  7. Social Responsibility, Profits and Social Accountability



Directing

Directing is something all of us do throughout our lives. We all make decisions which affect ourselves and our family, which affect the people with whom we come in contact, the community in which we live, the enterprise which employs us. They are often extremely important decisions. What kind of an education, what kind of school, what kind of trade or profession, whom to marry, choosing between alternative medical treatments such as drugs or surgery, whether to change one's job, indeed the country in which we wish to live and the kind of government we prefer, all these are decisions which we make and which have to be made again and again as we direct the course of our lives within the choices open to us.

Here we are discussing the work of managers and administrators, starting with those who direct their own companies and larger organisations. The decisions taken, by those who head enterprises and by those who govern, affect more people and greater resources than do those taken by ourselves in the course of our daily and private lives, but there is much common ground. Very basic is an understanding of what is going on, of what is happening, of the problems of the day.

So we begin by having a look at the sort of things which are taking place all around us.


The World in Which We Live

Some illnesses have disappeared, our life span has increased considerably within living memory but each year something like 100,000 people are admitted to our hospitals for diseases caused by drugs which should have cured.

There is inflation accompanied by confrontation between those who work and those who manage. While people are safeguarded against extreme poverty and hardship by extensive social security legislation and by the national health service, there is much unemployment, frustration and unrest.

Some established norms have been questioned. People's behaviour is being affected and there has been an increase in permissiveness (promiscuity), delinquency and crime, there is the younger age of those involved. There are social problems of oneparent families, there is increasing loneliness. There is increasing vandalism and callousness towards other people. There is use of violence (terrorism) against people for political ends.

The planet has become much smaller, meaning by this that we speak each other's languages, that we communicate all around the planet in a matter of seconds, that we travel anywhere in a matter of hours. The market now spans the entire planet, competition is tough and international.

There is the impact of technology, of laser applications, of electronic calculators, desk computers, computer-based automatic operations and control, microprocessors, and much more. But while on the one hand our space ships explore our planetary system and we have landed on the moon, on the other hand a country like Russia uses psychiatric hospitals in an attempt to break the resistance of those who stand up for individual freedom by disagreeing with the dictates of the state.

A few years have seen far reaching changes take place in the wealth of countries and individuals, a vast transfer of wealth towards largely Arab oil producing countries, with other countries struggling to maintain their standard of living. In addition there is an enormous and speedily increasing gap in living standards between the underdeveloped world and developed countries. A very high proportion of those living on the planet are permanently hungry, undernourished, starving, illiterate, deprived.

It used to be that costs and overheads were estimated and a customary percentage added for profit. This gave one the price at which the article was sold. Now we tend to assess what quantities can be sold at each of a number of different prices. The price tends to be what the market will bear and one has to produce and sell accordingly. Under such conditions the price is the maximum one can persuade people to pay for what one can persuade them to buy. The way in which oil prices were pushed up by the oil producing and exporting countries is a case in point. This is 'marketing'. When marketing replaces selling this affects the internal organisation of the company in different ways. There is increasing consumer awareness and interest in products, prices and company operations.

Much is happening. These are after all only some developments and trends and there is much else.

But there is one word which sums up what is taking place in all the many different areas. That word is 'change'.

Change is taking place and things are changing more quickly. We now live in a time of change, we live in a time of accelerating change. This is how our life today differs from life but a few years ago.

Yet pick up almost any textbook on management written but a few years ago and somewhere in it you are likely to find the phrase that people do not like change, that people will resist change <1>. Yet we live in a time of accelerating change and have to live with it, indeed have to overcome the resulting problems.

There are effective ways of overcoming the problems set by change {1} and we now look at how this can be done.


Adapting to Change

Consider a man walking as quickly as he can along a jungle path. He turns a corner and there a few yards ahead and facing him is a tiger. He immediately starts climbing the nearest tree. It happens quickly but much has gone on in his mind in that split second between seeing the tiger and starting to climb.

He sees the tiger. What can I do? Draw my pistol and shoot? Have I got it with me? Is there time to draw it? Is the tiger hungry? Is there a half-eaten animal nearby? How long will it be before the rest of the party get here? Are there any climbable trees nearby? Can I climb it? Start climbing!

What he did was to assess the situation and then act accordingly.

One survives in the jungle by adapting to it. To survive in a time of change, one must adapt to change. One adapts by assessing the situation and then acting accordingly. We see what is changing and how it is changing, estimate what is likely to happen and then act first. We forecast change and plan accordingly.


Forecasting and Planning

The experts see what is changing and how it is changing, and then estimate what things will be like at some time in the future. Such estimates are no more than qualified guesses made on the basis of the best available information at the time the guess is made. But such looking ahead into the distance is very necessary.

It is rather like driving a car. If we looked immediately in front of the bonnet we would have no time to react, would oversteer. Events would take us by surprise with what could easily be disastrous consequences. In driving a car we look into the distance and so are able to observe and correct small deviations from the straight course we intend to follow.

It is very difficult to look ahead thirty years with any degree of reliability. You may indeed find yourself getting lost in some fundamental and fascinating questions such as "Will we still be here?" or "Will we be nationalized wholly or in part?" but will you be getting your money's worth out of the exercise? What you will get will be an appreciation of some long-term trends, some idea of the kind of basic and fundamental problems which we may possibly have to cope with in the not-too-distant future.

You may well conclude that the gap between underdeveloped and developing people (countries) will continue to increase, that there will be such a shortage of food that the developing countries may be buying as many arms as they can so as to fight each other and us for what little food there may be. Or you may conclude that the developed countries will be able to produce large excess quantities of naturally grown or artificially produced foodstuffs for export to the starving underdeveloped countries.

You may then conclude that in the light of conditions existing at the time of the forecast, and in the light of information available at the time the forecast was made, that it would be good business to develop your interests in the armaments industry or to concentrate on food production, or you may indeed try both. Or you may find that there may be an increasing demand for insurance, or that telecommunications is likely to be the growth industry of the near future.

But you will need to remember that a forecast is no more than a considered opinion about the relative importance and interaction of trends. The far-away picture may change drastically at any time. For example, sudden success in developing a rice variety which crops twice as heavily as before would considerably change the long-term conclusions.

In other words, if you need to make the kind of decisions mentioned here then these are the kind of forecasts required. Much work may be required, the exercise is expensive and the results are uncertain. In any case you need to be sure to assess the underlying often academic or political assumptions which at times may not even be directly stated, which may only be implied.

Figures 1-4
Trends, Forecasts and Forecasting
Link to larger version

Figure 1 shows a forecast made in the year 1960 for the period up to the year 2000, showing how the forecaster expected the population of the country to increase. He sees how it changed in the past and assumes that it will continue to increase according to the curve 'A'.

Looking at this in 1960 we might decide to accept his estimate for the first five years up to year 1965, as illustrated by Figure 2. From this five-year trend we can estimate other likely changes which affect us such as energy requirements, new houses to be constructed, food to be produced, likely available labour force, possible effect on sales, number of hospital beds and doctors required, and so on.

The actual population is measured at regular intervals and Figure 3 shows the results of successive censuses and the corresponding forecasts. Figure 4 shows the successive assumed five-year trends and also how the population actually changed.

Figure 3 illustrates how uncertain long-term forecasts are and the consequent need for regular updating of the forecast.

Figure 4 shows that medium-term forecasts are much closer but also uncertain. But at least we are steering a course instead of drifting.


We are at least forced to consider the kind of problems that are likely to arise. For example, one forecast I saw before 1980 made some simple striking points:

  1. The population of the planet is increasing steadily.

  2. For associated reasons the amount of agricultural land is shrinking steadily.

  3. By the year 2000 the available agricultural land would just about still feed the growing population.

    After that the shortage of food would increase rapidly.

  4. One of the assumptions made was that the productivity of the land remained unchanged.

    Double the productivity of the land and you gain no more than about twenty-five years.

    Quadruple it and you gain perhaps no more than another twenty years.

Here are some other forecasts made about 1970 about the kind of breakthroughs likely to have taken place by about the year 2000, as follows:
  1. New organs through transplanting.
  2. Primitive artificial life.
  3. Direct link between brain and computer.
  4. Life span increased by another fifty years.

So-called 'genetic engineering' attempts to produce entirely novel microbes. Just one of the risks is (2) that experiments could endow a disease producing streptococcus with the capacity to resist penicillin and that it would obviously be a disaster if such a strain got loose on the population.

In different ways much work being done now is highly dangerous. It would be highly dangerous even in a responsible society as there is a very high degree of risk both to the workers involved and to the community at large.

I have selected the forecasts mentioned here because they are thought-provoking and much else could have been mentioned.

There is great need for people and governments as well as managers to become aware of the factors which are likely to be affecting our lives, for people in responsible positions to look ahead, to prepare us for what is likely to be in store so as to enable us to survive.

We need to assess what is changing and how it is changing and plan accordingly.


Deciding Policy

We decide policy when we decide what is to be achieved. A knowledge of the way the environment is changing, and for that matter of the way in which our own affairs are changing, is only one of the aspects which need to be considered. In essence, we also need to consider where we wish to go in relation to where we are, need to consider existing opportunities in relation to the strengths and weaknesses of our enterprise.

We then evaluate alternative strategies so as to find the best strategy. It is this best strategy which then becomes part of our forward plan.

This process was developed by myself to the point where it became both practical and straightforward. The steps are illustrated by Figure 5 'Systematic Approach for Deciding and Implementing Policy'. However, the process is not easy to carry out for the first time.


Figure 5
SYSTEMATIC APPROACH FOR DECIDING AND IMPLEMENTING POLICY
DECIDING POLICY
  1. State aims (both long-term and short-term).
  2. State present position.
  3. Evaluate opportunities.
  4. Review strengths and weaknesses.
  5. Derive alternative strategies (different ways of getting from 'present position' to 'aims').
  6. Decide best strategy(ies).

SETTING TARGETS
  1. List best strategy(ies).
  2. Prepare forward plan (quantified and timed).
  3. Institute controls.
  4. Feedback.


It is seen that we first look at what we wish to achieve in the long-term and in the immediate future. We then evaluate our present position. We look for and evaluate opportunities and review our strengths and weaknesses. Having developed our own appreciation and knowledge of the position in each area, we then continue by developing a number of different ways of getting from where we are to where we wish to be, that is we develop alternative strategies. We can then derive the best strategy or strategies.

When using the system we at least ensure that we have considered the relevant factors to the best of our knowledge and in the light of the information available to us at the time. And what we have done is that we have decided what to do, that is the direction in which we wish to move and the required speed. We have decided policy.

Once completed for the first time those concerned are usually so impressed with the usefulness of what they have done, that they continue to take stock and plan ahead in this way at regular intervals of either one or two years.

There are different kinds of plan dependent on the period which they cover. There is the long range policy statement which covers a period of between five and ten years. Then there is the intermediate or medium range plan which covers a period between three and six years. It is more precise and specific and enables people to plan ahead in outline. Then there is the annual short range or forward plan for the organisation which covers the work to be achieved during the coming year.

It is customary for such plans to be reviewed and revised once a year. However, once the annual plan has been accepted it becomes the forward plan for the whole organisation and indeed the organisation has agreed to commit itself to it and achieve it.


Implementing Policy

We have now decided what we wish to achieve, the direction in which the organisation is to move, the speed at which we wish to progress. This forward policy now has to be passed on to the whole organisation in a way which enables those who work in it to cooperate with each other to achieve our aims.

During a time of rapidly increasing change the company has to think ahead and move with the times and indeed the whole organisation has to work together to achieve the policy aims set by those who lead.

But this means that individuals instead of sitting at a desk and doing the same job again and again all their lives, instead of having a job, are now employed to achieve the company's or organisation's aims which may change from year to year at least in emphasis. We are now accordingly expecting people to think about the work they are doing and about the way in which they are doing it in relation to what the enterprise is attempting to achieve. We are now expecting people to work to targets which are set annually.


Effect of Style of Management

None of this is really different from the management process which goes on in any case. A manager will delegate certain work to his subordinates, he will discuss progress with them, he will advise, he will help, he will evaluate the extent to which their performance is affected by their own limitations, by their own lack of experience, or by circumstances outside their control. And above all he will ask them for comments and suggestions about how the work could be improved, about how the company can meet its targets more effectively. And this can and does work very well indeed if the manager is good and if he knows what he is doing.

It is here again that good management counts and bad management loses. Experience tells that the system does not work well if targets are simply imposed from the top downwards, if routine procedure and form-filling take the place of what may well have been good management, if what used to be secure employment becomes an annually renegotiated contract when the individual has to sign that he will within one year achieve certain objectives which his superior tells him must be achieved, or else. Where the opportunity is taken by management to introduce what is in effect an annually renegotiated contract of employment against specific targets determined by top management, where the individual's security is affected by the achievement of his targets, then this is likely to upset the organisation to the point where formal target setting procedures have to be abandoned. Authoritarian organisations have similar problems which are discussed in more detail in the report on style of management {3}.

Very little relevant cost data is available on the changeover from just working at doing one's job and the organisation working together to achieve the forward policy of its leadership. However, we do know that where attempts are made to introduce a system of procedures and reports to take the place of person to person responsible management and of delegated work, where attempts are made to impose a system of tougher direction in terms of employment, being imposed down the line from the top, that costs are high and benefits uncertain. This agrees with our previous findings that authoritarian managements are on the whole now known to be less effective.

Where gains are made, they are made because the subordinates are asked for their opinion as to how their job could be done better and the company then proceeds to use their ideas. I put it to you that this is common good practice anyway. In companies which are well run, a manager will in any case ask his subordinates how their job could be improved, how they could do their work better. If the subordinates are at all interested, it is they who will be able to improve their own work and the way in which it is done because after all that is what they know best.

Large gains are made in this way, large savings and much progress results.


Setting Targets

There may be much that we would like to change. Morale may be low, there may be an external threat from a new foreign competitor who is establishing a factory in our own country. Much effort may be wasted, our organisation may not be as effective as we think it should be. There could be lack of dedication and effort by those who work in the company or organisation, by those who support it, by those on whom we rely to achieve our aims.

It simply would not achieve much to express our aims in vague general terms such as that we wish to increase morale, that we wish to reduce labour turnover, that we need to increase sales, that we need to diversify. What is needed are specific, clear aims so that those who work with us and for us know what we expect of them, know what we are asking them to achieve.

What is needed are clear, quantified and timed aims, that is 'targets', such as:
  1. We are aiming to reduce labour turnover from 60 percent to 45 percent within one year and to 30 percent at the end of two years from now.
  2. Sales have to increase from 2,000 units to 2,800 units within one year from now.
Time limits for completion fulfil a similar purpose when work is not readily quantified.

Having stated our policies in such precise terms, we are then able to divide the work among different divisions, departments or managers in such a way that each knows his share, knows the part he has to play so that the policies can be achieved.

Targets convey clearly what one would like to achieve. They also enable us to provide those doing the work with the information they require to assess whether their progress is better or worse than planned.

In other words we can readily control events by instituting some kind of reporting back at regular intervals. In this way we enable the manager concerned to see how well he is progressing so that he may take appropriate action or feed information up the line asking for assistance or modification to the overall plan.


Agreeing Targets

The same system can be used badly or it can be used well, as illustrated by the following example:

An engineer in his middle forties was told that the company would soon be using new and involved computer software for design purposes and that he did not have the required knowledge or skill to use it, that he was too old, that he would have to find other work. Events have overtaken him, technological change has knocked him out, he is redundant, unlikely to find other employment at the same sort of level.

But his manager could have said:

"Jim, you know as well as I do that life is competitive. We are working to tougher margins, we must get our tenders out more quickly. To do this we are going to design and cost much of the work we do by using advanced computer software.

Your many years experience in the industry and with us are invaluable, you know how the company works, you know our methods, you have come across most of the snags before. So we would like you to assist with and perhaps run this part of our activity, we would like you to make sure that what we get is what we need and want.

You do not have to tell me that this is a new field for you. The company is making available some short courses for people like you and me at the software supplier's place, and their experts will be here during the change-over.

If you are interested then we would be only too pleased if you could go to these courses and develop the necessary knowledge and skills.

The company expects a lot from this development and we think that you are the right man to make sure that we do not make the kind of mistakes other people made when they tried the same thing. Let me know in two or three days what you think about it and whether you are prepared to tackle it."

The manager who is able to meet both his organisation's requirements as well as look after the needs of the employees in such a manner gains much from his team and for the company.

Shipping lines used to provide fast passenger transport across the Atlantic. The advent of regular, frequent plane services changed this. Passenger traffic is carried by planes. The impact was felt by the shipping lines. They had to adjust and had little time to do so. The passenger carrying boats which now cross the Atlantic are in the holiday and entertainment business, provide cruises and on-board entertainment instead of transport. The work changed, staffing changed, routes changed.

Here also we see the importance of making use of one's knowledge of what one wishes to achieve during the coming year and beyond by giving one's staff the opportunity to develop their skills, functional as well as managerial, so as to make sure that the company's experience and resources are fully utilised in meeting the company's changing requirements. On the other hand, a man's performance now depends on him preparing himself for the kind of work the company expects him to do in the future.

It is 'targets' which state what has to be done and can be done so as to achieve the overall target of the higher level. The target itself is broken down into component targets for the next lower level.

The way in which targets are determined and the way in which the work is passed down the line is crucial to the success of the plan. It does not matter whether the work consists of well-known work tasks or of parts of the forward plan (targets). The manager in either case distributes work and coordinates effort, has agreed with his subordinate just what he expects him to do and by when. The subordinate has to monitor his own progress and keep the manager informed of any difficulties so that appropriate action can be taken if and when required. Allowing for circumstances outside the subordinate's control, the manager assesses the subordinate's performance and the reward will to some extent be determined by this.

Tasks imposed from above are most unlikely to be done either willingly or well. Employees do not really care and effort is withdrawn. If in addition one's income, bonus, promotion or security of employment depend purely on the achievement of imposed targets regardless of other considerations, then much can and does go wrong.

In one place some time ago scientists had to submit their research plans in advance. Their grant for the following year was then made to depend on the extent to which they had successfully completed their planned research programme for the previous year.

So they had a problem. Most research is highly unpredictable and if their research was not successful then their grant would be reduced. What were they to do? Their way out was to keep back the results of successful research and state in their forward plan that they would do in the following year the research they had already successfully completed. Hence they always met their targets and always got their grants but of course publication of the results of the research was delayed by at least a year and probably at times by at least two years. This defeated the aims of the original planners.

Another example is that of the department which found that one or two months before the end of the year it had used up the allocated amount of paper but found that a certain high quality expensive paper reserved for senior management was not covered by any target. The manager of the department did not want to exceed his target and so they used the more expensive paper for the rest of the year. On the one hand they had met their target but on the other it had cost the company a good deal more than had been anticipated.

Sometimes people have to work under threat when survival and progress depend on completing the targets on time. People then find ways of reducing effort, of playing it safe, of ensuring that they meet their targets. Under such conditions the completion of individual targets becomes more important than the aims of the company or the cost to the company as a whole. People work against instead of with each other.

We see how important the style of management is in achieving results. It also affects in a very fundamental way the interview between manager and subordinate when they agree the targets for the subordinate.

When targets are imposed from above, when the manager insists on having his specific targets accepted as a norm, when sanctions such as loss of promotion or even the possibility of dismissal are implied, then cooperation is replaced by confrontation and negotiation.

The subordinates know as does the manager that the subordinates' performance in achieving their targets is likely to affect their appraisal, their performance rating, the increase they are likely to get, their future prospects. They can play it safe and hold out for easy targets which means that the company now aims rather lower and achieves less. Or the manager can tell them that they must accept his targets and they may have no option but to agree, knowing right from the beginning that the targets cannot be achieved. Other employees who depend on the achievement of these targets if they are to achieve theirs, are defeated before they even start.

Any subsequent appraisal of progress has to sort out why a particular target is not being achieved or has not been achieved. It could be because of circumstances outside the employee's control, it could be because he did not do his work well enough or because he did not pull his weight.

Clearly the way in which targets are agreed, progress controlled and individuals rewarded, is of the utmost importance if the company is to succeed. This depends to a large extent on commitment of employees towards the organisation's aims and on cooperation between them. This means identification with the company. What benefits the company needs to be seen and felt by the employees as also benefitting them. This is discussed in more detail in the reports on the style of management {3} and on the will to work {4}, but here consider the question of appraisal. What manager and subordinate are trying to sort out between them is the extent to which failure to achieve targets is due to either
  1. circumstances beyond the control of the employee (such as unrealistic targets, inadequate support, unexpected external change, etc.), or
  2. the employee's lack of skill, or
  3. inadequate performance (for example due to employee, manager, style of management, etc.)

One can of course take an appraisal form, complete it in the security of one's private office, send it to Personnel Department without the subordinate knowing that he has been appraised. In due course he will be told the increase he has been awarded as a result of his work. In practice he is likely to know quite unofficially about the whole procedure and is left to guess what you really think about him by comparing his increase with that of others.

I developed a different system of appraisal way back about twenty years ago <2>. We have used it and recommended it since then. I think it works well. It is effective and straightforward. All the manager does is to give a copy of the rating form to the subordinate and ask him to take it and rate himself at home, returning it after two days. The manager completes his copy of the form on his own and when they meet they can now discuss the employee's performance by comparing notes.

Although one points out that the whole exercise is in complete confidence, most employees have to be encouraged to rate themselves. The results are of value. The manager becomes aware of the simple fact that the employee generally knows the manager's opinion of him and has a pretty shrewd and clear idea of his shortcomings, that he would like to overcome them but does not really know how. Employees generally rate themselves below the opinion of their manager.

The result is that in about 80 percent of cases the manager becomes aware that the employee knows his opinion and in effect stops criticising, from then on concentrating on helping his subordinates to overcome their weaknesses and utilise their strengths. The employee finds out that the manager thinks more highly of his work and ability than he does himself, a considerable boost to the way in which he views himself and his work.

The overall result is increased cooperation between them and increased committal towards the company's aims and dedication towards achieving personal targets.

Similar considerations apply to the process of determining and agreeing targets. One needs to find out what is possible and the circumstances under which it is possible.

The organisation has at least to be given a chance to weld itself into a solid team which supports the leadership, which moves the organisation in the direction indicated by the leadership at the speed at which it is supposed to move.

The target setting process amounts to discussions between managers at the same level or at different levels looking at what one would like to do and who between them are deciding what can be done to achieve the targets. In other words, the overall targets need to be passed down the line and discussed at the various levels and need to be returned, coordinated and with comments, to senior management. It is now that an overall consistent and practicable plan can be prepared and put into effect.

We saw earlier on that such discussions can generate a wealth of suggestions about how work can be done better and ideas about opportunities. Some time ago I saw a cartoon which illustrates this point. The Post Office was continually making large losses and the cartoon showed a Post office employee whose suggestion was: "Why don't we misprint some stamps and make up the loss that way?" You may not agree with this particular suggestion but it does illustrate that there are plenty of ideas, one only has to listen.

Managers at different levels have been able to consider what can be done and how the work for which they would be responsible would fit in with work done by others elsewhere. Hence senior managers now know what, in the opinion of those who work for them, can be achieved and are also aware of reservations which have been made and of points to watch. Improvements have been suggested, opportunities have been pointed out.


Evaluating Performance

To plan well and to have work done effectively requires both sound organisation and a clear appreciation of what each employee has to achieve.

Continuous discussion brings out again and again the fact that too many managers are not really aware of what they are supposed to achieve, what their own managers want them to do, just what the important parts of their work are in the eyes of their own manager and of the organisation.

In many ways the discussion between manager and subordinate about their targets helps to define the job of the subordinate and helps to give him a clear idea of what he is supposed to achieve. This is something every manager wants to know and wants to be sure of.

We have already seen that the way of planning ahead described here can assist managers to prepare themselves for the work the company wants them to do in the future. Another result is that managers do not optimise something that is not really needed but a manager may tend to regard as less important and thus tend to neglect that part of his work which is not targeted.

Because performance is measured more readily, reward seems to be more easily related to results. However, the manager still has to assess the effect of circumstances outside the employee's control and deal with those situations and remove those obstacles which block progress.

Managers at all levels become more aware of what is taking place and generally do the best they can to achieve the plan, to feed information to others so as to get assistance, to overcome circumstances outside their control or to have the plan revised.

At the beginning of the year we may have estimated or budgeted for regularly increasing production. This does nor mean that it is bound to happen. A plan is no more than a statement of what we wish to achieve and considered practicable at the time the plan was made. If results are not according to plan, that is are not as expected, then the plan has fulfilled a very good purpose. Becoming aware of the difference between expected and actual results enables us to take appropriate action either to achieve the plan or else to feed information back so that the plan can be brought up to date.

What we have covered in this report is the need for planning and how to plan, the need for establishing priorities and for agreeing quantified and timed targets, the need to monitor progress.

There are certain sensitive and important areas such as the agreeing of clear targets, staff appraisal and the reviewing of performance. It is also important to use the control data to take appropriate action before it is too late.

The way of working described here, if applied well, can do much to increase the will to work.



Notes <..> and References {..}


Notes

<1>     People do not resist change for the better, which benefits them. They are likely to resist change imposed from above which does not benefit them and which may make work and life more difficult and less rewarding.
     
<2>   That is, twenty years before publication of the first edition of this report.


References

{1}     Work, Remuneration and Motivation of Directors
Manfred Davidmann
Social Organisation Ltd
     
{2}   The Experimental Manipulation of the Genetic Composition of Micro-Organisms.
Ashby Report
     
{3}   Style of Management and Leadership
Manfred Davidmann
     
{4}   The Will to Work: What People Struggle to Achieve:
Includes 'Remuneration, Job Satisfaction and Motivation'
Manfred Davidmann


Relevant Current and Associated Works

A list of other relevant current and associated reports by Manfred Davidmann on leadership and management.
     
     
Title   Description
     
Style of Management and Leadership     Major review and analysis of the style of management and its effect on management effectiveness, decision taking and standard of living. Measures of style of management and government. Overcoming problems of size. Management effectiveness can be increased by 20-30 percent.
     
Role of Managers Under Different Styles of Management     Short summary of the role of managers under authoritarian and participative styles of management. Also covers decision making and the basic characteristics of each style.
     
Motivation Summary   Reviews and summarises past work in Motivation. Provides a clear definition of 'motivation', of the factors which motivate and of what people are striving to achieve.
     
The Will to Work: What People Struggle to Achieve   Major review, analysis and report about motivation and motivating. Covers remuneration and job satisfaction as well as the factors which motivate. Develops a clear definition of 'motivation'. Lists what people are striving and struggling to achieve, and progress made, in corporations, communities, countries.
     
Work and Pay   Major review and analysis of work and pay in relation to employer, employee and community. Provides the underlying knowledge and understanding for scientific determination and prediction of rates of pay, remuneration and differentials, of National Remuneration Scales and of the National Remuneration Pattern of pay and differentials.
     
Work and Pay: Summary   Concise summary review of whole subject of work and pay, in clear language. Covers pay, incomes and differentials and the interests and requirements of owners and employers, of the individual and his family, and of the community.
     
Exporting and Importing of Employment and Unemployment   Discusses exporting and importing of employment and unemployment, underlying principles, effect of trade, how to reduce unemployment, social costs of unemployment, community objectives, support for enterprises, socially irresponsible enterprise behaviour.
     
Transfer Pricing and Taxation   One of the most controversial operations of multinationals, transfer pricing, is clearly described and defined. An easily-followed illustration shows how transfer pricing can be used by multinationals to maximise their profits by tax avoidance and by obtaining tax rebates. Also discussed is the effect of transfer pricing on the tax burden carried by other tax payers.
     
Inflation, Balance of Payments and Currency Exchange Rates     Reviews the relationships, how inflation affects currency exchange rates and trade, the effect of changing interest rates on share prices and pensions. Discusses multinational operations such as transfer pricing, inflation's burdens and worldwide inequality.
     
Organising   Comprehensive review. Outstanding is the section on functional relationships. Shows how to improve co-ordination, teamwork and co-operation. Discusses the role and responsibilities of managers in different circumstances.
     
Social Responsibility, Profits and Social Accountability   Incidents, disasters and catastrophes are here put together as individual case studies and reviewed as a whole. We are facing a sequence of events which are increasing in frequency, severity and extent. There are sections about what can be done about this, on community aims and community leadership, on the world-wide struggle for social accountability.
     
Social Responsibility and Accountability: Summary   Outlines basic causes of socially irresponsible behaviour and ways of solving the problem. Statement of aims. Public demonstrations and protests as essential survival mechanisms. Whistle-blowing. Worldwide struggle to achieve social accountability.
     
Co-operatives and Co-operation: Causes of Failure, Guidelines for Success   Based on eight studies of co-operatives and mutual societies, the report's conclusions and recommendations cover fundamental and practical problems of co-ops and mutual societies, of members, of direction, of management and control. There are extensive sections on Style of Management, decision-taking, management motivation and performance, on General Management principles and their application in practice.
     
Using Words to Communicate Effectively   Shows how to communicate more effectively, covering aspects of thinking, writing, speaking and listening as well as formal and informal communications. Consists of guidelines found useful by university students and practising middle and senior managers.
     
Community and Public Ownership   This report objectively evaluates community ownership and reviews the reasons both for nationalising and for privatising. Performance, control and accountability of community-owned enterprises and industries are discussed. Points made are illustrated by a number of striking case-studies.
     
Ownership and Limited Liability   Discusses different types of enterprises and the extent to which owners are responsible for repaying the debts of their enterprise. Also discussed are disadvantages, difficulties and abuses associated with the system of Limited Liability, and their implications for customers, suppliers and employees.
     
Ownership and Deciding Policy: Companies, Shareholders, Directors and Community   A short statement which describes the system by which a company's majority shareholders decide policy and control the company.
     
The Right to Strike   Discusses and defines the right to strike, the extent to which people can strike and what this implies. Also discussed are aspects of current problems such as part-time work and home working, Works Councils, uses and misuses of linking pay to a cost-of-living index, participation in decision-taking, upward redistribution of income and wealth.
     
Reorganising the National Health Service:
An Evaluation of the Griffiths Report
  1984 report which has become a classic study of the application and effect of General Management principles and of ignoring them.

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Relevant Subject Index Pages


Other Subjects; Other Publications


The Site Overview page has links to all individual Subject Index Pages which between them list the works by Manfred Davidmann which are available on the Internet, with short descriptions and links for downloading.

To see the Site Overview page, click Overview


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Copyright    ©    Manfred Davidmann    1979, 1981, 1982, 1989, 2002, 2006
ISBN 0 85192 028 4    Second edition 1982
All rights reserved worldwide.

History
1981 First edition ... ISBN 0 85192 015 2
1982 Second edition ... ISBN 0 85192 028 4
1989 Reprinted ... ISBN 0 85192 035 7
02/04/02 To Website