Summary and Notes of Ch 6 Staffing| Class 12th Business Studies 

Definition of Staffing (According to Theo Haimann) 

The staffing functions pertains to the recruitment, selection, development, training, and compensation of subordinate managers.

Importance of staffing

• Helpful in discovering and obtaining competent personnel.

• Helpful in Better Performance.

• Helpful in continuous survival and growth of the Enterprise.

• Helpful in optimum utilisation of the human resources.

• Helpful in improving job satisfaction and Morale of employees.

Staffing as part of Human Resource Management

Human resources management is a wider term as compare to staffing. It includes staffing, record keeping, personnel policies formulation, conducting personnel research, providing expert’s services, etc. hence, staffing is a part of the human resources management and not all of it. The human resources management can be divided into following categories:

• Recruitment.

• Analysing jobs, collecting information about jobs to prepare job description.

• Developing compensation and incentive plans.

• Training and development of employees for efficient performance and career growth.

• Maintaining labour relations and union management relations.

• Handling grievances and complaints.

• Providing for social security and welfare of employees.

• Defending the company in law suits and avoiding legal complications.

Evolution of Human Resource Management

Human resource management has replaced the traditional concept of labour welfare and personnel management. HRM in its present form has evolved from a number of significant inter-related developments, which date back to the era of industrial revolution. Emergence of trade union movement led to the need of a person who could act as an effective link between the owners and workers.

Staffing Process

• Estimating the Manpower Requirements: It is the first step of staffing. At the time of determining the number of persons required, the possibilities regarding internal promotions, retirements, resignations and dismissal, etc are also taken in to consideration.

• Recruitment: The process of recruitment includes the search of the various sources of employees, and encouraging them to send their applications to the enterprise.

• Selection: selection is the process of choosing from among the pool of the prospective job candidates developed at the stage of recruitment.

• Training and development: At this step of process of staffing, training and development are imparted to the employees so that their efficiency and effectiveness is increased.

• Performance Appraisal: Performance appraisal means evaluating an employee’s current and past performance as against certain predetermined standards.

• Promotion and career planning: Under this step employees get promoted to higher posts on the basis of their capability.

• Compensation: Compensation refers to all forms of pay and rewards going to employees. It may be of the following two types:


It refers to the process of searching for prospective employees and stimulating them to apply for job in the organisation.

Sources of Recruitment

Internal Sources

Transfers: It involves shifting of an employee from one job to another, one department to another or from one shift to another, without a substantive change in the responsibilities and status of the employee.

Promotions: Promotion is a process by which an employee working at a lower rank is appointed to the upper rank where his responsibility increases, his status and salary are also enhanced.

Merits of Internal Sources

• Employees are motivated to improve their performance.

• Internal recruitment also simplifies the process of selection and placement.

• Transfer is a tool of training the employees to prepare them for higher jobs.

• Filling of jobs internally is cheaper as compared to getting candidates from external sources.

Limitations of internal sources

• Stops the entry of young blood.

• The employees may become lethargic if they are sure of time bound promotions.

• A new enterprise cannot use internal sources of recruitment.

• Sense of competition among employees Hampered.

• Frequent transfer of employees may often reduce the productivity of the organisation.

External sources

External sources of recruitment of employees mean inviting applications for filling up the vacancies from candidates outside the organisation.

Main external sources of recruitment are as under:

• Direct Recruitment

• Casual callers

• Advertisement

• Employment Exchange

• Placement agencies

• Campus Recruitment

• Recommendations of Employees

• Labour Contractors

• Telecasting

• Web Publishing

Merits of External Sources

Qualified Personnel: By using external sources of recruitment, the management can attract qualified and trained people to apply for vacant jobs in the organisation.

Wider choice: When vacancies are advertised widely a large number applicants from outside the organisation apply.

Fresh Talent: The external source of recruitment helps the people with new and modern ideas to enter an organisation which certainly helps the organisation.

Competitive Spirit: When existing employees in the organisation come in contact with the new employee recruited through the process of external source, a spirit of competition is born hence their work performance is improved.

Limitations of External Sources

• External recruitment may lead to dissatisfaction and frustration among existing employees.

• Recruitment from external sources takes a long time.

• It is very costly process.


Selection refers to the process by which qualified applicants are selected by means of various tests in predetermined numbers, out of large number of applicants.

Process of selection

• Preliminary screening: Preliminary screening helps the manager eliminate unqualified or unfit job seekers based on the information supplied in the application forms.

• Selection Tests: Through these tests, ability and skill of the candidate are measured.

These tests are divided into following categories: 

• Intelligence test: This is one of the important psychological tests used to measure the level of intelligence quotient of an individual.

• Aptitude Tests: It is a measure of individual potential for learning new skills.

• Personality Tests: Personality tests provide clues to a person’s emotions, her reactions, maturity and value system etc.

• Trade test: They measure the level of knowledge and proficiency in the area of professions or technical training.

• Interest Test: Interest tests are used to know the pattern of interests or involvement of a person.

• Employment Interview: The main objectives are to see the looks of the candidate, his way of talking, his conduct and temperament, his interest, presence of mind etc.

• Reference and Background checks: Through it some personal information gathers like character of candidate, social relations, background, etc of the candidate.

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

• Medical Examination: Under medical examination candidate goes through a fitness test.

• Job offer: After successfully clearing the Medical Examination Test, job offer is given to the selected candidate.

• Contract of Employment: After the job offer has been made and candidate accepts the offer, certain document need to be executed by the employer and the candidate. Attestation form contains a candidate record which are authenticated and attested by him or her. Attested form will be a valid record for future reference.

Training and Development

Training and development is an attempt to improve the current or future employee performance by increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude or increasing his or her skills and knowledge.

Training and development help both the organisation and the individual.

Benefits to the organisation

• Training is a most economical and the best use of material and equipment.

• It enhances employee productivity both in terms of quality and quantity and also increased in profit.

• Training increases employee morale and reduces absenteeism and increase employee turnover.

• Training equips the future manager who can take over in case of emergency and also handle fast when any employee absent in the organisation.

• It helps in obtaining effective response to fast changing environment like social change, technological change, any change related to government and etc.

Benefits to the Employee

• It increases the skill and efficiency of the employee.

• Training makes the employee more efficient to handle machines this makes less prone to accident and helps employee to perform better.

• Training increases the satisfaction and morale of employees.


Training is a process by which effort is made to increase the knowledge and skill of employees for the successful accomplishment of a specific job and also prepare them for intended job.


Education is the process of increasing the knowledge and understanding of employees. It is the understanding and interpretation of knowledge and developed a broad mind.


Development refers to the learning opportunities designed to help employees grow. It covers not only those activities which improve job performance but also improve employee personality.

Training Method

• On The Job Methods

• Off The Job Methods

On The Job Methods

• Apprenticeship Programmes: This method is used in those cases where higher level of skill is required. The trainee is required to work with an expert for a specific period of time. Example electrician, plumbers etc.

• Coaching: In this method superior guides and instructs the trainee as a coach.

• Internship Training: It is a joint programme of training in which educational institutions and business firms cooperate. The objective of this training is to strike a balance between the theoretical and practical knowledge.

Off The Job Method

• Class Room Lectures/Conferences: Understanding Rules, procedure or Methods through video. This method provides a theoretical knowledge presented by expert.

• Films: It can be very effective technique particularly where demonstration of skill is required. It is usually used in conference discussion.

• Case study: Trainees study the cases to determine problems, analyse causes, developed alternative solutions.

• Computer Modelling: It is a computer-based training where the trainee uses computer to increase his/her skills.

• Vestibule Training: Under this method, with a view to imparting training to new employees, a separate training centre is set up. Actual work environments are created in a classroom and employees use the same materials, flies and equipment.

• Programmed Instruction: This method incorporates a prearranged and proposed acquisition of some specific skills or general knowledge.

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