Chapter-1: Evolution of Management

Musa Miah
M.B.A(HRM),B.B.A( Management)
Lecturer,
Dept. of Management, National Institute of textile
Engineering & Research (NITER)
E-mail:jnumusa2012@gmail.com
Course Contents….
⚫ Early Approaches to Management
⚫ Early Classical Approach
1.Scientific Management
2.Administrative Management
2. Bureaucracy Management
⚫ New Classical Approaches
1. Human Relation approach
2. Behavior approach
⚫ Modern Approaches
1.Quantitive Approach
3. System approach
4. Contingency Approach
 Early approaches to Management
⚫ The practice of management can be traced back thousands of years.The Egyptians used the
management functions of planning, organizing, and controlling when they constructed the
pyramids.
⚫ Alexander the Great employed a staff organization to coordinate activities during his military
campaigns.
⚫ The Roman Empire developed a well-defined organizational structure that greatly facilitated
communication and control.
⚫ Socrates discussed management practices and concepts in 400 BC, Plato described job
specialization in 350 BC, and the Persian scientist and philosopher Al-Farabi listed several
leadership traits in AD 900.
⚫ The Industrial Revolution, which began in Europe in the mid-1700s, was the starting point for the
development of management concepts and theories.
⚫ Two of its pioneers were Robert Owen and Charles Babbage. Owen (1771–1858), a British
industrialist and reformer, was one of the first managers to recognize the importance of an
organization‟s human resources and to express concern for the personal welfare of his workers.
⚫ Babbage (1792–1871), an English mathematician, focused his attention on efficiencies of
production. He placed great faith in the division of labor and advocated the application of
mathematics to such problems as the efficient use of facilities and materials.
Evolution of Management

Early Classical New Classical Modern

Approaches Approaches Approaches
• Scientific • Human • Quantitative
management relation approaches
• Administrative approaches • System
Management • Behavioral approach
• Bureaucracy approaches • Contingency
Management approaches
 Early Classical Approach
Scientific Management: Frederick Taylor developed this
system of scientific management, which he believed would lead
to a more efficient and productive workforce. Bethlehem Steel
was among the first organizations to profit from scientific
management and still practices some parts of it today.

Develop a science Scientifically select Supervise Continue to plan the

for each element of employees and employees to make work, but use
the job to replace then train them to sure they follow the workers to get the
old rule-of-thumb do the job as prescribed methods work done
methods described in step 1 for performing
their jobs
 Early Classical Approaches
⚫ Administrative Management :
Administrative Management focuses on
the managers and the use or principles and
functions for improving organizational
functioning.The administrative
management school treated as
management as a process get work done
through and with people.
⚫ It focused on principles that could be used
by managers to coordinate internal
activities of organization.
⚫ Henry Fayol [Father of Modern
Management] Jules Henry Fayol (1841-
1925), a French Manager-Engineer was
the first writer to advance a formal
statement of management elements &
principles
According to him, Managerial ability depended
on certain qualities and knowledge:
⚫ Physical Qualities: health, vigor, address
[manned of behavior]
⚫ Mental Qualities: ability to understand and
learn, judgment, mental vigor, and
adaptability.
⚫ Moral Qualities: energy, firmness,
willingness to accept responsibility, initiative,
loyalty, tact & dignity.
⚫ General Education: general acquaintance
with matters not belonging exclusively to the
function performed.
⚫ Special Knowledge: that peculiar to the
function, be it technical, commercial,
financial, managerial and so on.
⚫ Experience: knowledge arising from the
work proper; the recollection of lessons a
person has derived from the things.
 Fayol’s Principles of Management…
⚫ Division ofWork: is the well-known idea of assigning
separate tasks to individual specialists with the intent of
producing “more and better work with the same effort”
⚫ Authority: was defined as “the right to give orders and
the power to exact obedience”.
⚫ Discipline: is essentially respect and obedience
between a firm and its employees, it came from placing
knowledgeable managers at all levels of authority,
workplace agreements that are satisfactory to both
managers and employees.
⚫ Unity of Command: was expressed as “For any
action whatsoever an employee should receive orders
from one superior only”.
⚫ Unity of Direction: one head and one plan for a
group of activities having the same objective.
⚫ Subordination of individual interests to the
general interest: is a request to eliminate ignorance,
selfishness, ambition, laziness, weakness and all human
passions.
⚫ Remuneration: deals with day wages, piece rates,
bonuses and profit sharing.
⚫ Centralization: is a principle that Fayol felt
was always present to a greater or lesser extent
and belonged to the natural order. 9). Scalar
Chain: refers to “the chain of superiors ranging
from the ultimate authority to the lowest ranks”
and it is also called as gang plank.
⚫ Order: with regard to material order, ensures,
“a place for everything & everything in its place”.
⚫ Equity: is result from the combination of
kindliness and justice. It provides a basis for
dealing with employees and instilling devotion
and loyalty.
⚫ Stability ofTenure of personnel: sought to
provide for orderly human-resource staffing and
establishing provisions to ensure that employees
possessed the requisite abilities for the work to
be performed.
⚫ Initiative: as a principle, exhorted employees
to display zeal and energy in all endeavors.
⚫ Esprit de corps: stressed building harmony
and unity within a firm.
Early Classical Approaches
⚫ Bureaucratic Management:
MaxWebber (1864-1920), a
German economist-sociologist,
addressed the more fundamental
issue of how organizations
should be structured. He wrote
when Germany was undergoing
its industrial revolution. Weber
developed the principles of
Bureaucracy-a formal system of
organization and administration
designed to ensure efficiency
and effectiveness.
 New Classical Approaches..
The Human Relations Approach: The
Human Relations Approach is concerned with the
recognition of the importance of human element in
organizations & revealed the importance of social
and psychological factors in determining workers’
productivity and satisfaction. The basic tenets of
neo-classical theory or human relations approach
are as under:
⚫ The business organization is a social system.
⚫ The behavior of an individual is dominated by
the informal group of which he is a member.
⚫ An individual employee cannot be motivated by
economic incentives alone.
⚫ It is ultimately cooperative attitude and not the
mere command which yields result.
Factors affecting Human Relations Human
Relations in the organization are
determined by the individual, work-group,
leader and work environment.
⚫ Individual is an important element of
the organization and each individual is
unique. Behavior of an individual is
affected by his feelings, sentiments,
values and attitudes.
⚫ Work-group is the center of focus of
human relations approach & has an
important role in determining the
attitudes and performance of individual
workers.
⚫ Work-Environment where
organizational goals are achieved
through satisfaction of employees.
⚫ Leader must ensure full and effective
utilization of organizational resources
to achieve organizational goals.
New Classical Approaches

Behavioral Science Approach:

⚫ This approach emerged as a result of the contributions of
psychologists, sociologists and anthropologists to the field of
management.
⚫ It utilizes methods and techniques of social sciences such as
psychology, sociology, social psychology and anthropology for the
study of human behavior.
⚫ The pioneers of this school reasoned that in as much as managing
involves getting things done with and through people; the study of
management must be centered on people and their interpersonal
relations.
⚫ The behaviorists concentrated on motivation, individual drives,
group relations, leadership, group dynamics and so forth.
 Modern Approaches
Quantitative Approach
⚫ The quantitative or mathematical approach uses
pertinent scientific tools for providing a quantitative
basis for managerial decisions.
⚫ The belief of this approach is that management problems
can be expressed in terms of mathematical symbols and
relationship.
⚫ This approach is also called „Mathematical’,
Operations’ Research’ or ‘Management Science’
approach.
⚫ The basic feature of this approach is the use of mixed
teams of scientists from several disciplines.The technique ⚫ The different variables in management can
commonly used for managerial decision-making includes
Linear Programming (LP), Critical Path Method
(CPM), Program EvaluationTechnique (PERT),
GamesTheory, Queuing Theory, Break-even
Analysis.
The basic assumptions of quantitative approach
are as follows:
⚫ Management is essentially decision-making
and an organization is a decision-making
unit.
⚫ Organizational efficiency depends upon the
quality of managerial decisions.
⚫ The problem is expressed in the form of a
quantitative or mathematical model
containing mathematical symbols and
relationships.
be quantified and expressed in the form of
an equation.
⚫ Development of decision-making models
may require the skills of many disciplines
such as engineering, mathematics,
economics, statistics, physical sciences,
behavioral sciences and cost accountancy.
⚫ The mathematical models enable the
managers to discover significant relationships
between variables that could be controlled.
Modern Approaches
System Approach
It is based on the generalization that an
organization is a system and its components are
inter-related and inter-dependent. According to
Cleland and King, “A system is composed of
related and dependent elements which, when in
interaction, form a unitary whole. Its important
feature is that it is composed of a hierarchy of
sub-systems. An organization as a system has the
following characteristics:
⚫ A system is goal-oriented.
⚫ A system consists of several sub-systems
which are interdependent and interrelated.
⚫ A system is engaged is processing or
transformation of inputs into outputs.
⚫ An organization is an open and dynamic
system. It has continuous interface with the
external environment.
⚫ A system has a boundary which separates it
from other systems
Modern Approaches
Practical Utility of Contingency Approach ⚫ Contingency Approach:
The utility of contingency approach will be clear This approach is concerned with the analysis of
from the following features: interaction of specific organizations with their
⚫ It advocates that there is no single best way external environment and the adoption of
of managing applicable in all situations.The structure to meet the requirements of situation.
best solution is the one that is responsive to This approach suggests that there is no one best
the peculiarities of the given situation. way to handle any of the management problems
⚫ This approach rejects universality of and there is no best organizational structure to
management concept and it appeals to suit all situations.
common sense. It requires the ability to
analyze and diagnose a managerial situation
correctly.
⚫ Management should match or „fit‟ its
approach to the requirements of the
particular situation.
⚫ This approach is action-oriented as it is
directed towards the application of systems
concepts and the knowledge gained from
other approaches.
Thank You
Chapter-2: Introduction of management
Musa Miah
Lecturer, Dept of Management
National Institute of textile engineering & Research
E-mail:jnumusa2012@gmail.com
Lecture Session
⚫ Business concept and Business Organization
⚫ Efficiency, effectiveness and productivity
⚫ Management Definition
⚫ Functions of management
⚫ Nature, purpose, scope of management
⚫ Skills,levels and roles of management
Definition of Business
“an activity involving regular production or purchase of
goods and services for sale, transfer and exchange with
an object of earning profit”.
⚫ The word „Business‟ is come from the English words
„Busi+Ness‟ . Business is the legal process of production and
purchasing and selling to earn profit.
⚫ B.O Wheeler said , “Business is an institution organized to
provide goods and services to the society under the incentive
of gain.”
⚫ Skinner said , “Business is the exchange of goods ,services or
money for mutual benefit or profit.”
Types of Business
Business Organization
⚫ A business organization is an establishment formed to carry
on commercial enterprise.
⚫ A business organization is an entity aimed at carrying on
commercial enterprise by providing goods or services, to
meet needs of the customers. All business organizations: have
the common features such as formal structure, aim to achieve
objectives, use of resources, requirement of direction, and
legal regulations controlling them.
Forms of Business Organization

Sole
Partnership Company
proprietorship

Co-operative State-Owned
Efficiency, Effectiveness & Productivity
Efficiency, Effectiveness & Productivity
⚫ Efficiency is a measure of how well you do those things. If you are able
to get more outputs from the same inputs, you are said to have increased
efficiency.
Efficiency = Doing things right
⚫ Effectiveness is a measure of doing the “right things.” Highly effective
individuals and companies act in ways that move their highest priorities
forward on a regular basis.
Effectiveness = Doing the right things

⚫ Productivity is generally regarded as a measure of outputs divided by

inputs. All of the activities that you get done in a day may be considered
your output and the time you put into them are your inputs.
Productivity = Output / Input
What is management?
⚫ A set of activities (including planning and decision making,
organizing, leading, and controlling) directed at an organization‟s
resources (human, financial, physical, and informational) with the
aim of achieving organizational goals in an efficient manner.
⚫ F.W.Taylor -“Art of knowing what you want to do and then
seeing that it is done the best and cheapest way.
⚫ Henry Fayol –“To Manage is to forecast, to plan, to organise, to
command, to co-ordinate and to control”.
⚫ Peter F.Drucker –”Management is work and as such it has its
own skills, its own tools and its own techniques”.
“Management is the art of getting things done through
and with people”.
Function of Management…

Input from the Functions

Environment 1. Planing & Goals
1. Human Resources decision making
2. Financial
Attained
2. Organizing
Resources 1. Efficiently
3. Leading
3. Physical Resources 2. Effectively
4. Information 4. Controlling
Resources
Nature of Management
Management is universal
Management is a social process
Management is Goal oriented
Management is Science & Art
Management is Group Effort
Management is Required at all level
Management is Purposeful activity
Management is Intangible
Importance of Management

Accomplishment
Goal

Control
Industrial Effective
Relations and utilization of
competitive Resources
strengths

Importance of
Management
National growth Establish sound
and prosperity organization

Establishes
Reduce cost Equilibrium
 Principles of Management
Division of Work The Degree of Centralization

Authority and Responsibility Line of Authority/Scalar Chain -

Discipline Order

Unity of Command Equity

Unity of Direction Stability ofTenure of Personnel

Subordination of Individual Interest to Mutual Interest Initiative

Remuneration Esprit de Corps/Team Spirit

Scope of Management

/ubject-matter of Functional Areas of Management is an Inter-

Management Management Disciplinary Approach
• Financial Management
• Planning, • Commerce
• Organizing, • Human Resource • Economics
Management
• /taffing, • /ociology
• Marketing Management
• Directing and • Psychology and
• Production Management
• Controlling • Mathematics
• Material Management
• Purchasing Management
• Maintenance Management
• Office Management
• Accounting Management
Skills of Management

Technical

Time
Interpersonal
Management

Managerial
Skills

Decision-
Making Conceptual

Communicative Diagnostic
Levels of Management
Role of A Manager
Thank You
 Chapter-3: Planning

Musa Miah
Lecturer, Dept of Management
National Institute of textile engineering & Research
E-mail:jnumusa2012@gmail.com
Learning Objective
⚫ What is planning.
⚫ Types of Planning,
⚫ Steps of planning,
⚫ Tools &Techniques of planning in Production Industry
⚫ Planning process in a Business Organization.
 What is Planning…?
⚫ Planning is the fundamental
management function, which
involves deciding beforehand,
what is to be done, when is it to be
done, how it is to be done and who
is going to do it.
⚫ It is an intellectual
process which lays
down an organization's
objectives and develops
various courses of action, by
which the organization can achieve
those objectives. It chalks out
exactly, how to attain a specific
goal.
Types of Planning…

Nature Duration Level Use

• Formal • Short Term • Strategic • Single Use

Planning Planning Planning Planning
• Informal • Long Term • Intermediate • Standing
Planning Planning Planning Planning
• Operational
Planning
Planning Process
Recognizing
Need for
Action

Implementation /etting
of the Plan Objectives

Formulating
Developing
/upporting
Plan Premises

/electing the Identifying

Alternative Alternatives

Examining
Alternate
Course of
Action
 Tools & Techniques of Planning…
Assessing The Environment

• Environmental Scanning(Competitor intelligence, Reverse engineering

,Global scanning )
• Forecasting(quantitative, qualitative.)
• Benchmarking

Allocating Resources

• Budgeting
• Scheduling(Gantt charts, load charts, and PERT network analysis)
• Breakeven Analysis
• Linear Programming

Contemporary Planning Techniques

• Project Management
• Scenario Planning
1.A: Environmental Scanning
Environmental ⚫ Competitor intelligence - gathering information
Scanning: The about one’s competitors. It helps to answer May
screening of questions: who are competitors? What are they doing?
information to
How they doing? A variety of sources of information is
easily accessible.
anticipate and
interpret changes in ⚫ Reverse engineering - analyze a competitor’s product
becomes illegal corporate spying when
the environment. It proprietary\ownership materials or trade secrets are
helps organizations stolen fine line between what is legal and ethical and
to develop their what is legal but unethical internet opened vast sources
strategies of data.
accordingly. ⚫ Global scanning - screening of information on global
forces that might affect an organization that has global
interests. Requires more extensive procedures than those
used for scanning the domestic environment it might
require subscription in different international journals,
information basis, periodicals.
1.B: Forecasting
⚫ Quantitative
forecasting applies a set
of mathematical rules to a
series of past data to
predict outcomes.These
techniques are preferred
when managers have
sufficient hard data that can
be used
⚫ Qualitative forecasting,
in contrast, uses the
judgment and opinions of
knowledgeable individuals
to predict outcomes.
Qualitative techniques
typically are used when
precise data are limited or
hard to obtain.
1.C: Benchmarking

Benchmarking, the
search for the best
practices among
competitors or non
competitors that
lead to their
superior
performance. Does
benchmarking
work? Studies show
that users have
achieved 69 percent
faster growth and 45
percent greater
productivity.
2.A: Budgeting
Budgeting
A budget is a
numerical plan for
allocating resources
to specific activities.
Managers typically
prepare budgets for
revenues, expenses,
and large capital
expenditures such as
equipment.
2.B: Scheduling

1. GANTT CHARTS
The Gantt chart was
developed during the
early 1900s by Henry
Gantt, an associate of
Frederick Taylor, the
scientific
management expert.
The idea behind a
Gantt chart is simple.
It’s essentially a bar
graph with time on
the horizontal axis
and the activities to
be scheduled on the
vertical axis.The bars
show output, both
planned and actual,
over a period of time.
2.B: Scheduling…..

2. LOAD CHARTS
A load chart is a
modified Gantt chart.
Instead of listing
activities on the
vertical axis, load
charts list either
entire departments or
specific resources.
This arrangement
allows managers to
plan and control
capacity utilization. In
other words, load
charts schedule
capacity by work
areas.
2.B: Scheduling….
Steps in Developing a PERT Network
3. PERT NETWORK
⚫ Identify every significant activity that must be achieved for a project to
ANALYSIS be completed. The accomplishment of each activity results in a set of
Gantt and load charts events or outcomes.
are useful as long as the ⚫ Determine the order in which these events must be completed.
activities being
scheduled are few in ⚫ Diagram the flow of activities from start to finish, identifying each
number and activity and its relationship to all other activities. Use circles to indicate
independent of each
events and arrows to represent activities.These results in a flowchart
diagram called a PERT network.
other. But what if a
manager had to plan a ⚫ Compute a time estimate for completing each activity.This is done with
large project such as a a weighted average that uses an optimistic time estimate (to) of how
departmental long the activity would take under ideal conditions, a most likely
reorganization, the estimate (tm) of the time the activity normally should take, and a
implementation of a pessimistic estimate (top) that represents the time that an activity
cost-reduction program,
should take under the worst possible conditions. The formula for
calculating the expected time (the) is then
or the development of a
new product that ⚫ Using the network diagram that contains time estimates for each
required coordinating activity, determine a schedule for the start and finish dates of each
inputs from marketing, activity and for the entire project. Any delays that occur along the
manufacturing, and critical path require the most attention because they can delay the
product design? whole project.
2.C: Breakeven Analysis
Breakeven analysis is
a widely used
BEP =
resource allocation
technique to help
managers determine
breakeven point.
Breakeven analysis is
a simple calculation,
yet it’s valuable to
managers because it
points out the
relationship between
revenues, costs, and
profits.To compute
breakeven point (BE),
a manager needs to
know the unit price
of the product being
sold (P), the variable
cost per unit (VC),
and total fixed costs
(TFC).
2. D: Linear Programming
A mathematical technique for maximizing or minimizing a
linear function of several variables, such as output or cost.
⚫ 2p+4s ≤ 1200
⚫ 2p+2s ≥ 900
3.A: Project Management
⚫ Different types of organizations, from manufacturers such as
Coleman and Boeing to software design firms such as SAS
and Microsoft, use projects. A project is a one-time only set
of activities that has a definite beginning and ending point in
time.28 Projects vary in size and scope—from Boston’s “big
dig” downtown traffic tunnel to a sorority’s holiday formal.
Project management is the task of getting a project’s
activities done on time, within budget, and according to
specifications.
3.B: Scenario Planning

⚫ A scenario is a consistent view of what the future is likely to

be. Developing scenarios also can be described as
contingency planning; that is, if this event happens, then we
need to take these actions.
Thank You …..
 Chapter:4 Objectives

Musa Miah
Lecturer, Dept of Management
National Institute of textile Engineering & Research
E-mail:jnumusa2012@gmail.com
Learning outcome…..
⚫ What is objectives?
⚫ Nature of Objectives .
⚫ Goal VS Objective.
⚫ What is MBO ?
⚫ Process of MBO.
⚫ Management by Objectives (MBO): Benefits and Weakness.
What is Objectives….?
⚫ Objectives are the ends for the achievement of which
managerial activities are directed. Effective management is
possible only through the setting up of objectives and all
managerial efforts should be directed to achieve these
objectives. Objectives constitute the purpose, the attainment
of which is necessary for the business.
⚫ Mc.Farland defines objectives,“Objectives are the goals,
aims,or purposes that organizations wish to achieve over
varying periods of time.”
⚫ In the wordsofTerry,“A managerial objective is the
intended goal whichprescribes definite scope and
suggests direction to efforts of a manager.”
An objective is ‘SMART’…….

⚫ A company’s business objective is a detailed picture of the steps its

senior management plans. Specifically, they are steps it plans to
take to reach a specific goal.
⚫ These must be SMART so that the company can gauge and
monitor its progress
⚫ SMART refers to the first letter of each of the five words listed
below.They describe what an objective must be:
I. Specific: easy to understand and clear.
II. Measurable: in other words, easy to quantify.
III. Achievable: possible to be attained.
IV. Realistic: this one is similar to achievable.The aim must not be
‘pie in the sky’.
V. Time-bound: related to specific durations and dates.
 Comparison chart between Goal and
Objective….
Goal versus Objective comparison chart

Goal Objective

Meaning The purpose toward which an endeavor is directed. Something that one's efforts or actions are intended to attain or
accomplish; purpose; target.

Example I want to achieve success in the field of genetic research I want to complete this thesis on genetic research
and do what no one has ever done. by the end of this month.

Action Generic action, or better still, an outcome towards Specific action - the objective supports attainment
which we strive. of the associated goal.

Measure Goals may not be strictly measurable or tangible. Must be measurable and tangible.

Time frame Longer term Mid to short term

What is Management By
Objectives(MBO)….?
⚫ Management By Objectives (MBO) is an performance
management approach in which a balance is sought between the
objectives of employees and the objectives of an organization.
⚫ The essence of Peter Drucker ’s basic principle: Management By
Objectives is to determine joint objectives and to provide
feedback on the results. Setting challenging but attainable
objectives promotes motivation and empowerment of employees.
By increasing commitment, managers are given the opportunity to
focus on new ideas and innovation that contribute to the
development and objectives of organizations.
⚫ Management By Objectives (MBO) is also known
as Management By Results (MBR).
Guidelines of effective MBO….
However, Peter Drucker’s sets a number of conditions that must be
met:
⚫ Objectives are determined with the employees;
⚫ Objectives are formulated at both quantitative and qualitative
levels;
⚫ Objectives must be challenging and motivating;
⚫ Daily feedback on the state of affairs at the level of coaching and
development instead of static management reports;
⚫ Rewards (recognition, appreciation and/or performance-related
pay) for achieving the intended objectives is a requirement;
⚫ The basic principle is growth and development not punishments.
MBO process….

Determine or
revise the
organizational
objectives

Translating the
Evaluate and organizational
reward objectives to
achievements employees

Stimulate the
Monitoring of participation of
progress employees in the
determining of
the objectives
Management by Objectives (MBO):
Benefits and Weakness….!
Benefits…. Weakness….
⚫ . Better Managing ⚫ Failure to Teach MBO
⚫ Clarifying Organization Philosophy
⚫ Clarifying Organization ⚫ Failure to Give Guidelines
⚫ Encouraging Personal
to Goal setters
Commitment & ⚫ Difficulty in Setting Goals
⚫ Developing Controls ⚫ Emphasis on Short Term
Objectives
⚫ Danger of Inflexibility
Thank You Very Much
 Chap-5: Decision Making

Musa Miah
Lecturer, Dept of Management
National Institute of textile Engineering & Research
E-mail:jnumusa2012@gmail.com
Title
1. What is decision making?
2. Decision Making Process.
3. Nature of Decision Making .
4. Problem Solving & Decision Making.
5. Factor Affecting Decision Making.
6. Decision Making Support System.
1. What is Decision Making…
⚫ According to the Oxford Advanced Learner’s Dictionary the
term decision making means - the process of deciding
about something important, especially in a group of
people or in an organization.
⚫ Trewatha & Newport defines decision making process as
follows:, “Decision-making involves the selection of a
course of action from among two or more possible
alternatives in order to arrive at a solution for a
given problem”.
⚫ Decision making process can be regarded as check
and balance system that keeps the organization
growing both in vertical and linear directions.
2. Decision Making Process…
1. Underst
and The
situation
2. Identify
8.Implement the
Alternatives
problem

Decision
7.Choose the best 3.Define
alternative Making Objectives
Process

6.Evaluate 4.Diognose the

alternative problem

5. Develop
Alternative
3. Nature of Managerial Decision
Making
Programmed decisions
⚫ Programmed decisions are
made in accordance with
written or unwritten
policies, procedures, or
rules that simplify decision
making in recurring
situations by limiting or
excluding alternatives.
Non-programmed decisions
⚫ Non-programmed
decisions deal with unusual
or exceptional problems.
⚫ If a problem has not come
up often enough to be
covered by a policy or is so
important that it deserves
social treatment it must be
handled as a non-
programmed decision.
4. Problem solving & Decision
making…(Continue…..)
⚫ Problem solving is an
analytical process used to
identify the possible
solutions to the situation at
hand. Making decisions is a
part of problem solving.
Problem solving is a
complex process, and
judgment calls – or
decisions – will have to be
made on the way.
⚫ Decision making is a
choice made by using one’s
judgment.The art of
making sound decisions is a
particularly important skill
for leaders and managers.
You may need to make
numerous decisions as part
of the problem-solving
process.
How do you map problem solving to our
decision making process?
Stage Problem Solving Stage Decision Making

1 Identify the problem 1 Frame the decision

2 Explore alternative 2 Innovate to address needs & identify

alternatives

3 Select an Alternative 3 Decide & commit to act

4 Implement the solution 4 Manage consequences

5 Evaluate the Solution 4.1 Manage consequences & frame the

related decisions
5. Factors affecting Decision making…
6. What Is a Decision Support System?

⚫ DSS is a computerized-based information system that

organizes, collects, and analyzes business data that can be
used in decision-making activities for the management,
operations, and planning in an organization or business.
⚫ The typical types of information that is gathered by
a Decision Support System may include sales figures and
projected revenue, inventory data that has been organized
into relational databases for analysis, and comparative sales
figures between specific, selected time periods.
What Is a Decision Support System?
Thank You
 Chapter-6: Organizing

Musa Miah
M.B.A(HRM),B.B.A(Management)
Lecturer,Dept of Management
National Institute of textile engineering & Research
E-mail:jnumusa2012@gmail.com
Chapter Includes….
1. Organizing.

2. Organizing – Nature and Process

3. What is an Organization ?Types of Organization Structures.

4. Formal and Informal Organizations

5. Division of Works

6. Span of Management

7. Delegation of Authority

8. Centralized and Decentralized Organizations

9. Group Decision-Making
1. Organizing
⚫ Organizing or organizing is the establishment of
effective authority relationships among selected work,
persons and work places in order for the group to
work together efficiently. Or the process of dividing
work into sections and departments.
⚫ The process of grouping together of men and
establishing relationships among them, defining the
authority and responsibility of personnel by using the
company’s other basic resources to attain
predetermined goals and objectives.
⚫ The identification of the grouping of work to be done,
the delegation of authority and responsibility to the
employees, and the establishment of relationships
among the personnel in order to use to maximum
advantage the company’s basic material resources in
the accomplishment of a common goal.
Organizing – Nature and Process
Nature of Organizing:
⚫ Some believe it includes the
behavior of all member of the
group.
⚫ Others say it is the total system of
social and cultural relationships.
⚫ Generally, most managers think
that the terms means a formalized
design of intentional structures,
roles and positions.
Organizing as a Process:
⚫ First, the structure must reflect
objectives and plans because
activities of the organization are
based on them.
⚫ Second, the structure must reflect
authority given to top and middle
management.
⚫ Third, organization structure, like
any other plan, should reflect their
external environment (must be
economic, technological, political,
social or ethical)
⚫ Fourth, the organization must be
manned
What is an Organization ?

⚫ “Executive structure of a business” ,Webster – It indicates

that organization is the framework or backbone
⚫ Connotes a “creative process”. – All the parts of a business do
not come into existence spontaneously.They are the results
of managerial efforts to carry out a predetermined course of
action.
⚫ Sometimes used to mean the “total business organization”,
including facilities, materials, money, and manpower.
Types of Organization Structures
1. Line Organization –
simplest form of structure
and refers to a direct straight-
line responsibility and control
from the top management to
the middle management and
to the lower level.
Types of Organization Structures
2. Line and Staff
Organization – This utilizes
the assistance of experts or
specialists. Companies
expands from single to
complex by adding more
people to the organization.
Types of Organization Structures
3. Functional
Organization – It utilizes
the pure services of experts
or specialists.This removed
the staff specialist from his
“assisting” capacity and gave
him the pure authority and
responsibility for supervision
and administration of the
function.
Types of Organization Structures
4. Committees
Organization– Used in
situation where group
participation and decision are
required.These are created to
undertake special activities
rather than routinely
activities.
Types of Organization Structures
⚫ Matrix Organization is
an organizational structure in
which some individuals
report to more than one
supervisor or leader,
relationships described
as solid line or dotted line
reporting.
⚫ A matrix organization is a
structure in which there is
more than one line of
reporting managers.
Effectively, it means that the
employees of the organization
have more than one boss!
Formal and Informal Organizations

⚫ Formal Organization: Formal

organization is a well-defined
structure of authority and
responsibility that defines
delegation of authority and
relationships amongst the
organizational members. It
works along pre-defined set
of policies, plans, procedures,
schedules and programmed.
Most of the decisions in
formal organization are based
on pre-determined policies.
Formal and Informal Organizations
⚫ An informal
organization is the social
structure of the organization,
as opposed to the formal
structure of an organization.
It establishes how an
organization functions from a
practical standpoint.The
informal organization can
work in concurrence with the
formal organizational
structure, parallel with it, or
against it.
Division of Works
⚫ The division of work is the
course of tasks assigned to, and
completed by, a group of
workers in order to increase
efficiency.
⚫ Division of work, which is also
known as division of labor, is the
breaking down of a job so as to
have a number of different tasks
that make up the whole.
⚫ This means that for every one
job, there can be any number of
processes that must occur for
the job to be complete.
Span of Management
⚫ The Span of
Management refers to the
number of subordinates who
can be managed efficiently by a
superior. Simply, the manager
having the group of subordinates
who report him directly is
called as the span of
management.
⚫ The Span of Management has
two implications:
1. Influences the complexities
of the individual manager’s job
2. Determine the shape or
configuration of the Organization
Span of Management
Flat Structure Tall Structure
Departmentation
⚫ Departmentation refers to the formal structure of the
organization, composed of various departments and
managerial positions and their relationships to each other. As
an organization grows, its departments grow and more
subunits are created, which in turn add more levels of
management.
⚫ Four bases for departmentalizing an organization.
Departmentation by function, product, process and
geographical location.
Delegation of Authority
⚫ Delegation of Authority
means division of authority
and powers downwards to
the subordinate. Delegation is
about entrusting someone
else to do parts of your job.
⚫ Delegation of authority
can be defined as subdivision
and sub-allocation of powers
to the subordinates in order
to achieve effective results.
 Centralized and Decentralized
Organizations
⚫ Centralization is said to be a process
where the concentration of decision making
is in a few hands. All the important decision
and actions at the lower level, all subjects
and actions at the lower level are subject to
the approval of top management.
⚫ Decentralization is a systematic
delegation of authority at all levels of
management and in all of the organization.
In a decentralization concern, authority in
retained by the top management for taking
major decisions and framing policies
concerning the whole concern. Rest of the
authority may be delegated to the middle
level and lower level of management.
 Group Decision-Making
⚫ Group decision making is a type of

Group Decision Making

participatory process in which multiple
individuals acting collectively, analyze BRAINSTORMING
problems or situations, consider and evaluate
alternative courses of action, and select from
among the alternatives a solution or DIALETICAL
solutions. INQUIRY
⚫ Group decision-making (also known
as collaborative decision- NOMINAL GROUP
making or collective decision- TECHNIQUE.
making) is a situation faced
when individuals collectively make a choice DELPHI
from the alternatives before them. TECHNIQUE.
The decision is then no longer attributable
to any single individual who is a member of
the group.
Thank You
Human Resource Management(HRM)

Human resource management (HRM or HR) is the strategic approach to the effective
management of people in a company or organization such that they help their business gain
a competitive advantage. It is designed to maximize employee performance in service of an
employer's strategic objectives. Human resource management is primarily concerned with the
management of people within organizations, focusing on policies and systems. HR departments
are responsible for overseeing employee-benefits design, employee recruitment, training and
development, performance appraisal, and reward management, such as managing pay and benefit
systems. HR also concerns itself with organizational change and industrial relations, or the
balancing of organizational practices with requirements arising from collective bargaining and
governmental laws.

The process of hiring and developing employees so that they become more valuable to the
organization. Human Resource Management includes conducting job analyses, planning
personnel needs, recruiting the right people for the job, orienting and training, managing wages
and salaries, providing benefits and incentives, evaluating performance, resolving disputes, and
communicating with all employees at all levels. Examples of core qualities of HR management
are extensive knowledge of the industry, leadership, and effective negotiation skills.
Staffing:

Staffing: Staffing can be defined as one of the most important functions of management. It involves
the process of filling the vacant position of the right personnel at the right job, at right time. Hence,
everything will occur in the right manner. It is a truth that human resource is one of the greatest for
every organization because in any organization all other resources like- money, material, machine
etc. can be utilized effectively and efficiently by the positive efforts of human resource. Therefore it
is very important that each and every person should get right position in the organization so as to get
the right job, according to their ability, talent, aptitude, and specializations so that it will help the
organization to achieve the pre-set goals in the proper way by the 100% contribution of manpower.

Functions of Staffing

1. Manpower requirements- The very first step in staffing is to plan the manpower
inventory required by a concern in order to match them with the job requirements and
demands. Therefore, it involves forecasting and determining the future manpower needs
of the concern.
2. Recruitment- Once the requirements are notified, the concern invites and solicits
applications according to the invitations made to the desirable candidates.
3. Selection- This is the screening step of staffing in which the solicited applications are
screened out and suitable candidates are appointed as per the requirements.
4. Orientation and Placement- Once screening takes place, the appointed candidates are
made familiar to the work units and work environment through the orientation
programmers. Placement takes place by putting right man on the right job.
5. Training and Development- Training is a part of incentives given to the workers in
order to develop and grow them within the concern. Training is generally given according
to the nature of activities and scope of expansion in it. Along with it, the workers are
developed by providing them extra benefits of in-depth knowledge of their functional
areas. Development also includes giving them key and important jobs as a test or
examination in order to analyze their performances.
6. Remuneration- It is a kind of compensation provided monetarily to the employees for
their work performances. This is given according to the nature of job- skilled or
unskilled, physical or mental, etc. Remuneration forms an important monetary incentive
for the employees.
 7. Performance Evaluation- In order to keep a track or record of the behavior, attitudes as
well as opinions of the workers towards their jobs. For this regular assessment is done to
evaluate and supervise different work units in a concern. It is basically concerning to
know the development cycle and growth patterns of the employees in a concern.
8. Promotion and transfer- Promotion is said to be a non- monetary incentive in which the
worker is shifted from a higher job demanding bigger responsibilities as well as shifting
the workers and transferring them to different work units and branches of the same
organization.

Factor affecting Staffing:

Staffing is basically a dynamic process and it is affected by various external and internal factors.

1. External Factors:

There are various external factors that affect the staffing process and organization has no control
over these factors.

Nature of competition for Human Resources: - In India there is a cut throat competition
among organization for hiring managerial talents both fresh and experienced, computer
professionals etc. Companies are making campus recruitments and students from reputed
institutes like IIMs are being placed on very high packages. Companies are amending changes to
retain their good employees and offering a good working environment and salaries.

Legal factors: - There are various legal provisions which affect the staffing policies of an
organization. Various acts which provide restrictions to free recruitment are Child Labour Act
1986, Employment Exchange (compulsory notification of vacancies) Act 1959and Mines Act
1952. Also some provisions regarding compulsory employment of certain categories like OBC,
SC/ST affects the staffing policies of an organization.

Socio-culture Factors: - Various socio-culture factors affect the staffing process due to which
certain jobs are to be given to certain categories of people like our culture prevent the women to
be employed on in manufacturing operations involving physical exertion.

External influences:- There are various other elements which exert pressure on organization
like political pressure to employ local people or pressure from business contacts.
2. Internal Factors: -

Size of Organization: - Small organization cannot have same staffing practices which a large
organization may have; it may not be able to attract highly talented staff. Even if it tries to do so
it may increase the staffing cost.

Organizational Business Plan: - Organizational business plan directly affect the staffing
function because it determines the type of personal that may be required in future. On the basis
of business plan growing organization may need more staff in the future and declining
organization will have to shunt out its staff and stagnating organization will work for retaining its
staff. Staffing strategies may be different for these organizations.

Organizational Image: - organization image also affects the staffing practices. Organizational
image depends upon facilities to staff for training and development promotional policies,
working conditions and compensation incentives etc. if all these factors are positive then
organization will attract more candidates.

Recruitment & Selection:

1.Recruitment :
Recruitment is a process of identifying, screening, short listing and hiring potential resource for
filling up the vacant positions in an organization. It is a core function of Human Resource
Management.
Recruitment is the process of choosing the right person for the right position and at the right
time. Recruitment also refers to the process of attracting, selecting, and appointing potential
candidates to meet the organization’s resource requirements. The hiring of the candidates can be
done internally i.e., within the organization, or from external sources. And the process should
be performed within a time constraint and it should be cost effective.
1.Recruitment Planning

Recruitment planning is the first step of the recruitment process, where the vacant positions are
analyzed and described.

Job analysis is a process of identifying, analyzing, and determining the duties, responsibilities,
skills, abilities, and work environment of a specific job. These factors help in identifying what a
job demands and what an employee must possess in performing a job productively.

Job description is an important document, which is descriptive in nature and contains the final
statement of the job analysis. This description is very important for a successful recruitment
process.

Job description is an important document, which is descriptive in nature and contains the final
statement of the job analysis. This description is very important for a successful recruitment
process.

Job evaluation is a comparative process of analyzing, assessing, and determining the relative
value/worth of a job in relation to the other jobs in an organization.
 2. Recruitment strategy:
Recruitment strategy is the second step of the recruitment process, where a strategy is prepared
for hiring the resources. After completing the preparation of job descriptions and job
specifications, the next step is to decide which strategy to adopt for recruiting the potential
candidates for the organization.
While preparing a recruitment strategy, the HR team considers the following points −

• Make or buy employees

• Types of recruitment
• Geographical area
• Recruitment sources

3. Searching the Right Candidates

Searching is the process of recruitment where the resources are sourced depending upon the
requirement of the job. After the recruitment strategy is done, the searching of candidates will
be initialized. This process consists of two steps −
• Source activation − Once the line manager verifies and permits the existence of the
vacancy, the search for candidates starts.
• Selling − Here, the organization selects the media through which the communication of
vacancies reaches the prospective candidates.
Searching involves attracting the job seekers to the vacancies. The sources are broadly divided
into two categories: Internal Sources and External Sources.
4. Screening / Short listing
Screening starts after completion of the process of sourcing the candidates. Screening is the
process of filtering the applications of the candidates for further selection process. Screening is
an integral part of recruitment process that helps in removing unqualified or irrelevant
candidates, which were received through sourcing.
5. Evaluation and Control
Evaluation and control is the last stage in the process of recruitment. In this process, the
effectiveness and the validity of the process and methods are assessed. Recruitment is a costly
process, hence it is important that the performance of the recruitment process is thoroughly
evaluated.

2.Selection:
Selection is the process of picking or choosing the right candidate, who is most suitable for a
vacant job position in an organization. In others words, selection can also be explained as the
process of interviewing the candidates and evaluating their qualities, which are required for a
specific job and then choosing the suitable candidate for the position.
The selection of a right applicant for a vacant position will be an asset to the organization,
which will be helping the organization in reaching its objectives.

Difference between Recruitment and Selection

The major differences between Recruitment and Selection are as follows −

Recruitment Selection

Recruitment is defined as the process of Selection is defined as the process of choosing the
identifying and making the potential right candidates for the vacant positions.
candidates to apply for the jobs.

Recruitment is called as a positive process Selection is called as a negative process with its
with its approach of attracting as many elimination or rejection of as many candidates as
candidates as possible for the vacant jobs possible for identifying the right candidate for the
position.

Wage & Incentives

Wages:
Wages is the return given to workers for their mental and physical efforts which they put into the
production process.
Elements of an Ideal Wage-System:
• Guarantee of minimum wages.
• Based on ability of the worker.
• Simple.
• Motivating.
• Flexible.
• Regular payment.
Types:
1. Time wage system
2. Piece wage system

1. Time Wage System: In this system, the workers are paid wages according to the time
spent at the work place. E.g. a day, a week. A month etc. In this system, the work or
production done by an employee is not taken into consideration. This is the oldest type of
wage system.
2. Piece Wage System: In this system, wages are paid to workers according to their output.
This wage system is directly related to the skill, production capacity, speed and precision
of the worker. This system is also known as ‘PAYMENT BY RESULT SYSTEM’.
Incentives:
Incentives are an additional remuneration payable to efficient workers for their meritorious
performance in terms of time, costs and quality to motivate them to be more productive.
Incentives create aptitude for work among the workers, increasing their productivity. In the
absence of incentives, lethargy, inflexibility, frustration and indifference of the workers leads to
inefficiency in the long run.

Types:
• Monetary incentives
• Non-monetary incentives

Monetary Incentives:
Money is the main element of incentives. It boosts the enthusiasm and self-confidence of the
workers. It provides the workers with economic security and gives the worker a social security.

Types of Monetary Incentives:

• Profit-Sharing
• Co-Partnership
• Bonus
• Suggestions and Advices
• Commission
• Prizes

Non-Monetary Incentives:
Incentives not based on money are non-monetary incentives. Non-monetary incentives are useful
in increasing production and efficiency.

Types of Non-Monetary Incentives:

• Security of employment
• Recognition of food qualities.
• Promotion
• Adviser
• Assignment of responsibility
• Welfare activities and amenities
• Other incentives such as housing facilities, life insurance, educational and conveyance
Job evaluation & Enrichment:
Job evaluation
A job evaluation is a systematic way of determining the value/worth of a job in relation to other
jobs in an organization. It tries to make a systematic comparison between jobs to assess their
relative worth for the purpose of establishing a rational pay structure. Job evaluation needs to be
differentiated from job analysis. Job analysis is a systematic way of gathering information about
a job. Every job evaluation method requires at least some basic job analysis in order to provide
factual information about the jobs concerned. Thus, job evaluation begins with job analysis and
ends at that point where the worth of a job is ascertained for achieving pay equity between jobs
and different roles.
The process of job evaluation involves the following steps:

• Gaining acceptance: Before undertaking job evaluation, top management must explain the
aims and uses of the program to managers, emphasizing the benefits. Employees and unions
may be consulted, depending on the legal and employee relations environment and company
culture. To elaborate the program further, presentations could be made to explain the inputs,
process and outputs/benefits of job evaluation.
• Creating job evaluation committee: It is not possible for a single person to evaluate all the
key jobs in an organization. Often a job evaluation committee consisting of experienced
employees, union representatives and HR experts is created to set the ball rolling.
• Finding the jobs to be evaluated: Every job need not be evaluated. This may be too taxing
and costly. Certain key jobs in each department may be identified. While picking up the jobs,
care must be taken to ensure that they represent the type of work performed in that
department, at various levels.
• Analyzing and preparing job description: This requires the preparation of a job
description and also an analysis of job specifications for successful performance. See job
analysis.
• Selecting the method of evaluation: The method of evaluating jobs must be identified,
keeping the job factors as well as organizational demands in mind. Selecting a method also
involves consideration of company culture, and the capacity of the compensation and
benefits function or job evaluation committee.
• Evaluating jobs: The relative worth of various jobs in an organization may be determined
by applying the job evaluation method. The method may consider the "whole job" by ranking
a set of jobs, or by comparing each job to a general level description.
Job Enrichment:
The Job Enrichment is the job design technique used to increase the satisfaction among the
employees by delegating higher authority and responsibility to them and thereby enabling them
to use their abilities to the fullest. In other words, job enrichment is the opportunity given to the
employees to explore their abilities when some tough task is assigned to them. The job
enrichment is the vertical restructuring of moral excellence in which more authority, autonomy,
control is given to the employees to perform a given set of a job. This concept is in contrast to
the job enlargement which considers the horizontal restructuring, where more and more tasks get
added, and the challenge remains the same.
Job enrichment, as a managerial activity, includes a three-step technique:

1. Turn employees' effort into performance:

o Ensuring that objectives are well-defined and understood by everyone. The overall
corporate mission statement should be communicated to all. Individuals' goals
should also be clear: each employee should know exactly how he/she fits into the
overall process and be aware of how important their contribution is to the
organization and its customers.
o Providing adequate resources for each employee to perform well. This includes
support functions like information technology, communication technology, and
personnel training and development.
o Creating a supportive corporate culture. This includes peer support networks,
supportive management, and removing elements that foster mistrust and politicking.
o Free flow of information. Eliminate secrecy.
o Provide enough freedom to facilitate job excellence. Encourage and reward
employee initiative. Flextime or compressed hours could be offered.
o Provide adequate recognition, appreciation, and other motivators.
o Provide skill improvement opportunities. This could include paid education at
universities or on the job training.
o Provide job variety. This can be done by job sharing or job rotation program.
o It may be necessary to re-engineer the job process. This could involve redesigning
the physical facility, redesign processes, change technologies, simplification of
procedures, elimination of repetitiveness, redesigning authority structures.
2. Link employees performance directly to reward:
o Clear definition of the reward is a must
o Explanation of the link between performance and reward is important
o Make sure the employee gets the right reward if performs well
o If reward is not given, explanation is needed
3. Make sure the employee wants the reward. How to find out?
o Ask them
o Use surveys (checklist, listing, questions). Once you know what the employees want,
give them the tools they need to earn it and follow through on your word.

Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

We will be discussing the important performance appraisal tools and techniques in detail.
 1. Ranking Method
The ranking system requires the rater to rank his subordinates on overall performance. This
consists in simply putting a man in a rank order. Under this method, the ranking of an employee
in a work group is done against that of another employee. The relative position of each employee
is tested in terms of his numerical rank. It may also be done by ranking a person on his job
performance against another member of the competitive group.

2. Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates to
certain categories (e.g.: superior, above average, average) or percentiles (eg: top 10 percent,
bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted
to each category are a function of performance appraisal design and format. The workers of
outstanding merit may be placed at top 10 percent of the scale; the rest may be placed as 20 %
good, 40 % outstanding, 20 % fair and 10 % fair.

3. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective
behavior of an employee. These critical incidents or events represent the outstanding or poor
behavior of employees or the job. The manager maintains logs of each employee, whereby he
periodically records critical incidents of the workers behavior. At the end of the rating period,
these recorded critical incidents are used in the evaluation of the worker’s performance. Example
of a good critical incident of a Customer Relations Officer is: March 12 - The Officer patiently
attended to a customer’s complaint. He was very polite and prompts in attending the customers
problem.

4. Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each
statement has a weight or scale value attached to it. While rating an employee the supervisor
checks all those statements that most closely describe the behavior of the individual under
assessment. The rating sheet is then scored by averaging the weights of all the statements
checked by the rater. A checklist is constructed for each job by having persons who are quite
familiar with the jobs. These statements are then categorized by the judges and weights are
assigned to the statements in accordance with the value attached by the judges.

Compensation:
Compensation is a systematic approach to providing monetary value to employees in exchange
for work performed. Compensation may achieve several purposes assisting in recruitment, job
performance, and job satisfaction. Compensation is the results or rewards that the employees
receive in return for their work.
Compensation is the monetary benefit which is given to an employee or worker giving their
services to an organization. Compensation includes components like salary, wages, bonuses etc.
The compensation provided helps in motivating the employees, build their career and ensure that
their are committed in achieving the company goals.
Compensation is something, most usually money, which is given to the employees of an
organization or company as payment or reparation for their service towards the organization or
because of their loss incurred due to any organizational activity.

Types of Compensation

Direct compensation: The monetary benefit offered by an organization to its employees in return
for their service is called direct compensation. This includes an employee’s base pay (hourly
wage or annual salary), performance-based variable pay, bonuses (rewards for special occasions
or exceptional performance) as well as stock options (a right to purchase a part of business as a
reward for exceptional service).

Types of direct compensation

Some of the key components of direct compensation are discussed below.

Salary and wage

Direct compensation includes basic annual salaries or hourly wages paid to workers in return for
their services to the company account. It refers to the monetary benefits received for work done
for a specific duration like an hour, a week, a month or a year. It includes workers’ financial
compensation payments, contractual payments, pay for unscheduled time, and overtime, as well
as any retroactive pay.

Car allowance

Companies may offer their employees the use of a car and/or a fuel allowance. They may also
cover the cost of parking, public transportation, or cab fare for the employee.

Housing allowance

If workers have to relocate because of work, companies may provide their workers with a
housing allowance. Some companies even provide accommodation to facilitate the process of
relocation.

Medical reimbursement

Companies may offer workers medical reimbursements for medical claims covering not only
workers themselves, but also their family members. The claims include reimbursement for
medical bills as well as health insurance.

Leave travel allowance

Some organizations provide their employees with leave and an allowance for recreational travel.
These allowances are scaled based on the employee position and length of service with the
company.

Special/Other allowance

Direct compensation also covers some special allowances. These include meals, commissions,
mobile phone expenses, travel expenses, club memberships, insurance, reduced interest loans,
and more.

Indirect Compensation
Indirect compensation refers to the non monetary benefits provided to the employees by the
organization they serve. Indirect compensation is not paid directly to the employee. It is
calculated as an additional component to the base salary figure. Indirect compensation includes
everything from legally obligated health insurance to child care, social security etc.

Components of indirect compensation

The various components of the indirect compensation for the employees may be:

Examples of indirect compensation

Some examples highlighting compensation given indirectly are mentioned below:
Insurance: This covers life and accidental insurance.
Leave Travel: This includes travel allowances and leave allowances for holidays
Leave Policy: This includes sick leave, casual leave, maternity leave and other leaves which an
employee is entitled to.
Retirement Benefits: This includes pension allowances and other old age benefits
Flexible timings: This includes the option to come to office at timing apart from normal office
hours in case of emergency and personal problems.
Hospitalization: This includes medi-claims and other health benefits, claims of medical check
up and medication expenses and more.
Overtime Policy: This includes being paid for working beyond normal office hours for their
service and associated facilities.
Holiday Lodges: This includes access to company guest house and guest quarters on company
visits or holidays.
All these summarize indirect compensation which can be given to employees by an organization.
Hence, this concludes the definition of Indirect Compensation along with its overview.
Chapter 04: Recruitment &
Selection
Musa Miah
M.B.A(HRM),B.B.A(Management)
Lecturer, Dept. of Management
National Institute of textile engineering & Research
E-mail:jnumusa2012@gmail.com
Contents….
⚫ What is Recruitment?
⚫ Factors Influencing Recruitment
⚫ Sources of Recruitment
⚫ Process of Recruitment
⚫ Method of Recruitment
⚫ What is Selection ?
⚫ Process of Selection
⚫ RecruitmentVS Selection.
 What is Recruitment?
⚫ Recruitment is a process of
identifying, screening,
shortlisting and hiring
potential resource for filling
up the vacant positions in an
organization. It is a core
function of Human Resource
Management.
⚫ Recruitment is the process
of choosing the right person
for the right position and at
the right time. Recruitment
also refers to the process of
attracting, selecting, and
appointing potential
candidates to meet the
organization’s resource
requirements.
PURPOSE & IMPORTANCE
⚫ Determine the present and future requirement of the
organization in conjunction with its personnel
planning and job analysis activities.
⚫ Increase the job pool of job candidates at minimum
cost.
⚫ Help increase the success rate of the selection process
by reducing the number visibly under qualified or job
application.
⚫ Help reduce the probability that job applicants, once
recruited selected, will leave the organization only
after a short period of time.
⚫ Meet the organizations legal and social obligation
regarding the composition of its workforce.
⚫ Being identifying and preparing potential job
applicants who will be appropriate candidates.
⚫ Increase organization individual effectiveness in the
short term and long term.
 FACTORS INFLUENCING RECRUITMENT
Internal Factor External Factor
The internal factors also called as The external forces are the forces
“endogenous factors” are the factors which cannot be controlled by
within the organization that affect the organization.The major
recruiting personnel in the external forces are:
organization. Internal forces i.e. the
⚫ SUPPLY AND DEMAND
factors which can be controlled by
organization are: ⚫ LABOUR MARKET
⚫ RECRUITMENT POLICY ⚫ IMAGE/GOODWILL
⚫ SIZE OF ORGANISATION ⚫ POLITICAL-SOCIAL-LEGAL
⚫ HUMAN RESOURCE PLANNING ENVIRONMENT
⚫ COST OF RECRUITMENT ⚫ UNEMPLOYMENT RATE
⚫ GROWTH AND EXPANSIO ⚫ COMPETITORS
 SOURCES OF RECRUITMENT
Internal sources
INTERNAL RECRUITMENT seeks
applicants for positions from those
who are currently employed.
INTERNAL SOURCES include:
⚫ PRESENT EMPLOYEE
TRANSFER PROMOTION
⚫ EMPLOYEE REFERRALS
⚫ FORMER EMPLOYEES
⚫ PREVIOUS APPLICANTS
External Sources
EXTERNAL SOURCE far outnumber
the internal sources. It includes:
⚫ PROFESSION OR TRADE
ASSOCIATIONS
⚫ ADVERTISMENTS
⚫ EMPLOYMENT EXCHANGES
⚫ CAMPUS RECRUITMENT’
⚫ Walk-insWrite-ins & TALK-ins
⚫ CONSULTANTS
⚫ CONTRACTORS
⚫ DISPLACED PERSONS
⚫ RADIO AND TELEVISION
⚫ ACQUISITIONS AND MERGERS
⚫ COMPETITORS
⚫ E- RECRUITING
 Recruitment process
⚫ “Recruitment process involves a systematic procedure from sourcing the candidates to
arranging and conducting the interviews and requires many resources and time.”
1. Job Analysis: is a process to identify and determine in detail the
particular job duties and requirements and the relative importance of
these duties for a given job. Job Analysis is a process where judgments
are made about data collected on a job.
2. Recruitment Planning: The first step involved in the recruitment
process is planning. Here, planning involves to draft a comprehensive
job specification for the vacant position, outlining its major and minor
responsibilities; the skills, experience and qualifications needed; grade
and level of pay; starting date; whether temporary or permanent; and
mention of special conditions, if any, attached to the job to be filled.
3. Strategy Development: Once it is known how many with what
qualifications of candidates are required, the next step involved in this
regard is to devise a suitable strategy for recruiting the candidates in
the organization.
4. Searching: This step involves attracting job seekers to the organization.There
are broadly two sources used to attract candidates.These are:
1. Internal Sources
2. External Sources
5. Screening: Though some view screening as the starting point of selection, we
have considered it as an integral part of recruitment.The reason being the selection
process starts only after the applications have been screened and shortlisted.
6. Evaluation & control: Given the considerable cost involved in the recruitment
process, its evaluation and control is, therefore, imperative.The costs generally
incurred in a recruitment process include:
1. Salary of recruiters
2. Cost of time spent for preparing job analysis, advertisement
3. Administrative expenses
4. Cost of outsourcing or overtime while vacancies remain unfilled
5. Cost incurred in recruiting unsuitable candidates
METHOD OF RECRUITMENT
⚫ Direct Method: In this method, the representatives of the organization are
sent to the potential candidates in the educational and training institutes.They
establish contacts with the candidates seeking jobs. 25 26
⚫ Indirect Methods: Indirect methods include advertisements in news
papers, on the radio and television, in professional journals, technical magazines
etc.This method is useful when:
(i) Organization does not find suitable candidates to be promoted to fill
up the higher posts
(ii) When the organization wants to reach out to a vast territory, and
(iii) When organization wants to fill up scientific, professional and
technical posts.
⚫ Third Party Methods: These include the use of private employment
agencies, management consultants, professional bodies/associations, employee
referral/recommendations, voluntary organizations, trade unions, data banks,
labor contractors etc., to establish contact with the job- seekers.
 SELECTION
⚫ Selection is the process of picking or
choosing the right candidate, who is most
suitable for a vacant job position in an
organization. In others words, selection
can also be explained as the process of
interviewing the candidates and evaluating
their qualities, which are required for a
specific job and then choosing the suitable
candidate for the position
⚫ Selection is the process of differentiating
between applicants in order to identify and
hire those with a greater likelihood of
success in a job.
⚫ Selection is the process in which
candidates for employment are divided
into two classes— those who are to be
offered employment and those who are
not.
Recruitment VS Selection
Recruitment
⚫ Recruitment is defined as
the process of identifying
and making the potential
candidates to apply for the
jobs.
⚫ Recruitment is called as a
positive process with its
approach of attracting as
many candidates as possible
for the vacant jobs
Selection
⚫ Selection is defined as the
process of choosing the right
candidates for the vacant
positions.
⚫ Selection is called as a
negative process with its
elimination or rejection of as
many candidates as possible
for identifying the right
candidate for the position
Thank You
 Chapter-7: Leading

Musa Miah
M.B.A(HRM),B.B.A(Management)
Lecturer,Dept of Management
National Institute of textile engineering & Research
E-mail:jnumusa2012@gmail.com
Chapter Includes….
⚫ What is leading..?
⚫ What is leadership…?
⚫ Leadership Style.
⚫ Motivation..
⚫ Types of Motivation.
⚫ Different Theories of Motivation.
⚫ Creativity & Innovation Management.
1. Leading….?
⚫ LEADING is that
management function which
involves influencing others to Motivating
engage in the work, behaviors employees
necessary to reach
organizational goals.
⚫ Leading is the step that is
accomplished by
communicating, motivating, Leading
inspiring, and encouraging
employees towards a higher Functions
level of productivity.
⚫ Leading is the use of
Influencing Forming
influence to motivate employees effective groups.
employees to achieve
organizational goals
 2. Leadership…?
⚫ Leadership in business is the
capacity of a company's
management to set and achieve
challenging goals, take fast and
decisive action when
needed, outperform the competition,
and inspire others to perform at the
highest level they can.
⚫ Leadership is the art and the
science of influencing people so that
they willingly move toward the
achievement of the group goals.
⚫ Leadership the ability to obtain
followers and influence them makes
a leader.
2.1 Leadership Styles..
1.Democratic
Leadership
Commonly
Effective

8. Bureaucratic Leadership 2. Autocratic Leadership

Rarely Effective Rarely Effective

3. Laissez-Faire
7. Coach-Style Leadership Leadership
Commonly Effective Sometimes Effective

6. Transactional Leadership 4. Strategic

Sometimes Effective Leadership
Commonly
Effective
5. Transformational
Leadership
Sometimes Effective
3. Motivation
Motivation is the word derived
from the word ’motive’ which
means needs, desires, wants or
drives within the individuals. It is
the process of stimulating people
to actions to accomplish the goals.
In the work goal context the
psychological factors stimulating
the people’s behavior can be -
⚫ desire for money
⚫ success
⚫ recognition
⚫ job-satisfaction
⚫ team work, etc
3.1. Types of Motivation
3.2 Theories of Motivation
⚫ Motivation is a state-of-mind, filled with energy and enthusiasm,
which drives a person to work in a certain way to achieve desired
goals. Motivation is a force which pushes a person to work with
high level of commitment and focus even if things are against him.
Motivation translates into a certain kind of human behaviour.
⚫ It is important to ensure that every team member in an
organization is motivated.Various psychologists have studied
human behaviour and have formalized their findings in the form
various motivation theories.These motivation theories provide
great understanding on how people behave and what motivates
them.
⚫ Motivation is a huge field of study.There are many theories of
motivation. Some of the famous motivation theories include the
following:
 3.2. 1. Maslow’s hierarchy of needs

Abraham Maslow postulated that a person will be

motivated when his needs are fulfilled.The need
starts from the lowest level basic needs and keeps
moving up as a lower level need is fulfilled.
Below is the hierarchy of needs:
⚫ Physiological: Physical survival necessities
such as food, water, and shelter.
⚫ Safety: Protection from threats, deprivation,
and other dangers.
⚫ Social (belongingness and love): The need for
association, affiliation, friendship, and so on.
⚫ Self-esteem: The need for respect and
recognition.
⚫ Self-actualization: The opportunity for
personal development, learning, and
fun/creative/challenging work. Self-
actualization is the highest level need to
which a human being can aspire.
 3.2. 2. Hertzberg’s two factor theory
⚫ Hertzberg classified the needs
into two broad categories
namely hygiene factors and
motivating factors.
⚫ Hygiene factors are needed to
make sure that an employee is
not dissatisfied. Motivation
factors are needed for ensuring
employee's satisfaction and
employee’s motivation for
higher performance. Mere
presence of hygiene factors does
not guarantee motivation, and
presence of motivation factors
in the absence of hygiene factors
also does not work.
 3.2.3 ERG Theory
⚫ ERG theory, developed by Clayton
Alderfer, is a modification of
Maslow’s hierarchy of needs. An
empirical test of a new theory of
human needs.
⚫ Instead of the five needs that are
hierarchically organized, Alderfer
proposed that basic human needs
may be grouped under three
categories, namely, existence,
relatedness, and
growth. Existence corresponds to
Maslow’s physiological and safety
needs, relatedness corresponds to
social needs, and growth refers to
Maslow’s esteem and self-
actualization.
 3.2.4 McGregor’s theory X and theory Y
Douglas McGregor formulated two distinct
views of human being based on participation of
workers.The first is basically negative, labeled
asTheory X, and the other is basically positive,
labeled asTheoryY. Both kinds of people exist.
Based on their nature they need to be managed
accordingly.
⚫ Theory X: The traditional view of the
work force holds that workers are
inherently lazy, self-centred, and lacking
ambition. Therefore, an appropriate
management style is strong, top-down
control.
⚫ TheoryY: This view postulates that
workers are inherently motivated and eager
to accept responsibility. An appropriate
management style is to focus on creating a
productive work environment coupled
with positive rewards and reinforcement.
4. Creativity and Innovative Management
⚫ Creativity is defined as the
production of new and useful
ideas concerning products,
services, processes and
procedures by individuals or
small groups of persons working
together.
⚫ Creativity in
entrepreneurship include being
independent and spontaneous
and processing a problem
solving attitude.
This creative group is divided to
two different groups namely
initiators and problem solvers.
⚫ A person who initiates a course
of action
⚫ A person who start working
when problem arises
⚫ Creative people can be said to
have :
1. A particular Style
2. Originality
3. Experience
4. Determination Flexibility
5. Positive outlook
4. Creativity and Innovative Management
⚫ Innovation is introduction of a
new idea into the marketplace in
the form of a new product or
service or new market or an
improvement in organization or
process.
⚫ Ideas have little value unless they
are converted into useful product
and services
Characteristics of INNOVATION
⚫ Innovation leads to changes
⚫ Result of a thoughtful plan
⚫ Can bring complete revolution or
an extension to existing products
⚫ Provide unique identity to a
business
⚫ Innovation are action oriented and
result oriented
⚫ Help in making products and
processes simple to understand
⚫ Innovation involve continuous
experimentation
WHY CREATIVITY & INNOVATION
⚫ The highly competitive
nature of today’s business
needs creative and innovative
ideas for dominant success.
Although good service is the
essence of a successful
business (in long term), novel
ideas are jumping
advancements; thus, a
company has no chance to
win this competitive game in
the absence of creativity and
innovation.
Thank You