Effective management takes on a different meaning at each level of society's technological and economic development. Our present stage is known as the "Information Era" brought by development in high computer technology. This is characterized by an explosive rate at which knowledge is accumulated, stored and retrieved by computers; and distributed worldwide. Business competition is fierce and global. Economic survival requires creativity and quality.

Organizations must develop and nurture this competitive advantage from its own employees. The best management style seeks to unleash and nurture this creative advantage by allowing freedom, flexibility, participation and idea generation.

Compare that with the Industrial Revolution era. During that time, the economy was dominated by machine-run factories in production industries. Productivity was measured by quantity and speed of production. Then, a highly regimented, autocratic management style was accepted and may have been effective in controlling and monitoring the flow of production. This type of management is now considered dysfunctional and simply bad. Some call it micro-management -- a style characterized by total control, lack of trust and lack of flexibility.

A micro-manager dictates how employees do their jobs and constantly monitors the petty details. There is lack of delegation, no sharing of authority and a lack of employee empowerment. Oftentimes, the micro-manager misses the big picture while spending most of the time on the petty details of control.

A devastating result of this type of management is the inability to maximize employees' ideas, potential and contribution to the firm.  There is no progress because decision making is slow. Productivity is low as employees are stifled, unmotivated and frustrated.

This often leads to many employees leaving the company and high turnover costs. This cost can be staggering. In a July 2002 editorial article by Carla Johnson in HR Magazine titled "Capturing Turnover Costs," she said that "the challenge for HR is to capture all the costs, so that strategies can be aligned with true expenses." Categories such as pre-turnover, separation, vacancy, recruiting and new-hire processing can be used to guide the search for pertinent expenses. She further reported that various surveys and benchmarking studies had found huge variations in turnover costs. According to the American Hotel & Motel Association's 1997 U.S. Full-Service Deluxe & Luxury Hotel Benchmarking Study, the average annual turnover cost of a hotel was $631,400. In William M. Mercer's 1998 FAX Facts Survey on Employee Turnover, 55 percent of companies surveyed estimated the cost of turnover at $10,000 per person or less, 10 percent calculated it at more than $40,000 per person. And a 1998 retention study by Manchester Consulting found turnover costs are most likely to fall within the range of $1,000 to $10,000 per employee.

Competitive advantage today calls for a high-powered work system that requires employee involvement, training, communication and information, and a democratic management style.

Behavioral scientists propose the presence of three psychological states that could result in a highly motivated and productive worker. The worker must experience a.) meaningfulness or significance of one's job b.) responsibility for outcomes and c.) feedback on the work performed. Wise management never underestimates people's pride and dignity for work. Recognition goes a long way. When the environment is happy, work translates to play. Money matters but that's not all there is.

My survey of employees with the longest tenure -- from 10 to 15 years -- cited factors such as autonomy, empowerment, freedom, trust and a caring manager as the most common reasons for job satisfaction. Pay and benefits did not even make the ratings. Employees view these as their basic entitlements. What employees believe distinguishes their company from the competition is the human resource competitive advantage. A good corporate culture attracts the best and the brightest.

If you think micro-management plagues your organization, talk to employees and look for signs. This may be thwarting your company's growth and success.

Michelle Alarcon is an attorney and assistant professor
of management at Hawaii Pacific University.
She can be reached at malarcon@hpu.edu or michelle@alarconlawoffice.com