ORGANIZING AND

STAFFING
MODULE 3

SYLLABUS
Nature and purpose of organisation

Principles of organisation

Types of organisation

Departmentation

Committees

Centralisation Vs Decentralisation of authority and
responsibility

Span of control

MBO and MBE(Meaning only)

Nature and importance of staffing

Process of selection and recruitment

ORGANIZING - MEANING

The process of defining and grouping the activities of

the enterprise and establishing authority
relationship amongst them.

Process of determining the activities to be performed,

arranging these activities to administrative units, as
well as assigning managerial authority and
responsibilities to people employed in the
organization.

Deciding how best to group organizational activities

and resources

Organizing involves:

The

identification and classification of

required activities

The Grouping of activities necessary to
attain objectives

The assignment of each group to a manager
with the authority necessary to supervise it

The provision for coordination horizontally
[on the same or a similar organizational
level] and vertically [ between various
departments which are not on a similar
organizational level] in the organization
structure

DEFINITION

Heney, Organization is a harmonious adjustment of

specialized parts for the accomplishment of some
common purpose or purposes

Mc Farland, An identified group of people contributing

their efforts towards the attainment of goals is called an
organization

George Terry, Organizing is the establishing of

effective behavioural relationships among persons so
that they may work together effectively and gain
personal satisfaction in doing selected tasks under
given environmental conditions for the purpose of
achieving some goal or objective

NATURE/ CHARACTERISTICS OF ORGANIZATION

Two or more persons: Organisation is a form of human

association for achieving common goals. The human
association consists of two or more persons.

Common goals: The organisation exists to achieve some

common goals. Structure ensures the smooth achievement of
goals.

Cooperative efforts: Structure permits members to work in

a cooperative way, without any friction. The members
combine their efforts with a view to achieve goals.

Division of work: The work is divided into small parts and

assigned to people working at various levels. This ensures
speedy execution of work.

Communication : People communicate along

specified routes. Mainly downward communication
takes place in the form of superiors issuing commands,
orders, directives, etc.

Rules and regulations: Rules and regulations define

the territorial jurisdiction of members. Members have
to observe and implement these rules consistently.

Pyramidal shape: Organisation structure takes a

pyramidal shape, generally. Each superior will have a
limited number of people reporting to him, at any
point of time.

IMPORTANCE/PURPOSE OF ORGANIZATION

Focus

on and facilitate the attaining of

objectives.

Arrangement of positions and jobs within the
hierarchy.

Define responsibilities and line of authority of
all levels.

Creating relationships that will minimize
friction.

Effective managerial control of work and workers.

Greater scope for adaptation, innovation and
diversification in the face of any change in
business environment.

Smooth direction.

Easy communication.

Reduction in work-load of top management.

PRINCIPLES OF ORGANISATION

Principle of objective: A common objective should

be laid down for business as a whole and an
organisation should be set up to achieve that goal.

Principle of specialisation: Every individual

should be assigned a duty according to his skill,
education and qualification.

Principle of co-ordination: To achieve the ultimate

aim, there should be co-ordination of different
activities of various departments.

Principle of authority and responsibility: the authority

may be delegated but responsibility lies within the man, who
has been allotted the work. The authority flows downward.

Span of control: the span of control means number of

subordinates to which an officer can supervise effectively.
The number of subordinates should be such that supervisor
should be able to control their work effectively.

Scalar principle: this means the vertical placement of

superiors starting from top and going to the lower level. The
scalar chain is a pre-requisite. Sometimes known as the
chain of command.

Principle of unity of command: for making the

organisation sound and clear, there should be a unity of
command from top to bottom, i.e. a person should be
answerable to one boss only. Each subordinate should have
only one superior whose command he has to obey. Multiple
subordination must be avoided, for it causes uneasiness,
disorder, indiscipline and undermining of authority.

Principle of exception: this states that top

management should interfere only when something
goes wrong. If the things are done according to plans
then there is no need for the interference of top
management.

Principle of simplicity: Organisation should be

simple to be easily understood by every person. The
authority, responsibility and position of every person
should be made clear to avoid confusion.

Principle of Efficiency: Objectives of the enterprise

should be achieved at a minimum cost. The
organisation should also provide job satisfaction to
various employees.

TYPES OF ORGANISATION


Business organisation and non profit service

organisation:
Business organisations: are organisations which are formed
with the objective of earning profits. These organisations
undertake different types of business activities with sole
objective of creating surplus in the form of profit. They cannot
survive and grow without making profits. Firms engaged in
manufacturing, trading, services etc are examples of business
organisations.
Non profit service organisations: these organisations do
not have primary motive of making profits, and they are formed
to serve a specific community or a segment of a society. Thus
they are formed for charitable purpose to serve the society.
Rotary club, lions club, orphanages, charitable hospitals, schools
etc are examples of non profit organisations.









Formal and informal organisation:

Formal Organization
According to Bernard, Formal Organization is a system
of consciously coordinated activities of two or more persons
towards a common objective. These are officially formed
with definite structure , which describes authority and
responsibility and behaviors of organisational members are
governed by well laid down policies, rules and regulations .

Nature of Formal Organization

Deliberately created by top management
Based on division of labour or specialization
Defines clearly authority and responsibility of every
individual
Has written rules and regulations
Specifies communication channels
Depicted on the organization chart of the company
Focuses on the jobs and not the individuals who
perform the jobs

FORMAL ORGANIZATION STRUCTURE

CEO

VP
Production

VP HR

VP
Maktg

VP
Finance

Productio
n
Manager

HR
Manager

Marketin
g
Manager

Finance
Manager

Quality
Manager

Training
Manager

Sales
Manager

Cost
Manager

Merits

As definite boundaries of
each worker are clearly
defined, it reduces the
conflict among the
employees
Overlapping of
responsibility is avoided
Motivates employees as
standards of performance
are well established
Sense of job satisfaction,
security arises from the
classification of the task
Favouritism in evaluation
and appraisal is avoided

DEMERITS
o May reduce spirit of

initiative
o Does not consider
sentiments and
values of social groups
o Does not consider
individual goals
o May create
coordination problem

INFORMAL ORGANIZATION
A network of personal and social relationships that arise
spontaneously as people associate in a work
environment. Consists of all the informal groupings of
people within a formal organization
Nature of informal organization:
 Unplanned and arises spontaneously
 Reflects human and social relationships among people
 Based on common taste, language, religion, culture etc
 The membership of informal organization is voluntary
 Has no written rule and regulations

INFORMAL ORGANIZATION STRUCTURE

CEO

VP
Production

VP HR

VP
Maktg

VP
Finance

Productio
n
Manager

HR
Manager

Marketin
g
Manager

Finance
Manager

Quality
Manager

Training
Manager

Sales
Manager

Cost
Manager

Quality Manager, HR Manager, Sales Manager and Cost Manager form a group
for Cricket as they have common interest in Cricket

MERITS
Helps to satisfy
social and
psychological
needs of employees
to inspire them to
work efficiently
and effectively

Improves sense of
belongingness,
security and
loyalty among
employees

Recreation

Demerits
o Resistance to change
o Rumor- grapevine

Characteristics
Formation

Formal Organization Structure

Informal Organization Structure

Emerges spontaneously as a result
Deliberately formed, planned and
of social interaction among
created by Top Management
organizational members
To achieve planned goals of
organization0
Well defined tasks and
relationships

To provide social satisfaction to

members
No clear cut structure, complex
network of relations

Flexibility

Rigid, stable and predictable

Flexible, unstable and unpredictable

Standards of
behaviour

Standards of behaviour and

performance are prescribed by
management

Standards of behaviour and

performance are evolved by mutual
consent among members

Leadership

Managers act as leaders as they

have authority

Members voluntarily select their

leader

Communication

Formally established line of

communication, official
communication

Communicate according to
convenience

Organization Chart

Official structure can be shown in

Can not be shown
the form of chart

Rules and
regulations

Written and fixed

Purpose
Structure

Oral norms

Line organisation:
The basis of line organisation is authority and
responsibility. Line organisation is also called as scalar
or military organisation. It depicts clear line of
authority. The authority and responsibility are highest
at the top and go on reducing successively with each
level. Scalar chain is strictly followed.
It is simplest and oldest type of organisation and it is
found in most of the small organisation.


Merits

Quick decision making

Strict discipline can be
maintained
Clear authority and
responsibility
Scalar chain and unity of
command are followed.

Demerits
No scope for specialisation
Key persons are overloaded
with work
Less efficiency due to lack of
specialisation

Functional organisation:
Functional organisation is based on specialisation.
Specialists are available for each function and this
idea was originated by FW Taylor and hence it is also
known as Taylors functional organisation.


Merits
Scope of high
specialisation
Tasks are handled by
experts and quality of
work and efficiency is high
Area of work is narrow
and key persons are not
overloaded
Better decisions are made

Demerits
Delay in decision making
Scalar chain and unity of
command are not followed
Maintaining discipline is
difficult
Coordination among
foremen is difficult

Line and staff organisation:

It consists of two types of organisational members called line

members and staff members. Line members have authority
where as staff members do not have authority. Line
members are known as Doers and staff members are
known as Advisors. The function of staff members, who are
experts is only advising and they do not have any authority
in decision making. Line members can accept or reject the
advice and they are responsible for the tasks.
Merits
Availability of specialist
advise from staff members
Single line authority and
accountability is involved
Expert advise can improve
effectiveness
Experts can reduce load of
line members

Demerits
Staff members who have
expertise do not have
authority
Coordination between line
and staff members is difficult
Personality clashes may
result between line and staff
members

Committee organisation:
Committee is a group of people who meet discuss and
decide about actions to be taken for organisational issues
which cannot be solved by individuals. When an
organisation consists of different committees it is called
committee organisation.
Types/ Classification of Committees

Advisory Committees and Executive Committees
Committees vested with staff authority are known as
advisory committees. Advisory committees have only a
recommendatory
role
and
cannot
enforce
implementation of their advice or recommendation. Eg.
Works
committees,
Sales
committees,
finance
committees etc.

Executive Committees Committees vested with line
authority are known as executive committees. Executive
committees not only take decisions but also enforce
decisions and thus perform a double role of taking a
decision and ordering its execution. Eg. The Board of
directors of a company.


Standing Committees and ad hoc task forces

Standing or permanent committees are formed to deal
with recurrent (problems which take place very often)
organisational problems. Eg. Finanace committee in a
company, loan approval committee in a bank or the
admission committee in a college.

Ad hoc task forces have a short duration. They are

dissolved after the task is over, or the problem is solved.
Their members are chosen for their skills and
experience.

Principles of committees:
 Number of members in a committee should be optimum
minimum
 Committee objectives should be well defined
 Committee meetings should have an agenda and it
should be circulated in advance so that members can
come prepared.
 The role, authority and responsibility of committee
members should be well defined.
 Committees should not discuss any other matter other
than the subject.
 Meetings should start and end on time.
 Problems which can be solved by individuals should not
be referred to a committee.
 Committee recommendations should be published.
 A committee should be dissolved if its purpose is over.

Merits
Committee consists of
experts and can be
effectively used for solving
complex issues.
Encourages team work.
Better decisions are made.
Brings in coordination
among different functional
areas.
By serving in different
committees managers
acquire valuable experience
and hence committees help
in management
development.

Demerits
Slow in decision making.
Coordination is very
difficult.
No individual
accountability.
Very costly.
Few members may
dominate.

Virtual organisation:
The essential feature of this type of organisation is connectivity i.e.
its ability to network a large number of service-providers and
contractors whom it outsources its burden of getting
infrastructural support, retaining for itself only a few areas of
core competence. The organisation has no office as such because
its executives with mobile phones and laptop computers can work
at any place and at any time.


Collateral Organisation:
This concept says that a manager should develop a collateral mode
of functioning to which he should shift, to operate in tandem
with the problem, without displacing the existing classical [tall
organisation] or behavioural[flat organisation] formal structure.
It should be remembered that the change involved is only in the
mode of functioning, and not in the structure. Thus , if the
existing structure is classical[tall organisation], the collateral
mode developed for solving a non-routine problem may result in
creating only a special kind of task force, that cuts across the
usual kind of functional barriers, builds cross-communication
channels and finds new ways of seeing old ideas.


Matrix Organisation:

Combines two organization structures; functional and

project structures [based on projects organizational
activities are grouped]

Functional departments create vertical chain of command

Project or product types form horizontal chain

This type used to efficiently execute multiple project
operations of enterprise

Project managers coordinate teams of employees drawn
from different functional departments

Matrix organization relies on multiple command structure

MERITS
Where large number
of small projects have
to be executed or
completed, matrix
organization works
out better

Suitable to industries
like building and
construction, highly
technology oriented
industries etc

DEMERITS

Violates principle of

unity of command

Costly and
expensive

Delay in decision
making

Network Organisation:

Company keeps core business and through contacts

with external agencies runs business [outsourcing]
Manpower
Consultancy
Distribution
Agency

Accounting Firm

Core Business:
Manufacturing
shoes
Supplier Agency
Promotion/ Ad
Firm
Marketing Firm

MERITS
Focus on core
business

Cost saving

DEMERITS
o No control over

external agencies
o Failure in one
network may affect
entire network

DEPARTMENTATION
Departmentation is the process of splitting an
organisation into smaller manageable subunits.
Division is based on either similarities in
functions or products or any other close
relationships. This dividing process results in
creation of departments, divisions or sections. A
department may be defined as a workgroup
which is brought together for performing certain
functions, which are similar in nature.

 Functional

Departmentation

The process of dividing organisation into smaller units is on the basis

of organisations major activities or functions. Hence it is called
functional organisation. Each function like Marketing, Human
Resource, Finance, R&D, etc is assigned as a department and it
specialises on those related activities.
Each major function of the enterprise is grouped into a department.
For eg. There may be production, finance and marketing
departments in a manufacturing company or underwriting and
claims departments in an insurance company. A sales manager in
this kind of Departmentation is responsible for the sale of all
products manufactured by the company.
CEO

HR

Marketing

Finance

Production

Advantages :

Efficiencies from putting together similar specialties
and people with common skills, knowledge and
orientation.

In-depth specialization

Co-ordination within functional area.
Disadvantages:

Poor communication across functional areas.

Limited view of organisational goals.

PRODUCT-BASED DEPARTMENTATION
This form is eminently suited for a large organization manufacturing a
variety of products. Under this method, for each major product, a separate
semi-autonomous department is created and is put under the charge of a
manager. Several companies in India, such as Hindustan Unilever
(manufacturing detergents, toiletries, chemicals and agro-based products),
and Johnson and Johnson (manufacturing a range of products for children
and surgical sutures) have product-based departments.
CEO

Hair
Care

Health
care
General
Manager

Maruti 800

Maruti Alto

Maruti Wagon R

Maruti SX4

Advantages:

Allows specialization in particular products and
services

Managers can become experts in their industry.

Closer to customers.
Disadvantages:

Duplication of functions

Limited view of organisational goals.

 GEOGRAPHICAL BASED DEPARTMENTATION [REGIONS OR

TERRITORY BASED]
When several production or marketing units of an organisation are
geographically dispersed in various locations, it is logical to
departmentalize those units on a geographical basis. The Indian
Railways are departmentalized on this basis. Northern Railways,
Western Railways, Southern Railways, Eastern Railways, Central
Railways, etc. are departments in this sense.
Advantages:

More effective and efficient handling of specific regional issues that
arise.

Serve needs of unique geographic markets better..
Disadvantages:

Duplication of functions

Can feel isolated from other organisational areas.
General Manager

Northern
Railways

Western
Railways

Central
Railways

Southern
Railways

Eastern
Railways

CUSTOMER-BASED DEPARTMENTATION
An enterprise may be divided into a number of departments on the
basis of the customers that it services. For eg. An electronics firm
may have separate departments for military, industrial and
consumer customers. An educational institution may have
separate departments for day, evening and correspondence
courses to impart education to full-time students, locally
employed students and outstation students, respectively.
Advantages:

Customers needs and problems can be met by specialists
Disadvantages:

Duplication of functions

Limited view of organisational goals.
General Manager of a Private bank

Students Customers

Agriculturist Customers

Industrial Customers

 Process

Based Departmentation

Departmentation here is done on basis of several discrete stages in

the process or technologies involved in manufacture of a product.
Advantages:

More efficient flow of work activities.
Disadvantages:

Can only be used with certain types of products.
Cotton textile mill

Spinning

packing

weaving

Dyeing

Printing

Sales

Time Based Departmentation

In Departmentation by time, activities are grouped on the
basis of timing of their performance. For eg. As a small
machine shop grows in size, its owner has the choice of
adding extra shifts (thus separating identical sub-groups
by time). Generally, Departmentation by time is found in
the production function of the enterprise.

GENERAL
MANAGER

Day Shift

Night
Shift

Authority :
Is a form of power
 Right to command
 Right to give orders and power to extract obedience
 Right to make decisions and allocate resources.


o Responsibility:
 Is the obligation or the duty of an individual to
perform
 Ensures people are committed to perform
 Acts as a means for establishing relationships
between a superior and a subordinate.

CENTRALIZATION & DECENTRALIZATION

CENTRALIZATION

Centralization of power to make decision at the higher

levels of management
Hence employees cant act independently
This results in Tall Structure

Merits

Demerits

Taking emergency

No individual

or quick decisions
without any delay

Standardized policy
or procedures

initiative

Top management will
be over burdened

Widens gap between
managers and
employees

DECENTRALIZATION
Dispersal of decision making authority

Delegating power or authority to middle and lower
level managers

Degree to which lower level employees provide
input increases or actually they make decisions

Results in Flat Structure

Merits

Reduces burden

Increases flexibility

and involvement
from employees

Demerits

Increases
administrative cost

Difficult in controlling

Centralisation

Decentralisation

It refers to retention of
decision-making authority by
top management.

It refers to vesting decision

making authority in low level
managers or managers.

All the business decisions must

be approved or preapproved by
top level management.

All local and actual situation

decision are taken by low level
management.

Low level employees in this

type of organisation are
expected to do as told & may
contribute very little to the pool
of knowledge used by
organisation informing strategy
and decision making.

Reduces workload of top

management and thus develop
manager at lower level.

Employee morale is low

Employee morale is high.


A

variety of factors can influence the extent to

which a firm is centralized or decentralized. The
following is a list of possible determinants:

The external environment in which the
firm operates. The more complex and
unpredictable this environment, the more likely
it is that top management will let low-level
managers make important decisions. After all,
low-level managers are closer to the problems
because they are more likely to have direct
contact with customers and workers. Therefore,
they are in a better position to determine
problems and concerns.

The nature of the decision itself. The
riskier or the more important the decision, the
greater the tendency to centralize decision
making.

The abilities of low-level managers. If these

managers do not have strong decision-making skills,
top managers will be reluctant to decentralize.
Strong low-level decision-making skills encourage
decentralization.

The organization's tradition of
management. An organization that has
traditionally practiced centralization or
decentralization is likely to maintain that posture in
the future.

In principle, neither philosophy is right or wrong.
What works for one organization may or may not work
for another. Kmart Corporation and McDonald's have
both been very successful both practice
centralization. By the same token, decentralization
has worked very well for General Electric and Sears.
Every organization must assess its own situation and
then choose the level of centralization or
decentralization that works best.

SPAN OF CONTROL

Determining how many people will report to each

manager

The number of employees a manager can efficiently

and effectively manage

A manager must deal with 3 kinds of interactions

with and among subordinates;
Direct: managers one to one relationship with each
subordinate
 Cross: among subordinates
 Group: between groups of subordinates


SPAN OF CONTROL CONTD..

No of possible interactions of all types between

manager and subordinates can be determined as
follow:
N

I = N (2

/ 2 + N 1)

I= total no of possible interactions I = N ( 2 N / 2 + N 1)

N= no of subordinates

Ex: if N [ no of subordinates] = 2, the no of possible
interactions are 6.

If N= 5, I or no of possible interactions are 100.

Manager has to determine optimal span of control.
This is nothing but deciding whether it should be
narrow or wide span of management/ control

NARROW SPAN OF CONTROL

Few subordinates per manager

More managers are required in this type.

This results in Tall structure of the Organization

Merits
Personal contact
between managers and
subordinates
Effective control and
close supervision
Develops good human
relations in organization

Demerits
Expensive as larger no
of managers are involved
Creates communication
problems; because of
increased no of people
through whom
information must pass

WIDE SPAN OF CONTROL

Many subordinates per manager

Less supervisors are requires

Results in Flat organization structure

This is preferable if workers are well trained and competitive

Merits
Demerits
Reduces cost of supervision More administration and
as few managers are required supervisory responsibility of
managers

Easy communication
process

Effective control can not be

assured

Better coordination between Requires talented managers

manager and subordinates as
few managers supervise them Managers wont have time to

provide support and leadership

FACTORS INFLUENCING SPAN OF CONTROL

Managers capability: Experienced and capable

managers can supervise more number of subordinates
than inexperienced and less capable managers.

Subordinates capability: experienced and skilled

subordinates need not require close supervision and they
are capable of working on their own. A manager can have
wider span for such workers. But if subordinates are less
skilled and if they need close supervision, then span has
to be narrow.

Complexity of work: if the task of subordinates is

complex and they need more assistance then narrow span
is used. If tasks are simple, then wide span is used.

Similarity of tasks: repetitive jobs may not require

close supervise and thus wider span can be used. For
non-routine tasks narrow span is used.

Time required for non supervisory activities: if a

manager or a supervisor needs to attend more non
supervisory activities then he may have little time to
attend subordinates then narrow span is needed. When
non supervisory activities are less wider span is used.

Technology used: organisations employing modern

technology with tasks automated may use wider span as
automation reduces manual labour and thus close
supervision is not needed.

MBO ( MANAGEMENT BY OBJECTIVES)

1.

2.

3.

MBO is a process whereby subordinate and superiors of an

organisation jointly define common goals, define each individuals
major areas of responsibility in terms of results expected of him
and use these measures as guides for operating the unit and
assessing contribution of each of its members.
In simple terms MBO is concerned with joint participation of
subordinate and superior in the establishment of clear and
specific objectives for each individual and unit of the organisation.
It consists of the following steps:
Set the Organization's Goals Establish an organisation
wise plan for next year and set goals by the top level
management.
Set Departmental Goals In this step departmental heads
and their superiors jointly set goals for their departments.
Discuss Departmental goals Departmental heads discuss
the departments goals with all the subordinates in the
department and ask them to develop their own individual goals.

4. Define Expected Results (Set Individual

Goals) In this step, department heads and their
subordinates set short term performance targets.
5. Performance reviews : Measure the Results
Department Heads compare the performance of
each employee with expected results.
6. Provide Feed Back Department heads hold
periodic performance review meetings with
subordinates to discuss and evaluate the latters
progress in achieving expected results.
MBO approach leads to greater satisfaction, greater
agreement, greater comfort and less tension and
hostility
between
the
workers
and
the
management.

MBE (MANAGEMENT BY EXCEPTION)

Management by exception is a management style wherein

managers intervene only when their employees fail to meet
their performance standards. If the employees are performing
as expected, the manager will take no action. It is an
organisational system in which managers delegate as much
responsibility as possible to those below them, stepping in
only when it is absolutely necessary.
MBE policy is to focus on only those issues or events in which
there is a deviation from the established standard. The idea
is that management should spend its valuable time
concentrating on important strategic issues. Attention is
given to other issues only when there is a deviation which
requires some investigation.
Examples: cost of an operation exceeding standard cost, delay
in completion of project, delay in supply of materials,
decrease in productivity etc.

STAFFING
Process of planning, employing and developing human
resources at different levels of an organization for
carrying out the various functions in the organization

Includes activities as human resource planning,
recruitment, selection, placement, T&D, remuneration,
performance appraisal, promotion, transfer etc.

Koontz & O'Donnell, the managerial function of staffing
involves managing the organization structure through
proper and effective selection, appraisal and development
of personnel to fill the roles designed in to the structure

STAFFING
Staffing is defined as : Filling and keeping the positions
provided for by the organization structure filled with
the right people. It includes several sub-function:

Recruitment, or getting applicants for the jobs as they
open up.

Selection of the best qualified from those who seek the
jobs.

Training those who need further instructions to perform
their work effectively or to qualify for promotions.

Performance appraisal, since it serves as the basis for
job change or promotion, and

Administration of compensation plans, since it is an
important factor in both getting and holding qualified
people.

IMPORTANCE AND NEED FOR PROPER STAFFING

It helps in discovering talented and competent workers
and developing them to move up the corporate ladder.

It ensures greater production by putting the right man
in the right job.

It helps to avoid a sudden disruption of an enterprises
production run by indicating shortages of personnel, if
any, in advance.

It helps to prevent under-utilisation of personnel
through overmanning and the resultant high labour
cost and low profit margins.

It provides information to management for the internal
succession of managerial personnel in the event of an
unanticipated turnover.

STEPS OF STAFFING
I. Manpower planning is the process by which a firm
ensures that it has the right number of people and the
right kind of people at the right places at the right time,
doing work for which they are economically most useful.
It can be either short-term manpower planning (done to
find a temporary match between the existing individuals
and the existing jobs.) or long-term manpower planning
(done to find a proper match between the future jobs
and their future incumbents.)
II. Recruitment It can be defined as the process of
identifying the sources for prospective candidates and to
stimulate them to apply for the jobs. It is the process of
attracting potential employees to the company.

SOURCES OF RECRUITMENT
Sources of recruitment can be broadly classified into two
broad categories: internal and external. Internal
sources refer to the present working force of a
company. Vacancies other than at the lowest level may
be filled by selecting individuals from amongst the
existing employees of the company.
External sources of Recruitment:

Re-employing
former employees Former
employees who have been laid-off or have left for
personal reasons may be re-employed.

Friends and relatives of present employees
Some industries with a record of good personnel
relations encourage their employees to recommend
their friends and relatives for appointment in the
concern where they are employed.

Applicants at the gate Unemployed persons who call at

the gates of the factories are interviewed by the factory
representative and those who are found suitable for the
existing vacancies are selected.
College and technical institutions Many big companies
remain in touch with the colleges and technical institutions
from where young and talented persons may be recruited.
Employment exchanges An employment exchange is an
office set up by the government for bringing together those
men who are in search of employment and those employers
who are looking for men. Employee exchanges register
unemployed people and maintain the records of their names,
qualifications etc. The employers on their part intimate the
exchange about the vacancies which occur in their factories
and types of employees they require for filling up these
vacancies.
Advertising the vacancy Advertising the vacancy in
leading papers may be used in case the company requires the
services of persons possessing certain special skills or if there
is an acute shortage of labour force.

INTERNAL SOURCES OF RECRUITMENT

Promotions Existing employees are promoted
to higher levels to fill up the vacancies.

Internal Transfers Employees working in one
location are transferred to other location to fill up
the vacancies. This generally happens if one
location is having excessive of employees and
other location is having shortage.

RECRUITMENT PROCESS
Identify the vacancy
Prepare job description
Advertise the vacancy
Manage the responses
Shortlist applications
Arrange for interviews
Conduct interview and make decision

In different departments of the organisation. The

vacancies arise due to retirement or resignation of
employees, death, transfer of employees, business
expansion etc. job description is a statement of what the
job holders does, under what conditions it is done and
how it is done. It gives details of job title , job summary,
job activities and working conditions. From the job
description qualification, skills and experience required
for candidate can be listed. After identifying job holder
requirements, an advertisement is given to attract
potential candidates. Applications are received till the
last date and they are screened to shortlist the
candidates who can be called for an interview. Written
tests and interviews are conducted to select suitable
candidates.

III. Selection Comparison of the qualifications of the candidate

with the requirements of a job and eliminates all those who do not
stand up to this comparison.
As the employees are placed in the jobs for which they are best
suited, they derive maximum job satisfaction and reap maximum
wages. Labour turnover is reduced and the overall efficiency of the
concern is increased. A good relationship develops between the
employer and his workers.
Steps in the Selection Procedure

Job Analysis is the process by means of which a description is
developed of the present methods and procedures of doing a job,
physical conditions in which the job is done, relation of the job to
other jobs and other conditions of employment. Job Analysis is
intended to reveal what is actually done as opposed to what should
be done.

Job Description The lower level job descriptions are generally
written by the personnel department but managerial job
descriptions are written by the incumbent executive himself or by
his superior.

Job Specification is a statement of the minimum acceptable
human qualities necessary to perform a job satisfactorily.

STEPS FOLLOWED IN SELECTION

Application blank In this form, the applicant gives
relevant personal data such as his qualification,
specialisation, experience, firms in which he has worked
etc.

Initial interview of the candidate Means of
evaluating the appearance of the candidate. It is also
used for establishing a friendly relationship between
the candidate and the company and for obtaining
additional information.

Employment tests Certain tests such as Aptitude
test, Personality test, Interest test, Intelligence test by
which a candidates particular traits or abilities, his
likes or dislikes, his intelligence , his capacity to learn
etc can be estimated.

Checking references The employer would like to

get some important personal details about the
candidate, such as his character, past history,
background etc. verified from the people mentioned in
the application.

Physical or medical examination The objective is
to check the physical fitness of the applicant for the job
applied for.

Final interview In this interview, the selected
candidates are given an idea about their future
prospects within the organization.

IV. Placement Process of placing the right man on

the right job. A worker should be placed on a
position where there is a full use of his strengths
and all his weaknesses become irrelevant. A
misplaced person is always a frustrated individual.
V. Induction (Orientation) Process of
acclimatising a new employee to the new social
setting of his work. This should take into account
two major objects: i) familiarising the new
employee with his new surroundings, and company
rules and regulations; and ii) developing in him a
favourable attitude towards the company.