CBSE Class 12 Business Studies Revision Notes Chapter 6

Class 12 Business Studies Chapter 6 Notes

Chapter 6 in Class 12 Business Studies teaches about ‘Staffing’. Hiring and developing human resources to fill various positions within an organisation is referred to as staffing. It denotes putting the appropriate person in the proper place.

This managerial function is responsible for designing an organisation’s workforce requirements and overseeing employee selection, placement, training, and compensation.

As stated in the Class 12 Business Studies Chapter 6 Notes, staffing aids in the filling and maintenance of vacant roles within an organisation’s structure. It is a continual process because new positions are created regularly through company growth and diversification or through people quitting the company.

Class 12 Business Studies Chapter 6 Notes: Overview

Introduction:

An organisation’s ability to function is determined by its Human resources. The introduction of efficient and qualified personnel is critical to the company’s growth. Following the conceptualisation and selection of the organisational structure, the next phase is ‘Staffing’.

Staffing:

This step involves putting the correct individuals in the proper jobs. This includes personnel recruitment, selection, training, development, promotion, remuneration, and performance evaluation.

As a result, staffing is a management activity that comprises evaluating candidates’ talents and expertise and assigning them specific jobs depending on their skill set to hire people who are a suitable fit for the firm. It is involved in meeting the human resource needs of an organisation.

Extramarks expert commerce professors have prepared these Class 12 Business Studies Chapter 6 Notes so that any student can readily access the topics, making this Chapter easy to learn. Studying and comprehending Staffing concepts can be easier with the aid of Class 12 Business Studies Chapter 6 Notes and Solutions. Let’s look at the contents of these Class 12 Business Studies Chapter 6 Notes in more detail.

Key Topics Covered in Class 12 Business Studies Chapter 6 Notes

Importance of Staffing:

The following are some of the advantages of proper staffing in an organisation:

• It assists in determining the workforce requirements for various job roles.
• Putting the right people in the right places improves performance.
• The managers’ succession planning ensures the organisation’s long-term existence and expansion.
• Identifying workforce requirements and filling open positions as needed.
• It prevents disruptions by displaying specific workforce shortages ahead of time.
• Helps to improve employee job satisfaction by providing objective feedback and fair compensation for their contributions.

Benefits of Staffing:

• The best candidate:

Staffing assists in identifying and selecting the best candidate for the job.

• Increases Efficiency:

It guarantees that the correct individuals are hired for the proper role, which improves the efficiency and performance of the firm.

• Better prospects for growth:

If the top applicants are chosen for the job, a business has a better chance of growing.

• Personnel Planning:

Staffing can help with workforce planning and usage. It also assists in filling open posts, ensuring that productivity is maintained.

• Harmony:

The correct people are chosen for the task through staffing, depending on the applicant’s qualifications. After completing the required background checks and training, these individuals are placed in positions of responsibility. As a result, the proper individuals in the correct jobs will function more efficiently, and the organisation’s general harmony will be preserved.

Staffing as a Part of Human Resource Management:

• The staffing function deals with the human aspect, which is critical to an organisation’s success.
• As an organisation grows, the number of people employed grows, necessitating the formation of a separate department known as the human resources department, which consists of specialists and experts in dealing with people.
• Human Resource Management entails acquiring, developing, retaining, and evaluating  competent and satisfied staff to efficiently and effectively meet the organisation’s goals.

Specialised Activities of the HRM:

• Recruitment is the process of looking for qualified people.
• Analysing the tasks to be completed, gathering data, and writing job descriptions.
• Pay structures, incentives, and remunerations are being developed.
• Creating training programmes and a system for career advancement.
• Taking care of complaints and grievances.
• Keeping labour relations and union-management relations in good shape.
• Employee welfare and social security planning.
• Defending the corporation in court and staying out of trouble with the law

Staffing Process:

• Estimating Manpower Requirements:

The basic procedure entails determining the workforce required to fill various jobs within the company and complete duties related to the business’s goals. This is the next phase.

It is decided what educational qualifications are required, what skill sets and prior experience are needed to do each job, etc.

• Recruitment:

A positive procedure aimed at attracting a large number of people with the necessary characteristics to apply for open positions in the organisation.There are two types of recruitment sources: external and internal.

The following steps are completed during recruitment:

A. Job descriptions are being written.

B. The advertising medium will be chosen. The advertisement could be put on the factory gate, published in print media, or transmitted electronically.

C. This entails locating and evaluating prospective candidates. External and internal recruiting sources are investigated in this Class 12 Business Studies Chapter.

• Selection:

This procedure entails identifying or selecting the best candidate for the job from a pool of multiple candidates. A series of events, such as tests and interviews, are involved in this procedure.

It also guarantees:

1. that from all those who applied, the company receives the best.
2. That the selected ones’ self-esteem and prestige are boosted.

• Placement and Orientation:

During this phase, the selected person is given an overview of the work environment, shown about the workplace, and introduced to coworkers, subordinates, and seniors. They must learn the organisation’s rules, regulations, and policies.

• The selection process entails assigning the chosen individual to the role for which they were chosen.Training and Development:

In today’s fast-paced world, keeping one’s skills and technical sophistication up to date is more important than ever.

This process of self-improvement necessitates training, which the company may provide in-house or through partnerships with other organisations. Employees are trained as a result of these training programmes, from which the organisation also benefits.Employees are motivated by these programmes, and their skills  improve. This also aids in staff retention and attracts new talent.

• Performance Appraisal:

The evaluation of an employee’s performance against a set of criteria or based on a previous version is known as performance appraisal.Essentially, this is a method of providing feedback on an organisation’s employees’ performance.

• Promotion and Career Planning:

Promotion refers to an elevation in a person’s profile or position. This functions as a massive motivator for people to pursue their job goals. Promotions encourage people to do better work. Upgrading to a higher position entails taking on more duties, which translates to a higher salary and increases job satisfaction.

• Compensation:

Compensation is the monetary payment or reward made to employees by a company in the form of salary and wages. This can take several forms, including salary, incentives, commissions, bonuses, and indirect payments such as medical services.

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Aspects of Staffing:

The three aspects of staffing are as follows:

• Recruitment
• Selection
• Training

A. Recruitment:

This refers to identifying the best candidate for a job opening. Advertising is a crucial element of the recruitment process and can be done in various ways, including in newspapers, periodicals, campus interviews, etc.

The goal of the recruiting process is to attract possible and deserving candidates for acceptable job profiles who have the necessary qualifications and traits to be a good fit for the job.

This is where suitable applicants are identified and asked to apply for positions within the company.

Various activities are included in this process, including:

• Different sources of labour supply are identified.
• Validation of their claims.
• Select the most appropriate source or sources.
• Candidates looking for work are invited to apply.

Sources of Recruitment:

• Internal Sources
• External Sources

Internal Sources:

Internal sources of recruiting are those through which employees are recruited from within the organisation. Here, no new members or workers are sought.

Internally, there are two sources of recruitment:

Transfers:

• When employees are hired through the source, they are placed or transferred from one job to another or from one department to another.
• Employees can be moved from one shift to another without a significant change in their responsibilities or position. This is a horizontal shift in an employee’s work.
• Intercity or interstate transfers are possible.
• Job transfers are an effective technique to prevent termination and help resolve individual issues and grievances.

Promotion:

• Vacancies in higher posts are filled using this method. This is also known as an employee vertical shift. People are given increasing and higher responsibilities inside the organisation due to this.
• This approach aids in increasing employee motivation, loyalty, and satisfaction.
• This also sets in motion a cascade of promotions at lesser levels.

Merits of Internal Sources:

• Boosts employee morale:

Employee morale is boosted because employees are driven to perform better to advance.

• Reliable method:

It is a reliable strategy because it streamlines the selection and placement processes. As the candidates are already known to the organisation, this becomes one of the most reliable methods.

• Tool of Training:

Transfers serve as a technique for training individuals to prepare them for higher-level positions.

• Creates balance:

It also allows staff to be transferred from areas with shortages due to a department surplus.

• Inexpensive:

This is less expensive than hiring from outside sources.

Limitations of Internal Sources:

When there isn’t any new blood in the organisation, the opportunities for bringing in new talent are limited.

• Employee lethargy:

If employees are sure of receiving time-limited promotions, they may get drowsy.

• Not suited for newly created firms:

This source is not ideal for newly established organisations because it relies on current personnel to meet human resource demands.

• No competitive spirit:

The spirit of competition may be impaired if there is no competitive spirit.

• Reduced productivity:

Frequent transfers might reduce an organisation’s productivity.

External Sources:

When internal sources fail to meet the organisation’s needs, it turns to external sources for help. There could be a variety of reasons for this, including existing employees’ inability to meet the qualifying standards, a new organisation, etc.

External recruiting instils in the company new hopes and talents. The following are some of the most regularly used external sources:

• Direct Recruitment:

In this recruitment method, a notice with the job details is posted on the bulletin Board. Aspiring job seekers gather outside the organisation’s premises on a predetermined date and time, and the selection process is completed.

• Casual Callers:

Businesses may keep a database of applications they’ve received over time. The list is created so that candidates may be vetted out and positions can be filled as they emerge while also lowering the cost of recruitment.

• Advertisement:

When a larger pool of applicants is required, advertisements in newspapers and professional publications are placed. The source is beneficial to the business since it attracts many people looking for work and also provides management with a variety of options.

• Employment Exchange:

An employment exchange is a government organisation where job seekers can register. Employers and potential employees can connect through the employment exchange.

• Placement Agencies and Management Consultants:

Placement agencies serve as a conduit for connecting job seekers with employers. These organisations charge a small fee for their services, but they accommodate when thorough screening is required. They usually employ skilled recruiters who can quickly fill a company’s need for top executives by making the relevant offers.

• Campus Recruitment:

This is one of the most common ways to find a job. College management, universities, and vocational training centres are used to recruit.

• Advertising on Television:

Companies may use electronic media, such as television, to market the vacancy and the desired profile for the listed job.

• Web Publishing:

Companies can utilise the internet to recruit new personnel and publicise open positions within the company.

• Labour Contractors:

Companies may hire a labour contractor as an employee and provide him with the task of bringing in temporary workers.

Merits of External Sources:

• Qualified Personnel:

Management can use external sources to attract skilled and trained persons to apply for positions within the organisation.

• Wider Selection:

Many applications received from potential employees give the organisation more options when it comes to selecting the perfect individual.

• Fresh Talent:

People from outside the organisation bring in fresh talent and new ideas, injecting new life into the organisation.

• Competitive Spirit:

New employees instil a competitive atmosphere in the workplace, and both existing and new employees work hard to demonstrate their expertise.

Limitations of External Sources:

• Frustration among current employees:

Using external sources to fill positions may cause dissatisfaction among current employees who expect to advance through promotions.

• Long process:

The process of appointing people is time-consuming.

• Costly process:

External recruitment is a costly procedure because it requires large sums of money to be spent on advertising, processing applications, paying professional firms, and other cost-effective things.

B. Selection:

This is the process of deciding which option is the best. Several employment Examinations and interviews are undertaken to find the person who is the best fit for the position.

The procedure begins with screening applications and may continue until the candidate accepts an offer of employment and joins the company.

Process of Selection:

• Preliminary Screening:

Based on the application forms aids in the shortlisting of appropriate and likely candidates and the rejection of unqualified or unfit job seekers.

• Selection Tests:

Selection tests can be conducted either online or offline. A wide range of questions may be asked in this examination to measure a person’s intelligence, personality, and manual abilities.

The following are some of the most common tests used to select employees:

1.Intelligence Examination:

This test assesses a candidate’s learning abilities.

2. Aptitude test:

The aptitude examination assesses a candidate’s ability to pick up new skills.

3. Personality test:

It assesses the candidate’s total personality, including emotions, reactions, maturity, and value systems.

4. Trade test:

A trade test assesses a candidate’s current level of knowledge and skill.

5. Interest test:

The candidate’s areas of interest are identified through an interest test.

A more detailed explanation of the selection process:

• Employment Interview:

An employment interview is a formal and in-depth talk with an applicant to determine the candidate’s suitability.

• Reference and Background Check:

Reference and background checks are conducted to ensure the accuracy of the information provided by employees. This is also done to learn more about the prospect.

• Selection Decision:

At this point, all people engaged in the selection process convene and make a final decision on candidate selection.

• Medical Examination:

Before a job offer is issued, a medical examination is conducted to determine the candidate’s fitness.

• Job offer:

Applicants who have passed all of the primary barriers are given a job offer via a letter of appointment or confirmation at this stage of the selection process. The letter includes a deadline for the appointee to report to work.

• Contract of Employment:

After a job offer is made, both parties sign a contract that specifies the length of time they will work together.

Difference between Recruitment and Selection:

C. Training and Development:

This is an attempt to improve the employee’s current and future performance by boosting their ability to perform and introducing them to new skills and knowledge through various training programmes.

Developing an employee’s abilities and competencies required to execute a particular profession is called ‘Training’.

The term ‘Development’ refers to the process of an employee’s overall growth.

Training and development is one of the most significant aspects of skill enhancement, and it is critical for employee career progression and the achievement of organisational goals.

Organisational Advantages:

• It is preferable to provide systematic training to employees than hit-or-miss approaches, which waste time and effort for both the firm and the person.
• Employee productivity, both in terms of number and quality, leads to increased earnings.
• Training assists in meeting the market’s rapidly changing needs while also lowering absenteeism and staff attrition. It also prepares future managers to take over in an emergency.

Benefits To The Employee:

• It increases employees’ skill sets and knowledge, resulting in a better and brighter career for the individual.
• It improves staff efficiency when handling machinery, making them less prone to accidents.
• It improves an individual’s performance and helps them burn more calories. Additionally, it boosts employee happiness and morale.

Importance of Training and Development:

As the terminologies may be a little confusing, you can compare the aspects of these three types of staffing using Extramarks Class 12 Business Studies Chapter 6 Notes.

Training, Development, and Education:

• Training:

Training enhances an employee’s ability to do a specific profession through improving their skills and competency.

• Development:

Development refers to the learning opportunities provided to employees to help them grow.

• Education:

Education is a means of expanding an employee’s knowledge and comprehension. It aids in the better interpretation of information.

Training Methods:

1. On the Job Methods:

On-the-job training is when subordinates learn while being supervised by their superiors while working in the workplace.

It contains the following items:

• Apprenticeship Programs:

An apprenticeship programme is a system in which a trainee works under the supervision of a master worker for a set amount of time to learn specific skills.

• Coaching:

It is a way in which a superior acts as a coach, guiding or instructing the employee trainee to master skills and processes within a set time frame.

• Internship Training:

It is a collaborative effort between educational institutions and businesses to provide students with job experience and prepare them for the real world.

• Position rotation:

It is a training strategy in which individuals are given a broad range of abilities by moving them from one job to another or from one department to the next.

1. Off the Job Methods:

Off-the-job training is a type of training in which subordinates learn by working in a location other than the workplace.

It contains the following items:

• Classroom Lectures/Conferences:

This is a type of training in which material is delivered via lectures at conferences.

• Films:

This is a training method in which important information or abilities are demonstrated through films, televisions, videos, or presentations.

• Case study:

This is a training method in which actual work circumstances from the past are addressed to identify difficulties, analyse their causes, and generate alternative solutions to problems.

• Computer Modelling:

Computer modelling is a training method in which a computer is programmed to simulate the actual work environment.

• Vestibule Training:

This type of training, in which a simulated work environment is termed a ‘vestibule’ is set up to teach personnel technical and operational skills.

• Programmed Instructions:

This type of training is one in which specific skills or knowledge are divided into units and organised logically and sequentially.

Importance or Need for Staffing:

Management’s role in staffing is crucial. The following points emphasise this:

• Obtaining Competent Personnel:

It ensures that the most qualified and skilled person is available for all types of employment.

• Higher Performance:

It ensures better accomplishment by putting the right individual in the correct spot.

• Continuous Growth and Survival:

It ensures the enterprise’s long-term viability and progress by requiring managers to prepare ahead of time.

• Maximum Human Resource Utilisation:

This helps avoid overstaffing, underutilisation of the workforce, and high labour expenses. It also aids in the avoidance of work interruptions by forewarning impending employee shortages.

• Helps in Attaining Organisational Goals:

It improves job satisfaction by giving fair compensation and frequent appraisals, which assist in achieving organisational goals.

Staffing as a Part of Human Resource Management:

The human component of management is addressed through the staffing function. It is critical because its personnel, resources, proficiency, and driving force determine its performance and growth.

A distinct department called Human Resource Development (HRD) is developed in tandem to achieve constant market expansion and increase the number of employees. It consists of experts in all aspects of human resource management.

HR workers are responsible for a variety of tasks, including:

• Recruiting or looking for qualified applicants.
• Analysing job requirements and writing the job description.
• Creating incentive and remuneration plans.
• Employee education is essential.
• Labour relations and union-management relations are developed and maintained.
• Taking care of any complaints or issues that may arise.
• Providing social security and employee well-being.
• Defending the organisation in legal proceedings and avoiding legal entanglements.

As a result of the advantages mentioned above, Human Resource Management (HRM) is included in the staffing process.

Evolution of Human Resource Management:

Human Resource Management has emerged due to several significant advancements, including labour welfare officers, personnel officers, personnel managers, and human resources managers.

When trade unions first developed during the industrial revolution, a person was needed to act as a mediator between the workers and the owners, so the concept of a labour welfare officer was born. The personnel manager was in charge of hiring and maintaining employees for a massive production system. The human resource manager was in charge of the employees’ well-being.

Human Resource Management evolved as a result of the rapid growth of technology, the growing scale of organisations, and the complex behaviour of humans.

Staffing Process:

The staffing process begins with determining the number of human resources required and investigating various sources from which these resources might be obtained. In addition, the procedure attempts to provide training to newly hired employees in personal development, remuneration, and career planning to keep them within the company.

Estimating the Manpower Requirements:

This step includes forecasting and predicting the amount and types of workforce required by the company in the future.The management can determine the actual personnel needed by analysing the workload and the force required to complete the work. It also aids in determining whether the company is understaffed or overstaffed. Additionally, the job description specifies the qualifications, experience, training, and personal traits required for distinct positions.

Recruitment:

This stage entails locating potential individuals and encouraging them to apply for positions within the firm. This step aims to develop a pool of potential candidates from which to choose the best.

Selection:

In this stage, an eligible candidate is chosen from a pool of candidates for the relevant post. The selection process includes a series of interviews, examinations, and discussions to establish the employment contract.

Placement and Orientation:

The term “Placement” refers to a candidate’s acceptance of the position or post for which they have been chosen. The chosen candidate must then go through an orientation or induction programme, during which he is introduced to the rest of the company’s employees and familiarised with the company’s rules and procedures. This programme is led by the company’s senior managers, who provide a brief presentation.

Training and Development:

The new employee is trained in this stage to improve his job knowledge, skill sets, and attitude. The training also aids in the development of a person’s career and motivation level.

Appraisal of Performance:

An appraisal is a process of assessing an employee’s performance against predetermined criteria. In this step, the employee’s capacity is set, and feedback and opportunities for improvement are provided.

Career Advancement and Planning:

At this stage, the organisation addresses the employees’ career prospects and promotional opportunities, which benefits both the organisation and the employee. This also stimulates the individual and boosts his production, which helps the company in the long run.

Compensation:

Compensation refers to the cash or benefits offered to an employee in exchange for their work. Salaries, wages, incentives, commissions, and other forms of payment may be used. Employees are rewarded with incentives to motivate them to perform better.

Note:

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Class 12 Business Studies Chapter 6 Notes – Exercise & Solutions

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In their Class 12 Business Studies Chapter 6 Notes, the Extramarks team has covered every facet of the staffing process in great detail. The necessity of staffing will be explained in these study notes. You will also study how a logical and systematic strategy may influence and determine the conclusion of recruiting a new candidate in Class 12 Business Studies Chapter 6 Notes. In addition, the chapter notes delve deeper into the research on staffing limits in order to better understand the risks and vulnerabilities of enterprises.

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