CBSE Class 12 Business Studies Chapter 6 Notes: Staffing

Class 12 Business Studies Chapter 6 Notes (Staffing)

On this page, you can read the latest notes for CBSE Class 12th for Business Studies (Chapter 6: Staffing) to score better in board exams.

Table of Contents

Staffing	Recruitment
Selection	Training and Development
Differences between Internal and External Source of Recruitment	Differences between Recruitment & Selection
Differences between Training & Development

Staffing

Definition of Staffing

• Staffing consists of manpower planning, recruitment, selection, training, compensation, promotion, and maintenance of managerial personnel.
• It is the managerial function of filling and keeping filled positions in the organisation's structure. 
• The staffing function of management recognises the importance of every single person employed by an organisation.

Importance of Staffing

• Filling the roles by obtaining competent personnel - A staffing function is needed to fill the job position. There will be no use of job position unless and until these are occupied by employees and it is through staffing function only that employees are appointed to fill the vacant job.

• Placing the right person in the right job - A staffing function is needed to fill the job position. There will be no use of job position unless and until these are occupied by employees and it is through staffing function only that employees are appointed to fill the vacant job.

• Growth of enterprise - By appointing efficient staff, staffing ensures the continues survival and growth of the enterprise. An organisation grows with the efforts of its employees only.

• Optimum utilisation of human resources - Through manpower planning and job analysis we can find out the number of employees and the type of employees required in the organisation. So, there are no chances of over manning and shortage or underutilisation of personnel.

• Improves job satisfaction and morale of employees - Through manpower planning and job analysis we can find out the number of employees and the type of employees required in the organisation. So, there are no chances of over manning and shortage or underutilisation of personnel.

Staffing as a part of Human Resources Management (HRM)

• Human resources management involves determining the organisation's need for human resources, recruiting and selecting the best employee, training, developing, compensating and rewarding the employees. 
• Managing a human component of an organization is the most important task because the performance of an organization depends upon how well this function is performed. 
• As organizations grow and the number of a person’s employed increases, a separate department called the 'Human Resource Department’ is formed which has specialists in managing people. Staffing is a part of human resources management.

Staffing Process

1. Estimating Manpower Requirement
2. Recruitment
3. Selection
4. Placement & Orientation
5. Training & Development
6. Performance Appraisal
7. Promotion and Career Planning
8. Compensation

Below is the explanation: 

1. Estimating the manpower requirements: means knowing how many persons and of what type (i.e. educational qualification, skills, prior experience, personality characteristics, etc.) in the organisation to fill the various job positions created while designing the organisational structure. 
• Workload Analysis: It involves determining the number of types of human resources required to perform various jobs and to accomplish organizational objectives.
• Workforce Analysis: It estimates the number of types of human resources or employees available so that it may be known whether the organization is understaffed, overstaffed, or optimally staffed.
2. Recruitment refers to the process of inducing the people to apply for a vacant job position in the organization. The requisite positions may be filled up from within the organisation or from outside. After assessing the number and type of employees required, the manager tries that more and more people should apply for the job so that the organisation can get more choices and can select better candidates. Internal sources (e.g. transfers and promotions) may be used to a limited extent. For fresh talent and a wider choice of external sources (e.g. advertisements, management consultants, internet, etc.) are used.
3. Selection It refers to the process of identifying and choosing the best candidate to fill vacant job position. The selection is done through a process, which involves test, interviews, etc. In selection, the number of selected candidates is less than the number of rejected candidates which is why the selection is also called a negative process.
4. The main objectives of selection are: a) To select the best among the available. b) To make selected candidates realize that how seriously things are done in the organisation.
5. Placement and Orientation refers to occupying the position/post by the candidate for which he is selected. After selection, the employee is given an appointment letter and is asked to occupy the vacant job position. Orientation is introducing the selected employee to other employees and familiarizing him/her with the rules and the policies of the organisation. This process of familiarization called orientation is very crucial and may have a lasting impact on his decision to stay and on his job performance.
6. Training and development To improve the competence of employees and to motivate them it is necessary to provide training and development opportunities for employees so that they can reach the top and keep improving their skills. Training is the process of learning new skills and application of knowledge. It attempts to improve the performance of employees in their current job or prepare them for any intended job. Development refers to the learning opportunities designed to help employees grow. It means growth of an individual in all respects.
7. Performance Appraisal After taking training and performing the job for some time there is a need that employee’s performance must be evaluated. Performance appraisal means evaluating the performance of an employee against some predetermined standards.
8. The performance appraisal process, therefore, will include : a) Defining the job, b) Appraising performance and c) Providing feedback
9. Promotion and Career planning refers to being placed in a higher job position with more pay, job satisfaction and responsibility. By offering opportunities for career advancement to their members, organizations are not able to attract but also retail their talented people. Managers must encourage employees to grow and realize their full potential. Promotions are an integral part of people's careers.
10. Compensation refers to all forms of pay or rewards going to
11.  employees. It may be in the form of direct financial payments like wages, salaries, incentives, commissions and bonuses and indirect payment like employer paid insurance and vacations.

Recruitment

Definition of Recruitment

• Recruitment is defined as the process of searching for prospective employees and stimulating them to apply for jobs in an organisation.
• Recruitment brings together the job giver (employer) and the job seekers (applicants).
• Recruitment can be done either from inside or from outside the organisation.

Sources of Recruitment

There are two sources of recruitment:

1. Internal Sources
2. External Sources

Let's discuss both of them below:

1. Internal Sources: This includes the vacant job positions that are filled by promoting the existing employees of the organisation.

• Transfer means the shifting of an employee from one job to another or from one department to another or from one branch to another, without any change in the responsibilities, salary, and status of the employee. 
• It is the horizontal shifting of an employee. 
• Shortage of suitable employees in one department or branch may be fulfilled through transfer from an over-staffed department or branch.
• Promotion refers to shifting an employee from a lower job position to a higher job position. 
• It includes higher status, responsibilities, facilities, and pay. It is a vertical shift of an employee. 
• It helps in improving the motivation, loyalty, and satisfaction level of employees. 
• It has a psychological impact on employees because a promotion to a higher level may lead to a chain of promotions at lower levels in an organisation.

2. External Sources: When the candidates from outside the organization are invited to fill the vacant job position. Below are its types:

• Direct recruitment - Sometimes the organizations paste notices at the gate of their office or factory stating the vacant job positions. The people who are interested in those jobs can walk in for an interview. This method of external recruitment is most suitable for unskilled job positions, for example, sweeper, peon, etc. This method of recruitment is very inexpensive as it does not involve any cost of advertising the vacancies.
• Casual callers - Generally, the large organizations maintain an application file in which they keep all the pending applications/Unsolicited applications (sometimes the applications of suitable candidates who were not selected in the previous year's selection process are also kept in application file.) This application file is considered as a waiting list. Whenever there is a job vacancy suitable candidate from the waiting list are called. It reduces the cost of recruiting workforce in comparison to other sources.
• Recommendations of employees - Many firms encourage their employees to recommend the names of their relatives, friends and other known people to fill the vacant job position. A type of preliminary screening takes place because the present employees know both the company and the candidates and they would try to satisfy both.
• Labour contractors - Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice. Workers are recruited through labor contractors who are themselves employees of the organisation. If the contractor himself decides to leave the organization, all the workers employed through him will follow suit.
• Advertisement (Newspapers) - The most common and popular method of external recruitment for vacant job position is advertising in newspaper usually under classifieds column. 
• Advertising on television -  There is telecast on various channels regarding vacant job position. They telecast the recruitment of the job along with the qualification necessary to apply.  
• Web publishing - On the internet, there are certain websites specifically designed for providing information regarding job seekers and companies which have vacant job position. For example: www.naukri.com . Websites are very commonly visited both by prospective employees and organizations searching for suitable people.
• Employment Exchange -  Government employment exchanges act as middlemen between job seekers and organizations that have vacant job positions. The job seekers leave their bio-data and details of their qualifications with the employment exchanges and when the organization approaches employment exchanges the suitable candidates are sent. The records of employment exchange are often not up to date and many of the candidates referred by them may not be found suitable.
• Placement agencies and management consultants - Placement agencies provide nationwide service of matching personnel demand and supply of workforce. These agencies invite the bio data and record from various job seekers and send them to suitable clients. Management consultancy firms help the organizations to recruit technical, professional, and managerial personnel and even advertise the job on behalf of their clients to recruit the right type of personnel.
• Campus recruitment - Sometimes the senior managers of the organizations visit various professional colleges, technical institutes to get fresh graduates. This type of recruitment is more common for engineers, computer programmers, MBAs, etc.

 Selection

Definition of Selection

• Selection can be defined as discovering the most promising and suitable candidate to fill the vacant job position in the organization.
• It is called a negative process because the number of candidates rejected is much greater than the number selected.

Process of Selection

1. Preliminary screening - Preliminary screening is done to eliminate unqualified and misfit candidates based on information supplied in the application form. Preliminary interviews help reject misfits for reasons, which didn’t appear in the application forms.
2. Selection tests - The organizations prefer to conduct certain tests to find out the practical knowledge of the candidates. 
• Intelligence test - This kind of psychological test is used to measure the level of Intelligence Quotient (I.Q.) of an individual.  It is an indicator of judging a person's learning ability to take decisions and judgments.

• Aptitude test - This test is conducted to find out the potential of learning new job in the candidate. This test helps to know how the candidate will be performing in future. 
• Personality test - It is conducted to find out the human behaviour of the candidate. This test relates to intelligence, aptitude, attitude and interest of the candidate.

• Trade test - This test measures the existing skill of an individual. It helps to measure the level of knowledge and proficiency in the area of profession and technical training. 
• Interest test - This test is conducted to find out the type of job in which candidate has more interest as all the people have fascination for some jobs than others.

3. Employment interview - This test is conducted to find out the type of job in which candidate has more interest as all the people have fascination for some jobs than others.

4. Reference and background checks - In the application form, the candidate is asked to give the names of two references. If the candidates qualify the interview, then the organization prefers to check with the references about the personal character of the candidate. Previous employers, known persons, teachers and university professors can act as references.
5. Selection decision - The candidates who pass the test, interview and references check are included in the selection list. The views of the concerned manager will be generally considered in the final selection because it is he/she who is responsible for the performance of the new employee.
6. Medical examination - Before giving an appointment letter the candidates selected are sent for medical fitness test. Some organizations appoint their own doctors to do the test and some sign contracts with hospitals to do the best. The job offer is given to the candidate after being declared fit in the medical examination.

7. Job offer - The applicants who clear the medical test are given job offers through letter of appointment. In the letter, the date of joining, terms and conditions of job, etc. are mentioned. The appointee must be given reasonable time for reporting.
8. Contract of employment - After the job offer has been made and candidate accepts the offer, certain documents need to be executed by the employer and the candidate. Attestation Form : This form contains certain vital details about the candidate, which are authenticated and attested by him or her.

 Training and Development

Definition of Training and Development

• Training means equipping the employees with the required skills to perform the job.
• Development refers to the overall growth of the employee. It focuses on personal growth and the successful employees’ development.

Need for Training/Benefits of Training for the Organization

• Reduced Learning Time - A trained employee takes less time in learning the job as compared to an untrained employee. As a result, there is less wastage of resources and higher productivity in the organization.
• Better Performance - The performance of trained employees is always better than the performance of untrained employees. As in the training programmes their qualities and capacities are improved and employees get some experience of working on the job before they are actually assigned the job. This improves their performance and efficiency level.
• Attitude Formation - The training and development aim at molding the employees so that they can develop positive attitude for the organization. After motivating them they will become ready to take initiative, which results in better support and cooperation among the employees.
• Managing Manpower Needs - Some organizations have specialized techniques of production and the ready staff is not available. In that case, the organizations hire untrained people and train them with the required skill according to the organization's needs.

Different Types of Training Methods

1. On the Job Methods - When the employees are trained while they are performing the job then it is known as on-the-job training. Under this method, the employees learn by doing. This method is suitable only for technical jobs and the advantage of this method is employees can learn practical problems while working on the job. The biggest disadvantage of on-the-job training is that it results in the wastage of resources.

• Apprenticeship programmes - The workers seeking to enter skilled jobs are sent for apprenticeship training programme which is an on-the-job training method. The master worker performs the job and the trainee (learner) observes him performing. When the learner learns all the skills then slowly, he starts taking up the job step by step and the master worker becomes the observer. It is suitable for people seeking to enter skilled traits for example – plumbers, electricians, iron workers, etc.
• Internship training - An internship is an agreement between the professional institutes and the corporate sector where professional institutes send their students to various companies so that they can practice the theoretical knowledge acquired by them through professional institutes. Under this training programme, the organization gets people with fresh ideas and latest knowledge and the companies have to pay a very less amount of salary which is called a stipend. On the other hand, the students get chance to practice in a real work situation. In short, we can say under internship the classroom sessions are baked with practical training.
• Induction or Orientation Training - Induction or orientation is a process of receiving and welcoming an employee when he first joins the company and giving him the basic information, he needs to settle down quickly and happily to start work. The purpose of this training program is to make the new employee feel at home and develop a feeling of belongingness. 
2. Off the Job Methods - Learning Before Doing
   Off-the-job training means training the employees by taking them away from their work position which means employees are given a break from the job and sent for training. This method of training is more suitable for managerial job positions as conferences, and seminars are held to train the managers. 
• Vestibule training - When experience and delicate machineries are involved then employers avoid using on-the-job methods of training. A dummy model of machinery is prepared and instead of using original machinery employees are trained on dummy model. o   Sometimes the accountants who have to make entries in the inventory register or cash register are first supplied the duplicate registers with the same columns as in the original registers and when they become perfect in making entries in duplicate register then they are handed over original register. Vestibule school is an off-the-job method of training which makes use of the benefit of on-the-job method.
  

Differences between Internal and External Source of Recruitment

S. No.	Point of difference	Internal recruitment	External recruitment
1.	Meaning	Internal recruitment means making use of existing staff to fill up the vacant job positions in the organisation.	External recruitment means making use of new personnel or outsiders to fill up the vacant job positions in the organisation.
2.	Time	It is less time-consuming.	It is more time-consuming.
3.	Economy	This process is more economical as it does not involve any cost of searching external sources.	This process is costly as vacancies have to be notified in newspapers, magazines, etc.
4.	Quality	There is a limited choice so better quality may not be assumed.	It provides a wider choice and the best quality is assumed.
5.	Morale of the employees	This method boosts up the morale of the employees because existing staff gets chance of promotion.	This method brings down the morale of the employees as they do not get chance of growth and development.

Differences between Recruitment & Selection

S.No.	Point of difference or basis	Recruitment	Selection
1.	Meaning	It is a process of searching suitable candidates to fill up vacant job positions.	It is a process of screening and selecting the most eligible candidates and offering them jobs.
2.	Stage	Recruitment precedes the staffing function.	Staffing always starts where recruitment ends.
3.	Nature	It is a positive process as more and more candidates are induced to apply for the job.	It is a negative process and more candidates are rejected than the number of selected candidates.
4.	Contract of service	There is no contractual relation created.	Selection involves a contract of service between employer and employee.

Differences between Training & Development

S.No.	Point of difference	Training	Development
1.	Concept / depth of knowledge	Training is concerned with teaching technical skill only.	Development is concerned with teaching technical, human and conceptual skill.
2.	Suitability	Training is more suitable for technical staff.	Development is more suitable for managerial staff.
3.	Nature	Training concentrates on developing the skill already possessed by the employees.	Development concentrates on development of hidden qualities of the employees.
4.	Methods used	In training, on-the-job methods are preferred.	In development, off-the-job methods are preferred.
5.	Focus / purpose	Training focuses on present requirements of the organisation.	Development focuses on present as well as future requirements of the organisation.
6.	Time	It is a short-term process.	It is a long-term process.
7.	Initiative	The boss or superior takes initiatives for imparting training to subordinates.	The individual takes initiatives himself for his growth and development.
8.	Duration	Training is short-term; its duration is fixed and certain.	Development is a never-ending procedure; its duration is never defined.
9.	Levels of trainees involved	Useful for non-managerial (operative) employees or lower-level managers.	Useful for managerial personnel, i.e., middle- and top-level managers.
10.	Centered	It is work-centered.	It is person-centered.

The End

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A List of Notes:

Chapter 1  |  Chapter 2  |  Chapter 3  |  Chapter 4  |  Chapter 5  |  Chapter 6  |  Chapter 7  |  Chapter 8  |  Chapter 9  |  Chapter 10  |  Chapter 11  |  Chapter 12

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