Resources Management (HRM)/Personnel Management

The word Personnel Management is popular with different names such as Labour management, Staff management, and Industrial management and in modern times as Human Resources Management.

‘Human Resources’ cannot be standardized, no two persons are similar in mental abilities, traditions, sentiments and behaviour widely they differ. As people responsive they feel, think and act. They cannot be operated like a machine. Hence they need to be handled very tactfully and sensitively by managers for achieving optimum results of an organization.

In the words of Peter Drucker ‘the prosperity if not the survival of any business depends on the performance of its managers tomorrow’. Success of any organization depends mainly upon the quality of human resource and their performance. Organizational resources can be broadly categorized into two i.e. Human or psychological and physical resources. Human Resource Management deals with management of human resources of organization.

HRM is a strategically-driven process of acquiring, training, appraising and compensating employees, and maintaining good labour relations, health and safety. HRM directly addresses the business related issues or functions.

According to ’Leon C. Megginson’ the term ‘Human Resources’ can be thought of as “the total knowledge, skills, creative abilities, talents and aptitudes of an organization’s workforce, as well as their values, attitudes and beliefs of the individuals involves.”

A view from National Stand Point; the Human Resources can be defined as “the total knowledge, skills, creative abilities, talents and aptitudes in the population.” In other word “the total of the inherent abilities, acquired knowledge, behaviour and aptitudes of the employees.”

In modern times changes in the technological abilities and qualifications of employees are revolutionariesed in the organizations with the technological advancement. It has resulted tremendous changes in quality, attitudes, aspirations and complexity of work force and posed several challenges to Personnel Management.

Definitions:According to the Edwin B Flippo Personnel Management is the planning,

organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and the separation of human resource to the end that individual organizational and social objectives are accomplished.

According ‘Michael J. Jucius’ defined Personnel Management as “the field of management, which has to do planning, organizing, directing and controlling the functions of procuring, developing, maintaining and utilizing a labour force, such that the

a) Objectives for which the company is established are attained economically and effectively,

b) Objectives of all level of personnel are served to the highest possible degree, and c) Objectives of society are duly considered and served.”

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According to Dale Yoder Personnel Management is that the phase of management, which deals with the effective control, and use of manpower as distinguished from other sources of power.

According to Institute of Personnel Management – London, personnel management is part of management concerned with people and with their relationship within an enterprise.

In the words of Prof. E F L Brech personnel management is that part of management process which is primarily concerned with human constitution of an organization.

Human Resources Management (HRM) can be defined as managing (Planning, organizing, directing and controlling) the functions of employing, developing and compensating human resources resulting in the creation and development of human relations with a view to contributed proportionately (due to them) to the organizational, individual and social goals.

Difference between Personnel Management and Human Resources Management:Personnel management is different from HRM. Personnel means persons

employed. Hence, personnel Management views the man as economic man who works for money or salary. Human resources management treats the people as human beings having economic, social and psychological needs. Thus HRM is broader in scope compared to personnel management.

Academically there are three aspects for personnel management: -1. The welfare aspect - This is concerned with the working conditions and basic

enmities such as housing, schooling, hospitality, sanitary, canteen, crèches, handling personnel problems and the recreational facilities.

2. The labour or personnel aspect - This is concerned with recruitment, placement of employees, remuneration, training and development, promotions, incentives, measuring productivity and individual performance.

3. The industrial relation aspect - This is concerned with trade union, negotiations settlement of industrial disputes, joint consultation and collective bargaining.All these aspects are concerned with human element in industry as distinct from

the mechanical or physical.

Scope of personnel management:Scope of personnel management is very wide. It includes all activities which help

the management is getting work done by labour force in the best manner possible to accomplish the main objective of organization.

o Recruitment and maintenance of labour force.o Training to all persons new or old to meet the challenges of the new jobs and

techniques.o Job analysis, job description just to higher the qualified personnel to the jobs.o Compensation i.e. determining wage rates, wage methods and incentive plan.o Keeping personnel records or service registers i.e. to maintain complete bio-data

of each and every employee.o Welfare aspects such as housing, education, hospitality, sanitary conditions,

recreation etc.

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o Labour relation and activities such as settlement of disputes.

Importance of personnel management:Due to rapid Industrial Development and undetermined role of human resources

while other physical resources were given undue importance resulting in the new and new human problems in the industries. In order to solve these problems personnel management was assigned a very important role to play.

Labour being an important factor of production needs, motivation and proper guidance from the side of management to get the desired result. It is the task of management to deal with human force effective and to lead the work properly and in right direction.

Objectives of personnel management:Personnel management is an approach, appoint of view, a technique of thinking

and philosophy of management and it is concerned with the overall development of man at work. These objectives are categorized into two they are ‘general objectives’ and ‘specific objectives’. General objectives: -

o To get maximum individual development. o To maintain good relationship between employee and employer.o To optimise the utilization of the organizations human resources efficiently and

effective molding of human resource. Specific objectives: -

o To ensure right type and number of persons on the job, at right time.o To give proper orientation and introduction of the new employees.o To adopt suitable training facilities for better performance.o To ensure provision of better working conditions and other facilities.o To offer fair, sound and effective wage and salary and administration.o To give good impression to the men who is leaving the organization.o To create and maintain good relations with the employees.o To maintain a high morale, by ensuring the development of highly effective work-

groupo Provision for personnel research and auditing.

Principles of personnel management: -Principles of personnel management are guidelines for executives in

administrating and directing him/her personnel policies on rational basis. 1) Principle of maximum individual development.2) Principle of scientific selection3) Principle of high moral4) Principle of effectiveness 5) Principle of team spirit 6) Principle of dignity of labour7) Principle of fair rewards8) Principle of co-partnership 9) Principle of effective utilization of human resource10) Principle of contribution to national prosperity

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Function of Personnel Management: -The functions of personnel management are grouped into two categories; they are

‘Managerial’ and ‘Operative’ functions.

1. Planning: - Planning involves the ability to think, to predict, to analyse, and to come to decision, to control the action of its

personnel. It bridges the gap between ‘where they are and where they want to go’. For this purpose, the personnel manager has to determine in advance the personnel policies and programmes and how to attain the co-ordination between them. Planning today avoids crisis tomorrow.

2. Organizing: - after plans have been developed the personnel manager must establish an organization to carry them out. This function is therefore carried out. Grouping out the personnel activities, assignment of activities to individuals, delegation of authority to carry them out and provision of co-ordination of authority relation ships horizontally and vertically in the organization structure.

3. Directing: - It involves guiding, motivation and leadership. It also involves issuance of orders and motivation of workers to comply these orders so that the people may follow the path laid down in advance.

4. Co-ordination: - refers to the balancing, timing and integrating activities in an organization, so that a unity of action in pursuit of a common purpose is achieved. In the words of Terry – ‘it deals with the task of blending efforts in order to ensure a successful attainment of an objective’.

5. Controlling: - is concerned with observing and measuring the performance and correcting the deviations if any from the set standards and it is the follow up action of personnel planning and policies.

6. Motivating: - is stimulating the people or oneself to get desired course of actions. It is effective instrument in the hands of a manager for inspiring people at work.

Operative functions: ‘Recruitment and Selection’ – procurement of personnel Providing ‘Training and Development’ programmes for personnel – inducing the

knowledge and skills as and when employees are required, provides opportunity to get growth individually and providing better working conditions.

Providing ‘Welfare facilities’ – housing, education, hospitality etc. ‘Compensation’ to employees – fair salary and administrative ‘Manpower planning’ – in order to maintain balance between over staffing and under

staffing ‘Job Evaluation’ – to fix equitable wage rates by studying the job contents

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‘Performance Appraisal’ or merit rating – to assess the worth of a job holder periodically on his/her job

Maintain ‘Industrial Relations’ – to get industrial peace by handling grievances and disputes

Maintain ‘Service Registers’ – profile of an employee Promotions or demotions, terminations and transfers of personnel Personnel audit and research.

MANPOWER PLANNINGDefinition:

According to ‘Eric W Vetter’ the process by which management determines how the organization should move from its current manpower position to its desire manpower position.

According to ‘Coleman Bruce P’ manpower is the process of determining the manpower requirements and the means for meeting these requirements in order to carry out the integrated plans of the organization.

According to ‘Stainer’ manpower planning is the strategy for the acquisition, utilization, improvement and preservation of an enterprise human resource.

According to ‘Edwin B Gester’ manpower planning is a process including forecasting, developing, implement and controlling by which a firm assure that it has the right number of people and right kind of people and right place at right time for which they are economically useful.

From the above definitions: – Human resource planning is process of analyzing and approximating the present

and future vacancies in the light of organisational requirements. It includes the determination of the kind and quantity of employees.

Manpower planning translates the organisational objectives and plans into number of workers needed to meet organizational objectives.

It is the strategy of procurement, development, allocation and utilization of an organisations human resource. It relates to establishing job satisfaction or quantitative of jobs, and determine the number of personnel required and developing source of manpower.

It is ongoing process of human resource planning and development of manpower resource.

Manpower planning is maintaining balance between overstaffing and understaffing to meet current requirement of manpower.

Importance or Need of manpower planning1. Effective recruitment and selection policy2. Increase in the size of business3. Reduction in labour cost4. Avoiding disruptions in production5. It keeps national policy and employment 6. Effective employee development program can possible7. Maintain good industrial relation.

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Basis of manpower planning and its requirements1. Existing stock and wastage of manpower:2. Future manpower requirements:3. Business objectives and support form the top management:4. Well organized personnel deportment:5. Determination of other related personnel policies: – i.e. promotions, transfers,

salary and administration, assessment of overtime, training and fringe benefits.6. Planning responsibility:7. Fixed planning period:8. Manpower standards:

Prerequisites of Manpower Planning Process:Preparing manpower inventory: - avoids overstaffing and understaffing.

Manpower Inventory means the assessment of the present and potential capabilities of employees in terms of qualitatively and quantitatively.

Studying the individual or employee turnover: - it helps in estimating future need of work force, in order to assess individual output requires a lot of experience relating working conditions, job satisfaction, competitiveness, morel unemployment. Promotion, resignation, dismissal, transfers and death also effect to assess worth of an individual. It is varying from one job to another.

Forecasting manpower need: - it is based on production, sales budget, workload analysis, workforce analysis, estimated absenteeism and turnover of employees qualitatively and quantitatively.

Manpower process: - after determining the manpower requirements of an organisation should prepare best course of action to fill the gaps in manpower programs and strategies are developed for recruitment, selection, performance appraisal, training and transfers, promotions and demotions so that future requirements will be met.

Process of human resource planning: - the following are various phases iteratively done in manpower planning process.

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Objectives of manpower planning: -1. To ensure optimum se of human resource currently employed2. To assess or forecast future skills requirements that necessary resources are

available as and when required3. To determine manpower requirement level quantitatively4. To anticipate redundancies and void unnecessary dismissals5. To provide a basis for management development programs6. To determine optimum training levels 7. To access future accommodation requirements8. To decide in advance how to do it, when to do it, and who is to do it.

Limitations: This is time taking and expensive process Not suitable for small, big and moderate organizations may go for it Predictions may not have validity Lot of uncertainty in manpower planning implementation All are based on predictions and assumptions.

JOB EVALUATION

According to ‘Edwin B Flippo’ job evaluation is system and orderly process of determining the worth of a job in relation to other jobs.

It is an important function of personnel management is to fix the wage rates for each job and it determines the relative worth of the job by studying and defines all the job contents. Aims of job evaluators are…

To study each job contents and define To determine equitable wage rate for each job in an organization.

The process of job evaluation consist the following stages they are1. Job Analysis:2. Job Description / job manual:3. Job specification:4. Job grading:5. Pricing the Job:

1. Job Analysis: - it is a prerequisite of the job evaluation and the process, critically evaluation of the operations, duties and responsibilities in a job.

In the words of ‘Edwin B Flippo’ job analysis is the process of studying and collecting the information relating to the operations and responsibilities of a specific job.

Significance or use of job analysis:I. Will be useful for manpower planning

II. Recruitment, selection and placement of right person on the right jobIII. Facilitates training and development programs for personnel IV. Facilitates to maintain standards in each jobV. It helps in evaluating the job by determining the relative worth of each job

VI. It helps in appraising the performance of people on the job.VII. Job designing is safety and healthy

VIII. Helps in discipline

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2. Job Description: - it is a job manual; descriptive in nature contains all the particulars of a job with its unique title. In the words of ‘Edwin B Fippo’ job description is the first and immediate of job analysis, as its title indicates this document is basically descriptive in nature and constitute a record of existing pertinent job facts.

Contents of job description:I. Proper job title

II. Job summaryIII. Job locationIV. Duties and responsibilities V. Nature of supervision and span of control

VI. Machines, tools and materials to be usedVII. Relation of other jobs

VIII. Working conditionsIX. Other items such as elasticity and qualities of jobholder.

3. Job Specification: - it includes minimum qualities and qualifications of a jobholder. In the words of ‘Edwin B Flippo’ job specification is a statement of minimum acceptable human qualities (psychological and physical) to perform job properly. It includes physical and personal characteristics, responsibility, and qualification.

4. Job Grading: - it is relative levels of various jobs. Generally determines according to the nature of the jobs.

5. Pricing the job: - the main purpose of job evaluation is to fix the price based on the job contents and its complexities in an organization, by taking consideration of various factors i.e. internal and external. The following are the methods for determining the price of the job.

They are namely ‘Non-quantitative Methods’ and ‘Quantitative Methods’.

Non-quantitative: - in this method evaluators are not consider the details of job factors described and specified in job manuals, they determine the worth of job, on the basis overall impressions and its grade of the job. These are two methods namely, Ranking Method and Job Classification Method.

Ranking Method: - under this method a committee of executives is have a general opinion on a job and based upon their overall impression they give the ranks and placed in different salary ranges.

Merit: -1. It is quit simple to introduce.

Demerits: -1. No specific approach to determine rank.2. Lack of fairness in judgment while ranking3. Suitable for small organisation.

Job Classification or Grading Method: - a committee of executives is studies job

specification in the light of certain predetermined factors like skill, responsibility, experience, type of job etc., based upon ranks and allots the wage rate.

Merits: - 1. It is easy to understand

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2. It is based on job specification3. New jobs is easily ranked

Demerits: -1. Not suitable for large scale organization2. The wage rate effect the grading of job

Quantitative Methods: - to determine rate of a job, Evaluators are studied and fallows the job factors, which are descried in job manual, job specification and its grade. These methods are two types namely…

Factors Comparison method: - under this method all jobs are compared to each other to determine their relative importance by selecting job factors these are mental and or physical requirement, skills needed, responsibilities and authority are the key factors compared one another to find out the standers based on that they determine the wage of the particular job.

Merits: -1. More accurate2. Flexible and applicable to new jobs also3. The procedures o rating new jobs is logical

Demerits: -1. It is costly to install 2. Complicated to understand3. Due to factors weight-age difficult to allot the price.

Point Method: - in this method job manuals are required. In order to know the job factors (skill, efforts, responsibilities and job working conditions) are required job description each factor measured by giving the points and it provides scale or yardstick based on that evaluates the worth of a job.

Merits: - 1. Most suitable to large scale enterprise 2. It is objective study of job evaluation technique

Demerits: - 1. Point value result some times incorrect.

MERIT RATING OR PERFORMANCE APPRAISAL

Merit rating is a technique to know the relative worth of an employee in terms of qualitatively and quantitatively on the job so that his/her performance, potentialities may be known and developed. The both terms merit rating and performance appraisal one can use interchangeably.

The process of evaluating the worth of a person based on his/her past performance is called performance appraisal where as the process of evaluating the relative merit of the persons on a given job is known as Merit Rating. It is distinctly different from Job evaluation. In job evaluation, the jobs are evaluated to determine wages and salary but in merit rating job holder’s worth/performance will be evaluated.

Performance appraisal is the process of measuring and evaluating the performance or accomplishments including individual behaviour, of an employee on the job front for a given period. The main purpose is to assess the worth and value of a person to the organization.

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Definition: - According to ‘Alford and Beatty’ personnel rating is the evaluation or appraisal of the relative worth to the company of a man’s service of his/her better job.

According to ‘Edwin B Flippo’ Merit rating is a systematic, periodic and so fat as humanly possible an impartial rating of an employee’s excellence in matters pertaining to his/her present job and to his/her potentialities for a job.

According to Scot, Clothier and Spriegal Merit rating of an employee is the process of evaluating the employee’s performance on the job in term of the requirement of the job.

According to Maurice B. Coming “Merit rating attempts to recognize and reward the personnel abilities that an individual brings to his/her job, measured by the extent to which his/her output or quality of his work exceeds the minimum that can reasonably be expected for his/her basic rate of pay.”

Objectives and Purpose of Merit Rating: - The principle objective of merit rating is to assess the worth of an

employee on his/her present job in an organization. These objectives can view into self improvement of employee and personnel administration purpose.

Self-improvement:o Employee may improve him/herself as the performance appraisal brings out

deficiencies and short comings of the employee’s which may be improved if they are known to the person concerned.

Administrative purpose:o To assess the employee’s present level of performance o To identify the strengths or weaknesses of individual employeeo To provide feedback to the employee so that he/she can improve o To determine salary and incrementso To provide an objective basis for rewarding the employees for their better

performance and to decide who has to be transferred, promoted or demotedo To motivate and enhance employee morale and thus, stimulate positive

thinking among the employees about the work and the organization.o To identify the gaps and guiding and monitoring the performance of those who

are lagging behind and thus, assess training and development needs.o To provide a database for evolving succession strategies.o To provide a basis for many other personnel decisions such as fixation of

incentives, allowances, regularization of the services of the employee, promotion, transfer or demotion.

Methods of Merit rating:There are different methods of assessing the performance of the person on the job.

While most of them are based on supervisor’s remarks, some of them are based on self-evaluation. The following are the methods of merit rating.

1. Straight ranking method: In this method, the rater ranks the employee as whole in order of their merit with the best on the top and poorest at the bottom of the ranking table. This method does not conceder the various elements of performance, man as a whole and compared degree of difference between the employees. This method is suitable where the number of employees is less.

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2. Paired comparison method: here every employee is compared with all others in a particular cadre in the department. By comparing each pair of employees, the rater can decide which of the employees is more valuable to the organization. This method is more useful for an overall comparison of employees and if the number of employees is reasonable.

3. Man to man comparison method: It is commonly called ‘Factors comparison method’. Under this method certain factors such as Initiative, Leadership, Dependability, Reliability, productivity etc., selected. There after a five point master scale is designed to each factor by the rater. The five point scale would be excellent, good, satisfactory, average and poor and the weightage could be 5,4,3,2 and 1, respectively. The indications are recorded by marking the relevant number representing the degree to which the individual satisfies the standard. The individual weightage of each factor are added up, to judge the relative merit of each employee.

4. Grading Method: in this method certain categories of worth (made in factors comparison method) such as good, average and poor are established and defined in advance carefully. The actual performance of each employee is compared with the grades established and the person is allocated to the grade which best describes his/her performance.

5. Graphic scale method: it is like man-to-man comparison in this method there are two types of factors are considered by rater they are employee characteristics and contributions. An employee characteristic refers to the qualities of the persons such as dependability, ability, initiative leadership etc. Employee contributions are those which denote what the person produces such as quality and quantity of work, responsibilities assumed. Each of these factors will have three to five degrees. The indications are recorded through graph and rest is similar to man-to-man comparison.

6. Check list method: under this method the rater does not evaluate but reports employee’s performance and final ranking is done by personnel department. This method is also referred as ‘questionnaire method’ as it uses a checklist questionnaire which contains a series of “Yes” or “No” questions concerned with the employee and his behaviour. The employee answers these questions in ‘Yes’ or ‘No’ on the basis of checklist and the personnel department ranks the employees.

7. Forced choice description method: in this method employees are given a set of alternatives for a problem and they have to choose one. This method facilitates to assess the employees judgment, skill, analytical and reasoning skills. It is called forced choice because the employee is forced to choose on from the set of answers and explain why he/she thinks that alternative is the right answer.

8. Critical incident method: This method is based on the human behaviour concept. Employee exhibits a particular behavioural pattern while doing his job. This behavioural patron makes the difference between success and failure of a job. In this method the employee is ranked based on these reactions to a particular situation. Examples of employee reactions are upset or angry with work, failure, refused to help/support fellow being; refuge to get training etc. based on the ranks given by rater, personnel department makes an appraisal.

9. Descriptive evaluation method: In this method the rater prepares a consolidated descriptive report describing the performance of the employee on the job. The report reflects the personality, behaviour, quantity and quality of work performed by the employee. The report is prepared by rater purely by observation.

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10. Group appraisal method: In this method, the rating is made by a group of raters or supervisors generally who know the employee are sitting together and evaluate the performance of the employee.

11. Field review method: In this method, instead of directly interacting with employees, the experts from personnel department interview the concerned supervisor to obtain all the information about each employee and also ask them about the possible methods of improving performance of employees. Based on the interview the report is prepared and submitted to top management.

12. MBO: The short-term objectives mutually agreed upon by the management and the employees are used as performance standards. This method considers the actual performance as the basis for evaluation. It is a systematic method of foal setting. Also, it provides for reviewing performance based on results rather than personality traits or characteristics. However, this is not practical at all levels and for all kinds of work in the organization.

Limitations:o Hallo effect: the tendency of rater to an employee consistently average or

high in all jobs based on general impression. o Criterion problemo Frustrations both rater and employee o Lack of cooperation.

To sum up, merit rating is a crucial function which has to be carried out dispassionately and objectively. If it is not done in a professional way, this could be the source of complaints and tensions. Further, it should not be viewed as an annual ritual. Merit rating is a continuous phenomenon. Progressive organizations create an in-built system to enable their employees to constantly monitor their own performance periodically.

Distinction between Merit Rating and Job Evaluation:

Merit Rating Job Evaluationo Merit rating is for the job holder o Job evaluation is to evaluates the jobo It apprises relative performance of the

worker o Job evaluation determines the relative

worth of jobo Merit rating made after the placement

of workero Made before selection and recruitment

o The main objective is to development of each individual or employee

o The main objective of job evaluation is to establish equitable wage rate.

REASONS FOR GROWTH OF PERSONNEL MANAGEMENTThe service of personnel management had developed very recently the main reasons are

Technical factors:o Industrial Revolutions which introduced many revolutionary changes in the

method of techniques of industrial production.o New experiments and researches in other social sciences such as ‘Hawthorne’

experiments in the field of psychology affected the attitudes of the employees and also researches in behavioural science for selecting the right person on the right job.

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o Use of science in industry. Awakening among workers due to:

o After effects of World war-II and concentration of power in hands of few owners.

o Political movements and success of Russian revolution.o Emergency of industrial labour organizations

Favorable Government attitude:o Pay-scale structure: Maintaining standards in pay-scale structure and

promotional policy.o Changes in concept of labour from commodity concept to human concept.o Emergence of welfare states.

Cultural and Social emergences:o Spread of education o Population problemso Changes in social value of labour.

Increased size of business developed principles, procedures, rules and regulations. Change in the attitude of management Emergence of joint stock companies form of organization Problem of coordination and control over the workers.

QUALITIES OF PERSONNEL EXECUTIVEManagers are absolutely essential for the healthy functioning of organizations.

Management is growing in complexity in this age of sophisticated technology, uncertainty and discontinuity. It is indeed difficult to specify the immense range of abilities that may be legitimately expected in a manager/executive. The one indispensable quality is according to Preter F Drucker, integrity. This view is beyond challenge. Good managers are in short supply everywhere. A really effective manager is of inestimable value.

The position of a personnel manger in the organization is very important because he/she is the person to direct men at work and to get the work done by them to achieve the organizational objectives.

Drucker considers the usual definition of manager as ‘one responsible for the work or others’ as inadequate. He defines a manager as aperson who is responsible for the efficient performance of an organization, that is, proper use of the resouirces of production (men, machines, raw materials and so on).

Fred Smith stated that “a manager is not a person who can do the work better than his men. He is a person who can get his men to do the work better than he can”.

Abilities needed in a Manager:The manager requires an analytical mind and the ability to integrate diverse elements.

He must be able to use the talents of his people fully and should not be unduly pre-occupied with their deficiencies. He needs social skills. He should understand the infinite range of human moods and temperaments. He must understand their language and speak in a language they understand. Moreover, he has to develop persuasive abilities. It is not by logic alone that people are convinced.

Sense of vocation: sense of inner urge to get the best out of the available human resource.

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Sense of social responsibility: to get maximum coordination from workers – as individual and as a group.

Capacity to lead the people Capacity to persuade the top executives and to subordinate in reconciling the view

points. Personality:

o Art of public speaking o Facial expressions o Spontaneity of speech o Personal dignityo Courtesy and social awarenesso Foresightedness

Personnel integrity Personnel knowledge: He must pose the full knowledge of subject with latest

development in behavioural science in the word.

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