Chapter - 6

Staffing
Class 12
Business Studies
● Once the organisational goals are set, the
plans are prepared and organisation is
appropriately structured to pave the path for
achievement of the set goals.
● The next step is to provide appropriate
personnel to fill in the various positions
created by the organisational structure.
● Staffing means putting putting the right
person at the right job. It begins with human
resource planning and includes different other
functions like recruitment, selection, training,
development, promotion and performance
appraisal of work force.
 Oye Idli Chhod, Oye Ice-cream Hi Kha
Need/ Importance/
Significance of Staffing
1. Obtaining Competent Personnel: Proper
staffing helps in discovering and obtaining
competent personnel for various jobs. It ensures
that people with adequate competencies are
employed.
2. Improves Performance: Proper staffing
ensures higher performance by putting right
person on the right job.
3. Continuous growth: Proper staffing ensures
continuous survival and growth of the enterprise.
4. Optimum utilization of human resources:
Staffing indentifies the workforce
requirements and plans appointment of people
accordingly. It prevents under utilization of
personnel and high labour cost.
5. Improves job satisfaction: It improves job
satisfaction and morale of employee. It
provides opportunities for growth through
internal promotions, appreciates and rewards
the contribution through continuous appraisals.
6. Helps in competing: Two organisations can
easily acquire same type of physical and
financial resources but what helps organisation
to win over the other is the efficient staff.
7. Key to effectiveness of other functions:
No other function of management can be
carried out without efficient staffing function
because all the functions are performed by
human beings and human beings join the
organisation by staffing function only.
 Staffing Process
● Staffing as a function of management is
primarily responsible for timely fulfillment
of manpower requirements.
● Staffing is referred as both line as well as a
staff activity.
● Line activity because like other functions
staffing is also performed by every manager.
● Staff activity because it is an important area
of management and we have a separate
management department for it.
Staffing Process
1. Estimating Manpower Requirements: Staffing
is concerned with filling the jobs created in the
organisation structure by appointing personnel
with required skills, qualifications etc.
Thus it is important for the human resource
department to understand how many and what type
of personnel are required in the organisation.
(a) Workload Analysis – It enables an assessment
of the number and types of human resources
necessary for the performance of various jobs and
organisational goals.
(b) Workforce Analysis – It estimates the number
and type of human resources available. It helps in
finding whether the organisation is understaffed,
overstaffed or optimally staffed.
2. Recruitment: It refers to identification of
the sources of manpower availability and making
efforts to secure applicants for the various job
positions in an organization.
3. Selection: It is the process of choosing and
appointing the right candidates for various jobs
in an organization through various exams, tests
& interviews.
4. Placement and Orientation: When a new
employee reports for duty, he is to be placed on
the job for which he is best suited. Placement is
very important process as it can ensure "Right
person for right job". Orientation/Induction is
concerned with the process of introducing a new
employee to the organization.
5. Training and Development: Systematic
training helps in increasing the skills and
knowledge of employees in doing their jobs
through various methods. Development
involves growth of an employee in all respects.
It is the process by which the employees
acquire skills and competence to do their
present jobs and increase their capabilities for
higher jobs in future.

6. Performance Appraisal: It is concerned with

rating or evaluating the performance of
employees.
Transfers and promotions of the staff are based
on performance appraisal.
 Components/Elements/Aspects of
Staffing
The three components of staffing are:
1. Recruitment
2. Selection
3. Training

Recruitment + Selection + Training = Staffing

 Recruitment
● Recruitment may be defined as the process of
searching for prospective employees and
stimulating them to apply for jobs in the
organisation.
● It induces people to apply for the vacant jobs.
● It is a positive process.
► Sources of Recruitment
A. Internal Sources B. External Sources
A. Internal Sources of Recruitment
● Internal sources refer to inviting candidates
from within the organisation.
● The vacant jobs are filled by using existing
employees only and no outsiders are permitted
in internal sources.
► It is very popular and common because of its
advantages:
(i) It is economical.
(ii) It motivates the existing employees.
(iii) Less amount is spent on training.
(iv) Less chances of turnover, as the employees are already familiar
with the rules and regulations.
(v) Improve performance of employees.
(vi) Through transfer employees get training also in the form of
job rotation.
(vii) Through transfer surplus employees can be shifted
to other department.
►The Drawbacks or Demerits of Internal
Recruitment:
(i) No fresh or new ideas will come in the
organisation.
(ii) There will be limited choice.
(iii) Not suitable for new organisation.
(iv) Frequent transfer may reduce the
productivity of employee.
1. Transfers
● It involves shifting an existing employee from:
(i) one job to another at same level (ii) one shift to
another (iii) one department to another
● It may or may not change the responsibilities,
duties, status or salary of the transferred
employee.
● It is horizontal movement of employees.
● It can be used as a training tool to train people
for different jobs within an organisation.
● It helps to avoid termination or removal of
employees of an over staffed department by
transferring the capable people to under staffed
departments.
2. Promotion

● It involves filling higher positions by

promoting employees from lower jobs.
● It changes the responsibilities, duties, status
and salaries of promoted employees.
● It is vertical movement of employees.
● It motivates employees and provides job
satisfaction.
 B. External Sources of Recruitment
● When candidates from outside the organization are
invited to fill vacant job positions, it is called external
recruitment.
● Business expansions, people retiring or quitting
the organisation create new positions.
● An organisation may be under-staffed or may
not have people with desirable profile to fill in
these positions.
● Therefore, to fill the vacant positions the
business organisations may have to rely on
external sources.
 Common methods of External Recruitment
1. Direct Recruitment - Direct recruitment is
a process where the personnel department puts
the information about the situation vacant on
the office notice board or factory/office gate.
This method is most suitable for unskilled job
Positions eg. peon, sweeper, etc

2. Casual Callers - Many companies maintain

database of applications received over a period
of time. This database may be used to fill in the
vacancies as and when they arise. Whenever
there is a vacancy the suitable candidate from
the database is called. This method can be used
to fill in positions at lower level or to fill in leave
vacancies.
3. Advertisement - If a company needs to have
a wider choice to fill in senior or middle level
positions it may advertise in leading print media
like newspapers, magazines, or trade and
professional journals. This method is used to fill
in higher positions for which company may require
to have a wider choice.
4. Employment Exchanges – Employment
exchange is a government run organisation where
business enterprises may notify the vacant
positions. It is mandatory for government
agencies to notify the job positions with
employment exchange but private organisations
may also notify positions vacant.
5. Placement Agencies and Management
Consultants - Placement companies are the
private bodies or professional agencies which
provide details of candidates with desirable
profiles to their clients to fill in the vacant
positions. Such agencies maintain agencies of large
number of employees and recommend the suitable
candidates to their clients.
Management consultants usually specialize in
recruiting, managerial or professional people are
top and middle level. They may either advertise on
behalf of their client or use their databank to
provide the right type of personnel. They are also
called as ‘head hunters’ who may try to get
professionals from other companies.
6. Campus Recruitment - A business
organisation may liaise with universities,
colleges, vocational or management institutions
to recruit newly qualified students for technical,
professional or managerial positions. Campus
recruitment is a well established practice
followed by businesses to appoint fresh talent in
the organisation. It is most suitable method to
appoint fresh talent.
7. Recommendation of Employees – Companies
may fill vacancies with people recommended or
introduced by present employees, their friends
or relatives. This method can be used to fill in
positions of all levels.
8. Labour Contractors – Companies can use labour
contractors to appoint unskilled and casual workers.
These labour contractors may be company employee.
This method can be used to appoint unskilled or
casual workers even at short notice.

9. Advertising on TV – Companies may use

electronic media like television to telecast or
publicise the details of vacant job, qualifications
and qualities required to perform the advertised
job along with company profile.

10. Web Publishing – In internet there are

many websites for job seekers. Such websites
can be visited by job seekers and companies
Merits of External Sources of Recruitment

1. Qualified Personnel - It can be used to

attract qualified and trained people to apply for
the positions in the organisation.
2. Wider Choice – Through external sources of
recruitment organisation receive large number
of applications and thus have a wider choice
while selecting the suitable candidate.
3. Fresh Talent – It facilitates organisations to
appoint people with fresh talent, newer ideas and
experience from different fields. Employees
coming from outside world infuse new blood in
the organisation.
4. Competitive Spirit - The appointment of
people from outside develops competition among
new and existing employees. Each employee
works hard to prove his competence resulting in
increased productivity and improved
performance.
5. Latest Technological Knowledge – Through
campus placement organisation can get
employees with latest technological knowledge.
Demerits of External Sources of Recruitment

1. Dissatisfaction among existing employees

If higher positions are filled using external sources if
recruitment, it may lead to dissatisfaction among existing
employees who may be expecting to rise through promotions.
2. Lengthy Process – Recruitment using external sources
is very time consuming. It requires businesses to notify
the vacancies and then wait for potential candidates to
apply. Further, screening and selecting the candidates for
interviews also takes time.
3. Expensive Process – Using external sources involves huge
costs. Business has to pay for advertising, service charges to
Placement agencies, processing of applications or
reimbursement of expenses to potential candidates to
appear for the interview.
 Selection
● Selection is the second step of staffing
process.
● It is the process followed to identify and
choose the best person from the number of
prospective candidates who apply for the job.
● It may involve conducting series of tests and
interviews.
● Each stage of selection process aims to
eliminate the candidates with lesser potential
and finally select the right candidate, that is
why selection is considered as negative
process.
 Selection Process
1. Preliminary Screening – At this stage, the
manager scrutinizes all the applications
received for a job & eliminates the applications of
unqualified or unfit candidates.

2. Selection Tests – After the preliminary interview,

the selected candidates need to go through the
employment tests so that their aptitude, intelligence
and personality can be measured. An organisation may
conduct different types of selection tests namely-

(a) Intelligence Test – It measures the level of

intelligence quotient & indicates the candidate’s
ability to learn, take decisions and make judgements.
(b) Aptitude Test – It measures the ability to
learn new skills. It indicates candidate’s capacity
to develop.
(c) Personality Test – It aims to measure the
overall personality of a candidate in terms of
emotions, reactions, maturity, value systems etc.
It helps in finding out the approach of the candidate
whether candidate is having positive or negative
approach and how much initiative he will be taking
while performing the job.
(d) Trade Test – It aims to measure to candidate’s
existing level of knowledge and proficiency.
(e) Interest Test – It aims to understand the
pattern of interest or the area of involvement of
interest.
3. Employment Interview – Once the candidate
clears the basic screening & written tests, the
selected candidates go through the formal interview
process. It is the in-depth conversation between
interviewer & interviewee where interviewer may
seek information from interviewee and the
interviewee is expected to provide the same. The
interviewee may also seek information from the
interviewer about the prospective job and the
company.
4. Reference & Background Check – After
clearing the interview, employer may request for
names, addresses and telephone numbers of
references which may include previous employers
or any known person who can act as references.
5. Selection Decision – Once the process of
interviews and verifications are complete, the panel
who conducted the selection process and the
manager responsible for the performance of the new
employee take the final decision regarding selection
or rejection of the candidate.

6. Medical Examination – After final selection,

the candidate is required to undergo a medical
fitness test to ensure that the candidate selected is
medically fit.

7. Job Offer – The organisation gives job offer to

those candidates who successfully clear all stages of
selection process. The job offer is made through a
letter of appointment which if accepted by the
candidate confirms the appointment. The job
offer gives all the details about the job, joining
date etc.

8. Contract Employment - When candidate

accepts the job offer it refers to signing of
contract of employment. While signing the
contract of employment the employer and the
candidate exchange certain documents. The
common contents of contract of employment are
job title duties, responsibilities, pay, allowances,
hours of work, leave rules, disciplinary rules,
probation period etc.
 Training & Development
● Every business organisation constantly trains,
develops and educates its employees to ensure
that each employee is able to perform the
assigned duties most effectively and
efficiently.
● Training is a process, which aims to
incorporate or improve the attitudes, skills and
abilities amongst employees to perform specific
jobs.
● It aims to improve not only the current
performance of an employee but also prepares
him/her for other responsibilities.
● Development is a process of helping employees
grow. It involves all such activities, which aim to
provide opportunities to improve job
performance, bring growth in the personality,
help to realise true potential and be better
individuals.
Importance of Training and Development

● Process of training and development attempts

to:
- improve the current or future performance of an
employee.
- increase employee’s ability to perform through learning.
- change employee’s attitude or increase his/her skills and
knowledge.
● The training and development programmes
improve employees’ performance, which directly
helps an organisation to achieve its goals. Thus,
training benefits both employees & the
organisation.
 Need for Training & Development
(A) Benefits of Training and Development for
Organisations
(i) Systematic learning process: In the
absence of proper training employees use hit
and trial methods to perform the tasks assigned
to them which lead to wastage of resources and
effort. With the help of training, employees
learn the systematic way of doing specific jobs.
(ii) Enhances productivity: Systematic
processes help employees to perform tasks
efficiently & effectively leading to increased
productivity & improved performance.
(iii) Develops future managers: Training improves
managerial skills amongst employees enabling them
to manage enterprise in case of emergency.

(iv) Higher profits: The systematic learning helps

employees to perform tasks most effectively &
efficiently. This not only improves the employee
performance but also increases the quantity &
quality of work done in the organisation. It leads to
higher profits & better growth prospects.

(v) Helps to adapt changes: Training programmes

aim to upgrade employees’ knowledge & skills
enabling them to respond positively to the changes.
(vi) Lesser wastage and reduced risks of
accidents: Proper training enables employees to
use resources in the most optimal manner and
operate machines with proper technical and
operating skills. This leads to lesser wastage of
resources and reduces risks of accidents.

(vii) Reduces absenteeism and employee

turnover: With effective training employees are
able to improve their performance. This gives
them job satisfaction and increases their
confidence. Satisfaction in work not only reduces
absenteeism but also keeps employees’ content
leading to reduced turnover.
(B) Benefits to the Employees
(i) Growth Opportunities: It upgrade employees’
knowledge, develop their skills and prepare them
for higher responsibilities. It enables employees
to take challenges and thus have better growth
opportunities.
(ii) Higher Income: It improves employees’ skills
and help them to manage activities effectively
leading to improved performance. This gives
opportunities to earn higher salaries.
(iii) Improves efficiency & reduces risks: It
helps employees to learn the most effective ways
of handling machines & jobs assigned to them. This
improves efficiency & reduces risks of accidents.
(iv) High morale and job satisfaction: Training
helps employees to complete the jobs assigned
to them in an effective manner. This increases
the job satisfaction and develops high morale
among employees.

(v) Makes new employees comfortable in new

environment: Training is a mode to familiarise
newly appointed employees not only with the
organisation but also helps them to acquire
knowledge and skills required to perform the
duties assigned to them. It helps new employees
to start their work without any hindrance.
 Training V/s Development
Basis Training Development
1. Concept Teaching technical skills Teaching technical, human &
only. conceptual skills.
2. Suitable for technical Suitable for managerial
Suitability staff. staff.
3. Nature Focuses on developing the Focuses on development of
skill already possessed by hidden qualities of the
the employees. employees.
4. Methods On the job methods. Off the job methods.
5. Purpose Focuses on present needs Focuses on present as well
of the organisation. as future needs of
6. Time Short term process. organisation.
7. Initiative Superior takes initiative to Long term process.
impart training to his Individual himself takes the
subordinates. initiative for this growth and
8. Duration Its duration is fixed & development.
9. Levels of certain. Its never ending procedure.
trainees Useful for non-managerial Useful for middle and top
involved or lower level of level managers.
 Training V/s Development V/s Education

Basis Training Education Development

1. Meaning It is imparting It improves the It is overall growth of
knowledge or skill for general knowledge & employee for future
performing a understanding of management tasks of
particular job. employee. increasing difficulty &
scope.
2. Orientation Job oriented. Knowledge oriented. Career oriented.
Focuses on developing
3. Focus Focuses on improving logical and rational Focuses on personality
work efficiency. mind. development of
employee.
Gives importance to Education gives It gives importance to
4. Goal organisational goal. importance to goal of organisational as well
individuals. as individuals goals.
 Methods of Training

1. On-the-job Training – It refer to the

methods that are used at the workplace, while
the employee is actually working.
● It means ‘learning while doing’.
● The trainees learn in the real working environment
and gain practical experience dealing with the tasks
and challenges during a normal working day.
● On the job methods do not have to incur any
additional cost or loose working time.
(a) Apprenticeship Programme/Training

● Under this, the trainee is placed under

supervision of an experienced person (master
worker) who imparts him necessary skills and
regulates his performance.
● The trainee is given stipend while learning so
he/she can enjoy "earn while you learn" scheme.
● This training requires a trainee to:
- Work under guidance of a master worker.
- Acquire the specifically designed higher
level of skills.
- Spend prescribed amount or additional time
to acquire skills.
(b) Internship

● Under this method, an educational institute

enters into agreement with industrial
enterprises for providing practical knowledge to
its students by sending them to business
organizations for gaining practical experience.
● It is adopted by professional or technical
organisations who prepare professionals for
managerial positions or technical experts.
● In short, we can say under internship the
class room sessions are backed with practical
training.
2. Off-the-job Training – These are

conducted at locations whi ch are speci fi cally

designed for such trainings.

● These locati ons may be near or away from

the work place.

● It means ‘l earning before doing’.

● Trai ni ng conduct ed away from work place

minimizes di stractions and allows trainees to

pay att ention t o learning.

● Thi s method of training is more suit able

for managerial job positions as conferences,

seminars are held to train t he managers.

(a) Vestibule Training

● Vestibule means duplicate model or special

training centres.
● It is a training technique which provides
employees an opportunity to learn jobs on the
equipment they will operate on actual work.
● Qualified instructors train the employees
under a carefully planned and controlled
learning conditions.
● This method is used when organisation has to
provide the same kind of training to a large
number of people at the same time.