Effective Manager Development

An organization can make manager development more effective by doing the following:

(a)    Giving manager development to all levels

Every level of management should be provided with development programs so as to upgrade the competence of each category of managers. For first line managers they need to know the technical aspects of their jobs and how they can improve by understanding the basic management functions.

Middle management need growth through understanding of the theory and practice of management. Top management must update themselves with all functional areas of the firm e.g. finance and marketing and the effects of changing environmental factors.

(b)    Top management support

Training or development programs which have top management support and which are initiated by top management tend to be accepted and implemented more readily.

(c)    Assist managers in their development

Managers should be motivated to grow. They should be helped to realise that they need a positive attitude towards development if really they want to grow.

Compensation (Reward) System For Managers

Like other employees managers need compensation for their work. The main financial rewards are:-
    •    salaries
    •    bonuses
    •    profit sharing
    •    pension plans
    •    stock ownership

Salaries

A fixed monthly payment. It’s the main financial incentive for managers. Usually adjusted and reviewed to reflect manager development. A salary is advantageous to both the firm and the manager—to the firm it is easy to administer and to the manager it provides security. He can budget for it since he is sure it will come. However, a salary does not closely relate to performance and sometimes it leads to complacency on the part of the employees.

Bonuses

Most firms supplement a salary with a bonus. A bonus is directly related to results achieved. It is a sum of money given usually at the end of the year or on top of the salary. Usually used mostly by profit making firms.A bonus may be based on contribution to profit, waste reductions, sales increase, reduction in absenteeism etc.

Advantages:

•    They can encourage greater effort
•    Can help boost morale
•    Encourages harmony at work especially when managers receive group bonuses
•    Can help solve some problems e.g waste of material, where bonus is based on reduction of waste.

Disadvantages:

•    It is difficult to measure each individuals contribution say to sales or profits
•    It is expensive to administer, takes time and therefore makes management even more complex
•    When it is group bonus, the high performers may feel de-motivated as they are rewarded at the same rate with low performers.

Profit-Sharing

The managers are given a certain percentage of the profits. The profit sharing may be cash or kept in a fund and given later at an agreed age or date. Profit sharing can help reduce turnover and attract better managers—also helps increase morale on the part of managers leading to increased group co-operation.

Pension plans

The firm invests funds for its employees to be paid when they retire. Pension plans help managers stay longer with the firm. It helps meet the manager's need for security therefore it can boost morale.

Stock Ownership

Some companies do sell shares to their employees. This gives employees a personal stake in the company and can therefore make them more eager to improve the company's performance.

Note
Financial compensation for managers are different for different companies. They are affected by the following factors:

•    Type of the organization (e.g. is it profit making or not, is it private or public owned?)
•    Size of the organization
•    Type of industry
•    Importance of the managers job:
•    level of the job
•    contribution to profit
•    span of control
•    The managers education and experience
•    Competition
•    Supply and demand