LEADERSHIP
• Leadership is often regarded as the important modifier of organisational behaviour.
• The success of an organisation depends much on the quality of a leader and thus a strong leadership can contribute to the overall effectiveness of the organisation.
• Effective leadership is based upon ideas, but will not happen unless those ideas can be communicated to others in a way that engages them.
Definition:
• Leadership has been defined in different ways by different set of scholars.
• In simple terms, Leadership is defined as the ability to influence a group towards the achievement of a vision or set of goals.
Leadership Qualities and Characteristics
According to Chester Barnard, six qualities are essential for a leader and such qualities, as per his order of importance include
• Vitality and Endurance
• Decisiveness
• Persuasiveness
• Stability in Behaviour
• Intellectual Ability and
• Knowledge
The leadership qualities as suggested by Millet include:
• Good health
• Sense of mission
• Interest in other people
• Intelligence
• Integrity
• Persuasiveness
• Judgement
• Loyalty
Terry’s list of leadership qualities includes
• Energy
• Emotional stability
• Knowledge of human relations
• Empathy
• Objectivity
• Personal motivation
• Communicative skills
• Teaching ability
• Social skill and
• Technical Competence
Factors influencing Styles of leadership
The behavioural pattern, exhibited by a leader is influenced by various factors, including:
• Personality of Leader
• Personality of Group Members
• Nature of Tasks
• Nature of Environment
Styles of Leadership
• Feudal Type
o In the feudal type of leadership, the relationship that exists between a leader and follower is that of a lord and his subject
• Paternal Type
o In this type of leadership, the leader’s relationship with the employee is that of a father and son. Here the employees of the organization are seen as family members
• Dictatorial Type
o Here a leader dictates terms to the employees and demands obedience of the employees in carrying out the orders
• Participatory Type
o In this, the leader tends to adopt a flexible approach, wherein the employees of the organisation are allowed to participate in decision making process
o The leader shares his/her vision and ideas to the employees and the decisions are arrived at by having a group discussion
• Developmental Type
o Here, the leader feels that it is his/her duty to develop people
o The leader considers his/her subordinates to have vast potentialities for improvement and thus the focus of this leader is laid on promoting the subordinates to highest performances
• Bureaucratic Type
o Under this type of leadership, a leader is bound by strict rules and regulations and they expect their employees to follow the procedures in a prompt manner
• Manipulative Type
o In this case, the leader manipulates the employees of the organization so as to attain his own personal goals
• Charismatic Type
o Charismatic leaders are regarded as of divine origin and the recognition of the followers depends upon the demonstration of constant proof, which in turn, augments follower devotion and enthusiasm
Theories of Leadership
• Great Man Theory
• Trait Theory
• Behavioural Theories
o The Managerial Grid Model
o Role Theory
• Participative Theories
o Lewin’s leadership styles
o Likert’s leadership styles
• Contingency Theories
o Fiedler’s contingency theory o Hersey-Blanchard Situational Theory o Path-goal theory
o Vroom-Yetton-Jago decision-making model
o Cognitive Resource Theory
o Strategic Contingencies Theory
• Transactional Theories
o Leader-Member Exchange (LMX) Theory
• Transformational Leadership
o Bass’ Transformational Theory o Burns’ Transformational Theory
o Kouzes and Posner’s Leadership Participation Inventory
Great Man Theory
• The Great Man theory assumes that the traits of leadership are intrinsic.
• That simply means that great leaders are born, they are not made.
• This theory sees great leaders as those who are destined by birth to become a leader.
Trait Theory of Leadership
• The trait leadership theory believes that people are either born or are made with certain qualities that will make them excel in leadership roles.
• Hence, according to this model, a leader must have certain traits and qualities.
• Leaders like Mahatma Gandhi, Margaret Thatcher, Nelson Mandela, Narayana Murthy of Infosys, Steve Jobs etc. has been identified, based on the traits that they displayed.
Behavioural Theories
• In the 1940s, apart from the research studies being conducted on the traits displayed by leaders, research was also conducted on the behaviours exhibited by leaders.
• While the assumption behind traits theory is that “leaders are born, rather than made“, behavioural theories assume that specific behavioural patterns of leaders can be acquired through learning and experience.
• While the trait theory concentrates on “what the leaders are”, the behavioural theories concentrate on “what the leaders do”.
Contingency/Situational Theories
• Sometimes the success of a leader does not depend upon the qualities, traits and behaviour of a leader alone.
• The context in which a leader exhibits her/his skills, traits, and behaviour matters, because same style of functioning may not be suitable for different situations.
• Thus, the effectiveness of leadership also depends upon situations.
Cognitive Resource Theory
• In this model, the focus has been laid on the role of stress as a form of situational unfavourableness and how a leader’s intelligence and experience influence her/his reaction to stress.
Transactional Theories
• Transactional theories are also known as exchange theories or management theories of leadership.
• These theories state that the leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements.
• The transactional leaders tend to be highly directive and action oriented and their relationship with the followers tends to be transitory and not based on emotional bonds.
Transformational Theories
• The essence of transformational theories is that leaders transform their followers through their inspirational nature and charismatic personalities.
• These are also known as relationship theories.
Motivation
• The concept of motivation focuses on explaining what “moves” behaviour.
• In fact, the term motivation is derived from the Latin word ‘movere’, referring to movement of activity.
• Working, studying, playing and caring are some important daily activities which are considered purposeful. Motives help explain our movement towards the chosen goals.
• Hence, motivation is one of the determinants of behaviour.
• Instincts, drives, needs, goals, and incentives come under the broad cluster of motivation.
The Motivational Cycle
• A need is lack or deficit of some necessity. This condition leads to drive, which is a state of tension or arousal.
• Drive energises random activity. When one of the random activities leads to a goal, it reduces the drive, and the organism stops being active.
• The organism returns to a balanced state.
Types of Motives
Basically, there are two types of motives: biological and psychosocial.
Physiological / Biological Motives
• Biological motives are also known as physiological motives as they are guided mostly by the physiological mechanisms of the body. It is the earliest attempt to understand causes of behaviour.
• This theory states that organisms have needs (internal physiological imbalances) that produce drive, which stimulates behaviour leading to certain actions towards achieving certain goals, which reduce the drive.
• The earliest explanations of motivation relied on the concept of instinct. The term instinct denotes inborn patterns of behaviour that are biologically determined rather than learned.
• Some of the basic biological needs explained by this approach are hunger, thirst, and sex, which are essential for the sustenance of the individual.
Psychosocial motives
• Psychosocial motives are complex forms of motives mainly resulting from the individual’s interaction with her/his social environment.
• Social motives are mostly learned or acquired.
• Social groups such as family, neighbourhood, friends, and relatives do contribute a lot in acquiring these motives.
Need for Affiliation
• Need for affiliation is aroused when individuals feel threatened or helpless and also when they are happy.
• People try to get close to other people, to seek their help, and to become members of their group. Seeking other human beings and wanting to be close to them both physically and psychologically is called affiliation. It involves motivation for social contact.
Need for Power
• Need for power is an ability of a person to produce intended effects on the behaviour and emotions of another person.
Need for Achievement
• Achievement motivation refers to the desire of a person to meet standards of excellence. Need for achievement, also known as n-Ach, energises and directs behaviour as well as influences the perception of situations.
Curiosity and Exploration
• Often people engage in activities without a clear goal or purpose but they derive some kind of pleasure out of it. It is a motivational tendency to act without any specific identifiable goal.
• The tendency to seek for a novel experience, gain pleasure by obtaining information, etc. are signs of curiosity, Hence, curiosity describes behaviour whose primary motive appears to remain in the activities themselves.
General Motives
• This is an intermediate category of motives between the physiological and socio-psychological.
• The motives in this category are unlearned but not physiologically based.
Classification of Motives at Work
Primary & Secondary Motives
• Primary motives are unlearned, physiological needs that include hunger, thirst, sleep, sex, avoidance of pain etc.
• These needs are important for survival and are virtually universal, but they vary in intensity from one person to another.
• Secondary motives are learned, social motives that arise as a result of interaction with other people and develop as people mature.
• Included in this category are affiliation – desire to associate with others; recognition – need for frequent tangible proof that one is getting ahead; status – need to have a high rank in society etc.
Extrinsic and Intrinsic Motivation
• Extrinsic motivation is related to tangible rewards such as salary and fringe benefits, promotion, contract of service, the work environment and conditions of work.
• Intrinsic motivation is related to psychological rewards such as the opportunity to use one’s ability, a sense of challenge and achievement, receiving appreciation, positive recognition and being treated in a caring and considerate manner.
Importance of Motivation in Organisations:
• Employee motivation is essential to the success of any organisation, big or small. In the modern workplace, human resources are valued above all others.
• Motivated employees are productive, happy and committed.
• The spin-off of this includes reduced employee turnover, results-driven employees, company-loyalty and workplace harmony.
• Motivation is very important for an organisation because of the following benefits it provides:
• Increased productivity and improved employee performance
• Stability of workforce
• Positive workplace culture
• Better teamwork
• Workplace harmony
Theories of Motivation
• There are many competing theories, which attempt to explain the nature of motivation.
• These theories centre on three different aspects of motivation: the individual’s predisposition, the cognitive process, and the consequences deriving from the individual’s action.
• Based on these aspects, there are two types of theories of motivation:
• Content theories – These theories are concerned with identifying people’s needs and their relative strengths, and the goals they pursue in order to satisfy these needs.
• Process theories – These theories are concerned more with how motivated behaviour is initiated, directed and sustained.
Content Theories
Maslow’s Hierarchy of Needs
Abraham H. Maslow attempted to portray a picture of human behaviour by arranging the various needs in a hierarchy.
His viewpoint about motivation is very popular because of its theoretical and applied value, which is popularly known as the “Theory of Self-actualisation”.
Maslow’s model can be conceptualised as a pyramid:
• Bottom/base of the pyramid hierarchy represents basic physiological or biological needs which are basic to survival such as hunger, thirst, etc.
• Once these needs are met, need for safety arises. In the absence of physical safety – due to war, natural disaster, etc people may experience stress etc and take steps to ensure physical safety. In the absence of economic safety – there will be preference for job security.
• Once these needs are met, there is need to seek out other people, be social and involves feelings of belongingness.
• After these needs are fulfilled, the individual strives for esteem, i.e. the need to develop a sense of self-worth.
• The next higher need in the hierarchy reflects an individual’s motive towards the fullest development of potential, i.e. self-actualisation. A self-actualised person is self-aware, socially responsive, creative, spontaneous, open to novelty, and challenge.
• Lower level needs (physiological) in the hierarchy dominate as long as they are unsatisfied.
• Once they are adequately satisfied, the higher needs occupy the individual’s attention and effort.
Alderfer’s ERG Theory
• The ERG theory is an extension of Maslow’s hierarchy of needs.
• Clayton Alderfer (1972) suggested that needs could be classified into three categories, rather than five. These three types of needs are:
• Existence Needs: physiological and safety needs (such as hunger, thirst and sex).
• Relatedness Needs: social and external esteem (involvement with family, friends, co-workers and employers).
• Growth Needs: internal esteem and self-actualisation (the desire to be creative, productive and to complete meaningful tasks).
Peculiar features of ERG theory include:
• The ERG theory allows for different levels of needs to be pursued simultaneously.
• The ERG theory allows the order of the needs be different for different people.
• The ERG theory acknowledges that if a higher level need, remains unfulfilled, the person may regress to lower level needs that appear easier to satisfy. This is known as the frustration-regression principle.
Herzberg’s Motivator-Hygiene Theory
• Herzberg concluded that there are two sets of needs: the hygiene needs, which produce job dissatisfaction and the motivator needs, which produce job satisfaction.
• Taken together, the hygiene factors and motivators are known as Herzberg’s two-factor theory of motivation.
| Motivation factors – job satisfaction | Hygiene factors – job dissatisfaction |
| Achievement | Supervision |
| Work itself | Company policy |
| Recognition | Working conditions |
| Added Responsibility | Relationship with supervisor, peers, subordinates |
| Advancement & Growth | Salary & Security |
McClelland’s Learned Needs Theory
• David McClelland proposed that an individual’s specific needs are acquired over time and are shaped by one’s life experiences. Most of these needs can be classed as:
• Need for achievement – The desire to excel, to achieve in relation to a set of standards and to purse and attain goals.
• Need for affiliation – The desire for friendly and close interpersonal relationships.
• Need for power – The desire to control one’s environment and to influence others.
Process Theories
Process (or cognitive) theories of motivation focus on conscious human decision processes as an explanation of motivation.
Reinforcement Theory
• B.F. Skinner and his associates proposed the Reinforcement Theory of Motivation, which posits that behaviour depends on its consequences.
• Behaviour that is accompanied by favourable consequences is likely to continue, while behaviour that is followed by unfavourable consequences is not likely to be repeated.
• Based on this principle, reinforcement theory describes four contingency methods of shaping behaviour:
• Positive reinforcement – It occurs when behaviour is followed by a favorable consequence that encourages the repetition of that behaviour. For example, recognition, promotion, money, approval, fringe benefits etc.
• Negative reinforcement – It occurs when behaviour is accompanied by the removal of an unfavourable consequence that results in strengthening of that behaviour. For example, Salary Cut, etc.
• Punishment – It occurs when the administration of an un-favorable consequence discourages certain behaviour. For Example: Suspension conditions
• Extinction – It occurs when the target behaviour decreases because no reinforcement follows it. For example, research suggests that when mangers stop congratulating employees for their good performance, that performance tends to decline.
Carrot & Stick Theory
• The Carrot and Stick approach of motivation is based on the principles of reinforcement and is given by a philosopher Jeremy Bentham, during the industrial revolution.
• In this, an individual is given carrot i.e. reward when he performs efficiently and is given a punishment in case of non-performance.
Expectancy Theory
• Victor Vroom (1964) suggested that motivation is a product of three factors: expectancy, instrumentality and valence.
• This means that if any of these is zero, then the motivation to do something will be zero as well. In simple terms:
Expectancy x Instrumentality x Valence = Motivation
• Expectancy – Is the belief that more effort will result in success.
• Instrumentality – the person’s belief that there is a connection between activity and goal. If one performs well, one will get reward.
• Valence – the degree to which a person values the reward, the results of success.
Equity Theory
• The theory was suggested by Adams (1965) and is based on Social Exchange theory.
• According to this theory, people compare their contribution to work and the benefits to the contribution and benefit of relevant other persons.
• If people perceive that the ratio of their inputs-outputs to the ratio of referent other’s input-output is inequitable, then they will be motivated to reduce the inequity.
• There are two types of inequity—under-reward and over-reward. Individuals may attempt to reduce inequity in various ways:
• Change the inputs – A person may change his or her level of effort. Ex. an employee who feels under-rewarded is likely to work less hard.
• Change the outcomes – A person may try to change his or her rewards. Ex. asking for a raise
• Change the comparison other’s inputs – A person may change the behaviour of the reference person. Ex. By encouraging that person to put forth more effort.
• Change the comparison other’s outcomes – A person may change the outcome of the reference person. Ex. By asking the boss to stop giving favourable treatment to him/her.
• Change the comparison other – A person experiencing inequity may change the reference person and compare him or herself to a different person to assess equity.
• Change one’s perception – A person may believe that the co-worker is doing more or that the higher outcomes that the other receives are no better that his/hers.
• Quit the Situation – A person may avoid thinking about the inequity by keeping away from the situation. Ex. Quitting the job.
Goal-Setting Theory
• Locke and Latham (1990) primarily developed the goal-setting theory. It states that specific, measurable and attainable goals motivate an employee to achieve the goal.
• The basic components of goal-setting theory are:
• Set challenging but attainable goals
• Set specific and measurable goals
• Goal commitment should be obtained – allow employees to have a role in setting goals and making decisions and obtain commitment.
• Support elements should be provided – material resources and moral support required for attaining goals.
• Knowledge of results is essential – goals need to be quantifiable and there needs to be feedback.
Other Important Motivation Theories
McGregor’s Participation Theory or XY Theory
• Douglas McGregor proposed the X-Y theory in his 1960 book “The Human Side Of Enterprise.” The theory formulated two distinct views of human being based on participation of workers in the organization.
• Theory X assumes that the typical employee has little ambition, avoids responsibility and do not want to associate themselves with the organization’s goals.
• Consequently, Theory X concludes the typical workforce operates more efficiently when all actions are traceable to the individual responsible.
• This allows the individual to receive either a direct reward or a punishment, depending on the outcome’s positive or negative nature.
• Theory Y managers assume employees are internally motivated and enjoy their job. Employees additionally tend to take full responsibility for their work and do not need close supervision to create a quality product.
• Managers who choose the Theory X approach have an authoritarian style of management.
• On the contrary, managers who choose the Theory Y encourage participation and values individuals’ thoughts and goals.
• Since, there is no optimal way for a manager to adopt either Theory X or Theory Y, it is rational that a manager will need to adopt both approaches depending on the evolving circumstances at the workplace.
Theory Z
• Theory Z was given by William Ouchi.
• Theory Z promotes stable employment, high productivity and high morality and employee satisfaction.
• The loyalty of employees is increased by offering them a job for life with a strong focus on employee well-being both on the job as well as in their private lives.
Communication
• Communication plays key role in smooth functioning of organisation.
• Proper communications in organisations at all levels and between all levels can improve both the quantity and quality of output.
Definition:
• The word communication has been derived from the Latin word ‘communis’ which means ‘common’ which consequently implies common understanding.
• Generally, communication is understood as a process of exchange of ideas, views, facts, feelings etc., between two or more individuals to reach common understanding.
Elements of Communication
• Sender: Communicator/Transmitter
o The person who intends to convey the message with the intention of passing information and ideas to others is known as sender or communicator
• Message
o It is the content of ideas, feelings, suggestions, order etc., intended to be communicated
• Encoding:
o It is the process of converting the message into symbols such as words, pictures, gestures etc.
• Medium / Channel
o It is the path through which encoded message is transmitted to receiver. Example – Written – in a letter or verbal in form of speech
• Decoding
o It is the process of converting encoded symbols of the sender
• Receiver
o Receiver is the person who receives the message or for whom the message is meant for.
• Reaction / Feedback
o Feedback is the process of ensuring that the receiver has received the message and understood in the same sense as sender meant it.
• Noise / Interference:
o It includes any factor that inhibits the conveyance of a message
o This hindrance may be caused to sender, message or receiver.
Importance of Communication
• Communication is one of the most central aspects of managerial activities.
• Effectiveness of a manager depends significantly on his ability to communicate effectively with his superiors, subordinates and external agencies etc.
• Its importance in management can be judged from the following:
• Helps in smooth working of an enterprise: It helps employees to understand their role clearly and perform effectively.
• Boosts morale and provides motivation: An efficient system of communication enables management to motivate, influence and satisfy the subordinates.
• Increases managerial efficiency: It is the means through which delegation and decentralisation of authority is successfully accomplished in an organisation.
• Promotes cooperation and industrial peace: It helps in achieving co-ordination and mutual understanding which in turn, leads to industrial harmony and increased productivity.
• Establishes effective leadership
• Acts as basis of decision making
Types of Communication
• In an organisation communication can be made from supervisor to subordinate, from subordinate to supervisor and also between two supervisors at the same level.
• It can be done orally or in writing or even through gestures. It may be made through formal or informal channels.
• Thus, the various types are as follows:
| Basis of Channel Used | Basis of Direction | Basis of Mode Used |
| FormalInformal | UpwardDownwardHorizontalDiagonal | VerbalNon-Verbal |
Formal and Informal Communication
In every organisation we have both formal and informal channels.
Formal Communication
• Paths of communication are based on relationship which is established formally i.e. it flows through official channels designed in the organisation chart.
• It may take place between a superior and subordinate, a subordinate and superior or among same cadre employees or managers.
• It may be oral or written but generally recorded and filed in the office.
Informal Communication
• It takes place on the basis of informal or social relations among staff.
• The informal communication arises out of needs of employees to exchange their views, which cannot be done through formal channels.
Upward, Downward, Horizontal and Diagonal Communication
Upward Communication
• It refer to flow of communication from subordinate to superior.
• It is generally in form of request, appeal, report, suggestion or ideas.
• This encourages employees to participate actively in the operations of their department. Downward Communication
• Indicates communication from a superior to subordinate.
• Examples include: sending notices, assigning work etc.
Horizontal Communication
• It is communication amongst members at the same level in the organisation.
• Such communication facilitates coordination of activities that are interdependent
Diagonal Communication
• When communication is made between people who are neither in the same department nor at the same level of organizational hierarchy, it is called diagonal communication.
• For example, cost accountant may request for reports from sales representatives not the sales manager for the purpose of distribution cost analysis.
Verbal and Non-verbal Communication
Verbal
• Verbal communication is the use of words to share information with other people.
• It can therefore include both spoken (Oral) and written form.
Non-Verbal
• Sometimes verbal communication is supported by non-verbal communication such as facial expressions and body gestures.
• For example – wave of hand, a smile, or a frown etc.
Barriers to effective Communication
It is generally observed that managers face several problems due to communication breakdowns or barriers. These include:
Semantic Barriers
Semantic barriers are concerned with problems in encoding and decoding of message. These result on account of use of wrong words, faulty translations, different interpretations etc.
• Badly expressed message
• Symbols with different meanings
• Faulty translations
• Unclarified assumptions
• Technical jargon
• Body language and gesture decoding.
Psychological barriers
• Premature evaluation
• Lack of attention
• Loss by transmission and poor retention
• Distrust
Organisational barriers
• Organisational policy
• Rules and regulations
• Status
• Complexity in organisation structure
• Organisational facilities
Personal barriers
• Fear of challenge to authority
• Lack of confidence of superior on his subordinates
• Unwillingness to communicate
• Lack of proper incentives
How to improve effectiveness of Communication
• Clarify the ideas before communicating
• Communicate according to the needs of receiver
• Consult others before communicating
• Be aware of languages, tone and content of message
• Convey things of help and value to listeners
• Ensure proper feedback
• Communicate for present as well as future
• Follow up communications
• Be a good listener
Aspects of Staffing
• The prime concern of the staffing function in the management process is the timely fulfilling of the manpower requirements within an organisation.
• It starts with ascertaining the required number of various categories of employees for the organisation. This is done through several methods like job analysis, workload analysis, etc.
• The next thing is the recruitment exercise, followed by selecting the right person through tests and interviews and making their appointments.
• This is followed by necessary introduction of the work environment and the rules of compensation, promotion, transfer etc.
• Thus, the various steps involved in the process of staffing are as follows:
Recruitment
• The objective of recruitment is to attract potential employees with the necessary qualification, in the adequate number for the jobs available.
• Hence, recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation.
Process of Recruitment
The various activities involved with the process of recruitment includes
• Identification of the different sources of manpower supply,
• Assessment of their validity,
• Choosing the most suitable source or sources
• Inviting applications from the prospective candidates, for the vacancies.
Sources of Recruitment
• The requisite positions may be filled up from within the organisation or from outside.
• Thus, there are two sources of recruitment:
Internal Sources:
• There are two important sources of internal recruitment
o transfers
o promotions
External Sources:
• The various external sources of recruitment are:
o Direct recruitment notice placed on the notice-board of the enterprise specifying the details of the jobs available.
o Media Advertisements – Newspapers o Campus Recruitment o Recommendations of Employees
o Employment Exchange run by government – Example Rajasthan Employment Exchange o Publishing on company website.
o Unsolicited Application – Many reputed business organisations keep a database of unsolicited applicants in their offices. A list of such job-seekers can be prepared and can be screened to fill the vacancies as they arise.
o Through Private Employment Agencies
Selection
• When an adequate number of applications / names of interested candidates have been collected through the recruitment exercises the selection process starts.
• Selection is the process of choosing from among the pool of the prospective job candidates developed at the stage of recruitment.
• The effectiveness of the selection process would ultimately be tested in terms of on-the-job of the chosen person.
Process of Selection
The important steps in the process of selection include:
• Preliminary Screening
• Selection Test: Various tests employed include:
o Intelligence Tests
o Aptitude Tests
o Personality Tests
o Trade Tests
o Interest Tests
• Selection Interview
• Reference and Background Checks
• Medical Examination
• Job Offer – Issue of Appointment letter
Induction
• Induction or Orientation is the process of introducing new employees to the organisation and familiarising him/her with the rules and policies of the organisation.
• A proper induction programme is likely to reduce his anxiety on how to cope with the work and how to become part of the organisation and helps in development of a favourable attitude towards the organisation and the job.
Training & 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.
• Everyone must have the opportunity to rise to the top. The best way to provide such an opportunity is to facilitate employee learning.
• Organisations have either in-house training centres or have forged alliances with training and educational institutes to ensure continuing learning of their employees.
Education
• Education is the process of increasing the knowledge and understanding of employees.
• It does not provide definite answers, but rather develops a logical and rational mind.
• Education is broader in scope than training.
• Training is tied to the goals of organisations more than to the goals of the individual.
Training
• Training is any process by which the aptitudes, skills and abilities of employees to perform specific jobs are increased.
• It is a process of learning new skills and application of knowledge.
Methods of Training:
There are different methods of giving training to the employees, which can be divided into two broad categories.
• On-the-job methods
o Apprenticeship Programmes
o Job Rotation o Internship Training
o Mentorship / Coaching
• Off-the-Job methods
o Classroom Lectures/ Conferences
o Case studies
o Movies & Video shows
o Vestibule Training: Employees learn their jobs on the equipment they will be using, but the training is conducted away from the actual work floor.
o Programmed Instructions
Development
• Development refers to the learning opportunities designed to help employees grow.
• It covers not only those activities which improve job performance but also those which bring about growth of the personality and actualisation of their potential capacities.
Difference between Training & Development
| Training | Development |
| • It is a process of increasing knowledge and skills. | • It is a process of learning and growth. |
| • It is to enable the employee to do the job better. | • It is to enable the overall growth of the employee. |
| • It is a job-oriented process. | • It is a career-oriented process. |
Appraisal System
• All organisations have some formal or informal means of appraising their employee’s performance. Performance appraisal means evaluating an employee’s current and/or past performance as against certain predetermined standards.
• The performance appraisal process, includes defining the job, appraising performance and providing feedback.
Compensation
• No organisation can attract and retain qualified employees without offering them a fair compensation.
• Compensation, therefore, refers to all forms of pay or rewards going to employees.
Compensation may be in the form of:
• Direct financial payments like wages, salaries, incentives, commissions and bonuses or
• Indirect payments like employer paid insurance and vacations
Compensation may be divided into two categories:
• Base/primary compensation
o It is a fixed amount paid every month to an employee. It includes wages, salary and allowances paid to an employee irrespective of his performance
• Supplementary compensation
o It refers to the compensation paid to the employees to motivate them to work more efficiently
o It is also known as incentive compensation
o The incentives may be monetary or non-monetary
Promotion & Transfer
• It becomes necessary for all organisations to address career related issues and provide avenues for promotion to their employees.
• When an employee is assigned a job involving greater responsibilities, more pay, higher status and prestige than his/her present job, it is known as promotion.
• Promotion generally mean more pay, responsibility and job satisfaction.
• This practice helps to improve the motivation, loyalty and satisfaction level of employees.
• It has a great psychological impact over the employees because a promotion at the higher level may lead to a chain of promotions at lower levels in the organisation.
• Transfers 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.
• Thus, transfer does not usually involve any increase in pay or a superior status.