MGT601 - SME Management - Lecture Handout 29

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Conditions that Stimulate Learning

  • Behavior of Boss
    Boss is the key figure in an organization. Others tend to emulate him. Every meeting between boss and subordinate presents a teaching learning situation. If the boss favors training and development, the subordinates tend to become positively inclined to learn. Therefore, the boss should exhibit a tendency towards learning and training.
  • Behavior of Informal Group.
    Informal groups set the behavior norms for its individual members. It may either support or resist the introduction of any change. If the informal groups support training, measure would find a motivated group inclined towards obtaining it.
  • Influence of Formal Organization.
    The organizational structure, policies, procedures, objectives etc. reflect and reinforce the behavior which the formal organization prizes. For instance, if the company keeps the top management within the family or has rigid control, would little opportunity for growth. Learning is stimulated when there is openness, lack of constraints and climate of exploring new ideas and the objectives of the organization support training and development.
  • Economical &Technological Influence.
    A rapidly growing company in an expanding field offers more opportunities through training.
  • Performance Appraisal
    It is a form of counseling and coaching. It is used for defecting and correcting errors. It is the process by which owner gathers information about each employee’s performance, effectiveness and communicates the same to employee. It includes
    1. Establishment of Standards.
    2. Recording of Performance.
    3. Reviewing of Performance in accordance with Standards.
    4. Taking Corrective Action
  • Purpose of Performance Appraisal
    1. To evaluate performance over a specific time.
    2. To motivate employees through performance feedback.
    3. To evaluate individual employee’s potential for growth and development.
    4. To collect information for decision making.
    5. To evaluate effectiveness of training program.

Limitations of Performance Appraisal

  1. Limitation of Job Description
    People are unique. The same job may be performed differently by different people. The same is true of conditions within the organization. While framing position description, the managers attempt to find some congruence between the job description and their knowledge of requirements. No wonder, the position description may not be totally correct.
  2. Inadequacy of Appraisal and Problem of Reliability
    Many of the items that are included in appraisal such as initiative, quality of work, cooperation, adaptability etc. are subject to personal standards of the appraiser. Bias and prejudice are common failings of every individual. Therefore no appraisal can be considered as absolute. Due to these defects, ratings tend to vary widely and raise doubts about their reliability.
  3. Impediments in Communication
    Managers insist on fair criticism, based on performance appraisal. The employees, however, regard it as censure and tend to adopt a defensive mechanism against it. Therefore, there arise conflicts which make the goal of appraisal self-defeating.
  4. Failure to Motivate
    Appraisal procedures are not designed to provide motivation impact. The urge to change must come from within the individual. There is too long a gap between the act and its consequence and hence its failure to play any significant role in motivating the employee.

Employee Morale

Morale is the attitude of the employee towards factors in the work environment such as job, pay, superiors etc. Since it is an attitude, it can not be measured as the profits. Therefore indirect techniques are used to measure the morale.

Indirect Techniques to Measure the Morale

One such technique is” survey” in it employees are asked to check how they feel in a particular factors in a company. Another method of collecting morale data is” descriptive” survey wherein employees are asked to provide descriptive answer to question.

  1. Indicators of employee morale:
  2. High employee turnover ratio.
  3. Higher number of accidents.
  4. Lower productivity.
  5. Increased number of defective output.


Disciplinary problems arise due to lack of knowledge, Lack of interest and Carelessness. The following acts call for disciplinary action:

  1. Disorderly conduct: reporting for work under the influence of liquor.
  2. Dishonesty
  3. Obtaining employment by using false or misleading information
  4. Violation of safety procedure
  5. Gambling
  6. Excessive Tardiness
  7. Insubordination.

Types of Discipline
Progressive Discipline

It consists of minimum disciplinary action for first offence. The degree of punishment increases for subsequent violations. It may be in the form of oral warning, reprimand, written warning stating consequences of future violation, disciplinary lay off, demotion, discharge etc.
It should have following ingredients:

  1. A forewarning
  2. Immediate action
  3. Consistent
  4. Impersonal administration

Positive Discipline

  1. It is the most effective type of discipline since it corrects and strengthens an individual. Guidelines in this behalf are:
  2. Disciplining should be done in private and never in front of fellow employees.
  3. Concentrate on mistakes than on individual.
  4. Listen to the employees so as to get complete facts and clarify misunderstanding.
  5. Explain not only that something is being done incorrectly but also on as to why employee should be doing it the other way.
  6. There must be no favorites and privileged.
  7. Provide for appeal against decision considered unfair.

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