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PLANNING QUESTION PAPER 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. What is Planning and the steps involved in planning process? What are different types of planning? What is the need of Contingency planning? What are the two types of Operational plans? What are different types of Organization structures? Define Organizing and various steps involved in it? Why Forecasting is important for planning? A Company XYZ is scattered in different parts of India. Which type of Organization structure are they following? What are Planning Premises and its types? What is the basis of Departmentation? What is the difference between Centralization and Decentralization? PLANNING The process of setting goals, developing strategies, and outlining tasks and schedules to accomplish the goals. It is the process of deciding in advance what is to be done, where, how and by whom it is to be done. Planning as a process involves anticipation of future course of events and deciding the best course of action. Thus, it is basically a process of ‘thinking before doing’. Koontz and O’Donnell have defined planning in terms of future course of action. Planning is the selection from among alternatives for future courses of action for the enterprise as a whole and each department within it. Planning bridges the gap from where we are to where we want to go. It includes the selection of objectives, policies, procedures and programmes from among alternatives. A plan is a predetermined course of action to achieve a specified goal. NATURE OF PLANNING Planning is a mental activity Planning involves thinking on the part of the manager. Planning is goal-oriented Every plan specifies the goals to be attained in the future and the steps necessary to reach them. Planning is forward looking Planning is futuristic in nature since it is performed to accomplish some objectives in future. Planning pervades all managerial activity Planning is the basic function of managers at all levels, although the nature and scope of planning will vary at each level. Planning is the primary function Planning logically precedes the execution of all other managerial functions, since managerial activities in organizing; staffing, directing and controlling are designed to support the attainment of organizational goals. Planning is based on facts Planning is based on objectives, facts and considered forecasts. Planning is flexible Planning is a dynamic process capable of adjustments in accordance with the needs and requirements of the situations. Planning is essentially decision making Planning is a choice activity as the planning process involves finding the alternatives and the selection of the best. PLANNING PROCESS Establishing objectives Development of planning premises Identification of alternative courses of action Selection of best alternative Formulation of derivative plans Communicating the plan Follow up measures SIGNIFICANCE OF PLANNING An enterprise can achieve its objectives and handles increasing complexities of modern business only through systematic planning. Minimizes uncertainty - Planning helps in minimizing the uncertainties of the future as it anticipates future events. Emphasis on objectives - Planning fixes the objectives which are further achieved with the help of plans. Promotes coordination - Planning helps to promote the coordinated effort on account of pre-determined goals. Facilitates control - Planning and control are inseparable in the sense that unplanned actions cannot be controlled. Control is nothing but making sure that activities conform to the plans. Improves competitive strength - Planning enables an enterprise to discover new opportunities, which give it a competitive edge. Economical operation - Since planning involves a lot of mental exercise, it helps in proper utilization of resources and elimination of unnecessary activities. This, in turn, leads to economy in operation. Encourages innovation - Planning is basically the deciding function of management. Many new ideas come to the mind of a manager when he is planning. This creates an innovative and foresighted attitude among the managers. Tackling complexities of modern business - With modern business becoming more and more complex, planning helps in getting a clear idea about what is to be done, when it is to be done, where it is to be done and how it is to be done. LIMITATIONS OF PLANNING Although planning is a primary function of management and facilitates various other management functions, it has many barriers and limitations. Some of them are explained below: (a) Costly process. Planning is a costly process as time, energy and money are involved in gathering of facts and testing of various alternatives. (b) Rigidity. Planning restricts the individual’s freedom, initiative and desire for creativity as it strictly adheres to pre-determined -policies and Programmes. (c) Limited scope. The scope of planning is said to be limited in the case of organizations with rapidly changing situations. (d) Influence of external factors. The effectiveness of planning is sometimes limited because of the external social,political, economical and technological factors which are beyond the control of the planners. (e) Non-availability of data. Planning needs reliable facts and figures. planning loses its value unless reliable information is available. (f)People’s resistance. Resistance to change hinders planning. Planners often feel frustrated in instituting new plans,because of the inability of people to accept them TYPES OF PLANNING Strategic plans are designed with the entire organization in mind and begin with an organization's mission. Top-level managers, such as CEOs or presidents, will design and execute strategic plans. Strategic plans look ahead to where the organization wants to be in three, five, even ten years. Strategic plan are made for achieving growth, improving productivity and profitability and boosting return on investments Strategic Plans are developed to achieve organizational objectives and based on that middle and lower level managers can create compatible plans aligned with those objectives. Contingency planning involves planning what a business will do if something goes wrong, such as a failure of the original business plan to produce anticipated results or a emergency situation caused by a natural disaster. TACTICAL PLANNING Tactical planning involves determining the steps a business must take to reach the objectives developed through strategic planning. Tactical plans are concerned with the responsibility and functionality of lower-level departments to fulfill their parts of the strategic plan. OPERATIONAL PLANNING Operational Planning-Operational plans are made by frontline, or lowlevel, managers. All operational plans are focused on the specific procedures and processes that occur within the lowest levels of the organization. Managers must plan the routine tasks of the department. Examples of operational plans include things like scheduling employees each week; assessing, ordering and stocking inventory or creating a monthly budget. Operational plans can be either single-use or ongoing plans. Single-use plans are those plans that are intended to be used only once. They include activities that would not be repeated and often have an expiration. Creating a monthly budget and developing a promotional advertisement for the quarter to increase the sales of a certain product Ongoing plans are those plans that are built to withstand the test of time. They are created with the intent to be used several times and undergo changes when necessary. Outlining an employee's performance goals for the year would be considered an ongoing plan. ONGOING PLANS Ongoing plans are typically a policy, procedure or rule. Policies are general statements, or guidelines, that aid a manager in understanding routine responsibilities of his or her role as a manager. Examples of policies include things such as hiring, training, outlining and assessing performance appraisals and disciplining and terminating subordinates. A procedure details the step-by-step process of carrying out a certain task, such as assessing, ordering and stocking inventory. A rule provides managers and employees with specific and explicit guidelines of behaviour that is what they should and should not do as a member of the organization. CONCLUSION FROM TYPES OF PLAN Operational plans are necessary to attain tactical plans, and tactical plans lead to the achievement of strategic plans. TYPES OF PLANNING Financial and non-financial planning. Financial planning relates to the monetary aspect of the concern. On the other hand, non-financial planning relates to the physical resources of the concern. (b)Formal and informal planning. A planning in black and white is known as formal planning. Informal planning isonly thinking about it and nothing more. (c)Short-range and long-range planning. Short-termplanning relates to a period of less than one year. It is to accomplish objectives in the near future. Medium-term planning covers a period of over one year but less than three years. A planning between three to five years is known as long-term planning. (d)Standing and ad hoc planning. Standing plans are permanent in nature and are meant to be used over and overagain. They ensure quick decision and action whenever need arises. On the other hand, ad hoc plans are generally forspecific matters and are prepared only when some need arises. (e)Administrative and operational planning. Planning is generally done at various levels of management like top level, middle level, and lower level. Administrative planning associates with middle level managers and provides guidelines to operational planning. On the other hand, operational planning associates with lower levels of management and deals with actual execution of operations. Top level planning is concerned with fixing of objectives PLANNING PREMISES There are many environmental factors, which influence the plan. Assumptions are made about these factors. These assumptions are called premises. Planning premises include assumptions or forecasts of the future and known conditions that will affect the course of the plans. As Plans operate in the future an effective manager should anticipate the environment in which his plan will operate and forecast those elements in the environment, which will affect his plans. E.g.: Changes in Technology, Social Conditions, Political factors etc 1.Internal and External Premises Internal Premises come from the business itself. It includes skills of the workers, capital investment policies, philosophy of management, sales forecasts, etc. External Premises come from the external environment. That is, economic, social, political, cultural and technological environment. External premises cannot be controlled by the business. 2. Controllable and Uncontrollable Premises Controllable Premises are those which are fully controlled by the management. They include factors like materials, machines and money. Uncontrollable Premises are those over which the management has absolutely no control. They include weather conditions, consumers' behaviour, government policy, natural calamities, wars, etc. 3.Tangible and Intangible Premises Tangible can be expressed or measured in quantitative terms, e.g., labor hours, units of production, number of machines, capital investment, industry demand, population growth, etc. On the other hand, intangible premises can not be measured quantitatively, e.g., company reputation, public relations, employee motivation and morale, attitudes and philosophy of the owners, political stability, etc 4.Foreseeable and unforeseeable premises: Foreseeable premises tend to be definite and well-known and they can be foreseen with certainty. Requirements for men, money and machines are examples of foresee able premises. Unforeseeable premises "such as war, strike, natural calamities are unpredictable. STEPS OF PLANNING PROCESS Steps in Planning process As planning is one of great importance to an organisation, the entire process of planning should be carried out in a systematic manner. Planning is an intellectual process which an executive carries out before he does any job with the help of other people. It involves the following steps : 1. Determination of the objectives : The first step in planning is to identify certain objectives. The objectives set must clearly indicate what is to be achieved, where action should take place, who should perform it and when it is to be accomplished. The objectives should be established for the entire organisation and for each and every department. Planning has no utility if it is not related to certain objectives. 2. Collection and forecasting of Information : Sufficient information must be collected in order to make plans and sub plans. necessary information includes the critical assessment of current status of the organisation together with a forward look at the environment that is anticipated. The collection and forecasting of the information must be done in terms of external and internal environment. The considerations of the external environments must the competitions now and in the future. The assessment of internal environment may consist of the strong and weak point of the organisation. This is an important step of planning process. 3. Development of planning premises : The next step is the establishment of planning premises. Planning premises are the assumptions and predictions about the future. The assumptions are the basis of planning. Forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products etc in future. This requires a collection of data on present trends and future possibilities. 4. Discovering alternative courses of action : Usually, there are several alternatives for any plan. The manager should try to find out all the possible alternatives.At the time of developing alternatives he should screen out most viable alternatives. So he has to analyse in detail a limited number of alternatives. 5. Selection of best alternative : The various alternatives identified are evaluated and compared in terms of their expected costs and benefits. Many quantitative techniques are available to evaluate alternatives. after evaluating the various alternatives the best alternative should be selected for implementation. 6. Formulation of derivative plans : The next step is to develop detailed sub plans for its implementation. Derivative plans are required to support the overall plans. The derivative plans are developed in the frame work of overall plans.These are drawn up with respect to different areas of activity. 7. Communicating the plan : It is very important to get the co operation of the subordinates at every stage of its implementation. For this purpose the plans should be communicated and explained to them so that they can get the clear picture of what to be done. An organisation is not benefited from planning process until they are put into action. 8. Follow up measures : To ensure the plans are proceeding along the right lines, the actual performance is compared with the planned performance. In this way, any short coming can be noted and suitable remedial action can be taken. BARRIERS TO PLANNING Inability to plan or inadequate planning. Managers are not born with the ability to plan. Some managers are not successful planners because they lack the background, education, and/or ability. Others may have never been taught how to plan. When these two types of managers take the time to plan, they may not know how to conduct planning as a process. Lack of commitment to the planning process. The development of of a plan is hard work; it is much easier for a manager to claim that he or she doesn't have the time to work through the required planning process than to actually devote the time to developing a plan. (The latter, of course, would save them more time in the long run!) Another possible reason for lack of commitment can be fear of failure. As a result, managers may choose to do little or nothing to help in the planning process. Inferior information. Facts that are out-of-date, of poor quality, or of insufficient quantity can be major barriers to planning. No matter how well managers plan, if they are basing their planning on inferior information, their plans will probably fail. Focusing on the present at the expense of the future. Failure to consider the longterm effects of a plan because of emphasis on short-term problems may lead to trouble in preparing for the future. Managers should try to keep the big picture — their long-term goals — in mind when developing their plans. Too much reliance on the organization's planning department. Many companies have a planning department or a planning and development team. These departments conduct studies, do research, build models, and project probable results, but they do not implement plans. Planning department results are aids in planning and should be used only as such. Formulating the plan is still the manager's responsibility. Concentrating on controllable variables. Managers can find themselves concentrating on the things and events that they can control, such as new product development, but then fail to consider outside factors, such as a poor economy. One reason may be that managers demonstrate a decided preference for the known and an aversion to the unknown. FORECASTING A planning tool that helps management to cope with the uncertainty of the future, relying mainly on data from the past and present and analysis of trends. Forecasting starts with certain assumptions based on the management's experience, knowledge, and judgment. Objective of Forecasting ‘to minimize uncertainty and to identify and evaluate risk’ . Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions. Forecasting uses many statistical techniques. Therefore, it is also called as Statistical Analysis. IMPORTANCE OF FORECASTING Forecasting provides relevant and reliable information about the past and present events which is necessary for sound planning. It gives confidence to the managers for making important decisions. It is the basis for making planning premises. It keeps managers active and alert to face the challenges of future events and the changes in the environment. LIMITATION OF FORECATING Costly and Time Consuming Process: The collection and analysis of data about the past, present and future involves a lot of time and money. Therefore, managers have to balance the cost of forecasting with its benefits. Many small firms don't do forecasting because of the high cost. Only Estimation No Guarantee:Forecasting can only estimate the future events. It cannot guarantee that these events will take place in the future. Long-term forecasts will be less accurate as compared to short-term forecast. Based on Assumptions: Forecasting is based on certain assumptions. If these assumptions are wrong, the forecasting will be wrong. Forecasting is based on past events. However, history may not repeat itself at all times. Forecasting requires proper judgement and skills on the part of managers. Forecasts may go wrong due to bad judgement and skills on the part of some of the managers. Therefore, forecasts are subject to human error. ORGANIZING It is a function in which the synchronization and combination of human, physical and financial resources takes place. Organizing human efforts means assigning right employee having right kind of skills at right position or workplace. Physical assets refer to tangible fixed assets, such as office buildings, stores, manufacturing equipment, computers and office furniture. STEPS OF ORGANIZING Identification of activities - All the activities which have to be performed in a concern have to be identified first. For example, preparation of accounts, making sales, record keeping, quality control, inventory control, etc. Departmentally organizing the activities - The manager tries to combine and group similar and related activities into units or departments. Classifying the authority - Once the departments are made, the manager likes to classify the powers and its extent to the managers. This activity of giving a rank in order to the managerial positions is called hierarchy. Co-ordination between authority and responsibility - Relationships are established among various groups to enable smooth interaction toward the achievement of the organizational goal. Each individual is made aware of his authority and he/she knows whom they have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure is drawn and all the employees are made aware of it. IMPORTANCE OF ORGANIZING Specialization and Division of Work: Division of work is assigning responsibility to a specific individual or group.It becomes specialization when the responsibility for a specific task lies with a designated expert in that field. Specialization is achieved through division of work. Well defined jobs - Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their qualifications, skill and experience. Co-ordination - Organization is a means of creating co- ordination among different departments of the enterprise. A clear cut division of work and delegation of authority among positions leads to coordination. Effective administration - The roles to be performed by different managers are clarified leads to better administration. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every manager is clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in increasing mental satisfaction and thereby a sense of security in a concern. FORMS OF ORGANIZATION SYTRUCTURE Three Forms of Organization Structure Functional structure Divisional Structure Matrix Structure Functional Structure: The organization is divided into segments based on the functions. In this type of organization, for example, there may be a marketing department, a sales department and a production department. ADVANTAGES OF FUNCTIONAL STRUCTURE Functional structures appear to be successful in large organization that produces high volumes of products at low costs. The low cost can be achieved by such companies due to the efficiencies within functional groups. A system in which functional department are created to deal with the problems of business at various levels. FEATURES Features of Functional Organization The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise. Principle of unity of command does not apply to such organization. Specialization- Better division of labour takes place which results in specialization of function and it’s consequent benefit. Effective Control- Management control is simplified as the mental functions are separated from manual functions. Greater efficiency can be achieved. Expansion- Expert knowledge of functional manager facilitates better control and supervision. CHART OF FUNCTIONAL STRUCTURE DIVISIONAL STRCUTURE Divisional structure typically is used in larger companies that operate in a wide geographic area or that have separate smaller organizations within the umbrella group to cover different types of products or market areas. Each division is having its own units for functions such as accounting, marketing and warehousing in order to work independently. Divisions can be defined based on the geographical basis, products / services basis, or any other measurement. Product Structure - A product structure is based on organizing employees and work on the basis of the different types of products. If the company produces three different types of products, they will have three different divisions for these products. Market Structure - Market structure is used to group employees on the basis of specific market the company sells in. A company could have 3 different markets they use and according to this structure, each would be a separate division in the structure. Geographic Structure - Large organizations have offices at different place, for example there could be a north zone, south zone, west and east zone. The organizational structure would then follow a zonal structure. ADVANTAGES AND DISADVANTAGES Accordingly, this structures is a decentralized structure and thus allows for flexibility and quick response to environmental changes. It also enhances innovation and differentiation strategies. On the other hand, this structure results in duplication of resources because, for ex.,we need to have warehouse for each division. Obviously, it does not support the exchange of knowledge between people working in the same profession because part of them are working in one division and the others are working in other divisions. CHART OF DIVISIONAL STRUCTURE MATRIX STRUCTURE This is a structure which is a combination of function and product structures. The employee has to work under two authorities (bosses). The authority of the Functional Manager flows downwards while the authority of the Project Manager flows across (side wards). So, the authority flows downwards and across. Therefore, it is called "Matrix Organisation". Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. CHART OF MATRIX STRUCTURE SPAN OF CONTROL "Span of control refers to the number of people that a manager can supervise.“ These are the factors affecting span of control: Geographical Location, if the branches of a business are widely dispersed, then the manager will find it difficult to supervise each of them, as such the span on control will be smaller. Capability of workers, if workers are highly capable, and do not require much supervision and can be left on their own, eg: Theory Y type of people, need not be supervised much as they are motivated and take initiative to work,as such the span of control will be wider. Similarity of task, if the task that the subordinates are performing are similar, then the span of control can be wider, as the manager can supervise them all at the same time. However, of course the capability of the supervisor has to also be taken into consideration. Abilities and skills of Superior Communication Network Level of Management Financial position of the Organisation DEPARTMENTATION The process of grouping of activities into units for the purpose of administration is called departmentation. It can be defined "as the process by which activities or functions of enterprise are grouped homogeneously into different groups." The administrative units are called divisions, units or departments. The followings are the basis of departmentation: When departmentation is done on the basis of functions the departments created are production, marketing, accounting, finance and personnel departments. When departmentation is done on basis of geographical area, the departments are known as eastern department, western department, northern and southern department. The Indian Railway, for example is divided along territorial lines into central railway, western railway and so on. Departmentation can be done on the basis of product handled.e.g.division of food products, chemical,electrical and textile products.For example, a food products company may choose to divide its operations into a frozen food department, a dairy products department etc. Departmentation on the basis of Process e.g. Example is production unit of textiles, where workshops dedicated to processes like spinning, weaving, dying etc. sequentially operate to manufacture the finished goods. Departmentation can be done on the basis of customers. Banks are having similar kind of departments - retail banking for retail customers, corporate banking for business clients, separate services for high net worth individuals, and so on. The rates offered for same products or services might be different in case of some departments compared to the routine business with retail individual customers, because again the volumes or the deal values might be very high. For example, a university that offers evening programs in addition to day programs attempts to comply with the requests and special needs of part-time and full-time students. Companies may have special departments to handle the particular requirements of wholesale and retail customers CENTRALIZATION AND DECENTRALIZATION Centralization is said to be a process where the concentration of decision making is in a few hands. The implication of centralization can be : Reservation of decision making power at top level. Reservation of operating authority with the middle level managers. Reservation of operation at lower level at the directions of the top level. Decentralization is a systematic delegation of authority at all levels of management and in all of the organization Implications of Decentralization There is less burden on the top executives. Subordinates get a chance to decide and act independently which develops skills and capabilities. Diversification and horizontal can be easily implanted. Diversification results into creating new departments. Greater motivation and morale of the employees since they get more independence to act and decide. STAFFING The managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personnels to fill the roles assigned to the employers/workforce. Staffing pertains to recruitment, selection, development and compensation of subordinates.” NATURE OF STAFFING Staffing is an important managerial function because the operations of other functions depend upon the manpower which is available through staffing function. Staffing is a pervasive activity- As staffing function is carried out by all mangers and in all types of concerns where business activities are carried out. Staffing is a continuous activity- This is because staffing function continues throughout the life of an organization due to the transfers and promotions that take place. Staffing function is efficient management of personnel's- Human resources can be efficiently managed by a system or proper procedure, that is, recruitment, selection, placement, training and development, providing remuneration, etc. Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment procedures and selection as per the job requirements. Staffing is performed by all managers depending upon the nature of business, size of the company, qualifications and skills of managers,etc. In small companies, the top management generally performs this function. In medium and small scale enterprise, it is performed especially by the personnel department of that concern. STAFFING PROCESS Analyzing Manpower requirements: It is making an analysis of work and estimating the manpower requirement to accomplish the same. Recruitment: It is identifying and attracting capable applicants for employment. it ends with the submission of applications by the aspirants. Selection: It is choosing the fit candidates from the applications received in the process of recruitment. Placement: This may be on probation and on successfully completion of the same the candidate may be offered permanent employment. Training and Development: It is concerned with imparting and developing specific skills for a particular purpose. Performance Appraisal: Systematic evaluation of personnel by superiors or others familiar with their performance so as to rank employees to ascertain their eligibilty for promotions. MANPOWER PLANNING Manpower Planning which is also called as Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization. MANPOWER PLANNING PROCESS Analysing the current manpower inventory- Before a manager makes forecast of future manpower, the current manpower status has to be analysed. For this the following things have to be notedType of organization Number of departments Employees in these work units Making future manpower forecasts- Once the factors affecting the future manpower forecasts are known, planning can be done for the future manpower requirements in several work units. The Manpower forecasting techniques includes Expert Forecasts,Trend Analysis includes extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division. Developing employment programmes- Compare the current inventory with future forecasts, and develop the employment programmes, which will include recruitment, selection procedures and placement plans. Design training programmes- These will be based upon extent of diversification, expansion plans etc. Training programmes depend upon the extent of improvement in technology and advancement to take place. It is also done to improve upon the skills, capabilities, knowledge of the workers. NEED OF MANPOWER PLANNING Manpower Planning is a two-phased process because manpower planning not only analyses the current human resources but also makes manpower forecasts and thereby draw employment programmes. Shortages and surpluses can be identified so that quick action can be taken wherever required. All the recruitment and selection programmes are based on manpower planning. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing can be avoided. It also helps to identify the available talents in a concern and accordingly training programmes can be chalked out to develop those talents. It helps in growth and diversification of business. Through manpower planning, human resources can be readily available and they can be utilized in best manner. TYPE OF INVENTORY Skills Inventory Employee Personal data Skills-education,job experience,training etc Special achievenment Salary and Job history Potentials of Employee MANAGEMENT INVENTORY Personal data Work History Strengths and Weaknesses Career Plan Promotion Potentials Number and Types of employee managed Total Budgets managed Any special achievement such as conferences attended,paper presented etc JOB ANALYSIS Job Analysis is a systematic exploration, study and recording the responsibilities, duties, skills, accountabilities, work environment and ability requirements of a specific job. Job Analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. 1. 2. There are two outcomes of job analysis : Job description Job specification NEED OF JOB ANALYSIS It identifies the personal qualifications necessary to perform the job and the conditions under which work is performed. It helps in finding out what a particular department requires and what a prospective worker needs to deliver. It also helps in determining particulars about a job including job title, job location, job summary, duties involved, working conditions, possible hazards and machines, tools, equipments and materials to be used by the existing or potential employee. To create and establish a perfect fit between the job and the employee. It helps HR managers in deciding the compensation package and additional perks and incentives for a particular job position. It helps in assessing the training needs and performance of the existing employees. Job Analysis helps in finding out the nature of a job(Job Description) and qualities if the likely job holder(Job Specification) JOB DESCRIPTION AND SPECIFICATIONS JOB SPECIFICATION Personal Characteristics-age,gender,education ,job experience and extra curricular activities. Physical Characteristics- height, weight ,chest ,vision,health,hand and foot coordination. Mental Characteristics such as general intelligence, memory,judgement,ability to concentrate etc Social and pscychological characteristics such as emotional stability, flexibility,initiative, conversational ability ,creativity etc. RECRUITMENT AND SELECTION Recruitment is the process of generating a pool of capable people to apply for employment to an organisation. Recruitment is the process of finding and attracting capable applicants for employment. SOURCES OF RECRUITMENT Sources of Recruitment SELECTION Employee Selection is the process of putting right men on right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. SELECTION PROCESS 1. 2. 3. 4. 5. 6. 7. 8. Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimum eligiblity criteria laid down by the organization. The skills, academic and family background, competencies and interests of the candidate are examined during preliminary interview. Preliminary interviews are also called screening interviews. Application blanks- The candidates who clear the preliminary interview are required to fill application blank. It contains data record of the candidates such as details about age, qualifications, reason for leaving previous job, experience, etc. Written Tests- Various written tests conducted during selection procedure are aptitude test, intelligence test, reasoning test, personality test, etc to assess the candidate. Employment Interviews- It is a one to one interaction between the interviewer and the potential candidate. It is used to find whether the candidate is best suited for the required job or not. Medical examination- Medical tests are conducted to ensure physical fitness of the potential employee. Approval by Appropriate Authority Reference Check Appointment Letter- A reference check is made about the candidate selected and then finally he is appointed by giving a formal appointment letter. DIFFEREENCE BETWEEN RECRUITMENT ANS SELECTION Basis Recruitment Selection Meaning It is an activity of establishing contact between employers and applicants. It is a process of picking up more competent and suitable employees. Objectives It encourages large number of Candidates for a job. It attempts at rejecting unsuitable candidates. Process It is a simple process. It is a complicated process. Hurdles The candidates have not to cross over many hurdles. Many hurdles have to be crossed. Approaches It is a positive approach. It is a negative approach. Sequence It proceeds selection. It follows recruitment. Economy It is an economical method. It is an expensive method. DIFFERENCE 1. Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation WHEREAS selection involves the series of steps by which the candidates are screened for choosing the most suitable persons for vacant posts. 2. The basic purpose of recruitments is to create a talent pool of candidates to enable the selection of best candidates for the organisation, by attracting more and more employees to apply in the organisation WHEREAS the basic purpose of selection process is to choose the right candidate to fill the various positions in the organisation. 3. Recruitment is a positive process i.e. encouraging more and more employees to apply WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates. 4. Recruitment is concerned with tapping the sources of human resources WHEREAS selection is concerned with selecting the most suitable candidate through various interviews and tests. 5. There is no contract of recruitment established in recruitment WHEREAS selection results in a contract of service between the employer and the selected employee. TRAINING Training is the process of enhancing the skills, capabilities and knowledge of employees for doing a particular job. Training process moulds the thinking of employees and leads to quality performance of employees. TWO APPROACHES OF T AND D Traditional approach Most of the organizations before never used to believe in training. They were holding the traditional view that managers are born and not made. There were also some views that training is a very costly affair and not worth. MODERN APPROACH Organizations have realized the importance of corporate training. Training is now considered as more of retention tool than a cost. It create a smarter workforce and yield the best results. METHODS OF TRAINING Cognitive Methods 1. Cognitive methods are more of giving theoretical training to the trainees. 2. The various methods under Cognitive approach provide the rules for how to do something, written or verbal information, demonstrate relationships among concepts, etc. COGNITIVE METHODS 1. Lectures: This method is used to create understanding of a topic or to influence behaviour, attitudes through lecture. 2. Lecture is given to enhance the knowledge of listener or to give him the theoretical aspect of a topic. Demonstration: This method is a visual display of how something works or how to do something. Example, trainer shows the trainees how to perform or how to do the tasks of the job. Helps the focusing their attention on critical aspects of the task. 3. Discussion method is a two-way flow of communication 4. knowledge in the form of lecture is communicated to trainees Then understanding is conveyed back by trainees to trainer in the form of verbal and non-verbal feedback. Computer based training(CBT):Providing training to employees through Intranet or Internet.CBT does not require face to face interaction with a human trainer. Example of CBT are intelligent tutorials,Instructions etc. BEHAVIOURAL METHODS Behavioral methods are more of giving practical training to the trainees . The various methods in this allows the trainee to behavior in a real fashion . These methods are best used for skill development. BEHAVIORAL APPROACHES BUSINESS GAMES: In business games, trainees are given some information that describes a particular situation and are then asked to make decisions that will best suit in the favour of the company. CASE STUDIES: The trainee is given with some written material, and the some complex situations of a real or imaginary organization. EQUIPMENT STIMULATORS: Equipment simulators can be used in giving training to: Taxi Drivers Telephone Operators Maintenance Workers Product Development Engineers Airline Pilots. ROLE PLAYS:Role play is a simulation in which each participant is given a role to play. Information is given to Trainees related to: description of the role , objectives responsibilities, emotions, etc. Then, a general description of the situation, and the problem that each one of them faces, is given. Example, Situation could be strike in factory, Managing conflict between two parties Scheduling vacation days, etc. ON THE JOB TRAINING Coaching: It involves direct personal instructions and guidance usually with demonstration and continuous critical evaluation and correction. It is one-to-one interaction It can be done on phone, meetings, through mails, chat etc. Mentoring: An ongoing relationship that is developed between a senior and junior employee. Mentoring provides guidance and clear understanding of how the organization works. Job Rotation: Where the trainee is given several jobs in succession, to gain experience of a wide range of activities (e.g. a graduate management trainee might spend periods in several different departments) Job Instruction Technique(JIT):Step by step (structured) on the job training method in which a trainer (1) prepares a trainee with an overview of the job, its purpose, and the results desired, (2) demonstrates the task or the skill to the trainee, (3) allows the trainee to mimic the demonstration on his or her own, and (4) follows up to provide feedback and help. OFF THE JOB TRAINING Off the Job Training:This occurs when employees are taken away from their place of work to be trained. Common methods of off-the-job training include: Day release (employee takes time off work to attend a local college or training centre) Distance learning / evening classes Block release courses - which may involve several weeks at a local college Sandwich courses - where the employee spends a longer period of time at college (e.g. six months) before returning to work Sponsored courses in higher education INDUCTION TRAINING Induction training is important as it enables a new recruit to become productive as quickly as possible. The length of induction training will vary from job to job and will depend on the complexity of the job, the size of the business and the level or position of the job within the business. The following areas may be included in induction training: Learning about the duties of the job Meeting new colleagues Seeing the layout of the premises Learning the values and aims of the business Learning about the internal workings and policies of the business Vestibule Training:The employees are trained in a separate area/Training centres (known as a vestibule) where the actual working conditions are duplicated. RECRUITMENT PROCESS PERFORMANCE APPRAISAL Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. OBJECTIVES OF PERFORMANCE APPRAISAL To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. To identify the strengths and weaknesses of employees to place right men on right job. To maintain and assess the potential present in a person for further growth and development. To provide a feedback to employees regarding their performance and related status. To review and retain the promotional and other training programmes. ADVANTAGES OF PERFORMANCE APPRAISAL Communication:Through performance appraisal, communication can be sought for in the following ways: Through performance appraisal, the employers can understand and accept skills of subordinates. The subordinates can also understand and create a trust and confidence in superiors. It also helps in maintaining cordial management relationship. It develops the spirit of work and boosts the morale of employees. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. Compensation: Performance Appraisal helps in chalking out compensation packages for employees Compensation packages which includes bonus, high salary rates, extra benefits, allowances. Development: It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes. IMPORTANCE OF PA To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. METHODS OF PERFORMANCE APPRAISAL Ranking Ranking methods compare one employee to another, resulting in an ordering of employees in relation to one another. The ranking system requires the rater to rank his subordinates on overall performance. This consists in simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is done against that of another employee. Forced Distribution Forced distribution is a form of comparative evaluation in which an evaluator rates subordinates according to a specified distribution. Use of the forced distribution method is demonstrated by a manager who is told that he or she must rate subordinates according to the following distribution: 10 percent low; 20 percent below average; 40 percent average; 20 percent above average; and 10 percent high. In a group of 20 employees, two would have to be placed in the low category, four in the below-average category, eight in the average, four above average, and two would be placed in the highest category. CRITICAL INCIDENT TECHNIQUES Under this method, the manager prepares lists of statements of very effective and ineffective behaviour of an employee. These critical incidents or events represent the outstanding or poor behaviour of employees or the job. The manager maintains logs of each employee, whereby he periodically records critical incidents of the workers behaviour. WEIGHTED CHECKLIST METHOD In this system, a large number of statements that describe a specific job are given. Each statement has a weight or scale value attached to it. While rating an employee the supervisor checks all those statements that most closely describe the behaviour of the individual under assessment. The rating sheet is then scored by averaging the weights of all the statements checked by the rater. SAMPLE OF WEIGHTED CHECKLIST Does he give respect to his superiors? Yes/No Does he follow instructions properly? Yes/No Does he make mistakes frequently? Yes/No Based on elements of job performance, you can design questions as follows (for example) Employee works overtime when asked to?Yes/No Employee keeps work station well organized?Yes/No Employee listens to advice but seldom follows it?Yes/No Employee cooperatively assists coworkers who need help?Yes/No Employee plans actions before beginning work?Yes/No ESSAY METHOD This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. GRAPHIC RANKING SCALE In this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the job. The printed form prepared for the Graphic Rating contains various employee characteristics and his job performance. Characteristics can be initiative,leadership, dependability, creativity,maturity etc Job performance includes quality and quantity of work, responsibilities,specific targets achieved, regularity of attendance etc. GRAPHIC RATING SCALE 360 DEGREE PERFORMANCE METHOD 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. Such as his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors . Anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the "on-the-job" performance of the employee. 360 DEGREE PERFORMANCE APPRAISAL COMPONENTS OF 360 DEGREE 360 degree appraisal has four integral components: 1. Self appraisal 2. Superior’s appraisal 3. Subordinate’s appraisal 4. Peer appraisal. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree performance appraisal where the employees’ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others. DIRECTING Directing refers to instructing, guiding, communicating and inspiring people, so that objectives can be achieved. In the process of directing, the employees are given instructions and guidance to achieve a goal or objective. They are trained to develop communication and are inspired to achieve their objectives. Directing is a continuous process initiated at top level and flows to the bottom through organisational hierarchy. IMPORTANCE OF DIRECTING It Initiates Actions - Directions is the function which is the starting point of the work performance of subordinates. Through directing function subordinates understand their jobs and do according to the instructions. It Ingrates Efforts - Through direction, the superiors are able to guide, inspire and instruct the subordinates to work.It is through direction the efforts of every department can be related and integrated with others. Means of Motivation - A manager makes use of the element of motivation here to improve the performances of subordinates. This can be done by providing incentives or compensation, whether monetary or non - monetary, which serves as a “Morale booster” to the subordinates. It Provides Stability - Stability and balance in concern becomes very important for long term sun survival in the market. This can be brought upon by the managers with the help of four tools or elements of direction function which is a blend of persuasive leadership, effective communication, strict supervision and efficient motivation. Coping up with the changes- Adaptability with changing environment helps in sustaining planned growth and becoming a market leader. Effective communication helps in coping up with the changes Efficient Utilization of Resources - Direction finance helps in clarifying the role of every subordinate towards his work. The resources can be utilized properly only when less of wastages and duplication which helps in maximum possible utilization of resources of men, machine, materials and money. CHARACTERISTICS OF DIRECTING Direction initiates actions to get the desired results in an organisation. Direction attempts to get maximum out of employees by identifying their capabilities. Direction is essential to keep the elements like Supervision, Motivation, Leadership and Communication effective. It ensures that every employee work for organisational goals. Coping up with the changes in the Organisation is possible through effective direction. Stability and balance can be achieved through directing. ELEMENTS OF DIRECTING Supervision:Supervision denotes the functions performed by the supervisors. "Guiding and directing efforts of employees and other resources to accomplish stated work outputs” "Day-to-day relationship between an executive and his immediate assistant and covers training, direction, motivation, coordination, maintenance of discipline, etc." Motivation "Motivation is the complex force starting and keeping a person at work in an organisation. Motivation is something that moves the person to action, and continues him in the course of action already initiates.“ Motivation is an internal desire and force that drives us to accomplish tasks and goals. Communication "Communication is the transfer of information from one person to another person. It is a way of reaching others by transmitting ideas, facts, thoughts, feeling sand values." MOTIVATION Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. Factors stimulating the people’s behaviour can be desire for money success recognition job-satisfaction team work, etc PROCESS OF MOTIVATION The process of motivation consists of three stages: A felt need or drive A stimulus in which needs have to be aroused When needs are satisfied, the satisfaction or accomplishment of goals. The needs of individual serves as a driving force in human behaviour. MOTIVATION AND PERFORMNACE Factors affecting indivisual performance can be: Motivation: Level of motivation drives an individual for work. Sense of competence: Extent to which an individual regards himself as capable of doing work. Ability=Knowledge*Skills Role Perception: Pattern of actions expected of a person in activities involving others. Organizational Resources IMPORTANCE OF MOTIVATION 1. 2. 3. Puts human resources into action This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources. Improves level of efficiency of employees For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result into- Increase in productivity ,Reducing cost of operations, and Improving overall efficiency. Leads to achievement of organizational goals The goals of an enterprise can be achieved only when the following factors take place :There is best possible utilization of resources, There is a co-operative work environment, The employees are goal-directed and they act in a purposive manner, Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation. Builds friendly relationship In order to build a cordial, friendly atmosphere in a concern, various incentive plans has been framed which would help in: Effective co-operation which brings stability, Industrial dispute and unrest in employees will reduce, The employees will be adaptable to the changes and there will be no resistance to the change, MOTIVATION FOR INDIVISUAL AND BUSINESS Motivation is important to an individual as: 1. Motivation will help him achieve his personal goals. 2. If an individual is motivated, he will have job satisfaction. 3. Motivation will help in self-development of individual. 4. An individual would always gain by working with a dynamic team. Motivation is important to a business as: 1. The more motivated the employees are, the more empowered the team is. 2. The more is the team work and individual employee contribution, more profitable and successful is the business. 3. During period of amendments, there will be more adaptability and creativity. 4. Motivation will lead to an optimistic and challenging attitude at work place. INTRINSIC AND EXTRINSIC Motivation is the combination of a person's desire and energy directed at achieving a goal. It is the cause of action. Motivation can be intrinsic, such as satisfaction and feelings of achievement; or extrinsic, such as rewards, punishment, and goal obtainment. MOTIVATION TECHNIQUES Job Rotation Job rotation, also known as cross-training, can be very effective for employees that perform repetitive tasks in their job. Job rotation allows the employees to learn new skills by shifting them from one task to another. Job Enlargement Job enlargement is a motivation technique used for employees that perform very few and simple tasks. Job enlargement increases the number and variety of tasks that the employee performs, resulting in a feeling of importance. Job Enrichment This method increases the employees control over the work being performed. It allows employees to control the planning, execution, and evaluation of their own work, resulting in freedom, independence, and added responsibility. Flextime It allows employees to choose their own work schedule, to a certain extent. Variable-Pay Programs Merit-based pay, bonuses, gain sharing, and stock ownership plans are all great motivators for employees. Employee Participation People want to feel like they are a part of something. Letting the employees be more active in the decision-making related to their job makes them feel valued and important to the company and increases job motivation.
