Fundamentals of Business Management-Part-2.ppt

SUBJECT-FUNDAMENTALS OF BUSINESS
MANAGEMENT(FBM)-SEM-I
Fundamentals of Business
Management
Part-2
Functions of Management
1
Prepared by,
Dr.Pratibha A.Jagtap
Assistant Professor
Rajarambapu Institute of Technology,Rajaramnagar

Part-2-Functions of
Management
2
A) Planning: Meaning, Forecasting Vs. Planning,
steps in
Planning process, types of planning
B) Organizing: Meaning, Process, Types of
organizational
structure, MBO concept and process.
C) Staffing: Concept, Functions and Process of
Staffing,
Recruitment concept and sources, Selection
Process
D) Directing: Concept, Elements of Directing:
Supervision-Motivation-Leadership-
Communication, Techniques of Directing
E) Controlling :Concept, steps in control process,

Planning
Organising
Staffing
Leading
Controlling
Management
3

4
1.Planning-
 The process of setting goals, and determining the
appropriate action to achieve the goals of the company.
2.Organising-
 The process of allocating and arranging both human and
other resources through a formal structure of tasks and
authority so that plans can be carried out successfully.

2
3.Staffing-
Staffing is the process of hiring eligible candidates in
the organization or company for specific positions. In management, the meaning
of staffing is an operation of recruiting the employees by evaluating their skills,
knowledge and then offering them specific job roles accordingly
4.Directing/Leading-
The process of guiding and motivating employees to accomplish company’s
goals.
5.Controlling
The process of regulating company’s activities so that actual performance
conforms to the goals and standards set at the planning stage.

Concept of Plan and Planning
7
1.Plan –is commitment
 A plan is typically any diagram or list of steps with details of timing and
resources, used to achieve an objective to do something. It is commonly
understood as a temporal set of intended actions through which one
expects to achieve a goal.
 A Plan is document that captures goals and steps to achieve goals
 A plan make possible to identify risks and steps to prepare and handle
risks.
 Plan includes details of resources ,timing and responsibilities
2.Planning-is an activity(as consistent process-including sub-activities)
Planning can refer to the planned use of any and all resources

1.Planning
 Planning is deciding in advance what is to be done in future.
 Getting answers to –
 Why to do? What to do? Where to do? How to do? Who will do it?
 Planning is the process of drafting plans for what should be done in
future, and that too is based on the present performance plus
expectations .
 It encompasses formulating policies, establishing targets, scheduling
actions and so forth.
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Forecasting
 Forecasting is basically a prediction or
projection about a future event, depending
on the past and present performance and
trend.
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Basis for
Comparison
Forecasting Planning
Meaning
Forecasting is prediction or
estimating future performance
of an entity, considering past
and current performance and
facts.
Planning is a process of
looking ahead and
projecting the future
course of action for the
firm and also for various
other units, within it.
Based on
Suggestions and assumption,
that involves a certain degree
of guess.
Relevant information,
forecasts and objectives.
Concerned with
Estimating future event or
trend.
Assessing the future and
providing for it.
Stresses on Facts Facts and expectations

Definitions of Planning
 “Planning is deciding in advance what is to be done. When a manager plans, he
projects a course of action for the future, attempting to achieve a consistent, co-
ordinated structure of operations aimed at the desired results.”
 Theo Haimann
 “Planning is an intellectual process, the conscious determination of courses of
action, the basing of decisions on purpose, facts and considered estimates.”
Koontz and O’Donnell
 “Planning is the thinking process, the organised foresight, the vision based on fact
and experience that is required for intelligent action.”
 Alford and Beatty
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Examples of Plan
13
 Business Plan
 Health Plan
 Project Plan
 Govt.Five Years Plans-A plan prepared by govt.
 Strategic Plan-(Plan for 5-10 years)
 Tactical Plan-A plan to seize(to grab/to hold suddenly )
immediate opportunities or manage
imminent(close/near) risks.
 Contingency Plan- A plan to prepare for risks and
respond to risks that become issues.
 Assessment Plan-A plan to way to assess performance

Reasons for Planning
3
To co-ordinate human and physical
resource
To reduce uncertainty in operation
To reduce overlapping and wasteful
activities

Planning
4
Planning involves setting goals of the organization
and establishing a plan or strategy to achieve these
goals.

How to set goals? Be SMART!
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How to set goals? Be SMART!
5
 SMART Goals are
 Specific – goals are clearly defined and focused.
 Measureable – outcome of the goal can be measured.
 Achievable – goals should be realistic and are able to
accomplish.
 Relevant – goals are relevant to the business operation.
 Time-bound – a specific period of time must be set for
achieving the goal.
The use of SMART goal setting can help managers
save time and resources by making the planning
process more efficient and effective.

SMART Goal setting
1.Specific
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 What do you truly want to accomplish?
 Specifically- Write mission statements
 Think about goal in terms of the six Ws:
1. Who will you involve to help achieve the goal? -a
team involved.
2. When do you want to complete the objective? –a
timeframe.
3. What are you trying to achieve? -Be precise and
detailed.
4. What obstacles stand in path?-( Identifying
potential hazards in achieving your goal)
5. Where will this happen?-area/location.
6. Why are you doing this? What’s the purpose of the
goal?

SMART Goal setting
2.Measurable
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 It gives a way of evaluating progress.
 Making goals measurable ,ensures that they’re
more tangible and attainable.
 Will the project take a few weeks or more?

SMART Goal setting
3.Achievable
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• How important is the goal to you?
• How can you make it happen?
• Do you need to develop new skills or embrace new
technology?
• What do you need to do to achieve the goal?
• Can you achieve goal within your current skill set?
• Think about what needs to change to get you there.

SMART Goal setting
4.Relevant
21
 Relevance means focusing/relevant to
business goals.
 Goals should be set for business operation
and based on current economic climate.
e.g.
A business can set a goal of increasing 20% in sales
for its product A in the next year which is relevant
to the goal of obtaining 20% market share in the
industry.

SMART Goal setting
5.Time-bound:
Time-bound:
A goal should be bound within a time frame.
e.g. To achieve a target of sale in 6 months.
To expand business in 2 years.
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Process of Planning
10
 Once managers understand the goals of the
company, they can take steps to implement
the planning process in their company.
 Implementation of planning process is
important because if the planning cannot be
transformed into action, it will not be able to
generate benefits to the company.

Process of Planning
11
1Perception of
opportunities
2.
Establishing
objectives
3. Planning
premises
4.
Identification
of alternatives
5. Evaluation
of Alternatives
6.Choice of
Alternatives
7.Formulation
of supporting
plans
8.Establishing
sequence of
activities

Process of Planning
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1.Perception of Opportunities-
 Includes preliminary look at possible
opportunities and ability to see them clearly
and completely.
2.Establishing objectives-
 Organisational and unitwise objectives must
be set. Objectives indicate the end points of
what is to be done.
e.g. Profitability, Sales, Research &
Development, manufacturing and so on.
Perception-understand, see with deep though process

Process of Planning
27
3.Planning Premises(conditions)-
 Planning premises are conditions under
which planning activities will be
undertaken.(Internal & External
Environmental Conditions)
4.Identification of alternatives-
 Based on organizational objectives and
planning premises, various alternatives can
be identified.
5.Evaluation of alternatives-
 Includes evaluation of how each alternative
contributes to the organisational objectives

Process of Planning
28
6.Choice of alternative-
 After evaluation of various alternatives, most fit one is
selected.
 Sometimes more than alternative is equally good .In such
case, a planner may choose more than one alternative
which will work as an Contingency Plan.
7.Formulation of supporting plans-
 After formulating basic plan, various plans are derived so
as
to support the main plan
8.Establishing sequence of activities-
After formulating basic and supporting/derivative plans, the
sequence of activities is determined so that plans are put
into action.

Types of Planning
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Bases/Dimensions/
Activities
Types of Planning
1.Coverage of Activities 1.Corporate planning 2.Functional Planning
2.Importance of contents 1.Strategic Planning 2.Tactical/Operational Planning
3.Time Period involved 1.Long-Term Planning 2.Short-term Planning
4.Approach Adopted 1.Proactive Planning 2.Reactive Planning
5.Degree of formalization 1.Formal Planning 2.Informal Planning

Types of Planning
(On the basis of coverage of
Activities)
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1.Corporate Planning-
• Planning at top Level
• Includes long-term objectives of the
organisation.
2.Functional Planning-
 is segmental planning
 undertaken for each major function of
the organisation like production,
marketing, finance, human resource etc.

Types of Planning
(On the basis of Importance of contents)
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1.Strategic Planning-
 sets the long-term direction of the
organization in which it wants to
proceed in future.
2.Operational Planning-
 Tactical Planning/Short term Planning
usually for one year
 Aimed at sustaining the organisation in
its production and distribution of current
products or services to the existing
markets

Types of Planning
(On the basis of Time Period involved)
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1.Long-term Planning-
3-5 Years or upto 20 years
2.Short-tem Planning-
1year

Types of Planning
(On the basis of approach adopted)
33
1.Proactive Planning
2.Reactive Planning
Proactive-
If you are proactive, you make the things happen, instead of waiting for them
to happen to you. If you are proactive, you are ready before something
happens.
Reactive-
If you are reactive, you response, when something happens.

Types of Planning
(On the basis of approach adopted)
1.Proactive Planning-
Designing suitable future and then inventing ways to
create that future state. Planner not only set target for
the future , but the organization can actively control the
outcome. Planners actively shape the future, rather than
just trying to get ahead of events outside of their control.
2.Reactive Planning-
In Reactive Planning, organizations react to events as
and when they arise. When environmental change takes
place, organizations start planning.
 Proactive-Dynamic, Energitic,Enterprising
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Types of Planning
(On the basis of degree of formalization)
1.Formal Planning-
-well structured process involving different steps.
-Normally in writing.
2.Informal Planning-
-Not in writing.
-Not structured, Informal is undertaken by small
organizations.
-Informal planning will be effective only when the
number of action is less.
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Functions of Management-
2.Organising
3
 Organising is the process of allocating and
arranging the resources of the company
such as employee, facilities and equipment,
finance, to achieve the goals of the company.

Organizing Steps
4
1. Determine
the specific
activities
needed to
implement
2. Group
these
activities into
a logical
sequence
3. Assign
work to
specific
employees
and provide
resources
required
4. Coordinate
the work of
different
groups and
employees
5. Evaluate
the results or
organizing
process and
make
appropriate
adjustment

Organizing Process-Step-1
1. Determine the specific activities needed to
implement
 It is necessary to determine those activities which are essential to
accomplish the organisational objectives. The process of organising
involves identification and division of work. The whole work is to be
divided into smaller activities so that duplication is avoided and
work can be completed as per the organisational objectives.
Division of work facilitates specialisation in work.
 For example, a school may have different departments like
teaching, office administration, library, sports, etc., and a particular
department, say teaching, can further be sub-divided into smaller
departments on the basis of subjects like Commerce, Economics,
English, etc.
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2. Group activities needed to implement
 The process of grouping the activities of similar nature is called Departmentalisation.
Departmentalisation facilitates specialisation and coordination in the organisation.
 Activities can be grouped in the following ways:
 i. On the basis of functions – Various activities are grouped into different departments
on the basis of various functions in the organisation. For example, Purchase
Department for purchase functions, Finance Department for financing activities,
Marketing Department for marketing activities, etc.
 For accomplishing the works which are similar in nature different tasks, processes or
skills required are to be placed together so as to achieve the organisational
objectives.
 ii. On the basis of types of products – In this case, activities are grouped into
different departments on the basis of products manufactured by the organisation.
 iii. On the basis of geography – Activities are grouped on the basis of geographical
locations. For example, Northern Zone, Eastern Zone, etc.
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3.Assign work to specific employees and provide resources required
 After departmentalization, the next step is to
assign the work to the employees according to
their skills and competencies. In order to
ensure effective performance, it is essential
that parity is created between the nature of a
job and ability of the employee responsible for
that particular job.
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3.Assign work to specific employees and provide
resources required
 Assigning work means Delegation of authority i.e. duties and tasks are
entrusted to the subordinates by the superior, authority should be granted
to them to perform those duties and tasks well. While delegating authority
managers should work on establishing authority responsibility relationships
in an organisation structure.
 This implies the allocation of authority and responsibility among employees
of the enterprise in such a way that each person should know who is
responsible to whom and for what. It further creates hierarchy in the
management. Top management enjoys the highest degree of authority.
 The degree of authority reduces as the hierarchy flows towards lower level
of management. Authority flows from top to bottom in the hierarchy. Further,
establishing reporting relationships facilitates coordination at all levels of
management.
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4.Coordinate the work of different groups and employees
 In order to create a balance and structure in
the organisation, the activities of members
need to be well- coordinated. Coordination in
the organisation is essential for better
performance of employees as well as for the
timely achievement of organisational goals.
43

5. Evaluate the results of organizing process and make
appropriate adjustment
 Finally, evaluation of result /activities is done to judge the
effectiveness of performance of the different departments.
This stage reveals if any reorganizing process is necessary to
steer the activities of the departments in the desired direction.
44

Structure or Forms of
Organization
1.Line Organization Structure
a) Pure Line Organization b) Departmental Line Organization
2.Functional Organizational Structure
3.Line and Staff Organization Structure
4.Divisional Organizational Structure
5.Project Organization Structure
6.Matrix Orgnasaional Structure
7.Team Based organization Structure
45

Forms of Organizational
Structure
46
1.Line Organization
 is the oldest and simplest form of organization.
 have a single head who commands
Types:
A)Pure Line Organization
B)Departmental Line Organization

1.Line Organization
A)Pure Line Organization:
Each group of activities is self-contained unit and is able to perform the
assigned activities without the assistance of others.
Production
Manager
Foreman-A Foreman-B Foreman-C
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Worker
Worker
Worker

Foreman Vs.Supervisor
Foreman Supervisor
Foremen is basically an instructor who
gives instructions to operators
concerning their routine rasks
Supervisor is a middle line of manager
whose role includes checking on the
operations o subordinate including
that of foreman also
48

B)Departmental Line
Organization
 Each department is placed under one departmental
superintendent.
 All persons in the department are subject to control by
the departmental head.
49

B)Departmental Line
Organization
50
Production
Manager
Foreman
(Spinning)
F
Foreman
(Weaving)
Foreman
(Dying)
Foreman
(Finishing)
Worker
Worker Worker Worker

Forms of Organizational Structure
2.Functional Organization Structure
is a hierarchical organization structure wherein people are
grouped based on their area of specialization.
51

3.Line and staff Organization
 Line and staff organization is a combination of functional and line
structure. Line authority flows from top to bottom and the line
executive is directly concerned with the accomplishment of primary
objectives. They are actual doers and generally do not possess
specialized knowledge to solve complex problems.
 To provide specialized assistance to line mangers, staff positions
are created. Staff means a stick in the hand for support. Thus, staff
helps the line executives in their work. They play the role of an
advisor.
 Power of command remains with the line executive and staff serves
only as counselors.
52

Forms of Organizational
Structure
 In line and staff organization, the line authority remains
the same in the organization. But staff executives are
attached with line executives who help them by
providing necessary advice on important matters. Staff
executives have no power to command subordinates in
other departments.
 It is clear that PA to Managing Director, Personnel
Manager and Budget Manager play role of staff
executives. In most business units, staff executives are
used for collecting data required for taking decisions and
to provide expert advice to line managers.
53

54

 splits employees into segments that correspond to particular
products, services or markets.
 divisions are headed by the general manager who controls the
regular business activities.
 Each division enjoys some degree of autonomy, complete with
functional units such as operations, personnel, marketing and
research and development departments
 applied to those organisation which are large and have more than
one product line to continue.
 e.g. Suppose an organisation produces and sells four products, A,
B, C, D.
 All these products are organised into separate departments and
operated as individual units which are supported by functions.
55

56

5.Project Management Structure
 Project management team structure is organized in such
a way that the project manager has project authority.
 Dedicated teams are put together to work on projects in
a project organizational structure.
 He has jurisdiction over the project’s budget, schedule,
and the project team
57

6.Matrix Organizational Structure
 is a combination of two or more types of organizational structures.
 relationships are set up as a grid, or matrix, rather than in the traditional hierarchy.
 are two chains of command, where project team members have two bosses or
managers.(generally to both a functional manager and a product manager.)
58

7.Team Based Organizational Structure
59
 Work processes are handled by groups of employees
that are assigned specific projects with timelines
established to achieve goals.
 Employees have more autonomy and more authority to
make decisions, without needing managerial approval.

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Manager
Team-B
Quality
Team –C
Infrastructure
Team-D
Design
Team-A
Safety
Team Based Organizational Structure

PETER
DRUCKER
Austrian-American
management consultant,
educator, and author,
whose writings
contributed to the
philosophical and
practical foundations of
the modern business
corporation.
62
19 November 1909-11 November 2005

PETER
DRUCKER
 was also a leader in the
development of
management education,
he invented the concept
known as MBO and self
control.
 founder of modern
management
63
19 November 1909-11 November 2005

What is MBO?
 Management by Objectives (MBO) was first outlined by Peter
Drucker in 1954 in his book 'The Practice of Management'.
 In the 1990s, Peter Drucker himself decreased the significance of this
organization management method,
 When he said: "It's just another tool. It is not the great cure for
management inefficiency... Management by Objectives works if you
know objectives, 90% of the time you don't."
64

What is MBO?
Management By Objectives (MBO) is a
systematic and organized approach that allows
management to focus on achievable goals and
to attain the best possible results from available
resources.
65

Five-Step MBO Process
66
Organizational
Objectives
reviewed and
Set
Employees
Objectives set
Progress
Monitored
Performance
Evaluated
Achievers
rewarded

Types of Objectives
 Routine objectives
 Innovation objectives
 Improvement objectives
Objectives must be:
 focused on a result, not an activity
 consistent
 specific
 measurable
 related to time
 attainable
67

8 Key Result Areas where Managers must
Pursue Clear Objectives
 Marketing
 Innovation
 Human Organization
 Financial resources
 Physical resources
 Productivity
 Social responsibility
 Profit requirements
68

3.Staffing
Staffing is the process of hiring eligible candidates in
the organization or company for specific positions. In management, the
meaning of staffing is an operation of recruiting the employees by
evaluating their skills, knowledge and then offering them specific job
roles accordingly.
70

Process of Staffing
1. HR Planning-Job Analysis(Job Description & Job Specification)
2. Recruitment
3. Selection
4. Placement
5. Induction & Orientation
6. Performance Appraisal
7. Training and development
8. Compensation Management
9. Promotion,Transfer,Demotion
10. Employee Separation
71

Process of Staffing
1.Manpower/HR Planning
 Starting Point of Staffing Function
 Human Resource Planning is the process of finding the right number of
people for the right kind of a job, at a right time and the right place, by
forecasting the organization’s demand for and supply of human resources
in the near future.
72

Process of Staffing
1.HR planning
Job Analysis
Job analysis is the process of gathering and analyzing information
about the content and the human requirements of jobs, as well as,
the context in which jobs are performed. This process is used to
determine placement of jobs-1.Job Description2.Job Specification
73

 Job title
 Organizational location of the job
 Supervision given and received.
 Materials, tools ,machinery and equipment worked
 Designation of immediate superiors and subordinates
 Salary levels –pay ,Dearness Allowance, other allowances ,bonus ,incentives
,wages ,method of payment, hours of work ,shift and break
 Complete list of duties to be performed according to daily ,weekly ,monthly and
casual estimated time to be spent on each duty.
 Definition of unusual terms
 Conditions of work-location ,time ,speed of work, accuracy ,health hazards and
accident hazards
 Training and development facilities
 Promotional chances and channels
Contents of Job Description
74

1.Physical Characteristics
2.Personal Characteristics
3.Psychological characteristics
4.Responsibilites
5.Demographic Characteristics
75
Job Specifications

1.Physical Characteristics-Height, Weight, Vision, voice
etc.
2.Personal Characteristics- Emotional stability ,good and
pleasing ,manners, skill in dealing with others etc.
3.Psychological characteristics
Analytical Ability, mental concentration, alertness,
mechanical/professional aptitude
4.Responsibilites
5.Demographic- Characteristics-age ,sex ,education
,experience etc.
76
Job Specifications

Process of Staffing
2. Recruitment 3.Selection
2.Recruitment- It is a process of searching for
prospective employees and stimulating and
encouraging them to apply for jobs in an
organisation.
3.Selection- Selection is the screening and filtering
process of job applicants who have been invited to
apply for the vacant positions through which the
process comes to an end”.
77

Internal Sources of
Recruitment
 Promotion
 Transfer
 Past Experience
 Dependents
 Apprentice
78

External Sources of
Recruitment
 1.Advertisements
 2.Employment Exchange
 3.Campus Recruitment
 4.Unsolicited Applications
 5.Labour Contractors.
 6.Employee Referrals.
 7.Field Trips.
 8.Special Events.
 9.Appointing Part-time Employee as full-time.
 10.Deputation
 11.Vocational Guidance Counselors
 12.Waiting List
 13.Temporary Help Services
 14.Computer Data Bases
 15. Foreign Sources
79

Selection Procedure:
 1.Reception of Applications
 2.Scrutiny of applications
 3.Preliminary Interview
 4.Application Blank
 5.Employment Tests
 6.Interview
 7.Background Investigation
 8.Approval of supervisor
 9.Physical Examination
 10.Final Employment Decision
80

Selection Procedure
1.Reception of applicants
 Job Seekers send their applications to the employment office or
personnel dept. in response to the advt made by it.
 Many applicants personally come to deposit their applications.
 Sometimes campany calls the applicants to its office on a
specified date.
 Warming and positive environment should be created.
 There should be big waiting room in employment office.
 It should be clean and well ventilated with adequate lighting
facility.
 The applicant should be handled in well behaved manner.

Selection Procedure
 2.Scrutiny of applications-
 All applications must be scrutinised by the
personnel Dept. In order to eliminate those
applicants who do not fulfill required
qualifications.
 3.Preliminary Interview-
 Initial screening or preliminary interview is done
to limit the costs of selection.Its purpose is to
eleiminate unqualified candidates.It is sorting
process in whicg necessary information is elicited(
To make open to free talk) from candidates about
their education ,skills,experiance,salary wxpected
etc.

Selection Procedure
4.Application Blank-
i)Demographic Data-
Age,Gender,nationality,height,weight,marital status and no.of
dependents.
ii)Education and past experiance-
Educational qualification,knowledge gained from technical institutions
etc.is needed by employer.
iii)Personal Items-
Extra curricular activites,sports,hobbies,membership of association are
oftern required to find out a candidates suitability for a post.
iv)References-
Reference are letters of recpommondations..written by teachers or
previous employers.

Selection Procedure
5.Employment Test-
Selection tests are becoming increasingly popular
these days.A test is sample measurement of an
individuals job-related abilities and skills.It
provides a basis for comparing the
behaviour,performance and attitudes of two or
more persons.Tests are based on assumption that
person differ in
intelligence,knowledge,skill,motivation.

Selection Procedure
Tests are-
i)Intelligence test-
Testing mental ability of person with respect to reasoning
word,fluency,numbers,memory,comprehensions,picture arrangement etc.
ii)Aptitude test-
To test candidate's work related perception,judgment.These measures
whether an individual has capacity/ability to learn a given job if given
adequate training.
iii)Acheivment Test-
Acheivemnt Test is concerned with what one has accomplished.When
applicants claim to know something.
iv)Interest Tests-
These tests are related with likes and dislikes of candidates in relation to
work ,job,occupations,hobbies and recreational activites.
This is related with finding out whetehr a candidate is interested or not in
job.

Selection Procedure
Tests are-
v)Knowledge Test-
These are devised to measure depth of knowledge and proficiency in
certain skills already achived by applicants such as
engineering,accounting etc.
vi)Projective Test-
In these test,applicants projects his personality into free responses
about pictures shown to him which are ambigiuos.
vii)Judgement Test-
These are used for evaluating ability and knowledge judiciously in
solving a problem.
viii)Performance Tests-
Applicants is asked to demonstrate his ability to do the
job.e.g.prospective typists are asked to type several pages with speed
and accuracy.

Selection Procedure
6.Interview-
Final interview is usually followed by testing.
Types of Interviews-
i)Preliminary Interviews-Informal and Unsturctured
ii)Core Interview-
 Background Information Interview
 Job Probing Interview
 Stress Interview
 Group Discussion Interview
 Formal and Sturctured Interview
 Panel Interview
 Depth Interview
iii)Decision Making Interview-

Selection Procedure
6.Interview-
i)Preliminary Interviews-
Informal –These interviews can be conducted at any place by any
person to secure basic and non-job related information.The
interaction between candidate and personnel manager when former
meets latter to enquire about vancancies or additional particulars in
connection with employment.
Unsturctured-In this interview,candidate is given the freedom to tell
about himself by revealing his knowledge on various items/areas,his
background,expectations,interest etc.

Selection Procedure
ii)Core interview-
It is normally interaction between the candidate and the line
executive/experts on various areas of job knowledge,skill,talent etc.
i)Background Information Interview-
This interview is intended to collect the information which is not available in
the application blank and to check that information provided in application
blank regarding education ,place of domicile
family,health,interests,hobbies,likes and dislikes and extra-curricular
activites of applicants.
ii)Job Probing Interview-
This interview aims at etsting candidates job knowldge about
duties,activies,methods of doing the job,critical/problematic areas,methods
of handling those areas etc.
iii)Stress Interview-
This interview is designed to assess whether a person would be able to cope
with stress on the job or not.It is deliberate attempt to create tension and
pressure in an applicant to see how well he responds to these tensions.

Selection Procedure
Group Discussion Interview-
All candidates are brought into one room i.e interview room and are
interviewed one by one under group interview.This method helpd a busy
executive to save valuable time and gives a fair account of objectivity of
inteview to candidates.
Panel Interview-
A panel of experts interview each candidates,judges his perfromance
individually and prepares consilidated judgements.This type of interview
is known as panel Interview.
Depth Interview-
Candidates would be examined extensively in core areas of job skills and
knowledge.Experts test the candidates knowledge in depth.Depth
Interviews are conducted for spicalists jobs.
Decision Making Interview-
After candidates are exmined by experts including line managers of
organisation in core areas of the job,head of dept/section concenred
interviews candidates once again,mostly through informal discussions.

Selection Procedure
7.Checking of References-
 After completion of final interviews and medical
examinations,personnel dept. Will engage in checking
references,candidates are required to give names of
references in their application forms.These references
may be from individuals who are familiar with
candidates academic acheivements or from
applicant’s previous employer who is well versed with
applicants job performance and sometimes from co-
workers.

Selection Procedure
8.Approval by concenred Dept. Or supervisor
At this stage,third interview is conducted by line
maners to approve work qualities,understanding
and dedications of candidates,supervisors
appraisal is helpful.
9.Physical Examination-
Certain jobs require certain physical qualities like
clear vision,perfect hearing,unusal
stamina,tolerance of hardowrking conditions,clear
tone etc.

Selection Procedure
10.Final Selection/Employment Decision
After a candidate is finally seelcted,human
resoruce department recommends his name for
employment,management offers employment in
the form of appoitnment letter mentioning
post,rank,salary grade,date by which candidate
should join/other terms and conditions of
employments.

Process of Staffing
4. Orientation and Placement 5. Placement
4.Induction and Orientation
Induction can be defined as the introduction of the
newcomer to their job. Orientation, which provides basic
information about the employer organisation to the
fresher.
5.Placement-
After the employee is hired and oriented, he/she must be
placed in his/her right job. Placement is understood as
the allocation of people to the job. It is assignment or re-
assignment of an employee to a new or different job.
94

Difference between Induction and
Orientation
BASIS FOR COMPARISON INDUCTION ORIENTATION
Meaning Induction is a process takes
place to welcome new
comer to the organization,
to make them ready for their
job.
A process which involves
assimilation of new joinee
into the organization to
rehabilitate him at the new
workplace and provided with
basic information about the
company.
Involves Introduction of the employee
with the organization.
Integration of the employee
in the organization.
Sequence First Second
Form Detailed presentation or
brochure of the company's
rules, policies and employee
benefits is provided.
Practical overview of the
organization.
95

Process of Staffing
6.Performance Appraisal-
Performance appraisal is systematic evaluation of
the individual with respect to his or her
performance on the job and his or her potential
for development.
96

Process of Staffing
6.Performance Appraisal-Methods
Traditional Method Modern Method
1.Graphic Scale Method 1.Management by Objective
2.Ranking Method 2.Behaviorally Anchored Rating scale(BARS)
3.Paired Comparison 3.Assessment Centre
4.Grading Method 4.360 Degree Appraisal
5.Forced Distribution Method
6.Forced Choice Method
7.Checklist Method
8.Critical Incident Method
9.Essay Method
10.Confidential Report Method
11.Field Review Method
97

Process of Staffing
7.Remuneration, 8.Training and Development
7.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.
8.Training and Development-
Training is organized procedure by which people learn
knowledge and/or skill for a definite purpose.
98

 Job Rotation: In this method, usually employees are put on different jobs turn by turn
where they learn all sorts of jobs of various departments. The objective is to give a
comprehensive awareness about the jobs of different departments. Advantage – employee
gets to know how his own and other departments also function. Interdepartmental
coordination can be improved, instills team spirit. Disadvantage – It may become too much
for an employee to learn. It is not focused on employees own job responsibilities.
Employees basic talents may remain under utilized.
 Job Coaching: An experienced employee can give a verbal presentation to explain the
nitty-gritty’s of the job.
 Job Instruction: It may consist an instruction or directions to perform a particular task or a
function. It may be in the form of orders or steps to perform a task.
 Apprenticeships: Generally fresh graduates are put under the experienced employee to
learn the functions of job.
 Internships and Assistantships: An intern or an assistants are recruited to perform a
specific time-bound jobs or projects during their education. It may consist a part of their
educational courses.
On-the-Job Training Methods

 Classroom Lectures: It is a verbal lecture presentation by an instructor to a large
audience. Advantage – It can be used for large groups. Cost per trainee is low.
Disadvantages – Low popularity. It is not learning by practice. It is One-way
communication. No authentic feedback mechanism. Likely to boredom.
 Audio-Visual: It can be done using Films, Televisions, Video, and Presentations etc.
Advantages – Wide range of realistic examples, quality control possible,. Disadvantages –
One-way communication, No feedback mechanism. No flexibility for different audience.
 Simulation: creating a real life situation for decision-making and understanding the actual
job conditions give it. Following are some of the simulation methods of trainings
 Case Studies: It is a written description of an actual situation and trainer is supposed to
analyze and give his conclusions in writing. The cases are generally based on actual
organizational situations. It is an ideal method to promote decision-making abilities within
the constraints of limited data.
 Role Plays: Here trainees assume the part of the specific personalities in a case study
and enact it in front of the audience. It is more emotional orientation and improves
interpersonal relationships. Attitudinal change is another result. These are generally used in
MDP.
On the Job Training Methods

Off the Job Training Methods
101

Staffing Function
9.Promotion & Transfer 10.Employee Separation
9.Promotion ,Transfer, Demotion-
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.
Demotion is about shifting to lower level job.
10.Employee separation
According to Yoder, separation is a negative recruitment. It may be
in the form of resignation, dismissal or discharge, suspension,
retrenchment or lay-off.
102

Employee Separation
Employee-Initiated
Separations
(Natural Separations)
Employer-Initiated
Separations
Retirement Discharge/ Dismissal
Employee Death Lay-off
Employee Resignations Retrenchment
Voluntary Retirements Suspension
103

4.Directing/Leading
105
Direction is process of instructing, guiding,
counseling, motivating and leading the human
resources to achieve organizational objectives.

4.Directing/Leading
Direction is telling people what to do and seeing that they do it to
the best of their ability. It includes making assignments,
corresponding procedures, seeing that mistakes are corrected,
providing on-the-job instructions and of course, issuing orders. “
—Ernest Dale
“Direction is the impersonal aspect of managing by which
subordinates are led to understand and contribute effectively and
efficiently to the attainment of enterprise objectives.”
—Koontz and O’Donnell
106

Directing involves-
1. Telling people what is to be done and explaining how
to do it.
2. Issuing instructions and orders to subordinates.
3. Inspiring them to contribute towards the achievement
of objectives.
4. Supervising their activities.
5. Providing leadership and motivation.
107

Elements of Directing
1. Supervision
2. Leadership
3. Motivation
4. Communication
108

 Supervision- implies overseeing(supervising) the work
of subordinates by their superiors. It is the act of
watching & directing work& workers.
 Motivation- means inspiring, stimulating or encouraging
the sub-ordinates with passion to work. Positive,
negative, monetary, non-monetary incentives may be
used for this purpose.
 Leadership- may be defined as a process by which
manager guides and influences the work of
subordinates in desired direction.
 Communication- is the process of passing information,
experience, opinion etc. from one person to another.
109

1.Supervision
 Refers to day today relationship between manager /
Superior and his Subordinate.
 It’s a management activity which is carried out by
supervisors to oversee the productivity and progress of
employees who report directly to the Higher supervisors.
 It’s essentially an Educational Process.
 Educate less qualified or less experienced by better
qualified and better experienced ones.
 Supervisors are the key people among managers at
different levels. They are the link between the top and
middle management and the workers.
110

Differences between Direction / Supervising
Directing (Wide) Supervising (Narrow)
It include motivation, communication,
supervision, training & leadership.
It is only one of the elements of
direction.
 Direction is generally at top level.  It is restricted to the lower level management.
 Generally, direction is related to supervision
which is the intermediate link between the
workers and management .
 He has to deal, guide and lead workers
directly under his commands.
 Direction being at the top level, formulates
polices and takes important decision.
 Supervision at lower level only for
implementation.
 Financial & non financial incentives.  It cannot provide incentives but it can only
recommend rewards in special case.
 Leads the efforts of medium and lower Level
executives.
 Efforts of employee under his commands.
111

2.Leadership
 Leadership improves the performance of the employees.
 Leaders can motivate the followers to work and thereby
increase their performance level.
 With continuous support and guidance, leaders are able to
build confidence among the followers, thereby increasing
speed and accuracy and decreasing wastage.
 With friendly and cooperative efforts the leader is able to
build employees’ morale which in turn contribute to higher
productivity.
112

Leadership Styles
6
Leadership
Styles
Autocratic/
Authoritarian
Participative/
Democratic
Laissez-
faire

Leadership Styles
Authoritaria
n /
Autocratic
Leadership
•Classical style
•Manager retains power and decision-
making authority.
•Orders are issued to be carried out, with
no questions allowed and no
explanations given.
•It is best applied to situations where
there is little time for decision-making or
where the leader is the most
knowledgeable person of the team..
115

Leadership Styles
Laissez
faire
Leadership
•hands-off” style
• tends to adopt a policy of not 'interfering' with the
group by letting them run themselves.
• This style can be effective where employees are
highly qualified in an area of expertise.
•This method is generally only effective in highly
specialized fields.
• Due to the lack of leadership, informal leaders tend
to take control of the group and conflicts often result.
Everything must be done according to procedure or
policy.
It is best applied to situation where employees are
working in dangerous environment that requires a
definite set of procedures to operate.
116

Leadership Styles
Participative
(Democratic
)
Leadership
 Participative style
 Encourage employees to involve in decision
making.
 Let employees determine the work methods
and use feedback as an opportunity for
helpful coaching.
 Employees feel engaged in the process and
are more motivated and creative.
 It is best applied where staff require a great
deal of flexibility to complete the task or
where the staff know the job well and do
not require too much instruction.
117

Which Leadership Style is the
Best?
13
 Many factors such as the leader’s base of power,
the difficulty of the task, and the characteristics of
the employees will help to determine the most
appropriate leadership style in any particular
circumstance.
 No one single leadership style is the best of all.

Employee motivation
120
 Motivation is derived from the Latin word, “movere” which
literally means ‘Movement’.
 Employee Motivation is defined as the enthusiasm, energy
level, commitment and the amount of creativity that an
employee brings to the organization on a daily basis.

Element of Directing
Motivation
Motivation is defined as “the extent to which persistent
effort is directed towards a goal.”
1. Effort - must be defined in relation to its appropriateness to the
objectives being pursued.
2. Persistence - relates to the willingness of the individual to stay with
a task until it is completed.
3. Direction - measured in terms of how persistent effort is applied in
relation to the goals being pursued.
4. Goals - individual goals and organizational goals (must be
compatible).
i.e. Occur together without problems or conflicts.
121

Definitions of Motivation
 “Motivation is defined as the willingness to exert high levels
of effort towards organizational goals.”
Stephen P Robbins
 Motivation can be defined as “ a process that starts with
psychological deficiency or need that activates behaviour or
a drive that is aimed at a goal or incentive.”
Fred Luthans (1986)
Exert=Apply
122

Types of Motivation
 Intrinsic Motivation
 Extrinsic Motivation
 Positive Motivation
 Negative Motivation
123

Intrinsic motivation
 Intrinsic-Means-Natural, Inborn
 is doing something for the sake of personal satisfaction.
 Intrinsic motivations can be linked to our feelings.
 The primary motivator is internal .(i.e. you don’t expect
to get anything in return).
 Intrinsic motivation means employees are motivated
by rewards that are largely intangible
124

Types of Motivation
Intrinsic Motivation involves engaging in a behavior
because it is personally rewarding; essentially,
performing an activity for its own sake rather than the
desire for some external reward. Essentially, the
behavior itself is its own reward.
125

 A person is intrinsically motivated when
you do something simply because it
makes him feel good, is personally
challenging, and/or leads to a sense of
accomplishment.
 E.g. a student may be intrinsically
motivated to read because it satisfies their
curiosity about the world and brings them
a sense of calm. Intrinsic motivation is
doing something “just because.”
126

This means employee place more value on outcomes that are sourced
from within, rather than from external factors.
e.g.: Feeling satisfied
• Feeling capable
• Enjoying a sense of challenge
• Reinforcing self-esteem
• Satisfaction at accomplishments
• General enjoyment in our work
• Feeling appreciated
• Satisfaction at realizing our potential
• Taking pleasure at being treated with care and consideration
127

Intrinsic motivation –Life
examples
1. Exercising because you enjoy physically challenging
your body instead of doing it to lose weight or fit into an
outfit
2. Volunteering because you feel content and fulfilled
rather than needing it to meet a school or work
requirement
3. Going for a run because you find it relaxing or are trying
to beat a personal record, not to win a competition
4. Taking on more responsibility at work because you
enjoy being challenged and feeling accomplished, rather
than to get a raise or promotion
5. Painting a picture because you feel calm and happy
when you paint rather than selling your art to make
128

Extrinsic motivation
 Extrinsic-means –Outside
 is doing something to earn a reward or to avoid a
punishment.
 Primary motivator is external.
129

 Extrinsic motivation occurs when
employees are motivated to perform a
behavior or engage in an activity to earn a
reward or avoid punishment.
(In this case, you engage in a behavior not
because you enjoy it or because you find
it satisfying, but in order to get something
in return or avoid something unpleasant.)
130

 e.g. A person expect to get something for
completing a certain task, or a person want to
avoid a consequence for not doing something).
 E.g., a student studies for a test because they want
to earn a good grade Or they mind their behavior
because they don’t want to lose their
recess/break-time.
 Students choose behaviors not because they enjoy
them or find them satisfying, but in order to get
something in return or avoid an adverse outcome.
131

 Extrinsic motivation refers to motivation by external or tangible rewards.
 Things or factors which come from other people or organizations.
 E.g.
 Salary And What It Can Buy
 Fringe Benefits
 Promotion And Its Trappings
 Security
 Physical Work Environment (Such As A Better Office Or Car Parking Space)
 Conditions Of Work
 Often these benefits are beyond the direct control of a line manager and are more
often determined at an organizational level. Nonetheless, effective managers should
be supportive of colleagues motivated by extrinsic factors, if they are justly entitled to
such rewards.
133

External Extrinsic Rewards Examples
1. Competing in sports for trophies
2. Completing work for money
3. Customer loyalty discounts
4. Buy one, get one free sales
134

Extrinsic and Intrinsic Motivation
135

Examples of Extrinsic and Intrinsic
Motivation
Extrinsic Motivation Intrinsic Motivation
•Participating in a sport to win
awards
•Cleaning your room to avoid
being reprimanded (Scolded )by
your parents
•Competing in a contest to win a
scholarship
•Studying because you want to
get a good grade
•Participating in a sport because
you find the activity enjoyable
•Cleaning your room because
you like tidying up
•Solving a word puzzle because
you find the challenge fun and
exciting
•Studying a subject you find
fascinating
136

Psychological Extrinsic Rewards Examples
1. Helping people for praise from friends or
family
2. Doing work for attention, either positive
or negative
3. Doing tasks for public acclaim or fame
4. Doing tasks to avoid judgment
5. Completing coursework for grades
137

Techniques of Motivation
 Financial/Monetary Motivation
 Non-Financial/Non-Monetary Motivation
138

Techniques of Motivation:
1. Financial Motivation
Financial techniques refer to monetary rewards.
 1. Pay and Allowances
 2. Incentive Pay
 3. Profit Sharing
 4. Stock Options
 5. Retirement Benefits
 6.Skill-Based Pay
 7.Flexible Return
139

Techniques of Motivation:
2.Non-Financial
 Non-financial incentives do not involve money
payments.
 They bring in psychological and emotional
satisfaction to them.
 Employees work to have fun.
140

Examples of Non-financial
Incentives
1. Job security
2. Challenging work
3. Recognition
4. Better job Titles
5. Opportunities for Advancement
6. Empowerment
7. Competition
8. Job Rotation
9. Lead by Example — be passionate and energetic
10. Encourage the use of humour and creativity
11. Treat employee as human beings – neither inferior, nor superior
12.Work Group
13.Representation
 Empowerment-authority or power given to someone to do something./ process of becoming stronger and more
confident,
141

Some Financial & Non-Financial Techniques of Motivation
 Participation
 Participation refers to an activity involving employees in management decision
making and planning activities. Participation of employees in formulating corporate
plans and policies provides the feeling of belonging, recognition, acceptance,
accomplishment, and responsibility. As a result, employees will be motivated for a
higher level of performance.
 Behavioral Motivation
 This refers to the process of enhancing employee’s behavior with the help of different
tools and techniques. Because the changed behavior of employees can motivate
themselves towards the higher level of performance. This also increases their job
responsibility.
 Money and Financial Benefits
 Money and financial benefits are generated externally. They are provided in terms of
pay, incentives, benefits, and other tangible services. This works as a ‘carrot’ for
motivating employees.
142

Some Financial & Non-Financial Techniques of Motivation
 Work Group
 Under it, employees are categorized into different work units to fulfill their different
societal needs. Then the employees are allowed to work in the group, and they
discuss the quality and productivity thereby finding out the causes of deficiencies.
Hence, employees are self-motivated and self-directed towards the attainment of
organizational jobs and responsibilities,
 Profit Sharing Plans
 It is another way of motivating employees by allowing them a certain percentage of
profit. When employees directly participate in the profit of the company, they can be
motivated towards earning the better profit.
 Skill-Based Pay
 This method of motivation is concerned with paying employees on the basis of skill
held by them while performing the tasks. By doing so, highly skilled employees will
be directly motivated towards a higher level of job performance. Similarly, employees
with lower skills are induced to improve their skills and knowledge.
 Flexible Return
 This means the designation of a pay system or incentive plan which is based on
attempt shown by the employees in the actual workstation. If individual’s efforts and
attempts are recognized by some sorts of considerations they can motivate
143

Types of motivation
 c. Positive Motivation
 d. Negative Motivation
144

Types of motivation
 c. Positive Motivation:
 It is the reward based motivation which tries to create willingness to
perform better. It improves performance, increase mutual
cooperation and develops trust between employees and
management.
 Positive motivation may take the form of monetary, nonmonetary or
both. Examples of Monetary Incentive:-
 pay increment, cash reward, bonus payment, leave with pay, profit
sharing scheme, retirement benefit
 Examples of Non monetary Incentive:-
 promotion, participation in decision-making ,recognition, autonomy
or freedom to work, challenging work.
145

Types of motivation
d. Negative Motivation:
 Negative motivation means the act of forcing employees to work by
means of threat and punishment.
 It involves disciplinary actions.
 Examples of Monetary Motivation: - fines, penalties, pay cut,
 Examples of Non-monetary Motivation:- demotion, threat of
dismissal from job, transfer to remote areas, and group rejection.
 Since, this is not good practice.
 However, sometimes manager may be compelled to use this
technique with a view to prevent them from undesirable behavior.
146

Theories of Motivation
147
 Maslow's Hierarchy of Needs
 Mcgreger Theory X and Y
 Herzberg's Two-Factor Theory
 Vroom's Expectancy Theory

Behavioural Scientists
Name Theory
Abraham Maslow Hierarchy of Needs Theory
Douglas McGregor X and Y Theory
Fredrick Herzberg Two Factor Theory
Victor Vroom Expectancy Theory
148

Hierarchy of Needs Theory
-Abraham Maslow
149

Maslow’s Hierarchy of Needs
Theory
 Each individual has needs, or feelings of
deficiency that drive their behavior
 Once a need is satisfied, then it is no longer
motivating.
 Needs are in a hierarchy that an individual
moves up as they satisfy levels of needs.
150

Abraham Maslow's Hierarchy of
Needs Theory
Abraham Moslaw
(1908-1970)
151
•American psychologist
•Worked at Columbia University ,NewYork
•Developed Hierarchy Needs
•Promoted concept of Self Actualization
•Maslow’s Proposed in his research paper –
‘A Theory of Human Motivation’, in 1943
Focuses on describing the stages of growth in humans
needs

Motivation Theory
1.Maslow’s Hierarchy of Needs
1. Physiological Needs
2. Safety Needs
3. Social Needs
4. Esteem Needs
5. Self-Actualization Needs
152

153
Maslow’s Hierarchy of Needs
Motivation Theory

1.Maslow’s Hierarchy of Needs
1.Physiological Needs
Needs for human survival
e.g. air, water, food, rest, Clothing, shelter
If not met, the human body cannot function
154

2.Safety Needs
 Once physical needs are met, safety needs take over
1. Health safety
2. Financial safety
3. Job security/ safety
4. Safety of property (against natural disasters,
calamities, wars etc.)
155

3.Social Needs
 Need to love and be loved
 Need to feel a sense of belonging and acceptance
 Social Needs (Small groups) – clubs, office teams,
school/college ,houses
 Social Needs (Large groups) – political parties,
Sports teams, facebook/social media
156

4.Esteem Needs-
 One person may feel a sense of ‘belongingness’
 The need to feel ‘important’.
 Need to be respected by others
 Sense of self-valued in profession or hobby
 Need for status, recognition, fame, prestige, and
attention, self-respect, competence, mastery, self-
confidence, independence and freedom
157

Types of Esteem Needs
 Internal Esteem Needs-
Related with self-esteem such as-
Respect ,Achievement
 External Esteem needs –
Related with social status-
Recognition and respect from others.
158

Self Actualization Needs
 Self-actualization is truly about achieving dreams.
 Self-Actualisation is desire to become what one is
capable of becoming.
 It is the desire to become more and more what one is,
to become everything that one is capable of
becoming.
159

Great Personalities studied by
Maslow for self actualizations(1970)
1. Abraham Lincoln(president, United States from 1861)
2. George Washington Carver(American agricultural scientist)
3. Albert Einstein(Nobel Prize in Physics in 1921)
4. George Washington(President ,United States -1789 to 1797)
160

Theory X and Y -
Douglous Mcgregar
161

Theory X and Y
Douglas Mcgregor
(1906-1964)
 In 1960,Mcgregor Douglas
,formulated Theory X and Theory
Y.
 According to McGregor,
Perception of Manager about
nature of employees depends
upon the assumptions-
 Positive Assumptions
 Negative Assumptions
• .
162

Theory X and Theory Y
 In 1960,Mcgregor Douglas ,formulated Theory
X and Theory Y.
 According to McGregor, Perception of
Manager about nature of employees depends
upon the assumptions-
 Positive Assumptions
 Negative Assumptions
163

Theory X and Y
 The style of leadership depends on the
manager’s perception of people.
 In theory x, Douglas Mcgregor summarizes the
traditional view of management in a number of
characteristic assumptions in which Autocratic
Leadership style, close supervision and the
hierarchical principle are the key elements.
164

Theory X
 Theory X starts from the assumption that
people are naturally lazy, want to avoid work
as much as possible, do not wish to take
responsibility, have no ambition and prefer to
be supervised.
 The authoritarian leadership style is
therefore the most appropriate leadership style
166

Theory Y
 Theory Y managers assume employees are internally
motivated, enjoy their job, and work to better themselves
without a direct reward in return.
 These managers view their employees as one of the
most valuable assets to the company, driving the
internal workings of the corporation.
168

Theory Y
 Employees additionally tend to take full
responsibility for their work and do not
need close supervision to create a quality
product.
 If you assume that employees take pride
in doing a good job, you will tend to adopt
a more participative style.
169

DIFFERENCE BETWEEN X AND Y
171

Two Factor Motivational
Theory-Fedrick Herzberg
172

Two Factor Motivational Theory
Fredrick Herzberg History
 A clinical psychologist
 Pioneer of “job enrichment,”
 Developed his motivation
theory in his investigation of
200 accountants and
engineers in the USA.
173

Job Enlargement vs Job Enrichment
 Job Enlargement vs Job Enrichment
 The difference between job enrichment and
job enlargement is quality and quantity.
 Job enrichment means improvement, or an
increase with the help of upgrading and
development,
 Enlargement means to add more duties, and an
increased workload.
 By job enrichment, an employee finds satisfaction
in respect to their position and personal growth
potential,
 whereas job enlargement refers to having
additional duties and responsibilities in a current
job description.

176

Two Factor Motivational Theory
 People are influenced by two factors:
 Hygiene factors are needed to ensure an
employee does not become dissatisfied. They
do not lead to higher levels of motivation, but
without them there is dissatisfaction.
 Motivation factors are needed in order to
motivate an employee into higher
performance. These factors result from internal
generators in employees.
178

Two-Factor Theory
Hygiene Factors
 Company Policy
 Working conditions
 Salary
 Quality of supervision
 Relation with
superiors
 Peer relation
 Status
Motivating Factors
 Achievements
 Recognition
 Interesting Work
 Increased
Responsibility
 Growth
 Job content
 Work itself
179

According to the Two-Factory Theory,
there are four possible combinations impacting work
performance
1.High Hygiene + High Motivation: E.g.Salary+Recognition
 The ideal situation where employees are highly motivated and
have few complaints.
2.High Hygiene + Low Motivation:
 Employees have few complaints but are not highly motivated.
The job is viewed as a paycheck.
3.Low Hygiene + High Motivation:
 Employees are motivated but have a lot of complaints. A
situations where the job is exciting and challenging but salaries and
work conditions are not up to par.
4.Low Hygiene + Low Motivation:
 This is the worst situation where employees are not motivated
and have many complaints.
180

4.Communication
181

4.Communication
1. Communication involves exchange of ideas and information in order to
create mutual understanding.
2. It is a systematic process of telling, listening and understanding.
3. A Manager has to explain the plans and orders to his subordinates and to
understand their problems.
4. Manager must develop a sound two-way communication system so as to
be always in touch with his subordinates.
5. Sound communication fosters mutual understanding and coordination
among different units of the organisation.
182

Types of Communication
 Organisational Structure
 Formal Communication
 Informal Communication
 Direction
 Downward Communication
 Upward Communication
 Horizontal Communication
 Diagonal Communication
 Mode of Expression
 Non-Verbal Communication
 Verbal Communication
 Oral Communication
 Written Communication
183

I.As per Organisational
Structure
1.Formal Communication
 may be oral or written.
 Mostly controlled by managers
 It is hierarchical in nature and associated with the superior and subordinate
relationship
 Generally linked with formal status and positions of a person
 It may be upward, downward and horizontal.
184

185
Downward
Communication
Messages flows
downward through the
chain of command .i.e.
from manager to
employee
Upward
Communication
Messages flows upward
through the chain of
command .i.e. from
employee to boss
Horizontal
Communication
Messages flows laterally
between people of the
same rank .

I.As per Organisational
Structure
2.Informal Communication
 also called as grapevine communication.
 is unstructured, unofficial and unplanned.
 it is direct, spontaneous and flexible.
 it is personal, unofficial, and mostly verbal.
186

Types of Informal
Communication
187

Types of Informal
Communication
1.Single Strand Chain:
 In this type of grapevine communication ,the
information passes through a number of
persons like a chain. A tells something to B,
who tells it to C, who tells it to D and so on.
188

Types of Informal
Communication
2.Gossip Chain:
 In Gossip Chain, one person actively conveys information
to other persons around him. A circle or wheel-like figure is
formed in this communication.
 Here, in this picture. A is at the centre and transmits
messages to ‘B’, ‘C ‘D ‘E ‘F, ‘G’, and ‘H’ around him/her.
189

Types of Informal
Communication
3.Probability Chain:
 It is a random process in which information may move from one
person to any other person or persons according to law of
probability.
 Some people of the organisation will be informed and some others
will remain outside the arena of the communication.
 Here, in following diagram, below E is outside the communication
chain. This chain is used when information is interesting but less
important.
190

Types of Informal
Communication
4.Cluster Chain:
 Cluster chain is mostly used and the dominant pattern of grapevine
communication. In this type, one person tells something to some selected
trust worthy persons.
 Some of these persons may inform a few selected other individuals.
 Here in the picture, A tells some selected and trustworthy persons, B, C
and D. C again relays it to his selected persons, G, H and I. D tells J, a
person of his choice. M and L remain outside The cluster.
191
M
L

On the basis of Direction
On the basis of directions communication, may
be of four types of communication:
1. Downward Communication
2. Upward Communication
3. Horizontal Communication
4. Diagonal Communication
192

193
Downward
Communication
Messages flows
downward through the
chain of command .i.e.
from manager to
employee
Upward
Communication
Messages flows upward
through the chain of
command .i.e. from
employee to boss
Horizontal/Lateral
Communication
Messages flows laterally
between people of the
same rank .
Subordinates
Superior
Subordinates
Superior
Superior Superior

Downward or Upward Communication
194

Horizontal/Lateral
Communication
195

Downward Communication
 Communication that takes place from
superiors to subordinates in a chain of
command is known as Downward
Communication.
 Such type of communication may be in the
form of orders, instructions, policies,
programmes etc. It may be written or verbal.
196

Upward Communication
 When message are transmitted from bottom to
top of the organisational hierarchy, it is known
as Upward Communication.
197

Horizontal Communication
 When communication takes place between
two or more persons who are working at same
levels it is known as horizontal communication.
198

Diagonal Communication
 Diagonal communication is an exchange of
information between the persons at a different
level across departmental lines.
 This type of communication is used to spread
information at different levels of an
organization to improve understanding and co-
ordination so as to achieve organisational
objectives.
199

Types of Informal Communication-On the basis of Mode of
Expression
1. Non Verbal Communication
2. Verbal Communication
201

Types of Informal Communication-On the basis of
Mode of Expression
1.Non Verbal Communication
Communication through expressions, gestures
or posture is non-verbal communication.
It refers to the flow of information, through facial
expressions, tone of voice and other body
movements.
202

Mode of Expression
Non-verbal communication are:
 Body Language: Posture, Gesture, Eye
Contact, Silence etc.
 Proximity(Vicinity): Space (intimate space,
public space), Time, Surroundings etc.
 Para Language: Voice, Volume, Pause, Pitch,
Proper stress etc
Posture-the way that a person sits,stands,walks etc.
Gesture-a movement of the hans,head, etc.that expresses something
Proximity
How close you choose to stand or sit next to someone is also a form of nonverbal
communication. The space around you is often referred to as your personal space,
which generally is between 6-18 inches around your body.
203

Expression
2.Verbal Communication
Verbal Communication is an exchange of
information by words either written or oral.
Verbal communication consists of speaking,
listening, writing, reading etc.
It is the most preferred mode of
communication.
1. Oral Communication
2. Written Communication
204

Expression
Two types of Verbal Communication:
 Oral Communication
 Written Communication
205

Expression
1.Oral Communication
When a message is expressed through spoken
words, it may be either through face to face
conversations or with the help of electronic
mode such as telephone, cellular phone, etc.
206

Mode of Expression
2.Written Communication
 expressed through charts, pictures and
diagrams. It includes newspapers, reports,
letters, circulars magazines etc.
 While using written communication, words
should be used very carefully because
message ones sent can not be altered.
 it is formal in nature and cannot be
overlooked.
207

Techniques of Directing
 1. Consultative Direction
 2. Free-Rein Direction
 3. Autocratic Direction
 4. Supervision
 5. Motivation
 6. Leadership
 7. Communication
209

1. Consultative Direction:
Under this technique, superior, though vested
with powers to take decision independently,
does not take decision without consulting with
his subordinates.
The superior wins the co-operation of all the
subordinates by taking their inputs into his
decisions. Thus ,subordinates feel committed
and motivated to carry out such decisions made
out of their viewpoints.
210

2. Free-Rein Direction:
Under this technique, subordinates are
empowered to take decisions independently.
The superior limits himself to issuing guidelines.
The execution of the entire task is left to
subordinates. The subordinates are held
accountable for the results. This type of direction
can be practiced only when subordinates are
highly educated, experienced, capable and
competent. It is self-direction by subordinates.
211

Technique of Directing
3. Autocratic Direction:
Superior commands the subordinates to
accomplish a set of goals. He does not take
into his decision-making the views, opinions
and suggestions of subordinates.
The superior gives a clear direction and
precise orders to his subordinates.
212

4. Supervision:
Supervision is the process of overseeing the subordinates at work.
Supervisor gives a precise, detailed and clear cut instruction to
subordinates.
There are certain factors like skill, leadership, position, group
cohesiveness, cordiality or relations, etc., that enable the supervisor
to exercise effective supervision
213

5. Motivation:
 Motivation is the process of stimulating such forces like desires,
wishes and wants that impel human beings to achieve the desired
action. Motivation may be monetary and non-monetary. The impact
of non-monetary motivation is supposed to last longer than
monetary motivation.
 Motivation is also classified into positive and negative motivation.
While positive motivation is to be reinforced, the negative motivation
should be applied as a last resort. The type of motivation varies
according to nature of industry. Without motivation, the energy,
efficiency and morale of the employees cannot be sustained.
214

6. Leadership:
 Leadership is defined to be the ability of a
manager to influence his subordinates to
accomplish the goals. A leader is supposed to
possess certain qualities to exercise effective
leadership.
 A leader does many functions like formulation of
objectives, representing the undertaking,
initiating action, influencing followers, etc.
215

7. Communication:
 Communication enables a group to think together, see together and
act together. It becomes indispensable for passing on decisions to
those engaged in executing them.
 Where communication is not understandable to the receiver,
direction becomes ineffectual. Face to face communication and
feedback system is essential for smooth operation of business.
There are certain principles like clarity, preciseness, concreteness
etc., to be followed for effective communication.
216

Functions of Management-
5.Controlling
 Controlling is a process of control.
 Control means measurement.
 Controlling is a process of gathering and
feeding back information about performance
so that decision makers can compare actual
results with planned results and decide what to
do about any apparent discrepancies or
problems.
218

Functions of Management-Controlling
 “Managerial control implies the measurement
of accomplishment against the standard and
the correction of deviations to assure
attainment of objectives according to plans”.
Koontz And O’Donnell
 “Control is the process of bringing about
conformity of performance with planned
action.”
Dale Henning
219

Controlling
Controlling refers to the task of ensuring that
activities are producing the desired results.
Control in this sense is limited to monitoring
the outcomes of activities ,reviewing feedback
information about this outcome, and, if
necessary, taking corrective action.
220

Steps or Process of Controlling
221
1.Desired/Standard
Performance
2. Actual
Performance
3. Measurement of
Performance
4. Comparison of
actual and
standard
5. Identification of
Deviation
6.Analysis of
causes of
Deviation
7.Corrective action
plan
8.Implementation
of correction

Techniques of controlling
1. Traditional Techniques
2. Modern Techniques
223

Techniques of controlling
Traditional Techniques Modern Techniques
Personal Observation Return on Investment
Break Even Analysis Financial Statement and Ratio
Analysis
Statistical Reports Responsibility Accounting
Budgetary Control Internal/Management Audit
PERT & CPM
Management Information System
224

Traditional Techniques of
Controlling
225

Traditional Techniques-Personal Observation
1.Personal Observation
 It is the oldest traditional method of controlling .
 Known as On-the-Spot or Direct Observation.
 In this, the manager personally observes the employees/workers
at the workplace.
 Direct observation pressurizes the employees and motivates them
to work with maximum efficiency. However, this technique involves
a huge amount of time during supervision.
 The benefit of using it is to get first-hand and authentic information
for the analysis. Also, the managers can correct the operations on
the spot in case of non-performance.
 Besides the above merits, the employees can share issues or
problems simultaneously. In addition, it boosts the morale of the
employees.
226

Traditional Techniques
2.Break-even Analysis
 This control technique depicts the relationship between Cost and Volume at
different output levels. It is also known as the Cost, Volume and Profit analysis.
 It predicts the profits and losses in response to the changes in the output levels. The
point where the cost price equals the selling price is the Break-even point.
 Break-even Point Formula:
 Total cost involves two costs, i.e. Fixed Costs and Variable Costs. Profits and
Losses are affected by the proportional changes in both.
 In the Break-Even Analysis technique, the evaluation is based on:
 Break-even Point
 Angle of Incidence
 Contribution Margin
 Margin of Safety
227

Traditional Techniques
3.Statistical Reports
 The manager gathers information to evaluate performance in
functional areas. And they use the collected information for
comparison purposes. It involves the analysis of the numeric data in
the form of: –
 Averages
 Percentages
 Co-relation
 Ratios, etc
 The organization presents the above information
via Charts, Graphs, Tables, etc. These reports help visualize the
data and identify the areas that demand attention. Hence, it is the
most used and helpful technique for data analysis.
228

Traditional Techniques-Budgetary Control
4 .Budgetary Control
 The budgeting process includes comparing and evaluating the actual and
budgeted performances.
Steps in budgeting broadly cover: –
 Creating standards by bifurcating the overall business goals into
departmental targets.
 Comparison of predefined Budget/Standards with the actual performance.
 Calculate the logical deviations from the plan and take corrective
measures.
 Types of budgets -
 Cash Budget
 Sale Budget
 Production Budget
 Capital Budget
 Material Budget
229

Modern Techniques of
Controlling
230

Controlling
1.Return on Investment
 Return on Investment (ROI) is the profit earned by invested
capital. It is analyzed to attain financial control in the business. It is
also known as the Du-Pont System of financial analysis.
 To measure the generated return, we calculate the rate of ROI. This
rate helps assess the financial position of the business.
 ROI Formula: Net profit/Cost of Investment x 100
 As per the technique, ROI can be increased in two ways:
1. By raising sales volume relatively grater than the total investment.
2. Reducing total investment without reducing sale volume.
231

Controlling
2.Financial Statement and Ratio Analysis
 It helps in controlling the finances of the organization by calculating
different Ratios. For this purpose, data is accumulated from the firms’
financial statements.
 The most extensively used Ratios are as follows: –
1) Profitability Ratios
2) Liquidity Ratios
3) Solvency Ratios
4) Turnover Ratios
232

Controlling
3.Responsibility Accounting
 It is an accounting system that depends upon the responsibility assigned to
the employee.
 So, businesses conduct an evaluation of the employee’s ability to fulfil the
assigned responsibility as per set standards.
 is suitable for large organizations containing many departments.
Generally, responsibility centres are of four types: –
1. Revenue Centre
2. Cost Centre
3. Profit Centre
4. Investment Centre
233

Controlling
4.Internal/Management Audit
 Management or Internal Audit is the
examination of the utilization of the
company’s resources. The Top-level initiates
it to ensure the efficient performance of the
management.
 Internal Auditing starts as soon as the financial
audit ends. During the audit, the overall
management process is critically evaluated.
 However, conducting a management audit is
not compulsory for the organizations.
234

controlling
5.PERT & CPM
PERT=Programme Evaluation and Review Techniques
CPM=Critical Path Method
 1. Project Evaluation and Review Technique (PERT) :
PERT is appropriate technique which is used for the projects where the
time required or needed to complete different activities are not known.
PERT is majorly applied for scheduling, organization and integration of
different tasks within a project. It provides the blueprint of project and is
efficient technique for project evaluation .
 2. Critical Path Method (CPM) :
CPM is a technique which is used for the projects where the time needed
for completion of project is already known. It is majorly used for determining
the approximate time within which a project can be completed. Critical path
is the largest path in project management which always provide minimum
time taken for completion of project
235

PERT Vs.CPM
PERT CPM
It is event oriented technique. It is activity Based Technique.
PERT Manages unpredictable
activities.
CPM manages the predictable
activities.
It is focused on time control. It focus o cost optimization.
It was developed in 1958. It was developed in 1957.
It is three time estimate. It is single time estimate.
It is probability method. It is deterministic model.
236

controlling
5.PERT & CPM
PERT=Programme Evaluation and Review Techniques
CPM=Critical Path Method
 used explicitly for project management and evaluation.
 The activity or project’s success is largely affected by the time taken and
steps involved. Therefore managers strive to cut the total time and cost
involved in completing the activity.
 It focuses on the efficient execution of the project. But the execution must
be within the stipulated time and predetermined costs.
237

controlling
6.Management Information System
 Management Information system (MIS) basically
provides information for effective decision making.
Managers can retrieve any data as and when needed. It
is one of the cost-effective controlling techniques
available for managers.
 Moreover, it provides information at the right time and
helps manage a huge bundle of data. The information
obtained from MIS is accurate and facilitates decision
making.
MIS has two major components:
 Data Collection
 Data Management
238

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