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Human Capital Theory:

This theory was introduced in 1950 and implemented till date.


Human capital is a stock of knowledge, abilities, habits, social and
personality attributes including creativity embodied in the ability to
perform labor so as to produce economic value.
It is also a collection of resources such as all knowledge, talent, skills,
abilities, experiences, intelligence, training, judgment possessed
individually and collectively by individual in a population. These are the
resources are the total capacity of the people that represents a form of
wealth which can be directed to accomplish the goals of the firm or
organization.
Employees are just like our assets.
Human Relation Theory:
This theory was introduced in 1920 by Elton Mayo which is known as
Father of Human relation theory. It depends on development of
employees.
Characteristics of Human Relation Theory:
1. Money is not only the motivational factor.
2. Employees Empowerment.
3. Happy customer is a satisfied worker and satisfied worker is a
productive worker.
1. Money is not motivational factor:
It is means that there are so many factors for motivating employee
of the organization not only the money. Money is not everything.
There are two types of benefits:
a. Monetary Benefit:

The benefit which is convertible into cash is called monetary


benefits.
b. Non-Monetary Benefit:
The benefits which in not convertible in cash and offered in
form of facility is called Non-monetary benefits. All the
facilities are offered to employee but not convertible in cash.
Example:
Transport facility.
House facility.
Medical facility.
These are the other factors which motivate the employee of the
organization and employee give good response in return.
2. Employees Empowerment:
Employee empowerment is giving employees a certain degree of
responsibility for decision-making regarding their specific
organizational tasks. It allows decisions to be made at the lower
levels of an organization where employees have a unique view of
the issues and problems facing the organization at a certain level..
Advantages:
Employee empowerment provides some distinct advantages.
Employee empowerment should lead to increased organizational
responsiveness to issues and problems and an increase in
productivity. It should also lead to a greater degree of employee
commitment to organizational goals, since employees can take
some degree of ownership in the decisions made towards goal
achievement.
3. Happy worker is a satisfied worker and satisfied worker is a
productive worker:

It means creating conditions under which workers feel happy


about their work results in greater productivity and other
positive work behaviours.
Happy individuals are more likely than their less happy peers
to have fulfilling, positive relationships, superior work
performance and robust health.
Happier people tend to get better performance evaluations
and higher pay.
Contingency Theory:
A contingency theory is an organizational theory that claims that there is
no best way to organize a corporation, to lead a company, or to make
decisions. Instead, the optimal course of action is contingent (dependent)
upon the internal and external situation.
Example:

Scientific Management Theory:

This theory was introduced by Fredrik Taylor in 1920. It is based on


organizational growth. It is also called taylorism.
It is a theory of management that analyzes and synthesizes workflows.
Its main objective is improving economic efficiency, especially labor
productivity. It was one of the earliest attempts to apply science to
the engineering of processes and to management.
Important Points:

What is work to be done?


How is the work to be done right now?
Comparison of option 1 and 2.
Implementation of best one.

Organizational Behavior Model:


There are two types of variable which are as following:
Dependent variable.
Independent variable.
Dependent Variable:
The variable which depends on other variable is called dependent
variable.
Productivity
Absenteeism
Turnover
Organizational citizenship behavior
Job satisfaction
1. Productivity:

Transferring the input into output at a lower cost is called


productivity.
2. Absenteeism:
Failure to report. The activity which depends on previous
activity is called assembly line production.
Types:
a. Wanted absenteeism:
The absenteeism in which organization want to show the
absenteeism in some specific case.
b. Un Wanted absenteeism:
In which organization is suffering and does not want
absenteeism.
3. Turnover:
Permanent withdrawal from an organization. No link from
organization.
Turnover = Avg. No. of employees hiring during a year/
Avg. No. of employees leaved during a year100
If turnover will exceed 4% then it will show negative
impact on goodwill
If turnover will not exceed 4% then it will show positive
impact on goodwill
4. Organizational citizenship behavior:
The behavior in which employees will done extra services
without any cost is called OCB.
Example:
Training of employee.
Employee show OCB when they satisfy from job.

5. Job satisfaction:
It is impossible to measure
Soft skills.
Independent Variable:
The variable which is not depend on other variable is called independent
variable.