The art of effective management is addressed, along with motivational factors that affect the way in which employees respond to management. To meet challenges for better production, organizational systems are taking into account the development of individual employees. Since human behavior must be fully understood to develop human resources, "new design managers" need to understand psychological needs and what motivates individuals. Therefore, at the heart of effective administration are working conditions designed to meet physical and psychological needs, and the astute skill exhibited in approaching employees in a way that causes them to be motivated. Eight of 16 motivational factors important to developing human resources for productivity are as follows: showing respect for employees increases self-esteem and positive feelings; understanding that individual successes strengthen the total organization; rewarding and praising employees increases productivity; challenging workers and providing stimulating work provides the incentive to produce more; knowledge of progress is reinforcing; working for the same goals encourages teamwork; employees tend to identify with leaders who set desirable examples; and individuals are usually encouraged to work harder when they feel secure about their status. (SW)