(Notes) Subject Notes - Business Studies (Staffing)

(Subject Notes) Business Studies


- Staffing -


2-3 marks Q should not exceed 30-40 words
4-5 marks Q should not exceed 60-80 words
6 marks Q should not exceed 100 words

Staffing Syllabus (one 6 marks question comes as a choice and one 4 marks question comes on wage and time piece system) 6+4=10 marks

Define staffing as a function of management? (DASTOD)

  • Staffing is the process of determining the manpower needed to meet the objectives of the organisation.

  • Apprising and selecting candidates to fill these requirements; and

  • Training, orienting and developing (TOD) new and existing staff.

Explain briefly 6 steps in the STAFFING PROCESS ?–6 mks

(maintain the sequence. 2 marks will be deducted if sequence is not maintained)

Following are the important steps involved in the staffing process:

Manpower planning:

  • Man power planning tries to assess manpower requirements in advance keeping the production schedules, market fluctuations, demand forecasts, etc. in the background.

  • The focus of manpower planning is to get the right number of qualified people at the right time.

  • Manpower requirements are estimated through job analysis.

Job analysis: (What is job analysis?)

  • Job analysis means a careful study of the tasks and responsibilities involved in a job.

  • The relation of one job with another job

  • The conditions under which the job is to be done; and

  • The capabilities of the job-holder to perform the job satisfactorily.

Recruitment: (Define recruitment?)

  • Recruitment is the process of finding and attracting candidates to fill up vacant positions in the organisation.

  • The process begins when new recruits are sought and ends when their applications are submitted.

  • Both internal and external sources may be used to recruit staff.

Selection: (Define selection?)

  • Selection is choosing from among the applications the most suitable candidates to fill up the vacancies in the organisation.

  • It involves comparing and evaluating candidates in the light of qualifications required to perform the job.

  • It consists of application, test, interview, medical examination, reference check, etc.

Training (Define Training)

  • Training means providing new recruits with required knowledge and skills relating to their jobs.

  • Training increases workers’ knowledge, ability, competence & makes them more useful.

  • Every new recruit has to undergo a period of training in different departments till he is found to have sufficient knowledge of the important types of work. Subsequently he is given the job that he is best suited for.

Placement & Orientation

  • Placement means asking the candidates to occupy the position in the organisation for which they have been selected.

  • Orientation means taking the new recruits round the office/plant and introducing them to all employees and to the rules and policies of the organisation.

  • Orientation enables new recruits to adjust themselves to the work environment.

Why are external sources of recruitment better than internal sources of recruitment? Explain briefly, any six reasons – 6 marks


What are the merits of external sources of recruitment?

  • Wide choice is possible as many applications can be obtained from external source.

  • Fresh candidates infuse new blood and new ideas into the enterprise

  • Internal employees have to compete with fresh external candidates, which proves to be advantageous to the firm.

  • Internal source is not capable of meeting entire requirements of the enterprise so it has to depend on external sources also.

Explain in brief any 6 external sources of recruitment of employees?
(½ for naming each source + ½ mark for explanation) - Imp

All firms cannot meet all their manpower requirements from internal sources alone. Therefore recruitment from outside sources is necessary. These sources are:

Recommendation of present employees:
Many firms encourage their employees to recommend their relatives/friends for employment because they believe this policy will prove to be a valuable asset

  • in maintaining goodwill of the present employees; and

  • in finding reliable candidates.

Factory Gate:

In times of severe unemployment and when unskilled workers and casual workers are required, workers are recruited from a large number of job seekers that assemble everyday at the factory gate.


Notices or posters placed at a central location in the workshop, office or at the factory gate help in identifying suitable candidates for the job.

Jobbers & Contractors: (Agents)

Many industries in India secure their manpower requirements through jobbers and contractors. These jobbers and contractors keep in touch with the potential labourers in the villages and on payment of a commission, bring them to the places where workers are needed.

Waiting list:

Many firms receive casual applications either through mail or personal visits to the firms. These applications are kept in record and can prove to be an excellent source of recruitment.

Personnel Consultants:

If the personnel policy of the firm permits, a firm can opt to use the services of a personnel or management consultancy firm that is specialised in recruitment purposes.

Media advertising:

Advertising is a popular method of recruiting staff. The benefit is that the firm can use the most appropriate newspaper or journal to advertise the vacancy and also get the best candidate to fill up the vacancy.


(Any six in sequence with suitable explanation – 1 mark to be deducted if proper sequence is not followed)

Code to remember – Select APATIR (The Personnel Manager scrutinises the candidate’s application then arranges a preliminary interview, then makes candidate fill the form, gives a test, interviews, lastly request references and medical check ups).

Application scrutiny:

Every person who applies for the job may not possess the qualifications that the job demands. Hence the applications are carefully screened and those who do not possess the required qualifications are eliminated from the list of candidates that will be called for a preliminary interview.

Preliminary interview:

A brief preliminary interview is conducted in which questions relating to the job for which vacancies are being filled up, are asked. If the applicant is successful in the preliminary interview, he or she will be asked to fill an application form.

Application form:

The candidates selected in the preliminary interview have to fill up blank application forms. Sometimes the applicant may also have to attach his or her photograph to the application form. These applications are then maintained in the records of the Personnel Department.

Testing: (list the different types of test used in the selection process)

The candidates are then tested and there are large number of tailor made or standardised tests available for this purpose. These include the following tests:

  • Trade test - to discover the job skills of the prospective candidate

  • Performance test to check the proficiency of the applicant. For example a typist/steno is tested on the speed of her typing/shorthand.

  • Psychological test to check the intelligence, attitude, aptitude, achievements, emotions, interests and other such qualities of the candidate.


  • Interview is especially important for skilled and technical jobs.

  • In an interview the candidate is evaluated for poise, appearance and to get more information than what is stated in the application form.

  • Since a pool of interviewers interview the candidate, wide judgement of all experts becomes available.

References/medical checks:

  • After the interview, the candidate may have to provide unbiased references to assess the character and reputation of the candidate.

  • The candidate has to then undergo a medical examination to check the physical fitness.

  • On satisfactory conclusion of the above process, a letter of appointment is issued to the successful candidate and a reasonable time is given to join the organisation.

Distinguish between:– (all points V. Imp)

On the basis of ‘Purpose/Objective, level of persons involved, depth of knowledge, etc

It imparts technical skills
It imparts technical, human and conceptual skills
Level of persons involved
It is useful for non managerial personnel
It is useful for managerial personnel

Depth of knowledge Imparted

It develops skills already possessed by personnel
It develops hidden skills and talents
Initiative in learning
It uses on the job training
It uses off the job training
Scope of learning
It has limited scope of imparting skills to workers
It has wider scope associated with overall development of executives
Short duration as it is job oriented
Long duration as it is career oriented

Explain briefly any six reasons as to why the training of employees is necessary?

  • Training helps to improve the performance of both new and experienced employees.

  • It qualifies employees for promotion to hold more responsible jobs.

  • It reduces the learning time and ensures higher productivity from new employees.

  • It reduces absenteeism, turnover, accidents and grievances.

  • It helps in economic and better utilisation of raw materials, tools and equipment.

  • It helps employees to acquire new knowledge and job skills. This increases their market value and earning power. It also increases their job security with existing employer.

  • It is difficult for a company to get sufficient skilled workers, training therefore solves this manpower problem by establishing its own apprentice training programme.

  • It helps to mould the attitude of employees and obtains better cooperation and greater loyalty from employees.



What are the METHODS used for training of workers? 6 marks CBSE-1992

Job Rotation: (on the job training)

Under this method, an employee is periodically rotated from one job to another to acquire knowledge and general background of all the jobs.
Advantage: New comers get knowledge of several business situations.
Drawback: It prevents specialisation of a particular job.

Apprenticeship training: (on the job training)

It is a practical form of training whereby the trainee is placed under the control and supervision of an experienced person. He observes how the work is done and thus learns from him. He is in a way assistant to the experienced person. People seeking to enter skilled trades like plumber, electrician, etc. are often required to undergo this training under the guidance of a master worker.

Vestibule training: (Off the job training)

Under this method, employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor. It is generally used to train employees on sophisticated modern equipments and machinery.

Internship training (Off the job training)

This refers to a joint programme of training in which technical institutes and business enterprises cooperate to enable the students to gain practical training of the theoretical knowledge gained in the classroom. Classroom principles are better understood against a practical background in a factory. It is not a service contract but during this period normally a stipend is paid to the student.

What is meant by INCENTIVE?

  • Incentive means

    • Paying a guaranteed minimum remuneration irrespective of whether there has been an output or not.

    • Plus paying additional remuneration for larger output

      • For saving time

      • For reducing costs; and

      • For better workmanship

Your subordinate expect new source of motivation at every subsequent stage. Suggest any 4 MONETARY AND ANY 3 NON MONETARY SOURCES, giving a sentence for each source, how it will inspire them


Explain the various types of INCENTIVES which may be used to motivate employees with suitable examples ( 6 marks)

There are two types of incentives – monetary and non-monetary incentives.

Monetary incentives (financial incentives):

  • They are monetary benefits paid in cash or kind or both.

  • They are generally used to motivate workers and non-managerial employees.

  • The various sources of monetary incentives are:

    • Profit sharing incentives given to workers for higher productivity and greater profitability.

    • Co partnership- workers get their usual wages + a share in profits + a share in management of the company.

    • Bonus – It is a one time reward in cash, kind or any other form offered to workers for higher performance

    • Suggestion system: It is an incentive given to a worker when his suggestions results in either increased profits or reduced costs. The amount of reward varies according to the value of the suggestions.

Non-Monetary incentives: (non financial incentives)

  • They do not involve cash but satisfy ego and self -esteem.

  • They are generally used to motivate higher level of management.

  • The various sources of non monetary incentives are: (sarp)

    • Supervisory relationship: coordination with supervisors enhances commitment to work and motivates employees to work efficiently and effectively.

    • Assigning Challenging jobs – Repetitive work creates monotony in work. In order to create interest in the work, employees should be assigned challenging jobs. When the challenging tasks are successfully performed, it gives a sense of satisfaction to the employees, which should also be suitably rewarded.

    • Recognition – Praise or recognition has a great impact when given on received and helps in improving the attitude of employee and motivates them to perform better.

    • Participation in management decisions: employees should be encouraged to participate in management decisions. Good suggestions and comments from employees should be acknowledged and implemented.

4 marks definite question on time rate and piece rate wage system (v. important)

You are the representative of workers in a factory and want to impress upon the management the need for introducing time rate system in place of piece-rate system of wage payment. What four reasons would you like to give to the management to justify your point of view? Explain in brief.
(Give any four advantages of time rate wage system)

As a worker’s representative, I would prefer the time rate wage system due to its following advantages:

  • It is simple to calculate the wages and therefore easily understood by workers.

  • It provides stable income to employees so they can plan their expense budgets.

  • Workers are therefore not in a hurry to complete the job and can therefore pay more attention to quality of their work. There is no rough handling of machinery, tools and equipment.

  • As the workers work sincerely and honestly, constant supervision is not required which reduces production and administration costs.

  • It is favoured by trade unions as workers are treated at par on the basis of their output and efficiency.

The workers of a factory are demanding the introduction of time wage system in place of the existing piece-rate system of wage payment. The management is not prepared to accept this demand of the workers. Why, in your opinion, is the management opposing this demand? Explain in brief any four reasons.

The management is opposing the introduction of time wage system due to the following reasons: (write the disadvantages of time wage system) – any 4

  • In time wage system, both efficient and inefficient workers get equal remuneration for same job. There is no incentive for efficient workers to work better in terms of quality and quantity of output. Efficiency will neither result in extra remuneration nor promotion for them. As a result there is quality of work is low.

  • It is difficult to assess a worker’s efficiency, as there is no record of his performance.

  • Time wage system treats workers at par. As such trade unions pressurise management to accept their demands. If they do not accept the demands it leads to industrial unrest, strikes, riots and lockouts, etc.

  • Constant supervision of workers is required which increases cost of production

  • There is the tendency for workers to go slow and hence production suffers.

  • Skilled workers are not required.

What are the advantages of piece rate system?

  • It provides an incentive to produce more.

  • It ensures fairness by correlating wages and productivity.

  • Cost of supervision is less as workers do not need to be supervised.

When is TIME wage payment method suitable? – {Hint all work that requires time to do the work is time wage system} Go through all they are important

  • When high degree of skill is required

  • Where production process is complicated and intricate

  • Where quality is more important than quantity.

  • Where mental work is involved such as administration, management and policy making.

  • When workers are recruited on group basis

  • When machines used are delicate and expensive

  • When workers have no control over their output (control is by machine)

  • When there is no clear relationship between effort and output

  • Where units of output CANNOT be measured

  • When output of learners CANNOT be expected to reach the minimum standard

Which method of wage payment – time rate or piece rate – would you adopt under each of the following situations? Give reasons in support of your answer – 4 marks CBSE 2004 Set 1, 2 and 3 (V. Important) –

When production process is complicated and (intricate) or requires a high degree of skill.

Time rate is more suitable as the job requires a high degree of skill. The workers would not be in a hurry to complete their job and would maintain the degree of skill and quality desired.

Where quality is of supreme importance

Time-rate wage payment method.
The workers are not in a hurry to complete the job If it was piece rate workers would hurry to complete the job and would not maintain the quality desired.

When a collective effort of group of individuals is necessary for computation of a job

Time rate wage system will be adopted because in collective effort where it is difficult to measure precisely the output of individual workers this system is more suitable

When skilled personnel is engaged in tasks requiring high quality workmanship

Time wage system is suitable as workers are not in a hurry to complete their work to get more wages.

When workers have no control over the rate of output


Where the output of learners CANNOT be expected to reach the minimum standard


Where rate of output is determined solely by machine and not by operation

Time rate wage payment method
As there is no standard unit of output and rate of output is determined solely by machine and not by operator or measurement technique.

Where there is NO clear relationship between effort and output.

Time rate wage payment method.
Because here it is not possible to pay the worker according to her work done by him as output of each worker cannot be separately identified.

Where time factor is not important

Time rate wage system as time factor is not significant which means quality is preferred over quantity.

Where delays in work are beyond employer’s control

Time rate wage system as delay in work is not in control of employer.

When the nature of work requires close supervision.

Time rate wage system because quality is more important than quantity

State any five situations when is PIECE wage payment method suitable? (Learn all are important) -4 marks – CBSE 1999

  • When the units of output can be measured

  • The job is standardised (of repetitive nature), work flow is regular and delays are few and consistent

  • There is a clear relationship between efforts of employees and quantity of output

  • Quality is less important than quantity

  • Employees are efficient and do not require constant supervision

Which method of wage payment – time rate or piece rate – would you adopt under each of the following situations? Give reasons in support of your answer – 4 marks CBSE 2004 Set 1, 2 and 3 (V. Important) –

Where units of output can be measured;

Piece rate wage payment method.
As there is clear relation between effort and output. OR
As wages can be easily calculated on the basis of output produced by the worker.

Where quantity of work is measured, inspected and counted

Piece rate wage system is suitable in order to differentiate between efficient and non efficient workers and to motivate them.

When the job is standardised. OR method of production is standardised

Piece rate wage payment method is suitable as output of each worker can be measured

When workflow is regular

Piece rate wage system
As the workflow is regular and delays are few and consistent, here output of each worker can be easily measured and workers can easily be paid according to the efforts and work done by him.

Where there is clear relationship between efforts and output.

Piece rate wage system
Because here it is possible to pay the worker according to the work done by him as output of each worker can be separately identified.

Where quality is less important than quantity (i.e. when quantity is more imp than quality)

Piece rate wage payment method.
Because worker is in a hurry to complete the work as he gets wages based on quantity produced.
Therefore quality will not be maintained.

Where the work is of a repetitive nature and there is no need to increase the production.

Where work is of repetitive nature and there is no need to increase the production, no supervision is required, no skilled personnel is required, quality is not important, in such cases piece rate system is more suitable


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