StaffingClass 12 Business Studies Part 1 Notes

Management of Human Resources at INFOSYS

Infosys, a major consulting and software company, provides a great example of why staffing is so important. The company's former CEO, Narayana Murthy, famously said, "Our assets walk out of the door each evening. We have to make sure that they come back the next morning."

This statement highlights a key idea: in knowledge-based industries, the employees—with their skills, creativity, and expertise—are the most valuable assets. Unlike machines or buildings, these assets can leave at any time. Infosys even includes its human resources on its balance sheet to show their value. The company understands that its success depends on its ability to attract, keep, and develop talented people in a very competitive environment.

This challenge is at the heart of staffing. The management style at Infosys, which focuses on empowering employees and sharing wealth, was created to ensure their most valuable assets want to return every morning.

Introduction to Staffing

The foundation of any successful organization is its people. Talented and hardworking employees are the main assets that drive a company's growth. To succeed, an organization must continuously bring in quality staff. This process of ensuring the right people are in the right positions is called staffing.

Meaning of Staffing

After a company has made its plans and designed its organizational structure (planning and organizing), the next step is to fill the job roles created. This is the core of the staffing function.

In simple terms, staffing means 'putting people to jobs.' It's a complete process that includes:

• Workforce planning (figuring out how many and what kind of people are needed)
• Recruitment (attracting applicants)
• Selection (choosing the right person)
• Training and development
• Promotion and compensation
• Performance appraisal (evaluating job performance)

Essentially, staffing is the part of management concerned with finding, using, and maintaining a capable and satisfied workforce. It is the managerial function of filling and keeping positions filled within the organization's structure.

Importance of Staffing

Human resources are the backbone of any business. The right people can lead a business to success, while the wrong people can cause it to fail. Therefore, staffing is one of the most critical functions of management. Its importance has grown due to rapid technological changes, the increasing size of organizations, and the complex nature of human behavior.

Proper staffing provides the following benefits:

• Finds Competent People: It helps in discovering and hiring skilled and capable personnel for various jobs.
• Improves Performance: By placing the right person in the right job, overall performance and productivity increase.
• Ensures Survival and Growth: Through succession planning for managers, it ensures the company has a pipeline of talent ready to fill future leadership roles.
• Optimizes Use of Human Resources: It prevents both overmanning (which leads to high labor costs) and under-staffing (which can disrupt work).
• Boosts Morale and Job Satisfaction: When employees are assessed objectively and rewarded fairly for their contributions, their morale and job satisfaction improve.

Staffing as Part of Human Resource Management

Staffing is a function that every manager must perform. It is closely linked to organizing, because once job positions are created, they need to be filled with qualified people.

In small organizations, a manager might handle all staffing duties, including salaries, welfare, and working conditions. However, as an organization grows, it typically forms a separate Human Resource Department (HRD) staffed with specialists.

Human Resource Management (HRM) is a broader concept than staffing. Staffing is a key part of HRM. HRM includes many specialized activities, such as:

• Recruitment: Searching for qualified people.
• Job Analysis: Collecting information about jobs to create job descriptions.
• Compensation and Incentive Plans: Developing salary structures and bonus plans.
• Training and Development: Planning for employee growth.
• Labor Relations: Managing relationships with unions.
• Handling Grievances: Addressing employee complaints.
• Social Security and Welfare: Providing for employee well-being.
• Legal Compliance: Defending the company in lawsuits and avoiding legal issues.

Evolution of Human Resource Management

The concept of HRM has evolved over time.

1. Industrial Revolution: The rise of trade unions created a need for a labour welfare officer to act as a link between owners and workers.
2. Factory System: As thousands of people began working under one roof, the role of a personnel officer emerged to handle hiring, selection, and placement. This later became the personnel manager.
3. Modern Era: With fast-changing technology and a greater understanding of human relations, the focus shifted. People were no longer just seen as workers but as valuable resources that could be developed. This led to the replacement of the personnel manager with the human resource manager.

The Staffing Process

The main goal of staffing is to fill manpower requirements in a timely manner. This process involves several sequential steps.

1. Estimating Manpower Requirements: This first step involves figuring out not just how many people are needed, but also what type of people (skills, qualifications, experience). This is done through two types of analysis:

   • Workload Analysis: Assesses the number and types of employees required to perform the various jobs and achieve organizational goals.
   • Workforce Analysis: Determines the number and type of employees already available within the organization. This comparison reveals whether the company is understaffed, overstaffed, or optimally staffed, which then guides the next actions.

2. Recruitment: This is the process of searching for potential employees and encouraging them to apply for jobs. The goal is to create a large pool of prospective candidates from which the best can be chosen.

3. Selection: This is the process of choosing the most suitable candidates from the pool created during recruitment. It's often seen as a "negative" process because it involves eliminating unsuitable applicants through tests and interviews to find the right fit.

4. Placement and Orientation: Once selected, the new employee begins to socialize into the workplace.

   • Placement: The employee officially occupies the position or post for which they were selected.
   • Orientation: The employee is introduced to their colleagues, superiors, and subordinates, and is familiarized with the company's rules and policies. A good orientation can have a lasting impact on an employee's performance and decision to stay with the company.

5. Training and Development: Employees seek not just a job, but a career. Organizations facilitate this by providing opportunities for learning and growth. Training helps employees improve their skills for their current job, while development prepares them for future responsibilities. This benefits both the employee (career advancement) and the organization (higher performance).

6. Performance Appraisal: After an employee has been on the job for some time, their performance needs to be evaluated against pre-set standards. This process involves defining the job standards, appraising performance, and providing feedback to the employee.

7. Promotion and Career Planning: Organizations need to provide employees with opportunities for growth. Promotions involve moving an employee to a position with increased responsibility, pay, and status. This is a key part of career planning and helps in retaining talented employees.

8. Compensation: This refers to all forms of pay or rewards given to employees. It includes:

   • Direct Financial Payments: Wages, salaries, incentives, commissions, and bonuses. These can be time-based (e.g., monthly salary) or performance-based (e.g., paid per unit produced).
   • Indirect Payments: Benefits like employer-paid insurance and vacations.

Aspects of Staffing

There are three main aspects or components of the staffing function: Recruitment, Selection, and Training.

Recruitment

Recruitment is the process of finding potential candidates for a job and encouraging them to apply. It aims to attract a sufficient number of qualified applicants to create a pool of candidates.

Sources of Recruitment

There are two main sources from which an organization can recruit employees: internal and external.

Internal Sources This involves filling vacancies from within the organization. The two main methods are:

1. Transfers: Shifting an employee from one job, department, or shift to another without a major change in responsibility or salary. This is a horizontal movement and is useful for filling vacancies in one department with surplus staff from another.
2. Promotions: Shifting an employee to a higher position with more responsibility, status, and pay. This is a vertical movement and is a great motivator for employees.

Merits of Internal Sources:

• Motivates employees to improve performance.
• Simplifies the selection process, as candidates are already known.
• Cheaper than external recruitment.
• No need for induction training.
• Helps shift surplus staff to departments with shortages.

Limitations of Internal Sources:

• Reduces the scope for fresh talent to enter the organization.
• Employees may become lazy if they expect time-bound promotions.
• A new business cannot use internal sources.
• May hamper the spirit of competition.

External Sources This involves looking for candidates from outside the organization. This is necessary when existing staff are insufficient or don't have the required skills.

Commonly Used External Sources:

• Direct Recruitment: A notice is placed on the company's notice board, and job-seekers assemble on a specific date for on-the-spot selection. This is common for unskilled or semi-skilled jobs.
• Casual Callers: Keeping a database of unsolicited applicants who can be contacted when vacancies arise. This is a very cost-effective method.
• Advertisement: Placing job ads in newspapers, trade journals, or online. This provides a wide choice of candidates but can also attract many unsuitable applicants.
• Employment Exchange: Government-run agencies that act as a link between job-seekers and employers, mainly for unskilled and skilled operative jobs.
• Placement Agencies and Management Consultants: Private firms that specialize in recruitment. They maintain databases of candidates and are often used for technical, professional, and senior-level positions.
• Campus Recruitment: Recruiting directly from colleges, management institutes, and technical schools. This is a popular source for fresh talent in professional and managerial jobs.
• Recommendations of Employees: Applicants introduced by current employees. This is often reliable as the current employee knows both the company and the candidate. [!example] Infosys and Lenovo have found that employee referrals are a top source for quality hires. Employees understand the company culture and the job requirements, so they can make good recommendations. Infosys even has an online portal for employees to submit and track referrals.
• Labour Contractors: These contractors maintain contact with laborers and can supply unskilled workers at short notice.
• Advertising on Television: Telecasting vacancies is becoming more popular, especially for reaching a wide audience.
• Web Publishing: Using internet job sites like Naukri.com or company career pages to post vacancies and find candidates.

Merits of External Sources:

• Attracts qualified and trained people.
• Provides a wider choice of candidates.
• Brings in "new blood" and fresh perspectives.
• Creates a competitive spirit among existing staff.

Limitations of External Sources:

• Can cause dissatisfaction among existing employees who may feel their promotion chances are reduced.
• It is a lengthy and time-consuming process.
• It is a costly process due to expenses on advertising and processing applications.

Selection

Selection is the process of identifying and choosing the best person for a job from the pool of prospective candidates. It is an elimination process where candidates are screened at various stages.

Process of Selection

The selection process is a series of steps designed to filter out unqualified candidates.

1. Preliminary Screening: This involves reviewing application forms to eliminate candidates who do not meet the minimum qualifications. A brief preliminary interview may also be conducted.
2. Selection Tests: These are mechanisms to measure certain characteristics of individuals. Common tests include:
   • Intelligence Tests: Measure an individual's IQ, learning ability, and decision-making skills.
   • Aptitude Test: Measures a person's potential to learn new skills.
   • Personality Tests: Provide clues about a person's emotions, reactions, maturity, and value system.
   • Trade Test: Measures the existing skills and knowledge a person possesses in a specific technical or professional area.
   • Interest Tests: Used to identify the pattern of a person's interests or involvement to see if it aligns with the job.
3. Employment Interview: A formal, in-depth conversation to evaluate the applicant's suitability. The interviewer seeks information, and the interviewee provides it. It's a chance to assess the candidate's personality and communication skills.
4. Reference and Background Checks: Employers contact references (like previous employers or teachers) provided by the applicant to verify information and gain additional insights.
5. Selection Decision: The final decision is made from the candidates who have passed all previous stages. The manager of the concerned department is usually involved in this decision, as they will be responsible for the new employee's performance.
6. Medical Examination: Before a job offer is made, the candidate must undergo a medical test to ensure they are physically fit for the job.
7. Job Offer: A formal letter of appointment is given to the selected candidate. This letter includes details like the date of joining.
8. Contract of Employment: After the candidate accepts the job offer, a formal contract is prepared. This document includes key details like Job Title, Duties, Pay, Hours of Work, Leave Rules, and Termination of Employment.

Training and Development

As one saying goes, "If you wish to plan for a lifetime, develop people." Training and Development is the process of improving an employee's performance by increasing their ability to perform through learning. It usually involves changing an employee's attitude or increasing their skills and knowledge.

Importance of Training and Development

In today's fast-changing world, jobs have become more complex, making employee training more important than ever.

Benefits to the Organisation:

• It is a systematic way of learning, which is better than "hit and trial" methods.
• It enhances employee productivity, leading to higher profits.
• It prepares future managers to take over in emergencies.
• It increases employee morale and reduces absenteeism and turnover.
• It helps the organization respond effectively to a changing environment.

Benefits to the Employee:

• Improved skills and knowledge lead to better career opportunities.
• Increased performance helps the individual earn more.
• It makes employees more efficient in handling machines, reducing accidents.
• It increases the job satisfaction and morale of employees.

Training, Development, and Education

These three terms are related but distinct.

• Training: A process to increase the skills and abilities to perform a specific job. It is job-oriented and short-term.
• Education: A process of increasing general knowledge and understanding. It develops a logical and rational mind. It is broader than training.
• Development: Refers to learning opportunities designed to help employees grow in all respects. It covers job performance and personality growth. It is a career-oriented, ongoing process.

Training Methods

Training methods are broadly divided into two categories: On-the-Job and Off-the-Job.

On-the-Job Methods These methods involve "learning while doing." The training takes place at the actual workplace.

1. Apprenticeship Programmes: The trainee (apprentice) works under the guidance of a master worker to acquire a high level of skill. This is common for skilled jobs like plumbing or electrical work.
2. Coaching: A superior guides and instructs the trainee as a coach. The trainee works directly with a senior manager, who takes responsibility for their training, often grooming them for a future role.
3. Internship Training: A joint program between educational institutions and business firms. Students work in a factory or office for a period to gain practical knowledge and skills while still studying.
4. Job Rotation: The trainee is shifted from one department or job to another. This gives them a broader understanding of the entire organization and helps them discover their own aptitude.

Off-the-Job Methods These methods involve "learning before doing." The training is conducted away from the workplace.

1. Class Room Lectures/Conferences: An effective way to convey specific information, rules, or procedures to a large group of trainees.
2. Films: Used to demonstrate skills that are not easily explained through lectures.
3. Case Study: Trainees are given real-life business problems to analyze. They must identify problems, develop solutions, and choose the best course of action.
4. Computer Modelling: Simulates a work environment on a computer, allowing trainees to learn without the risk or high cost of making mistakes in a real-life situation.
5. Vestibule Training: A classroom environment is created with the actual equipment and machinery that employees will use on the job. This is done away from the actual work floor and is ideal for training on sophisticated or dangerous equipment.
6. Programmed Instruction: Information is broken down into sequential, logical units. The trainee learns step-by-step, answering questions or filling in blanks as they go.