STAFFING

Staffing Function of Management

Staffing, a managerial function of management, involves manning the
organization structure through proper and effective selection, appraisal
and development of workers/ personnel to fill the manpower needs of an
organization.

According to McFarland,“Staffing is the function by which managers build

an organization through the recruitment, selection, and development of
individuals as capable employees.”

According to Theo Haimann, “Staffing pertains to recruitment,

selection, development and compensation of subordinates.”

According to Koontz, O’Donnell and Heinz Weihrich,“The

management function of staffing is defined as filling position in the
organization structure through identifying workforce requirements,
inventorying the people available, recruitment, selection, placement,
promotion, appraisal, compensation, and training of needed people.

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Nature of Staffing Function

1. Staffing is an important managerial function- Staffing function is the

most important managerial activity along with planning, organizing,
directing and controlling. The operations of these four functions
depend upon the manpower which is available through staffing function.

2. Staffing is a pervasive activity- As staffing function is carried out by

all managers and in all types of concerns where business activities are
carried out.

3. Staffing is a continuous activity- This is because staffing function

continues throughout the life of an organization due to the transfers
and promotions that take place.
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4. The basis of staffing function is efficient management of personnel-

Human resources can be efficiently managed by a system or proper
procedure, that is, recruitment, selection, placement, training and
development, providing remuneration, etc.

5. Staffing helps in placing right men at the right job. It can be done
effectively through proper recruitment procedures and then finally
selecting the most suitable candidate as per the job requirements.

6. Staffing is performed by all managers depending upon the nature of

business, size of the company, qualifications and skills of managers, etc.
In small companies, the top management generally performs this
function. In medium and small scale enterprise, it is performed
especially by the personnel department of that concern.

Process of Staffing Function

The essential steps involved in process of staffing function of management

are:
1. Manpower Planning
2. Recruitment
3. Selection

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4. Placement

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5. Training
6. Development
7. Promotion
8. Transfer
9. Appraisal
10. Determination of Remuneration

1. Manpower Planning
Manpower planning may be regarded as the quantitative and qualitative
measurement of labor force required in an enterprise. It involves in
creating and evaluating the manpower inventory and to develop required
talents among the employees selected for promotion advancement.
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2. Recruitment
Recruitment is a positive process of searching for prospective
employees and stimulating them to apply for the jobs in the
organization. In other words, recruitment stands for discovering the
source from where potential employees will be selected. The scientific
recruitment leads to greater productivity, better wages, higher morale,
reduction in labor turnover and better reputation of the concern.

3. Selection
Selection is process of eliminating (among all the candidates considered
for possible employment) those who appear unpromising. The purpose of
selection process is to determine whether a candidate is suitable for
employment in the organization or not.
The chief aim of the process of selection is choosing right type of
candidates to fill in various positions in the organization. Selection
process requires exactness. A well planned selection procedure is of
utmost importance for every enterprise.

4. Placement
Placement means putting the person on the job for which he is
selected. It includes the introduction of the employee with the job.

5. Training

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After selection an employee, the most important and established part

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of the personnel program is to impart training to the new comer. With
the rapid technological changes, the need for training employees is
being increasingly recognized so as to keep the employees in touch with
the new developments.

Every concern must have a systematic training program otherwise

employees will try to learn the job by trial and error which can prove to
be a very costly method.

6. Development
A sound staffing policy calls for the introduction of a system of
planned promotion in every organization. If employees are not at all
STAFFING

having suitable opportunities for their development and promotion, they

get frustrated.

Each and every employee should be given to understand the various

promotion routes/possibilities and the attendant facilities that are
made available in the form of training programs, orientation schemes,
etc., to achieve the same.

7. Promotion
Promotion implies upgrading of an employee to a higher post involving
increase in rank, prestige or status and responsibilities. Generally,
increase in pay accompanies promotion but it is not essential ingredient.

8. Transfer
Transfer implies movement of an employee from one job to another
without any increase in pay, status or responsibilities. Usually transfer
takes place between jobs paying approximately the same salaries.

9. Appraisal
Appraisal of employees reveals as to how efficiently the subordinate is
performing his job and also to know his aptitudes and other qualities
necessary for performing the job assigned to him. The qualities of
employees that are appraised through performance appraisal are ability
to do work, spirit of cooperation, managerial ability, self-confidence,

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initiative, intelligence etc.

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The main objective of performance appraisal is to improve the
efficiency of a concern by attempting to mobilize the best possible
efforts from individuals employed in it.

10. Determination of Remuneration

Fixation of remuneration is the most difficult and complex function of
the personnel department because there are no definite or exact means
to determine the correct wages.

Job Evaluation is the only systematic technique to determine the worth

of the job but much remains to be done in this regard. As wages
constitute major part of the cost of production, every concern must
consider this aspect very seriously.
STAFFING

Sources of Recruitment

The different sources of recruitment are classified into two categories,

viz.,

2.1 Internal - sources of recruitment are from within the

organization.
2.2 External - sources of recruitment are from outside the
organization.

Internal Sources of Recruitment

The internal sources of recruitment are:-

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

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of the employee. So, the vacancy can be filled by transferring a

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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
STAFFING

faces a problem which can only be solved by that particular

manager. After he solves the problem, his leave is extended.

Merits of Internal Sources

The benefits / advantages / merits of using internal sources of

recruitment:-

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 organization.
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

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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 organization.
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.
STAFFING

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. Final year students, who are soon to graduate, 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

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inexperienced candidates.

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4. Recommendations - The organization may also recruit candidates
based on the recommendations received from existing managers or
from sister companies.

5. Deputation Personnel - The organization may also recruit

candidates who are sent on deputation by the Government or
Financial institutions or by holding or subsidiary companies.

Advantages of External Sources

The benefits / merits / advantages of using external sources of

recruitment-
STAFFING

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 conducted.
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

Employee Selection Process

Employee Selection is the process of putting right men on right job.
It is a procedure of matching organizational requirements with the
skills and qualifications of people. Effective selection can be done only
when there is effective matching. By selecting best candidate for the

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required job, the organization will get quality performance of

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employees. Moreover, organization will face less of absenteeism and
employee turnover problems. By selecting right candidate for the
required job, organization will also save time and money. Proper
screening of candidates takes place during selection procedure. All
the potential candidates who apply for the given job are tested.

But selection must be differentiated from recruitment, though

these are two phases of employment process. Recruitment is
considered to be a positive process as it motivates more of candidates
to apply for the job. It creates a pool of applicants. It is just sourcing
of data. While selection is a negative process as the inappropriate
candidates are rejected here. Recruitment precedes selection in
staffing process. Selection involves choosing the best candidate with
STAFFING

best abilities, skills and knowledge for the required job. The Employee
selection Process takes place in following order:

1. Preliminary Interviews- It is used to eliminate those candidates

who do not meet the minimum eligibility criteria laid down by the
organization. The skills, academic and family background,
competencies and interests of the candidate are examined during
preliminary interview. Preliminary interviews are less formalized and
planned than the final interviews. The candidates are given a brief
up about the company and the job profile; and it is also examined
how much the candidate knows about the company. Preliminary
interviews are also called screening interviews.
2. Application blanks- The candidates who passed the preliminary
interview are required to fill-out application form. It contains data
record of the candidates such as details about age, qualifications,
reason for leaving previous job, experience, etc.

3. Written Tests- Various written tests conducted during selection

procedure are aptitude test, intelligence test, reasoning test,
personality test, etc. These tests are used to objectively assess the

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potential candidate. They should not be biased.

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4. Employment Interviews- It is a one to one interaction between the
interviewer and the potential candidate. It is used to find whether
the candidate is best suited for the required job or not. But such
interviews consume time and money both. Moreover the
competencies of the candidate cannot be judged. Such interviews
may be biased at times. Such interviews should be conducted
properly. No distractions should be there in room. There should be
an honest communication between candidate and interviewer.

5. Medical examination- Medical tests are conducted to ensure

physical fitness of the potential employee. It will decrease chances
of employee absenteeism.
STAFFING

6. Appointment Letter- A reference check is made about the

candidate selected and then finally he is appointed by giving a
formal appointment letter.

The difference between Recruitment and Selection

BASIS RECRUITMENT SELECTION

Meaning It is an activity of It is a process of picking up

establishing contact between
employers and applicants
Objective It encourages large number
of candidates for the job.
Process It is just a simple process
Hurdles The candidates have not to
cross over many hurdles
Approach It is a positive approach
Sequence It proceeds selection
Economy It is an economical method
more competent and
suitable employees
It attempts at rejecting
unsuitable candidates.
It is a complicated process
Many hurdles have to be
crossed
It is a negative approach
It follows recruitment
It is an expensive method

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Time Less time is required More time is required

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consuming

Orientation and Placement

Once the candidates are selected for the required job, they have to be
fitted as per the qualifications. Placement is said to be the process of
fitting the selected person at the right job or place, i.e. fitting square
pegs in square holes and round pegs in round holes. Once he is fitted into
the job, he is given the activities he has to perform and also told about
his duties. The freshly-appointed candidates are then given orientation
STAFFING

in order to familiarize and introduce the company to him. Generally the

information given during the orientation program includes:

Employee’s layout
Type of organizational structure
Departmental goals
Organizational layout
General rules and regulations
Standing Orders
Grievance system or procedure

In short, during orientation, employees are made aware about the

mission and vision of the organization, the nature of operation of the
organization, policies and programs of the organization. The main aim of
conducting orientation is to build up confidence, morale and trust of the
employee in the new organization, so that he becomes a productive and
an efficient employee of the organization and contributes to the
organizational success.
The nature of Orientation program varies with the organizational size,
i.e., the smaller the organization the more informal is the Orientation
and the larger the organization more formalized is the Orientation

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program. Proper Placement of employees will lower the chances of

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employee’s absenteeism. The employees will be more satisfied and
contended with their work.

Training of Employees - Need and Importance of Training

Training of employees takes place after orientation takes place. Training

is the process of enhancing the skills, capabilities and knowledge of
employees for doing a particular job. Training process molds the
thinking of employees and leads to quality performance of employees. It
is continuous and never ending in nature.

Importance of Training - Training is crucial for organizational

development and success. It is fruitful to both employers and
STAFFING

employees of an organization. An employee will become more efficient

and productive if he is trained well. Training is given on four basic
grounds:

1. New candidates who join an organization are given training. This

training familiarize them with the organizational mission, vision,
rules and regulations and the working conditions.

2. The existing employees are trained to refresh and enhance

their knowledge.

3. If any updating and amendments take place in technology,

training is given to cope up with those changes. For instance,
purchasing a new equipment, changes in technique of production,
computer installation. The employees are trained about use of
new equipment and work methods.

4. When promotion and career growth becomes important.

Training is given so that employees are prepared to share the
responsibilities of the higher level job.

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The benefits of training can be summed up as:

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1. Improves morale of employees - Training helps the employee to get
job security and job satisfaction. The more satisfied the employee
is and the greater is his morale, the more he will contribute to
organizational success and the lesser will be employee absenteeism
and turnover.

2. Less supervision- A well trained employee will be well acquainted with

the job and will need less of supervision. Thus, there will be less
wastage of time and efforts.

3. Fewer accidents- Errors are likely to occur if the employees lack

knowledge and skills required for doing a particular job. The more
STAFFING

trained an employee is, the less are the chances of committing

accidents in job and the more proficient the employee becomes.

4. Chances of promotion- Employees acquire skills and efficiency during

training. They become more eligible for promotion. They become an
asset for the organization.

5. Increased productivity- Training improves efficiency and productivity

of employees. Well trained employees show both quantity and
quality performance. There is less wastage of time, money and
resources if employees are properly trained.

Ways/Methods of Training

Training is generally imparted in two ways:

1. On the job training- On the job training methods are those

which are given to the employees within the everyday
working of a concern. It is a simple and cost-effective
training method. The in proficient as well as semi- proficient
employees can be well trained by using such training method.

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The employees are trained in actual working scenario. The
motto of such training is “learning by doing.” Instances of

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such on-job training methods are job-rotation, coaching,
temporary promotions, etc.

2. Off the job training- Off the job training methods are those in
which training is provided away from the actual working
condition. It is generally used in case of new employees.
Instances of off the job training methods are workshops,
seminars, conferences, etc. Such method is costly and is
effective if and only if large number of employees have to
be trained within a short time period. Off the job training is
also called as vestibule training, i.e., the employees are
STAFFING

trained in a separate area ( may be a hall, entrance,

reception area, etc. known as a vestibule) where the actual
working conditions are duplicated.

Employee Remuneration

Employee Remuneration refers to the reward or compensation given

to the employees for their work performances. Remuneration
provides basic attraction to a employee to perform job efficiently
and effectively. Remuneration leads to employee motivation. Salaries
constitutes an important source of income for employees and
determine their standard of living. Salaries effect the employees
productivity and work performance. Thus the amount and method of
remuneration are very important for both management and
employees.

Methods of Employee Remuneration

1. Time Rate Method - Under time rate system, remuneration is

directly linked with the time spent or devoted by an employee on
the job. The employees are paid a fixed pre-decided amount

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hourly, daily, weekly or monthly irrespective of their output. It is

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a very simple method of remuneration. It leads to minimum
wastage of resources and lesser chances of accidents. Time Rate
method leads to quality output and this method is very beneficial
to new employees as they can learn their work without any
reduction in their salaries. This method encourages employees’
unity as employees of a particular group/cadre get equal salaries.

There are some drawbacks of Time Rate Method, such as, it leads
to tight supervision, indefinite employee cost, lesser efficiency of
employees as there is no distinction made between efficient and
inefficient employees, and lesser morale of employees. Time rate
system is more suitable where the work is non-repetitive in nature
STAFFING

and emphasis is more on quality output rather than quantity

output.

2. Piece Rate Method - It is a method of compensation in which

remuneration is paid on the basis of units or pieces produced by an
employee. In this system emphasis is more on quantity output
rather than quality output. Under this system the determination of
employee cost per unit is not difficult because salaries differ with
output. There is less supervision required under this method and
hence the per unit cost of production is low. This system improves
the morale of the employees as the salaries are directly related
with their work efforts. There is greater work-efficiency in this
method.

There are some drawbacks of this method, such as, it is not easily
computable, leads to deterioration in work quality, wastage of
resources, lesser unity of employees, higher cost of production and
insecurity among the employees. Piece rate system is more suitable
where the nature of work is repetitive and quantity is emphasized

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more than quality.

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In conclusion, staffing is the most vital asset in an organization. Without
which, Organization cannot move ahead in the competitive world. It can be
equated with HR management as both have same sort of objectives.
Staffing is an open system approach. It is carried out within the
enterprise but is also linked to external environment.
 LEADING Engineering Management

INTRODUCTION TO LEADING

Definition

Leading is the work that managers perform to influence people to take

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effective action.

Activities of Leading
• Decision Making
• Communicating
• Motivating
• Selecting People
• Developing People

Principle for Leading

Principle of Human Reaction – every action directed at another person tends to evoke a similar and
increasing reaction in the terms in which it is understood.

1. DECISION MAKING

Definition
Decision making is the work that managers perform to reach
the conclusions and judgements necessary for people to act.

Types of Decisions

Spontaneous Decisions – are based on intuition rather than on a careful analysis of the facts.
They are often based on hunches or are patterned after decisions made in the past
under similar circumstances.

Rational Decisions – are based on a systematic study and analysis of the problem. They
involve a search for the facts and a weighing of alternatives before the decision is
made.

Principles for Decision Making

• Principle of Definition
The more accurately a problem is defined, the more effective the decision leading to its
solution tends to be.
• Principle of Differing Perception
Facts may appear to differ, depending upon the point of view and the point in time from
which they are observed.
LEADING Engineering Management

• Principle of Adequate Evidence

A logical decision must be valid in terms of the evidence upon which it is based.

The Logical Decision-Making Technique

The logical decision-making technique has two parts:
(1) The steps for making the decision and; Page | 2
(2) The steps for implementing the decision.

Making the Decision

1. Identify the problem as it seems
2. Seek the facts
3. Identify the real problem
4. Generate alternative solutions to the problem
5. Assess the alternative
6. Decide on the best solution

Implementing the Decision

1. Determine the course of action
2. Implement the course of action
3. Evaluate the outcome of the decision

2. COMMUNICATING

Definition

Communicating is the work that managers perform to create

understanding among people so that they can act effectively.

The Communication Process

• Understanding: Asking, Telling, Listening

• A communication begins when a sender sends a verbal or nonverbal message to a receiver.
• A verbal message is one sent using words; a non verbal message is one sent through voice tone,
facial expressions, gestures, posture, and so forth.
• Feedback is a verbal or non verbal message that tells the sender how his or her message is
affecting the receiver.

Barriers to Communication

Physical barriers - Physical barriers are often due to the nature of the environment. An example of
this is the natural barrier which exists if staff are located in different buildings or on different
sites. Likewise, poor or outdated equipment, particularly the failure of management to introduce
new technology, may also cause problems. Staff shortages are another factor which frequently
causes communication difficulties for an organization. Whilst distractions like background noise,
poor lighting or an environment which is too hot or cold can all affect people's morale and
concentration, which in turn interfere with effective communication.
LEADING Engineering Management

System design - System design faults refer to problems with the structures or systems in place in
an organization. Examples might include an organizational structure which is unclear and
therefore makes it confusing to know who to communicate with. Other examples could be
inefficient or inappropriate information systems, a lack of supervision or training, and a lack of
clarity in roles and responsibilities which can lead to staff being uncertain about what is
expected of them.
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Attitudinal barriers - Attitudinal barriers come about as a result of problems with staff in an
organization. These may be brought about, for example, by such factors as poor management,
lack of consultation with employees, personality conflicts which can result in people delaying or
refusing to communicate, the personal attitudes of individual employees which may be due to
lack of motivation or dissatisfaction at work, brought about by insufficient training to enable them
to carry out particular tasks, or just resistance to change due to entrenched attitudes and ideas.

Ambiguity of words/phrases - Words sounding the same but having different meaning can convey
a different meaning altogether. Hence the communicator must ensure that the receiver receives
the same meaning. It is better if such words are avoided by using alternatives whenever
possible.

Individual linguistic ability - The use of jargon, difficult or inappropriate words in communication
can prevent the recipients from understanding the message. Poorly explained or misunderstood
messages can also result in confusion. However, research in communication has shown that
confusion can lend legitimacy to research when persuasion fails.

Physiological barriers - These may result from individuals' personal discomfort, caused—for
example—by ill health, poor eyesight or hearing difficulties.

Presentation of information - Presentation of information is important to aid understanding. Simply

put, the communicator must consider the audience before making the presentation itself and in
cases where it is not possible the presenter can at least try to simplify his/her vocabulary so that
the majority can understand.

Principles of Communication

• Principle of Emotional Appeal

Appeals to emotion tend to be communicated more readily than appeals to reason.
• Principle of Application
The more an idea is put to use, the better it tends to be understood and remembered.
• Principle of Line Loss
The more extended a communication, the less effective it tends to become.

Guidelines for Communicating

• Know What You Want to Say

If you do not know what you are trying to communicate and what result you expect from the
communication, how can you expect your listener to know?
• Know Your Audience
You can plan your approach and anticipate reactions if you are familiar with your audience.
• Gain Favorable Attention
Appeal to the interest of others
Anticipate and overcome emotional objections
LEADING Engineering Management

Talk in people terms

Lead from the present to the future
• Secure Understanding
Start with agreement
Use simple, specific words
Communicate in small increments Page | 4
• Ensure Retention
Use repetition
Associate with familiar ideas
• Encourage Feedback
Learn to listen
Ask questions
• Stress Application

3. MOTIVATING

Definition

Motivating is the work that managers perform to inspire,

encourage, and impel people to take required action.

Motivation Research

• Frederick W. Taylor – TAYLORISM

Taylor was a pioneer in scientific management who made some early discoveries in motivating
while studying productivity in a steel mill. He began the scientific study of methods. Emphasis
was largely on the work itself. Little attention was paid to the workers.

• Elton Mayo – HAWTHORNE STUDIES

One of the first insights into motivation came in the Hawthorne Works of the western Electric
Company. Mayo and his researchers concluded that social and psychological factors, not
physical factors, have the greatest influence on willingness to work. Happy, satisfied people who
are made to feel important produce more. People respond to trust and confidence rather than
compulsion, and they work most productively under friendly supervision.

• Douglas McGregor – THEORY X AND THEORY Y

McGregor proposed that manager behave according to one of two theories. Theory X managers
believe that people are lazy, unambitious, irresponsible, and gullible, and they treat them
accordingly. Theory Y managers believe that people really want to work hard and to be creative;
these managers use participation, communication, and recognition to motivate their people.
McGregor emphasized the need to integrate individual and organization objectives and to help
people feel an emotional ownership in their work.

• Abraham Maslow – HIERARCHY of NEEDS

Maslow proposed that needs are hierarchical. He originally pictured five levels of needs in
pyramid form (the lowest to the highest): physiological, safety acceptance, esteem, self
actualization.
LEADING Engineering Management

Maslow said that people will try to safety these needs on the job or in other social situation. By
providing conditions that will allow a person to satisfy some of these needs on the job, manager
can help to instil a positive attitude in people about their work.

• Frederick Herzberg – MOTIVATORS AND HYGIENE FACTORS

Herzberg said that two sets of factors affect workers: motivators and hygiene factors.
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Motivators include personal growth, achievement, recognition, responsibility, advancement, and
interesting work. Motivators have the power to make employees want to do better; they have
positive effects on work.

Hygiene factors include fringe benefits, job security, working conditions, pay, and fair treatment
on the job. Hygiene factors do not motivate a person; they serve primarily to prevent job
dissatisfaction. If hygiene factors are unsatisfactory, they can demotivate.

• B.F. Skinner – CONDITIONED LEARNING

Skinner is a behaviourist who proposed that people tend to repeat behaviour that is rewarded
and to avoid behaviour that is not rewarded.

The more promptly the reward follows the act, the more a person is encouraged to repeat it.
Once behaviour is established, irregular or intermittent rewards are better than regular reward.

• David McClelland – THREE MAJOR NEEDS

McClelland believed that there are three major needs in work: a need for achievement, a need
for affiliation, and a need for power.

✓ The need for achievement is a desire for success in competitive situations. Three
characteristic are used to identify a person with a high need for achievement.

1. Likes to set his or her own goals

2. Will set moderately difficult goals
3. Likes frequent and concrete feedback about performance

✓ The need for affiliation is the need to be liked by other people.

✓ The need for power is the need to influence other people. This need can take two forms.
1. The need for personalized power
2. The need for socialized power (exercising power for the good of
the organization)

Individuals are motivated to different degrees by each of the needs defined. According to
McClelland, these needs can be learned and developed in people through education.

McClelland’s research indicates that successful managers have a high need for socialized power
relative to other people. More importantly, these managers have a higher need for socialized
power than they do for affiliation.

• Victor Vroom – EXPECTANCY THEORY

Vroom contributed to motivational theory by applying his expectancy model to work motivation.

His model states that people are motivated to perform work to the extent that they expect it to
lead to the achievement of desired personal goals. To be motivated, an individual must first have
 LEADING Engineering Management

personal goals that he/she wants t achieve. Second, that individual must expect that his/her
efforts will lead to the accomplishment of those goals.

The key to motivation, then, is to create situations in which individuals can achieve their desire
for money, creativity, self-esteem, etc. through the accomplishment of organization objectives.
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Principle for Motivating
• Principle of Human Reaction
Every action directed at another person tends to evoke a similar and increasing reaction in
terms in which it is understood
The Golden Rule
“Do unto others as you would have others do unto you”
• Principle of Reciprocated Interest
People tend to be motivated to achieve the results that you want to achieve to the extent that
you show interest in the results that they want to achieve.
• Principle of Participation
Motivation to achieve results tends to increase as people are given opportunities to participate
in the decisions affecting those results.
• Principle of Communication
Motivation to achieve results tends to increase as people are informed about matters affecting
those results.
• Principle of Recognition
Motivation to achieve results tends to increase as people are given recognition for their
contribution to those results.
• Principle of Job Satisfaction
People tend to contribute to group objectives to the extent that they find in them satisfaction of
their own personal objectives.
• Principle of Delegated Authority
Motivation to achieve results tends to increase as people are given authority to make decisions
affecting those results.

Guidelines for Motivating

• Identify personal and organization objectives
• Define personal benefits to be gained
• Establish understood and accepted limits
• Enforce limits firmly but fairly
• Provide maximum freedom within established limits
• Provide feedback and reward good performance

4. SELECTING PEOPLE

Definition

Selecting people is the work that managers perform to find and to choose
people for positions in the organization and for advancement.
 LEADING Engineering Management

Importance of Personnel Selection

People chosen to come into the company or selected for promotion from within the company, will affect
future success of the enterprise.

The Manager should:

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• Find the best people available
• Evaluate candidates against appropriate standards
• Be willing to recommend for promotion qualified members of his own team.

Principle for Selecting People

• Principle of Future Characteristic
Past accomplishments tend to be the best prediction of future performance.

Technique for Selecting People

1. Make certain that the job is necessary
2. Specify position qualifications
3. Solicit applications
4. Review applications
5. Conduct initial interview
a. Before the interview
- Arrange for a private place to conduct the session
- Prepare for the interview
b. During the interview
- Maintain a professional stance and be polite
- Provide the candidate with clear and complete information
- Close the interview smoothly
c. After the interview
- Record your impressions
- Follow up the interview quickly
6. Check the employment history
a. Contact immediate superior
b. Establish purpose
c. Ask meaningful questions
d. Follow up inconsistencies
e. Make more than one check
7. Conduct final interview
8. Follow up on the job
a. Alert the team
b. Introduce the new person
c. Train the person
9. Evaluate your selection

5. DEVELOPING PEOPLE

Definition

Developing people is the work that managers perform to help

people improve their knowledge, attitudes, and skills.
 LEADING Engineering Management

Importance of Developing People

The development of human resources is deserving of as much effort as can be devoted to it.
The future needs of an enterprise will require more professional managers.

Basic of Developing People

• All people can be developed
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• Self-development is best
• Managers develop on the job
• Good managers develop good managers
• Management training is not a guarantee of success

Prerequisites of a Sound Management Development Program

• There is an identifiable management system
• There is a sound organization
• There is an established compensation plan that rewards managers for doing management work

Principle for Developing People

• Principle of Self-Evaluation
The more effectively people can evaluate their own performance, the stronger their motivation
to improve tends to be

Developing People

The activity of developing people is made up of three segments which are:

• Performance Appraisal – Appraise a person’s current performance, potential for advancement,

and/or career development opportunities.

• Performance Counselling – Conduct a performance counselling session.

• Developmental Activities – select and implement activities to help individuals improve their
knowledge, attitudes, and skills.

Performance Appraisal
Performance Appraisal is the work that managers perform to evaluate the performance capabilities of
themselves and their people.

Conditions for Successful Performance Appraisal

• People understand and accept the results they are expected to achieve and the work for which they are
accountable.
• They can determine for themselves how well they are doing their work and achieving their results.
• They can get the help they need when they need it.
• They are rewarded for good work, but are not rewarded for poor work.
• They are assumed to be as concerned as the organization about the quality of their work and results.

Four Steps in Performance Appraisal

1. Establish Objective and Standards
2. Measure Progress and Results
3. Evaluate Performance
4. Conduct Performance Appraisal Interview
CONTROLLING 2nd sem 2013-14

INTRODUCTION TO CONTROLLING

Definition
Controlling is the work that managers perform to assess and regulate the work in
progress and to assess the results secured.

Activities of Controlling
• Developing performance standards
• Measuring performance
• Evaluating performance
• Correcting performance

Concept of Evolution of Controls

• Natural Control
➢ Natural control is seen in the early stages of development, when
managers tend to rely on themselves as both the standard and the means
of control. They personally observe the work being done.
• Management Control
➢ In the management control stages, managers are interested in identifying
and correcting major deficiencies in systems or methods. They are not
interested in minor details or deficiencies.

Types of Control
• Control by inspection – manager must see work himself. Deficiencies can be
corrected rapidly. Method works only for short term, can limit initiative, and can
fail as organization grows.
• Control by exception – managers sets standards and let subordinate evaluate
own work. This is the management leader’s approach, but it can be risky in some
situations.

Principle for Controlling

• Principle of the Critical Few
➢ In any given group of occurrences, a small number of causes will tend to
give rise to largest proportion of results.
• Principle of Point of Control
➢ The greatest potential for control tends to exist at the point where the
action takes place.
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• Principle of Self-Control
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➢ Self-control tends to be the most effective control

CONTROLLING 2nd sem 2013-14

DEVELOPING PERFORMANCE STANDARDS

Definition
Developing performance standards is the work that managers perform to
establish the criteria by which work and results are evaluated.

Types of Standards
• Mandates
• Specifications
• Past performance
• Market requirements
• Action plans

Guidelines for Developing Performance Standards

• Base standards on plans
• Establish variance limits
• Keep standards real
• Review standards periodically
• Secure understanding and acceptance

Methods of Quantifying
• Ideally, use Cardinal Measures
• Otherwise, look for Ordinary Measures
• Use a Nominal Scale
• Consider a Comparative Approach
- As good as
- Increase or decrease
- Presence or absence
• Take “People Action” measures

Possible Problems in Using Performance Standards

• The standards identified may be inappropriate because they:
1. Require more responsibility and authority to achieve than that has been
delegated to those doing the work.
2. Require effort that is outside the scope of the work that was planned.
3. Are unrealistic and cannot reasonably be met by those assigned to do the
work. Even the best performers couldn’t meet the standards.
• The standards were appropriate at the outset, but work conditions changed and
the standards didn’t
• Subordinates may have performance deficiencies that do not allow them to meet
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or exceed standards because they:

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1. Obstacles in the job situation that prevent meeting or exceeding standards

CONTROLLING 2nd sem 2013-14

2. Lack of motivation or demotivation. Self-motivation may be affected due to:

a. Obstacles in the job situation that prevent meeting or exceeding
standards
b. Lack of consequences when standards are met or exceeded
c. Negative consequences when standards are met or exceeded.

MEASURING PERFORMANCE

Definition
Measuring performance is the work that managers perform to record and to
report works being done and results obtained.

Stewardship Concept of Reporting

Manager is accountable for the cost of the people, materials, tools and facilities
entrusted to his care.
Manager is accountable for reports he receives and specific their content and
format. In other words, manager is accountable for his own control data.

Common Methods of Measurement

• Accounting Measurements
• Performance Against Budget
• Field Inspections
• Audit Findings
• Performance Appraisal

Guidelines for Developing Reporting Skills

• Identify critical performance to be measured
• Identify Accountability
• Measure performance accurately
• Require reports that are understandable, concise, accurate and timely.

EVALUATING PERFORMANCE

Definition
Evaluating performance is the work that managers perform to analyze, interpret and
determine the worth or quality of work done and results secured.

Deviations from Standards

• Variance – is a deviation from what was intended, plus or minus, that falls within
established limits.
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• Exception- is a deviation from a standard that falls outside established limits.

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CONTROLLING 2nd sem 2013-14

Technique for Evaluating Performance

1. Compare completed work and work in progress with establish standards
2. Identify deviations from standards
3. Conduct a performance standards problem analysis
4. Transmit evaluation conclusions to the point of control

CORRECTING PERFORMANCE

Definition
Correcting performance is a work that managers perform to rectify or improve the
work being done and the result secured.

Types of Performance Corrections

• Technical Action – the correction of exception in technical work, usually short-
term, often an emergency measure.
• Management Action – the development of new or improved plans, organization,
or controls, usually long-term in nature

Keypoint in Taking Corrective Action

• Decide, then act
• Provide for self-correction
• Correct first think first
• Provide for both management and technical action

Components of Organizational Control System

Organizational control systems consist of the following:

1. Strategic plan
2. The long range financial plan
3. The operating budget
4. The performance appraisals STRATEGIC PLANNING:
5. Statistical reports The term Strategic Planning refers to
the process of determining the major
6. Policies and procedures goals of the organization and the policies
and strategies for obtaining and using
resources to achieve those goals. The top
STRATEGIC PLANS management of any firm is involve in this
type of planning.
In Strategic Planning, the whole
A strategic plan provides the basic control company is considered, specifically its
objectives and current resources. The
mechanism for the organization. When there are output of the strategic planning is the
indications that activities do not facilitate the Strategic Plan which spells out “the
decision about the long-range goal and
accomplishment of strategic goals, these activities are the course of action to achieve these
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goals.”
either set aside, modified or expanded. These
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corrective measures are made possible with the adoption of strategic plans.
CONTROLLING 2nd sem 2013-14

THE LONG-RANGE FINANCIAL PLAN

The planning horizon differs from company to company. Most firms will be satisfied
with one year. Engineering firms, however, will require longer term financial plans.
This is because of the long lead times needed for capital projects. An example is the
engineering firm engaged to construct the Light Rail Transit (LRT) within three
years. As such, the three-year financial plan will be very useful.
The financial plan recommends a direction for financial activities. If the goal does
not appear to be where the firm is headed, the control mechanism should be made
to work.
THE OPERATING BUDGET
An operating budget indicates the expenditures, revenues or profits planned for
some future period regarding operations. The figures appearing in the budget are
used as standard measurements for performance.
PERFORMANCE APPRAISALS
Performance appraisal measures employee performance. As such, it provides
employees with a guide on how to do their jobs better in the future. Performance
appraisals also function as effective checks on new policies and programs. For
example, if a new equipment has been acquired for the use of an employee, it would
be useful to find out if it had a positive effect on his performance.
STATISTICAL REPORT
Statistical reports pertain to those that contain data on various developments within
the firm. Among the information which may be found in a statistical report pertain to
the following:
MORNING STAR CHEMICAL CORPORATION
1. Labor efficiency rate Power Consumption Report
2. Quality control rejects For the 1st Quarter, 1997
(in KwH)
3. Accounts receivable
Dept. Jan Feb Mar Total
4. Sales reports A 1,000 1,100 1,200 3,300
5. Accident reports B 900 1,400 1,010 3,310
6. Power consumption reports C 1,180 1,650 1,200 4,030
D 500 1,100 600 2,200
POLICIES AND PROCEDURES E
Total
600
4,180
455
5,705
632
4,642
1,687
14,527

Policies refer to “the framework within

which the objectives must be pursued.” A procedure is “a plan that describes the
exact series of actions to be taken in a given situation.”
An example of a policy is as follows:
“Whenever two or more activities compete for the company’s attention, the client
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takes priority.”
CONTROLLING 2nd sem 2013-14

An example of a procedure is as follows:

PROCEDURE IN THE PURCHASE OF EQUIPMENT:
1. The concerned manager forwards a request for purchase to the purchasing
officer.
2. The Purchasing officer forwards the request to top management for
approval;
3. When approved, the purchasing officer returns the form to the requesting
manager.
4. The purchasing officer negotiates with the lowest complying bidder.

It is expected that policies and procedures laid down by management will be

followed. When they are breached once in a while, management is provided with a
way to directly inquire on the deviations. As such, policies and procedures provide a
better means of controlling activities.
STRATEGIC CONTROL SYSTEMS
To be able to ensure the accomplishment of the strategic objectives of the company,
strategic control systems become necessary. These systems consist of the following:
1. Financial analysis
2. Financial Ratio Analysis
Financial Analysis
The success of the most organizations depends heavily on its financial performance.
It is just fitting that certain measurements of financial performance be made so that
whatever deviations from standards are found out, corrective actions may be
introduces.
A review of the financial statements will reveal important details about the company’s
performance. The balance sheet contains information about the company’s assets,
liabilities and capital accounts. Comparing the current balance sheet with previous
ones may reveal important changes, which, in turn, provides clues to performance.
The income statement contains information about the company’s gross income,
expenses, and profits. When also compared with previous years’ income statements,
changes in figure will help the management determine if it did well.
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CONTROLLING 2nd sem 2013-14

Identifying Control Problems

Recognizing the need for control is one thing, actually implementing it is another. When operations
become complex, the engineer manager must consider useful steps in controlling. Kreitner
mentions three (3) approaches:

1. Executive Reality check

2. Comprehensive internal audit
3. General checklist of symptoms

Executive Reality Check

Employees at the frontline often complain that management imposes certain requirements that
are not realistic. In a certain state college, for instance, requests for purchase of classroom
materials and supplies take last priority. This is irregular because request of such kind must be of
the highest priority considering that the organization is an educational institution. Ironically, because
certain officers of the non-academic staff have direct access to the president, their purchase
requests almost always get top priority. Later on, when the president made an inspirational speech
on quality teaching, many members of the faculty just shrugged their shoulders and listened
passively.

One school, the Central Luzon state University, provides a good example on how the
executive reality check maybe exercised. It requires its executives to handle at least one subject
load each. What the executives will experience in the classroom will make him more responsive in
the preparation of plans and control tools.

The engineer manager of a construction firm, could, once in a while, perform the work of one
of his labourers. In doing so, he will be able to see things that he never sees inside the confines of
his air-conditioned office. Because the said action exposes the engineer manager to certain
realities, the term “executive reality check” is very appropriate.

Comprehensive Internal Audit

An internal audit is one undertaken to determine the efficiency and effectiveness of the
activities of an organization. Among the many aspects of operations within the organization, a small
activity that is not done right may continue to be unnoticed until it snowballs into a full-blown
problem.
An example is the resignation of an employee after servicing the company for 15 years. After
one week, another employee with ten years of service also resigned. Both were from the same
department. If after another week, a third employee is resigning, a full investigation is in order. Even
if the source of the problem is identified, it may already have caused considerable losses to the
organization. A comprehensive internal audit aims to detect dysfunctions in the organization before
they bring bigger troubles to management.

Symptoms of Inadequate Controls

If a comprehensive internal cannot be availed of for some reason, the use of the checklist for
symptoms of inadequate control may be used.
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CONTROLLING 2nd sem 2013-14

Some of the common symptoms Kreitner had listed are:

1. An unexplained decline in the revenues and profits.

2. A degradation of service ( a customer complaints).
3. Employees dissatisfaction (complaints, grievances, turnover)
4. Cash shortages caused by bloated inventories or delinquent accounts receivable.
5. Idle facilities or personnel.
6. Disorganized operations (work flow bottlenecks, excessive paperwork).
7. Excessive cost.
8. Evidence of waste and inefficiency (scrap, rework)

It must be noted that behind every symptom is a problem waiting to be solved. Unless this
problem is clearly identified, no effective solution maybe derived. Nevertheless, problems are easily
recognized if adequate control measures are in place.

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