Vivek G Kumar

Controlling Process consists of following systematic steps: 1. Setting Performance Standards: The first step in the process of controlling is concerned with setting performance standards. These standards are the basis for measuring the actual performance. Thus, standards act as a lighthouse that warns & guides the ships at sea. Standards are the benchmarks towards which efforts of the entire organization are directed. These standards can be expressed both in quantitative and qualitative terms.2. Measurement of Actual Performance: Once the standards have been determined, the next step is to measure the actual performance. The various techniques for measuring are sample checking, performance reports, personal observation etc. However, in order to facilitate easy comparison, the performance should be measured on the same basis that the standards have. Following are some of the ways for measuring performance: (a) Superior prepares a report regarding the performance of an employee. (b) Various ratios like gross profit ratio, debtor turnover ratio, return on investment, current ratio etc. are calculated at periodic intervals to measure company's performance. (c) Progress made in areas like marketing can be measured by considering the number of units, increase in market share etc. (d) In small organizations, each unit produced can be checked personally to ensure the quality standards. (e) In a large organization, the technique of sample checking is used. Under this technique, some pieces are checked at random for quality specifications. 3. Comparing Actual Performance with Standards: This step involves comparing the actual performance with standards laid down in order to find the deviations. For example, the performance of a salesman in terms of unit sold in a week can be easily measured against the standard output for the week. 4. Analysing Deviations: Some deviations are possible in all the activities. However, the deviation in the important areas of business needs to be corrected more urgently as compared to deviation in insignificant areas. Management should use critical point control and management by the exception in such areas. (a) Critical Point Control: Since it is neither easy nor economical to check each and every activity in an organization, the control should focus on Key Result Areas (KRAs) which act as the critical points. The KRAs are essential for the success of an organization. Therefore, the entire organization has to suffer if anything goes wrong at these points. For example, in a manufacturing organization, an increase of 7% in labor cost is more troublesome than an 18% increase in stationary expenses. (b) Management by Exception: Management by exception or control by exception is an important principle of management control. According to this principle, an attempt to control everything results in controlling nothing. Thus only the important deviations which exceed the prescribed limit should be brought to the notice of management. Thus, if plans provide for 3% increase in labor cost, deviations beyond 3% alone should be brought to the notice of the management. Advantages of Critical Point Control and Management by Exception are as follows: (i) Since managers deal only with important deviations, it results in saving time and efforts. (ii) It helps in identifying important deviations which need timely action to keep the organization on the correct path. (iii) By handing over the routine problems to the subordinates, management by exception facilitates delegation of authority and helps in increasing morale of employees. (iv) It ensures better utilization of managerial expertise by focusing managerial attention only on important areas. After identifying the deviations, various causes for these deviations are analyzed. The main causes can be structural drawbacks, shortage of resources, environmental factors beyond organizational control, unrealistic standards, defective process etc. Exact cause or causes of deviation must be identified correctly in order to take effective corrective measures. 5. Taking Corrective Action: The last step in the process of controlling involves taking corrective action. If the deviations are within acceptable limits, no corrective measure is required. However, if the deviations exceed acceptable limits, they should be immediately brought to the notice of the management for taking corrective measures, especially in the important areas. Following are some of the examples of corrective action: Causes of Deviation: (i) Obsolete Machinery (ii) Defective Process manufacturing process. (iii) Defective Material used. (iv) Defective physical conditions of work. (v) Defective machinery. Corrective action to be taken: (i) Technological Upgradation of machinery. (ii) Change the specification standards for the manufacturing process. (iii) Change the quality standards for material. (iv) Improvement in physical conditions of work. (v) Repair the existing machine or purchase new machine if it cannot be repaired.

Controlling labor costs presents a significant financial challenge to small business owners. There must be enough employees scheduled to serve customers and complete the company's work objectives, but not so many that it drives up production costs unnecessarily or makes the product or service too costly. Skilled owners and managers learn the art of demand forecasting so they can accurately calculate manpower requirements and schedule the correct number of employees neither too few to get the job done nor so many that costs are out of control. The steps involved in the staffing process are: 1. Estimating manpower requirement: Staffing process begins with the estimation of manpower requirement which means finding out number and type of employees needed by the organization in near future. Manpower requirement is not only to find out the number of people needed but also the type of people. Type means what should be the qualification educational background of the people whom we need to appoint. While assessing the type of manpower required company should also make policy regarding a number of people to be appointed from backward classes, women force, minority, etc. For estimating manpower Requirement Company will take following three steps: i. Workload Analysis: This requires finding number and type of employees required to perform various jobs designed in organizational structure. ii. Workforce Analysis: It means analyzing existing workforce or employees already occupying the job positions and how many of them are overburdened or under burdened. iii. Comparison: After doing workload analysis and workforce analysis, the manager compares both as an excess of workload over workforce indicated understaffing and you need to appoint more people whereas an excess of the workforce over workload indicated over staffing and you need to remove or transfer some employees elsewhere. As both overstaffing as well as understaffing are undesirable. The manager tries to find out the manpower requirement by equating workload analysis to workforce analysis. 2. Recruitment: It refers to the process of inducing the people to apply for the job in the organization. After assessing the number and type of employee required, the manager tries that more and more people should apply for the job so that the organization can get more choice and select better candidates. If we can fulfill the requirement from inside the organization through transfers and promotion, then it is very economical and fast but generally, the organization has to fulfill its requirement from outside the organization. To recruit people from outside the organizations to contact various placement consultants, employment exchanges, contractors etc. but the most common way to recruit fresh talent is through advertisement. The company advertises in newspapers etc. and many job seekers after reading the advertisement applies for the job. 3. Selection: It refers to choosing the most suitable candidate to fill the vacant job position. The selection is done through a process, which involves the test, interviews, etc. In selection number of selected candidate is less than the number of rejected candidates that is why selection is called negative process also. The main objectives of selection are: (i) To select the best among the available. (ii) To make selected candidate realize that how seriously things are done in the organization. 4. Placement and Orientation: Placement refers to occupying of the post by the candidate for which he is selected. After selection, the employee is given appointment letter and is asked to occupy the vacant job position. Orientation refers to the introduction of new employees to the existing employee's large organizations organize orientation programmes to familiarize the new employees with the existing whereas in small organizations superior takes the new employees on round and introduces him to the existing employees. 5. Training and Development: To improve the competence of employees and to motivate them it is necessary to provide training and development opportunities for employees so that they can reach the top and keep improving their skill. Organisations may have in-house training centers or arrange with some institutions to provide training for their employees. Training and development not only motivate employees but these improve the efficiency of work also. By offering the opportunities for career advancement to their employee's organizations can improve their effectiveness and efficiency. In most of the large, scale organizations there is a separate human resource department which performs staffing function but in small organizations, the line managers only perform all the functions. So small organizations in which there is no human resource department include following steps also in the staffing process. i. Performance Appraisal: After taking training and performing the job for sometimes there is a need that employee's performance must be evaluated. Performance appraisal refers to evaluating the performance of employees against some standards. The standards are made known to employees in advance. Superiors prepare a feedback report on the basis of performance appraisal. ii. Promotion and Career Planning: Promotion refers to being placed in a higher job position with more pay, job satisfaction, and responsibility. Generally on the basis of feedback report of employee's, the performance they are given promotion and opportunities for higher job positions. iii. Compensation: It refers to the price of the job. It includes pays, reward and other incentives given to employees. It includes direct as well as indirect payments. Direct payments such as wages, salary, etc. Indirect payments such as medical facility, insurance, etc. The managers must fix the right compensation on the basis of qualification, type of job, etc. Direct financial payments are of two types: (i) Time-based payment: This plan means salary/wages are paid on the daily, weekly or monthly basis. (ii) Performance-based: Performance based. Under this method, the payment is made to employees on the basis of a number of pieces or units produced by the employees. Some pay plans use time-based payment in combination with some incentives such as bonus, commission, etc. Organisations must consider various factors before fixing the compensation such as Labour laws, Minimum Wages Payment Act, Union's policy, Competitor's policy, etc.