Managing the People Dimension - Essay Example

Managing the People Dimension School: EXECUTIVE SUMMARY The ical theory of management was developed and started being used, during the era of the industrial revolution, in the process of fashioning solutions to due to the problems facing the factory system. The main themes of the theory include the role of bureaucracy and increasing the productivity of organizations. The advantages of the classical theory of management include that it splits the workforce of an organization into groups, and it supports the division of labour. The disadvantages of the theory include that the developers relied on assumptions and used on untested assumptions. Rationalization has been very important to Toyota Motors, including that it enables it to streamline the production system for cost reduction. The contrasting and complementary perspectives employed by the company include automation and reengineering. In the process of managing the people dimension of the company, the HR department encourages the use and the development of creativity and constant communication on different issues. The information gathered through the module will improve personal management in different areas, including learning and training, importance of design and the role of employee development. INTRODUCTION The classical management theory was conceived and used during the era of the Industrial Revolution, after the emergence of new problems in the working of the factory system. Many of the managers tasked with the role of managing organizations did not know the best ways of training workers and the strategies they could use to deal with increases in labor dissatisfaction, and that compelled them to start testing solutions (Wagner-Tsukamoto, 2008). The testing of the solutions fashioned led to the development of the classical theory of management; it is a collection of best practices for performing and managing organizational roles and tasks. The theory is comprised of two sides: the classical administrative and the classical scientific branches (Kaplan and Norton, 2008). The classical administrative functions side emphasizes the importance of expertise, rules and rationalization – it emphasizes the importance of the clarity of roles and efficiency. The classical scientific branch was developed to address the need to augment the efficiency and the productivity of organizations and systems. The emphasis of this branch was the skills of the workforce, which could be manipulated to get more work done and help in improving work processes. This paper will explore the classical management theory, complementing and contrasting perspectives, the HRM resource of the company and a reflection on the importance of the module. MAIN FEATURES OF THE CLASSICAL MANAGEMENT THEORY AND RATIONALIZATION The advantages and the disadvantages of the approach in the management of human resources The advantages of the classical management theory include that it splits the human resources of organizations into a hierarchical model, where the responsibilities and the objectives of each groups are explicit (Hermel and Ramis-Pujol, 2003). The second advantage of the classical management theory is that it supports the division of labor, where different workers and groups are required to perform different roles and tasks. The breaking down of projects into smaller tasks increases the human resource’s ability to perform excellently, and also increases the levels of specialization (Robbin and Coulter, 2005). The third advantage of the theory is that it emphasizes the importance of monetary incentives, which are a major part of the system that compels workers to work more and increase their efficiency and productivity (Shafritz and Ott, 2001). The fourth advantage of the theory is that it encourages the harmony of decision making through altering power distribution, due to its identification with the autocratic leadership style (McAdam, Hazlett and Casey, 2005). The disadvantages of the theory include that the developers of the theory relied on their managerial experience in different fields, including manufacturing firms, and not the empirical study of organizational and HR management (Dahlgaard and Dahlgaard-Park, 2004). The second disadvantage of the theory is that it relies on untested assumptions, including that workers are only motivated by money and only work for money. Thirdly, the theory tends to ignore the informal relations of employees and other informal aspects of the organization. Other disadvantages of the theory include that it does not take into consideration, the unintended consequences of management and external forces (Krajeswky, Ritzman and Malhortra, 2007). The implementation of rationalization in Toyota Motors Corporation The Toyota Motors Corporation has used the classical approach to increase the production of the organization, through the rationalization of the work function of the organization (Liker, 2004). TMC, in using the classical model, employed the managerial perspective of its human resources, but has also paid attention to the informal organization and the human relations aspect of employee motivation (Shibata and Kaneda, 2001). Using rationalization enables the company to control and improve its systems of production and the outputs, so as to increase production efficiency and meet the demands of its customers. One of the rationalization strategies employed by the organization is the Just in Time (JIT) system and the Jishuken model of employee development and improvement. The purpose of the rationalization process in the management of the human resources of the organization is to encourage skills development through group activity, where emphasis is offered to learning by doing at the company’s shop-floors (Hsieh, Chou and Cheng, 2002). One important aspect of the rationalization processes used by TMC in the management of its human resources is the standardization of work, emphasizing the learning of value added work. The strategies used by the company during the rationalization process include the division of work between workers and managers; the provision of performance-based incentives and training the workers scientifically. Additionally, the Toyota Company emphasizes the creation of a science for the roles of employees and has developed systems for checking that work is done efficiently and in a timely manner (Dahlgaard-Park, 2003). The specific exercises, actions and the processes put in place to guarantee that the organization is meeting the standards include the provision of work-shop lectures that are customized for different job areas. Other practices aimed at improving the rationalization of the work and the output of the workers include assessing and rating employees, reviewing the performance of workers, facilitating the learning of workers through groups, and engaging workers during the setting of timings and targets (Kanji and Moura, 2007). The Toyota Motors Company encounters the advantages and the disadvantages of the classical management model in a variety of areas and ways. These ways include that, due to the hierarchical nature of the administrative system – and also the fact that the objectives and the responsibilities of different groups are explicit – the company has resolved to the standardization of work. More importantly, the standardization of work has enabled the company to train its workers in different skill areas, especially those that are very useful in improving productivity and the efficiency of the production system. Secondly, due to the fact that the model increases the division of labor, the company has used the system to identify staffs, lines and processes that are not critical to the company’s production. Through the identification of the areas or the workers that are not critical to the organization, the company is able to identify the critical areas of the production system that allow it to benefit the most and in the long term. The actions taken include planning for employee training and workshop events for critical areas, which are very important in increasing the productivity of the company. The effects of the strategies taken include that the capacity of the workers of the organization is improved continually, and that has helped them to acquire skills in new areas, including the working of new drive systems. Due to the models emphasis on the importance of monetary incentives, the company has used this advantage to benefit from increased productivity. The company does this through evaluating the productivity of different workers, and then using their productivity levels as the main determinant of salaries and wages (Hino, 2006). However, due to the high competition facing the company globally, the company has had to substitute the emphasis offered to monetary incentives with the motivation of workers using other practices like training and development among others. In taking advantage of the increased harmony of decision-making power, the company has maintained a globally managed network, where the core activities of facilities are managed centrally. For example, in the outsourcing of production capacity and materials, the company has continued to manage all activities and decisions at regional oversight centers. Further, at the level of a production facility/ outlet, the company has emphasized a top-down management of business activities and business. The outcomes include that the management of human resources has remained harmonious and streamlined; that has increasingly improved its productivity globally. In response to the disadvantages of the model, the company has employed a variety of strategies, including that the company has invested and facilitated the working of its research development function to improve its performance. The strategies used in the development of the company’s human resources, which have been critical in improving the performance of the organization include its proposal about the importance of emails and monthly visits to the monitoring of production processes. The proposal was put into action, and the company has benefited from it in many ways, including that employee productivity has increased and the management of employees improved. The model is also affected by the fact that its developers relied on untested assumptions, regarding critical organizational areas like the fact that workers are only motivated by money. In countering this area of disadvantage, the company has invested in the development of its employees, following the recent knowledge that many workers are motivated by growth, skills development and personal development in their careers. The programs adopted by the company include the assessment of the human resources of different facilities when developing the materials and the topics to be covered during workshops. The effects of the strategies implemented on the human resources of the company include that, the creativity of the workers has been improving, and that increases the creativity of the company. In countering the disadvantage identified from the original model, which is that little attention is offered to informal relations and the employee culture, the company has adopted a new training model. The new training model is reliant on the role of groups in the training and the development of workers and their capacity (Jacobs and Suckling, 2007). The human resource management functions used to counter the disadvantage include classroom training and model supplier visits. The importance of the group-based training and learning programs is that they foster the learning of employees and suppliers in different areas of importance. In addressing the disadvantage that the model does not take into account unintended consequences and external forces, the company does periodical analysis of the company’s objectives and the human resource gaps that may limit its productivity in the short and the long term. CONTRASTING AND COMPLEMENTARY PERSPECTIVES Automation is a similar process, despite the fact that it can be used with all organizational functions of insurance, manufacturing, retail distribution and wholesale businesses. Automation and rationalization are different from one that, in that rationalization entails the execution of business functions in a scientific and rational way (Daft and Armstrong, 2009). On the other hand, automation is related to the large scale and increasing usage of machinery, which leads to the displacement of workers. One of the areas where the Toyota Motors company has used rationalization is cutting the finances towards its research and development (R & D) departments during the recent financial crisis (Fujimoto, 1999). The automation practices employed by the company include the usage of low-cost robots at Toyota production facilities (Fujimoto, 1999). The automation of the company’s production process is done with the aim of improving the productivity of the company, despite the fact that the process leads to the loss of employment. There is another difference between the two processes, which is that, it is possible for the rationalization process to take place in the company, without the company’s adoption of capital-intensive machinery or devices. The two processes are dependent upon technological development, but the choice of the techniques adopted by the company differentiates whether the company has initiated automation or rationalization. Other technological changes that correspond with these organizational changes include the automation of quality control-systems, the automation of process controls and the automation of identification-systems (Ozono, Shimizu and Takeuchi, 2008). Different from rationalization, business processes reengineering is the drastic restoration of the company’s business processes, with the goal of eliminating paper-intensive, repetitive, bureaucratic filled roles (Mansar and Reijers, 2005). The aims of this process include reducing the costs of production and doing business, as well as improving the quality of the services or the products supplied by the company. One of the processes used by the company under this class of organizational remodeling is the case of Just-In-Time (JIT) system used by the Toyota Motors Corporation during the 1950s (Hirano and Makota, 2006). The process has continued to be used at the facilities of the company, where the company only secure enough supplies for the work at hand; doing that helps the company to reduce the costs of keeping the operations of facilities going. The main similarities between rationalization and BPR include that they are aimed at increasing the productivity and the profitability of the company (Fujimoto, 1999). The major differences between the two processes include that reengineering is a rapid process, while rationalization is a slow-changing and slow-moving process. Also, BPR is a process, which is likely to present more risk and also returns, unlike the slower process of rationalization, which exposes the company to less risk and lower returns (Hirano and Makota, 2006). THE MANAGEMENT OF THE PEOPLE DIMENSION IN TOYOTA MOTORS CORPORATION The company emphasizes the use of the lean manufacturing strategy, which is aimed at the reduction of the costs of operation in the company. The management of the people dimension in the company emphasizes constant communication, as a way of encouraging and developing cooperation and teamwork in the company. The second people management best practice is encouraging creativity and offering the flexibility to work in the production areas where workers are more suited, and that has been at the core of the company’s production of new technologies and the creation of innovative strategies (Petersen, 2009). Thirdly, the company has relied on its studious and consistent decision-making processes, where the workers communicate on critical issues with their superiors in the best ways available (Dahlgaard-Park and Dahlgaard, 2007). For example, towards realizing this, the company has emphasized the use of email message and periodic reporting, as a way of ensuring that the performance of workers remains high. As part of its renationalization process, the company has highlighted the importance of standardizing job functions, which calls for the standardisation of employee behaviours (George, Copper and Douglas, 2003). One practice used in this area of managing its human resources is the practice of recording the techniques, abilities and the characteristics of candidates, during the interviews done to recruit them as new staffs or for specialised assignments. During the development and training of employees, the company pays special attention to the interpersonal communication and teamwork abilities of employees, with the aim of establishing their potential to work in the dynamic teams (McFarlane, 2001). During the selection of workers, the company is usually interested in the work ethics of potential candidates, including that the employees should be willing and able to learn new areas and perform (Liker and Meier, 2007). During the selection and the management of work teams, the company checks whether the employees to head teams can act as strong motivators and trainers (Monden, 1998). More importantly, the human resource management function of the company requires the team leaders to show knowledge of all the job areas within the company, in order for them to train the employees in the different areas of work (Sinclair and Zairi, 1995). By selecting the people who are knowledgeable in the different work areas, the company checks to ensure that there is the continuity of skills development (Liker and Meier, 2007, p. 64). TMC has taken its employee development practices to a higher level, through the development of training centres, starting with one in Thailand, a second in England and another in Kentucky (Liker and Meier, 2007). Some of the employee training best practices initiated by the company include the process of interactive learning programs and systems. The new systems entail the use of videotapes and computers, which allows the available trainers to communicate their skills and know-how to the company’s global team (Liker and Meier, 2007, p. 24). In the area of performance appraisal, the company channels more resources towards increasing the performance efficiency of systems and teams than individuals. In the area of compensation, the company emphasizes the importance of paying their workers highly, in order to retain the experts in the industry (Liker and Meier, 2007, p. 12, 213). Towards guaranteeing its workers the continuity of tenure, the company has exercised the practice of retaining its workers, even during bad financial times. For example, the company is known to transfer the workers that are harmed during their work at the factory floors, and assigning them alternative roles where they can still perform (Besser, 1995, p. 391). Recommendations for changes and the improvement of the management of the people dimension TMC identifies greatly with the classic model of management, and the limitations include that the decision-making capacity of HR supervisors, because they often will posses the best knowledge about workers and the areas befitting them. Currently, only the head of the HR department can decide on hiring and promotions (Lemack, 2004). Due to the bureaucracy and the structure of the company’s HR department, the HR representatives of the company are burdened by many administrative issues, and in order to address the problem, it is recommended that the company establishes a central call centre for addressing the general questions of the workers and customers. In order to improve the performance of HR personnel across the many facilities, the company should offer more training on the effective management of the human resources and the importance of improving the effectiveness of the HR department. More importantly, emphasizing the promotion of a culture of collaboration and learning will be very important to the future of the company, and will help to improve the effectiveness of the company’s workforce. REFLECTION ON MODULE KNOWLEDGE CAN INFORM PERSONAL MANAGEMENT PRACTICES Through the knowledge gained from the module, I gained more understanding of the impact of management on people, including the importance of learning and training for professional development and practice (Harrington, 2004). For example, the module has given the information that employee learning and training can help managers to retain good employees – and that will enable me to engage workers more effectively – so as to improve the productivity of workers. The module has shed light on the importance of the design and the effectiveness of action research, which is a critical ingredient in improving the management of the people within an organization. Some of the skills that I found to be very important in personal and professional development for the heads of HR as well as the employees include those of critical analysis, action planning reflection and evaluation. CONCLUSION The classical theory of management was conceived and its use started during the industrial revolution, following the collapse of the factory system. The theory emphasises the importance of expertise, rules and rationalization, with respect to the improvement of productivity and profitability. The main advantages of the theory include that the staffs are divided into different groups; it promotes the division of labour and emphasizes the importance of monetary incentives. The disadvantages of the theory include that the proponents relied on unfounded conclusions and it ignores informal relations and systems. In TMC, the company has used rationalization in the division of labour, the provision of employee training and the assessment and rating of employees based on performance. The perspectives that are contrasting and complementary to rationalization include automation and business process reengineering. The management of the people dimension in Toyota motors is aimed at leaning the manufacturing of the company, through encouraging the activity of the employees and the standardization of work processes. Through the information gained from the module, a number of things were highlighted and their importance emphasized. The areas learnt include the importance of learning and training, the significance of action research and the importance of personal and professional development. REFERENCE LIST Besser, T., 1995. Rewards and Organizational Goal Achievement: A Case Study of Toyota Motor Manufacturing in Kentucky. Journal of Management Studies, 383-399. 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Did Taylorism fail because of a too positive image of human nature? Journal of Management History, 14(4), 354. Read More