Staffing Concept, Importance & 8-Step Process

6.1 Opening Case — Management of Human Resources at Infosys

The chapter on Staffing^? opens with one of the most quoted lines in Indian corporate history. N. R. Narayana Murthy^?, the former CEO of Infosys^?, captured the essence of human-resource management in a single sentence:

From this single case the chapter draws a powerful lesson: people are not merely a cost — they are the most important asset of an organisation. The Infosys story sets up the entire chapter on staffing — the managerial function that finds, develops and keeps the right people in the right jobs.

6.2 Concept of Staffing — Meaning and Definition

The foundation of any organisation is the talented and hardworking people who are its principal assets. The growth of any enterprise requires the continual infusion of quality staff. Adequate staffing — providing appropriate human resources^? — is therefore an essential requirement for organisational success. The bedrock idea is simple: an organisation can achieve its objectives only when it has the right persons in the right positions.

Once the management has decided what is to be done (planning) and how the structure should look (organising), the next step is to fill the various posts created in the structure. This is the management of staffing function. In its simplest expression, staffing is "putting people to jobs."

It begins with workforce planning^? and includes a sequence of related functions — recruitment, selection, training, development, promotion, compensation and performance appraisal of the workforce. In other words, staffing is that part of the management process which is concerned with obtaining, utilising and maintaining a satisfactory and satisfied work force. Today, staffing may involve any combination of employees including daily-wagers, consultants and contract employees.

Staffing recognises the importance of every single person employed by an organisation, because it is the individual worker who is the ultimate performer. In a new enterprise, the staffing function follows planning and organising — once the structure exists, the management is in a position to know its human-resource requirements at different levels. In an existing enterprise, staffing is a continuous process because new jobs may be created and existing employees may leave.

6.3 Importance of Staffing

In any organisation there is a need for people to perform work, and the staffing function fulfils this requirement by finding the right people for the right job. Basically, staffing fills the positions shown in the organisation structure. Human resources are the foundation of any business — the right people can take the business to the top; the wrong people can break it. Hence, staffing is the most fundamental and critical driver of organisational performance.

The staffing function has assumed greater importance in modern times because of rapid advancement of technology, the increasing size of organisations, and the complicated behaviour of human beings. The ability of an organisation to achieve its goals depends upon the quality of its human resources. NCERT lists five proper-staffing benefits to the organisation.

6.4 Staffing as Part of Human Resource Management

Staffing is a function which all managers need to perform. It is also a separate and specialised function with many aspects of human relations to consider. Managers must fill positions in their organisation and make sure that those positions remain occupied with qualified people. Staffing is closely linked to organising — once the structure and positions have been decided, people are required to work in those positions, and they must subsequently be trained and motivated to work in harmony with organisational goals. Thus, staffing is treated as a generic function of management.

The staffing function deals with the human element of management. Managing the human component is the most important task because the performance of an organisation depends on how well this function is performed. The success of an organisation in achieving its goals is determined to a great extent on the competence, motivation and performance of its human resource.

When Managers Perform Staffing — Limited Role

It is the responsibility of all managers to directly deal with and select people to work for the organisation. When the manager performs the staffing function, his role is slightly limited and includes — placing the right person on the right job, introducing new employees to the organisation, training employees and improving their performance, developing their abilities, maintaining their morale and protecting their health and physical conditions. In small organisations, managers may perform all duties related to employee salaries, welfare and working conditions.

As Organisations Grow — Specialised HR Department

As organisations grow and the number of persons employed increases, a separate department called the Human Resource Department^? is formed, with specialists in managing people. The number of HR specialists and the size of this department give an indication of the size of the business itself. For very large companies, the HR Department itself contains specialists for each function.

HRM — Specialised Activities and Duties

NCERT lists the specialised activities and duties that the human-resource personnel must perform. The list defines the modern scope of HRM:

Evolution of HRM — From Labour Welfare Officer to HR Manager

HRM has replaced the traditional concept of labour welfare and personnel management. Its present form has evolved through significant inter-related developments dating back to the era of the Industrial Revolution:

1. Labour-Welfare Officer (early 19th century) — Emergence of trade-union movement created the need for a person who could act as an effective link between owners and workers; his role was limited to bare-minimum welfare activities.
2. Personnel Officer / Personnel Manager (factory system) — Thousands of persons began working under one roof; one person was given the responsibility of recruitment, selection and placement of personnel — first the personnel officer, later the personnel manager.
3. Human-Relations Approach — Recognised the human factor as the most important instrument of success in an organisation; people came to be seen as a valuable resource to be developed.
4. Human Resource Manager — Fast-changing technological developments necessitated new skill development and training of employees; increase in scope led to the replacement of the personnel manager with the modern HR manager.

6.5 Staffing Process — The Eight Steps

The prime concern of the staffing function is the timely fulfilment of the manpower requirements within an organisation. These requirements may arise from starting a new business, expanding an existing one, or replacing those who quit, retire, are transferred, promoted or fired. As NCERT puts it, the search for "the right person for the right job" hardly needs over-emphasis. But just as drinkable water is scarce despite two-thirds of the earth being water, finding the right person for the right job is a real challenge. The eight steps below codify the staffing process.

Step 1 — Estimating the Manpower Requirements

While designing the structure, an analysis is undertaken of decisions and decision-making levels, activities and the relationships among them. From this exercise, various job positions are created. Performance of each job necessitates the appointment of a person with a specific set of educational qualifications, skills and prior experience. Operationally, this requires both workload analysis (how much work, of what types) and workforce analysis (how many people of what type are already available). The exercise reveals whether the firm is understaffed, overstaffed or optimally staffed. Manpower requirements are then translated into specific job descriptions and the desirable profile of the occupant — the desired qualifications, experience and personality characteristics — which becomes the base for looking for potential employees.

Step 2 — Recruitment

Recruitment may be defined as the process of searching for prospective employees and stimulating them to apply for jobs in the organisation. Information generated in writing the job description and candidate profile is used to develop the "situations vacant" advertisement, which may be displayed at the factory/office gate, published in the print media or flashed in the electronic media. The essential objective is to create a pool of prospective candidates. Both internal and external sources may be tapped — internal sources to a limited extent; external sources for fresh talent and wider choice.

Step 3 — Selection

Selection is the process of choosing from among the pool of prospective candidates developed at the recruitment stage. Even where the choice space is narrow, the rigour of selection serves two purposes: (i) it ensures the organisation gets the best among the available, and (ii) it enhances the self-esteem and prestige of those selected and conveys the seriousness with which things are done in the organisation. Successful candidates are offered an employment contract stating the terms and date of joining.

Step 4 — Placement and Orientation

Joining a job marks the beginning of socialisation of the employee at the workplace. The new employee is given a brief presentation about the company and is introduced to superiors, subordinates and colleagues; he is taken around the workplace and given charge of the job. Orientation is introducing the selected employee to other employees and familiarising him with the rules and policies of the organisation, while placement refers to the employee occupying the position for which he has been selected. This first impression has a lasting impact on the employee's decision to stay and on his job performance.

Step 5 — Training and Development

What people seek is not simply a job but a career. Everyone must have the opportunity to rise to the top, and the best way to provide such an opportunity is to facilitate employee learning. Organisations have either in-house training centres or alliances with training and educational institutes for continuing learning. Both organisation and employee benefit — motivation rises, competencies are strengthened, performance improves, and organisations are able to attract and retain talented people.

Step 6 — Performance Appraisal

After employees have undergone training and have been on the job for some time, there is a need to evaluate their performance. Performance appraisal^? means evaluating an employee's current and/or past performance against certain predetermined standards. The employee is expected to know what the standards are, and the superior provides the employee feedback. The process therefore includes defining the job, appraising performance and providing feedback.

Step 7 — Promotion and Career Planning

It becomes necessary for organisations to address career-related issues and promotional avenues for their employees. Managers must design activities that serve employees' long-term interests and encourage employees to grow and realise their full potential. Promotions refer to being placed in positions of increased responsibility — usually meaning more pay, responsibility and job satisfaction.

Step 8 — Compensation

All organisations need to establish wage and salary plans for their employees. Compensation refers to all forms of pay or rewards going to employees. It may take the form of:

• Direct financial payments — wages, salaries, incentives, commissions and bonuses
• Indirect payments — employer-paid insurance and vacations

Direct financial payments are of two types: time-based (paid daily, weekly, monthly or annually) or performance-based (paid according to piecework — for example, a worker may be paid according to the number of units produced). Some pay plans combine time-based pay plus incentives for higher performance. Pay design is also influenced by legal (labour-law) requirements, unions, company policy and the principle of equity.

6.6 Indicative Visualisation — Why HR Belongs on the Balance Sheet

The Infosys case argued that long-term success depends on non-financial parameters such as expertise, innovation, leadership and entrepreneurial skill. The chart below is a pedagogical sample illustrating how HR-related parameters could be quantified alongside financial performance — the kind of view Infosys championed when it placed human resources on its balance sheet.