What Is Total Quality Management?

Why is online shopping a better experience on some sites than on others? Let's look at total quality
management (TQM) for the reasons.
Total quality management is an organization-wide philosophy with its core values centered on
continually improving the quality of its product and services, and the quality of its processes, to meet
and exceed customer expectations.
This means that everyone in the organization - from top management to the employees - plays a role in
providing quality products and services to customers. Even suppliers and the customers themselves are
part of the TQM.
Five Principles Of TQM
In order to exceed customer expectations, an organization must embrace five principles:
Produce quality work the first time
Focus on the customer
Have a strategic approach to improvement
Improve continuously
Encourage mutual respect and teamwork
Producing quality work (the first time) means quality is built into the processes for producing
products or providing services. Employees are trained and empowered to identify problems and
fix them right away.
Focusing on the customer involves designing products or services that meet or exceed the
customer's expectations. Data can be gathered from surveys to measure customer satisfaction.
This information is then disseminated to all departments to continually improve products and
services.
Having a strategic approach to improvement means processes are developed and tested to
ensure the product or service's quality. This is a never-ending process that involves everyone
from top to bottom, even suppliers and customers themselves.
Improving continuously means always analyzing the way work is being performed to
determine if more effective or efficient ways are possible. Management and employees are
always making improvements and striving for excellence.
Encouraging mutual respect and teamwork is important because it fosters a single-
organizational culture of excellence.
ISO 9000 is a set of standards and quality management systems that ensure that the needs of customers are met
while also meeting all statutory and regulatory requirements. ISO 9000 is based on eight guiding principles that
work together to improve customer satisfaction, include more effective use of resources and employee talents and
create efficient processes and systems to ensure overall quality standards.
What Is ISO 9000 Certification?
The principles include:
1. Customer focus is done by exceeding customer expectations by linking organizational objectives to
customer needs.
2. Leadership unifies the purpose and direction by management to develop a fully-involved staff.
3. Involvement of people utilizes employees' best talents, encouraging autonomy and holding employees
accountable for their contribution.
4. Process approach is directing work as a process by defining work activities, assigning responsibility and
accountability to employees and having a system to analyze and measure the process in terms of risk to
customers and suppliers.
5. Systems approach to management aligns processes and systems inter-dependently to meet customer needs
in an efficient and effective way.
6. Continual improvement produces products, services, processes and systems are evaluated through training,
tracking improvements and recognizing those employees responsible for improvements.
7. Factual approach to decision making uses accurate and reliable data available to employees to use for
decision making.
8. Mutually beneficial supplier relations fosters relationships with suppliers that are based on shared short-
and long-term goals that benefit both parties.
The certification process involves adopting the principles, training employees on quality management systems,
scheduling a pre-assessment, analyzing the outcomes, implementing improvements and cycling through an
additional audit over a three-year period of time.
Management by objectives (or MBO)
is a personnel management technique where managers and employees work together to set, record
and monitor goals for a specific period of time. Organizational goals and planning flow top-down through
the organization and are translated into personal goals for organizational members. The technique was
first championed by management expert Peter Drucker and became commonly used in the 1960s.
Key Concepts
The core concept of MBO is planning, which means that an organization and its members are not
merely reacting to events and problems but are instead being proactive. MBO requires that employees
set measurable personal goals based upon the organizational goals. For example, a goal for a civil
engineer may be to complete the infrastructure of a housing division within the next twelve months. The
personal goal aligns with the organizational goal of completing the subdivision.
MBO is a supervised and managed activity so that all of the individual goals can be coordinated to work
towards the overall organizational goal. You can think of an individual, personal goal as one piece of a
puzzle that must fit together with all of the other pieces to form the complete puzzle: the organizational
goal. Goals are set down in writing annually and are continually monitored by managers to check
progress. Rewards are based upon goal achievement.
Advantages
MBO has some distinct advantages. It provides a means to identify and plan for achievement of goals. If
you don't know what your goals are, you will not be able to achieve them. Planning permits proactive
behavior and a disciplined approach to goal achievement. It also allows you to prepare for
contingencies and roadblocks that may hinder the plan. Goals are measurable so that they can be
assessed and adjusted easily. Organizations can also gain more efficiency, save resources and
increase organizational morale if goals are properly set, managed and achieved.
Disadvantages
MBO is not without disadvantages. Application of MBO does take some concerted effort. You cannot
rely upon a thoughtless, mechanical approach. You should note that some tasks are so simple that
setting goals makes little sense and becomes more of silly annual ritual. For example, if your job is
snapping two pieces of a product together on an assembly line, setting individual goals for your work
borders on the absurd.
Rodney Brim, a CEO and critic of the MBO technique, has identified four other weaknesses. There is
often a focus on mere goal setting rather than developing a plan that can be implemented. The
organization often fails to take into account environmental factors that hinder goal achievement, such as
lack of resources or management support. Organizations may also fail to monitor for changes, which
may require modification of goals or even make them irrelevant. Finally, there is the issue of plain
human neglect - failing to follow through on the goal.
Example
Let's say that you are a senior associate at a law firm who practices in the civil litigation practice
department. Your cases involve complex business litigation that usually take years to prepare before
trial (and the inevitable appeals, given the dollars at stake).
You sit down with the managing partner of the department for your annual case review. You and your
managing partner triage the cases and set goals for you to complete. Some cases are stuck in
discovery but should be progressing to trial. Some cases have just started and require a kick-start
through discovery. A few cases are about to go to trial and one is ready for appeal.
You set an overall goal to get all cases on track and in line with the firm's case progression standards.
Your managing partner requests a monthly memo from you regarding the status on your goal
completion so that any necessary adjustments can be made. You'll meet in a year for a final
assessment and development of new goals.
Summary
Management by objectives is a management technique that involves the supervised setting of
measurable personal work goals that align with overall organizational goals. Progress is monitored and
assessed periodically by managers so that adjustments can be made.
Some advantages include providing a means to develop a proactive plan, which may increase
efficiency, save resources and increase organizational morale. Disadvantages include the risk that the
technique will be become a hollow ritual applied mechanically without much thought, too much
emphasis on the goal rather than the plan to achieve the goal, failure to take into account environmental
factors and employee and management neglect of the goal and plan.
What is a SWOT Analysis?
One of the very first steps in creating a marketing plan is the formation of a business mission
statement. A mission statement should be worded according to a company's market, and not just about
a specific product or service. Once a business mission statement has been created, then it's important
to conduct a situational analysis on the overall business environment to compete effectively.
Businesses also have to research and analyze choices before choosing a path. Their decision making
process is called conducting a SWOT analysis, or situational analysis. SWOT stands
for strengths,weaknesses, opportunities and threats. A marketer must look at each part of the
SWOT analysis to decide on the correct path and plans in order to create an effective marketing
strategy
When looking for a company's strengths, it's important to ask what you're best at and what you're known
for. Do you have a unique selling proposition? A USP, or unique selling proposition, is something that
you're very good at, but your competition is not
When looking for company weaknesses, a marketing manager asks what areas need improvement. What
could our competitors view as a weakness? What issues could cost us sales? They then attack those
areas and have a plan in place to protect and improve their situation.
When looking for company weaknesses, a marketing manager asks what areas need improvement. What
could our competitors view as a weakness? What issues could cost us sales? They then attack those
areas and have a plan in place to protect and improve their situation.
The Needs Theory: Motivating
Employees with Maslow's Hierarchy
of Needs

Maslow proposed that motivation is the result of a person's attempt at fulfilling five basic needs:
physiological, safety, social, esteem and self-actualization.
Physiological needs are those needs required for human survival such as air, food, water, shelter, clothing and
sleep.
Safety needs include those needs that provide a person with a sense of security and well-being. Personal
security, financial security, good health and protection from accidents, harm and their adverse affects are all
included in safety needs.
Social needs, also called love and belonging, refer to the need to feel a sense of belonging and acceptance.
Social needs are important to humans so that they do not feel alone, isolated and depressed. Friendships,
family and intimacy all work to fulfill social needs.
Esteem needs refer to the need for self-esteem and respect, with self-respect being slightly more important
than gaining respect and admiration from others.
Self-actualization needs describe a person's need to reach his or her full potential.
Maslow's theory is based on two principles. Progression principle suggests that lower-level needs must
be met before higher-level needs. Deficit principle claims that a once a need is satisfied it is no longer a
motivator because an individual will take action only to satisfied unmet needs.
As a manager, you should review the specific steps that can be taken to provide your employees with a
means of satisfying all of Maslow's needs. Remember, a motivated employee is an asset to any
organization and it is up to you to provide motivators to your employees.
Theory X & Theory Y: Two Types of
Managers
Douglas McGregor believed that there were two types of managers: Theory X and Theory Y.
Theory X
Hate the idea of having to go to work and do so only to earn a paycheck and the security that it offers.
Are inherently lazy, lack ambition and prefer to be directed on what to do rather than assume responsibility on
their own.
Are self-centered and care only about themselves and not the organization (or its goals), making it necessary
for the manager to coerce, control, direct or threaten with punishment in order to get them to work towards
organizational goals.
They also dislike change and tend to resist it at all costs.
Theory Y
Accept work as a normal part of their day, and it's right next to recreation and rest.
They are not lazy at all. In fact, when the proper motivations and rewards are in place, employees are not only
willing but purposely driven to seek out responsibility and challenges on their own.
They're full of potential, and it's through their own creativity, ingenuity and imagination that organizational
goals are met.

Function of Collective Bargaining

collective bargaining is a group process of negotiating work-related issues with the anticipation of
coming to an agreement. Employees form a labor union, which is a group of workers who band
together to protect their rights. The employer and the union follow the process of collective bargaining to
settle issues. The process of collective bargaining involves steps. Each party will:
Prepare by assembling a team of representatives to represent both parties.
Discuss the issues by having the two parties meet at a neutral site.
Propose a solution by having one or both parties formally recommend a solution to the issue at hand.
Bargain or negotiate by making offers and counter-offers.
Settle or come to an agreement on the issue that is in the best interest of both parties.

Budget Controls: Top-Down,
Bottom-Up, Zero-Based &
Flexible A budget is a financial plan for saving, spending and borrowing money. A
budget helps an organization determine whether it can operate based on projected income and
expenses for a period of time. A budget is generally prepared for a period of one year but is broken
down monthly for various spending and saving purposes. Accurate projection of revenue and expenses
is vital for organizational planning for resources like people, materials and money. The purpose of a
budget is:
To provide a projection of revenues and expenses
To forecast an organization's financial future based on the outcomes of organizational plans
To measure and compare projected expenses to actual expenses
To establish a cost ceiling for operational, or short-term day-to-day expenses, and capital, or long-term
expenses for major projects
Types Of Budget Controls
There are several budget controls used in organizations:
Top-down budgeting
Bottom-up budgeting
Zero-based budgeting
Flexible budgeting
Top-down budgeting starts at the top management level of an organization. Top management decides how
all resources should be allocated, and then the budget is distributed to the lower managers to use to
accomplish organizational goals like projects and activities.
Bottom-up budgeting starts at the bottom level of the organization. Lower-level managers and employees
determine what they believe the expenses of the department will be based on upcoming projects or goals
that need to be met and then send the budget to top management for approval.
Zero-based budgeting starts with a zero balance and ends with a zero balance. Budget lines are added as
projects and activities are planned, and top management reviews the proposed items.
Flexible budgeting starts with a budget, but unlike traditional budgets, it allows for flexibility in the
amount required for projects and activities. Additional money can be allocated for special projects if a good
opportunity presents itself.
There is no budget better than another. Each budget has its pros and cons. Depending on the nature of
the business, the best budget is a budget that keeps costs low while meeting organizational goals.
Forms of Union Agreements
A union is an organization of workers that work together to try to improve wages, benefits and working
conditions. Rather than negotiating separately with the employer, union members bargain as a unit in a
process called collective bargaining. The end result of collective bargaining is the collective bargaining
agreement. Collective bargaining agreements will often have a clause where the company agrees to an
open shop, union shop or agency shop.
If the company is an open shop, it can hire nonunion employees who don't have to join the union but
still get benefits of union representation.
If the company agrees to a union shop, all newly hired employees must join the union within a certain
period of time or face discharge.
An agency shop exists where an employer can hire nonunion employees who don't have to join the
union. However, nonunion employees in an agency shop have to pay a fee to the union for its
representation.
Finally, in closed shops, a company agrees to hire only union members and would fire anyone who
quit the union. Closed shops are now illegal.
Objectives:
Representation (Workers Interests)
Negotiation (Collective Bargaining)
Voice in decisions (Lay off, Retrenchment) affecting workers
Member Service (Education, Training, Welfare, Discounts, Loans)

Problems for Trade Union Growth
Off-Centering Labour
Segmentation of Workforce
Core / Periphery
Employment Instability
Investment Attraction
Individualisation of Labour Relations
Labour Cost Cutting
Leadership Credibility/ Inside vs. Outside leadership
Failure of Institutions
Emergence of Non-union firms/ E-union/ Cyber-union

Functions:
i) Militant functions,
(ii) Fraternal functions

militant functions of trade unions can be summed up as:

To achieve higher wages and better working conditions

To raise the status of workers as a part of industry

To protect labors against victimization and injustice

fraternal functions of trade unions can be summed up as:

To take up welfare measures for improving the morale of workers


To generate self confidence among workers


To encourage sincerity and discipline among workers


To provide opportunities for promotion and growth


To protect women workers against discrimination






What is Leadership
Leadership is a process by which an executive can direct, guide and influence the behavior and work of
others towards accomplishment of specific goals in a given situation. Leadership is the ability of a
manager to induce the subordinates to work with confidence and zeal.
Leadership is the potential to influence behaviour of others. It is also defined as the capacity to influence
a group towards the realization of a goal. Leaders are required to develop future visions, and to motivate
the organizational members to want to achieve the visions.
According to Keith Davis, Leadership is the ability to persuade others to seek defined objectives
enthusiastically. It is the human factor which binds a group together and motivates it towards goals.
Characteristics of Leadership
1. It is a inter-personal process in which a manager is into influencing and guiding workers towards
attainment of goals.
2. It denotes a few qualities to be present in a person which includes intelligence, maturity and
personality.
3. It is a group process. It involves two or more people interacting with each other.
4. A leader is involved in shaping and moulding the behaviour of the group towards accomplishment
of organizational goals.
5. Leadership is situation bound. There is no best style of leadership. It all depends upon tackling
with the situations
The following points justify the importance of leadership in a concern.
1. Initiates action- Leader is a person who starts the work by communicating the policies and plans
to the subordinates from where the work actually starts.
2. Motivation- A leader proves to be playing an incentive role in the concerns working. He
motivates the employees with economic and non-economic rewards and thereby gets the work
from the subordinates.
3. Providing guidance- A leader has to not only supervise but also play a guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to perform
their work effectively and efficiently.
4. Creating confidence- Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates, explaining them clearly their role and giving them
guidelines to achieve the goals effectively. It is also important to hear the employees with regards
to their complaints and problems.
5. Building morale- Morale denotes willing co-operation of the employees towards their work and
getting them into confidence and winning their trust. A leader can be a morale booster by
achieving full co-operation so that they perform with best of their abilities as they work to achieve
goals.
6. Builds work environment- Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human relations should be kept into
mind by a leader. He should have personal contacts with employees and should listen to their
problems and solve them. He should treat employees on humanitarian terms.
7. Co-ordination- Co-ordination can be achieved through reconciling personal interests with
organizational goals. This synchronization can be achieved through proper and effective co-
ordination which should be primary motive of a leader.
Relationship between Authority and Responsibility
Authority is the legal right of person or superior to command his subordinates while accountability is the
obligation of individual to carry out his duties as per standards of performance Authority flows from the
superiors to subordinates,in which orders and instructions are given to subordinates to complete the task.
It is only through authority, a manager exercises control. In a way through exercising the control the
superior is demanding accountability from subordinates. If the marketing manager directs the sales
supervisor for 50 units of sale to be undertaken in a month. If the above standards are not accomplished,
it is the marketing manager who will be accountable to the chief executive officer. Therefore, we can say
that authority flows from top to bottom and responsibility flows from bottom to top. Accountability is a
result of responsibility and responsibility is result of authority. Therefore, for every authority an equal
accountability is attached.
Differences between Authority and Responsibility
Authority Responsibility
It is the legal right of a person
or a superior to command his
subordinates.
It is the obligation of subordinate to perform the
work assigned to him.
Authority is attached to the
position of a superior in
concern.
Responsibility arises out of superior-
subordinate relationship in which subordinate
agrees to carry out duty given to him.
Authority can be delegated by a
superior to a subordinate
Responsibility cannot be shifted and is absolute
It flows from top to bottom. It flows from bottom to top.


Marketing Mix - A mixture of several ideas and plans followed by a marketing representative to
promote a particular product or brand is called marketing mix. Several concepts and ideas combined
together to formulate final strategies helpful in making a brand popular amongst the masses form
marketing mix.
Elements of Marketing Mix
The elements of marketing mix are often called the four Ps of marketing.
1. Product
Goods manufactured by organizations for the end-users are called products.
Products can be of two types - Tangible Product and Intangible Product (Services)
An individual can see, touch and feel tangible products as compared to intangible products.
A product in a market place is something which a seller sells to the buyers in exchange of money.
2. Price
The money which a buyer pays for a product is called as price of the product. The price of a
product is indirectly proportional to its availability in the market. Lesser its availability, more would
be its price and vice a versa.
Retail stores which stock unique products (not available at any other store) quote a higher price
from the buyers.
3. Place
Place refers to the location where the products are available and can be sold or purchased.
Buyers can purchase products either from physical markets or from virtual markets. In a physical
market, buyers and sellers can physically meet and interact with each other whereas in a virtual
market buyers and sellers meet through internet.
4. Promotion
Promotion refers to the various strategies and ideas implemented by the marketers to make the
end - users aware of their brand. Promotion includes various techniques employed to promote
and make a brand popular amongst the masses.
Promotion can be through any of the following ways:
Advertising
Print media, Television, radio are effective ways to entice customers and make them
aware of the brands existence.
Billboards, hoardings, banners installed intelligently at strategic locations like heavy traffic
areas, crossings, railway stations, bus stands attract the passing individuals towards a
particular brand.
Taglines also increase the recall value of the brand amongst the customers.
Word of mouth
One satisfied customer brings ten more customers along with him whereas one dis-
satisfied customer takes away ten more customers. Thats the importance of word of
mouth. Positive word of mouth goes a long way in promoting brands amongst the
customers.
.
Limitation of Marketing Mix
Marketing mix (4 Ps) was more useful in early 19s when production concept ws in
and physical products were in larger proportion. Today, with latest marketing
concepts, marketing environment has become more intergrated. So, in order to extend
the usefulness of marketing mix, some authors introduced a fifth P and then seven
Ps (People, Packaging, Process). But the foundation of Marketing Mix still stands on
the basic 4Ps.


Marketing is
1) Marketing is one to many.
2) Marketing tells the stories (company, product, etc.) to many people.
3) Marketing looks after the brands reputation
4) Marketing needs to keep the stories circulating and resonating with the target markets using the
companys plumb line (the business of the business) as its central reference.
5) Marketing analyses the big data. Marketing brings you the average result not the specifics.
6) Marketing studies what experience customers expect when they buy or try a product, service or
solution. That means reading their digital footprint and understanding their online chatter as much as
it does focus group discussions. Marketing looks for new metrics about consumer clusters and
grouping. Online groups are markets of the near future as more and more people cocoon
themselves and shop less.
7) Marketing should not promote special prices and discounts, instead replace these with special
offers, focusing on delivering greater value more bang for the buck is the new mantra and greater
value with fair exchange is the principle of pricing today not cost plus as it has been in the past.
Sales is
1) Sales is about one to one.
2) Sales is where our business becomes real for the client. It is where the stories and brand come to
life.
3) Sales develops relationships. Its relationship-driven.
4) Sales looks after individuals.
5) Sales deals with the ambiguities and the details of each person. It cannot be averaged.
6) Sales analyses the behavior of the prospects and customers whom they deal with on an individual
basis. Sales professionals talk to their customers about the joys of risk free offerings that help them
realise their goals and objectives. They tap into their buyers Facebook, LinkedIn and other digital
pages to gain a deeper understanding of what experiences each individual customers want.
7) Sales moves away from discussing price and discount, instead replacing these with discussions
about total cost of ownership which includes price but extends to include deliveries, warranties,
support, training and the other contributing things that are delivered as part of the purchase. Sales
engages with customers to understand what risks they face when making a purchase and then
learns how to position their companies as risk free alternatives.



2. Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker.
b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no. of pieces are paid
wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
d. This system is a source of incentive to workers who improving their efficiency in order to
get more wages.
e. It also encourages inefficient workers to improve their performance and achieve their
standards.
f. It leads to mass production which minimizes cost and maximizes profits.
Stages For Recruitment In Human Resources
There are several important stages that most organizations use when recruiting employees. The
recruitment stages include:
Job analysis: The human resources representative needs to review and analyze what they need the new
employee to do in the open position. From that analysis, the representative needs to build a job description,
set minimum qualifications, and define a salary range.
Advertise the open position: The search begins for applicants through networking, advertising, or other search
methods in order to find applicants who match the job requirements.
Screening applicants: Screening involves testing skills and/or personalities. It also includes the assessment of
the applicant's motivation and their fit with organizational requirements through the interview process.
Finalizing the job offer: The applicant is offered a job, which includes a compensation package. Once the
candidate has accepted the offer, the organization helps with the introduction of the new employee.










Sales promotion is the process of persuading a potential customer to buy the
product. Sales promotion is designed to be used as a short-term tactic to boost sales it
is rarely suitable as a method of building long-term customer loyalty.

There are many methods of sales promotion, including:
Money off coupons customers receive coupons, or cut coupons out of newspapers
or a products packaging that enables them to buy the product next time at a
reduced price
Competitions buying the product will allow the customer to take part in a chance
to win a prize
Discount vouchers a voucher (like a money off coupon)
Free gifts a free product when buy another product
Point of sale materials e.g. posters, display stands ways of presenting the
product in its best way or show the customer that the product is there.
Loyalty cards e.g. Nectar and Air Miles; where customers earn points for buying
certain goods or shopping at certain retailers that can later be exchanged for
money, goods or other offers
Leaders and Managers can be compared on the following basis:
Basis Manager Leader
Origin
A person becomes a manager by virtue
of his position.
A person becomes a leader on basis of his
personal qualities.
Formal Rights
Manager has got formal rights in an
organization because of his status.
Rights are not available to a leader.
Followers
The subordinates are the followers of
managers.
The group of employees whom the
leaders leads are his followers.
Functions
A manager performs all five functions
of management.
Leader influences people to work willingly
for group objectives.
Necessity
A manager is very essential to a
concern.
A leader is required to create cordial
relation between person working in and for
organization.
Stability It is more stable. Leadership is temporary.
Mutual
Relationship
All managers are leaders. All leaders are not managers.
Accountability
Manager is accountable for self and
subordinates behaviour and
performance.
Leaders have no well defined
accountability.
Concern
A managers concern is organizational
goals.
A leaders concern is group goals and
members satisfaction.
Followers
People follow manager by virtue of job
description.
People follow them on voluntary basis.
Role
continuation
A manager can continue in office till he
performs his duties satisfactorily in
congruence with organizational goals.
A leader can maintain his position only
through day to day wishes of followers.
Sanctions
Manager has command over allocation
and distribution of sanctions.
A leader has command over different
sanctions and related task records. These
sanctions are essentially of informal
nature.
What is Forecasting?
Process of predicting a future event based on historical data
Educated Guessing
Underlying basis of
all business decisions
Production
Inventory
Personnel
Facilities
Importance of Forecasting in OM
Departments throughout the organization depend on forecasts to formulate and execute their
plans.
Finance needs forecasts to project cash flows and capital requirements.
Human resources need forecasts to anticipate hiring needs.
Production needs forecasts to plan production levels, workforce, material requirements,
inventories, etc.

Production is the creation of goods and services. Production is a measure of output only and
not a measure of efficiency

Operations management (OM) is the set of activities that create value in the form of goods and
services by transforming inputs into outputs



Productivity
Productivity =Units produced/Input used
Measure of process improvement
Represents output relative to input
Only through productivity increases can our standard of living improve


Importance of HRM for Organizational Success
The practice of HRM must be viewed through the prism of overall strategic goals for the organization
instead of a standalone tint that takes a unit based or a micro approach. The idea here is to adopt a
holistic perspective towards HRM that ensures that there are no piecemeal strategies and the HRM policy
enmeshes itself fully with those of the organizational goals. For instance, if the training needs of the
employees are simply met with perfunctory trainings on omnibus topics, the firm stands to lose not only
from the time that the employees spend in training but also a loss of direction. Hence, the organization
that takes its HRM policies seriously will ensure that training is based on focused and topical methods.
In conclusion, the practice of HRM needs to be integrated with the overall strategy to ensure effective use
of people and provide better returns to the organizations in terms of ROI (Return on Investment) for every
rupee or dollar spent on them. Unless the HRM practice is designed in this way, the firms stand to lose
from not utilizing people fully. And this does not bode well for the success of the organization.
HRM in Personnel Management: This is typically direct manpower management that involves
manpower planning, hiring (recruitment and selection), training and development, induction and
orientation, transfer, promotion, compensation, layoff and retrenchment, employee productivity.
The overall objective here is to ascertain individual growth, development and effectiveness which
indirectly contribute to organizational development.
It also includes performance appraisal, developing new skills, disbursement of wages, incentives,
allowances, traveling policies and procedures and other related courses of actions.
HRM in Employee Welfare: This particular aspect of HRM deals with working conditions and
amenities at workplace. This includes a wide array of responsibilities and services such as safety
services, health services, welfare funds, social security and medical services. It also covers
appointment of safety officers, making the environment worth working, eliminating workplace
hazards, support by top management, job safety, safeguarding machinery, cleanliness, proper
ventilation and lighting, sanitation, medical care, sickness benefits, employment injury benefits,
personal injury benefits, maternity benefits, unemployment benefits and family benefits.
It also relates to supervision, employee counseling, establishing harmonious relationships with
employees, education and training. Employee welfare is about determining employees real
needs and fulfilling them with active participation of both management and employees. In addition
to this, it also takes care of canteen facilities, crches, rest and lunch rooms, housing, transport,
medical assistance, education, health and safety, recreation facilities, etc.
HRM in Industrial Relations: Since it is a highly sensitive area, it needs careful interactions with
labor or employee unions, addressing their grievances and settling the disputes effectively in
order to maintain peace and harmony in the organization. It is the art and science of
understanding the employment (union-management) relations, joint consultation, disciplinary
procedures, solving problems with mutual efforts, understanding human behavior and maintaining
work relations, collective bargaining and settlement of disputes.
The main aim is to safeguarding the interest of employees by securing the highest level of
understanding to the extent that does not leave a negative impact on organization. It is about
establishing, growing and promoting industrial democracy to safeguard the interests of both
employees and management.
Disadvantages of Planning
Internal Limitations
There are several limitations of planning. Some of them are inherit in the process of planning like rigidity
and other arise due to shortcoming of the techniques of planning and in the planners themselves.
1. Rigidity
a. Planning has tendency to make administration inflexible.
b. Planning implies prior determination of policies, procedures and programmes and a strict
adherence to them in all circumstances.
c. There is no scope for individual freedom.
d. The development of employees is highly doubted because of which management might
have faced lot of difficulties in future.
e. Planning therefore introduces inelasticity and discourages individual initiative and
experimentation.

2. Misdirected Planning
a. Planning may be used to serve individual interests rather than the interest of the
enterprise.
b. Attempts can be made to influence setting of objectives, formulation of plans and
programmes to suit ones own requirement rather than that of whole organization.
c. Machinery of planning can never be freed of bias. Every planner has his own likes,
dislikes, preferences, attitudes and interests which is reflected in planning.
3. Time consuming
a. Planning is a time consuming process because it involves collection of information, its
analysis and interpretation thereof. This entire process takes a lot of time specially where
there are a number of alternatives available.
b. Therefore planning is not suitable during emergency or crisis when quick decisions are
required.
4. Probability in planning
a. Planning is based on forecasts which are mere estimates about future.
b. These estimates may prove to be inexact due to the uncertainty of future.
c. Any change in the anticipated situation may render plans ineffective.
d. Plans do not always reflect real situations inspite of the sophisticated techniques of
forecasting because future is unpredictable.
e. Thus, excessive reliance on plans may prove to be fatal.
5. False sense of security
a. Elaborate planning may create a false sense of security to the effect that everything is
taken for granted.
b. Managers assume that as long as they work as per plans, it is satisfactory.
c. Therefore they fail to take up timely actions and an opportunity is lost.
d. Employees are more concerned about fulfillment of plan performance rather than any
kind of change.
6. Expensive
a. Collection, analysis and evaluation of different information, facts and alternatives involves
a lot of expense in terms of time, effort and money
b. According to Koontz and ODonell, Expenses on planning should never exceed the
estimated benefits from planning.
External Limitations of Planning
1. Political Climate- Change of government from Congress to some other political party, etc.
2. Labour Union- Strikes, lockouts, agitations.
3. Technological changes- Modern techniques and equipments, computerization.
4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
5. Natural Calamities- Earthquakes and floods.
6. Changes in demand and prices- Change in fashion, change in tastes, change in income level,
demand falls, price falls, etc.
Steps in Planning Function
Planning function of management involves following steps:-
1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate
direction of efforts.
d. Moreover objectives focus the attention of managers on the end results to be achieved.
e. As a matter of fact, objectives provide nucleus to the planning process. Therefore,
objectives should be stated in a clear, precise and unambiguous language. Otherwise the
activities undertaken are bound to be ineffective.
f. As far as possible, objectives should be stated in quantitative terms. For example,
Number of men working, wages given, units produced, etc. But such an objective cannot
be stated in quantitative terms like performance of quality control manager, effectiveness
of personnel manager.
g. Such goals should be specified in qualitative terms.
h. Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises
a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Establishment of planning premises is concerned with determining where one tends to
deviate from the actual plans and causes of such deviations.
d. It is to find out what obstacles are there in the way of business during the course of
operations.
e. Establishment of planning premises is concerned to take such steps that avoids these
obstacles to a great extent.
f. Planning premises may be internal or external. Internal includes capital investment policy,
management labour relations, philosophy of management, etc. Whereas external
includes socio- economic, political and economical changes.
g. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative
course of actions have to be considered.
b. For this purpose, each and every alternative will be evaluated by weighing its pros and
cons in the light of resources available and requirements of the organization.
c. The merits, demerits as well as the consequences of each alternative must be examined
before the choice is being made.
d. After objective and scientific evaluation, the best alternative is chosen.
e. The planners should take help of various quantitative techniques to judge the stability of
an alternative.
4. Formulation of derivative plans
a. Derivative plans are the sub plans or secondary plans which help in the achievement of
main plan.
b. Secondary plans will flow from the basic plan. These are meant to support and expediate
the achievement of basic plans.
c. These detail plans include policies, procedures, rules, programmes, budgets, schedules,
etc. For example, if profit maximization is the main aim of the enterprise, derivative plans
will include sales maximization, production maximization, and cost minimization.
d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.
5. Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take
subordinates or those who have to implement these plans into confidence.
b. The purposes behind taking them into confidence are :-
i. Subordinates may feel motivated since they are involved in decision making
process.
ii. The organization may be able to get valuable suggestions and improvement in
formulation as well as implementation of plans.
iii. Also the employees will be more interested in the execution of these plans.
6. Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise its effectiveness.
c. This is done on the basis of feedback or information received from departments or
persons concerned.
d. This enables the management to correct deviations or modify the plan.
e. This step establishes a link between planning and controlling function.
f. The follow up must go side by side the implementation of plans so that in the light of
observations made, future plans can be made more realistic.
The term Levels of Management refers to a line of demarcation between various managerial positions
in an organization. The number of levels in management increases when the size of the business and
work force increases and vice versa. The level of management determines a chain of command, the
amount of authority & status enjoyed by any managerial position. The levels of management can be
classified in three broad categories:
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the three levels is
discussed below:

LEVELS OF MANAGEMENT
1. Top Level of Management
It consists of board of directors, chief executive or managing director. The top management is the
ultimate source of authority and it manages goals and policies for an enterprise. It devotes more
time on planning and coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the performance
of the enterprise.

2. Middle Level of Management
The branch managers and departmental managers constitute middle level. They are responsible
to the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of middle
level of management but in big enterprises, there may be senior and junior middle level
management. Their role can be emphasized as -
a. They execute the plans of the organization in accordance with the policies and directives
of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better performance.

3. Lower Level of Management
Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, Supervisory
management refers to those executives whose work has to be largely with personal oversight and
direction of operative employees. In other words, they are concerned with direction and
controlling function of management. Their activities include -
a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with the
workers.
Delegation of authority is the base of superior-subordinate relationship, it involves following steps:-
1. Assignment of Duties - The delegator first tries to define the task and duties to the subordinate.
He also has to define the result expected from the subordinates. Clarity of duty as well as result
expected has to be the first step in delegation.
2. Granting of authority - Subdivision of authority takes place when a superior divides and shares
his authority with the subordinate. It is for this reason, every subordinate should be given enough
independence to carry the task given to him by his superiors. The managers at all levels delegate
authority and power which is attached to their job positions. The subdivision of powers is very
important to get effective results.
3. Creating Responsibility and Accountability - The delegation process does not end once
powers are granted to the subordinates. They at the same time have to be obligatory towards the
duties assigned to them. Responsibility is said to be the factor or obligation of an individual to
carry out his duties in best of his ability as per the directions of superior. Responsibility is very
important. Therefore, it is that which gives effectiveness to authority. At the same time,
responsibility is absolute and cannot be shifted. Accountability, on the others hand, is the
obligation of the individual to carry out his duties as per the standards of performance. Therefore,
it is said that authority is delegated, responsibility is created and accountability is imposed.
Accountability arises out of responsibility and responsibility arises out of authority. Therefore, it
becomes important that with every authority position an equal and opposite responsibility should
be attached.