2.

BPR

Proper execution of Business Process Reengineering can be a game-changer to any

business.

If properly handled, it can perform miracles on a failing or stagnating company, increasing the
profits and driving growth.

Business process reengineering, however, is not the easiest concept to grasp. It involves
enforcing change in an organization – tearing down something people are used to and creating
something now.

And that’s not an easy task.

Jump to any section

 So, What is Business Process Reengineering?

 Business Process Reengineering Steps
o Step #1: Identity and Communicating the Need for Change
 Risk of Failure: Not Getting Buy-In From The Company
o Step #2: Put Together a Team of Experts
 Risk of Failure: Not Putting The Right Team Together
o Step #3: Find the Inefficient Processes and Define Key Performance Indicators (KPI)
 Risk of Failure: Inability to Properly Analyze Processes
o Step #4: Reengineer the processes and Compare KPIs
 Business Process Reengineering Examples
o BPR Examples: Ford Motors

So, What is Business Process Reengineering?

Business process reengineering is the act of recreating a core business process with the goal of
improving product output, quality, or reducing costs.

Typically, it involves the analysis of company workflows, finding processes that are sub-par or
inefficient, and figuring out ways to get rid of them or change them.

Business process reengineering became popular in the business world in the 1990s, inspired
by an article called Reengineering Work: Don’t Automate, Obliterate which was published in the
Harvard Business review by Michael Hammer.

His position was that too many businesses were using new technologies
to automatefundamentally ineffective processes, as opposed to creating something different,
something that is built on new technologies.
Think, using technology to “upgrade” a horse with lighter horseshoes which make them faster,
as opposed to just building a car.

In the decades since, BPR has continued to be used by businesses as an alternative

to business process management (automating or reusing existing processes), which has largely
superseded it in popularity.

And with the pace of technological change faster than ever before, BPR is a lot more relevant
than ever before.

Business Process Reengineering Steps

As we’ve mentioned before, business process reengineering is no easy task.

Unlike business process management or improvement, both of which focus on working with
existing processes, BPR means changing the said processes fundamentally.

This can be extremely time-consuming, expensive and risky. Unless you manage to carry out
each of the steps successfully, your attempts at change might fail.

Step #1: Identity and Communicating the Need for Change

If you’re a small startup, this can be a piece of cake. You realize that your product has a high
user drop-off rate, send off a text to your co-founder, and suggest a direction to pivot.

For a corporation, however, it can be a lot harder. There will always be individuals who are
happy with things as they are, both from the side of management and employees. The first
might be afraid that it might be a sunk investment, the later for their job security.

So, you’ll need to convince them why making the change is essential for the company. If the
company is not doing well, this shouldn’t be too hard.

In some cases, however, the issue is with the company not doing as well as it could be.
Meaning, you should do your research. Which processes might not be working? Is your
competition doing better than you in some regards? Worse?

Once you have all the information, you’ll need to come up with a very comprehensive plan,
involving leaders from different departments. The management will have to play the role of
salespeople: conveying the grand vision of change, showing how it’ll affect even the lowest-
ranked employee positively.

Risk of Failure: Not Getting Buy-In From The Company

If you fail to do this, however, your business process reengineering efforts might be destined
to fail long before they even start.

Business Process Re-Engineering can seriously impact on everyone in the company, and
sometimes this can appear to be a negative change for some. Some employees might, for
 example, think you’ll let them all go if you find a better way to function (which is a real
possibility).

In such cases, even if the management is on board, the initiative might fail because the
employees aren’t engaged.

Usually, it’s possible to get the employees buy-in by motivating them or showing them different
views they weren’t aware of. Sometimes, however, the lack of employee engagement might be
because of a bad workplace culture – something that might need to be dealt with before starting
any BPR initiatives.

Getting your employee to commit to change isn’t easy. There are a bunch of change management
models that help you accomplish this, though. Some of our favorites include the ADKAR
Model and Bridge’s Transition Model.

Step #2: Put Together a Team of Experts

As with any other project, business process reengineering needs a team of highly skilled,
motivated people who will carry out the needed steps.

In most cases, the team consists of:

 Senior Manager. When it comes to making a major change, you need the supervision of
someone who can call the shots. If a BPR team doesn’t have someone from the senior
management, they’ll have to get in touch with them for every minor change.
 Operational Manager. As a given, you’ll need someone who knows the ins-and-outs of the
process – and that’s where the operational manager comes in. They’ve worked with the
process(es) and can contribute with their vast knowledge.
 Reengineering Experts. Finally, you’ll need the right engineers. Reengineering processes
might need expertise from a number of different fields, anything from IT to manufacturing. While
it usually varies case by case, the right change might be anything – hardware, software,
workflows, etc.

Risk of Failure: Not Putting The Right Team Together

There are a lot of different ways to mess this one up.

If the team consists of individuals with a similar viewpoint and agenda, for example, they might
not be able to properly diagnose the problems/solutions.

Or, the team might involve too many or too few people. In the first case, the decision making
might be slowed down due to conflicting viewpoints. In the later, there might not be enough
experts in certain fields to create adequate solutions.

It’s hard to put all that down as a framework, as it depends on the project itself. There is one
thing, however, that benefits every BPR team: having a team full of people who are enthusiastic
(and yet unbiased), positive and passionate about making a difference.
 Step #3: Find the Inefficient Processes and Define Key Performance Indicators (KPI)

Once you have the team ready and about to kick-off the initiative, you’ll need to define the
right KPIs. You don’t want to adapt to a new process and THEN realize that you didn’t keep
some expenses in mind – the idea of BPR is to optimize, not the other way around.

While KPIs usually vary depending on what process you’re optimizing, the following can be very
typical:

 Manufacturing
o Cycle Time – The time spent from the beginning to the end of a process
o Changeover Time – Time needed to switch the line from making one product to the next
o Defect Rate – Percentage of products manufactured defective
o Inventory Turnover – How long it takes for the manufacturing line to turn inventory into
products
o Planned VS Emergency Maintenance – The ratio of the times planned maintenance and
emergency maintenance happen
 IT
o Mean Time to Repair – Average time needed to repair the system / software / app after an
emergency
o Support Ticket Closure rate – Number of support tickets closed by the support team
divided by the number opened
o Application Dev. – The time needed to fully develop a new application from scratch
o Cycle Time – The time needed to get the network back up after a security breach
Once you have the exact KPIs defined, you’ll need to go after the individual processes. The
easiest way to do this is to do business process mapping. While it can be hard to analyze
processes as a concept, it’s a lot easier if you have everything written down step by step.

This is where the operational manager comes in handy – they make it marginally easier to
define and analyze the processes.

Usually, there are 2 ways to map out processes:

 Process Flowcharts – the most basic way to work with processes is through flowcharts. Grab a
pen and paper and write down the processes step by step.
 Business Process Management Software – if you’re more tech-savvy, using software for
process analysis can make everything a lot easier. You can use Tallyfy, for example, to digitize
your processes, set deadlines, etc. Simply using such software might end up optimizing the said
processes as it allows for easier collaboration between the employees.
Want to get started with BPMS, but not sure how? Our guide to different BPM tools (and their distinct
features) is as good of a start as any.

Risk of Failure: Inability to Properly Analyze Processes

Or, to put it more succinctly – impatience. It’s uncommon for someone to try business process
reengineering if they profits are soaring and the projections are looking great.

BPR is usually called for when things aren’t going all that well and businesses need drastic
changes. So, it can be very tempting to hurry things up and skip through the analysis process
and start carrying out the changes.

The thing is, though, the business needs analysis needs to be done properly, not rushed
through to get to the more exciting parts.

There are always time and money pressures in the business world, and it’s the responsibility of
the senior management to resist the temptation and make sure the proper procedure is carried
out. Problem areas need to be identified, key goals need to be set and business objectives need
to be defined and this takes time.

Ideally, each stage requires input from groups from around the business to ensure that a full
picture is being formed, with feedback and ideas being taken into consideration from a diverse
range of sources. The next step is to identify and prioritize the improvements that are needed
and those areas and processes that need to be scrapped. Any business that doesn’t take this
analysis seriously will be going into those next steps blind and will find that their BPR efforts will
fail.

Any business that doesn’t take this analysis seriously will be going into those next steps blind
and will find that their BPR efforts will fail.

Step #4: Reengineer the processes and Compare KPIs

Finally, once you’re done with all the analysis and planning, you can start implementing the
solutions and changes on a small scale.

Once you get to this point, there’s not much to add – what you have to do now is keep putting
your theories into practice and seeing how the KPIs hold up.

If the KPIs show that the new solution works better, you can start slowly scaling the solution,
putting it into action within more and more company processes.

If not, you go back to the drawing board and start chalking up new potential solutions.

Business Process Reengineering Examples

The past decade has been very big on change. With new technology being developed at such a
breakneck pace, a lot of companies started carrying out business process reengineering
initiatives. There are a lot of both

There are a lot of both successful and catastrophic business process reengineering examples in
history, one of the most famous being that of Ford.
BPR Examples: Ford Motors

One of the most referenced business process reengineering examples is the case of Ford, an
automobile manufacturing company.

In the 1980s, the American automobile industry was in a depression, and in an attempt to cut
costs, Ford decided to scrutinize some of their departments in an attempt to find inefficient
processes.

One of their findings was that the accounts payable department was not as efficient as it could
be: their accounts payable division consisted of 500 people, as opposed to Mazda’s (their
partner) 5.

While Mazda was a smaller company, Ford estimated that their department was still 5 times
bigger than it should have been.

Accordingly, Ford management set themselves a quantifiable goal: to reduce the number of
clerks working in accounts payable by a couple of hundred employees. Then, they launched a
business process reengineering initiative to figure out why was the department so overstaffed.

They analyzed the current system, and found out that it worked as follows:

1. When the purchasing department would write a purchase order, they sent a copy to accounts
payable.
2. Then, the material control would receive the goods, and send a copy of the related document
to accounts payable.
3. At the same time, the vendor would send a receipt for the goods to accounts payable.
Then, the clerk at the accounts payable department would have to match the three orders, and
if they matched, he or she would issue the payment. This, of course, took a lot of manpower in
the department.

Old Payable Process

So, as is the case with BPR, Ford completely recreated the process digitally.

1. Purchasing issues an order and inputs it into an online database.

2. Material control receives the goods and cross-references with the database to make sure it
matches an order.
3. If there’s a match, material control accepts the order on the computer.

New payable process

This way, the need for accounts payable clerks to match the orders was completely eliminated.

You can learn more about the case here.

[Link] AND ITS TECHNIQUES

f you're like many people, you may feel that certain stress relief techniques don’t work for you while
others work quite well. There are reasons that the same stress relievers can work so differently for various
people. Often the techniques that don’t seem to work for a particular person are ineffective for one of two
reasons: either they are a poor match for the person's personality or for the situation. For example,
breathing exercises can effectively relieve stress, but may not be a powerful enough technique to be
the sole coping strategy for someone experiencing caregiver stress, chronic job stress, or another type of
chronically-occurring stress.

There are so many different ways to relieve stress that sometimes finding the right technique for your
personality and situation may seem overwhelming, or at least like more work than you want to tackle
when you're already feeling stressed. Finding stress relievers that work for you, however, can be well
worth the effort in that the work you do to try different techniques that work for you can ultimately
change your whole experience of stress.

Whether you have a few techniques that work for you and are just looking to add one or two, or need to
overhaul your way of dealing with stress and create a whole new system, the following list can help.
These stress relief techniques are grouped according to various categories you may be looking at when
deciding how to best manage your stress.

1
Acute Stress

@dantes1401 via Twenty20

Acute stress is the type of stress that throws you off-balance momentarily. This is the type of stress that
comes on quickly and often unexpectedly and doesn’t last too long, but requires a response and shakes
you up a bit, like an argument with someone in your life, or an exam for which you don’t feel adequately
prepared.

Your body's stress response is triggered with acute stress, but you can reverse it with quick relaxation
techniques, and then go back to your day feeling less stressed again. These stress relievers can help you to
relax and more quickly recover from acute stress.

 Breathing Exercises: Great for acute stress because they work quickly.
 Cognitive Reframing: Learn to change the way you look at the situation to manage your stress
levels.
 Progressive Muscle Relaxation: Like breathing exercises, PMR will give you a moment to
regroup and calm down.
 Mini-Meditation: Take breathing exercises a step further with this quick, 5-minute meditation
technique to calm down in the moment.

Chronic Stress

Yuri_Arcurs / Getty Images

Chronic stress is the type of stress that tends to occur on a regular basis. This type of stress may leave you
feeling drained, and can lead to burnout if it’s not effectively managed. This is because, when the stress
response is chronically triggered and the body is not brought back to a relaxed state before the next wave
of stress hits, the body can stay triggered indefinitely.

This can lead to the host of health issues that are generally associated with stress, including
cardiovascular disease, gastrointestinal issues, anxiety, depression, and a host of other conditions. This is
why it is important to effectively manage chronic stress.

Managing this type of stress often requires a combination approach, with some short-term stress relievers
(like those for acute stress), and some long-term stress relief habits that relieve overall stress. (Different
emotion-focused coping techniques and solution-focused coping techniques are important as well.)

The following long-term habits can help you to better manage general stress that you may feel from the
chronic stressors in your life.

 Exercise Regularly: Exercise and stress management are closely linked for several reasons.
 Maintain a Healthy Diet: Fueling your body well can help with overall stress levels because your
entire system will function better.
  Cultivate Supportive Relationships: Having a solid support system is a crucial coping mechanism.
 Meditate Regularly: While quick meditations are great for dealing with acute stress, a regular
meditation practice will help build your overall resilience to stress.
 Listen to Music: Music can act as a wonderful, stress-reducing backdrop to everyday tasks.

More

Emotional Stress

PeopleImages / Getty Images

The pain of emotional stress can hit harder than some other types of stress. For example, the stress that
comes from a conflicted relationship tends to bring a greater physical reaction and a stronger sense of
distress than the stress that comes from being busy at work.

Therefore, it is important to be able to manage emotional stress in effective ways. Strategies that help you
to process, diffuse, and build resilience toward emotional stress can all work well, and different
approaches can work in different situations. Here are some ways to manage emotional stress.

 Write in a Journal: There are several different journaling strategies to try, all with benefits.
 Talk to a Friend: Learn about the several different types of social support friends can offer you.
 Listen to Music
 Practice Mindfulness: Mindfulness can help keep you rooted in the present moment.
 Talk to a Therapist

More

Battling Burnout

Cultura RM/Jason Butcher/ Getty Images

Burnout is the result of the prolonged chronic stress of situations that leave people feeling a lack of
control in their lives. Certain conditions of a job can create a greater risk of burnout, including not only a
high level of demands, but also unclear expectations, lack of recognition for achievements, and a high
level of risk of negative consequences when mistakes are made.

Once you reach a state of burnout, it is difficult to maintain motivation to work and accomplish what you
need to accomplish, and you can feel chronically overwhelmed. In addition to the strategies that work
well for chronic stress and emotional stress, the following strategies can help you to come back from a
state of burnout—or prevent it entirely.
  Take Some Time Off: If you never take your vacation time, here's why you should start.
 Get More Laughter Into Your Life: Laughter can lead to better overall health and bring joy into
your day.
 Indulge in Hobbies: Don't wait until your life calms down to engage in your hobbies.
 Get More Enjoyment Out of Your Current Job: If you landed in a job you don't love, all is not
lost. Learn how to make your job more fulfilling.
 Make Your Weekends Count: Learn how to bring some of your weekend into your work week for
less stress

[Link] AND SIGNIFICANCE OF ORGANISATIONAL BEHAVIOUR

The concept and significance of organisational behaviour

Definetion: According to Stephen P. Robbins, "Organisational behaviour (OB) is a field of

study that investigates the impact that individuals, groups, and structure have on behavior
within organizations, for the purpose of applying such knowledge toward improving an
organization's effectiveness."

According to Aldag and Brief, " OB is a branch of social sciences that seeks to build theories that
can be applied to predicting , understanding and controlling behaviour in a work organisation."

Organisational behaviour is the multidisciplinary approach which is an integration of different

field of studies like psychology, sociology, social psychology, anthropology, and political science.

OB studies human behaviour at individual level, group level and organisational level.

Basically, organisations are made up of peoples, therefore managers in the organisation must
know how they behave in an organisation to make organisation productive.

Determinants of behaviour in an organisation are:

1. Individuals
2. Groups and
3. Structure

Elements of Organisational Behaviour

1. People: People make up the internal social system of the organisation. They consists of
individuals and groups. Groups may be formal or informal.

2. Structure: Structures define the formal relationship between people in an organisation.

3. Technology: Technology consist of physical objects, activities and process, knowledge, etc
through which people accomplish their tasks to achieve organisational objectives.

4. Environment: All organizations operate within an external environment. It is part of a

larger system that contains thousand of other [Link] includes the suppliers, customers,
competitors, governments’ agencies, employees, unions, political parties, and economic,
political, cultural, technological and social factors in which the organization embedded.

Significance of Organisational Behaviour

OB is concerned with understanding, applying and controlling of behavioural and structural

knowledge of an organisation for organisation's effectiveness. Management function includes
Planning, organising, leading and controlling where people are involved in different roles
(interpersonal roles, informational roles, and decisional roles) and different capacities.
Therefore, for an organisation to succeed it is very important for it to understand its
organisation's culture, people by way of understanding their perception, attitudes, motivation,
personality, key personality characteristics relevant to workplace, learning, job satisfaction, etc
through theories of motivation, learning, and reinforcement. And mould their dissatifaction to
satisfaction, motivate them to achieve desired results, provide them appropriate work culture,
growth opportunities, punish their inappropriate behaviour, and infusing learning environment
and leadership.

[Link]

Characteristics of Leadership:

On the basis of an analysis of different definitions, following characteristics of

leadership emerge:
1. Leadership is a process of Influence:

ADVERTISEMENTS:

Influence is the ability of an individual to change the behaviour, attitude, and belief of another

individual directly or indirectly. Someone has rightly defined leaderships as the “process of

social influence in which one person can enlist the aid and support of others in the

accomplishment of a common task”.

2. Leadership is not one-dimensional:

The Essence of leadership is Followership. Leadership is a systems thinking in multiple

dimensions. In terms of systems thinking, the organizational performers (followers) are must in

the leadership process. Without followers there can be no leadership.

3. Leadership is Multi-faceted:

Leadership is a combination of personality and tangible skills (drive, integrity, self-confidence,

attractive personality, decisiveness, etc), styles (Authoritarian to laissez-faire), and situational

factors (organisation’s internal and external environment, objectives, tasks, resources, and

cultural values of leaders and the followers).

4. Leadership is Goal oriented:

Leadership is “organizing a group of people to achieve a common goal.” Thus, the influence

concerns the goals only. Outside the goals, the concerns are not related to leadership.

5. Leadership is not primarily a Particular Personality Trait:

A trait closely linked to leadership is charisma, but many people who have charisma (for

example, movie actors and sports heroes) are not leaders.

6. Leadership is not primarily a Formal Position:

There have been many great leaders who did not hold high positions—for example, Mahatma

Gandhi, Martin Luther King, Jr. and—and Anna Hazare . On the other hand there are people

who hold high positions but are not leaders.

7. Leadership is not primarily a Set of Important Objectives:

It involves getting things done.

8. Leadership is not primarily a Set of Behaviours:

Many leadership manuals suggest that leadership involves doing things such as delegating and

providing inspiration and vision; but people who are not leaders can do these things, and some

effective leaders don’t do them at all.

Manager vs. Leader:

Some questions are often being asked – Does a manager has to be a leader too? Does a leader

have to be a manager as well? It is possible to be a boss in a company without being a leader.

Managers are appointed but leaders may be appointed or emerge.

ADVERTISEMENTS:

Managers depend upon their positional authority to direct subordinates. Leaders are able to

influence followers beyond their formal authority. Managers are people who do things right and

leaders are people who do the right thing.

Leadership and management must go hand in hand. They are not the same thing. But they are

necessarily linked, and complementary. Any effort to separate the two is likely to cause more

problems than it solves. A good manager must possess leadership qualities.

It is very right to conclude that task is not only to manage people, but the task is to lead people.

And the goal is to make productive the specific strengths and knowledge of every individual.

Importance of Leadership:

If an organization is flourishing, its members developing, and achieving breakthrough after

breakthrough, then one can be sure about one thing that there is a strong leader at the helm of

the organization. If an organization is failing, the problem again relates to the leader of the

organization. Thus everything rises and falls on leadership.

Leadership is an important function of management which facilitates to maximize efficiency and

effectiveness to achieve organizational goals. Leadership has paramount importance in present

competitive business environment, because with the help of leadership a company will face all

the problems very efficiently.

1. Guides and Inspires Subordinates:

A leader has to not only supervise but also to play a guiding role for the subordinates. Guidance

here means instructing the subordinates the way they have to perform their work effectively and

efficiently. Leadership creates among subordinates a sense of belongingness and commitment.

Desire for achievement is transformed into a passion.

2. Secures Cooperation:

A leader sells rather than tells. He persuades, rather than dictates, and creates enthusiasm

among his subordinates and thus, secures their cooperation.

3. Creates Confidence:

Confidence is an important factor which can be achieved through expressing the work efforts to

the subordinates, explaining them clearly their role and giving them guidelines to achieve the

goals effectively. It is also important to hear the employees with regards to their complaints and

problems.
4. Builds Work Environment:

Management is getting things done from people. An efficient work environment helps in sound

and stable growth. Therefore, human relations should be kept into mind by a leader. He should

have personal contacts with employees and should listen to their problems and solve them. He

should treat employees on humanitarian terms.

5. Maintains Discipline:

By turning subordinates into followers, the job of securing order and compliance, becomes easy.

He motivates the employees with economic and non- economic rewards and thereby gets the

work from the subordinates voluntarily. It is this willingness on the part of subordinates which

leads to maintenance of discipline.

6. Facilitates Integration of Organisational and Personal Goals:

A leader is one who is visionary, deciding the destination to be reached. Vision is the source of

organisational objectives. Vision requires synchronisation of goals through integration of

personal and organisational goals.

A leader creates common goals and understanding among subordinates that their personal goals

are related with the attainment of organisational goals. It also leads to coordination.

7. Works as a Change Agent:

No change in thinking, processes, and practices becomes possible without leadership. It is the

leader who convinces actively about the change and making it part and parcel of their working

and reducing resistance to change.

8. Boosts Morale:

Morale denotes willing co-operation of the employees towards their work and getting them into

confidence and winning their trust. A leader can be a morale booster by achieving full co-

operation so that they perform with best of their abilities as they work to achieve goals.
Principles of Leadership:

To help you be, know, and do, follow these eleven principles of leadership:
1. Know Yourself and Seek Self-Improvement:

In order to know yourself, you have to understand your be, know, and do, attributes. Seeking

self-improvement means to continually strengthen your attributes. This can be accomplished

through self-study, formal classes, reflection, and interacting with others.

2. Be Technically Proficient:

As a leader, you must know your job and have a solid familiarity with your employees’ tasks.

3. Seek responsibility and take responsibility for your actions:

Search for ways to guide your organization to new heights. And when things go wrong, they

always do sooner or later — do not blame others. Analyze the situation, take corrective action,

and move on to the next challenge.

4. Make sound and timely decisions:

Use good problem solving, decision making, and planning tools.

5. Set the example:

Be a good role model for your employees. They must not only hear what they are expected to do,

but also see. We must become the change we want to see – Mahatma Gandhi.

6. Know your people and look out for their well-being:

Know human nature and the importance of sincerely caring for your workers.

7. Keep your workers informed:

Know how to communicate with not only them, but also seniors and other key people.

8. Develop a sense of responsibility in your workers:

Help to develop good character traits that will help them carry out their professional

responsibilities.
9. Ensure that tasks are understood, supervised, and accomplished:

Communication is the key to this responsibility.

10. Train as a team:

Although many so called leaders call their organization, department, section, etc. a team; they

are not really teams…they are just a group of people doing their jobs.

11. Use the full capabilities of your organization:

By developing a team spirit, you will be able to employ your organization, department, section,

etc. to its fullest capabilities.

Theories of Leadership:

During the 20th Century, there has been a great interest in research on leadership. Early

leadership theories focused on what qualities distinguished between leaders and followers (i.e.,

traits), while subsequent theories looked at other variables such as behavioural and situational

factors and skill levels.

While many different leadership theories have emerged, most can be classified as

one of eight major types:

1. “Great Man” Theories:

Great man theories assume that the Leaders are born and not made. Great leaders will arise

when there is a great need, like Rama, Krishna, Buddha, Mahatma Gandhi, Eisenhower, and

Winston Churchill.

These theories often portray great leaders as heroic, mythic and destined to rise to leadership

when needed. The term “Great Man” was used because, at the time, leadership was thought of

primarily as a male quality, especially in terms of military leadership.

Early research on leadership was based on the study of people who were already great leaders.

These people were often from the aristocracy, as few from lower classes had the opportunity to
lead. Gender issues were not on the table when the ‘Great Man’ theory was proposed because

most leaders were male.

2. Trait Theories:

Similar in some ways to “Great Man” theories, trait theories assume that People are born with

inherited qualities and traits that make them better suited to leadership. Some traits are

particularly suited to leadership. Trait theories often identify particular personality or

behavioral characteristics shared by leaders. People who make good leaders have the right (or

sufficient) combination of traits.

Early research on leadership was based on finding the traits which differentiated leaders from

non-leaders. If we look at Ratan Tata of Tata Sons, Kumar Mangalam Birla of Aditya Birla

Group, Azim Premji of Wipro, Kamath of Infosys, Anand Mahindra of Mahindra and Mahindra,

all these leaders possess some common traits.

The traits are vision, self confidence, simplicity, integrity, and adherence to values. Traits are

matched by skills. There have been many different studies of leadership traits and they agree

only in the general saintly qualities needed to be a leader.

Perhaps a day may come when the researchers will find a ‘leadership gene’. But traits alone do

not explain leadership clearly as situational factors are ignored.

3. Behavioral Theories:

Behavioural theories of leadership are based upon the beliefs that great leaders are made, not

born (a big leap from Trait Theory) and exhibit something unique in their behaviour.

Behavioural theories of leadership do not seek inborn traits or capabilities. Rather, they look at

what leaders actually do, like democratically or autocratically. People can learn to become

leaders through learning and observation. This is the crux behind leadership development

programmes.
Three important researches on behavioural theories need mention – University of Iowa studies

by Kurt Lewin (democratic leadership style can contribute good and high quality of work), Ohio

State University Studies by Edwin A. Fleishman in 1945(a leader high on initiating structure –

defines his own and subordinates’ roles to achieve goals; and consideration- mutual trust and

respect for employees’ ideas and feelings); and University of Michigan Studies by Renesis Likert

(identified two types of leadership behaviour – job- centred behaviour and employee-centred

behaviour and later on Black and Mouton developed management grid).

4. Contingency and Situational Theories:

During researches it has been realised that leadership phenomenon is more than isolating a few

traits or behaviours. According to contingency theory, no leadership style is best in all

situations. Success depends upon a number of variables, including the leadership style,

capabilities and behaviour of the followers and other situational factors.

It means a leadership style that is effective in some situations may not be successful in others.

This is the reason that some leaders who seem to have the ‘Midas touch’ in one situation

suddenly appear to be very unsuccessful in another situation.

Situational theory proposes that the best action of the leader depends on a range of situational

factors. An effective leader does not just fall into a single preferred style, different are the

situations different are the styles of decision-making. Factors that affect situational decisions

include motivation and capability of followers.

Contingency theory is similar to situational theory. Both believe in that there is no one right

way. But they differ as the situational theory tends to focus more on the behaviours adopted by

the leader, given situational factors (often about follower behaviour), whereas the contingency

theory takes a broader view that includes contingent factors about leader capability and other

variables within the situation.

In case of situational theory the leaders’ perception of the follower and the situation will affect

what they do rather than the truth of the situation. The leader’s perception of themselves and

other factors such as stress and mood will also modify the leaders’ behaviour.

Four important approaches in isolating key situational variables have been very important.

These studies include – Fiedler’s Contingency Model (leadership effectiveness depends on the

proper match between the leader’s style and the degree to which situation gives control to the

leader); Robert House’ Path-goal theory (leader’s job is to assist followers to attain their goals

and to provide necessary support and direction to ensure compatibility of their goals with that of

the organisation – like E. Sreedharan, of Delhi Metro); Victor Vroom and Phillip Yetton’s

leader-participation model(leader can adapt his style to different situation); and Paul Hersey

and Kenneth Blanchard’s Situational Leadership (a leader must assess the maturity levels of

followers to determine which combination of leader behaviours to use in a given situation.

Types of Leadership:
1. Bureaucratic Leadership:

Bureaucratic leadership follows a close set of standards. Everything is done in an exact, specific

way to ensure safety and/or accuracy. One will often find this leadership role in a situation

where the work environment is dangerous and specific sets of procedures are necessary to

ensure safety.

A natural bureaucratic leader will tend to create detailed instructions for other members of a

group. The bureaucratic leadership style is based on following normative rules and adhering to

lines of authority

2. Charismatic leadership:

“Charismatic leadership emphasises primarily the magnetic personality and behaviour of

leaders and their effects on followers, organizations, and society. Sociologists, political

historians, and political scientists have widely accepted the theory of charismatic leadership
originally advanced by Weber (1947). Charisma is regarded as of divine origin or as exemplary,

and on the basis of them the individual concerned is treated as a leader.

Mahatma Gandhi, Jawaharlal Nehru, Indira Gandhi, Lai Bahadur Shashtri, and Mother Teresa

were charismatic leaders. Charismatic leaders inspire via persona, reputation, and

communications and also show courage, competence, and idealistic vision.

Late President John F Kennedy and his look-alike Fmr. President Bill Clinton have often been

called “The most charismatic leaders of 20th century” Another good example would be Adolf

Hitler, who rose from a “Bohemian corporal” to “Herr Fuhrer” due to his ability to captivate

people into following him.

3. Visionary Leadership:

A visionary leader perceives challenges and growth opportunities before they happen,

positioning people to produce extraordinary results that make real contributions to life. Some of

the visionary leaders include – Dalai Lama (for his ability to incorporate new ideas into his

traditional framework while being a messenger for peace and enlightenment for the world),

Mahatma Gandhi and Nelson Mandela (for his courage and conviction and perseverance against

all odds to free and unite people for justice), and President Obama (for his ability to galvanize

and inspire people with the vision that we can transform our consciousness & world). The list is

endless.

4. Strategic Leadership:

Strategic leadership refers to a manger’s potential to express a strategic vision for the

organization, and to motivate and persuade others to acquire that vision.

Strategic leadership can also be defined as utilizing strategy in the management of employees. It

is the potential to influence organizational members and to execute organizational change.

Strategic leaders create organizational structure, allocate resources and express strategic vision.
Thus, this type of leadership relates to the role of top management. Strategic leaders work in an

ambiguous environment on very difficult issues that influence and are influenced by occasions

and organizations external to their own.

The main objective of strategic leadership is strategic productivity. Another aim of strategic

leadership is to develop an environment in which employees forecast the organization’s needs in

context of their own job. Strategic leaders encourage the employees in an organization to follow

their own ideas.

Strategic leaders make greater use of reward and incentive system for encouraging productive

and quality employees to show much better performance for their organization. Functional

strategic leadership is about inventiveness, perception, and planning to assist an individual in

realizing his objectives and goals.

5. Servant leadership:

The term “Servant Leadership” was coined by Robert K. Greenleaf in The Servant as Leader, an

essay that he first published in 1970. Leaders have a responsibility towards society and those

who are disadvantaged. People who want to help others best do this by leading them. The

servant-leader is servant first and leader next.

The servant leader serves others, rather than others serving the leader. Serving others thus

comes by helping them to achieve and improve. Famous examples of servant leaders include

George Washington (America), Gandhi (India), and Cesar Chavez (Venezuela).

6. Substitutes for Leadership:

The term has been brought to light by Kerr and Jermier in 1978. According to them there are

aspects of the work setting and the people involved that can reduce the need for a leader’s

personal involvement, because leadership is already provided from within. The term substitutes
mean the situation where leader behaviours are replaced by characteristics of subordinates, the

task at hand, and the organisation.

7. Transactional and Transformational Leadership:

Transactional leadership is based upon the assumptions that people are motivated by reward

and punishment (Rational Man), social systems work best with a clear chain of command, when

people have agreed to do a job, a part of the deal is that they cede all authority to their manager,

and the basic purpose of a subordinate is to do what their manager tells them to do.

The style of a transactional leader is that he works through creating clear structures whereby it

is made clear as to what is required of subordinates and the rewards that they get for following

orders. Punishments are not always mentioned, but they are also well- understood and formal

systems of discipline are usually in place.

To begin with, Transactional Leadership negotiates the contract whereby the subordinate is

given a salary and other benefits, and the company gets authority over the subordinate.

While the leader allocates work to a subordinate, they are considered to be fully responsible for

it, whether or not they have the resources or capability to carry it out.

When things go wrong, then the subordinate is considered to be personally at fault, and is

punished for their failure (just as they are rewarded for succeeding).

The leader often uses management by exception, working on the principle that if something is

operating to defined (and hence expected) performance then it does not need attention.

Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind

of corrective action is applied for performance below expectation.

In management versus leadership spectrum, it is more towards the management end.

Transactional leadership is based in contingency, in that reward or punishment is contingent

upon performance.

Transactional Leadership is still a popular approach with many managers, despite its limitation

of ignoring complex emotional factors and social values.

When the demand for a skill outstrips the supply, then Transactional Leadership often is

insufficient. Transformational leadership is the answer. It “recognizes and exploits an existing

need or demand of a potential follower… (And) looks for potential motives in followers, seeks to

satisfy higher needs, and engages the full person of the follower”

Transformational leadership is based upon the assumptions that people will follow a person who

inspires them, a person with vision and passion can achieve great things, and the way to get

things done is by injecting enthusiasm and energy.

These leaders are focused on the performance of group members, but also want each person to

fulfil his or her potential. Leaders with this style often have high ethical and moral standards.

Transformational Leadership starts with the development of a vision. This vision may be

developed by the leader, by the senior team or may emerge from a broad series of discussions.

The next step is to constantly sell the vision. While doing so, he must create trust and personal

integrity. Along with selling, the leader finds the way forward.

And finally, transformation leaders remain upfront and central during the action and visible –

constantly doing the rounds, listening, soothing and enthusing.

Transformational Leader seeks to infect and reinfect their followers with a high level of

commitment to the vision. They are people- oriented and believe that success comes first and

last through deep and sustained commitment.

Transformational Leaders are often charismatic, but are not as narcissistic as pure Charismatic

Leaders, who succeed through a belief in themselves rather than a belief in others.

Whilst the Transformational Leader seeks overtly to transform the organization, there is also a

tacit promise to followers that they also will be transformed in some way

One of the traps of Transformational Leadership is that passion and confidence can easily be

mistaken for truth and reality. Paradoxically, the energy that gets people going can also cause

them to give up.

Transformational Leaders also tend to see the big picture, but not the details, where the devil

often lurks. If they do not have people to take care of this level of information, then they are

usually doomed to fail.

Finally, transformational leaders, by definition, seek to transform. When the organization does

not need transforming and people are happy as they are, then such a leader will be frustrated.

It is important for the follower to understand the difference between Charismatic Leaders and

Transformational Leaders. They both are Inspiring and both have a Vision and both are not as

caring about people as followers might want them to be.

Charismatic Leaders are Inspiring in order to lead for their own purpose which may or may not

benefit the organization or people. “It’s all about me.” Transformational Leaders are inspiring in

order to support a shared vision of improvement for the organization and its people.
“It’s all about the organization.” The visions of transformational Leaders are practical and

achievable in order to improve organization. Transformational Leaders often “downsize” the

work force to

improve the organization. Transformational Leaders often “downsize” the work force to improve

organizational efficiency for the good of the organization. On the other hand, Charismatic

Leaders abuse or fire persons who do not agree with them, or who question their vision or

otherwise inhibit their personal accomplishment as Leaders improve organizational efficiency

for the good of the organization.

On the other hand, Charismatic Leaders abuse or fire persons who do not agree with them, or

who question their vision or otherwise inhibit their personal accomplishment as Leaders

To conclude, transformational and transactional leadership are not opposite to each other,

rather they are complementary. A great transformational leader has to be a great transactional

leader as well.

Leadership Styles:

Before we delve into describing leadership styles, it would be proper to distinguish between

types of leaders and styles of leadership. Type of leader is determined and identified by the

“personality” displayed by the leader in terms of core trait along with other traits and personal

qualities being displayed and used to gain the trust of the people and lead them to commit to

undertake the major task facing the organization.

On the other hand, “style” of leadership is defined and identified by the competencies and skills

that the leader “applies” to guide facilitate and support the people of the organization in their

efforts to accomplish the task.

Leadership style reflects a leader’s decision making behaviour. It is the result of the philosophy,

personality and experience of the leader. Leadership style refers to how decisions are made to

providing direction, implementing plans, and motivating people.

Types of Leadership Styles

Three major leadership styles are:

1. Authoritarian or Autocratic

2. Participative or Democratic

3. Free-rein or Delegate
Authoritarian Style:

When the leaders tell their subordinates/followers at their own what work they want to get

done, and how – it is known as authoritarian or autocratic leadership style.

It works well if the leader is competent and knowledgeable enough to decide about each and

every thing. All decision-making powers are centralised in the leader, as with autocratic leaders.

No suggestions or initiatives from subordinates are acceptable.

Authoritarian or autocratic leadership does not mean using foul language and leading by

threats. This unprofessional style is known as “bossing people around”.

This style should be used only when the leader has all the information and is short of time and

the employees are well motivated. If the leader wants to gain greater commitment and motivate

his subordinates, then it should be used very rarely.

Participative Style:

In the authoritarian style the leader used to say – “I want you to….”, but in participative style the

leader says – “let us work together to solve this problem”.

A Participative Leader, rather than taking autocratic decisions, seeks to involve other people

including subordinates, peers, superiors and other stakeholders in the process.

Here the leader takes his subordinates into confidence about what to do and how to do, but the

final authority vests in the leader. This style can be divided into two – one, where leader

consults, and two, where decision is taken through consensus. Use of this style by a leader is not

a sign of weakness.

It is the strength, your subordinates will respect. This style is used when the employees are

knowledgeable and skilful. This style is also known as consultative, empowerment, joint

decision-making, democratic leadership, Management by Objective (MBO) and power-sharing.

It helps in ascertaining and identifying future leaders among the subordinates. Also, it keeps a

team’s spirit and morale high, as the team members feel that their opinions are valued by their

leader.
To illustrate, an advertising manager approaches his subordinates on how to promote a

particular product of a company. The team members brain storm over the issue, some suggest

print media and others suggest electronic media. The participative leader takes all these

suggestions, and makes a decision after weighing their pros and cons.

Free-rein Leadership Style:

In this style the leader says – “you take care of the problem”. Final responsibility always remains

with the leader. A free-rein leader does not lead, but leaves the group entirely to itself.

Such a leader allows maximum freedom to subordinates, i.e., they are given a free hand in

deciding their own policies and methods. It is used when the leader has full trust and confidence

in the abilities of his subordinates.

Since a leader cannot do everything. He prioritises the work and delegates certain tasks. This

style may be used but with caution. This style is also known as laissez faire (non-interference in

the affairs of others).

To illustrate, a manager has newly joined a firm. He is still learning how various things move in

the organization. In such a situation, he relies on the suggestions and opinions of his team

members and lets them do the things the way they are used to, till the time he is able to gain

sufficient knowledge and can suggest some more feasible changes.

Forces influencing the Styles:

1. Availability of time

2. Relationships between leader and subordinates (based on trust or on disrespect?)

3. The information is with whom (the leader, employees or both? If the leader knows the

problem but does not have all the information – use participative style)
4. How well the leader knows the task and employees well versed? (Use participative style if the

employees know the job well)

5. Internal Conflicts

6. Levels of stress

7. Type of task (structured, unstructured, complicated or simple?)

8. Systems and procedures (are they well established?)

9. If an employee is just learning the job – use authoritarian style, and if employees know more

than the leader about the job use free-rein style)

Good leaders should be able to master all the styles, to be a better leader. He must be able to use

all the styles depending upon the forces in operation among the leader, followers and the

situation. If the existing procedure is not working go in for authoritarian to establish a new one;

if their ideas and input are to be taken use participative and using delegative style while

delegating the procedure to them for execution. Normally one of styles will be dominant. But

bad leaders tend to stick to one style only.

Before deciding which style to use, a leader should ask two questions, the first is to ask what my

leadership style is. This is to focus on what you enjoy, what you might be good at, what strengths

and weaknesses you have.

The second is to ask what leadership style is best for the people, team or organisation that I’m

leading. This is to focus on the needs of the situation, on the criteria for success, on the approach

that will bring about the maximum impact. Modern leadership demands both.

Managerial Grid:
The Managerial Grid, a behavioural leadership model, has been developed by Robert R. Blake

and Jane Mouton. This model originally identified five different leadership styles based on the

concern for people and the concern for production. The optimal leadership style in this model is

based on Theory Y of motivation.

The model is represented as a grid with concern for production (on the X-axis) and concern for

people (on the Y-axis); each axis ranges from 1 (Low) to 9 (High). The resulting leadership styles

are as follows:

a. The indifferent (also called as impoverished) style (1, 1):

Evade and elude or low production/low people. In this style, managers have low concern for

both people and production. This leader is mostly ineffective. Managers use this style to

preserve job and job seniority, protecting themselves by avoiding getting into trouble.

The main concern for the manager is not to be held responsible for any mistakes, which results

in less innovative decisions. The leader has no regard for either work or people.
b. The accommodating (also called as country club) style (1, 9):

Yield and comply or high people/low production. This style has a high concern for people and a

low concern for production. Managers using this style are more concerned about needs and

feelings to the security and comfort of the employees, in hopes that this will increase

performance. The resulting atmosphere is usually friendly, but not necessarily very productive

due to lack of direction and control.

C. The dictatorial (also called as produce or perish) style (9, 1):

Control and dominate or high production/low people. With a high concern for production, and a

low concern for people, managers using this style find employee needs unimportant; they

provide their employees with money and expect performance in return.

Managers using this style also pressure their employees through rules and punishments to

achieve the company goals. This dictatorial style is based on Theory X of Douglas McGregor, and

is commonly applied by companies on the edge of real or perceived failure. This style is often

used in cases of crisis management.

d. The status quo (also called as middle-of-the-road) style (5, 5):

Balance and compromise or medium production/medium people. Managers using this style try

to balance between company goals and workers’ needs. By giving some concern to both people

and production, managers who use this style settle for average performance and often believe

that this is the most anyone can expect.

e. The sound (also called as team style) (9, 9):

Contribute and commit or high production/high people. In this style, high concern is paid both

to people and production. As suggested by the propositions of Theory Y, managers choosing to

use this style encourage teamwork and commitment among employees. This method relies

heavily on making employees feel themselves to be constructive parts of the company.

The grid has been evolving continuously. It has added two more leadership styles -the

paternalistic style: prescribe and guide (alternates between the (1,9) and (9,1) locations on the

grid- managers using this style praise and support, but discourage challenges to their thinking )

and Opportunistic style: exploit and manipulate(does not have a fixed location on the grid-

leaders adopt whichever behaviour offers the greatest personal benefit). These styles were added

to the grid theory before 1999.

Contemporary Leadership Issues:

Leadership is probably the single most subject in management getting the most attention of

business leaders. Some of the current issues relating to leadership development are as under;

1. Emotional Intelligence:

Should a leader have high Intelligence Quotient (IQ) and technical intelligence? Off course, they

are necessary. But more important is to possess Emotional Intelligence (EI).

The five components of EI are self-awareness, self- regulation, self-motivation, empathy and

social skills. Without EI one cannot be a great leader. Indira Nooyee has become President of

PepsiCo because she has shown EI.

2. Gender and Leadership:

Does gender make any difference to leadership? Victor vroom and others in their leader-

participation model under contingency theories of leadership find that women managers are

significantly more participative than their male counterparts.

The women managers show more interactive leadership, and thus, better rating from peers,

supervisors, and subordinates. Shikha Sharma of Yes bank and Chanda Kochar of ICICI bank

are examples of women managers and best leaders.

3. Cross-cultural Leadership:
Of late the corporations are appointing expatriates as the CEOs or managers. Very recently,

GoAir of Wadia Group has appointed Giorgio De Roni as its CEO, a former chief Revenue officer

of Italian airline, Air One.

Mahindra and Mahindra also as a matter of policy sends Indian managers to its foreign

companies and managers from foreign companies are put in India-based companies.

The purpose is to train them in different cultures to avoid any culture shock..Culture plays an

important role, and managers must understand the culture of subordinates.

Ratan Tata has rightly pointed a finger at British managers that they are not like Indian

managers, who stay till midnight, if the situation so warrants.

4. Building Trust:

Coca Cola and PepsiCo were accused of pesticides, Reliance Energy of soil pollution, Dow

Chemical’s of Bhopal tragedy, Satyam of accounting fraud, and Indian call centres of

encroaching upon privacy of clients.

All these incidents show the decresing public trust in corporate leaders. Trust involves integrity,

competence, consistency, loyalty, and openness. Trust is very critical to leadership. Knowledge

and information can be accesses by a leader only if he is trust worthy. What people talk about

ethical leadership is the same thing.

[Link] FOR HR

Responsibility 1: Participate in Planning and

Development
In the modern marketplace, human resource executives serve as strategic
partners. They participate in the identification, development and execution of
corporate objectives. In this capacity, HR executives align the work of their
business unit to achieve company goals. The participation in company
planning allows human resource leaders to gain a profound understanding of
the organizational activities needed to aid in the sustainable growth of the
enterprise.

Responsibility 2: Provide Employees With Career

Assistance
Periodically, human resource leaders conduct staff member evaluations.
Today, HR professionals take an active role in helping employees advance
their careers. Instead of simply grading employees on a checklist of
performance points, modern human resource specialists help workers identify
areas for improvement and develop specific action steps.

By helping employees with career development, modern HR professionals

gain deeper insight into available human capital and the availability of internal
candidates for potential role succession. This helps organizations gain a
marked advantage in filling future roles and meeting forthcoming market
demands.

Responsibility 3: Find and Recruit Employees That

Advance Company Objectives
Today’s human resource executives do more than post ads and interview job
candidates to fill open positions. Modern HR executives formulate employer
brands designed to attract the right job candidates.

In this responsibility, human resource leaders work to promote their respective

firms as highly favorable workplaces. HR executives often earn this kind of
accolade for organizations by creating a positive culture and providing
satisfactory compensation and benefits as ways to attract ideal work
candidates.

Responsibility 4: Serve as Leaders of Change1

Modern human resource leaders frequently lead change initiatives for their
organizations. As a result, current HR executives yield strong project
management skills in their corporate toolboxes. The professionals are skilled
at helping organizational stakeholders make the connection between change
initiatives and strategic needs, minimizing change resistance and employee
unrest.
Shaping organizational culture, managing staff member satisfaction and
weighing the success of change initiatives are all a part of the human
resource professional’s scope of responsibility in the modern workplace.

Responsibility 5: Advocate for Employees

While fulfilling their roles as employee advocates, HR executives play an
integral part in the success of organizations. In this regard, human resource
professionals contribute to building a work environment where employees feel
satisfied and motivated.

To promote this outcome, HR leaders deploy effective practices such as

employee empowerment, goal setting and open communication, resulting in a
positive culture that leads to the workforce delivering better consumer
experiences.

Responsibility 6: Provide Support for Domestic

Violence Victims1
The Centers for Disease Control (CDC) forecasts that domestic violence can
affect 1 in 4 women and 1 in 7 men in the United States. The issue has grown
so prevalent that employers can no longer afford to think of domestic violence
as a matter best left to the local authorities. As a result, today’s HR
professionals encourage those who’ve experienced domestic violence to seek
help in the workplace.

To encourage this, human resource professionals promote an organizational

culture where staff members do not feel intimidated or ashamed to approach
to HR employees with domestic violence concerns.

Responsibility 7: Ensure No Cyberbullying At Work2

Traditionally, workplace intimidation took place solely in the office. Today,
however, the connectivity of the Internet extends the influence of bullies to
victims’ personal workstations and homes, an activity called cyberbullying.
Employees and supervisors know that this can happen in the workplace, yet
dealing with office cyberbullying may prove challenging. Despite this,
contemporary human resource executives strive to eliminate this kind of
negative activity in the workplace.
Modern HR professionals are leaders in their organizations. The specialists
sponsor the organizational mission, vision, values and goals among staff
members, and they monitor and adjust organizational activities to ensure the
success of various initiatives. Human resource specialists contribute to
enterprises by managing the most important asset of any organization, the
people who complete the daily tasks that result in productive outcomes. Their
work aids in the global success of their organizations.

10)SOURCES OF RECRUITMENT

(A) Internal Sources:

Best employees can be found within the organisation… When a
vacancy arises in the organisation, it may be given to an employee who
is already on the pay-roll. Internal sources include promotion, transfer
and in certain cases demotion. When a higher post is given to a
deserving employee, it motivates all other employees of the
organisation to work hard. The employees can be informed of such a
vacancy by internal advertisement.

ADVERTISEMENTS:

Methods of Internal Sources:

The Internal Sources Are Given Below:
1. Transfers:
Transfer involves shifting of persons from present jobs to other similar
jobs. These do not involve any change in rank, responsibility or
prestige. The numbers of persons do not increase with transfers.

2. Promotions:
Promotions refer to shifting of persons to positions carrying better
prestige, higher responsibilities and more pay. The higher positions
falling vacant may be filled up from within the organisation. A
promotion does not increase the number of persons in the
organisation.

A person going to get a higher position will vacate his present position.
Promotion will motivate employees to improve their performance so
that they can also get promotion.

3. Present Employees:
The present employees of a concern are informed about likely vacant
positions. The employees recommend their relations or persons
intimately known to them. Management is relieved of looking out
prospective candidates.

ADVERTISEMENTS:

The persons recommended by the employees may be generally

suitable for the jobs because they know the requirements of various
positions. The existing employees take full responsibility of those
recommended by them and also ensure of their proper behaviour and
performance.

Advantages of Internal Sources:

The Following are The Advantages of Internal Sources:
1. Improves morale:
When an employee from inside the organisation is given the higher
post, it helps in increasing the morale of all employees. Generally
every employee expects promotion to a higher post carrying more
status and pay (if he fulfills the other requirements).
2. No Error in Selection:
When an employee is selected from inside, there is a least possibility of
errors in selection since every company maintains complete record of
its employees and can judge them in a better manner.

3. Promotes Loyalty:
It promotes loyalty among the employees as they feel secured on
account of chances of advancement.

4. No Hasty Decision:
The chances of hasty decisions are completely eliminated as the
existing employees are well tried and can be relied upon.

5. Economy in Training Costs:

The existing employees are fully aware of the operating procedures
and policies of the organisation. The existing employees require little
training and it brings economy in training costs.

6. Self-Development:
It encourages self-development among the employees as they can look
forward to occupy higher posts.

Disadvantages of Internal Sources:

(i) It discourages capable persons from outside to join the concern.

(ii) It is possible that the requisite number of persons possessing

qualifications for the vacant posts may not be available in the
organisation.
(iii) For posts requiring innovations and creative thinking, this
method of recruitment cannot be followed.

(iv) If only seniority is the criterion for promotion, then the person
filling the vacant post may not be really capable.

Inspite of the disadvantages, it is frequently used as a source of

recruitment for lower positions. It may lead to nepotism and
favouritism. The employees may be employed on the basis of their
recommendation and not suitability.

(B) External Sources:

All organisations have to use external sources for recruitment to
higher positions when existing employees are not suitable. More
persons are needed when expansions are undertaken.

The external sources are discussed below:

Methods of External Sources:
1. Advertisement:
It is a method of recruitment frequently used for skilled workers,
clerical and higher staff. Advertisement can be given in newspapers
and professional journals. These advertisements attract applicants in
large number of highly variable quality.

Preparing good advertisement is a specialised task. If a company

wants to conceal its name, a ‘blind advertisement’ may be given asking
the applicants to apply to Post Bag or Box Number or to some
advertising agency.
2. Employment Exchanges:
Employment exchanges in India are run by the Government. For
unskilled, semi-skilled, skilled, clerical posts etc., it is often used as a
source of recruitment. In certain cases it has been made obligatory for
the business concerns to notify their vacancies to the employment
exchange. In the past, employers used to turn to these agencies only as
a last resort. The job-seekers and job-givers are brought into contact
by the employment exchanges.

3. Schools, Colleges and Universities:

Direct recruitment from educational institutions for certain jobs (i.e.
placement) which require technical or professional qualification has
become a common practice. A close liaison between the company and
educational institutions helps in getting suitable candidates. The
students are spotted during the course of their studies. Junior level
executives or managerial trainees may be recruited in this way.

4. Recommendation of Existing Employees:

The present employees know both the company and the candidate
being recommended. Hence some companies encourage their existing
employees to assist them in getting applications from persons who are
known to them.

In certain cases rewards may also be given if candidates recommended

by them are actually selected by the company. If recommendation
leads to favouritism, it will impair the morale of employees.

5. Factory Gates:
Certain workers present themselves at the factory gate every day for
employment. This method of recruitment is very popular in India for
unskilled or semi-skilled labour. The desirable candidates are selected
by the first line supervisors. The major disadvantage of this system is
that the person selected may not be suitable for the vacancy.

6. Casual Callers:
Those personnel who casually come to the company for employment
may also be considered for the vacant post. It is most economical
method of recruitment. In the advanced countries, this method of
recruitment is very popular.

7. Central Application File:

A file of past applicants who were not selected earlier may be
maintained. In order to keep the file alive, applications in the files
must be checked at periodical intervals.

8. Labour Unions:
In certain occupations like construction, hotels, maritime industry
etc., (i.e., industries where there is instability of employment) all
recruits usually come from unions. It is advantageous from the
management point of view because it saves expenses of recruitment.
However, in other industries, unions may be asked to recommend
candidates either as a goodwill gesture or as a courtesy towards the
union.

9. Labour Contractors:
This method of recruitment is still prevalent in India for hiring
unskilled and semi-skilled workers in brick klin industry. The
contractors keep themselves in touch with the labour and bring the
workers at the places where they are required. They get commission
for the number of persons supplied by them.

10. Former Employees:

In case employees have been laid off or have left the factory at their
own, they may be taken back if they are interested in joining the
concern (provided their record is good).

11. Other Sources:

Apart from these major sources of external recruitment, there are
certain other sources which are exploited by companies from time to
time. These include special lectures delivered by recruiter in different
institutions, though apparently these lectures do not pertain to
recruitment directly.

Then there are video films which are sent to various concerns and
institutions so as to show the history and development of the
company. These films present the story of company to various
audiences, thus creating interest in them.

Various firms organise trade shows which attract many prospective

employees. Many a time advertisements may be made for a special
class of work force (say married ladies) who worked prior to their
marriage.
These ladies can also prove to be very good source of work force.
Similarly there is the labour market consisting of physically
handicapped. Visits to other companies also help in finding new
sources of recruitment.

Merits of External Sources:

1. Availability of Suitable Persons:
Internal sources, sometimes, may not be able to supply suitable
persons from within. External sources do give a wide choice to the
management. A large number of applicants may be willing to join the
organisation. They will also be suitable as per the requirements of
skill, training and education.

2. Brings New Ideas:

The selection of persons from outside sources will have the benefit of
new ideas. The persons having experience in other concerns will be
able to suggest new things and methods. This will keep the
organisation in a competitive position.

3. Economical:
This method of recruitment can prove to be economical because new
employees are already trained and experienced and do not require
much training for the jobs.

Demerits of External Sources:

1. Demoralisation:
When new persons from outside join the organisation then present
employees feel demoralised because these positions should have gone
to them. There can be a heart burning among old employees. Some
employees may even leave the enterprise and go for better avenues in
other concerns.

2. Lack of Co-Operation:
The old staff may not co-operate with the new employees because they
feel that their right has been snatched away by them. This problem
will be acute especially when persons for higher positions are recruited
from outside.

3. Expensive:
The process of recruiting from outside is very expensive. It starts with
inserting costly advertisements in the media and then arranging
written tests and conducting interviews. In spite of all this if suitable
persons are not available, then the whole process will have to be
repeated.

4. Problem of Maladjustment:
There may be a possibility that the new entrants have not been able to
adjust in the new environment. They may not temperamentally adjust
with the new persons. In such cases either the persons may leave
themselves or management may have to replace them. These things
have adverse effect on the working of the organisation.

Suitability of External Sources of Recruitment:

External Sources of Recruitment are Suitable for The
Following Reasons:
(i) The required qualities such as will, skill, talent, knowledge etc., are
available from external sources.
(ii) It can help in bringing new ideas, better techniques and improved
methods to the organisation.

(iii) The selection of candidates will be without preconceived notions

or reservations.

(iv) The cost of employees will be minimum because candidates

selected in this method will be placed in the minimum pay scale.

(v) The entry of new persons with varied experience and talent will
help in human resource mix.

(vi) The existing employees will also broaden their personality.

(vii) The entry of qualitative persons from outside will be in the long-
run interest of the organisation.

[Link] SELECTION AND TRAINING

Recruitment, selection and training

Recruitment is the process of identifying that the organisation needs to employ someone up
to the point at which application forms for the post have arrived at the organisation.
Selection then consists of the processes involved in choosing from applicants a suitable
candidate to fill a post. Training consists of a range of processes involved in making sure
that job holders have the right skills, knowledge and attitudes required to help the
organisation to achieve its objectives. Recruiting individuals to fill particular posts within a
business can be done either internally by recruitment within the firm, or externally by
recruiting people from outside.

The advantages of internal recruitment are that:

1. Considerable savings can be made. Individuals with inside knowledge of how a business
operates will need shorter periods of training and time for 'fitting in'.

2. The organisation is unlikely to be greatly 'disrupted' by someone who is used to working

with others in the organisation.

3. Internal promotion acts as an incentive to all staff to work harder within the organisation.

4. From the firm's point of view, the strengths and weaknesses of an insider will have been
assessed. There is always a risk attached to employing an outsider who may only be a
success 'on paper'.

The disadvantages of recruiting from within are that:

1. You will have to replace the person who has been promoted

2. An insider may be less likely to make the essential criticisms required to get the company
working more effectively

3. Promotion of one person in a company may upset someone else.

External recruitment
External recruitment makes it possible to draw upon a wider range of talent, and provides
the opportunity to bring new experience and ideas in to the business. Disadvantages are
that it is more costly and the company may end up with someone who proves to be less
effective in practice than they did on paper and in the interview situation.
 There are a number of stages, which can be used to define and set out the nature of
particular jobs for recruitment purposes:

Job analysis is the process of examining jobs in order to identify the key requirements of
each job. A number of important questions need to be explored:

 the title of the job

 to whom the employee is responsible
 for whom the employee is responsible
 a simple description of the role and duties of the employee within the organisation.

Job analysis is used in order to:

1. Choose employees either from the ranks of your existing staff or from the recruitment of
new staff.

2. Set out the training requirements of a particular job.

3. Provide information which will help in decision making about the type of equipment and
materials to be employed with the job.

4. Identify and profile the experiences of employees in their work tasks (information which
can be used as evidence for staff development and promotion).

5. Identify areas of risk and danger at work.

6. Help in setting rates of pay for job tasks.

 Job analysis can be carried out by direct observation of employees at work, by finding out
information from interviewing job holders, or by referring to documents such as training
manuals. Information can be gleaned directly from the person carrying out a task and/or
from their supervisory staff. Some large organisations specifically employ 'job analysts'. In
most companies, however, job analysis is expected to be part of the general skills of a
training or personnel officer.

Job description
A job description will set out how a particular employee will fit into the organisation. It will
therefore need to set out:

 the title of the job

 to whom the employee is responsible
 for whom the employee is responsible
 a simple description of the role and duties of the employee within the organisation.

A job description could be used as a job indicator for applicants for a job. Alternatively, it
could be used as a guideline for an employee and/or his or her line manager as to his or her
role and responsibility within the organisation.

Job specification.
A job specification goes beyond a mere description - in addition, it highlights the mental and
physical attributes required of the job holder. For example, a job specification for a trainee
manager's post in a retail store included the following:

'Managers at all levels would be expected to show responsibility. The company is looking
for people who are tough and talented. They should have a flair for business, know how to
sell, and to work in a team.'
 Job analysis, description, and specification can provide useful information to a business in
addition to serving as recruitment instruments. For example, staff appraisal is a means of
monitoring staff performance and is a feature of promotion in modern companies. In some
companies, for example, employees and their immediate line managers discuss personal
goals and targets for the coming time period (e.g. the next six months). The appraisal will
then involve a review of performance during the previous six months, and setting new
targets. Job details can serve as a useful basis for establishing dialogue and targets. Job
descriptions can be used as reference points for arbitrating in disputes as to 'who does
what' in a [Link] involves procedures to identify the most appropriate
candidates to fill posts. An effective selection procedure will therefore take into
consideration the following:

 keeping the costs of selection down

 making sure that the skills and qualities being sought have been identified,
 developing a process for identifying them in candidates
 making sure that the candidates selected, will want the job, and will stay with the company.

Keeping the costs of selection down will involve such factors as holding the interviews in a
location, which is accessible to the interviewing panel, and to those being interviewed. The
interviewing panel must have available to them all the necessary documentations, such as
application forms available to study before the interviews take place. A short list must be
made up of suitable candidates, so that the interviews do not have to take place a second
time, with new job advertisements being placed.

The skills required should have been identified through the process of job analysis,
description and specification. It is important then to identify ways of testing whether
candidates meet these requirements. Testing this out may involve:

 interviewing candidates
 asking them to get involved in simulated work scenarios
 asking them to provide samples of previous work
 getting them to fill in personality and intelligence tests
 giving them real work simulations to test their abilities.

Induction and training

New workers in a firm are usually given an induction programme in which they meet other
workers and are shown the skills they must learn. Generally, the first few days at work will
simply involve observation, with an experienced worker showing the 'new hand' the ropes.
Many large firms will have a detailed training scheme, which is done on an 'in-house' basis.
This is particularly true of larger public companies such as banks and insurance companies.
In conjunction with this, staff may be encouraged to attend college courses to learn new
skills and get new qualifications. Training thus takes place in the following ways:

1. On the job - learning skills through experience at work

2. Off the job - learning through attending courses.

Promotion within a firm depends on acquiring qualifications to do a more advanced job. In

accountancy for example, trainee accountants will be expected to pass exams set by the
Association of Chartered Certified Accountants (ACCA). At the same time, a candidate for
promotion must show a flair for the job. It is the responsibility of the training department
within a business to make sure that staff with the right skills are coming up through the firm
or being recruited from outside.

The Association of Chartered Certified Accountants has 300,000 members and students
throughout the world. It is a professional body setting standards for the accountancy
profession. To be properly qualified, accountants must have passed examinations that
make them eligible for membership of one or more professional accounting bodies, such as
ACCA. Typically accountants will improve their knowledge and experience by taking
courses run and organised by ACCA during their professional training enabling them to
develop and enhance their careers.

Induction is the process of introducing new employees to an organisation and to their work
responsibilities in that organisation.