Principles of Management - notes , Commerce, Management PDF Download

 Page 1


Chapter 1 
 
Introduction to Management and Organizations 
 
The 21
st
 century has brought with it a new workplace, one in which everyone must 
adapt to a rapidly hanging society with constantly shifting demands and opportunities.  
The economy has become global and is driven by innovations and technology and 
organizations have to transform themselves to serve new customer expectations.  
Today’s economy presents challenging opportunities as well as dramatic uncertainty. 
The new economy has become knowledge based and is performance driven.  The 
themes in the present context area ‘respect’, participation, empowerment, teamwork and 
self management. In the light of the above challenges a new kind of leader is needed to 
guide business through turbulence. Managers in organizations do this task.   
 
A manager is someone who coordinates and oversees the work of other people so that 
organizational goals can be accomplished.  It is not about personal achievement but 
helping others do their job.  Managers may also have additional work duties not related 
to coordinating the work of others. 
 
Managers can be classified by their level in the organization, particularly in traditionally 
structured organizations—those shaped like a pyramid  
 
1) First-line managers (often called supervisors) are located on the lowest level of 
management. 
2) Middle managers include all levels of management between the first-line level 
and the top level of the organization. 
3) Top managers include managers at or near the top of the organization who are 
responsible for making organization-wide decisions and establishing plans and 
goals that affect the entire organization. 
 
The changing nature of organizations and work often requires employees in formerly 
nonmanagerial jobs to perform managerial activities.  Non managerial jobs are those 
where one works directly on a job and had no one reporting to him. 
 
Mary Parker Follet defines management as, “The art of getting things done through 
people” 
 
Management involves coordinating and overseeing the work activities of others so that 
their activities are completed efficiently and effectively. 
 
1) Coordinating and overseeing the work of others is what distinguishes a 
managerial position from a nonmanagerial one. 
2) Efficiency is getting the most output from the least amount of inputs in order to 
minimize resource costs.  Efficiency is often referred to as “doing things right” 
Effectiveness is completing activities so that organizational goals are attained 
and is often described as “doing the right things”  
Page 2


Chapter 1 
 
Introduction to Management and Organizations 
 
The 21
st
 century has brought with it a new workplace, one in which everyone must 
adapt to a rapidly hanging society with constantly shifting demands and opportunities.  
The economy has become global and is driven by innovations and technology and 
organizations have to transform themselves to serve new customer expectations.  
Today’s economy presents challenging opportunities as well as dramatic uncertainty. 
The new economy has become knowledge based and is performance driven.  The 
themes in the present context area ‘respect’, participation, empowerment, teamwork and 
self management. In the light of the above challenges a new kind of leader is needed to 
guide business through turbulence. Managers in organizations do this task.   
 
A manager is someone who coordinates and oversees the work of other people so that 
organizational goals can be accomplished.  It is not about personal achievement but 
helping others do their job.  Managers may also have additional work duties not related 
to coordinating the work of others. 
 
Managers can be classified by their level in the organization, particularly in traditionally 
structured organizations—those shaped like a pyramid  
 
1) First-line managers (often called supervisors) are located on the lowest level of 
management. 
2) Middle managers include all levels of management between the first-line level 
and the top level of the organization. 
3) Top managers include managers at or near the top of the organization who are 
responsible for making organization-wide decisions and establishing plans and 
goals that affect the entire organization. 
 
The changing nature of organizations and work often requires employees in formerly 
nonmanagerial jobs to perform managerial activities.  Non managerial jobs are those 
where one works directly on a job and had no one reporting to him. 
 
Mary Parker Follet defines management as, “The art of getting things done through 
people” 
 
Management involves coordinating and overseeing the work activities of others so that 
their activities are completed efficiently and effectively. 
 
1) Coordinating and overseeing the work of others is what distinguishes a 
managerial position from a nonmanagerial one. 
2) Efficiency is getting the most output from the least amount of inputs in order to 
minimize resource costs.  Efficiency is often referred to as “doing things right” 
Effectiveness is completing activities so that organizational goals are attained 
and is often described as “doing the right things”  
 
No two managers’ jobs are exactly alike. All managers perform certain function, enact 
certain roles and display a set of skills in their jobs. 
  
Management Functions  
 
According to the functions approach managers perform certain activities to efficiently 
and effectively coordinate the work of others.  They can be classified as   
 
1) Planning involves defining goals, establishing strategies for achieving those 
goals, and developing plans to integrate and coordinate activities. 
2) Organizing involves arranging and structuring work to accomplish the 
organization’s goals. 
3) Leading involves working with and through people to accomplish 
organizational goals.  
4) Controlling involves monitoring, comparing, and correcting work performance. 
 
Since these four management functions are integrated into the activities of managers 
throughout the workday, they should be viewed as an ongoing process and they need 
not the done in the above sequence. 
 
Management Roles  
 
In the late 1960s, Henry Mintzberg conducted a precise study of managers at work. He 
concluded that managers perform 10 different roles, which are highly interrelated.  
 
Management roles refer to specific categories of managerial behavior.  Overall there are 
ten specific roles performed by managers which are included in the following three 
categories. 
 
1) Interpersonal roles include figurehead, leadership, and liaison activities. 
2) Informational roles include monitoring, disseminating, and spokesperson 
activities. 
3) Decisional roles include entrepreneur, disturbance handler, resource allocator, 
and negotiator. 
 
Although the functions approach represents the most useful way to describe the 
manager’s job, Mintzberg’s roles give additional insight into managers’ work. Some of 
the ten roles do not fall clearly into one of the four functions, since all managers do 
some work that is not purely managerial. 
 
Management Skills  
 
Managers need certain skills to perform the challenging duties and activities associated 
with being a manager. Robert L. Katz found through his research in the early 1970s that 
managers need three essential skills  
Page 3


Chapter 1 
 
Introduction to Management and Organizations 
 
The 21
st
 century has brought with it a new workplace, one in which everyone must 
adapt to a rapidly hanging society with constantly shifting demands and opportunities.  
The economy has become global and is driven by innovations and technology and 
organizations have to transform themselves to serve new customer expectations.  
Today’s economy presents challenging opportunities as well as dramatic uncertainty. 
The new economy has become knowledge based and is performance driven.  The 
themes in the present context area ‘respect’, participation, empowerment, teamwork and 
self management. In the light of the above challenges a new kind of leader is needed to 
guide business through turbulence. Managers in organizations do this task.   
 
A manager is someone who coordinates and oversees the work of other people so that 
organizational goals can be accomplished.  It is not about personal achievement but 
helping others do their job.  Managers may also have additional work duties not related 
to coordinating the work of others. 
 
Managers can be classified by their level in the organization, particularly in traditionally 
structured organizations—those shaped like a pyramid  
 
1) First-line managers (often called supervisors) are located on the lowest level of 
management. 
2) Middle managers include all levels of management between the first-line level 
and the top level of the organization. 
3) Top managers include managers at or near the top of the organization who are 
responsible for making organization-wide decisions and establishing plans and 
goals that affect the entire organization. 
 
The changing nature of organizations and work often requires employees in formerly 
nonmanagerial jobs to perform managerial activities.  Non managerial jobs are those 
where one works directly on a job and had no one reporting to him. 
 
Mary Parker Follet defines management as, “The art of getting things done through 
people” 
 
Management involves coordinating and overseeing the work activities of others so that 
their activities are completed efficiently and effectively. 
 
1) Coordinating and overseeing the work of others is what distinguishes a 
managerial position from a nonmanagerial one. 
2) Efficiency is getting the most output from the least amount of inputs in order to 
minimize resource costs.  Efficiency is often referred to as “doing things right” 
Effectiveness is completing activities so that organizational goals are attained 
and is often described as “doing the right things”  
 
No two managers’ jobs are exactly alike. All managers perform certain function, enact 
certain roles and display a set of skills in their jobs. 
  
Management Functions  
 
According to the functions approach managers perform certain activities to efficiently 
and effectively coordinate the work of others.  They can be classified as   
 
1) Planning involves defining goals, establishing strategies for achieving those 
goals, and developing plans to integrate and coordinate activities. 
2) Organizing involves arranging and structuring work to accomplish the 
organization’s goals. 
3) Leading involves working with and through people to accomplish 
organizational goals.  
4) Controlling involves monitoring, comparing, and correcting work performance. 
 
Since these four management functions are integrated into the activities of managers 
throughout the workday, they should be viewed as an ongoing process and they need 
not the done in the above sequence. 
 
Management Roles  
 
In the late 1960s, Henry Mintzberg conducted a precise study of managers at work. He 
concluded that managers perform 10 different roles, which are highly interrelated.  
 
Management roles refer to specific categories of managerial behavior.  Overall there are 
ten specific roles performed by managers which are included in the following three 
categories. 
 
1) Interpersonal roles include figurehead, leadership, and liaison activities. 
2) Informational roles include monitoring, disseminating, and spokesperson 
activities. 
3) Decisional roles include entrepreneur, disturbance handler, resource allocator, 
and negotiator. 
 
Although the functions approach represents the most useful way to describe the 
manager’s job, Mintzberg’s roles give additional insight into managers’ work. Some of 
the ten roles do not fall clearly into one of the four functions, since all managers do 
some work that is not purely managerial. 
 
Management Skills  
 
Managers need certain skills to perform the challenging duties and activities associated 
with being a manager. Robert L. Katz found through his research in the early 1970s that 
managers need three essential skills  
1) Technical skills are job-specific knowledge and techniques needed to 
proficiently perform specific tasks. 
2) Human skills are the ability to work well with other people individually and in 
a group.  
3) Conceptual skills are the ability to think and to conceptualize about abstract and 
complex situations. 
 
These skills reflect a broad cross-section of the important managerial activities that are 
elements of the four management functions   
 
Significant changes in the internal and external environments have a measurable impact 
on management. Security threats, corporate ethics scandals, global economic and 
political uncertainties, and technological advancements have had a great impact on the 
manager’s job. 
Two significant changes facing today’s managers are importance of customers to the 
manager’s job and Importance of innovation to the manager’s job 
 
Organizations need managers. An organization is a deliberate arrangement of people to 
accomplish some specific purpose. Organizations share three common characteristics:  
(1) Each has a distinct purpose (2) Each is composed of people (3) Each develops some 
deliberate structure so members can do their work. Although these three characteristics 
are important in defining what an organization is, the concept of an organization is 
changing. The characteristic of new organizations of today include: flexible work 
arrangements, employee work teams, open communication systems, and supplier 
alliances. Organizations are becoming more open, flexible, and responsive to changes. 
Organizations are changing because the world around them has changed and is 
continuing to change. These societal, economic, global, and technological changes have 
created an environment in which successful organizations must embrace new ways of 
getting their work done. 
 
The importance of studying management in today’s dynamic global environment can be 
explained by looking at the universality of management, the reality of work, and the 
rewards and challenges of being a manager.  
 
The Universality of Management: Management is needed in all types and sizes of 
organizations, at all organizational levels, and in all organizational work areas 
throughout the world. 
 
The Reality of Work: All employees of an organization either manage or are managed.  
 
Rewards and Challenges of Being a Manager  
 
Challenges 
 
a) Managers may have difficulty in effectively blending the knowledge, skills, 
ambitions, and experiences of a diverse group of employees. 
b) A manager’s success typically is dependent on others’ work performance. 
 
Page 4


Chapter 1 
 
Introduction to Management and Organizations 
 
The 21
st
 century has brought with it a new workplace, one in which everyone must 
adapt to a rapidly hanging society with constantly shifting demands and opportunities.  
The economy has become global and is driven by innovations and technology and 
organizations have to transform themselves to serve new customer expectations.  
Today’s economy presents challenging opportunities as well as dramatic uncertainty. 
The new economy has become knowledge based and is performance driven.  The 
themes in the present context area ‘respect’, participation, empowerment, teamwork and 
self management. In the light of the above challenges a new kind of leader is needed to 
guide business through turbulence. Managers in organizations do this task.   
 
A manager is someone who coordinates and oversees the work of other people so that 
organizational goals can be accomplished.  It is not about personal achievement but 
helping others do their job.  Managers may also have additional work duties not related 
to coordinating the work of others. 
 
Managers can be classified by their level in the organization, particularly in traditionally 
structured organizations—those shaped like a pyramid  
 
1) First-line managers (often called supervisors) are located on the lowest level of 
management. 
2) Middle managers include all levels of management between the first-line level 
and the top level of the organization. 
3) Top managers include managers at or near the top of the organization who are 
responsible for making organization-wide decisions and establishing plans and 
goals that affect the entire organization. 
 
The changing nature of organizations and work often requires employees in formerly 
nonmanagerial jobs to perform managerial activities.  Non managerial jobs are those 
where one works directly on a job and had no one reporting to him. 
 
Mary Parker Follet defines management as, “The art of getting things done through 
people” 
 
Management involves coordinating and overseeing the work activities of others so that 
their activities are completed efficiently and effectively. 
 
1) Coordinating and overseeing the work of others is what distinguishes a 
managerial position from a nonmanagerial one. 
2) Efficiency is getting the most output from the least amount of inputs in order to 
minimize resource costs.  Efficiency is often referred to as “doing things right” 
Effectiveness is completing activities so that organizational goals are attained 
and is often described as “doing the right things”  
 
No two managers’ jobs are exactly alike. All managers perform certain function, enact 
certain roles and display a set of skills in their jobs. 
  
Management Functions  
 
According to the functions approach managers perform certain activities to efficiently 
and effectively coordinate the work of others.  They can be classified as   
 
1) Planning involves defining goals, establishing strategies for achieving those 
goals, and developing plans to integrate and coordinate activities. 
2) Organizing involves arranging and structuring work to accomplish the 
organization’s goals. 
3) Leading involves working with and through people to accomplish 
organizational goals.  
4) Controlling involves monitoring, comparing, and correcting work performance. 
 
Since these four management functions are integrated into the activities of managers 
throughout the workday, they should be viewed as an ongoing process and they need 
not the done in the above sequence. 
 
Management Roles  
 
In the late 1960s, Henry Mintzberg conducted a precise study of managers at work. He 
concluded that managers perform 10 different roles, which are highly interrelated.  
 
Management roles refer to specific categories of managerial behavior.  Overall there are 
ten specific roles performed by managers which are included in the following three 
categories. 
 
1) Interpersonal roles include figurehead, leadership, and liaison activities. 
2) Informational roles include monitoring, disseminating, and spokesperson 
activities. 
3) Decisional roles include entrepreneur, disturbance handler, resource allocator, 
and negotiator. 
 
Although the functions approach represents the most useful way to describe the 
manager’s job, Mintzberg’s roles give additional insight into managers’ work. Some of 
the ten roles do not fall clearly into one of the four functions, since all managers do 
some work that is not purely managerial. 
 
Management Skills  
 
Managers need certain skills to perform the challenging duties and activities associated 
with being a manager. Robert L. Katz found through his research in the early 1970s that 
managers need three essential skills  
1) Technical skills are job-specific knowledge and techniques needed to 
proficiently perform specific tasks. 
2) Human skills are the ability to work well with other people individually and in 
a group.  
3) Conceptual skills are the ability to think and to conceptualize about abstract and 
complex situations. 
 
These skills reflect a broad cross-section of the important managerial activities that are 
elements of the four management functions   
 
Significant changes in the internal and external environments have a measurable impact 
on management. Security threats, corporate ethics scandals, global economic and 
political uncertainties, and technological advancements have had a great impact on the 
manager’s job. 
Two significant changes facing today’s managers are importance of customers to the 
manager’s job and Importance of innovation to the manager’s job 
 
Organizations need managers. An organization is a deliberate arrangement of people to 
accomplish some specific purpose. Organizations share three common characteristics:  
(1) Each has a distinct purpose (2) Each is composed of people (3) Each develops some 
deliberate structure so members can do their work. Although these three characteristics 
are important in defining what an organization is, the concept of an organization is 
changing. The characteristic of new organizations of today include: flexible work 
arrangements, employee work teams, open communication systems, and supplier 
alliances. Organizations are becoming more open, flexible, and responsive to changes. 
Organizations are changing because the world around them has changed and is 
continuing to change. These societal, economic, global, and technological changes have 
created an environment in which successful organizations must embrace new ways of 
getting their work done. 
 
The importance of studying management in today’s dynamic global environment can be 
explained by looking at the universality of management, the reality of work, and the 
rewards and challenges of being a manager.  
 
The Universality of Management: Management is needed in all types and sizes of 
organizations, at all organizational levels, and in all organizational work areas 
throughout the world. 
 
The Reality of Work: All employees of an organization either manage or are managed.  
 
Rewards and Challenges of Being a Manager  
 
Challenges 
 
a) Managers may have difficulty in effectively blending the knowledge, skills, 
ambitions, and experiences of a diverse group of employees. 
b) A manager’s success typically is dependent on others’ work performance. 
 
Rewards 
a) Managers have an opportunity to create a work environment in which 
organizational members can do their work to the best of their ability and help the 
organization achieve its goals. 
b) Managers often receive recognition and status in the organization and in the 
larger community; influence organizational outcomes; and receive appropriate 
compensation. 
c) Knowing that their efforts, skills, and abilities are needed by the organization 
gives many managers great satisfaction. 
 
 
The manager of today must integrate management skills with new approaches that 
emphasize the human touch, enhance flexibility, and involve employees. 
 
Page 5


Chapter 1 
 
Introduction to Management and Organizations 
 
The 21
st
 century has brought with it a new workplace, one in which everyone must 
adapt to a rapidly hanging society with constantly shifting demands and opportunities.  
The economy has become global and is driven by innovations and technology and 
organizations have to transform themselves to serve new customer expectations.  
Today’s economy presents challenging opportunities as well as dramatic uncertainty. 
The new economy has become knowledge based and is performance driven.  The 
themes in the present context area ‘respect’, participation, empowerment, teamwork and 
self management. In the light of the above challenges a new kind of leader is needed to 
guide business through turbulence. Managers in organizations do this task.   
 
A manager is someone who coordinates and oversees the work of other people so that 
organizational goals can be accomplished.  It is not about personal achievement but 
helping others do their job.  Managers may also have additional work duties not related 
to coordinating the work of others. 
 
Managers can be classified by their level in the organization, particularly in traditionally 
structured organizations—those shaped like a pyramid  
 
1) First-line managers (often called supervisors) are located on the lowest level of 
management. 
2) Middle managers include all levels of management between the first-line level 
and the top level of the organization. 
3) Top managers include managers at or near the top of the organization who are 
responsible for making organization-wide decisions and establishing plans and 
goals that affect the entire organization. 
 
The changing nature of organizations and work often requires employees in formerly 
nonmanagerial jobs to perform managerial activities.  Non managerial jobs are those 
where one works directly on a job and had no one reporting to him. 
 
Mary Parker Follet defines management as, “The art of getting things done through 
people” 
 
Management involves coordinating and overseeing the work activities of others so that 
their activities are completed efficiently and effectively. 
 
1) Coordinating and overseeing the work of others is what distinguishes a 
managerial position from a nonmanagerial one. 
2) Efficiency is getting the most output from the least amount of inputs in order to 
minimize resource costs.  Efficiency is often referred to as “doing things right” 
Effectiveness is completing activities so that organizational goals are attained 
and is often described as “doing the right things”  
 
No two managers’ jobs are exactly alike. All managers perform certain function, enact 
certain roles and display a set of skills in their jobs. 
  
Management Functions  
 
According to the functions approach managers perform certain activities to efficiently 
and effectively coordinate the work of others.  They can be classified as   
 
1) Planning involves defining goals, establishing strategies for achieving those 
goals, and developing plans to integrate and coordinate activities. 
2) Organizing involves arranging and structuring work to accomplish the 
organization’s goals. 
3) Leading involves working with and through people to accomplish 
organizational goals.  
4) Controlling involves monitoring, comparing, and correcting work performance. 
 
Since these four management functions are integrated into the activities of managers 
throughout the workday, they should be viewed as an ongoing process and they need 
not the done in the above sequence. 
 
Management Roles  
 
In the late 1960s, Henry Mintzberg conducted a precise study of managers at work. He 
concluded that managers perform 10 different roles, which are highly interrelated.  
 
Management roles refer to specific categories of managerial behavior.  Overall there are 
ten specific roles performed by managers which are included in the following three 
categories. 
 
1) Interpersonal roles include figurehead, leadership, and liaison activities. 
2) Informational roles include monitoring, disseminating, and spokesperson 
activities. 
3) Decisional roles include entrepreneur, disturbance handler, resource allocator, 
and negotiator. 
 
Although the functions approach represents the most useful way to describe the 
manager’s job, Mintzberg’s roles give additional insight into managers’ work. Some of 
the ten roles do not fall clearly into one of the four functions, since all managers do 
some work that is not purely managerial. 
 
Management Skills  
 
Managers need certain skills to perform the challenging duties and activities associated 
with being a manager. Robert L. Katz found through his research in the early 1970s that 
managers need three essential skills  
1) Technical skills are job-specific knowledge and techniques needed to 
proficiently perform specific tasks. 
2) Human skills are the ability to work well with other people individually and in 
a group.  
3) Conceptual skills are the ability to think and to conceptualize about abstract and 
complex situations. 
 
These skills reflect a broad cross-section of the important managerial activities that are 
elements of the four management functions   
 
Significant changes in the internal and external environments have a measurable impact 
on management. Security threats, corporate ethics scandals, global economic and 
political uncertainties, and technological advancements have had a great impact on the 
manager’s job. 
Two significant changes facing today’s managers are importance of customers to the 
manager’s job and Importance of innovation to the manager’s job 
 
Organizations need managers. An organization is a deliberate arrangement of people to 
accomplish some specific purpose. Organizations share three common characteristics:  
(1) Each has a distinct purpose (2) Each is composed of people (3) Each develops some 
deliberate structure so members can do their work. Although these three characteristics 
are important in defining what an organization is, the concept of an organization is 
changing. The characteristic of new organizations of today include: flexible work 
arrangements, employee work teams, open communication systems, and supplier 
alliances. Organizations are becoming more open, flexible, and responsive to changes. 
Organizations are changing because the world around them has changed and is 
continuing to change. These societal, economic, global, and technological changes have 
created an environment in which successful organizations must embrace new ways of 
getting their work done. 
 
The importance of studying management in today’s dynamic global environment can be 
explained by looking at the universality of management, the reality of work, and the 
rewards and challenges of being a manager.  
 
The Universality of Management: Management is needed in all types and sizes of 
organizations, at all organizational levels, and in all organizational work areas 
throughout the world. 
 
The Reality of Work: All employees of an organization either manage or are managed.  
 
Rewards and Challenges of Being a Manager  
 
Challenges 
 
a) Managers may have difficulty in effectively blending the knowledge, skills, 
ambitions, and experiences of a diverse group of employees. 
b) A manager’s success typically is dependent on others’ work performance. 
 
Rewards 
a) Managers have an opportunity to create a work environment in which 
organizational members can do their work to the best of their ability and help the 
organization achieve its goals. 
b) Managers often receive recognition and status in the organization and in the 
larger community; influence organizational outcomes; and receive appropriate 
compensation. 
c) Knowing that their efforts, skills, and abilities are needed by the organization 
gives many managers great satisfaction. 
 
 
The manager of today must integrate management skills with new approaches that 
emphasize the human touch, enhance flexibility, and involve employees. 
 
Chapter 2 
 
Management Yesterday and Today 
 
Organizations and managers have existed for thousands of years. The Egyptian 
pyramids and the Great Wall of China were projects of tremendous scope and 
magnitude, and required good management. Regardless of the titles given to managers 
throughout history, someone has always had to plan what needs to be accomplished, 
organize people and materials, lead and direct workers, and impose controls to ensure 
that goals were attained as planned. 
 
Two historical events significant to the study of management are work of Adam Smith, 
in his book,’ The Wealth of Nations’, in which he argued brilliantly for the economic 
advantages of division of labor (the breakdown of jobs into narrow, repetitive tasks). 
The Industrial Revolution is second important pre-twentieth-century influence on 
management. The introduction of machine powers combined with the division of labor 
made large, efficient factories possible. Planning, organizing, leading, and controlling 
became necessary activities. 
 
There are six major approaches to management.  They are explained as follows 
 
1)         SCIENTIFIC MANAGEMENT 
 
Scientific management is defined as the use of the scientific method to 
determine the “one best way” for a job to be done. The most important 
contributor in this field was Frederick W. Taylor who is known as the “father” 
of scientific management. Using his principles of scientific management, 
Taylor was able to define the “one best way” for doing each job.  
 
Frank and Lillian Gilbreth were inspired by Taylor’s work and proceeded to 
study and develop their own methods of scientific management. They devised a 
classification scheme to label 17 basic hand motions called therbligs in order to 
eliminate wasteful motions  
 
Guidelines devised by Taylor and others to improve production efficiency are 
still used in today’s organizations. However, current management practice is not 
restricted to scientific management practices alone. Elements of scientific 
management still used include: 
 
1. Using time and motion studies 
2. Hiring best qualified workers 
3. Designing incentive systems based on output