14 Principles of Management for Effective Team Management

Managing a team effectively isn’t easy. Although it can be learned through entrepreneurship, there’s a reason business leaders spend years in school studying how to manage people. There are many principles of management that one needs to learn to effectively manage people.

One of the key management thinkers is Henri Fayol. Despite having died more than a century ago, Fayol spelled out 14 principles that managers swear by to this day.

Beginning in the 1870s, Fayol published articles on mining topics. But as he took on administrative responsibilities, he became more interested in management methods. Fayol proposed that there were five functions of management:

  1. Planning: According to Fayol, a manager’s first role is to put together a plan. How will the job get done?
  2. Organizing: To work efficiently, teams must tap the strengths of their respective members. Fayol realized the importance of putting the right people in the right roles.
  3. Commanding: Teams need directives from managers, Fayol understood. Managers must confidently command their teams.
  4. Coordinating: Fayol knew that any team must work as a unit. Effective managers help employees work in concert with each other.
  5. Controlling: Fayol didn’t think of controlling people in an authoritarian sense. He simply meant managers need to make necessary tweaks to processes and analyze results.

To fulfill those functions, Fayol pointed to his 14 principles. His approach—often called “Fayolism”—revolutionized how managers work.

Fayol’s principles of management aren’t rocket science, but it’s not always clear how to put them into practice. Let’s dig in.

1. Division of Work

The first principle of Fayolism is that specialization promotes efficiency. Workers will always be better at some tasks than others. They should focus their attention on tasks where they perform best.

As a manager, you’re responsible for distributing your team’s workload. Assigning tasks according to each team member’s strengths will allow them to accomplish better work in less time. Distributing work evenly also creates efficiency. Make sure one employee isn’t feeling overloaded or overwhelmed.

2. Authority and Responsibility

Managers need the authority to delegate, impose consequences, and provide rewards. That authority derives, ideally, from the respect of the manager’s team. Managers must possess the skills and values that their team members admire.

With authority comes responsibility. Whether the team succeeds or fails, blame ultimately rests with the manager. That responsibility must be reinforced with accountability. The employer can reward or punish the manager, just as they can with their team.

3. Discipline

A manager must be able to teach and correct team members when warranted. Discipline should not be metered out solely as a punishment but as a way to improve the team member’s performance. When proper discipline is given and received, teams can grow and move past their mistakes.

Different teams will respond to different types of discipline. It’s up to the manager to discern what approach is best. A warning system can be implemented, with punishments laid out at each stage. Make your employees aware of any punishments they might receive as extra incentive to follow guidelines, and be prepared to keep your word.

4. Unity of Command

Unity of command means there can only be one manager on a team. Answering to multiple superiors can cause confusion and conflicts of interest.

While there will typically be various levels of management in an organization, team members must know who’s directly in charge of them. When questions or concerns arise, knowing who they should approach right off the bat makes team members more efficient.

5. Unity of Direction

Every team needs a common goal. What that is—and how it’s achieved—must be determined by the team’s manager. Teams with too many goals struggle to see the manager’s desired end.

Think of it as a tug-of-war: When team members pull against each other, they typically get nowhere. Managers have to get everyone pulling in the same direction to make efficient use of their team members.

6. Subordination of Individual Interests

The interests of the group as a whole must be more important than those of each individual. With a group mindset, teams can reach greater heights than if everyone was working for themselves.

Managers must recognize that the team’s interests come before every member’s, including their own. Self-dealing or favoritism undermines the respect the team has for its manager. While individual rewards are important management tools, they must be given only when it serves the wider team.

7. Remuneration

Managers who expect loyalty and hard work from their team members must pay them fairly. Fair wages show employees not only that they’re appreciated but also that a certain quality of work is expected from them.

Offer wages at least equal to what your competitors do to their employees, but don’t stop there. Use benefits and personalized perks to sweeten the pot. Don’t try to cut corners: Consulting group Giftology argues “cheaping out” sends a worse message than giving nothing at all.

8. Centralization and Decentralization

Centralization refers to who makes decisions for the wider team. A small company may be very centralized, with the owner and CEO making all the moves. A larger company with numerous branches will have to decentralize, allowing managers of each one to operate with greater autonomy.

There’s no one-size-fits-all degree of centralization. Determine what’s best by looking at the size of your team, the CEO’s preferences, and the individual managers’ strengths. Finding the perfect balance will boost team effectiveness.

9. Scalar Chain

The management principle called the “scalar chain” refers to the idea that communication must run in an orderly fashion. It starts from the top, continues through the company’s managers, and eventually reaches individual contributors. This chain of command holds everyone responsible and ensures that each level of the company receives the same instruction.

Some modern managers question this principle. For example, Elon Musk told his employees at Tesla that they can bypass the chain of command to make communication quicker and more efficient. He authorized even the lowest employees to contact leaders directly.

If in doubt, experiment. Authorize employees to contact executives directly about certain topics—such as new service lines or harassment—and check in with managers. Are they confused, or do they see their teams working more efficiently?

10. Order

In management, organization is everything. Everyone on the team needs to understand what tasks are and aren’t under the purview of their role. Defined roles minimize overlap and ensure that all tasks are being completed.

Try this: Ask each employee to write down their job duties. Are they on the same page as you, their manager? If not, decide what should be added or removed from each list of duties.

11. Equity

Can you think of a manager or supervisor you had in the past who you didn’t like? You’re not alone. A recent survey found that 57% of employees who left their job did so because of their boss. That’s why Fayol urges managers to treat their employees with respect and kindness.

While there will be moments of discipline and tension, managers should always strive to treat their team members as equals. Leaders who value loyalty and dedication should express those sentiments to their employees before asking them to do the same.

12. Stability of Tenure

Constant turnover is inefficient because employees need time to master their roles. Add in recruitment expenses, and turnover costs employers an average of $15,000 per worker. Allow that cycle to continue, and you’ll be out of a job yourself.

Don’t wait to work on retention until you see signs of disengagement. Reward loyalty, and build the sort of culture you’d want to work in. Give feedback regularly so workers know where they stand.

13. Initiative

This management principle isn’t about managers taking work from other members of the team. In fact, it’s about encouraging team members to speak up and start on projects of their own volition.

While team members do need guidance, supporting their autonomy and critical thinking helps them grow. A speaker in my network, Jay Baer, talks about this all the time: Being helpful is more beneficial than being pushy. Use rewards and discipline to point employees in the right direction.

14. Esprit de Corps

This French phrase translates literally to “the spirit of the body.” What Fayol meant by this is that team camaraderie matters. If a team doesn’t get excited about working together, it’s tough to bring out the best in them.

Use company culture events, such as picnics and happy hours, to nurture team spirit. Take time to get to know each other as people, not just as members of the team. Celebrate wins whenever you can.

Final Thoughts

Different people follow different principles of management. Some people even formulate their own. However, the fact that Henri Fayol’s principles of management are still being talked about today speaks to their value.

Implement them, and you’ll see: Henri Fayol never fails.

More Tips on Effective Management

When it comes to being effective vs efficient, there are a lot of similarities, and because of this, they’re often misused and misinterpreted, both in daily use and application.

Every business should look for new ways to improve employee effectiveness and efficiency to save time and energy in the long term. Just because a company or employee has one, however, doesn’t necessarily mean that the other is equally present.

Utilizing both an effective and efficient methodology in nearly any capacity of work and life will yield high levels of productivity, while a lack of it will lead to a lack of positive results.

Before we discuss the various nuances between the word effective and efficient and how they factor into productivity, let’s break things down with a definition of their terms.

Effective vs Efficient

Effective is defined as “producing a decided, decisive, or desired effect.” Meanwhile, the word “efficient ” is defined as “capable of producing desired results with little or no waste (as of time or materials).”

A rather simple way of explaining the differences between the two would be to consider a light bulb. Say that your porch light burned out and you decided that you wanted to replace the incandescent light bulb outside with an LED one. Either light bulb would be effective in accomplishing the goal of providing you with light at night, but the LED one would use less energy and therefore be the more efficient choice.

Now, if you incorrectly set a timer for the light, and it was turned on throughout the entire day, then you would be wasting energy. While the bulb is still performing the task of creating light in an efficient manner, it’s on during the wrong time of day and therefore not effective.

The effective way is focused on accomplishing the goal, while the efficient method is focused on the best way of accomplishing the goal.

Whether we’re talking about a method, employee, or business, the subject in question can be either effective or efficient, or, in rare instances, they can be both.

When it comes to effective vs efficient, the goal of achieving maximum productivity is going to be a combination where the subject is effective and as efficient as possible in doing so.

Effectiveness in Success and Productivity

Being effective vs efficient is all about doing something that brings about the desired intent or effect. If a pest control company is hired to rid a building’s infestation, and they employ “method A” and successfully completed the job, they’ve been effective at achieving the task.

The task was performed correctly, to the extent that the pest control company did what they were hired to do. As for how efficient “method A” was in completing the task, that’s another story.

If the pest control company took longer than expected to complete the job and used more resources than needed, then their efficiency in completing the task wasn’t particularly good. The client may feel that even though the job was completed, the value in the service wasn’t up to par.

When assessing the effectiveness of any business strategy, it’s wise to ask certain questions before moving forward:

  • Has a target solution to the problem been identified?
  • What is the ideal response time for achieving the goal?
  • Does the cost balance out with the benefit?

Looking at these questions, a leader should ask to what extent a method, tool, or resource meets the above criteria and achieve the desired effect. If the subject in question doesn’t hit any of these marks, then productivity will likely suffer.

Efficiency in Success and Productivity

Efficiency is going to account for the resources and materials used in relation to the value of achieving the desired effect. Money, people, inventory, and (perhaps most importantly) time, all factor into the equation.

When it comes to being effective vs efficient, efficiency can be measured in numerous ways. In general, the business that uses fewer materials or that is able to save time is going to be more efficient and have an advantage over the competition. This is assuming that they’re also effective, of course.

Consider a sales team for example. Let’s say that a company’s sales team is tasked with making 100 calls a week and that the members of that team are hitting their goal each week without any struggle.

The members on the sales team are effective in hitting their goal. However, the question of efficiency comes into play when management looks at how many of those calls turn into solid connections and closed deals.

If less than 10 percent of those calls generate a connection, the productivity is relatively low because the efficiency is not adequately balancing out with the effect. Management can either keep the same strategy or take a new approach.

Perhaps they break up their sales team with certain members handling different parts of the sales process, or they explore a better way of connecting with their customers through a communications company.

The goal is ultimately going to be finding the right balance, where they’re being efficient with the resources they have to maximize their sales goals without stretching themselves too thin. Finding this balance is often easier said than done, but it’s incredibly important for any business that is going to thrive.

Combining Efficiency and Effectiveness to Maximize Productivity

Being effective vs efficient works best if both are pulled together for the best results.

If a business is ineffective in accomplishing its overall goal, and the customer doesn’t feel that the service is equated with the cost, then efficiency becomes largely irrelevant. The business may be speedy and use minimal resources, but they struggle to be effective. This may put them at risk of going under.

It’s for this reason that it’s best to shoot for being effective first, and then work on bringing efficiency into practice.

Improving productivity starts with taking the initiative to look at how effective a company, employee, or method is through performance reviews. Leaders should make a point to regularly examine performance at all levels on a whole, and take into account the results that are being generated.

Businesses and employees often succumb to inefficiency because they don’t look for a better way, or they lack the proper tools to be effective in the most efficient manner possible.

Similar to improving a manager or employee’s level of effectiveness, regularly measuring the resources needed to obtain the desired effect will ensure that efficiency is being accounted for. This involves everything from keeping track of inventory and expenses, to how communication is handled within an organization.

By putting in place a baseline value for key metrics and checking them once changes have been made, a company will have a much better idea of the results they’re generating.

It’s no doubt a step-by-step process. By making concentrated efforts, weakness can be identified and rectified sooner rather than later when the damage is already done.

Bottom Line

Understanding the differences between being effective vs efficient is key when it comes to maximizing productivity. It’s simply working smart so that the intended results are achieved in the best way possible. Finding the optimal balance should be the ultimate goal for employees and businesses:

  • Take the steps that result in meeting the solution.
  • Review the process and figure out how to do it better.
  • Repeat the process with what has been learned in a more efficient manner.

And just like that, effective and efficient productivity is maximized.

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