ACCA paper 1 3 managing people 2005 answ 2

Answers Part Examination – Paper 1.3 Managing People June 2005 Answers Overview A grievance occurs when an individual thinks that he or she has been wrongly treated by colleagues or management, especially in disciplinary matters An unresolved feeling of grievance can often lead to further problems for the organisation The purpose of procedures is to resolve disciplinary and grievance issues to the satisfaction of all concerned and as early as possible If a grievance perceived by an employee is not resolved, then conflict and discontent 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 should 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 employee 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, especially dismissal Suspension or Lay-off If an offence is of a serious nature, if the employee has repeated an earlier offence 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 within an organisation This is a very serious step to take and can be regarded as a form of internal dismissal This course of action 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 extreme 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, especially at the more serious stages Part (b): Oliver may feel he has a grievance as a consequence of treatment which he perceives 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 procedures David Morgan did not follow this procedure No informal talk took place which might 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 Henderson at any level of the organisation and regardless of their status Managers must have suitable training in procedures and be provided with background as to how grievances can occur in the first place Grievance procedures must be regarded as beneficial and not threatening If an employee has a grievance, he or she should be able to pursue it and have the problem which has led to the grievance resolved A formal grievance procedure must be available, set out in writing and accessible 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 each 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 manager must become involved – The interview between the employee and manager takes place with the employee being 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 employees Finally, the procedure must be time limited Allowance must be made for the involvement of a trade union, staff association or individual support (if desired) at an appropriate stage in the procedure At Hoopers and Henderson, Oliver has attempted to discuss the issue with his immediate manager (David Morgan) but without success He has therefore followed the procedure, but to continue correctly, Oliver must have taken up his grievance with the manager next in seniority to David Morgan, who in this case is the partner responsible 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 The 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 partner 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 appointment The second stage is the consideration stage This is undertaken by the appropriate 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 or 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 Overview: The accountant is frequently the manager or group leader An understanding of leadership 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 two 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 these two basic leadership dimensions These two dimensions were placed as the axes on a grid structure now known as the Managerial Grid A person who scores on ‘concern for production’ (the x axis) and on ‘concern for people’ (the y axis) is known as a 7,5 leader 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 smallest 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 that 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 achieve 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 production 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 dimensions 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 people, 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 basis 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 organisation 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 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 specification is of greater value in the professional sector, where it is inappropriate to assume repetition and where there is a greater degree of discretion in performing the task Part (a): (i) A person specification - also referred to as a personnel specification – provides 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 task 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 from a job analysis and defines the position and role that has to be fulfilled It is a statement of the component tasks, duties, objectives and standards It describes the purpose and relationships of the specific job together with the physical, social and economic 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 person specification sets out the qualities of an ideal candidate whereas a job description defines the duties and responsibilities of the job 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 whether an individual’s personality, abilities and experience match the organisation’s requirements For promotion, to evaluate whether an individual has the necessary ability and personality to move within the organisation In evaluation of performance to assess whether the person has demonstrated the necessary skills to the job effectively In disciplinary procedures through demonstrating that the person specification required to a particular job for which some one was appointed are not evident or being applied For example, where an employee required to be discrete is discovered to have disclosed confidential information to third parties 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 are 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 employee 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 confirming 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 all the required details A standard form should ask about the existing job title, the main duties and responsibilities of the current 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 most referees are well known to the applicant and hesitate to say anything critical However, the more skilful reference reader learns 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 performance, are time consuming for the referee and the subsequent reader A particular problem is that employers who want to rid themselves 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 recruitment process and therefore breach confidentiality 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 managed 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 motivation Hygiene factors (or ‘dissatisfiers’) are concerned with those factors associated with, but not directly a part of, the job itself Herzberg suggested that these are mainly salary and the perceived differences with others’ salaries, job security, working conditions, the level and quality of supervision, organisational policy and administration and the nature of interpersonal relationships Resolution of hygiene factors, however, is short term, longer term resolution requires motivator factors 10 (b) Motivators (or ‘satisfiers’) are those factors directly concerned with the satisfaction gained from the job itself Herzberg suggested that these included a sense of achievement, the level of recognition of the employee, the intrinsic value felt at the job itself, level of responsibility, opportunities for advancement and the status 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 self 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 Overview: The need for clear and concise communication and the consequences of poor communication must be understood by a profession which exists to provide information to others Poor communication leads to ineffective control, poor co-ordination and management failure Part (a): Good communication ensures that individuals know what is expected of them Co-ordination takes place within the organisation and there is control of the organisation’s plans, procedures and staff Instructions of management need to be clearly understood in assisting group and team cohesiveness and reducing stress from misunderstood instructions Bias, distortion and omission is removed with clear communication, as is secrecy, innuendo and rumour Good communication 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 communicating, including language differences between staff, management and customers The use of jargon, especially by professional and 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 communication 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 communication overload; too much information being communicated at one time leading to confusion Distances involved and the subsequent use of different communication facilities is a barrier, leading to misunderstandings based on problems noted above Finally, and perhaps most importantly, distortion of the information transmitted 11 Part Examination – Paper 1.3 Managing People June 2005 Marking Scheme Part (a) Description of the six steps in the procedure (Two marks per step); (up to 12 marks) (Maximum for part (a) 12 marks) Part (b) Explanation of grievance (up to marks) (Maximum for part (b) marks) Part (c) Description of the main stages of a formal grievance procedure (Two marks per step); (up to 10 marks) (Maximum for part (c) 10 marks) Part (d) Description of the three stages of a grievance interview (Three marks per stage); (up to marks) (Maximum for part (d) marks) (Maximum for Question One 40 marks) Part (a) Description of the Management Grid (up to marks) (Maximum for part (a) marks) Part (b) Examples of ‘scores’ (One mark per ‘score’) (up to marks) (Maximum for part (b) marks) Part (c) Discussion of the usefulness of the grid (up to marks) (Maximum for part (c) marks) (Total for Question 15 marks) 13 Part (a) (i) Description and understanding of person specification (up to marks) (ii) Description and understanding of job description (up to marks) (Maximum for part (a) marks) Part (b) Recognition of differences (up to marks) (Maximum for part (b) marks) Part (c) Description of purposes (up to marks) (Maximum for part (c) marks) (Total for question 15 marks) Part (a) Description of the purpose of references (up to marks) (Maximum for part (a) marks) Part (b) Description of the contents of a reference (up to marks) (Maximum for part (b) marks) Part (c) Outline the problems with references (up to marks) (Maximum for part (c) marks) (Total for Question 15 marks) Part (a) Description of hygiene factors (up to marks) (Maximum for part (a) marks) Part (b) Description of motivators (up to marks) (Maximum for part (b) marks) (Total for Question 15 marks) 14 Part (a) Explanation of the importance of good communication (up to marks) (Maximum for part (a) marks) Part (b) Description of five barriers (Two marks per barrier, one for identification, one for description) (up to 10 marks) (Maximum for part (b) 10 marks) (Total for Question 15 marks) 15 ... 11 Part Examination – Paper 1. 3 Managing People June 20 05 Marking Scheme Part (a) Description of the six steps in the procedure (Two marks per step); (up to 12 marks) (Maximum for part (a) 12 ...Part Examination – Paper 1. 3 Managing People June 20 05 Answers Overview A grievance occurs when an individual thinks that he or she has... for people? ?? (the y axis) is known as a 7,5 leader Part (b): Blake and Mouton analysed the extreme scores as: 1, 1 – Impoverished Management low concern for production and low concern for people