Chapter 07 – Supervisory Planning
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CHAPTER 7
Supervisory Planning
LEARNING OBJECTIVES
1. Describe how an organization plans.
2. Describe the supervisor’s role in the overall planning system of the organization.
3. Discuss the steps involved in the supervisory planning process – with special emphasis on
setting objectives.
4. Identify the SMART criteria for setting objectives.
5. Discuss the role of contingency plans.
6. Differentiate among organizational policies, procedures, and rules.
7. List several common supervisory planning activities.
8. Understand the basic elements of a management by objectives (MBO) system.
9. Explain the purpose of a balanced scorecard (BSC) system.
SUGGESTIONS FOR PRESENTATION
Demonstrate the universality of the steps in planning.
Planning is essentially making decisions for the future. Return to Chapter 2 and relate the process
of decision making to the process of planning. Try the following:
Put the steps listed below on the board, and have students apply them to such diverse activities as
planning the investment of an inheritance, planning a trip to another city, planning the purchase
of a car, planning the introduction of a new product, planning a party, etc. Use examples from
students’ own experiences. Have them write an objective (or talk it out as you write it on the
board) for each of these.
The steps in planning could be broken out in this fashion:
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LECTURE OUTLINE
Supervision Dilemma
Jane misses a couple of promised deadlines and is called in to talk with her department head.
I. How the Organization Plans
• All levels of management within an organization develop plans that vary according to the
methods used and the extent of planning.
• A formal plan is a written, documented plan developed through an identifiable process.
• Strategic or corporate plans are the primary responsibility of top management, but many
levels of managers are involved in its development.
o Specific plans for the different parts of the organization are derived from the strategic
plan.
o The key is for each lower-level plan to be based on the plan at the next-higher level.
o As the planning process moves down to lower levels in the organization, it becomes
narrower in scope, covers shorter time frames, and becomes more specific and
detailed.
o Figure 7.1 illustrates how supervisory planning relates to other levels of planning.
A. The Supervisor and Strategic Planning
• Strategic management is the process of developing strategic plans and keeping
them current as changes occur internally and in the environment.
• Benefits of involving supervisors in the strategic management process:
o Allows them to see the “big picture”
o Develops more conceptual skills and better decision-making skills
o Prepares them to move up in the organization and fosters a long-range
orientation
• Gap analysis focuses on identifying areas needing improvement by following certain
steps.
o Defining a desired state and current situation
o Comparing the two to identify gaps
o Plan to reduce or eliminate gaps
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II. The Supervisor’s Role in Planning
• Supervisory plans are derived from the more general plans of higher levels of
management.
• Supervisory plans are more detailed, answering questions related to what, why, where,
who, and how.
o Supervisory plans operationalize the plans of higher management.
• Supervisors often provide input for upper level management planning.
• Figure 7.2 presents a model of the supervisory planning process.
III. The What and How of Supervisory Planning
• Planning is the process of deciding what objectives to pursue during a future time period
and what to do to achieve those objectives.
A. Objectives versus Goals
• An objective is a statement of a desired measurable result of what is to be achieved.
• When objectives are viewed in this way, the terms objectives and goals are
interchangeable.
o Figure 7.3 illustrates several levels of objectives.
B. Setting Objectives
• At the supervisory level, objectives typically deal with quantity, quality, cost,
personnel, and safety.
• How objectives are set at the supervisory level and how they are stated can have a
great deal to do with how successful a supervisor may be in reaching them.
o Supervisors should involve their employees in the objective-setting process or,
at the very least, keep them informed as to what is going on.
o Objectives that have the best chance for success follow the SMART criteria.
SMART stands for specific, measurable, achievable, relevant, and time-based.
▪ Specific—observable actions, behaviors, or achievements are described
and linked to a rate, number, percentage, or frequency.
▪ Measurable—a system must exist that allows the tracking and recording
of the specific action, behavior, or achievement upon which the objective
is focused.
▪ Achievable—objectives should be set so that people are capable of
achieving them.
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▪ Relevant—the objective is viewed by affected employees as being
important to the organization and as something that they can impact or
change.
▪ Time-based—there should be a specific date or time frame for reaching
or achieving the objective.
• Objectives should be regularly updated and assigned priorities.
• Figure 7.4 presents examples of how some poorly stated objectives might be better
stated. Figure 7.5 shows some typical areas in which a supervisor might set
objectives.
C. Action Planning
• Once the objectives have been set and prioritized, the supervisor must decide how
they will be achieved. This phase of the planning process is called action planning.
o It must answer the following questions.
▪ What must be done?
IV. Contingency Plans
• Contingency plans address the “what–ifs” of the supervisor’s job.
o Contingency plans keeps the supervisor prepared and knowing what to do if
something goes wrong.
o They should be developed for problems that have a reasonable chance of occurring
based on the most critical assumptions of the current plan.
o They should be discussed with subordinates and other supervisors who would be
affected by them.
V. Policies, Procedures, and Rules
A. Policies
• Policies are broad general guidelines to action.
o Policies usually do not dictate exactly how something should be done, but they
do set boundaries for action.
o A major purpose of policies is to ensure consistency in decisions and actions.
o Policies define the limits within which supervisors must operate.
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B. Procedures
• A procedure is a series of related steps or tasks performed in sequential order to
achieve a specific purpose
o Well-established and formalized procedures are often known as standard
operating procedures (SOPs).
o Major advantages of procedures are that they achieve a degree of uniformity in
how things are done and lessen the need for decisions
C. Rules
• Rules require that specific and definite actions be taken or not taken with respect to
given situations.
o Unlike policies, they permit no flexibility or deviation.
o Rules usually involve a single action.
o Rules do not necessarily specify sequence.
VI. Common Supervisory Planning Activities
• Supervisors regularly engage in certain specific planning activities. Some of the most
common are:
A. Providing Information for High-Level Planning
• Upper-level management planners often ask supervisors for certain information.
B. Developing a Budget
• A budget is a statement of expected results or requirements expressed in financial or
numerical terms.
C. Improvement Programs
• These include cost-reduction programs and programs aimed at improving safety,
quality, methods, and housekeeping.
D. Human Resource Needs
• These include staffing needs, vacation scheduling, and planning for leaves of
absences.
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E. Production Planning
• Production planning primarily include determining the necessary materials, facilities,
and human resources.
• Resource allocation, routing, and scheduling are three of the most common
production planning activities performed by supervisors.
o Gantt charts—modeling tool used to visualize and simplify scheduling.
o Critical Path Method (CPM) and Program Evaluation and Review
Technique (PERT)—two of the most popular networking methods
▪ Activity—the work necessary to complete a particular event.
▪ Event—denotes a point in time.
▪ Dummies—dashed arrows that show the dependent relationships among
activities.
VII. Management by Objectives (MBO)
• Management by objectives (MBO) is a style of supervising that has its roots in the
planning function.
o MBO is based on the premise that establishing personal goals elicits employee
commitment, which in turn leads to performance.
o Each employee has a part in determining work objectives and the means for
achieving them.
o Direct feedback is given to employee on actual performance as compared to planned
performance.
o Employees are rewarded on the basis of objective attainment.
• MBO is most effective when it is used at all levels of the organization.
A. Balanced Scorecard (BSC)
• Balanced scorecard (BSC) is a performance measurement framework through
which organizations define strategic objectives at every level in the organization.
o It combines financial results with measurements of tasks that an organization
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must perform well to meet its objectives at all levels within the organization.
o It strives to put equal emphasis on people, business processes, customer
relationships, and financial performance.
o It has added strategic nonfinancial performance measures to traditional
financial measures to provide a more “balanced” view of organization
performance.
o Under BSC, operational managers and supervisors develop scorecards at every
level in the organization so that each person can see how his or her job duties
relate to and contribute to the higher-level objectives.
Solution to the Supervision Dilemma
Jane misses a couple of promised deadlines due to lack of planning and taking on excess work.
Supervision Illustration
7-1: Strategic Management at MICHELMAN, Inc.
7-3: Contingency Planning at FEDEX
7-4: Routing and Scheduling Software Increases Efficiency of Delivery Trucks
REVIEW QUESTIONS
1. Explain the strategic management process and the role that supervisors play in the process.
Strategic management is defined as the process of developing strategic plans and keeping
2. What time span do most supervisory plans cover?
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3. Name and briefly discuss the SMART criteria for developing objectives.
Objectives that have the best chance for success follow the SMART criteria.
• Specific—an observable action, behavior, or achievement is described and linked to
4. What is action planning? What six questions should be addressed in action planning?
Action planning is deciding how objectives will be achieved after they have been
determined. The six questions addressed in action planning are:
• What must be done?
5. What is a contingency plan?
6. Define and distinguish among policies, procedures and rules.
Policies are broad, general guidelines to action. Procedures are related series or sequence
7. Name five specific planning activities in which supervisors commonly engage.
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8. What are the differences between resource allocation and scheduling?
9. What is routing and what does it do?
10. What is a Gantt chart?
11. What is the difference between a CPM network and a PERT network?
12. What are the basic elements of an MBO system?
13. What is a balanced scorecard system?
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SKILL-BUILDING QUESTIONS
1. Discuss the following statement: “Planning is something that supervisors should do when
they don’t have anything else to do.”
2. Comment on the following: “Planning is concerned with the future implications of today’s
decisions and not with decisions to be made in the future.”
3. Why do you think that supervisors often have a hard time determining how their plans and
activities fit into the overall scheme of things for the organization? Would strategic
management help with this problem? Why or why not?
4. Research has shown that more than half of the attempts to install MBO have failed. What
do you think might be some reasons for this high failure rate?
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REFERENCES
Refer page 149 for details
ADDITIONAL READINGS
SKILL BUILDING APPLICATIONS
Incident 7-1: A Plan for Productivity Improvement
This case is designed to help the students evaluate the potential effectiveness of an MBO plan,
based on their readings in the chapter.
1. Do you think Grady’s plan will work if it is implemented as described above? Why or why
not?
Yes. Grady has incorporated the three required elements for an effective MBO plan:
• The subordinates have a part in determining the objectives
2. Can you think of any ways in which Grady’s plan might be improved?
3. What do you think are the chances that Grady’s plan will enjoy initial successes and then
slowly lose the group’s interest as the newness wears off? Give reasons for your response.
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Incident 7-2: What Should I Do Next?
This case is designed to illustrate what a supervisory level plan should include.
1. How would you answer Kim’s question if you were Ed Jackson?
2. How would you go about preparing this plan if you were Kim Allred? (Suggest a
framework for Kim to follow.)
3. Do you think Kim’s initial reaction to the planning process was unusual? Why or why not?
Exercise 7-1: Personal Objectives
Obviously, this exercise will go as many different directions as the number of students. The
Exercise 7-2: Identifying Personal Goals
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Exercise 7-3: How Well Do You Know Company Policies?
Exercise 7-4: Setting SMART Objectives
Student’s responses on this exercise will vary.
Specific
Measurable
Achievable
Relevant
Time-
based
Objective 1
X
✓
?
✓
X
Objective 2
✓
✓
✓
✓
X
Objective 3
X
X
?
✓
✓
Objective 4
✓
✓
✓
✓
✓
Objective 5
✓
✓
✓
✓
✓
Objective 6
✓
✓
✓
✓
X
Objective 7
X
✓
✓
✓
✓
Objective 8
✓
✓
?
✓
✓
Objective 9
X
✓
?
✓
X
Objective 10
X
✓
?
✓
✓
Objective 11
X
?
?
✓
X
Exercise 7-5: Drawing a CPM Logic Network
The correct logic network to match the exercise is shown.
KEY to numbers in the logic network:
/0/ Begin the project
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1. What specific benefits do you think that a CPM network would provide on this project?
2. What information does the CPM network that you created provide that would not be
provided by a Gantt chart of the same project?
SUPERVISORY ANECDOTE
The General Motors Saturn plant in Spring Hill, Tennessee is one example of how extended
plans must sometimes be. The effort was initiated in 1982, announced in 1985, and the first cars
RELATED VIDEOS
1. Supervisory Planning and Control, Coronet, 26 mins. This video is a general overview of
supervisory responsibilities.
Chapter 07 – Supervisory Planning
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4. If You Want It Done Right, Rank / Roundtable, 20 mins. This video is about planning,
communicating and following up on work assignments. The video is aimed at first line
supervisors.