Plus Two Business Studies Notes Chapter 6 Staffing

Kerala State Board New Syllabus Plus Two Business Studies Notes Chapter 6 Staffing.

Kerala Plus Two Business Studies Notes Chapter 6 Staffing


Staffing is concerned with determining the manpower requirement of enterprise and includes functions like recruitment, selection, placement, promotion, training, growth and development and performance appraisal of employees in the organization.

Importance of Staffing

  • Helps in discovering and obtaining competent personnel for various jobs.
  • Makes for higher performance, by putting right person on the right job.
  • Ensures continuous survival and growth of the enterprise.
  • Helps to ensure optimum utilization of the human resources.
  • Improves job satisfaction and morale of employees.

Staffing as a part of Human Resources Management (HRM)

Staffing is an inherent part of human resource management. It is a function which all managers need to perform. Human resource management involves planning, procurement and development of human resources.

Functions of Human Resource Management:

  • Recruitment, i.e., search for qualified people.
  • Analysing jobs, collecting information about jobs to prepare job descriptions.
  • Developing compensation and incentive plans.
  • Training and development of employees.
  • Maintaining labour relations
  • Handling grievances and complaints.
  • Providing for social security and welfare of employees.
  • Maintaining relation with trade unions.

Staffing Process

1) Manpower planning: It is concerned with forecasting the future manpower needs of the organisation, i.e. finding out number and type of employees need by the organisation in future.
2) Recruitment: Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.
3) Selection: Selection is the process of selecting the most suitable candidates from a large number of applicants.
4) Placement and Orientation: Placement refers to putting the right person on the right job. Orientation is introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation.
5) Training and Development: The process of training helps to improve the job knowledge and skill of the employees. It motivates the employees and improve their efficiency.
6) Performance Appraisal: Performance appraisal means evaluating an employee’s current and past performance as against certain predetermined standards.
7) Promotion and Career Planning: Promotion means movement of an employee from his present job to a higher level job.
8) Compensation: Compensation refers to all forms of pay or rewards going to employees. It may be in the form of direct financial payments like wages, salaries, commissions and indirect payments like employer paid insurance and vacation.

Sources of Recruitment

There are two sources of recruitment.

  1. Internal sources
  2. External sources

Internal Sources

It refers to the recruitment for jobs from within the organisation.
It includes:
1) Transfer: It involves shifting of an employee from one job to another without change in responsibility or compensation.
2) Promotion: It refers to shifting of a person from lower position to a higher position carrying higher status, responsibility and more salary.

Merits of Internal Sources:

  • It motivate the employees for better performance.
  • The existing employees get an opportunity for promotion.
  • It establishes better employer-employee relationship.
  • It creates a sense of security and loyalty among employees.
  • Internal recruitment is less time – consuming.

Limitations of Internal Sources:

  • It encourages favouritism and nepotism
  • There is no opportunity for efficient outsiders.
  • There will be absence of competition.
  • It may give rise to conflict in the organisation among employees.
  • Frequent transfers of employees may often reduce the productivity of the organisation

External Sources

Selection of employees from outside the enterprise is known as external recruitment. The important external sources of recruitment are:
1) Direct Recruitment: Under the direct recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Jobseekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. It is suitable for filling casual vacancies.
2) Casual callers: Many reputed business organisations keep a database of unsolicited applicants in their office. This list can be used for recruitment.
3) Advertisement: Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required.
4) Employment Exchange: Employment exchanges keep records of job seekers and will be supplied to business concern on the basis of their requisition.
5) Placement Agencies and Management Consultants: These agencies compile bio-data of a large number of candidates and recommend suitable names to their clients.
6) Campus Recruitment: Business enterprises may conduct campus recruitment in educational institutions for selecting young and talented candidates.
7) Recommendations of Employees: Applicants introduced by present employees, ortheirfriends and relatives may prove to be a good source of recruitment.
8) Labour Contractors: Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice.
9) Web Publishing: There are certain websites specifically designed and dedicated forthe purpose of providing information to the job seekers.

Merits of External Sources:

  • It attracts qualified and trained people to apply for the vacant job in the organisation.
  • The management has a wider choice of selecting the people for employment.
  • Best and talented employees can be selected.
  • If a company taps external sources, the staff will have to compete with the outsiders.

Limitations of External Sources:

  • It may cause dissatisfaction among the employees.
  • Employees may feel that their chances of promotion are reduced.
  • It is time – consuming process.
  • It is costly.


Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job.

Process of Selection:
1) Preliminary Screening: Preliminary screening helps the manager to eliminate unqualified job seekers.

2) Selection Tests: Various tests are conducted to know the level of ability, knowledge, interest, aptitude, etc. of a particular candidate. The various types of tests are:

  • Intelligence Tests: This is one of the important psychological tests used to measure the level of intelligence quotient (IQ) of an individual.
  • Aptitude Test: It is a measure of individual’s potential for learning new skills.
  • Personality Tests: Personality tests provide clues to a person’s emotions, reactions, maturity and value system, etc.
  • Trade Test: These tests measure the existing skills of the individual.
  • Interest Tests: Interest tests are used to know the pattern of interests or involvement of a person.

3) Employment Interview: Interview is a formal, in-depth conversation conducted to evaluate the applicant’s suitability for the job.

4) Reference and Background Checks: Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and, gaining additional information on an applicant.

5) Final Selection: The final decision has to be made from among the candidates who pass the tests, interviews and reference checks.

6) Medical Examination: After selection, the candidates are required to appear for a medical examination for ensuring that he is physically fit for the job.

7) Job Offer: After a candidate has cleared all the hurdles in the selection procedure, he is formally appointed through an order. It contains the terms and conditions of the employment, pay scale, joining time, etc.

8) Employment Contract: Basic information that should be included in a written contract of employment are job title, duties, responsibilities, date of joining, pay and allowances, hours of work, leave rules, disciplinary procedure, work rules, termination of employment, etc.

Difference between Recruitment and Selection

1) It is the process of searching for candidates and making them apply for the job
2) It is a positive process
3) It is simple
4) It is less expensive
5) Recruitment is the first stage

1) It is the process of selection of most suitable candidates
2) It is a negative process
3) It is complex
4) It is more expensive
5) Selection follows the recruitment


Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.

Importance of Training:

A. Benefits to the Organisation:

  • It enhances employee productivity both in terms of quantity and quality, leading to higher profits.
  • Training reduces absenteeism and employee turnover.
  • It helps to obtaining effective response to the changing environment.
  • Training increases employee morale.
  • If the employees are given adequate training, the need for supervision is minimum.
  • Trained employees can use materials and machines economically. It helps to reduce cost of production.

B. Benefits to the Employee:

  • Training helps in securing promotion and career growth.
  • Increased performance by the individual helps him to earn more.
  • Training helps to reduce the chances of accident and wastages.
  • Training increases the satisfaction of employees.

Training methods

There are two methods of training

  1. On the job training.
  2. Off the job training.

1. On the Job Method: Under this method the employee is given training when he is on the job. It means learning while doing. The important On the Job Methods are:

  • Apprenticeship Programme: Under apprenticeship training, a trainee is put under the supervision of a master worker.
  • Coaching: In this method, the superior guides and instructs the trainee as a coach.
  • Internship Training: It is a joint programme of training in which vocational and professional institutes enter into an agreement with business enterprises for providing practical knowledge to its students.
  • Job Rotation: Here the trainee is transferred from one job to another job or from one department to another department so that he can learn the working of various sections.

2. Off the Job Method: It refers to those methods under which an individual is provided training away from the work place. It means learning before doing. The important Off the Job Methods are:

  • Classroom Lectures/Conferences: The lecture approach is well adapted to convey specific information such as rules, procedures or methods. The use of audio-visuals can often make a formal classroom.
  • Films: They can provide information and demonstrate skills.
  • Case Study: Trainee studies the cases to determine problems, analyses causes, develop alternative solutions and select the best solution to implement.
  • Computer Modelling: It stimulate the work environment by programming a computer to imitate the realities of the job and allows learning to take place without the risk or high cost.
  • Vestibule Training: Under this method, separate training centres are setup to give training to the new employees. Actual work environment is created in that centre and employees used the same material, equipment, etc. which they use while doing the actual job.
  • Programmed Instruction: Here information is broken into meaningful units and these units are arranged in a proper way to form a logical and sequential learning package.


Development refers to the overall growth of the employee. It includes personality development, motivation for growth, career planning, n etc. Development equip the employees to take up future responsibilities of the organisation.

Differences between training and development


  1. It means imparting skills and knowledge for doing a particular job
  2. It increases job skills
  3. It has a short term perspective
  4. It is job centred
  5. The role of supervisor is very important


  1. It means the growth of am employee in all respects
  2. It shapes the attitude
  3. It has long term perspective
  4. It is career centred
  5. It is self driven