| The behavior of employees can have a direct | | | | bound. It is then capped at the upper bound. |
| impact on the successful completion of the | | | | Organizational architecture has a major impact |
| objectives and goals of the organization. One | | | | within my organization. Our decision rights system |
| common way that the organization can control | | | | is broken into a three tier system. At the highest |
| and influence this behavior is through its | | | | level of the system are the Presidents and Vice |
| organizational architecture. Organizational | | | | Presidents. They oversee the middle level which |
| architecture is defined as the structure and form | | | | consists of Directors and Managers. The middle |
| by which any business operates. This structure or | | | | level manages and supervises the remaining lower |
| form consists of a three systems. These | | | | level employees. Our decision control is mainly |
| systems assign decision rights, measure | | | | handled by the highest level employees. Decision |
| performance, and reward and punish | | | | management is then controlled by the middle level |
| performance. | | | | employees. |
| These three systems that make up the | | | | For most of our employees, their performance is |
| organizational architecture are commonly referred | | | | based on meeting quarterly and yearly sales goals. |
| to as a "three-legged stool". These "legs" must | | | | Because of this, their performance is tracked and |
| remain balanced and individually, they must be | | | | measured within our accounting program known |
| coordinated with the two others. An employee | | | | as MAS90. It is used to track each and every |
| should only have decision rights that can be | | | | financial transaction that occurs within our |
| measured and rewarded or punished. The system | | | | organization. From those transactions, MAS90 |
| measuring performance must be able to measure | | | | then generates reports that are used by all levels |
| the area with which the employee has decision | | | | of employees. For non-sales employees, their |
| rights. And the reward and punishment system | | | | performance is measured on strictly subjective |
| must be equivalent to the employees measured | | | | measures. |
| performance. | | | | For the final system, rewarding or punishing |
| The system that assigns decision rights must be | | | | performance, MAS90 also plays a major role. The |
| designed specifically for the organization. It | | | | bulk of employee performances are based on the |
| typically includes a hierarchical structure. This | | | | amount of sales a salesperson is able to generate. |
| hierarchical structure is used to separate | | | | Sales commissions are then paid on a flat |
| managers from employees and also the decision | | | | percentage rate against the gross revenue of |
| management from the decision control aspect of | | | | each project. MAS90 generates all of these |
| the decision process. Decision management | | | | reports. Rewards are also given to the |
| includes the initiation and implementations while | | | | salesperson based on the total amount of yearly |
| decision control includes the ratifications and | | | | sales they generate. There formula or rate used |
| monitor of the decision. | | | | to determine this bonus amount is different for |
| The system that measures performance should | | | | each salesperson. Each of them has a different |
| measure both objectively and subjectively. | | | | agreed upon formula calculation based on their |
| Objective measures are explicit and verifiable | | | | employee contract. |
| while subjective measures are implicit and hard to | | | | These systems are currently working adequately |
| measure. Accounting systems are widely used by | | | | within my organization. The only recent change |
| organizations for this system. Along with | | | | that has been made was due to the downturn in |
| monitoring the accounting figures, the accounting | | | | the economy. Our company, like most, lost a |
| system can provide internal reports and provide a | | | | significant amount of business and because of this, |
| form of control. Each of these can be used as a | | | | commission rates for everyone in sales were |
| measure of performance. | | | | renegotiated. I believe that there is always room |
| The system that is used to reward or punish | | | | for improvement within any structure. |
| performance can be performed through | | | | I believe that there are two items we should |
| monetary or nonmonetary methods. Monetary | | | | consider to improve our organizational |
| rewards typically come in the form of an annual | | | | architecture. The first is by upgrading our |
| bonus that is included in an employees | | | | accounting system. MAS90 is an older version of |
| compensation contract. Many times these | | | | software that does have significant upgrades |
| bonuses are based on the achievement of goals | | | | available. MAS200 is a newer Sage accounting |
| or objectives and are set by a bound. Accounting | | | | system product that includes great features we |
| based goals many times have a lower bound and | | | | could take advantage of. Secondly, I think that |
| may have an upper bound. The lower bound is | | | | we should consider implementing more subjective |
| the minimum requirement that must be met in | | | | measures for the salespeople and more objective |
| order to receive a bonus. The bonus then | | | | measures for all other staff. |
| increases as you get higher above the lower | | | | |