Introduction
The world is increasingly becoming competitive due to the emergence of new firms in various industries. According to Phipps (2011, p. 275), firms are finding themselves under increased pressure to deliver products of very high quality, but at subsidized prices to attract customers. Delivering products of high quality at reduced prices is not an easy task.
This is because the cost of production has consistently been on the rise. Firms are finding themselves at awkward positions where they have to pay for the increased processes related to acquisition of raw materials and labor. It is not an easy undertaking for a firm to deliver products using inputs that are more expensive and still afford to charge competitive prices.
However, there is no option for these firms. They must find ways through which they can maintain their competitive prices while at the same time increasing their products’ value. It is through this that they will be assured of an increased market share in the industries they operate. In order to achieve this, firms have realized that they have to maintain high efficiency and effectiveness in their operations.
The process of delivering products to the market must be very efficient. In this case, the efficiency involves ensuring the process takes place at the least possible cost within the shortest time possible. Effectiveness will be ensured by making sure the factors of production deliver output as expected. The management must be in control of these factors of production in order to deliver the desired results.
There has been an argument that the pursuit of efficiency and effectiveness in the production process comes at the expense of the welfare of the workforce. Those who support this line of thinking argue that when the management emphasizes on production efficiency and effectiveness, it would always come at the expense of human resource. This is mainly because human resource is a factor of production.
In order to enhance efficiency, there must be a reduced cost of production in the firm. This means that in the quest to lower this cost, the management will make an effort to cut the cost of labor in the firm. This would result into a scenario where the management will try to make maximum use of labor force at the least cost possible.
This means that the management will try to exploit the workforce. This exploitation is what is referred to as lack of consideration for the welfare of the workforce. This research examines the claims that management’s pursuit of efficiency and effectiveness has been at the expense of labor’s welfare.
Management’s Pursuit of Efficiency and Effectiveness Comes
According to Bowey (2005, p. 19), the human resource is the most important asset in the organization. The above scholar argues that for a firm to achieve its objectives, it must find a way of making employees part of the objectives. The workers are always responsible for the implementation of projects in the organization. The main input of employees is directly proportional to the overall output of the firm.
When they work with motivation, their efforts will always be transferred to the overall output of the firm. The managements of some organizations have abused their employees despite their full knowledge of the impact these employees have on their organizations. These managers therefore consider using other mechanisms to ensure that employees do what is expected.
There are cases where employees are forced to undertake duties against their wish because of the threats meted out by the management. According to Waddell, Jones, and George (2011, p. 112), the era when managers used carrot and stick tactics to make employees do what they want is long gone.
Although some management units consider using punitive measures to motivate their employees in undertaking some important assignments, this strategy is outdated. When an employee works under such pressures, the drive ceases to a motivating factor and turns out to be fear. They develop fear that when they fail to do as expected and they might face the wrath of the management.
The research done by Caldari (2007, p. 64) shows that some managers over emphasize the effectiveness and efficiency of their production at the expense of their employees. In such instances, employees are forced to work for overtime hours even if it is against their wish.
In such instances, the management would demand that employees meet the set goals even if the goal is way beyond the original jurisdiction of the employee as signed during the hiring process. Some of the managements have opted to have a leaner workforce as a way of increasing efficiency. These managements consider retrenching their employees whenever they feel the organization can run with a lesser number of employees.
Retrenchment always has a ripple effect that results to massive negative effect both to the retrenched employees and to the remaining workforce. It is true that part of improving efficiency of an organization may involve having a lean, but very effective workforce. However, some managers always retrench employees in total disregard to the well-being of their employees.
The retrenched employees will have to look for alternative source of income. This will have a direct impact not only to them as individuals, but also to their families and other benefactors. To the remaining employees, their motivation will be reduced to the lowest level possible. They will be working in constant fear that at any moment, their job may be terminated.
This lack of job security is an abuse to the welfare of the employees. When other employees are retrenched, the remaining workforce will develop a sense of loss at the workplace. This is because those they had developed close ties with are forced out of the firm unceremoniously.
These scholars also believe that when emphasis is laid on the efficiency and effectiveness of the factors of production, the welfare of the employees will be forgotten. Employees are human beings with normal feelings. In order to protect their welfare, they should be awarded various incentives that will not only make them motivated in their work, but also make them renewed to deliver more in their respective areas of work.
As such, there is need to ensure that they are given fully paid leave, teambuilding seminars, end-year parties to celebrate the achievements within that particular year, a pay rise to appreciate improved productivity among other incentives. However, most managements do not consider awarding their employees these incentives when their focus in on efficiency.
They would consider the resources- in terms of money and time- ‘wasted’ in offering these incentives enough to increase part of production. As Caldari (2007, p. 61) says, whenever the management gives emphasis to efficiency and effectiveness, the welfare of the employees would be ignored.
Schwartz (2007, p. 51) says that the argument that management’s pursuit of efficiency and effectiveness comes at the expense of labors’ welfare is not valid. This scholar observes that employees are always at the core of the production process. They are part of the organization, and for a firm to be able to succeed in its undertaking, there must be the goodwill from the employees.
A firm may not operate as a distinct unit from its employees. The employees are the component of an organization, which helps in ensuring that the organization’s objectives are on the track. For this reason, when the management focuses on efficiency and effectiveness of its production process, the employees will be part of their focus.
In most cases, lack of efficiency within an organization does not mean that the welfare of the employees is well taken care of within the firm. In fact, the opposite can be said to be the truth. This is because when an organization is not efficient and effective in its production process, then it would most likely register losses.
A firm that registers losses cannot be considered able to meet the welfare of its employees. This is because it will lack the financial power to meet most of its obligations. Improving efficiency means improving every segment of a firm, with employees being part of it.
It means ensuring that every section of the organization performs optimally. It is a scenario where the focus of the management is both on the employees and on the production. Blake and Mouton’s managerial theory below helps bring out this point much clearly.
Blake and Mouton’s Managerial Grid
Black and Mouton’s managerial grid is one of the most important leadership theories in the contemporary world. The grid is as shown below. As evidenced from the above grid, the theory gives emphasis on concern for people and concern for production. As a leader, there is always a concern to ensure that the organization functions effectively (Sikula, Olmosk, Kim, & Cupps 2001, p. 18).
This can be measured by increased productivity of the firm. This theory says that productivity should not be overemphasized at the expense of employees.
Employees are very valuable to any organization and their interest should be taken care. The need for productivity should be balanced with the need to protect the employees. At level 1.1, the graph shows there is impoverished management where employees concern is not taken care of and production is poor.
At (9,1), emphasis is laid on task, while taking middle ground (5.5) would help the firm achieve its objectives moderately with moderately satisfied employees. At level 1, 9, emphasis is given on concern for employees. The best grid is at 9.9, which always referred to as team management. Employees concern is emphasized while ensuring that production is put at maximum levels possible.
Basing leadership upon this theory, a leader would need to realize that for there to be a change in the production, the change should start with the employees. The employees should feel that the management cares for them. When this is achieved, it is easier for the management to introduce change.
In order to ensure efficiency and effectiveness in the production process, the management must consider both the welfare of the employees, and the productivity of all sections of the organization. This theory above clearly demonstrates that seeking efficiency does not mean ignoring the welfare of the employees.
In essence, it means ensuring that while the interests of the employees are well taken care of, the management should maximize the productivity of the employees and other factors of production to improve the productivity of the firm. When a firm becomes more efficient and effective, it would increase its productivity and profitability in the market.
This would translate to increased financial power. With the increased financial power, such a firm can afford to offer its employees a better pay, thereby improving their welfare. Schwartz (2007, p. 84) says that focusing on the efficiency and effectiveness within the firm is a process that cannot be achieved if the welfare of the employees is ignored.
In order to ensure that employees give their best effort within the firm, there is always a need to ensure that employees are motivated, and are in support of what is being proposed by the management. There is need to ensure that the objectives of the organization is intertwined with that of employees.
Conclusion
Some scholars argue that when the management focuses on efficiency and effectiveness in the firm, there is likelihood that the welfare of the employees will be ignored. Although their arguments are factual, there is no absolute truth regarding the matter. It is not possible to ignore the welfare of the employees and succeed in achieving efficiency and effectiveness of the firm. This argument is therefore invalid based on the discussion above.
List of References
Bowey, A 2005, Motivation: the art of putting theory into practice, Organisation Advice and Research, vol. 1, no. 20, pp. 17-20.
Caldari, K 2007, Alfred Marshall’s critical analysis of scientific management, Euro. J. History of Economic Thought, vol. 14, no. 1, pp. 55 – 78.
Phipps, S 2011, Mary, Mary, Quite Contrary: In a male-dominated field, women contributed by bringing a touch of spirituality to early management theory and practice, Journal of Management History, vol. 17, no. 3, pp. 270-281.
Schwartz, M 2007, The “business ethics” of management theory, Journal of Management History, vol. 13, no. 1, pp. 43-54.
Sikula, A, Olmosk, K, Kim, C & Cupps, S 2001, A New Theory of Management, Ethics and Behavior, vol. 11, no. 1, pp. 3-21.
Waddell, D, Jones, R, George, J 2011, Contemporary Management, 2nd edn, McGraw-Hill Australia Pty Limited, Sydney.