MANAGEMENT LEVELS NOTES

Introduction

Management is involved in coordinating all factors of production so that they can contribute positively to the organizational goals. Management is involved in utilization of human resources and other resources such as machinery, capital, information and time in the organization. In this chapter we will address the basic functions of a manager, skills that effective manager requires , roles that managers have in their organizations and various management levels and decisions made in each of this levels.

Definition
Management is the process of achieving organizational goals through engaging in the four major functions of planning, organizing, leading and controlling. Another defines management as the process of working with people and resources to accomplish organizational goals. Management involves coordinating and overseeing the work activities of others so that their activities are completed efficiently and effectively. (Coulter & Robbins 2007) A more comprehensive definition of management states that management is a process of assembling and using resources (human, financial, material and information) in a goal directed manner to accomplish tasks in an organization. Managers are those individuals who bring together the money manpower materials and machinery necessary to operate a business. They make decision and decide course of action that the organization takes. A manager is someone who works with and through other people by coordinating their work activities in order to accomplish organizational goals.

Management levels
Managers’ decisions vary with their level in the organization. Each level requires different skills too given the fact that they perform different functions. Top management includes president, chief executive officer, chief financial officer, and vice president (the titles may differ among organizations). The decisions that are made by managers in this level are strategic in nature meaning they stretch over five years and cover the whole organization. Decisions in this level are also unstructured and include answering questions such as should we expand? How can we expand? (Is it through acquisition or merger or joint ventures?) Middle level management includes position such as regional manager and departmental heads. They are responsible for business’s short-term decisions. Much of their work involves implementing in their region or department what the top managers have deliberated. The decision-making in this level is semi-structured since they have to conform to the top management decisions. First line management (supervisory) mostly oversees the employees who are engaged in day-to-day production process. They deal with issues such as employee absenteeism and customer complaints. (Madura 2007)

Management Functions

PLANNING
Planning is the function of management that involves setting objectives and determining a course of action for achieving these objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision-makers. Planning is a process consisting of several steps. The process begins with environmental scanning, which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning. Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary. There are many different types of plans and planning.

Strategic Planning
Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conducts strategic planning.

Tactical Planning
Tactical planning is intermediate-range planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Tactical planning often has a one- to three-year time horizon.

Operational Planning
Operational planning generally assumes the existence of objectives and specifies ways to achieve them. Operational planning is short-range planning that is designed to develop specific action steps that support the strategic and tactical plans. Operational planning usually has a very short time horizon, from one week to one year.

ORGANIZING
Organizing is the managerial function of arranging people and resources to work toward a goal. The purposes of organizing include but are not limited to determining the tasks to be performed in order to achieve objectives, dividing tasks into specific jobs, grouping jobs into departments, specifying reporting and authority relationships, delegating the authority necessary for task accomplishment, and allocating and deploying resources in a coordinated fashion.

Organizing plays a central role in the management process. Once plans are created the manager’s task is to see that they are carried out. Given a clear mission, core values, objectives, and strategy, the role of organizing is to begin the process of implementation by clarifying jobs and working relationships. It identifies who is to do what, who is in charge of whom, and how different people and parts of the organization relate to and work with one another. All of this, of course, can be done in different ways. The strategic leadership challenge is to choose the best organizational form to fit the strategy and other situational demands.

Organizing Decisions
When organizing, managers must make decisions about the division of labour and work specialization, departmentalization, chain of command, span of management, centralization, and formalization. Collectively, these decisions are often called organizational design- the process of structuring an organization

Division of Labour or Specialization
Division of labour contributes to increased productivity and efficiency by allowing workers to specialize and become proficient at a specific task. This principle, coupled with technological advances, has made possible the tremendous productivity of industrial companies during most of the twentieth century. By the 1940s most manufacturing jobs in developed nations were highly specialized, with workers performing specific, standardized, and repetitive tasks. This resulted in reduced staffing, training, and compensation costs, since highly skilled workers were often not necessary. In addition, since employees were doing the same task repetitively, they tended to become very good at it. Despite the improvements in productivity made possible by the division of labour, managers must be aware of the negative aspects of specialization: fatigue, stress, boredom, low quality products, absenteeism, and turnover. Such problems have led to programs geared toward job enlargement and job enrichment.

Departmentalization
After the work to be completed is organized into identifiable jobs through a process of dividing labour, jobs are then combined into logical sections or departments. Doing so allows for effective coordination of effort. There are many ways to departmentalize, each of which has important advantages and disadvantages. One of the most common forms is functional departmentalization, which involves grouping similar jobs into a common department, such as accounting, sales, human resources, and engineering. Another form is product departmentalization, which involves organizing around an enterprise’s various product lines. Other ways of departmentalizing include organizing by customer and by geographic territory. In practice, most large companies use a hybrid form of departmentalization, which means they combine one or more of the above methods to form their organizational structure.

Chain of Command
The chain of command is a line of authority extending from the top to the bottom of the organizational structure. Classic principles of organizing emphasize that one must be aware of the need to define the extent of managers’ responsibility and authority by specifying their place in the chain of command. Another principle of organizing related to the chain of command is called the unity of command, which states that a person should have only one superior to whom he or she must report.

Span of Management
The span of management, often called the span of control, is the number of individuals who are directly responsible to a particular manager. A classic principle of organizing suggests that there are definite limits to the number of subordinates one manager can supervise effectively. When organizing, managers must keep these limits in mind. Wide spans of management lead to flatter organizational structures with fewer layers of management, and are thus considered more efficient. However, if spans become too wide managers may not be able to provide adequate direction to subordinates. Narrow spans of management lead to tall organizational structures with many layers of management. Although narrower spans of management allow for closer supervision of subordinates they have many drawbacks, including cost, communication problems, and difficulty in developing the initiative and autonomy of subordinates. In general, the trend is toward wider spans of management, with an accompanying decrease in management hierarchy. Technological advances in information processing and communication have made wider spans of management more feasible.

Degree of Centralization
Another organizing decision is the degree of centralization in the organizational structure. If decision-making authority in an organization is highly centralized, then most major decisions are made at the upper levels of the structure. Conversely, if decision-making authority is decentralized, important decisions are often made at lower levels of the hierarchy. The degree of centralization that is appropriate for a given organization depends upon many factors, including the nature of the environmental conditions that face the enterprise, the characteristics and abilities of lower-level employees, and the size of the enterprise. Many organizations are favouring a greater degree of decentralization of their decision-making authority.

Formalization
The degree of formalization in an enterprise refers to the degree to which there are standardized rules and procedures governing the activities of employees. A company with a high degree of formalization is characterized by detailed job descriptions and clearly defined policies and procedures covering a wide variety of employee behaviours. Conversely, a company with a low level of formalization is characterized by nonstructured jobs and fewer explicit policies and procedures. As companies grow larger, a certain amount of formalization is inevitable. Employees require some direction in their job responsibilities and in the procedures required for consistency within the organization’s production schema. When organizing, however, managers should be aware of the costs of excessive formalization, which may include stifling employee creativity and innovation as well as slowing the organization’s
responsiveness to critical issues and problems.

Factors Affecting Organizing Decisions
There is no standard formula for the best way to organize an enterprise. Several factors have been shown to influence organizing decisions. Among the most important of these factors are strategy, size, environmental conditions, and technology.

Strategy
Managers organize in order to achieve the objectives of the enterprise for which they work. Thus, the strategy of the enterprise affects organizing decisions. Changes in strategy frequently necessitate changes in the way the enterprise is organized.

Size
Small enterprises tend to exhibit less formalization, centralization, and complexity in their organizational structure. Nevertheless, enterprises of the same size may be organized quite differently because of differences in strategy, environmental conditions, and technology.

Environmental Conditions
The key factor in the external environment that is relevant to organizing is uncertainty. Some enterprises face competitive environments that change rapidly and are quite complex, while others face relatively stable conditions. Generally, turbulent environments call for organizing decisions that lead to less formalization and centralization in the organizational structure.

Technology
The processes by which an enterprise transforms inputs into outputs may also affect organizing decisions. Some research suggests that organizing decisions that lead to high degrees of formalization, centralization, and work specialization are more appropriate for routine technologies and that the converse is true for non-routine technologies.

Organization structure
Organizational structure – is the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate to achieve an organization’s goals. Organizational design – is the process by which managers select and manage various dimensions and components of organizational structure and culture so that an organization can achieve its goals.

Structure and culture affect:

  1. Behaviour
  2. Motivation
  3. Performance
  4. Teamwork and cooperation
  5. Inter-group and Interdepartmental relationships

What bearing does organizational design have on organizational behaviour?
The way a structure or culture is designed or evolves over time affects the way people and groups behave within the organization.
Once an organization decides how it wants its members to behave, what attitudes it wants to encourage, and what it wants its members to accomplish, it can then design its structure and encourage the development of the cultural values and norm to obtain these desired attitudes, behaviours, and goals.

How does an organization determine which attitudes and behaviours to encourage? An organization bases these design decisions on the contingencies it faces (a contingency is any event that might possibly occur and thus must be taken into account in planning).
The three major contingencies that determine what kind of structure and culture an organization designs:

  1. Organization’s environment
  2. Technology an organization uses
  3. Organization’s strategy.

In developing an organizational structure, managers must decide how to differentiate and group an organization’s activities by function and division in a way that achieves organizational goals effectively.’ The result of this process can be most easily seen in an organizational chart that shows the relationship between an organization’s functions and divisions.

Types of organizational structures

Functional Structure
Functional structure groups people together because they hold similar positions in an organization, perform a similar set of tasks, or use the same kind of skills. This division of labour and specialization allows an organization to become more effective.

Advantages of a Functional Structure

Coordination Advantages

Easy communication among specialists – People grouped together according to similarities in their positions can easily communicate and share information with each other.

  1. Quick decisions – People who approach problems from the same perspective can often make decisions more quickly and effectively than can people whose perspectives differ.
  2. Learning – Makes it easier for people to learn from one another’s experiences.

Thus a functional structure helps employees improve their skills and abilities and thereby enhances individual and organizational performance.

Motivation Advantages

  1. Facilitates performance evaluation for supervisor – Supervisors are in a good position to monitor individual performance, reward high performance, and discourage social loafing. Functional supervisors find monitoring easy because they usually possess high levels of skill in the particular function.
  2. Facilitates performance evaluation for peers – Allows group members to monitor and control one another’s behaviour and performance levels.
  3. Creates teamwork – Can also lead to the development of norms, values, and group cohesiveness that promote high performance.
  4. Creates a career ladder – Functional managers and supervisors are typically workers who have been promoted because of their superior performance.

Disadvantages of a Functional Structure

  1. Serving needs of all products – When the range of products or services that a company produces increases, the various functions can have difficulty
  2. Coordination – As organizations attract customer with different needs, they may find it hard to service these different needs by using a single set of functions.
  3. Serving needs of all regions – As companies grow, they often expand their operations nationally, and servicing the needs of different regional customers by using a single se of manufacturing, sales, or purchasing functions becomes very
    difficult.

Divisional Structures: Product, Market, and Geographic
A divisional structure that overlays functional groupings allow an organization to coordinate inter-group relationships more effectively than does a functional structure

Product Structure
Each product division contains the functions necessary to that service the specific goods or services it produces.

What are the advantages of a product structure?
It increases the division of labour so that the number similar products can be increased (such as a wider variety of appliances like stoves, or ovens) expand into new markets and produce totally new kinds of products (such as when an appliance maker starts to produce computers or air planes).

Market Structure
Market Structure – Group functions into divisions that can be responsive to the needs of particular types of customers.

Geographic Structure
An organization facing the problem of controlling its activities on a national or international level is likely to use a geographic structure and group functions into regional divisions to service customers in different geographic areas. Each geographic division has access to a full set of the functions it needs to provide its goods and services.

Advantages of a Divisional Structure
Coordination Advantages

  1. Quality products and customer service – Functions are able to focus their activities on a specific kind of good, service, or customer. This narrow focus helps a division to create high-quality products and provide high-quality customer service.
  2. Facilitates communication – between functions improve decision making, thereby increasing performance.
  3. Customized management and problem solving – A geographic structure puts managers closer to the scene of operations than are managers at central headquarters. Regional managers are well positioned to be responsive to local situations such as the needs of regional customers and to fluctuations in resources. Thus regional divisions are often able to find solutions to region specific problems and to use available resources more effectively than are managers at corporate headquarters.
  4. Facilitates teamwork – People are sometimes able to pool their skills and knowledge and brainstorm new ideas for products or improved customer service.
  5. Facilitates decision making – As divisions develop a common identity and approach to solving problems, their cohesiveness in- creases, and the result is improved decision making.

Motivation Advantages

  1. Clear connection between performance and reward – A divisional structure makes it relatively easy for organizations to evaluate and reward the performance of individual divisions and their managers and to assign rewards in a way that is closely linked to their performance. Corporate managers can also evaluate one regional operation against another and thus share ideas between regions and find ways to improve performance.
  2. Customized service – regional managers and employees are close to their customers and may develop personal relationships with them-relationships that may give those managers and employees extra incentive to perform well.
  3. Identification with division – employees’ close identification with their division can increase their commitment, loyalty, and job satisfaction.

Disadvantages of a Divisional Structure

  1. High operating and managing costs – because each division has its own set of functions, operating costs- the costs associated with managing an organization-increase. The number of managers in an organization, for example, increases, because each division has its own set of sales managers, manufacturing managers, and so on. There is also a completely new level of management, the corporate level, to pay for.
  2. Poor communication between divisions – Divisional structures normally have more managers and more levels of management than functional structures have, communications problems can arise as various managers at various levels in various divisions attempt to coordinate their activities.
  3. Conflicts among divisions – divisions may start to compete for organizational resources and may start to pursue divisional goals and objectives at the expense of organizational ones.

Matrix Structure
A complex form of differentiation that some organizations use to control their activities results in the matrix structure, which simultaneously groups people in two ways- by the function of which they are a member and by the product team on which they are currently working In practice, the employees who are members of the product teams in a matrix structure have two bosses-a functional boss and a product boss.

Coordination Advantages

  1. Facilitates rapid product development
  2. Maximizes communication and cooperation between team members
  3. Facilitates innovation and creativity
  4. Facilitates face-to-face problem solving (through teams)
  5. Provides a work setting in which managers with different functional expertise can cooperate to solve non-programmed decision-making problems.
  6. Facilitates frequent changes of membership in product teams

Motivation Advantages
The matrix structure provides a work setting in which such employees are given the freedom and autonomy to take responsibility for their work activities.

Disadvantages of a Matrix Structure

  1. Increase role conflict and role ambiguity- Two bosses making conflicting demands on a two-boss employee cause role conflict. Reporting relationships in the matrix makes employees vulnerable to role ambiguity.
  2. High levels of work stress- Conflict and ambiguity can increase feelings of stress. Difficulty employees have in demonstrating their personal contributions to team performance because they move so often from one team to another.
  3. Limited opportunities for promotion- because most movement is lateral, from team to team, not vertical to upper management positions.

The extent of these problems explains why matrix structures are used only by companies that depend on rapid product development for their survival and that manufacture products designed to meet specific customer needs. Matrix structures are especially common in high-tech and biotechnology companies.

STAFFING
The managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personnel to fill the roles assigned to the employers/workforce. According to Theo Haimann, “Staffing pertains to recruitment, selection, development and compensation of subordinates.”

Nature of Staffing Function

  1. Staffing is an important managerial function- Staffing function is the most important managerial act along with planning, organizing, directing and controlling. The operations of these four functions depend upon the manpower
    which is available through staffing function.
  2. 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.
  3. 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.
  4. The basis of staffing function is efficient management of personnel- Human resources can be efficiently managed by a system or proper procedure, that is, recruitment, selection, placement, training and development, providing remuneration, etc.
  5. Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment procedures and then finally selecting the most suitable candidate as per the job requirements.
  6. 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 Staffing Process – Steps involved in Staffing

Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a concern in order to match them with the job requirements and demands. Therefore, it involves forecasting and determining the future manpower needs
of the concern.

Recruitment- Once the requirements are notified, the concern invites and solicits applications according to the invitations made to the desirable candidates.

Selection- This is the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as per the requirements.

Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to the work units and work environment through the orientation programmes. Placement takes place by putting right man on the right job.

Training and Development- Training is a part of incentives given to the workers in order to develop and grow them within the concern. Training is generally given according to the nature of activities and scope of expansion in it. Along with it, the workers are developed by providing them extra benefits of in-depth knowledge of their functional areas. Development also includes giving them key and important jobs as a test or examination in order to analyze their performances.

Remuneration- It is a kind of compensation provided monetarily to the employees for their work performances. This is given according to the nature of job- skilled or unskilled, physical or mental, etc. Remuneration forms an important monetary incentive for the employees.

Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as opinions of the workers towards their jobs, regular assessment is done to evaluate and supervise different work units in a concern. It is basically concerning to know the development cycle and growth patterns of the employees in a concern.

Promotion and transfer-Promotion is said to be a non- monetary incentive in which the worker is shifted from a higher job demanding bigger responsibilities as well as shifting the workers and transferring them to different work units and branches of the same organization.

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. Human Resource Planning has got an important place in the arena of industrialization. Human Resource Planning has to be a systems approach and is carried out in a set procedure. The procedure is as follows:

  1. Analyzing the current manpower inventory
  2. Making future manpower forecasts
  3. Developing employment programmes
  4. Design training programmes

Analyzing the current manpower inventory- Before a manager makes forecast of future manpower, the current manpower status has to be analyzed. For this the following things have to be noted-

  1. Type of organization
  2. Number of departments
  3. Number and quantity of such departments
  4. Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting. 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 commonly employed by the organizations are as follows:

  1. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique.
  2. Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure).
  3. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division.
  4. Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have to be made for getting net manpower requirements.
  5. Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis.

Developing employment programmes- Once the current inventory is compared with future forecasts, the employment programmes can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans.

Design training programmes- These will be based upon extent of diversification, expansion plans, development programmes 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.

Importance of Manpower Planning

  1. Key to managerial functions- The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the manpower. Human
  2. Efficient utilization- Efficient management of personnel’s becomes an important function in the industrialization world of today. Setting of large scale enterprises requires management of large scale manpower. It can be effectively done through staffing function.
  3. Motivation- Staffing function not only includes putting right men on right job, but it also comprises of motivational programmes, i.e., incentive plans to be framed for further participation and employment of employees in a concern. Therefore, all types of incentive plans become an integral part of staffing function.
  4. Better human relations- A concern can stabilize itself if human relations develop and are strong. Human relations become strong trough effective control, clear communication, effective supervision and leadership in a concern. Staffing function also looks after training and development of the work force which leads to co-operation and better human relations.
  5. Higher productivity- Productivity level increases when resources are utilized in best possible manner. Higher productivity is a result of minimum wastage of time, money, efforts and energies. This is possible through the staffing and it’s related activities ( Performance appraisal, training and development, remuneration)

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. Manpower Planning is advantageous to firm in following manner:

  1. Shortages and surpluses can be identified so that quick action can be taken wherever required.
  2. All the recruitment and selection programmes are based on manpower planning.
  3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing can be avoided.
  4. It also helps to identify the available talents in a concern and accordingly training programmes can be chalked out to develop those talents.
  5. 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.
  6. It helps the organization to realize the importance of manpower management which ultimately helps in the stability of a concern.

Obstacles in Manpower Planning
Following are the main obstacles that organizations face in the process of manpower planning:

  1. Under Utilization of Manpower: The biggest obstacle in case of manpower planning is the fact that the industries in general are not making optimum use of their manpower and once manpower planning begins, it encounters heavy odds in
    stepping up the utilization.
  2. Degree of Absenteeism: Absenteeism is quite high and has been increasing since last few years.
  3. Lack of Education and Skilled Labour: The extent of illiteracy and the slow pace of development of the skilled categories account for low productivity in employees. Low productivity has implications for manpower planning.
  4. Manpower Control and Review:
  • Any increase in manpower is considered at the top level of management
  • On the basis of manpower plans, personnel budgets are prepared. These act as control mechanisms to keep the manpower under certain broadly defined limits.
  • The productivity of any organization is usually calculated using the formula:
    Productivity = Output / Input
    But a rough index of employee productivity is calculated as follows:
    Employee Productivity = Total Production / Total no. of employees
  • Exit Interviews, the rate of turnover and rate of absenteeism are source of vital information on the satisfaction level of manpower. For conservation of Human Resources and better utilization of men studying these conditions, manpower control would have to take into account the data to make meaningful analysis.
  • Extent of Overtime: The amount of overtime paid may be due to real shortage of men, ineffective management or improper utilization of manpower. Manpower control would require a careful study of overtime statistics.

Types of Recruitment

Recruitment is of 2 types

Internal Recruitment – is a recruitment which takes place within the concern or organization. Internal sources of recruitment are readily available to an organization. Internal sources are primarily three – Transfers, promotions and Reemployment of ex-employees. Re-employment of ex-employees is one of the internal sources of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are situations when ex-employees provide unsolicited applications also. Internal recruitment may lead to increase in employee’s productivity as their motivation level increases. It also saves time, money and efforts. But a drawback of internal recruitment is that it restrains the organization from new blood. Also, not all the manpower requirements can be met through internal recruitment. Hiring from outside has to be done.
Internal sources are primarily 3:

  1. Transfers
  2. Promotions (through Internal Job Postings) and
  3. Re-employment of ex-employees – Re-employment of ex-employees is one of the internal sources of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are situations when ex-employees provide unsolicited applications also.

External Recruitment – External sources of recruitment have to be solicited fromoutside the organization. External sources are external to a concern. But it involves lot of time and money .The external sources of recruitment include – Employment at factory gate, advertisements, employment exchanges, employment agencies, educational institutes, labour contractors, recommendations etc.

1. Employment at Factory Level – This a source of external recruitment in which the applications for vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind of recruitment is applicable generally where factory workers are to be appointed. There are people who keep on soliciting jobs from one place to another. These applicants are called as unsolicited applicants. These types of workers apply on their own for their job. For this kind of recruitment workers have a tendency to shift from one factory to another.

2. Advertisement – It is an external source which has got an important place in recruitment procedure. The biggest advantage of advertisement is that it covers a wide area of market and scattered applicants can get information from advertisements. Medium used is Newspapers and Television.

3. Employment Exchanges – There are certain Employment exchanges which are run by government. Most of the government undertakings and concerns employ people through such exchanges. Now-a-days recruitment in government agencies has become compulsory through employment exchange.

4. Employment Agencies – There are certain professional organizations which look towards recruitment and employment of people, i.e. these private agencies run by private individuals supply required manpower to needy concerns.

5. Educational Institutions – There are certain professional Institutions which serve as an external source for recruiting fresh graduates from these institutes. This kind of recruitment done through such educational

6. Recommendations – There are certain people who have experience in a particular area. They enjoy goodwill and a stand in the company. There are certain vacancies which are filled by recommendations of such people. The biggest drawback of this source is that the company has to rely totally on such people which can later on prove to be inefficient.

7. Labour Contractors – These are the specialist people who supply manpower to the Factory or Manufacturing plants. Through these
contractors, workers are appointed on contract basis, i.e. for a particular time period. Under conditions when these contractors leave the organization, such people who are appointed have to also leave the concern.

Employee Selection Process
It is a procedure of matching organizational requirements with the skills and qualifications of people. Effective selection can be done only when there is effective matching. By selecting best candidate for the required job, the organization will get quality performance of employees. Moreover, organization will face less of absenteeism and employee turnover problems. By selecting right candidate for the required job, organization will also save time and money. Proper screening of candidates takes place during selection procedure. All the potential candidates who apply for the given job are tested.

But selection must be differentiated from recruitment, though these are two phases of employment process. Recruitment is considered to be a positive process as it motivates more of candidates to apply for the job. It creates a pool of applicants. It is just sourcing of data. While selection is a negative process as the inappropriate candidates are rejected here. Recruitment precedes selection in staffing process. Selection involves choosing the best candidate with best abilities, skills and knowledge for the required job. The Employee selection Process takes place in following orderi)

Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimum eligibility 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 less formalized and planned than the final interviews. The candidates are given a brief up about the company and the job profile; and it is also examined how much the candidate knows about the company. Preliminary interviews are also called screening interviews.

– 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. These tests are used to objectively assess the potential candidate. They should not be biased.

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. But such interviews consume time and money both.
Moreover the competencies of the candidate cannot be judged. Such interviews may be biased at times. Such interviews should be conducted properly. No distractions should be there in room. There should be an honest communication between candidate and interviewer.

Medical examination– Medical tests are conducted to ensure physical fitness of the potential employee. It will decrease chances of employee absenteeism.

Appointment Letter– A reference check is made about the candidate selected and then finally he is appointed by giving a formal appointment letter.

Orientation and Placement
Once the candidates are selected for the required job, they have to be fitted as per the qualifications. Placement is said to be the process of fitting the selected person at the right job or place i.e. fitting square pegs in square holes and round pegs in round holes.
Once he is fitted into the job, he is given the activities he has to perform and also told about his duties. The freshly appointed candidates are then given orientation in order to familiarize and introduce the company to him. Generally the information given during the orientation programme includes) Employee’s layout

  1. Type of organizational structure
  2. Departmental goals
  3. Organizational layout
  4. General rules and regulations
  5. Standing Orders
  6. Grievance system or procedure

During Orientation employees are made aware about the mission and vision of the organization, the nature of operation of the organization, policies and programmes of the organization. The main aim of conducting Orientation is to build up confidence, morale and trust of the employee in the new organization, so that he becomes a productive and an efficient employee of the organization and contributes to the organizational success.

The nature of Orientation program varies with the organizational size, i.e., smaller the organization the more informal is the Orientation and larger the organization more formalized is the Orientation programme. Proper Placement of employees will lower the chances of employee’s absenteeism. The employees will be more satisfied and contended with their work.

Training of Employees
Training of employees takes place after orientation takes place. 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. It is continuous and never ending in nature.

Importance of Training
Training is crucial for organizational development and success. It is fruitful to both employers and employees of an organization. An employee will become more efficient and productive if he is trained well. Training is given on four basic grounds:

  1. New candidates who join an organization are given training. This training familiarizes them with the organizational mission, vision, rules and regulations and the working conditions.
  2. The existing employees are trained to refresh and enhance their knowledge.
  3. If any updating and amendments take place in technology, training is given to cope up with those changes. For instance, purchasing new equipment, changes in
  4. When promotion and career growth becomes important. Training is given so that employees are prepared to share the responsibilities of the higher level job.

The benefits of training can be summed up as:

  1. Improves morale of employees- Training helps the employee to get job security and job satisfaction. The more satisfied the employee is and the greater is his morale, the more he will contribute to organizational success and the lesser will be employee absenteeism and turnover.
  2. Less supervision- A well trained employee will be well acquainted with the job and will need less of supervision. Thus, there will be less wastage of time and efforts.
  3. Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills required for doing a particular job. The more trained an employee is, the less are the chances of committing accidents in job and the more proficient the employee becomes.
  4. Chances of promotion- Employees acquire skills and efficiency during training. They become more eligible for promotion. They become an asset for the organization.
  5. Increased productivity- Training improves efficiency and productivity of employees. Well trained employees show both quantity and quality performance. There is less wastage of time, money and resources if employees are properly trained.

Ways/Methods of Training
Training is generally imparted in two ways:

  • On the job training- On the job training methods are those which are given to the employees within the everyday working of a concern. It is a simple and cost effective training method. The proficient as well as semi- proficient employees can be well trained by using such training method. The employees are trained in
  • Off the job training- Off the job training methods are those in which training is provided away from the actual working condition. It is generally used in case of new employees. Instances of off the job training methods are workshops,
    seminars, conferences, etc. Such method is costly and is effective if and only if large number of employees have to be trained within a short time period. Off the job training is also called as vestibule training i.e., the employees are trained in a
    separate area( may be a hall, entrance, reception area etc. known as a vestibule) where the actual working conditions are duplicated.

Employee Remuneration
Employee Remuneration refers to the reward or compensation given to the employees for their work performances. Remuneration provides basic attraction to a employee to perform job efficiently and effectively. Remuneration leads to employee motivation.
Salaries constitute an important source of income for employees and determine their standard of living. Salaries affect the employee’s productivity and work performance. Thus the amount and method of remuneration are very important for both management and employees.

There are mainly two types of Employee Remuneration

  • Time Rate Method
  • Piece Rate Method

Time Rate Method: Under time rate system, remuneration is directly linked with the time spent or devoted by an employee on the job. The employees are paid a fixed pre-decided amount hourly, daily, weekly or monthly irrespective of their output. It is a very simple method of remuneration. It leads to minimum wastage of resources and lesser chances of accidents. Time Rate method leads to quality output and this method is very beneficial to new employees as they can learn their work without any reduction in their salaries. This method encourages employees’ unity as employees of a particular group/cadre get equal salaries.

There are some drawbacks of Time Rate Method, such as, it leads to tight supervision, indefinite employee cost, lesser efficiency of employees as there is no distinction made between efficient and inefficient employees, and lesser morale of employees. Time rate system is more suitable where the work is non-repetitive in nature and emphasis is more on quality output rather than quantity output.

Piece Rate Method: It is a method of compensation in which remuneration is paid on the basis of units or pieces produced by an employee. In this system emphasis is more on quantity output rather than quality output. Under this system the determination of employee cost per unit is not difficult because salaries differ with output. There is less supervision required under this method and hence the cost per unit of production is low. This system improves the morale of the employees as the salaries are directly related with their work efforts. There is greater work-efficiency in this method.

There are some drawbacks of this method, such as; it is not easily computable, leads to deterioration in work quality, wastage of resources, lesser unity of employees, higher cost of production and insecurity among the employees. Piece rate system is more suitable where the nature of work is repetitive and quantity is emphasized more than quality.

DIRECTING
Directing is said to be a process in which the managers instruct, guide and oversee the performance of the workers to achieve predetermined goals. Directing is said to be the heart of management process. Planning, organizing, staffing have no importance if direction function does not take place. Directing initiates action and it is from here actual work starts. Direction is said to be consisting of human factors. In simple words, it can be described as providing guidance to workers is doing work. In field of management, direction is said to be all those activities which are designed to encourage the subordinates to work effectively and efficiently. According to Human, “Directing consists of process or technique by which instruction can be issued and operations can be carried out as originally planned”

Therefore, Directing is the function of guiding, inspiring, overseeing and instructing people towards accomplishment of organizational goals.

Direction has got following characteristics:

  1. Pervasive Function – Directing is required at all levels of organization. Every manager provides guidance and inspiration to his subordinates.
  2. Continuous Activity – Direction is a continuous activity as it continuous throughout the life of organization.
  3. Human Factor – Directing function is related to subordinates and therefore it is related to human factor. Since human factor is complex and behaviour is unpredictable, direction function becomes important.
  4. Creative Activity – Direction function helps in converting plans into performance. Without this function, people become inactive and physical resources are meaningless.
  5. Executive Function – Direction function is carried out by all managers and executives at all levels throughout the working of an enterprise; a subordinate receives instructions from his superior only.
  6. Delegate Function – Direction is supposed to be a function dealing with human beings. Human behaviour is unpredictable by nature and conditioning the people’s behaviour towards the goals of the enterprise is what the executive does in this function. Therefore, it is termed as having delicacy in it to tackle human behaviour.

Importance of Directing Function
Directing or Direction function is said to be the heart of management of process and therefore, is the central point around which accomplishment of goals take place. A few philosophers call Direction as “Life spark of an enterprise”. It is also called as on actuating function of management because it is through direction that the operation of an enterprise actually starts. Being the central character of enterprise, it provides many benefits to a concern which are as follows:-

  • It Initiates Actions – Directions is the function which is the starting point of the work performance of subordinates. It is from this function the action takes place, subordinates understand their jobs and do according to the instructions laid. Whatever are plans laid, can be implemented only once the actual work starts. It is there that direction becomes beneficial.
  • It Ingrates Efforts – Through direction, the superiors are able to guide, inspire and instruct the subordinates to work. For this, efforts of every individual towards accomplishment of goals are required. It is through direction the efforts of every department can be related and integrated with others. This can be done through persuasive leadership and effective communication. Integration of efforts bring effectiveness and stability in a concern.
  • Means of Motivation – Direction function helps in achievement of goals. 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 Motivation is also helpful for the subordinates to give the best of their abilities which ultimately helps in growth.
  • 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 – judicious blend of persuasive leadership, effective communication, strict supervision and efficient motivation. Stability is very important since that is an index of growth of an enterprise. Therefore a manager can use of all the four traits in him so that performance standards can be maintained.
  • Coping up with the changes – It is a human behaviour that human beings show resistance to change. Adaptability with changing environment helps in sustaining planned growth and becoming a market leader. It is directing function which is of use to meet with changes in environment, both internal as external. Effective communication helps in coping up with the changes. It is the role of manager here to communicate the nature and contents of changes very clearly to the subordinates. This helps in clarifications, easy adoption and smooth running of an
  • 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, duplication of efforts, overlapping of performances, etc. don’t take place. Through direction, the role of subordinates become clear as manager makes use of his supervisory, the guidance, the instructions and motivation skill to inspire the subordinates. This helps in maximum possible utilization of resources of men, machine, materials and money which helps in reducing costs and increasing profits.

Functions of a Supervisor
Supervisor, being the manager in a direct contact with the operatives, has got multifarious function to perform. The objective behind performance of these functions is to bring stability and soundness in the organization which can be secured through increase in profits which is an end result of higher productivity. Therefore, a supervisor should be concerned with performing the following functions –

  • Planning and Organizing – Supervisor’s basic role is to plan the daily work schedule of the workers by guiding them the nature of their work and also dividing the work amongst the workers according to their interests, aptitudes, skills and interests.
  • Provision of working conditions – A supervisor plays an important role in the physical setting of the factory and in arranging the physical resources at right place. This involves providing proper sitting place, ventilation, lighting, waterfacilities etc. to workers. His main responsibility is here to provide healthy and hygienic condition to the workers.
  • Leadership and Guidance – A supervisor is the leader of workers under him. He leads the workers and influences them to work their best. He also guides the workers by fixing production targets and by providing them instruction and
    guidelines to achieve those targets.
  • Motivation – A supervisor plays an important role by providing different incentives to workers to perform better. There are different monetary and nonmonetary incentives which can inspire the workers to work better.
  • Controlling – Controlling is an important function performed by supervisor. This will involve
    Recording the actual performance against the time schedule.
    Checking of progress of work.
    Finding out deviations if any and making solutions
    If not independently solved, reporting it to top management.
  • Linking Pin – A supervisor proves to be a linking pin between management and workers. He communicates the policies of management to workers also passes instructions to them on behalf of management. On the other hand, he has a close contact with the workers and therefore can interpret the problems, complaints, suggestions, etc to the management. In this way, he communicates workers problems and brings it to the notice of management.
  • Grievance Handling – The supervisor can handle the grievances of the workers effectively for this he has to do the following things :-
    He can be in direct touch with workers.
    By winning the confidence of the workers by solving their problems.
    By taking worker problems on humanitarian grounds.
    If he cannot tackle it independently, he can take the help and advice of
    management to solve it.
  • Reporting – A supervisor has got an important role to report about the cost, quality and any such output which can be responsible for increasing productivity. Factors like cost, output, performance, quality, etc can be reported continually to the
    management.
  • Introducing new work methods – The supervisor here has to be conscious about the environment of market and competition present. Therefore he can innovate the techniques of production. He can shift the workers into fresh schedules whenever
    possible. He can also try this best to keep on changing and improving to the physical environment around the workers. This will result in
    Higher productivity,
    High Morale of Workers,
    Satisfying working condition,
    Improving human relations,
    Higher Profits, and
    High Stability
  • Enforcing Discipline – A supervisor can undertake many steps to maintain discipline in the concern by regulating checks and measures, strictness in orders and instructions, keeping an account of general discipline of factory, implementing penalties and punishments for the indiscipline workers. All these above steps help in improving the overall discipline of the factory.

CONTROLLING
Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions According to Brech, “Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs.”

According to Donnell, “Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course.”
Controlling has got two basic purposes

  • It facilitates co-ordination
  • It helps in planning

Features of Controlling Function
Following are the characteristics of controlling function of management

  1. Controlling is an end function- A function which comes once the performances are made in conformities with plans.
  2. Controlling is a pervasive function- which means it is performed by managers at all levels and in all type of concerns.
  3. Controlling is forward looking- because effective control is not possible without past being controlled. Controlling always look to future so that follow-up can be made whenever required.
  4. Controlling is a dynamic process- since controlling requires taking review methods, changes have to be made wherever possible.
  5. Controlling is related with planning- Planning and Controlling are two inseparable functions of management. Without planning, controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling succeeds planning.

Process of Controlling
Controlling as a management function involves following steps:

Establishment of standards- Standards are the plans or the targets which have to be achieved in the course of business function. They can also be called as the criterions for judging the performance. Standards generally are classified into two

  • Measurable or tangible – Those standards which can be measured and expressed are called as measurable standards. They can be in form of cost, output, expenditure, time, profit, etc.
  • Non-measurable or intangible- There are standards which cannot be measured monetarily. For example- performance of a manager, deviation Controlling becomes easy through establishment of these standards because controlling is exercised on the basis of these standards.

Measurement of performance- The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when performance of manager has to be measured. Performance of a manager cannot be measured in quantities. It can be measured only by

  • Attitude of the workers,
  • Their morale to work,
  • The development in the attitudes regarding the physical environment, and
  • Their communication with the superiors.
    It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.

Comparison of actual and standard performance- Comparison of actual performance with the planned targets is very important. Deviation can be defined as the gap between actual performance and the planned targets. The manager has to find out two things here- extent of deviation and cause of deviation. Extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. The managers have to exercise control by exception. He has to find out those deviations which are critical and important for business. Minor deviations have to be ignored. Major deviations like replacement of machinery, appointment of workers, quality of raw material, rate of profits, etc. should be looked upon consciously. Therefore it is said, “If a manager controls everything, he ends up controlling nothing.” For example, if stationery charges increase by a Once the deviation is identified, a manager has to think about various causes which have led to deviation. The causes can be

  • Erroneous planning,
  • Co-ordination loosens,
  • Implementation of plans is defective, and
  • Supervision and communication is ineffective, etc.

Taking remedial actions- Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives here

  • Taking corrective measures for deviations which have occurred; and
  • After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow up is an important step because it is only through taking corrective measures, a manager can exercise controlling.

Relationship between planning and controlling
Planning and controlling are two separate functions of management, yet they are closely related. The scopes of activities if both are overlapping to each other. Without the basis of planning, controlling activities becomes baseless and without controlling, planning becomes a meaningless exercise. In absence of controlling, no purpose can be served by. Therefore, planning and controlling reinforce each other. According to Billy Goetz, “Relationship between the two can be summarized in the following points

  1. Planning precedes controlling and controlling succeeds planning.
  2. Planning and controlling are inseparable functions of management.
  3. Activities are put on rails by planning and they are kept at right place through controlling.
  4. The process of planning and controlling works on Systems Approach which is as follows :
    Planning → Results → Corrective Action
  5. Planning and controlling are integral parts of an organization as both are important for smooth running of an enterprise.
  6. Planning and controlling reinforce each other. Each drives the other function of  management.

In the present dynamic environment which affects the organization, the strong relationship between the two is very critical and important. In the present day environment, it is quite likely that planning fails due to some unforeseen events. There controlling comes to the rescue. Once controlling is done effectively, it gives us stimulus to make better plans. Therefore, planning and controlling are inseparable functions of a business enterprise.

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