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Definition of Organizing : -
Organizing is a systematic process of structuring, integrating, co-ordinating task goals, and
activities to resources in order to attain objectives.
Nature :-
The following are the important Natures of organizing.
Specialization and division of work. The entire philosophy of organization is centered on
the concepts of specialization and division of work. The division of work is assigning
responsibility for each organizational component to a specific individual or group thereof.
It becomes specialization when the responsibility for a specific task lies with a designated
expert in that field. The efforts of the operatives are coordinated to allow the process at
hand to function correctly. Certain operatives occupy positions of management at various
points in the process to ensure coordination.
Orientation towards goals. Every organization has its own purposes and objectives.
Organizing is the function employed to achieve the overall goals of the organization.
Organization harmonizes the individual goals of the employees with overall objectives of
the firm.
Composition of individuals and groups. Individuals form a group and the groups form an
organization. Thus, organization is the composition of individual and groups. Individuals
are grouped into departments and their work is coordinated and directed towards
organizational goals.
Continuity. An organization is a group of people with a defined relationship in which they
work together to achieve the goals of that organization. This relationship does not come
to end after completing each task. Organization is a never ending process.
Purpose : -
Helps to achieve organizational goal. Organization is employed to achieve the overall
objectives of business firms. Organization focuses attention of individuals objectives
towards overall objectives.
Optimum use of resources. To make optimum use of resources such as men, material,
money, machine and method, it is necessary to design an organization properly. Work
should be divided and right people should be given right jobs to reduce the wastage of
resources in an organization.
To perform managerial function. Planning, Organizing, Staffing, Directing and Controlling
cannot be implemented without proper organization.
Facilitates growth and diversification. A good organization structure is essential for
expanding business activity. Organization structure determines the input resources
needed for expansion of a business activity similarly organization is essential for product
diversification such as establishing a new product line.
Humane treatment of employees. Organization has to operate for the betterment of
employees and must not encourage monotony of work due to higher degree of
specialization. Now, organization has adapted the modern concept of systems approach
based on human relations and it discards the traditional productivity and specialization
Formal organisational structure clearly spells out the job to be performed by each individual, the
authority, responsibility assigned to every individual, the superior- subordinate relationship and
the designation of every individual in the organisation. This structure is created intentionally by
the managers for achievement of organisational goal.
Features of Formal organisation:
(1) The formal organisational structure is created intentionally by the process of organising.
(2) The purpose of formal organisation structure is achievement of organisational goal.
(3) In formal organisational structure each individual is assigned a specific job.
(4) In formal organisation every individual is assigned a fixed authority or decision-making power.
(5) Formal organisational structure results in creation of superior-subordinate relations.
(6) Formal organisational structure creates a scalar chain of communication in the organisation.

Advantages of Formal Organisation:

1. Systematic Working:
Formal organisation structure results in systematic and smooth functioning of an organisation.
2. Achievement of Organisational Objectives:
Formal organisational structure is established to achieve organisational objectives.
3. No Overlapping of Work:
In formal organisation structure work is systematically divided among various departments and
employees. So there is no chance of duplication or overlapping of work.
4. Co-ordination:
Formal organisational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports
to whom.
6. More Emphasis on Work:
Formal organisational structure lays more emphasis on work than interpersonal relations.
Disadvantages of Formal Organisation:
1. Delay in Action:
While following scalar chain and chain of command actions get delayed in formal structure.
2. Ignores Social Needs of Employees:
Formal organisational structure does not give importance to psychological and social need of
employees which may lead to demotivation of employees.
3. Emphasis on Work Only:
Formal organisational structure gives importance to work only; it ignores human relations,
creativity, talents, etc.
In the formal organisational structure individuals are assigned various job positions. While
working at those job positions, the individuals interact with each other and develop some social
and friendly groups in the organisation. This network of social and friendly groups forms another
structure in the organisation which is called informal organisational structure.
The informal organisational structure gets created automatically and the main purpose of such
structure is getting psychological satisfaction. The existence of informal structure depends upon
the formal structure because people working at different job positions interact with each other to
form informal structure and the job positions are created in formal structure. So, if there is no
formal structure, there will be no job position, there will be no people working at job positions
and there will be no informal structure.
Features of informal organisation:
(1) Informal organisational structure gets created automatically without any intended efforts of
(2) Informal organisational structure is formed by the employees to get psychological satisfaction.
(3) Informal organisational structure does not follow any fixed path of flow of authority or
(4) Source of information cannot be known under informal structure as any person can
communicate with anyone in the organisation.
(5) The existence of informal organisational structure depends on the formal organisation

Advantages of Informal Organisation:

1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster spread of communication.
2. Fulfills Social Needs:
Informal communication gives due importance to psychological and social need of employees
which motivate the employees.
3. Correct Feedback:
Through informal structure the top level managers can know the real feedback of employees on
various policies and plans.
Strategic Use of Informal Organisation.
1. The knowledge of informal group can be used to gather support of employees and improve
their performance.
2. Through grapevine important information can be transmitted quickly.
3. By cooperating with the informal groups the managers can skillfully take the advantage of both
formal and informal organisations.
Disadvantages of Informal organisation:
1. Spread Rumours:
According to a survey 70% of information spread through informal organisational structure are
rumors which may mislead the employees.
2. No Systematic Working:
Informal structure does not form a structure for smooth working of an organisation.
3. May Bring Negative Results:
If informal organisation opposes the policies and changes of management, then it becomes very
difficult to implement them in organisation.
4. More Emphasis to Individual Interest:
Informal structure gives more importance to satisfaction of individual interest as compared to
organisational interest.
An organizational chart (often called organization chart, org chart, organigram(me),
or organogram) is a diagram that shows the structure of an organization and the relationships and
relative ranks of its parts and positions/jobs. The term is also used for similar diagrams, for
example ones showing the different elements of a field of knowledge or a group of languages.
In the words of George R Terry, "A chart is a diagrammatical form which shows important
aspects of an organization including the major functions and their respective relationships, the
channels of supervision, and the relative authority of each employee who is in charge of each
respective function."
A company's organizational chart typically illustrates relations between people within an
organization. Such relations might include managers to sub-workers, directors to managing
directors, chief executive officer to various departments, and so forth. The different types of
organization charts include:
Hierarchical or Top
Flat (also known as Horizontal)
There is no accepted form for making organization charts other than putting the principal official,
department or function first, or at the head of the sheet, and the others below, in the order of
their rank. The titles of officials and sometimes their names are enclosed in boxes or circles. Lines
are generally drawn from one box or circle to another to show the relation of one official or
department to the others
Hierarchical or Top organization chart

Flat Chart (also known as Horizontal)

Circular Chart
Control by the top management people in all the core and special departments in a circular flow.
Tall VS Flat Organization Chart
Organizational structure refers to the way in which an organization's activities are divided,
grouped and coordinated into relationships between Managers and Employees, Managers and
Managers, and Employees and Employees.
(i) Line organisational structure.
(ii) Staff or functional authority organisational structure.
(iii) Line and staff organisational structure.
(iv) Committee organisational structure.
(v) Divisional organisational structure.
(vi) Project organisational structure.
(vii) Matrix organisational structure and
(viii) Hybrid organisational structure.
These organisational structures are briefly described in the following paragraphs:
1. Line Organizational Structure:
A line organisation has only direct, vertical relationships between different levels in the
firm. There are only line departments-departments directly involved in accomplishing the primary
goal of the organisation. For example, in a typical firm, line departments include production and
marketing. In a line organisation authority follows the chain of command.

2. Staff or Functional Authority Organizational Structure

The jobs or positions in an organisation can be categorized as:
(i) Line position:
A position in the direct chain of command that is responsible for the achievement of
an organisations goals and
(ii) Staff position:
A position intended to provide expertise, advice and support for the line positions.
The line officers or managers have the direct authority (known as line authority) to be
exercised by them to achieve the organisational goals. The staff officers or managers have staff
authority (i.e., authority to advice the line) over the line. This is also known as functional authority.
An organisation where staff departments have authority over line personnel in narrow
areas of specialization is known as functional authority organisation.

3. Line and Staff Organizational Structure:

Most large organisations belong to this type of organisational structure. These
organisations have direct, vertical relationships between different levels and also specialists
responsible for advising and assisting line managers. Such organisations have both line and staff
departments. Staff departments provide line people with advice and assistance in specialized
areas (for example, quality control advising production department).
4. Divisional Organisational Structure:
In this type of structure, the organisation can have different basis on which departments
are formed. They are:
(i) Function,
(ii) Product,
(iii) Geographic territory,
(iv) Project and
(iv) Combination approach.
5. Project Organisational Structure:
A project organisation is a temporary organisation designed to achieve specific results by
using teams of specialists from different functional areas in the organisation. The project team
focuses all its energies, resources and results on the assigned project. Once the project has been
completed, the team members from various cross functional departments may go back to their
previous positions or may be assigned to a new project. Some of the examples of projects are:
research and development projects, product development, construction of a new plant, housing
complex, shopping complex, bridge etc.
6. Matrix Organisational Structure:
It is a permanent organisation designed to achieve specific results by using teams of
specialists from different functional areas in the organisation. The matrix organisation is
illustrated in Exhibit 10.8.

7. Hybrid Organisational Structure:

Exhibit 10.9 (a) illustrates the hybrid organisational structure.
Exhibit 10.9 (b) illustrates a combination structure

1. Alignment of corporate and divisional goals.
2. Functional expertise and efficiency.
3. Adaptability and flexibility in divisions.
1. Conflicts between corporate departments and units.
2. Excessive administration overhead.
3. Slow response to exceptional situations.
Authority is the right to perform or command.
Line authority:
Line authority means that people in management positions have formal authority to
direct and control immediate subordinates.
Line functions are those that are related directly with the attainment of the
organizational objectives Ex: production and sales are line functions, while finance,
personnel and accounting are staff functions in manufacturing organization.
But in bank, finance and accounting are the line functions.

Staff authority:
Staff authority includes the right to advise, recommend and counsel the staff specialists
area of expertise.
Staff functions are those that help line functions in attaining the objectives.
In marketing department ,selling may be line function whereas market research is a staff
Departmentation means group of activities and employees into departments. It is, as Allen
wrote a means of dividing the large and monolithic functional organization into smaller, flexible
administrative units.
Processes of Departmentation
Departmentation is done through the following processes:
(a) Identification of tasks or duties.
(b) Analysis of details of each task.
(c) Description of the functions.
(d) Entrusting the groups of functions to separate specialist heads and providing them with
suitable staff.
(e) Delineation of scope of authority and responsibility of departmental heads.
Types of Departmentation
(a) Functions, e.g., sales, production, personnel, planning, transport, etc.
(b) Products, e.g., air-conditioners, accounting machines, electronic calculators, etc.
(c) Territory, region, or geographical area, e.g., Northern Railway, Western Railway, N.E.
Railway, etc.
(d) Customer, e.g., wholesaler, retailer, government.
(e) Process.
(f) Appropriate combination of any of these types.
Function wise Departmentation
Under each of these five managers, there will be subordinate managers and under them, the
subordinate staff.
The advantages of this type of structure are as follows:
(i) It is a logical reflection of functions.
(ii) It follows the principle of specialisation.
(iii) Maintains power and prestige of major functions.
(iv) Inter-departmental co-ordination is facilitated.
(v) The structure is simple, logical and easy to understand.
(vi) Provides a good means of control at the top.

There are also some disadvantages:

(i) Responsibility for profits tends to be at the top.
(ii) There may be chances of heavy centralisation in decision-making.
(iii) Where geographical centralisation is desirable or required, this form becomes
(iv) This is not very suitable where product lines have to be emphasized.
(v) There is a lower potential for manager development.
Product wise Departmentation
The advantages of this type of structure are:
(i) Places greater effort on individual product line.
(ii) Better customer service arising from greater product knowledge.
(iii) Simplifies departmentation of profitability of each product line. Responsibility for profits is
at the Division level.
(iv) Improves co-ordination of functional activities.
(v) New department may be added without difficulty. Permits growth and diversity of products
and services.
(vi) Detailed information on markets for specific products will be generated.
(vii) Extremely suitable where product lines are complex or vary greatly.
(viii) Furnishes measurable training ground for Managers.

Some of the disadvantages inherent in such departmentation are:

(i) A customer has to deal with different salesmen or managers for different products of the
same company.
(ii) Extra costs of maintaining separate sales force for each product.
(iii) Duplication of costs on travel, etc.
(iv) Tends to make maintenance of economical central services difficult.
(v) Results in increased problems of the top management control.
Territorial or Geographical Departmentation
The advantages of such departmentation are:
(i) Regional expertise is generated and managers can tackle customers or competition better.
Places responsibility at lower levels.
(ii) Proximity will reduce costs of operation and administration.
(iii) Places emphasis on local markets and problems. Local conditions might warrant different
types of selling. This is possible only in territorial departmentation.
(iv) Improves co-ordination at the regional level.
(v) Better face-to-face communication with local interests in mind.
(vi) Better manager development.

Some disadvantages are listed as follows:

(i) Involves higher costs of co-ordination and control from headquarters.
(ii) Results in more managerial levels which increases overhead costs.
(iii) Unsuitable for departments like Finance, where no gains are possible by specialisation on
local factors.
(iv) Increases problems of the top management control.
Departmentation by Customers
Some advantages of this type of structure are:
(i) Greater specialized customer service.
(ii) Where marketing channels are considerably different for various types of customers, this
type of structure is very useful.
Some disadvantages of this type are:
(i) May not be enough work for certain types of customers. Hence, under employment of
facilities and manpower specialized in terms of customer groups.
(ii) Problems of co-ordination might pose difficulties.
(iii) Unequal development of customer groups.
Process Departmentation
Grouping of activities on the basis of product or service or customer flow. Because each
process requires different skills, process departmentalization allows homogenous activities to be
categorized. For example, the applicants might need to go through several departments namely
validation, licensing and treasury, before receiving the drivers license. So process
departmentation means where products have to go through the stages as they made.
Delegation is the assignment of responsibility or authority to another person (normally from a
manager to a subordinate) to carry out specific activities, such as starting on proper tires during a
wet race.
Definition of Authority Official right of a person to do and make things happen in an
organization. ( Power is the capacity to act & influence others ).
Principles of Delegation
1. Delegation to go by expected results.
2. Responsibility is absolute
3. Authority to match responsibility
4. Unity of Command
5. Clarification of the limits of Authority.
Classification of Delegation :
General Delegation May perform any function necessary for results expected
Specific Delegation Only a specific function may be performed
Written Delegation By written orders & instructions.
Unwritten Delegation Based on customs & conventions
Upward Delegation Subordinate assigning a task to superior.
Sideward Delegation Assigned to another subordinate
Advantages of delegation of authority are explain below.
1. Relief to Managers : A manager divides the entire work of his department among his
subordinates. While assigning work to subordinates, the manager also provides adequate
authority to the subordinates. Thus, the manager can concentrate himself on more innovative and
important works as he becomes free from routine work.
2. Promote Decisions: Delegation of authority enables subordinates to take decisions with in the
scope of their authority. For example, a foreman has the authority to make certain decisions
within his level of authority.
3. Improvement of Job satisfaction : Division of work with responsibility and adequate authority to
subordinates provides them the feeling that they are being recognised. The delegation of
authority motivates them to put their best efforts in order to show good results.
4. Scope for expansion of business : If the subordinates are well motivated and perform their tasks
and also acquire the required expertise in decision making and discharging their duties, the
management can successfully undertake expansion or diversification activities.
The barriers to delegation are described under the following heads :
i) Desire for domination of superiors : A good number of superiors feel that delegation of
authority to subordinates would result in loss of control.
ii) Lack of confidence in subordinates : A good number of managers do not have confidence on his
subordinates and so they hesitate to delegate authority.
iii) Fear of critics among the subordinates : A good number of subordinates do not care to accept
authority for the fear of being criticised should he/she fail to perform well.
iv) Lack of Incentives : Economic and non-economic incentives must be provided to encourage
those subordinates who prove their ability, as lack of incentives keep the subordinates away from
accepting authority.
v) An environment of mutual distrust : The enterprise must ensure mutual trust and confidence
between the superiors and the subordinates. Lack of mutual trust environment would not allow
any scope for delegation of authority as superiors do not like to delegate and subordinates do no
like to accept authority.
vi) Fear of being proved as less efficient : The superiors always carry a fear of being proved as less
efficient in case they entrust their works upon subordinates.
According to Allen, Centralization is the systematic and consistent reservation of authority
at central points in the organization. The implication of centralization can be :-
1. Reservation of decision making power at top level.
2. Reservation of operating authority with the middle level managers.
3. Reservation of operation at lower level at the directions of the top level.
According to Allen, Decentralization refers to the systematic effort to delegate to the lowest
level of authority except that which can be controlled and exercised at central points.
Centralization Decentralization
The unification of powers and authorities, in Decentralization means dispersal of
the hands of high level management is known powers and authorities by the top level to the
as Centralization. functional level management.
Centralization is best for a small sized Large sized organization should practice
organization, decentralization.

In centralization formal communication flow is Conversely, in decentralization, communication

there. stretches in all directions.

In centralization due to concentration of On the other hand, decentralization proves

powers in the hands of a single person, the better in terms of decision making as the
decision takes time. decisions are taken much closer to the actions.

There is full leadership and coordination in Decentralization, shares the burden of the top
Centralization. level managers.
The reason for centralization is inadequate The reason for decentralization is good and
control over the organization effective control over the same.

Job design essentially involves integrating job responsibilities or content and certain qualifications
that are required to perform the same. It outlines the job responsibilities very clearly and also helps in
attracting the right candidates to the right job. Further it also makes the job look interesting and
The whole process of job design is aimed to address various problems within the
organizational setup, those that pertain to ones description of a job and the associated
relationships. More specifically the following areas are fine tuned:
Checking the work overload.
Checking upon the work under load.
Ensuring tasks are not repetitive in nature.
Ensuring that employees don not remain isolated.
Defining working hours clearly.
Defining the work processes clearly.
The above mentioned are factors that if not taken care of result into building stress within the
Benefits of Job Design
The following are the benefits of a good job design:
1. Employee Input: A good job design enables a good job feedback. Employees have the
option to vary tasks as per their personal and social needs, habits and circumstances in the
2. Employee Training: Training is an integral part of job design. Contrary to the philosophy of
leave them alone job design lays due emphasis on training people so that are well aware
of what their job demands and how it is to be done.
3. Work / Rest Schedules: Job design offers good work and rest schedule by clearly defining
the number of hours an individual has to spend in his/her job.
4. Adjustments: A good job designs allows for adjustments for physically demanding jobs by
minimizing the energy spent doing the job and by aligning the manpower requirements
for the same.
Job design is a continuous and ever evolving process that is aimed at helping employees make
adjustments with the changes in the workplace. The end goal is reducing dissatisfaction,
enhancing motivation and employee engagement at the workplace.
Definition of HRM : According to Edwin B. Flippo, Personnel Management or Human Resource
Management is the the planning, organizing , directing and controlling of the procurement,
development, compensation, integration maintenance and reproduction of human resources to
the end that individual, organizational and societal objectives are accomplished.
The primary objective of HRM is to ensure the availability of right people for right jobs, so as the
organizational goals are achieved effectively. This primary objective can further be divided into
the following sub objectives.
1. To help the organization to attain its goals effectively and efficiently by providing
competent and motivated employees.
2. To utilize the available human resources effectively.
3. Increase the fullest employees job satisfaction and self-actualization.
4. To develop and maintain the quality of work life which makes employment in the
organization a desirable personal and social situation.
5. Helps to maintain the ethical policies and behavior inside and outside the organization.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual / group goals with organizational goals.
Werther and Davis have classified the objectives into 4 categories.




Planning Procurement
Organizing Development
Directing Compensation
Controlling Integration


In the words of Beach, Human Resource Planning is a process of determining & assuming that the
organisation will have an adequate number of qualified persons, available at the proper times,
performing jobs which meet the needs of the enterprise & which provide satisfaction for the
individuals involved.
Objectives of HR planning
To ensure optimum use of existing human resources.
To forecast future requirements.
To provide control measures.
To assess the surplus and shortage of HR.
To anticipate the impact of technology on jobs.
To determine levels of recruitment & training.
To facilitate productivity bargaining.
To meet the needs of expansion & diversification programmes.
Importance of HR planning
1. Every organisation requires employees with adequate knowledge and experience.
2. HRP is helping in selecting and training that type of individual.
3. It identifies gaps in existing manpower in terms of their quantity and talent.
4. Provision for replacement of personnel can be made through HRP.
5. HRP facilitates the expansion and diversification of an organization.
6. HRP helps to reduce the wastages of power.
7. HRP is helpful in effective utilization of technological progress.

Recruitment refers to the process of attracting, screening, selecting, and on boarding a
qualified person for a job.
Definition - Recruitment
Recruitment is defined as a process to discover the source of manpower to meet the
requirements of staffing scheduling and to employ effective measures for attracting the
manpower in adequate numbers to facilitate effective.
Sources of Recruitment
Every organization has the option of choosing the candidates for its recruitment processes
from two kinds of sources: internal and external sources.
1. Internal Sources of Recruitment : sources of recruitment are from within the organization.
2. External Sources of Recruitment: sources of recruitment are from outside the organization.

Internal Sources Of Recruitment

1. Promotions: Promotion means to give a higher position, status, salary and responsibility to
the employee. So, the vacancy can be filled by promoting a suitable candidate from the
same organization.
2. Transfers: Transfer means a change in the place of employment without any change in the
position, status, salary and responsibility of the employee. So, the vacancy can be filled by
transferring a suitable candidate from the same organization.
3. Internal Advertisements: Here, the vacancy is advertised within the organization. The
existing employees are asked to apply for the vacancy. So, recruitment is done from within
the organization.
4. Retired Managers: Sometimes, retired managers may be recalled for a short period. This is
done when the organization cannot find a suitable candidate.
5. Recall from Long Leave : The organization may recall a manager who has gone on a long
leave. This is done when the organization faces a problem which can only be solved by that
particular manager. After he solves the problem, his leave is extended.
The below figure clearly shows the internal sources of recruitment:
Merits of Internal Sources
The benefits / advantages / merits of using internal sources of recruitment are :-
1. It is time saving, economical, simple and reliable.
2. There is no need of induction training because the candidate already knows everything
about the organization, the work, the employee, the rules and regulations, etc.
3. It motivates the employees of work hard in order to get higher jobs in the same
4. It increases the morale of the employees and it improves the relations in the organization.
5. It reduce executive turnover.
6. It develops loyalty and a sense of responsibility.
Demerits of Internal Sources
The limitations / demerits of using internal sources of recruitment:-
1. It prevents new blood from entering the organization. New blood brings innovative ideas,
fresh thinking and dynamism into the organization.
2. It has limited scope because it is not possible to fill up all types of vacancies from within
the organization.
3. The position of the person who is promoted or transferred will be vacant.
4. There may be bias or partiality in promoting or transferring persons from within the
5. Those who are not promoted will be unhappy.
6. The right person may be promoted or transferred only if proper confidential reports of all
employees are maintained. This involves a lot of time, money and energy.
External Sources Of Recruitment
The external sources of recruitment are:-
1. Management Consultants: Management consultants are used for selecting higher-level
staff. They act as a representative of the employer. They make all the necessary
arrangements for recruitment and selection. In return for their services, they take a service
charge or commission.
2. Public Advertisements: The Personnel department of a company advertises the vacancy in
newspapers, the internet, etc. This advertisement gives information about the company,
the job and the required qualities of the candidate. It invites applications from suitable
candidates. This source is the most popular source of recruitment. This is because it gives a
very wide choice. However, it is very costly and time consuming.
3. Campus Recruitment: The organization conducts interviews in the campuses of
Management institutes and Engineering Colleges. Final year students, who're soon to get
graduation, are interviewed. Suitable candidates are selected by the organization based
on their academic record, communication skills, intelligence, etc. This source is used for
recruiting qualified, trained but inexperienced candidates.
4. Recommendations: The organization may also recruit candidates based on the
recommendations received from existing managers or from sister companies.
5. Deputation of Personnel: The organization may also recruit candidates who are sent on
deputation by the Government or Financial institutions or by holding or subsidiary

Advantages of External Sources

The benefits / merits / advantages of using external sources of recruitment:-
1. It encourages young blood with new ideas to enter the organization.
2. It offers wide scope for selection. This is because a large number of suitable candidates
will come for the selection process.
3. There are less chances of bias or partiality.
4. Here there is no need to maintain confidential records.
Limitations of External Sources
The demerits / limitations of using external sources of recruitment:-
1. It is very costly. This is because advertisements, test, medical examination etc., has to be
2. It is very time consuming. This is because the selection process is very lengthy.
3. It may not develop loyalty among the existing managers.
4. The existing managers may leave the organization if outsiders are given higher post.

The selection procedure is the system of function and devices adopted in a given company
ascertain whether the candidates specifications are matched with the job specifications are not.

Selection can be defined as a process of choosing the right person for the right job from a
pool of different candidates who applied for a certain job.

Two Types Of Errors In Selection Process:

1. Reject Errors:
Reject the candidates who would have performed successfully in the job
2. Select Error:
Select the candidates who later perform poorly in the job interview.

Process of Selection
The process of selection is not the same in all organizations; it can be different in many
organizations depending upon the nature of that organization. However, one particular type of
selection is approved by most organizations; it can be explain with the help of following diagram:

1. Job analysis
The very first step in the selection procedure is the job analysis. The HR department prepares
the job description and specification for the jobs which are vacant. This gives details for the jobs
which are vacant. This gives details about the name of the job, qualification, qualities required and
work conditions etc.
2. Advertisement
Based on the information collected in step 1, the HR department prepares an
advertisement and publishes it in a leading news papers. The advertisement conveys details about
the last date for application, the address to which the application must be sent etc.
3. Application blank/form
Application blank is the application form to be filled by the candidate when he applies for a
job in the company. The application blank collects information consisting of the following four
1. Personal details
2. Educational details
3. Work experience
4. Family background
4. Written test
The applications which have been received are screened by the HR department and those
applications which are incomplete are rejected. The other candidates are called for the written
test. Arrangement for the written test is looked after the HR department i.e. question papers,
answer papers, examination centers and hall tickets etc.
5. Interview
Candidates who have successfully cleared the test are called for an interview. The entire
responsibility for conducting the interview lies with the HR department i.e. they look after the
panel of interviewers, refreshments, informing candidates etc.
6. Medical examination
The candidates who have successfully cleared the interview are asked to take a medical
exam. This medical exam may be conducted by the organization itself (army). The organization
may have a tie up with the hospital or the candidate may be asked to get a certificate from his
family doctor.
7. Initial job offer
Candidates who successfully clear the medical exam are given an initial job offer by the
company stating the details regarding salary, terms of employment, employment bond if any etc.
The candidate is given some time to think over the offer and to accept or reject.
8. Acceptance/ rejection
Candidates who are happy with the offer send their acceptance within a specified time limit
to show that they are ready to work with the company.
9. Letter of appointment / final job offer Candidates who send their acceptance are given
the letter of appointment. The letter will state the name of the job. The salary and other benefits,
number of medical leaves and casual leaves, details of employment bond if any etc. It will also
state the date on which the employee is required to start duty in the company.
10. Induction
Induction can be defined as a process of introducing the employee who is newly elected to
the organization. When an employee is given a letter of appointment he joins the company on
duty. The very first thing that the company does is, introduces the new employee to the
organization and people working there. An induction program may be conducted at a particular
center for all employees or at different places (branches of the company) for different employees.
Normally the new employee is called together to the staff training college for the induction
Types Of Selection Test
Different selection test are adopted by different organization depending upon their
requirements. These tests are specialized test which have been scientifically tested and hence
they are also known as scientific test. Different types of test can be explained with the help of
following diagram:

Types of Selection Test

1. Aptitude test - Aptitude tests are test which assess the potential and ability of a candidate. It
enables to find out whether the candidate is suitable for the job. The job may be managerial
technical or clerical. The different types of aptitude test are the following:
a) Mental ability/mental intelligence test
This test is used to measure the overall intelligence and intellectual ability of the candidate
to deal with problems. It judges the decision making abilities.
b) Mechanical aptitude test
This test deals with the ability of the candidate to do mechanical work. It is used to judge
and measure the specialized knowledge and problem solving ability. It is used for technical and
maintenance staff.
c) Psycho motor test
This test judges the motor skills the hand and eye co-ordination and evaluates the ability to
do jobs lie packing, quality testing, quality inspection etc.
2. Intelligence test
This test measures the numerical skills and reasoning abilities of the candidates. Such abilities
become important in decision making. The test consists of logical reasoning ability, data
interpretation, comprehension skills and basic language skills.
3. Personality test
In this test the emotional ability or the emotional quotient is tested. This test judges the
ability to work in a group, inter personal skills, ability to understand and handle conflicts and
judge motivation levels. This test is becoming very popular now a day.
4. Performance test
This test judges and evaluates the acquired knowledge and experience of the knowledge
and experience of the individual and his speed and accuracy in performing a job. It is used to test
performance of typist, data entry operators etc.

After the selection of people for various jobs, the next function of staffing is to arrange for
their training and development. This is because a person, however carefully selected is not
molded to specifications and rarely meets the demands of his job adequately.
According to Flippo, "Training is the act of increasing the knowledge and skills of an
employee for doing a particular job."
Purpose Of Training :
The purpose of training includes
To prepare the employee, both new and old to meet the present as well as the changing
requirements of the job and the organization.
To prevent obsolescence.
To impart the new entrants the basic knowledge and skills they need for an intelligent
performance of a definite job.
To prepare employees for higher level tasks.
To assist employees to function more effectively in the present positions by exposing them
to the latest concepts, information and techniques and developing the skills in their
particular fields.
To build up a second line of competent officers and prepare them to occupy more
responsible positions..
To broaden the minds of senior managers by providing them with opportunities for an
interchange of experiences within and outside with a view to correcting the narrowness of
outlook that may arise from over specialization.
To develop the potentialities of people for the next level job.
To ensure smooth and efficient working of a department.
To ensure economical output of required quality.
To promote individual and collective morale, a sense of responsibility, co-operative
attitudes and good relationships.
Types Of Training
Various types of training programmes are not mutually exclusive, but invariably overlap and
employ many of the same techniques. Some of the more common types of training programmes
are examined below:

1. Induction or Orientation Training

It is a training program used to induct a new employee into the new social setting of his
The new employee is introduced to his job situation, and to his co-employees.
He is also informed about the rules, working conditions, privileges and activities of the
company, what the company does, how it serves the community and other particulars
pertaining to the company.
In some companies the complete induction programme is divided into two phases. In the first
phase, induction is done by the personnel department which supplies to the new employee all
sorts of information relating to the company.
In the second phase, induction is done by the supervisor. He has the responsibility of seeing
that both the newcomer and the work team must accept each other. The supervisor should follow
a set of induction procedure.
A ten step procedure for induction programme is :
1. Greeting the newcomer cordially;
2. Displaying a personal interest in the newcomer;
3. Reviewing his terms of employment;
4. Giving additional information;
5. Showing the newcomer around;
6. Explaining the importance of his job in relation to other jobs;
7. Introducing the newcomer to the rest of the work team;
8. Telling the newcomer his duties;
9. Selecting a person who can assist the newcomer on the job; and
10. Following up frequently.
The induction training not only helps personal adjustment of the new employee to his job
and work group but also promotes good morale in the organization. In view of these advantages,
many large companies give much importance to induction training.
2. Refresher Training
As the name implies, the refresher training is meant for the old employees of the enterprise.
This refresher training is essential because of the following factors :
(a) Rapid technological changes make even the most qualified workers obsolete in course of time
because new technology is associated with new work methods and job requirements. Existing
workers need to learn new work methods to use new techniques in doing their jobs.
(b) Workers require training to bring them up-to-date with the knowledge and skills and to
relearn what they have forgotten.
(c) Refresher training becomes necessary because many new jobs which are created due to
changes in the demand for goods and services are to be manned by the existing employees.
The existing talented employees may also be given adequate training to make them eligible
for promotion to higher jobs in the organization. It is known as 'training for promotion'. The
purpose of training for promotion is to develop the existing employees to make them fit for
undertaking higher job responsibilities. This serves as a motivating force to the employees.
3. Job Training
The object of job training is to increase the knowledge of workers about the jobs with which
they are concerned, so that their efficiency and skill of performance are improved. In job training,
workers are enabled to learn correct methods of handling machines and equipment, avoiding
accidents, removing bottlenecks, minimizing waste, etc.
4. Promotional Training
Many concerns follow a policy of filling some of the vacancies at higher levels by promoting
existing employees. This policy increases the morale of workers. They try to put up maximum
efficiency so that they may be considered for promotion.
When the existing employees are promoted to superior positions in the organization, they are
required to shoulder new responsibilities. For this, training has to be given to them so that they
may not experience any difficulty to shoulder the responsibilities of the new position to which
they have been promoted.
Methods Of Training:
A large variety of methods of management development have come into Prominence these
days. These methods can be classified into two broad categories, namely, (a) on-the job methods;
and (b) off-the job methods as follows: These programmes are classified into on the - job and off
the job training programmes.
I. on the job training methods:
1. Job Rotation
2. Coaching
3. Job Instruction
4. Training Through Step By Step
5. Committee Assignments
II. Off the job training methods:
1. Vestibule Training
2. Role Playing
3. Lecture Methods
4. Conference Or Discussion
5. Programmed Instruction


Another name of this training is Job Instruction training. It is the most commonly used training
method. In this method, the individual is placed on a regular job and taught the skills necessary to
perform that job. The trainee learns under the supervision and guidance of a qualified worker or
instructor. On the job training has the advantage of giving first hand knowledge and experience
under the actual working conditions.
1. Job rotation :
This type of training involves the movement of the trainee from one job to another.
The trainee receives job knowledge and gains experience from his supervisor or
trainer in each of the different job assignments.
Though this method of training is common in general management positions,
trainees can also be rotated from job to job in workshop jobs. This method gives an
opportunity to the trainee to understand the problems of employees on other jobs and respect
2. Coaching :
The trainee is placed under a particular supervisor who functions as a coach in training the
The supervisor provides feedback to the trainee on his performance and offers him some
suggestions for improvement.
Often the trainee shares some of the duties and responsibilities of the coach and relieves
him from his work burden.
A limitation of this method is the trainee may not have freedom or opportunity to express
his own ideas.
3. Job instruction:
This method is also known as training through step by step method.
In this method the training is render through step by step.
Under this method, the trainer explains to the trainee the way of doing the jobs
with this the Job knowledge and skills allows him to do the job.
The trainer appraises the performance of the trainee, by provides feedback
information about his work.
4. Committee assignments:
In this method, a group of trainees are given and asked to solve an actual organizational
The trainees must solve the problem jointly and this method may develop teamwork
among the trainees.


Under this method of training, the trainee is separated from the job situation and his
attention is focused upon learning the material related to his future job performance.
Since the trainee is not distracted by job requirement, he can place his entire concentration on
learning the job rather than spending his time in performing it.
1. Vestibule training:
The responsibility to operate a vestibule school generally rests with the personnel
In this method, actual work conditions are stimulated in a classroom. Materials, files and
equipment, which are used in actual job performance, has used in this training.
This method has the advantage of training large number of persons without hampering on
going operations.
It also saves costly machines from being damaged by mishandling of the untrained
Here, the trainee avoids the confusion and pressure of the work situation and thus is able
to concentrate on learning.
2. Role playing :
It is defined as a method of human interaction that involves realistic behavior in imaginary
This method of training involves action. Doing and practice.
The participants play the role of certain characters such as the production manager,
mechanical engineer, superintendents, maintenance engineers, quality control inspectors,
foreman, workers and the like.
3. Lecture method
It is a traditional and direct method of instruction.
The instructor organizes the material and gives it to a group of trainees in the form of a
To be effective, the lecture must motivate and create interest among the trainees.
4. Conferences / discussion:
It is a method of training provided to the clerical, professional and supervisory personnel.
This method involves a group of people who pose ideas, examine and share facts, ideas,
data, test assumptions and draw conclusions.
All of which contribute to the improvement of job performance.
Discussion has the distinct advantage over the lecture method, in that the discussion
involves two way communication and hence feedback is provided.
The participant feels free to speak in small groups.
The success of this method depends on the leadership qualities of the person who leads
the group.
5. Programmed instruction:
In recent years, this method has become popular.
The subject matter to be learned and presented by a series of carefully planned
sequential units.
These units are arranged from simple to more complex levels of instruction.
The trainee goes through these units by answering questions or filling the blanks. This
method is expensive and time consuming.
Define Performance
According to Lockett (1992), performance management aims at developing individuals with the
required commitment and competencies for working towards the shared meaningful objectives
within an organizational framework.
The major objectives of performance management are discussed below:
To enable the employee towards achievement of superior standard of work performance.
To help the employees in identifying the knowledge and skills required for performing the
job efficiently as this would drive their focus towards performing the right task in the right
Boosting the performance of the employees by encouraging employee empowerment,
motivation and implementation of an effective reward mechanism.
Promoting a two way system of communication between the supervisors and the
employees for clarifying expectations about the roles and accountabilities,
communicating the functional and organizational goals, providing a regular and a
transparent feedback for improving employee performance and continuous coaching.
Identifying the barriers to effective performance and resolving those barriers through
constant monitoring, coaching and development interventions.
Creating a basis for several administrative decisions strategic planning, succession
planning, promotions and performance based payment.
Promoting personal growth and advancement in the career of the employees by helping
them in acquiring the desired knowledge and skills.
Performance Appraisal Methods
1.Traditional methods
2. Modern methods
Traditional methods
Ranking method
Paired comparison
Forced Distribution Method
Forced Choice Method
Checklist Method
Critical Incidents Method
Graphic Scale Method
Essay Method
Field Review Method
Confidential report
This traditional method lay importance on the rating of the individuals personality traits, such as
initiative, dependability, drive, creativity, integrity, intelligence, leadership potential etc.,
Modern Methods

Management By Objectives
Behaviorally Anchored Rating Scales
Assessment Centers
360 Degree Appraisal
Cost Accounting Method
This modern method place more emphasis on the evaluation of work results, I.e., job
achievements than the personal traits. It tend to be more objective and worthwhile.
1. Ranking Method
In this method one employee is compared with all others for placing them in a
simple rank.
The employees are ranked from the highest to the lowest or from the best to the
The employee who is the highest on the characteristics being measured and also the
one, who is the lowest, are indicated.
Thus, if there are 10 employees to be appraised, there will be ten ranks from 1 to 10.
Limitations of this method :
It is very difficult when a large number of employees are rated.
It does not tell that how much better or worse one is than another.
It is very difficult to compare one individual with others having varying behavioral
2. Paired Comparison Method
Each employee is compared with other employees on one on one basis. Based on
one trait only.
The rater is provided with a bunch of slips each containing a pair of names, the rater
puts a tick mark against the employee whom he considers the better of the two.
The number of times this employee is compared as better with others determines
his final ranking.
The no.of possible pair for a given number of employees is ascertained by the
following formula.
3. Paired Comparison Method
N (N-1) / 2
N = total number of employees to be evaluated.
Ex: if the following five teachers have to be evaluated by the Vice Chancellor of a University. (K,
M, R, V, B.)
The above formula gives 5(5-1)/2 = 10 pairs. These are:
K with M, K with R, K with V, K with B.
M with R, M with V, M with B.
R with V, R with B.
V with B.
Limitation of this Method:
1. It can become unwieldy when large numbers of employees are being compared.
4. Grading Method
In this method certain categories of worth are established in advance and carefully
There can be three categories established for employees : Outstanding,
Satisfactory and Unsatisfactory.
Employee performance is compared with grade definitions.
The employee is then allocated to the grade that best describes his performance.
Such type of grading is done in semester pattern of examinations and in the
selection of a candidate in the public service sector.
Limitation of this Method:
1. In this method the rater may rate most of the employees on the higher side of their
5. Forced Distribution Method
This method was evolved by Tiffen to eliminate the central tendency of rating most of the
employees at a higher end of the scale.
The method assumes that employees performance level confirms to a normal statistical
distribution. I.e., 10, 20, 30, 40, 50, 60, 70, 80, 90, 100.
This is useful for rating a large number of employees job performance and promotability.
It ends to eliminate or reduce bias.
It is also highly simple to understand and easy to apply in appraising the performance of
employees in organizations.
Limitation of this Method:
1. All distribution grades improve similarly, no single grade would rise in a ratings.
6. Forced Choice Method
This method is developed by J.P.Guilford. It contains a series of group of
The rater rates how effectively a statement describes each individual being
Common method of forced-choice method contains two statements, both positive
or negative. Examples of positive statements are:
1. Gives good and clear instructions to the subordinates
2. Can be depended upon to complete any job assigned.
A pair of negative statements may be as follows:
1. Makes promises beyond his limit to keep these.
2. Inclines to favor some employees.
Each statement carries a score or weight, which is not made known to the rater.
The Human resource section does rating for all sets of statements both positive
and negative.
The final rating is done on the basis of all sets of statements.
Limitation of this Method:
1. The actual constructing of several evaluative statements, also called forced choice Scales,
takes a lot of time and effort.
7. Check List Method
A series of statements I.e., questions with their answers in yes or no are prepared by the
HR department.
The check-list is then, presented to the rater to tick appropriate answers relevant to the
Each question carries a weightage in relationship to their importance.
When the checklist is completed, it is sent to the HR department to prepare the final
scores for all appraisees based on all questions.
Limitation of this Method :
It is difficult to assemble, analyse and weigh a number of statements about employee
characteristics and contributions
It is very costliest method, if there are a number of job categories in the organisation,
because a checklist of questions must be prepared for each category of job. it will involve a
lot of money, time and efforts.
Modern methods of Performance Appraisal

Management By Objectives

Behaviorally Anchored Rating Scales

Assessment Centers

360 Degree Appraisal

Cost Accounting Method

This modern method place more emphasis on the evaluation of work results, I.e., job
achievements than the personal traits. It tend to be more objective and worthwhile.
Management by Objectives ( MBO)
In 1954-MBO was conceived by Peter.F.Drucker.
MBO as a process whereby the superior and subordinate managers of an organisation jointly
identify its 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
the contributions of each of its members.
In other words, MBO requires the manager to get specific measurable goals with each
employee and then periodically discuss his progress toward these goals.

MBO Programme consists of four main steps.

1. Goal Setting
2. Performance Standard
4. Periodic Review.
Steps in MBO Programme
1. The superior and subordinate jointly establish these goals. The goals refer to the desired
outcome to be achieved by each individual employee.
2. When the employees start performing their jobs, they come to know what is to be done,
what has been done, and what remains to be done.
3. This enables the evaluator to find out the reasons for variation between the actual and
standard performance of the employees. Such comparision helps devise training needs for
increasing employees performance.
4. Corrective measure is initiated when actual performance deviates from the standards . The
purpose of conducting reviews is not to degrade the performer but to aid in his future
Limitations of MBO

Setting immeasurable objectives.

Timeconsuming setting goals, measuring progress, providing feedback take

more time

Tug of war manager pushes for higher quotas and subordinates push for lower

Lack of trust MBO is likely to be ineffective in an environment where

management has little trust. They make decisions autocratically and relies heavily
on external controls.
Some times it is called behavioral expectation scales
BAR are rating scales whose scale points are determined by statements of effective and
ineffective behaviors.
The scales represent a range of descriptive statements of behavior varying from the least to the
most effective.
A rater must indicate which behavior on each scale best describes an employees performance.
BARS were developed to provide results which subordinates could use to improve
Superiors would feel comfortable to give feedback to the ratees.
BARS helps to overcome rating errors.
It is mainly used for executive hiring.
An assessment center is a central location where managers may come together to have their
participation in job related exercises evaluated by trained observers.
The principle idea is to evaluate managers over a period of time, say one to three days, by
observing their behavior across a series of selected exercises or work samples.
The assesses are requested to participate in in basket exercises, work groups, computer
simulations, role playing, and other similar activities which require the same attributes for
successful performance, as in the actual job.
The characteristics assessed in a typical assessment center include assertiveness, persuasive
ability, communicating ability, planning and organizational ability, self confidence, resistance
to stress, energy level, decision making, sensitivity to the feelings of others, administrative
ability, creativity, and mental alertness.
Sizeable number of trained observers and psychologists measures accurately over three days
the managers activities.
This appraisal provides a broader perspective about an employees performance.
This technique facilitate greater self development of the employees.
It makes the employee feel much more accountable to his internal customers.
This will helps to identifying and measuring interpersonal skills, customer satisfaction and
team building skills.
It enables an employee to compare his perception about self with perceptions of others.
Limitation of this Method:
The firms that use the technique take a long time on selecting the rater, designing
questionnaires, and analyzing the data.
It is essential that the organisation create a non threatening environment by emphasizing
the positive impact of the technique on an employees performance and development.
Receiving feedback on performance from multiple sources can be intimidating.
This method evaluates performance from the monetary returns the employee yields to his
A relationship is established between the cost included in keeping the employee and the
benefit the firm derives from him.
Performance of the employee is then evaluated based on the established relationship between
the cost and the benefit.
This method of evaluation has vast potential as increasingly firms are converting their training
departments into profit centers.
Careers were traditionally viewed as an upward, linear progression in one or two firms or as
stable employment within a profession.
Career Management is defined as the process of designing and implementing plans to enable
the organization to satisfy employee needs and allow individuals to achieve their career goals .
Career planning:
It is a systematic process by which one selects career goals and the path to these goals.
Career Planning is a deliberate process through which a person becomes aware of personal
To attract and retain the right type of persons in organization
Trained and developed for higher positions.
More stable work force by reducing labour turnover and absenteeism.
Better use of human resources
To improve employee morale and motivation
Steps in Career Planning:
o Verify your values
o Understand your unique personality
o Know your learning style.
o Recognize your learning style.
o Know your personal interests.
o Know the various options
o Collect information to take a decision.
o Identify people who can help you.
o Set goals.
o Act after planning.
Process of career planning:
Identifying individual needs and aspirations
Analyzing career opportunities
Identifying match and mismatch
Formulating and implementing strategies
Reviewing career plans
Making career planning effective:
Through the support of Top Management
By Expansion
By Clear goals
By Motivated and hard working staff.
By Proper selection
By Proper age balance
By Fair promotion policy
Through manage the career stress
By Internal publicity
Through Continuity
Roles in Career Development:
Accept responsibility for your own career
Assess your interest, skills and values
Seek out career information and resources
Establish foals and career plans
Utilize development opportunities
Talk with your manager about your career
Follow through in realistic career plans.
Provide timely performance feed back
Provide developmental assignment
Participative in career development discussion
Support employee development plans
Communicate mission, polices and procedures
Provide training and development opportunities
Provide career information and career programs
Offer a variety of career options.




Foundations of individual and group behavior:

Foundations of Individual Behavior

An individuals personality is the combination of the psychological traits that

characterize the behavior of a person. Literally dozens of traits are attributed to an
individuals behavior. Following are those traits.

1. Myers-Briggs Type Indicator (MBTI)

2. Big Five model
3. Emotional intelligence (EI)
4. Locus of control
5. Machiavellianism