Management and Human Relations
Management is described as the process of ‘getting things done through other people’. This is achieved in organizations, industries and commercial enterprises where large numbers of people are employed to achieve corporate goals. Managers collectively are the bosses, invariably highly paid and/or rewarded with shares in the company with a share of the profits. Top management agrees on objectives, strategies, and tactics to achieve the goals they set for the company they run, employing a large workforce to produce the goods and provide the services to consumers around the world.
Management theory concerned with how to get the most out of front-line workers in industrial and commercial enterprises became a 20th century phenomenon. Earlier, after the industrial revolution, large concentrations of workers were needed in mills and factories to mass-produce goods that replaced farm and craft work hitherto produced in small rural family or communal units. In those days, managers were overbearing and tyrannical when slave labor or forced labor, including child labor at starvation wages, could be deployed at the behest of the ruling capitalist class.
The world has changed since then, and the owners of capital can no longer treat labor as a disposable commodity. Trade unions, communism and universal education together with world markets meant that the old methods of almost forced, repetitive and exhausting work in the ‘dark satanic factories’ could no longer be sustained. New disciplines emerged such as economics, psychology and sociology. These social sciences were called upon to build management theories and organizational behavior that would explain and help understand the dynamics of an increasingly sophisticated and demanding workforce.
Early management theories exemplified by the work of Frederick Winslow Taylor had been colloquially described as the “carrot and stick” approach. Taylor coined the term “scientific management” for his theory, which was later simply called “Taylorism.” He tried to break tasks down into their simplest elements so that an assembly line robot could perform them without thinking. All mental work was to be removed from the shop and handled only by the managers. Taylorism is explained as the “decoupling of the work process from the skills of the workforce” and is defined as “management strategies that are based on the separation of conception from execution”. This approach worked well with early immigrants to the US with almost no English language facility and limited social or communal life, but it proved less effective with future generations.
However, in automated plants that use very high-tech solutions for 24-hour routine work with little or no human involvement, the principle still applies. The researchers acknowledge that McDonald’s and outsourced call centers (customer service operations) use these types of strategies and can boast of success in ensuring “predictability and controllability.” An up-to-date example of scientific management still at work is Malcolm Moore’s report titled ‘Bullies in China’s Shops’ (The Daily Telegraph, March 6, 2010). It describes working conditions as ‘inhumane’ for the 38,000 dormitory workers who work for one of 102 factories owned by Foxconn, Quanta or Pegatron, all Chinese companies that are suppliers of US Apple products (e.g. iPhone) to the global market. Strange as it may seem, these supplier companies are the ones that increasingly ‘propose new designs and technology’ and ‘are at the forefront’ (op. cit.). Chinese workers today seem to use their brains even without the ‘human relations’ focus!
Elton Mayo’s (1927-32) Hawthorne plant experiments at the Western Electric plant in Cicero, Illinois, gave rise to a theory that departed from Taylorism and became known as the Human Relations school to its many adherents. Douglas McGregor called Taylorism and similar top-down command-and-control approaches to work management Theory X, and instead proposed Theory Y which gives employees more autonomy and discretion at work following Elton Mayo’s approach to Human Relations. Mayo’s experiments involved changing lighting, changing work hours, and giving more or fewer breaks, which resulted in workers producing more with each intervention. The ‘Hawthorne effect’ has been summed up as employees becoming more productive because they know that prestigious people who happen to be social scientists are looking on sympathetically. These experiments demonstrated that “the psychological boost of being singled out, involved, and made to feel important” produced an increase in worker productivity.
The conclusion is that the “Hawthorne researchers… identified the importance of the ‘human factor’ in organizations (which) meant that workers were now recognized as having social needs and interests in such a way that they could no longer be regarded as the economically motivated automata envisioned by Taylorism.” However, it should be noted that there were 19th century industrialists with a Quaker background, who met the “moral and social needs” of their workers by providing housing, places of worship, and other community services. The Cadbury Chocolate Factory Bournville plant in the UK is a good example. Being included in the Human Relations school is the work of the Tavistock Institute in London, which has undertaken to study the work of coal miners. They also understood that the simplification and specialization of work did not increase productivity but gave more autonomy to the work group in organizing their work shift, producing better results. Under conditions of uncertainty, when engaged in non-routine tasks, ‘semi-autonomous’ work groups fared better than isolated individual workers.
Another theory not exclusively applicable to management, but which was a general psychological theory that supported the Human Relations school, was Abraham Maslow’s Hierarchy of Needs. McGregor called this Theory Z. Simply put, it can be visualized as a pyramid with its broad base beginning with the physiological (lowest) needs, which must be met first before requiring attention to safety needs, followed by love/affiliation needs, then esteem needs, and at the highest point, self-actualization needs.
One company that had presumably adhered to classical theories of worker motivation, but found them impractical at its cost, was Iceland Frozen Foods (The Sunday Times, March 8, 2009). Four years before the change, worker morale at the company was “in rock-bottom after 40% of Deeside head office staff were made redundant”. With a change in tack, CEO Malcolm Walker made the workforce “confident in the leadership abilities of the senior management team, giving it a top score of 73%.” As the basic needs of employees for fair wages, reasonable working hours, paid vacations, non-discrimination (sex, race, disability, etc.) are respected, i.e., equal opportunity (now legally enforced), workers will seek Maslow’s higher order needs to be satisfied through their daily work. This is what Iceland Frozen Foods was able to provide to its workforce after a change to the human relations model for treating employees.
Malcolm Walker, nicknamed ‘the king of fashion’, initiated measures to give his workers the opportunity to achieve promotions by working hard and using their brains. For example, a plant worker-turned-delivery driver rose to the position of senior supervisor in just a few years and is quoted in the article speaking approvingly of his boss. Staff at Iceland Frozen Foods are reported to not feel too much pressure… and are not prone to work-related stress. A survey of a cross-section of UK companies revealed that Iceland Frozen Foods was voted by a workforce of over 17,000 men and women as the third most successful company out of all other companies in motivating them to achieve their best at work. Here is a good example of human relations at work and giving strong support to the movement.
Another example that sheds a different light on human relations theory comes from the current trend toward globalization. Euro Disneyland, a “transplanted American theme park” near Paris, lost $34 million in the first six months since it opened in April 1992. Even before it opened there was strong local opposition threatening French cultural sensibilities. A strict dress code for employees and a ban on wine in the park (sacred to the French), among other things, angered Parisians. Eisner, the CEO of the parent company in the US, who could speak French and had a French wife, and also received many awards from the French government, still failed to make Euro Disney a going concern.
The change came as “Eisner learned to recognize French cultural traditions and quality of life, instead of focusing exclusively on American business interests, income, and profit at the expense of underlying French culture.” The relaxation of rigid rules, the removal of American-style hot dog carts, the appointment of local stewards, and the decision to use the French language in the park were essential components of his later success. The conclusion is inescapable that both ‘carrot and stick’ approaches still seem to work if the conditions are right for either approach.