Controlling and Evaluating

Introduction to Control
  • Due to the fact that plans, policies, and procedures are not followed perfectly by human beings and that organizations are dynamic, control systems are used to exercise a degree of control in order to take corrective actions when organizational objectives are not fulfilled.  Control systems should be used to fulfill objectives rather than to find wrongdoers and should be implemented so that they are viewed in a positive rather than a negative light.
    • For example, conflict occurs when a bureaucratic, authoritarian control system is placed upon technical professionals, particularly researchers, who generally value autonomy, freedom, and a collegial control system.  Technical professionals, however, do understand the need to control, measure, and evaluate in order to help the organization grow and remain profitable.  When doing research, technical professionals utilize control, measurement, and evaluation to ensure results are reproducible and of value to the scientific and professional community.
    • Systems for control should be established that are sensitive to the needs of technical professionals.
    • If employees distrust or resent the control system, then faked, erroneous, or missing control data may result leading to ineffective control decisions. 
  • Control can be viewed as a three-step process to correct deviations from established values or standards for performance.
    • Measuring - using formal or informal reports to determine how well progress toward objectives is being made and is accomplished by
      • developing and implementing public measuring systems and media
        • In order to show the usefulness of control systems and gain employee trust, control system measurements and results must be made public to employees affected by the control system.
      • recording and reporting performance of people and project tasks
      • analyzing and interpreting measured results
      • using results to refine the work of measuring
    • Evaluating - finding the cause of significant deviations from planned performance and possible ways to correct the deviations.
    • Correcting - take action to correct the deviation or take advantage of a favorable trend that might come out of a deviation.
      • If this step is missing, employees view the control system as worthless and may not actively support it.
  • In order to have control, certain systems must be established, such as the organizational, planning, and measurement systems that are not overburdening to the employees and not of tremendous cost to the organization.
  • Everyone in an organization is responsible for control and the flow of control information, from the executive to the technical professional.  Control information must flow to the units and people who need and can use it the most.
Control Systems
  • Control systems are organized by
    • Type of input - available resources, such as human resources, financial resources, hardware, management
    • Dimension of control - quality, quantity, time (schedule), cost (budget)
    • Time element
      • Precontrols - take place before an activity starts, such as marketing research and feasibility studies
      • Steering controls - take place while the task is being done
      • Yes-no controls - take place at specific points of a task to determine if the task results are of sufficient quality
      • Postaction controls - take place at the end of a task and compare the task results to its predefined standard
  • Tools in control systems
    • General tools in control systems include reports, memoranda, policy manuals, charts, ratios, performance requirements, and standard procedure.  More specific examples are given below.
    • Human resources
      • Quality - performance appraisal, psychological test
      • Quantity - time study, work measurement, performance appraisal
      • Time - meetings, committees
      • Cost - general tools
    • Financial resources
      • Quality - audits, work measurement
      • Quantity - budgets, profit planning, audits, work measurement
      • Time - forecast
      • Cost - profitability accounting, return on investment
    • Materials
      • Quality - statistical quality control, visual inspection, inspection instruments, work measurement, inventory control, blueprints
      • Quantity - operations manual, work measurement, inventory control, blueprints
      • Time - operations manual
      • Cost - operations manual, estimates
    • Time
      • Quality - work measurement
      • Quantity - time study, deadlines, commitments, schedules, work measurement
      • Time - forecast
      • Cost - general tools
    • Space
      • Quality - general tools
      • Quantity - productivity per square foot
      • Time - general tools
      • Cost - cost per square foot, estimates
Control System Principles
  • As a manager, you can overstress yourself and your employees by controlling too much or controlling too little.  The result of controlling too much is that employees may spend more time on controlling rather than doing their job.  In addition, they may be made to feel like they are not trusted to do their job.  The result of controlling too little is that employees do not know how well they are doing until it may be very difficult to correct a performance deviation.  They may feel unsupported and punished by the organization.
  • To facilitate control, control points should be planned strategically so that tasks are measured or reviewed at critical points.  Critical points are difficult to define since tasks are so varied, but critical points are those where some preliminary task results are available that if not done well, could impact the rest of the task negatively.  Another way of looking at it is to plan control points before significant deviations could occur and only often enough to keep significant deviations from occurring.
    • Control safeguards should be built in for any points where failures could occur.  The safeguards are alternative actions to take if a failure occurs.  Safeguards help with risk management.
    • Control "random sampling points", such as informal conversations, may be used to keep in touch with your employees and help them with questions they may have recently found.
  • Let employees know that their cooperation and high performance are welcome rather than use the control system to nitpick through their work.  They may begin to let you catch errors rather than do it themselves.
  • Corrective actions in control systems must be assigned to a responsible party with a clear set of steps and be as economical as possible.
  • Control information must be collected in a way such that its accuracy is as high as reasonably possible and its promptness is as soon as reasonably possible.
  • Control systems should be evaluated on a continuous basis in order to streamline them, make them more flexible and valid, raise their ability to be learned by the employees, and boost employee confidence and participation in them.
  • When establishing control systems
    • affected employees should understand the reason for the control system and be actively encouraged to participate in the design and development of the control system.
    • development and implementation should be carefully planned and budgeted.
      •  More resources may be needed, such as people, hardware, and software to implement, maintain, and update the control system.
      • The control system may be implemented in phases so that employees are not overwhelmed with the full version and problems can be worked out in smaller increments.
      • Training for the control system must be put in place.
      • A feedback mechanism for the control system must be implemented.
      • The control system should integrate well with the existing organization; i.e., it facilitates rather than hampers employee work.
Measurement and Evaluation
  • Because control systems may be viewed as a "blame game", measuring and evaluating are sensitive subjects wherever and whenever they are done.  Again, the focus on measuring and evaluating must be on problem solving as well as making things better.  The measurements taken should indicate when deviations are occurring, such as measurements outside of standard norms.  Keep in mind, however, that measurements are indicators, not absolutes.  Investigation is still required to determine if a deviation is occurring that needs correcting.  The problem solving process should be used to evaluate whether or not a significant deviation exists.
  • Measuring may be performed at several levels.
    • Individual
      • How do you evaluate the performance of an employee?
        • If the employee is a scientist, you might use number of papers published in respected and refereed journals and conferences, number of patents, number of citations of the scientist's work by other researchers, organization products influenced by the scientist's work, and peer evaluation of work and ability to work with others.
        • If the employee is an engineer, you might use number of patents, number of new products s/he helped to develop, ratio of number of tasks completed to schedule, ratio of number of tasks completed to budget, average number of problems found with task results from reviews, and peer evaluation.
    • Group
      • Group evaluation may be done by ratio of projects completed to schedule and budget, number of failed projects, number of new or improved products per year, number of projects or products completed per year, profitability of projects or products, development cost per person, and average peer evaluations.
    • Project
      • Project evaluation may look at ratios of tasks completed to budget and schedule, number of problems found during reviews, customer satisfaction survey, profitability of project, development cost per person, number of requirements, number of design modules, number of code modules, number of test cases, project comparisons to competition, and number of failed test cases.
    • Product
      • Product evaluation may use customer satisfaction surveys, number of returns, number of complaints, cost of production, schedule of production, profitability of the product, product comparisons to competition, and product units failing to pass inspection before being shipped.
    • Department
      • Departmental evaluation may be done by looking at employee churn rate, ability to attract new and talented people, career development of employees, budget and schedule for what the department does, operating costs, and ratio of tasks completed to budget and schedule.
    • Management
      • Management measures may be related to number of employees managed per project or department, quality and number of plans, average peer evaluations, number of tasks or projects managed, forecasting ability, number of problems per project or task, complaints, and number of objectives fulfilled/on-going/waiting.
    • Organization
      • Organizational measurements should look at overall profitability, performance against major competitors, operating costs, and overall customer complaints.
Summarizing Thoughts
  • A control system is used to keep the organization smoothly operating and to keep significant deviations from occurring.
  • Control systems are based on appropriate measurements taken on a continuous basis to monitor accomplishment of objectives.
  • Control systems must be integrated well with the overall organization and facilitate higher quality work.
  • Control systems and measurements must be implemented in a positive manner so that employees know the system is for solving problems, not assigning blame.
Review
  • Why are control systems necessary?
  • What is the control system process?
  • What needs to be in place before a control system can be implemented?
  • How are control systems organized?
  • What are the tools in control systems?
  • Where should control points be placed?
  • How are control systems established?
  • What measurements may be used and how can they show deviations?

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Last edited:  03/31/04 01:21:59 PM