Page 271 - Introduction to Business

CHAPTER 7 Motivating and Leading Employees 245

3. The manager then meets with each employee to work out detailed yet realistic
goals for each and also determine exactly how and when output will be
measured. As far as possible, the output must be quantifiable and verifiable to
facilitate quarterly or annual evaluation. The manager also tries to identify any
additional resources that each employee will need to achieve his or her goals.

4. The manager meets with each employee periodically to review progress and
make mutually acceptable changes to goals because of new developments in
the business environment like a regional, national, or global economic
slowdown; political instability; or a changing structure of competition caused
by mergers and acquisition activity. The original goals could have become
unrealistic given drastic changes in the business environment.
5. At the time of the annual evaluation, the manager meets with each employee
to determine if the agreed-on goals were met. The employee’s rewards—pay
increase, recognition, promotion—will reflect whether he or she met the
agreed-on goals.
Several companies practice MBO because it involves the joint setting of
achievable goals through close communication between management and employ-
ees. The disadvantages of the MBO system are its top-down approach and the fact
that top management must endorse the program; otherwise it will fail. Also, the
process could be quite time-consuming, especially if reviews are to be conducted
each quarter. Although managers try to be as objective as possible by using quan-
tifiable output measures, some tasks still call for subjective evaluation, which could
lead to some unpleasant outcomes. All things considered, MBO is being success-
fully used in many companies globally.

Use of Teams by Firms

As the workforce in a country becomes better educated and skilled, managers real-
ize that employees can be made more productive if work is organized around
groups to exploit synergies associated with teams. Teams are collections of people
who must rely on group collaboration if each member is to experience the opti-
mum of success and goal achievement. Firms use teams in the workplace due to
5
their efficiency, as measured in terms of output. Managers use the team approach
in production when they realize that the output in terms of quantity and quality of
work of the team is greater than the sum of the individual outputs of its members.
Globalization, advances in information technology and the Internet, and increased
concern over business ethics have even motivated the development of interna-
tional teams in several industries. The changing environment of business is
increasingly calling for the use of multicultural, multidisciplinary teams that can
cater to the needs of diverse domestic and international markets. Firms in the past
have successfully utilized teams in such industries as manufacturing, management
consulting, project design and analysis, and new product development, including
R&D. These days, firms increasingly utilize international teams in projects like cus-
tomized software and business process offshoring.
Researchers have identified 17 guidelines that facilitate team success. 6
1. Tolerating ambiguity, uncertainty, and seeming lack of structure.
2. Taking an interest in each member’s achievement, as well as the group’s
3. Giving and accepting feedback in a nondefensive manner
4. Being open to change, innovation, group consensus, team decision making,
and creative problem solving

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