Revision Notes for Class 12 Business Studies Chapter 6 Staffing

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Revision Notes for Class 12 Business Studies Chapter 6 Staffing

Here we are providing Revision Notes for Class 12 Business Studies Chapter 6 Staffing. These are the important points related to the chapter. Students should remember these points.


In the simplest terms, staffing means, ‘Placing the right people at the right place’.

Staffing may be defined as, the process of obtaining, utilizing and maintaining a satisfactory and satisfied work force.


Staffing is not a one time function but is deemed to be continuous process as there is an ongoing needs within an organisation to obtain, maintain and train and develop manpower in the best possible manner. Furthermore, with the swift advancement of technology, growing size of organisation and complex behaviour of human beings importance of staffing function

has gained greater importance. In a nutshell, Staffing involves two things; first to fill up the various job positions provided for in the organisation structure and second to keep filled with efficient and effective people.

The various benefits offered by proper staffing are stated below :

(a)         It helps in identifying and hiring competent manpower to fill in the various job positions within the organisation.

(b)         It leads to higher productivity by placing the right person on the right job i.e. assigning tasks to people in accordance to their individual potential

(c)          It ensures perpetual existence of the organisation and also fosters its growth through continuous manpower planning and execution.

(d) It leads to optimum utilisation of human resource by avoiding the situations of overstaffing or understaffing.

(e)         It boost the morale of the employees and enhances their job satisfaction, by adopting an objective method of performance appraisal and fair system for rewards and recognitions.


Human Resource Management refers to the process of managing the employees within an organisation as human factor is recognised as the most important instrument of success in an organisation. Staffing is considered to be an inherent part of human resource management as it deals with the human element of management and is concerned with obtaining, utilising and maintaining a satisfactory and satisfied work force.

In practice the Human Resource Department has a very wide scope as it consist of a number of specialised activities.


The various steps involved in the staffing process are detailed below:

(a)         Estimating the Manpower Requirements: The correct estimation of the manpower requirements involves two aspects; how many persons are required and of what type. Workload analysis would facilitate an estimation of the number and types of human resources essential for the performance of various jobs and achievement of organisational goals. Workforce analysis would make known the number and type of the manpower available within the organisation. This would also bring to light if an organisation is understaffed, overstaffed or optimally staffed.

(b)         Recruitment: Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for job positions within an organisation.

(c)          Selection: Selection is the process of choosing from among the pool of the prospective job candidates who have applied for the job. The selection process serves two purposes.

(,d) Placement and Orientation: The term placement refers to the process by which an employee takes charge of his job position. At the same time, the process of orientation is important in order to familiarise the new employees with the various aspects related to the organisation and the workers. It is also referred to as induction training.

(e)         Training and development: Training as a process aims at increasing the knowledge and skill of an employee for doing a particular job.

Development is a much wider term as compared to training because it seems to improve upon an individuals in all spheres be it human or technical and foster their growth.

(f)          Performance Appraisal: Performance appraisal seeks to measure the worth of an employee to an organisation. The work of an employee needs be evaluated against certain predetermined standards.

(g)         Promotion and career planning: Every employee aspires to rise high in his career and Promotions are a fundamental part of a person’s career. Promotion results in an increases the status and a higher pay package for the employee.

(h) Compensation: Compensation refers to the remuneration given to an employee in return for his/her services to the organisation. Compensation, consists of all forms of pay or rewards going to employees.


The three important aspects of staffing are as follows:

(i)          Recruitment

(it) Selection (tit) Training


The various methods of recruitment through each of these sources are outline below:

I.             Internal Sources of Recruitment

The two widely used sources of internal recruitment are transfers and promotions.

(a)         Transfers: Transfer refers to the shifting of an employee horizontally along the organisational structure.

(b)         Promotions: Promotion refers to the vertical movement of an employee along the organisational structure. It to an increase both in the status/job position as well as in the compensation.

Merits of Internal Sources

The internal sources of recruitment offer the following advantages:

(a)         Motivates employees: When an organisation uses internal sources of recruitment it provides a psychological benefit and helps to maintain peace within the organisation.

(b)         Simple process: The process of internal recruitment is relatively simple and more reliable.

(c)          Promotes training: A systematic transfer policy can be used as an effective tool to foster the knowledge and skill of the employees about different jobs.

(d) Deal with internal issues: Under the situations where an employee is likely to be terminated due to overstaffing, such an employee can be effectively placed in an understaffed department.

(e) Economical source: Internal recruitment is relatively and economical source as it helps to save time, effort and money.

Limitations of Internal Sources

The limitations of using internal sources of recruitment are as outlined below:

(a)         Limited choice: The use of internal sources of recruitment restricts the infusion of fresh blood within the organisation.

(b)         Lethargic employees: When an organisation follows a time bound promotion policy its employees are likely to become complacent.

(c)          Not suitable for new enterprises: It is not possible for a new organisation to depend on internal source of recruitment.

(d)         Dissatisfaction among employees: If the promotion policy followed within an organisation is not fair and justified, it may lead to dissatisfaction among the employees.

(,e) Reduce productivity: Unplanned and frequent transfers of employees is likely to have an adverse effect on the productivity of the organisation.

il. External Sources of Recruitment

In order to filling the various job positions an organisation may use different sources of external recruitment, depending upon the level and nature of work. The most commonly used sources of external recruitment are described below:

(a)         Direct Recruitment: Under the direct recruitment, the organisation places a notice on the notice board specifying the details of the various jobs available. It is suitable for filling the casual vacancies which comprise of unskilled or semi-skilled jobs.

(b)         Casual Callers: Many reputed enterprises maintain a database of unsolicited applications for various job positions. This record serves as a ready reckoner to fill the various job positions as and when they arise.

(c)          Advertisement: Advertisement is one of the most popular sources of recruitment which is being widely used for ages to inform and persuade the prospective candidates to apply for the various available job positions.

(d)         Employment Exchange: Then employment exchange works as an intermediary and seeks to provide a link between the job seeker and government organisation. It can be used to fill up both skilled as well as unskilled job positions.

(e) Placement Agencies and Management Consultants: The placement agencies may also prove to be a useful instrument in changeover of the top level executives from one organisation to another. The management consultancy firms primarily specialise in filling up the vacancies and the middle level and top level management

(f) Campus Recruitment: Many reputed organisations work in close coordination with the universities, vocational school and management institute, so as to be able to type the best of the human resources.

(g)         Recommendations of Employees: The enterprise may encourage its present employees to provide references of their friends and relatives who proved to be a worthwhile source of recruitment for the organisation.

(h)         Labour Contractors: The labour contractors as a very useful source for hiring unskilled worker at a very short notice. The labour contractor are themselves the employees of the organisation.

(z) Advertising on Television: Television is considered to be one of the most popular electronic medium of advertising.

(j)          Web Publishing: The growing popularity of internet has been away for a new source of recruitment. Websites prove to be beneficial to both the organisations which are searching for suitable people and candidates themselves.

Merits of External Sources

The advantages of using external sources of recruitment are as follows:

(a)         Qualified Personnel: By exploring external sources of recruitment an organisation is able to attract qualified and competent persons for the vacant positions in the organisation.

(b)         Wider Choice: External sources of recruitment offers a wider choice to the organisation unlike internal sources which provide only a limited choice.

(c)          Fresh Talent: External sources leads to infusion of fresh blood within the organisation, (d) Competitive Spirit: The use of external sources of recruitment helps to instil a competitive

spirit among the existing employees.

Limitations of External Sources

The limitations of using external sources of recruitment are as follows:

(a)         Dissatisfaction among existing staff: Many a times use of external sources of recruitment creates a feeling of unhappiness and discontentment among the present employees.

(b)         Lengthy process: The use of external sources of recruitment is a lengthy and tedious process as it involves a series of time consuming steps.

(c)          Costly process: The use of external sources of recruitment is considered to be an expensive process.


Selection is the process of choosing the best candidate from the pool of applicants.

Process of Selection

The various steps involved in the selection process are described below:

(a)         Preliminary Screening: Preliminary screening is undertaken with the objective of eliminating all those applicants who do not fulfill the minimum requirements of the job.

(b)         Selection Tests: Selection tests form an integral part of selection process. Unlike when interview a selection test is free from all kinds of bias and Prejudice and purely objective in nature.

The important tests used for selection of employee outline as follows:

(i)          Intelligence Tests: These includes important psychological tests are useful in measuring the intelligence quotient of an individual.

(ii)         Aptitude Test: These tests seek to evaluate the potential of a candidate in acquiring new skills and develop.

(iii)  Personality Tests: These tests seek to provide an insight in to a person’s emotions, her reactions, maturity and value system etc.

(iv)        Trade Test: These tests seek to measure the knowledge, skills and proficiency that a candidate possess with regard to a particular job position.

(v)         Interest Tests: These tests are used to define the interests of the candidate.

(c)          Employment Interview: An interview involves a face to face interaction between the prospective candidate and the interviewer(s).

(d)       Reference and Background checking: The organisation may like to establish the credibility of the person from the references is provided in the application form as well, from his/ her previous or current employer may be contacted in order verify the details supplied by the candidate and also procure further information about his/her character, experience, outlook etc.

(e)        Selection Decision: Once the genuineness of the candidate has been ascertained, the organisation has to take the final decision about hiring the candidate(s).

(f)          Medical Examination: The selected candidates are asked to undergo medical examination of before the job offer is made.

(g)         Job Offer: The job offer of a contains a proposal in terms of job position, total emoluments to be given, date of joining, and other related important information about the job.

(h)         Contract of Employment: If selected candidate accepts the job offer he she is issued a letter of appointment.


Importance of Training and Development

Over the years, due to rapid changes in technology the need for employees to constantly

upgrade or alter their skills has been increased.

Benefits of Training to the Organisation

Training offers the following benefits to the organisation:

(a)         Training programs are organised in a systematic manner and helps to avoid wastage of resources.

(ib) Training leads to an increase in the productivity of an organisation both in qualitative and quantitative terms, leading to higher profitability.

(c)          Training seeks to prepare the employees take charge of higher positions in case of any emergency.

(d) Training enables the managers to deal with the problem of absenteeism and employee turnover.

(e)         Training equips the managers with the required technical and managerial skills, so as to facilitate transitions within the organisation in the light of changes in the business environment.


Training offers the following benefits to the employees:

(a) The career prospects of an employee strengthen with training, as it improves his/her knowledge and skill related to a particular job.

(,b) A trained employee is likely to earn more as his/her productivity is likely to be higher.

(c)          Training leads to an increase in the efficiency of the employees in handling various kinds of machines and equipments.

(d)         Training enhances the level of job satisfaction and boosts the morale of the employees.


Training: Training refers to the process which enables a person to improve upon his/her attitudes, skills and abilities for performing a particular job by leaning new knowledge and skills.

Development: The term development refers to the learning opportunities that promote growth of individual in all respects.

Education: Education is the process of increasing the knowledge and understanding by awakening the faculties of mind and character of an individual.


The various methods of training may be broadly categorised into two groups:

(a)         On-the-job and

(b)         Off-the-Job methods.

On-the-job Training Methods

The various methods of on-the-job training are described below:

(a)         Internship Training: An internship training program works through a collaboration between an educational institute and business firms. This training method is very popularly used in case of professionals like doctors, engineers, lawyers etc. It is a method of on-the-job training

(b)         Apprenticeship Training: Apprenticeship training in India, is covered under apprenticeship Act 1961. As per the Provisions of the Act, it is provided to the people who plan to pursue skilled jobs like that of a plumber, electrician, welder, craftsman etc. Under this method training, the trainee acquires the knowledge and skill related to a particular line of specialisation under guidance of a master worker.

(c)          Induction Training: Induction training is provided to the new employees of an organisation so as to familiarise them with the organisational rules and policies, their superior and subordinate, important places in the organisation like, both room, conference room and so on.

Off-the-Job Training Method

One of the popular methods of off-the-job training is described below:

Vestibule training: Under this method of training, a replica of the actual work situation is created and the trainees are expected to develop their knowledge and skill related to the particular job in an environment which is similar to their actual work environment. This method is suitable in the cases where the trainees are expected to work on sophisticated machineries and equipments at the actual place of work.

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