Unit III Organising

1. SRI RAMAKRISHNA INSTITUTE OF TECHNOLOGY,
COIMBATORE-10
(APPROVED BY AICTE, NEW DELHI – AFFILIATED TO ANNA UNIVERSITY, CHENNAI)
MG6851 -PRINCIPLES OF MANAGEMENT
I.Karthikeyan
Assistant Professor,
Mechanical Department .

2. UNIT III ORGANISING
 Nature and purpose – Formal and informal
organization – organization chart – organization
structure – types – Line and staff authority –
departmentalization – delegation of authority –
centralization and decentralization – Job Design
 Human Resource Management – HR Planning,
Recruitment, selection, Training and Development,
Performance Management , Career planning and
management.

3. ORGANIZATION
The word organization is used to connote a group of
people, structure of relationships and a function of
management.
Group of persons: it is a group which works for
the achievement of common objectives. People who
form a group also demarcate their authority and
responsibility.

4. ORGANIZATION
A group has following features:
 People in a group communicate and co-operate with
each other.
 They work together for the achievement of goals and
objectives.
 It is imperative that the objective must be common for
all the members of the group. Group members also lay
down the rules and regulations and a formal structure of
relationship among themselves for a proper coordination
of efforts.

5. DIFFERENCE BETWEEN FORMAL AND INFORMAL
ORGANIZATION
 An organization is a collection of people who work
together to attain specified objectives. There are
two types of organization structure, that can be
formal organization and informal organization.
 An organisation is said to be formal
organisation when the two or more than two
persons come together to accomplish a common
objective, and they follow a formal relationship,
rules, and policies are established for compliance,
and there exists a system of authority.

6.  The basic objective of the establishment of an
organisation is the attainment of the organisation’s
goal.
 For this purpose, work is assigned, and authorities
are delegated to each member and the concept of
division of labour and specialisation of workers are
applied and so the work is assigned on the basis of
their capabilities.
 The job of each is fixed, and roles, responsibilities,
authority and accountability associated with the job is
clearly defined.
 In addition to this, there exists a hierarchical structure,
which determines a logical authority relationship and
follows a chain of command. The communication
between two members is only through planned
channels.

7. TYPES OF FORMAL ORGANIZATION STRUCTURE
 Line Organization
 Line and Staff Organization
 Functional Organization
 Project Management Organization
 Matrix Organization

8.  On the other end, there is an informal
organisation which is formed under the formal
organisation as a system of social relationship,
which comes into existence when people in an
organisation, meet, interact and associate with
each other

9.  An informal organisation is formed within the formal
organisation; that is a system of interpersonal
relationships between individuals working in
an enterprise, that forms as a result of people meet,
interact and associate with one another.
 The organisation is created by the members
spontaneously, i.e. created out of socio-
psychological needs and urge of people to talk.

10.  The organisation is featured by mutual aid, cooperation,
and companionship among members.
 In an informal organisation, there are no defined
channels of communication, and so members can
interact with other members freely. They work together
in their individual capacities and not professional.
 There is no defined set of rules and regulations that
govern the relationship between members. Instead, it is
a set of social norms, connections, and interaction. The
organisation is personal i.e. no rules and regulations are
imposed on them, their opinions, feelings, and views are
given respect. However, it is temporary in nature, and it
does not last long.


11. STEPS IN ORGANIZATION
1.Determination of objectives: without any objective,
organizing is meaningless.
2.Division of activities: it enables the members what
is required of them. Also avoids duplication of
efforts.
3. Fitting right persons into right jobs: it reduces the
chances of errors.
4. Developing relationships: i.e. authority
responsibility relationships. Who’s accountable to
whom.
5. coordination: i.e. the work of one employee
supplements to that of the other.

12. IMPORTANCE OF ORGANIZATION
1.Clearly defined authority relationships: members become
clear who is accountable to whom and what is
expected of him.
2. Coordination: helps to establish clear cut relationship
among departments.
3.Growth and diversification: facilitates growth by
increasing the capacity to handle increased level of
activity.

13. IMPORTANCE OF ORGANIZATION
4. Technological innovations: sound organization structure
help modify the existing authority responsibility
relationships in the wake of technological
improvements.
5. Optimum use of Human resources: placing the right
person at right job
6. Efficient management: other functions of management
like Planning, Staffing, Directing and Controlling are
dependent on it.

14. DEPARTMENTATION
Meaning: It is a process of division of an enterprise into
different parts. The chief executive divides activities into
different divisions (Departments) such as production, sales,
marketing, finance etc.
Example : Further, in the marketing department there can be
advertising, marketing research, customer service etc
departments.
These divisions are administered by the senior executives.
There can primary, intermediate or ultimate departmentation.

15. BASES OF DEPARTMENTATION
Functional: Organization divided into a particular type of
functional activity. Blue Bell ice creameries has sales,
production, R &D, Distribution and finance departments.
Product: Microsoft has divided into three divisions i.e.
platform products and services (windows and MSN),
Business (office and business solution products) and
entertainment (windows mobile and Microsoft TV)
Process: production department of a textile mill
Customer: e.g. wholesale, retail and export
Territory: e.g. Colgate Palmolive is organized into regional
divisions in North America, South America, the Far East
and South Pacific.

16. BASES OF DEPARTMENTATION
R & D Director
Dyeing
Marketing
Coarse
Textiles Division
Production
Director
Marketing Woolen
Steel division
Bleaching
Marketing North
CHIEF EXECUTIVE
Finance
Director
Marketing
Director
Human Relations
Director
Marketing fine
and super dine
Ginning weaving
Marketing south
Spinning

17. ORGANIZATION CHARTS
 An organization chart or "org chart," as it's more commonly
known, is a diagram that displays a reporting or
relationship hierarchy. The most frequent application of an
org chart is to show the structure of a business,
government, or other organization.
 Org charts have a variety of uses, and can be structured in
many different ways. They might be used as a
management tool, for planning purposes, or as a
personnel directory, for example. Perhaps your
organization doesn't operate in a "command and control"
style, but instead relies on teams
 An organization chart or "org chart," as it's more commonly
known, is a diagram that displays a reporting or
relationship hierarchy. The most frequent application of an
org chart is to show the structure of a business,
government, or other organization.

18.  Org charts have a variety of uses, and can be
structured in many different ways. They might be
used as a management tool, for planning purposes,
or as a personnel directory, for example.
 Diagrammatic representation of the framework or
structure of an organization.- J.Batty

19. HISTORY
 The Scottish-American engineer Daniel
McCallum (1815–1878) is credited for creating the first
organizational charts of American business around
1854.This chart was drawn by George Holt Henshaw.
 The term "organization chart" came into use in the early
twentieth century. In 1914 Brinton[7] declared
"organization charts are not nearly so widely used as
they should be.
 As organization charts are an excellent example of the
division of a total into its components, a number of
examples are given here in the hope that the
presentation of organization charts in convenient form
will lead to their more widespread use." In those years
industrial engineers promoted the use of organization
charts.

20.  In the 1920s a survey revealed that organizational
charts were still not common among ordinary
business concerns, but they were beginning to find
their way into administrative and business
enterprises.

21.  Vertical charts
 The vertical organization has a structure with power
emanating from the top down. There's a well-
defined chain of command with a vertical
organization, and the person at the top of the
organizational chart has the most power.
Employees report to the person directly above them
in the organizational structure. Each person is
responsible for a specific area or set of duties.

22.  Vertical organizations are efficient. They can make
decisions quickly, because responsibility lies with
people highest in the chain of command.
Employees coming into a job have clearly defined
duties and each position involves specialized tasks,
with little need to learn new tasks and skills.
Horizontal organizations have fewer rules and put
more power in the hands of employees, which can
increase employee satisfaction. Employees in a
horizontal organization may have a stronger sense
of identification with the company, feeling they are
part of a team.

23.  Disadvantages
 Vertical organizations can be rigid, with many rules.
Some employees feel stifled by this kind of
structure, or feel their input isn't important.
Horizontal organizations are less efficient, taking
more time and resources to make decisions.
Workers in horizontal organizations have to learn
more skills, which can increase job stress or make
the job more interesting, depending on the
employee.

25.  Horizontal chart
 A horizontal organization has a less-defined chain of
command. Employees across lines have similar
input into how the organization is run. Instead of
each person having clearly defined duties,
employees may work in teams, with everyone on the
team having input.
 Employees may perform many different function and
may report to several supervisors, rather than a
single boss. Project managers or team leaders
report to a team of supervisors, with members of
each team being essentially equal in terms of
power.
 Supervisor- left side

27.  In circular chart the centre of the circle represents the
position of supreme authority and the functions radiate
in all directions from the centre. The higher the positions
of authority, the nearer they are to the centre and the
lesser the positions of authority, more distant they are
from the centre. The positions of relative equal
importance are located at the same distance from the
centre. The lines forming different blocks of functions or
positions indicate the channels of formal authority, the
same as in other arrangements. The circular chart
depicts the actual condition of outward flow of formal
authority from the Chief Executive in many directions.

28.  Principles of Organization Charts:
 Following principles should be kept in mind while
framing organization charts:
 (i) The top management should faithfully follow the line
of authority while dealing with subordinates. Any attempt
to buy pass the organization chart will make it
meaningless.
 (ii) The chart should define lines of position. The lines of
different individuals should be so defined so that there is
no overlapping and no two persons should be given the
same position.
 (iii) The undue concentration of duty at any point should
be avoided.
 (iii) The organization chart should not be influenced by
personalities. Balance of organization should be given
more importance than the individuals.
 (v) The organization chart should be simple and flexible.

29.  Advantages of Organization Charts:
 1. An organization chart is a managerial tool. It helps in
specifying authority and responsibility of every position.
 The relationships among different persons are also established
for smooth working of the organization.
 2. As organization chart specifically defines authority and
responsibility of people in the enterprise there will be no
duplication and overlapping of duties etc. Even if it happens in a
particular instance it can be rectified immediately.
 3. The organization chart will help in pointing out the faults,
deficiencies, dual command etc. in the organization. The
management will be able to take prompt remedial action in case
of certain lacuna.
 4. The organization chart acts as an information centre to the
new entrants and they can easily understand different levels of
authority and responsibility.
 5. The charts are also helpful in decision-making process. They
act as a guide to the decision makers.

30.  Limitations of Organization Charts:
 The organization charts suffer from the following
drawbacks:
 1. The organization charts show the relationship of different
positions and not the degree of authority and responsibility.
The size of boxes or circles in the chart cannot show the level
of authority, etc.
 2. A chart only depicts formal organizational relationship
whereas informal organization is ignored. Practically informal
organization is as useful as formal organization. Informal
organization greatly helps management in knowing the
reactions of the people and is an important channel of
communication.
 3. A chart shows organizational position and status at different
levels. It gives rise to superior-inferior feeling among people
and it retards the feeling of team work.

31. ORGANIZATIONAL STRUCTURE
is theformal patternof interactions and coordination
designedby managementtolink thetasks of individuals
and groups in achieving the organizationalgoals.

32.  An organizational structure defines how activities such
as task allocation, coordination and supervision are
directed toward the achievement of organizational
aims.
 Organizations need to be efficient, flexible, innovative
and caring in order to achieve a sustainable competitive
advantage.
 Organizational structure can also be considered as the
viewing glass or perspective through which individuals
see their organization and its environment

33.  An organization can be structured in many different
ways, depending on its objectives. The structure of
an organization will determine the modes in which it
operates and performs.
 Organizational structure allows the expressed
allocation of responsibilities for different functions
and processes to different entities such as
the branch, department, workgroup, and individual.

34. TYPES
Functional Structure
 Under a functional organization structure, people
who do similar tasks are grouped together based
on specialty. So all the accountants are placed in
the finance department and so on for the marketing,
operations, senior management and human
resources departments.
 The advantages of this kind of structure include
quick decision making, because the group
members can easily communicate.
 They can also learn from each other, since they
already possess similar skill sets and interests.

35. Divisional Structure
 In a divisional structure, your company groups
workers into teams based on the products or
projects that meet the needs of a certain type of
customer.
 For example, a bakery with a catering operation
might structure the workforce based on key
clientele, such as a wedding department and a
wholesale-retail department. The division of labor in
this kind of structure ensures workers making
similar products can achieve greater efficiency and
higher output.

36. Matrix Structure
 A matrix structure combines elements of the functional
and divisional models, so it’s more complex.
 It groups people into functional departments of
specialization, then further separates them into
divisional projects and products.
 In a matrix structure the team members are given more
autonomy and expected to take on more responsibility
for their work.
 This increases the productivity of the team, fosters
greater innovation and creativity, and allows managers
to cooperatively solve decision-making problems
through group interaction. This type of organizational
structure takes lots of planning and effort, making it
appropriate for large companies that have the resources
to devote to managing a complex business framework.

37. Flat Structure
 A flat organizational structure attempts to disrupt the
traditional top-down management system of most
companies. Management is decentralized so there is
no everyday “boss.”
 Each employee is the boss of themselves, eliminating
bureaucracy and red tape and improving direct
communication. For example, an employee who has
an idea doesn’t have to wade through three levels of
upper managers to get the idea to the key person
making the decision. The employee simply
communicates directly with the target on a peer-based
level.
 A company adopting this type of structure for everyday
purposes typically establishes a special top-down
management system for temporary projects or events.

38. Pre-bureaucratic structures
 Pre-bureaucratic (entrepreneurial) structures
lack standardization of tasks. This structure is most
common in smaller organizations and is best used
to solve simple tasks.
 The structure is totally centralized. The strategic
leader makes all key decisions and most
communication is done by one on one
conversations. It is particularly useful for new
(entrepreneurial) business as it enables the founder
to control growth and development.

39.  Bureaucratic structures
 Weber (1948, p. 214) gives the analogy that “the fully
developed bureaucratic mechanism compares with other
organizations exactly as does the machine compare with the
non-mechanical modes of production. Precision, speed,
unambiguity, … strict subordination, reduction of friction and of
material and personal costs- these are raised to the optimum
point in the strictly bureaucratic administration.”
 Bureaucraticstructures have a certain degree of
standardization.
 They are better suited for more complex or larger scale
organizations, usually adopting a tall structure. The tension
between bureaucratic structures and non-bureaucratic is
echoed in Burns and Stalker's distinction between mechanistic
and organic structures.
 The Weberian characteristics of bureaucracy are:
 Clear defined roles and responsibilities
 A hierarchical structure
 Respect for merit

40.  Bureaucratic structures have many levels of management ranging
from senior executives to regional managers, all the way to
department store managers. Since there are many levels,
decision-making authority has to pass through more layers than
flatter organizations.
 A bureaucratic organization has rigid and tight procedures, policies
and constraints. This kind of structure is reluctant to adapt or
change what they have been doing since the company started.
Organizational charts exist for every department, and everyone
understands who is in charge and what their responsibilities are for
every situation.
 Decisions are made through an organized process, and a strict
command and control structure is present at all times.In
bureaucratic structures, the authority is at the top and information
is then flowed from top to bottom. This causes for more rules and
standards for the company which operational process is watched
with close supervision. Some advantages for bureaucratic
structures for top-level managers are they have a tremendous
control over organizational structure decisions.

41.  Post-bureaucratic
 The term of post bureaucratic is used in two senses in the
organizational literature: one generic and one much more
specific. In the generic sense the term post bureaucratic is
often used to describe a range of ideas developed since the
1980s that specifically contrast themselves with Weber's
ideal type bureaucracy.
 This may include total quality management, culture
management and matrix management, amongst others.
None of these however has left behind the core tenets of
Bureaucracy.
 Hierarchies still exist, authority is still Weber's rational, legal
type, and the organization is still rule bound. Heckscher,
arguing along these lines, describes them as cleaned up
bureaucracies, rather than a fundamental shift away from
bureaucracy. Gideon Kunda, in his classic study of culture
management at 'Tech' argued that 'the essence of
bureaucratic control - the formalization, codification and
enforcement of rules and regulations - does not change in
principle.....it shifts focus from organizational structure to the
organization's culture'.

42.  Another smaller group of theorists have developed the
theory of the Post-Bureaucratic Organization., provide a
detailed discussion which attempts to describe an
organization that is fundamentally not bureaucratic.
 Charles Heckscher has developed an ideal type, the
post-bureaucratic organization, in which decisions are
based on dialogue and consensus rather than authority
and command, the organization is a network rather than
a hierarchy, open at the boundaries (in direct contrast to
culture management); there is an emphasis on meta-
decision-making rules rather than decision-making rules.
 This sort of horizontal decision-making
by consensus model is often used in housing
cooperatives, other cooperativesand when running
a non-profit or community organization. It is used in
order to encourage participation and help
to empower people who normally
experience oppression in groups.

43.  This works best for managers who have a
command and control style of managing. Strategic
decision-making is also faster because there are
fewer people it has to go through to approve.
 Some disadvantages in bureaucratic structures are
it can discourage creativity and innovation in the
organization. This can make it hard for a company
to adapt to changing conditions in the marketplace.

44. TYPES OF ORGANIZATION STRUCTURE
 Based on the power of flow within the organization, it may
be classified into the following categories :
1.Bureaucratic or mechanistic structure
2.Organic or adaptive structure
 Based on the formation of departments or groups,
organizations may be classified into the following types
1. Functional structure
2. Divisional structure
3. Matrix structure
4. Team structure
5. Network structure

45. FUNCTIONAL STRUCURE
CEO
PRESIDENT
MANAGER
PRODUCTION DEPART MARKETING DEPART
FINANCE DEPART PERSONNEL DEPART

46. DIVISIONAL STRUCTURE
CEO
ELECTRONICS
DIVISION
CHEMICAL
DIVISION
CONSUMER
GOODS
DIVISION
PRESIDENT
MARKETING DEPARTMENT
PRODUCTION DEPARTMENT
FINANCE DEPARTMENT
MARKETING DEPARTMENT
PRODUCTION DEPARTMENT
FINANCE DEPARTMENT
MARKETING DEPARTMENT
PRODUCTION DEPARTMENT
FINANCE DEPARTMENT

47. MATRIX APPROACH
Chief Executive
Officer
Production
depart
Marketing
depart
Project A
Finance
depart
Personnal
depart
Project C
Project B

48.  Is a hybrid organizational form
 It contains both functional and divisional structure.
 In divisional structure, a complete responsibility
from top to bottom is assigned to a manager, but in
matrix structure, the manager only shares the
responsibility with others.
 In this type, when one project is completed its
resources are directed to other projects.
 Also there exists a permanent set of functional
groups.
 For a project, personnel are drawn from
departments and returned back once completed.

49.  Examples : Larsen and toubro, Western India group
adapt this method for various projects.

50. DIFFERENCE AUTHORITY AND POWER
 Authority is the power to enforce
law, to take command and to
expect obedience from those
without any authority.
 E.g. a professor has an
authority over his pupils but no
power.
 It is the skill of getting people to
willingly do your will because of
your personal influence.
 Those who have authority also
have responsibility to discharge.
 Flows downward.
 Power is the ability to get the
things done by others. The
principle of power is to punish
or reward.
 E.g. an armed robber has a
power but no authority.
 In short, it is the ability to force
someone to do your will even if
they would choose not to.
 Power and responsibility do
not go hand in hand
 It can go in any direction.

51. LINE AND STAFF CONCEPT
Line organization: The quantum of authority is maximum at the
top and lowest at the bottom. People at the top have a
formal authority to direct and control their immediate
subordinates.
Line and staff Organization: Narrower in approach. It includes
the right to advise, recommend and counsel the staff
specialists.

52. LINE AND STAFF CONFLICT
The line managers view themselves as supreme as they directly
accomplish the objectives of an enterprise. Therefore, staff
members may feel ignored resulting into a conflict situation.
Major reasons of conflict (Line Managers View)
1. Interference in their work
2. Lack of practicality and too theoretical
3. lack of accountability
4. Credit shared by the staff specialists

53. LINE AND STAFF CONFLICT
 Major reasons of conflict (Staff’s Viewpoint)
1. No proper use of the staff members
2. Resistance to adopt new ideas
3. Staff do not have the proper authority to get even the best
ideas executed by the subordinates.
Suggestions:
1. Clear line of demarcation i.e. line has the implementation
responsibility and staff has the advisory function.
2. Line managers must justify why a particular advise can’t be
implemented.

54. LINE AND STAFF CONFLICT
3. Staff members need to be more tolerant as the changes
are always disliked first.
4. Staff personnel should give concrete suggestions to the
line managers about why a certain proposal be
implemented.
5. Line managers also need to understand that a certain
opportunity may be missed out if timely action (as
proposed by the staff) is not taken.

55. DELEGATION OF AUTHORITY
 Delegation is process in which a superior assigns some of
the tasks within his jurisdiction to his subordinate. It enables a
manager to concentrate more on some important matters.
 Elements in delegation:
1. Assignment of responsibility to the subordinate.
2. Granting of authority to the subordinate
3. Subordinate becomes responsible to his superior although
the overall responsibility vests in hand of superior.

56. WHAT IS AUTHORITY
 Authority is a legitimate right to make decisions to
carry out decisions and to direct others. Managers expect
to have the authority to assign work, hire or fire employees
and the allotment of money.
 Organizations have a formal authority system that depicts
the authority relationship between the people and their
work. E.g. in case of line organization, superior has an
authority over his subordinates.
 In case of line and staff, the staff has authority over the
subordinates but they work with the line managers.
 Functional authority allows managers to direct specific
processes or policies in other departments.

57. WHAT IS RESPONSIBILITY
 Responsibility is the obligation to accomplish the goals
related to the position and the organization. In order to
enable the subordinate do his duty well, it is the duty of a
superior to tell him what is expected of him.
 Manager at whatever level of the organization have the same
basic responsibilities when it comes to managing the
workforce i.e. direct employees toward objectives, oversee
the work effort of employees, deal with the immediate
problems and report the progress of work to superiors.

58. WHAT IS ACCOUNTABILITY
It is the obligation to carry out responsibility and exercise
authority in terms of performance standards.
When a subordinate is given an assignment and is granted
necessary authority to complete it, the final phase is holding
the subordinate responsible for results.
However, the extent of accountability depends upon the
authority and responsibility delegated. A person cannot be
held answerable to the acts not assigned to him by his
superior.
For effective accountability, performance standards be
communicated in advance to the subordinate and he must
accept it.

59. IMPORTANCE OF DELEGATION
1. To help the superiors concentrate on more important
matters.
2. Subordinates given authority to take decisions to dispose off
the matters quickly. Thus, it helps in quick decision making.
3. Employees feel motivated and try to prove themselves for
the trust reposed by the superiors in them.
4. Serves as a tool for the future training of executives.
5. It improves work performance of subordinates as delegation
is given according to their specialization.

60. PROBLEMS IN DELEGATION
Difficulties on the part of superior:
1. Resistance: That I can do the job in a better way.
2. Lack of ability of a manager to correctly issue instructions to
the subordinates.
3. Lack of willingness to let go: superior wants to have
dominance over the work of subordinates
4. Lack of trust in subordinates: because of their inability
5. Ineffective controls: where the manager does not set up
adequate controls or he has no means of knowing the
proper use of authority, he may feel hesitant to delegate the
authority

61. PROBLEMS IN DELEGATION
Difficulties on the part of subordinate:
1. Lack of self confidence
2. Desire to play safe by depending upon the boss for
all decisions.
3. Fear of committing mistakes and then criticized
4. Overburden with duties
5. Inadequacy of information for performing the
duties.
Difficulties on the part of organization:
1. Non clarity of authority responsibility structure
2. Lack of effective control 3. Inadequate planning

62. GUIDELINES FOR EFFECTIVE DELEGATION
1. Clear cut objectives i.e. the subordinate must
know the objective of work delegated to him
2. Unity of command i.e. the subordinate must
receive orders from a single executive.
3. Clear explanation of the work assigned and
authority delegated
4. Reasonable control over delegatee i.e.
executive may evaluate the performance and
issue necessary instructions from time to time.
5. No intervention in day to day work of the
delegatee
6. The subordinates must be reasonably trained for
the job

63. DECENTRALIZATION
 Decentralization is a systematic delegation of authority
at all levels of management and in all of the organization.
 In a decentralization concern, authority is retained by the top
management for taking major decisions and framing policies
concerning the whole concern only.
 Rest of the authority may be delegated to the middle level
and lower level of management. In other words, it is the
diffusion of authority in a planned way.

64. REASONS FOR DECENTRALIZATION
1. Better access to local information: Local managers
know better about the local conditions like strength
and nature of local competition, local labour work
force etc.
2. More timely response: In centralized form
information sent to head office and results
awaited. In decentralized local managers can
quickly respond to customers demands.
3. Focus on central management: Central
management gets free to concentrate on more
important issues.

65. REASONS FOR DECENTRALIZATION
4. Training and evaluation of segment managers: it gives a
chance to senior managers to evaluate the capabilities of
subordinate managers.
5. Motivation of segment managers: self esteem and self
actualization needs of the segment managers get satisfied.
Greater responsibility supplies them more satisfaction and
motivate them to exert greater effort.

66. ROAD MAP
 The Human Resources environment
 The Human Resources management process
 Recruiting
 Interviewing
 Training
 Disciplining
 Legal and ethical concerns

67. HUMAN RESOURCES MANAGEMENT
 Human Resources (HR) Management
 The management function devoted to acquiring,
training, appraising, and compensating employees.
 Strategic Human Resource Management
 The linking of the human resource function with the
company’s strategies to accomplish that strategy.

69. PERSONAL PLANNING
 The process by which management
ensures it has the right number and kinds
of people in the right places at the right
time, who are capable of helping the
organization achieve its goals
 Steps in the planning process:
1. Assessing current human resources
2. Assessing future human resources needs and
developing a program to meet those needs

70. STEPS IN THE RECRUITMENT AND
SELECTION (STAFFING) PROCESS

71.  Staffing
 Filling a firm’s open positions; also, the
personnel process that includes six steps:
job analysis
personnel planning
recruiting
interviewing
testing and selection
training and development

72.  Job Analysis
 The procedure used to determine the duties of
particular jobs and the kinds of people (in terms
of skills and experience) who should be hired for
them.
 Job Specification
 The human qualifications in terms of traits, skills,
and experiences required to accomplish a job.
 Job Description
 A document that identifies a particular job,
provides a brief job summary, and lists specific
responsibilities and duties of the job.

73. SOURCE OF RECRUITMENT
 Current employees
 Advertising
 The Internet
 Employment agencies
 Public
 Private
 Contingent workers and temporary help
agencies
 Executive recruiters
 Employee referrals
 Walk-ins etc.,

74. TRAINING EMPLOYEE
 Training Program
 The process of providing new employees with
information they need to do their jobs satisfactorily.
 Training Program Steps
 Needs analysis
 Instructional design
 Validation
 Implementation
 Evaluation and follow-up

75.  What and Why?
 Changing skills, knowledge, attitudes, or behavior.
 Changing what employees know, how they work; or their
attitudes toward their jobs, co-workers, managers, and the
organization
 On-the-Job Training Methods
 Job rotation
 Understudy assignments
 Off-the-Job Training Methods
 Classroom lectures
 Films and videos
 Simulation exercises
 Vestibule training

76. PERFORMANCE
 Performance management system
 A process of establishing performance standards
and evaluating performance in order to arrive at
objective human resource decisions and to
provide documentation to support personnel
actions
 Adjective rating scales
 Rating an individual on each job performance
factor on an incremental scale
 360-degree appraisal
 An appraisal device that seeks feedback from a
variety of sources for the person being rated

77.  Group-order ranking
 Requires the evaluator to place employees into a particular
classification such as “top fifth” or “second fifth”
 Individual ranking approach
 Requires the evaluator merely to list the employees in order
from highest to lowest
 Paired comparison approach
 Each employee is compared with every other employee in
the comparison group and rated as either the superior or
weaker member of the pair
 Each employee is assigned a summary ranking based on
the number of superior scores achieved
 MBO
 Employees are evaluated by how well they accomplish a
specific set of objectives determined to be critical in the
successful completion of their jobs

78. CAREER PLANNING

79. IDENTIFY FUTURE GOALS
• It is not about deciding at the age of 16 what
you want to do for the rest of your life. It is
about uncovering ever more possibilities and
using robust planning, research and evaluation
techniques to make these possibilities tangible
and real.
• If knowledge is power, pupils who have ‘no idea’
what they want to do with their future are
powerless and without support may have less
reason to make the progress they need to climb
the ladder.

80. PLAN YOUR LADDER FROM THE TOP
DOWNWARDS
 Step one : Look to the future and identify long
term career goal
 Step two : Research university courses which
can lead to that career
 Step three : Plan how you will achieve the first
step of your ladder

81. Career
Post degree qualification
University course
Your Career as a
Ladder

82. TRAFFIC LIGHT COLOUR CODE HOW WELL YOU
FIT THE REQUIREMENTS
• Red for ‘I have not made
any progress with this
yet ‘
• Orange for ‘I have
identified this target but
still some way to go ‘
• Green for ‘I have made
good progress and
completed this target’

83. USE SMART TARGETS TO HELP YOU
ACHIEVE

84. HRM
 “At L’Oreal, success starts with people. Our people
are our most precious asset. Respect for people,
their ideas and differences, is the only path to our
sustainable long-term growth.”2 Many organizations
profess that their people are their most important
asset and acknowledge the important role that
employees play in organizational success.
However, why is HRM important and what external
factors influence the HRM process?

85.  HRM is important for three reasons. First, it can be
a significant source of competitive advantage as
various studies have concluded.3 And that’s true for
organizations around the world, not just U.S. firms.
 The Human Capital Index, a comprehensive study
of more than 2,000 global firms, concluded that
people-oriented HR gives an organization an edge
by creating superior shareholder value.

86.  Second, HRM is an important part of organizational
strategies. Achieving competitive success through
people means managers must change how they think
about their employees and how they view the work
relationship. They must work with people and treat
them as partners, not just as costs to be minimized or
avoided.
 That’s what people-oriented organizations such as
Southwest Airlines and W. L. Gore do.
 Southwest Airlines Co. is a major U.S. airline
headquartered in Dallas, Texas, and the world's largest
low-cost carrier.

87.  Finally, the way organizations treat their people has
been found to significantly impact organizational
performance.5 For instance, one study reported
that improving work practices could increase
market value by as much as 30 percent.
 Work practices that lead to both high individual and
high organizational performance are known as
high-performance work practices

88.  The common thread among these practices seems
to be a commitment to involving employees;
improving the knowledge, skills, and abilities of an
organization’s employees; increasing their
motivation; reducing loafing on the job; and
enhancing the retention of quality employees while
encouraging low performers to leave.

89.  Even if an organization doesn’t use high-
performance work practices, other specific HRM
activities must be completed in order to ensure that
the organization has qualified people to perform the
work that needs to be done—activities that
comprise the HRM process

90. 

91.  The administrative assistant job opening paying $13
an hour at a Burns Harbor, Indiana, truck driver
training school for C. R. England, a nationwide
trucking company, was posted on a Friday
afternoon.8 By the time the company’s head of
corporate recruiting arrived at work on Monday
morning, there were about 300 applications in the
company’s e-mail inbox. And an inch-and-a-half
stack of résumés was piled up by the now outof-
paper fax machine. Out of those 500 plus applicants,
one person, who had lost her job

92.  four months earlier, impressed the hiring manager so
much that the job was hers, leaving the remaining 499
plus people, including a former IBM analyst with 18
years’ experience, a former director of human
resources, and someone with a master’s degree and
12 years’experience at accounting firm Deloitte &
Touche, still searching for a job. This is not a unique
example.
 The economic slowdown has made filling a job
opening an almost mind-boggling exercise. Such is
the new reality facing HRM. The entire HRM process
is influenced by the external environment. Those
factors most directly influencing it include the
economy, employee labor unions, governmental laws
and regulations, and demographic trends.

93. SELECTION AND INTERVIEW PROCESS
 Selection is the process which enables the
enterprise to pick up the candidates with the
required qualifications, training and skill for the job
after careful screening and rejecting the
undesirables at each successive stage.

94. THANK YOU