Introduction to Management (Mgmt 211)

Unit Five
Staffing Functions
5.1 Meaning of Staffing
It is filling and keeping filled positions in the organization structure through identifying work-force
requirements, inventorying the people available, recruiting, selecting, placing, promoting, appraising,
planning the careers, compensating, and training or otherwise developing both candidates and current
jobholders to accomplish their tasks effectively and efficiently.
According to Koontz and O’Donnell, “The managerial function of staffing involves managing the
organization structure through proper and effective selection, appraisal and development of personnel to fill
the roles designed into the structure.”
According to Theo Hahnemann, “Staffing function is concerned with the placement, growth and development
of all those members of the organization whose function is to get things done through the efforts of other
individuals.”
Staffing is a process of acquiring, retaining, developing, properly using and terminating the human
resource in an organization.
While performing the staffing function, the manager has to see that men are fit for jobs and jobs are not
altered for men. The major elements of staffing identified from the above definitions are: effective
recruitment and selection, proper classification of personnel and pay fixed for them, proper placement,
adequate and appropriate training for development, satisfactory and fair transfer and promotion, sound
relationship between management and workers, and adequate provision for retirement.
5.2 Functions of Staffing
The staffing function has three basic phases: acquisition, retention, and termination phase of human resources
in an organization.
Phases 1. The acquisition phase involves job analysis, human resource planning, skills inventory, recruiting,
screening/selecting and placing personnel.
Phase 2.The retaining (utilization) phase involves using employees in an organization for long time through
compensation, training and development, promotion, transfer and demotion, performance appraisal
Phase 3.The terminating phase is the opposite of retention i.e. separation of an employee due to several
reasons such as breaking rules, failing to perform adequately, or job cutbacks etc.

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Phases 1: The acquisition phase

5.2.1 Job Analysis
It is the process of determining, through observation and study, the pertinent information relating to the
nature of a specific job. Jobs are created through the organizing function. The boxes in the structure
define positions and jobs. Job analysis aims at fixing the employment standards. Job analysis results in
job specification and job description. They are the two results of job analysis.
Job Description – is a systematic and organized written statement of the duties and responsibilities in a
specific job.
Job Specification – is a statement of personal qualities, skills, traits or attributes that an individual must
possess for successful performance in a particular job.

Job Analysis-Determining pertinent information relating to the nature of a job

Job Description- A written statement of a job and Job Specification-A written statement of the Necessary
its requirements qualification of the job holder
Job titles, location, duties to be performed, characteristics of the job Education, Experience, Training, Mental abilities, Physical effort and skills

5.2.2 Human Resource Planning/Manpower Planning

Manpower planning/human resource planning/personnel planning is the development of a comprehensive
staffing strategy for meeting the future human resource needs of an organization.
It is the process of determining how an organization can get the right number of qualified people into the
right job at the right time. Therefore, human resource planning is based on forecasting future manpower
requirement both in the short run and the long run. The future manpower requirement for an organization is
satisfied from the current employees and new employees that will be attracted through the recruitments
process.
It is an attempt to forecast how many and what kind of employees will be required in the future and to what
extent this demand is likely to be met.
I.e. how many employees will be retired, laid off, die, discharged, fired, acquired and what kinds of
employees (regarding sex and educational back ground) are going to be hold in the future.
Skills Inventory/inventorying the skills
It contains basic information on all the employees of an organization, giving a comprehensive picture of the
individual. It consolidates information about the organization’s current human resources (the quality and
quantity of its human resources). Listing of abilities, qualifications…of …
If the planned manpower requirement is less than the inventoried skill, there will be reduction of manpower.
But, if the planned manpower requirement is less than the skill inventoried, new employees will be hired.
Therefore, before trying to recruit, comparing the current manpower with the planned manpower is
important.

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5.2.3 Recruiting
Recruiting involves attracting candidates to fill the positions in the organization structure. Recruitment
involves seeking and attracting a supply of people from which qualified candidates for job vacancies can be
selected. It is the process of finding the apt/apropos candidates and inducing them to apply for the job in an
organization. It is the set of activities an organization uses to attract job candidates with the abilities and
attitudes needed to help the organization achieves its objectives. Its objective is attracting the best qualified
applicants to fill vacancies.
According to Dalton E. McFarland, “The term recruitment applies to the process of attracting potential
employees of the company”.
Edwin B. Flippo, “Recruitment is the process of searching for prospective employees and stimulating them to
apply for the jobs in the organization”.
A. Sources of Recruitment
i) Internal Sources
These include personnel already on the payroll of an organization. It is through upgrading, transferring,
promoting or sometimes demotion. Potential sources are those personnel who were ones the employees of the
company include: those who quit voluntarily, those on leave of absence, and those on production lay-off (but
are wishing to return or the company would take to re-hire).
Advantages of recruitment from internal sources
 It increases the morale among the staff members of the organization.
 The training expenses may be reduced to some extent.
 An organization would have a good idea about the strengths and weaknesses of its own employees.
 Employee morale and motivation are positively affected by internal promotion.
 It increases the organization’s return on its investment as the result of using the employees’ ability to
the fullest extent.
 It induces the staff members to work hard to get promotion.
 Such expenses as on advertisement, recruitment, test and interview are avoided.
Disadvantages of Recruitment from Internal Sources
 Individuals tend to rise to their levels of incompetence, in the hierarchy.
 The inbreeding of ideas. Fresh and original ideas and initiatives will not be generated.
 If the promotion is a guarantee to the internal staff members after the expiry of a specific period, the
concerned staff member does not care to work efficiently.
 An Under qualified person may be appointed in the higher post.
 Conflicts among members of the organization may arise for promotion.

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ii) External Sources

These sources lie outside the organization and there are various external sources of recruitment. They are:
 New entrants to the labor force. These include college graduates and inexperienced potential
employees.
 The unemployed with wide range of skills and abilities.
 Retired experienced persons such as mechanics, machinists, welders, etc.
 Others in the labor force (such as married women)
Advantages of Recruitment from External Sources
 Choice. A company can recruit the best person out of a large number of applicants. Each and every
candidate’s plus points and minus points are taken into consideration for the purpose of recruitment.
Then the best candidate can be selected by the company.
 New Outlook. If a new person is recruited by the company, a new way of approach may be drawn to
solve the problem, which will give maximum benefits to the company.
 Wide Experience. If the recruited new candidate has experience in various fields, the company can get
the benefit of the candidate’s experience.
Disadvantages of Recruitment from External Sources
 Hostility of current Employees. If a candidate is recruited from external sources, the existing staff may
have a grudge/complaint or hostility against him. It results in demoralization of the staff members.
 Lack of co-operation. The existing staff members do not extend their co-operation to the person who is
selected from out of external sources. In addition to this, the existing staff members make the new
recruit face the difficulties and try to disorient him in relation to his work.
 Expensive. Recruitment of a person from outside the company requires a lot of formalities. Completing
all the formalities involves a lot of expenditure.
 Trade union obstacle. If the trade union of the company is very strong, it is very difficult to convince
the trade union and recruit a person from outside a company.
 Danger of non-adjustment. If a newly recruited person fails to adjust himself to the working conditions
of the company, it leads to more expenditure in looking for his replacement. Besides, it causes irritation
and quarrel between the recruited person and the existing staff members.
B. Methods of Recruitment
There are three methods of recruitment.
i) Direct Methods
These include sending recruits to educational and professional institutions. The different sources used under
this method are:
 Waiting list. The business concern prepares a waiting list of candidates who have already been
interviewed. But, they are not appointed for lack of vacancy. Whenever a vacancy arises, the vacancy
may be filled up by the company out of the waiting list.
 Unsolicited applicants. They refer to the applications received through mail from the candidate. The
application brings the complete information about the applicant. If there is any vacancy at that time,
the candidate will be recruited for the specified post.
It is similar with gate applicants. The difference lies on the method of application-unsolicited
applicants send their documents through mail whereas; the gate applicants present their documents
personally. Normally, this type of application is considered for the posts at the lower level.

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 Jobbers and contractors. The casual vacancy may be filled up by the company through the jobbers
and contractors. Normally, unskilled candidates are appointed in this way. They are available at short
notice and for a small salary. This type of candidate is brought by the jobbers and contractors to the
place of work and they receive some wages from the company for this service.
 Field trips. A company may send a group of experts to the towns and the cities where the various
kinds of candidates required by the company are available. In this case, a prior advertisement may be
issued in newspapers. The advertisement contains information regarding the date, venue and time of
the interview. The interview is conducted in different places.
ii) Indirect Methods
These include mostly advertising on the media: newspapers, radio, in trade & professional journals, etc. When a
company wants to inform the public that it has a vacancy, it puts up an advertisement. The details of the job and the
qualification of the candidates are briefly given.
iii) Third Party Methods
These include the use of third parties to recruit candidates for the vacant positions. This method includes the use of
the following sources.
 Personnel Consultant. Private consultant is a separate specified agency doing the function of
recruitment of the personnel on behalf of the company. In other words, the functions of personnel
department of any company re-performed by the personnel consultants. It receives the
applications from the candidates, verifies the applications, conducts interviews and selects the
candidates. The personnel consultant receives fees from the company for its service. The same is
true with commercial or private employment agencies.
 Educational institutions. Universities, colleges and institutions are formed to offer specific
courses. The educational institutions make an arrangement for campus interview. The business
concerns come to the campus of educational institutions to recruit the students for various posts.
The selected students are requested to join the post after completing the course.
 State agencies. They are government institutions engaged in employee recruitment and
administration activities. In Ethiopia, the civil service uses the Federal Civil Service Commission
and The Regional Civil Service Bureaus for recruitment purposes.
 Recommendations. Recommendation means appointment of a person on getting a
recommendation letter from a person reliable and well-known to the company. In certain cases,
an employee of the company may bring the candidates to the company for the purpose of being
appointed, when the company does not conduct an interview for selection. Other sources of
recommendation may be: Placement office of schools, colleges and professional association,
friends, relatives, etc.

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2.4 Selection
It is choosing from among the candidates the one that best meets the position requirements. Selection is
the process of deciding which candidate, out of the pool of applicants developed in recruitment has the
abilities, skills and characteristics most closely matching job demands.
The hiring process can be successful, if the following preliminary requirements are satisfied:
 Someone should have the authority to hire. The one who undertakes the selection process should
have the authority to select otherwise, the whole process will be a futile exercise.
 There must be some standard of personnel with which a prospective employee may be compared.
In other words, there must be properly developed job specification. Among the applicants only
those who fulfill the requirements or standards of employment will be selected.
 There must be a sufficient number of applicants from whom the required numbers of employees
may be selected. If the number of applicants are fewer than or equal to or a bit greater than the
vacant positions we cannot make a successful selection. Therefore, management should develop a
good number of applicants.
 Successful Human resource Planning. It determines the human resource requirement of the
organization for both short run and long run purposes of the organization. Therefore it must be
developed properly so as to know the right number and type of employees up on which selections
can be made successfully.

Steps or Process of Selection

1. Receiving and screening of applications
Prospective employees are requested to submit the applications in white paper or in a prescribed form. In
both the cases, full particulars of the employee should be given. Any omission may disqualify the
particular candidate. The information relates to the name of the candidate, age, educational qualification,
date of birth, experience, parent’s name and occupation, address for communication, etc.
2. Initial interview/Preliminary
The object of conducting this interview is to know whether the applicant is physically and mentally fit for
the job. Questions are put to the candidate for evaluation. These questions are related to his/her
qualifications: education, experience, skill, salary demanded, reasons for leaving their present jobs, their
job interest, their physical appearance, age and facility in speech. Only a minimum time is spent for this
interview. Candidates who have passed in the initial interview are called for the next selection procedure.
3. Application Blank
A specific format is followed by an organization for this selection process. The nature of the format varies
for each job. The reason is that different qualifications and skills are required for different jobs.

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The advantages of a blank application in the selection procedure are explained below:
 Acts as an agent test device.
 Shy and slow candidates get a chance to explain their ideas.
 Aid to build trust among applicants.
 Bases for final interview.
 Aid to preparing waiting list.
4. Test
The test is conducted by the organization for the purpose of knowing more about the applicants to be
selected or rejected.
Tests can be classified into two kinds.
1. Proficiency Test- refers to the testing of the skills/abilities possessed by the candidate.
The types of Proficiency Test include:
- Temperament Test – is used to measure the likes and dislikes, and habits of the individual.
- Achievement Test – is used to measure the level of knowledge for performing the work assigned to an
individual. It is otherwise called performance test or trade test.
- Interest Test – is used to discover the individual’s interest in having the work assigned to him/her. It
is assumed that an individual who is interested in one type of work does better than the one who is not
interested.
2. Aptitude Test- refers to measuring of the skills and abilities which may be developed by the
applicant to perform the job in future.
The types of Aptitude Test include:
- Intelligence Test – is used to measure the mental ability, capacity and general awareness of the
individual. The most common intelligence tests used for management purposes are group tests,
individual tests, self-evaluation test, self-administration tests, performance tests, verbal
comprehension, word fluency, memory, inductive reasoning, test of reasoning, number facility, speed
of perception and the like.
- Personality Test – is used to measure courage, initiative, emotion, confidence reaction, ability to mix
with others, ability to motivate, general behavior of the individual, cheerfulness, leadership, patience
and domination of character.
- Situational Test – is used to measure the reactions of applicants to a particular situation. Besides, the
applicant’s ability to succeed in his job in this situation is also measured.
- Judgment Test – is used to measure the ability of an individual in applying to knowledge,
intelligence and experience to solve the problems presented before him.

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- Efficiency Test – is used to know how quickly and efficiently an individual uses his hands to
accomplish the work assigned to him. It is otherwise called dexterity test.
Advantages of Tests
1. Tests help the employer to find whether a candidate is fit for the job or not.
2. Tests help in checking candidate’s claims in respect of his qualification, experience, etc.
3. Standards of job performance can be established with the help of this test.
4. Labor turnover can be reduced.
5. Tests reduce the cost of selection and placement.
6. Tests highlight the hidden talents and overlooking of these can be avoided.
7. Tests may be conducted for transfer and promotion.
Disadvantages of Tests
1. The actual performances of a candidate cannot be found out through the test.
2. Some candidates do not reveal their talents through tests.
3. Test is not able to measure the combination of characteristics required for various jobs.
4. Test is not appropriate if the number of candidates is few.
5. Test is not appropriate for all types of jobs.
5. Checking Reference
Sometimes, the applicants are required to furnish references. References are the norm in society.
Applicants may include the name and address of parent educational institutions and the present employer.
The information furnished in the applications are checked from these persons.
If the referee is a present employer, the applicant’s job performance, salary drawn particulars, reasons for
leaving the job, etc., are checked. A letter of recommendation may also be treated as a reference.
6. Interview/Secondary Interview
Interview is considered as a method of personal appraisal through face to face conversation and
observation. The management selects a candidate through an interview by one or more persons. The
interviewing persons are experts in the interview technique and they have a thorough knowledge in their
respective fields. Interview helps the employer to evaluate the candidate regarding the personality,
smartness, intelligence, attitude, etc.
In any interview, the interviewer has a dominant position over the interviewee. The following are the
basic interviewing steps:
1. Interviewers must acquaint themselves with the job analysis/ Review of background information.
2. They must analyze the information on application blanks.
3. Preparation of questions.
4. Putting the applicant at ease. You may invite tea, coffee or you may put the interviewee feel
relaxed.

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5. Interviewers need to ask questions that elicit information that can add to data on the application
blank
6. Drawing cut the best applicant
7. Concluding Interview
Kinds of Interview
1. Direct Interview: Under this type of interview, straight away questions are put before the applicant to
get answers for them. Face to face conversation is the trend towards the interview.
2. Indirect Interview: Questions are not raised directly by the interviewer before the interviewee. The
particular applicant is requested to express his views on any topics as he likes. The interviewer carefully
listens to what the applicant expresses. The interviewer does not interpret the applicant’s views.
3. Patterned Interview: A number of standard questions with their answers are framed before they are
to be put before the applicant. The answers for these questions are found while framing the questions
and answers are written near the questions. These are used for a verification purpose when answers are
given by the applicant during the interview.
4. Stress Interview: Irritating questions are put before the applicant by the interviewer. If any applicant
gets angry when these types of questions are put to him, the particular applicant is evaluated as unfit for
the job.
5. Systematic in-depth Interview: Under this type of interview, the interviewer asks anyone of the
questions, initially. Then, he proceeds step by step to get an integrated view of the skills and personality
of the applicants.
6. Board or Panel Interview: A group of persons ask the applicant questions in the area of interest of
the applicant. Immediately after the interview, they evaluate the performance of an applicant based on
the answers given by the applicant.
7. Group Interview / group discussion or house party technique: A number of applicants are interviewed
simultaneously. A common topic is presented before the group. One group consists of six to eight
members. Each applicant is allotted a number. They may call other members of the group by calling the
concerned member’s number. They are restricted to use their names. The applicants are selected or
rejected on the basis of performance in group discussion.
7. Final Selection
Finally, a suitable applicant is selected on the basis of performance in the above mentioned test and
interview. Only the required number of applicants is selected by the management. The competent
authority has to approve the selection of the applicants. In the case of big organization, a separate
department known as personnel department is in charge of selection.
8. Medical/Physical Examination
This is carried out for the purpose of assessing physical fitness of the prospective employee. Many
organizations do not follow the process of medical examination. The reason is that there is no need for
medical examination in certain jobs.

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9. Orientation/Familiarizing
Orientation refers to providing the information regarding the organization briefly to new employees. The
term information includes co-workers of new employees, superior, subordinates, location of work place,
duties, authorities, responsibilities and the overall administration of the organization.
The new employees are taken round the offices and plant and they are introduced to the existing
employees. The orientation program helps the new employee to acquire knowledge about the organization
functioning without any delay. It facilitates the effective performance of a job by the new employee.
10. Placement
The applicants are placed on a probation basis only after completing all the formalities. The probation
period may vary from one job to another job according to the nature of the job. The probation period for
any job may be 45 days or three months depending upon the company policy. The new employees are
observed keenly over the probation period. These new employees are regularized on the completion of the
probation period successfully.
5.2.5 Training and Development
Both increase the efficiency and productivity of employees. Edwin B. Flippo stated that, “While training
is the act of increasing the knowledge and skills of an employee for doing a particular job, the
management development includes the process by which managers and executives acquire not only skills
and competence in their present job, but also capacities for future managerial tasks of increasing difficulty
and scope.” Training is generally associated with operating employees and development is associated
with managerial personnel. See the comparison below:
Training can be conducted to new employees as part of orientation and it is concerned with immediate
improvement.
Training has a beginning and an end but the job of development has no end.
Training requirement may arise from internal and external changes. These changes need employees to be
trained in a new ways. Internal changes may include: planned organizational changes & expansion,
strategy change and objective and focus change. And external changes may also include: economic
change, social change, technological change and government change.
Training concentrates on short term needs of the organization, while development looks after long term
goals of the organization.
Development of an employee is an ongoing process which continues well beyond training

Management development refers to the process of education and developing selected personnel so that
they acquire the knowledge and skills needed to manage in future positions. It is concerned with
developing the attitudes and skills necessary to become or remain an effective manager.
The objectives of management development are to:
 Ensure the long-run success of the organization.
 Furnish competent replacements.
 Create an efficient team that works well together.
 Enable each manager to use his full potential.

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This is necessary because of high executive turnover, a shortage of management talents, and society’s
emphasis on lifelong education and development. To be successful it must be supported by top
management and should be designed, conducted and evaluated on the following basis:
ii) Steps to be taken to ensure that job training is effective
i) Prepare the employee for learning the job. Before the training is given the trainer should explain
the objectives of the training, the requirements from the trainee to make the training successful.
ii) Break down the work into components and identify the key points. The breakdown can be seen as
a detailed road map that helps guide the employee through the entire work cycle in a rational,
easy-to-understand manner, without injury to the person or damage to the equipment.
iii) Demonstrate the proper way to perform the job. An employee must not only be told but also must
be shown how to do the job. Each component of the job must be demonstrated. While each is
being shown, the key points for that component should be explained.
iv) Allow the employee to perform the job. An employee should perform the job under the guidance
of the trainer. Generally, an employee should be required to explain what to do at each phase of
the job. If the explanation is correct, the employee is then allowed to perform the phase. If it is
incorrect, the mistake should be corrected before the employee is allowed to actually perform the
phase.
v) Gradually put the employee on his or her own. When trainer is reasonably sure an employee can
do the job alone, the employee should be allowed to work at his or her own pace and should be
left alone while developing skills in performing the job.
iii) Importance and Need for Training
1. Non-availability of trained personnel. It is very difficult to find fully trained workers for all
categories levels of jobs in an organization. Then the organization selects the persons who are having
little training or no training. Adequate training will be given by the employers themselves to the
untrained worker.

2. Suitability for the job. A worker might be assigned on a job for which he is not trained. Then a need
arises for giving the same special training to the concerned worker. All types of training are not
provided in a vocational school. A supplemental training is also essential to the worker in the basis of
the peculiarity of the job.

3. Getting knowledge by latest methods. The rapid development of science and technology (innovations
and inventions) has made it necessary to give training to the workers.
iv) Types of Training
Training methods can be devised according to the mental caliber of personnel in an organization and the
importance of the job training.
A. On-The-Job-Training
On-the-job training refers to learning while actually performing a particular work or job. The trainee is
shown how to perform the job and allowed to do it under the trainer’s supervision. Trainees under training
contribute to the organizational production. On the job training can be classified as follows.

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1. On specific Job: A person can learn when he/she is actually put in a job for which he/she is selected.
2. Rotation of Position: A person is given jobs in various sections of the organization at various levels. It
is also referred to as job-rotation or cross training: Its objective is to broaden the knowledge &
background of the trainee. It allows flexibility in the department and no special facilities are required.
3. Special Projects and Committee Assignment: An existing employee is deputed to special projects.
He/she is expected to work under special projects up to the finishing stage. Then he/she learns the jobs
under special projects and he gets an opportunity to move with other different types of persons.
4. Apprenticeship (Under Study): The trainee is put under the supervision of an expert. It is a system in
which an employee is given instruction and experience, both on and off the job in all the practical and
theoretical aspects of the work required in a skilled occupation, craft or trade. For example, barber,
butcher, carpenter, etc.
Titles begin with “Assistant to--- “are examples of such type of training. This type of training is used to
fill up the places of skilled personnel.
5. Coaching: The trainee is put under an experienced manager. The experienced manager, then, advices
and guides trainees in solving managerial problems. The coach’s expertise and experience are of critical
importance.
B .Off-The-Job-Training
Under this type of training system, a trainee is removed from his normal working place and spends his
full time for training purpose in any other place. During the training period, there is no contribution of
trainee to the organization. Normally, this type of training is provided outside the organization and rarely
within the organization but not given in the working place. This type of training is classified and briefly
discussed as follows.
1. Special course and lectures: The basic concepts and theories, principles and pure applied knowledge
of the particular subject are imparted to the participants. This type of training is aimed at giving
fundamental information to the trainee.
Classroom Training: It is an effective means of quickly getting information to large groups with limited
or no knowledge of the subject being presented.
2. Conference: The trainees are expected to offer their ideas and use their experience for solving the
problems with the help of the trainer. Small groups are formed for an intensive discussion of various
subjects.
Brainstorming: It is a technique used to generate ideas. Ten to fifteen members are necessary to conduct
a brainstorming session. The same level of people is constituted into a group. Each member is asked to
give more number of ideas to solve the problem. Idea generation is the main objective of brainstorming.
Webster Dictionary defines brainstorming as, “A conference technique by which a group attempts to find
a solution for a specific problem by amassing all the ideas spontaneously contributed by its
members.”
3. Case Study: A case is written, real or hypothetical, in blue print form and circulated among the trainees
and decision must be made by trainees. The blue print contains the information like the history of
business unit, external environment affecting the concerned business unit, internal separation and

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financial structure. No case contains the full details of the organization as a reader wishes. Then the
trainee takes decisions on the basis of the available information and makes a reasonable assumption on
the information not in hand.
4. Role Playing: It is used in a group where different persons are given the role of different managers.
They are requested to solve a problem in a situation or arrive at a decision. Discussion among the trainees
sparks of spontaneously. At the end of the role playing session, the trainees are given feedback of their
role playing.
5. Management games: Management games are used to stimulate the thinking of people to develop their
skills to run a company or a department. They are used to develop the skill in the area of investment,
production, sales, collective bargaining, etc. The trainer gives the feedback to everyone.
6. Transactional Analysis: It is used to develop interpersonal interactions among individuals.
Understanding of personal factors of individuals is the main objective of transactional analysis. Besides,
the ego status of individuals is identified.
7. Vestibule Training: Procedures and equipment similar to those used in the actual job are set up in a
special working area called vestibule. The trainee is then taught how to perform the job by a skilled
person and is able to learn the job at a comfortable pace without the pressures of production schedules.
It is used to train typists, word processor operators, bank tellers, nurses, pilots and bank clerks. It may be
referred as In-basket Technique/ simulation Technique.
Phases 2: The acquisition Utilization/Maintenance phase
Employees are recruited, selected, placed to the position for which they are selected, and the necessary
training and development is given. The next activity is utilizing these employees to the benefit of the
organization. This includes:
Employee Remuneration
It refers to the cash remuneration and benefits that an employee receives in exchange for the service
he/she renders for his/her employer.
Compensation: Wage and Salary (Fixed)
Commissions, bonuses, (Variable- based on performance)
Benefits consist of retirement plans, health insurance, life insurance, vacation, employee stockownership
plans, etc.
Performance Appraisal
Performance appraisal is the systematic/formal or informal evaluation of the performance of an employee
by an expert, his immediate superior or others. The very purpose of appraising an employee is for the
promotion of the employees. However, it can also serve as a means of identifying whether training is
necessary or not and who needs and who does not. Performance appraisal can be conducted by the
management periodically or it can be conducted whenever needed.

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Promotion/Upgrading
Promotion may be defined as the placement of an employee to a better job which results in extending
prestige, salary, powers, duties, responsibilities and it requires more knowledge and skills to perform the
job. Higher posts and key posts are filled up by the management through the promotion policy. This
promotion policy persuades the employees to be loyal to the management.
There are two basic bases of promotion: seniority and competence (merit)
A. Seniority
Seniority refers to the possession of more number of years of service in the same organization than those
of the other employees. Seniority is the basis for promotion to a job which does not require much
competence. Promotion by seniority is preferred by most employees, because:-
 The system is simple to understand and operate.
 It recognizes the older members need for respect.
 It promotes discipline and morals in the organization for all are assured that promotion will come
when it is due.
However, it has the following disadvantages:
 It does not reward meritorious work, extra competence, achievement and initiative.
 It does not encourage an employee to work hard so that he may get an opportunity for
advancement in the organization.
 It leads to lowered productivity, for individuals are not required to fulfill any level of competence
but simply years of service.
B. Competence/Merit
Competence refers to the accomplishment of a particular job effectively than the other employees.
Competence is the basis for promotion to a job which requires professional skills.
The system of promotion by merit yields the following benefits:
 It brings rewards for meritorious work, extra competence, achievement and initiative.
 It encourages an employee to work hard so that he may get an opportunity for advancement in the
organization.
 It leads to increased productivity, for individuals are satisfied that their merit and competence will
be properly appreciated and recruited.
However, it has the following disadvantages:
 The system is complex to understand and operate.
 It does not recognize the older members need for respect.
 It does not promote discipline and morale in the organization for all as it is subject to personal
biases.

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Demotion or Downgrading
Demotion refers to the lowering down of the status, salary and responsibilities of an employee. It is used
as punitive measure when there are serious breaches of duty on the part of an employee. Causes of
demotion are the following:
1. When departments are combined and jobs are eliminated.
2. Inadequacy on the part of the employees in terms of job performance, attitude and capacity.
3. Because of change in technology, methods and practices.
Transfer
It is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or
position to another at the same or another place where salary, status and responsibility are the same. It
generally does not involve a promotion, demotion, or a change in job status. They are generally carried
out to build up a more satisfactory work team and to achieve the following purposes.
A. To satisfy organizational needs at times of change – quantity, structure, etc.
B. To meet an employee’s own request when he feels uncomfortable on the job.
C. To utilize the services of an employee properly.
D. To increase the versatility of the employee – to have ample opportunities for gaining a usual and
broader experience of work.
E. To help employers work according to their conveniences so far as timings are concerned.
Types of Purposes of Transfer
A. Versatility Transfer- is carried out to give the worker varied and broader experience. It is also done to
bring job enrichment.
B. Plant Transfer- is carried out to adjust the workforce of one plant to that of another when one is
closed down.
C. Replacement Transfer-is carried out to relieve an employee by replacing him with a new employee.
D. Shift/Personal Transfer- is carried out to help employees work according to their conveniences. (It is
done to meet employees’ request)
E. Remedial Transfer- is carried out to use the employee effectively and make him more productive
than before.
F. Flexibility Transfer- is carried out to satisfy the human resource power needs of an organization.

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Phase 3.The terminating phase is the opposite of retention

Separation
Separation refers to cessation / stoppage of service with the organization. It refers to termination of
services in an organization. An employee may be separated from the payroll of the company as a result
of:
1. Resignation – Voluntarily stoppage. This is at the personal request of the employee.
2. Discharge – Separation for violation of company rules or for inadequate performance.
3. Suspension – An employee is suspended when he/she is suspected to commit certain crime or violate
the company rule and regulations. If the case is proved and the employee is found committed the
violation he/she will be discharged otherwise he/she will resume his/her position. All the salaries and
benefits unpaid during suspension will be paid to the employee.
4. Retrenchment –An employee permanently terminates his/her services in an organization for
economic reasons in a going concern. When the organization faces financial problems, some of the
employees will be separated.
5. Lay- offs – An indefinite separation of the employee due to factors beyond the control of the
employer such as: surplus skills, production stoppage, to reduce the financial burden of an
organization.
6. Absenteeism – When an employee is absent for a long period of time, the employee is said to be
separated during that time of his/her absence.
7. Retirement – Occurs normally when an employee is not performing his or her job because of by old
age, injury, or serious sickness.

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