Chapters, 5,6 and 7

Chapter Five
5. Staffing, 6 Leading and 7,Controlling Functions

5.1. The Staffing Function

5.1.1. Meaning and Nature of Staffing
The staffing function follows the function of planning and organizing. Staffing is filling and
keeping field positions in the organizational structure through the right man power. Staffing
is the executive function of recruiting, selecting, training, developing, promoting, and retiring
subordinates. Putting it differently, the managerial function of staffing involves managing the
organization structure through proper and effective selection, appraisal, and development of
personnel to fill the roles designed into the structure. It is the responsibility of every
manager.

The benefits of staffing are:

 It helps in discovering and obtaining competent personnel for various jobs.
 It makes for higher performance by putting the right man on the right job.
 It ensures the continuous survival and growth of the enterprise through the development
of successive managers.
 It helps to ensure optimum utilization of human resources
 It avoids over manning as well as shortage of manpower in advance
 It improves job satisfaction and morale of employees through objective assessment and
fair rewarding of their contributions.
Generally, the purpose of staffing function is to ensure that the right number and the right
type of people are working on the right jobs at the right time and right place.

5.1.2. Activities in Staffing Function

The major activities in the staffing function include:
A. Manpower planning
B. Recruitment
C. Selection
D. Placement
E. Induction/ orientation
F. Training and development.
G. Performance appraisal

A. Manpower Planning/Human Resource Planning

Manpower refers to the quantity and quality of workforce. Manpower planning is the process
of forecasting the number and type of personnel whom the organization will have to hire,
train, and promote in a particular period in order to achieve its objectives. It involves
determining objectives, policies, programs, and procedures in relation to human resources. It
refers to planning for the future personnel needs of the organization.

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The process of manpower planning consists of the following steps:
1. Forecasting manpower requirements: This refers to anticipation of the requirements of
manpower for a particular future period of time in terms of the number, type and quality
of people.
2. Preparing manpower inventory / manpower audit: It refers to the analysis and assessment
of the current human resources in terms of the size and quality of personnel available.
3. Identifying manpower gaps: In order to identify the manpower gap, the existing number
of personnel and their skills are compared with the forecasted manpower requirement.
4. Formulate manpower Plans: This involves developing appropriate and detailed policies,
programs and strategies for recruitment, selection, training, promotion, retirement, and
replacement.

B. Recruitment
It is the process of searching for prospective employees and stimulates them to apply for jobs
in the organization. The purpose of recruitment is to attract potential employees with the
necessary characteristics and in the proper quantity for the jobs available. It is generally
viewed as a positive process. The sources of recruitment include:

 Internal sources: These consist of transfers and promotions of present employees. A

transfer refers to the shifting of an employee from one job to another without a drastic
change in the responsibilities and status of the employee. On the other hand, promotion
involves shifting an employee to a higher position carrying higher responsibilities, higher
status and more pay. Transfer is a horizontal shifting while promotion is a vertical shifting.
 External sources: Where all vacancies cannot be filled from within, external sources are
used to fill the positions. The advantage of external sources is that it provides wide choice
and brings new blood to the organization. However, it is not without limitation. The major
limitation is that it is expensive and time consuming.
The various external sources of recruitment are:
 Advertisements
 Employment agencies
 Educational institutions
 Recommendations by other people

C. Selection
Selection involves screening or evaluation of applicants to identify those who are best suited
to perform the jobs. It divides the candidates into two categories.
1. Those who will be employed
2. Those who will not be employed
Selection is described as a negative process. The proper selection of employees will go a long
way towards building a stable work force and eventually reducing labor costs. When selected
personnel are suitable to the job requirements, their efficiency and productivity will be high.
Such personnel will have job satisfaction and high morale.

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D. Placement
Placement is the process which involves putting or posting the selected candidates on
appropriate jobs. It involves assigning specific jobs and work places to the selected
candidates. In placement, employees are assigned to jobs that are most suitable to them. New
employee is given a particular job to perform on the basis of his/her abilities, aptitude, skills
etc. The purpose of placement is to match the worker and the job, or to place right man on the
right job. The advantages of correct placement are:
Placement improves job satisfaction and productivity
Placement reduces labor turnover
Placement reduces absenteeism

E. Induction/ Orientation
When an employee is hired, two processes are started. These are induction and orientation.
Although the terms "induction" and "orientation" are used interchangeably, in some cases,
there is a difference between the two.
Induction: - is a socializing process by which the organization seeks to make an individual
its agent for the achievement of its objectives and the individuals seeks to make the
organization an agency for the achievement of his personal goals.

Orientation: - is a socializing process by which new employee is provided with information

about work environment and operating realities. Specifically, orientation involves Rules,
regulations and daily routines, grievance procedures, safety, measures standing orders,
employee activities, benefits and services.
Generally, if induction and orientation programs are not undertaken formally, the new
employee may form wrong impression. Thus, first impression is the last impression.

F. Training and Development

Very often the terms "training" and "development" are considered as synonymous. But, there
is a difference between the two.
Training: It is the process of increasing the knowledge and skills of an employee for doing a
particular job. It implies imparting technical knowledge, manipulative skills, problem solving
ability and positive attitude. The purpose of training is to enable the employees to get
acquainted with their present/prospective jobs and also to increase their knowledge and skills
and to modify their attitude. Training is not a one-stop process, but continues throughout the
career of an individual.
Development: It refers to the growth of an individual in all aspects - physically,
intellectually, and socially. Development is career bound. Development of individuals is the
consequence of training. In other words, training is the cause whereas development is the
consequence.

G. Performance Appraisal: Process of evaluating performance and qualifications of the

employees in terms of job standards for the purposes of administration including promotion
reward, training, and placement.

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6.1. The Leading Function

6.1.1. Meaning and Need for Leadership

A traditional definition of leadership: Leadership is an interpersonal influence directed

toward the achievement of a goal or goals. Three important parts of this definition are the
terms interpersonal, influence, and goal. Interpersonal means between persons. Thus, a
leader has more than one person (group) to lead. Influence is the power to affect others. .
Goal is the end one strives to attain.

Putting it differently Leadership-is the process of influencing employees to work toward the
achievements of organizational objectives. Hence leadership:
 is the process by which a person exerts influence over other people; and inspires,
motivates, and directs their activities to help achieve group or organizational goals.
 is the process of influencing individuals to set and achieve goals.

Generally speaking, leadership deals with the interpersonal aspects of a manager's job,
whereas planning, organizing, and controlling deal with the administrative aspects.
Leadership deals with change, inspiration, motivation, and influence.

Managers plan, organize, staff, lead, and control. They may or may not be effective in
influencing their subordinates or team members to set and achieve goals. Leaders, on the
other hand are involved in single function of management that is leading and they are
individuals who are able to exert influence over other people to achieve organizational
objectives. Leadership involves creating and sharing of visions, generating strategies to bring
visions to realize. Therefore, leaders and managers are not necessarily the same; it is mainly
because leading perform only one aspect of management functions. Managers can be leader
because they can perform leading function. But may not be effective leaders since they may
not have enough ability to influence others.

6.1.2. Leadership Theories

A. Trait Theory
The trait theory of leadership focuses on identifying the personal characteristics that are
responsible for effective leadership. It is based on the assumption that leaders are born not
made. That is good leaders are born naturally, not made. According to this theory effective
leaders must have the following traits:
 Intelligence: helps managers understand complex issues and solve problem
 Self confidence: contributes to managers effectively influencing subordinates and
persisting when faced with difficulties.
 Integrity and honesty: helps managers behave ethically and earn their subordinates
trust and confidence.
 Physical traits: such as height, appearances etc.
 Social traits: such as cooperativeness skill etc.
Traits alone however, are not the key to understand leader effectiveness. Some effective
leaders do not possess all of these traits, and some leaders do possess them but are not
effective in their leadership roles.

B. The Behavioral Theory

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Behavioral studies had their roots in the Ohio State University and University of Michigan by
careful study of the behaviors of specific leaders. This theory tried to identify the behaviors
shown by leaders in the work environment and they were generally able to identify two sets
of leaders.

I. Work Centered (Concerned for Task)Leaders

 This approach is also referred to as initiating structure, job centeredness and task
orientation.
 This considers leaders who are authoritarian, autocratic, production oriented and activity
focused. A leader with such behavior mostly tends to
- plan and define work
- assign task responsibilities
- set clear work standards
- urges for tasks completion
- monitors performance results persistently, etc...

II. Employee Centered(People Centered) Leaders

 Such leaders are also known as democratic, considerate, consultative and participative
leaders.
 They tend to share decisions with subordinates, encourage participation, and support the
team work needed for high levels of task accomplishment.
 A leader with such behavior tends to
- act warmly and supportive to followers
- develop social rapport (relationship) with followers
- respect the feeling of followers
- be highly sensitive to the needs of followers
- show trust and confidence in followers.

C. Situational Theory

Situational leadership theory attempts to determine the appropriate leadership style for
various situations. Fiddler’s contingency model suggests that managers should choose task or
employee focus depending on the interaction of three situation variables: leader member
relation, task structure, and leader position power.
Leader-member relations: the extent to which followers like, trust, and are loyal to their
leader is determinant of how favorable a situation is for leading. If leader-member relations
are good situations are good for leading. If relation is poor, the manager may have to resort
to negotiation or to promising favors to get performance.
Task structure: the extent to which the work to be performed is clear-cut. When task
structure is high, situations are favorable for leading. When task structure are low, goals may
be vague, subordinates may be unsure of what they should be doing or how they should do it,
and the situation is unfavorable for leading.
Position power: How much authority does the manager possess?

6.1.3. Leadership Styles

Based on the degree to which managers share decision making authority with subordinates
leadership styles can be classified in to three: Autocratic, democratic , and laissez-faire
1. Autocratic Leadership Style

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It is a leadership style in which a manager does not share decision-making authority with
subordinates. These managers are those who tend to be heavily work – centered, placing most
of their emphasis on task accomplishment and little on the human elements. Autocratic
leadership style is characterized by:
 Managers’ emphasis on close control
 Managers’ willingness to delegate a very little decision-making authority.
 No flow of information from subordinates (Leader- subordinate relation ship is
characterized by order giving on the leader’s part)
 Sensitivity of managers about their authority.
 Leader’s assumption that payment is just a reward for working

2. Democratic Leadership Style

It is a leadership approach in which a manager shares decision –making authority with
subordinates. Managers who have high concern for both people and work practice it. In
democratic leadership managers:
 are not much sensitive about their authority
 make employees participate in decision making
 appreciate suggestions from subordinates
 exercise broad supervision
 motivate subordinates with rewards

3. Laissez-Faire (Free-Rein Style)

It is leadership approach in which a manager develops a frame work for subordinates in
which they can act and leave decision making authority to the subordinates and remain for
consultation. It is employed by managers who are basically uninvolved in the operations of
the unit. This type of leadership is mostly applied in organizations with highly skilled and
well-trained professional. In addition to the above three styles, the following two are also
commonly practiced.
4. Situational Leadership Style
It is leadership approach in which managers utilize the combination of the above styles
depending on the situation in external environment.

5. Theory X and Theory Y-Assumptions

Are assumptions about human nature developed by Douglas Mc Gregor. He developed the
assumptions based on the attitude that managers have about workers. Theory X and Theory Y
each represent different ways in which leaders view employees. Theory X managers believe
that employees are motivated mainly by money, are lazy, uncooperative, and have poor work
habits. Theory Y managers believe that subordinates work hard, are cooperative, and have
positive attitudes.

Theory - X assumes the following:

 The average worker is lazy, dislikes job, and will avoid work whenever possible
 Because most people dislike work, they have to be closely supervised and threatened
with punishment to reach objectives.
 Above all people want security
 Average people prefer to be directed, wish to avoid responsibilities and they have
little ambition.

Theory X leads naturally to an emphasis on the tactics of control - to procedures and

techniques for telling people what to do, for determining whether they are doing it, and for

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 administering rewards and punishment. Theory X explains the consequences of a particular
managerial strategy. Because its assumptions are so unnecessarily limiting, it prevents
managers from seeing the possibilities inherent in other managerial strategies. As long as the
assumptions of Theory X influence managerial strategy, organizations will fail to discover,
let alone utilize, the potentialities of the average human being.

Theory- Y assumes the following

 Most people find work as natural as play or rest and develop an attitude toward work
based on their experience with it.
 People do not need to be threatened with punishment; they will work voluntarily
toward organizational objectives to which they are committed.
 The average person working under proper is not only to accept but also to seek
responsibility.
 Managers should decentralize authority to employees and make sure employees have
the resources necessary to achieve organizational goals.

Theory Y's purpose is to encourage integration, to create a situation in which an employee

can achieve his or her own goals best by directing his or her efforts toward the objectives of
the organization. It is a deliberate attempt to link improvement in managerial competence
with the satisfaction of higher-level ego and self-actualization needs. Theory Y leads to a
preoccupation with the nature of relationships, with the creation of an environment which
will encourage commitment to organizational objectives and which will provide opportunities
for the maximum exercise of initiative, cleverness, and self-direction in achieving them.

6.1.4. Motivation (Concepts and Theories)

Motivation- is an inner desire to satisfy an unsatisfied need. Motivation is:
- the result of the interaction of a person’s internal needs and external influences that
determine behavior.
- willingness to achieve organizational objectives.
- psychological force that determines the direction of a person’s behavior in an
organization, a person’s level of effort and a person’s level of persistence.

Motivation can be internal or external type:

Intrinsic Motivation: behavior performed for its own sake. Motivation comes from
performing the work.

Extrinsic Motivation: behavior performed to acquire rewards. Motivation source is the

consequence of an action.

Theories of Motivation
A) Carrot and Stick approach- This theory of motivation is based on the tradition which says
that” give carrot for donkey to make go quick and bit with stick if it refuses to move fast
having eaten the carrot”. In an organization, it means that pay adequate money to your
employees to motivate them or to make them work; if they fail to perform fairly, punish them
to work. In front of the worker are placed job security and other financial rewards-carrot. If
the worker does not move forward, the stick (the loose of pay raises, demotions, outright,
fringe benefits is used.)

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B) Maslow’s Hierarchy of Needs- Abraham Maslow, a psychologist, proposed that all people
seek to satisfy five basic kinds of needs; physiological needs, safety needs, social needs,
esteem needs and self actualization needs.
Level I - physiological needs: includes basic needs such as need for food, cloth, shelter, etc.
The organization helps to satisfy employees' physiological needs by a paycheck.
Level II - Safety needs: are needs to avoid financial and physical problems. The
organization helps to satisfy employees' safety needs by benefits.
Level III - Social needs: are needs for friendship, affiliation, attraction etc. The supervisor
can help fulfill social needs by showing direct care and concern for employees.
Level IV - Esteem needs: are needs for self respect, recognitions etc. The organization helps
to satisfy employees' esteem needs by matching the skills and abilities of the employee to the
job. The supervisor can help fulfill esteem needs by showing workers that their work is
appreciated.
Level V - Self-actualization needs: are needs for maximizing one’s skills, abilities, and
other potentials. It is a need for attaining the maximum possible development. The
supervisor can help fulfill self-actualization needs by assigning tasks that challenge
employees' minds while drawing on their aptitude and training. Maslow’s theory is based
on four premises (assumptions)
1. Only unsatisfied need can influence behavior: satisfied need is not a motivator
2. A persons needs are arranged in a priority order of importance in hierarchical forms

Hierarch
3. A person will at least minimally satisfy each level of need before filling the need at
the next level
4. If need satisfaction is not maintained at any level the unsatisfied need will become
priority once again.

Need
y
Level
of
Description
Examples
Self-
Realize
RealizeUse
Self- one’s
abilities
Needs
Use
one’s
abilities Self Actualization

full potential
Actualization
full
Actualization to
tothe
thefullest
potential fullest
Feel good
Promotions
Feel good
Promotions
Social Needs

Esteem
Esteem
about oneself
& recognition Esteem Needs
about oneself
&
Social recognition
Interpersonal
Social
Belongingness Interpersonal
Belongingness
Safety Needs

interaction,
relations,
love parties
interaction,
relations,
love parties
Job
Job security,
security,
Safety
Physiological Needs
Security, stability
Safety health
Security, stability
health insurance
insurance
Food,
Food,Basic
water,
Basic
water,pay
paylevel
level
Physiological
Physiological
shelter
to
tobuy
shelter buyitems
items
Lower level needs
must be satisfied
before higher needs
are addressed.

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 Abraham Maslow’s hierarchy of needs

C. Hertzberg’s Two-Factors Theory

Psychologist F. Hertzberg developed needs theory called two-factors or hygiene-motivator
theory. According to this theory there are two sets of factors where one set of factors lead to
job dissatisfaction; these are called hygiene factors. The other set of factors produce job
satisfaction and motivations; these are called motivators.
Hygiene Factors- are extrinsic to the job i.e., they don’t relate directly to a person’s actual
work activity. Hygiene factors are part of a job’s environment; they are part of context of the
job, not its content. According to Hertzberg, when hygiene factors that an employee provides
are not sufficient, workers will be dissatisfied. When the factors are of sufficient finally they
don’t necessarily act as motivators. Hygiene factors include: salary, job security, working
condition, company policies, quality of interpersonal relationship among peers, supervisors,
subordinates, etc.
Motivation Factors- are the primary cause of job satisfaction according to Hertzberg. They
are intrinsic to a job and relate directly to the real nature of the work people perform. In other
words motivation factors relate to the job content. When an employer fails to provide
motivation factors, employees will be dissatisfied. With quality motivation factors,
employees enjoy job satisfaction and provide high performance. Different people require
different kinds and degree of motivation factors – what stimulates one worker may not affect
another.

Generally, managers can use their knowledge to ensure that hygiene factors are there in the
environment as foundation on which to build motivation. Once top management has
provided satisfactory hygiene factors, they can focus on motivation factors. Moreover,
according to Hertzberg, hygiene factors will not motivate workers but their absence de
motivates them.

7.1. The Controlling Function

7.1.1 Meaning and Need for Control

Controlling is the process in which management evaluates performance using predetermined
standards and in light of the results makes a decision regarding corrective action. Controlling
is the process of establishing and implementing mechanisms to ensure that objectives are
achieved. Controlling is one of the basic managerial functions, which deals with evaluating
how well an organization is achieving its goals and taking action to maintain or improve
performances. Controlling is a managerial function, which involves comparing actual
performance with standard, identifying and analyzing deviations, finding causes of
deviations, if any, takes corrective actions to meet the standards in subsequent periods.

Controlling is important in order to confirm the degree to which organization is efficient in

using its resources and to ensure the degree to which organization is successful in attaining its
objectives. A controlling system contains the measures that allow managers to assess how
effectively the organization is producing goods and services.

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7.1.2. The Control Process
The control process is a process, which includes different steps in establishing controlling.
There are four steps in the control process:
1. Establishing Standards of Performance
Standard is any established rule or basis of comparison used to measure capacity, quantity,
content, value, cost, quality, or, performance. Standard is pre-determined amount of desired
performance. Establishment of performance standards is a prerequisite for the operation of
the control system. Standards provide yardstick (comparison measurement) against which
performance is measured in order to determine variance, if any, between standards and actual
performance.
In standard:
 The basis of standard will be heavily quantitative
E.g., return on investment in one year is compared with that of the previous year.
 At the other time the basis will be more qualitative as when the public’s view of the
enterprise is examined, and management attempts to answer the question-is our
performance getting better or becoming worse?

2. Measuring Actual Performance

After standards are established, managers must measure actual performance to determine
variation from standards. In measuring performance emphasis should be placed on its
quantitative as well as qualitative aspects. Control measurements are generally used for
measuring those aspects of performance which can be expressed in qualitative terms such as
employee morale, interpersonal and inter group relations, work environment, etc, and
quantitative terms such as costs, revenues, number of hours worked, and so forth.
3. Comparing Actual Performance with the Set (Established) Standards
The other step in the control process is to compare actual performance to the standards set for
that performance. Comparison of actual performance with the set standards leads to
identification of deviations needing attention. If there is significant deviation, managers
should analyze the real causes of deviations to take actions. Nevertheless, every deviation
from the plan doesn’t require corrective action. Some results can be considered good enough,
as when there is a desired profit of 1 million Birr and actual profit of 988,000 Birr where the
deviation is insignificant.

4. Taking Corrective Action

Once the underlying causes of deviations have been identified, the next step in control
process is to take corrective actions. When an employee determines the cause or causes of
significant deviation from a standard, he or she must take corrective action to avoid repetition
of the problem or defect. Policies and procedures may prescribe the actions. The corrective
action may involve changing certain conditions like replacement of machines, better service
to customers, training, transfers, revision of objectives, strategies, etc.

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All the above steps in control process: establishment of standards, measurement of
performance, and comparison of actual performance to the standards set, and taking
corrective actions should be considered as interdependent parts of the control system.
Changes in any one of these parts involve changes in all the other parts. For example,
corrective actions may involve revision of standards which will affect all the other parts of
the system.

7.1.3. Types of Control

Based on the time of controlling, controls can be classified into three: feed forward controls,
concurrent controls, and feedback controls. Each focuses on a different point of a process.
A) Input or Preventive Controls
- are controls that focus on the prevention of defects and deviations from the standards. They
focus on operation before it begins
- are controls that allow managers to anticipate problems before they arise
Example
-Screening job applicants and using several effective interviews, managers can lessen (minimize) the
chance of hiring people who lack necessary skills or experience to perform effectively.
-When manufacturer works closely with its suppliers to ensure that the suppliers deliver goods and
services that meet standards, the manufacturer is implementing forward control.

B) Concurrent Controls

 are controls that give managers immediate feedback on how effectively inputs are being
transformed into outputs so that managers can correct problems as they arise.
 are controls that apply to process as the processes are happening.
 are actions taken as inputs are transformed into outputs to ensure that standards are met and
enables taking of corrective action while activities are being performed.

C) Feedback /Output /Controls

 are controls that focus on the results of operations. They are after the fact or post
performance controls.
 are controls that give managers information about customers’ reaction to goods and services
so that corrective actions can be taken if necessary.
 In a feedback control, managers measure actual performance against the standard and take
corrective actions if there is any unfavorable variation. The actions have no use for present or
already done activities rather for future activities.

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7.1.4. Control Techniques
A number of techniques are used for controlling. Some of them like return on investment, ratio
analysis, financial statement, etc, are used for the measurement of overall performance of the
enterprise. Other techniques like the break even point analysis, budgets, etc, are designed to measure
specific aspects of performance such as production costs, sales and so on. The basic purpose of all
these techniques is, however, the same to measure actual performance and determine deviations from
desired performance so that corrective actions may be taken.

7.1.5.Effective Control Systems

Control systems are formal target setting , monitoring , evaluation and feed back systems that provide
managers with information about how well the organizations strategy and structure are working.

Characteristics of effective control systems include:

Accuracy- information that is received from control system should be accurate or real. If the
information is not correct, the resulting decisions are likely to make things worse rather than solving
problems.
Timely- the information being feedback must be provided on time to allow managers to obtain full
benefits from the data.
Economical- the cost of control system must be weighed against its benefits. If the resources
expended on the control don’t return equal or greater value, the control is better left unimplemented.
Focus on critical points- a manager does not have time to control every aspect of operations. As a
result a control system should single out specific areas that provide overall comprehensive control.
Acceptability- people must agree that controls are necessary and the controls will not have negative
impacts on individuals or their efforts to achieve personal goals

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