Scientific Management and Human Relations in the New Charter Housing Trust Group - Case Study Example

Organizational Behaviour Table of Contents Scientific management and human relations 3 Scientific management 3 Human relations theory in management 5Scientific and human relations management in TGI Fridays 6 Scientific management and human relations in New Charter Housing Trust Group 7 Comparison 8 Management in the 21st century 9 Management in non-profit organizations 9 Reference list 11 Scientific management and human relations Scientific management Scientific management and human relations theories had emerged in the 20th century. The theories aim at increasing the efficiency and proficiency levels existing in organizations. Even though both theories follow different approaches in achieving management objectives, the ultimate goal to be achieved remains the same under both the theories (Taylor, 2004). The scientific management theory was developed by Frederick Taylor. In his theory, Taylor had stated that productivity of a particular job can be increased by optimizing and simplifying jobs. He had also stated that adequate levels of cooperation are essential between managers and workers. Taylor also believed that workers were generally motivated by money. Therefore he promoted the idea that fair pay system must be established in every organization. The pay system must be established in a manner such that each worker is compensated on the basis of the amount of work performed. Taylor had an educational background in mechanical engineering. Hence he was highly interested in efficiency related matters. He studied different methods through which efficiency of employees and machines can be studied and improved. According to his theories if a worker was not receiving as much pay as his colleague, it must be assumed that he was not working productively. Hence the pay system was to be based upon efficiency and productivity of each worker (Barker, 2001). During his career with a steel manufacturing company in the U.S., Taylor had conducted a number of experiments for determining the optimal performance levels of employees. The studies had revealed that the by calculating the standard time required for performing a job it is possible to determine the best way off completing a job. The time and motion studies also led Taylor to develop the understanding that certain workers could work more efficiently than others. Therefore selecting the right candidates is important for increasing the efficiency levels within the organization. Based on the studies, Taylor formulated the following principles of scientific management (Jaffee, 2001). Removing rule of thumb- Taylor had stated in his work that managers must study a given job from different perspectives and accordingly develop a suitable plan of performing the same. Most managers are seen to apply the rule of thumb or their simple common sense for determining the manner in which a job should be performed. Capability study- Taylor had stated that skill levels of employees vary significantly. All employees are not suitable for performing the same kind of tasks. It therefore becomes essential to map the competency levels of employees and accordingly assign them different types of tasks. Training is also an effective way of improving employee performances (Fournier and Grey, 2000). Monitoring- monitoring work helps in increasing the accuracy levels in the work which is being performed. Monitoring the work would help mangers to ensure that there exists an adequate level of efficiency in the organization. Proper allocation of work- It has been identified that proper allocation of work between the managers and the employees are highly essential for efficient organizational performance. Managers must be assigned with the tasks of planning and training where as employees must perform the different types of tasks allocated to them effectively. Work allocation must be done by considering aspects such as the skills of the workers, job responsibilities and requirements and the objectives of the management (Jones, 2000). Taylor’s idea of scientific management differs from other concepts such as MBO (Management by Objective). Scientific management theory provides less autonomy to workers to choose the right way of performing a job. Workers are required to work in a rapidly changing environment. Therefore it becomes essential to change the manner in which tasks are performed as the internal and external environmental conditions fluctuate. Adhering to a rigid pattern of working may influence the work in a negative manner. Taylor also has given less emphasis to the aspect of team work. Taylor’s theory mainly concentrates upon allocating to each worker and achieving efficiency in the same. However managers are also at times required to assign tasks on the basis of team (Price, 2011). Under such circumstances the performance of the team as a whole becomes an essential aspect to study. Modern systems of management study performance in a holistic manner. Taylor’s theories as opposed to the modern theories emphasize upon specialization. Experts have stated that the cooperation principle established in Taylor’s scientific management theory has led to the development of team work which is experienced today by modern organizations. Although Taylor’s principles are not widely practiced in today’s businesses, but they have provided adequate advancement to the management practices which has evolved over the ages (Sundstrom, et al., 2000). Human relations theory in management The human relation theory emphasizes upon the relationships existing between the organization and the employees. The theory mainly states that happy employees are the most productive employees. The theory mainly considers the issues which arise out of the interpersonal relationships existing within an organization. Employees are the most important resources of an organization. Hardworking and dedicated employees are one of the primary features of a successful organization. The contributors of the human relations theory were Elton Mayo and Fritz Roethlisberger. Both of them were curious to know how the efficiency levels of workers can be improved within an organization. They decided to do a research upon the productivity levels of employees at the Western Electric Factory, in Chicago. Mayo and Roethlisberger though that by increasing the number of lights in the factory, the workers would be able to work more productively. However it was seen that lighting had no impact upon the work performed by the workers. It was also seen that the amount of attention that the workers received while these tests were being conducted played an important role in developing the performance of the employees. In the second phase of the study Mayo and Roethlisberger decided to examine the work hours and rest periods of the workers. The test groups were subjected to a variety of changes in the environment. The changes were made in respect of pay scale, length of work days and length of breaks taken. The results were same as the previous tests conducted. Employee performances had increased positively. The tests showed that employee performance changed as they were engaged in more number of researches (Wickstrom and Bendix, 2000). After carefully analyzing all the data, Mayo and Roethlisberger came to the conclusion that employees are highly affected in the manner in which they are treated. Interpersonal relations which employees experience are a contributing factor towards their job satisfaction and productivity. The results of this study came to be known as the Hawthorne Effect. After the Hawthorne studies, a number of researchers began studying the psychological needs of workers and the impact of the interpersonal organizational relationships upon employees (Gruening, 2001). Abraham Maslow proposed that there are five basic needs which are required to be satisfied in order to improve the motivation levels of employees. These levels are namely; psychological needs, safety needs, belongingness, esteem needs and the self actualization needs. These needs are set in a hierarchical order. Only the satisfaction achieved at one level will motivate workers to move higher up to the next level of the hierarchy. Hence satisfaction of the lower level needs are highly essential so that the higher needs can be achieved. Similarly Douglas McGregor had proposed two theories in relation to the human relations school of management. These theories were known as Theory X and Theory Y. Theory X states that employees are only productive when the pay scale and incentives are high. On the other hand, Theory Y states that self motivation plays is one of the driving factors behind effective performance. The research conducted by McGregor led him to the conclusion that Theory Y is most suited in the business environment (Cole, 2004). The different types of researches conducted by different scholars upon the human school of management can be summed up as follows: 1) Employees obtain satisfaction from not just economic factors but also through different social and psychological aspects. 2) A business organization is a part of the social system and therefore social interactions cannot be avoided. 3) Cooperative attitude is seen to do better than commanding attitude in the corporate environment. 4) Social skills such as communication and leadership play an important role in developing an employee’s performance apart from technical skills. 5) Morale and productivity must be given equal importance in an organization (Hislop, 2003). Scientific and human relations management in TGI Fridays TGI Fridays is a famous casual dining restaurant located in the U.K. The headquarters of the restaurant is located in Luton. The company takes its name from the famous expression “Thank God it’s Friday”. TGI Fridays is known for its highly attractive interiors and its ambience. The restaurant is claimed to be one of the best places to work as per the 2013 Sunday Times list of 25 best companies list. The survey conducted by Sunday Times was based upon how employees feel about their companies. TGI Friday had achieved a ranking of number 3 in the list. Employees of TGI are highly enthusiastic about the company. Employees of TGI have ranked the company highly on the scales of management attitude, team work an attitude and leadership levels. The survey results had proved that the internal ambience of the company is highly suitable and motivates management performance. The employees of the company have also given it high rankings on the grounds of job security. TGI has 55 restaurants in Britain and approximately 4000 employees (Best Companies, 2014). The restaurant follows a policy of addressing their employees as family members. The management of TGI gives high importance to the employees and takes into consideration their interests while implementing strategic decisions. Workers of the company have stated that team spirit is extremely high within the company. Employees feel a strong sense of unity while working in teams. The company encourages employees to perform well by providing awards and recognition. Employees wear the medals given to them as badges. Such strategies of the management encouraged enhancing the employee morale and fostering productivity. It can be well stated that TGI mainly follows the human relations school of thinking in its management style. The company ensures that the ambience and interpersonal relationship are highly motivating. Employee engagement in managerial decision making process is considered as an important aspect. Mangers are seen to take all possible efforts in order to ensure that employees are satisfied with the working conditions. TGI is also dedicated to the human relations concept of team work and leadership. Employees are encouraged to work in a manner such that they can set examples to others. The management also incorporates the scientific school of management thinking by compensating employees on the basis of their productivity. Employees who are highly productive are provided with greater amount of incentives. Mangers are seen to exert high interest in the well being of the employees from all perspectives (Best Companies, 2014). Scientific management and human relations in New Charter Housing Trust Group The New Charter Housing Trust Group not only provides housing and building services but it also provides charity and social letting agency services. The group also sponsors three academies. New Charter Housing Trust Group has a high level of goodwill in the society. The company was successful at achieving the seventh position in the 2013 Sunday Times List of the 100 Best Not for Profit Organisations (The Sunday Times, 2014). The employees of the firm state that they do not feel lethargic to come to work. The well developed internal environment acts as an encouraging factor for the employees. Mangers ensure that the communication network within the organization is well developed. Subordinates are encouraged to talk about their difficulties with the management. Superior employees ensure that all employee grievances are dealt with on time and without causing any types of internal conflicts. The company also gives huge importance to the aspect of training and development. Managers recognize the fact that it is essential to implement organizational changes alongside of changes in the external conditions. Employees will only be able to successfully be able to comply with these changes if adequate training and development is imparted. The assessment of New Charter Housing Trust Group reveals that the company follows both the scientific and the human relation methods of management. The company follows the scientific methods of work allocation, capability mapping and monitoring. The company ensures that work is allocated to employees on the basis of the skills and abilities. Employees are also provided with suitable incentives and perks to encourage higher performance. By monitoring the work of the employees, it becomes possible for them minimize errors. The company is also seen to follow the human relations management. The company ensures that employee problems are addressed on time. Employees are also encouraged to participate in the management decision making processes. Team spirit is also promoted by the internal environment of the organization. Training and development is also adequately provided by the company (The Sunday Times, 2013). Comparison The above analysis of the management of employees in TGI Fridays and New Charter Housing Trust Group reveals that both companies mainly adhere to human relations management style. Since both the firms give very high importance to their employees, it becomes necessary to follow the concepts laid down by the human relations system of management. However the analysis reveals that team spirit and the level of motivation existing in TGI is much higher than that of New Charter Housing Trust Group. New Charter Housing Trust Group believes that by engaging themselves in appraisal and monitoring activities, the company can increase its productivity. These are concepts of the scientific management style. The study of the management styles existing in the two companies has also revealed that TGI follows an employee friendly strategic decision making policy. All the important decisions taken by the management are studied by analyzing its impact both upon the organization and its employees. The firm believes that organizational wellbeing can only be achieved if employees remain satisfied. On the other hand it is seen that New Charter Housing Trust Group gives more emphasis to collaborating the interests of the management and the employees. Employee needs are only given premier significance if they result in the achievement of the motives of the organization. Management in the 21st century The 21st economy is characterized with high competition and innovation. Organizations are frequently required to implement changes to sustain high competition. The scientific system of management is considered as an obsolete theory in the present business world. The scientific theory is considered to be rigid and emphasizes on giving less autonomy to employees. The scientific policies concentrate upon developing a controlled environment. This may de-motivate employees. The scientific management policies also give less emphasis to team work, training, motivating employees and innovative thinking. The theory states that employers are required to mainly concentrate upon improving the efficiency of the workers. The theory seems to neglect many areas of employee needs (Drucker, 2007). The modern management concepts have evolved out of the human relations school of thinking. Therefore it can be stated that the concepts of human relations management have many similarities with the modern management concepts. The modern concepts emphasize upon being flexible towards change and encouraging innovation. The human relations concepts however form the basis for the emergence of the concepts such as MBO. MBO states that an organization must set objectives and policies regarding managing employees by considering the interests of both the firm and the workers. The motive is to ensure that the interests of shareholders and investors are also met. The modern theories of management also emphasize upon the development of an adequate communication framework to exist in an organization (Brinckerhoff, 2009). Management in non-profit organizations The scientific style of management emphasizes upon improving productivity and increasing the profits of the business. This system is therefore not suitable for the non-profit seeking organizations. Non profit seeking organizations emphasize upon providing employees with adequate scope for development and a proper work environment. Most of the non-profit seeking organizations are seen to develop a participatory style of management (Anheier, 2014). The participatory style engages employees in important management decision making processes. The autocratic and the impoverished styles of management are also not followed in the non-profit organizations. Modern management theories such as MBO are considered to suitable for non-profit organizations. Management styles such as MBO are seen to be followed by the non-profit organizations at large. Non-profit organizations include the development of team work and a strong communication networks within the organization. Although non-profit organizations do not emphasize upon earning high profits, it is essential for them to earn adequate profits to cover the costs of production and to survive in the long run. Therefore it can be stated that the non-profit seeking organizations primarily follow the human relations concept of management (Speckbacher, 2003). Reference list Anheier, H. K., 2014. Nonprofit organizations: Theory, management, policy. London: Routledge. Barker, R. A., 2001. The nature of leadership. Human relations, 54(4), pp. 469-494. Best Companies, 2014. T.G.I. Fridays UK Ltd. [online] Available at: [Accessed 5 August 2014]. Brinckerhoff, P. C., 2009. Mission-based management: Leading your not-for-profit in the 21st century (Vol. 231). New Jersey: John Wiley & Sons. Cole, G., 2004. Personnel and human resource management. Personnel Review, 33(3), pp. 373-374. Drucker, P. F., 2007. Management challenges for the 21st century. London: Routledge. Fournier, V. and Grey, C., 2000. At the critical moment: conditions and prospects for critical management studies. Human relations, 53(1), pp. 7-32. Gruening, G., 2001. Origin and theoretical basis of New Public Management. International public management journal, 4(1), pp. 1-25. Hislop, D., 2003. Linking human resource management and knowledge management via commitment: a review and research agenda. Employee relations, 25(2), pp. 182-202. Jaffee, D., 2001. Organization theory: tension and change. New York: McGraw-Hill. Jones, O., 2000. Scientific management, culture and control: A first-hand account of Taylorism in practice. Human Relations, 53(5), pp. 631-653. Price, A., 2011. Human resource management. Connecticut: Cengage Learning. Speckbacher, G., 2003. The economics of performance management in nonprofit organizations. Nonprofit Management and Leadership, 13(3), pp. 267-281. Sundstrom, E., McIntyre, M., Halfhill, T. and Richards, H., 2000. Work groups: From the Hawthorne studies to work teams of the 1990s and beyond. Group Dynamics: Theory, Research, and Practice, 4(1), pp. 44. Taylor, F. W., 2004. Scientific management. London: Routledge. The Sunday Times, 2013. New Charter Housing Trust Group. [online] Available at: [Accessed 5 August 2014]. The Sunday Times, 2014. 100 best small companies to work for 2014. [online] Available at: < http://features.thesundaytimes.co.uk/public/best100companies/live/template> [Accessed 5 August 2014]. Wickstrom, G. and Bendix, T., 2000. The" Hawthorne effect"—what did the original Hawthorne studies actually show? Scandinavian journal of work, environment & health, 1(1), pp. 363-367. Read More