NCERT Notes for Class 12 business studies Chapter 6 Staffing

Class 12 business studies Chapter 6 Staffing

NCERT Notes for Class 12 business studies Chapter 6 Staffing, (business studies) exam are Students are taught thru NCERT books in some state board and CBSE Schools.  As the chapter involves an end, there is an exercise provided to assist students to prepare for evaluation.  Students need to clear up those exercises very well because the questions inside the very last asked from those.

Sometimes, students get stuck inside the exercises and are not able to clear up all of the questions.  To assist students, solve all of the questions, and maintain their studies without a doubt, we have provided step-by-step NCERT Notes for the students for all classes.  These answers will similarly help students in scoring better marks with the assist of properly illustrated Notes as a way to similarly assist the students and answer the questions right.

NCERT Notes for Class 12 business studies Chapter 6 Staffing

Class 12 business studies Chapter 6 Staffing

Hardworking and talented workforce/manpower is the principal asset of any organisation. Staffing is concerned with work force planning. It facilitates obtaining, utilising and maintaining a satisfactory and satisfied work force. Staffing function includes manpower planning, job analysis, recruitment, selection, placement and training of personnel. An organisation can achieve its objectives only when it has the right persons in the right positions. The right people can help you take your business to the top; the wrong people can break your business. Staffing function fills the position as shown in the organisation structure. Staffing is an important function because the success of an organisation depends upon the quality of its workforce.


According to French Wendell “Staffing or Human Resources Management is the recruitment, selection, development, utilisation, compensation and motivation of human resources of the organisation”

Nature/Features of Staffing

  1. Staffing is the function of management
  2. It is a continuous or never ending function
  3. It is concerned with human resources of an organisation
  4. Staffing is concerned with optimum utilisation of human resources.

Importance of Staffing

Human resources are the foundation of any business. It has been estimated that labour cost in case of manufacturing concern amounts to 60% of the selling cost. It shows that the success of the business depends to a greater extent on the right selection, training, development and appraisal of the staff. If right kind of employees are not available it will lead to wastage of materials, time, efforts, resulting in lower productivity and poor quality products. The importance of staffing can be highlighted on the following ground:

Helps in obtaining competent personnel

Efficient staffing discovers the talented, experienced and qualified staffs which prove to be an asset for the enterprise.

Ensure Maximum Productivity

Staffing ensures higher productivity by placing right person on the right job by proper recruitment and selection.

  1. Optimum utilisation of manpower : It ensures optimum utilisation of human resources by avoiding over staffing or shortage of staff. Over staffing leads to under utilisation of personnel and thereby higher labour cost. Shortage of personnel leads to disruption of work.

Improve the job satisfaction and morale of employees

Staffing function does not end only with appointment of employees. It includes training, promotion, compensation etc. All these activities help in motivating the employees and boost up the morale of the employees.

Key to effectiveness of other functions

Among the various factors of production, manpower is the only factor which has the capacity to “think”. All functions in the organisation are performed by human beings and through proper selection and training of manpower, staffing process ensures organisation objectives.

Staffing as part of Human Resource Management

Staffing is a function which all managers need to perform. It is the job of managers to fill positions in their organisation and to make sure that right persons are appointed on the right job. In small organisations, managers may perform all duties related to employee’s salaries, welfare and working conditions. But in big organisations, due to large number of employees, a separate department called the Human Resource Department is formed to manage the human resources. Management of human resource is a specialised area which requires the expertise of many people. The number of human resource specialists and the size of this department give an indication of the size of the business as well. Human Resource Management includes many specialised activities and duties which the human resource personnel must perform. These duties are:

  1. Recruitment, i.e., search for qualified people
  2. Analysing jobs, collecting information about jobs to prepare job descriptions.
  3. Developing compensation and incentive plans.
  4. Training and development of employees for efficient performance and career growth.
  5. Maintaining labour relations and union management relations.
  6. Handling grievances and complaints of employees.
  7. Providing for social security and welfare of employees.

Evolution of Human Resource Management

Human Resource Management has replaced the traditional concept of labour welfare and personnel management. The concept of Human Resource Management was developed as a slow process which involves the following stages:

  1. With emergence of industrial revolution, the trade union activities became very active.
  2. The trade union activities forced the management to appoint a person who could act as a link between owner and persons.
  3. This resulted in appointment of labour welfare officer. His role was limited to the welfare of employees only.
  4. With the introduction of factory system large number of labour were employed under one roof.
  5. This resulted in appointment of one more person who was given responsibility of recruitment, selection and placement of persons. This person was known as personnel officer.
  6. In Human Resource Management (formerly known as Personnel management) employees are considered as valuable assets .HRM provide various training and developing activates to employees to update their knowledge. Now, in medium and large scale business organisation, Human Resource Department is a common department just like production and purchase departments.

Staffing and Human Resource Department

‘Staffing’ is seen in small business organisation while ‘HRM’ is in large business organisation. In staffing employees are treated as mere workers but in HRM, employees are considered as valuable assets. Staffing function is performed by managers at all levels. It is the job of all managers to involve directly and select people to work for their organisation. Subsequently, they need to be trained and motivated. But when the organisations grow and there are large number of employees there requires a separate department to take care of human resources. This department is called Human resource Department (HRM).HRM will have specialist in managing people. Actually, staffing is a part of Human Resource Management.

Staffing Process

The prime concern of the staffing function in the management process is the timely fulfilment of manpower requirements of an organistion. Manpower requirements may arise at the time of starting a new business or expanding an existing business or to replace those who quit, retire or promoted.The objective of staffing function is to obtain the most competent and the best available staffs (Human resource) for the enterprise. Staffing is an important function, staffing process starts from understanding the manpower requirements of an organisation and identifying the potential sources from where it can be met, either from within the organisation or from outside. The process of staffing consist of the following steps:

  1. Estimating the manpower requirements
  2. Recruitment
  3. Selection
  4. Placement and orientation
  5. Training and development
  6. Performance appraisal
  7. Promotion and career planning
  8. Compensation

Estimating the Manpower Requirements

Estimating the manpower requirements of an organisation is called manpower planning. It is process of determining the number and types of staff required by an organisation. Manpower planning can be divided into two parts-qualitative aspect and quantitative aspect. Through qualitative aspects of manpower planning, management tries to ensure a fair number of staff in each department. Through qualitative aspect analysis, the quality and characteristics required for

employees to perform various jobs. Manpower planning helps to avoid over-staffed or under-staffed situations.


Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation. In other words, recruitment means discovering the source of employees. Recruitment is called a positive process because it encourages maximum number of people to apply for jobs. The essential objective of recruitment is to create a pool of the prospective job candidates. Recruitment may be from internal sources like promotion, transfer etc. and external sources like employment exchange, placement consultants, contractors etc. For fresh talent and wider choice external sources are used.


Selection is the process of choosing the best person for a particular job. Selection starts where recruitment ends. Selection is a negative process as it involves rejection of unsuitable candidates. The selection is done through a process, which involves test, interviews etc. In selection, both internal and external sources of recruitment may be explored.

Placement and orientation

Placement refers to the posting of the selected employees in the post for which he is selected. After selection, the employee is given appointment letter and is asked to occupy the vacant job position. This is called posting.

Orientation refers to introducing the selected employee to his superiors, subordinates and colleagues and familiarising him with the rules and policies of the organisation. The employee is given a brief presentation about the organisation and introduced to his colleagues.

Training and Development

Today people want is not simply a job but a career. A job is work you perform to earn money to support your basic needs. A career is a long-term professional journey based on your passions. To build up a career a certain level of training is required.

Training means giving expertise. Training refers to the process by which the aptitude, skills and abilities of employees to perform specific jobs are improved. It is the art of increasing the knowledge and technical skills of an employee for doing a particular job efficiently. Both newly appointed and existing staff needs training. Organisations may have in house training centres or arrange with some institutions to provide training for their employees.

Development is a much wider concept compared to training. Where training aims increasing one’s skills and abilities to do a particular job, developments aims at the overall development of a person and equips him to handle higher jobs of the organisation in future. Training and development not only motivate employees but these improve efficiency of work also.

Performance Appraisal

Performance appraisal means evaluating an employee’s current/past performance as against certain pre-determined standards. It is examining whether an employee’s performance is according to the predetermined standards. The employee is informed in advance what the standards are expected from him and is examined whether he has attained the standards. An employee’s wages, promotion and training depend on performance appraisal.

For example, if a sales manager was given a sales target of 2,000 TV during the month, his performance will be evaluated on the basis at the end of the month.

Promotion and career planning

Promotion refers to the shifting of an employee from a lower position to a higher position with higher status, greater responsibilities, better facilities and better pay. Promotions are an integral part of people’s career. Generally on the basis of feedback report of employees’ performance, they are given promotion and opportunities for career development.


Compensation refers to all forms of pay or reward given to the employees. It is the reward for the efforts of employees. It may be direct financial payments like wages, salaries, incentives, commissions, bonus etc. And indirect payments like employer paid insurance, medical facilities, travelling facilities etc.


Recruitment refers to the process of finding possible candidates for a job. Recruitment may be defined as “the process of searching for prospective employees and stimulating them to apply for jobs in an organisation. Advertisement is commonly part of recruitment. Information about job vacancies of an organisation can be informed to the job seekers through news paper advertisement, online advertisement etc.

Sources of recruitment

There are two sources of recruitments-Internal sources and external sources.

1. Internal sources

Internal sources refer to inviting candidates from within the organisation. There are two important sources of internal recruitment, namely

(a) Transfers

(b) Promotions

a). Transfers: Transfers involve shifting an employee from job to another, one department to another or one shift to another .Transfer will not have any change in position, responsibility or

remuneration of an employee. Transfer does not affect the total number of employees in the organisation. Transfers can be used for training of employees for learning different jobs.

For Example, transfer of clerk from Union Bank Kumaramangalam branch to Union Bank, Kottayam branch.

b). Promotion: Promotion is the shifting of an employee from a lower job position to a higher job position. Promotion gives an employee a higher position and remuneration as well as greater responsibilities. It helps to improve motivation, loyalty and satisfaction level of employees.

For example, promotion of clerk to accountant position, LD clerk to UD clerk

Advantages of internal sources of recruitment

  1. It is an economical source-It is an economical source of recruitment as no time and money has to be spent on advertising vacancies or on conducting tests and interviews.
  2. It motivates employees-It motivates employees to improve their performance as promotion at a higher level may lead to a chain of promotions at lower levels in the organisation. Employees work with commitment and loyalty and remain satisfied with their jobs.
  3. It simplifies the process of selection and placement-Selection is very easy as candidates are already known to the organisation.
  4. Better performance of employees-To get promotion employees show better performance.
  5. Adjustment of surplus staff-Transfer has the benefit of shifting work force from the surplus departments to those where there is shortage of staff.
  6. No need for induction training-In case of internal source of recruitment, there is no need for induction training , as the employees are already familiar with the organisation.
  7. Automatic training-Through transfer employees get training also in the form of job rotation

Disadvantages of internal sources of recruitment

  1. In complete source of recruitment-It is an incomplete source of recruitment because the existing staff may be insufficient or they may not fulfil the eligibility criteria of the jobs to be filled.
  2. Reduced productivity-Frequent transfers of employees may often reduce the productivity of the organisation.
  3. Hindrance for induction of fresh talents-Internal source of recruitment reduces the scope for induction of fresh talents into the firm.
  4. Not suitable for new enterprises-A new enterprise can’t use internal sources of recruitment.
  5. Lack of competition among employees-The spirit of competition among the employees may be hampered because employees are likely to expect automatic promotion by seniority; performance is not a matter at all.

External Sources of Recruitment

External sources of recruitment refer to recruiting employees from outside the organisation.External sources of recruitment requires when the existing staff may be insufficient or they may not fulfil the eligibility criteria of the jobs to be filled. Whenever large number of job positions are vacant then external recruitment is preferred. External recruitment provides wide choice and brings new blood in the organisation. The external sources of recruitment are: –

  1. Direct Recruitment
  2. Casual Callers
  3. Media advertising
  4. Employment Exchanges
  5. Placement Agencies
  6. Management Consultants
  7. Campus Recruitment
  8. Recommendations by the Existing Employees
  9. Web Publishing


  1. Direct Recruitment-Sometimes, the organizations paste notice at the gate of their office or factories stating the vacant job positions. The people who are interested in those jobs walk in for the interview. This method of recruitment is very inexpensive and is most suitable for unskilled job positions like sweeper, peon etc.
  2. Casual Callers-Qualified candidates send their bio-data to the institutions even when applications are not called for. Institutions keep a database of such unsolicited applicants and consider them for appointment when vacancies arise.
  3. Media advertising-The most common and popular method of external recruitment is advertising about the vacant job position. Advertisement in TV, newspapers and journals etc.will attract a large number of applicants.
  4. Employment Exchange-Employment exchanges run by government helps to match personnel demand and supply by serving as link between job seekers and employers. It is suitable for unskilled and skilled jobs.
  5. Placement Agencies-Placement agencies provide nation-wide service of matching demand and supply of work force. These agencies invite the bio data and record from various job seekers and send them to suitable clients. These agencies charge fee for providing such service.
  6. Management Consultants-Management consultants help the organizations to recruit technical, professional and managerial personnel .They specialize in middle level and top level executive placements.
  7. Campus Recruitment-Sometimes the senior managers of the organizations visit various professional collages, technical institutions to get fresh graduates or the people with the latest technological know-how. The organizations prefer fresh graduates because they can be mould according to the requirement of the organization.
  8. Recommendations by the Existing Employees-Many firm encourage their employees to recommend the names of their relatives and friends to fill the vacant job position. Such appointments are usually done at lower levels.
  9. Web publishing-In internet there are certain websites specifically designed to provide information regarding job seekers and companies which have vacant job position. These websites can be visited by job seekers as well as companies. Example:, etc.

Advantages of External sources of recruitment

  1. Wider choice-Through external recruitment the organisation gets wider choice.
  2. Fresh Talent-With external recruitment fresh and new talent come to the organisation.
  3. Latest technological knowledge-Through campus selection organisation can get employees with latest technological knowledge.
  4. Competitive Spirit-Through external recruitment when out-sliders join the organisation, this develops a completive spirit in existing employees of organisation.

Disadvantages of External sources of recruitment

  1. Dissatisfaction among existing employees-It may lead to dissatisfaction among the existing staff as it reduces their chances of promotion.
  2. Costly Process-It is costly process as a lot of money has to be spent on advertisement and processing of applications.
  3. Lengthy Process-Recruitment from external sources takes a long time. The business has to notify the vacancies and wait for applications to initiate the selection process.

Difference between internal sources and external sources


Internal sources

External sources


Internal sources refer to inviting

candidates from within the organisation.

External sources of recruitment

refer to recruiting employees from outside the organisation


It is less time-consuming

It is more time consuming


It is more economical

It is costly


There is limited choice

There is wider choice

Morale of the existing employees

This method boosts up the morale of existing employees

This method brings down the morale of existing employees


It is generally based on seniority cum merit

It is strictly based on merit and qualifications

Quality of recruitment

Quality of recruitment is not as- superior as in case of external source of recruitment because of

the limited choice

There is wider choice, so quality of recruitment is superior.


Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job. Towards this purpose, the candidates are required to take a series of

employment tests and interviews. At every stage many are eliminated and a few moves on to the next stage until the right person is found. Selection is a negative process as it involves rejection of unsuitable candidates.

Process of Selection

The important steps in the process of selection are as follows:

1. Preliminary Screening or screening through bio-data 2.Selection Tests

  1. Employment Interview
  2. Reference and Background Checks
  3. Selection decision
  4. Medical examination
  5. Job offer
  6. Contract of employment

1- Preliminary Screening or screening through bio-data: This is the first stage in the selection procedure. Preliminary screening helps the manager to eliminate unqualified or unfit candidates based on the information furnished in the application forms.

2- Selection Tests-Selection test have been developed as an objective means of measuring the qualities, abilities and the skills of the candidates in terms of job specifications. The common types of tests conducted by the organisations are:

  • Intelligent test-To measure the level of intelligence. It is an indicator of a person’s learning ability or the ability to make decisions and judgments.
  • Aptitude test-To measure individual’s potential for learning new skills. It indicates the person’s capacity to develop.
  • ersonality test-Personality test is conducted to find out the human behaviour of the candidate. It gives clues of a person’s emotions, reactions, maturity, value, system, etc.
  • Trade test-These tests measure the existing skills of the individual. The difference between aptitude test and trade test is that the former measures the potential to acquire skills and the later the actual skills possessed.
  • Interest test-This test is conducted to find out the type of job in which candidate has more interest as every individual has fascination for some job than the others.

3- Employment Interview- The candidates who qualify the test are called for interviews. The interview has many advantages over written test because in interviews you can find out the confidence level of the candidate along with his professional knowledge. Interview gives chance to candidate to clarify their queries regarding salary, working conditions, posting etc.

4- Reference and background checks: Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and, gaining additional information on an applicant. Previous employers, known persons, teachers and university professors can act as references

5- Selection decision-The candidate who pass the test, interview and reference check are included in the selection list and the managers select the most suitable candidates from the list.

6- Medical examination-After the selection decision and before the job offer is made, the candidate is required to undergo a medical fitness test.

7- Job offer– After a candidate has cleared all the hurdles in the selection procedure, he is formally appointed. He will be issued an appointment letter and is asked to join before a specific date.

8- Contract of employment-After the job offer has been made and the candidate accepts the offer, it refers to signing of contract of employment between employer and employee. The common contents of the contract of employment are the duties, responsibilities, pay, allowances, hours of work and disciplinary rules etc.

Difference between Recruitment and Selection



It is the process of searching for the suitable candidates

It is the process of selecting the most eligible candidates.

Its main aim is to attract more candidates

Its main aim is to eliminate those who are not


Recruitment is a positive process

Selection is a negative process

It is a simple process

It is a complex process

Training and Development

Training-Training means to impart information and skills through instructions. It is a method of increasing the knowledge, skills and aptitudes of an employee for performing a particular job. Its purpose is to enable them to do their job better.

Development-Development refers to overall growth of the employee. It focuses on personal growth and successful employee’s development. Development is much wider in concept as compared to training. Where training aims at increasing one’s skills and abilities to do a particular job, development aims at the overall development of a person and equip him to handle higher jobs of the organisation in future. Development converts a person to become not only good employees but also better men and women.

Difference between Training and Development





It is a method of imparting knowledge or skill for performing a job.

It is the process for overall growth of the

employees. Development is concerned with technical, human and conceptual skill


Training is more suitable for technical staff

Development is more suitable for managerial staff


Its focus is to improve work efficiency

Its focus is personality development of the employees


It is a short term process

It is a long term process

Methods used

In training on-the-job methods of training are preferred

In development off the job methods of training are preferred.


Work cantered

Employee cantered

Importance of training and development

Now a day’s jobs have become more complex which require the employees to get themselves trained to improve their skills. Therefore the importance of employee training has increased. Training and development benefits not only the employees but also the organisation

Benefits of Training and Development

Benefits to the organisation

Benefits to the employees

It enhances employee productivity

Training provides better career opportunities for the employees

It reduces the wastage of efforts and money

Improvement in performance helps the

employees to earn more

Training increases employee morale and reduces absenteeism and employer turnover

It increases the job satisfaction and morale of employees

Training helps to develop future managers

It reduces the chances of accidents in the work place

Training Methods

Training methods are broadly categorised into two groups:

  1. On-the-Job Training
  2. Off-the- Job Training

On the job methods are applied at the work place where the employee is actually working, while off the job methods are carried out away from work place. On the job training means learning while doing. Off the job training means learning before doing.

1- On -the -job training

This is a very old and effective method of training. In this method a worker learns by doing the work under the guidance of a supervisor. ‘Learning while doing’ is the principle followed by this system. The worker learns his work in the actual work environment. Different methods of on the job training are:

  1. Apprenticeship programmes-Here trainees are placed under the guidance of a senior worker in the organisation. This type of training is designed to acquire higher level of skill. It is a common practice to refer candidates from technical institutions to reputed organisations to have an apprentice training for about 6 months. People who want to enter skilled works, e.g, plumbers, electricians, mechanic etc. are required to undergo such training.
  2. Coaching-In this method, the senior manager guides and instructs the trainee as a coach. The coach sets mutually agreed goals and suggests how to achieve these goals. The coach periodically reviews the progress made by the trainees and suggests changes required, if any.Here, teaching about the job is emphasized rather than doing the job.
  3. Internship training-Internship is an agreement between the professional institutions and the corporate sector where professional institutions send their students to various companies so that they can practice the theoretical knowledge acquired by them through professional institutions. Under this training programme the organisation gets people with fresh ideas and latest knowledge and the organisations have to pay very less amount of salary which is called stipend. On the other hand, the students get chance to practice under the real work situation. E.g,CA students gain practical knowledge from a Chartered Accountant, Medical students gain practical knowledge from medical college.
  4. Job Rotation:-This kind of training involves shifting the trainee from one department to another or from one job to another. This enables the trainee to gain a broader understanding of all jobs of the business. When employees are trained by this method, the organisation finds it it easier at the time of promotions, replacements or transfers.

2- Off-the-job training

Off-the-job training means training the employees by taking them away from their work position which means employees are given a break from the job and sent for training. It is a process of ‘learning before doing’. Different methods of off-the -job training are:

  1. Class Room Lectures/Conferences: Top level manager holds conference and shares his views with employees. He tells employees about the latest development in the field and new ideas. This is a very easy method and is adopted at all levels of training. With the help of audio-visual aids training can be made more interesting.
  2. Films-Showing films are also a very effective method in certain cases. Films can give important information on various techniques through demonstrative skill.
  3. Case Study-In case study, trainees are given an imaginary/real problem or situation. They are asked to find out the solutions to the problems given to them. Trainees study the cases to determine problems, analyse causes, develop alternative solutions, select what they believe to be the best solution and implement it.
  4. Computer modelling-Under this method a computer is programmed to show real problems of job and how to overcome such problems. In this method the employees can learn a lot without incurring much cost.
  5. Vestibule training-In this method, actual work environments is created in a class room. Employees use the same materials and equipments here. It is a costlier method and it is usually carried out when employees are required to handle sophisticated machinery and equipment. Here the learner gets both theoretical and practical knowledge.
  6. Programmed instructions-Here, the information to be obtained by a trainee is broken into meaning full units. The training goes through these units in the sequential order i.e., simple to complex. It will help the trainees to acquire the knowledge very easily.

Distinguish between on-the-job training and off-the-job training

On-the-job training

Off-the-job training

On the job training is given to workers while

they are engaged in the work

Off-the-job training given to workers outside the

actual place of work

In on the job training, at the time of learning,

workers also contribute towards production.

At the time of training, workers do not

contribute towards organisational goals

It does not require any extra costs in the form of

tools, equipments, etc for training purpose.

It requires extra cost in the form of tools,

equipments, place etc., for training purpose.

In on the job training, trainee gets practical

training more but lacks in theoretical training

Here, theoretical knowledge is imparted more

than practical skill

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