UNIT-III

ORGANIZATION AND HRM

Principles of Organization: Organizational Design &Organizational Structures; Departmentalization, Delegation;

Empowerment, Centralization, Decentralization, Recentralization; Organizational Culture; Organizational
Climate and Organizational Change. Human Resource Management & Business Strategy: Talent Management,
Talent Management Models and Strategic Human Resource Planning; Recruitment and Selection; Training and
Development; Performance Appraisal

What is Organisation?
Organisation refers to a collection of people who are working towards a common goal and
objective. In other words, it can be said that organisation is a place where people assemble together and
perform different sets of duties and responsibilities towards fulfilling the organisational goals.

Types of Organisation and their Structure

There are two broad categories of organisation, which are:

1. Formal Organisation

2. Informal Organisation

What Is Organization Design?

Organization design is a process for structuring and running organizations. It takes a holistic
approach to the work done in an organization including team formations, shift patterns, reporting,
decision-making, communication methods and much more. The purpose of organization design is to help
an organization excel at what it does and help meet its goals. That can mean everything from a large-scale
reorganization to subtle shifts in structures and systems.

Organization design often comes into play as an organization is growing or, conversely, if it is
downsizing. Either of these shifts requires a company to reexamine how it does business. Other reasons
that prompt organization design include a change in leadership, strategy or the marketplace in which the
organization operates.
Principles of Organization Design

1. Free Yourself From the Past: The organization has to look reflectively at itself, its purpose and
how changes to those foundational pillars will affect clients, employees and investors. As you
begin to explore changes, think about how they can differentiate you from the competition and
how these changes will play out over the next few years.
2. Design With Knowledge of Your DNA: In order to know what to prioritize in organizational
design, step back and identify the universal building blocks of your organization. All
organizations can be divided into tangible or formal elements such as how decisions are made,
how data is processed and how work is divided. Businesses also have intangible or informal
elements such as how people act and are inspired to contribute.
 3. Fix Your Structure Last: The organizational chart of the company might seem like the logical
first step, but you want to create a bridge that will carry the organization from the old ways to the
new ways. It’s a common mistake to think that you can simply jump from one structure to
another. That structure is the final step after you’ve done everything to support it and the changes
it will initiate.
4. Use Your Top Talent: You make a change by empowering the people in your organization, so
no matter what structural changes you plan on making, you want to identify the strengths of your
key performers and make sure they are empowered to collaborate and facilitate those changes.
The leadership team is responsible for successful organization design.
5. Know What You Can Control: It’s important to list the constraints that are slowing you down
as an organization and the sacrifices that you’re always making. Know your limitations before
any attempt to execute a new organization design. You should also be aware of the regulations,
supply shortages and customer demand that are out of your control but don’t spend too much time
focusing on the things that you can change.
6. Promote Accountability: You want to keep everyone accountable for their jobs which requires
transparency and clear communications, not micromanaging. This is likely the single most
important change you can make to your organization. If communication flows without
obstruction and everyone is taking responsibility for their work, the structure you design is going
to work better.
7. Benchmarking Isn’t As Important As You Think: There can be problems with tracking what
competitors are doing. While it can help optimize your design and expose hidden issues, it also
short-changes your unique capabilities. It’s not productive to compare your organization to others
that might have a different value proposition or capabilities. If you must benchmark, focus on
select elements rather than the whole organization.
8. Organization Design Should Fit Company Purpose: Every organization is different and the
right structure for your organization will likely not fit another. When designing the organization,
make sure it aligns with your purpose and is consistent across the organization.
9. Don’t Neglect the Intangible Elements: It’s easy to focus on the tangible elements of
organization design, such as decision rights and the organization chart, but that won’t get the
results you want. Instead, balance the tangible with the intangible if you want to get things done.
The tangible is important but without addressing how people think and act in that structure, you
won’t change anything.
10. Build on Your Strengths: One of the best ways to implement successful organization design is
to build on your strengths. Often the organization’s design is so far from the organization’s core
values and strengths that it’s destined to fail. Make sure to find the organization’s strengths and
build on that foundation.
Types of Organization Design

Just as there isn’t one type of organization, there isn’t one type of organization design. These
various organizational structures are a framework for the organization to distinguish power and authority,
roles and responsibilities and determine how the information will flow through the organization. Let’s
take a look at some of the more common organization design structures that support organization design.

Hierarchical Structure

This is a pyramid-shared organizational chart with the CEO or manager on top and each level
descending in the chain of command until the base is entry-level employees. This defines authority,
shows everyone to whom they report and clarifies the career path. However, a hierarchical structure can
slow down innovation and make those at the base of the pyramid feel as though they are outside the
process.

Functional Structure

As in the hierarchical structure, those with more authority and responsibility are placed at the top
of the chart and it then descends by responsibility. However, the organization is determined by skillset
and function in the company, with each department managed independently. This gives departments a
sense of self-determination and the structure can be easily scaled. But a functional structure can also
create silos in the organization and block interdepartmental communications.

Horizontal or Flat Structure

The opposite of a hierarchical structure, the horizontal structure is popular with startups and other
organizations in which there is not much distance between management and employees. It encourages
less supervision and more involvement from everyone in the organization. Employees feel ownership and
take more responsibility. It fosters communication and speeds the delivery of new ideas. However, there
can be a lack of supervision that causes confusion and is difficult to maintain at scale.

Divisional Structure

As the name implies, each division in the organization controls its own resources as if an
independent company within a larger organization. Each division has its own marketing, sales and IT
teams. The structure lends itself to larger organizations and allows them to be more flexible, quickly
responding to market changes and customer needs with a customized approach. It can also create
duplicate resources, wasting time and energy. Communication can be difficult between divisions, too,
leading to internal competition within the larger organization.
Matrix Structure

This grid-like structure is great for cross-functional teams that are created to serve special
projects. This structure helps connect otherwise disparate parties. The matrix structure also helps
managers easily find team members for whatever project they’re leading and provides a more dynamic
view of the organization. Employees are encouraged to use their skills beyond those applied to their
original role. It can create conflicts between managers in different departments.

Team-Based Structure

As the name suggests, this structure organizes employees by teams. This is against what’s
considered to be a traditional hierarchical structure and is ideal for a more problem-solving, collaborative
environment where employees have more control. This can boost productivity and performance, breaking
down the silo mentality in favor of more transparency. It also allows for lateral moves throughout the
organization and provides less managerial supervision. It’s a great fit for agile project management and
scrum teams. It does tend to make promotional paths less clear.

What is Organisation?
Organisation refers to a collection of people who are working towards a common goal and
objective. In other words, it can be said that organisation is a place where people assemble together and
perform different sets of duties and responsibilities towards fulfilling the organisational goals.

Types of Organisation and their Structure

 There are two broad categories of organisation, which are:

1. Formal Organisation

2. Informal Organisation

Formal Organisation:
Formal organisation is that type of organisation structure where the authority and responsibility
are clearly defined. The organisation structure has a defined delegation of authority and roles and
responsibilities for the members.

The formal organisation has predefined policies, rules, schedules, procedures and programs. The
decision making activity in a formal organisation is mostly based on predefined policies.

Formal organisation structure is created by the management with the objective of attaining the
organisational goals.
There are several types of formal organisation based on their structure, which are discussed as
follows:

1. Line Organisation

2. Line and Staff Organisation

3. Functional Organisation

4. Project Organisation

5. Matrix Organisation

Let us learn about these organisation structures in detail in the following lines.

Line Organisation:
Line organisation is the simplest organisation structure and it also happens to be the oldest
organisation structure. It is also known as Scalar or military or departmental type of organisation.

In this type of organisational structure, the authority is well defined and it flows vertically from
the top to the hierarchy level to the managerial level and subordinates at the bottom and continues further
to the workers till the end.

There is a clear division of accountability, authority and responsibility in the line organisation
structure.

Advantages of Line organisation

1. Simple structure and easy to run

2. Instructions and hierarchy clearly defined

3. Rapid decision making

4. Responsibility fixed at each level of the organisation.

Disadvantages of Line organisation:

1. It is rigid in nature

2. It has a tendency to become dictatorial.

3. Each department will be busy with their work instead of focusing on the overall development
of the organisation.

Line and Staff Organisation:

Line and staff organisation is an improved version of the line organisation. In line and staff
organisation, the functional specialists are added in line. The staff is for assisting the line members in
achieving the target effectively.

Advantages of Line and Staff organisation

1. Easy decision making as work is divided.

2. Greater coordination between line and staff workers.

3. Provides workers the opportunity for growth.

Disadvantages of Line and Staff Organisation

1. Conflict may arise between line and staff members due to the improper distribution of authority.

2. Staff members provide suggestions to the line members and decision is taken by line members, it
makes the staff members feel ignored.

Functional Organisation:
Functional organisation structure is the type of organisation where the task of managing and
directing the employees is arranged as per the function they specialise. In a functional organisation, there
are three types of members, line members, staff members and functional members.

Advantages of Functional organisation

1. Manager has to perform a limited number of tasks which improves the accuracy of the work.

2. Improvement in product quality due to involvement of specialists.

Disadvantages of Functional organisation

1. It is difficult to achieve coordination among workers as there is no one to manage them directly.
2. Conflicts may arise due to the members having equal positions.

Project Organisation:
A project organisation is a temporary form of organisation structure that is formed to manage
projects for a specific period of time. This form of organisation has specialists from different departments
who are brought together for developing a new product.

Advantages of Project organisation

1. The presence of many specialists from different departments increases the coordination among the
members.

2. Each individual has a different set of responsibilities which improves control of the process.

Disadvantages of Project Organization

1. There can be a delay in completion of the project.

2. Project managers may find it difficult to judge the performance of different specialists.

Matrix Organisation: Matrix organisation is the latest form of organisation that is a combination of
functional and project organisation. In such organisations there are two lines of authority, the functional
part of the organisation and project management part of the organisation and they have vertical and
horizontal flow of authority, respectively.

Advantages of Matrix Organisation

1. Since the matrix organisation is a combination of functional and project management teams, there is an
improved coordination between the vertical and horizontal functions.

2. Employees are motivated as everyone will be working towards one project.

Disadvantages of Matrix Organisation

1. Due to the presence of vertical and horizontal communication, there will be increased cost and
paperwork.

2. Having multiple supervisors for the workers leads to confusion and difficulty in control.
Informal Organisation:
Informal organisations are those types of organisations which do not have a defined hierarchy of
authority and responsibility. In such organisations, the relationship between employees is formed based
on common interests, preferences and prejudices.
Departmentalization
Definition:
Departmentalization or Departmentation is a process wherein jobs/teams are combined together
into functional units called as departments on the basis of their area of specialization, to achieve the goals
of the organisation. So, in this way, the entire organization is divided into parts,
i.e. departments which comprise of a group of employees, who carry out activities of similar nature.
It determines the functions/activities which are to be housed together and coordinated at
the same place. Further, it groups the personnel, who will undertake the delegated functions/tasks.
In a corporate ladder, every level below the top is departmentalized, and each subsequent level is
further differentiated into departments.
The top-level executives, groups activities in various departments, such as production, marketing,
finance, human resource, research and development, etc. These departments are headed by senior
executives, called as managers of the respective department. The departmental managers can delegate
tasks and duties to the subordinates, and they are accountable to the chief executive for the performance
of the department.

Objectives of Departmentalization
✔ To specialize activities.
✔ To simplify the process and operations of the organization
✔ To maintain control
Departmentalization of activities results in the increase in efficiency of the management and
ultimately the enterprise. It is helpful in fixing responsibilities and accountability.
Methods of Departmentalization
Departmentalization by Function: When the creation of department is on the basis of specified functions,
such as production, marketing, purchase, finance etc. In this method, all the activitiesrelated to a function or
which are of similar nature are combined in a single unit, to give proper directions to the entire group in
one go.
Example:
A manufacturing company has separate departments for production, sales, research and development,
and customer service, each focusing on specific functional areas to enhance efficiency and expertise.

Departmentalization by Process: In departmentation by the process, the activities are grouped as per the
production processes. These departments require manpower and material so as to carryout operations.
Example:
A global retail chain organizes its departments by continent or country, such as North America, Europe,
Asia, etc., to address the unique market demands, regulatory environments, and cultural nuances of each
geographical area.

Departmentalization by Product: When the activities related to product development and delivery are
combined into a particular division, it is called as product departmentalization. It is appropriate for large-
scale multi-product enterprises.
Example:
A consumer electronics company has separate departments for smartphones, laptops, and wearable
devices, allowing each unit to focus on the development, marketing, and support of its specific product
category.

Departmentalization by Customer: The grouping of the organization according to the different classes
of customer or clients. It focuses on special customer needs.
Example:
A financial services firm has separate departments for retail clients, small businesses, corporate clients,
and institutional investors, tailoring its services and support to meet the specific needs of each customer
segment.

Departmentalization by Territory: When the division is based on the geographical area, it is called as
territorial departmentalization. This is suitable for the organizations that have widespread operations at
different locations.
Example:
A global retail chain organizes its departments by continent or country, such as North America, Europe,
Asia, etc., to address the unique market demands, regulatory environments, and cultural nuances of each
geographical area.
The choice of departmentalization basis is influenced by the factors such as the degree of specialization,
coordination, control, cost consideration, adequate attention to key areas, etc.
DELEGATION ( Delegation of Authority)
The Delegation of Authority is an organizational process wherein, the manager divides his work
among the subordinates and gives them the responsibility to accomplish the respective tasks. Along with
the responsibility, he also shares the authority, i.e. the power to take decisions with the subordinates, such
that responsibilities can be completed efficiently.
In other words, a delegation of authority involves the sharing of authority downwards to the
subordinates and checking their efficiency by making them accountable for their doings. In an
organization, the manager has several responsibilities and work to do. So, in order to reduce his burden,
certain responsibility and authority are delegated to the lower level, i.e. to the subordinates, to get the
work done on the manager’s behalf.
Under the delegation of authority, the manager does not surrender his authority completely, but
only shares certain responsibility with the subordinate and delegates that much authority which is
necessary to complete that responsibility.

Features of Delegation of Authority

1. Delegation means giving power to the subordinate to act independently but within the limits
prescribed by the superior. Also, he must comply with the provisions of the organizational
policy, rules, and regulations.
2. Delegation does not mean that manager give up his authority, but certainly he shares some
authority with the subordinate essential to complete the responsibility entrusted to him.
3. Authority once delegated can be further expanded, or withdrawn by the superior depending on
the situation.
4. The manager cannot delegate the authority which he himself does not possess. Also, he cannot
delegate his full authority to a subordinate.
5. The delegation of authority may be oral or written, and may be specific or general.
6. The delegation is an art and must comply with all the fundamental rules of an organization.

Process of Delegation of Authority:

The Delegation of Authority is a process wherein the manager assigns responsibility to its
subordinate along with the certain authority to accomplish the task on the manager’s behalf.
 Process of Delegation of Authority
The process of delegation of authority comprises of four steps which are as follows:

Assignment of Duties to Subordinates:

Before the actual delegation of authority, the delegator must decide on the duties which he wants
the subordinate or the group of subordinates to perform. Here, the manager lists the activities to be
performed along with the targets to be achieved, and the same is spelled out to the subordinates. Thus, in
the first stage, the duties are assigned to the subordinates as per their job roles.
Transfer of Authority to perform the duty:
At this stage, an adequate authority is delegated to the subordinate which is essential to perform
the duty assigned to him. A manager must make sure; that authority is strictly delegated just to perform
the responsibility, as more authority may lead to its misuse by the subordinate.
Acceptance of the Assignment:
At this stage, the subordinate either accepts or rejects the tasks assigned to him by his superior. If
the subordinate or the delegate, refuses to accept the duty and the authority to perform it, then the
manager looks for the other person who is capable of and is willing to undertake the assignment. Once the
assignment gets accepted by the subordinate, the delegation process reaches its last stage.
Accountability:
The process of delegation of authority ends at the creation of an obligation on the part of the
subordinate to perform his responsibility within the powers assigned to him. Once the assignment is
accepted by the subordinate, then he becomes responsible for the completion of the duty and is
accountable to the superior for his performance.
Thus, the process of delegation of authority begins with the duties assigned to the subordinates
and ends when the subordinate is obliged to carry out the operations as intended.

EMPOWERMENT

Definition: Empowerment refers to the delegation of some authority and responsibility to employees and
involving them in the decision-making process, not in mere job activities, but rather at all the levels of
management.

In other words, empowerment implies freedom, power, authority, motivation and encouragement
given to the employees to take decisions related to a specific organizational task. It is also called as
Participative Management, as employees are involved in the decision making. The purpose of
empowerment is to facilitate decision-making at lower levels of the organization where the employees can
offer a unique idea and suggestion about the problem being faced by the organization at a certain level.

The most common ways of empowerment are participation in boards, stock options, collective
bargaining, job enrichment and enlargement, quality circles, suggestion schemes, total quality
management, self-managed teams, etc.

Empowerment offers several benefits;

It brings a sense of ownership to the employee due to which he personalizes the goals and
objectives of the organization and associate his success with his own abilities. Also, the performance of
the employee improves as he attaches self-induced rewards with his performance by making decisions
pertaining to the problem and sees the results (success) that follow.

Empowerment increases the organization’s responsiveness towards the problems or issues. Also,
there is an increase in the productivity of an employee as he is completely engaged with the firm and take
decisions for the betterment of the organization as a whole.

Empowerment suffers from serious limitations.

First, the decisions made might not be in line with the organizational goals. Second, there could
be a lack of coordination among the different levels of the organization. Third, the superior-subordinate
relation might get tensed due to the violation of authority. Fourth, sometimes it can be counterproductive
as the superior might keep a close watch on the employee to check if the authority is misused. This might
increase the dissatisfaction among the employees.
CENTRALIZATION

d or center of the
Centralization, means the concentration of powers, authority and control, at the head
organization. So, the location of powers as to planning, decision making, formulation of policies, etc.
lies in the hands of top-level management, which consists of a few executives who regulate the
organization.

In a centralized organization, there is only one focus of control, And so, the powers are
concentrated and retained by the group of people or by a particular authority, while the rest of the
members receive orders, and work as per the directions.

The system seeks to improve efficiency by making use of potential economies of scale and to
increase reliability by reducing the chances of errors. Further, the level of centralization in an organization
is measured on the basis of – hierarchy of authority, as well as the degree of participation in the process of
decision making.

Objectives of Centralization
Centralization is an organizational philosophy which stresses on the selective concentration of the
authority, within the organization structure. The objectives of centralization are discussed as under:

1. To facilitate personal leadership: At the time of commencement of the organization, the

success of the organization isea based on personal leadership and supervision of the dynamic and
visionary leader. When the authority is centralized, personal leadership may result in effective decision
making and imaginativ action.
 2. To improve efficiency: Overlapping of efforts and duplication of work can be avoided with
centralization, to a great extent. The management can exercise higher control to reduce waste and
attain economy in operations.
3. To increase coordination: The success of every organization depends on th coordination of
individual efforts. A centralized system acts as a thread which coordinates the work of different units
and subunits of the concern.
4. To achieve uniformity in action: To cause the uniformity and consistency in actions and policy,
authority is centralized at the apex level of management. The uniformity in decisions and actions is a
must in personnel, purchasing, marketing, etc.

Types of Centralization

There are a few different types of centralization that companies can implement within their management.
These types include:

 Departmental centralization: This type of centralization is based on different departments within an

organization. Each department has a head office or leader who makes the decisions for that department.
 Management centralization: This is the most common type of centralization. Management
centralization is when one person or one department makes all decisions for an entire organization.
 Geographic centralization: This type of centralization is often seen in larger companies that have
locations in various areas. Each location has its own leader or group of leaders who make decisions for
that location.
 Advantages of Centralization

● Clear Chain of Command: As there is a unity of command, centralization tends to improve

coordination in the organization.
● Consistency in Decision Making: Due to the concentration of power at the apex level, it
ensures consistency in the decisions, taken at different points in time, to meet the organization’s
objectives.
● Optimum utilization of resources: Centralization facilitates effective utilization of
organizational talent and resources, which helps in developing the corporate personality.
● Uniformity in procedures and policies: There is a uniformity in the work processes, which are
performed as per the same policies and procedures.
● Better control over operations: With centralization, maximum control over the organization as
well as its operations is possible.
● Economy in Administration: As the employee gets orders from the top management directly,
the chances of chaos and duplication of work are minimum, which ensures the economy in
administration.
Disadvantages of Centralization

● Delay in implementation of actions: As the workers have to refer to the top-level

management of the organization for every action which increases dependability and also delays the
implementation of actions.
● Autocratic control: Centralization of the activities results in autocratic (absolute) control over
the subordinates, which reduces the flexibility in work.
● Increases irresponsiveness: The decisions are taken by the top management, but at the same
time they are not completely aware of the local conditions and requirements, which results in
irresponsiveness.
● Lack of employee’s participation: Due to the concentration of the powers in the hands of a
few people, employees do not get the opportunity to act on their own, and so there is lack of employee’s
participation.
DECENTRALISATION
“Decentralisation refers to tire systematic effort to delegate to the lowest levels all authority
except that which can only be exercised at central points.” —Louis A. Allen
“Decentralisation means the division of a group of functions and activities into relatively
autonomous units with overall authority and responsibility for their operation delegate to time of cacti
unit.’—Earl. P. Strong

Definition of Decentralisation
Decentralisation is referred to as a form of an organisational structure where there is the
delegation of authority by the top management to the middle and lower levels of management in an
organisation.

In this type of organisation structure, the duty of daily operations and minor decision- making
capabilities are transferred to the middle and lower levels which allow top-level management to focus
more on major decisions like business expansion, diversification etc.
Delegation refers to the assigning a portion of work and the associated responsibility by a
superior to a subordinate. In simple words, when delegation is expanded on an organisational level, it is
called decentralisation.

Example of Decentralisation
Good examples of decentralised business are Hotels, supermarket, Dress showrooms and etc.
Because it is not possible for one person to focus on more than 100 branches which have branches
throughout the world, take an example of a hotel. When a particular person holds a chain of hotels as his
business, he particularly focuses on using decentralised structures so that local hotel managers and
assistants are empowered to make on-the-spot decisions to handle customers – problems, complaints and
requirements.

Importance of Decentralisation

1. Rapid decision making – Most of the decisions are taken on the spot, and approval from the
higher authority is not required. The ability to make a prompt decision allows an organization to
function its operation quickly and effectively.
2. Administrative development – The decentralization process questions the manager’s judgments
and techniques, when responsibility and challenges to develop solutions are given to them. This
questioning method grows confidence, encourages self-reliance, and makes them a good
decision-maker resulting in the development of the organization.
3. Development of executive skills – It allows the employee to perform task individually, giving
them invaluable exposure. This individual performance creates an environment where an
individual can enhance their expertise, take ownership & more significant responsibilities, and be
suitable for promotion.
4. Promotes growth – Decentralization also allows the heads of the department to work
independently. This independence helps the department to grow, have a healthy competition
between other departments. Ultimately, the competition will lead to an improvement and
enhancement in productivity.
5. Higher control – It also evaluates and reviews the performances of each department and gives
them a comprehensive perspective of their work. However, controlling is the biggest challenge of
decentralization and stabilized management and scorecard are being developed.
Objectives of Decentralization
Decentralization is an important strategical decision. It changes the whole organizational structure right
from the top management to the bottom level. Like other business strategies, decentralization is also
purposeful. Let us understand the various objectives for which organizations decentralize their
operations

:
 Development of Managerial Personnel
Decentralization provides for self-learning of the managers by facing the problem, finding the
solutions themselves and taking the correct decisions. It adds on to the skills, experience and expertise of
the managers in their respective departments.

Effective Control and Supervision

The managers exercise better control over the operations of the subordinates by taking
disciplinary actions. They can make decisions related to production schedules, promotions and leaves
taken by the subordinates.
Flexibility
Decentralization leads to flexibility in business operations. It also provides authority to the
managers to handle unexpected situations independently. It allows them to manage their respective
departments in the way they want to.
Motivates and Boosts Morale
It creates self-dependent managers and drives them to enhance their performance, take the
initiative and develop a problem-solving attitude. Decision making also boosts their morale and
confidence.
Prompt Decision Making
There are times when the managers have to take immediate and unplanned decisions at operational
levels; it is only possible in decentralized organizations.

On the contrary, in a centralized organization, the decision-making process is quite lengthy and
complicated, which is ineffective for handling unforeseen operational problems and issues.Reduces the
Burden of Top Management
The management has to take certain crucial strategically decisions which require a lot of analysis
and planning. Decentralization releases the management from operational decision making, facilitating
them to engage themselves in future strategic planning.

Advantages of Decentralisation

1. Reduces the burden on top executives

2. Facilitates diversification
3. Executive Development
4. It promotes motivation
5. Better control and supervision

Disadvantages of Decentralisation

1. Uniform policies not Followed

2. Problem of Co-Ordination.
RECENTRALIZATION

Recentralization is the process of concentrating power in a central authority, such as a government,

company, or system, that was previously delegated to regional or local authorities. It can also refer to the
aspects of service provision and accountability that central governments need to maintain to improve the
effectiveness of decentralized reform.

Recentralization can be a reaction to perceived failures of decentralization. Recentralization typically

refers to the process of shifting authority or control back to a central point or entity. This can occur in
various contexts, such as in government, where power might be returned to a central authority after being
decentralized, or in organizational settings, where decision-making might be consolidated at a higher level.
For example,
 1. Government and Politics:
COVID-19 Response

 Context: During the COVID-19 pandemic, some countries saw a shift from local to national control
over public health measures. For instance, in the US, certain states initially had the authority to set their
own restrictions and guidelines, but the federal government increasingly centralized decision-making
and coordination efforts to ensure a unified response.

2. Corporate and Organizational Structures:

 Example: IBM's Corporate Restructuring

o Context: IBM, a company known for its decentralized divisions, undertook a recentralization
process in the early 2000s to streamline operations and improve efficiency. By centralizing
certain functions, such as IT services and administrative processes, IBM aimed to reduce
redundancy and enhance overall coordination across its global operations.

3. Technology and Data Management:

 Example: Cloud Computing

o Context: Many organizations have shifted their data and IT infrastructure to cloud services like
Amazon Web Services (AWS) or Microsoft Azure. This move can be seen as recentralization in
terms of IT management because, instead of managing multiple, disparate on-premises servers,
companies are centralizing their IT resources and data in a few large cloud providers, benefiting
from their advanced management and security features.

ORGANIZATIONAL CULTURE

Definition:
Organizational culture, as the name suggests is the culture inherent in the organization, which
determines its internal atmosphere and the overall personality. It refers to a pattern of accepted and
learned behaviour, which are mutually shared and are taught to the new joiners as to how to perceive,
think and behave in the organization. Moreover, it develops a sense of identity and uniqueness in the
employees.

Organizational Culture is a system of common values, beliefs, ideas, preferences, assumptions,

code of conduct, unwritten rules, priorities, and principles, that guides employees of the appropriate and
inappropriate behaviour.

Types of Organizational Culture

The four organizational cultures Cameron and Quinn identified are:
1. Adhocracy culture – The dynamic, entrepreneurial Create Culture.
2. Clan culture – The people-oriented, friendly Collaborate Culture.
3. Hierarchy culture – The process-oriented, structured Control Culture.
4. Market culture – The results-oriented, competitive Compete Culture.

Type 1: Clan Culture

Primary Focus: Mentorship and teamwork.
About Clan Culture: A clan culture is people-focused in the sense that the company feels family-
like. This is a highly collaborative work environment where every individual is valued and
communication is a top priority. Clan culture is often paired with a horizontal structure, which helps to
break down barriers between the C-suite and employees, and it encourages mentorship opportunities.
These companies are action-oriented and embrace change, a testament to their highly flexible nature.
Companies like Tom’s of Maine, Tata Group, and Mahindra may be described as clan cultures
that prioritize their employees.
 Type 2: Adhocracy Culture
Primary Focus: Risk-taking and innovation.
About Adhocracy Culture: Adhocracy cultures are rooted in innovation and adaptability. These
are the companies that are on the cutting-edge of their industry — they’re looking to develop the next big
thing before anyone else has even started asking the right questions. To do so, they need to take risks.
Adhocracy cultures value individuality in the sense that employees are encouraged to think creatively and
bring their ideas to the table. Because this type of organizational culture falls within the external focus
and differentiation category, new ideas need to be tied to market growth and company success.
Most start-up and tech companies like Apple, Google, and Facebook are driven by adhocratic
culture because it provides them the latitude to be innovative.
Type 3: Market Culture
Primary Focus: Competition and growth.
About Market Culture: Market culture prioritizes profitability. Everything is evaluated with the
bottom line in mind; each position has an objective that aligns with the company’s larger goal, and there
are often several degrees of separation between employees and leadership roles. These are results-
oriented organizations that focus on external success rather than internal satisfaction. A market culture
stresses the importance of meeting quotas, reaching targets and getting results.
Examples of companies driven by a market culture are Tesla, Amazon, and Reliance,Airtel.
Type 4: Hierarchy Culture
Primary Focus: Structure and stability.
About Hierarchy Culture: The hierarchy culture is a prevalent corporate culture in the US. It is
defined by structure, established procedures, and levels of authority. Employees in this culture know
precisely where they fit in the chain of command – who’s accountable to them, who they report to, and
what the rules are. It is imperative in this culture to do the right thing.
Examples: SBI, ONGC, Indian Railways
Dimensions of Organizational Culture

● Innovation and Risk-Taking: The extent to which employees are motivated to become
innovative, willing to experiment and take risks.
● Attention to detail: The standard to which organizations workers are expected to work on
precision, analysis and pay attention to details.
● Outcome Orientation: The degree to which the company’s management is oriented towards
the outcomes instead of the strategies and processes employed to achieve them.
● People Orientation: The extent to which the impact of the decisions made and the
consequences of these decisions on people of the organization are considered by the management,
through greater participation. Hence, it is all about the degree of value and respect for people
working in the organization.
● Team Orientation: The extent to which relevance is given to effective teamwork in comparison
to the individual efforts and contributions to the organization, by way of collaborative problem-
 solving.
● Aggressiveness: It is all about the employee’s approach to the work, i.e. the extent to which
employees show competitiveness towards work, instead of having a casual approach.
● Stability: It determines how open an organization is, with respect to change. Moreover, it is also
associated with the company’s status quo, i.e. to what extent the company gives preference on
maintaining the statement of affairs.

Levels of Organizational Culture

Organizational Culture has a very strong impact on the people in the organization governing the
way they interact, dress, behave and perform their tasks. It can be a source of an organization’s
competitive advantage. Let’s take a look at the levels of organizational culture:

1. Assumptions: It indicates the basic beliefs concerning human tendency and reality, but it cannot be read
and understood.
2. Beliefs and Values: It refers to the common principles, standards and goals of the organization, reflecting
the greater level of awareness.
3. Artefacts: It determines visible or say tangible features of the organizational culture, but are usually
taken for granted.
The organizational culture cannot be seen or touched, though it influences the behaviour, thinking
and performance of all the employees. Hence, it is abstract, which the members of the organization can
sense it.It answers questions like – How tasks are supposed to be completed? What is appropriate in the
context of an organization? It is acceptable to question the decision of managers?
Furthermore, it constitutes the distinct social and psychological environment of the organization.
When these are combined, they create a climate which acts as a guide to communicate, plan and make
decisions effectively.
It encompasses shared beliefs and values designed by the company’s top executives, which is
passed on down the line, i.e. conveyed and implemented through various methods, which helps in
determining employee’s perceptions, behaviour and understanding

ORGANIZATIONAL CLIMATE

What do you mean by organizational climate?

Organizational climate, on the other hand, is often defined as the recurring patterns of behavior,
attitudes and feelings that characterize life in the organization, while an organization culture tends to be
deep and stable. Although culture and climate are related, climate often proves easier to assess and
change.
ORGANIZATIONAL CLIMATE:

Organizational climate refers to an employee's long-lasting perception of the working

environment and culture of the business they work for. You can think of climate as similar to personality:
every person has a unique personality, and every organization has a unique climate.
Types of Organizational Climate

Type Explanation

Human-centric An organizational climate that emphasizes the importance of caring for each
climate other.

Rule-oriented An organizational climate that prioritizes compliance with organizational rules

climate and regulations for every organizational member.

An organizational climate that focuses on implementing innovative working

Innovation-
styles and processes to foster creativity and innovativeness at work.
oriented climate

An organizational climate that is result-driven. Thus, this organizational climate

Goal-oriented
emphasizes the realization of organizational values and perfectionism to attain
climate desirable business outcomes.

Organizational Climate Characteristics

Five common characteristics can shape an organizational climate at work.They are:

1. General perception: the organizational climate is people's general perception of an organization.

It offers an understanding of people's impressions of the organization's internal environment.
2. Abstract and intangible concept: an organizational climate is abstract and intangible in the
sense that it is subjective. Thus, an organizational climate is challenging to explain and measure
in units.
3. Unique and distinct identity: an organizational climate gives an organization a unique and
distinctive identity that differs from other organizations.
4. Long-standing quality: an organizational climate cannot be built overnight. In other words,
organizations must spend a long time and consistent efforts in shaping their desirable
organizational climate.
5. Multi-dimensional concept: an organizational climate is multi-dimensional given that it
involves various dimensions at work, such as individual autonomy, leadership style,
communication, organizational conflicts, teamwork, etc.
ORGANIZATIONAL CHANGE

Organizational change refers to the actions in which a company or business alters a major
component of its organization, such as its culture, the underlying technologies or infrastructure it uses to
operate, or its internal processes.

Organizational change happens when a company decides to change its structure, strategies,
culture, policies, technology, or even its core values in order to improve performance and business
growth. Reasons to implement change include: Adapting to market changes. Digital transformation and
technology upgrades.

Organizational changes are of two types:

1. Reactive changes and
2. Proactive changes (planned changes).

A brief description of these follows:

1. Reactive Changes:
Reactive changes occur when forces compel organization to implement change without delay. In
other words, when demands made by the forces are compiled in a passive manner, such a change is called
reactive change.
2. Proactive Changes:
Proactive changes occur when some factors make realize organization think over and finally
decide that implementation of a particular change is necessary. Then, the change is introduced in a
planned manner.

The difference between reactive and proactive changes can made on the basis of behavioural
angle:
1. Reactive change involves a reflexive behaviour whereas proactive change involves purposive
behaviour.
2. Reactive change covers a limited part of the system but proactive change co-ordinates the
various parts of the system as a whole.
3. While reactive changes respond to immediate symptoms, proactive changes address to
underlying forces creating symptoms.

Reasons for Organization Changes:

What causes organisational change?

The main reason for restructuring a business is to execute a new strategy. A strategy sets out a plan
that determines how a business will use its major resources to meet its strategic objectives.

When you change your strategy, you often have to adapt your business structure to ensure that the
two elements continue to support each other. This may happen, for example, when you:

● transition from a start-up to a scale-up company

● take on a partner, or introduce change in management
● move into new product lines
● prepare your business for growth
● expand your business overseas
External factors affecting organisational change
External factors that might prompt a change in your business' structure include having to:

● address new markets

● react to changes in product or service demand
● keep up with new technologies or products from competitors
Other external events that can affect either your business or your rivals can also stimulate
organisational change. These include, for example:
 ● mergers and acquisitions
● joint ventures and business partnerships
● preparing to sell your business
Internal factors affecting organisational change
Internal business needs can also prompt business change. For example, these may include the need to:

● raise capital, improve cash flow or profitability of your business

● improve working practices and processes
● eliminate excess job positions and duplicate management roles
● reorganize internal functions, such as sales and marketing, for efficiencies

What is the difference between organization culture and climate?

Organizational culture refers to the shared behavioral expectations and norms in a work
environment. This is the collective view of “the way work is done.” Organizational climate represents
staff perceptions of the impact of the work environment on the individual.
TALENT MANAGEMENT

Talent management is a constant process that involves attracting and retaining high- quality
employees, developing their skills, and continuously motivating them to improve their

performance. The primary purpose of talent management is to create a motivated workforce who will

stay with your company in the long run. The exact way to achieve this will differ from company to

company.

IMPORTANCE OF TALENT MANAGEMENT

1. It helps businesses improve performance

Talent management is most effective of all when it combines three key components: rapid talent

allocation, positive employee experience, and a strategic HR team.

2. It allows companies to stay competitive

By hiring and developing talented employees, your organization becomes stronger and better
prepared to face changes and risks.

3. It drives innovation
 New technologies are always hitting the scene, whatever your industry. Talented
employees are able to find ways to harness the capabilities of new tools and solve problems or come up
with original ideas.

4. It helps form productive teams

The appropriate talent management strategy will allow you to form a more productive team. This
is far more useful than just having a bunch of creative and talented people in your organization.

5. It decreases turnover

When employees feel valued at a company, when they know they will have plenty of
opportunities to grow in the business, they are less likely to seek work elsewhere.

6. It leads to strong employer branding

Talent management brands your company as an employer. This helps you to attract the best
candidates for future hires.

7. It motivates others to grow

Having inspiring talent on your team will motivate other employees and help them grow.

TALENT MANAGEMENT MODEL

1. Planning

Planning aligns your talent management model in line with the overall goals of your

organization. Only with the correct planning can you ensure that you seek talent with the right skills

and experience. In addition, it assesses current employees to see what is working well for the company.

For instance, if employees with certain characteristics tend to stay at the organization for longer, you

should plan to hire more workers like them.

2. Attracting

It is not always as simple as when one person leaves the company, you start a search for someone

else to fill the role. For instance, your needs may change or employees may take on new responsibilities.

Talent management ensures that you always have sufficient staff to carry out all your operations and

prevent heavy workloads that could cause demotivation.

The right strategy will attract just the kind of workers you want at your business. Such hires will
be driven, skilled, and seeking to advance within the company. Attracting talent is all about branding your
company as an employer. You’ll need to find ways to increase visibility in ways that allow you to present
company as a best place to work. The main consideration here is to make your business more
approachable.

Even if you choose not to hire someone for a particular position, you still need to create a positive

experience. This will give you the opportunity to hire these candidates for other jobs or use them as

ambassadors to acquire other talent.

3. Developing
The development part of the model involves taking steps to help talent grow within the company.

It should be aligned with the employee development plan and includes identifying roles where particular

employees could move to in the future as well as considering how to expand workers’ skills and

knowledge to fulfill new challenges facing your organization. Talent Management also looks at what will

keep employees at your company enthusiastic and willing to go the extra mile. It is necessary to provide

employees with value. Motivation also requires the correct on boarding — to give new hires a great

impression of your company from the verybeginning. This will increase the chance that they stay with the

company and work hard.

4. Retaining

Another purpose of talent management is to keep people at your company for longer. Employees
need to continue feeling that the company is an enjoyable, meaningful place to work. Through training
and other types of engagement, employees have the chance to create a career without leaving the
company. You may achieve this by focusing on compensation (monetary and

otherwise) as well as company culture.

5. Transitioning

After hiring and developing their skills, you need to plan for employees’ transitions. Your aim at
this stage is to keep their knowledge within the company this is called knowledge management.

TALENT MANAGEMENT PROCESS

The talent management process is how you organize the management of your human resources.

It is how you choose employees, how you hire them, and how (or if) you train them, motivate
them, fire them, and so on. The following steps cover what you need to do to develop a

continuous talent management process for your organization. It covers how to find the most talented people

available and then help them stay in your company.

Step 1: Specify What Skills You Need

What is the first step in the talent management process? Before you can go any further, you must
determine what kinds of hires you need and what requirements they should fill. Consider if it would be
possible to teach existing employees to avoid the need to hire anyone new.

Step 2: Attract the Right People

There are several stages to attracting talent:

1. Create targeted advertisements and post them on top job sites — HR branding is helpful here.

2. Plan interviews and other means to identify the best person for the job. In addition to
regular questions, consider using personality assessments, references, and tests that require

candidates to perform in real-life situations.

3. Hire your top choices.

Step 3: Onboard and Organize Work

Help new employees feel orientated by being ready for them as soon as they enter the company.

Know what tasks you will set them, have training sessions scheduled, and assign current employees

to support new workers settle in.

Step 4: Organize Learning and Development

Remember, it is often easier to develop the skills of your current employees than to hire new
talent. Plus, even if you do hire top talent, they will likely want to learn something in their new role. Plan
ways for your workers to learn and grow, such as through conferences, courses, and a learning
management system to create a learning environment.

Step 5: Hold Performance Appraisals

 Checking employee performance regularly allows you to see if workers could manage additional
responsibilities. This could save you hiring new talent and it may help an employee prepare for a
promotion.

Step 6: Strategize to Retain Your Best Talent

Keep employees satisfied at work through promotions, benefits, motivating tactics, ensuring job
satisfaction, and improving company culture.
Step 7: Plan for Successions

Nurture employees for successions, such as for when a senior member of staff retires.
Enable employees to perform to their best through continuous learning opportunities, including

Knowledge management. If an employee decides to leave the company, conduct an exit interview

to find out what went wrong — this will help you prevent the same issue occurring again in the future.

Talent Management ─ Types

Talent management includes within its fold those individuals who can make a difference to the

organization’s goals, either through their immediate contribution or in the long run. Talent is a composite

state made up of various elements. An Individual is said to be talented when he/she possesses or acquires

the following elements.

✔ Skills, knowledge, intelligence, and experience

✔ Ability to learn and grow
✔ Judgment, attitude, character
✔ Perseverance and self-motivation

Talent is a set of unique abilities possessed by individuals. There are two types of talent found in an

organization. They are unidimensional and multidimensional. Both types of talent have the same objective,

however, with different perspectives.

Unidimensional Talent

In an organization, we observe that some employees are best in a particular skill and ability.

For instance, some employee may be best in administration, some of them best in sales, while some

employees may be best in their respective functions. When individuals possess a singular talent in any

particular field, it is called unidimensional talent.

 Multidimensional Talent

On the other hand, in an organization we also observe that employees are adept at multiple skills
and abilities. For example, one employee is best in administration sales, accounting and production
at a stretch. Such an employee is said to possess multi-dimensional talent.
Definition of Human Resource Planning

According to Vetter, “HRP is the process by which management determines how the organization
should move from its current man power position to desired manpower position. Through planning,
management strives to have the right time, doing things which result in both the organization and
individual receiving maximum long run benefits”.

According to Gordon McBeath, “HRP is concerned with two things: Planning of manpower
requirements and Planning of Manpower supplies”.
HUMAN RESPOURCES PLANNING

Human Resource Planning which is also called as manpower Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for which they
are suited for the achievement of goals of the organization. Human Resource Planning has got an
important place in the arena of industrialization. Human Resource Planning has to be a system approach
and is carried out in a set procedure. The procedure is as follows:

1. Analyzing the current manpower inventory

2. Making future manpower forecasts

3. Developing employment programmes

4. Design training programme

STEPS IN HUMAN RESOURCES PLANNING

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

• Type of organization

• Number of departments

• Number and quantity of such departments

• Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting.

2. Making future manpower forecasts- Once the factors affecting the future manpower forecasts are
known, planning can be done for the future manpower requirements in several work units.
 The Manpower forecasting techniques commonly employed by the organizations are as follows:

i. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi
Technique.

ii. Trend Analysis: Manpower needs can be projected through extrapolation (projecting Past
trends), indexation (using base year as basis), and statistical analysis (central Tendency

measure).

iii. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch
or in a division.

iv. Work Force Analysis: Whenever production and time period has to be analyzed, due
Allowances have to be made for getting net manpower requirements.

v. Other methods: Several Mathematical models, with the aid of computers are used to
forecast manpower needs, like budget and planning analysis, regression, new venture analysis.

3. Developing employment programmes-

Once the current inventory is compared with futureforecasts, the employment programmes can be
framed and developed accordingly, which willinclude recruitment, selection procedures and placement
plans.

4. Design training programmes-

These will be based upon extent of diversification, expansionplans, development programmes,etc.

Training programmes depend upon the extent ofimprovement in technology and advancement to take
place. It is also done to improve upon theskills, capabilities, knowledge of the workers.

IMPORTANCE OF HUMAN RESOURCE PLANNING

1. Efficient utilization- Efficient management of personnel becomes an important function in

theindustrialization world of today. Setting of large-scale enterprises require management of large-scale
manpower. It can be effectively done through staffing function.

2. Motivation- Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmers, i.e., incentive plans to be framed for further participation and
employment of employees in a concern. Therefore, all types of incentive plans become an integral part of
staffing function.

3. Better human relations- A concern can stabilize itself if human relations develop and are strong.
Human relations become strong trough effective control, clear communication, effective supervision and
leadership in a concern. Staffing function also looks after training and development of the work force
which leads to co-operation and better human relations.

4. Higher productivity- Productivity level increases when resources are utilized in best possible manner.
Higher productivity is a result of minimum wastage of time, money, efforts and energies.

This is possible through the staffing and its related activities (Performance appraisal, training and
development, remuneration)

OBSTACLES OF HUMAN RESOURCE PLANNING

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

1. Under Utilization of Manpower: The biggest obstacle in case of manpower planning is the factthat
the industries in general are not making optimum use of their manpower and once manpowerplanning
begins, it encounters heavy odds in stepping up the utilization.

2. Degree of Absenteeism: Absenteeism is quite high and has been increasing since last few years.

3. Lack of Education and Skilled Labour: The extent of illetracy and the slow pace of
development of the skilled categories account for low productivity in employees. Low

productivity has implications for manpower planning.

4. Manpower Control and Review:

a. Any increase in manpower is considered at the top level of management

b. On the basis of manpower plans, personnel budgets are prepared. This act as control
mechanisms to keep the manpower under certain broadly defined limits.

c. The productivity of any organization is usually calculated using the formula:

Productivity = Output / Input.

But a rough index of employee productivity is calculated as follows:

Employee Productivity = Total Production / Total no. of employees

d. Exit Interviews, the rate of turnover and rate of absenteesim are source of vital
information on the satisfaction level of manpower. For conservation of Human Resources and

better utilization of men studying these condition, manpower control would have to take into

account the data to make meaningful analysis.

e. Extent of Overtime: The amount of overtime paid may be due to real shortage of men,
 ineffective management or improper utilization of manpower. Manpower control would

require a careful study of overtime statistics.

RECRUITMENT:

Meaning and Definition

Recruitment forms a step in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first being the manpower
planning. Recruiting makes it possible to acquire the number and types of people necessary to ensure the
continued operation of the organisation. Recruiting is the discovering of potential applicants for actual or
anticipated organisational vacancies.

According to Edwin B. Flippo, “Recruitment is the process of searching for prospective

employees and stimulating them to apply for jobs in the organisation.”

According to Lord, “Recruitment is a form of competition. Just as corporations compete to

develop, manufacture, and market the best product or service, so they must also compete to identify,
attract and hire the most qualified people. Recruitment is a business, and it is a big business.”

Factor Affecting Recruitment

The factors affecting recruitment can be classified as internal and external factors.

The internal factors are:

✔ Wage and salary policies;

✔ The age composition of existing working force;
✔ Promotion and retirement policies;
✔ Turnover rates;
✔ The nature of operations involved the kind of personnel required;
✔ The level and seasonality of operations in question;
✔ Future expansion and reduction programmes;
✔ Recruiting policy of the organisation;
✔ Human resource planning strategy of the company;
✔ Size of the organisation and the number of employees employed;
✔ Cost involved in recruiting employees, and finally;
✔ Growth and expansion plans of the organisation.

The external factors are:

✔ Supply and demand of specific skills in the labour market;

✔ Company’s image perception of the job seekers about the company.
✔ External cultural factors: Obviously, the culture may exert considerable check on
recruitment. For
✔ example, women may not be recruited in certain jobs in industry.
✔ Economic factors: such as a tight or loose labour market, the reputation of the enterprise
in the
✔ community as a good pay master or otherwise and such allied issues which determine the
quality
✔ and quantity of manpower submitting itself for recruitment.
 ✔ Political and legal factors also exert restraints in respect of nature and hours of work for
women
✔ and children, and allied employment practices in the enterprise, reservation of Job for SC,
ST andso on.

Recruitment Process
Every organization follows its own recruitment process, but there are some basic steps that are
followed by most the organization, which are listed here:
Step 1: Preparing
Once the job opening is approved internally, the recruiter contacts the hiring manager. This step
is about gathering details about the open position. During the discussion, the recruiter has to gather
information, like the required skills, roles, responsibilities, etc., and use this information to write a clear
and inclusive Job description. Based on the job description, they can write the job posting.
Step 2: Sourcing
Once the job description is ready, the next step is to start the sourcing. It refers to identifying and
contacting qualified candidates rather than waiting for the candidate to apply for the position. The primary
goal is to pull qualified candidates. A recruiter uses a variety of job portals to pull the resumes, but it is
not essential that for every position, sourcing is required. In some cases, if there are a large number of
applications, there may not be any need to source more candidates.
Step 3: Screening
The Screening of a candidate can take place in many ways. Generally, the first step is Resume
screening. If the resume meets the criteria required for the job opening, then the next step is the phone
screening, in which, the recruiter can cover topics, like thecandidate’s availability, current role, and
responsibilities, current salary, salary expectations, Notice period, etc., and if he seems to be the right
candidate, an organization can process further with his profile.
Step 4: Selecting
This process is about sending the assignments, psychometric tests and scheduling interviews,
participating in the interview process, and also keeping the hiring manager in the loop for the whole
process. It is about maintaining a good relationship with the candidate and keeping the candidate updated
about the interview feedback.
Step 5: Hiring
This step includes the final discussion with the candidate about salary, joining date, etc. Once the
joining date is confirmed, the offer letter is released. In some cases, this step also includes background
checks.
Step 6: Onboarding
Once the candidate has accepted the offer letter, the process is not over yet. This is where the pre-
boarding period starts. This is the time between the joining date and when the offer letter was accepted.
And it’s very important to be in touch with your candidate during this period to keep them engaged. If not
done so, it can result in them joining another company. It also includes sharing the new hire’s email and
other details with the team. Once the candidate starts the first day, it’s time to begin the onboarding
process.

SELECTION

Selection is the process of choosing people by obtaining and assessing information about the
applicants with a view to matching these with the job requirements. It involves a careful screening and
testing of candidates who have put in their applications for any job in the enterprise. It is the process of
choosing the most suitable persons out of all the applicants. The purpose of selection is to pick up the
right person for every job.
 According to Dale Yoder, “Selection is the process in which candidates for employment are
divided into two classes-those who are to be offered employment and those who are not”.

According to Thomas 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”.

Dale Yoder says, “Selection has long held a high rank in the priority of problem areas in
management. Investments in good people produce a very high rate of return. A good choice of people can
provide a basis for long, sustained contributions.”
Selection Procedure
The selection procedure is concerned with securing relevant information about an applicant. This
information is secured in a number of steps or stages. The objective of selection process is to determine
whether an applicant meets the qualification for a specific job and to choose the applicant who is most
likely to perform well in that job. Selection is a long process, commencing from the preliminary interview
of the applicants and ending with the contract of employment (sometimes).

The major factors which determine the steps involved in a selection process are as follows:

a) Selection process depends on the number of candidates that are available for selection.
b) Selection process depends on the sources of recruitment and the method that is adopted for
c) making contact with the prospective candidates.
d) Various steps involved in as selection process depend on the type of personnel to be selected.

All the above factors are not mutually exclusive, rather these operate simultaneously. In any case, the
basic objective of a selection process is to collect as much relevant information about the candidates as is
possible so that the most suitable candidates are selected. A comprehensive selection process involves the
various steps as shown in Figure.
 1. Application Pool:
Application pool built-up through recruitment process is the base for selection

process. The basic objective at the recruitment level is to attract as much worthwhile applications as
possible so that there are more options available at the selection stage.

2. Preliminary Screening and Interview:

 It is highly noneconomic to administer and handle all the applicants. It is advantageous to sort out
unsuitable applicants before using the further selection steps. For this purpose, usually, preliminary
interviews, application blank lists and short test can be used. All applications received are scrutinised by
the personnel department in order to eliminate those applicants who do not fulfil required qualifications
or work experience or technical skill, his application will not be entertained.

Such candidate will be informed of his rejection.

Preliminary interview is a sorting process in which the prospective candidates are given the
necessary information about the nature of the job and the organisation. Necessary information is obtained
from the candidates about their education, skills, experience, expected salary etc. If the candidate is found
suitable, he is elected for further screening. This courtesy interview; as it is often called helps the
department screen out obvious misfits. Preliminary interview saves time and efforts of both the company
and the candidate. It avoids unnecessary waiting for the rejected candidates and waste of money on
further processing of an unsuitable candidate. Since rejection rate is high at preliminary interview, the
interviewer should be kind, courteous, receptive and informal.

3. Application Blank or Application Form:

An application blank is a traditional widely accepted device for getting information from a
prospective applicant which will enable the management to make a proper selection. The blank provides
preliminary information as well as aid in the interview by indicating areas of interest and discussion. It is
a good means of quickly collecting verifiable (and therefore fairly accurate) basic historical data from the
candidate. It also serves as a convenient device for circulating information about the applicant to
appropriate members of management and as a useful device for storing information for, later reference.
Many types of application forms, sometimes very long and comprehensive and sometimes brief, are used.
Information is generally taken on the following items:

(a) Biographical Data: Name, father’s name, data and place of birth, age, sex, nationality,
height, weight, identification marks, physical disability, if any, marital status, and number of dependants.

b) Educational Attainment: Education (subjects offered and grades secured), training acquired
in special fields and knowledge gained from professional/technical institutes or through correspondence
courses.

(c) Work Experience: Previous experience, the number of jobs held with the same or other employers,
including the nature of duties, and responsibilities and the duration of various assignments, salary received,
grades, and reasons for leaving the present employer.
(d) Salary and Benefits: Present and expected.

(e) Other Items: Names and addresses of previous employers, references, etc. An application blank is a
brief history sheet of an employee’s background and can be used for future reference, in case needed.

4. Selection Tests:

Many organisations hold different kinds of selection tests to know more about the candidates or
to reject the candidates who cannot be called for interview etc. Selection tests normally supplement the
information provided in the application forms. Such forms may contain factual information about
candidates. Selection tests may give information about their aptitude, interest, personality, which cannot
be known by application forms. Types of tests and rules of good of testing have been discussed in brief
below:
 A. Aptitude Tests: These measure whether an individual has the capacity or talent ability to
learn a given job if given adequate training. These are more useful for clerical and trade positions.

B. Personality Tests: At times, personality affects job performance. These determine

personality

traits of the candidate such as cooperativeness, emotional balance etc. These seek to assess an

individual’s motivation, adjustment to the stresses of everyday life, capacity for interpersonal relations and
self-image.

C. Interest Tests: These determine the applicant’s interests. The applicant is asked whether he
likes, dislikes, or is indifferent to many examples of school subjects, occupations, amusements,
peculiarities of people, and particular activities.

D. Performance Tests: In this test the applicant is asked to demonstrate his ability to do the job.
For example, prospective typists are asked to type several pages with speed and accuracy.

E. Intelligence Tests: This aim at testing the mental capacity of a person with respect to
reasoning, word fluency, numbers, memory, comprehension, picture arrangement, etc. It measures the
ability to grasp, understand and to make judgement.
F. Knowledge Tests: These are devised to measure the depth of the knowledge and proficiency
in certain skills already achieved by the applicants such as engineering, accounting etc.
G. Achievement Tests: Whereas aptitude is a capacity to learn in the future, achievement is
concerned with what one has accomplished. When applicants claim to know something, an achievement
test is given to measure how well they know it.
H. Projective Tests: In these tests the applicant projects his personality into free responses about

pictures shown to him which are ambiguous.

5. Interview:

An interview is a procedure designed to get information from a person and to assess his

potential for the job he is being considered on the basis of oral responses by the applicant to oral inquiries
by the interviewer. Interviewer does a formal in-depth conversation with the applicant, to evaluate his
suitability. It is one of the most important tools in the selection process. This tool is used when
interviewing skilled, technical, professional and even managerial employees. It involves two-way
exchange of information.

The interviewer learns about the applicant and the candidate learns about the employer.

Objectives of Interviews: Interview helps:

✔ To obtain additional information from the candidate.

✔ Facilitates giving to the candidate information about the job, company, its policies, products etc.
✔ To assess the basic suitability of the candidate.
6. Background Investigation:

The next step in the selection process is to undertake an investigation of those applicants who
appear to offer potential as employees. This may include contacting former employers to confirm the
 candidate’s work record and to obtain their appraisal of his or her performance/ contacting other job-
related and personal references, and verifying the educational accomplishments shown on the application.

The background investigation has major implications. Every personnel administrator has the
responsibility to investigate each potential applicant. In some organization, failure to do so could result in
the loss of his or her job. But many managers consider the background investigation data highly biased.
Who would actually list a reference that would not give anything but the best possible recommendation?
The seasoned personnel administrator expects this and delves deeper into the candidate’s background, but
that, too, may not prove to be beneficial. Many past employers are reluctant to give any information to
another company other than factual information (e.g., date of employment).

6. Physical Examination
After the selection decision and before the job offer is made, the candidate is required to
undergo physical fitness test. Candidates are sent for physical examination either to the
company’s physician or to a medical officer approved for the purpose. Such physical examination
provides the following information.
a) Whether the candidate’s physical measurements are in accordance with job requirements or not?
b) Whether the candidate suffers from bad health which should be corrected?
c) Whether the candidate has health problems or psychological attitudes likely to interfere with
work
d) efficiency or future attendance?
e) Whether the candidate is physically fit for the specific job or not?

7. Approval by Appropriate Authority:

On the basis of the above steps, suitable candidates are recommended for selection by the
selection committee or personnel department. Though such a committee or personnel department
may have authority to select the candidates finally, often it has staff authority to recommend the
candidates for selection to the appropriate authority. Organisations may designate the various
authorities for approval of final selection of candidates for different categories of candidates.
Thus, for top level managers, board of directors may be approving authority; for lower levels,
even functional heads concerned may be approving authority.
8. Final Employment Decision:

After a candidate is finally selected, the human resource department recommends his name for
employment. The management or board of the company offers employment in the form of an
appointment letter mentioning the post, the rank, the salary grade, the date by which the candidate should
join and other terms and conditions of employment. Some firms make a contract of service on judicial
paper. Usually an appointment is made on probation in the beginning. The probation period may range
from three months to two years. When the work and conduct of the employee is found satisfactory, he
may be confirmed. The personnel department prepare a waiting list and informs the candidates. In case a
person does not join after being selected, the company calls next person on the waiting list.

9. Evaluation: The selection process, if properly performed, will ensure availability of competent
and committed personnel. A period audit, conducted by people who work independently of the
human resource department, will evaluate the effectiveness of the selection process. The auditors
will do a thorough and the intensive analysis and evaluate the employment programme.
 Training and Development:

Meaning & Definition

According to Edwin Flippo “Training is the act of increasing the knowledge & skill of an
employee for doing a particular job.”The following features have been directly associated with improved
employee and organizational outcomes: ◻ Start with training needs assessment.

Training is important for the following reasons: ◻ Increased productivity

i. Higher employee morale ◻ Less supervision

ii. Less wastage ◻ Easy adaptability
iii. Reduced turnover and absenteeism
iv. Employee Development

What is Training and Development?

Training and Development is the continuous process of improving skills, gaining knowledge,
clarifying concepts and changing attitude through structured and planned education by which the
productivity and performance of the employees can be enhanced. Training and Development emphasize
on the improvement of the performance of individuals as well as groups through a proper system within
the organization which focuses on the skills, methodology and content required to achieve the objective.
Good & efficient training of employees helps in their skills & knowledge development, which eventually
helps a company improve its productivity leading to overall growth.
Training is about knowing where you are in the present and after some time where will you reach
with your abilities. By training, people can learn new information, new methodology and refresh their
existing knowledge and skills. Due to this there is much improvement and adds up the effectiveness at
work. The motive behind giving the training is to create an impact that lasts beyond the end time of the
training itself and employee gets updated with the new phenomenon. Training can be offered as skill
development for individuals and groups.

Training and Development Process

Training and development is a continuous process as the skills, knowledge and quality of work
needs constant improvement. Since businesses are changing rapidly, it is critical that companies focus on
training their employees after constantly monitoring them & developing their overall personality.
Steps for training and development processes are:
1. Determine the need of training and development for individuals or teams
First of all the need has to be seen for training and development. it has to align with the
company's goals and objectives. If a company is trying to start a new department or strengthen existing
sales team in new products, then an appropriate training is needed.
2. Establish specific objectives & goals which need to be achieved
goals and objectives of the training and development have to be established. Whether the goal is
awareness about new products or even installation is required to be learnt.
3. Select the methods of training
Next, methods have to be defined. The training can be done as a :
a. Classroom Training
b. Online Self paced courses
c. Course with certification
d. Instructor led online training
4. Conduct and implement the programs for employees
After the plan and methods are finalized, the training and development programs have to be
executed where courses, instructions are taught to the employees, partners or vendors. Evaluate the output
and performance post the training and development sessions
Training and Development is incomplete without proper monitoring. Monitoring can be done
through evaluation of the instructor as well as attendees. Instructor evaluation can be done through
feedback or ratings but attendees can be evaluated through internal or external certifications or scores.
5. Keep monitoring and evaluating the performances and again see if more training is required
Based on the evaluation results in the previous step, management needs to ascertain that if the
training and development program was sufficient for now or more training and enablement would be
required. Also, if future trainings are to be planned.

Importance of Training and Development

For companies to keep improving, it is important for organizations to have continuous training
and development programs for their employees. Competition and the business environment keeps
changing, and hence it is critical to keep learning and pick up new skills. The importance of training and
development is as follows:
1, Optimum utilization of resources
2. Development of skills like time management, leadership, team management etc.
3. To increase the performance, productivity and motivation
4. To imbibe the team spirit
5. For improvement of organization culture
6. To improve quality
7. To increase profitability and bottom line by acquiring new skillsImproving brand image by having well
 trained employees

Relation and Difference between Training and Development

There is a relation between training and development, and there is clear difference between the
two based on goals to be achieved. Development is made to answer the training problems:

TRAINING DEVELOPMENT
Training is meant for Development is meant for
operatives executives
It is reactive process It is pro- active process
AIM: To develop additional skills AIM: To develop the total
personality
It is short term process It is continuous process
OBJECTIVE: To meet the present OBJECTIVE: To meet the future
need of an employee need of an employee
Initiative is taken by the Initiative is taken by an
management individual.

Need for Training and Development

Training and development of employees is a costly activity as it requires a lot quality inputs from
trainers as well as employees. But it is essential that the company revises its goals and efficiencies with
the changing environment. Here are a few critical reasons why the company endorses training and
development sessions.

1. Improvement
When management thinks that there is a need to improve the performances of employees
2. Benchmarking
To set up the benchmark of improvement so far in the performance improvement effort
3. Specific Role Requirement
To train about the specific job responsibility and skills like communication management, team
management etc.
4. Testing
To test the new methodology for increasing the productivity

Advantages of training and development

Training and development has a cost attached to it. However, since it is beneficial for companies
in the long run, they ensure employees are trained regularly. Some advantages are:
1. Helps employees develop new skills and increases their knowledge.
2. Improves efficiency and productivity of the individuals as well as the teams.
3. Proper training and development can remove bottle-necks in operations.
4. New & improved job positions can be created to make the organization leaner.
5. Keeps employees motivated and refreshes their goals, ambitions and contribution levels.
 Disadvantages of training and development
Even though there are several advantages, some drawbacks of training and development are
mentioned below:
1. It is an expensive process which includes arranging the correct trainers and engaging employees for
non-revenue activities.
2. There is a risk that after the training and development session, the employee can quit the job.
Performance Appraisal:

Performance Management is the managerial process that deals with the various dimensions of the
performance of the employees which include the identification of the resources to be provided to the
employees, evaluation of the employees at regular intervals of time and delivering feedback to them,
planning the rewards and incentives, etc.

● Performance Appraisal deals with the evaluation part of performance management.

● It involves the systematic evaluation of an employee with regard to their contribution to the
organization. Performance appraisal takes the behaviour, attitude, skillset and knowledge
improvement, learning potential and other factors into consideration.
● Performance appraisal is the process of assessment of the job performance of the employees by
taking specific metrics into consideration by the supervisors or any other assigned team
members.
● It involves the comparison of the performance of an employee with their own performance
and with the performance of the other employees over a specific period of time.

Objectives of Performance appraisal

● Helping the organization over promotions, salary increments, incentives, internal job transfers,
terminations, improving training modules, etc.
● Providing evaluation feedback to employees, to state what is required from them and what are
the areas they need to improve.
● Creating a friendly environment by assessing the difficulties faced by the employees and
motivating them.
● To monitor the performance of the employees.

Methods of Performance appraisal

i. Traditional methods
ii. Modern Methods:

Traditional methods

The traditional methods of performance appraisal are as follows: Signup

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1. Ranking method: In this method, the employees are ranked by taking their performance levels and
other characteristics into consideration.

● Very useful to divide a good and an average performer.

● Can be used easily for a small set of employees.
 ● The ranking becomes difficult when a large set of employees have similar characteristics.

2. Grading method: In this method, different grades are given to the employees based on their
contribution to the organization.

● Grades may be in the form of alphabets (A, B, C, D, E, F..) or in words like excellent, very
good, moderate, bad, very bad, worst or excellent, good, bad.
● Based on the grades given, promotions, hikes, training, etc. are planned.

3. Paired comparison method: In this method, the appraiser compares two employees and marks
the better performer. The process is continued until all the employees are compared with one another in
this manner.

● After the entire process is completed, ranking is given to all the employees based on the
number of times that the employee has been marked as a better performer.
● This method is very difficult for an organization that has a large number of employees.

4. Forced choice method: In this method, the appraiser is given a set of statements and asked to select
one statement which defines the employee.

● Let us consider the following three statements,

o He/ She is a team player.
o He/ She needs to be trained to improve the skill set.
o He/ She completes the assigned tasks in time.
● The appraiser has to select one statement as a part of the evaluation process.
● This is a time-consuming method.

5. Graphical rating method: In this method, different characteristics of the employees are rated. The
appraiser rates the employees on each characteristic in the form of points like 1, 2, 3, 4, 5, 6, 7 or in the
form of excellent or average or bad, etc.

● Let us consider two characteristics like efficiency and training. If an employee performs very
well in the training sessions, then that employee will be given the rating as 6 or 7 on 7 point scale.
● If the same employee performs poorly on the project related tasks, then that employee will be
given 2 points or 1 point for efficiency.

6. Forced distribution method: In this method, the appraiser has to distribute the employees into
five levels like excellent, very good, average, very bad and worst performers.

● For example, if there are 1000 employees, the appraiser has to distribute the employees into
various categories as per their performance levels.
● If there are 200 excellent performers, they fall into the excellent category. If the performance
levels of another 200 employees are not up to the mark, then they fall intothe very bad category.
This method is continued until every employee is distributed into some category.

7. Checklist method: In this method, all the characteristics in the question form are written in order
and two options yes and no is given to the appraiser for every question. The appraiser has to tick the yes
box when the given characteristic is found and no box when it is not.

● All the responses are counted, and a final rating is obtained.

● It is a time taking process and not accurate.

8. Essay method: In this method, the appraiser writes about the characteristics of the employee in his
 own words in the form of an essay.

● With this, the strong and weak points can be easily known.
● But the essay depends on the writing skills of the appraiser. Sometimes, there may be a
chance of weak areas getting more highlighted than the strong areas of an employee. This
may demotivate the employee.

9. Critical incidents method: In this method, the performance of the employees during critical
incidents is taken into consideration.

● All the critical tasks performed by each employee are written and are compared with each
other by the appraisal team.
● The rating is done based on the severity of the critical incident.

10. Field review method: In this method, the appraiser takes the help of subordinates and supervisors
to rate an employee.

● This method is mostly used during the promotions and increments.

● It is a time-consuming process.

Modern Methods:

1. Management by Objectives(MBO): This method was developed by Peter Drucker. In this method,
certain tasks(objectives) based on their job role are given to the employees and a team is assigned to
monitor the tasks.

● This will help the organization to know the skill gap of the employees.
● This will help the organization to plan the training modules.
● The setting of objectives to determine the true potential of the employees is a difficult and
time-consuming task.

2. 360-degree appraisal: In this method, an employee is appraised by the supervisors, the clients, the
subordinates, the customers, including themselves.
● This will help the organization to know about the strong and weak areas of the employees.

● The employees can freely express their views and suggest any changes in the training methods.
3. Assessment centres:

In this method, a group of employees are selected and are asked to perform a few tasks individually and a
few tasks in teams.

● These tasks are mainly aimed to check the teamwork, leadership qualities and skill set of the
employees.
● The tasks are mostly related to their job responsibilities.
● e whether an employee is to be promoted or trained.
This method is used to d cide

4. Behaviourally Anchored R ating Scales (BARS): In this method, all the critical incidents are
identified and are divided into different groups based on their departments.

● The employees are rated on their behaviour towards the incidents rather than on the traits.
● This will enable the organization to know the involvement of the employees.