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1576

Organizing Function / Line and Staff Organization

« on: April 25, 2012, 06:47:39 PM »

Line and staff organization is a modification of line organization and it is more complex than line organization. According to this administrative organization, specialized and supportive activities are attached to the line of command by appointing staff supervisors and staff specialists who are attached to the line authority. The power of command always remains with the line executives and staff supervisors guide, advice and council the line executives. Personal Secretary to the Managing Director is a staff official.
                         
                                                                     MANAGING DIRECTOR                                                                   
                                                                      ↓             ↓                    ↓
                                             Production Manager   Marketing Manager   Finance Manager
                                                           ↓                        ↓                              ↓
                                                Plant Supervisor        Market Supervisor     Chief Assisstant
                                                           ↓                       ↓                                 ↓
                                                      Foreman          Salesman                  Accountant
 

Features of Line and Staff Organization

    There are two types of staff :
        Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
        Staff Supervisor- Operation Control Manager, Quality Controller, PRO

    Line and Staff Organization is a compromise of line organization. It is more complex than line concern.
    Division of work and specialization takes place in line and staff organization.
    The whole organization is divided into different functional areas to which staff specialists are attached.
    Efficiency can be achieved through the features of specialization.

    There are two lines of authority which flow at one time in a concern :
        Line Authority
        Staff Authority
    Power of command remains with the line executive and staff serves only as counselors.


Merits of Line and Staff Organization

    Relief to line of executives- In a line and staff organization, the advice and counseling which is provided to the line executives divides the work between the two. The line executive can concentrate on the execution of plans and they get relieved of dividing their attention to many areas.

    Expert advice- The line and staff organization facilitates expert advice to the line executive at the time of need. The planning and investigation which is related to different matters can be done by the staff specialist and line officers can concentrate on execution of plans.

    Benefit of Specialization- Line and staff through division of whole concern into two types of authority divides the enterprise into parts and functional areas. This way every officer or official can concentrate in its own area.

    Better co-ordination- Line and staff organization through specialization is able to provide better decision making and concentration remains in few hands. This feature helps in bringing co- ordination in work as every official is concentrating in their own area.

    Benefits of Research and Development- Through the advice of specialized staff, the line executives, the line executives get time to execute plans by taking productive decisions which are helpful for a concern. This gives a wide scope to the line executive to bring innovations and go for research work in those areas. This is possible due to the presence of staff specialists.

    Training- Due to the presence of staff specialists and their expert advice serves as ground for training to line officials. Line executives can give due concentration to their decision making. This in itself is a training ground for them.
    Balanced decisions- The factor of specialization which is achieved by line staff helps in bringing co- ordination. This relationship automatically ends up the line official to take better and balanced decision.

    Unity of action- Unity of action is a result of unified control. Control and its effectivity take place when co- ordination is present in the concern. In the line and staff authority all the officials have got independence to make decisions. This serves as effective control in the whole enterprise.

Demerits of Line and Staff Organization

    Lack of understanding- In a line and staff organization, there are two authority flowing at one time. This results in the confusion between the two. As a result, the workers are not able to understand as to who is their commanding authority. Hence the problem of understanding can be a hurdle in effective running.

    Lack of sound advice- The line official get used to the expertise advice of the staff. At times the staff specialist also provide wrong decisions which the line executive have to consider. This can affect the efficient running of the enterprise.

    Line and staff conflicts- Line and staff are two authorities which are flowing at the same time. The factors of designations, status influence sentiments which are related to their relation, can pose a distress on the minds of the employees. This leads to minimizing of co- ordination which hampers a concern’s working.

    Costly- In line and staff concern, the concerns have to maintain the high remuneration of staff specialist. This proves to be costly for a concern with limited finance.

    Assumption of authority- The power of concern is with the line official but the staff dislikes it as they are the one more in mental work.

    Staff steals the show- In a line and staff concern, the higher returns are considered to be a product of staff advice and counseling. The line officials feel dissatisfied and a feeling of distress enters a concern. The satisfaction of line officials is very important for effective results.

1577

Organizing Function / Functional Organization

« on: April 25, 2012, 06:41:39 PM »

   

Functional organization has been divided to put the specialists in the top position throughout the enterprise. This is an organization in which we can define as a system in which functional department are created to deal with the problems of business at various levels. Functional authority remains confined to functional guidance to different departments. This helps in maintaining quality and uniformity of performance of different functions throughout the enterprise.

The concept of Functional organization was suggested by F.W. Taylor who recommended the appointment of specialists at important positions. For example, the functional head and Marketing Director directs the subordinates throughout the organization in his particular area. This means that subordinates receives orders from several specialists, managers working above them.

Features of Functional Organization

    The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations.

    Complex form of administrative organization compared to the other two.

    Three authorities exist- Line, staff and function.

    Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise.

    Principle of unity of command does not apply to such organization as it is present in line organization.

Merits of Functional Organization

    Specialization- Better division of labour takes place which results in specialization of function and it’s consequent benefit.
    Effective Control- Management control is simplified as the mental functions are separated from manual functions. Checks and balances keep the authority within certain limits. Specialists may be asked to judge the performance of various sections.
    Efficiency- Greater efficiency is achieved because of every function performing a limited number of functions.
    Economy- Specialization compiled with standardization facilitates maximum production and economical costs.
    Expansion- Expert knowledge of functional manager facilitates better control and supervision.

Demerits of Functional Organization

    Confusion- The functional system is quite complicated to put into operation, especially when it is carried out at low levels. Therefore, co- ordination becomes difficult.

    Lack of Co- ordination- Disciplinary control becomes weak as a worker is commanded not by one person but a large number of people. Thus, there is no unity of command.

    Difficulty in fixing responsibility- Because of multiple authority, it is difficult to fix responsibility.

    Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not agree on certain issues.

    Costly- Maintainance of specialist’s staff of the highest order is expensive for a concern.

1578

Organizing Function / Delegation of Authority

« on: April 25, 2012, 06:40:14 PM »

A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should delegate authority. Delegation of Authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.

Elements of Delegation

    Authority - in context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to take decisions and to give orders so as to achieve the organizational objectives. Authority must be well- defined. All people who have the authority should know what is the scope of their authority is and they shouldn’t misutilize it. Authority is the right to give commands, orders and get the things done. The top level management has greatest authority. Authority always flows from top to bottom. It explains how a superior gets work done from his subordinate by clearly explaining what is expected of him and how he should go about it. Authority should be accompanied with an equal amount of responsibility. Delegating the authority to someone else doesn’t imply escaping from accountability. Accountability still rest with the person having the utmost authority.

   
    Responsibility - is the duty of the person to complete the task assigned to him. A person who is given the responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks for which he was held responsible are not completed, then he should not give explanations or excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among the person. Responsibility flows from bottom to top. The middle level and lower level management holds more responsibility. The person held responsible for a job is answerable for it. If he performs the tasks assigned as expected, he is bound for praises. While if he doesn’t accomplish tasks assigned as expected, then also he is answerable for that.

    Accountability - means giving explanations for any variance in the actual performance from the expectations set. Accountability can not be delegated. For example, if ’A’ is given a task with sufficient authority, and ’A’ delegates this task to B and asks him to ensure that task is done well, responsibility rest with ’B’, but accountability still rest with ’A’. The top level management is most accountable. Being accountable means being innovative as the person will think beyond his scope of job. Accountability, in short, means being answerable for the end result. Accountability can’t be escaped. It arises from responsibility.

For achieving delegation, a manager has to work in a system and has to perform following steps : -

    Assignment of tasks and duties

    Granting of authority

    Creating responsibility and accountability

Delegation of authority is the base of superior-subordinate relationship, it involves following steps:-

    Assignment of Duties - The delegator first tries to define the task and duties to the subordinate. He also has to define the result expected from the subordinates. Clarity of duty as well as result expected has to be the first step in delegation.

    Granting of authority - Subdivision of authority takes place when a superior divides and shares his authority with the subordinate. It is for this reason, every subordinate should be given enough independence to carry the task given to him by his superiors. The managers at all levels delegate authority and power which is attached to their job positions. The subdivision of powers is very important to get effective results.

    Creating Responsibility and Accountability - The delegation process does not end once powers are granted to the subordinates. They at the same time have to be obligatory towards the duties assigned to them. Responsibility is said to be the factor or obligation of an individual to carry out his duties in best of his ability as per the directions of superior. Responsibility is very important. Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is absolute and cannot be shifted. Accountability, on the others hand, is the obligation of the individual to carry out his duties as per the standards of performance. Therefore, it is said that authority is delegated, responsibility is created and accountability is imposed. Accountability arises out of responsibility and responsibility arises out of authority. Therefore, it becomes important that with every authority position an equal and opposite responsibility should be attached.

Therefore every manager,i.e.,the delegator has to follow a system to finish up the delegation process. Equally important is the delegatee’s role which means his responsibility and accountability is attached with the authority over to here.
   

1579

Organizing Function / Importance of Delegation

« on: April 25, 2012, 06:38:48 PM »

Delegation of authority is a process in which the authority and powers are divided and shared amongst the subordinates. When the work of a manager gets beyond his capacity, there should be some system of sharing the work. This is how delegation of authority becomes an important tool in organization function. Through delegation, a manager, in fact, is multiplying himself by dividing/multiplying his work with the subordinates. The importance of delegation can be justified by -

    Through delegation, a manager is able to divide the work and allocate it to the subordinates. This helps in reducing his work load so that he can work on important areas such as - planning, business analysis etc.

    With the reduction of load on superior, he can concentrate his energy on important and critical issues of concern. This way he is able to bring effectiveness in his work as well in the work unit. This effectivity helps a manager to prove his ability and skills in the best manner.

   

    Delegation of authority is the ground on which the superior-subordinate relationship stands. An organization functions as the authority flows from top level to bottom. This in fact shows that through delegation, the superior-subordinate relationship become meaningful. The flow of authority is from top to bottom which is a way of achieving results.

    Delegation of authority in a way gives enough room and space to the subordinates to flourish their abilities and skill. Through delegating powers, the subordinates get a feeling of importance. They get motivated to work and this motivation provides appropriate results to a concern. Job satisfaction is an important criterion to bring stability and soundness in the relationship between superior and subordinates. Delegation also helps in breaking the monotony of the subordinates so that they can be more creative and efficient. Delegation of authority is not only helpful to the subordinates but it also helps the managers to develop their talents and skills. Since the manager get enough time through delegation to concentrate on important issues, their decision-making gets strong and in a way they can flourish the talents which are required in a manager. Through granting powers and getting the work done, helps the manager to attain communication skills, supervision and guidance, effective motivation and the leadership traits are flourished. Therefore it is only through delegation, a manager can be tested on his traits.

    Delegation of authority is help to both superior and subordinates. This, in a way, gives stability to a concern’s working. With effective results, a concern can think of creating more departments and divisions flow working. This will require creation of more managers which can be fulfilled by shifting the experienced, skilled managers to these positions. This helps in both virtual as well as horizontal growth which is very important for a concern’s stability.

Therefore, from the above points, we can justify that delegation is not just a process but it is a way by which manager multiples himself and is able to bring stability, ability and soundness to a concern.

1580

Organizing Function / Principles of Delegation

« on: April 25, 2012, 06:37:57 PM »

There are a few guidelines in form of principles which can be a help to the manager to process of delegation. The principles of delegation are as follows: -

    Principle of result excepted- suggests that every manager before delegating the powers to the subordinate should be able to clearly define the goals as well as results expected from them. The goals and targets should be completely and clearly defined and the standards of performance should also be notified clearly. For example, a marketing manager explains the salesmen regarding the units of sale to take place in a particular day, say ten units a day have to be the target sales. While a marketing manger provides these guidelines of sales, mentioning the target sales is very important so that the salesman can perform his duty efficiently with a clear set of mind.

    Principle of Parity of Authority and Responsibility- According to this principle, the manager should keep a balance between authority and responsibility. Both of them should go hand in hand.

   

    According to this principle, if a subordinate is given a responsibility to perform a task, then at the same time he should be given enough independence and power to carry out that task effectively. This principle also does not provide excessive authority to the subordinate which at times can be misused by him. The authority should be given in such a way which matches the task given to him. Therefore, there should be no degree of disparity between the two.

    Principle of absolute responsibility- This says that the authority can be delegated but responsibility cannot be delegated by managers to his subordinates which means responsibility is fixed. The manager at every level, no matter what is his authority, is always responsible to his superior for carrying out his task by delegating the powers. It does not means that he can escape from his responsibility. He will always remain responsible till the completion of task. Every superior is responsible for the acts of their subordinates and are accountable to their superior therefore the superiors cannot pass the blame to the subordinates even if he has delegated certain powers to subordinates example if the production manager has been given a work and the machine breaks down. If repairmen is not able to get repair work done, production manager will be responsible to CEO if their production is not completed.

    Principle of Authority level- This principle suggests that a manager should exercise his authority within the jurisdiction / framework given. The manager should be forced to consult their superiors with those matters of which the authority is not given that means before a manager takes any important decision, he should make sure that he has the authority to do that on the other hand, subordinate should also not frequently go with regards to their complaints as well as suggestions to their superior if they are not asked to do. This principle emphasizes on the degree of authority and the level upto which it has to be maintained.

1581

Organizing Function / Centralization and Decentralization

« on: April 25, 2012, 06:37:04 PM »

Centralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. According to Allen, “Centralization” is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be :-

    Reservation of decision making power at top level.
    Reservation of operating authority with the middle level managers.
    Reservation of operation at lower level at the directions of the top level.

Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. For example, in a business concern, the father & son being the owners decide about the important matters and all the rest of functions
like product, finance, marketing, personnel, are carried out by the department heads and they have to act as per instruction and orders of the two people. Therefore in this case, decision making power remain in the hands of father & son.
On the other hand, Decentralization is a systematic delegation of authority at all levels of management and in all of the organization. In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern. Rest of the authority may be delegated to the middle level and lower level of management.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the lowest level. According to Allen, “Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points.

Decentralization is not the same as delegation. In fact, decentralization is all extension of delegation. Decentralization pattern is wider is scope and the authorities are diffused to the lowest most level of management. Delegation of authority is a complete process and takes place from one person to another. While decentralization is complete only when fullest possible delegation has taken place. For example, the general manager of a company is responsible for receiving the leave application for the whole of the concern. The general manager delegates this work to the personnel manager who is now responsible for receiving the leave applicants. In this situation delegation of authority has taken place. On the other hand, on the request of the personnel manager, if the general manager delegates this power to all the departmental heads at all level, in this situation decentralization has taken place. There is a saying that “Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization”. Decentralization is wider in scope and the subordinate’s responsibility increase in this case. On the other hand, in delegation the managers remain answerable even for the acts of subordinates to their superiors.
Implications of Decentralization

    There is less burden on the Chief Executive as in the case of centralization.
    In decentralization, the subordinates get a chance to decide and act independently which develops skills and capabilities. This way the organization is able to process reserve of talents in it.
    In decentralization, diversification and horizontal can be easily implanted.
    In decentralization, concern diversification of activities can place effectively since there is more scope for creating new departments. Therefore, diversification growth is of a degree.
    In decentralization structure, operations can be coordinated at divisional level which is not possible in the centralization set up.
    In the case of decentralization structure, there is greater motivation and morale of the employees since they get more independence to act and decide.

    In a decentralization structure, co-ordination to some extent is difficult to maintain as there are lot many department divisions and authority is delegated to maximum possible extent, i.e., to the bottom most level delegation reaches. Centralization and decentralization are the categories by which the pattern of authority relationships became clear. The degree of centralization and de-centralization can be affected by many factors like nature of operation, volume of profits, number of departments, size of a concern, etc. The larger the size of a concern, a decentralization set up is suitable in it.

1582

Organizing Function / Delegation and Decentralization

« on: April 25, 2012, 06:35:47 PM »

Please click this link

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1583

Planning Function / Planning Function of Management

« on: April 25, 2012, 06:21:29 PM »

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur”.

Steps in Planning Function

Planning function of management involves following steps:-

    Establishment of objectives

        Planning requires a systematic approach.
        Planning starts with the setting of goals and objectives to be achieved.
        Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
        Moreover objectives focus the attention of managers on the end results to be achieved.
        As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
        As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager.
        Such goals should be specified in qualitative terms.
        Hence objectives should be practical, acceptable, workable and achievable.

    Establishment of Planning Premises

        Planning premises are the assumptions about the lively shape of events in future.
        They serve as a basis of planning.
        Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.
        It is to find out what obstacles are there in the way of business during the course of operations.
        Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
        Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.
        Internal premises are controllable whereas external are non- controllable.

    Choice of alternative course of action

        When forecast are available and premises are established, a number of alternative course of actions have to be considered.
        For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.
        The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
        After objective and scientific evaluation, the best alternative is chosen.
        The planners should take help of various quantitative techniques to judge the stability of an alternative.

    Formulation of derivative plans

        Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
        Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.
        These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
        Derivative plans indicate time schedule and sequence of accomplishing various tasks.

    Securing Co-operation

        After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.
        The purposes behind taking them into confidence are :-
            Subordinates may feel motivated since they are involved in decision making process.
            The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
            Also the employees will be more interested in the execution of these plans.

    Follow up/Appraisal of plans

        After choosing a particular course of action, it is put into action.
        After the selected plan is implemented, it is important to appraise its effectiveness.
        This is done on the basis of feedback or information received from departments or persons concerned.
        This enables the management to correct deviations or modify the plan.
        This step establishes a link between planning and controlling function.
        The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.

1584

Planning Function / Characteristics of Planning

« on: April 25, 2012, 06:19:59 PM »

           

    Planning is goal-oriented.

        Planning is made to achieve desired objective of business.
        The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
        Planning identifies the action that would lead to desired goals quickly & economically.
        It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching diesel models.

    Planning is looking ahead.

        Planning is done for future.
        It requires peeping in future, analyzing it and predicting it.
        Thus planning is based on forecasting.
        A plan is a synthesis of forecast.
        It is a mental predisposition for things to happen in future.

    Planning is an intellectual process.

        Planning is a mental exercise involving creative thinking, sound judgement and imagination.
        It is not a mere guesswork but a rotational thinking.
        A manager can prepare sound plans only if he has sound judgement, foresight and imagination.
        Planning is always based on goals, facts and considered estimates.

    Planning involves choice & decision making.

        Planning essentially involves choice among various alternatives.
        Therefore, if there is only one possible course of action, there is no need planning because there is no choice.
        Thus, decision making is an integral part of planning.
        A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

    Planning is the primary function of management / Primacy of Planning.

        Planning lays foundation for other functions of management.
        It serves as a guide for organizing, staffing, directing and controlling.
        All the functions of management are performed within the framework of plans laid out.
        Therefore planning is the basic or fundamental function of management.

    Planning is a Continuous Process.

        Planning is a never ending function due to the dynamic business environment.
        Plans are also prepared for specific period f time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.
        Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to be tackled by planning effectively.

    Planning is all Pervasive.

        It is required at all levels of management and in all departments of enterprise.
        Of course, the scope of planning may differ from one level to another.
        The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same.

    Planning is designed for efficiency.

        Planning leads to accompishment of objectives at the minimum possible cost.
        It avoids wastage of resources and ensures adequate and optimum utilization of resources.
        A plan is worthless or useless if it does not value the cost incurred on it.
        Therefore planning must lead to saving of time, effort and money.
        Planning leads to proper utilization of men, money, materials, methods and machines.

    Planning is Flexible.

        Planning is done for the future.
        Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt. policies etc.
        Under changed circumstances, the original plan of action must be revised and updated to male it more practical.

1585

Planning Function / Advantages of Planning

« on: April 25, 2012, 06:18:06 PM »

         

    Planning facilitates management by objectives.

        Planning begins with determination of objectives.
        It highlights the purposes for which various activities are to be undertaken.
        In fact, it makes objectives more clear and specific.
        Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
        Without planning an organization has no guide.
        Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives.
        Therefore, planning brings order and rationality into the organization.

    Planning minimizes uncertainties.

        Business is full of uncertainties.
        There are risks of various types due to uncertainties.
        Planning helps in reducing uncertainties of future as it involves anticipation of future events.
        Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.
        Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.

    Planning facilitates co-ordination.

        Planning revolves around organizational goals.
        All activities are directed towards common goals.
        There is an integrated effort throughout the enterprise in various departments and groups.
        It avoids duplication of efforts. In other words, it leads to better co-ordination.
        It helps in finding out problems of work performance and aims at rectifying the same.

    Planning improves employee’s moral.

        Planning creates an atmosphere of order and discipline in organization.
        Employees know in advance what is expected of them and therefore conformity can be achieved easily.
        This encourages employees to show their best and also earn reward for the same.
        Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.

    Planning helps in achieving economies.

        Effective planning secures economy since it leads to orderly allocation ofresources to various operations.
        It also facilitates optimum utilization of resources which brings economy in operations.
        It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At the same time it ensures regular supply for the production department, that is, overall efficiency.

    Planning facilitates controlling.

        Planning facilitates existence of certain planned goals and standard of performance.
        It provides basis of controlling.
        We cannot think of an effective system of controlling without existence of well thought out plans.
        Planning provides pre-determined goals against which actual performance is compared.
        In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.

    Planning provides competitive edge.

        Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.
        With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges.
        Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved.

    Planning encourages innovations.

        In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.
        Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.

1586

Planning Function / Disadvantages of Planning

« on: April 25, 2012, 06:16:41 PM »

       
             
Internal Limitations

There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.

    Rigidity

        Planning has tendency to make administration inflexible.
        Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
        There is no scope for individual freedom.
        The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
        Planning therefore introduces inelasticity and discourages individual initiative and experimentation.

    Misdirected Planning

        Planning may be used to serve individual interests rather than the interest of the enterprise.
        Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
        Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.

    Time consuming

        Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
        Therefore planning is not suitable during emergency or crisis when quick decisions are required.

    Probability in planning

        Planning is based on forecasts which are mere estimates about future.
        These estimates may prove to be inexact due to the uncertainty of future.
        Any change in the anticipated situation may render plans ineffective.
        Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
        Thus, excessive reliance on plans may prove to be fatal.

    False sense of security

        Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
        Managers assume that as long as they work as per plans, it is satisfactory.
        Therefore they fail to take up timely actions and an opportunity is lost.
        Employees are more concerned about fulfillment of plan performance rather than any kind of change.

    Expensive

        Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
        According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’

External Limitations of Planning

    Political Climate- Change of government from Congress to some other political party, etc.
    Labour Union- Strikes, lockouts, agitations.
    Technological changes- Modern techniques and equipments, computerization.
    Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
    Natural Calamities- Earthquakes and floods.
    Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.

1587

Employee Retention / Employee Retention

« on: April 25, 2012, 06:03:15 PM »

     
             
What is an Organization ?

A set up where individuals come together and work in unison to achieve a common goal is called as organization. Individuals working together in an organization to earn their bread and butter as well as make profits are called employees. Employees are the lifeline of an organization and contribute effectively to its successful running and profit making.

An organization can’t survive if the employees are not serious about it and are more concerned about their personal interests.

What is Employee Retention ?

Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time.
   
Why do Employees Leave ?

Research says that most of the employees leave an organization out of frustration and constant friction with their superiors or other team members. In some cases low salary, lack of growth prospects and motivation compel an employee to look for a change. The management must try its level best to retain those employees who are really important for the system and are known to be effective contributors.

It is the responsibility of the line managers as well as the management to ensure that the employees are satisfied with their roles and responsibilities and the job is offering them a new challenge and learning every day.

Let us understand the concept of employee retention with the help of an example:

Misha was a talented employee who delivered her best and completed all her work within the desired time frame. Her work lacked errors and was always found to be innovative and thought provoking. She never interfered in anybody else’s work and stayed away from unnecessary gossips and rumours. She avoided loitering around at the workplace, was serious about her work and no doubts her performance was always appreciable. Greg, her immediate boss never really liked Misha and considered her as his biggest threat at the workplace. He left no stone unturned to insult and demotivate Misha. Soon, Misha got fed up with Greg and decided to move on.

Situation 1 - The HR did not make any efforts to retain Misha and accepted her resignation.

Situation 2 - The HR immediately intervened and discussed the several issues which prompted Misha to think for a change. They tried their level best to convince Misha and even appointed a new boss to make the things better for her.

Situation 1 would most likely leave the organization in the lurch. It is not easy to find an employee who gels well with the system and understands the work. Hiring an employee, training him and making him fit to work in an organization incur huge costs and thus sincere efforts must be made to retain the employee. Every problem has a solution and the management must probe into the exact reasons of an employee’s displeasure. Employees sticking to an organization for a longer time tend to know the organization better and develop a feeling of attachment towards it. The employees who stay for a longer duration are familiar with the company policies, guidelines as well as rules and regulations and thus can contribute more effectively than individuals who come and go.

Employee retention techniques go a long way in motivating the employees for them to enjoy their work and avoid changing jobs frequently.

1588

Employee Retention / Need & Importance of Employee Retention

« on: April 25, 2012, 06:02:20 PM »

Employee Retention refers to the techniques employed by the management to help the employees stay with the organization for a longer period of time. Employee retention strategies go a long way in motivating the employees so that they stick to the organization for the maximum time and contribute effectively. Sincere efforts must be taken to ensure growth and learning for the employees in their current assignments and for them to enjoy their work.

Employee retention has become a major concern for corporates in the current scenario. Individuals once being trained have a tendency to move to other organizations for better prospects. Lucrative salary, comfortable timings, better ambience, growth prospects are some of the factors which prompt an employee to look for a change. Whenever a talented employee expresses his willingness to move on, it is the responsibility of the management and the human resource team to intervene immediately and find out the exact reasons leading to the decision.
   
Need & Importance of Employee Retention

Let us understand why retaining a valuable employee is essential for an organization.

    Hiring is not an easy process: The HR Professional shortlists few individuals from a large pool of talent, conducts preliminary interviews and eventually forwards it to the respective line managers who further grill them to judge whether they are fit for the organization or not. Recruiting the right candidate is a time consuming process.

    An organization invests time and money in grooming an individual and make him ready to work and understand the corporate culture: A new joinee is completely raw and the management really has to work hard to train him for his overall development. It is a complete wastage of time and money when an individual leaves an organization all of a sudden. The HR has to start the recruitment process all over again for the same vacancy; a mere duplication of work. Finding a right employee for an organization is a tedious job and all efforts simply go waste when the employee leaves.

    When an individual resigns from his present organization, it is more likely that he would join the competitors: In such cases, employees tend to take all the strategies, policies from the current organization to the new one. Individuals take all the important data, information and statistics to their new organization and in some cases even leak the secrets of the previous organization. To avoid such cases, it is essential that the new joinee is made to sign a document which stops him from passing on any information even if he leaves the organization. Strict policy should be made which prevents the employees to join the competitors. This is an effective way to retain the employees.

    The employees working for a longer period of time are more familiar with the company’s policies, guidelines and thus they adjust better: They perform better than individuals who change jobs frequently. Employees who spend a considerable time in an organization know the organization in and out and thus are in a position to contribute effectively.

    Every individual needs time to adjust with others: One needs time to know his team members well, be friendly with them and eventually trust them. Organizations are always benefited when the employees are compatible with each other and discuss things among themselves to come out with something beneficial for all. When a new individual replaces an existing employee, adjustment problems crop up. Individuals find it really difficult to establish a comfort level with the other person. After striking a rapport with an existing employee, it is a challenge for the employees to adjust with someone new and most importantly trust him. It is a human tendency to compare a new joinee with the previous employees and always find faults in him.

    It has been observed that individuals sticking to an organization for a longer span are more loyal towards the management and the organization: They enjoy all kinds of benefits from the organization and as a result are more attached to it. They hardly badmouth their organization and always think in favour of the management. For them the organization comes first and all other things later.

    It is essential for the organization to retain the valuable employees showing potential: Every organization needs hardworking and talented employees who can really come out with something creative and different. No organization can survive if all the top performers quit. It is essential for the organization to retain those employees who really work hard and are indispensable for the system.

The management must understand the difference between a valuable employee and an employee who doesn’t contribute much to the organization. Sincere efforts must be made to encourage the employees so that they stay happy in the current organization and do not look for a change.

1589

Employee Retention / Employee Retention Strategies

« on: April 25, 2012, 06:00:56 PM »

         

For an organization to do well and earn profits it is essential that the high potential employees stick to it for a longer duration and contribute effectively. The employees who spend a considerable amount of time tend to be loyal and committed towards the management and always decide in favour of the organization. When you meet someone, there is hardly any attachment in the beginning, but as the friendship matures, a sense of loyalty and trust develops. In the same way, when an individual spends a good amount of time in an organization, he gets emotionally bonded to it and strives hard for furthering the brand image of the organization.

The management can’t completely put a full stop to the process of employees quitting their jobs but can control it to a large extent.

Let us go through some strategies to retain an individual:
   

    An employee looks for a change when his job becomes monotonous and does not offer anything new. It is essential for everyone to enjoy whatever he does. The responsibilities must be delegated according to the individual’s specialization and interests. It is the responsibility of the team leader to assign challenging work to his team members for them to enjoy work and do not treat it as a burden. Performance reviews are important to find out whether the employees are really happy with their work or not.

    Constant disputes among employees encourage them to go for a change. Conflicts must be avoided to maintain the decorum of the place and avoid spreading negativity around. Promote activities which bring the employees closer. Organize outdoor picnics, informal get together for the employees to know each other better and strengthen the bond among themselves. Let them make friends at the workplace whom they can really trust. Friendship among employees is one strong factor which helps to retain employees. Individuals who have reliable friends at the workplace are reluctant to move on for the sake of friendship. No one likes to leave an organization where he gets mental peace. It is essential to have a cordial environment at the workplace.

    The human resource department must ensure that it is hiring the right candidate. Frustration crops up whenever there is a mismatch. A finance professional if is hired for a marketing profile would definitely end up being frustrated and look for a change. The right candidate must be hired for the right profile. While recruiting a new candidate, one should also check his track record. An individual who has changed his previous jobs frequently would also not stick to the present one and thus should not be hired.

    Employee recognition is one of the most important factors which go a long way in retaining employees. Nothing works better than appreciating the employees. Their hard work must be acknowledged. Monetary benefits such as incentives, perks, cash prize also motivate the employees to a large extent and they prefer sticking to the organization. The performers must have an upper edge and should get a special treatment from the management.

    Performance appraisals are also important for an employee to stay motivated and avoid looking for a change. The salary hike should be directly proportional to the hard work put by the employees. Partiality must be avoided as it demotivates the talented ones and prompt them to look for a better opportunity.

    The salary of the employees must be discussed at the time of the interview. The components of the salary must be transparent and thoroughly discussed with the individuals at the time of joining to avoid confusions later. The individuals should be made to join only when the salary as well as other terms and conditions are acceptable to them.

    The company’s rules and regulations should be made to benefit the employees. They should be employee friendly. Allow them to take a leave on their birthdays or come a little late once or twice in a month. It is important for the management to understand the employees to gain their trust and confidence. The consistent performers must also have a say in the company’s decisions for them to feel important.

1590

Employee Retention / Role of Motivation in Employee Retention

« on: April 25, 2012, 06:00:13 PM »

Employee retention involves various steps taken to retain an employee who wishes to move on. An employee must find his job challenging and as per his interest to excel at work and stay with the organization for a longer period of time. The management plays an important role in retaining the talented employees who are familiar with the working conditions of the organization and thus perform better than the employees who just come and go.

Motivation plays an important role in employee satisfaction and eventually employee retention.

Nothing works better than motivation. Motivation acts as a catalyst to an individual’s success. The team leaders and the managers must constantly motivate the employees to extract the best out of them. If an employee has performed exceptionally well, do appreciate him. Simple words like “Well done”,“Bravo”,“Good”,“Keep it up” actually go a long way in motivating the employees. The top performers must be in the limelight. The employees must feel indispensable for the organization. It is essential for the employees to be loyal towards their organization to deliver their level best.
   

Does anyone spoil his personal belongings? No. The reason being we are concerned about our own stuff. In the same way a sense of belonging at workplace is important for better output. Ownership of work only comes through motivation. Ask the team members to buck up so that they perform well every time and meet the expectations of the management.

The superiors should send motivational emails to their team once in a week. Display inspirational posters, photographs on the notice board for the employees to read and stay motivated. It is natural for an individual to feel low sometimes, but the superiors must ensure to boost their morale and bring them back on track. No individual should be neglected or criticized. This demotivates them. If they fail to perform once, motivate them and give them another opportunity.

Organize various activities and events at the workplace. Ask each one to take charge of something or the other. Engage the employees in productive tasks necessary for their overall development. The management must show its care and concern for all the staff members. The employees must feel secure at the workplace for them to stay motivated.

Whenever any company policy is to be formulated, the opinion of each and every employee should be taken into consideration.

Invite all of them on a common platform and ask for their suggestions as well. Freedom of expression is must. Every employee must have a say in the organization’s guidelines as they are made only to benefit them.

Incentives, perks, cash prizes are a good way to motivate the employees. The employees who have performed well consistently should be felicitated in front of all the staff members as well as the management. Give them trophies or badges to flaunt. Ask the audience to give a loud applause to the employees who have performed well. This is a good way to motivate the employees for them to remain happy and work with dedication for a longer duration. Others who have not performed up to the mark also gear up for future. The names of the top performers must be put on the company’s main notice board or bulletin board for everyone to see.

Appraisals are also an important way to motivate the employees. The salaries of the performers must be appraised at regular intervals- an effective way to retain the employees. Career growth is an important way to retain the talented employees. Give them power to take some decisions on their own but the management must have a close watch on them so that they do not misuse their power.

Without motivation, it is not fair to expect the best out of the employees. No individual likes to leave an organization where he is being treated well.