Three-Tier Management

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Three-Tier Management

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Aaron Z. Brook

When it comes to traditional methods of personnel management, we can find:

It in the orient is the combination of hard and soft, or of kindness and severity;

It in the west is “carrot and stick”.

Comparing two kinds of traditional methods of personnel management suggest that both are actually very similar.

The eastern hard, or rigidity, is approximately equal to the west stick, and to the management in modern society to rules for restricting people's daily activities.

The eastern soft is approximately equal to the west carrot, and to the management in modern society to emotions for encourage people to consciously obey laws and rules.

Traditional methods of personnel management come from traditional agricultural societies.

Because traditional agricultural societies are characterized by self-sufficiency and self-contained, and lack of competition, the main task in managing people is to maintain the stability for self-sufficiency groups. As a result, the combination of hard and soft, of carrot and stick, and of management to rules and management to emotions is adequate to bring each group member the willing and happy obedience.

However, market societies are not such a case.

Market economy is essentially an exchange economy.

What can be used to exchange by people? They are either natural resources or non-natural human creation.

The exchange based on natural resources is limited;

But the exchange based on non-natural human creation is limitless;

So, under the condition of market economy, for facilitating enterprise development, in addition to the combination of management to rules and management to emotions to be used to keep employee stability, I have to add a kind of management to innovations to improve innovation ability of employees and enterprises

Thereby, I can form a three-tier management by integrating management to rules, management to emotions, and management to innovations into a system.

Here, we may have a more visual understanding of the composition of the three-tier management through an example of automobile manufacturing.

Suppose that such auto parts as tire, steering wheel, seat, engine, and windshield are just like all types of talent within the enterprise, then, the car manufacturing is like the business management to be also divided into three levels:

The first level is its mechanical assembly that assembles variety of automotive spare parts into a full vehicle through the use of screwing, welding, joggling linking, sewing, and so on.

This level is equivalent to the management to rules for companies, integrating talents of different specialty and levels into a complete business organization by using the rules and regulations, processes, duties, job descriptions, organizational charts, and so forth.

The second level is its lubrication damping that uses lubricant viscosity and elasticity of the damping system to prevent hard injury caused by the collision among variety of automotive spare parts in driving.

This level is equivalent to the management to emotions, cultivating positive employee emotions to rules and regulations, business organization, and colleagues, and reducing unnecessary conflict and friction among employees, and sections.

The third level is its updating and transformation, constantly upgrading outdated car models by adopting new designs, new accessories, and new features to continuously meet the new needs of the market.

This level is equivalent to the management to innovations whose purpose is to facilitate enterprises continuously changing, rapidly changing, and correctly changing to create more and more new products, new technologies, new rules and procedures, etc.

As the competitive automotive manufactures is step-by-step progress from mechanical assembly level to lubrication damping level to updating and transformation level, the vigorous company also is the climbing up from bottom management to rules, to middle management to emotions, to top management to innovations, and the integration of three different kinds of management levels.

Based on the above visual comparison, the rationality of the three-tier management can be testified.

Further studies showed that if we start with Maslow's judgment about “different types of management styles derive from different types of assumption of human natures” as a premise, and take Maslow's hierarchy of needs as the assumption of human natures behind the three-tier management (for the sake of narrative convenience, I adopt Alderfer's ERG theory to be closely related to Maslow's hierarchy of needs), there is a one-to-one correspondence between three kinds of management rising up in order and three types of needs.

Four key points of Alderfer's ERG theory

1. From bottom to top, the human need can be divided into three levels of existence needs, relatedness needs, and growth needs.

2. All three levels of needs coexists in every person, having the needs eating for the top people, and having hopes respected by others for bottom beggars.

3. Three levels of human needs are usually rising in turn.

4. People of different survival state have different focus on needs, either focusing on existence needs or focusing relatedness needs or focusing on growth needs.

The one-to-one correspondence between Alderfer's ERG theory and the three-tier management

1. Adopting management to rules for meeting employees’ existence needs.

The rules I am talking are specifically viewed as all rigidity for forming business organizations. It includes organization chart, staffing establishment, departmental responsibilities, job descriptions, post responsibilities, limits of authority, benefit, vertical command and horizontal coordination, workflow, operation flow, work standards, rules and regulations, policy, employee handbooks, and so on.

My definition of management to rules is to take rules as object of management (thus, please note that my management to rules is different from using rules to manage organizations).

From the perspective of forming organization, my management to rules mainly relates to an organization's rules design and arrangements, including how many kinds of rules are needed to construct an organization? Who should institute various rules and regulations? Which procedures must be complied with In the process of making rules? What kinds of corporate values should become the guidance to make rules? What is the relationship among different rules? How to solve the conflict among different rules? How to modify and repeal them? Who is responsible for the implementation and monitoring of rules? Which department is responsible for promulgation, interpretation, review, learning and archiving of rules respectively?

The major purpose of my management to rules is to build a high efficiency business organization.

How to create an efficient business organization? I think the only way is to adopt my management to rules.

Namely according to corporate goal and vision, integrate different specialties and levels of talents into an accurate business organization to efficiently work and achieve the efficiency of which one plus one is far more than two by adopting organization chart, staffing establishment, departmental responsibilities, job descriptions, post responsibilities, limits of authority, benefit, vertical command and horizontal coordination, workflow, operation flow, work standards, rules and regulations, policy, employee handbooks, and so on.

In this regard, one of the earliest and most famous descriptions of the advantages of business organization is in Adam Smith, the wealth of nations, originally published in 1776. He describes how one person could make 20 ordinary pins per day, but ten well-organized works made 48,000 per day.

Since my management to rules can build a high efficiency business organization, since a high efficiency business organization within a fair and reasonable market economy can increase employees’ salaries, and since increasing employees’ salaries is able to meet their existence needs very well, I can use the management to rules to meet employees’ existence needs.

2. Adopting management to emotions for meeting employees’ relatedness needs.

I have no any particular meaning for emotions. It is mainly concerned with people's psychological response to external stimuli, for examples, happy, anger, love, hate, and so on.

My definition of management to emotions is to take emotion as object of management (thus, please also note that my management to emotions is different from the management containing emotions).

The content of the management to emotions mainly include below: analyzing and evaluating the employees’ demand to emotions, setting the goal of management to emotions to accord with the request of enterprise development, making and Implementing the related plan of the management to emotions, tracking and monitoring the execution situation of plan of the management to emotions in whole process, and then modifying plan of the management to emotions, if necessary.

The chief purpose of my management to emotions is to cultivate healthy employee emotions to rules and regulations, business organization, and colleagues.

Obviously, the management to emotions, whether process or result, is just for meeting employees’ relatedness needs.

3. Adopting management to innovations for meeting employees’ growth needs.

The innovation I am speaking is to create unprecedented useful new technology?new products, and new management method for corporation.

My definition of management to innovations is to take innovation as object of management (thus, please still note that my management to innovations is different from the innovation to management).

The content of the management to innovations mainly include below: setting up innovational enterprise value, culture, and interior environment, establishing a mechanism for Innovation, forming Innovational team, breeding creative talents, planning and organizing and coordinating and encouraging for innovational activity,  assessing and controlling the risk of innovation, and so on.

The principal purpose of my management to innovations is to help company rapid and continual and correct transformation to create more and more new technologies, products, and management methods.

Based on my management to innovations, on the one hand, only after corporations complied laws of innovation activities, strengthened education and training for employees, and given employees full respect, care, cherishing, equality, freedom, and so on, only then can they gain enough creative harvests from employees. On the other hand, innovative achievements give employees not only the most powerful evidence of unique value of life, and the most peak experiences of self-actualization, but also more opportunities for career promotion.

So, I can employ the management to innovation to meet employees’ growth needs.

By the way, the difference among three levels of management is not absolute but relative. Not only does the management to rules include instituting rules related to innovation activities, that is, there is the management to innovations within the management to rules, but also the management to innovations also includes improving rules, namely there is the management to rules within the management to innovations.

4. Adopting the entirety formed by integrating three different sorts of management lied on three different levels rising up in order for meeting employees’ whole needs.

Accordingly, I can say that the three-tier management is really a humanistic management for company to meet employees’ whole needs.

5. The three-tier management is divided into three levels from bottom management to rules, to middle management to emotions, to top management to innovations.

So, it is fully in accord with Alderfer's ERG theory in which the human need can also be divided into three levels from bottom existence needs, to middle relatedness needs, to top growth needs.

6. The three-tier management is an inseparable entirety. None of these three types of management, namely management to rules and management to emotions and management to innovations, can be lacked. They must coexist in each development stage of each company, and in each career period of each employee. For example, High-tech IT companies and high-level managerial and technical talents need to be controlled and coordinated by the management to rules, and labor-intensive enterprises and low-level production operation employees also need the management to innovation to engage in those small inventions, and to provide some rationalization proposal.

Thus, the three-tier management is fully in accord with Alderfer's ERG theory in which three levels of needs coexist within every person.

7. Within the three-tier management, just as middle management to emotions is based on bottom management to rules, top management to innovations is based on middle management to emotions and bottom management to rules, too. If lower management as base is not secure, upper management will not be able to stand up.

Therefore, the three-tier management is fully in accord with Alderfer's ERG theory in which upper needs usually appear after lower needs is met.

8. There are different emphases among different enterprises and employees. The emphases for high-tech IT companies and high-level managerial and technical talents is on the management to innovations, but the emphases for labor-intensive enterprises and low-level production operation employees is on the management to rules.

Thereby, the three-tier management is fully in accord with Alderfer's ERG theory in which there are different emphases of needs among different persons.

Here what I want to stress is that everybody not only has their own focus on needs, but also will coordinate two non-focus needs with the needs as focus. For instance, along with the rising of people’s focus on needs from existence to growth, the food quality standard needed by those elites is much higher than laborers. While this case is reflected in the three-tier management, corresponding situation is that every employee not only has their own focus on different management tier, but also will coordinate two non-focus management tiers with the one as focus. For example, along with the rising of people’s focus on management tier from rules to innovations, the management to rules needed by high-tech IT companies and high-level managerial and technical talents has more flexibility than for labor-intensive enterprises and low-level production operation employees. As performance appraisal rules, because the former is engaged in complex mental work, we only need to regard the results for performance appraisal, do not to trace them from hand to foot again and again, otherwise, the results would be just the opposite to expectation. Because the latter is engaged in the simple physical labor, we need to not only monitor the result, but also review processes for performance appraisal. To a certain extent, once let worker comply strictly with official procedures and standards in doing things?manager will certainly obtain a qualified result.

Alderfer's ERG theory is in keeping with Engel's law

Engel's law can be briefly stated as follows: the percentage of income allocated for food purchases decreases as income rises. As a household's income increases, the percentage of income spent on food decreases while the proportion spent on other goods (such as entertainment, health care, and education) increases.

When comparing Alderfer's ERG theory with Engel's Law, we shall find that they are in fact the same.

As Engel's law said, in the case of low family income, the bulk of household expenditure is to be used to buy basic necessities of life. This case just show in people’s mind the first needs is always existence needs, and is in line with Alderfer's ERG theory.

Vice versa, under the situation of an ever-increasing family income, people will roughly keep the same proportion of income spent on basic necessities of life, but at the same time gradually increase the proportion of money spent on entertainment, health care, education, and so on. This case indicate that along with the raise of household income, after basic existence needs be met, meeting relatedness needs and growth needs usually will bit by bit become the key point of people’s household spending, and is fully consistent with Alderfer's ERG theory.

The accord between Alderfer's ERG theory or Maslow's hierarchy of needs and Engel's law will make those who suspect Maslow's hierarchy of needs due to lacking sufficient research specimens completely lose support. Engel's law roots in statistics, and go through long-term proof around the world, such a fact itself is just the largest and most extensive research specimens. Perhaps the details of Maslow's hierarchy of needs is necessary to be further improved, however, its major frame and direction are undoubtedly credible.

Here, my direct verification for Maslow's hierarchy of needs, of course, is indirect verification for three-tier management, three-tier economy, three-tier market and three-tier salary, even three-tier capitalism.

There is the identity between Alderfer's ERG theory<B styl