Interesting, and quite moderrn, dear Debi !

Thank you. You may lead us to analyse the Modern World...

I am not a specialist in management and HR, thus please take my answer as one coming from a layman.. and guided by observing peoiples behaviour. I believe the success of hard line managers despite bad people policies is based on fear. Employees are afraid to lose their jobs. Are driven by circumstances of their life to accept whatever level of job and payement is offered because of the lack of choices.

Fear of being fired, fear of not being able to feed their families, of being too old to be competitive, etc if they do not "obey the rules".

Actually fear is a big driver of lives... unfortunately.

Warmest regards, Michaela

Your are right, dear Debi. However, one should also take into account that a short-term victory does not necessarily imply a long-term success. Those managers and employers usually are successful only in the short run. Management and companies are to be read also in larger time-scales. There the view changes radically.

Dear Debi

A hard driven Employer out to succeed may be equally hard on himself as well as on his employees. The employees may not dislike this if he is severely hard on himself too. If he is punctual others will also be punctual. If he works hard others too will. If he does not waste time, money or energy, others too will not. So it all depends on how he too is.

In our place there is a saying 'YathhO Raja, thathhO Praja' meaning 'As is the people as the King is'

So it will not be surprising if such people do succeed. It need not mean that he is BAD

Narayanan

You are asking, why and under what circumstances, are cost-cutters and those with hard people-management policies are successful. A lot depends on the management and the workers.  It's true that short term success does not predict long term success.  But just wait till COMPETITION COMES ALONG, and the repressed workers are given a choice.  The whole work force may just migrate.

I believe that we should have good people management methods and concern for those who work for us.  And I believe that it's BY INNOVATION AND GOOD MANAGEMENT WE REALLY WIN.

"..key source of competitive advantage is proven time and again to be that they simply provide their people with better platforms for brainstorming, sharing, and experimenting with new ideas...give people more chances to speak up, share their insights and take action when new opportunities or challenges present themselves."

http://www.huffingtonpost.com/scott-steinberg/business-innovation-how-t_b_6413276.html

Bad people management happens as there are certain sets within the population who are willing to accept (or even volunteer)  the enforced controls and limits.

The locus of control for such decisions are

• Poverty
• Unemployment / under employment
• Under developed societies
• Contended / lesser expectations
• Less Job opportunities etc.,

"Bad managers tell employees what to do, good managers explain why they need to do it, but great managers involve people in decision making and improvement."

In 90% of workplace situations, I'd guess, the manager shouldn't be telling people what to do, even if they are making the effort to explain why. Great managers engage people in designing their work and they continue to engage them in ongoing improvement. As I learned from former Toyota employees and the books of Taiichi Ohno, work procedures "should not be forced down from above but rather set by the production workers themselves."

http://www.entrepreneur.com/article/237470

http://www.bizmove.com/general/m6b.htm

http://www.businessknowhow.com/manage/successful-manager.htm

I am sure that only the support of the state is a condition for the existence of weak institutions and companies. Of course such a policy is hopeless. History teaches that such communities are falling apart. What is the basis of such a policy? Shortsightedness, greed, corruption.

These days a large Italian bank announced that it will lay off 18,000 people in Europe and the quotations of the bank shot up high.

Private companies often create "bad company" to eliminate branches of enterprise, employees etc. Sometimes (often in public agencies for services) the objectives of the company change within a few months or years (this is done to accommodate economic policies who want to reduce spending by reducing the quality of service)

Putting together these three small examples perhaps we could understand  why often the high meneger choose paranoid executives that serve to discredit and de-motivate the staff and then prepare the way for more drastic measures.

In any business, only success matters. Nothing is absolutely good or bad. The strategy that works and leads to success is good unless bad.  I am not an HR management expert but I think that bad people-management policies may work in some cases or in certain situations. The probability of success even through bad HR management may be due to fear-factor as said by Dear Michaela. “You don't have to have a friendly relationship with wood if you want to light a fire” as rightly said by Dear Artur Braun. However, specific ways are recommended as good HR management practice applicable in most of the cases.

Looking over the landscape of business approaches throughout the world, much depends on whether we are talking about true enterprise that is not "helped along" by political cronyism, over-regulation that hurts competition, or blatant favoritism. But in the ideal world, where freedom is the keyword, an employee would not have to put up with corporate bullies, limited opportunities for start-ups, or monopolies by political favor. If fear is the motivator, we can be sure that there are politicians in the background and the employer is assured the upper hand in a legal showdown. In a truly free market, if one does not like the policies of a given firm they are free to gain the education and skills and go into competition with oppressive firms. To me, the employer that succeeds in making a profit in the fear and oppressive market of an uneven playing field is not a winner in the true sense of the word, but is a bully that is enabled by political favoritism and the regulatory climate created through collusion of certain politicians and their supporters. 

Stand-out HR/People Management policies alone will not make a business successful - esp. product based businesses. So many other aspects of the business model must be in place, i.e. the right product - the right place/delivery mechanism - the right price and the right promotion to make the business successful.

However, people make all the difference when it comes to pre- and post-sale support. Therefore, in businesses where a high touch with the customer is needed, the right HR/People policies can and do matter.

Regards,

rs

Plight of Indian workers abroad

Employers take away employee's passports in order to force them to work underground without an opportunity to go home and with the constant danger of being arrested by police.

Hi Debi,

I answer not as an academic but as a generalist HR practitioner with 3 decades of corporate experience.  From my experience, a great deal depends upon the senior executive and the team they set up.  That sets a culture.  If the culture is that the bottom line matters at all costs, then there is very little impact that HR can make. They may even be part of a management team, but the chance to make any changes will be limited. In a country with a high unemployment rate people are regarded as expendable, and the individuals desperate for employment - at all levels and including HR - will not challenge. 

In multi-national corporates, there is also an international culture that determines a great deal of what is prioritised.  There may also be a disregard for what the local country requirements are.  One of the challenges in South Africa is the disregard for any of the legislated transformation measures post apartheid.

The reporting structure and the level of the senior HR practitioner is also important. For example if there is an HR person reporting to the Financial executive, that will influence the priorities and direction given.

Finally, as outsourcing of services is an international trend, if the HR service is outsourced and at a distance from the day to day workings of the company, that will mean that everything communicated to HR is "translated" through the eyes of the executive providing the briefing. What may appear to be HR action is simply reaction and reflection of the overall corporate culture. 

Excellent overview, Sylvia. You covered some important points.

At first, most of managers I know (I also work in a hard nose numbers-company), will never have read such research. It is unfortunate that academics have this data, but businesspeople see this a lot more seldom. From my perspective, if I talk about the added value of people centered organizations, there is simple disbelief about this, reflected in the questions, why we even have HR. If you work in an organization that sees people (at least at shopfloor level) as a cost factor, this leads to the independence of individual people decision (such as to leave the company) as they are a replaceable asset, with non-unique competencies. When I worked in FMCG, people and their creativity were seen (in the marketing and sales offices) as the unique competitive advantage, together with the R&D brains. On shopfloor this was still a bit so, as the machines had a multiple month training time. When I look at a lot of shopfloor jobs in steelmills, these are relatively easily replaceable, and therefore the only factor to recon with here, is collective actions (unions), and hence the unions behave as such.

So in short, if the company is numbers centred/ short term, in their view the policies you describe as 'bad' are simply aligned with the industrial/cultural environment.The environment and the culture defines what people management style is seen as effective. What the effect of different leadership or management styles would be, is not tried out, as the culture filters out such experiments. Thereby it proves to them their perception tat HR is a transactional factor at shopfloorlevel at best, even though at sr management level the more 'people centred' policies are in place, as they themselves do not want to be treated as a cost-factor.

The term HR has a foundational connotation I.e. group alignment. As long as individuals group together with common agenda, goals, priority, aspirations, and attitude mapped and are in congruence, everything else remains secondary. This mapping could be beneficial and /or detrimental. Steering group / individual needs to take care.

Dear Maurizio

you are not so wrong when you labell some executives as paranoid. Please take a look at the movie "The corporation" at www.thecorporation.com

Dear Michaela, a great movie, indeed. Just to follow-up your invitation. See also "Minor report" - just en passant.

In managing people there are two approaches a hard approach and a soft approach. the hard approach looks at the numbers and is more concerned with control so as to improve the bottom line. the soft approach has to do with humane treatment in order to achieve organizational performance through commitment and the right culture. the hard approach may look as though it mistreats people and yet the organization succeeds. i guess this could be the reason you imagine the people are treated badly and yet they perform. the expectations are laid out and those employed therein understand and work as expected.

Top ten reasons managers become great

http://scottberkun.com/2009/top-ten-reasons-managers-become-great/

Think employers / managers still succeed in business even though they are following bad people-management policies might due to: 1) employee attributes, 2) surrounding environment, 3) timing.

1) employee attributes - e.g. employers / managers can use theory-X management style (which is rough, tough, less humane etc) treating their theory-X employees whom may need more control, micro-managed, scolded etc.  Hence, those employees / managers still can get works done / achieve their or organizations' objectives.  However, theory-X managers will face problem managing theory-Y employees vice-versa.

2) surrounding environment - like some scholars had pointed out e.g. when surrounded by environments like many are jobless, many organizations are retrenching, employer market etc, employees tend to give-in in order to secure their jobs even though they are unhappy & their employers / managers are exercising bad people management.

3) timing - e.g. bad people managers still can command what they demand from "poor" employees during short term.  In long run, employees will resign, sabotage, file complaint against the bad managers, take legal actions etc. which will not bring success to business.

Hence, practicing the right management style is better as the ROI is higher and the manager can last longer, anologous to doing the right things than do the things right.

It has been often noticed that Managers are born & not made .The principle of Honesty is important & necessary even in every business & personal life.

Bad people management policies is the curse to the business & the management where it involves well many employees calling for the preparation of their dark days .

With the bad policy in the initial stage they may get success as their success with under the abuse of moral cause -ethics -corrupts practices.

Dear Debi,

This is a very good observation. To understand that phenomenon we have to decide upon the metric used in evaluating "bad/good/great managers", and think that managers have been invented to take care of the ownership of shareholders who have only one interest: maximizing their profit.

In all economic paradigms in which maximizing profit represents the fundamental rule of management, managers who get good economic results are considered "good". They are task oriented and as Michaela emphasized they use fear as the main mechanism of managing people. Cut-costing and cost-leadership are practices that yield good economic results but only on short terms. In long term management, these methods may not be the best.

If we change the perspective, and consider what Peter Drucker said that business means to create value for society and not to maximize the profit, then good managers are those who balance "task oriented behavior" with "people oriented behavior". Their approach is strategic since they think for the future. 

Also, the cultural environment is very important since all decisions are based on cultural values. If in a given culture people are important, than managers take care of them. If the employees represent just a means of generating profit, then managers will have a "task oriented" behavior.

Finally, I would say that this question should be discussed with students in any school of business. I do it in the beginning of the Strategic Management course.

Rohin makes the point of ethics in management, probably the most important markers for corporate culture, as well. That culture extends from employees to product innovation and quality assurance to customer service to public relations and community participation.  The outcome is called maintaining high intergrity in fulfilling the corporate mission and minimizes employee abuse, consumer disappointment, and unfair trade practices that depend on political favor. 

Yes, we have all seen organizations succeeding in spite of their bad people management practices, and I would like to add some more factors to the discussion above: critical competency in a certain domain/ technology; a head-start over competitors in a particular business; having a niche offering; great alliances and networks that have a complementary effect; key employees loyal because of "fear" or being heavily invested.

However, these are for the short term. Just as unethical practices for creating short-term shareholder value do not succeed in the long run, poor people practices do not create long-lasting value either for employees or shareholders in the long run.

So how short is short-term, and how long is long-term? It would depend on the industry, the surrounding culture, and the times (as has already been mentioned above. If we are going through bad times, employees may stay, but quit as soon as the economy improves).

It happens because at the end of the day results trump methods but in the long run methods will eventually overtake the results. What I mean by that is when I was with NBC/GE the then CEO Jack Welch had a four block that he used to explain this. It measured Values and Results. GE wanted its leaders to have both (Values and Results). However, sometimes they had leaders that had the values but no results and vice versa. Both those types needed to get their act together. The person with the Values needed to deliver and the person with the results needed to improve their values. Unfortunately there was more tolerance for the person with the results. But as I stated earlier eventually the lack of values caught up with them and they were gone regardless of results.

Any organization has three types of people:  about 5% are star performers, 70-75% are load bearers, who carry bulk of the organizational load and contribute significantly, 20-25% are passengers, whom organization has to carry and who remain disengaged in spite of managerial effort towards fruitful engagement. There is nothing wrong in organization's  formulating exit policy for the passengers and thus cost cutting through down sizing. Critical mass in human resources is very important for optimum organizational performance. Management decisions taken by maintaining transparency, ethics and with mutual trust are good decisions, even though are hard sometimes.