Importance of Management

It helps in Achieving Group Goals – It arranges the factors of

production, assembles and organizes the resources, integrates
the resources in effective manner to achieve goals. It directs
group efforts towards achievement of pre-determined goals. By
defining objective of organization clearly there would be no
wastage of time, money and effort. Management converts
disorganized resources of men, machines, money etc. into useful
enterprise. These resources are coordinated, directed and
controlled in such a manner that enterprise work towards
attainment of goals.
Optimum Utilization of Resources – Management utilizes all
the physical & human resources productively. This leads to
efficacy in management. Management provides maximum
utilization of scarce resources by selecting its best possible
alternate use in industry from out of various uses. It makes use of
experts, professional and these services leads to use of their
skills, knowledge, and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no
under employment of any resources.
Reduces Costs – It gets maximum results through minimum
input by proper planning and by using minimum input & getting
maximum output. Management uses physical, human and
financial resources in such a manner which results in best
combination. This helps in cost reduction.
Establishes Sound Organization – No overlapping of efforts
(smooth and coordinated functions). To establish sound
organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfillment of
this, it establishes effective authority & responsibility relationship
i.e. who is accountable to whom, who can give instructions to
whom, who are superiors & who are subordinates. Management
fills up various positions with right persons, having right skills,
training and qualification. All jobs should be cleared to everyone.
Establishes Equilibrium – It enables the organization to survive
in changing environment. It keeps in touch with the changing
environment. With the change is external environment, the initial
co-ordination of organization must be changed. So it adapts
organization to changing demand of market / changing needs of
societies. It is responsible for growth and survival of organization.
Essentials for Prosperity of Society – Efficient management
leads to better economical production which helps in turn to
increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource. It
improves standard of living. It increases the profit which is
beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which
generate income in hands. Organization comes with new products
and researches beneficial for society.
 Objectives of Management
The main objectives of management are:

1. Getting Maximum Results with Minimum Efforts – The

main objective of management is to secure maximum
outputs with minimum efforts & resources. Management is
basically concerned with thinking & utilizing human, material
& financial resources in such a manner that would result in
best combination. This combination results in reduction of
various costs.
2. Increasing the Efficiency of factors of Production –
Through proper utilization of various factors of production,
their efficiency can be increased to a great extent which can
be obtained by reducing spoilage, wastages and breakage of
all kinds, this in turn leads to saving of time, effort and
money which is essential for the growth & prosperity of the
enterprise.
3. Maximum Prosperity for Employer & Employees –
Management ensures smooth and coordinated functioning of
the enterprise. This in turn helps in providing maximum
benefits to the employee in the shape of good working
condition, suitable wage system, incentive plans on the one
hand and higher profits to the employer on the other hand.
4. Human betterment & Social Justice – Management serves
as a tool for the upliftment as well as betterment of the
society. Through increased productivity & employment,
management ensures better standards of living for the
society. It provides justice through its uniform policies.
Functions of Personnel Managers

The functions of a personnel manager can be broadly

classified into two categories :-

1. Managerial functions
2. Operative functions

Managerial functions

The managerial functions of a personnel manager have an

impact on the operative functions as well. They are
enumerated below :-

Planning – this involves formulating the future course of

action. Planning includes determining in advance the
personnel programs and changes required that would
contribute to the achievement of organizational goals.

Organising – it involves establishing an intentional

structure of roles for people in an organization. Structural
considerations such as the chain of command, division of
labour, and assignment of responsibility are party of the
organizing function. The organizing function establishes
relationships among employees so that they can contribute
collectively towards the attainment of an organisation's
goals.

Staffing – This is the process of obtaining and maintaining

capable and competent personnel in various positions at all
levels. It broadly encompasses manpower planning,
recruitment, placement, induction and orientation,
transfer, career progression, promotion and separation.

Directing – it involves directing all the available resources

towards the common organizational goals. Thus, direction
is a vital management function, which ensures maximum
employee contribution and also helps in establishing sound
industrial and human relations. It also involves
coordination between different departments.

Controlling – it invoves the measurement of performance

against goals and plans, identifies deviations and by placing
the process back on track, helps in the accomplishment of
plans.

Operative functions

These can be classified into four broad areas, employment,

development, compensation and employee relations.

Employment – it involves procuring and employing

individuals with suitable knowledge, skills, experience and
aptitude necessary to perform various jobs. It includes
functions such as job analysis, human resource planning,
recruitment, selection, placement and induction.

1. Job analysis involves preparing job description, job

specification, job requirements and employee specification
and providing the guides, plans and basis for job design
and redesign.
2. Human resource planning involves forecasting the
human resource requirements of an organization and the
future supply of human resources. It also involves assessing
the possibility of developing the human resources to match
the requirements.
3. Recruitment is the process of seeking and attracting
prospective candidates against a vacancy in an
organization.
4. Selection is the process of identifying and establishing the
credentials of a candidate for a job to ensure success.
5. Placement is decided based on the needs of the
organization.
6. Introducing a new employee to the organization, its
business, the organization culture, its values and beliefs,
practices and procedures is termed as induction.

Training and development

This process aims to train and develop employees to

improve and update their knowledge and skills, so as to
help them perform their jobs better. The process also
includes developing the attitudes, beliefs and values of the
employees to match the organizational needs. This
comprises of performance appraisal, training, management
/ executive development, career planning and development.

1. Performance appraisal is the process of evaluating the

performance of an employee on the job and developing a
plan for improvement.
2. Training is the systematic development of the knowledge,
skills and attitudes required to perform a job.
3. Development is the concept of developing the employees
in an organization to meet future changes and challenges.
4. Career planning and development refers to identifying
one's career goals and formulating plans of reaching them.
It attempt to harmonize an individuals career aspirations
with organizational needs.

Compensation

It is governed by the principle of rewarding an employee

extrinsically during and after the course of his job for his
contributions to the organization adequately, equitably and
in a fair manner. It encompasses salaries, incentives, bonus
and fringe benefits. This function comprises of Job
evaluation, wage and salary administration, incentives,
bonus and fringe benefits.

1. Job evaluation is the systematic determination of the

value of each job in relation to other jobs in the
organization.
2. The process of formulating and operating a suitable wage
and salary program is known as wage and salary
administration.
3. Incentives are the rewards an employee earns in addition
to regular salary based on his performance or of the
collective performance.
4. Bonus is primarily a share in the surpluses and is often
directly related to the organization performance.
5. Fringe benefits are monetary and non-monetary benefits
including disablement benefits, housing facilities, canteen
facilities, conveyance facilities, educational facilities,
recreational facilities, medical and welfare facilities, post
retirement benefits, etc.

Employee relations & services

This function deals with employees as a social group that

contributes to the organization, it includes –

1. Maintaining employee records, analyzing them and

developing information needed for managerial decision
making.
2. Increasing employee productivity
3. Keeping the employees satisfied and motivated
4. Maintaining a healthy and effective human organization.
5. Counseling services and developing employees into
complete individuals and responsible citizens.
6. Developing policies, rules, guidelines and procedures
relating to employee behavior and ensuring their
implementation and observance.
7. Developing team building, team management and
leadership skills in employees.
8. Developing a fast and suitable grievance management
system to redress grievances.
9. Compliance with labor laws.
10. Personnel research.
11. Enhancing the quality of work life and personal life of
the employees.
Main Differences between Personnel Management and HRM
• Personnel management is workforce centered, directed mainly
at the organization’s employees; such as finding and training
them, arranging for them to be paid, explaining management’s
expectations, justifying management’s actions etc. While on the
other hand, HRM is resource –centered, directed mainly at
management, in terms of devolving the responsibility of HRM to
line management, management development etc.

• Although indisputably a management function, personnel

management has never totally identified with management
interests, as it becomes ineffective when not able to understand
and articulate the aspirations and views of the workforce, just as
sales representatives have to understand and articulate the
aspirations of the customers.

• Personnel Management is basically an operational function,

concerned primarily with carrying out the day-to day people
management activities. While on the other hand, HRM is
strategic in nature, that is, being concerned with directly
assisting an organization to gain sustained competitive
advantage.

HRM is more proactive than Personnel Management. Whereas

personnel management is about the maintenance of personnel
and administrative systems, HRM is about the forecasting of
organizational needs, the continual monitoring and adjustment
of personnel systems to meet current and future requirements,
and the manageme