Productivity Improvement

Management Planning and Control Systems

Step 2: Measure and compare actual with planned results

As with setting standards, the objectivity of the measurement and the person who measures and compares the performance are important. Measuring and comparing can be accomplished by the person performing the task, by the boss, or by a staff person; even an automated system can measure and compare. From a behavioral standpoint, the last method is the least popular, followed by measurement by a staff person only.

An employee believes an automated system, a staff person, or even the boss does not know enough about the conditions of the job to make a fair comparison between actual and planned results.

Also, the employee often distrusts the staff person and sometimes even the boss. At the same time, the employee is usually not trusted enough by the company to perform the measurement and comparison alone. The best solution is to have the measurement done by the person most trusted by the employee and to allow the employee some input.

Behavioral Responses to Control Systems

When employees have relatively low trust in a control system, they sometimes behave in various ways that are harmful to the organization. They may do what is required by the system.

For example, when bonuses for salespeople in a department store were based on sales volume, many employees soon lost interest in customers who did not immediately purchase an item, and they spent little time helping customers, making merchandise attractive, or performing stock work.

Quite often employees will report data in such a way that performance will look good for a particular time period. Some control systems will also cause employees to report invalid or misleading data about what can be done.

For example, it is not uncommon at budget time for managers to ask for larger amounts than needed if they believe their requests will be reduced. In many organizations budget setting sessions are largely negotiating games with little effort given to establishing realistic standards. The advent of computer-based management information systems has also caused invalid data to be provided. These systems sometimes require historical cost, production, and other data that are simply not available and cannot be provided. When pressed, however, the data are estimated, often inaccurately.

Finally, control systems that employees view as clearly threatening will cause strong resistance, perhaps the best example of this is automatic data systems. These systems create new experts with much power, are often not well understood, and, therefore are feared by many employees.