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8/6/2019 Forms of Control
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IV. FORMS OF CONTROL
1. Behavioral Control
Behavioral control refers to facts that show whether there is a right to direct orcontrol how the worker does the work. A worker is an employee when thebusiness has the right to direct and control the worker. The business does nothave to actually direct or control the way the work is done ² as long as theemployer has the right to direct and control the work.
The behavioral control factors fall into the categories of:
y Type of instructions giveny Degree of instructiony Evaluation Systemsy Training
a. Types of Instructions Given
An employee is generally subject to the business·s instructions about when,where, and how to work. All of the following are examples of types of instructions
about how to do work.
y When and where to do the work.y What tools or equipment to use.y What workers to hire or to assist with the work.y Where to purchase supplies and services.y W
hat work must be performed by a specified individual?y What order or sequence to follow when performing the work.
b. Degree of Instruction
Degree of Instruction means that the more detailed the instructions, the morecontrol the business exercises over the worker. More detailed instructionsindicate that the worker is an employee. Less detailed instructions reflects lesscontrol, indicating that the worker is more likely an independent contractor.
Note: The amount of instruction needed varies among different jobs. Even if noinstructions are given, sufficient behavioral control may exist if the employer hasthe right to control how the work results are achieved. A business may lack theknowledge to instruct some highly specialized professionals; in other cases, thetask may require little or no instruction. The key consideration is whether thebusiness has retained the right to control the details of a worker's performance orinstead has given up that right.
c. Evaluation System
If an evaluation system measures the details of how the work is performed, then
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these factors would point to an employee.
If the evaluation system measures just the end result, then this can point to
either an independent contractor or an employee.
d. Training
If the business provides the worker with training on how to do the job, thisindicates that the business wants the job done in a particular way. This isstrong evidence that the worker is an employee. Periodic or on-going trainingabout procedures and methods is even stronger evidence of an employer-employee relationship. However, independent contractors ordinarily use theirown methods.
2. Output control
This approach relies upon the ability to identify specific tasks having a measurable
output or criterion of overall achievement-for example, an end ²product ,a part
manufactured to agreed standards, batch production or sub-assembly. Once
outputs or criteria for achievement have been identified, management can specify
outputs standards and targets. Rewards and sanctions can be related to
performance levels expressed in output terms. The efficiency of incentives will
largely depend on the degree of trust in management¶s intentions to honour the
relationship between performance and rewards.
Output control can make use of responsibility accounting ¶systems. The assignmentof responsibility may be in terms of investment centres, profit centres, or cost
centres .output control strategy is aimed at faciliting the delegation of operational
decision-making without the need for bureaucratic controls or relying on close
personal supervision .once output standards have been agreed, subordinates can
work with a ¶semi-autonomous· relationship to management, free from detailed
control over how tasks are carried out. Output control may be difficult to apply to
certain activities, such as the legal department of a business organisation. Although
it may be difficult to establish suitable and agreed measures of output, and it may
be difficult for management to codify the activities involved, ouput control may be
more appropriate than the application of a bureaucratic control strategy.
3. Control in public sector