GHG Academy, Jagraon

Class 12 Business Studies

Chapter- Staffing
✓ Staffing- Meaning
• Staffing may be defined as the process of hiring and developing
the required for personnel to fill in various positions in the
organization.
• It implies placing right person at the right job.
• This function of management is concerned with the determined
manpower requirement, selection, placement, training and
compensation of employees of the enterprise.
• It goes on as a continuous process because new jobs are created
every time, as employees may leave the organization and also
because of the growth and diversification in the organization.
• Acc. to Theo Haimann, “The staffing function pertains to
recruitment, selection, development, training and
compensation of subordinate managers.”
• Acc. to Koontz, “The managerial Function of staffing
involves the filling and keeping filled positions in the
organizational structure.”
✓ Importance of staffing
1. Competent employees - Staffing helps in discovering and
obtaining competent employees for various jobs.
2. Higher performance- Staffing leads to higher performance, by
putting right person on the right job.
3. Continuous survival - Staffing ensures the continuous survival
and growth of the enterprise.
4. Optimum utilization of employee - Staffing helps to ensure
optimum utilization of the human resources. By selecting right
no. of employees, staffing function prevents underutilization of
employees and high labour costs. At the same time, it avoids
disruption of work by indicating in advance the shortages of
employees/personnel.
5. Improve job satisfaction - It improves job satisfaction and
morale of employees through objective assessment and fair
rewarding of their contribution.
✓ Staffing as a part of Human Resource Management (HRM)
• HRM is a wider term than staffing i.e, staffing is a part of HRM.
• HRM refers to that part of management process which develops
and manages the human element of the organization.
• Specialised activities to be performed by HRM:
i) Recruitment- Searching for eligible candidates.
ii) Analyzing job and preparing job description.
iii) Developing compensation and incentive plans.
 iv) Training and development of employees for efficient growth
and career growth.
v) Maintaining labour relations and union management relations.
vi) Handling grievances and complaints.
vii) Providing for social security and welfare of employees.
viii) Defending the company in law suits and avoiding legal
complications.
✓ Staffing Process

Staffing
process

Estimating the manpower requirements Recruitment Selection Placement and orientation Training and development Performance appraisal Promotion and career planning Compensation

1. Estimating the Manpower Requirements: It involves estimating

how many persons are required in the organization and of what
type. Understanding the manpower requirements would mean
doing workload analysis and workforce analysis. Workload
analysis would tell the number and types of human resources
necessary for the performance of various jobs. Workforce analysis
would tell the actual the number and type available. So, a firm can
find if the firm is understaffed, overstaffed or optimally staffed.
2. Recruitment: Recruitment may be defined as the process of
searching for prospective employees and stimulating them to apply
for jobs in the organization. The essential objective is to create a
pool of the prospective job candidates.
3. Selection: Selecting an employee is choosing from among the
candidates the one that best meets the position requirements.
4. Placement and Orientation: The employee is given a brief
presentation about the company and is introduced to his superiors,
subordinates and the colleagues. He is taken around the workplace
and given the charge of the job for which he has been selected.
Orientation is, thus, introducing the selected employee to other
employees and familiarizing him with the rules and policies of the
organization. Placement refers to the employee occupying the
position or post for which the person has been selected.
5. Training and Development: Training means equipping employees
with required knowledge and skills related to their jobs. After final
approval every candidate must go through a period of training.
This period changes depending upon the nature of the job, size of
the enterprise, etc.
6. Performance appraisal: After the employees have completed
their training and have been on the job for some time, then there is
a need to evaluate or check their performance. Performance
appraisal means evaluating or checking an employees present or
past performance with the predetermined standards given to the
employees.
7. Promotion and career planning: Organization should take care of
career related issues, promotions etc of their employees.
 Organizations are dynamic (changing), which leads to shifting the
people to higher positions. Also, many workers may not fit into
their current jobs, so transfers into positions according to their
skills and interests is very important. Mangers must encourage
employees to grow and realize their full potential. This category
includes all activities associated with promoting, transferring, and
demoting individuals (promotion involves more pay, more
responsibility, and more job satisfaction).
8. Compensation: All organizations need to establish wage and
salary plans for their employees. Compensation means all the
forms of pay or rewards which is given to employees like wages,
salaries, commissions, vacations etc. Wage rates can be on the
basis of time or piece produced. An organization must match a
person's salary with the contribution made by him.
Related Questions
1. Placing right person at right job is known as ____.
2. What is the first step of process of staffing?
3. Give one word for all the forms of payments on rewards given
to an employee.
4. Staffing functions deals with which element of Management?
a) Human b) machine c) money d)
material
5. ABC Enterprises is a company manufacturing water geyser.
The company has a functional structure with 4 main functions-
production, marketing, finance and human resource. As the
demand for the product grows, the company decided to hire
more employees. Identify the concept which will help the
human resource manager in deciding the actual number of
persons required in each department.
✓ Recruitment
• Recruitment means the process of finding possible candidates for a
job or a function.
• Acc. to Flippo, “Recruitment is the process of searching for
prospective employees and stimulating them to apply for the
job in the organization.”
• Acc. to Dalton E. McFarland, “It is the process of attracting
potential employees to the company.”
• The various activities involved in the process of recruitment are:-
i) Identification of sources of labor supply
ii) Assessing their validity
iii) Choosing the most suitable source
iv) Inviting applications from prospective candidates.
✓ Sources of recruitment
 Sources of
recruitment

Internal External
sources sources

I. Internal sources of recruitment

• Internal sources refers to the recruitment from within the
organization, i.e, from the existing staff and employees.
Sources of
internal
recruitment
Promotion Transfers

i) Transfers:
• It involves shifting an employee from one job to another, one
department to another or from one shift to another, without a
major change in the responsibilities and status of the employee.
• It may lead to changes in duties and responsibilities, working
condition etc., but not necessarily salary.
• Transfer is a good source of filling the vacancies with employees
from over-staffed departments.
• It is practically a horizontal movement of employees.
• Shortage of suitable personnel in one branch may be filled
through transfer from another branch or department.
ii) Promotions:
• Business enterprises generally follow the practice of filling
higher jobs by promoting employees from lower jobs.
• Promotion leads to shifting an employee to a higher position,
carrying higher responsibilities, facilities, status and pay.
• Promotion is a vertical shifting of employees.
• This practice helps to improve the motivation, loyalty and
satisfaction level of employees.
• It has a great psychological impact over the employees because a
promotion at the higher level may lead to a chain of promotions
at lower levels in the organization.
Merits of Internal Sources
1. Provides motivation: Employees are motivated to improve their
performance. A promotion at a higher level may lead to a chain of
promotion at lower levels in the organization. This motivates the
employees to improve their performance. Employees work their
commitment and loyalty and remain satisfied within jobs. Also,
peace prevails in the enterprise because of promotional avenues.
2. Simplifies selection process: Internal recruitment also simplifies
the process of selection and placement. The candidates that are
already working in the enterprise can be evaluated more accurately
 and economically. This is a more reliable way of recruitment since
the candidates are already known to the organization.
3. Tool for training: Transfer is a tool of training the employees to
prepare them for higher jobs. Also, people recruited from within
the organization do not need induction training.
4. Maintaining balanced workforce: Transfer has the benefit of
shifting workforce from the surplus departments to those where
there is shortage of staff.
5. Reduces cost: Filling of jobs internally is cheaper as compared to
getting candidates from external sources.
Limitations of Internal Sources
1. No fresh talent: When vacancies are filled through internal
promotions, the scope for induction of fresh talent is reduced.
Hence, complete reliance on internal recruitment involves danger
of ‘inbreeding’ by stopping ‘infusion of new blood’ into the
organization.
2. Lazy employees: The employees may become lazy/lethargic if
they are sure of time bound promotions.
3. Not for new enterprise: A new enterprise cannot use internal
sources of recruitment. No organization can fill all its vacancies
from internal sources.
4. Low spirit of competition: The spirit of competition among the
employees may be hampered.
5. Reduce productivity: Frequent transfers of employees may reduce
productivity of the organization.
➢ External Source of recruitment
• External Sources refers to the recruitment from outside the
organization, as all the positions cannot be filled from within the
organization.
External sources of recruitment

Direct recruitment Casual callers Advertisement Employment exchange Placement agencies and management consultants Campus recruitment Recomendation of employees Labour contractor Advertising on television Web publishing

1. Direct Recruitment: Under the direct recruitment, a notice is

placed on the noticeboard of the enterprise specifying the details of
the jobs available. Jobseekers come on the specified date and
selection is done on the spot. The practice of direct recruitment is
followed usually for casual vacancies of unskilled or semi-skilled
jobs.
2. Casual Callers: Many firms maintain their application files in
which applications received in the past are kept pending. Similarly,
individuals might have visited personally or enquired about the
availability of job through mail or on phone. This list can be
screened to fill the vacancies when they arise.
3. Advertisement: Advertisement in newspapers or trade and
professional Journals is generally used when a wider choice is
 required. Most of the senior positions are filled by this method.
The advantage of advertising vacancies is that more information
about the organization and job can be given in the advertisement.
Advertisement gives the management a wider range of candidates
from which to choose.
4. Employment Exchange: Employment exchanges run by the
Government are regarded as a good source of recruitment for
skilled and skilled operative jobs. Thus, employment exchanges
help to match personnel demand and supply by serving as link
between jobseekers and employers.
5. Placement Agencies and Management Consultants: These are
firms of personnel or management consultants, which specialize in
the recruitment of managerial personnel. Placement agencies
provide a nationwide service in matching demand and supply of
personnel. These agencies have biodata of a large number of
candidates and recommend suitable names to their clients. Such
agencies charge fee for their services and they are useful where
extensive screening is required.
6. Campus Recruitment: Colleges and institutes of management and
technology have become a popular source of recruitment for
technical, professional, and managerial jobs. Many big
organizations maintain a close link/liaison with the universities,
management institutes etc. to recruit qualified personnel for
various jobs.
7. Recommendations of Employees: Applicants introduced by
present employees, or their friends and relatives may prove to be a
good source of recruitment. Such applicants are likely to be good
employees because their background is sufficiently known. A type
of preliminary screening takes place before recruitment.
8. 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
labour contractors who are themselves employees of the
organization.
9. Television: The detailed requirements of the job and the qualities
required to do it are publicised along with the profile of the
organization where vacancy exists.
10. Internet/Web Publishing: Internet is becoming a common
source of recruitment these days. Websites such as
www.naukri.com, www.jobstreet.com, etc., are very commonly
visited both by the prospective employees and the organizations
searching for suitable people.
Merits of external sources
i) Qualified Personnel: By using external sources of recruitment, the
management can attract qualified and trained people to apply for
vacant jobs in the organisation.
ii) Wider Choice: When vacancies are advertised widely, a large
 number of applicants from outside the organization apply. The
management has a wider choice while selecting the people for
employment.
iii) Fresh Talent: The present employees may be insufficient or they
may not fulfill the specifications of the jobs to be filled. External
recruitment brings new blood & talent in the organization.
iv) Competitive Spirit: If a company recruit’s employees from
external sources then the existing staff will have to compete with
the outsiders. They will work harder to show better performance.
Limitations of External Sources
i) Dissatisfaction among existing staff: External recruitment may
lead to dissatisfaction and frustration among existing employees.
They may feel that their chances of promotion are reduced.
ii) Lengthy Process: Recruitment from external sources takes a long
time. The business has to notify the vacancies and wait for
applications to start the selection process.
iii) Costly Process: It is very costly to recruit staff from external
sources. A lot of money has to be spent on advertisement and
processing of applications.
✓ Related Questions
1. Under which method of recruitment a notice is placed on the
notice board of the enterprise, specifying details of jobs
available?
2. Which involves shifting of an employee from one job to
another?
3. Columns appearing in newspaper and journals for motivating
people to apply for the job is an example of which source of
recruitment?
4. Recruitment of employees from external sources increases the
dissatisfaction among present employees as their chance of ___
___ are reduced.
5. For the purpose of recruiting employees a company plays a TV
commercial on a leading channel. This is a example of
recruitment through which method?
➢ Selection
• Selection is the process of carefully screening the candidates so as
to a identify and choose the most suitable persons for job.
• It involves a series of tests, interviews and examinations in order to
generate a contract of employment, containing terms and
conditions of employment in the organization.
• Selection is regarded as a negative process, as it involves
elimination of candidates at every step.
• Acc. to dale Yoder, “ Selection is the process of choosing from
among the outside, the most suitable persons for current
position or for the future position.”
• Acc. to Stone, “ Selection is the process of differentiating
 between applicants in order to identify and hire those with a
greater likelihood of success in a job.”
✓ Selection Process

Selection process

Preliminary screening Selection tests Employment interview Reference and background checks Selection decision Medical examination Job offer Contract of employment

Intelligence test Aptitude test Personality test Trade test Interest test

1. Preliminary Screening: Preliminary screening helps the manager

to eliminate unqualified or unfit job seekers based on the
information supplied in the application forms. That is those who do
not possess the required qualifications are kept out of the list of
candidates for further processing.
2. Selection Tests: An employment test is a mechanism that attempts
to measure certain characteristics of individuals. Example of these
tests are Intelligence test, Aptitude test, Personality test, Trade test,
Interest test etc.
a) Intelligence test: This test is conducted to measure the level of
intelligence of the candidatea. It is an indicator of a person’s
learning ability or ability to make decisions and judgments.
b) Aptitude test: It is a psychological test used to measure the potential of an individual to learn new skills.
c) Personality test: It is a test that provide clues regarding a person's emotions, reactions and value systems.
d) Trade test: It is a test used to measure the existing skills of an individual to perform a job.
e) Interest test: It is a test used to know the interests or involvement of a person in either activity.
3. Employment Interview: Interview is a formal, in-depth
conversation to check the applicant's suitability for the job. The
role of the interviewer is to seek information and that of the
interviewee is to provide the same.
4. Reference and Background Checks: Many employers request
names, addresses, and telephone numbers of references for the
purpose of verifying information and gaining additional
information of an applicant. Previous employers, known persons,
teachers and university professors can act as references.
5. Selection Decision: The final decision has to be made from among
the candidates who pass the tests, interviews and Reference checks.
The views of the concerned manager will be generally considered
in the final selection because that manager will be responsible for
the performance of the new employee.
6. Medical Examination: After the selection decision the candidate
is required to undergo a medical fitness test. The job offer is given
to the candidate being declared fit after the medical examination.
 7. Job Offer: The next step in the selection process is job offer to
those applicants who have passed all the previous hurdles. Job
offer is made through a letter of appointment/confirm his
acceptance. Such a letter generally contains a date by which the
appointee must report on duty. 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 prepared.
One such document is the attestation form. This form contains
certain vital details about the candidate, which are authenticated
and attested by him or her. Attestation form will be a valid record
for future reference. There is also a need for preparing a contract of
employment which contains Job Title, Duties, Responsibilities,
date when employment starts, rates of pay, allowances, hours of
work, leave rules, sickness, grievance procedure, disciplinary
procedure, work rules, termination of employment etc.
Related Qualifications
1. The form which contains certain vital details about the
candidate, which is authenticated and attested by him is
________.
2. The information technology department of a company had a
few vacancies in cybersecurity. The HRD of the company
decided to recruit fresh engineers and graduate of IT from IIT
university. This type of recruitment is _____.
3. Naveen, the director of garments company, is planning to
manufacture bags for the utilization of waste material from one
of his garment unit. He has decided that this manufacturing
unit will be set up in the rural area of Odisha, where people
have very few job opportunities and labor is available at very
low rates. He has also thought of giving equal opportunities to
men and women. For this, he wants four different heads for
sales, accounts, purchase and production. He gives an
advertisement and short lists 10 candidates for post after
conducting different selection tests. Identify and state next
three steps for choosing the best candidate out of the candidate
shortlisted.
➢ Training and development
✓ Training
• Training is a process by which effort is made to increase the
aptitudes, skills and abilities of employees for the successful
accomplishment of specific goals.
• It is a process of learning new skills and application of knowledge.
• It aims to improve the performance of employees on the current job
and prepare them for any intended job.
✓ Employee development
• Employee development is a process designed to develop the skills
 necessary for future activities.
• It means to improve the overall effectiveness of employees at their
current post and to prepare them for handling more responsibilities
in future.
• It covers not only those activities which improve job performance,
but also those which bring about growth of the personality, helps
individuals in the progress towards majority and actualization of
their potential capacities so that they become not only good
employees, but better human beings.
✓ Education
• It is a process of increasing knowledge and understanding the
employees.
• It imparts qualities of mind, character and understanding of basic
principles.
• It is broader in scope than training as training is limited to the
goals of organization rather than to the goals of individuals.
✓ Difference between training and development
Training Development
1. It is a process of increasing knowledge & It is a process of learning & growth in all respects
skills. like technical, human and conceptual skills.
2. It is to enable the employee to do the job better. It is to enable the overall growth of employee.
3. It is job-oriented process. It is career-oriented process.
4. It is mainly useful in the case of non- It is mainly useful in the case of managerial
managerial personnel. personnel.
5. It seeks to develop skills already possessed by It seeks to develop hidden qualities and talent of
workers. persons.
6. It is short term process and for fixed period. It is a long term and continuous process.
7. It has limited scope. It has wider scope.
8. Training is a reactive process. Development is a proactive process.
✓ Benefits of training

Benefits of training

Benefits to organization Benefits to the Employee

i) Training is a systematic learning, always better than i) Improved skills and knowledge due to
hit and training lead to better career of the
trial methods which lead to wastage of efforts and individual.
money. ii) Increased performance by the individual
ii) It increases/enhances employee productivity both in help him to earn more.
terms of iii) Training makes the employee more
quantity and quality, leading to higher profits. efficient to handle machines. Thus, less
iii) Training equips the future manager who can take prone to accidents.
over in iv) Training increases the satisfaction and
case of emergency. morale of employees.
➢ Methods of training
iv) Training increases employee moral and reduces
absenteeism
and employee turnover.
v) It helps in obtaining effective response to fast
changing
environment - technological and economic.
 Methods of training

On the job training

When the employees are trained while they are Off the job training
performing the job, it is known as on the job When the employees are Trained by taking them
training. away from their work position, It is known as of
Under this method, the employees learn by doing. the job training.
Suitability only for technical jobs. Suitability For managerial jobs.
Advantage employees can learn Practical
problems while working on the job.
Disadvantage Results in wastage of resources.

✓ On the job training methods

(i) Apprenticeship Programmes:
• Apprenticeship programmes put the trainee under the guidance of a
master worker.
• These are designed to acquire a higher level of skill.
• People seeking to enter skilled trade like plumbers, electricians or
iron-workers, are often required to undergo apprenticeship training.
• These apprentices are trainees who spend a prescribed amount of
time working with an experienced guide, or trainer.
• During the apprenticeships period, the trainee is paid less than a
fully qualified worker.
(ii) Internship Training:
• It is a joint programme of training in which educational institutions
and business firms cooperate.
• It is done to gain a good balance between theory and practice.
• Classroom principles are better understood against the practical
background in a factory.
• Internship is virtually a practical training of theoretical
knowledge.
• Selected candidates carry on regular studies for the prescribed
period.
• They also work in some factory or office to acquire practical
knowledge and skills.
• For example, internship is part of course in case of Chartered
Accountants.
(iii) Induction training:
• Induction training is a type of training given to help a new
employee in settling down quickly into the job by becoming
familiar with the people, the surroundings, the job and the
business.
• The duration of such type of training may be from a few hours to a
few days.
 • The objective of induction is to familiarize new employees with
their place of employment, make them immediately more effective
and to make them feel more comfortable in their new employment.
• A successful induction programme will motivate new staff and
reduce the risk of staff leaving.
• Effective induction programme covers Introduction to the
business/department and its personnel/management structure,
Layout of the buildings (factory/ offices), Relevant personnel
policies, such as training, promotion and health and safety,
Business rules and procedures etc.
II. Off the job training
(i) Vestibule Training:
• Employees learn their jobs on the equipment they will be using, but
the training is conducted away from the actual work floor.
• Actual work environments are created in a clasroom and employees
use the same materials, files and equipment.
• This is usually done when employees are required to handle
sophisticated machinery and equipment.
Related Questions
1. Name the training method in which
i) a newly appointed employee is acquainted with the
organization.
ii) trainee learns under the guidance of Master worker.
iii) Trainee learns on the dummy equipments he/she will be using.
2. Name the concept, which involves growth of individual in all
respect.
3. Based on the performance appraisal report of 2020, the HR
manager of a company adopted the following ways of training
for improving the quality of output and providing more job
satisfaction to the employees.
i) Mr. Rahul was in the company so that he could practice the
theoretical knowledge acquired by him from his college.
ii) Mr. Mehul was provided a dummy model of machinery to do
practice on it.
iii) Mr. Sahil was asked to work with an expert for specific period
of time so that he learns by observations.
Identify the technique of training discussed in above cases.