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CHAPTER- 7
DIRECTING

Directing function of management is connected with instructing, guiding,

inspiring, motivating the employees in the organisation so that their efforts result
in achievement of organisational goals.
“Directing is telling people what to do and seeing that they do it to the best of
their ability”—Ernerst Dale

Features:
1.Directing initiates the action:
● Other functions prepare a setting for action directing initiates action in
the organisation.
● By giving the instructions the managers get the work started in the
organisation.
2. Continuing function:
● Managers cannot rest after giving instructions.
● He has to continuously guide, supervise, and motivate his subordinates.
● He must continuously check them whether the work is done properly
3. Takes place at all levels:
● Directing is performed in all the levels of management.
● Managers will have to supervise, motivate, guide and communicate with
the subordinates to get the work done
● Directing takes place wherever the superior subordinate relation
exists.
4. Directing flow from top to bottom:
● Every manager can take directions from his immediate superior and can
direct his subordinate.
● Directing starts from the top level and flows to the low level.

Importance/Significance of directing:
1. Initiates action:
● Directing initiates action by guiding leading, harmonising and managing
the human elements in an organisation to achieve the desired goals.
● Without directing all the managerial functions will become ineffective.
2. Provides balance in the organisation:
● Directing helps the people to satisfy their individual goals and at the same
time utilise their capabilities for achieving the organisational goals.
● It also helps in resolving the conflicts arising out of the different
methodologies and perception of people for achieving the organisational
goals
3. Facilitate changes in the organisation:
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● Every organisation has to face a lot of changes like social, environmental,

technical, and individual.
● Through directing workers are motivated to adjust to the changes which
are in the interest of the organisation.
4. Integrates the employee’s efforts:
● It is difficult for every organisation to achieve its objectives each worker
starts independently.
● Directing with its various elements like supervision, leadership
,motivation and communication, brings about synchronisation in the
activities of the workers operating at different levels and departments
of the organisation.
5. Means of motivation:
● Directing motivates the workers to work efficiently and contribute their
maximum efforts towards achievement of goals.
● It develops a feeling of belongingness and encourage the employees to
perform upto their best ability.

ELEMENTS OF DIRECTION:
1. COMMUNICATION
2. MOTIVATION
3. LEADERSHIP
4. SUPERVISION

1.COMMUNICATION :
● Communication is the process of exchange of information two or more
persons to reach a common understanding.
● Directing abilities of a manager largely depends on the communication
skills.
● Communication is a two way process as it begins with the sender and ends
with the feedback from the receiver to the sender.
● It is originated from the latin word “communis” which means common
implying common understanding.
● There are two forms of communication a)formal communication and b)
informal communication.
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Communication process:

1.SENDER: He is a person who conveys the message. The communication process

begins immediately when the idea comes in the mind of the sender
2. MESSAGE: The contents of ideas or message or suggestions which sender wants
to share with receiver is called message
3.ENCODING: Receiver cannot read the mind of the sender. So receiver converts
the idea into a language or other communication symbols such as pictures,
gestures etc. This is known as encoding.
4MEDIA: It is the way or means through which encoded message has to be
transmitted to receiver. The common ways of transmission are phone
letter, internet ,message etc.
5.DECODING: Decoding refers to converting the encoded message into language
and understanding the message.
6. RECEIVER: He is the person who receives the communication and understands
the message.
7. FEEDBACK: After understanding the message the receiver sends his response
on that idea or message to sender. When response reaches the sender then
only the communication process ends.
8.NOISE: Noise is the hindrance in the process of communication. T creates hurdle
in the way of conservation. It can take place at any place of the
communication process. Due to this the message is not conveyed to the
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receiver properly and the receiver is not able to decode it in the manner
required by the sender. For example
● Use of ambiguous symbols in encoding
● Telephone line going dead
● An inattentive receiver
● Understanding wrong leaning of the message
● Wrong assumptions(sending message assuming that the receiver
knows English)
● Honking of a vehicle
● Sound of somebody coughing
● Letter being lost in the mail

IMPORTANCE OF COMMUNICATION
1 Acts as the basis of co-ordination:
● To get the work done coordination among various activities is needed.
● It is essential that the people should have a mutual understanding
regarding the goals of the organisation and they should know the ways to
achieve the same.
● This is possible through effective communication.
2. Acts as the basis of decision making:
● Before taking any decision a lot of information needs to be collected on
the basis of which the ideas are given the final shape.
● It can be only possible through communication.
3 Increases managerial efficiency.:
● It is through communication that the managers pass on the messages
about the objective laid down, issue direction, divide work and control
activities.
● In the absence of communication the managers role is inactive and the
presence of communication makes his efficient.
4. Establish effective leadership:
● Communication is the basis of leadership.
● In every organisation all the subordinates must clearly know the
duties assigned to them and to whom they must be responsible.
● That is possible only when there is an effective system of
communication.
● Communication helps to influence subordinates.
5. Promotes cooperation and industrial peace:
● A two way communication system provides better understanding and
cooperation between the employer and the employees.
● It results in better industrial relations and smooth functioning.
6. Aid to management:
● It is an important means of for management to discharge its functions
effectively.
● It helps in co ordination of human and physical resources.
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● The management has to get the work done to through the workers by
issuing orders and instructions.
● It is possible only through effective communication.
7. Boosts morale:
● The manager may boost the morale of the worker by maintaining human
relations through effective system of communication.
● Through this medium he can carry out training and development
programmes

FORMAL COMMUNICATION:
● It refers to the transmission of message or information through
established chain of command.
● It brings about a direct contact between the boss and he immediate
subordinate and vice versa .
● It can be oral or written but generally it is written.
● It can be horizontal and vertical .
● .All concerned people in the chain of command are supposed to follow
it.
There can be three types of such communication:

a) Downward communication:
• The flow of information from the top level (superior) to the bottom level
(subordinate) is known as downward communication.
• In this the managers passes the instructions to the juniors and the
success of this type of communication depends upon the communication
skills of managers.

b) Upward communication:
• It is the flow of communication from the subordinate to superior .
• It include the application to grant of leave, submission of progress
report.

c) Horizontal communication:
• It is also known as lateral communication
• Takes place between two divisional heads.
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Advantages of formal communication:

1. It is the tool for the management to explain its plans and policies to the
workers and get the desired work done.
2. It is more accurate precise and systematic. There are no chances of
changes in the contents of the message in the transmission process.
3. It is easy to fix responsibility for incorrect or false statements.
4. It helps in coordinating and controlling the activities of the workers.
5. Since the principle of scalar chain is strictly observed, it avoids confusion
and mis understanding.

Disadvantages
1. The information passes in a slow speed because it follows the scalar chain
principle.
2. It is deliberately impersonal and does not satisfy the social needs of the
workers.
3. Since it follows established rules and procedures, it is rather rigid.

COMMUNICATION NETWORK
• A network of communication represents the pattern of contacts among
the members of the organisation.
• It mainly depends upon the channels of communication and the number
of persons involved in the communication process.
• This network represents the speed, accuracy and smoothness with which
the messages flow throughout the organisation.
• It can take place in any of the following ways.

FORMAL COMMUNICATION NETWORK:

1.) Wheel: It is the most centralised form of network as all the information
flows from one person to all other members of the organisation. There is no
communication channel among the subordinates. All communication takes
place from the centre
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2.)Chain : Here the persons at the extremes of the chain can interact with only
level where as all others can two way channel of communication. The network
exists between a hierarchical chain of command.

3.)Circle: In this network every person can communicate two other persons.
Hence flow of communication is slow.

4.)Free flow: It is the most decentralised form which allows for free flow of
information among all the members. The flow of communication is very fast in
this network. This kind of information flow is generally found in informal
communication.

5) Inverted “V”: In this network a subordinate is allowed to communicate with

his superior and his superior’s superior. In this network only prescribed
communication takes place.
INFORMAL COMMUNICATION
It means the communication within the organisation that is not officially
sanctioned. It is formed from the informal relations like friendship and
membership of the same club. Information’s that are difficult to gather through
the formal communication is gathered in this manner. It is also called grapevine
communication network because there is no definite channel of communication. It
is just like a grapevine where we cannot find the beginning and the end.Ther is
chance of rumour and distortion in such type of communication

Advantages:
1. Under this the communication travels very fast.
2. This type of communication is done in a free environment which means
there is no pressure of any office.
3. It save the employees from tension and hence the establishment of beter
human relations.
4. Problems that cannot be solved by formal organisation structure can be
solved by informal methods
5. This type of communication satisfies the social needs of the customers.

Limitations:
1 . The information may not reach the person concerned because of its
unsystematic nature
2. Most of the information received through this method is unreliable in nature.

Barriers to Effective Communication

Sometimes communication does not yield the desired results. It is because

some barriers appear in the process of communication. The information sent by
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the sender is received by the receiver in the opposite sense and it proves to be a
barrier in communication. The barrier can be in the form of wrong use of language
or haste on the part of the receiver in understanding the information received or
some other reason. Whatever may be the cause of the barrier, it nullifies the
importance of communication and the enterprise may have to face serious
consequences. For the convenience of study the different barriers can be divided
into four parts:
• Semantic Barriers.

• Psychological barriers

• Organisational Barriers.

• Personal barriers

(1) Semantic Barriers

● There is always a possibility of misunderstanding the feelings of the sender
of the message or getting a wrong meaning of it.
● These are the barriers resulting from linguistic problems like words, signs,
and figures used in the communication are explained by the receiver in the
light of his experience which creates doubtful situations.
● It is concerned with the problems of encoding and decoding of messages. This
happens because the information is not sent in simple language. The chief
language related barriers are as under:
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(i) Badly Expressed Message:

● Because of the obscurity of language or inadequate vocabulary there
is always a possibility of wrong interpretation of the messages.
● This barrier is created because of the wrong choice of words, in civil
words, the wrong sequence of sentences and frequent repetitions.
(ii) Symbols or Words with different Meanings:
● A symbol or a word can have different meanings. If the receiver
misunderstands the communication, it becomes meaningless.
● For example, the word 'value' can have the following meanings:
(a) What is the value of computer education these
days?
(b) What is the value of this mobile set?
(c) Don’t desert your friend in a desert
d)Close the window before the bee comes
too close
(iii) Faulty Translation:
● A manager receives much information from his superiors and
subordinates and he translates it for all the employees according to
their level of understanding.
● Hence, the information has to be moulded according to the understanding
or environment of the receiver.
● If there is a little carelessness in this process, the faulty translation can be
a barrier in the communication.
● Proficiency in both languages is must to avoid such barriers
iv)Unclarified Assumptions:
● It has been observed that sometimes a sender takes it for granted that the
receiver knows some basic things and, therefore, it is enough to tell him
about the major subject matter.
● This point of view of the sender is correct to some extent with reference
to the daily communication, but it is absolutely wrong in case of some
special message.
● Special messages should be made absolutely clear otherwise there is a
possibility of some wrong action in the absence of clarification.

v)Technical Jargon:
● Generally, it has been seen that the people working in an enterprise are
connected with some special technical group who have their separate
technical language.
● Their communication is not so simple as to be understood by everybody.
● Hence, technical language can be a barrier in communication.
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● This technical group includes industrial engineers, production

development manager, quality controller, etc.
(vi) Body Language and Gesture Decoding:
● When the communication is passed on with the help of body language
and gestures, its misunderstanding hinders the proper understanding of
the message.
● example, moving one's neck to reply to a question does not indicate
properly whether the meaning is 'Yes' or 'No'.

(2) PSYCHOLOGICAL OR EMOTIONAL BARRIERS

● The importance of communication depends on the mental condition of
both the parties.(state of mind of both sender and receiver)
● A mentally disturbed party can be a hindrance in communication.
Following are the emotional barriers in the way of communication:

(i) Premature Evaluation:

● Sometimes the receiver of information tries to dig out meaning without
much thinking at the time of receiving or even before receiving
information, which can be wrong.
● Such premature evaluation may be due to preconceived notions or
prejudice
● This type of evaluation is a hindrance in the exchange of information
and the enthusiasm of the sender gets dampened.
(ii) Lack of Attention:
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● When the receiver is preoccupied with some important work he/she

does not listen to the message attentively.
● For example, an employee talking to his boss when the latter is busy in
some important conversation.
● In such a situation the boss may not pay any attention to the talk of the
subordinate.
● Thus, there arises psychological hurdle in communication.
(iii) Loss by Transmission and Poor Retention:
● When a message is received by a person after it has passed through the
medium of many people or many levels ,generally it loses some of its
truth.
● This is called loss by transmission.
● This happens normally in case of oral communication.
● Poor retention of information means that with every next transfer of
information the actual form or truth of information changes.
● According to one estimate with each transfer of oral communication the
loss of information amounts to nearly 30%.
● This happens because of the carelessness of human behaviour.
(iv) Distrust:
● For successful communication the transmitter and the receiver must
trust or believe each other.
● If there is a lack of trust between them, the receiver will always derive
an opposite meaning from the message.
● Because of this, communication will become meaningless.

(3) ORGANISATIONAL BARRIERS

● The factors related to Organisational structure, authority relationships,
rules and regulations may greatly affect the capability of the employees
as far as the communication is concerned.
● Some major organisational hindrances in the way of communication are
the following:
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(i) Organisational Policies:

● Organisational policies determine the relationship among all the
persons working in the enterprise.
● For example, it can be the policy of the organisation that
communication will be in the written form.
● In such a situation anything that could be conveyed in a few words shall
have to be communicated in the written form.
● Consequently, work get delayed.
● In a highly centralised structure people may not be encouraged to have
free communication
(ii) Rules and Regulations:
● Organisational rules become barriers in communication by determining
the subject-matter, medium, etc. of communication.
● Troubled by the definite rules, the senders do not send some of the
messages.
● Rigid rules and cumbersome procedures result in barrier.
● More over communication through prescribed channel result in delays
(iii) Status:
● Under organising all the employees are divided into many categories
on the basis of their level.
● This divide may create a psychological distance between them
● A status conscious manager may not allow his subordinate to
communicate with him
● This formal division acts as a barrier in communication especially
when the communication moves from the bottom to the top.
● It delays the taking of decisions.
(Iv) Complexity in Organisational Structure:
● The greater number of managerial levels in an organisation makes it
more complex.
● It results in delay in communication and information gets changed
before it reaches the receiver.
● In other words, negative things or criticism are concealed.
● Thus, the more the number of managerial levels in the organisation, the
more ineffective the communication becomes.
(iv) Organisational Facilities:
● Organisational facilities mean making available sufficient stationery,
telephone, translator, frequent meetings, suggestion box, complaint
box, social and cultural gathering, transparency in operations etc.
● When these facilities are sufficient in an organisation, the
communication will be timely, clear and in accordance with necessity.
● In the absence of these facilities communication becomes meaningless.
.
(4) PERSONAL BARRIERS
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● The above mentioned organisational barriers are important in themselves

but there are some barriers which are directly connected with the sender
and the receiver.
● They are called personal barriers.
From the point of view of convenience, they have been divided into two parts:

(a) Barriers Related to Superiors:

These barriers are as follows:
(i) Fear of Challenge of Authority:
● Everybody desires to occupy a high office in the organisation.
● In this hope the officers try to conceal their weaknesses by not
communicating their ideas.
● There is a fear in their mind that in case the reality comes to light they may
not have to move to the lower level.
(Ii) Lack of Confidence in Subordinates:
● Top level superiors think that the lower level employees are less
capable and, therefore, they ignore the information or suggestions sent by
them.
● They deliberately ignore the communication from their subordinates
in order to increase their own importance.
● Consequently, the self-confidence of the employees is lowered.
(b) Barriers Related to Subordinates: Subordinates related barriers are the
following:
(i) Unwillingness to Communicate:
● Sometimes the subordinates donot want to send any information to their
superiors.
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● When the subordinates feel that the information is of negative nature and
will adversely affect them, an effort is made to conceal that information.
● If it becomes imperative to send this information, it is sent in a modified
or amended form.
● Thus, the subordinates, by not clarifying the facts, become a hindrance in
communication.
(Ii) Lack of Proper Incentive:
● Lack of incentive to the subordinates creates a hindrance in communication.
● The lack of incentive to the subordinates is because of the fact that their
suggestions or ideas are not given any importance.
● If the superiors ignore the subordinates, they become indifferent towards
any exchange of ideas in future.

MEASURES TO OVERCOME THE BARRIERS

a. Clarify ideas before communication:
Before communicating anything it is better that the communicator clarifies his
ideas properly.This enables the receiver to derive correct meaning of the message.
b. Consult others before communicating:
If matter of communication requires suggestion or approval from it others it is
better that they should be consulted before communicating
c)Communicate according to the needs of the receiver:
Communication should be according to the level of understanding of the receiver
and depends on the level of education and experience.
d)Be aware of the language tone and content of the message:
The communicator should be aware of the language tone and content of the
message. Language used in the message must be according to the language of the
receiver, message should not offend the sentiments of the receiver, and content
should be crisp and clear
e)Communicate things of help and value
Communicate thing that evoke positive response from the receiver
f.Communicate for present as well as future:
Generally the communication is needed for meeting the existing commitments.
However to maintain consistency the communication should aim at the future
objectives of the firm.
g.Ensure proper feed back
Through proper feedback both the communicator and the receiver may be able to
avoid ambiguity in communication. It ensure that the what has been communicated
has been understood by then receiver in the same way
h.Follow up communication;
Such follow up help in removing hindrance in implementing the instructions
i.Be a good listener:
The communicator should put ample emphasis on listening and encourage his
listeners to put forward their opinions.
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IV. LEADERSHIP

Leadership is the process of influencing the behaviour of the people by making

them strive voluntarily towards the achievement of organisational goals
It indicates the ability of a person to develop and maintain a good interpersonal
relations with followers

Features
1. It is the ability of a person to influence others
2. It tries to bring change in the behaviour of a person
3. It indicates the interpersonal relations between the leader and the follower
4. It is goal oriented
5. It is continuous

Importance of leadership
“Managers are important but leaders are vital for lasting organisational success”
1. Influences the hehaviour:
Leardeship influences the behaviour of people which help them to
positively contribute to the success of the organisation. They always
produce good result through their followers.
2. Interpersonal relationships:
It maintains good interpersonal relations and helps the followers to fulfil
their needs. He creates a congenial work atmosphere in the organisation
3. Introduction to changes:
Leader plays a vital role in bringing changes in the organisation.. He
persuades clarifies and influence people to accept changes whole heartedly.
4. Handles conflicts:
He handles conflicts effectively reducing its adverse effects to the minimum,
by allowing the followers to ventilate their feeling and disagreement .
5. Provides training:
He provides training to the subordinates. Good leader always builds his
successor and helps in smooth succession process.

Styles of leadership:
There are three basic styles of leadership
a) Autocratic style b) democratic style c) laissez faire style
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a) Autocratic or authoritarian leader:

● He fives prders and expects his subordinate to obey these orders
● There is only one way communication
● He is dogmatic(does not change or wish to be contradicted)
● He believes in reward and punishment
● Helps in quick decision making
● He may listen to everyone’s opinion, consider the subordinates ideas
but decision will be their own
● It is boss centred.
Suitability:
● Suitable for small organisation with semiskilled or unskilled employees
● Organisations with extensive rules and regulations and there is
emphasis on following them strictly.
● Where quick decision making is needed.

Advantages and disadvantages

Advantages Disadvantages
1)Provides satisfaction to employees who 1)Generally subordinates does not like
prefer to work under centralised this style especially when negative
authority and strict control motivation is emphasised
2) Helps in fast decision making 2)Poor morale level of subordinates
effects the productivity
3)Because of the limited role of 3)Lack of development of leadership
subordinates in planning their because of less opportunities for
incompetencies are not exposed initiative and creativity

B) Democratic or participative leader

● Joint decision making involving superior and subordinate
● Encourages them to participate in decision making.
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● This leader believes that if people set their own objectives they perform the
best.
● They respect others opinion
● They exercise more control by using the forces within the group
● They support subordinate to get the work done
● There is two way communication
● It is group centred leadership
Suitability:
● Large organisation having skilled employees
● Large organisation perusing decentralisation
Advantages and disadvantages:
Advantages Disadvantages
1)it is motivation to employees as the 1)In the absence of highly skilled employees
employees opinions are taken participative decision making becomes
meaningless
2)productivity is high as the 2)Not suitable for such employees who
employees are implementing their wants minimum interaction with superiors
own set targets
3)Subordinate assume responsibility
for their work
4)Leads to leadership development
because of active participation of
subordinates

C) Laissez faire or free-rein leader:

● Laissez faire means ‘without any intervention”
● He doesnot believe in power unless it is absolutely essential.
● High degree of freedom to employees to s and ways to set their own
objective and ways to achieve them
● The manager is only to support them and to provide them with
required information to complete the task.
● Subordinate assumes responsibility of the task
● Minimum interaction between superior and subordinate.
Suitability:
● It is suitable for those organisations having self motivated and self
managing teams having autonomy
Advantages and Disadvantages
Advantages Disadvantages
1)Low burden on superior as his 1)Minimal contribution from superior
role is minimal leading to questions of his relevance in
organisation
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2)Highly motivating to employees 2)Requires highly competent workforce

as they are given higher degree of
autonomy
3)Rewards based on group
performance and group members
put their best efforts leading to
high productivity
4)Development of subordinates to
future leaders
both in terms of work related and
interpersonal interactions
3)Absence of a conducive work
environment ,adoption of this style
results in chaos.

MOTIVATION: MEANING AND IMPORTANCE

Definitions of Motivation
(1) According to Koontz and O'Donnell, "To motivate is to induce people to act
in a desired manner. "
(2) According to W.G. Scott, "Motivation means a process of stimulating people
to action to accomplish desired goals. "
The organisation as well as the employees get maximum satisfaction.
Motivation means a process which excites people to work for the attainment of a
desired object.
MOTIVATORS
Motivator refers to a technique which is employed to motivate people like financial
and non-financial.

(1) Motivation is an Internal Feeling:

• Motivation is a psychological concept which lies within a person.
• First of all some needs appear in the mind of an individual which affect
his behaviour.
• He wants to do some work in order to satisfy those needs.
(2) Motivation produces Goal-directed Behaviour:
• Motivation is a power which leads the employees to the achievement of
their goal.
• The behaviour of the motivated employees clearly shows that they are
inclined towards the achievement of their goal.
• For examples, promotion is a technique of motivation.
• The employees who desire to be promoted definitely improve their work
performance.
(3) Motivation can be either Positive or Negative:
• There are two types of employees from point of view of motivation-
laborious as well as shirkers.
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• Those employees who are laborious in the true sense of the word are
encouraged with some awards.
• This is called positive motivation.
• On the other hand, those workers who are by nature shirkers are
encouraged to work with the threat of demotion, suspension or
termination.
• Such people start working because of the fear factor.
• This is called negative motivation.
• Motivation is a Complex Process:
• All the people working in an organisation have different nature.
• All have different needs.
• Therefore, everybody cannot be motivated with only one motivator.
• Keeping in mind the needs of the person concerned, monetary and
non-monetary techniques are used.
• Therefore, it is a complex process.

Motivation Process
• The objective of motivation process is to know as to where from does it
start and where does it end.
• This is a work that cannot be finished at one go.
• It is a combination of various steps.
• Robbins and Coulter have presented the following 'Need-Satisfying
Process' .

Need-Satisfying Process
(1) Unsatisfied Need: At the first step of motivation a person feels the need of
something or there is a feeling that he lacks something.
(2) Tension: The person concerned gets tensed at the very idea of his need not
being satisfied.
(3) Drives: Drive signifies some sort of tumult in the mind of the person
concerned. At this step the person concerned endeavours to fulfil his need. The
fulfilment of need depends on the direction and intensity of the drive.
(4) Search Behaviour: At this step, a person tries to discover different options
to fulfil his need. But he puts the best option into operation.
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(5) Need Satisfied: If the option really happens to be a correct one, satisfaction
is obtained.
(6) Reduction of Tension: The person concerned gets his tension relieved when
his need is satisfied.
Conclusion: The above motivation process shows that when a person gives a
good work performance, there is some need lurking in the background which is
continuously exerting pressure on him. Therefore, needs continuously motive a
person.

Importance of Motivation

An enterprise may be having the best of materials, machines and other means
of production, but they are meaningless unless they are used properly by
motivated people. “Poorly motivated people can nullify the soundest organization”.
The importance of motivation is brought out by the following facts:

Improves Performance Level: The ability to do work is obtained with the help of
education and training and willingness to do work is obtained with the help of
motivation. Willingness is more important in comparision to ability. For example.a
person is highly educated and he is recruited on this very basis. But it is not
essential that he will do outstanding work. He shall have to be motivated to do
good work. This is possible only through motivation. Therefore, motivation
improves efficiency.

Helps to change Negative or Indifferent Attitudes of Employees: Some

employees of an organisation have a negative attitude. They always think that
doing more work will not bring any credit. A manager uses various techniques to
change this attitude. For example, if the financial situation of such an employee is
weak, he gives him a raise in his remuneration and if his financial condition is
satisfactory he motivates him by praising his work.

Reduction in Employee Turnover:The reputation of an organisation is affected by

the turnover. This creates a lot of problems for the managers. A lot of time and
money go waste in recruiting employees and giving them education and training .
Motivated people work for a longer time in the organisation and there is reduction
in the rate of turnover.

Helps to Reduce Absenteeism in the Organisation: In some of the organisations,

the rate absenteeism is high. There are many causes for this - poor work
conditions, poor relations with md superiors, no recognition in the organisation,
insufficient reward, etc.
Motivated employees do not remain absent from work place becomes a source of
joy for them.
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Reduction in Resistance to Change: New change continue taking place in the

organisation. Employees are not prepared to accept any changes in their normal
routine. Employees can be made to accept changes easily with the help of
motivation.

Abraham Maslow’s Need Hierarchy Theory

• Abraham Maslow was the first to present the Need hierarchy Theory of
Motivation in 1943.
• Maslow developed the theory on the basis of a chain or sequence of needs.
• According to him, needs can be categorised on the basis of priority.
• For needs which are more sharply felt should be satisfied first and the other
needs should be satisfied afterwards.
• Similarly, the least felt need should be thought of last of all.
• Maslow has divided different human needs according to priority into five
parts which are shown in the following diagram:

I. Physiological Needs:
• In this category, those needs are included which need to be satisfied to
keep a man alive.
• These needs include food, shelter, clothing and sleep, etc.
• In the organisational contest the basic salary helps to satisfy these
needs
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II. Safety Needs:

• After physiological needs are satisfied, a man thinks about his safety.
• Safety needs include physical, economic and psychological needs.
• Physical Safety refer to defence against accidents, attacks, diseases and
other unexpected problems.
• Economic Safety means safety of livelihood and arrangement for old
age.
• Psychological Safety means maintain one's prestige.
• In organisational contest job security, pension plan, medical insurance
etc helps to satisfy these needs
III. Affiliation or Social Needs or belongingness needs:
• Man is a social animal and wants to live in society honourably.
• It is, therefore, necessary that he should have friends and relatives with
whom he can share his joys and sorrows.
• Maslow has placed social needs at number three in order of priority.
• Cordial relations with colleagues, informal organisation, clubs etc helps
to satisfy these needs
IV. Esteem and Status Needs:
• These needs are called ego needs of man and include self-respect,
autonomy, status, recognition and attention
• This means every human being wants to attain a higher status so that
his power increases and he gets authority.
• Job title, awards, appreciation letters, promotion etc helps to satisfy
these needs
V. Self-Actualization Needs:
• Last of all, a man tries to satisfy himself by attaining self-realisation.
• This means that a man should be whatever he can be, meaning thereby,
that he should actually be an achiever in respect of his capability.
• It means growth, self fulfilment, etc.
• For example, a musician wants to be proficient in music, an artist
wants to excel in the field of creating works of art.
• Similarly, a poet wants to be a specialist in his field.
• Career development, promotion policy etc helps in satisfying this need.

Assumptions of Maslow's Theory

Following are the assumptions of Maslow's theory:
1. People's behaviour, being affected by their needs.
2. The needs are in hierarchical order starting from basic to higher
level needs
3. A satisfied need can no longer act as a motivator.
4. People move to next higher need only when the lower level needs
are satisfied.
Individual Need Hierarchy Organisation Related Need Hierarchy
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5. Self-Fulfillment 5. Achievement of Goals

4. Status 4. Job Title
3. Friendship 3. Cordial Relations with Colleagues
2. Stability of Income 2. Pension Plan
1. Hunger 1. Basic Salary

Conclusion
The above analysis shows that an individual has many needs and that their order
can be determined. The moment an individual's one need is satisfied, he gets
worried about his next need. After the satisfaction of the second need comes the
third and this order continues till all his needs are satisfied. It is,therfore, clear that
needs can be motivators. In order to satisfy needs an individual himself wants to
work with vigour and full capacity.

Incentives

Incentive is that power which motivates an employee towards a set target. People
have different nature and it is quite possible that one incentive method may be
successful in motivating a particular person while the same method may not be
successful is case of some other person. Generally, two methods of incentives are
used to motivate the people. They are as under:

Financial/Monetary and Non-Financial/Non-Monetary Incentives

In the context of financial and non-financial motivators it is said that, "Financial
and non-financial incentives are required to motivate the workers for harder work
just as right and left foot both are essential for walking." In other words, both have
the same importance and it is essential to implement the both simultaneously.
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(A) Financial Or Monetary Incentives

• Financial incentives are those incentives which are evaluated in terms of
money.
• Evaluation in terms of money does not mean that all types of incentives
should be in the form of money but some such facilities can be provided as
can be evaluated in terms of money
(i) Pay and Allowances(ii) Productivity Linked Wage Incentives (iii) Bonus (iv)
Profit Sharing (v) Co-partnership (vi) Retirement Benefits (vii) Perquisites

(1) Pay and Allowances: Pay and allowances are the chief monetary incentives
for every employee. Salary includes basic pay and dearness allowance
alongwith other allowances. The employees remain motivated with the annual
increment in pay and allowances.

(2) Productivity Linked Wage Incentive: The employees can be motivated by

linking productivity with their salary. In other words, the increment in salary
will be in direct proportion of increase in productivity.

(3) Bonus:
• Bonus refers to that payment to employees in addition to their regular
remuneration which is paid as a reward of their good services.
• The bonus plan helps in establishing cordial relations between owners
and employees.
• These days the payment of bonus to employees is prevalent in almost all
industries.
• The payment of bonus may be in cash or kind.
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• For example, an employee can be given cash reward or sent abroad in

recognition of his/her services.

There can be many reasons of giving bonus, such as:

(i) Regularly attending duty.(ii) Contribution to high quality of production. (iii)
Contribution to high yield of production etc

(4) Profit Sharing:

• The earned profit of a business organisation is the outcome of the efforts of
two parties, namely- owners and employees.
• The owners invest money and employees provide services to fulfil the
objectives.
• Consequently, the owners get profit in lieu of their investment whereas the
employees get salary/wages for providing services.
• Although the employees naturally get their remuneration as a reward of
their services yet sometimes they are made part of the profit earned by
the company with the hope that they will provide services with full
potential, labour and honesty.
• The plan of profit thus given is known as profit sharing.
• By profit sharing we mean providing share in profit of the organisation to
the employees besides their regular remuneration (salary/wages).
• The main goal of this incentive plan is to create the feeling of cooperation
and commitment among the employees for their organisation.

Features
(i) The employees participate only in profit.
(ii) The percentage of share in the profit is decided in the beginning of the year.
(iii) There can be no change in the percentage of the share of profit between the
year once decided.
(iv) The knowledge of the profit sharing plan is communicated to all concerned
persons.
(v) The profit thus received is in addition to their regular remuneration.
(vi) Each employee, without any discrimination, gets share of profit.
(vii) Individual ability of the employee is not taken into consideration while
sharing profit.
(viii) Distributed share in profits is either paid in cash or in the form of shares
orcredited to the provident fund of the employees

5)Co-partnership: (Stock Option)

• Co-partnership, in fact, is a developed form of profit sharing.
• Co-partnership is based on the establishment of industrial democracy
and workers, participation in management.
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• Under this plan, the employees provide their services to the company
and they are also the partners in the equity capital.
• Consequently, the employees get dividend as well as participation in
management besides their regular remuneration.
• The equity shares of the company may be issued to the employees in
two ways:
• On cash payment basis. (ii) In lieu of any incentive otherwise payable
in cash.
• For example, issue of shares under profit sharing plan or payment of
bonus in the form of shares.
Features
(i) The employees are also the shareholders of the company.
(ii) The employees get dividend on the issued shares.
(iii) The employees also participate in the management due to their shareholding.
(iv) The employees have to take the risk of getting less or no dividend at all in case
the company is in loss.

• Retirement Benefits:
• Every employee remains concerned about his future after retirement.
• If he is offered financial security for his post-retirement period, his
future will be secured.
• This situation will certainly motivate him.
• Provident Fund and Gratuity are the best examples of post
retirement benefit.
• Provident fund is a fixed percentage of amount deducted from the pay
of every employee and is deposited in this fund. The employer also
makes his contribution.
• At the time of retirement the employee gets the accumulated amount
alongwith interest.
• Gratuity: In token of the services rendered by the employee, the
employer makes some payment to employee which is called gratuity.

(7) Perquisites:
• Perquisites are those facilities which an employee gets free from the
employer e.g. rent free accommodation, car, facility of a servant, etc.
• These facilities play an important role in motivating the employees.

(B) Non-Financial or Non-Monetary Incentives

Non-financial incentives are not directly related with money. They are related with
the internal feelings of the employees, meaning thereby that these are
psychological incentives. It means that non-financial rewards are more effective
than the financial rewards in order to motivate materially prosperous persons. The
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following factors are primarily helpful in motivating the employees with non-
financial rewards:
(1) Status
(2) Organisational Climate
(3) Career Advancement opportunity
(4) Job Enrichment
(5) Employee Recognition programs
(6) Job Security
(7) Employee Participation
(8) Employee Empowerment

(1) Status: Status means the position or rank of a person in the organisation. It
can be high or low. The rank of an employee is directly linked with his authority,
responsibility and other facilities (e.g. a separate cabin, costly furniture, car, peon,
PA etc.).
(2) Organisational Climate:
• Organisational climate means the working system within the organisation.
• This includes individual autonomy, receipt of awards, the importance of
employees, etc.
• Every person likes to work in a better organisational climate.
• The manager can motivate the employees by providing a better
organisational environment.
(3) Career Advancement Opportunity:
• Every employee of the organisation wants to advance in his life.
• Promotion is an important example of advancement.
• Training and development facilities have got to be provided for the
promotion of the employees.
(4) Job Enrichment:
• Job enrichment means increasing the importance of work.
• Such a job should have (i) Greater variety of work content ii)authority,
responsibility, and a wide scope for challenges, (iii) there should be a need
of higher knowledge and skill, (iv) the opportunities for personal
development should be available, and (v) there should be absolute freedom
to take decisions.
• The employees feel proud of getting such a job.
• Thus, job enrichment enhances people's interest in their work and they start
getting motivated automatically.
(5) Employee Recognition Programmes:
• It means that he should have his own identity and he should appear to be
distinctive.
• The manager should distribute work among the employees in a manner that
should give a feeling to every employee that his work is special and that he
alone is capable of doing it.
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• By getting such an importance they are motivated and work harder and in a
more responsible manner.
• Some of the examples are given below which help in the employee's
recognition:
(i) Congratulating the employee for good work performance.
(ii) Displaying employee's achievements on the information board and
publishing them in the news magazine of the organisation.
(iii) Awarding certificates of merit at the ceremonial functions of the
organisation for better work performance.
(iv) Presenting mementos.
(v) Honouring for offering valuable
suggestions.
(6) Job Security.
• Security of job means a feeling of permanence and stability.
• For example, if an employee has a sense of fear or insecurity in his mind, that
he can be removed from his job any time, he will never work whole-heartedly
and this worry continues troubling him.
• This is the reason why people prefer a permanent job with less salary to a
temporary job with high or more salary.
• Employee Participation:
• Employee get encourged to notice their when they take decisions on
matters relating to them.
• Therefore, they offer their full cooperation
• Joint management committees, canteen committee etc
• Employee Empowerment:
• Employee empowerment means giving the employees more
autonomy and power to take decisions.
• When the decision-making power of the employees increases, they
consider that they are doing some important work in the organisation.
• This feeling motivates them.

Difference between Monetary and Non-Monetary

Incentives
Basis of
Monetary Incentives Non-Monetary Incentives
Difference
These can be measured in terms These cannot be measured in terms of
1. Measurement
of money money

These are highly effective in case

2. Suitability These are effective in case of managers
of workers

3. Level of These help in satisfying lower These help in satisfying higher level
satisfaction level needs needs (esteem and
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self-actualisation)
Monetary incentives are visible Non-monetary incentives may not be
4. Visibility as they are measurable in terms visible as they are not measurable in
of money terms of money

IV. SUPERVISION:

• It is the process of guiding the efforts of the employees and other resources
• It means overseeing the activities done by the subordinates and giving
instructions to them
• It is a function performed by the operative level of management.
(Immediately above the worker)

Role of supervisor/Importance of supervision

• Day to day contact with the worker and maintain friendly relations
• He acts as a link between the worker and the management. Conveys their
ideas to workers and the problems of the workers to management.
• He maintains group unity by sorting out their internal differences.
• Ensures performance of the work according to target.
• Provide good on the job training
• With his good leadership qualities, he can influence the employees and
build their morale
• He analysis the work of the workers and gives feedback , and suggests
ways to develop skills.