Module – 1

Management
Management is the art of knowing what you want to do and then seeing that it is done in the
best and cheapest way.
Or
The process of dealing with or controlling things or people.

Functions of management;

1. Planning: Planning is determination of courses of action to achieve desired goals.

2. Organizing: Organizing process of bringing together physical, financial and human resources
and developing productive relationship amongst them for achievement of organizational goals.
3. Staffing: Managerial function of staffing involves manning the organization structure through
proper and effective selection; appraisal & development of personnel to fill the roles designed
under the structure.
4. Directing: Direction is that inert-personnel aspect of management which deals directly with
influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational
goals.
5. Controlling: Controlling is the measurement & correction of performance activities of
subordinates in order to make sure that the enterprise objectives and plans desired to obtain them
as being accomplished

Principles of F.W Taylor;

1. Time and motion study: In this technique, a complex job is first divided into a series of simple
tasks. After that, the way these tasks are performed is observed to determine and eliminate waste
motions. Time and motion study is most appropriate for repetitive jobs.
2. Differential piece rate plan: This plan was developed by Taylor on the assumption that all the
workers have different capabilities and must be paid accordingly. This plan is also based on an
assumption that the production system is based on piece rates. Based on time and motion study
the standard time for a job is calculated for completing a job and based on the achievement of
workers payment will be done.
3. Supervision: Taylor suggested that work in an organisation must be planned and assigned to the
workers by foremen. Foremen should assign work on the basis of workers’ specialty and
supervise the performance of workers.
4. Scientific recruitment and training: for developing their skills so that they can efficiently
perform more than one type of job.
5. Economy: Cost accounting system to be followed to control cost and training.
6. Friendly cooperation between management and workers: Taylor believed that both
management and workers have one common goal, i.e. increase in production.
 Principles of Henri Fayol;
1. Division of work: According to this principle, work should be divided among individuals and
groups according to their skills and knowledge. This helps in completing the work with greater
efficiency.
2. Authority and responsibility: Authority is a right of an individual to give orders and
instructions. Responsibility is a state of being accountable for the consequences of the decisions
taken by an individual.
3. Discipline: Discipline in an organisation refers to the obedience to authority. Employees must
obey and respect the governing policies and rules of the organisation.
4. Unity of command: According to this principle, employees associated with a particular type of
work should report to one superior only. This helps in avoiding confusions in the role of the
employees.
5. Unity of direction: It means that there should be one direction in which employees must move to
achieve a particular objective. If employees get pulled into different directions, it may be difficult
for them to achieve the objective.
6. Subordination of individual interest to general interest: In this principle, Fayol laid emphasis
on aligning individuals’ personal goals to organisational goals.
7. Remuneration: There should be provision of fair wages for workers. The calculation of wages
should be done by considering various factors, such as business environment, cost of living,\
capacity of organisation to pay, and productivity of employees.
8. Centralization: According to Fayol, the degree of centralisation should be decided to make the
optimum utilisation of employees’ skills.
9. Scalar chain: Scalar chain refers to the hierarchy followed in an organisation from top managers
to employees working at lower levels. In scalar chain, all communication should pass through
proper channels of hierarchy.
10. Order: Order is required for the efficient coordination of all the elements in an organisation.
Management must follow the principle of the right place for everything and every man.
11. Equity: The principle of equity means fair treatment of all employees. Management must treat
all employees equally and should be free from biases and prejudices
12. Stability of tenure of personnel: Management must strive to stabilise the tenure of employees
by providing them job security. Increased turnover always results in inefficient production;
therefore, organisations must attempt to reduce it by improving employee morale and motivation.
13. Initiation: Management must provide freedom to employees so that they can carry out orders
effectively. Employees should be encouraged to take initiatives in their respective fields in order
to perform their jobs efficiently.
14. Espirit Decorps: It refers to team spirit. Management must adopt new ways to improve team
spirit among employees. This helps employees to work in harmony.

Contributions of F.W.Taylor towards scientific management.

a) Developed principle of breaking a task (job) into elements for timing the same.
b) Conducted exploration on causes of inefficiency and labor difficulties in industry.
c) Evolved certain principles of investigating work on scientific basis, selecting best worker for the
task, training him to acquire desired skill, developing cooperative spirit between management
and workers, almost equal division of work between workers and management.
d) Concept of a 'fair day’s task’ (need for planning work).Also undertook studies on fatigue
incurred by workers and the time necessary to complete a task.
e) Taylor developed functional organization in which one foreman was made in charge for each
function.
 f) Devoted maximum attention towards time studies and establishing work standards.
g) Introduced and operated various costing systems.
h) Suggested a wage incentive scheme known as Taylor's Differential Piece rate system.

Compare between contribution of F.W.Taylor and Fayol

Similarities

a) Universality of management
b) Scientific methods
c) Importance of personnel
d) Improvement of practice
e) Idea through experience
f) Books written

Dissimilarities

a) Taylor for shop floor management, Fayol for top level management
b) Taylor for bottom to upwards, Fayol from top to bottom
c) Taylor for productivity, Fayol for theoretical approach
d) Taylor for management, Fayol for administration

Types of ownership;
There are four main type of ownership
1. Sole or individual proprietorship
This type of business is owned by a single man. The owner invests capital, employees, labour
and machines hence he enjoys all the benefits. The owner has the power to determine the policies and
solves any problem that may arise during its functioning.
Examples of enterprise run buy single owners are printing press, auto repair shop, small
fabrication shop etc. That is retail trades, service industries, and small engineering firms.
Advantages
Easy and simple to start
Organisation is simple
It requires less capital
Owner is free to make all decisions
Business secrecy can be maintained
It is flexible
It is free from government regulation
Disadvantage
It is suitable for Limited capitals
Managerial skill is limited
All losses should be beared by owner only
Risk in the business is more
2. Partnership organisation
Some of the disadvantage of single ownership organisation can be eliminated by a well
organised partnership organisation. Partnership is the relationship between the persons who have
agreed to share the capital and profits of business carried on by all or any of them acting for all.
Partnership is based upon agreement between the partners which is known as partnership deed. The
Partnership depends on mutual confidence adjustment and cooperation between the partners.
3. Joint stock company
The main limitation of the earlier forms of business organisations are lack of capital and
managerial resources and the burden of risk and unlimited liability. Joint Stock Company overcomes
these limitations.
A joint stock company is an association of individuals called shareholders who joined together
 for profit and agree to supply capital divided into shares that are transferable for carrying a specific
business.
The management body of a joint stock company is the board of directors elected by the
shareholders. The board of directors makes policies, take decisions and run the company efficiently.
Types of joint stock companies are
 Private limited company
 Public limited company
a)Private limited company
In this case the capital is supplied by the promoters, their relatives and friends and hence they
are the owners of the company. The minimum Number of persons required to start this firm is 2 and
the maximum is 50. There is no minimum subscription to start the business. They need not produce
the prospectus, accounts, balance sheet open to the public. It is not subjected to government control.
The transfers of the shares are restricted to their shareholders only. It has the advantage that big
capital can be collected from the private partners.
b) Public limited company
In this case the shares can be issued to the general public and there is no restriction over the
maximum number of person but the minimum number of person is 7. Shares are Transferable in part
or full without requiring any prior approval. The affairs of the company are managed by an elected
body known as board of directors. The directors of the company are subject to rotation. a public
company has to issue a prospectus to public and it should send the financial statements to all
members and the registrar. It must get its account audited every year by registered auditor. It can
start only after receiving the "certificate to commence business".
4. Cooperative society
To achieve common economic objectives a set of people may proceed together and form a
cooperative society. They may be agriculturist consumers labours etc. All these societies are
registered and regulated by the cooperative societies act of the concerned state
A Cooperative organisation different from other forms of business organisation in that does
not aim at the maximization of profit. The main aim of the Cooperative organisation is self-help and
mutual help. To Start cooperative society the minimum number of persons required is 10 and the
maximum is unlimited. For starting cooperative society the members join together, collect the share
amount ranging between rupees 1 to rupees 10
Application is submitted to the registrar of cooperatives registrar will depute their officials to
attend the first General Body Meeting where by-laws are framed and directors are elected. And if the
authorities are satisfied about the soundness a license will be issued by the registrar and thus the
society is formed.

Transnational Organisation
A commercial Enterprise that operates substantial facilities does business in more than one
country and does not consider any particular country its National home. One of the significant
advantage transnational company is that they are able to maintain greater degree of responsiveness to
the local markets where they maintains facilities

Organisation structure
Industrial system is a place where men material and machines are brought together and produce
required product in an economic way. For achieving this common goal a good organization system is
necessary. Thus organisation is defined as the group of people who work together in an organised way for a
shared purpose.
Organisational structure is the systematic arrangement of the people working for the organisation in order to
achieve predetermined goals. This structure provides an appropriate framework for authority and
responsibility relationships between various persons. The organizational structure is generally shown online
organisational chart.
The structure of one industrial organization depends upon;
Size of the organisation, Nature of product, Complexity of problems being faced.

Different types of organisational structure

A few commonly known types of organisation structures are;
1. Line Organisation
This is the simplest form of organisation. This is also known as military organisation because
it resembles to old military organisation. It is based upon relative authority and responsibility rather
than on the nature and kind of operations or activities. The authority flows directly from the general
manager to the works manager to superintendent to foreman and from them to workers. Since the
authority flow and communication is from top to bottom in a vertical line this is also called line or
scalar organisation. The immediate supervisor gives orders to the subordinates, assign duties, dismiss
and take disciplinary actions against them. Any Enterprise that starts with small probability starts
with a line type of organisation.

2. Line and staff organisation

In large Organisation operating on a big scale, managers cannot give careful attention to
every part of the management. They are unable to think and plan they are busy with ordinary task of
production and sales hence some staff is deputed to do the work of Investigation research recording and
advise to managers. Thus staff brings specialisation by assisting the line officers. The line maintains the
discipline and stability. Staff provides expert information and helps to improve the overall efficiency. Thus
the staffs are the thinkers and the lines are doers usually the staff reports to the executive and gives advice
on the subject of his speciality. The final decision whether to accept and implement the Recommendation of
staff executives' remain in the hands of the line executive.
 The general manager receives advice from the Accounts Officer personnel manager sales manager
and the Purchase engineer who are under the direct control of board of director. Design engineer research
and development stores officer who are under the control of GM offer their advice to work manager.

3. Functional organisation
F W Taylor suggest functional organisation because it was difficult to find all around expert
persons qualified to work at middle management level in the line Organisation. Functional organisation is
also a line type of organisation. With the difference that instead of one Forman there are 8 functional
Forman four of them located on the shop floor and remaining four in the office but everyone having direct
and equal authority over the workers. Each functional Forman who is a specialist in an activity is in charge
of one function.

Repair boss is responsible for adequate repairs and maintenance of equipment and machinery.
Speed boss ensure proper cutting tools are being used, Cut is start at right place in the work piece, and
optimum speeds, feeds and depth of cut are being employed.

Gang boss ensure proper setting of work in the machine.

Route Clerk gives work orders and routing the jobs.

Instruction Clerks Issues specifications and instructions related to jobs to the workers.

Disciplinarian keeps personnel records of workers and handles the cases of insubordination.

Human Resource Management

The success of modern organisation is depend on the contribution made by the employees as
they perform the various tasks to which they are assigned. Organisations are successful only when the
employees are satisfied and productive in their tasks. HR management strives to use human resources
effectively in order to exceed the target.
In short managing man is the personnel management. Human Resource Management is also called as
personal or labour or manpower management. The wastage of material, money, time and energy can be
minimised if right person is placed at the right place. If people at work are carefully handled they will put in
their sweat and blood to the organisation of which they are working.

Importance of HR management
 it discovers The talented experienced qualified competent workers to take up various jobs
 it ensures maximum productivity per worker by providing right man on right job
 it helps in foreseeing manpower requirements for the present and for the near future
 it enables best possible utilisation of HR resulting in reduction of labour cost per unit of production
 it gives workers job satisfaction and essence of happiness due to proper placement
 it ensures attractive pay which provides mental satisfaction to workers

Functions of HR management
1) Performance appraisal
It is a powerful tool with tremendous impact on mind of employees the purposes of performance appraisal
are;
a) To find out suitability for
Promotion
Transfer
Termination
b) To select persons for training and development
c) To facilitate in determining salary increment etc.
2) Feedback and performance coaching
In HRDs supervisor are responsible for observation and feedback to subordinates about their strength and
weakness and also for guidance for improving performance capabilities
3) Career planning
Employees are eager to know the possibilities for their own growth and career opportunities. Managers and
supervisors must therefore inform their subordinates about the growth plans of the company and to assist
them in planning their career within the organisation
4) Organisation development
It includes research to ascertain psychological health of the organisation efforts are made to improve the
organisational health through various means so as to maintain or improve the psychological climate that is
conductive to increase productivity
5) Rewards
Appropriate rewards for performance and behavior not only recognise and motivate employees but also
communicate the organisation values to the employees. Rewards may be given to individuals as well as to
teams or department in the organisation.
6) Employee welfare and quality of work life
HR development systems focus on employee welfare and quality of work life by continuously examining
employee needs and meeting to extent feasible. this generates a sense of belonging that benefits the
organisation in the long run
7) HR information system
All appropriate information’s about employees including training programs performance records potential
appraisals accomplishments etc. are stored in a data Bank( usually by computer). This data is utilized
whenever there is a need to identify employees for considering for special projects, additional training, or
higher level jobs.
8) Training and development
The main objective of industrial training is to prepare people to do effectively their own work and to remain
in touch with the latest inventions and discoveries So industrial training is based upon requirements and the
employees are given knowledge and skill for particular industrial work. Every industry has to give the
training to the new recruits before putting them on job

Requirements of manpower planning

One of the main task of the staffing process is manpower planning which involves estimating human
resource requirements. This activity is concerned with forecasting and determination of future manpower
needs of organisation. Manpower planning has two aspects, short term and long-term. Short term manpower
planning is concerned with matching organisational jobs and personal during the present period. Long term
manpower planning is concerned with the estimation of personal needed over specified period say 2, 3 or
5years in future.

JOB EVALUATION
Job evaluation is a systematic way of determining the value of a job in relation to other jobs in an
organization. It tries to make a systematic comparison between jobs to assess their relative value for the
purpose of establishing a rational pay structure. Job evaluation needs to be differentiated from Job analysis
is a systematic way of gathering information about a job. Every job evaluation method requires at least some
basic job analysis in order to provide factual information about the jobs concerned, thus, evaluation begins
with job analysis and ends at that point where the worth of a job is ascertained for achieving pay equity
between jobs.
In every organization there are different types of jobs having different characteristic. Depending upon the
job characteristics factors like qualification, skill, experience physical ability, aptitude may vary Therefore
the various jobs in an industry are to be analyzed and classified into different grades based on their
requirements and varying factors this process is known as job evaluation which helps in rewarding the job
according to its real value. It is the measuring of monetary worth of a job and determining the wages for the
job. So it shows the relative value of different jobs in the organization. It enable to maintain a high degree of
standardization in wage levels in all its plants. It also eliminates wage disparities for similar jobs in, the
same department or different departments.

Features of job evaluation

 lt tries to assess jobs, not people. The standards of job evaluation are relative, not absolute.
 The basic information on which job evaluations are made obtained from job analysis.
 Job evaluations are carried out by groups, not by individuals Some degree of subjectivity is always
present in job evaluation
 Job evaluation does not fix pay scales, but merely provides basis for evaluating a rational wage structure.

Objectives of Job evaluation

The following are the main objectives of job evaluation:
 To decide relative values of different jobs
 To determine a suitable wage structure.
 To improve employer employee relations
 To reduce labor turnover and improve job Satisfaction.
 To minimize Labor unrest and to create healthy work situations
 TRAINING
In order to attain a competent work force at the highest level of all technical phases training is an
absolute necessity. Workers should ‘be systematically trained upon a specific need, it imparts knowledge
and develops employees aptitude and skill for a particular industrial task. The managers should be trained in
a functional specialty such as engineering, marketing, planning, organizing, controlling, total quality
management etc., because the management theory and practices have undergone fast changes in the past two
decades and these will individually continue and even accelerate.

Importance Of Training
 Ensure an adequate supply of properly trained employees at all levels of industry.
 Improve productivity and quality.
 Attain precision and clarity in the transition of business.
 To reduce wastage, accidents, fatigue, labour turnover, absenteeism and overtime.
 To boost employee morale, cooperation and good relations.
 To inculcate a broad understanding of relevant science and technology.
 To teach standardized work methods.
 To promote team work.
 To inculcate good work habits.
 To improve the performance of each employee to the highest level.

TYPES OF TRAINING
1. on the job training
Under this method supervisor gives instructions to the new Worker about the job to be made. Supervisor
explains the use of machines and tools and the procedure for the performance of the job then the new worker
is asked to try himself and make the job Mistakes, if any committed by new worker is kept under constant
watch until he develops correct work habits.
2. Apprentice training
A person under training is called apprentice. This training include an academic side as well as practical one.
i.e. trainee attend certain theory class or courses as well as practical training. For this special instructors may
be employed or the supervisor of the shop floor gives training. The trainee may be rotated in different
department to gain full understanding of all the function. Generally this training is as per the apprenticeship
act of the central government. The trainee will get a stipend from the concerned government.
3. Vestibule school training
This type of training is generally given in the vestibule (entrance hall) of the company, before actual entry to
the shop floor. The trainees will be admitted to the training school where they undergo a plan course of
instructions and practice in a similar type of machines of that of shop floor. After the trainees achieve
proficiency they are transferred to production floor to take up regular production work without delay.
4. Training by skilled, experienced and old workers
The new worker is attached with an old, skilled and experienced worker. The new worker watches the
experienced worker while he works and then tries to do the same himself in the same way. From time to
time he gets instructions from the skilled worker also.
ADVANTAGES OF TRAINING
 To increase the efficiency of workers/supervisors.
 To reduce wastage of materials, machine and man hour
 To Increase productivity and reduce production cost.
 reduce supervision and improved product quality
 gives job satisfaction
 it reduces labour turnover and chances of accident
 Less fatigue to the Workers.
 Increased organizational stability and flexibility
 Specialization and standardization is easy.
 It can boost the morale, cooperation and good relation.
 It helps to build team spirit.

LABOUR TURNOVER

This may be defined as the ratio of number of workers who have left their job on their accord to the
average number of workers employed in a factory during a given time. So Labour turnover can be
represented by the ratio

In other words, it is the shifting of workforce into and out of an organization. It measures the
extend to which old employees leave and new employee enter into an organization during a specific period.

WAGES

IMPORTANCE OFA GOOD WAGE PAYMENT SYSTEM

In order to achieve organisational goals the management should plan and establish a good wage
system. A good wage payment system should provide financial and nonfinancial incentive which will
motivate the employees to better work performance we know that most of the labour problems are due to the
wage differences in the industrial setup. So a good wage policy can be capable of reducing the labour
problems to some extend. A good wage payment system is important to create a good employer employee
relationship. It will reduce labourturnover. It will create a security feeling in employees. A good wage
payment system is important in the sense that it satisfies the workers and at the same time brings profits
through improved productivity and quality to the management.

The objectives of a good wage payment system reveals its importance as follows:
 it enable the employee to earn a good and reasonable salary or wage
 It pays equitable sums to different individuals, avoiding anomalies
 It should be understandable and acceptable to the employee
 lt rewards and encourage high quality work
 It encourages employees to accept the changes in methods of working
 it encourage employees to develop better methods of working.
 It rewards and encourage ‘high level of outputs. It motivates a team spirit and cooperation.
 It improves employer-employee relations.
 It gives job satisfaction and job enrichment.
 It promotes peace and harmony in the organisation.
 A good wage system will make the administration easier.
 It improves overall efficiency of the organisation.

TYPES OF WAGES
According to the remuneration paid by an employer a worker wages can be of the following types.
1. Nominal Wages
It is the amount of money paid to a worker in cash for the effort put in by him in an industry and no other
advantage to the worker is made. This is also called money wages. The amount of payment is calculated
from the actual worth of his service. This rates varies from place to place and the availability of labour.
2. Real Wages
Real wages includes the amount needed to meet the necessities. Comforts, luxuries and cash payments
which a worker can get in return of his effort and work. For example uniforms, essential commodities.
Housing with free water and electric supplies, conveyance and other such facilities are generally provided by
the factory, in addition to the money in cash. All these amount as a whole is considered as Real
3. Living Wages
The rates of the wage are in such a way that they can meet some of the requirement of the family, like
education food. Clothes and some insurance against the more important misfortunes along with prime
necessities of life are called “Living Wages”.
4. Minimum Wages
The labour is a human being, and from the humanitarian point of view, he is to be protected from the
cheating of the employer. But at the same time the wages cannot be raised beyond a certain limit because the
financial position of the industry to pay should be considered. So by considering two important factors, India
government enacted Minimum wage Act in 1948. According to this act wages have been fixed for different
parts of the country and this has forced employers to give not less than this fixed minimum wages to any of
the workers.

REQUIREMENTS OF A GOOD WAGE PAYMENT SYSTEM

 It should provide rewards for good performance and incentives for further improvements in performance.
 It should ensure equality in pay for similar jobs.
 It would be well planned and guarantee a minimum wage.
 It should be simple, easy to understand, operate and control.
 It must not involve heavy clerical work.
 It should encourages suitable staff to remain with the organisation.
 Lt should take care general increase in the cost of living or in market rates by a proportionate increases in
the ‘minimum and maximum wage levels.
 There should be incremental systems which will indicate the rates at which individuals can progress
according to merit or experience.
 It should have clear salary review guidelines, the limit to which the pay of each department can increase. .
 It should aim at increasing production without adversely affecting quality.
 It should reduce wastage of material, man hours, and machine hour.
 A worker should get incentive both for quantity and quality.
 Standardisation should be the basis for all incentive scheme, work method, materials, work place, working
conditions etc. all should be standardised.
 Incentives, bonus etc. should be payable along with the wages and not put off for future.
 No limit should be put on a workers incentive earnings.
 The formula for calculating bonus and the conditions under which it is paid should be clearly defined.

INCENTIVE

Incentive may be defined as something that encourages a worker to put in more productive efforts
voluntarily or incentive is an inducement or reward which is given to a worker for his efficiency and hard
work. Incentives are in addition to the normal hourly rate and are in some proportion to the workers
contribution towards production.
There are mainly three types of incentives as follows.
1. Financial incentives
2. Non-Financial incentives
3, Semi-Financial incentives

1. Financial incentives
Any incentive that pay off either directly or indirectly in money is labeled as financial incentives,
the idea behind the financial incentive is that the money is a strong motivator to control the human
behaviour and environment. For example, if an employer finds that he will be earning an extra profit of
R550, if a particular work is finished in 5 hours less than the prescribed time. Now if the worker is promised
to an extra payment of R325, if completes the job five hours early, he becomes motivated. This extra
payment is known as financial incentive.

Methods of financial incentive payment;

 Straight piece rate system
 Straight piece rate with a guaranteed wage
 Differential piece rate system
 Halsey plan
 Rowan plan
 Gantt plan

2. Non-Financial Incentives
Non-financial incentives may take the form of
 Greater responsibility.
 Token rewards like mementos.
 Better and healthy working conditions and surroundings.
 Opportunity for quick promotion. .
 Training and future study opportunities
3. Semi-financial incentives
This is a combination of financial and nonfinancial incentives such as:
 Provision of canteen at a subsidised rate, recreational and medical facilities to the workers and subsidised
educational facilities for their children.
 Cooperative societies for workers where subsidised consumable items will be obtained.
 Conveyance facilities to employees at a concession rate.
 Pension and other benefits etc.