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The manufacturing manager of Webster's largest division is told to cut his managerial payroll by 15%. Provides company background data and a description of the manufacturing manager's reactions to the proposed reduction. Provides the students with an opportunity to design a strategy for making the reduction decisions and also to discuss some of the difficulties inherent in a large reduction of force. Also contains a detailed description of Webster's performance appraisal system and may be used to stimulate discussion of measurement systems.

Supplements the (A) case.

Spreadsheet supplement for case 476-110.

Deals with the organizational designer trying to create a structure, rewards, and a system of measurement that are compatible with the external environment, strategy, tasks, the members of the organization, management style, and the existing culture.

A survey of 19 companies indicates that performance appraisal is still in use even though it is difficult to carry out. It is useful in identifying employee weaknesses, assessing management potential, justifying salaries, and forcing bosses to relate employee behavior to results. Systematic and behavioral barriers hinder successful performance appraisal. Four simple procedures can help performance appraisal work: keep it simple; keep it separate; keep it contained; and keep it participative.

Supplements the (A) case.

Supplements the (B) case.

Raises questions about basing a reward system on profit and changing MBO indicators through time.

Regular use of the relaxation response counteracts the harmful effects of stress. Stress creates high blood pressure, or hypertension, through the documented "fight-or-flight" response of the hypothalamus. The relaxation response is an innate, integrated set of physiologic changes opposite to the fight-or-flight response. There are many techniques that elicit the relaxation response. Various investigations indicate that regular use of one of these can also reduce alcohol intake, drug abuse, and cigarette smoking. The business community has the opportunity to help itself and its employees by introducing these stress-reducing techniques into the workplace.

A case study examines the history of McDonald's compensation schemes for managers. The initial plans, managers complained, based compensation on sales volume, were too complicated, and used bonus payments based on supervisors' subjective evaluations which inaccurately recognized performance. McDonald's then developed four alternative plans. Four experts comment on the plans and outline various objectives: to be result-oriented, to produce extra effort, direct effort, provide compensation, encourage risk, place an emphasis on higher sales, avoid rapid upward mobility, and provide a comprehensible system which the managers find fair.

Growth in demands on the bank's "back office" required a totally new approach to management. New stress on systems orientation, objectives, measurement, process design and control has resulted in lower costs, fewer people, and higher quality. Also resulted in fear, suspicion, and alienation in middle management. How to get the benefits of change without the unanticipated consequences?

Growth in the banking field has produced new demands on the "back office." Traditional management practices in check processing and paper handling operations have resulted in ten years of cost increases and quality loss. New manager of the operating group faces an action question--can he turn the back office into a production-oriented factory?

Involves the unionization of the employees of a commercial bank by one of the big national unions. Illustrates the reasons why bank employees and other white collar employees may feel the need for union representation.

Organizational theory and practice is undergoing a crisis due to major changes in business objectives and tasks. New business is multidimensional. It is shifting from mechanical to process technology, and from manufacturing to providing knowledge and services. Proven models, such as Fayol's model of functional organization and Sloan's model of federal decentralization for General Motors, are unsurpassed, and yet, they are unequipped to deal with today's problems. New organizational design principles focus on team organization, simulated decentralization, and systems structure. McKinsey Award Winner.

An on-going study of 406 employees in 3 companies indicates the two variables that affect job retention and turnover are job satisfaction and environmental reasons, such as financial responsibilities, family ties, friendships, and community relations. Seven characterizations of psychological levels of development and work values explain why employees stay according to their level of psychological development.

Performance compensation for policy-level executives is interdependent with company policy. Survey data show that most companies use cash bonuses and some additional compensation while few companies rely on stock options alone. The character of the bonus system is interrelated to the company's growth. The range of possible payoffs and the variability of bonuses increase, and bonuses become more directly related to performance as a company expands.

Conventional approach to performance appraisal forces managers to make judgments on the personal worth of a fellow employee. An effective alternative is employee self-evaluation. This requires that they think about their jobs, assess carefully their own strengths and weaknesses, and formulate specific plans to reach their goals. The superior's role is to help correlate the employee's self-appraisal goals and plans with the concerns of the organization. This system places the major responsibility on the subordinate, and shifts the emphasis from appraisal to analysis. The Supplement, Chairman Mac in Perspective, by W.G. Bennis, provides an evaluation of McGregor's work.

An examination of the Japanese style of management regarding decision making, corporate planning, worker productivity, and management training, suggests ways in which managers in the West might redirect their approaches to these issues. Topics described include decision by consensus, lifetime employment and continuous training, and managerial godfathers. Despite existing societal tensions and frustrations, Japan's managerial achievements contain answers to Western management's most pressing problems.

Douglas McGregor's "Theory Y" fails to explain worker motivation under all circumstances. Recent studies show that there is not one best organizational approach, and that the best approach is one fitted to the nature of the work to be done. The "Contingency Theory" states that an individual's central need is to achieve a sense of competence. Competence is most likely to be fulfilled when there is a fit between task and organization. In this situation, competence continues after the achievement of initial goals.

Performance appraisal can have negative as well as positive motivational consequences, especially in "zero-sum" systems in which an employee's performance is ranked against that of his other peers. As alternatives, there are a number of "management by objectives" systems which center on the establishment of goals and the subsequent contrasting of performance with these goals. Employees are measured against agreed-upon goals rather than against each other. These systems are future-oriented, non zero-sum and flexible.