The Managerial Job

Presthus identified one of the basic patterns by which people accommodate themselves to
working in organizations is to be upwardly-mobile. This person then associates his or her goals
with those of the organization.1 The major group of people in organizations who meet this
description are its managers. This connection that these people make between themselves and
the organization needs to be enhanced and encouraged through the compensation plan. This
section will discuss the managerial role, the characteristics of managerial work, and the
differences in levels of managerial work.

The Managerial Role

In a way, all managers are the people in the middle. 2 This emphasizes the fact that managers
have to please a number of constituencies in order to get their work done. Broadly speaking,
managers have an internal role and an external role. 3 The internal role has to do with directing an
organizational unit. In interpersonal terms, Katz sees this as a leadership function. 4 The external
role requires the manager to deal with people outside the organizational unit to accomplish the
unit's work. This role is not as clearly defined as the internal role but involves developing
relationships, gathering information, and deciding where the organization is going and how to get
there. In this, the manager is often like the salesperson – on the margin of the organization. To
the extent that this is the case, incentive plans would seem appropriate.

Mintzberg has elaborated further upon the manager, developing ten roles, divided into three
categories: interpersonal roles, informational roles, and decisional roles. 5 Each of these
categories has roles that can be considered internally and externally oriented, as illustrated in the
figure below.

Figure 18-1. The internal and external roles of the manager

Externally, the manager represents the organization to the world, deals with the world, and
decides the direction the organization needs to take. Internally, the manager directs
organizational activity and allocates resources to accomplish goals. All this is central to the
organization's success. Not all managerial jobs contain all ten roles equally, nor do all managers
perform all roles equally. This leads to a great deal of variety in the definition of the managerial
job, with the manager having a good deal of influence over the definition.
Characteristics of Managerial Work

Mintzberg goes on to point out that managerial activity has three basic characteristics: brevity,
variety, and fragmentation. Managers deal with a great many things each day – sometimes a
hundred or more – and these things cover a wide variety of topics. Managers are active people.
They perform a large quantity of work and find it hard to leave it behind when they leave the
office. In this they are like professionals. Further, managers are not able to concentrate their
energies on a single project until it is completed; instead they jump from one thing to another all
day long, leading to the feeling of fragmentation. This makes the job very ambiguous to the
manager.

It is no wonder that Sayles finds that managers have a hard time describing what they do to
others in meaningful terms and that what comes out sounds like a lot of little unconnected items. 6
Thus, describing the managerial job can be very difficult, partly because the manager has trouble
defining what he or she does and partly because it is hard to make sense of what is done.
Developing useful job descriptions is difficult in this circumstance. Since most compensation
programs need job descriptions for evaluation purposes, this problem may change the way
managerial compensation is handled.

These characteristics of the managerial job are tied to the activities of managers just discussed.
Since managerial jobs differ in the degree to which certain activities take place in the job, the
characteristics also vary. For instance managerial jobs such as sales or marketing positions are
more subject to brevity and fragmentation than some other managerial jobs. 7

Levels of Managerial Work

Organizations are hierarchical, which is what creates the managerial role in the first place. Large
organizations have a number of managerial levels. In fact, the organization chart is usually a
chart of the managerial Jobs in the organization. Compensation plans for the managers in an
organization generally follow this organizational hierarchy closely. The hierarchy contains three
levels of managers: top management (executives), middle management, and lower management
(supervisors).

Top Management. Executives are those at the top of the organizational hierarchy, usually the top
1-5 percent of the organization's work force.8 They look out of the organization to the
environment. They are charged with developing the goals and strategies required to keep the
organization effective. The owners, through the board of directors, see these people as the
trustees of their resources. Thus compensation for this group is closely associated with the
success of the organization as a whole.

Ordinarily, top management is responsible for the total operations of the organization (the CEO
and executive VPs), a major segment of the organization (an-operating division with a set of
products), or a major organizational function (such as finance). The results of these units are
measurable, and it is usually assumed that these managers had a significant impact on these
results and therefore should be rewarded on the basis of the results.

Lower Management. At the other end of the hierarchy are the supervisors. They are first-line
managers. That is, they direct the work of non-managerial employees. This job is more internally
oriented, in two ways. First, the supervisor is more intimately concerned with a small group of
workers and the work of that unit. Second, although the supervisor's external contacts are outside
the organizational unit, they are still within the organization itself. The pressures of the first-line
supervisor are immediate and influence today's results, in considerable contrast with the top
manager, who is concerned mostly with problems extending years into the future. Because
supervisors are so close to their workers, the job comparison for first-line supervisors is often the
worker in the organizational unit. Thus the supervisor's wages are some percentage over those of
the workers. In fact a series of studies show that employees have a definite idea about the
"appropriate" distance between organizational levels. Mahoney's review of these concepts and
other studies indicates that about a 33 percent distance between organizational levels feels right
to people.9 A study by one of the authors shows a lower differential at the supervisory level,
closer to 20 percent.10

Middle Management. As the name implies, this consists of the organizational levels between the
two so far discussed. These managers direct other managers and act as an information channel
between top management and supervisors. Their perspective is ordinarily intermediate. They are
usually responsible for a specific function in the organization and spend much of their time
coordinating this function with other groups in the organization. A great number of the contacts of
this group are lateral, so that getting work done is through means other than the use of
authority.11 This creates considerable ambiguity for the middle manager, a feeling that he or she
is responsible but does not have the necessary control. These contacts make peer comparisons
important for this group. Compensation for this group is often related to the function that is being
managed, and since there are large enough numbers of managers, managerial wage surveys
make sense. It should be noted that this group has decreased dramatically in the past twenty
years as organizations have downsized and eliminated organizational levels to reduce
bureaucracy.

Managerial Personality

It is difficult to identify any particular personality pattern as being common to managers. However,
there are a number of aspects of managers relevant to the development of a compensation
program for them that need to be explored. These are their commitment, decision orientation, and
power needs.

Commitment. From the discussion thus far it should be clear that commitment is one thing
managers have and organizations need. Managers associate themselves with the organization
and spend a great deal of time at their work, usually up to 60 hours a week. But even if they are
not formally working, managers find it is hard to turn off the job. They think about their jobs even
when they are supposed to be at leisure. In terms of the membership model, these people have
high inputs and will therefore expect high outcomes from the organization.

Decision Orientation. Managers are action-oriented. Mintzberg found that managers had a
preference for live action and the use of verbal media. 12 This often gives them the appearance of
being intuitive rather than analytical in their decision making. 13 This is in contrast with why the
professional, who is analytical, is valuable to the organization. The manager ensures that things
keep moving and get done. Decisions are the heart of the manager's job. 14 In a way this is what
the manager is paid for. Certainly the time span of discretion, by which Jaques measures job
level, implies that decisions are central to defining managerial jobs. 15 Likewise, the Hay system of
job evaluation, the one most commonly used to evaluate managerial jobs, focuses upon three
aspects of decisions: know-how, problem solving, and accountability. 16 So an orientation to
decision making is probably useful in trying to evaluate managerial jobs and performance.
Furthermore, both Kotter and Mintzberg find that being knowledgeable about the business and
organization and having a wide set of contacts in order to collect information are important
aspects of the manager's job.17

Managerial decision making is not like technical decision making. Katz points out that as
managers move up the organizational hierarchy they need to have higher levels of conceptual
skill. This skill requires the manager to think in terms of general trends rather than specifics and
to be able to see the forest for the trees.18 This skill may be related to the idea of left-brain
thinking.19 The point is that managers as they move up in the organization need to be able to
think and make decisions using a much broader framework and be able to deal with high levels of
uncertainty. These skills may be in very short supply within the society, creating demand higher
than supply.20

Power Needs. McClelland found that, unlike sales personnel, managers do not have a high
achievement drive. This is not to say that they do not focus on accomplishing things or are not
ambitious; they do and are.21 But they do not match McClelland’s technical definition of
achievement drive. What McClelland did find out about managers is that they have a high power
need .22 They enjoy controlling a situation and having a strong influence on. the outcome of
events. This desire for power can take two different forms, “power over” and “power to.” The
former is a personal definition of power that taps the unsavory aspects of the idea of power. The
“power to” is a more institutional expression of power that focuses on getting the job done in the
organization within the rules of the organization. Compensation programs for managers need to
encourage this type of power drive.

This power aspect of the manager indicates that managers have and need considerable
interpersonal skill. Most studies show that this is true. 23 Katz sees that this interpersonal skill
takes on two forms, supervisory and peer. Supervisory skill has to do with the leadership of the
people in the manager's organizational unit. Peer skill has to do with the myriad contacts the
manager must engage in outside the organizational unit in order to get the work done. 24

Also connected to power is the idea of status. Managers spend a great deal of time on the job,
are committed to the organization, and carry heavy responsibility. They must find it worth doing.
Beyond the high wages, there are a number of other extrinsic and intrinsic rewards available to
managers. The management job is held in esteem within the organization, if not in society as a
whole. Also there is a hierarchy of managers in the organization, with those further up having
more status than those lower down. The measure of status is most often reflected in the wages of
the person. Thus, managerial compensation is a reflection not only of job worth but of the rank
and status of the manager.

Why organizations need Managers

In Mintzberg’s classification the roles are to be considered collectively, because in

 To ensure the organization carries out its fundamental purpose, whether this is the
production of goods or services, in an efficient manner.

 To design and maintain the effective operation of the organization.

 To undertake responsibility for strategicdecison aking and to ensure the

 To ensure the organization serves the ends of those who control it, whther they be
the public, shareholders, the government etc.

 To act in the role of a link, passing and receiving information between the
organization and its enviroment.
 To act as the formal authority in order to operate the organisation’s status system.