Contr

olling
Lesson 7, HRM001
Controlling is the management process of measuring and correcting the
activities of the organization. This process determines the corrective measures
that should be done to direct the efforts and activities towards the desired goals
and objectives. It is a managerial activity for knowing and instituting important
measures to correct deviations in the process of planning, organizing and
directing. It involves judgment for the success of meeting the established goals,
programs, schedules, budgets and the company's policies and procedures.
Controlling in management
is setting the directional
guide towards the overall
accomplishment of planned
objectives. It is used to
determine where you want
to go by making sure that
the courses of action are
properly implemented.
Characteristics of
Control
1. It must be accurate and attuned to the activity. Control should reflect the needs of people
different using them.
2. It must identify quickly deviation from the set of standards. Immediate actions must be
done when performance standards are not followed. It must provide immediate signals to
avoid further crises to develop.
3. It must be forward looking. The manager must be proactive by developing forward looking
indicators using reliable historical data.
4. It must be strategically oriented. This involves selecting the crucial points at which control
is applied. The manager must exercise precautionary measures in selecting the critical points
in the control system.
5. It must be flexible and comprehensible. It must be flexible to permit some changes for
unexpected situations. Rigidity destroys effectiveness.
6. It must be economical in its implementation. The cost control measures should not exceed
the benefits that will be derived from its implementation. It must measure what it intends to
measure.
7. It must be easily understood by people to whom it is intended. The people involved must
understand the purpose of the control measures given them. They must understand what the
things evaluated are and how the control system operates and its effects on them.
8. It must indicate corrective actions. The important aspect of control is to identify
performance variances. Corrective actions must be in place to institute immediate remedy for
any deviation and to keep the plan on to act towards the established criteria.
9. It must be organizationally realistic. The standards set by the management must be
attainable by the people who are supposed to do the tasks. Subordinates may distort data if
the standards set are too high
10. It must be prescriptive and operational. When performance standards are not met, an
effective control system will indicate exactly what course of action is necessary.
 The Controlling Process
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1 3
1. Setting performance standards and accountability - These are performance yardstick that are
measurable, specific, understandable and acceptable by all concerned. These could be seen in the
planning process as procedures, schedules, programs and budgets.

Standards are desired level of performance and constitute the foundation of control process. These
serve as the criteria against which the performance is evaluated by the manager. The commonly used
standards are:
a) Quantity. The output produced at a specific time, say in 8 hours, in a week or a month. These
could be daily or weekly report.
b) Quality. This refers to following standard product specifications with an acceptable reject (for
example, of say 2 percent or no rejects at all). The result could be used to judge the effectiveness
of the group or the department.

c) Time. The period specified for which a task has to be completed. Time tables are based on
schedule of activities as stated in the plan.
d) Cost. It must be based on estimated cost per product produced. Cost accounting system will
determine variances on cost per unit. This is a guide to actual production efforts and to keep the
desired time limits.
2. Performance Indicators - Performance indicators are the yardsticks to measure the degree of
accomplishment. Records and report must be kept to compare it against target in terms of peso
investment and profit. These may be in terms of product produced, customer calls, activities completed
and many others. Reports must be accurate and measurable.

Standards used should be known to the workers. Time and motion study is a technique to set standard
time for which a job can be completed. The manager has to check the level and quality of output.
3. Interpreting Results - The results must be interpreted against the performance indicators. These
must be judged in accordance with specific measurable criteria crafted during the planning process.
These must identify discrepancies and variations and the reasons why they occurred.

This phase of control involves checking actual performance against predetermined or planned
performance. This is done through the following:
a) Checks actual performance output
b) Compares with production schedule and time table.
c) Conducts periodic performance appraisal system
d) Checks return on investment per peso value produced.
4. Responsibility for Corrective Action - Corrective action is going back to the desired objectives
through corrections and revisions. The experience of deviation or failure must be studied on new
developments and budgetary allocations. Careful analysis of the organizational strengths, weaknesses,
opportunities and threats must be the guiding philosophy of the new action.

The manager should not assume that his responsibility is over after making recommendations for
corrective actions. The following specific actions should be taken:
 
a) Redesign new system and procedure that will bring out better results;
b) Train people on a new system and procedures;
c) Introduce new machines and equipment when necessary;
d) Conduct training programs for supervisors to improve supervisory practices; and
e) Develop or revise the performance appraisal system that reflects actual output.
OBJECTIVES
OF
CONTROLLIN
G
The appointment of managers to their position could be justified only if they perform the intricate
functions of management. paid higher and This given is the kinder benefits. of work Managers for
which should they are be trained to manage department. and control the operation of their respective

Management controls alert manager to potential problems. At the Top Level, executives are concerned
when set organizational goals are not being met and when production targets become negative and time
tables are not followed. At the Middle Management, the problem occurs when they fail to deliver the
desired objectives and targets for which they are responsible. These may be in production standards,
schedules, product quality, production rejects and exceeding budget. Any negative variance in
organization output is a major concern of all managers.
The management must be able to:

Prevent the development of problem and crises. Crises develop when managers are not
aware of the operational problems. When problems are not solved immediately, small problems
turn into crises.
Develop standards of product output. Products and services can be standardized in terms of
quality and quantity through the use of good control. These could be done through training and
the use of quality machines and equipment.
Develop an effective employee appraisal system. An objective appraisal system is a
management tool to determine good performance. Indicators of good performance help
management develop better products and services.
Develop an updated plan. Planning and controlling are two interrelated process. We must
remember that the final step in the planning process is to control its results. Control allows
managers to compare with what is happening. When variances occur an updated plan has to be
developed.
Develop corporate measures to protect its assets. Corporate assets are the very foundation of
the success of the organization. Human resources' inefficiency is waste
handling of Production valuable of equipment pilferage manpower is and that a waste
production could of turn materials. resources better Improper products develop shutdown.
TYPES OF MANAGEMENT
CONTROL
1. Control that standardizes employee performance. This type of control system is designed to
increase efficiency and productivity. Efficiency reduces operating cost due to savings in man-hours.
Under this category are:
a) Time and Motion Study;
b) Inspection of Work in Progress;
c) Written Policies and Procedures; an
d) Production Schedules.

2. Control that safeguards company assets. Company assets are vital components of the
organization. It must be protected from theft, vandalism, misuse and wastage. This involves the
following:
e) Inventory Records;
f) Assignment of Custodial Responsibility;
g) Proper Maintenance and Inspection; and
h) Records of Company Assets.
3. Control that standardizes product quality. Product quality is the company asset for customer
consumptions. Rejects are cost that need to be looked into by all Supervisors and Managers. Under
this control system are:
a. Product Blue Prints;
b. Inspection Reports; and
c. Statistical Reports on Product Quality.

4. Control that limits delegated authority. This refers to policies that limit the authority exercised by
lower-level Managers. The authority specifies the extent of authority that lower-level manager can
exercise without the approval of top management.
a) Job Description and Specifications;
b) Policy Manuals;
c) Work Systems and Procedures; and
d) Internal Management Audits.
5. Control that measures job performance. Job performance is on the hands of direct supervisors.
Performance control is the following:
a. Quarterly Performance Appraisal Report;
b. Employee Output Data; and
c. Internal Audit and Reports.
6. Control for planning and programming operations. This refers to the following aspects of
company operation:
d. Sales and Production Forecast;
e. Budgets and Cost Estimates;
f. Cost Standards per Product or Unit; and
g. Man-hour Cost and Administrative Overhead.
KEY AREAS IN
CONTROLLING
1. Profitability. Organization objective of increase profit is the primary concern
of all managers. Operation has to achieve a certain level of profitability. This is
reflected at the planning process and control measures have to be adapted.
2. Market position. This refers to the position of the product in its market niche.
Marketing strategy should be developed to increase market shares. These are
determinants of profit and effective control measures which must be instituted.
3. Productivity. This pertains to the delivery of required performance of
employees in the organization. Performance indicators determine the productive
level of workers
4. Employee and attitudes. Attitudes are reflected and values. Organizational
values work. These are related to in effective the employee’s coordination
concern in for all activities.
5. Balance organizational goals. The organization has to balance its goal of
expansion and profitability to its capability to deliver the most effective system
of operation. Balance of financial exposure and personnel development should
be looked into as over expansion could also be detrimental to corporate goals in
the long run.