ACCA F1 Accountant in Business Solved Past Papers 0207

Accountant in
Business
Time allowed: 2 hours
ALL FIFTY questions are compulsory and MUST be attempted.
Do NOT open this paper until instructed by the supervisor.
This question paper must not be removed from the examination hall.
Fundamentals Pilot Paper Knowledge module
Paper F1
The Association of Chartered Certified Accountants
ALL FIFTY questions are compulsory and MUST be attempted
Please use the Candidate Registration Sheet provided to indicate your chosen ans
wer to each multiple choice question.
1 An organisation which restructures through a major de-layering exercise has as
a result moved to a shorter scalar
chain and a narrower span of control.
Is the above statement true or false?
A True
B False
(1 mark)
2 Which of the following is the main function of marketing?
A To maximise sales volume
B To identify and anticipate customer needs
C To persuade potential consumers to convert latent demand into expenditure
D To identify suitable outlets for goods and services supplied
(2 marks)
3 Which one of the following has become an established best practice in corporat
e governance in recent years?
A An increasingly prominent role for non-executive directors
B An increase in the powers of external auditors
C Greater accountability for directors who are in breach of their fiduciary duti
es
D A requirement for all companies to establish an internal audit function
(2 marks)
4 In a higher education teaching organisation an academic faculty is organised i
nto courses and departments, where
teaching staff report both to course programme managers and to subject specialis
ts, depending on which course
they teach and upon their particular subject specialism.
According to Charles Handy s four cultural stereotypes, which of the following des
cribes the above type of
organisational structure?
A Role
B Task
C Power
D Person
(2 marks)
5 At what stage of the planning process should a company carry out a situation a
nalysis?
A When converting strategic objectives into tactical plans
B When formulating a mission statement
C When validating the effectiveness of plans against outcomes
D When formulating strategic objectives
(2 marks)
6 Which one of the following is potential advantage of decentralisation?
A Greater control by senior management
B Risk reduction in relation to operational decision-making
C More accountability at lower levels
D Consistency of decision-making across the organisation
(2 marks)
7 Which one of the following is an example of a internal stakeholder?
A A shareholder
B An non-executive director
C A manager
D A supplier
(2 marks)
8 According to Mendelow, companies must pay most attention to the needs of which
group of stakeholders?
A Those with little power and little interest in the company
B Those with a high level of power but little interest in the company
C Those with little power but a high level of interest in the company
D Those with a high level of power and a high level of interest in the company
(2 marks)
9 What is the responsibility of a Public Oversight Board?
A The establishment of detailed rules on internal audit procedures
B The commissioning of financial reporting standards
C The creation of legislation relating to accounting standards
D The monitoring and enforcement of legal and compliance standards
(2 marks)
10 The ageing population trend in many European countries is caused by a increas
ing birth rate and an increasing
mortality rate.
Is this statement true or false?
A True
B False
(1 mark)
11 Which one of the following is consistent with a government s policy objective t
o expand the level of economic
activity?
A An increase in taxation
B An increase in interest rates
C An increase in personal savings
D An increase in public expenditure
(2 marks)
12 Martin is an experienced and fully trained shipbuilder, based in a western Eu
ropean city. Due to significant
economic change in supply and demand conditions for shipbuilding in Martin s own c
ountry, the shipyard he
worked for has closed and he was made redundant. There was no other local demand
for his skills within his own
region and he would have to move to another country to obtain a similar employme
nt, and could only find similar
work locally through undertaking at least a year s retraining in a related enginee
ring field.
Which of the following describes the type of unemployment that Martin has been a
ffected by?
A Structural unemployment
B Cyclical unemployment
C Frictional unemployment
D Marginal unemployment
(2 marks)
13 When an organisation carries out an environmental scan, it analyses which of
the following?
A Strengths, weaknesses, opportunities and threats
B Political, economic, social and technological factors
C Strategic options and choice
D Inbound and outbound logistics
(2 marks)
14 Which of the following is data protection legislation primarily designed to p
rotect?
A All private individuals and corporate entities on whom only regulated data is
held
B All private individuals on whom only regulated data is held
C All private individuals on whom any data is held
D All private individuals and corporate entities on whom any data is held
(2 marks)
15 Which of the following types of new legislation would provide greater employm
ent opportunities in large
companies?
A New laws on health and safety
B New laws to prevent discrimination in the workplace
C New laws making it more difficult to dismiss employees unfairly
D New laws on higher compensation for employer breaches of employment contracts
(2 marks)
16 The total level of demand in the economy is made up of consumption, _________
___, government expenditure and
net gains from international trade.
Which of the following correctly completes the sentence above.
A Savings
B Taxation
C Investment
(1 mark)
17 Which set of environmental factors does a lobby group intend to directly infl
uence?
A Political
B Technological
C Demographic
D Economic
(2 marks)
18 Adrian is the manager of a call centre. Consultants have advised him that by
reorganising his teams to complete
highly specific tasks the call centre will be able to increase the throughput of
work significantly, as well as
increasing the number of sales calls made to the public. The reorganisation prop
osals are unpopular with many
workers, who feel that their jobs will become tedious and repetitive.
The proposal to reorganise the work of the call centre utilises principles put f
orward by which school of
management thought?
A The human relations school
B The empirical school
C The scientific school
D The administrative school
(2 marks)
19 The original role of the accounting function was which one of the following?
A Providing management information
B Recording financial information
C Maintaining financial control
D Managing funds efficiently
(2 marks)
20 Tax avoidance is a legal activity whilst tax evasion is an illegal activity.
A True
B False
(1 mark)
21 The system used by a company to record sales and purchases is an example of w
hich of the following?
A A transaction processing system.
B A management information system
C An office automation system
D A decision support system
(2 marks)
22 The implementation of a budgetary control system in a large organisation woul
d be the responsibility of the internal
auditor.
A True
B False
(1 mark)
23 Which type of organisation would have the retail prices it charges to persona
l consumers subject to close
scrutiny by a regulator?
A A multinational corporation
B A multi-divisional conglomerate
C A national utilities company
D A financial services provider
(2 marks)
24 The central bank has announced a 2% increase in interest rates.
This decision has the most impact on which department in a large company?
A Auditing
B Treasury
C Financial accounting
D Production
(2 marks)
25 The major purpose of the International Accounting Standards Board (IASB) is t
o ensure consistency in ___________.
Which two words complete this sentence?
A Financial control
B Corporate reporting
C External auditing
(1 mark)
26 Farrah, Gordon, Helene and Ian work in the finance department of X Co, which
has separate financial accounting
and management accounting functions. Farrah deals with payroll, the purchase led
ger and sales invoicing. Gordon s
duties involve inventory valuation, budgetary control and variance analysis. Hel
ene deals with fraud prevention
and detection, and internal control. Ian carries out risk assessments, investmen
t appraisals and assists in project
planning.
Which member of the department works in the financial accounts function?
A Farrah
B Gordon
C Helene
D Ian
(2 marks)
27 In an economic environment of high price inflation, those who owe money will
gain and those who are owed money
will lose.
A True
B False
(1 mark)
28 To whom is the internal auditor primarily accountable?
A The directors of the company
B The company as a separate entity
C The shareholders of the company
D The employees of the company
(2 marks)
29 Which one of the following is a DISADVANTAGE of a computerised accounting sys
tem over a manual accounting
system?
A A computerised system is more time consuming to operate
B The operating costs of a computerised system are higher
C The computerised system is more costly to implement
D A computerised system is more error prone
(2 marks)
30 Calum works in the internal audit department of Z Co. His duties involve the
identification, evaluation and testing
of internal controls. He produces reports to senior management on these activiti
es.
For which type of audit is Calum responsible?
A Operational audit
B Transactions audit
C Social responsibility audit
D Systems audit
(2 marks)
31 What is the primary responsibility of the external auditor?
A To verify all the financial transactions and supporting documentation of the c
lient
B To ensure that the client s financial statements are reasonably accurate and fre
e from bias
C To report all financial irregularities to the shareholders of the client
D To ensure that all the client s financial statements are prepared and submitted
to the relevant authorities on time
(2 marks)
32 Which of the following are substantive tests used for in the context of exter
nal audit of financial accounts?
A To establish whether a figure is correct
B To investigate why a figure is incorrect
C To investigate whether a figure should be included
D To establish why a figure is excluded
(2 marks)
33 In the context of fraud, teeming and lading is most likely to occur in which ar
ea of operation?
A Sales
B Quality control
C Advertising and promotion
D Despatch
(2 marks)
34 In order to establish an effective internal control system that will minimise
the prospect of fraud, which one of
the following should be considered first?
A Recruitment policy and checks on new personnel.
B Identification of areas of potential risk.
C Devising of appropriate sanctions for inappropriate behaviour.
D Segregation of duties in critical areas
(2 marks)
35 The leadership style that least acknowledges the contribution that subordinat
es have to make is ___________.
Which word correctly completes this sentence?
A Authoritarian
B Autocratic
C Assertive
(1 mark)
36 Renata has attended a leadership development course in which she experienced
a self-analysis exercise using
the Blake and Mouton managerial grid. The course leader informed her that the re
sults suggested that Renata
demonstrated a 9.1 leadership style, which suggested that she is highly focused
on achieving the objectives of
the team.
What other conclusion may be drawn in relation to Renata s leadership style?
A She maximises the involvement of her team
B She demonstrates little concern for people in the team
C She balances the needs of the team with the need to complete the task.
D She favours psychologically close managersubordinate relationships
(2 marks)
37 Jackie leads an established team of six workers. In the last month, two have
left to pursue alternative jobs and one
has commenced maternity leave. Three new staff members have joined Jackie s team.
Which one of Tuckman s group stages will now occur?
A Norming
B Forming
C Performing
D Storming
(2 marks)
38 Richard is a highly enthusiastic member of his team. An extrovert by nature,
he is curious and communicative. He
responds to new challenges positively and has a capacity for contacting people e
xploring anything new. However,
his attention span is short and he tends to become less involved in a task once
his initial interest has passed.
According to Belbin s team roles theory, Richard displays the characteristics of w
hich of the following?
A Monitor-evaluator
B Plant
C Resource-investigator
D Company worker
(2 marks)
39 Which one of the following statements is correct in relation to monetary rewa
rds in accordance with Herzberg s
Two-Factor theory?
A Pay increases are a powerful long-term motivator
B Inadequate monetary rewards are a powerful dissatisfier
C Monetary rewards are more important than non-monetary rewards
D Pay can never be used as a motivator
(2 marks)
40 Which one of the following is a characteristic of a team as opposed to a grou
p?
A Members agree with other members
B Members all have equal status
C Members arrive at decisions by consensus
D Members work in cooperation
(2 marks)
41 According to Victor Vroom:
Force (or motivation) = _________ x expectancy
Which of the following words completes Vroom s equation.
A Needs
B Valence
C Opportunity
(1 mark)
10
42 According to Handy s shamrock organisation model, which one of the following is b
ecoming progressively less
important in contemporary organisations?
A The permanent, full-time work force
B The part-time temporary work force
C The role of independent sub-contractors
D The role of technical support functions
(2 marks)
43 Which pattern of communication is the quickest way to send a message?
A The circle
B The chain
C The Y
D The wheel
(2 marks)
44 Poor quality lateral communication will result in which of the following?
A Lack of direction
B Lack of coordination
C Lack of delegation
D Lack of control
(2 marks)
45 Role playing exercises using video recording and playback would be most effec
tive for which type of training?
A Development of selling skills
B Regulation and compliance
C Dissemination of technical knowledge
D Introduction of new processes or procedures
(2 marks)
46 In the context of marketing, the four P s are price, place, promotion and _______
___.
Which word correctly completes this sentence?
A Processes
B Production
C Product
(1 mark)
11
47 In relation to employee selection, which type of testing is most appropriate
for assessing the depth of knowledge
of a candidate and the candidate s ability to apply that knowledge?
A Intelligence testing
B Personality testing
C Competence testing
D Psychometric testing
(2 marks)
48 A company has advertised for staff who must be at least 1.88 metres tall and
have been in continuous full-time
employment for at least five years.
Which of the following is the legal term for this unlawful practice?
A Direct discrimination
B Indirect discrimination
C Victimisation
D Implied discrimination.
(2 marks)
49 Gloria has the responsibility to work with selected management trainees in he
r organisation. Her objective is to help
the trainees over the medium to long-term with their personal career development
. Supporting and encouraging
them to fulfil their potential is an integral part of her role. Gloria has no in
volvement in the technical content of the
trainee managers work.
Which of the following roles does Gloria fulfil?
A Buddy
B Counsellor
C Mentor
D Instructor
(2 marks)
50 Gils is conducting an appraisal interview with his assistant Jill. He initial
ly invites Jill to talk about the job, her
aspirations, expectations and problems. He adopts a non-judgmental approach and
offers suggestions and guidance.
This is an example of which approach to performance appraisal?
A Tell and sell approach
B Tell and listen approach
C Problem solving approach
D 360 degree approach
(2 marks)
End of Question Paper
12
13
Answers
14
Pilot Paper F1 Answers
Accountant in Business
1 B 26 A
2 B 27 A
3 A 28 A
4 B 29 C
5 D 30 D
6 C 31 B
7 C 32 A
8 D 33 A
9 D 34 B
10 B 35 B
11 D 36 B
12 C 37 B
13 B 38 C
14 B 39 B
15 B 40 C
16 C 41 B
17 A 42 A
18 C 43 D
19 B 44 B
20 A 45 A
21 A 46 C
22 B 47 C
23 C 48 B
24 B 49 C
25 B 50 B
Rationale for answers
1 B The span of control is concerned with the number of subordinates reporting d
irectly to one person. The scalar chain concept
relates to the number of levels in the management structure. Therefore delayerin
g causes a reduction in levels of management,
with each manager having more subordinates.
2 B The basic principle that underlies marketing is that it is a management proc
ess that identifies and anticipates customer needs.
The other distractors in the question refer to specific activities undertaken by
a marketing function.
3 A Successive reports on corporate governance (Cadbury, Higgs, etc.) have highl
ighted the increasingly prominent role that nonexecutive
directors should take in large organisations. This has become an established bes
t practice.
4 B The task culture is appropriate where organisations can accommodate the flex
ibility required to adjust management and team
structures to address the tasks that must be fulfilled. This is very common in l
arge consultancy firms.
5 D A situation analysis is carried out when deciding on strategic objectives. T
he organisation will have already decided on its
mission statement and goals.
15
6 C Greater accountability at lower levels will lead to greater empowerment of t
hose taking decisions and hence greater motivation
and commitment, but will lead to less control and potentially more inconsistency
.
7 C A manager is employed by the organisation and is therefore a constituent par
t of it. All the others are known as connected
stakeholders.
8 D The organisation must constantly be aware of the needs of stakeholders with
a high level of power and the ability to influence the
organisation profoundly. Management decisions must therefore take most account o
f the needs of this group of stakeholders.
9 D The primary aim of a public oversight board is to eliminate or minimise any
actual or potential breaches of legislative requirements
and to ensure compliance with regulations applicable to organisations within the
ir terms of reference.
10 B The ageing population trend is caused by decreasing birth rate and a decrea
sing mortality rate.
11 D An increase in public expenditure should increase the level of consumer dem
and and hence the level of economic activity. This
would also be achieved by other measures, such as a reduction in taxation or a r
eduction in interest rates.
12 C Frictional unemployment arises even when there are unfilled vacancies in th
e economy. It is because there is never a perfect
match between the types of job available and their location with the skills of t
hose seeking work and where they live.
13 B Any environmental scan analyses the external factors that affect an organis
ation, often categorised as political, economic, social
and technological factors.
14 B Data protection legislation is formulated to protect the interests of data
subjects who are private individuals. Not all data is
regulated.
15 B Diversity policies are intended to reduce recruitment and selection policie
s and processes that enable discrimination to arise on
the basis of gender, race, lifestyle and age, therefore such policies widen acce
ss of employment.
16 C The components of effective demand in the economy are consumer spending, in
vestment by enterprises, central and local
government expenditure and the net gains from international trade.
17 A Lobby groups are primarily established to influence political decision take
rs, such as the government and individual
lawmakers.
18 C Scientific management principles consider the ways in which the factors of
production (land, labour, capital and the
entrepreneurial function) can be combined to maximise efficiency in production.
The founding principles are based on the
work of Frederick Winslow Taylor. The reorganisation of the call centre follows
these principles.
19 B The accounting function originated from the need to record transactions com
pletely and accurately. Other requirements naturally
evolved from this at a later stage.
20 A Tax avoidance enables the individual or entity to apply legitimate rules to
reduce the amount of tax payable. Tax evasion is
always based on a deliberate intent not to pay tax that is lawfully due.
21 A A transaction processing system enables all sales and purchase transactions
to be recorded by volume and category.
22 B The implementation of a budgetary control system would be the responsibilit
y of the financial controller in many organisations.
The internal auditor is not responsible for implementing systems, but is involve
d in monitoring the effectiveness of these
systems.
23 C Public ultilities companies often have national or local monopolies and it
is therefore necessary for their pricing structures to
be subject to the scrutiny of a regulatory body.
24 B An interest rate is the price of money. The output of the treasury function
is directly affected by the price of funds to the
organisation and the returns that can be made from surplus funds.
25 B The IASB aims to promote consistency in corporate reporting by creating fin
ancial reporting standards to which major businesses
are expected to adhere.
26 A Payroll, purchase ledger and sales invoicing are core functions within the
responsibility of the financial accountant.
27 A Where price inflation is high the value of money reduces consistently over
time. Those who owe money (debtors) therefore pay
back less capital in real terms, and interest rates seldom adjust adequately to
compensate for this.
28 A The internal auditor must have the right to report and is most accountable
to the highest level of management (Directors) in
the organisation. They must be free of influence from any individual manager, ir
respective of seniority.
16
29 C A computerised system can be costly to set up, though this disadvantage is
essentially a short-term issue, as the running costs
should offset this over time. A computer system should also reduce transaction p
rocessing time and the incidence of errors.
30 D Systems audit is concerned with the effectiveness of the system itself and
not the processes, activities or values of the
organisation.
31 B The external auditor has to ensure that the financial statements of the org
anisation truly reflect the activities of the business in
the relevant accounting period. This assessment should be independent and theref
ore free from subjectivity on the part of the
management of the client organisation.
32 A Substantive tests verify the accuracy of the financial information.
33 A Teeming and lading involves the theft of cash and is a type of fraud that i
s carried out by manipulating transactions. There
would be most potential for this fraud within the sales department where cash ma
y be received and remitted.
34 B All control systems should be based on an assessment of areas of risk prior
to the consideration of other factors.
35 B The Ashridge model identifies four styles: autocratic; authoritarian; consu
ltative; laissez-faire (or participative). The first of these
is the least participative.
36 B The Blake and Mouton managerial grid enables leadership styles to be catego
rised on a nine point scale with reference to
concern for people and concern for production.
37 B With the recent departures and the new staff joining the group, it will rev
ert to the forming stage.
38 C The words curious and explore confirm that the individual is a resource-investi
gator.
39 B According to Herzberg, money is a hygiene factor (or dissatisfier). Althoug
h it is a powerful short-term motivator, it is questionable
whether each individual increase in monetary reward will have a major long-term
effect. According to Herzberg, A reward once
given becomes a right .
40 C Consensus implies coming to decisions that are acceptable, paying due regar
d to the input of all members of the team.
41 B Victor Vroom defines valence as the individual s preference for a given outcome
.
42 A Handy s theory suggests that full-time, permanent workers are both expensive
and inflexible in comparison with other elements
of the shamrock. These other elements are part-time workers and independent cont
ractors. A fourth leaf can be getting the
customer to do the work.
43 D The wheel facilitates transmission of the message directly to all receivers
and therefore transmits most quickly.
44 B Lateral communication is horizontal. Therefore, poor quality communication
will result in poor coordination between team
members.
45 A Role playing exercises are most effectively used for skills development, in
cluding sales training. Other common business
applications include effective selection interviewing and performance appraisal
interviewing.
46 C Product is the fourth component of the marketing mix. This term can also re
late to a service as well as tangible products.
47 C Competence testing evaluates and validates knowledge and the ability to app
ly these to given situations. It assesses whether
the individual can actually do specified tasks.
48 B A height restriction is a form of indirect discrimination on the grounds of
gender. On average, men are taller than women.
49 C A mentor has a longer-term role than buddies, counsellors or instructors.
50 B The tell and listen approach encourages input from the individual, promoting
participation the process by the appraisee.
Managing People
PART 1
MONDAY 9 DECEMBER 2002
QUESTION PAPER
Time allowed 3 hours
This paper is divided into two sections
Section A This question is compulsory and MUST be
answered
Section B FOUR questions ONLY to be answered
Paper 1.3
Section A This ONE question is compulsory and MUST be attempted
1 The supermarket chain Food is Us has decided to tackle prejudice and discriminat
ion in all its stores by establishing
a policy applicable to all its stores. As part of this, it is challenging all em
ployees, especially managers, to examine
their attitudes towards people of a different race, sex and ability.
The reasons for introducing the policy are threefold. Plainly there is legislati
on on discrimination which must be
complied with if the company is to avoid the risk of legal action against it. Al
so, from a marketing point of view, Food
is Us wish to be identified with its customer base by reflecting the racial diver
sity of the environments in which it
operates. Most positively, the company wants to develop a workforce which can re
flect sufficient diversity not only to
avoid risk and to maintain its current market position, but also produce the ini
tiatives which will develop the company
in a successful and sustained manner.
During the course of the coming year, all store employees will be expected to at
tend an awareness-raising training
programme. This programme is intended to help employees explore their own attitu
des and highlight any prejudices
that these employees might have.
The personnel director, Anne Healey, told shop operatives we want to make all our
front line employees who deal
closely with the members of the public aware of any subconscious prejudices that
they might have.
It is very difficult to quantify the benefits of such specialist training, but it
is one of our corporate principles that all
people are treated fairly by employees, whether they are customers or work colle
agues, she added.
Initially small groups of employees will attend sessions to raise awareness. The
se sessions, to be held in-store, will
take place during time already set aside for staff training and development.
The new policy is to be an extension of Food is Us current equal opportunities sch
eme for managers. So far more
than 1500 managers have attended one day awareness-raising courses over the past
18 months.
The same course is to be revised and updated following feedback from previous pa
rticipants and will also be extended
to include senior executives for the first time.
Required:
With reference to the above scenario:
(a) Equal opportunities encompass many features. For Food is Us
(i) What would be the main features of a sex discrimination policy? (10 marks)
(ii) What would be the main characteristics of a race relations policy? (6 marks
)
(b) Why should an organisation like Food is Us have an equal pay policy? (6 marks)
(c) What are the key points of a disability discrimination policy? (8 marks)
(d) What is the difference between an equal opportunities policy and a managing
diversity initiative within an
organisation? (10 marks)
(40 marks)
2
Section B FOUR questions ONLY to be attempted
2 In seeking organisational success, some managers are adopting a Theory Z approac
h to managing.
Required:
(a) Describe the characteristics of an organisation which uses a Theory Z approach
. (10 marks)
(b) Are the ideas of Theory Z universally applicable? (5 marks)
(15 marks)
3 An organisation is recruiting additional staff and has decided to compare the
benefits of appointing existing internal
staff with that of appointing external candidates.
Required:
(a) Define and describe the advantages of internal promotion. (5 marks)
(b) Define and describe the advantages of external recruitment. (5 marks)
(c) Describe three factors that should be taken into account when deciding upon
whether to use recruitment
consultants. (5 marks)
(15 marks)
4 Modern business organisations require trained employees, but individuals appro
ach learning in different ways.
Required:
(a) Briefly describe the four stages in the experiential learning cycle. (4 mark
s)
(b) Describe the four learning styles identified by Honey and Mumford and their
implications for training
programmes. (11 marks)
(15 marks)
5 Motivation is fundamental to the task of management.
Required:
(a) What is meant by the term process theory of motivation? (5 marks)
(b) What is meant by the equity theory of motivation? (5 marks)
(c) Briefly describe the response an individual might have to feelings of negati
ve inequity. (5 marks)
(15 marks)
3 [P.T.O.
6 A key part of an accountant s job is communicating information to others.
Required:
(a) Explain the importance of good communication. (5 marks)
(b) List five possible barriers to good communication. (5 marks)
(c) Describe how these barriers to communication can be overcome. (5 marks)
(15 marks)
4
Answers
Part 1 Examination Paper 1.3
Managing People December 2002 Answers
1 Overview
Organisations and businesses are made up of many individuals all working togethe
r. These individuals have different attitudes,
perceptions and learning experiences, which together with gender and personality
differences can be either a good source for
developing creativity within an organisation or the root of an organisation s prob
lems.
Managers need to be aware of the many factors that affect individual differences
and their own attitudes and assumptions. They
should recognise individual potential and harness talent to achieve the organisa
tional goals.
(a) Equal Opportunities is a generic term which describes the belief that there
should be an equal chance for all workers in an
organisation to apply and be selected for jobs, to be trained and promoted in em
ployment and to have that employment
terminated fairly. Employers should only discriminate according to ability, expe
rience and potential. All employment decisions
should be based solely on a person s ability to do the job in question; no conside
ration should be taken of a person s sex,
age, racial origin, disability or marital status.
(i) A Sex Discrimination Policy would look at equality in all areas of employmen
t. Such areas would include the selection
process, opportunities for training, promotion, the provision of benefits and fa
cilities and dismissal.
This policy would deem it wrong to make any form of discrimination within employ
ment matters because of marital
status or sex.
The policy should cover the three main categories of sex discrimination: direct
discrimination, indirect discrimination and
victimisation.
Direct discrimination incorporates the treating of a person on sexual or marital
grounds less favourably than others would
be treated. One act of discrimination is sufficient and must be directed against
an individual. Such as a clause in the
employment contract which states that it would be terminated on marriage.
Indirect discrimination consists in applying a term or condition applicable to b
oth sexes but which one sex has
considerably smaller ability to comply with it than the other. Such as all appli
cants for a post must be six feet tall.
Victimisation is the discrimination against an individual who has brought procee
dings or given evidence in another case.
Such persons should not be treated less favourably than any other individual in
the same circumstances.
(ii) A race relations policy would adopt the same approach as the sex discrimina
tion policy. However this policy would look
at racial grounds and racial groups . These phrases refer to colour, race, nationalit
y or other ethnic or national origins.
The same three categories of direct and indirect discrimination and victimisatio
n can be used.
(b) An equal pay policy means that a woman is entitled to identical pay with men
and vice versa in respect of like work or work
that is rated as equivalent or equal value to that of a man in the same employment.
Like work means work of a broadly similar nature where differences are not of a pr
actical nature. Work rated as equivalent
requires equal pay. This is when work has been evaluated and graded to be equiva
lent as other work in relation to effort, skill
and decision-making. Work of equal value is that of a woman s to that of a man s in
the same organisation.
This should apply equally to men and women.
In addition to any statutory equal pay policy and indeed social responsibility t
oward its workforce, Food is Us would benefit
from an equal pay policy in other ways. It would avoid the costs and poor public
ity that might arise from legal action brought
to enforce the law would be important for a business of this size and profile. I
n addtion it would project a caring image to it s
diverse customer base and in terms of good people management, attract the best e
mployees from a wider range of sources
and with more diverse characteristics, and help build it s customer base to includ
e a wider constituency.
(c) A disability discrimination policy should contain the following key points:
a disabled person is defined as a person who has a physical or mental impairment
that has a substantial and long-term,
more than 12 months, adverse effect on his/her ability to carry out normal day t
o day activities. Severe disfigurement is
included, as are progressive conditions such as HIV even though the current effe
ct may not be substantial.
the effect includes mobility, manual dexterity, physical co-ordination, and lack
of ability to lift or speak, hear, see,
remember, concentrate, learn or understand or to perceive the risk of physical d
anger.
the policy should also make it clear that it is wrong to discriminate against di
sabled people in the interviewing and
selection process, for promotion, transfer or training and by dismissal.
the employer has the duty to make reasonable adjustments to the physical feature
s of the workplace where they
constitute a hazard to the disabled person.
7
(d) Equal Opportunities and Managing Diversity
There is a new generation of managers within organisations who regard the qualit
y of their people as the distinguishing feature
of a successful organisation.
People are the single sustainable source of competitive advantage. Nurturing hig
h performance through the development of
people is essential if organisations are to remain viable and competitive.
The promotion of equal opportunities has made good business sense. Equal opportu
nities has been promoted as a key
component of good management as well as being legally required, socially desirab
le and morally right.
Managing diversity expands the horizons beyond equality issues and builds on rec
ognised approaches to equal opportunities.
It adds new impetus to the development of equal opportunities and the creation o
f an environment in which enhanced
contributions from all employees will work to the advantage of business, people
themselves and society more generally.
It offers an opportunity for organisations to develop a workforce to meet their
business goals and to improve approaches to
customer care.
Managing diversity is about having the right person for the job regardless of se
x, colour or religion. Essentially the management
of diversity is a quality assurance approach. It helps identify hidden organisat
ional barriers which make it more difficult for
people who are perceived as being different from the majority of their colleague
s to succeed and develop careers.
It also helps to effect cultural change and to create an environment in which pe
ople from all backgrounds can work together
harmoniously. The management of diversity combats prejudice, stereotyping, haras
sment and undignified behaviour.
2 Overview
In the search for organisational success, many business organisations have sough
t to adopt what appear to be successful Japanese
management methods. The leading theorist in this field is William Ouchi, who, dr
awing on earlier work, has described the Japanese
approach to management as Theory Z.
(a) William Ouchi, a Japanese American, has concerned himself with comparing Jap
anese management techniques with
American. Ouchi uses the term Theory Z for firms which use Japanese methods adapte
d to the Western system. Such
organisations display certain characteristics:
workers and managers trust their superiors
a much longer time horizon is the norm; the idea of short-term profit is rejecte
d in favour of long-term growth
there is a team approach. Departments see their position within the organisation
as a whole
a caring, paternal management unhampered by unions, demarcation or professional
prejudices
generalised training. Managers learn the business, not just parts of it
a flexible organisation structure
collective values and company wide rewards
slow, but known promotion
lifelong employment.
(b) Theory Z requires an emphasis on interpersonal skills and group and team wor
king; decisions are based on consensus, but,
unlike in Japan from where the idea originates, responsibility remains with the
individual.
Trust and informal relationships are the keystone of Theory Z organisations, eve
n though the formal hierarchy and
organisational traditional structure remain.
It is often compared to Macgregor s Theory Y approach in that it is seen as a more
caring, sensitive and effective way of
achieving organisational success.
The theory is dependent upon the demands of the organisational situation. Some o
rganisations, as a consequence of their
product or service do not provide a suitable environment for the use of motivati
onal techniques associated with Theory Z.
Its strength lies in the fact that because of improved standards of education an
d changed social and political values, many
employees have wider expectations from the workplace and expect to be consulted
and to participate.
The application of Theory Z will therefore depend upon:
the organisational culture, structure and objectives
the procedures and practices involved in the organisation
the technology, environment and product or service
the organisation s history and attitude
the level of satisfaction that already exists in an individual s task or role.
8
3 Overview
Recruitment of staff, especially if large numbers are involved, may be time cons
uming and a drain on resources. Additionally, the
expertise may not exist within the organisation, requiring the organisation to s
eek suitable candidates outside.
(a) Internal promotion describes the situation where an organisation has an expl
icit policy to promote from within and where
there is a clear and transparent career structure. This is typical of many manag
ement and administrative staff and of certain
sectors of the economy such as the public services.
The advantages of internal promotion:
it acts as a source of motivation and provides good general morale amongst emplo
yees
staff seeking promotion are known to the employer
inexpensive in terms of time and money
training and induction costs are minimised
further training can be product and organisational specific
the culture of the organisation is understood by the individual
illustrates the organisation s commitment to encouraging the staff
the individual will already be familiar with the other members of the organisati
on.
(b) External recruitment describes the situation where the organisation decides
to recruit someone from outside the organisation
to fill a staff vacancy.
The advantages of external recruitment:
may be essential if particular skills or expertise are not available within the
organisation
is necessary to restore staffing levels or where an organisation urgently needs
new employees
can bring new ideas and novel approaches to the organisation and to the specific
task
provide experience and work methods from other employers.
(c) Any organisation which is considering the use of external recruitment consul
tants would make its decision upon the following:
the availability, level and appropriateness of expertise available within the or
ganisation and its likely effectiveness
the cost of using consultants against the cost involved in using the organisatio
n s own staff, recognising the level of the
vacancy or vacancies against the consultant s fee
the particular expertise of the consultants and the appropriate experience with
any particular specialised aspect of the
recruitment process
the level of expertise required of potential employees and therefore the appropr
iate knowledge required of the consultants
the need for impartiality; this may be of particular importance with public sect
or appointments, organisations with
particular needs of security or impartiality or where it is felt that an externa
l, objective assessment is required
the time involved in the consultants needing to learn about the organisation, it
s requirements and the vacancy or
vacancies
if there is a ready supply of labour then consultants may be less useful, standa
rd vacancies may be readily filled by
advertising or similar inexpensive means
the views of internal staff as to the likely effect of using outside consultants
what effect the use of consultants might have on the need to develop expertise w
ithin the organisation, the use of
consultants will not assist with developing internal organisational expertise
the likelihood of existing staff to have misgivings about the presence of, or re
commendations of, outside consultants
which can lead to mistrust and rejection of any candidates recruited by the cons
ultants.
9
4 Overview
Individuals are often reluctant to undertake further learning, especially in the
workplace. It is important therefore that managers
understand the way in which individuals actually learn, if any training programm
e is to be succesful.
(a) David Kolb suggests that learning is a series of steps based on learning fro
m experience. He suggested that classroom learning
is false and that actual learning comes from real life experiences. Learning is
experiential and comes from doing , this ensures
that learners actually solve problems.
Kolb s experiential learning cycle
........concrete experiences........
testing the observation
implications of and
concepts in new situation reflection
........formation of abstract........
concepts and generalisations
The first stage (concrete experiences) is the situation where the person is lear
ning something new.
The second stage (observation and and reflection) is so called because the exper
ience is being reviewed.
The third stage (concepts and generalisations) is when the experience has been a
ccepted or rejected.
The fourth stage (concepts in new situations) is when the person calculates how
and when to apply that which has been learned.
(b) HONEY AND MUMFORD have identified four learning styles.
Theorists are concerned with forming principles or how does this relate to that? T
hey think problems through in a vertical,
step by step logical way and tend to be perfectionists who do not rest easy unti
l things are tidy and fit into a rational scheme.
Theorists are usually detached, analytical and dedicated to rational objectivity
rather than anything subjective or ambiguous.
Often known as CONCLUDING.
For them training must be:
programmed and structured
designed to allow time for analysis
provided by others who share the same preference for ideas and analysis.
Reflectors are concerned with observation and reflection or I would like time to
think about this. They like to stand back and
ponder experiences and observe them from many different perspectives. They colle
ct data, both first hand and from others,
and prefer to think about it thoroughly before coming to any conclusion. Thought
ful people, they prefer to take back seats in
meetings and discussions. Often known as REVIEWING.
Reflectors need an observational approach to training
need to work at their own pace
do not find learning easy, especially if rushed
conclusions are carefully thought out
slow, cautious and non-participative.
Activists are concerned with actual experience What s new? I m game for anything. They
involve themselves fully and
without bias in new experiences, are open minded, not sceptical and this tends t
o make them enthusiastic about anything
new. They are gregarious people constantly involving themselves with others but,
in so doing, they seek to centre all activities
around themselves. Often known as DOING.
Activists have a practical approach to training
prefer practical problems, a dislike of theory
insist on having hands on training
enjoy participation and challenge
flexible, optimistic
tend not to prepare
are easily bored.
10
....
...
. ....
....
Pragmatists are concerned with deliberate testing or How can I apply this in prac
tice? They are keen on trying out ideas,
theories and techniques to see if they work in practice, positively search out n
ew ideas and take the first opportunity to
experiment with applications. They are essentially practical, down to earth peop
le who like making practical decisions and
solving problems. Often known as PLANNING.
Pragmatists need to see a direct value and link between training and real proble
ms.
enjoy learning new techniques and tasks
good at finding improved ways of doing things
aim to do things better
impatient if new ideas are not reflected in practical applications.
5 Overview
Motivation is fundamental to the task of management. Many different theories hav
e been presented on how management might
motivate employees; Adams equity theory is an attempt to bring a more modern appr
oach to the topic, based on the idea of
distributive justice.
(a) The process theory of motivation asks the question How can people be motivate
d?
The process theory of motivation does not emphasise the need for fulfilment thro
ugh work (as in the content theory), but
concentrates upon the processes through which individuals are motivated. They at
tempt to explain how individuals start,
sustain and direct behaviour and assume that individuals are able to select thei
r own goals and means of achieving those
goals through a process of calculation. Process theory emphasises the importance
of rewards, often financial.
(b) Equity theory focuses on the feelings of the individual and how fairly they
feel they have been treated in comparison with
treatment received by others. It is sometimes referred to as exchange theory; in
dividuals expect certain outcomes in exchange
for certain efforts and contribution to the organisation. When an individual per
ceives that his or her efforts are equal to others
and the rewards are the same, then equity exists. If the perception is that the
efforts and rewards of one person are unequal
to others, then there is inequity.
(c) When an individual has feelings of negative inequity, he or she can
change the amount of effort put into the task
change the nature or amount of reward required
change the basis of comparison
distort the comparisons psychologically
leave the work situation or employer.
6 Overview
The need for clear and concise communication and the consequences of poor commun
ication must be understood by a profession
which exists to provide information to others. Poor communication leads to ineff
ective control, poor co-ordination and management
failure.
(a) Good communication is important because:
individuals know what is expected of them
better co-ordination within the organisation
improves control of the organisation s plans, procedures and staff
the instructions of management are understood
encourages group and team cohesiveness
can lead to the reduction of stress
bias, distortion or omission can be removed
secrecy and misunderstanding is reduced or removed
information is received by appropriate person
conflict in the workplace is reduced
11
(b) Barriers to communication include:
the personal background of the persons communicating
language differences
use of jargon
different education levels
noise ; that is the message confused by extraneous matters
the perception of individuals
conflict within the organisation
overload; that is too much information being communicated at once
problems of distance
basic misunderstanding
accidental or deliberate distortion of information.
(c) Barriers to communication may be overcome by:
consideration of the needs and understanding of recipients
careful and clear reporting at all levels
express information clearly and concisely
not using jargon or abbreviations
using more than one communications system
encouraging dialogue rather than monologue
ensuring as few links as possible in the communication chain
ensuring feedback.
12
Managing People December 2002 Marking Scheme
1 (a) (i) Description of the main features of a sex discrimination policy Up to
10 marks
(ii) Description of the main characteristics of a race relations policy Up to 6
marks
(Maximum for Part (a) 16 marks)
(b) Reasons for an equal pay policy Up to 6 marks
(Maximum for Part (b) 6 marks)
(c) Description of key points of policy and means of discrimination Up to 8 mark
s
(Maximum for Part (c) 8 marks)
(d) Discussion and recognition of the differences Up to 10 marks
(Maximum for Part (d) 10 marks)
(Total for Question 40 marks)
2 (a) Description of Theory Z Up to 10 marks
(One mark per characteristic) (Maximum for Part (a) 10 marks)
(b) Discussion on Theory Z Up to 5 marks
3 (a) Description of the advantages of internal recruitment Up to 5 marks
(b) Description of the advantages of external recruitment Up to 5 marks
(c) Description of three factors Up to 5 marks
4 (a) Brief description of the four stages in the experiential learning cycle Up
to 4 marks
(b) Description of the learning styles and their implications for training progr
ammes Up to 11 marks
5 (a) Description of process theory Up to 5 marks
(b) Description of equity theory Up to 5 marks
(c) Description of negative inequity Up to 5 marks
13
6 (a) Explanation of the importance of good communication
(One mark per factor) Up to 5 marks
(b) List five barriers to communication
(One mark per barrier) Up to 5 marks
(c) Description of overcoming barriers
(One mark per factor) Up to 5 marks
14
Managing People
PART 1
MONDAY 9 JUNE 2003
QUESTION PAPER
Section A This question is compulsory and MUST be
answered
Paper 1.3
1 Sunshine Sweets is a manufacturer of additive free, organic children s candies.
With the rise in demand for additive
free children s products, Sunshine Sweets has expanded its production capacity to
almost double what it was two
years ago and trebled the number of employees. Until recently the board of direc
tors, made up of the two founders
Emma Watkind and Jenna Pain, took charge of day to day business. Both have now a
llowed management more
freedom than before.
Despite success in the market, as the company has grown some problems have begun
to arise. Phil Short, the factory
manager has been with the company since the beginning and since the expansion in
the number of employees, finds
controlling and communicating with such a large workforce difficult. He has reso
rted to pinning notices and memos
of all kinds to notice boards, circulating his own reports to colleagues who sho
uld not be receiving them and refusing
to organize meetings.
The newly appointed production manager Mark Mason is an engineer and deputy to P
hil. He has found that he has
little idea of what s going on in the factory and is finding communication channel
s are non existent between the
management team, supervisors and directors. The financial controller, Debbie Pur
ple is equally frustrated and finds
communicating with anyone in the production area of the factory to be almost imp
ossible.
In addition, the workforce, despite being well paid and trained, is fragmented a
nd not working together. The rapid
expansion of the company has led to poor internal communication. As a consequenc
e workers are suffering from
absenteeism, low morale and confusion brought about by endless rumours about the
future of the company. This is
because the line supervisors are also unaware of what is going on and consequent
ly are unable to communicate
management s plans and objectives to the workforce, or to make management aware of
the concerns of the workforce.
Required:
You are a consultant brought in by the directors to advise on the current proble
ms. They believe the current
problems stem from poor and mis-directed communication and think that establishi
ng committees will improve
communication. You have been asked to:
(a) Explain the need for good communication within any organisation. (5 marks)
(b) Identify five barriers to communication that might exist in Sunshine Sweets.
(5 marks)
(c) Explain how the barriers identified in (b) can be overcome and identify the
alternative methods of
communication available to the management. (10 marks)
(d) Explain to the management of Sunshine Sweets the importance of communication
, the form it takes and the
directions in which it might flow in an organisation. (10 marks)
(e) Advise on the suitability of committees as methods of communication, outlini
ng their usefulness and
shortcomings. (10 marks)
(40 marks)
2
2 Performance Management is defined as a means of achieving better results by unde
rstanding and managing overall
organisational performance.
Required:
Describe the five stages typically involved in the process of performance manage
ment.
(15 marks)
3 All organisations need to recruit new employees. An important step in the proc
ess is the selection interview.
Required:
(a) Explain the purpose of the selection interview. (4 marks)
(b) Explain the advantages and the disadvantages of:
(i) the interview by one person defined as the face to face interview; (6 marks)
(ii) the interview with many people defined as the panel interview. (5 marks)
(15 marks)
4 The health and safety of employees has become increasingly a matter for manage
ment.
Required:
(a) Briefly describe three hazards to health and safety that might be found in t
he workplace and demonstrate
why they are hazards. (5 marks)
(b) Briefly describe general policies that an organisation might take to avoid r
isks in the workplace. (10 marks)
(15 marks)
5 An organisation has decided to create a team oriented approach to business.
Required:
Describe Tuckman s stages of team development.
(15 marks)
3 [P.T.O.
6 Your manager has been called upon to provide advice, guidance and counselling
to employees.
Required:
(a) Explain what is meant by counselling in the work place. (2 marks)
(b) Describe the skills a manager would require to fulfil the role of the counse
llor. (7 marks)
(c) Briefly describe three advantages of counselling for the organisation. (6 ma
rks)
(15 marks)
4
Answers
Managing People June 2003 Answers
1 Communication is a core activity of management and the accounting profession.
It is the process of transmitting information from
one person to another, or from one organisation to another, or a combination of
both.
Communication can be described as the process by which ideas and information are
transmitted to others for the purpose of
effecting a desired result. Ideas and information are the content of the message
communicated.
(a) The function of communication is to ensure that every member of the organisa
tion knows what is expected of them and to
allow an opportunity for feedback. Good communication in an organisation is crit
ical in ensuring coordination and control of
individuals, groups and departments.
The management of Sunshine Sweets need to understand that good communication ens
ures individuals know what is
expected of them, the correct information is received by the appropriate person
and consequently there is co-ordination within
the organisation. Good communication ensures that there is control of the organi
sation s plans, procedures and the
instructions to staff by management are understood. Group and team cohesiveness
is encouraged and stress can be reduced.
Many problems such as bias, distortion and omission can be reduced and removed,
as can secrecy, rumour and innuendo,
resulting in a reduction of conflict.
(b) The need for clear and concise communication and the consequences of poor co
mmunication should be understood by the
management of Sunshine Sweets. Poor communication leads to ineffective control,
poor co-ordination and management
failure. Very often barriers to communication are not recognised as such. In Sun
shine Sweets the directors, managers and
staff are using different phrases and expressions.
Barriers to communication are many; the personal background of the persons commu
nicating, including language differences,
the use of jargon, especially by different professions and different education l
evels as is often the case in factories and is the
case here. The concept of organisational noise is often an issue. The message is c
onfused by matters unrelated to the matter
in hand, or there is overload, where too much information is being communicated.
The different perception of individuals can
lead to conflict within the organisation and thus to a communication barrier. Th
e distance between those individuals
communicating with each other is often overlooked in the business environment. T
his often leads to distortion of information
and thus to misunderstanding between departments and individuals.
(c) Communication cannot take place if there are barriers to the communication p
rocess. These must be recognised and removed.
Barriers to communication can be overcome by a consideration of the needs and un
derstanding of the message recipients
with careful and clear reporting. Information should be expressed clearly, avoid
ing jargon or abbreviations. The use of more
than one communications system can assist, as does the encouragement of dialogue
rather than monologue and ensuring
that there are as few links as possible in the communication chain.
Communication can often be improved by identifying appropriate written, verbal o
r electronic methods. Meetings, interviews
and video conferencing involve personal, face to face communication.
Telephone, email, faxing and public address systems can be used where personal c
ommunication methods are difficult.
Written communication is often the most suitable and clearest means of communica
tion. This takes the form of memoranda,
internal and external reports, forms, notices, house journals, rules and procedu
res, standard documentation, manuals and
job descriptions.
Visual communication is a powerful communication media. Charts, files, slides, v
ideos or films provide an immediate and
clear message.
Electronic means of communication are increasingly becoming more relevant. Elect
ronic mail, document imaging, telex, fax,
internet and email are instantaneous and provide clear communication possibiliti
es.
(d) Communication is vital in all organisations and the communication process ma
y take many forms. It is important that
managers and supervisors recognise the nature of channels of communication.
There are many forms of communication within an organisation, both formal and in
formal, but in the main, communicated
information often flows through quite clear channels and in defined directions.
The direction of the three main information
flows are downwards, upwards and lateral.
Downwards communication (or superior-subordinate communication)
This form of communication is often the one most easily recognised. Its purpose
is to give specific directives, provide
information about procedures and practices or provide information about the task
in hand. Control of subordinates and
information about their performance is an important use of downward communicatio
n, as is the provision of information on
organisational and departmental objectives.
Upwards communication (or subordinate initiated communication) tends to be non d
irective in nature and generally takes
two forms, personal problems or suggestions or technical feedback as part of the
organisation s control system.
Lateral or horizontal communication is increasingly important and necessary in m
odern organisations, especially as
traditional communication theory assumes only vertical communication. It can tak
e the form of task co-ordination, such as
departmental managers or supervisors meeting regularly, problem solving through
departmental meetings to resolve an issue,
and sharing ideas with other departments. Properly understood, this form of comm
unication can resolve conflict and
interdepartmental friction.
7
(e) One traditional and well tried formal communication method is the establishm
ent of a committee. Properly structured and
understood, they are a useful method of communication. They can however be waste
ful and time consuming if not structured
and managed effectively.
A committee is a group of people who meet for a particular purpose. Committees d
iffer from other forms of communication,
notably teams, because they are often a permanent part of the organisation s struc
ture and communication mechanism.
Committees make formal recommendations and are able to make decisions, or if nee
d be, have the authority to delay
decisions if insufficient information is available. Committees provide inter dep
artmental co-ordination, can relay decisions in
the form of briefings, represent different people, departments and disciplines a
nd through their membership provide
information and feedback to others.
Committees are often used as a task force or working party to solve problems by
consultation, through synergy by
brainstorming in an effort to arrive at different or difficult decisions that ca
nnot or will not be made by an individual.
If the workforce is fragmented, committees can be useful to bring co-ordination
and the sharing of information and viewpoints.
2 Accountants as managers should develop and understand the process that links e
mployee performance with organisational goals
and organisational success. However, before the process of performance managemen
t begins the organisation must itself have
developed a clear, planned strategy.
The process of performance management typically involves five stages:
Stage One identify and describe the essential job functions and competencies and
relate them to the objectives of the organisation
as laid out in the corporate plan.
Stage Two develop realistic and appropriate performance standards which will for
m the basis of a performance agreement.
This defines the expectations of the individual or team and includes the establi
shment of performance standards and indicators,
together with the skills and competencies needed.
Stage Three draw up an individually agreed performance and development plan. Thi
s details the action needed to improve
performance and involves identification of areas in need of development, agreeme
nt on performance and development and training
requirements.
Stage Four performance is evaluated throughout the year, counselling and guidanc
e is given as appropriate. Activity requirements
are updated and control action taken. Communicating constructive performance eva
luation is important as is the giving and
receiving of feedback about performance.
Stage Five the performance review. At an agreed time during the year, actual per
formance is measured against the agreed
performance plan. The meaningful part of stage five is the planning and providin
g of education and development opportunities to
build upon and improve employee performance in the future.
3 Interviews are extensively used for the recruitment of new employees, but have
been criticised for failing to identify appropriate
candidates suitable for the organisation. It is essential that professional acco
untants recognise both the problems and opportunities
that formal selection interviews present.
(a) The purpose of the selection interview is to find the best possible person f
or the position and who will fit into the organisation.
Those conducting the interview must also ensure that the candidate clearly under
stands the job on offer, the associated career
prospects and that he or she feels that fair treatment has been provided through
out the selection process.
In addition, the interview also provides the opportunity to provide a good impre
ssion of the organisation, whether the
candidate has been successful or not.
(b) (i) The face to face interview is the most common form of interview. In this
situation the candidate is interviewed by a
single representative of the employing organisation.
The advantages of such interviews are that they establish an understanding betwe
en the participants, are very cost
effective for the organisation (as compared with panel interviews) and, because
of the more personal nature, ensure that
candidates feel comfortable.
The disadvantages however are that the selection relies on the views and impress
ion of a single interviewer which can
be both subjective and biased. In addition, the interviewer may be selective in
questioning and it is easier for the
candidate to hide weaknesses or lack of ability.
(ii) Panel interviews are often used for senior appointments and consist of two
or more interviewers.
The advantages of such interviews are that they allow opinion and views to be sh
ared amongst the panel. They have
the authority to reach immediate decisions and provide a more complete picture,
hence the problems or any bias
inherent in face to face interviews can be removed.
The disadvantages however are that they can be difficult to control. Interviewer
s may deviate or ask irrelevant questions
and they can be easily dominated by a strong personality who is able unduly to i
nfluence others. In addition, such
interviews can often result in disagreement amongst the panel members.
8
4 Health and safety is an issue for all organisations. It is something that has
only recently become a responsibility for management.
Few managers and employees take safety seriously or indeed recognise the dangers
in the workplace.
(a) All places of work contain hazards, including the accounts or finance office.
Work and office based hazards can include
slippery and wet floors, especially after cleaning. Torn and worn floor covering
s can lead to slips or falls.
In many offices, computer, telephone and electrical leads are left to hang loose
over which employees may trip, as they could
do over obstacles in corridors or stairways used for storage.
Poor lighting and unlit areas, especially corridors and stairs can also lead to
trips, falls or collision with other objects.
Unmarked glass doors are particularly dangerous since not only could employees c
ollide with them, but sufficient force could
cause breakages and significant injury. Filing cabinets which are top heavy, or
left open can fall on to employees whilst the
lifting of heavy items, papers and files can often lead to physical injury to th
e back. Perhaps the most dangerous of all is the
deliberate removal of safety guards or screens from machines or machines being o
perated by untrained staff, which can lead
to very serious injury.
Other, less obvious physical hazards to employees are the danger from staff usin
g drugs or abusing alcohol, for which the
organisation must have a disciplinary procedure. Computer screens and repetitive
strain injury are other, less obvious dangers
but can be alleviated by screen covers, careful use of computers, breaks and exe
rcise.
(b) Management should be aware that appropriate preventative action can reduce t
he risks in the workplace. These include:
Consultative participation The most important and involves formal participation
between management and employees (or
their representatives) such that health and safety rules are relevant, understoo
d, accepted and followed.
Safety rules and instructions Should be formalised, issued to all employees and
form part of any training programme.
Encourage safety consciousness Ensures that safety forms a part of the culture,
practice and duties of all the workforce, that
pride is taken in maintaining a good record of safety.
Materials handling A major cause of accident and injury, even in an office envir
onment. Management should ensure that
materials handling is minimised or designed for safe working and operation and t
hat appropriate training and equipment is
provided.
Satisfactory safety standards - Should be adopted so that everyone is aware of th
e standards required to maintain a safe
workplace and against which safety measures can be measured.
Adoption of an ongoing maintenance programme So that temporary measures to keep
equipment working do not prejudice
safety.
5 Much has been written about the need for teams and team working; they have to
develop, mature and often eventually terminate.
It is possible to identify distinct stages of development through which teams pa
ss.
B W Tuckman has described these stages as:
Forming the members meet and decide upon the purpose of the team and how it will
operate. At this stage the team is no more
than a collection of individuals, finding out about one another and about the ta
sk, although objectives may be unclear. This stage
is wasteful and time consuming, although essential since the prospective team me
mbers are not at this stage comfortable with
each other.
Storming the phrase storming is a deliberate reference to this stage which is char
acterised by conflict. Previous ideas, ideals,
norms, attitudes and behaviour is challenged and often rejected. There is compet
ition for the roles within the team. This is a
constructive and often fruitful stage with trust developing. If the individuals
come successfully through this stage then a stronger
team will result.
Norming the norms under which the team will operate are established. The team is
settling down, members investigate ideas
and test the reactions of the team as a whole and consequently, norms are establ
ished. In addition, it is at this stage that the team
establishes patterns of behaviour, levels of trust and the methods by which deci
sions will be taken.
Performing the team is now complete and able to perform to its full potential. D
ifficulties with team roles, individual conflicts
and problems of adjustment have been resolved.
Dorming has been suggested as a final and fifth stage. This is when the team bec
omes complacent, has lost interest in the task
and exists only for self preservation.
(Some students may refer to this final phase as adjourning or mourning. )
9
6 Situations can arise in the workplace which require particular and careful peo
ple-centred skills. In such circumstances, professional
accountants as managers may be called upon to act as counsellors. What constitut
es counselling and the sensitive skills required
in this process is often misunderstood.
(a) Counselling can be defined as when a person agrees explicitly to offer time,
advice, guidance and support to another person
(or persons) temporarily in the role of client; in the organisational context, t
he client being a fellow employee or subordinate.
It may be used in giving career development advice and in coaching and mentoring
staff.
(b) In assuming the role of the counsellor, the manager should be able to:
help others to identify problems, issues and possible solutions to problems
adopt a passive role and avoid leading or suggesting
encourage reflection and discussion of past issues
allow the employee to lead and talk around issues
use open questions to help the employee explore ideas and feelings
maintain active listening and not interrupt the employee
speak only to clarify issues and elicit answers when appropriate
(c) For the organisation, the advantages of counselling are that:
it provides a confidential service to the employee to discuss problems
allows human resources policy to be developed based upon an understanding of ind
ividual problems
provides a service to external agencies to assist with personal problems if appr
opriate
prevents under performance and increases commitment
demonstrates organisational commitment to the employees
demonstrates commitment for particular matters such as career development, redun
dancy or retirement
10
Managing People June 2003 Marking Scheme
1 (a) Brief description of those factors that ensure good communication Up to 5
marks
(one mark each)
(b) Identification of five barriers Up to 5 marks
(one mark each)
(c) Explanation of how communication barriers can be overcome Up to 5 marks
Identification of alternative communication methods Up to 5 marks
(d) Explanation of different channels Up to 10 marks
(Maximum for Part (d) 10 marks)
(e) Outline of the usefulness of committees Up to 10 marks
(Maximum for Part (e) 10 marks)
2 (a) Description of the five stages in performance management Up to 15 marks
(Three marks awarded for description of each of the five stages)
3 (a) Explanation of the purpose of the selection interview Up to 4 marks
(b) Explanation of, and the advantages and the disadvantages
(i) the face to face interview Up to 6 marks
(ii) the panel interview Up to 5 marks
4 (a) Brief description of any three hazards that might be found in the workplac
e Up to 5 marks
(b) Brief description of preventative action Up to 10 marks
5 Description of the five steps in team development Up to 15 marks
(Three marks for each step, including dorming )
11
6 (a) Explanation of the term counselling in the workplace Up to 2 marks
(b) Explanation of the role of the manager as counsellor Up to 7 marks
(c) Brief description of three advantages of counselling for the organisation Up
to 6 marks)
(Two marks for each of the advantages described) (Maximum for Part (c) 6 marks)
12
Managing People
PART 1
QUESTION PAPER
Section A This ONE question is compulsory and MUST be
answered
Paper 1.3
1 A management consultancy has been employed by Swandiff Local Authority to exam
ine the problems junior staff
appear to be having in reaching the performance expected of all staff. The autho
rity employs 8,500 staff in total with
25 senior managers, 123 middle managers and some 2,560 employed at junior manage
ment level, mainly
supervisors. The authority has evolved into a traditional, bureaucratic, formal
governmental type of organisational
structure.
The management consultants decided to hold a series of meetings with all levels
of management. Initially they found
that the junior managers were unhappy with and sceptical about the value of the
meetings; we ve seen it all before
was the main response. After the meetings, the consultants produced a report whi
ch identified three main problem
areas.
Firstly, it became apparent that the level of morale for all staff was low. Lack
of facilities, pressure of work and
particularly reductions in available funds appeared to be the main grievance. Th
ere appeared however to be a deeper
problem, that of mistrust between the staff as a whole and senior management. Th
e mistrust appeared to be more
apparent between the senior management and supervisors. The reason for this was
unclear.
The second problem appeared to be that the staff as a whole regarded the supervi
sors as a level of management poor
at managing their sections, disregarding or ignoring work practices and performa
nce standards. In response, the
supervisors said that their position in general was unclear; there were no clear
lines of authority, command or
responsibility which allowed them to make decisions for their departments. Some
supervisors simply regarded
themselves as menial and unrecognised, referring to funding shortages, unrealist
ic targets, little recognition of their
position, no job descriptions and lack of training.
Job security was the third issue. Financial cutbacks and changes in service leve
ls had led to rumours of substantial
cutbacks in staff. Rumours were especially strong amongst the junior management.
New, younger staff would be
better trained to replace supervisors, more adaptable and better able to use com
puter systems and the latest available
software packages.
In all, the problems had shown themselves in high labour turnover, which in addi
tion to the problems already outlined,
were blamed on low salaries, little opportunity for personal advancement and poo
r working conditions.
Required:
(a) Using Herzberg s theory of motivation, explain the attitude of the supervisors
. (15 marks)
(b) What aspects of organisational structure and culture could explain the super
visors attitude at Swandiff Local
Authority? (10 marks)
(c) How could re-training supervisors overcome the problems identified in (a) an
d (b)? (15 marks)
(40 marks)
2
2 All managers need to understand which activities contribute to organisational
success.
Required:
Briefly describe and discuss Tom Peters characteristics of successful business.
(15 marks)
3 You have been asked to provide guidelines on the structure and content of an a
dvertisement to be used for the future
recruitment of new staff.
Required:
(a) What factors need to be taken into account when preparing a recruitment adve
rtisement? (5 marks)
(b) Briefly describe five factors which will influence the choice of advertising
media. (10 marks)
(15 marks)
4 Training and development programmes form an important part of improving employ
ee skills.
(a) Briefly explain what is meant by the following different types of training a
nd development:
(i) Coaching; (5 marks)
(ii) Mentoring. (5 marks)
(b) Explain five criteria against which the effectiveness of training might gene
rally be evaluated. (5 marks)
(15 marks)
5 All managers and supervisors need to understand the concept of motivation in t
he workplace.
Required:
(a) Explain the content theory of motivation. (5 marks)
(b) Explain what is meant by MacGregor s (5 marks)
(i) Theory X;
(ii) Theory Y. (5 marks)
(15 marks)
3 [P.T.O.
6 Communication is vital in all organisations but requires an understanding of a
ppropriate structures and
communication channels and patterns.
Required:
(a) Briefly explain the main purposes of the three main formal communication cha
nnels in an organisation:
(i) Downwards; (3 marks)
(ii) Upwards; (3 marks)
(iii) Lateral or horizontal. (3 marks)
(b) Briefly explain the characteristics and effectiveness of ANY THREE of the fo
llowing communication patterns:
(i) The Circle;
(ii) The Y ;
(iii) The Wheel;
(iv) The All Channel. (6 marks)
(15 marks)
4
Answers
1 (a) The case illustrates Herzberg s motivation theory, one of the content theori
es of motivation. These attempt to explain those
factors which motivate the individual by identifying and satisfying the individu
al s needs, desires and the goals pursued to
satisfy these desires.
This theory of motivation is a two factor, content theory. It is based upon the
idea that motivation factors can be separated
into hygiene factors and motivation factors and is therefore often referred to a
s a two need system. These two separate
needs are the need to avoid unpleasantness and discomfort and, at the other end of
the motivational scale, the need for
personal development.
A shortage of those factors which positively encourage employees (motivating fac
tors) will cause those employees to focus on
other, non job related factors, the so called hygiene factors. These are illustrat
ed in the case with the attitude of the
supervisors to senior management and their concerns for example with shortages,
targets, recognition and training and we ve
seen it all before .
The most important part of this theory of motivation is that the main motivating
factors are not in the environment but in the
intrinsic value and satisfaction gained from the job itself. It follows therefor
e that the job itself must have challenge, scope for
enrichment and be of interest to the job holder. This is not the case in the sce
nario; there appears to be little or no intrinsic
satisfaction from the supervisor s work, illustrated by the supervisors regarding
themselves and their role as menial and
unrecognised and their lack of responsibility and decision making powers within
their own departments.
Motivators (or satisfiers ) are those factors directly concerned with the satisfact
ion gained from the job itself, the sense of
achievement, level of recognition, the intrinsic value felt of the job itself, l
evel of responsibility, opportunities for advancement
and the status provided by the job. Motivators lead to satisfaction because of t
he need for growth and a sense of self
achievement. Clearly, none of this applies to the supervisors at Swandiff.
A lack of motivators leads to over concentration on hygiene factors; that is tho
se negative factors which can be seen and
therefore form the basis of complaint and concern.
Hygiene (or maintenance) factors lead to job dissatisfaction because of the need
to avoid unpleasantness. They are so called
because they can in turn be avoided by the use of hygienic methods i.e. they can b
e prevented. Attention to these hygiene
factors prevents dissatisfaction but does not on its own provide motivation. Hyg
iene factors (or dissatisfiers ) are concerned
with those factors associated with, but not directly a part of, the job itself.
These can be detected in the scenario; salary and
the perceived differences with others, job security, working conditions, the qua
lity of management, organisational policy and
administration and interpersonal relations.
Understanding Herzberg s theory identifies the nature of intrinsic satisfaction th
at can be obtained from the work itself, draws
attention to job design and makes managers aware that problems of motivation may
not necessarily be directly associated
with the work.
(b) Organisations such as Swandiff Local Authority can be described by Handy s Rol
e Culture and the structure may also be
depicted as Mintzberg s machine bureaucracy.
This is the traditional organisational structure and culture based on rules, reg
ulations, rationality, logic and predictability and
is invariably associated with government organisations. This structure is illust
rated by the Greek temple, the roles and
functions are the pillars with the management at the top. The organisation is ef
ficient, its activities and culture are based on
formality and procedures, employees are process and rule oriented, have clear ro
les and are not required to be innovative or
imaginative. The environment is stable, predictable; this kind of organisation i
s slow to adapt or respond to change.
The structural and cultural implications of the scenario suggest that this organ
isation is in fact an inefficient bureaucracy. It
is poorly designed with a lack of job descriptions, unclear lines of authority,
responsibilities and role definition within which
the supervisors undertake their duties. In addition there is a lack of training
and skill development appropriate to supervisors.
The organisation is paradoxically insufficiently bureaucratic; the clarity of ro
les, procedures and position required for such
an organisation to operate do not exist. This lies at the heart of the organisat
ion s problems.
(c) The benefits for the supervisors can be identified by increased motivation a
ccompanied by greater job satisfaction and
improved organisational performance. A matching of individual goals with those o
f the organisation, coupled with enhanced
skills and abilities could in turn lead to enhanced promotion opportunities for
the supervisors. Individual supervisors would
feel that he or she is of value to the organisation and acquire new skills which
may be useful in the future.
Part of the training could lead to improved work methods, improved social skills
and opportunities, the increasing of employee
knowledge and, in the longer term, increase the value of the organisation s human
assets. Most importantly from the scenario,
it could lead to greater staff commitment, understanding and loyalty.
7
2 Success is a basic requirement of all business organisations. Although there a
re different approaches, the American writer Thomas
J Peters has suggested that successful businesses demonstrate eight particular c
ultural and organisational characteristics.
Peters focused on the process of organising and ignored many of the standard too
ls of management such as budgets and plans.
He rejects ideas based on detailed forecasting and control, because these encour
age a culture that rejects mistakes and
concentrates on negative measures.
He emphasises the importance of culture and values to organisational success and
the desirability of developing a strong, common
organisational culture, capable of motivating employees to unusual performance l
evels.
He suggested that successful ( excellent ) businesses displayed particular character
istics.
A BIAS FOR ACTION. The encouragement of an informal, innovative, task oriented c
ulture not based on formal systems. A system
of management by wandering around .
CLOSE TO THE CUSTOMER. A culture of listening to customers, being obsessed with
customer service.
AUTONOMY AND ENTREPRENEURSHIP. The fostering of innovation and the use of produc
t champions when practical risk taking
by the organisation s members is encouraged. An organic system of management is de
veloped.
PRODUCTIVITY THROUGH PEOPLE. People in the organisation are seen as the basic so
urce of quality. Staff are encouraged and
praised, a team approach is developed based on mutual trust.
HANDS ON, VALUE DRIVEN. The values of the business and its objectives are shared
by all the organisation s members.
Management is involved at all levels and there is encouragement for doing the jo
b well.
STICK TO THE KNITTING. The organisation grows through internally generated diver
sification. There is no movement into markets
or products outside the core business.
SIMPLE FORM, LEAN STAFF. There are no complicated organisational and management
structures, simple product divisional
forms are used.
SIMULTANEOUS LOOSE-TIGHT PROPERTIES. Autonomy and responsibility is pushed down
the organisation. However, core
values such as the control of quality are centralised.
Such successful businesses understand the basics; thinking is encouraged, things
are kept simple and chaos is tolerated in return
for results. The firm s core values are prized.
3 Organisations need to recruit the best possible individuals and a common means
of recruitment is to place an advertisement. The
purpose of the advertisement is to attract potential employees and act as a mean
s of pre-selection.
(a) Writing a recruitment advertisement that is attractive and informative is no
easy task. If it is poorly constructed then the
appropriate potential employees will not be reached.
Preparing an advertisement requires:
Skill and attention to fulfil the objective of attraction and pre-selection and
must be concise yet contain enough information
about the job, rewards and specifications.
It must be constructed in such a way as to be attractive to the maximum potentia
l employees and at the same time the
advertisement must present the organisation in a positive way.
It must be honest and not contain claims that are exaggerated and its contents m
ust be relevant and appropriate.
(b) The types of organisation. Different vacancies will be advertised in differe
nt ways. Local businesses may advertise only
through local outlets while large international businesses may well look at a wi
der employment market.
The type of job. An organisation seeking a financial director may advertise in a
professional journal or national newspaper.
Advertisements for skilled factory workers would appear in the local press.
The cost. Advertising must be seen to be cost effective because advertising in a
ny media is expensive. Government sponsored
employment organisations are the cheapest way of advertising. Local newspapers a
re a useful medium and inexpensive.
However, for senior appointments, the expense of trade and professional journals
or international newspapers may be seen
to be worthwhile.
The readership, circulation and suitability of the chosen medium. The advertiser
should strike a balance between advertising
to a large audience and yet reaching the target market of suitable candidates. F
or example, accountants read national
newspapers but would look for job advertisements in their own professional journ
als or magazines.
The frequency with which the organisation needs to recruit staff.
8
4 There are many forms of training, ranging from external courses to internal tr
aining, which in turn take many forms. Managers
must understand the different internal methods and be able to evaluate the effec
tiveness of training, something that can be
expensive and time consuming.
(a) (i) Coaching is where the trainee is supervised by an experienced individual
who gives instruction on the task to be
undertaken. It is a specialised form of training often which occurs when an empl
oyee has to have skills improved and
deepened quickly due to new technology, techniques or to replace other individua
ls. This form of training must be
planned, monitored and feedback provided to the trainee but is however expensive
in terms of time. It may well be
undertaken by the line manager of the person and will focus on special skills.
(ii) Mentoring is the use of an especially trained individual, or one with parti
cular skills to provide guidance and direction
to the trainee, who is often a new recruit possibly at a management level. This
form of training also requires careful
planning and feedback. It is usually not performed by the line manager of the su
bject and is more developmental and
broadly based than coaching.
(b) Evaluation of training is often seen as satisfying five criteria, which are:
Trainees reaction is the most important measure. Trainees must be asked whether t
hey thought the training to be useful and
relevant. Although such questions and answers are likely to be ambiguous, they p
rovide an instant response.
Trainee Learning measures the depth of the trainees learning through some form of
test or method of evaluation of the
training.
Change in job behaviour and application post-training is based on the study of t
he trainees after the completion of the
training to measure and ensure that the training has had a beneficial effect on
work practices.
Organisational changes due to learning requires an examination of whether the pr
actices, behaviour and attitude of others
who did not benefit from the training has changed.
Training and the impact on organisational objectives requires investigation as t
o whether the training provided has assisted
with the achievement of the organisation s objectives. This is the ultimate test o
f the value of training.
(Students may recognise the evaluation criteria is based partly on the work of H
amblin)
5 The way in which managers duties are undertaken can significantly influence the
satisfaction that employees derive from their
work. An understanding of human relations skills are required in motivating peop
le.
(a) Content theories ask the question What are the things that motivate people?
Content theories are sometimes called need theories and assume that human beings
have a set of needs or desired outcomes,
and that these needs can be satisfied through work. They focus on what arouses,
sustains and regulates good, directed
behaviour, and what particular personal forces motivate people. Content theories
assume that everyone responds to
motivating factors in the same way and that therefore there is one, best way to
motivate everybody.
(b) Douglas MacGregor has suggested that the individual s attitude to work can gen
erally be divided into two categories, which
he called Theory X and Theory Y. The style of management adopted will stem from
the view taken as to how subordinates
behave.
These two typologies are not discrete, they represent the two ends of a continuu
m.
(i) Theory X is based on traditional organisational thinking. It assumes that th
e average person is basically indolent and
has an inherent dislike of work which should be avoided at all costs. The indivi
dual lacks ambition, shuns responsibility,
has no ambition and is resistant to change. This theory holds that the individua
l seeks only security and is driven solely
by self interest. It follows that because of this dislike of work, most have to
be directed, controlled, organised or coerced.
Management is based on fear and punishment and will have an exploitive or author
itarian style.
(ii) Theory Y is at the opposite end of the continuum and is in keeping with mor
e modern thinking on motivation. It is based
on the idea that the goals of the individual and the organisation can be integra
ted. It holds that personal satisfaction can
be achieved through the workplace.
It assumes that for most people, work is as natural as rest or play and that ind
ividuals will exercise self discipline and
self direction in helping to achieve the organisation s objectives. For the averag
e human being, physical and mental effort
in work is perfectly natural and work is actively sought as a source of satisfac
tion. In addition, the average human being
will seek and accept responsibility. Creativity and innovative thinking is widel
y distributed amongst the population as a
whole and should be encouraged in the work situation. The intellectual ability o
f the average person is only partly used
and should therefore be encouraged as individuals are motivated by seeking self-
achievement.
Control and punishment are not required and management therefore has to encourag
e and develop the individual.
However, the operation of Theory Y is not easy, it can be frustrating, time cons
uming and sometimes regarded with
suspicion.
9
6 There are many forms of communication within an organisation, both formal and
informal. In the main, communicated information
often flows in quite clear directions. The direction of the three main informati
on flows can be said to be downwards, upwards and
lateral.
(a) Communicated information flows in three main directions.
Downwards. This form of communication is often the one most easily recognised. I
ts purpose is to give specific directives, to
provide information about procedures and practices and to provide information ab
out the job. It also serves to tell subordinates
about their performance and to provide information on organisation and departmen
tal objectives.
Upwards communication tends to be non directive in nature and generally takes tw
o forms: personal problems or suggestions
and/or technical feedback as part of the organisation s control system.
Lateral or horizontal. Although traditional communication theory assumes only ve
rtical communication, horizontal
communications is becoming increasingly important and necessary. It takes the fo
rm of task co-ordination, such as
departmental managers or supervisors meeting regularly, or problem solving where
departmental members meet to resolve
an issue and information sharing. It also describes inter-departmental sharing o
f ideas, or conflict resolution and to resolve
inter-departmental friction. This corresponds to Foyol s gang plank.
(b) Structural characteristics can limit group performance in the accomplishment
of a task.
The Circle. Each member of the group communicates only with the person next to t
hem. This method of communication is
the slowest, lacks co-ordination and proves slow in problem solving. Participant
s satisfaction is the lowest.
In the Y, each member of the group communicates only through the central position
of the network. The central figure obtains
the greatest satisfaction although the remainder do not.
The Wheel. As with the Y, members of the group communicate only through the centra
l figure. This configuration solves
problems the quickest, although this depends on the ability of the central figur
e, who obtains the greatest satisfaction. There
is a mixed response from the remainder of the participants.
The All Channel allows communication in all directions. This is the best for sol
ving complex problems with a high degree of
satisfaction obtained by the participants. However, it becomes a wheel or disint
egrates under pressure.
(Students may wish to illustrate these patterns with appropriate diagrams)
10
1 (a) Explanation of Herzberg s Theory and relevance to the scenario. Up to 5 mark
s
Description of hygiene and motivator factors and relevance to the scenario. Up t
o 10 marks
(b) Recognition and description of role culture and structure.
(5 marks for recognition and description of role culture and 5 marks for descrip
tion of inefficient bureaucracy)
Up to 10 marks
(c) Advantages of training and relevance to the scenario. Up to 15 marks
2 Brief description of the thinking behind the characteristics (3 marks)
Description of any six individual characteristics
Up to 2 marks each to a maximum of 12 (12 marks)
3 (a) Description of factors Up to 5 marks
(b) Brief description of factors
(2 marks for each of the five factors) Up to 10 marks
4 (a) (i) Brief description and understanding of coaching Up to 5 marks
(ii) Brief description and understanding of mentoring Up to 5 marks
(b) Explanation of evaluation
(1 mark for each evaluation factor) Up to 5 marks
5 (a) Explanation of content theory Up to 5 marks
(b) (i) Explanation of Theory X Up to 5 marks
(ii) Explanation of Theory Y Up to 5 marks
11
6 (a) Description of the three communication flows
(3 marks for each flow) Up to 9 marks
(b) Brief description of any three
(i) Brief description of the circle
(ii) Brief description of the Y
(iii) Brief description of the wheel
(iv) Brief description of all channel (2 marks each)
12
Managing People
PART 1
MONDAY 14 JUNE 2004
QUESTION PAPER
answered
Paper 1.3
1 Watkin Williams is a small accountancy practice based in a small British town.
The two partners, Reg Watkin and
Oscar Williams are supported by a small team of qualified and part qualified acc
ountants, technicians and support
staff. The staff consists of five account managers who look after the main clien
ts, a customer liaison manager (whose
role it is to look for new clients), four account managers who maintain contact
with smaller and newer clients and a
support staff of five technicians and four secretaries. The practice is regarded
as outgoing and constantly seeking
expansion.
The two partners feel that the practice has grown so much that it can no longer
be managed in an informal way. Reg
Watkin has been studying management in his spare time and suggested to his partn
er that a staff appraisal scheme
should be introduced. He believes that rewards should be related to performance
and wants to use the appraisal
scheme as the basis for salary increases, annual bonuses and other incentives. D
espite the office being very busy and
there being substantial demands on staff, the scheme has been active for the las
t six months, with appraisal interviews
being fitted in as time has become available.
The two partners are soon to discuss strategy and amongst other things, intend t
o discuss the salaries budget for the
coming year. However, feedback from the staff has identified a number of problem
s with the appraisal system. It has
been alleged that nobody on the staff knows what appraisals are for, whether the
y are simply a discussion or a session
to ask for more money. Some members of staff regard appraisals as a waste of tim
e and resources since their own
performance depends on others work, how well they perform and the time they are g
iven. The partners are rarely
available in the office and are therefore seen as out of touch. Staff members fe
el that appraisal interviews are a low
priority for the partners, who hold them only at short notice when convenient to
them. As a consequence, some staff
say nothing, others complain and in reality, there has been no follow up to the
interviews. The staff now feel that an
informal system should be introduced since the formal system has failed because,
in their view, it is inappropriate to
the organisation.
The partners are concerned about the views of the staff and have commissioned yo
u to report on performance
appraisal systems.
Required:
(a) Briefly describe the three main components of an appraisal system. (3 marks)
(b) Outline the potential benefits of the appraisal from the viewpoint of:
(i) The employees at Watkin Williams; (5 marks)
(ii) The employer Watkin Williams. (5 marks)
(c) Describe five main barriers to an effective appraisal system at Watkin Willi
ams. (5 marks)
(d) Describe the documentation that should be prepared BEFORE an appraisal inter
view. (8 marks)
(e) Describe three approaches the partners of Watkin Williams might use for cond
ucting the appraisal interview
and explain which method you think might be most beneficial and why. (9 marks)
(f) Explain what actions should be taken after the appraisal has been completed.
(5 marks)
(40 marks)
2
2 Your manager has decided to introduce a system of Management by Objectives but
is uncertain how to set about it.
You have been asked to advise.
Required:
Describe the seven key stages that should be followed in a Management by Objecti
ves programme.
(15 marks)
3 Selection testing has become a common method of seeking information about pote
ntial employees. Such tests
however are subject to some limitations.
Required:
(a) Briefly describe the purposes of:
(i) Intelligence Tests; (2 marks)
(ii) Aptitude Tests; (2 marks)
(iii) Competence Tests; (2 marks)
(iv) Personality Tests. (2 marks)
(b) Briefly outline four limitations of selection tests. (7 marks)
(15 marks)
4 Training programmes play an important part in improving employee skills and or
ganisational performance.
Required:
(a) Briefly explain the advantages of training for the organisation. (5 marks)
(b) Briefly explain the advantages of training for the individual. (4 marks)
(c) Briefly explain what is meant by the following different types of training:
(i) Computer based; (2 marks)
(ii) Job rotation; (2 marks)
(iii) Work shadowing. (2 marks)
(15 marks)
3 [P.T.O.
5 Your manager has heard of Action Centred Leadership and wishes to involve the
department in this idea. You have
been asked to explain the idea to your colleagues.
Required:
(a) Briefly outline three skills a leader might possess. (6 marks)
(b) Briefly explain the term action centred leadership . (3 marks)
(c) Describe the three major goals of action centred leadership. (6 marks)
(15 marks)
6 The accounts manager does not understand what is meant by discipline within th
e employment context. You have
been asked to explain.
Required:
(a) What do you understand is meant by the term discipline in the employment conte
xt? (3 marks)
(b) Explain what is meant by the terms:
(i) positive discipline; (2 marks)
(ii) negative discipline. (2 marks)
(c) Provide four examples of situations where disciplinary action may be require
d. (8 marks)
(15 marks)
4
Answers
1 Appraisal systems are often misunderstood and mismanaged, as in this scenario.
Appraisals are central to human resource and
performance management and understanding their role, objectives, benefits and pu
rpose is extremely important. Careful
preparation and understanding are required if the appraisal process is to be suc
cessful and worthwhile.
(a) Appraisal systems exist to improve organisational efficiency by ensuring tha
t individuals perform to the best of their ability,
develop their potential and earn appropriate reward. This leads in turn to impro
ved organisational performance.
To successfully implement a performance appraisal system, the partners need to u
nderstand the basic and inter-linked
purposes of an appraisal system, which are threefold:
To measure the extent to which an individual may be awarded a salary or pay incr
ease compared with his or her peers; the
Reward review component. The staff at Watkin Williams believe that this is why t
hey should have appraisals.
To identify training needs and plan follow up training and development to enable
the individual better to assist the organisation
to achieve its objectives; the Performance review component. This is the view of
the partner Reg Watkin who wants to use
appraisal to link salaries with performance.
To aid the individual s career development and succession by attempting to predict
the type and level of work that the
individual is likely to be capable of in the future; the Potential review compon
ent. This approach needs some thought at
Watkin Williams, with the apparent unclear understanding by all concerned at Wat
kin Williams of the wider purpose of
appraisals.
(b) (i) Each employee at Watkin Williams could benefit by establishing what he o
r she has to do to further the objectives of the
organisation and thus feel more involved. The appraisal establishes key results
which the individual needs to achieve
within a set period of time whilst also comparing the individual s performance aga
inst a set and established standard.
The original reason for introducing appraisals at Watkin Williams was to provide
a basis for remuneration whilst also
identifying training and development needs. Both are essential in an expanding a
nd changing organisation.
(ii) For Watkin Williams, the employer, the benefits are the identification of c
andidates for promotion and areas for individual
improvement. It will provide a basis for human resource planning, monitoring hum
an resource selection processes
against results and perhaps most importantly from the case details, improve comm
unication.
(c) The appraisal system should be a well constructed scheme which is fair to bo
th the individual and the organisation. The
scenario highlights a number of barriers which exist at the moment within Watkin
Williams.
Chat the appraisal interview is seen as an informal, loosely constructed and bad
ly managed dialogue without purpose. It
is this that some of the staff wish to introduce, but it is as much of a danger
to the appraisal process as any of the others.
This has been the approach at Watkin Williams and goes some way to explaining th
e misunderstanding and mistrust of the
appraisal scheme.
Bureaucracy a system based on forms devised solely to satisfy the employer. Thus
its main purpose, that of identifying
individual and organisation performance and improvement, is forgotten. This is n
ot the case at Watkin Williams at the
moment, but is seen by some staff members as a reason to reject appraisals.
Confrontation due to lack of agreement on performance, badly explained or subjec
tive feedback, performance based on recent
events or disagreement on longer term activities. In an expanding organisation s
uch as Watkin Williams where performance
criteria are unclear, this is a serious barrier.
Judgement the appraisal is seen as a one sided process based entirely on the man
ager s or owner s perspective. This is a
danger at Watkin Williams, some staff members are concerned that their appraisal
s will be based partly on the activities of
others.
Unfinished Business the appraisal is not seen as part of a continuing process of
performance management. Without clear
performance criteria at Watkin Williams, this threatens to be yet another barrie
r.
An Annual Event the appraisal is seen as simply an event which sets targets annu
ally that quickly become out of date.
Appraisals are best held more frequently. This again could be viewed negatively
by the staff at Watkin Williams.
(d) A formal appraisal interview is an integral part of appraisal and performanc
e management. The appraiser should be the
immediate supervisor but in the case of the scenario it is one of the partners.
Prior to the appraisal interview, the appraiser
undertaking the interview should have prepared the following documentation.
The required documents for an appraisal are the job description, a statement of
performance or appraisal form and a record
book highlighting the employee s performance. In addition, peer assessment and if
appropriate, comments from clients and
customers (as might well be the case in the scenario) and the self assessment fo
rm issued to the employee prior to the
interview (which apparently is not the case in the scenario) might be useful. Fi
nally, the human resources file on the employee
which should contain notes on the employee s general personal attitude, including
discipline issues such as timekeeping and
attendance should be available to the appraiser.
7
(e) The partner s interview might be based on one of three approaches: The Tell an
d Sell Method. The partner explains to the
appraisee (the staff member) how the assessment is to be undertaken. The next st
ep is to gain acceptance from the appraisee
of the evaluation and improvement plan. Human resource skills are important with
this approach in order for the partner to
be able to provide constructive criticism and to motivate the appraisee. This ha
s been the way the partners have approached
the appraisal interview thus far.
The Tell and Listen Method. The partner invites the appraisee to respond to the
way that the interview is to be conducted.
This approach requires counselling skills and encouragement to allow the apprais
ee fully to participate in the interview. A
particular feature of this approach is feedback from the appraisee and with the
current misunderstanding and mistrust, might
be an appropriate approach.
The Problem Solving Method. Here the partner takes a more helpful approach and c
oncentrates on the work problems of the
appraisee. The appraisee is encouraged to think through his or her problems and
to provide their own intrinsic motivation.
This might be the more appropriate approach in the current atmosphere at Watkin
Williams.
(f) After the interview, the partner and appraisee should agree on actions to be
undertaken.
There needs to be an agreement between the partner and appraisee on the results
of the appraisal and an agreed action plan
on improvement of the appraisee. This has not happened to date. There will have
to be assistance and monitoring of the
appraisee in the future with arrangements for feedback on future progress.
2 Setting objectives for individual managers and departments can be difficult, t
he more so when individual and departmental
objectives must correspond with and follow the overall objectives of the organis
ation.
A Management by Objectives programme follows a logical and coherent structure:
Stage 1. Define the main areas of responsibility and performance for each indivi
dual and department as appropriate. This is
often laid out as targets or schedules and is based on a measure of efficiency.
Secondary targets are also included.
Stage 2. Define and agree principal areas of activity where failure to succeed w
ould damage the organisation s overall
objectives.
Stage 3. Define and agree means of measurement. This stage involves two separate
issues. The first is to establish the criteria
by which performance will be measured. The second establishes the point at which
the measurement of objectives
constitutes effective performance for which reward may be received.
Stage 4. Define and agree some key result areas. These are normally no more than
one or two critical areas.
Stage 5. Decide upon an action plan and appropriate review periods. This will be
itemised and contain details of action
required by the individual, the department and the management. Barriers will be
identified and actions planned to
remove them.
Stage 6. The annual performance review will be established at which time results
will be compared to the principal areas noted
at step one and success in achieving objectives assessed.
Stage 7. Objectives are revised and a new sequence of objectives begins.
3 The selection of the correct employee is fundamental to the success of an orga
nisation. In the first instance, the application form
obtains information about a potential employee simply and in a number of differe
nt ways. However, the application form is often
poorly constructed, asks the wrong questions or fails in its function to assist
managers and supervisors. These shortcomings can
be overcome through the use of selection tests.
(a) Intelligence Tests are constructed to test a candidates general intellectual
ability, his or her individual memory capability,
speed of thought and to test problem solving skills, sometimes through setting o
f a specific, time limited test.
Aptitude Tests are designed to measure an individual s potential, measure mechanic
al ability, understanding and dexterity,
clerical ability and assess physical dexterity.
Competence Tests have one real aim, to measure the depth of knowledge learned by
the individual in the past.
Personality Tests are designed to assess the skill of the individual in dealing
with people, the individual s leadership skills,
personal emotional stability and the individual s ambition and motivation.
(b) Despite the claims of the supporters of such tests, they are not foolproof a
nd are subject to severe limitations. It is almost
impossible to exclude bias from such tests, different genders and cultures may f
or example, perform better in some aspects
than others. Despite claims that tests have in-built checks, it is possible for
some candidates to guess at least some of the
answers. The test conditions are by definition artificial and there can often be
no direct relationship between a person s ability,
the test results and the ability to do the job required of the individual. It is
possible to do well in such tests through coaching
and practice. They are non predictive and are expensive to administer. Interpret
ation of test results is a skilled task and this
adds to the cost and overall expense of recruitment.
8
4 There are many forms of training, ranging from detailed, expensive external co
urses, to internal, relatively inexpensive forms of
training. Accountants as managers need to understand the benefits of training an
d to have an understanding of different internal
training methods.
(a) The organisational benefits can be identified in a number of ways. The most
important is the establishment of an appropriately
trained workforce, increasing employee knowledge whilst at the same time lowerin
g waste and scrap costs and increasing
productivity. In addition, training can improve upon those skills which already
exist, leading to improved job performance and
providing a pool of skills upon which the organisation can draw. Further benefit
s include greater staff commitment, which in
turn should require less need for detailed supervision whilst also increasing th
e value of the organisation s human resources.
Finally, training can aid recruitment and selection planning.
(b) For the individual, the benefits can be identified by increased motivation t
he individual feels that he or she is of value to
the organisation greater job satisfaction, enhanced promotion opportunities and
an opportunity to increase remuneration.
Training leads to improved work methods and thus enhanced skills and abilities c
an be a means of matching individual goals
with those of the organisation. Improved social skills and opportunities can als
o benefit the individual and such newly
acquired skills could be useful in the long term.
(c) (i) Computer based training (CBT) sometimes referred to as Computer Assisted
Learning (CAL) is a user friendly, hands on
self learning system that allows the trainee to learn at his or her own pace som
etimes without direct supervision. This
type of training often involves the use of interactive pre-set programmes.
(ii) Job rotation is aimed at developing employees wider experience and skills wi
thin the organisation. The trainee is moved
in succession from one job to another, thus broadening experience and making him
or her aware of the range of skills
required within the organisation.
(iii) Work shadowing is often used to encourage employees with potential for pro
motion and is a straightforward, inexpensive
training method. It involves one employee shadowing or assisting another often a s
enior to learn the skills involved
at a higher level.
5 A contemporary approach to leadership is to regard it as being made up of a nu
mber of different skills. This has been extended to
an approach known as action centred leadership. This recognises that leadership oc
curs within three inter-related variables: the
task, the group and individual needs.
(a) Leadership requires a number of different skills, including the ability to i
nspire confidence and trust, an understanding of the
task in hand and the ability to employ employees abilities and skills but also to
recognise weaknesses. Clear and concise
communication skills are important, as is the ability to make and explain decisi
ons. Fundamental to communication skills is
the ability to motivate both the individual and the team or group as a whole and
perhaps most important of all, to create and
sustain a sense of encouragement and direction to meet the objectives of the org
anisation.
(b) Action centred leadership is a process made up of three inter-related variab
les: the needs of the task, the needs of the group
and the needs of the individual. The leader needs to balance the relative import
ance of all three variables, however the
situation requires that relative importance be given to identifying and acting u
pon the immediate priority.
(c) Action centred leadership requires recognition of three variables: task, gro
up and individual needs.
Task needs are setting objectives for the team or group, planning and initiating
the task or tasks, allocating responsibilities,
setting and verifying performance standards and establishing a control system.
Group needs involve team building so that mutual support and understanding is ac
hieved, developing appropriate
independence within the group, setting agreed standards, providing training as r
equired and appropriate and, most
importantly, establishing communication and information channels.
The leader needs to recognise the development of individual needs and achievemen
t, motivation by recognition, the
encouragement of creativity, the delegation as far as possible of authority to e
ncourage group support and to attend to any
problems or grievances.
9
6 Understanding the problems of discipline in the employment situation are impor
tant management skills. Whilst it is important that
accountants as managers have a knowledge of motivation techniques, it is equally
important that they are also able to recognise
the other side of motivation, that of discipline.
(a) Discipline may be defined as a condition in the organisation in which there
is orderliness, and in which organisational
members behave sensibly and conduct themselves in accordance with standards of b
ehaviour acceptable to the organisation s
members, goals and objectives.
(b) (i) Discipline may be positive in that the employee is encouraged to conform
to good practices and acceptable behaviour
by being given training, and by the presence and consistent application of rules
and procedures.
(ii) Discipline may, on the other hand, be negative. This is the situation where
actions may be taken to ensure that the
organisation s members behave in an appropriate way. Such actions include punishme
nt, deterrent or reformative
measures.
(c) There are many occasions in the workplace when disciplinary situations arise
. Management research indicates that some are
more frequent than others.
A disciplinary situation arises when absenteeism is seen as excessive and taken
without good cause. Poor timekeeping in
terms of start or finish at work or at breaks is a common disciplinary issue, as
is poor work performance such as high error
rates and inferior work, customer complaints or inaccuracy; especially important
issues in the accounting context. At a more
personal level, negative attitudes toward work which influence the individual s ow
n work or the attitude or work of others,
such as noncompliance or deliberate violation of procedures, rules and regulatio
ns are another cause for concern.
Inappropriate appearance or behaviour is a special issue in accounting as is dis
regard of safety procedures and, more
profoundly, insubordination.
Increasingly, managers are faced with disciplinary problems which do not occur w
ithin the workplace. This is a difficult matter,
but if conduct away from the workplace impacts upon the employee s conduct in work
, then management must deal with the
problem within organisational disciplinary procedures.
10
1 (a) Brief description of the three main components of an appraisal system.
(One mark each) up to 3 marks
(Maximum for part (a) 3 marks)
(b) Outline of the benefits of the appraisal from the viewpoint of:
(i) The employees at Watkin Williams up to 5 marks
(ii) The employer Watkin Williams up to 5 marks
(Maximum for part (b) 10 marks)
(c) Description of five main barriers to an effective appraisal up to 5 marks
(One mark each)
(Maximum for part (c) 5 marks)
(d) Description of the documentation up to 8 marks
(One mark each)
(Maximum for part (d) 8 marks)
(e) Description of three approaches to take in conducting the appraisal intervie
w up to 9 marks
(Three marks each)
(Maximum for part (e) 9 marks)
(f) Explanation of follow up action up to 5 marks
(Maximum for part (f) 5 marks)
2 Description of seven stages in a Management by Objectives programme. up to 15
marks
(Two marks per stage with one available for using examples)
(15 marks)
3 (a) Brief description of:
(i) Intelligence Tests up to 2 marks
(ii) Aptitude Tests up to 2 marks
(iii) Competence Tests up to 2 marks
(iv) Personality Tests up to 2 marks
(One mark for each characteristic)
(b) Brief outline of limitations of tests up to 7 marks
(One mark for each limitation)
4 (a) Brief explanation of the advantages for the organisation up to 5 marks
(b) Brief explanation of the advantages for the individual up to 4 marks
(c) Brief explanation of types of training
(i) Computer based up to 2 marks
(ii) Job rotation up to 2 marks
(iii) Work shadowing up to 2 marks
11
5 (a) Brief outline of three skills of a leader
(Two marks each) up to 6 marks
(b) Brief explanation of action centred leadership
(One mark each) up to 3 marks
(c) Description of the three major goals up to 6 marks
(Two marks each)
6 (a) Description of discipline up to 3 marks
(b) (i) Description of positive discipline up to 2 marks
(ii) Description of negative discipline up to 2 marks
(c) Examples of disciplinary situations up to 8 marks
(Two marks for each example)
12
Managing People
PART 1
QUESTION PAPER
answered
Do not open this paper until instructed by the supervisor
This question paper must not be removed from the examination
hall
Paper 1.3
1 Rockers is a small recording studio established four years ago which is owned an
d operated by a group of twelve
people. The group has been working together amicably and successfully for a cons
iderable time.
Neville has been in charge since the beginning and his leadership is valued by a
ll the team s members and the support
given to him by Olivia, the second in command. Outgoing and extrovert, she often
elaborates on Neville s instructions
and deals on his behalf with group members queries, especially when he is away on
business.
Much of the success of the group has been due to Peter, who is creative at probl
em solving, and Rosalind, who has
an encyclopedic knowledge of sources of supply and information. Another group me
mber, Quentin, is an expert on
charts and records and Suki is invaluable at sorting out disagreements and keepi
ng everyone cheerful. The remaining
members of the group also fulfil roles which are acceptable to themselves and ot
hers.
Recently, Olivia resigned for family reasons. As the workload has been increasin
g, Neville took it upon himself to
recruit four new people to the group. Neville now finds that various members of
the original group complain to him
about what they are expected to do and about other people s failings. Peter and Ro
salind have been particularly helpful
to Neville, but have had several serious arguments between themselves and with o
thers.
Required:
(a) Describe Tuckman s stages of group development and explain the stage the group
was at before and after
Olivia s departure. (15 marks)
(b) Until the changes, the group worked well together as a team with each member
fulfilling a role as identified
by Belbin.
(i) What role did Olivia play and what are its characteristics? (5 marks)
(ii) Name and describe the team roles fulfilled by Neville, Peter, Rosalind, Que
ntin and Suki. (10 marks)
(iii) What problems might arise as a consequence of Olivia s departure and consequ
ently the team role she
played? (5 marks)
(c) Recommend how Neville should ensure that the group reverts to its former coh
esiveness. (5 marks)
(40 marks)
2
2 All organisations develop a culture which influences the way an organisation s e
mployees behave.
Required:
(a) Define and describe what is meant by the term culture in the organisational co
ntext. (3 marks)
(b) Describe Handy s four cultural types. (12 marks)
(15 marks)
3 You have been asked to carry out a job analysis of the employees in the accoun
ts department.
Required:
(a) Briefly explain what is meant by the term job analysis . (3 marks)
(b) Briefly explain the four stages involved in carrying out a job analysis. (4
marks)
(c) Identify and briefly explain the information you would expect to collect dur
ing the job analysis investigation.
(8 marks)
(15 marks)
4 Your employer has realised that a formal recruitment and selection process is
required. You have been asked to advise.
Required:
Identify and explain the stages involved in recruitment and selection.
(15 marks)
5 There is often confusion between the meanings of job enrichment , job enlargement a
nd job rotation .
Required:
(a) Define and explain the term job enrichment . (5 marks)
(b) Define and explain the term job enlargement . (5 marks)
(c) Define and explain the term job rotation . (5 marks)
(15 marks)
3 [P.T.O.
6 Employee discipline is important in achieving organisational success.
Required:
(a) What is meant by the term discipline in the organisational context? (3 marks)
(b) Describe in the correct order, the six steps involved in a formal disciplina
ry procedure. (12 marks)
(15 marks)
4
Answers
1 (a) Teams have to develop, mature and often eventually terminate. According to
Tuckman, it is possible to identify distinct stages
of development through which teams pass. There are five distinct stages.
The Forming stage is when the members meet and decide upon the purpose of the te
am and how it will operate. At this stage
the team is no more than a collection of individuals, finding out about one anot
her and about the task even though the
objectives may be unclear. This stage is wasteful and time consuming, although e
ssential since the prospective team members
are not at this stage comfortable with each other.
The second stage is Storming. The phrase storming is a deliberate reference to a s
tage of development characterised by
conflict. Previous ideas, ideals, norms, attitudes and behaviours are challenged
and often rejected. There is competition for
the roles within the team. This is a constructive and often fruitful stage with
trust developing. If the individuals come
successfully through this stage then a stronger team will result.
The Norming stage is when the routines under which the team will operate are est
ablished. The team is settling down,
members investigate ideas and test the reactions of the team as a whole and cons
equently, norms are established. In addition,
it is at this stage that the team establishes patterns of behaviour, levels of t
rust and the methods by which decisions will be
taken.
By the time the Performing stage is reached, the team is now complete and able t
o perform to its full potential. Difficulties
with team roles, individual conflicts and problems of adjustment have been resol
ved.
In practice, many teams reach the Dorming stage, which has been suggested as a f
inal and fifth stage, when the team
becomes complacent, has lost interest in the task and exists only for self prese
rvation.
The group of people who established Rockers would by now have gone through the dev
elopment stages, the scenario clearly
suggesting that each group member had settled into and fulfilled their roles wit
h the group having reached the performing
stage. However, with Olivia s departure and the recruitment of four new members wh
ich represents a substantial expansion
in numbers the group would have been taken back to the forming and storming stag
e; a collection of individuals needing
to resolve uncertainties and conflict.
(b) (i) Olivia was the Shaper. The scenario describes a dominant, extrovert pers
onality. Task driven to the point of passion; a
force for action, her role is central and will be missed.
(ii) Neville is the Coordinator. He provides the leadership, coordination and is
good at working with others. A balanced and
disciplined person.
Peter is the Monitor Evaluator/Innovator, not creative but analytical in approac
h, examines ideas and finds errors and
flaws. However, he may be tactless and aloof.
Rosalind is the Resource Investigator. Popular, social, extrovert and relaxed, s
he is a useful source of new contacts but
not ideas. She needs to be used.
Quentin is the Company Worker. The administrator and organiser who turns ideas i
nto jobs and tasks. He is efficient,
trustworthy but unexcitable.
Suki is the Team Worker. The silent member. Concerned with the maintenance of the
team, supportive and popular
with the team but noticed only when absent.
(iii) All team members are a matter of balance. Belbin suggests that all team me
mbers have a dual role; the primary role is
that of the skill or function, usually the individual s professional role. The sec
ondary role is the team role based on the
individual s preferred behaviour pattern.
Olivia was the Shaper, thus the team role which involves driving the team and en
suring that action takes place is
missing. Her departure might well have a damaging effect on the group and the su
ccess of Rockers .
In addition, the scenario does not describe remaining roles, the Plant (the intr
overt, intellectually gifted and imaginative
individual who acts as a source of ideas) and the Completer/Finisher who pushes
the team to meet targets, sees urgency
and follow through as important and enjoys details. The person who fulfils this
role is not popular with the team. These
roles were probably secondary (Belbin suggests that it is possible to have more
than one team role) but suggest, along
with Olivia s departure and the recruitment of four new members, that roles will n
eed to be re-addressed.
(c) Neville will need to re-build the team, identify and fill the vacant team ro
les and allow the team to develop through the stages
of team development. He needs to understand that all team roles are required for
a successful team in addition to the team
members bringing their own disciplines and skills. It is possible that all will
have more than one team role skill, although one
will be greater. The team role itself may change, depending on the task and the
number of team members otherwise there is
the danger of team imbalance. Often the supposed benefits of teamwork do not mat
erialise due to incompatible personalities
or too many individuals with the same views and backgrounds. Teams can be destru
ctive if not properly constructed.
7
2 Organisational culture reflects deep set beliefs about the way that work shoul
d be organised, authority exercised and the degree of
formality, rules and procedures which are appropriate.
(a) Mullins describes organisational culture as
the collection of traditions, values, policies, beliefs and attitudes that consti
tute a pervasive context for everything we do and
think in an organisation.
Schwartz and Davies describe organisational culture as
a pattern of beliefs and expectations shared by the organisation s members and whic
h produce norms which powerfully shape
the behaviour of individuals and groups in the organisation.
Many other writers describe culture simply as
the way we do things around here.
(b) Charles Handy has suggested that organisations can, in general terms, be des
cribed in terms of the relationship between their
structure and culture. Students should recognise that the descriptions of Handy
are of the organisational structure and the
relationship with culture.
The Power/Club Culture:
In this culture, power and influence come from the centre of the structure, ofte
n drawn as a web. Decisions are made by the
centre and radiated outwards, the further from the centre of the organisation, t
he weaker the power and influence. This
organisation is not rigidly structured, is capable of rapid change but relies ve
ry much on the influence and ability of the centre.
Typical of small or new organisations, employees need to be adaptable, understan
d each other and the organisation s
objectives; personal contact and like minded individuals typifies this culture.
The Role Culture:
This is the traditional and typical organisational structure and culture based o
n rules, regulations, rationality, logic and
predictability. This structure is illustrated by a Greek temple. The roles and f
unctions are the pillars with the management at
the top. The organisation is efficient, its activities and therefore culture are
based on formality and procedures. Employees are
process oriented, have clear roles and are not required to be innovative or imag
inative. The environment is stable, predictable;
this kind of organisation is slow to adapt or respond to change.
The Task Culture:
The task culture is often illustrated as a matrix or net structure. The culture
is task and team based. The objective for the
organisation and its members is clear, to complete the task. There is no leader.
The individuals employed are experts or
specialists formed together to fulfil a results based task. Job satisfaction is
high, there is strong group identity and these
organisations are flexible, changing and expensive.
The Person or Existentialist Culture:
This structure is illustrated as a bounded cluster. This type of structure is to
tally different from the others. It exists to fulfil the
needs and ambitions of the individuals within it, rather than driven by any exte
rnal task. These organisations exhibit
interdepence and collaboration. Management is difficult because of individual ex
pertise and the nature of rewards.
3 Job analysis is an important component of the descriptive documents that relat
e to the job itself. Before any other job related tasks
such as a job description or performance measures can be undertaken, the job mus
t be carefully analysed and described. Job
analysis precedes a number of other people management issues.
(a) Job analysis is
the process of collecting, analysing and setting out information about the conten
t of jobs in order to provide the basis for a
job description and data for recruitment, training, job evaluation and performan
ce management. Job analysis concentrates
on what job holders are expected to do.
(b) A job analysis must be carried out systematically in order to obtain the fac
ts about the job and consists of four stages.
Stage One is when all the necessary relevant and appropriate documentation is ob
tained.
Stage Two involves asking managers about the purpose and more general aspects of
the job, its main activities and the
responsibilities involved.
Stage Three asks the same questions of the job holders as perceptions may differ
between individuals.
Stage Four is the final stage and requires observation of the job holders at wor
k.
(c) The information collected during a job analysis investigation is made up of
eight items.
The Purpose is the reason for the activity. Access to and provision of informati
on has to be seen within the context of the
whole organisation.
The Content identifies the tasks that are expected to be undertaken.
8
The Accountabilities are the results for which the job holder is responsible, mu
ch as in the same way as the task.
The Performance Criteria are the measurements by which the job holder is judged
and may be based on task related matters
such as work accuracy.
The Responsibility item indicates the importance of the job and may be measured
in terms of decision making responsibility,
accountability, discretion and programmed or unpredictable routines.
The Organisational factors which are taken into account identify how the job hol
der reports and whether by line management
or function.
The Developmental factors include promotion and career prospects of the job whil
st the Environmental factors examine the
working conditions, security and safety needs and requirements.
4 Recruitment of suitable staff is fundamental to organisational success. Too of
ten the recruitment and selection of staff is treated as
a secondary, unimportant activity. It is important therefore that a formal proce
dure exists to ensure that recruitment and selection
is successful.
Recruitment and Selection
This needs to be an organised and systematic process aimed at matching the corre
ct candidate to the post. It begins with the
recognition of a vacancy or vacancies and should be based upon the requirements
detailed in the human resource plan.
Recruitment and selection must follow a logical process.
A Job Description
This specifies the job content and the relevance of the vacancy to other posts.
It must include the main duties and responsibilities
of the post holder, the major tasks and limits to authority. It also details the
job title, location and relationships with others in the
organisation.
The Person Specification
This is often overlooked during the recruitment process, the assumption being th
at the job description suffices. The person
specification identifies personal characteristics such as physical attributes, a
ptitude, team approach, aspirations, intelligence,
communication skills, personal disposition, experience and generally fitting in to
the organisation.
A Job Advertisement
Most organisations place an advertisement in an appropriate newspaper, professio
nal journal or job centre. It is important to
recognise that this advertisement must be targeted effectively and be attractive
to a potential employee. It should include
information about the vacancy (salary, work details, qualifications) and the org
anisation.
An Application Form
This is an effective and efficient way of gathering information about candidates
and a mechanism for comparison. The form has
to be designed to be completed in a logical manner so that the correct informati
on is provided. It must include questions on age,
qualifications and experience. It must also reflect the vacancy and the culture
of the organisation. For example, if the vacancy is
in the caring professions, then questions might be asked about social interests
and family background. Space should always be
provided for the candidate to write about his or herself and the reasons why he
or she is attracted to the vacancy. The application
form allows early screening of candidates and should result in the compiling of
a short list of potential employees to be called for
interview.
The Interview
This follows the screening of the application forms. It is the most important st
age in the process. It provides an opportunity to
assess the candidate and for the candidate to learn more about the organisation.
The interview process must have clear goals. It
should aim to find the best person for the job, allow the candidate to understan
d what is expected of him or her and ensure that
the candidate feels that he or she has been fairly and equitably treated.
The interview should be structured so that all candidates are put at ease, are a
sked the same questions and allowed the same
opportunities to ask questions. A scoring system is sometimes adopted to ensure
that some form of rational comparison is
undertaken.
Selection Testing
This is a scientific method for assessing a candidate s ability. The techniques of
selection testing are widely used throughout
business and industry and may include tests on intelligence, aptitude, proficien
cy and personality. They are, however, expensive
to administer and may only be used for senior appointments.
Offer Procedure
If an offer is to be made to the successful candidate, references are taken up a
nd an offer letter prepared together with the
requirement of acceptance by the successful candidate. Upon acceptance, a formal
contract is prepared by the employer.
Unsuccessful candidates should also be notified and thanked for their interest.
9
5 Motivation can take many forms. Widening and deepening interest in the organis
ation and its many tasks and departments is a
tried and tested method for motivating employees.
(a) Job enrichment (sometimes referred to as vertical job enlargement ) is a planne
d, deliberate action to build greater
responsibility, breadth and challenge into the work of the individual. The empha
sis is on the individual rather than the
organisation, team or group.
It provides the job holder with the responsibility for decision making of a high
er order and provides greater freedom to decide
how the job or task should be undertaken. It encourages participation in plannin
g procedures, allows for regular feedback
between the employee and management, whilst improving the individual s understandi
ng of the whole process.
(b) Job enlargement (sometimes referred to as horizontal job enlargement ) is aimed
at widening the content of jobs by increasing
the number of operations in which the job holder is involved.
It reduces the level of repetition and dullness whilst providing a horizontal ex
tension to the job. In addition, it reduces both
monotony and boredom through the provision of a greater level of challenge and i
ncentive.
(c) Job rotation is the planned rotation of staff between jobs and tasks to redu
ce monotony and boredom and provide fresh
opportunities and challenges. It takes two forms.
The first is where job rotation takes the form of a transfer to another job afte
r some time in an existing job and the introduction
of another individual to the job being vacated.
Alternatively, it can be used as a form of training where individuals are moved
through different jobs to learn new skills. These
moves are regular and the employee is invariably regarded as a trainee.
6 Professional accountants require a knowledge of motivation techniques. However
, it is equally important to recognise the other side
of motivation, that of discipline and of the need for formal procedures when dea
ling with disciplinary issues.
(a) Discipline is achieved when the organisation s members behave and conduct them
selves in accordance with standards of
behaviour acceptable to the organisation s rules, goals and objectives.
Discipline may be positive. The employee is encouraged to conform to good practi
ces and acceptable behaviour through
training and by the presence and consistent application of rules and procedures.
Discipline may also be negative. This is the situation where actions may be take
n to ensure that the organisation s members
behave in an appropriate way. Such actions include punishment, deterrent or refo
rmative measures.
(b) Proper disciplinary procedures are essential for harmonious relationships be
tween management and staff and are increasingly
a legal requirement.
A six step approach to disciplinary actions is recommended.
The Informal Talk
If the disciplinary matter is of a minor nature and the individual has had until
this occasion a good record, then an informal
meeting can often resolve the issue.
Reprimand or Oral Warning
Here the manager draws the attention of the employee to unsatisfactory behaviour
, a repeat of which could lead to formal
disciplinary proceedings.
Official or Written Warning
A written warning is a serious matter. It draws the attention of the offending e
mployee to a serious breach of conduct and
remains a recorded document on the employee s employment history.
Such written documents can be used as evidence if further action is taken, inclu
ding dismissal.
Suspension or Lay-off
If an offence is of a serious enough nature, if the employee has repeated an ear
lier offence, or if there have been repeated
problems then an employee may be suspended from work for a period of time withou
t pay.
Demotion
This is a situation where an employee is demoted to a lower salary or position l
evel within an organisation. This is a very
serious step to take and can be regarded as a form of internal dismissal. This c
ourse of action can have negative repercussions
because the employee concerned will feel dissatisfied and such feelings can affe
ct their own work and that of others.
Dismissal
This is the ultimate disciplinary measure and should be used only in the most ex
treme cases. As with demotion, the dismissal
of a staff member can lead to wider dissatisfaction amongst the employees.
Although a procedure is a legal requirement in some circumstances, this procedur
e may vary in detail between organisations
and countries.
Candidates may also note that such formal procedures are required by law in the
UK and other countries.
10
1 (a) Description of Tuckman s stages of group development and explanation of the
group stages.
(Two marks per development stage;
two marks for identifying the team stage prior to Olivia s departure;
three marks for identifying the stages the group reverted to after her departure
forming and storming)
(Up to a maximum for part (a) 15 marks)
(b) (i) Olivia s role and its characteristics. (Up to 5 marks)
(ii) Description of the team roles.
(Two marks each) (Up to 10 marks)
(iii) Description of problems after Olivia s departure. (Up to 5 marks)
(c) Recommendation on reversion to former cohesiveness. (Up to 5 marks)
(Total for question 40 marks)
2 (a) Explanation of what is meant by the term culture in the organisational conte
xt.
(b) Description of Handy s four cultural types.
(Up to four marks for each)
3 (a) Brief description of the term job analysis .
(b) Brief description and discussion of the four stages.
(One mark per stage)
(c) Description and discussion on the information expected.
(One mark per item for the eight items)
4 The seven stages in recruitment and selection are:
A Job Description
(Up to three marks)
The Person Specification
(Up to three marks)
The Job Advertisement
(Up to three marks)
The Application Form
(Up to three marks)
The Interview
(Up to three marks)
Selection Testing
(Up to three marks)
Offer Procedure
(Up to three marks)
Up to three marks possible for each stage up to a maximum for the entire quesiti
on of 15 marks.
11
5 (a) Definition and explanation of the term job enrichment .
(b) Definition and explanation of the term job enlargement .
(c) Definition and explanation of the term job rotation .
6 (a) Definition of discipline.
(One mark)
Recognition and description of positive discipline.
(One mark)
Recognition and decription of negative discipline.
(One mark)
(b) Description in correct order, of the six steps involved in a formal discipli
nary procedure.
(Up to two marks per step, one for the correct position in the order and one for
the
description)
12
Managing People
PART 1
QUESTION PAPER
answered
hall
Paper 1.3
1 At Williams, Watkins and McDonald investment fund managers, there is a strong
emphasis on democratic
management. The employees are grouped into teams with a team leader. The team is
given sales targets to meet but
is allowed to decide how it will go about meeting those targets. The team decide
s how it will organise work in its own
area (i.e. the physical layout of the area). Alongside each team area there are
meeting areas with chairs grouped in
a circle. In this area are charts showing the performance of each team. The team
s meet to discuss what is going well
and what is going badly and to suggest ideas for improvement. The team then has
the responsibility for putting their
ideas into practice.
Dean Thomas is responsible for the blue team. He is the most recently recruited
team leader in the organisation. The
blue team has an average age of 26 years. Dean Thomas enjoys bringing his team t
ogether every morning for a daily
briefing. He gives out the tasks for the day and allows his team to pick and cho
ose their tasks and to discuss any
problems with each other before they actually settle down to begin work. Dean te
nds to be more concerned with
maintaining good relations with his team than sometimes with achieving targets.
The blue team like Dean s approach,
where they can make their own decisions, work on their own and are one of the mo
st cohesive teams in the
organisation if not as successful as they should be.
Lee Allen is the green team leader. He is the most experienced team leader. His
team of eight members have all been
at Williams, Watkins and McDonald for many years. Lee Allen knows that the compa
ny policy strongly prefers a more
relaxed style of leadership. However, Lee comes from a disciplined background an
d quite often needs to give orders
and demand results when deadlines need to be met or the team appears likely to f
ail to meet its target. The green
team has the best success rate but also the highest absentee rate of all six tea
ms working for Williams, Watkins and
McDonald.
Emma Jenkins, a green team member, has complained about Lee Allen s style of leade
rship and has asked to be
moved to the blue team. She feels that she has less input into decision making t
han she would like.
Required:
(a) (i) Identify the four broad styles of leadership described in Tannenbaum and
Schmidt s continuum of
management style. (12 marks)
(ii) Briefly describe the four factors upon which the appropriate management sty
le depends. (4 marks)
(b) Using the Tannenbaum and Schmidt model and appropriate evidence from the sce
nario, identify which of
the broad styles of leadership Dean Thomas and Lee Allen demonstrate at Williams
, Watkins and McDonald.
(8 marks)
(c) Explain action centred leadership and justify why Lee Allen s approach can be
described as action centred.
(8 marks)
(d) Using Feidler s contingency theory of leadership, explain the possible reasons
for Emma Jenkins
dissatisfaction as a green team member and her desire to become a blue team memb
er. (8 marks)
(40 marks)
2
2 Research has shown that management involves more than simply giving orders or
commands.
Required:
(a) Briefly describe Mintzberg s view of the process of management. (3 marks)
(b) From Mintzberg s research, identify and describe the three key roles which man
agement appears to fulfil.
(12 marks)
(15 marks)
3 Recruitment and selection of potential employees involves a number of differen
t steps, one of which may be the
completion of an application form.
Required:
(a) Describe the purpose of the application form. (5 marks)
(b) Describe the kind of information that the application form should obtain. (1
0 marks)
(15 marks)
4 You have been asked to prepare a personal development plan for new employees.
Required:
Explain the three steps involved in the preparation of a personal development pl
an.
(15 marks)
5 Reward systems should involve more than assuming that financial rewards are ap
propriate in all circumstances.
Required:
(a) Explain what is meant by intrinsic rewards. (3 marks)
(b) Explain what is meant by extrinsic rewards. (3 marks)
(c) Describe any six types of extrinsic reward. (9 marks)
(15 marks)
3 [P.T.O.
6 Conflict in the workplace is a common feature of organisational and business l
ife.
Required:
(a) Under what circumstances can a conflict be constructive? (5 marks)
(b) Under what circumstances can a conflict be destructive? (5 marks)
(c) Briefly describe five causes of conflict. (5 marks)
(15 marks)
4
Answers
1 Leaders accept responsibility for the outcomes of the groups or teams they lea
d. While leaders have to exercise authority, the way
in which this is done (the style of leadership) might vary. It is generally acce
pted that a leader s style of leading can affect the
motivation, efficiency and effectiveness of the employees. Some leadership theor
ies present two basic choices a task centred on
one hand and an employee centred on the other. Tannenbaum and Schmidt suggest th
at leadership style is best described as a
continuum, the appropriate style depending on the characteristics of the leader,
the subordinates and of the situation. Adair looks
at three basic needs that result in differing leadership styles. Known as action
centred leadership, it is a process made up of three
inter-related variables, the needs of the task, the group and the individual. Th
e leader needs to balance the relative importance of
all three variables. However the situation requires that emphasis is given to id
entifying and acting upon the immediate priority.
(a) (i) Tannenbaum and Schmidt leadership theory is based on a continuum that su
ggests a range of styles between autocratic
and democratic, but without any suggestion that one style is right or wrong.
DICTATORIAL
The manager makes decisions and enforces them TELLS
The manager sells his decisions to subordinates TELLS AND SELLS
AUTOCRATIC
The manager suggests own ideas and asks for comments TELLS AND TALKS
The manager suggests sketched ideas, asks for comments and amends the ideas as a
result CONSULTS
DEMOCRATIC
The manager presents a problem, asks for ideas, makes a decision from ideas INVO
LVES
The manager allows subordinates to discuss and decides DELEGATES
LAISSEZ-FAIRE
The manager allows the subordinates to act as they wish within specified limits
ABDICATES
(ii) Tannenbaum and Schmidt s continuum recognises that the appropriate style depe
nds upon four factors:
the leader
personality, values, natural style
the subordinates
their knowledge, experience, attitude
the situation
forces such as the organisational culture, time pressures, levels of authority a
nd responsibility
the environment
ecology pressures, education changes, union power base
(b) Dean Thomas is democratic to laissez-faire. He presents tasks, allows discus
sion and room for ideas from his team members.
He involves them and gives them relative freedom to carry out their tasks. He fl
uctuates along the Tannenbaum and Schmidt
continuum.
Lee Allen is group orientated at times, but the need of the task takes priority
and then he becomes dictatorial. He obviously
considers the situation and his management style differs depending on the highes
t priority, how he perceives the capability
of his subordinates, and the environmental pressure he faces.
(c) A contemporary approach to leadership is to regard it as being made up of a
number of different skills. This has been extended
to the approach known as action centred leadership . This recognises that leadershi
p occurs within three inter-related
variables: the task, group and individual needs.
Action centred leadership is a process made up of three inter-related variables,
the needs of the task, the group and the
individual. The leader needs to balance the relative importance of all three var
iables; however the situation requires that
emphasis be given to identifying and acting upon the immediate priority.
Task needs are setting objectives for the team or group, planning and initiating
the task or tasks, allocating responsibilities,
setting and verifying performance standards and establishing a control system.
Group needs involve team building so that mutual support and understanding is ac
hieved, developing appropriate
independence within the group, setting of agreed standards, provision of trainin
g as required and appropriate and, most
importantly, establishing communication and information channels.
The individual needs recognise the development of individual needs and achieveme
nt, motivation by recognition, the
encouragement of creativity, the delegation as far as possible of authority to e
ncourage group support and to attend to any
problems or grievances.
Lee Allen displays some of the characteristics of action centred leadership, alt
hough he is clearly more task driven especially
when deadlines have to be met. He needs to develop greater skills in group and i
ndividual needs to address the absentee
problem.
7
(d) Feidler suggests that there is a relationship between styles of leadership a
nd team or group effectiveness. He distinguishes
between two types of leader: psychologically close or psychologically distant ma
nagers.
Psychologically close managers prefer informal relationships with staff, are oft
en over concerned with good human relations
and favour informal contacts rather than formal meetings. Feidler also described
this approach as relationship oriented. It is
clear from the scenario that this is Dean Thomas s approach.
Psychologically distant managers prefer formal relationships, tend to be reserve
d in their personal relationships with staff
(although conversely often have good inter-personal skills) and prefer formal me
etings. This approach Feidler also called task
oriented. This is Lee Allen s approach.
Emma Jenkins is uncomfortable with the formal, distant approach taken by Lee All
en. She would be more comfortable and
productive in the more informal approach taken by Dean Thomas.
2 The management task is not straightforward, nor as prescriptive, as much manag
ement teaching suggests. The work of Henry
Mintzberg is particularly interesting because it points to the fractious nature
of the task.
(a) Henry Mintzberg was concerned with what managers actually do, rather than wh
at the long accepted theory suggested they
do.
He showed that there is a difference between what they say they do and what they
actually do, and observes that the task
is fragmented.
(b) He noted three basic management roles, grouped into three areas:
INTERPERSONAL role leading .
This role arises from the manager s formal position within the organisation and th
e consequent authority which arises from
it.
He suggests three categories:
Figurehead:
Because of the formal authority and position in the organisation, the manager ac
ts as a focus both internally and externally,
but this is not necessarily a formal leadership role. Often in reality the manag
er is simply a figurehead.
Leader:
Brings together organisational and individual goals and needs, especially throug
h motivation, hiring and firing.
Liaison:
Maintains a network of relationships within and especially outside the organisat
ion. A substantial amount of management
time is spent fulfilling this role.
INFORMATIONAL role administrating .
This role arises because managers have access to and contact with all staff and
many contacts outside the organisation.
Monitor:
The manager monitors the environment by receiving information (internal and extern
al) and transmitting it to others. A great
deal of information may be of an informal nature.
Disseminator:
Passes on factual and value information to the department.
Spokesman:
Acts as the spokesman for the organisation by providing information about the or
ganisation, both internally but especially
externally.
DECISIONAL role fixing .
This role is the most crucial and arises from the manager s position of formal aut
hority, which means that he or she has
unique access to information. Consequently, the manager is the only person able
to take decisions which arise from and affect
the department.
Entrepreneur:
The manager makes decisions about changing what happens within the organisation
or department by initiating action and
encouraging change, especially in a changed environment.
Disturbance Handler:
Has to make decisions about events because these events are often outside his or
her control. Has to react to unpredictable
situations. Thus it is important to be able to react as well as plan.
Resource Allocator:
Central to the organisation, the manager has to take control of the allocation o
f scarce resources and determine the direction
of the organisation.
8
Negotiator:
Negotiates inside and outside the organisation and at the same time commit resou
rces. A great time user.
These three basic management roles are not all embracing and change depending up
on the manager s position in the
organisation.
3 The selection of a suitable employee is fundamental to the success of an organ
isation. In the first instance, the application form
obtains information about a potential employee simply and in a number of differe
nt ways. However, the application form is often
poorly constructed, asks the wrong questions or fails in its function to assist
management.
(a) The main purpose of the application form is to identify candidates closest t
o the existing or previously prepared person
specification. In addition, it can eliminate unsuitable candidates and act as a
preliminary to interview. It can also form the
basis of future human resources by establishing a record keeping system for futu
re reference.
(b) The application form should be able to provide information on personal detai
ls on age, address and family background. It also
provides information about the candidate s education and employment experience, pr
esent employment terms, experience
and leisure interests. It is particularly useful in assessing the candidate s effe
ctiveness in writing, self expression and ambition
and character.
In addition, the application form should contain a general section allowing the
applicant to express career ambitions and
aspirations in his or her own words.
4 A personal development plan is a clear progressive action plan for an individu
al which incorporates a wide set of developmental
opportunities including formal training. The concept of the personal development
plan is one which enables employees to link their
development needs with those of the organisation and thus to motivate them and t
o improve morale.
Preparation of a personal development plan:
STEP 1 Analyse the current position/job analysis:
Identifying the skills required for future work and the current skills of each o
f the job holders. A manual skills analysis can be
conducted where the hand, finger and body movements are recorded in great detail
. This can lead to a faults analysis where the
analyst produces a specification showing what typically causes frequently occurr
ing faults and how to identify and resolve them.
Analysis of the required skills can also be achieved through a personal SWOT (St
rengths, Weaknesses, Opportunities and Threats)
Analysis. The manager has an input into this by identifying the skills required
of the employee on a simple grid:
THE INDIVIDUAL SKILL SWOT ANALYSIS
Performance
High Low
High Like and do well Like but don t do well
Liking of
Skills Low Dislike but do well Dislike and don t do well
The outcome of this exercise is to include more of the employees individual inter
ests into their actual role. The analysis of the
current knowledge and skills of the job-holder can be found from appraisals and
observations.
STEP 2 Set goals to cover performance in the existing job:
An outline of the individual development needs is found from the skills analysis
. Identify deficiencies in the current skills of job
holders and outline the necessary development needs.
Forecast future changes in the current role and identify goals. A deficiency lis
t is produced which is used to formulate an individual
training plan. As far as reasonably possible all objectives should be SMART (Spe
cific, Measurable, Attainable, Realistic and Timely).
This is then used to identify the training required.
STEP 3 Draw up the action plan:
All the different development needs are collated from the sources outlined in th
e first two steps and are entered into an action plan
with the most important training identified first.
5 It is often believed that employment rewards are based simply on payment. Howe
ver, as individuals become more discerning, they
seek more from employment than monetary reward alone.
It is important for managers to understand that monetary rewards are in many way
s less important in the modern economy than
previously thought, especially in services and the professions.
(a) Intrinsic rewards are within the control of the individual and include feeli
ngs of personal satisfaction, status, recognition,
responsibility and pride in the work.
9
(b) Extrinsic rewards are those forms of reward which are not in the control of
the individual but at the disposal of others; usually
the individual s superior. Extrinsic rewards can be seen and include wages and salar
ies and also perks such as bonuses,
prizes and working conditions.
(c) Common types of extrinsic reward include most importantly basic pay and cond
itions, often added to by bonuses and
incentive schemes. Performance related pay has entered many service activities w
here traditional bonuses do not readily
apply. In addition, share option schemes have become popular as have car usage o
r loans and other schemes of various
types, such as holidays as a form of extra bonus. Some organisations offer payme
nt benefits beyond those required by law;
pension scheme generosity often based on non-contributory arrangements or other
forms of enhanced pension schemes.
Private health care insurance and other insurance, including life, disability an
d sickness are offered beyond those required by
law or tradition. Crèches and other facilities aimed at family employees are popul
ar, as are subsidised loans for purchase of
goods other than those of the employer and medical facilities or subsidised paym
ents to private health schemes.
6 Any organisation which employs individuals will at times be the subject of con
flict of some sort. Conflict is not necessarily a sign
of problems, but nevertheless managers need to recognise and control it as appro
priate.
(a) Conflict which is constructive can lead to outcomes which can be seen as ben
eficial to the organisation because it often
challenges existing business practices and ideas. It can introduce different ide
as, solutions to problems and define power,
authority and responsibility limits. It can also encourage creativity, innovatio
n and change and is capable of bringing problems
into the open.
(b) Destructive conflict can lead to outcomes which can be seen as damaging to t
he organisation overall. It can undermine
personal relationships, distract attention from the task, dislocate group cohesi
on and alienate individuals and groups from
another.
(c) The causes of conflict include departmentalisation and specialisation, the n
ature of the work involved and formal objectives
diverging from the objectives actually being pursued by management or individual
departments or where objectives are
concealed by management. In addition, conflict can occur when individual roles a
re poorly specified, departmental and
individual boundaries overlap or contractual relationships are unclear. Other ca
uses include issues where individuals are
undertaking simultaneous roles, or there are differences in perception as to an
individual s position in the organisation or the
individual s effort and output in comparison to others. Differences can also arise
through the individual s perceived authority
and importance, often leading to personality differences and clashes.
10
1 (a) (i) Identification and description of the four broad leadership styles des
cribed
by Tannenbaum and Schmidt.
(Three marks per style) (Up to 12 marks)
(ii) Brief description of the four factors.
(One mark each) (Up to 4 marks)
(b) The Tannenbaum and Schmidt leadership style which best describes
(i) Dean Thomas (Up to 4 marks)
(ii) Lee Allen (Up to 4 marks)
(c) Explanation of action centred leadership and justification of Lee Allen s appr
oach. (Up to 8 marks)
(d) Description of Feidler s two approaches and appreciation of Emma Jenkin s positi
on. (Up to 8 marks)
2 (a) Brief description of Mintzberg s view of the management process. (Up to 3 ma
rks)
(b) Description and discussion of the three management roles
Interpersonal role
Figurehead
Leader
Liaison (Up to 4 marks)
Informational role
Monitor
Disseminator
Spokesman (Up to 4 marks)
Decision role
Entrepreneur
Disturbance handler
Resource allocator
Negotiator (Up to 4 marks)
3 (a) Description of the application form s purpose. (One mark per item up to 5 ma
rks)
(b) Description of the information obtained by the application form. (One mark p
er item up to 10 marks)
4 Explanation of the three steps in the preparation of a personal development pl
an.
Step 1 Analyse the current position (Up to 5 marks)
Step 2 Set goals to cover performance of the existing job (Up to 5 marks)
Step 3 Draw up action plan (Up to 5 marks)
11
5 (a) Explanation of intrinsic rewards. (Up to 3 marks)
(b) Explanation of extrinsic rewards. (Up to 3 marks)
(c) Decription of any six extrinsic rewards. (One and a half marks per reward up
to 9 marks)
6 (a) Explanation of constructive conflict. (Up to 5 marks)
(b) Explanation of destructive conflict. (Up to 5 marks)
(c) Brief description of any five causes of conflict.
(One mark per cause) (Up to 5 marks)
12
Managing People
PART 1
MONDAY 13 JUNE 2005
QUESTION PAPER
answered
hall
Paper 1.3
1 Oliver Hoppe has been working at Hoopers and Henderson accountancy practice fo
r eighteen months. He feels that
he fits in well, especially with his colleagues and has learnt a lot from them.
However, he feels that the rules and
regulations governing everyday activities and time keeping are not clear.
Oliver does not get on well with his line manager, David Morgan. There appears t
o be a clash of personalities and
reluctance on David Morgan s part to deal with the icy atmosphere between them aft
er David was asked by one of
the accounting partners to give Oliver a job. For the past three months Oliver h
as gone to lunch with his fellow workers
and always returned to work with them or before them. In fact they all have retu
rned to work about ten minutes late
on several previous occasions. After the third time, Oliver was called into Davi
d Morgan s office and given an oral
warning about his time keeping.
Oliver was not permitted to argue his case and none of the other staff who retur
ned late were disciplined in this way.
On the next occasion the group was late returning from lunch, David Morgan prese
nted Oliver with a written warning
about his time keeping.
Yesterday, Oliver was five minutes late returning to work. His colleagues return
ed after him. David Morgan gave Oliver
notice and told him to work until the end of the week and then collect his salar
y, the necessary paperwork and to
leave the practice.
There is a partner responsible for human resources. Oliver has come to see the p
artner to discuss the grievance
procedures against David Morgan for his treatment and about what Oliver regards
as unfair dismissal.
Required:
(a) Describe the six stages of a formal disciplinary procedure that an organisat
ion such as Hoopers and
Henderson should have in place. (12 marks)
(b) Explain why Oliver might legitimately feel he has a grievance against his ma
nager and identify which aspects
of the formal disciplinary procedure David Morgan did not follow or allow in thi
s case. (9 marks)
(c) Describe the main stages of a formal grievance procedure that Oliver should
now pursue. (10 marks)
(d) Describe the three stages of a formal grievance interview that Oliver might
seek with the appropriate partner
at Hoopers and Henderson following the formal procedure. (9 marks)
(40 marks)
2
2 An important part of management is understanding the style of leadership.
Required:
(a) Explain what Blake and Mouton s Managerial Grid measures. (5 marks)
(b) Briefly describe the five extreme scores identified by Blake and Mouton. (5
marks)
(c) Discuss the usefulness of the managerial grid in assessing the attributes of
managers. (5 marks)
(15 marks)
3 The person specification is derived from the job description.
Required:
(a) Explain what is meant by the terms:
(i) person specification ; (4 marks)
(ii) job description . (4 marks)
(b) Briefly describe the way in which a person specification differs from a job des
cription . (3 marks)
(c) Describe the purposes for which a person specification might be used. (4 mar
ks)
(15 marks)
4 In addition to the application form and interview, references provide further
confidential information about the
prospective employee.
Required:
(a) Define the purpose of a reference. (3 marks)
(b) Describe the content of a reference. (5 marks)
(c) Outline the problems with references. (7 marks)
(15 marks)
5 An organisation s goals can only be achieved through the efforts of motivated in
dividuals.
Required:
Explain what is meant by the following terms:
(a) Hygiene factors. (8 marks)
(b) Motivators. (7 marks)
(15 marks)
3 [P.T.O.
6 The accountant communicates information to others in reports and statements. U
nderstanding the nature and
importance of communication is therefore an important part of the accountant s rol
e.
Required:
(b) Describe five major barriers to good communication. (10 marks)
(15 marks)
4
Answers
1 Overview
A grievance occurs when an individual thinks that he or she has been wrongly tre
ated by colleagues or management, especially
in disciplinary matters. An unresolved feeling of grievance can often lead to fu
rther problems for the organisation. The purpose of
procedures is to resolve disciplinary and grievance issues to the satisfaction o
f all concerned and as early as possible.
If a grievance perceived by an employee is not resolved, then conflict and disco
ntent can arise that will affect the work of the
individual and the organisation. Accountants as managers need to be aware of the
need to resolve grievances satisfactorily and
professionally.
The fundamental basis of organisational disciplinary and grievance procedures is
that they must be explicitly clear and accessible
to all.
Part (a):
An official and correctly applied disciplinary procedure has six steps which sho
uld be followed in the correct order and applied
equitably.
The Informal Talk.
This is the first step. If the disciplinary matter is of a minor nature and the
individual has had until this occasion a good record,
then an informal meeting can often resolve the issue.
Reprimand or Oral Warning.
Here the manager draws the attention of the employee to unsatisfactory behaviour
, a repeat of which could lead to formal
disciplinary proceedings.
Official or Written Warning.
A written warning is a serious matter. It draws the attention of the offending e
mployee to a serious breach of conduct and remains
a recorded document on the employee s employment history.
Such written documents can be used as evidence if further action is taken, espec
ially dismissal.
Suspension or Lay-off.
If an offence is of a serious nature, if the employee has repeated an earlier of
fence or if there have been repeated problems then
an employee may be suspended from work for a period of time without pay.
Demotion.
This is a situation where an employee is demoted to a lower salary or position w
ithin an organisation. This is a very serious step
to take and can be regarded as a form of internal dismissal. This course of acti
on can have negative repercussions because the
employee concerned will feel dissatisfied and such feelings can affect their own
work and that of others.
Dismissal.
This is the ultimate disciplinary measure and should be used only in the most ex
treme cases. As with demotion, the dismissal of
a staff member can lead to wider dissatisfaction amongst the employees.
The employee may nominate a representative at any stage of the procedure, especi
ally at the more serious stages.
Part (b):
Oliver may feel he has a grievance as a consequence of treatment which he percei
ves as unfair. Proper disciplinary procedures are
essential for harmonious relationships between management and all staff. Oliver
may feel that he has been singled out and that
David Morgan does not understand the need for equity in invoking disciplinary pr
ocedures.
David Morgan did not follow this procedure. No informal talk took place which mi
ght have resolved the problem, preferring to
deliver an oral warning, then moving to a written warning and dismissal. Oliver
was not represented and his dismissal is likely to
lead to dissatisfaction with Oliver s peers.
Oliver must now invoke the correct grievance procedure.
Part (c):
Grievance procedures must be accessible to all employees of Hoopers and Henderso
n at any level of the organisation and
regardless of their status. Managers must have suitable training in procedures a
nd be provided with background as to how
grievances can occur in the first place. Grievance procedures must be regarded a
s beneficial and not threatening.
7
If an employee has a grievance, he or she should be able to pursue it and have t
he problem which has led to the grievance resolved.
A formal grievance procedure must be available, set out in writing and accessibl
e to all employees. The procedure should consist
of five formal stages.
The first stage states the grade of employee or employees and their rights for e
ach type of grievance.
The second stage details the actual procedures for pursuing a grievance, and is
in four parts:
The employee must discuss the grievance with his or her immediate supervisor or
line manager.
If the grievance can not be resolved at the first level, then the employee s manag
er must become involved.
The interview between the employee and manager takes place with the employee bei
ng allowed a representative if desired.
If the grievance remains unresolved then the matter must be referred to a higher
manager.
The third stage (referral to a higher manager) requires that the Human Resources
Department or, in the case of Hoopers and
Henderson the partner responsible, must be informed.
The fourth stage is that written records must be kept and be available to all em
ployees.
Finally, the procedure must be time limited.
Allowance must be made for the involvement of a trade union, staff association o
r individual support (if desired) at an appropriate
stage in the procedure.
At Hoopers and Henderson, Oliver has attempted to discuss the issue with his imm
ediate manager (David Morgan) but without
success. He has therefore followed the procedure, but to continue correctly, Oli
ver must have taken up his grievance with the
manager next in seniority to David Morgan, who in this case is the partner respo
nsible for human resources.
Part (d):
Oliver should arrange a formal grievance interview with the appropriate partner.
Both Oliver and the partner need to be aware that
the grievance interview follows three steps in a particular and logical order. T
he meeting between Oliver and the partner responsible
for human resources must be in a formal atmosphere.
The first stage is exploration. The manager or supervisor in this case the partn
er responsible for human resources must gather
as much information as possible. No solution must be offered at this stage. The
need is to establish what is actually the problem;
the background to the problem (in this case the icy relationship between Oliver
and David Morgan) and the facts and causes of
the problem in this case the resentment felt by David Morgan over Oliver s appoint
ment.
The second stage is the consideration stage. This is undertaken by the appropria
te manager or partner here, who must firstly check
the facts, analyse the causes of the complaint and evaluate possible solutions.
The meeting may be adjourned if at this stage the
partner requires more time to fulfil this step.
The final stage is the reply. This will be carried out by the partner after he o
r she has reached and reviewed a conclusion. It is
important that the outcome is recorded in writing; the meeting and therefore the
interview and procedure is only successful when
an agreement is reached.
If no agreement is reached then the procedure should be taken to a higher level
of management.
2 Overview:
The accountant is frequently the manager or group leader. An understanding of le
adership theory and practice is therefore an
important part of an accountant s training.
Part (a):
Robert Blake and Jane Mouton in their Ohio State Leadership Studies, observed tw
o basic leadership dimensions that were
apparent from their studies; concern for the task and concern for people.
They recognised that it was possible for concern for the task to be independent
of concern for people. It was therefore possible for
a leader to be strong on one and weak on the other, strong on both, weak on both
or any variation in between.
They devised a series of questions, the answers to which enabled them to plot th
ese two basic leadership dimensions. These two
dimensions were placed as the axes on a grid structure now known as the Manageri
al Grid. A person who scores 7 on concern
for production (the x axis) and 5 on concern for people (the y axis) is known as a
7,5 leader.
8
Part (b):
Blake and Mouton analysed the extreme scores as:
1,1 Impoverished Management
low concern for production and low concern for people.
This manager only makes the minimum effort in either area and will make the smal
lest possible effort required to get
the job done.
1,9 Country Club Management
low concern for production and high concern for people.
This manager is thoughtful and attentive to the need of the people, which leads
to a comfortable friendly organisation
atmosphere but very little work is actually achieved.
9,1 Task Management
high concern for production and low concern for people.
This manager is only concerned with production and arranges work in such a way t
hat people interference is minimised.
5,5 Middle of the Road Management
reasonable concern for both dimensions.
This manager is able to balance the task in hand and motivate the people to achi
eve these tasks.
9,9 Team Management
High concern for production and high concern for people.
This manager integrates the two areas to foster working together and high produc
tion to produce true team leadership.
(Candidates may wish to draw the grid and describe these scores).
Part (c):
This all assumes that leadership styles can be categorised into the two dimensio
ns and that the results can be plotted on the grid.
The position of team management is accepted as the best form of leadership. This
may not be practical or indeed advisable. In
many industries, concern for the task may be more important than concern for peo
ple, and vice versa. It will always depend on
the individual situation; behaving in a way which is alien to one s attitudes will
be seen as inconsistent and confusing.
However, if the grid has relevance to leadership skills, it can provide the basi
s for training and for management development. One
way in which it could be useful is (for example) to support a 9,1 leader with a
1,9 subordinate.
The managerial grid also links in to the motivational ideas of Douglas Macgregor
. Theory X assumes that the average person has
an inherent dislike of work. The approach is likely to be task driven, and thus
managers will have a high score on the x axis.
Theory Y is based on the idea that the goals of the individual and the organisat
ion can be integrated. In this case, the approach
is likely to be concerned with the individual and thus managers will have a high
score on the y axis.
3 Overview:
A traditional job description can only list or outline the tangible elements of
a job. As work becomes more challenging, more
information is required about the skills needed to perform that job. A person sp
ecification is of greater value in the professional
sector, where it is inappropriate to assume repetition and where there is a grea
ter degree of discretion in performing the task.
Part (a):
(i) A person specification - also referred to as a personnel specification provi
des the organisation with a profile of the kind of
person that would match the needs of the post. It sets out in written detail the
education, qualifications, training, experience,
personal attributes and competencies a post holder must possess to perform the t
ask to the satisfaction of the organisation.
It describes the person needed to fulfil the task.
(ii) On the other hand, the job description is based on information gathered fro
m a job analysis and defines the position and role
that has to be fulfilled. It is a statement of the component tasks, duties, obje
ctives and standards. It describes the purpose
and relationships of the specific job together with the physical, social and eco
nomic factors which affect it. Fundamentally, it
describes the job to be done.
Part (b):
The difference between a person specification and a job description is that a pe
rson specification sets out the qualities of an ideal
candidate whereas a job description defines the duties and responsibilities of t
he job.
9
10
Part (c):
The person specification might be used for a number of purposes:
In recruitment, to provide an illustration of the type of candidate sought prior
to the selection stage.
In selection, the most obvious and popular use of this document, is to assess wh
ether an individual s personality, abilities and
experience match the organisation s requirements.
For promotion, to evaluate whether an individual has the necessary ability and p
ersonality to move within the organisation.
In evaluation of performance to assess whether the person has demonstrated the n
ecessary skills to do the job effectively.
In disciplinary procedures through demonstrating that the person specification r
equired to do a particular job for which some one
was appointed are not evident or being applied. For example, where an employee r
equired to be discrete is discovered to have
disclosed confidential information to third parties.
4 Overview:
References are used by most employers as a key part of their selection process,
but mainly to verify facts about the candidate rather
than as an aid to decision making. The reference check is usually the last stage
in the selection process and referees should be
contacted only after permission has been given by the applicant. Good referees a
re almost certain to know more about the
applicant than the selector and it would be foolish not to seek their advice or
treat the reference check as a mere formality.
Part (a)
References provide further confidential information about the prospective employ
ee. This may be of varying value, as the reliability
of all but the most factual information must be in question.
The purpose of a reference is to obtain straightforward factual information conf
irming the nature of the applicant s previous job(s),
the period of employment, current pay and the circumstances for wishing to leave
the present employment and to seek opinions
about the applicant s personality and other attributes. However, allowance must be
made for prejudice and charity.
Part (b)
A simple standard form to be completed by the referee is acceptable to provide a
ll the required details. A standard form should
ask about the existing job title, the main duties and responsibilities of the cu
rrent job, period of employment, present pay or salary
and the attendance record.
Part (c)
There can be significant problems with references, these include the fact that m
ost referees are well known to the applicant and
hesitate to say anything critical. However, the more skilful reference reader le
arns to look for what is conspicuous by omission
although there is always the risk that the writer merely forgot.
Often there are glowing tributes designed to aid the candidate on their way and
some can be too ambiguous to be useful.
It is also important to note that references are poor predictors of future perfo
rmance, are time consuming for the referee and the
subsequent reader. A particular problem is that employers who want to rid themse
lves of unsatisfactory employees could write an
enthusiastic reference, or at best one which leaves a lot unsaid.
However, care should be taken when providing references. Potentially, there can
be legal consequences if a reference is misleading
or misrepresents the person for whom the reference is provided.
In addition, problems can arise when references are sought too early in the recr
uitment process and therefore breach confidentiality.
5 Overview
Understanding what motivates people is necessary at all levels of management. It
is important that professional accountants
understand the relevance of individual motivation. Unless individuals are well m
anaged and motivated they are unlikely to cooperate
to achieve the organisation s objectives.
Part (a):
(a) Hygiene (or maintenance) factors lead to job dissatisfaction because of the
need to avoid unpleasantness. They are so called
because they can in turn be avoided by the use of hygienic methods, that is, they
can be prevented. Attention to these
hygiene factors prevents dissatisfaction but does not on its own provide motivat
ion.
Hygiene factors (or dissatisfiers ) are concerned with those factors associated wit
h, but not directly a part of, the job itself.
Herzberg suggested that these are mainly salary and the perceived differences wi
th others salaries, job security, working
conditions, the level and quality of supervision, organisational policy and admi
nistration and the nature of interpersonal
relationships. Resolution of hygiene factors, however, is short term, longer ter
m resolution requires motivator factors.
(b) Motivators (or satisfiers ) are those factors directly concerned with the satis
faction gained from the job itself. Herzberg
suggested that these included a sense of achievement, the level of recognition o
f the employee, the intrinsic value felt at the
job itself, level of responsibility, opportunities for advancement and the statu
s both inside and outside provided by the job or
position held.
Motivators lead to satisfaction because of the need for growth and a sense of se
lf achievement
A lack of motivators leads to over concentration on hygiene factors; that is tho
se negative factors which can be seen and
therefore form the basis of complaint and concern.
6 Overview:
The need for clear and concise communication and the consequences of poor commun
ication must be understood by a profession
which exists to provide information to others. Poor communication leads to ineff
ective control, poor co-ordination and management
failure.
Part (a):
Good communication ensures that individuals know what is expected of them. Co-or
dination takes place within the organisation
and there is control of the organisation s plans, procedures and staff. Instructio
ns of management need to be clearly understood in
assisting group and team cohesiveness and reducing stress from misunderstood ins
tructions. Bias, distortion and omission is
removed with clear communication, as is secrecy, innuendo and rumour. Good commu
nication ensures that the right information
is received by the correct person and thus acted upon, reducing conflict within
and between different parts of the organisation.
Part (b):
Barriers to communication include the personal background of the people communic
ating, including language differences between
staff, management and customers. The use of jargon, especially by professional a
nd technical staff, differences in education levels
can be a substantial barrier throughout the organisation. Communication noise is a
barrier not always recognised. This is where
the message is confused by extraneous matters not relevant to that particular co
mmunication. Different levels of education and
experience can lead to different perception of individuals, leading to conflict
within the organisation, between individuals and
between departments. Similarly, another barrier often not recognised is communic
ation overload; too much information being
communicated at one time leading to confusion. Distances involved and the subseq
uent use of different communication facilities
is a barrier, leading to misunderstandings based on problems noted above. Finall
y, and perhaps most importantly, distortion of the
information transmitted.
11
1 Part (a)
Description of the six steps in the procedure
(Two marks per step); (up to 12 marks)
Part (b)
Explanation of grievance
(up to 9 marks)
Part (c)
Description of the main stages of a formal grievance procedure.
(Two marks per step); (up to 10 marks)
Part (d)
Description of the three stages of a grievance interview.
(Three marks per stage); (up to 9 marks)
(Maximum for Question One 40 marks)
2 Part (a)
Description of the Management Grid
(up to 5 marks)
Part (b)
Examples of scores
(One mark per score )
(up to 5 marks)
Part (c)
Discussion of the usefulness of the grid (up to 5 marks)
13
3 Part (a)
(i) Description and understanding of person specification (up to 4 marks)
(ii) Description and understanding of job description (up to 4 marks)
Part (b)
Recognition of differences (up to 3 marks)
Part (c)
Description of purposes (up to 4 marks)
4 Part (a)
Description of the purpose of references (up to 3 marks)
Part (b)
Description of the contents of a reference (up to 5 marks)
Part (c)
Outline the problems with references (up to 7 marks)
5 Part (a)
Description of hygiene factors (up to 8 marks)
Part (b)
Description of motivators (up to 7 marks)
14
6 Part (a)
Explanation of the importance of good communication (up to 5 marks)
Part (b)
Description of five barriers (up to 10 marks)
(Two marks per barrier, one for identification, one for description)
15
Answers
7
Part 1 Examination Paper 1.3 June 2006 Answers
Managing People
1 All organisations of whatever size need to understand and address the issues o
f the relationship between various levels of
management, especially the nature, source and limitations of authority, responsi
bility and delegation. Understanding responsibility,
delegation and authority is fundamental to the practice of management. Professio
nal accountants should be able to show an
understanding of the problems and challenges associated with these concepts of m
anagement. Students are not expected to
remember definitions verbatim, but they are expected to show an understanding of
the inherent logic contained in these concepts,
and to demonstrate a clear distinction between the two main concepts of authorit
y and responsibility.
(a) There are many explanations of what managers do. The most widely understood
approach is that of Henri Fayol, who said
that managers perform five duties, to forecast and plan, to organise, to command
, co-ordinate and control. Managers are
ultimately responsible for the efficient use of the organisation s resources and a
re accountable to the organisation s owners.
At Flavours Fine Foods, the owners (the Jones brothers) must recognise this real
ity and allow the managers to manage.
It used to be said that a manager did his or her job by getting others to do the
irs. In many ways this sums up the role of the
supervisor. However, management must ensure that supervisors understand organisa
tional objectives and must make clear
the powers and limits of the supervisors authority. Supervision is an important a
nd integral part of the task and process of
management.
The role of the supervisor is critical because of direct contact with and respon
sibility directly for the work of others. The
supervisor is unique; he or she is the interface between management and the work
force and is the direct link between the
two, being in direct physical contact with non-managers on a frequent basis. Sup
ervisors are in the front line of management
and see that others fulfil their duties, resolve problems first hand and often q
uickly, direct the work of others and enforce
discipline. In addition, they often must have direct knowledge of health, safety
and employment legislation and have authority
for negotiation and industrial relations within the department.
(b) (i) RESPONSIBILITY is the liability of a person to be called to account for
their actions and results, and is therefore an
obligation to take some action to discharge that responsibility. Unlike authorit
y, responsibility cannot be delegated. There
is however some discussion on the extent to which this statement is true: the id
ea that responsibility cannot be delegated
is too simplistic. Any task contains an element of responsibility. It is the ide
a of accountability and the direction of
responsibility that is the relevant concept and is the problem at Flavours Fine
Foods; ultimate responsibility resides with
the owners. It is self evident that it is impossible to exercise authority witho
ut responsibility because this could lead to
problems of control and therefore undesirable outcomes for the organisation. How
ever, the superior (the owner) is always
ultimately responsible for the actions of his or her subordinates. The key eleme
nt here is the recognition of discretion by
virtue of the person s position. This underlines the doctrine of absolute responsi
bility; the superior is always ultimately
accountable.
(ii) AUTHORITY is the scope and amount of discretion given to a person to make d
ecisions by virtue of the position held
within the organisation. The authority and power structure of an organisation de
fines the part each member of the
organisation is expected to perform and the relationship between the organisatio
n s members so that its efforts are
effective. The source of authority may be top down (as in formal organisations)
or bottom up (as in social organisations
and politics). In the scenario, authority is from the top and should be delegate
d downwards.
(iii) DELEGATION is giving a subordinate the discretion to make decisions within
a certain, defined sphere of influence.
Therefore the superior must possess the authority to delegate. The key element h
ere is discretion and the level of
authority within a specific sphere which is behind the problems at Flavours Fine
Foods. Authority should be clearly
delegated as appropriate to the managers and, through them, to the supervisors.
(c) (i) Without delegation, formal organisations could not exist. Without alloca
tion of authority, responsibility and delegation, a
formal organisation cannot be effective. They are critical aspects. Managers mus
t delegate because of the size and
complexity of the organisation (certainly an issue for Flavours Fine Foods). Del
egation can help overcome the physical
and mental limitations of staff, managers and supervisors and it allows manageme
nt to attend to other matters since
routine tasks and decision making can be passed down. However, superiors must ca
ll subordinates to account and coordinate
their activities.
(ii) Effective delegation can be achieved by assigning agreed tasks to the subor
dinate, ensuring that resources are allocated
and by specifying expected performance levels and ensuring that they are underst
ood. In addition, it is necessary to
ensure that the subordinate has the ability and experience to undertake the task
s by maintaining frequent contact and
ensuring that the subordinate has authority to do the job. Sufficient authority
must be delegated to fulfil the task. This
authority in turn may be specific or general; the scenario suggests that the aut
hority of the managers and supervisors is
specific. The subordinate should not refer decisions upwards, and the superior s
hould not expect this. In addition there
should be no doubts over boundaries; they must be clearly defined as to who hold
s what authority and who accounts
to whom. Therefore there must be clarity as to departmental functions and indivi
dual authority, which is at the root of
the problem at Flavours Fine Foods.
(iii) Problems with delegation are threefold. Firstly, reluctance from managers
who are afraid of losing control, who fear that
subordinates may carry out the work badly and who are resentful of subordinate d
evelopment. Secondly, there is the
problem of lack of confidence, lack of self confidence in the manager and often
a lack of confidence in the subordinates.
Thirdly, there are problems of trust; that is the amount of trust the superior h
as in the subordinate and the trust that the
subordinate feels the superior has in him or her.
(iv) Problems with delegation can be overcome by careful selection and training,
an open communication system, the
establishment of an appropriate control system and a system that rewards effecti
ve delegation.
2 All organisations of whatever size have to work in a co-ordinated way to ensur
e that the objectives laid down are achieved.
However, for effective co-ordination to take place, the structure must be correc
t and understood. Very often, managers know the
structure but cannot explain its significance or appropriateness.
(a) The structure of an organisation is often depicted as a chart. The structure
explains the communication pattern, the linking
mechanism between departments, tasks and individuals, the co-ordinating mechanis
m that ensures the entire organisation
is working toward the same objective, and who is in control of the organisation s
activities and at what level in the
organisation.
(b) The strategic apex is the highest level of the organisation and is therefore
the highest level of management. This part ensures
that the organisation s mission is followed and manages the relationship with the
environment.
The operating core is the part that represents the productive activity of the or
ganisation, gathering inputs and, through
conversion, turns them into outputs.
The middle line represents that part of the organisation where the middle manage
rs operate. The role of this part is to turn
the instructions of the strategic apex into activities for the operating core.
The technostructure includes the staff who provide a technical or supportive act
ivity but which are not a part of the core
activities. This part of the organisation includes the engineering, accounting a
nd human resource departments.
The support staff carry out the ancillary activities that are neither part of th
e core nor the technostructure. Support staff have
no role in the direct activities of the organisation: these activities include c
atering and public relations.
(Students may draw the appropriate diagram)
3 The interview is extensively used for the selection of new employees and in ma
ny cases is the only method of selection. However,
interviews have been criticised for failing to identify appropriate candidates s
uitable for the organisation. It is essential therefore
that professional accountants recognise both the problems and opportunities that
the formal selection interview presents.
(a) The purpose of the selection interview is to find the best possible person f
or the position who will fit into the organisation.
Those conducting the interview must also ensure that the candidate clearly under
stands the job on offer, career prospects and
that all candidates feel that fair treatment has been provided through the selec
tion process.
In addition, the interview also gives the opportunity to convey a good impressio
n of the organisation, whether the candidate
has been successful or not.
(b) (i) The face to face interview is the most common form of interview. In this
situation the candidate is interviewed by a
single representative of the employing organisation.
en the participants, are cost effective
for the organisation (only one member of the organisation s staff is involved) and
, because of the more personal nature,
ensure that candidates feel comfortable.
The disadvantages are that the selection interview relies on the views and impre
ssion of a single interviewer that can
be both subjective and biased. In addition, the interviewer may be selective in
questioning and it is easier for the
candidate to hide weaknesses or lack of ability.
(ii) Panel interviews are often used for senior appointments and consist of two
or more interviewers.
The advantages of such interviews are that they allow opinion and views to be sh
ared amongst the panel. They provide
a more complete and coherent approach, hence problems of bias inherent in face t
o face interviews can be reduced.
They may also be appropriate where an individual with specialist or technical sk
ills has to support the interviewer in
relation to assessing the technical competencies of the interviewee.
The disadvantages are that panel interviews can be difficult to control, intervi
ewers may deviate or ask irrelevant
questions and they can be easily dominated by a strong personality who is able u
nduly to influence others. In addition,
such interviews can often result in disagreement amongst the panel members.
8
4 All organisations need appropriately trained employees. Due to the nature of m
odern business, especially the professions, much of
this training is internal and often on a one to one basis. Accountants as manage
rs should therefore be able to understand the
different approaches to training and which of them is the most appropriate and c
ost effective for the training requirements of the
organisation.
(a) Computer based training can be inexpensive and is based upon user friendly i
nteractive computer programs designed to
enable trainees to train on their own and at their own pace.
(b) Coaching involves the trainee being assisted by another, experienced employe
e. It is a specialised, systematic learning
programme based on communication, defined targets and continuous learning. It en
courages constructive feedback between
the trainee and trainer.
(c) Mentoring, not to be confused with coaching, involves training on a wider ra
nge of activities, often aimed at career
development of employees at supervisory or management level. The trainee is prov
ided with a development programme and
is under close supervision. The mentor should not be the trainee s immediate super
visor or manager.
(d) Job rotation is an important training method and is often also seen as a mea
ns of motivation. It involves moving the trainee
from one job to another and is therefore more suitable for lower level employees
. The trainee is required to do different jobs
in logical succession, thus broadening experience and gaining a picture of the o
rganisation s wider activities.
(e) Job instruction is a one to one method of training through which the trainee
is shown how to fulfill a task and then allowed
to get on with that task. It is a systematic approach to training involving imme
diate supervision and by allowing the trainee
to complete the task is a cost effective way of training.
5 The way in which managers duties are undertaken can significantly influence the
satisfaction that employees derive from their
work. Abraham Maslow suggested that individuals have a hierarchy of personal nee
ds which are identifiable, universally applicable
and can be satisfied in the workplace. Understanding this concept provides guida
nce to management as to the appropriateness of
motivational techniques.
(a) Maslow s theory of motivation is a content theory. Its basic idea is that each
individual has a set of needs which have to be
satisfied in a set order of priority.
Maslow suggested that individuals have five needs:
Self-actualisation
(or self fulfilment)
Esteem needs
(or ego)
Social needs
Safety needs
Physiological needs
These needs are arranged in a hierarchy of importance and movement is upwards, f
rom physiological needs to selfactualisation.
Any individual will always want more; each need must be satisfied before the nex
t is sought. However and
critically so far as motivation in the workplace is concerned a satisfied need i
s no longer a motivator.
The theory is usually presented in the shape of a triangle, with physiological n
eeds at its base and self-actualisation at its
apex. The triangle shape has a clear significance. As an individual moves up tow
ard the apex, the needs thin out, that is
physiological needs are far greater than self-actualisation needs. For many indi
viduals, reaching social needs is often the
highest need to be satisfied. The theory is sometimes presented as a staircase;
again with self-actualisation at the top. This
second diagrammatic form reflects the application of the theory to more modern s
ituations, where it can reasonably be
assumed that those within the organisation have already achieved physiological a
nd safety needs. For such individuals, social
and esteem needs may well be greater.
Physiological needs are the basic survival needs which, although part of the the
ory, probably have less relevance today. These
needs are usually seen as food, shelter (which is sometimes noted as a safety ne
ed), warmth and clothing.
Safety needs are the desire for security, order, certainty and predictability in
life and freedom from threat.
The above two so-called lower order needs dominate until satisfied.
Social needs are the gregarious needs of mankind, the need for friendship, relat
ionships and affection. This is often seen as
the desire to be part of a family.
Esteem needs are the desire for recognition and respect, often associated with s
tatus, especially in the modern world.
Self-actualisation (self fulfilment) is the ultimate goal. Once this state is ac
hieved the individual has fulfilled personal
potential.
9
However, later work by Maslow has suggested that there are two additional needs;
freedom of enquiry (free speech and
justice) and knowledge (the need to explore and learn). These additional needs a
re a further development of social needs and
recognise the changing nature of modern life.
(b) This theory is based on the idea that the goals of the individual and the or
ganisation can be integrated and that personal
satisfaction can be achieved through the workplace. It also assumes that individ
uals will achieve self-actualisation through
their role in assisting the organisation to achieve its objectives. It follows t
herefore that work is the principal source of
satisfaction.
The theory s practical application is that managers should recognise that subordin
ates needs are always evolving and
increasing, so continued attention to increasing the employees personal developme
nt, opportunities for advancement and
recognition of achievement are essential to keep them motivated.
6 To get the best out of people, managers need to have effective communication s
kills. Professional accountants as managers need
to understand the difference between aggressive and assertive behaviour. Often a
n exchange of communication can be interpreted
as a belligerent response from an employee. However, a slight difference in appr
oach can communicate different feelings and
achieve a more positive result.
(a) Aggressive behaviour is competitive and directed at defeating someone else.
It is standing up for oneself at the expense of
other people. It is defending one s rights but doing so in such a way that violate
s the rights of other people. Aggressive
behaviour ignores or dismisses the needs, wants, opinions, feelings or beliefs o
f others.
Characteristics of aggressive behaviour include excessive I statements, boastfulne
ss, and the individual s opinions expressed
as fact, threatening questions or postures from the individual, sarcasm and othe
r throw-away remarks and a constant blaming
of others.
Aggressive behaviour can be self defeating. It may cause such antagonism in the
others in the organisation that they will
refuse to co-operate or work with the person showing aggressive behaviour.
(b) Assertive behaviour on the other hand is based on equality and co-operation.
It involves standing up for one s own rights
and needs but also respects the rights and needs of others. It is not overbearin
g or aggressive but can be described as clear,
honest and direct communication.
Assertive individuals defend their rights in a way that does not violate another
individual s rights. They express their needs,
wants, opinions, feelings and beliefs in direct and appropriate ways.
Characteristics of assertive behaviour include statements that are short, clear
and to the point, distinctions made between fact
and opinion, suggestions weighted with advice and evidence. Constructive critici
sm is the norm and offered without blame
or assumptions. Questions to establish the wishes, opinions and thoughts of othe
rs are used as ways of getting around
problems. There are no ought or should conditions, the first statement is often held
, the individual s own feelings are
expressed and not those of others. Assertive behaviour can be successful if it d
isplays a willingness to deliver a mutual
compromise as an aid to achieving a clear objective.
10
Part 1 Examination Paper 1.3 June 2006 Marking Scheme
Managing People
1 (a) Explanation of the differences between the manager and supervisor
Five marks for the manager
Eight marks for the supervisor
(One mark for a specific reference to the interface role) Up to 13 marks
(b) Explanation of:
(i) responsibility Up to 4 marks
(ii) authority Up to 3 marks
(iii) delegation Up to 3 marks
(c) Explanation of:
(i) the need for delegation Up to 3 marks
(ii) achieving effective delegation Up to 6 marks
(iii) problems with delegation Up to 4 marks
(iv) how to overcome problems Up to 4 marks
2 (a) Description of the term organisational structure.
(One mark per factor identified) Up to 5 marks
(b) Explanation of Mintzberg s five organisational components.
(Two marks per component) Up to 10 marks
3 (a) Explanation of the purpose of the selection interview
(One mark per factor identified) Up to 4 marks
(b) Explanation of the advantages and disadvantages:
(i) The face to face interview Up to 6 marks
(ii) The panel interview Up to 5 marks
(in each case, one mark per factor)
11
4 (a) Explanation of computer based training Up to 3 marks
(b) Explanation of coaching Up to 3 marks
(c) Explanation of mentoring Up to 3 marks
(d) Explanation of job rotation Up to 3 marks
(e) Explanation of job instruction Up to 3 marks
5 (a) Explanation of Maslow s theory Up to 10 marks
(Two marks per step)
(b) Application of the theory Up to 5 marks
6 (a) Explanation and examples of aggressive behaviour Up to 8 marks
(b) Explanation and examples of assertive behaviour Up to 7 marks
12
Managing People
PART 1
MONDAY 12 JUNE 2006
QUESTION PAPER
answered
hall
Paper 1.3
1 Flavours Fine Foods is a leading producer for the food industry, supplying man
y of Europe s leading restaurants.
Started just five years ago by brothers Lee and Alan Jones, the organisation has
grown from a small company
employing five people to a multi-divisional organisation employing 120 people.
The organisation s production facility is divided into three separate departments.
Each department has a single
manager with supervisors assisting on the production lines. The managers and sup
ervisors, all of whom are aware of
their roles, work well together. However, although the organisation has grown, t
he owners continue to involve
themselves in day to day activities and this has led to friction between the own
ers, managers and supervisors.
As a result a problem arose last week. Alan Jones instructed a supervisor to rep
air a machine on the shop floor, which
he refused to do without confirmation and instruction from his departmental mana
ger. The supervisor s manager,
Dean Watkins, became involved and was annoyed at what he saw as interference in
his department s activities. Dean
told Alan Jones that he should have come to me first because although the responsi
bility for the overall organisation
was a matter for the brothers, action taken in the factory was his through power
s that had been delegated to him and
through his authority, as manager. In the argument that followed, Alan Jones was
accused of failing to understand
the way that the hierarchy in such a large organisation operates and that interf
erence with operational decisions by
senior management was not helpful.
As a consequence of this, Alan Jones has asked you to explain to him and his bro
ther the issues behind the dispute
to clarify the roles of managers and supervisors and to indicate how and why suc
cessful delegation might be achieved.
Required:
(a) Explain to Alan Jones the main differences between the work of a manager and
that of a supervisor.
(13 marks)
(b) Explain in the context of Flavours Fine Foods, what is meant by:
(i) responsibility; (4 marks)
(ii) authority; (3 marks)
(iii) delegation. (3 marks)
(c) To correct the problems at Flavours Fine Foods, explain to Alan Jones:
(i) the need for delegation; (3 marks)
(ii) how effective delegation might be achieved; (6 marks)
(iii) problems with delegation; (4 marks)
(iv) how these problems might be overcome. (4 marks)
(40 marks)
2
2 The activities of an organisation have to be managed and co-ordinated to ensur
e that its objectives are met. The
organisation s structure is designed to support this.
Required:
(a) What is meant by the term organisational structure, often shown as an organisa
tion chart? (5 marks)
(b) Explain Mintzberg s five organisational components. (10 marks)
(15 marks)
3 Organisations need to recruit new employees. An important step in the process
is the selection interview.
Required:
(i) the face to face interview between two people; (6 marks)
(ii) the panel interview with more than one interviewer. (5 marks)
(15 marks)
4 All organisations require trained employees. However, training can take many f
orms, some of which are internal to
the organisation.
Required:
Explain what is meant by the terms:
(a) Computer based training. (3 marks)
(b) Coaching. (3 marks)
(c) Mentoring. (3 marks)
(d) Job rotation. (3 marks)
(e) Job instruction. (3 marks)
(15 marks)
3 [P.T.O.
5 Your manager has heard of Maslow s hierarchy of needs theory and how it has some
relevance to motivational
techniques.
Required:
(a) Explain Maslow s hierarchy of needs theory. (10 marks)
(b) How can Maslow s theory be applied to the motivation of staff? (5 marks)
(15 marks)
6 An important part of managing people in a professional organisation is to be a
ble to distinguish between
aggressiveness and assertiveness in an employee.
Required:
(a) Explain and give examples of aggressive behaviour. (8 marks)
(b) Explain and give examples of assertive behaviour. (7 marks)
(15 marks)
4
Managing People
PART 1
QUESTION PAPER
answered
hall
Paper 1.3
1 Bailey s is a large toy manufacturer based in a traditional industrial region. E
stablished in the 1970s, it has faced
many changes in the market and survived. This has been due in part to employing
a largely unskilled low paid staff,
and maintaining its main advantage, that of low production costs based on low pa
y. Most of the production involves
repetitive and boring work with little challenge and opportunity for innovation.
Although many of the employees have
been with the company for some time, there has been a high level of employee tur
nover.
However, an unhappy atmosphere has been apparent for some time. There has been a
number of instances of
arguments between the staff, friction between different departments, disturbance
, low morale, poor production and
general unrest, made worse recently by a decline in business which may lead to s
taff reduction and redundancy. Poor
pay is leading to family problems that are affecting the commitment and motivati
on of the employees.
The business was recently sold to the new owner, Rebecca Stonewall. She is conce
rned that the negative atmosphere
she has found will harm the prospects of the business and is determined to addre
ss the issues that have become
apparent.
She has therefore decided that it is time to take account of opinions and views
of the employees in an attempt both
to identify the problems and to resolve them. She has appointed external counsel
lors since she thinks that a
programme of individual counselling might be appropriate and is also of the opin
ion that some form of different or
improved approach to motivation might be the answer to the problems at Bailey s.
Required:
(a) Define the role that the external counsellor must fulfil at Bailey s. (3 marks
)
(b) Describe the skills that a counsellor should possess. (14 marks)
(c) Briefly describe three advantages to Bailey s of counselling. (3 marks)
(d) Explain to the management of Bailey s why consideration should be given to res
olving the problems through:
(i) job rotation; (5 marks)
(ii) job enlargement; (5 marks)
(iii) job enrichment. (5 marks)
(e) Briefly provide five reasons to the management of Bailey s why financial rewar
ds could be considered to
improve motivation. (5 marks)
(40 marks)
2
2 Traditionally, the only objective of a business was to make a profit. However,
some writers have suggested that this
idea is simplistic and that profitability is only one objective amongst many.
Required:
State and explain Drucker s eight classifications of objectives.
(15 marks)
3 An organisation has decided to compare the benefits of promoting existing staf
f with those of appointing external
candidates and to assess whether the use of external recruitment consultants is
appropriate.
Required:
(a) Describe the advantages of internal promotion. (5 marks)
(b) Describe the advantages of external recruitment. (5 marks)
(c) Briefly describe five factors to be taken into account when deciding whether
to use recruitment consultants.
(5 marks)
(15 marks)
4 A properly conducted appraisal interview is fundamental in ensuring the succes
s of an organisation s performance
appraisal system.
Required:
(a) Describe three approaches to conducting the appraisal interview. (5 marks)
(b) Describe five main barriers to an effective appraisal interview. (10 marks)
(15 marks)
5 All managers need to understand the importance of motivation in the workplace.
Required:
(a) Explain the content theory of motivation. (5 marks)
(b) Explain what is meant by McGregor s
(i) Theory X; (5 marks)
(ii) Theory Y. (5 marks)
(15 marks)
3 [P.T.O.
6 Communication is important for all organisations and requires an understanding
of communication flows and
channels.
Required:
(a) Briefly explain the main purposes of the three main formal communication cha
nnels in an organisation:
(i) Downwards; (3 marks)
(ii) Upwards; (3 marks)
(iii) Lateral or horizontal. (3 marks)
(b) Briefly explain the two types of informal communication known as the grapevi
ne and rumour. (6 marks)
(15 marks)
4
Answers
1 One of the many skills that managers are called upon to use is counselling. Si
tuations often arise in the workplace where particular
and careful people-centred skills are required. It is important that managers un
derstand exactly what counselling involves and the
delicate skills involved. In addition, many problems identified by counselling c
an be resolved through appropriate methods of
motivation. Widening and deepening interest in the organisation and its many tas
ks and departments is a tried and tested method
for motivating employees. However, financial rewards remain a strong and importa
nt motivator.
(a) The external counsellor s role must be as a person who takes on the role of cou
nsellor and agrees explicitly to offer time,
attention, advice, guidance and support to another person (or persons) temporari
ly in the role of client .
(b) It is clear that many of the problems at Bailey s that have led to the unhappy
atmosphere lend themselves to resolution
through the neutral and non-judgemental approach offered by the appointment of e
xternal counsellors. The counsellor must
be in a position to help the individual employee to identify problems, issues an
d possible solutions to the kind of problems
that have manifested themselves at Bailey s: poor production, unrest, low morale a
nd significantly, the long tradition of poor
pay that is leading to employee family problems outside the factory. There is al
ways the danger of leading the employee, so
the counsellor must adopt a passive role, show interest and encourage reflection
whilst allowing the employee to lead and
talk around the issues. Open questions must be used to help the employee explore
ideas and feelings. The counsellor must
be an active listener, speaking only to clarify issues and elicit answers when a
ppropriate. Above all, the counsellor must be
impartial and this is why Bailey s has appointed outside counsellors.
Counselling skills require the ability to establish rapport with the employee, t
o clarify and summarise as appropriate, to ask
non-specific questions, use a non-directive approach, to listen and be able to d
iscern what is meant by what the employee
says. In addition, the counsellor must allow the employee to be silent if he or
she wishes to be, to allow any meeting to take
place at the speed of the employee and anticipate the employee s views on the caus
es, which at Bailey s are many, and to
allow solutions to the problems.
(c) For Bailey s the advantages of counselling as a means of understanding and add
ressing the problems are that it provides a
confidential service to the employee to discuss problems away from and not invol
ving management or supervision. There is
no obvious human resources policy at Bailey s and counselling provides an opportun
ity to develop an appropriate policy from
understanding individual problems.
This in turn will demonstrate organisational commitment to the employees that ha
s been lacking in the past at Bailey s and
begin the process of better performance and increase in commitment.
At another level, counselling can provide a link to other external agencies to a
ssist with personal problems that may be
deemed too specific for resolution within Bailey s.
(d) (i) Job rotation is the planned rotation of staff between jobs and tasks to
reduce monotony and boredom and provide fresh
opportunities and challenges. This could be a useful way of encouraging employee
s at Bailey s alongside enrichment
and enlargement. Rotation would encourage better understanding between employees
at Bailey s. It takes two forms,
the transfer to another job after some time in an existing job and the introduct
ion of another individual to the job being
vacated, or as a form of training where individuals are moved through different
jobs to learn new skills.
(ii) Job enlargement is often referred to as horizontal job enlargement and is aim
ed at widening the content of jobs by
increasing the number of operations in which the job holder is involved and is a
nother method by which employees at
Bailey s might become more involved. It reduces the level of repetition and dullne
ss by providing a horizontal extension
to activity, reducing monotony and boredom inherent in the operations at Bailey s.
(iii) Job enrichment, which is often referred to as vertical job enlargement , is a
planned, deliberate action to build greater
responsibility, breadth and challenge into the work of the individual. The empha
sis is on the individual rather than the
organisation, team or group. This may be a way forward for some of Bailey s employ
ees since it provides the individual
employee with the responsibility for decision making of a higher order, provides
greater freedom to decide how the job
or task should be undertaken, improves understanding of the entire process, enco
urages participation in the planning
and production procedures and provides regular feedback to management urgently n
eeded at Bailey s.
(e) There are issues at Bailey s as a consequence of poor pay. Although non-financ
ial motivation has an important role to play
in encouraging commitment, the fact remains that financial rewards act as a stro
ng motivating factor, especially in what has
been a low pay business. Financial rewards are all encompassing and apply to all
employees at all levels, are universally
applicable, able to satisfy all types of need and simple to apply and understand
. At Bailey s, financial rewards have a greater
effect because they can provide recognition and prestige if pay is improved, are
seen as the most important hygiene factor
(especially in a business with a history of low pay and low morale) and are a me
asure of achievement against goals, especially
if some form of bonus or performance related pay is introduced by the new manage
ment at Bailey s. In addition, financial
rewards are a basis for satisfaction and are often used as a form of professiona
l or social comparison outside the organisation.
7
2 For the complex, modern business, the view that the single objective of busine
ss is to make a profit is regarded by many writers
as simplistic. Peter Drucker has argued that for a business to be successful, it
must address a number of objectives.
Drucker was one of the first writers to identify the dangers of the single objec
tive of profit maximisation. Concentrating on a single
objective (invariably profit) is not only unproductive but potentially harmful t
o the organisation and can endanger the survival of
the business and seriously undermine its future. He argues that business organis
ations have in fact eight objectives, all of which
must be addressed concurrently. These eight objectives are particularly relevant
to management, bringing together as they do the
need to address all the issues with which the organisation is concerned.
Market standing is the need to identify and maintain market share and to ensure
the development of new products to maintain
share. Without market standing, no organisation can succeed.
Innovation is the need to develop and find new products and processes; no busine
ss can survive on providing the same product
or service over the long term. Innovation is fundamental to understanding growth
; organisations grow by developing innovative
differences to their competitors.
Productivity and contributed value recognises the need for efficiency and the effi
cient use of business resources.
Physical and financial resources is a recognition of the need to use the correct
and appropriate financial resources.
Profitability. The word profit does not appear, but profitability . Here there are th
ree important determinants, profitability as a
measure of effectiveness (many businesses make a profit which in fact is a poor
return on the effort produced), the need for profit
so that the business can be self-financing and the need to attract new capital.
Manager performance and development is the explicit recognition that the busines
s requires objectives and that management
activity can be linked directly to those objectives.
Worker performance and attitude is recognition that it is vital to measure the p
erformance of the workforce by such means as
labour turnover. However, worker attitude is more difficult to measure, but shou
ld be attempted.
Public responsibility has become an issue in the twenty-first century. Any busin
ess needs to be aware that it is a part of the
community within which it operates and is therefore part of a wider social syste
m.
3 All organisations rely upon their staff for success. However, recruitment of s
taff can be time consuming; a drain on resources and
the necessary expertise may not exist within the organisation.
(a) Internal promotion describes the situation where an organisation has an expl
icit policy to promote from within and where
there is a clear and transparent career structure. This is typical of many profe
ssional bodies, large organisations and public
services.
The advantages of internal promotion are that it acts as a source of motivation,
provides good general morale amongst
employees and illustrates the organisation s commitment to encouraging advancement
. Recruitment is expensive and internal
promotion is relatively inexpensive in terms of time, money and induction costs
and since staff seeking promotion are known
to the employer, training costs are minimised. Finally, the culture of the organ
isation is better understood by the individual.
(b) External recruitment describes the situation where the organisation decides
to fill a staff vacancy and recruit from outside the
organisation.
It may be essential if particular skills or expertise are not already available
within the organisation and is necessary to restore
depleted staffing levels or when for some reason the organisation urgently needs
new employees. New staff members bring
new ideas and novel approaches to the organisation and to the specific task, oft
en providing experience and work methods
from other employers.
(c) An organisation considering the use of external recruitment consultants woul
d make its decision upon the availability, level
and appropriateness of expertise available within the host organisation and its
likely effectiveness, together with the cost of
using consultants set against the cost of using the organisation s own staff. The
organisation should consider the level of
expertise required of potential employees and therefore the appropriate knowledg
e required of the consultants and the need
for impartiality or security which may be of particular importance for some orga
nisations. In addition, the views of internal
staff as to the likely effect of using outside consultants must be considered, a
s is the effect the use of consultants might have
on the need to develop expertise within the organisation.
4 Appraisal systems are central to human resource management and understanding t
he difficulties of such schemes and the correct
approach to them is necessary if the appraisal process is to be successful and w
orthwhile.
(a) The manager conducting the interview might base it on one of three approache
s.
The Tell and Sell Method. The manager explains to the employee being appraised h
ow the appraisal assessment is to be
undertaken and gains acceptance of the evaluation and improvement plan from the
employee. Human resource skills are
important with this approach in order for the manager to be able to provide cons
tructive criticism and to motivate the
employee.
8
The Tell and Listen Method. The manager invites the employee to respond to the w
ay that the interview is to be conducted.
This approach requires counselling skills and encouragement to allow the employe
e to participate fully in the interview. A
particular feature of this approach is the encouragment of feedback from the emp
loyee.
The Problem Solving Method. With this method the manager takes a more helpful ap
proach and concentrates on the work
problems of the employee, who is encouraged to think through his or her problems
and to provide their own intrinsic
motivation.
(b) The appraisal system should be well constructed and fair to both the individ
ual and the organisation. However, there are a
number of barriers, often because employees see the appraisal as one or more of
the following:
Confrontation due to lack of agreement on performance, badly explained or subjec
tive feedback, performance based on recent
events or disagreement on longer term activities.
Judgement, the appraisal is seen as a one sided process based entirely on the ma
nager s perspective.
Chat is the worst of all worlds. The appraisal interview is seen as an informal,
loosely constructed and badly managed
conversation without purpose.
Unfinished business is when the appraisal is not seen as part of a continuing pr
ocess of performance management.
An annual event when the appraisal is seen as largely irrelevant and simply an e
vent to set annual targets that quickly become
out of date.
A system of bureaucracy based on forms devised solely to satisfy the organisatio
n s human resources department so that its
main purpose, that of identifying individual and organisation performance and im
provement, is forgotten.
5 The way in which managers treat their employees can significantly influence th
e satisfaction that the employees derive from their
work and thus the overall success of the organisation. Understanding the importa
nce of motivation is therefore an important
management skill.
(a) Content theories address the question What are the things that motivate peopl
e?
Content theories are also called need theories (because they concentrate on the
needs fulfilled by work) and are based on the
notion that all human beings have a set of needs or required outcomes, and accor
ding to this theory, these needs can be
satisfied through work. The theory focuses on what arouses, maintains and regula
tes good, directed behaviour and what
specific individual forces motivate people. However, content theories assume tha
t everyone responds to motivating factors in
the same way and that consequently there is one, best way to motivate everybody.
(b) Douglas McGregor has suggested that the managers view of the individuals attit
ude to work can be divided into two
categories, which he called Theory X and Theory Y. The style of management adopt
ed will stem from the view taken as to
how subordinates behave. However, these two typologies are not distinct; they do
in fact represent the two ends of a
continuum.
(i) Theory X is based on traditional organisational thinking. It assumes that th
e average person is basically indolent and has
an inherent dislike of work which should be avoided at all costs. The individual
lacks ambition, shuns responsibility, has
no ambition and is resistant to change. This theory holds that the individual se
eks only security and is driven solely by
self-interest. It follows that because of this dislike of work, most have to be
directed, controlled, organised or coerced.
Management is based on fear and punishment and will have an exploitative or auth
oritarian style. This reflects the
thinking of the classical school of management, based on a scientific approach,
specialisation, standardisation and
obedience to superiors.
(ii) Theory Y is at the opposite end of the continuum and reflects a contemporar
y approach to motivation, reflecting growth
in professional and service employment. It is based on the idea that the goals o
f the individual and the organsiation can
indeed should be integrated and that personal fulfilment can be achieved through
the workplace. It assumes that for
most people, work is as natural as rest or play and employees will exercise self
-discipline and self-direction in helping
to achieve the organisation s objectives. Physical and mental effort at work is pe
rfectly natural and is actively sought as
a source of personal satisfaction.
In addition, the average employee seeks and accepts responsibilty and creativity
. Innovative thinking is widely distributed
amongst the whole population and should therefore be encouraged in the work situ
ation.
The intellectual ability of the average person is only partly used and should be
encouraged and thus individuals are
motivated by seeking self-achievement. Since control and punishment are not requ
ired, management therefore has to
encourage and develop the individual. However, the operation of a Theory Y appro
ach can be difficult and frustrating,
time consuming and sometimes regarded with suspicion.
9
6 There are many forms of communication within an organisation, both formal and
informal. Formally communicated information
often flows in one of three main directions: downwards, upwards and lateral. How
ever, all organisations also have informal
communication channels and management must understand their importance.
(a) Formal communicated information flows in three main directions.
(i) Downwards. This form of communication is often the one most easily recognise
d and understood. The purpose of
downward communication is to give specific directives, to provide information ab
out procedures and practices and to
provide information about work practices. It also serves to tell employees about
their performance and provides
information on organisational and departmental objectives.
(ii) Upwards communication is generally non-directive in nature and often takes
two forms: personal problems or
suggestions and/or technical feedback as part of the organisation s control system
.
(iii) Lateral or horizontal. Traditional communication assumes a hierarchical st
ructure with only vertical communication,
however horizontal communication has become important and necessary in less form
al organisations. It takes the form
of coordination with departmental managers or supervisors meeting regularly, pro
blem solving with department members
meeting to resolve an issue or information sharing and it also describes interde
partmental sharing of ideas or conflict
resolution where there is a need to resolve interdepartmental friction.
(b) The grapevine and rumour are the two main types of informal communication.
The grapevine is probably the best known type of informal communication. All org
anisations have a grapevine and it will
thrive if there is lack of information and consequently employees will make assu
mptions about events. In addition, insecurity,
gossip about issues and fellow employees, personal animosity between employees o
r managers or new information that has
not yet reached the formal communication system, will all drive the grapevine.
Rumours are the other main informal means of communication and are often active
if there is a lack of formal communication.
A rumour is inevitably a communication not based on verified facts and may there
fore be true or false. Rumours travel quickly
(often quicker than both the formal system and the grapevine) and can influence
those who hear them and cause confusion,
especially if bad news is the basis of the rumour. Managers must ensure that the
formal communication system is such that
rumours can be stopped, especially since they can have a serious negative effect
on employees.
10
1 (a) Definition of the role of the external counsellor. (Up to 3 marks)
(b) Description of the role and skills of the external counsellor. (Up to 14 mar
ks)
(c) Brief description of three advantages to Bailey s of counselling (one mark eac
h). (Up to 3 marks)
(d) Explanation and usefulness of:
(i) job rotation (Up to 5 marks)
(ii) job enlargement (Up to 5 marks)
(iii) job enrichment (Up to 5 marks)
(e) Five reasons why financial rewards could be considered to improve motivation
(one mark each). (Up to 5 marks)
2 Explanation of the eight classifications of objectives. (Up to 15 marks)
3 (a) Description of the advantages of internal recruitment (one mark for each r
elevant point). (Up to 5 marks)
(b) Description of the advantages of external recruitment (one mark for each rel
evant point). (Up to 5 marks)
(c) Description of five factors (one mark each). (Up to 5 marks)
4 (a) Description of the three interview approaches. (Up to 5 marks)
(b) Description of the five main barriers (two marks per barrier). (Up to 10 mar
ks)
5 (a) Explanation of content theory. (Up to 5 marks)
(b) (i) Explanation of Theory X. (Up to 5 marks)
(ii) Explanation of Theory Y. (Up to 5 marks)
11
6 (a) Brief explanation of the main purposes of the three main formal communicat
ion channels:
(i) Downwards (Up to 3 marks)
(ii) Upwards (Up to 3 marks)
(iii) Lateral or horizontal (Up to 3 marks)
(b) Brief explanation of the two types of informal communication (up to 3 marks
each) (Up to 6 marks)
12
Managing People
PART 1
MONDAY 11 JUNE 2007
QUESTION PAPER
answered
hall
Paper 1.3
1 The Darby Motor Company manufactures toy cars and was established at the begin
ning of the twentieth century by
David Darby, whose grandson John Darby still owns the company. The company has g
rown to employ a total of 2,500
staff with five senior managers and 20 supervisors, each of whom has responsibil
ity for a separate department. A long
established business with a traditional product range, the Darby Motor Company h
as evolved into a traditional,
bureaucratic, formal type of organisational structure based on rules, procedures
and standardisation.
The company has recently experienced problems. Production levels are low and att
empts to improve production levels
have been made in all departments, but their supervisors are having problems rea
ching the expected performance
levels. John Darby has decided to hold a series of meetings with both levels of
management. Initially he found that
the supervisors were unhappy with and sceptical about the value of the meetings.
It became apparent that the level of morale of all staff was low. Lack of facili
ties, pressure of work and uncertain
procedures were the main grievances. There appeared however to be a deeper probl
em, that of mistrust between the
staff as a whole and senior management. The mistrust was more apparent between t
he senior management and
supervisors. The reason for this was unclear. In addition, the workforce as a wh
ole regard the supervisors as poor at
managing their departments, disregarding new work practices and required perform
ance standards. The supervisors
said that their position in general was unclear, despite the size of the organis
ation. There were no clear lines of
authority, command or responsibility which allowed them to make decisions for th
eir departments. Some supervisors
simply regarded themselves as menial and unrecognised, referring to funding shor
tages, unrealistic targets, little
recognition of their position, no job descriptions and lack of training, all of
which are required to meet the new
production levels.
Job security has also become an issue. The changes in production and hoped for i
mproved production levels have
led to rumours of eventual cutbacks in staff. Rumours are especially strong amon
gst the supervisors. They worry that
they might be replaced by new, younger staff that would be better trained, more
adaptable and better able to use
modern production equipment.
The problems have manifested themselves in high labour turnover, in addition to
the problems already outlined, was
blamed on low salaries, lack of opportunity for personal advancement and working
conditions, which were worse for
some employees than others.
The owners have asked you to examine the problems the supervisors are having in
reaching the performance expected
of all staff.
Required:
(a) Explain how Herzberg s theory of motivation might help to explain the attitude
of the supervisors.
(10 marks)
(b) Which of Handy s classifications describes the organisational culture? (5 mark
s)
(c) How well does Darby Motor Company fit Mintzberg s machine bureaucracy? (15 mar
ks)
(d) Explain how training the supervisors could overcome the problems identified
in the company. (10 marks)
(40 marks)
2
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2 Many writers suggest that organisational success can be predicted.
Required:
Briefly describe the characteristics that according to Peters and Waterman, are
common to successful
organisations.
(15 marks)
3 The selection interview remains the primary means through which organisations
recruit new employees.
Required:
(i) the face to face interview; (6 marks)
(ii) the panel interview. (5 marks)
(15 marks)
4 All business organisations need trained employees, yet individuals learn in di
fferent ways.
Required:
(a) Briefly describe the four stages in Kolb s experiential learning cycle. (4 mar
ks)
(b) Describe the four learning styles identified by Honey and Mumford and their
implications for training
programmes. (11 marks)
(15 marks)
5 Motivation is fundamental to the task of management.
Required:
(a) What is meant by a content theory of motivation? (5 marks)
(b) What is meant by a process theory of motivation? (5 marks)
(c) What is meant by an equity theory of motivation? (5 marks)
(15 marks)
3 [P.T.O.
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6 Fundamental to the task of people management is communicating information to o
thers.
Required:
(b) Explain five barriers to good communication. (5 marks)
(c) Describe how the barriers to communication identified in (b) can be overcome
. (5 marks)
(15 marks)
4
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Answers
1 (a) The scenario demonstrates Herzberg s motivation theory which explains the fa
ctors that motivate the individual by identifying
and satisfying individual needs, desires and goals. It is based on the idea that
factors affecting people at work can be
separated into hygiene factors and motivation factors and is therefore often ref
erred to as a two need system or two factor
theory. These two separate needs are the need to avoid unpleasantness and discomfor
t and, at the other end of the
motivational scale, the need for personal development. A shortage of those facto
rs which positively encourage employees
(motivating factors) will cause those employees to focus on other, non-job relat
ed factors. These are the so-called hygiene
factors, illustrated in the scenario the supervisors concern with lack of facilit
ies, work pressures, funding shortages, poor
recognition and lack of training. The most important part of this motivation the
ory is that the main motivating factors are not
in the environment but in the intrinsic value and satisfaction gained from the j
ob itself. It follows therefore that the job itself
must have challenge, scope for enrichment and be of interest to the job holder.
This is not the case in the scenario, where
there appears to be little or no intrinsic satisfaction from the supervisors work
.
Hygiene (or maintenance) factors lead to job dissatisfaction because of the need
to avoid unpleasantness. They are so called
because they can be avoided by the use of hygienic methods, that is, they can be p
revented. Attention to these hygiene
factors prevents dissatisfaction but does not on its own provide motivation exce
pt in the short term. Hygiene factors are
concerned with those factors associated with, but not directly a part of, the jo
b itself. These are mainly salary and the
perceived differences with others, job security, working conditions, the quality
of management, organisational policy and
administration and interpersonal relations.
Motivators (or satisfiers ) are those factors directly concerned with the satisfact
ion gained from the job itself, the sense of
achievement, level of recognition, the intrinsic value of the job itself, the le
vel of responsibility, opportunities for advancement
and the status provided by the job.
Motivators lead to satisfaction because of the need for growth and a sense of se
lf achievement. A lack of motivators leads to
over concentration on hygiene factors; that is those negative factors which can
be seen and therefore form the basis of
complaint and concern. Understanding Herzberg s theory identifies the nature of in
trinsic satisfaction that can be obtained
from the work itself, draws attention to job design and makes managers aware tha
t problems of motivation may not
necessarily be directly associated with the work. Problems may often be external t
o the work itself.
(b) The organisation could be described by Handy s role culture. This culture (and
structure) is often illustrated by the Greek
temple: the roles and functions are the pillars with the management at the top.
This is the traditional organisational culture
based on rules, regulations, rationality, logic and predictability often associa
ted with medium to large manufacturing concerns
of long standing in relatively stable environments. In this culture, people desc
ribe their job by its duties, not its purpose.
(c) The structure may also be depicted as Mintzberg s machine bureaucracy. Such an
organisation should be efficient, with
activities and culture based on formality and procedures, employees are process
and rules oriented, have clear roles and are
not required to be innovative or imaginative. The environment is stable, predict
able; this kind of organisation is slow to adapt
or respond to change and that in turn explains some of the problems at Darby Mot
or Company.
The structure and culture at Darby Motor Company suggest that the organisation i
s an inefficient bureaucracy, poorly
designed, with a lack of job descriptions, unclear lines of authority, responsib
ilities and role definitions within which the
supervisors undertake their duties. In addition there is a lack of training and
skill development appropriate to supervisors,
especially during times of change. The organisation is paradoxically insufficien
tly bureaucratic; the clarity of roles, procedures
and position required for such an organisation to operate does not exist. This l
ies at the heart of the organisation s problems.
(d) The benefits of training for the supervisors will be improved motivation acc
ompanied by greater job satisfaction and improved
organisational performance. A matching of individual goals with those of the org
anisation and enhanced skills and abilities
should lead to enhanced satisfaction for the supervisors. Individual supervisors
would feel valued by the organisation and
acquire new skills which will be useful in the future. The training should incre
ase the knowledge and skills of employees,
thereby increasing opportunities and increasing the value of the organisation s hu
man resources. Importantly from the
scenario, it could lead to greater staff commitment, understanding and loyalty.
2 Although there are different approaches to predicting success, Peters and Wate
rman suggest that successful business organisations
display common characteristics.
They focus on the process of organising and reject the standard tools of managem
ent such as budgets, plans and detailed
forecasting and control, because these encourage a system that concentrates on n
egative measures. They emphasise the
importance of values to organisational success and the importance of a strong, c
ommon organisational culture, capable of
motivating employees to outstanding performance levels.
They suggest that successful businesses display eight characteristics.
A BIAS FOR ACTION. This describes the encouragement of an informal, innovative,
task oriented culture that is not based on
formal systems, a system they describe as management by wandering around .
CLOSE TO THE CUSTOMER. An organisational culture based on listening to customers
and being obsessed with customer
service.
7
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AUTONOMY AND ENTREPRENEURSHIP. This is the encouragement and fostering of innova
tion, the use of product champions
and practical risk taking by the organisation s members. An organic system of mana
gement is developed and the associated
organisational structure is developed.
PRODUCTIVITY THROUGH PEOPLE. Peters and Waterman see people in the organisation
as the basic source of quality and
overall success. The staff is encouraged and praised and a team approach is deve
loped based on mutual trust and appropriate
motivation.
HANDS ON, VALUE DRIVEN. The values of the organisation and its objectives are kn
own and shared by all the organisation s
members. The management is involved at all levels and they encourage a system ba
sed on doing a job well.
STICK TO THE KNITTING . Peters and Waterman point to successful organisations remai
ning in markets and products of their
core business. The organisation grows through internally, rather than externally
, generated diversification.
SIMPLE FORM, LEAN STAFF. There are no complicated organisational and management
structures; organic structures and simple
product divisional forms are used.
SIMULTANEOUS LOOSE-TIGHT PROPERTIES. As far as possible, autonomy and responsibi
lity are pushed down the organisation,
although core values such as the control of quality remain at the centre of the
organisation.
These successful organisations understand the basics; thinking at all levels is
encouraged, things are kept simple and chaos is
tolerated in return for results. The organisation s core values are known by all a
nd prized by all .
3 Interviews remain the main source of recruitment of new employees, even though
they are regarded as unscientific and often fail
to identify suitable candidates. Proper understanding of the purpose and structu
re of selection interviews can alleviate many of the
problems associated with this practice.
(a) The purpose of the selection interview is clear; that is to ascertain the be
st possible person for the position and who will also
fit into the organisation. The individuals who conduct interviews should also en
sure that the candidate clearly understands
the position on offer, the potential career prospects and that fair treatment ha
s been provided throughout the selection process.
The interview must provide a good impression of the organisation, whether the ca
ndidate is successful or not.
(b) (i) The face to face interview is the most common form of interview. The can
didate is interviewed by a single representative
of the employing organisation.
en the participants, are cost effective
(compared with panel interviews) and because of the more personal nature, ensure
that candidates feel comfortable.
The disadvantages are that the selection relies on the views and impression of a
single interviewer which can be
subjective and biased. In addition, the interviewer may be selective in question
ing and it is easier for the candidate to
hide weaknesses or lack of ability.
(ii) The panel interview is commonly used for senior appointments and consists o
f two or more interviewers.
The advantage of such interviews is that they allow opinion and views to be deve
loped and shared amongst the panel
members and so a more complete picture of the candidate can be developed. Thus p
roblems or bias inherent in face to
face interviews can be removed. In addition, the panel often has the authority t
o reach immediate decisions and so
speed up the selection process.
The disadvantages are that panels can be difficult to control; panel members may
deviate from the issues or ask
irrelevant questions. Panels can often be dominated by a strong personality who
is able unduly to influence others. There
is a particular danger that panel interviews can result in disagreement amongst
the panel members.
4 If training programmes are to be successful, managers need to understand that
individuals learn in different ways and that learning
can be based on previous experience and be affected by the style with which indi
viduals learn.
(a) David Kolb suggests that learning is a series of steps based on experience a
nd argues that classroom based learning is
inefficient. Actual learning comes from real life experiences, is experiential a
nd comes from 'doing,' this then ensures that
learners actually solve problems.
Kolb s experiential learning cycle
.. experience ..
. .
. .
active observation
experimentation and
reflection
. .
. .
... abstract ...
concepts and generalisations
8
The first stage (experience) is the situation where the person is learning somet
hing new. This may be planned learning or
accidental .
The second stage (observation and reflection) is where the significance of the e
xperience is reviewed.
The third stage (abstract concepts and generalisations) is where the experience
is reviewed and applied to other situations.
The fourth stage (active experimentation) is where the person applies the learni
ng in similar situations, it involves creativity,
decision making and problem solving and is the creative and main developmental s
tage of the cycle.
(b) Honey and Mumford classify learners into four styles.
Theorists are concerned with forming principles and take an intellectual view. T
hey think problems through in a vertical, step
by step, logical way and tend to be perfectionists who do not rest easy until th
ings are tidy and fit into a rational scheme.
Theorists are usually detached, analytical and dedicated to rational objectivity
rather than anything subjective or ambiguous.
For them training must be programmed and structured, designed to allow time for
analysis and provided by others who share
the same preference for ideas and analysis.
Reflectors are concerned with observation and reflection. They stand back and po
nder experiences and observe them from
many different perspectives. They collect data, both first hand and from others,
and prefer to think about it thoroughly before
coming to any conclusion. Thoughtful people, they prefer to take back seats in m
eetings and discussions. They need an
observational approach to training, need to work at their own pace and do not fi
nd learning easy, especially if rushed.
Conclusions are carefully thought out and are slow, cautious and non-participati
ve.
Activists are concerned with actual experience. They involve themselves fully in
new experiences, are open minded, not
sceptical and tend to be enthusiastic about anything new. Gregarious and constan
tly involving themselves with others, they
seek to centre all activities around themselves. They have a practical approach
to training, preferring practical problems, a
dislike of theory, insist on having hands-on training, enjoy participation and c
hallenge, and are flexible, optimistic but easily
bored.
Pragmatists are concerned with deliberate testing. They are keen on trying out i
deas, theories and techniques to see if they
work in practice, search out new ideas and take the opportunity to experiment wi
th applications. They are essentially
practical, down to earth people who like making practical decisions and solving
problems. They need to see a direct value
and link between training and real problems, enjoy learning new techniques and t
asks, are good at finding improved ways of
doing things and aim to do things better. But they get impatient if new ideas ar
e not reflected in practical applications.
5 Understanding motivation is fundamental to managing people. Many different the
ories have been presented on how management
might motivate employees. There are many different approaches and management mus
t understand the appropriateness of each.
(a) Content theories present the question What are the things that motivate peopl
e? Content theories are also called need theories
(because they concentrate on the needs fulfilled through work) and are based on
the notion that all human beings have a set
of needs or required outcomes that can be satisfied through work. The theory foc
uses on what arouses, maintains and
regulates good, directed behaviour and what specific individual forces motivate
people. However, content theories assume
that all individuals respond to motivating factors in the same way and that cons
equently there is one, best way to motivate
everybody.
(b) A process theory of motivation asks the question How can people be motivated?
A process theory of motivation does not
emphasise the need for fulfilment through work (as in content theory), but conce
ntrates upon the processes through which
individuals are motivated. The theory attempts to explain how individuals start,
sustain and direct behaviour and assumes
that individuals are able to select their own goals and means of achieving those
goals through a process of calculation. Process
theory emphasises the importance of rewards, which are often financial in nature
.
(c) Equity theory focuses on the feelings of the individual and how fairly they
feel they have been treated in comparison with
treatment received by others. It is sometimes referred to as exchange theory; in
dividuals expect certain outcomes in exchange
for certain efforts and contribution to the organisation. When an individual per
ceives that his or her efforts are equal to others
and the rewards are the same, then equity exists. If the perception is that the
efforts and rewards of one person are unequal
to others, then there is inequity which develops into other issues.
6 Clear and concise communication and the consequences of poor communication nee
d to be understood by management. Poor
communication can lead to ineffective control, poor co-ordination and often orga
nisational failure.
(a) Good communication is important because it ensures that individuals know wha
t is expected of them. In addition, it leads to
co-ordination within the organisation, improves control of the organisation s plan
s, procedures and staff and ensures that the
instructions of management are understood. Team and group cohesiveness is encour
aged and good communication can lead
to the reduction of stress, remove bias and distortion. Secrecy and misunderstan
ding are reduced or removed, information is
received by appropriate persons and conflict in the workplace is reduced.
9
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(b) Barriers to communication are many, but the main barriers include the person
al background of the persons communicating,
language differences, different education levels and the use of jargon. Noise in c
ommunication (that is the message confused
by extraneous matters) is often a serious but understated communication barrier
as is the perception of individuals. Conflict
within the organisation, communication overload (too much information being comm
unicated at once), problems of distance
and simple basic misunderstanding or accidental or deliberate distortion of info
rmation can all act as communication barriers.
(c) Communication barriers can be overcome by consideration of the needs and und
erstanding of recipients, careful and clear
reporting at all levels and expressing information clearly and concisely. Avoidi
ng the use of jargon, professional terms or
abbreviations is important, as is using more than one communications system if a
ppropriate. The encouraging of dialogue
rather than monologue reduces barriers, as does ensuring that there are as few l
inks as possible in the communication chain.
Above all, ensuring feedback will assist with overcoming communication barriers.
10
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Marks
1 (a) Explanation of Herzberg s Theory and relevance to the scenario. Up to 10 mar
ks
(b) Description of Handy s organisational culture (Role). Up to 5 marks
(c) Description of Mintzberg s machine bureaucracy and recognition of the inapprop
riate structure and culture that explain the
supervisors attitude. Up to 15 marks
(d) Explanation of ways to resolve the problems. Up to 10 marks
2 Brief description of the characteristics. Up to 15 marks
3 (a) Explanation of the purpose of the selection interview. Up to 4 marks
(b) Advantages and disadvantages of:
(i) the face to face interview. Up to 6 marks
(ii) the panel interview. Up to 5 marks
4 (a) Brief description of the four stages in the experiential learning cycle. U
p to 4 marks
(b) Description of the learning style and their implications for training progra
mmes. Up to 11 marks
5 (a) Meaning of content theory. Up to 5 marks
(b) Meaning of process theory. Up to 5 marks
(c) Meaning of equity theory. Up to 5 marks
11
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Marks
6 (a) Brief explanation of the importance of good communication. Up to 5 marks
(b) Brief explanation of five barriers to communication.
(One mark per point) Up to 5 marks
(c) Brief description of overcoming barriers. Up to 5 marks
12
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Paper 1.3

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