Chapter 6 (Part 1) Staffing, CBSE, Class 12, Business Studies

Chapter 6 (Part 1) Staffing 

INTRODUCTION

• Meaning After planning and selection of the organisation structure, the next step in the management process is to fill the various posts provided in the organisation.
• staffing is ‘putting people to jobs’.
• It begins with workforce planning and
• includes different other function like
  • recruitment,
  • selection,
  • training,
  • development,
  • promotion,
  • compensation and
  • performance appraisal of work force. 
     

IMPORTANCE OF STAFFING

•  finds the right people for the right job.
• Human resources are the foundation of any business.
• The right people can help you take your business to the top; the wrong people can break your business.
• staffing is the most fundamental and critical drive of organisational performance.
• Human resources are the most important asset of an organisation.
• The ability of an organisation to achieve its goal depends upon the quality of its human resources.

Proper staffing ensures the following benefits to the organisation: (i) helps in discovering and obtaining competent personnel for various jobs; (ii) makes for higher performance, by putting right person on the right job; (iii) ensures the continuous survivaland growth of the enterprise through the succession planning for managers; (iv) helps to ensure optimum utilization of the human resources. (v) By avoiding over manning, it prevents under utilisation of personnel and high labour costs. At the same time it avoids disruption of work by indicating in advance the shortages of personnel; and (vi) improves job satisfaction and morale of employees through a. objective assessment and b. fair reward for their contribution. 
 

STAFFING AS PART OF HUMAN RESOURCE MANAGEMENT
It is a separate and specialised function and there are many aspects of human relations to be considered. It is the job of managers to fill positions in their organisation and to make sure that they remain occupied with qualified people. Staffing is closely linked to organising since after the structure and positions have been decided, people are required to work in these positions. Subsequently, they need to be trained and motivated to work in harmony with the goals of the organisation. Thus, staffing is seen as a generic function of management. The staffing function deals with the human element of management. Managing the human component of an organisation is the most important task because the performance of an organisation depends upon how well this function is performed. The success of an organisation in achieving its goals is determined to a great extent on the competence, motivation and performance of its human resource. It is the responsibility of all managers to directly deal with and select people to work for the organisation. When the manager performs the staffing function his role is slightly limited. Some of these responsibilities will include:

• placing the right person on the right job,
• introducing new employees to the organisation,
• training employees and improving their performance,
• developing their abilities,
• maintaining their morale and
• protecting their health and physical conditions. In small organisations, managers may perform all duties related to employees salaries, welfare and working conditions. But as organisations grow and number of persons employed increases, a separate department called the human resource department is formed which has specialists in managing people. The management of human resource is a specialized area which requires the expertise of many people. The number of human resource specialists and size of this department gives an indication of the size of the business as well. For a very large company, the Human Resources Department itself will contain specialists for each function of this department. Human Resource Management includes many specialised activities and duties which the human resource personnel must perform. These duties are:
• Recruitment i.e., search for qualified people
• Analysing jobs, collecting information about jobs to prepare job descriptions.
• Developing compensation and incentive plans.
• Training and development of employees for efficient performance and career growth.
• Maintaining labour relations and union management relations.
• Handling grievances and complaints.
• Providing for social security and welfare of employees.
• Defending the company in law suits and avoiding legal complications.

EVOLUTION OF HUMAN RESOURCE MANAGEMENT
Human resource management has replaced the traditional concept of labour welfare and personnel management. Human Resource Management (HRM) in its present form has evolved from a number of significant inter-related developments, which date back to the era of industrial revolution. Emergence of trade union movement led to the need of a person who could act as an effective link between the owners and workers. Thus, the concept of labour welfare officer came into being. His role was limited to the bare minimum welfare activities of employees. In fact, he was looked down by both the workers and the owners. With the introduction of factory system, thousands of persons began to be employed under one roof. The job of hiring people for the organisation was given to one man, who later on was assigned the responsibility of recruitment, selection and placement of personnel. This led to the emergence of personnel officer in the first place and personnel manager, later on. Human relations approach recognizes human factor as the most imprtant instrument of success in an organisation. Fast changing technological developments, however, necessitated new skill development and training of employees. People came to be recognised as a valuable resource, which can be further developed. Increase in scope of the work led to replacement of personnel manager with human resource manager. You may have observed that all these aspects are concerned with the human element in industry as distinct from the mechanical side of the enterprise. Thus, staffing is an inherent part of human resource management as it is the practice of finding, evaluating and establishing a working relationship with people, for a purpose. It is important to understand that staffing is both a function of management just like planning, organising, directing, and controlling as well as a distinct functional area of management just as marketing management and financial management. Staffing, is therefore, referred to as both a line as well as a staff activity i.e., an essential function of the manager as well as an advisory role played by the Human Resource Department. 
 

STAFFING PROCESSSS
(i) Estimating the Manpower Requirements: an analysis of the decisions and the decision-making levels, activities as well as relationship among them with a view to evolving the horizontal and vertical dimensions of the structure. Thus, various job positions are created. Clearly, performance of each job necessitates the appointment of a person with a specific set of educational qualifications, skills, prior experience and so on.  Thus, understanding manpower requirements is not merely a matter of knowing how many persons we need but also of what type. Given that we need to encourage women, persons from backward communities and persons with special abilities (such as physically challenged, visually and hearing impaired) to assume responsible positions in our organisations, there is a need to understand, and if the need be, to redefine manpower requirements accordingly. workload analysis on the one hand and workforce analysis on the other.

• Workload analysis would enable an assessment of the number and types of human resources necessary for the performance of various jobs and accomplishment of organizational objectives
• Workforce analysis would reveal the number and type available. In fact such an exercise would reveal whether we are understaffed, overstaffed or optimally staffed. It may be pointed out that neither over-staffing nor under-staffing is a desirable situation.
• overstaffing somewhere would necessitate employee removal or transfer elsewhere.
• understaffing would necessitate the starting of the recruitment process. 

However, before that can be done, it is important to translate the manpower requirements into specific job description and the desirable profile of its occupant — the desired qualifications, experience, personality characteristics and so on. This information becomes the base for looking for potential employees. (ii) Recruitment: Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation. The information generated in the process of writing the job description and the candidate profile may be used for developing the ‘situations vacant’ advertisement. The advertisement may be

• displayed on the factory/ office gate or else
• it may be got published in print media or
• flashed in electronic media. This step involves locating the potential candidate or determining the sources of potential candidates. The essential objective is to create a pool of the prospective job candidates. Both internal and external sources of recruitment may be explored.
• Internal sources may be used to a limited extent.
• For fresh talent and wider choice external sources are used.

(iii) Selection: Selection is the process of choosing from among the pool of the prospective job candidates developed at the stage of recruitment. Even in case of highly specialised jobs where the choice space is very narrow, the rigour of the selection process serves two important purposes:

• it ensures that the organisation gets the best among the available, and
• it enhances the self-esteem and prestige of those selected and conveys to them the seriousness with which the things are done in the organisation. The rigour involves a host of tests and interviews, described later. Those who are able to successfully negotiate the test and the interviews are offered an employment contract, a written document containing the offer of employment, the terms and conditions and the date of joining.

(iv) Placement and Orientation: Joining a job marks the beginning of socialisation of the employee at the workplace. The employee is given a brief presentation about the company and is introduced to his superiors, subordinates and the colleagues. He is taken around the workplace and given the charge of the job for which he has been selected. This process of familiarisation is very crucial and may have a lasting impact on his decision to stay and on his job performance. Orientation is, thus, introducing the selected employee to other employees and familiarizing him with the rules and policies of the organisation. Placement refers to the employee occupying the position or post for which the person has been selected.

(v) Training and Development: What people seek is not simply a job but a career. Every one must have the opportunity to rise to the top. The best way to provide such an opportunity is to facilitate employee learning. Organisations have either inhouse training centers or have forged alliances with training and educational institutes to ensure continuing learning of their employees. The organisations too benefit in turn. If employee motivation is high, their competencies are strengthened, they perform better and thus, contribute more to organizational effectiveness and efficiency. By offering the opportunities for career advancement to their members, organisations are not only able to attract but also retain its talented people. As discussed earlier, in most organisations there is a separate Human Resource Department, which takes care of the staffing function. But in small organisations the line manager is required to perform all the functions of management viz, planning, organising, staffing, directing and controlling. The process of staffing will then include three more stages.

(vi) Performance Appraisal: After the employees have undergone a period of training and they have been on the job for some time, there is a need to evaluate their performance. All organisations have some formal or informal means of appraising their employee’s performance. Performance appraisal means evaluating an employee’s current and/or past performance as against certain predetermined standards. The employee is expected to know what the standards are and the superior is to provide the employee feedback on his/her performance. The performance appraisal process, therefore, 

• will include defining the job,
• appraising performance and
• providing feedback.

(vii) Promotion and career planning: It becomes necessary for all organisations to address career related issues and promotional avenues for their employees. Managers need to design activities to serve employee’s long-term interests also. They must encourage employees to grow and realise their full potential. Promotions are an integral part of people’s career. They refer to being placed in positions of increased responsibility. They usually mean more

• pay,
• responsibility and
• ob satisfaction.

(viii) Compensation: All organisations need to establish wage and salary plans for their employees. There are various ways to prepare different pay plans depending on the worth of the job. Basically the price of the job needs to be determined. Compensation, therefore, refers to all forms of pay or rewards going to employees. It may be in the form of direct financial payments like wages, salaries, incentives, commissions and bonuses and indirect payments like employer paid insurance and vacations. Direct financial payments are of two types :

• time based: A time based plan means salary and wages are paid either daily, weekly or monthly or annually.
• performance based. Performance based plans means salary/wages are paid according to piecework. For example, a worker may be paid according to the number of units produced by him/her. There are many methods to calculate the  compensation under various incentive plans to reward performance. Certain pay plans can be created which are a combination of time based pay plus incentives for higher performance. Various plans may be formulated for paying employees time based wage or salary as well as performance based financial incentives and bonuses, and employee benefits. Besides there are some other factors also which influence the design of any pay plan, like legal (labour laws), union, company policy and equity. 

Thus, we see that as a process, staffing includes acquisition, retention, development, performance appraisal, promotion and compensation of the most important resource of an organisation, that is, its human capital. It needs to be kept in mind that several factors such as supply and demand of specific skills in the labour market, unemployment rate, labour market conditions, legal and political considerations, company’s image, policy, human resource planning cost, technological developments and general economic environment etc., will influence the way recruitment, selection and training will be actually carried out. 
 

RECRUITMENT
Recruitment refers to the process of finding possible candidates for a job or a function. It has been defined as ‘the process of searching for prospective employees and stimulating them to apply for jobs in an organisation.’ Advertising is commonly part of the recruitment process, and can occur through several means, through • newspapers,

• using newspaper dedicated to job advertisement,
• through professional publication,
• using advertisements placed in windows,
• through a job center,
• through campus interviews, etc. 

Sources of Recruitment The object of recruitment is to attract potential employees with the necessary characteristics or qualification, in the adequate number for the jobs available. It locates available people for the job and invites them to apply for the job in the organisation. 

The process of recruitment precedes the process of selection of a right candidate for the given positions in the organisation. Recruitment seeks to attract suitable applicants to apply for available jobs.
The various activities involved with the process of recruitment includes (a) identification of the different sources of labour supply, (b) assessment of their  validity, (c) choosing the most suitable source or sources, and (d) inviting applications from the prospective candidates, for the vacancies. The requisite positions may be filled up from within the organisation or from outside.

TWO SOURCES OF RECRUITMENT – INTERNAL AND EXTERNAL
1. INTERNAL SOURCES 
(i) Transfers: It involves shifting of an employee from

• one job to another,
• one department to another or
• from one shift to another,
• without a substantive change in the responsibilities and status of the employee. It may lead to changes in duties and responsibilities, working condition etc., but not necessarily salary. Transfer is a good source of filling the vacancies with employees from overstaffed departments. It is practically a horizontal movement of employees. Shortage of suitable personnel in one branch may be filled through transfer from other branch or department . Job transfers are also helpful in avoiding termination and in removing individual problems and grievances. At the time of transfer, it should be ensured that the employee to be transferred to another job is capable of performing it. Transfers can also be used for training of employees for learning different jobs.

(ii) Promotions: Business enterprises generally follow the practice of filling higher jobs by promoting employees from lower jobs. Promotion leads to

• shifting an employee to a higher position,
• carrying higher responsibilities, facilities, status and pay.
• Promotion is a vertical shifting of employees.
• This practice helps to improve the motivation, loyalty and satisfaction level of employees.
• It has a great psychological impact over the employees because a promotion at the higher level may lead to a chain of promotions at lower levels in the organisation. 
   

MERITS OF INTERNAL SOURCES 
(i) Employees are motivated to improve their performance. A promotion at a higher level may lead to a chain of promotion at lower levels in the organisation. This motivates the employees to improve their performance through learning and practice. Employees work with commitment and loyalty and remain satisfied with their jobs. Also peace prevails in the enterprise because of promotional avenues; (ii) Internal recruitment also simplifies the process of selection and placement. The candidates that are already working in the enterprise can be evaluated more accurately and economically. This is a more reliable way of recruitment since the candidates are already known to the organisation; (iii) Transfer is a tool of training the employees to prepare them for higher jobs. Also people recruited from within the organisation do not need induction training; (iv) Transfer has the benefit of shifting workforce from the surplus departments to those where there is shortage of staff; (v) Filling of jobs internally is cheaper as compared to getting candidates from external sources . `
 

LIMITATIONS OF INTERNAL SOURCES 
(i) the scope for induction of fresh talent is reduced. Hence, complete reliance on internal recruitment involves danger of ‘inbreeding’ by stopping ‘infusion of new blood’ into the organisation; (ii) The employees may become lethargic if they are sure of time bound promotions; (iii) A new enterprise cannot use internal sources of recruitment. No organisation can fill all its vacancies from internal sources; (iv) The spirit of competition among the employees may be hampered (problem creator); and (v) Frequent transfers of employees may often reduce the productivity of the organisation.