Organizational management encompasses a broad range of factors, initiatives, and processes. The quality of management and leadership decisions largely predetermines the quality and efficiency of organizations’ performance. It is no wonder that few managers have knowledge, skills, and capacity to take relevant leadership decisions. It is no wonder that leadership remains the issue of hot organizational concern. Dramatic shifts in population and the growing diversity of employees result in serious generational, ethnic, cultural, and gender conflicts. The current state of literature and organizational development reflect the growing tension between Baby Boomers and Generation X. Differences in values and beliefs do not allow achieving a common organizational compromise. As a result, leaders are left to decide upon the best conflict management technique. Generational conflicts and poor leadership aren’t the only problems, faced by organizations. Conflicts and dissatisfaction among employees are caused by a number of factors, including misbalanced performance of management systems, ineffective and confusing goal setting, and inequity. Very often, the rewards, benefits, and incentives, provided to employees, do not meet their expectations. Given the multitude of problems and challenges in organizations, leaders must be particularly thorough in their choice of management and decision making techniques. Leaders must ensure that their choices are not confusing or self-contradictory. In these situations, holistic approaches to leadership and management are preferable. Simultaneously, before the ultimate strategy is developed, leaders and managers must review each problem separately and create taxonomy of all decisions that are likely to affect employees and the entire organization.
Leadership, Coaching, and Generational Conflict
Leadership and coaching issues in organizations are, usually, considered separately. However, with the growing diversity of staff, generational conflicts are becoming uncommon. Since leaders play a crucial role in resolving generational conflicts, these aspects should be managed and solved together. The symptoms of poor leadership, the absence of a coaching culture, and generational conflicts are obvious. Basically, the company does not have a single, accepted leader. Hank used to be the foreman, but 10 years after he was appointed to his position he is no longer considered as such. Under the influence of the union, Hank is getting too cautious in his staff decisions. He can no longer control the luggers, their decisions and performance. The luggers do not accept Hank’s superiority; nor are they willing to comply with his orders and demands. Feeling this pressure, Hank chooses to withdraw, meaning that either he leaves them alone or gives orders that are accompanied by long explanations and justifications of their importance. The guilt and fear Hank experiences are difficult to conceal. Hank has transferred most supervision responsibilities to Mr. Abrams; the latter, however, is nothing but an object of mockery for the working staff, and his ever present representative Lyle has a nickname of “Puppy”.
Even the union representative cannot establish effective relationships with the staff, especially the butchers. The generational conflict between them, the luggers and managers continues to persist. The butchers constantly complain that the luggers do their job poorly, but no one ever takes their comments seriously. In the meantime, two ex-butchers who have become luggers experience serious difficulties, working in the new team. Hank is totally useless and Carl, the shop steward and a friend of the luggers, has no interest in pushing the interests of the two ex-butchers. All these conflicts reduce the effects and potential of unionization. Most employees are left to act on their own, and leaders cannot influence their decisions and actions.
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Leadership and generational conflicts are popular topics of present day organizational analysis. A recent surge in interest toward generational conflicts is justified by the profound changes in demography and the growing diversity of organizational staff. Westerman and Yamamura (2007) write that Generation X and Generation Y currently make up almost one half of the American workforce. At the edge of the new millennium, scholars in organization studies predicted that the two generations would soon face a “conflict Armageddon” (Karp & Sirias, 2001). As of today, virtually 77 million of Baby Boomers occupy top positions in private and public organizations, whereas Generation X is represented by 48 million of working adults at the very beginning of their flourishing career (Karp & Sirias, 2001). Organizations constantly change; and so is the structure of the workforce. The percentage of Generation X workers constantly increases, whereas Baby Boomers gradually give up their positions. In this atmosphere, Baby Boomers often feel off the board, as organizations typically look ahead and try to adjust their practices and values to meet the needs of future generations (Westerman & Yamamura, 2007). Simultaneously, failure to consider all interests and adjust to generational differences can result in miscommunications, misunderstandings, and conflicts (Westerman & Yamamura, 2007).
Leaders and managers must realize that “an understanding of the differences between and relationship among the preferences and motivators of generations and associated work outcomes can be used as an important building block in the development of effective recruitment materials and benefits packages” (Westerman & Yamamura 2007, p.151). In other words, leaders need to know what exactly their intergenerational employees expect from them (Wieck, Prydun & Walsh, 2002). Certainly, intergenerational relationships are not as negative as they seem: more often than not, intergenerational relationships have the potential to become an essential prerequisite of effective management and decision making in organizations (DiRomualdo, 2006).
The role of management and leadership in conflict resolution has been abundantly established. Harvey and Haines (2005) write that it is not just what managers do during the conflict that matters but how they implement their strategies and decide upon the best strategic initiatives and choices. Leaders are also expected to be attentive to the ways employees react to their decisions (Harvey & Haines, 2005). Different organizations view leadership and management in completely different ways. Throughout years, management scholars sought to develop a clear hierarchy of leadership principles to be applied in organizations; the numerous dimensions of leadership were labeled variously, from goal achievement and task ability to authoritarianism, autocracy, and effectiveness (Blanchard & Hersey, 1996). Here, the line of distinction between leaders and managers needs to be drawn: managers are to use legitimate power and push employees toward the desired goal, but leaders are to use their charisma and influence and motivate followers toward these goals (Isaac, Zerbe & Pitt, 2001). Isaac et al. (2001) recommend that effective workforce should be comprised of leaders, rather than employees; simply stated, motivation and empowerment are the vital predictors of organizational efficiency and success.
Leadership models are various. Transformational leadership is designed to broaden the interests of employees, meet the purpose and mission of the organization, and motivate employees to operate beyond their capacity and look beyond their self-interests (Humphreys, 2005). Servant leaders, in turn, rely on their charisma and care for employee interests (Humphreys, 2005). Irrespective of the leadership style, leaders must provide direction and motivate their followers; otherwise, the lack of direction and motivation leads to organizational lethargy (Folaron, 2005). This lethargy further adds complexity to the existing intergenerational conflicts and turns into a serious barrier to developing reciprocity and trust in employees.
Food Merchandizing Corporation faces several options. First, managers can leave the situation unchanged; the luggers and the butchers will have complete freedom of action and decision making and, as a result, will be able to solve their problems without anybody’s help. Unfortunately, in this situation, the conflict between the butchers and luggers will persist. The quality of organization’s performance will suffer. According to Westerman and Yamamura (2007), generational differences exemplify a serious source of conflict in organizations. Old timers are seriously dissatisfied with the quality of their relations with the luggers, and the conflict may even push them to strikes and refusal to fulfill their workplace obligations. However, the company may also reconstruct its approaches to leadership, management, coaching, and generational conflict. Most probably, these initiatives will demand considerable time and effort but, at the end, these initiatives will reduce the existing generational gap between the luggers and the butchers, strengthen their workplace motivation, and meet their expectations and needs.
To begin with, the company must learn what exactly the representatives of the two different generations want from their jobs. Of particular importance are the interests and expectations of the younger generation, since they will support and drive the organization in the future. The luggers are what Wieck et al. (2002) call the “twenty-something generation”, and this generation wants to be led, not managed. Therefore, the organization can initiate a survey of feelings, interests, desires, and expectations held by workers. This is the best way to understand what exactly the workers expect from their leaders. This is also how leaders and managers can ensure that the goals they set and the rewards they provide in return are personally valued by the workers (Isaac et al., 2001). Once the results of the survey are known to managers, the development of a new servant leadership worldview will re-orient the organization towards meeting the needs and desires of employees. The survey will also help to expose the main elements required to make workers more effective; this knowledge will become the basis for developing and sustaining a culture of coaching at all levels of the organization’s hierarchy (Lindbom, 2007).
Goal setting is one of the basic problems, observed at Food Merchandizing Corporation. The problem is not in that the quality of goal setting processes is poor, but that goal setting is virtually absent at all levels of the company’s performance. Neither the butchers nor the luggers have specific performance goals to achieve. Both groups of workers fulfill monotonous tasks. Despite the absence of explicit goals, the butchers and the luggers display different levels of motivation. The luggers perceive their workplace performance as a source of additional earnings (tips), whereas the butchers are highly de-motivated to perform their work better, due to the absence of challenging goals, regular performance feedback, and encouraging rewards. Power misbalances and generational conflicts, further, complicate the situation; as a result, the butchers and the luggers cannot achieve the point of cohesion as they are working on their workplace tasks.
Goals and performance are directly related. The more difficult are the goals the better workers perform (Hollenbeck & Klein, 1987; Locke & Latham, 2002). Since employers and employees can never change the past, they can focus on the future of their work: performance is prospective and it is always wiser to pay more attention to setting correct goals (Lee, 2005). According to Locke and Latham (2002), goals affect performance via four basic mechanisms: first, they fulfill a directive function; second, they energize; third, goals influence employee persistence and the time they spend on fulfilling their tasks; and fourth, goals and performance are indirectly related, as they lead to arousal and result in the creation and use of task-relevant knowledge and skills. In this context, the concept of participative goal-setting deserves the major attention, as participation was found to increase goal acceptance and commitment to challenging tasks (Erez, Earley & Hulin, 1985).
Food Merchandizing Corporation does not have too many decision options here. Basically, the company can choose between setting explicit goals and setting no goals at all. In its current state, the company managers do not do too much employee supervision; as such, employees are left free to deal with their tasks and complexities. This situation does not help to resolve the power misbalances and struggles between the butchers and the luggers. The conflict does not simply reduce performance but does not let the workers express their preferences and choices. The situation is particularly challenging with the butchers who have little interest in contributing to the organization’s improvements. Simultaneously, new difficult goals may first discourage the workers from achieving them; most of them are already used to monotonous work and do not want any limits, set on their performance. However, effective goal setting does not necessarily result in close supervision; Food Merchandizing Corporation can develop a series of goal setting mechanisms that empower employees to enhance their performance.
In order to remain competitive, companies must ensure that employees are enthusiastic about the goals, assigned to them (Humphreys, 2003). Participative goal setting is what the company needs to motivate its luggers and butchers. The role of participation and self-expression in goal setting has been widely documented. Self-set goals make people more committed to these goals (Locke & Latham, 2002). Self-set goals motivate people to seek better task strategies and respond constructively to negative feedback (Locke & Latham, 2002). The butchers and luggers must be involved in goal setting on equal terms, with no regard to their personal characteristics. Participation will result in greater acceptance of these goals (Erez et al., 1985). Participative goal setting will lead to three considerable performance benefits: (a) it will reduce resistance to new goals; (b) it will help to resolve the conflict between the butchers and the luggers, uniting them around collectively set goals; and (c) it will also mediate the power misbalances between the workers.
Food Merchandizing Corporation provides warehouse operations in a small city of New Jersey; the company stocks certain goods and, later, ships them to various stores. In the meat department, operations are held by the two groups of workers – the luggers and the butchers. The main controversy comes from the invention of portable rails and the redistribution of functions that resulted. A few years ago, the work of the butcher was considered preferable, due to its monotonous character. Butchers required great skills but did not have to sweat like the luggers who were loading and unloading docks. With the invention of portable rails the work of the luggers became much easier and much more profitable financially. It comes as no surprise that the butchers resist to this type of innovation; the latter also stand in Hank’s way to productive foremanship.
Change and resistance go hand in hand. Organizational change is one of the most frequently discussed topics in literature. Effective changes in manufacturing and related organizational processes must undergo a series of stages, without which these changes may render themselves ineffective. First, all existing processes have to be reviewed against new strategic directions (MacMillan & Tampoe, 2001). Second, no change is possible without gaining managers’ agreement to the process changes (MacMillan & Tampoe, 2001). Third, it is imperative that the criteria of change effectiveness are developed and implemented (MacMillan & Tampoe, 2001). Eventually, the new process and its organizational implications must be made public for the rest of the staff (MacMillan & Tampoe, 2001). None of these was followed at Food Merchandizing Corporation. Managers’ agreement was not obtained; the luggers did not develop the criteria of change effectiveness and did not make the change public to other employees. Moreover, the overall effectiveness of their operations did not change. Nevertheless, the change in processes shifted the philosophy of performance among the luggers and caused huge dissatisfaction among the butchers who could not benefit from the invention. This raises the question of overcoming resistance to change.
Different researchers propose different ways to deal with change. Coghlan (1994) lists rejection of outsiders as one of the main sources of resistance (this is what, actually, happens at Food Merchandizing Corporation) and suggests that team building be used to provide the medium and relevant targets against change resistance. Atkinson (2005) suggests that everything should begin with recognizing resistance as natural and inherent to all change processes. Finally, according to O’Connor & Fiol (2006), employee involvement in all change processes, empowerment and participation, and the development and communication of clear objectives are all prerequisites for achieving change goals and overcoming resistance to change.
Food Merchandizing Corporation may leave the situation intact and let the workers produce and lead innovations and change on their own. In this situation, the conflict between the luggers and the butchers will reduce the relevance and efficiency of the proposed innovations. Resistance to change will continue to increase. Simultaneously, the company may also reconsider the ways the two groups of workers interact, identify the reasons of change resistance, and invite all employees to turn change to their common benefit. The latter option is preferable, although not all managers may be prepared to recognize resistance as natural and inseparable from change (Atkinson, 2005). Most probably, managers will need additional motivation and incentives, to have enough strength and willingness to overcome employee resistance, but this is the best way to achieve the desired strategic results.
All changes at Food Merchandizing Corporation must follow a set of patterns and procedures. The best is to develop a policy of organizational change, which all workers and managers will need to follow. The policy will require that all changes/ innovations be made with managers’ agreement (MacMillan & Tampoe, 2001). Once implemented, a new process will have to be made public to the entire staff (MacMillan & Tampoe, 2001). It is imperative that the process of change at Food Merchandizing Corporation becomes open and interactive: for this reason, managers and workers will be obligated to hold conferences and meetings and encourage the staff to communicate their opinions and concerns, regarding the new and proposed change processes (O’Connor & Fiol, 2006). The company should regularly survey its workers, to identify and overcome the main barriers to change.
The symptoms of the conflict in Food Merchandizing Corporation are more than obvious. More important are the reasons of the conflict and possible ways to resolve it. In the discussed situation, conflicts originate from the three main sources: (1) generational differences; (2) inequity of incentives and rewards; and (3) resistance to organizational change. The luggers and the butchers live different personal and workplace lives. Their values and commitment differ greatly. The butchers resist to the change, proposed and promoted by the luggers. The former also feel that they are treated inadequately, as they have to work additional hours for half of the pay the luggers make in a few hours.
Employee relations are extremely complex, and every single employee faced a workplace conflict at least once in a lifetime. 95 percent of all conflicts in the workplace are by the problems with rewards and performance appraisal, promotions and vacations, and similar issues (Reynolds, 1998). Conflicts are indispensable ingredients of employee routines. This is why researchers are trying to define and address the most frequent causes of conflict in the workplace. Dreu & Vianen (2001) write that people who work together in one team strive to develop productive relationships and avoid task related issues. Dreu and Vianen (2001), further, suggest that teams fail to be productive, when team members cannot develop a relevant team climate and or agree on the common values, political norms, tastes, and other issues. Inequity in teams is not uncommon, and it is perceive inequity that often leads to conflicts in organizations. Based on equity theory, individuals tend to evaluate the quality of their interpersonal relationships by evaluating the ratio of their own and others’ inputs and outcomes (Huseman, Hatfield & Miles, 1987). Logically, employees will perceive their interpersonal relationships as fair and equal, if the ratio of their inputs and outcomes is equal or at least close to that of others (Harder, 1991). One of the main questions is how to manage and resolve the conflict. Kohlriser (2007) lists six essential skills for managing conflict: (1) creating a relationship bond with the adversary; (2) establishing a dialogue; (3) communicating openly; (4) understanding the causes of the conflict; (5) using the law of reciprocity; and (6) building and sustaining a positive relationship. These skills can be successfully applied in a variety of business situations and support companies in their transition to the new levels of trust and efficiency in the workplace.
Managers at Food Merchandizing Corporation may try to resolve each conflict and address every cause of the conflict separately. However, most likely, they will not be able to prioritize among them. Moreover, as the discussed causes of the workplace conflict are closely interrelated, failure to address the issue complexly and creatively will reduce the efficiency of short-time, single-moment initiatives. In this situation, there is no way better than engaging all workers in an open discussion of all issues that lead to the conflict. Based on the information, provided by the workers, managers will have to build a new system of relations between them and the employees.
The set of recommendations, provided by Kohlriser (2007), will create the groundwork for resolving organizational conflicts within Food Merchandizing Corporation. However, the sequence of the conflict resolution actions, proposed by Kohlriser (2007), will have to be changed. It is better to begin with establishing the dialogue and defining the main causes of the conflict; in other words, the workers need freedom to express their concerns. This is particularly the case of the older generation – the butchers who are confined to fulfill their monotonous work at 35o. The company may initiate a general meeting of managers and employees, with the mandatory participation of union representatives, to ensure that the conflict does not turn into litigation. The union representatives have experience and knowledge conflicts, and they will support managers, as the latter develop a small conflict management training session for the workers (Reynolds, 1998). The presence of union representatives is, further, necessitated by the fact that the issue of rewards equity is involved. These equity issues are discussed below.
Performance Appraisal and Motivation
The performance appraisal system at Food Merchandizing Corporation is deeply flawed. The luggers and the butchers fulfill mostly similar tasks, but the rewards they get for their contribution to the organization’s performance vary considerably. On the one hand, luggers are being paid twice as much as the butchers. On the other hand, the luggers exercise a privileged position in the organizational hierarchy, as they are able to use their rails innovation to earn tips. The company lacks a clear and comprehensive system of performance appraisal; it is no wonder that the butchers are not motivated to improve their performance.
The lack of motivation and feelings of inequity in Food Merchandizing Corporation expose managers’ failure to establish a comprehensive and efficient performance management system and, simultaneously, points to the dangers of having employees rewarded by pay only. Again, as it is in case of the organizational conflict, equity theory comes into play. Equity theory is one of the most frequently discussed topics in the context of performance appraisal. As previously mentioned, employees build their performance on the expectations they hold in terms of their jobs, and the degree to which these expectations are met. These expectations, further, motivate or discourage employees to fulfill their obligations productively (Isaac et al., 2001). Equity is directly related to performance, as employees perform much better and work more persistently, when they feel that their inputs in the organization’s performance are rewarded equally or at least similarly to the same inputs, made by their colleagues (Huseman et al., 2007).
Motivation is at the heart of contemporary organization research. As the level of market competition increases, employees seek to motivate their workers to do more and better job within a shorter period of time. Most employees naturally believe that motivation is directly related to performance; in reality, “the relationship between effort and performance was likely mediated by human perceptions, traits, and abilities” (Humphreys & Einstein 2004, p.61). These features and attitudes must be taken into consideration, when managers develop and implement performance appraisal systems. The quality and efficiency of performance management systems depend upon a huge number of factors, which include but are not limited to goals (Kerr, 1975), financial pay (Mani, 2002), the quality and comprehensibility of performance criteria and metrics (Hammer, 2007), and the presence or absence of timely feedback (Lee, 2005). Organizations must remember that performance management and appraisal systems can damage employee performance and reduce their commitment to their strategic goals; the lack of non-monetary incentives and the absence of quality feedback may reduce the validity of the performance appraisal model (Pfeffer & Sutton, 2006).
Food Merchandizing Corporation may, further, avoid developing and implementing a clear system of performance appraisal, with the hope that the luggers do well with their tips and the butchers, because of their age, will soon leave the company to be replaced by younger workers. The latter will find ways to motivate themselves. However, this is not the best approach to motivation. Motivation is an extremely complex construct, based on employee self-concept, congruency of goals, and task complexity (Humphreys & Einstein, 2004). The butchers lack motivation and, once the tips stop coming, the luggers will be no longer motivated to work. The development of a performance appraisal system will cause serious resistance among employees and managers. For many years, Hank and other managers enjoyed the benefits of laziness and did not do anything to develop performance appraisal metrics (Hammer, 2007). It may happen that the company will need to replace its managers and either hire new ones or promote employees from the lower positions. Yet, these costs are a trifle compared to what the company loses because of inadequate goals and rewards.
The quality of performance appraisal and rewards is directly associated with goal setting. The benefits of participative goal setting were described earlier. Here, managers will need to invest their efforts and knowledge in the development of performance appraisal metrics (Hammer, 2007). Food Merchandizing Corporation should not lose itself to the misleading assumption that measuring performance is easy (Hammer, 2007). Months may pass before the company achieves the best balance of achievements and rewards. The systems of rewards should be reviewed, too. First, no tips should be allowed among the luggers. Second, the rewards, the luggers and the butchers get for their work, should correspond to the complexity of their tasks. Third, workers should be rewarded for their innovations, if these are implemented in accordance with the company’s change policy (discussed above). In this way, all workers will develop a better sense of perceived equity (Huseman et al., 2007; Isaac et al., 2001). Finally, the new performance management and rewards system should offer non-monetary incentives: most employees feel motivated by pay, but they all need recognition and support (Mani, 2002). Managers will need to find ways to enrich the jobs, especially among the butchers (Herzberg, 2003). Regular feedback will reduce the judgmental nature of performance appraisal, making it more informative and humanistic (Lee, 2005).
The situation in Food Merchandizing Corporation suggests that employees seek to avoid micromanagement by all possible means. The lack of control over the luggers implies that, even if managers wish, they will not be able to control the subordinates’ actions. Yet, that does not mean that the company is secured from the risks and fallacies of micromanagement. The company needs to establish the clear lines of management and control and, at the same time, maintain autonomy and freedom among employees as long as they meet the organizational goals and objectives.
Contemporary scholars and practicing managers treat micromanagement as the source of numerous controversies and the phenomenon that is highly undesirable in organizations. Marino (1998) writes that micromanagers lack imagination; they create chaos over minor issues and leave employees little freedom of action. Micromanagers are those who appoint themselves to oversee all major and minor staff operations (Presutti, 2006). Although oversight and control are important, most employees perceive micromanagement as oppressive, abusive, and omnipresent (Presutti, 2006). The best managers can do is to make employees feel free, as they are trying to cope with their tasks. Employees need to have their roles and goals clearly defined – this is what Presutti (2006) recommends.
Hank and other managers may impose strict boundaries and control on the butchers and luggers. This decision will meet huge resistance from the employees. They disregard Hank’s authority and do not want to be monitored and supervised. The company may also choose to ignore the processes and decisions within the luggers’ team. However, they are an important element of the organization and must operate in accordance with the prescribed policies and processes.
The solution to potential micromanagement problems within the company will not be simple. Basically, managers at Food Merchandizing Corporation will need to clarify employee roles and set explicit goals (Presutti, 2006). To enhance the quality of the goal setting process, managers will have to encourage employees to participate in it. The details of participative goal setting have been described earlier.
The results of this analysis suggest that companies face dozens of major and minor management problems. All these problems and their solutions are closely interrelated. Goal setting depends on employee participation; the latter also enhances the quality of conflict resolution techniques and team performance. Yet, conflict resolution is impossible, if the company does not promote equity of rewards and incentives; here, again, participation comes into play. Equity and rewards are inseparable. They drive motivation which, in turn, improves employee and organizational performance. This being said, employee involvement should become the fundamental measure of the organization’s strategic success.