Chapter -5

ORGANISING
Introduction:
 Once the objectives are set and the plans have been laid down, the next step is to organise the
resources and the activities in such a manner that plans can be successfully implemented and
objectives are accomplished.
 Meaning of Organising:
Organising essentially implies a process which coordinates human efforts, assembles resources and
integrates both into a unified whole to be utilised for achieving specified objectives.
OR
Organising is a process that initiates implementation of plans by clarifying jobs and working
relationships and effectively deploying resources for attainment of identified and desired results
(goals).

Definition:
According to Theo Haimman, “Organising is the process of defining and grouping the activities of the
enterprise and establishing authority relationships among them”.

Steps in the Process of Organising:  

(a) Identification and Division of Work: It involves identification and division of total work to be done
into specific activities (called jobs) in accordance with previously determined plans. By dividing
the work, the burden of work can be shared among the employees. It facilitates specialization of work
& skills. Duplication of work can be avoided by dividing the work into manageable activities.  
(b) Departmentalization: Once work has been divided into small and manageable activities then
those activities which are similar in nature are grouped together. Such sets facilitate specialisation.
This grouping process is called departmentalisation.
Departments can be created using several criteria as a basis. Examples of some of the most
popularly used basis are territory (north, south, west etc.) and products (appliances, clothes, cosmetics
etc).
(c) Assignment of duties: Once departments have been formed each of them is placed under
the charge of an individual called departmental head (e.g., production manager, finance manager etc.).
Jobs are then allocated to the members of each department according to their skills and competencies.
(d) Establishing Reporting Relationships: Merely allocating work is not enough. Each individual
should also know from whom he has to take orders and to whom he is accountable. It helps in
co-ordination amongst various departments.
 
Importance of Organising:  
The significance of the organising function mainly arises from the fact that it helps in the survival and
growth of an enterprise and equips it to meet various challenges. In order for any business enterprise
to perform tasks and successfully meet goals, the organising function must be properly performed.
The following points highlight the crucial role that organising plays in any business enterprise:
(a) Benefits of specialization: In organizing every individual is assigned apart of total work and not
the whole task. This division of work into smaller units and repetitive performance leads to
specialization. Thus organizing promotes specialization which in turn leads to efficient & speedy
performance of tasks.  

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(b) Clarity in working relationship: It helps in creating well defined jobs and also clarifying the
limits of authority and responsibility of each job. Every individual has clarity as to whom he can give
orders and from whom he has to receive orders.
(c) Effective Administration: It provides a clear description of jobs and related duties which helps to
avoid confusion and duplication. Clarity in working relationships enables proper execution of work
which results ineffective administration.  
(d) Optimum utilization of resources: Organising leads to the proper usage of all material, financial
and human resources. The proper assignment of jobs avoids overlapping of work and also makes
possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and
minimising the wastage of resources and efforts.
(e) Adoption to Change: A properly designed organizational structure is flexible which facilitates
adjustment to changes in workload caused by change in external environment related to technology,
products, resources and markets.  
(f) Development of Personnel: Sound organization encourages initiative and relative thinking on part
of the employees. When managers delegate their authority, it reduces their workload so they can focus
on more important issues related to growth & innovation. This also develops the subordinates’ ability
and helps him to realize his full potential.  
(g) Expansion and growth: It helps in growth & diversification of an enterprise. It enables the
enterprise to take up new challenges. It allows a business enterprise to add more job positions,
departments and even diversify their product lines. New geographical territories can be added to
current areas of operation and this will help to increase customer base, sales and profit.

Organisation Structure:
Organisation structure is the outcome of the organising process. An effective structure will result in
increased profitability of the enterprise. The need for an adequate organisation structure is felt by an
enterprise whenever it grows in size or complexity.
The organisation structure can be defined as the framework within which managerial and
operating tasks are performed. It specifies the relationships between people, work and resources. It
allows correlation and co-ordination among human, physical and financial resources and this enables a
business enterprise to accomplish desired goals.
The span of management, to a large extent gives shape to the organisational structure. Span of
management refers to the number of subordinates that can be effectively managed by a superior. This
determines the levels of management in the structure.
Types of organisation structures:
The organisational structure can be classified under two categories which are as follows:
(i) Functional structure
(ii) Divisional structure
Functional Structure: Grouping of jobs of similar nature under functional and organising these
major functions as separate departments creates a functional structure. All departments report to a
coordinating head.

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Advantage of functional structure:
The functional structure has many advantages to offer.
a) A functional structure leads to occupational specialisation since emphasis is placed on specific
functions. This promotes efficiency in utilisation of manpower as employees perform similar
tasks within a department and are able to improve performance.
b) It promotes control and coordination within a department.
c) It helps in increasing managerial and operational efficiency and this result in increased profit.
d) It avoids duplication of efforts and thus reduces cost.
e) It makes training of employees easier.
f) It ensures that different functions get due attention.

Disadvantage functional structures:

The functional structure has certain disadvantages which an organisation must take into consideration
before it adopts it. Some of them are as follows:

a) It may lead to problems in coordination as information has to be exchanged across functionally

differentiated departments.
b) A conflict of interests may arise when the interests of two or more departments are not
compatible.
c) Functional heads do not get training for top management positions because they are unable to
gather experience in diverse areas.
d) A functional structure places less emphasis on overall enterprise objectives than the objectives
pursued by a functional head.

Suitability: It is most suitable when the size of the organisation is large, has a diversified activities and
operations require a high degree of specialisation.

Divisional Structure: 
In a divisional structure, the organisation structure comprises of separate business units or divisions.
Each unit has a divisional manager responsible for performance and who has authority over the unit.

For example, a large company may have divisions like cosmetics, clothing etc.

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 Advantage of Divisional structure:
a) Product specialisation helps in the development of varied skills in a divisional head and this
prepares him for higher positions.
b) Divisional heads are accountable for profits, as revenues and costs related to different
departments can be easily identified and assigned to them.
c) It promotes flexibility and initiative because each division functions as an autonomous unit
which leads to faster decision making.
d) It facilitates expansion and growth.
Disadvantages of divisional structure: The divisional structure has certain disadvantages. Some of
them are as follows:

a) Conflict may arise among different divisions with reference to allocation of funds.
b) It may lead to increase in costs since there may be a duplication of activities across products.
c) Divisional managers may ignore organisational interests.
Suitability: Divisional structure is suitable for those business enterprises where a large variety of
products are manufactured using different productive resources.

Differences between Functional and Divisional structure.

Sl.No Basis Functional Structure Divisional Structure

.

1 Formation Formation is based on functions Formation is based on product

lines and is supported by functions.

2 Specialisation Functional specialisation. Product specialisation.

3 Responsibility Difficult to fix on a department. Easy to fix responsiblity for

performance.
4 Managerial Difficult. Easy.
Development

5 cost Functions are not duplicated Duplication of resources in various

hence economical departments, hence costly.

6 Coordination Difficult for a multiproduct Easy, because all functions related to

company. a particular product are integrated in
one department.
Formal and Informal Organisation:
Formal organisation:
Meaning: Formal organisation refers to the organisation structure which is designed by the
management to accomplish a particular task.
It specifies clearly the boundaries of authority and responsibility and there is a systematic
coordination among the various activities to achieve organisational goals.
Definition:
According to Louis Allen, “ The formal organisation is a system of well-defined jobs, each bearing a
definite measure of authority, responsibility and accountability”.

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 OR
According to Chester Barnand, “Formal organisation is a system of consciously coordinated activities
of two or more persons toward a common objective”.
Features of formal Organisation:
a) It specifies the relationships among various job positions and the nature of their
interrelationship. This clarifies who has to report to whom.
b) It is a means to achieve the objectives specified in the plans, as it lays down rules and
procedures essential for their achievement.
c) Efforts of various departments are coordinated, interlinked and integrated through the formal
organisation.
d) It is deliberately designed by the top management to facilitate the smooth functioning of the
organisation.
e) It places more emphasis on work to be performed than interpersonal relationships among the
employees.

Advantages of formal Organisation:

Formal organisation offers many advantages:

a) It is easier to fix responsibility since mutual relationships are clearly defined.

b) There is no ambiguity in the role that each member has to play as duties are specified. This
also helps in avoiding duplication of effort.
c) Unity of command is maintained through an established chain of command.
d) It leads to effective accomplishment of goals by providing a framework for the operations to be
performed.
e) It provides stability to the organisation.

Disadvantages of formal Organisation:

The formal organisation suffers from the following limitations:

a) The formal communication may lead to procedural delays as the established chain of command
has to be followed which increases the time taken for decision making.
b) Poor organisation practices may not provide adequate recognition to creative talent, since it
does not allow any deviations from rigidly laid down polices.
c) It is difficult to understand all human relationships in an enterprise as it places more emphasis
on structure and work.

Informal Organisation:

Interaction among people at work gives rise to a ‘network of social relationships among employees’
called the informal organisation.

Definition:
According to Chester Barnand “An informal organisation is an aggregate of interpersonal
relationships without any conscious purpose but which may contribute to joint results.”
OR

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 According to Keith Davis, “Informal organisation is a network of personal and social relations not
established or required by the formal organisation but arising spontaneously as people associate with
one another”.

Features of Informal Organisation:

a) An informal organisation originates from within the formal organisation as a result of personal
interaction among employees.
b) The standards of behavior evolve from group norms rather than officially laid down rules and
regulations.
c) Independent channels of communication without specified direction of flow of information are
developed by group members.
d) It emerges spontaneously and is not deliberately created by the management.
e) It has no definite structure or form because it is a complex network of social relationships
among members.

Advantages of Informal Organisation:

The informal organisation offers many benefits. Important among them are given below:

a) Prescribed lines of communication are not followed. Thus, the informal organisation leads to
faster spread of information as well as quick feedback.
b) It helps to fulfill the social needs of the members and allows them to find likeminded people.
c) It contributes towards fulfillment of organisational objectives by compensating for
inadequacies in the formal organisation.

Disadvantages of Informal organisation: The informal organisation has certain disadvantages. Some
of them are as follows:
a) It acts as a destructive force and goes against the interest of the formal organisation.
b) The management may not be successful in implementing changes if the informal organisation
opposes them. Such resistance to change may delay or restrict growth.
c) It pressurises members to conform to group expectations. This can be harmful to the
organisation.

 Distinguish Between Formal and Informal Organization:

Sl.No Basis Formal organization Informal organization

.

1 Meaning Structure of authority Network of social relationships

relationships created by the arising out of interaction among
management employees

2 Purpose It is created to achieve It has no predetermined objectives

predetermined objectives

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3 Origin Arises as a result of company Arises as a result of social
rules and policies interaction

4 Behaviour It is directed by rules There is no set behaviour

pattern

5 Flow of Communication takes place Flow of communication is not

communication through the scalar chain through a planned route. It can take
place in any direction.
6 Nature Rigid. Flexible.

7 Leadership Managers are leaders. Leaders may or may not be

managers. They are chosen by the
group.
8 Authority Arises by virtue of position in Arises out of personal qualities.
management.

9 Stability They are stable They usually do not last.

10 Relationship The relationship of people is The relationship of people is inter

impersonal. personal.

DELEGATION:

Meaning:

Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a

pre-requisite to the efficient functioning of an organisation.

Definition:

According to Theo Haimman “Delegation of authority merely means the granting of authority to
subordinates to operate within prescribed limits.”

Elements of delegation.

1) Authority
2) Responsibility
3) Accountability

1. Authority:
Authority refers to the right of an individual to command his subordinates and to take action within the
scope of his position.
The concept of authority arises from the established scalar chain which links the various job positions
and levels of an organisation.
Authority also refers to the right to take decisions inherent in a managerial position to tell
people what to do and expect them to do it.

2. Responsibility:

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 Responsibility is the obligation of a subordinate to perform the assigned duty. It arises from a
superior subordinate relationship because the subordinate is bound to perform the duty
assigned to him. Thus, responsibility flows up upward i.e. subordinate is always responsible to
his superior.
3. Accountability:

Accountability means being answerable for the final results. It is an obligation to carry out
responsibility and to give reports about ones performance to the superiors. Authority can never
be delegated.

COMPARISION OF AUTHORITY, RESPONSIBILITY and ACCOUNTABILITY:

BASIS AUTHORITY RESPONSIBILITY ACCOUNTABILIT

Y

1) MEANING Right to command. Obligation to perform an Answerability for

assigned task. outcome of the
assigned task.
2) DELEGATIO It can be delegated It cannot be entirely It cannot be delegated
N delegated. at all.

3) ORIGIN Arises from formal Arises from Arises from

position. Delegated authority. Responsibility.

4) FLOW Flows downward from Flows upward from Flows upward from
superior to subordinate. subordinate to superior. subordinate to
superior

Importance of Delegation:

Delegation of authority is necessary for the smooth functioning of a business. It increases the working
capacity of a manager. Effective delegation can lead to the following benefits:

1. Effective management: Delegation enables superiors to assign the routine activities to the
subordinates and he can concentrate on other important functions. Thus, a manager can increase
his effectiveness by using the skills of subordinates through delegation of authority.
2. Employee development: Employees get more opportunities to utilize their talent. It motivates
them to develop themselves for higher positions, as they are given opportunities to use their skills
and talents for gaining excellence in their job.
3. Facilitation of growth: Delegation helps in the expansion of an organisation by providing a
ready workforce to take up leading positions in new ventures. Trained and experienced employees
are able to play significant roles in the launch of new projects.
4. Motivation of employees: Delegation helps in developing the talents of the employees. It also
has psychological benefits. When a superior entrusts a subordinate with a task, it is not merely the
sharing of work but involves trust on the superior’s part and commitment on the part of the
subordinate.
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5. Basis of management hierarchy: Delegation of authority establishes superior-subordinate
relationships, which are the basis of hierarchy of management. It is the degree and flow of
authority which determines who has to report to whom. The extent of delegated authority also
decides the power that each job position enjoys in the organisation.
6. Better co-ordination: The elements of delegation namely authority, responsibility and
accountability clearly define powers, duties and answerability related to various departments.
This helps to avoid overlapping of duties, brings better co-ordination among various departments
and functions of management.
7. Quick decision making: The subordinates are given authority to take decisions. They need not
go to their superiors from time to time for taking decision on routine matters. This increases speed
of decision making.

Decentralization:

Meaning:

Decentralisation refers to delegation of authority throughout all the levels of the organisation.

Definition:

According to Louis Allen “Decentralization refers to systematic effort to delegate to the lowest level,
all authority except that which can be exercised at central points.’’

Importance of Decentralization

Decentralisation is a fundamental step and its importance can be understood from the following
points:

1. Develops initiative among subordinates: Decentralisation helps to promote self-reliance and

confidence amongst the subordinates. This is because when lower managerial levels are given
freedom to take their own decisions they learn to depend on their own judgment. A
decentralisation policy helps to identify those executives who have the necessary potential to
become dynamic leaders.
2. Develops managerial talent for the future: Decentralisation gives subordinates a chance to
prove their abilities. In turn, it helps to develop a qualified team of subordinates who can be
considered to fill up more challenging managerial positions through promotions.
3. Quick decision making: In a decentralised organisation, decisions are taken at levels which
are nearest to the points of action and there is no requirement for approval from many levels,
the process is much faster. There are also less chances of information getting distorted because
it doesn’t have to go through long channels.
4. Relief to top management: The authority is delegated to the lower levels. The top
management is relieved of taking operational decisions. They can concentrate on corporate
planning, control and co-ordination of the activities of different departments. In fact
decentralisation is greatest when checking required on decisions taken by lower levels of
management is least.

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 5. Facilitates growth: It enables the managers at the lower level heads to perform to their full
potential and also develops a sense of competition among the departments. Such position spirit
contributes towards growth of enterprise.
6. Better control: Decentralisation makes it possible to evaluate performance at each level and
the departments can be individually held accountable for their results. The extent of
achievement of organisational objectives as well as the contribution of each department in
meeting the overall objectives can be ascertained.

As a conclusion, it must be noted that in spite of its benefits decentralisation should be applied with
caution as it can lead to organisational disintegration if the departments start to operate on their own
guidelines which may be contrary to the interest of the organisation. Decentralisation must always be
balanced with centralisation in areas of major policy decisions.

Differences between delegation and Decentralisation.

Sl.No Basis Delegation Decentralisation

.

1 Nature Delegation is a compulsory Decentralisation is an optional

act because no individual can policy decision. It is done at the
perform all tasks on his own. discretion of the top management.

2 Freedom of action More control by superiors Less control over executives

hence less freedom to take own hence greater freedom of action.
decisions.
3 Status It is a process followed to share It is the result of the policy decision of
tasks. the top management.

4 Scope It has narrow scope as it is It has wide scope as it implies

5 Purpose
limited to superior and his
immediate subordinate.
To lessen the burden of the
manager
extension of delegation to the lowest
level of management.
To increase the role of the subordinates
in the organisation by giving them
more autonomy.

Differences between Centralisation and Decentralisation.

Sl.No Centralisation Decentralisation

.

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1 The decision making authority is retained by The decision making authority is delegated
higher management levels. to lower levels of management.

2 There is no delegation of authority There is delegation of authority.

3 Generally found in small organisation. Found in case of large organisations.

**************************

Chapter-6:
STAFFING
Introduction:

People are an organisation most important because the ‘Right people can take the business to the
top and the wrong people can even break the business’. The success of every organisation depends on
the talented and hardworking people who are the principle asset/primary asset of any organization.

Meaning:

Staffing is the managerial function of filling and keeping filled the positions in the organisation
structure.
OR

Staffing is that part of the process of management which is concerned with obtaining, utilising and
maintaining a satisfactory and satisfied work force.

Importance of staffing:

In any organisation, there is a need for people to perform work. The staffing function of management
fulfills this requirement and finds the right people for the right job. Proper staffing ensures the
following benefits to the organisation:
1. It helps in discovering and obtaining competent personnel for various jobs.
2. Staffing function contributes for higher performance, by putting right person on the right job.
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 3. It ensures the continuous survival and growth of the enterprise through the succession
planning for managers.
4. It helps to ensure optimum utilisation of the human resources. By avoiding overmanning, it
prevents under-utilisation of personnel and high labour costs.
5. It improves job satisfaction and morale of employees through objective assessment and fair
reward for their contribution.
Staffing as a part of human resource management:

It is a function which all managers need to perform. It is a separate and specialised function and there
are many aspects of human relations to be considered. The staffing function deals with the human
element of management. The success of an organisation in achieving its goals is determined to a
great extent on the competence, motivation and performance of its human resource.
Human Resource Management includes many specialised activities and duties which the
human resource personnel must perform. These duties are:
⮚ Recruitment i.e., search for qualified people
⮚ Analysing jobs, collecting information about jobs to prepare job descriptions.
⮚ Developing compensation and incentive plans.
⮚ Training and development of employees for efficient performance and career growth.
⮚ Maintaining labour relations and union management relations.
⮚ Handling grievances and complaints.
⮚ Providing for social security and welfare of employees.
⮚ Defending the company in law suits and avoiding legal complications.

STAFFING PROCESS:

The main purpose of staffing is to obtain the most competent person into the organisation, wrong
selection may result in “Square peg for a round hole and a round peg for a square hole” which means
the mismatch in the staffing of employees in an organisation.

STEPS:

1. Estimating the manpower requirement.

2. Recruitment
3. Selection
4. Placement and orientation
5. Training and development
6. Performance appraisal
7. Promotion and career planning
8. Compensation

1. Estimating the manpower requirement: It refers to the process of estimating the man power
requirement of an organisation. While estimating the man power requirement the management
generally keeps in mind the available infrastructure like technology, production schedule,
market fluctuation etc. the focus of the man power is to get the right number for qualified
people at the right time.

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 2. Recruitment: Recruitment may be defined as the process of searching for
prospective employees and stimulating them to apply for jobs in the organisation. The
information generated in the process of writing the job description and the candidate
profile may be used for developing the ‘situations vacant’ advertisement. The
advertisement may be displayed on the factory/ office gate or else it may be got
published in print media or flashed in electronic media.
Both internal and external sources of recruitment may be explored. Internal sources
may be used to a limited extent. For fresh talent and wider choice external sources
are used.

3. Selection: Selection is the process of choosing from among the pool of the prospective
job candidates developed at the stage. It involves testing the ability, knowledge and
skill of the applicant through selection tests and interviews. Those who are able to
successfully negotiate the test and the interviews are offered an employment contract
through an appointment letter.

4. Placement and orientation: Placement refers to the employee occupying the position or post
for which the person has been selected. Orientation means introducing the selected employee
to other employees and familiarising him with the rules and policies of the organisation.

5. Training and development: Training is the process which is undertaken to increase the
knowledge and skills of an employee to perform the present job accurately.
The term development refers to the process of not only building up the skills and abilities for
specific purpose, but also the overall competence of managerial and challenging task. In short
development refers to the training of managers and executives.

6. Performance appraisal: It is the systematic evaluation of the individual with respect to his
performance on the job and his potential for development. It also determines an employee’s
worth to the organisation.
7. Promotion and career planning: Promotion is vertical movement of an employee within the
organisation. In other words promotion refers to the upward movement of an employee from
one job to another higher job with increasing salary, status and responsibility. Promotion
requires more knowledge, experience and skill to perform the job.
8. Compensation: It refers to all forms of pay or rewards going to employees. It may be in
the form of direct financial payments like wages, salaries, incentives, commissions
and bonuses and indirect payments like employer paid insurance and vacations.
Direct financial payments are of two types: time based or performance based. A time
based
Plan means salary and wages are paid either daily, weekly or monthly or annually.
Performance based plans means salary/wages are paid according to piecework.

RECRUITMENT:
Meaning: Recruitment refers to the process of finding possible candidates for a job or a function.

It has been defined as ‘the process of searching for prospective employees and
stimulating them to apply for jobs in an organisation.’

SOURCES OF RECRUITMENT:

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The object of recruitment is to attract potential employees with the necessary characteristics or
qualification, in the adequate number for the jobs available. The requisite positions may be filled up
from within the organisation or from outside. Thus, there are two sources of recruitment – Internal
and External.
1. Internal sources : There are two important sources of internal recruitment, namely, transfers and
promotions, which are discussed below:
a) Promotion: It refers to the upward movement of an employee from one job to another
higher job, with increasing salary, status and responsibility. Promotion requires more
knowledge, experience and skill to perform the job.
b) Transfer: It involves shifting of an employee from one job to another, one
department to another or from one shift to another, without a substantive change in
the responsibilities and status of the employee.
Merits of Internal Sources:

Filling vacancies in higher jobs from within the organisation or through internal transfers has the
following merits:

a) Employees are motivated to improve their performance.

b) Internal recruitment also simplifies the process of selection and placement.
c) Transfer is a tool of training the employees to prepare them for higher jobs.
d) Filling of jobs internally is cheaper as compared to getting candidates from external sources.

Limitations of Internal Sources:

a) When vacancies are filled through internal promotions, the scope for induction of fresh talent
is reduced.
b) The employees may become lethargic if they are sure of time bound promotions.
c) A new enterprise cannot use internal sources of recruitment. No organisation can fill all its
vacancies from internal sources
d) The spirit of competition among the employees may be hampered.
e) Frequent transfers of employees may often reduce the productivity of the organisation.

2. External sources:
All vacancies cannot be filled up from within the organization so that organization so the
organization has recruit new candidate from various external sources.
a) Direct recruitment: Under the direct recruitment, a notice is placed on the notice-board of
the enterprise specifying the details of the jobs available. Jobseekers assemble outside the
premises of the organisation on the specified date and selection is done on the spot. The
practice of direct recruitment is followed usually for casual vacancies of unskilled or
semi-skilled jobs.
b) Casual callers: Many qualified persons apply for employment to reputed companies on their
own initiative. Such applications are known as unsolicitated applications. A proper record may
be kept of such applications and the candidates may be called for interview whenever they
need arises.
c) Advertisement: It is the most effective means to search potential employees from outside the
oganisation. Employment advertisement in journals, newspaper, bulletin etc... is quite common

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 in our country. The necessary information about the company, job specification is given in the
advertisement to bring to suitable candidate.
d) Employment exchange: In India employment exchanges have been setup by the government
for bringing together the job seekers and employer who are looking for employee. Those who
are in search of employment get themselves registered with the local employment exchanges,
which keep a record of all such persons who require help in finding jobs.
e) Placement agencies and Management Consultant: In urban area a number of private
oganisation have started functioning as employment placement agencies .These agencies
register with them and the names of job seekers and try to arrange job interviews for such
candidates’ companies’ often get in touch with such agencies to provide them the details of
suitable candidates for various jobs.
Management consultancy firms help the organisations to recruit technical, professional
and managerial personnel. They specialise in middle level and top level executive placements.
f) Campus Recruitment: Now a days, companies or large organization maintain a close contact
with the various universities, institutes and colleges for recruitment of their staff as and when
the need arises, The companies send their executives to the above educational institutions.
These executives take the interview of the interested candidates and select the suitable
candidates as per their requirement. This process is popularly known as Campus recruitment.
g) Labour contractors: Labour contractors are the specialist, people who supply man power to
the factory or manufacturing plants workers are recruited through labour contractors who are
themselves employees of the organization. Workers are appointed on contract (i.e. for a
particular time period) basis.
h) Advertising on Television: Tele-casting over T.V is a widely used source of recruitment the
practice of tele-casting of vacant post, job description, qualification required etc., has a very
wide reach. Generally this type of telecasting is popular in big cities,
i) Web-publishing: Internet is becoming a common source of recruitment these days. There are
certain websites specifically designed and dedicated for the purpose of providing information
about both job seekers and job opening.

Merits of External Sources: The advantages of using external sources of recruitment are as follows:
a) Qualified Personnel: By using external sources of recruitment, the management can attract
qualified and trained people to apply for vacant jobs in the organisation.
b) Wider Choice: When vacancies are advertised widely, a large number of applicants from
outside the organisation apply. The management has a wider choice while selecting the people
for employment.
c) Fresh Talent: External recruitment provides wider choice and brings new blood in the
organisation. However, it is expensive and time-consuming.
d) Competitive Spirit: If a company taps external sources, the existing staff will have to compete
with the outsiders.
Limitations of External Sources:
a) Dissatisfaction among existing staff: External recruitment may lead to dissatisfaction and
frustration among existing employees. They may feel that their chances of promotion are
reduced.
b) Lengthy process: Recruitment from external sources takes a long time.
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 c) Costly process: It is very costly to recruit staff from external sources. A lot of money has to be
spent on advertisement.
SELECTION:
Selection is the process of identifying and choosing the best person out of a number of prospective
candidates for a job. Towards this purpose, the candidates are required to take a series of employment
tests and interviews. At every stage many are eliminated and a few move on to the next stage until the
right type is found. The process may start right from the screening of the applications. It may continue
even after the offer of employment, acceptance and joining of the candidate.
Process of Selection: The important steps in the process of selection are as follows:
1. Preliminary Screening: After receiving the applications from the candidates, the same must be
examined to decide, which ones deserve to be considered and followed up. Screening exercise
involves checking the content of the application like name address, nationality, date and place of birth,
religion and education and training, so has to ascertain whether or not the minimum eligibility
conditions are fulfilled by the candidates. “The purpose of screening is to prepare a list of eligible
candidates who are to be evaluated further”.

2. Selection test: After screening the applications, eligible candidates are asked to appear for selection
tests. These tests are made to discover and measure, the skill and abilities of the candidates. The
following tests are usually conducted to measure intelligence, aptitude, personality etc…

Important Tests Used for Selection of Employees:

a) Intelligence Tests: This is one of the important psychological tests used to measure the level of
intelligence quotient of an individual. It is an indicator of a person’s learning ability or the
ability to make decisions and judgments
b) Aptitude test: Aptitude means the potential which an individual has for learning new skills.
This test indicates the person’s capacity and his potential for development
c) Trade or proficiency test: Trade tests are designed to measure the skills already acquired by
the individuals’ candidates. They measure the level of knowledge and proficiency in the area
of profession or technical training.
d) Personality test: Personality tests evaluate the personal, emotions and reactions, maturity
level, value system etc., these tests probe the overall personality. Hence, these are difficult to
design and implement.
e) Interest test: Interest test identify the areas in which a candidate has special concern,
involvement etc.., these test suggest the nature of job liked by a candidate.

3. Employment Interview: Interview is considered as a method of performance appraisal, through

face to face conversation and observation. Interview helps the employer to evaluate the candidate
regarding the personality, smartness, intelligence, attitude etc..,

4. Reference and Background checks: The candidate’s skills, qualification, honesty and experience
etc… cannot be judged on the basis of any test. Therefore information is to be obtained and verified
from the heads of educational institutions or from the persons whose names are given by the
candidates as referee or from their previous employers.

5. Selection decision: After a candidate has cleared all the hurdles in the selection procedure the
employer may take a decision of selection after consulting the concerned manager.

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6. Medical examination: Candidates finally selected for the job are asked to undergo medical
examination to see whether they are physically fit for the job. The physical fitness of employees
reduces absenteeism, accidents etc….

7. Job offer : Candidates finally selected are offered to join the organization for which a formal
appointment order is issued by the organisation. It contains the nature of job, the remuneration, pay
scale and other terms and conditions relating to job.

8. Contract of employment : If the selected candidates decide to join the organization, he has to
report it to the concerned authority and formally join the organisation by giving his acceptance in
writing. Then the organisation will open a service register in that of the candidate and record all details
about life, particulars of employment, pay scale, qualification etc…

Training and development:

Training and Development is an attempt to improve the current or future employee performance by
increasing an employee’s ability to perform through learning, usually by changing the employee’s
attitude or increasing his or her skills and knowledge.
Importance of training and development:
Training and development help both the organisation and the individual.
Benefits to the organisation: The benefits of training and development to an organisation are as
follows:
a) Training is a systematic learning, always better than hit and trial methods which lead to
wastage of efforts and money.
b) It enhances employee productivity both in terms of quantity and quality, leading to higher
profits.
c) Training equips the future manager who can take over in case of emergency.
d) Training increases employee morale and reduces absenteeism and employee turnover.
e) It helps in obtaining effective response to fast changing environment – technological and
economic.
Benefits to the Employee: The benefits of training and development activity to the employees are as
follows:

a) Improved skills and knowledge due to training lead to better career of the individual.
b) Increased performance by the individual helps him to earn more.
c) Training makes the employee more efficient to handle machines. Thus, less prone to
accidents.
d) Training increases the satisfaction and morale of employees.
Training, Development and Education:
Training is any process by which the aptitudes, skills and abilities of employees to perform specific
jobs are increased. It is a process of learning new skills and application of knowledge.

Education is the process of increasing the knowledge and understanding of employees. It is the
understanding and interpretation of knowledge.

Development refers to the learning opportunities designed to help employees grow.

Differences between Training and Development:

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Sl.No Training Development
.

1 It is a process of increasing knowledge and It is a process of learning and growth.

skills.

2 It is to enable the employee to do the job It is to enable the overall growth of the
better. employee.
3 It is a job oriented process. It is a career oriented process.

METHODS OF TRAINING: There are various methods of training. These are broadly categorised
into two groups: On-the-Job training methods and Off-the-Job training methods.

On-the-Job training methods: On-the-Job training methods refer to the methods that are applied to
the workplace, while the employee is actually working. There are various methods of on-the-job
training. They are:
a) Apprenticeship programmes: Apprenticeship programmes put the trainee under the
guidance of a master worker. These are designed to acquire a higher level of skill. People
seeking to enter skilled jobs, to become, for example, plumbers, electricians or iron-workers.
During the course of training, the expert gives complete knowledge of both theoretical and
practical aspects of the job. During the period of training stipend is paid to the trainee by the
employer.

b) Coaching: In this method, the superior guides and instructs the trainee as a coach. The coach
or counselor sets mutually agreed upon goals, suggests how to achieve these goals periodically
reviews the trainees progress and suggests changes required in behavior and performance. The
trainee works directly with a senior manager and the manager takes full responsibility for the
trainee’s coaching.

c) Internship training: It is a joint programme of training in which educational institutions and

business firms cooperate. Selected candidates carry on regular studies for the prescribed
period. They also work in some factory or office to acquire practical knowledge and skills.

d) Job rotation: This kind of training involves shifting the trainee from one department to
another or from one job to another. This enables the trainee to gain a broader understanding of
all parts of the business. Job rotation allows trainees to interact with other employees
facilitating future cooperation among departments.

Off-the- job training methods:

Off-the-Job training methods are used away from the work place. The following are the
important methods of off the job training.

a) Class room lectures / Conferences: The lecture or conference approach is well adapted to
conveying specific information-rules, procedures or methods. The use of audiovisuals or
demonstrations can often make a formal classroom presentation more interesting.

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b) Films: They can provide information and explicitly demonstrate skills that are not easily
represented by the other techniques. Used in conjunction with conference discussions, it is a
very effective method in certain cases.

c) Case study: It is a written description of an actual situation in the past in the same organisation
or somewhere else and trainees are supposed to analyse and give their conclusions. This is an
excellent method to ensure full participation of employees and generates good interest among
them.

d) Vestibule training: Employees learn their jobs on the equipment they will be using, but the
training is conducted away from the actual work floor. Actual work environments are created
in a class room and employees use the same materials, files and equipment. This is usually
done when employees are required to handle sophisticated machinery and equipment.

e) Computer modeling: It is the technique of representing the real world by a computer program
or software. It can assist in the design, creation and the evaluation of complex system. It allows
learning in an artificial environment without the risk of damage to machines or equipments.

f) Programmed Instruction: Information is broken into meaningful units and these units are
arranged in a proper way to form a logical and sequential learning package i.e. from simple to
complex. The trainee goes through these units by answering questions or filling the blanks.

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