Chapter 10.

PERSONNEL
MANAGEMENT
10.1 Management Principle: Administration and
Organization Principle
Management
• “A process by which responsible person in an
organization get things done through the efforts of
other people in grouped activities”.

• Four basic elements of Management : Towards

objective; through people via technique; and in an
organization
 • According to Marry Parker Fillet, “Management
is the art of getting things done with and through
people.”

• Men (Human)
• Materials
• Machine
• Money
• Minute
• Market
• Methods
Organization and its management Principle
• The term organization has been derived from
Greek word „organon‟ meaning tool or
instrument.
organization consists of:
• Goal oriented arrangements (people with
purpose)
• Psychosocial systems (people interacting in
groups)
• Technological systems (people using knowledge
and techniques)
• An integration of structured activities (people
working together in patterned relationships)
 Management Principle: Organizational
• Span of Management
• Line, staff and auxiliaries
• Unity of command
• Span of control
• Hierarchy
• Delegation of authority
• Decentralization and centralization
• Coordination
• Communication
• Job definition
• Increasing organizational leadership
• Contact
 Management principle: Administrative
The contributor to administrative theory was French Industrialist and mining Engineer
named Henri Fayol. Fayol‟s fourteen principles of management, which are universally
acceptable and applicable in all types of organizations.
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interests to the general interests
7. Remuneration
8. Centralization
9. Scalar chain
10.Order
11.Equity
12.Stability of tenure of personnel
13.Initiative
14.Spirit de crops
 10.2 Centralization and Decentralization
Centralization
• Centralization is said to be a process where the
concentration of decision making is in a few hands.
• All the important decision and actions at the lower level, all
subjects and actions at the lower level are subject to the
approval of top management.
• Centralization is the systematic and consistent reservation
of authority at central points in the organization

Decentralization
• Decentralization is the process of dispersing decision-
making governance closer to the employee or people or
citizen.
• It includes the dispersal of administration or governance in
sectors or areas like engineering, management science,
political science, political economy, sociology and
economics.
 10.3 Supervisory and Leadership Styles
Leadership
• Leadership is a process by which an executive can direct, guide and
influence the behavior and work of others towards accomplishment
of specific goals in a given situation.
• Leadership is the ability of a manager to induce the subordinates to
work with confidence and zeal

Characteristics of Leadership
• It is an inter-personal process in which a manager is into
influencing and guiding workers towards attainment of goals.
• It denotes a few qualities to be present in a person who includes
intelligence, maturity and personality.
• It is a group process. It involves two or more people interacting
with each other.
• A leader is involved in shaping and molding the behavior of the
group towards accomplishment of organizational goals.
• Leadership is situation bound. There is no best style of leadership.
It all depends upon tackling with the situations
A leader Should posses following characteristics
• Initiates action-
• Motivation-
• Providing guidance-
• Creating confidence-
• Building morale- .
• Builds work environment-
• Co-ordination-
 Leadership Styles
All leaders do not possess same attitude or same
perspective.
• Autocratic
leadership style:

• Democratic /
Participative
leadership style:

• The Laissez Faire

Leadership Style:

• Bureaucratic
leadership:
Autocratic leadership style:
• Complete command and hold by Leader over their employees/team.
• The team cannot put forward their views
• They cannot criticize or question the leader‟s way of getting things done.
The leader herself/ himself gets the things done.
• The advantage of this style is that it leads to speedy decision-making and
greater productivity under leader‟s supervision.
• This leadership style works only when the leader is the best in
performing or when the job is monotonous, unskilled and routine in
nature or where the project is short-term and risky.
• Drawbacks of this leadership style are that it leads to greater employee
absenteeism and turnover.
Democratic / Participative leadership style:
The leaders invite and encourage the team members to play an important
role in decision-making process, though the ultimate decision-making
power rests with the leader.
The leader guides the employees on what to perform and how to perform,
while the employees communicate to the leader their experience and the
suggestions if any.
The advantages of this leadership style are that it leads to satisfied,
motivated and more skilled employees. It leads to an optimistic work
environment and also encourages creativity.
This leadership style has the only drawback that it is time-consuming.
The Laissez Faire Leadership Style:
Here, the leader totally trusts their employees/team to
perform the job themselves. He just concentrates on the
intellectual/rational aspect of his work and does not
focus on the management aspect of his work.

•The team/employees are welcomed to share their views

and provide suggestions which are best for
organizational interests.

•This leadership style works only when the employees

are skilled, loyal, experienced and intellectual.

Bureaucratic leadership:
Here the leaders strictly adhere to the organizational rules and policies.
Also, they make sure that the employees/team also strictly follows the
rules and procedures. Promotions take place on the basis of employees‟
ability to adhere to organizational rules.
.
 10.4 Importance of Communication
The term communication is
derived from the Latin word
„communis‟ which means
common. Thus if a person
communicates, the person
establishes a common ground of
understanding
• Thus, we can say that “effective
communication is a building
block of successful
organizations”.
• In other words, communication
acts as organizational blood
The importance of communication:

• Communication promotes motivation

• Communication is a source of information
• Communication also plays a crucial role in altering
individual’s attitudes, i.e., a well-informed
individual will have better attitude than a less-
informed individual.
• Communication also helps in socializing.
• Communication also assists in controlling process.
Communication Process
• Communication is a process, a simple model of communication
process consists of seven parts or elements as follows:
Barriers to communication
• Physical Barriers
• Personnel Barriers
• Material Barriers
• Semantic Barriers
• Outside Barriers
 10.5 Information System for Decision
Decision making
• Decision making is an indispensable component
of management process. In general terms
decision making is the process of selecting a best
course of action out of many available
alternatives.
Information and decision
• Information is the necessity for decision making.
• A manger can take effective decisions when he has full information relating to a
problem.
• He/she can get full information by analyzing data obtained from reliable sources.
• Managing information involves accumulating the necessary data from proper sources
and processing accurately such information.
• Taking right decision facilities in solving problems and it supports to maintain control
over the functioning of the organization.

Steps in decision making

1. Step I :Observe
2. Step II :Formal recognition
3. Step III :Interpretation and Diagnosis
4. Step IV :Definition
5. Step V :Set Objectives
6. Step VI :Determine the Options
7. Step VII :Evaluate options
8. Step VIII:Select Option
9. Step IX :Implement the option
10. Step X :Monitor
 10.6 Motivating and Directing
The term motivation is derived from „movere‟ which means
„to move‟.
In simple words „it is will to work.‟
Performance (P) = f (A+M+OD)
Theories of Motivation
A. Content Theory of Motivation
• They are also called universalistic theories. They explain the dynamic
of human needs, such as why people have different needs at different
times. By understanding an employees need we can discover the
condition that motivate that person.
• Important theories in this categories are Maslow's need hierarchy
theory, Herzberg‟s motivator-hygiene theory, Alderfer‟s ERG theory
and McClelland‟s theory of learned needs etc.

B. Process theories of motivation

• These theories do not directly explain how needs emerge. They only
describe the process through which needs are translated into behavior.
These theories help us understand, predict, and influence employee
performance, attendance, work satisfaction and other outcomes.
• Important theories in these categories are Equity theory of Stacy
Adam, Expectancy theory of Victor Vroom and Reinforcement theory
of B.F Skinner.
Maslow’s Need Hierarchy Theory
• Maslow‟s need priority model is one of the most popular
theories of motivation. This theory is clinically derived
theory and is based on human needs.
Herzberg’s Two – Factor theory
10.7 Personnel Selection, Testing & Training
• Selection is essentially a process of choosing right
applicant best suited for the organization‟s
requirement.
• It is also the process of rejecting the unsuitable
applicants and finally arriving at the most suitable
one.
• Types of Selection Tests
– Achievement tests:
– Aptitude or Potential Ability Tests
– Personality tests
– Interest tests:
– Psychomotor (skill) tests
– Graphology tests
– Polygraph test
Recruitment and
Selection
• “Recruitment is the
discovering of people
candidates for actual or
anticipated
organizational
vacancies.”
Recruitment process
•The process of searching for a new employee is
traditionally initiated by manager who decides that needs to
have staffed or to replace someone who is leaving the
organization.
•Before sending request to HR manager he must deeply
consider the following facts:
•Whether the post is vacant or not?
•Whether there is alternative solution or not? (like part
time, over time, transfer, outsourcing etc)
•Whether there is budgetary provision or not?
•Whether the qualification is according to job
specification or not?
 Training
It is the process of learning, a sequence of
programmed behavior. In other words, training is
learning experience in that it seeks a relatively
permanent change in an individual that will
improve his or her ability to perform on the job.
• It is application of knowledge.
• It gives people an awareness of the rules and
procedures to guide their behavior.

Lack of skill or Need for training

knowledge
Performance
defeciency

Due to other reason Need for motivation

Desired performance - Actual Performance = Training Need

 Training Methods
On the Job training
Off-the job training
(OJT)
Apprenticeship Lecture
Job Instruction Training
Conference
(JIT)
Internship Case Studies
Role Play
Programmed Instruction
Computer Assisted
Instructions
Audio-Visual Methods
Other Methods
 10.8 Trade Unions and Relation with
Management
• A union is an organization of workers. A union is an
organization of workers, acting collectively, seeking to
promote and protect its mutual interests through
collective bargaining
Labor /industrial relations “Industrial relations are the complex of
inter-relations among workers, managers
Meaning and nature and government.”

• Industrial/ labor relation play a crucial role in establish

in and maintaining industrial democracy and peace in
the country.
– Industry: it is meant for any productive activity in which
an individual is engaged.
– Relations: it is meant for the relations that exist in the
industry between the employer and the employees /labor.
Objective of IRS/LRS
– To safeguard the interests
– To avoid industrial conflict
– To raise productivity
– To establish and maintain the growth
– To establish government control

Actors of an LR System
• In an integrated and relatively free business society, the three major actors
involved in the LRs are:
1. Workers: represented by trade union
2. Employers: represented by employer association
3. The society/ state: represented by government

Process of LR
• Step I legal existence of management
• Step II formation of unions
• Step III problem
• Step IV Collective Bargaining
• Step v negotiation
• Step VI Implementation and Monitoring
 Unionization
A union is an organization of workers. The
process of labor relations begins with
the formal establishment of labor
union and its recognition by the
employer. A union is an organization
of workers, acting collectively, seeking
to promote and protect its mutual
interests through collective bargaining.

Collective bargaining
Collective bargaining is an important function of union. It
refers to negotiation, administration and interpretation of time-
bound written agreement between two parties. It is collective
because the union represents the workers as a bargaining
agent, whereas employer associations or managers represents
employers.

Labor disputes
Labor disputes are differences, conflicts or strike between workers and the employers.
It can be individual disputes or collective disputes. They are related to rights and
interests of workers.
Disputes can be between employers and workers, between employers and employers,
between workers and workers and between employers and governments. In practice
most of the disputes are between workers and employers
Settlement of disputes (Nepalese context)
The labor act 2074 of Nepal makes the following provisions for the disputes settlement procedures.
1. Written complaint to employer
Process:
– Complaint files in a written form
– About 51% of workers must signed it
– Complaint is made through authorized trade union
Outcome:
Bilateral discussions are held between labor and management. Negotiations are done. If within the 21 days if
dispute is not settled it follows the next step
2. Written complaint to labor office
Process:
– Files the written complaint to labor office of the government
– Labor officer plays conciliation role between workers and management
– The disputes is tried to settle within 15 days. If not the following situation can occur
Outcome:
Strike: the worker can go strike. 30 days‟ notice is given to management in advance before going to strike.
Notice should be given to labor office, Department and DAO.
Lock out: Management can resort to lock out with government approval

3. Appointment of mediator / Tribunal

Process:
– A mediator can be appointed with mutual consent of labor and management.
– If there is no agreement on mediator a tribunal could be constituted
– Tribunal must have equal representation form all the parties (labor, management and government)
Outcome:
Dispute is settled by the mediator or tribunal within 25 days through arbitration. If not, the next step follows
4. Appeal to government
Any party after award from the arbitration can file an appeal to the government within 35 days. The
government adjudicates on the dispute within 60 days. If the decisions is not given in specified time, worker
can go on strike.
END OF CHAPTER