MINE MANAGEMENT

MN 481
Management
Management can be defined as the process of designing and maintaining in which
individuals, working together in groups, accomplish efficiently selected aims.

Management is the gate through which social, political, economic and

technological change - indeed, change in every dimension - is rationally and
effectively spread through society.

Management is a matter of getting subordinates to do things. A manager has

duties and responsibilities. Duties are the things he must do himself; for these he
manages only his own activities and time. Responsibilities are the things he must
get other people to do.

In most industry, especially mines the management of subordinates' activities is

too important to be left entirely to ad hoc and non-systematic personal inspection
tours and visual observations. There should be formal, documented management
systems that can help to measure performance of the organization and personnel
Management cont.…
Management system:

 It brings information to the manager,

 It allows managers to compare what happened with what should have

happened,

 Compare what is happening with what should be happening,

 Enables him to assess the impact of alternative actions,

 Provide him with a measure of his subordinates' effectiveness, and

 It is an indication to the manager where he/she should intervene

The items above can be achieved by comprehensive of all the projects and
activities within the organization
PLANNING PROCESS
Planning can be defined as a total approach to improving long-term profitability by
identifying opportunities, allocating resources and organizing immediate and
longer-range action to achieve desired results.

It embraces both long-range strategic and operational planning as well as short-

range planning (annual planning or budgeting).

Planning process consists of:

 Assessing the company's position, and the opportunities and threats it faces.

 Setting goals, establishing priorities, and developing strategies.

 Making plans for each business activity.

 Assuring that plans are carried out.

Planning Process cont.
Planning process can be divided into four phases:

 Business assessment - gathering facts and forecasts in order to assess the

company's current position, prospects, opportunities and threats.

 Strategic planning-determining - the 'grand design' of the enterprise and the

allocation of resources to opportunities - deals with effectiveness (deciding the
right things to do)

 Operational planning - developing more detailed long-range plans for major

functions and activities; determining what must be done, when and by whom to
implement strategic decisions - deals with efficiency (determining how to do
things right)

 Annual planning and action by managers assigned responsibility for specific

activities.
Business assessment
The purpose of this phase is to reach conclusions on the company's position and prospects
which are essential prerequisites to making sound planning decisions. There are four steps in
this phase:

1) Assessment of the company's performance, strengths and limitations

Key elements for the company's success:

 Profitability: Profit trends of each main sector of the business.

 Growth: Growth trends of each sector in relation to the industry and competition.

 Marketing: How and where the end product is sold and distributed in comparison to
competition.

 Ore reserves: Present inventory and development potential.

 Financial resources: Capital structure and financing capability.

 Human resources: Employment practices and management capability.

 Productivity: Effectiveness and efficiency in mining and milling operations.

Business assessment cont.
2) Assessment of the external environment

 Competitors: Resource reserves and financial strength of direct competitors.

 Economic conditions: National and international economic conditions, projected

changes, and impact on demand.

 Technology: Developing technology and the introduction of substitutions.

 Capital markets: Future capital availability and cost.

 Government activity: Possible legislation in areas such as taxation and

environment control.
Business assessment cont.
3) Assessment of the expectations of stakeholders.
 Shareholders: Expectations of shareholders as to growth, stability of earnings,
and dividends.

 Joint venture partners: Expectations of joint venture partners as to speed of

resource exploitation and investment in exploration.

 Management: Expectations of management in terms of challenge, personal

development, and growth in compensation.

 Employees: Expectations of labour concerning compensation, security and

working conditions.

 Customers: Expectations of customers in terms of certainty of supply, prices,

quality and deliveries.

 Creditors: Expectations of creditors in terms of terms, conditions and ability to

pay.

 Government: Expectations regarding output, local processing, employment,

environment control, local equity participation, etc.
Strategic Planning
The purpose of this phase is to determine the overall long-term direction of the
enterprise-a clear idea of where the business should be in five or ten years and
how, in very broad terms, to get there. There are four main steps:

1) Developing the business mission

The examination of internal strengths and weaknesses and external threats and
opportunities provides a starting point for clarifying the business mission which
addresses such questions as:

 What aspect of mining (i.e. what business) should we be in?

 What particular segments of mining should we specialize in?

 Which markets and customers should we concentrate on?

 How do we want to grow?

 Where should we pursue our supply of resources?

Strategic Planning cont.
2) Formulating the business policy and objectives

A mining company should consider developing objectives and policies on the

following topics:

 Profitability;

 Financial resources;

 Physical resources;

 Market position;

 Human resource development;

 Public responsibility;

 Productivity
Strategic Planning cont.
3) Evaluating the alternatives and opportunities

Some of the kinds of alternatives and opportunities which a mining company might
evaluate for strategic purposes would be the following:

Exploration: In existing or new areas; For existing or new products; With company
or hired efforts; Or through purchase of known reserves.

Development: Of existing or new properties; For existing or new products; Now or

in the future;

Exploitation: Rapid or moderate; At stable or fluctuating levels;

Marketing: Long-term contract or open market; Base metals or further refinement;

Domestic or international.

Resource ownership: Sole owners or joint ventures.

Strategic Planning cont.
4) Determining the strategies

Having come to the point of completing a strategic plan, one might well ask
whether it is any good. Will it lead to concentration of effort?: Is it clear and
unambiguous? Is it a stimulus to effort and commitment?

Is it consistent with the environment?: Is it appropriate to our customers' and the

consumers' needs?; Does it fully exploit opportunities?; Does it minimize threats?;
Does it provide for the likely responses of competitors?

Is it consistent with the competence and resources?: Does it exploit strengths?;

Does it minimize or correct weaknesses?; Does it fully utilize resources?

If the answers to these questions are 'no', further work is needed on the strategic
plan.
 Evaluation and
Present strategic
External
external Choice
threats and
environment
Top Opportunities
manageme
nt
Orientation
Medium Short
Inputs range range
planning planning

Forecast of Development
future of alternative
environment strategies
Implem
Enterprise entation
Profile

Contro
l

Purpose
and major
Internal
objectives Resource audit weakness and
of the
strength
enterprise

Consistency
testing
Contingency
planning
Feedback
OPERATIONAL PLANNING
Once the strategic plan has been completed more detailed planning is needed to
decide what must be done, by whom, and when to implement the chosen strategy
and move the company from its present position to the attainment of its long-range
objectives. Operational planning provides an essential link between strategic and
annual planning, and is usually covers these steps:

1) Organization:

 Deciding on the organization structure appropriate to the strategy selected, and

 Segmenting and delegating the strategic plan to the prime organizational units
for execution.

 Define each unit's mission, the scope of its activities and constraints, and
critical relationships with other units.
OPERATIONAL PLANNING cont.
2) Formulate unit policies and objectives:

 Considers the application of the strategic plan to each unit.

 This leads to the formulation of more detailed policies and objectives for
each unit.

3) Develop and select unit actions:

 Preparation of action and programs for achieving the unit objectives.

 Critical decisions are made that will affect resource development and
exploitation schedules impacting on the ultimate profitability of the mining
operations.
OPERATIONAL PLANNING
4) Preparing an integrated action plan:

 Integration of all unit plans.

 Converting plans into quantitative and monetary terms.

 Preparation of the projected financial statements for each year of the planning
period.

 Projections should be concise and deal only with the critical components.

 To check whether plans are in balance, desired results are obtainable, and
financial resources adequate.

If care is not taken, this can become bogged down in excessive detail that detracts
from the value of the planning effort.
ANNUAL PLANNING AND ACTION
After the three planning phases above, more detailed short-term plans can be
made. Annual planning and action specify the results to be achieved and actions to
be taken within the next fiscal year and should identify the contribution that each
unit and manager is committed to achieve.

The annual plan should provide the basis for the company budget and this permits
control measures to be directly related to the firm's strategy. Special care should
be taken in ensuring this linkage so that planning does not become something
done in a vacuum or the operations do not continue without reflecting major
strategy changes.

The annual budget should, wherever possible, be based on performance

standards - standards of time and method, material usage, inventory turnover,
collections, and so on.

A part of all this is a system of feedback reporting which permits periodic

comparison of actual results with budget, performance standards, or managers'
priority plans. Out of feedback comes corrective action.
BENEFITS AND LIMITATIONS OF
PLANNING
A well-structured and directed planning process can improve decision making by:

 Relating decisions to their importance in achieving overall corporate purposes.

 Improving the coordination and integration of decisions.

 Providing discipline in evaluating alternatives and reaching decisions.

 Bringing the appropriate management talent to bear.

 Revealing weak data and assumptions.

 Providing better information about the business, more awareness of the

environment, and more systematic coverage of opportunities.
BENEFITS AND LIMITATIONS OF PLANNING
Cont.
Planning enables a more effective management team to be developed through:

 Fostering unity of purpose and increased commitment to common goals.

 Permitting greater delegation of decision-making without loss of control.

 Improving managers' understanding of the total picture.

 Improving concentration of effort and so reducing wheelspinning at lower levels

of management.
Objectives
In planning processes, the second step is to establish objectives for the entire
enterprise and then for each subordinate work unit, for the long term as well as
short term range.

Objectives specify the expected results and indicate the end points of what is to be
done, where the primary emphasis is to be placed and what is to be accomplished
by the network of strategies, policies, procedures, rules, budgets and programs.

Company objectives give direction to the major plans which, by reflecting these
objectives, define the objective of every major department. Major department
objectives, in turn, control the objectives of subordinate departments, and so on
down the line.
Objectives
How to set objectives

Without clear objectives, managing is haphazard. No individual and no group

can expect to perform effectively and efficiently unless there is a clear aim.

Quantitative and Qualitative Objectives

To be measurable, objectives must be verifiable.

Non verifiable objectives

 To make a reasonable profit

 To improve communication

 To improve productivity of the production department

 To Install a monitoring system

Objectives
Verifiable objectives

 To achieve a return on investment of 12% at the end of the current fiscal

year

 To issue a two page monthly news letter beginning July 1, 2017.

 To increase production output by 5% by December 31, 2017 without

additional costs while maintaining the current quality level.

 To install a computerized monitoring system (with certain specifications) in

the processing plant by December 21, 2016.
Hierarchy of Objectives
Hierarchy of Objectives
The board of directors and top managers are very much involved in determining
the purpose, the mission and overall objectives of the firm

Middle level manager can be a vice president, or manager of marketing, or the

production manager are involved in setting of key result area objectives, division
as well as department objectives.

The primary concern of lower level managers is the setting of the objectives in
the department and unit level as well as the objectives of their subordinates.

Discuss whether adopting using top down approach or bottom up approach on

setting objectives in an organization.
PLANNING IN THE MINING INDUSTRY
Some of the factors considered during designing a planning process for a mining
company:

 High risk in acquiring mineral ore supply

 Capital intensive nature of mining

 Little or no control over product price

 The actual timing of development

 Substantial government intervention and control

In summary, the nature of the mining industry limits a company's ability to control
the critical variables of demand and the market place.
HOW TO MAKE PLANNING PRODUCTIVE
In order to make planning productive and to avoid some of the more frequently
encountered difficulties, here are a few suggestions based on experience.

 Keep planning action oriented

 Maintaining line responsibility

 Keeping it simple

 Emphasizing strategy

 Keeping it top-down

 Being realistic

 Giving sufficient attention to the process

INVESTMENT STRATEGY FOR MINING
PROJECTS
Investment decisions in the mining industry, as in any other, normally
focus on numerical methods comparing alternative investments.
1. MINING INVESTMENTS
Investments in the mining industry have many characteristics not
found in most other industries. Characteristics includes;
 Finding or Exploration: exploration must be funded for a company
to get/renew investments that will be profitable in the future. The
program, which may be structured as individual efforts,
partnerships, or joint ventures, take time to develop good
prospects/projects.
 Size: Most of the mining projects are lower-grade deposits, large-
scale mining, and processing using high technology equipment.
Most of the projects require good infrastructure to make them
feasible. As a result, mining became highly capital intensive.
Projects costing in the hundreds of millions of dollars are more and
more common.
INVESTMENT STRATEGY FOR MINING
PROJECTS
 Life: Projects generally have very long lives. Many years pass
between first finding ore-grade material, proving up the reserves,
planning the project, and construction.

 Product: mining projects produce a major product, although byproduct

or co-products are often produced. The product produced in the
mining process is not sold to the final customer. Rather, this raw
product is often sold to others who, after adding value to it, may or
may not sell to the final customer. As a result, demand for “raw”
mining products is “derived” and therefore subject to price and volume
swings in addition to those generated by the final customer.

 Profile: Projects are usually “high” profile wherever they are located
because they are “natural resources.” In some countries, they often
get much more media and political coverage than they might
elsewhere. If this situation exists, or may come to exist, attitudes and
business ground rules can change very quickly; what appears to be a
good investment one day can quickly become less attractive.
INVESTMENT STRATEGY FOR MINING
PROJECTS
2. INVESTMENT STRATEGIES

Challenges in mining is proving enough ore to support profitable investment and

to be sure on the factors controlling the existence of the project.

Dramatic changes in the price and volume of mining products, operating costs,
and government attitudes, among other considerations, have led to the
reexamination of a once successful strategy.

3. CALCULATION METHODS

The evaluation of a mining investment starts with the con-cept that the rate of
return over future periods measures the financial productivity of capital.

Decision makers on the investment use tangible and intangible data which are
sometimes uncertain for their calculations, to cope with this uncertainty it is
recommended to use the techniques below:
INVESTMENT STRATEGY FOR MINING
PROJECTS
4. DECISION MAKING

Decision making for a mining investment is a process. It involves decisions within

many separate disciplines that are then linked together. The initial economic
decision is to invest or not to invest and thereafter to grow, maintain, or disinvest.

Good communication within the organization and with outside consultants is

extremely important. It speeds decision making and it minimizes
misunderstandings. But often it is overlooked as a key element that helps the
decision process progress smoothly.

Also poor negotiation with outside parties can lead to major problems and
unforeseen penalties. The process is critical to every aspect involved in a project.
Experienced personnel have a better understanding of what to expect, how to act,
and what to demand. They pay attention to:

 Organizing Their Positions: They plan for changing negotiation strength,

interference by others in the organization, insufficient internal communication,

 Empathizing with Others: They place themselves in another’s position to

understand different ways of thinking; they recognize the need for “saving
face.”
INVESTMENT STRATEGY FOR MINING
PROJECTS
 Determining the Role of Government: They try to understand the politics,
the role for private enterprise in the country, status of businessmen,
government involvement in negotiations,

 Focusing on the Decision-Making Process: They weigh economic and

political criteria, the role of personal relations and personalities and the
amount of time assigned to negotiations by others.

As the decision-making process approaches the go/no-go decision, senior

management and the board of directors become more and more involved.
By this time, all work is reviewed to check for consistency, risk, and possible
omissions or areas that need more work pending the final decision.

“Due diligence” is an investigatory safeguard and is particularly important. It

covers reserve verification, project risks, projected capital and operating
costs and their variability with volume, competitive assessment, market
analysis, and financial analysis.

The due diligence process is normally conducted again if, potential equity
investors and/or project finance are needed. Then money providers are
given up to date factually correct data on the project together with a
discussion of potential risks.
Government Role and Influence in Mining
Government plays a strong role in every aspect of mineral development from
exploration through mining, processing, and consumption.

The mineral industry is profoundly affected by laws, regulations, and other

government actions on land use, worker health and safety, environment, taxes,
fiscal policy, and many other policy areas.

It is not possible to plan, design, build, or operate mines, mills, smelters, or even
office buildings without detailed consideration of government regulations and
permitting requirements dealing with environment, worker health and safety.
Government Role and Influence in Mining

Governments and their agencies exert many influences on the mining industry, pertaining to;
land use, mineral rights, taxation, quotas, tariffs, financial incentives, antitrust constraints,
stockpiling, safety and environment, and expressed or implied mineral policies.

A mining company is subject to the same forms of taxation upon income as any other
business and, in Tanzania, the taxation applies also to production, royalty, and severance
taxes as well.

The need for safety and environmental regulation arises because of the complexity nature of
the mining industry. Sometimes environmental impact are direct and obvious, but more often
they are considered side effects. Typical impacts include;

 Accidents and health hazards,

 Land-use and environmental impacts, and

 Economic-political-social-psychological effects.
Government Role and Influence in Mining
Physical, chemical, and biological changes in the environment often result from mining. They
are usually the most evident and serious of mining’s side effects. Examples are disturbance
of the surface, subsidence, water and air pollution, consumption of irreplaceable resources,
threat to endangered species, and preemptive use of land

There is a variety of indirect effects, often more subtle and less susceptible of measurement,
that may be associated with mining. Often they result from either initiation or termination of
mining operations.

The primary effects of opening a mine are largely beneficial, of course, but there may be
deleterious secondary ones that create economic and political strains, require social
readjustments, and cause psychological stress among the population. These are multiplied
when a mine closes.
Government Role and Influence in Mining
SOCIAL-LEGAL-POLITICAL-ECONOMIC IMPACTS

The impact of government permeates all aspects of the operational, financial, and
managerial life of a mine or a company.

Social-Legal-Political-Economic Impacts, describes how government works in a general way

and how it applies to mining. It also discusses the socioeconomic and political aspects of
mineral policy and how and why there are many constituencies to be considered, not only in
mineral policy but in the actual process of planning mines.

STRUCTURE OF GOVERNMENT

 Create institutions and administer them,

 Establish regulations relating to the conduct of individuals and organizations and enforce
them, and

 Collect taxes and allocate the receipts.

Government Role and Influence in Mining
Socioeconomic Consequences of Mining Operations
Both industry and government has to anticipate and prepare for the social, economic, and
environmental effects of the development of new mining and processing operations.

The new economic benefits are for the most part welcomed. But there is also the downside
when mining operations eventually cease. In addition to the positive and negative economic
and environmental consequences encountered during the life of a mine, there can also be
considerable social strain placed on a community in many phases.

Governments are fearful of the costs to be faced and uncertain of their revenues. Industry, on
the other hand, is trying to make a new venture successful and does not welcome
unexpected financial burdens or public restraints. Both mine and local government managers
must anticipate these public vs. private stresses that accompany mining and plan how to
cope with them independently and cooperatively.
Government Role and Influence in Mining
Government as a Source of Uncertainty for Mine Management
Despite the capability of the mining managers or the individual engineer to recognize and
deal with the risks and hazards that are a part of mining, they may find the uncertainties that
originate in the behavior of governments a less familiar situation. Every aspect of mining is
touched by government policies, regulations, or prohibitions.

Relations with the labor force can be influenced, new costs may appear, or both foreign and
domestic markets may be affected. At one moment, government actions may be supportive
of domestic mining, but the next day they may be advantageous to competitors at home or
abroad.

Perhaps the most frustrating aspect of government rules and policies is that they do not
remain static. A corporate decision tends to be made on the basis of policies and regulations
at the time the decision is made.

It may become deeply imbedded in how the mine is operated, the ore or mineral is
processed, or to what market output is directed. Yet the policies and regulations may change
continuously over the several decades that the mine operates.
Government Role and Influence in Mining

Government as a Source of Uncertainty for Mine Management

Governmental influence to the mining demands that management as well as engineers
involved in planning future operations need to weave government as a variable into their
work and their decisions.

Initial plans are best drafted employing current laws, regulations, and policy. These plans
should then be reviewed using assessments on how the government posture could possibly
change within reasonable bounds over time. Such scenarios can provide rough measures of
sensitivity to the effect of future government actions and plans. Projects can then be adjusted
to minimize this impact.

This should be just as much a part of engineering design and management decisions as the
careful examination of technology, costs, and prices. Finally, approval or disapproval of a
project at the board of directors level may once again assess these tangible and intangible
political elements before a decision is made.

Investment decisions is influenced by current economic conditions. If prices have been

dropping, then pessimism colors profit expectations and extra caution appears. Rising prices
will have the opposite effect. This is true on the world political scene. Leaderships change,
and the policy pendulum swings between relatively conservative and liberal viewpoints.
SPECIFIC AREAS OF GOVERNMENT INVOLVEMENT
Work Force

Mining companies, particularly the larger ones, are much more constrained in what they can do and
in some cases are directed as to what they must do.

Areas of Government involvement:

 Labor/Management Relations: Refer to Employment and Labor Relations Act 2004.

 Civil Rights: The laws are an integral part of the government efforts to assure that employment
is not influenced by religion, race, age, color, or sex. Affirmative action goes one step further in
directing that efforts be made to correct for past discrimination in hiring.

 Wages and Hours: The minimum wage laws, are constantly being revised to reflect the
changing cost of living and the nature of the work force. In addition, the laws define the
maximum permissible hours that can be worked and the schedule of compensation for various
types of overtime.

 Other Compensation: Employees also receive compensation beyond that related to actual
hours on the job. Compensation to a worker injured on the job has to be clearly stated, as in
other injury claims, through reliance on the courts.

 Training

 Safety
Mining Law
Mining law is essentially a branch of the law of real property. It concerns the acquisition
of property for extracting contained minerals, and the rights, privileges, and duties that
fall upon the holder of the property once the rights are acquired.

The general Mining Law

The law is based fundamentally on two principles:

 One can acquire mineral rights to land by making a discovery of valuable minerals
and

 A person who has made such an acquisition must continue to develop the minerals
on the land to retain possession.

No person shall, on or in any land, prospect for minerals or carry on mining operations
except under the authority of a mineral right granted or deemed to have been granted.

Any person who contravenes subsection the above statement, commits an offence and
on conviction is liable-

Any minerals obtained in the course of unauthorized prospecting or mining operations

including equipment involved in such operations shall be forfeited.
Tanzania Mining Act 2010
The mining Act of 2010 is a United Republic of Tanzania Law that authorizes and
governs prospecting and mining for economic minerals: Industrial, Gemstone,
Construction, Metallic minerals…

The law applies to Tanzanian Main Land only…

REFER TO TANZANIA MINING ACT OF 2010

Organization
Organizing means:

 The identification and classification of required activities

 Grouping of activities necessary to attain objectives

 The assignment of each grouping to a manager with authority necessary to supervise it

(delegation)

 The provision for coordination horizontally (on the same or similar organizational level)
and vertically e.g. corporate headquarters, division, and department) in the organization
structure.
Organization
For an organization role to exist and to be meaningful to people, it must incorporate:

 Verifiable objectives: which are the major part of planning

 A clear idea of the major duties or activities involved

 An understood area of discretion or authority, so that the person filling the role knows
what he or she can do to accomplish goals
DUTIES AND RESPONSIBILITIES OF MANAGING
Duties: activities performed by managers

Responsibilities: activities that a managers will motivate other to do

A manager should minimize his duties and maximizes his responsibilities.

Effective manager is the one who ensure that his responsibilities are carried out to
his satisfaction.

Successful of a manager in getting his subordinates carry out his responsibilities

will largely depend on how he organizes their duties and responsibilities.
Elements of administration
Forecasting: deciding what the future holds

Planning: what is to be done about the future.

Organizing: who is to do what.

Commanding: getting it done.

Coordinating: directing people interaction.

Controlling: identifying deviations for action.

Functional Organization

Mine manager

Accounting
Mine Mill Maintenance
and
superintendent superintendent department
adminstration
Some of the functional activities in a mine
are:
 Exploration and development: Looking for and defining an ore body.
 Production: Mining and beneficiation of the ore.
 Marketing and sales: Selling the product.
 Financial accounting and control: Getting the numerical figure-work done
to provide the stakeholders (government, shareholders, employees,
suppliers, managers etc.) with appropriate fiscal information that is
required.

 Personnel: Assisting management to recruit, train, motivate, remunerate,

and keep good people.

 External relations: Representing the company to the outside world

(government, environmentalists, industry associations, local communities
etc.).
THE PERFORMANCE APPRAISAL PROCESS
It is a supervisor's and manager's responsibility to the company to appraise employees and
communicate the evaluation to the employee

The performance appraisal provides a basis for reward and punishment for good or poor
performance by the subordinate

The evaluation of an employee's performance also forms the basis of many of management's
decisions relating to staff;

 Determining the training needs of staff, and evaluating that training.

 Determining whether to increase or decrease the number of subordinates.

 Determining promotion and potential of individuals.

 Determining the effectiveness of supervision.

 Gathering data for manpower planning.

 Determining the contribution of the employee to the organization and, therefore, appropriate
compensation.
APPROACHES TO THE PERFORMANCE-
APPRAISAL
Three approaches to the performance-appraisal system

 Task Evaluation

 Skill Assessment

 Management by Objectives (MBO)

APPROACHES TO THE PERFORMANCE-
APPRAISAL
1. Task evaluation
This deals with quantitative and some qualitative evaluation of set criteria common
to most repetitive, predictable tasks.

The system is best suited to clerical or production oriented positions, usually being
hourly-paid employees.

Little training is required for supervisors in the use of the system.

Example that shows some criteria on a typical evaluation form;

The job criteria usually fit into the area of:

 Production - quality and quantity of work, and adherence to safety regulations,

 Attitude - towards duties, fellow employees and supervisor, and
 Adaptability-ability to learn, ability to work with others, and take on new tasks.
APPROACHES TO THE PERFORMANCE-
APPRAISAL
2. Skill assessment
This deals with more qualitative than quantitative evaluation of the skills required to
perform a job.

Skill Assessment is suitable for first-level supervisory and technical positions.

The evaluation is no longer confined to quantity and quality of output, but general
judgement, decision making, planning ability, analytical ability, etc.

3. MANAGEMENT BY OBJECTIVES
EDUCATION, TRAINING AND DEVELOPMENT
Project Scheduling
 What is a Project?
 A project is a sequence of unique, complex, and connected
activities that have one goal or purpose and that must be
completed by a specific time within budget, and according to
specification.
 Scheduling
• A schedule is the conversion of a project action
plan into an operating timetable
• It serves as the basis for monitoring and
controlling project activity
– work changes daily, so this is essential
• With the plan and budget, it is the major tool
for the management of projects
– most scheduling is at the WBS level (tasks), not the
work package level
– only the most critical work packages may be shown
on schedule
 Scheduling
• In a project environment, the scheduling
function is more important than it would be in
an ongoing operation
• Projects lack the continuity of day-to-day
operations and often present much more
complex problems of coordination
 Scheduling

• The basic approach of all scheduling

techniques is to form a network of activity
and event relationships
• This network graphically portrays the
relations between a project’s tasks
• Tasks that must precede other tasks are then
clearly identified, in time as well as function
 Network Scheduling Advantages
• Networks are a powerful tool for planning and
controlling a project and have the following
benefits:
– consistent framework for planning, scheduling,
monitoring, and controlling the project
– illustrates the interdependence of all tasks, work
packages, and work elements
– denotes the times when specific individuals must
be available for work on a given task
Network Scheduling Advantages
– aids in ensuring that the proper communications
take place between departments and functions
– determines an expected project completion date
– identifies so-called critical activities that, if
delayed, will delay the project completion time
– identifies activities with slack that can be delayed
for specific periods without penalty
Network Scheduling Advantages
– determines the dates on which tasks may (or must)
be started if the project is to stay on schedule
– illustrates which tasks must be coordinated to avoid
resource timing conflicts
– illustrates which tasks may (or must) run in parallel
to achieve the predetermined project completion
date
– relieves some interpersonal conflict by clearly
showing task dependencies
 Network Scheduling Techniques
• PERT was developed in 1958 for the Polaris
missile/submarine project
• The Critical Path Method (CPM) was developed
by DuPont during the same time period
• Initially, CPM and PERT were two different
approaches
• Microsoft Project (and others) have blended CPM
and PERT into one approach
 Terminology
• Activity - A specific task or set of tasks that
are required by the project, use up
resources, and take time to complete
• Event - The result of completing one or
more activities. An identifiable end state
occurring at a particular time. Events use
no resources.
• Network - The combination of all activities
and events that define a project
– Drawn left-to-right
– Connections represent predecessors
 Terminology Continued

• Path - A series of connected activities

• Critical - An activity, event, or path which,
if delayed, will delay the completion of the
project
• Critical Path - The path through the project
where, if any activity is delayed, the project
is delayed
– There is always a critical path
– There can be more than one critical path
 Terminology Continued

• Sequential Activities - One activity must be

completed before the next one can begin
• Parallel Activities - The activities can take place at
the same time
• Immediate Predecessor – an activity that must be
completed before a particular activity can begin
• An activity can be in any of these conditions:
– It may have a successor(s) but no predecessor(s) -
starts a network
– It may have a predecessor(s) but no successor(s) -
ends a network
– It may have both predecessor(s) and successor(s)
- in the middle of a network
 Terminology Continued

• Activity on Arrow (AOA) - Arrows

represent activities while nodes stand for
events
• Activity on Node (AON) - Nodes stand for
events and arrows show precedence
 Constructing an AON Diagram

1. Begin with the START activity

2. Add activities without predecessors
– There will always be one
– There may be more than one
3. Add activities that have existing activities
as predecessors
4. Repeat step 3 until no more activities
 Gantt Charts

• Developed by Henry L. Gantt in 1917

• Shows planned and actual progress
• Easy-to-read method to show current status
 Gantt Charts: Advantages and
Disadvantages
• Easily understood
• Provide a picture of the current state of a
project

• Difficult to follow with complex projects

Example
The AON Network
Critical Path and Time
 Critical Path Calculation
To find the critical path:

1.start with set of children of the Start node

2.for each node: use the earliest start time (the greatest
“earliest finish time of all this node’s predecessors), add in
the duration to calculate the earliest finish time

3.repeat step 2 for the children of each node in the set

 Slack Calculation
To find the slack:

1. start with End node and note its LS time

2. for each predecessor node: set the LF time to the
lowest LS time of the successor(s) and subtract the
duration to get the EF time

3. repeat step 2 for the children of each node in the set