Psychologists working in the field of group dynamics have long been aware that people behave differently in groups than they do as individuals. Moreover, studies conducted during World War II showed that housewives who participated in group discussions on the dietary value of citrus fruits tended to use citrus fruits to a greater degree than matched groups that were simply lectured at, on the same subject, by dieticians.
Implication of management
If employees were given the chance to participate in decision-making, they would accept the fiscal decision and be more wholehearted in working towards its implementation. Therefore changing, a continuing preoccupation of business, might then become more acceptable at the lower echelons.
Yet, here again, the easy answer does not always apply. For example, Professor Arnold S. Tannenbaum of the University of Michigan describes an experiment in which a company divided its clerical staff into two groups, one to be managed participative, the other in the usual way, with management making all decisions.
In the participative group, the clerks discussed and decided things like rules for office conduct, size of workgroups, length of coffee breaks, and so on. The other group was not allowed to participate in decisions.
Effective Management Outcomes
Although productivity in each group went up and the clerks in the participative group enjoyed their work more, productivity in the nonparticipative group rose most. Professor Tannenbaum accounted for the results by suggesting that productivity went up in the participative group because of increased job satisfaction and in the other group because of the manager’s increased control. If the supervisor had realized that the purpose of participation was not to make personnel happy but to improve their functioning inside the organizational context.
Importance of Group Participation
Academic findings and discussions aside, the practising executive knows from experience that participation can help achieve a number of extremely desirable objectives:
By letting employees in on the “ground floor” of a problem or development, they’re getting direct and early information, as compared to the garbling and confusion that may result from attempts at communication after the fact.
The executive who gives his subordinates the opportunity to participate in discussions of problems, plan developments, and so on gains the benefits of the ideas and suggestions of his people, as well as the modifications or extensions of his own ideas.
Training self-respect and dignity
Subordinates who have a chance to join you in discussions become exposed to your values, attitudes, and experiences in a most constructive situation. In addition, their response to being treated as “equal,” as “being important enough to become important factors” in planning and other important activities will clearly have a desirable influence.
Factor of Motivation
Perhaps the greatest benefit of the opportunity for participation by your people is the great sense of responsibility and willingness with which they undertake tasks that grow out of their participation.
The Pareto Principle
Vilfredo Pareto, a nineteenth-century economist, analyzed the distribution of welfare in his time and discovered that most of it were in the hands of a few people (the vital few), while the vast majority (the trivial many) existed in poverty. In his book “Managing for Results,” Peter Drucker suggests that many management problems lend themselves to this approach.
Drucker points out, “In the marketplace, a handful of products in the line produce the bulk of sales volume; a few salesmen out of the total roster produce % of all new business.” The Pareto principle applies to any management problem that can be quantified or broken down into units of relative importance.
A company asked its key officers to list the obstacles to increased profitability. When the lists were tabulated, they showed a total of 37 problems—too many to handle at once. The list was sent back to the company officials with the request that they rate the problems in order of importance. The second set of lists showed that five of the problems fell into the category of the vital few. The rest fell into the category of the trivial many.
Learning the Pareto Principle
The above example demonstrates the four basic steps involved in applying the Pareto principle,
- Firstly, make a written list of the factors, units, or components involved in the problem.
- Secondly, arrange these items in order of importance relative to the problem.
- Thirdly, identify the vital few. Fourth, identify the trivial many.
Another illustration of the application of how the four steps above apply: the president of a clock-making company eliminated one-third of the regular models when he found they added up to only 4 percent of the company’s volume. Within six months, the company was doing a larger, more profitable volume. In another case, the company analyzed 2,753 orders. The top 13 percent accounted for 66 percent of the sales volume in dollars, while the bottom 69 percent of the orders brought in only 7.1 percent of sales .
In this case, the vital few, while accounting for 66 percent of the results, involved only 13 percent of the sales costs. The trivial many, bringing in only 7.1 percent of the sales were responsible for 68 per-cent of the costs. As Drucker puts it, “Results in costs stand in various relationships to each other.” In this case it is clear, cutting off sales costs, to be most effective, must come from the trivial many.
The “HALO EFFECT”
When one trait of a person or aspect of a situation influences your judgment of another trait or another aspect, you have the “halo effect” in action. It’s a management problem in cases like these:
Interviewing prospective employees
An executive permits the pleasant appearance and oral skills of an applicant to blind him to the fact that the man has a murky work history. And, of course, the “halo effect” can work in the opposite way: an unattractive appearance or manner may blind one to an applicant’s assets.
A subordinate does an excellent job of investigating and reporting a space situation in his company. His boss promptly gives him another task: analyzing poor reactions to requests for suggestions from the staff. The subordinate gets nowhere. Eventually, his boss realizes that he’s fine when dealing with tangibles: space, inventory, and so on. He’s a babe in the woods in human relations situations.
Judging job performance
“Barry’s turning in a terrific job,” a sales manager tells the V.P. in charge of sales. “This is the third week he’s among the top 3 producers.” “You’re overlooking something,” observes the V.P. “His cancellation rate from customers is tops also.”
It’s important for the executive not only to understand how the “halo effect” works but also to be aware of preventive measures –
1. Keep the “halo effect” in mind when rating people
Remind yourself from time to time that a man who’s industrious is not necessarily cooperative; that a man whose job knowledge is excellent doesn’t necessarily apply himself. And, remember that the man who is eager to please is not necessarily the best one for a demanding assignment.
2. Judge employees on one trait at a time
This is an added safeguard. Let’s say you’re rating the group’s cooperation and initiative. By rating everyone on cooperation first, you get around the danger of letting Smith’s cooperation rating influence his mark for the initiative. By the time you get back to Smith to rate his initiative, you’ve broken through the “blinding” of the “halo effect.”
3. Avoid putting similar traits close together if you make up your own rating form
For example, it’s a good idea to follow a work performance trait-like job skill with a personality trait like initiative. The “halo-effect” concept is a good reminder that our judgments are susceptible to illogical pressures. Awareness of the “halo effect” phenomenon can be major protection against unbalanced judgment.
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