Tag: Learned

Learned!

To learn new things is beneficial at any age, and any kind of learning can benefit other aspects of your life. For instance, taking music lessons can increase your language skills. If you’re interested in a topic, study it. If you’d like a new skill, practice it. Your life is ever-changing and infinitely complex, and your ability to experience it depends on your willingness the learn. The more you learned, the more you live.

Embrace failure and confusion. When you are learning a new thing, you are entering into unknown territory. Allow yourself to experience the confusion of unanswered questions and unfamiliar parameters. When you study a new topic, don’t look up answers to your questions right away. Instead, spend some time trying to figure the answers out on your own. This kind of trying (and failing) helps you better understand what you are learning.

  • The Evolution and Development of Human Resource Management!

    The Evolution and Development of Human Resource Management!

    Learn and Study, The Evolution and Development of Human Resource Management!

    Human resource management as a practice happens wherever there is more than one person. The Evolution and Development of HRM with PDF, PDF Reader, and Free Download. It starts at the family level where family members take different roles and responsibilities for the accomplishment of family objectives. The head of the household would harness all available resources including people to find the best in them in order to achieve whatever may be needed or desired. Indeed, the division of labor depends on the philosophies, values, and expectations of family members and which are rooted in the wider society, be it a clan, a tribe or religion. Also learned, Guide to Theories in HRM! The Evolution and Development of Human Resource Management!

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    Managing people in an organizational setting is well documented throughout the history of mankind. Organisational structures evolved, leadership emerged or was formed, roles and responsibilities were assigned to people, accountability systems were laid down, and rewards and punishments were also provided. In this regard, the division of labor, specialization, and accountability were systematically organized to achieve a specific purpose.

    However, the documentation of the evolution and development of human resource management practices can be traced back to the booming European economy of the 1900s. This economy created the necessary environment for more serious thought on the role of effective people management in the emerging labor market of the time. The economies were preparing for the First World War and its aftermath where industrial production required a mass of skilled, well organized and disciplined labor force. The challenges revolved around mobilization of resources including people, which led to the evolution and development of four stages in managing labor. The stages were mainly identified by looking at the changing titles of officers responsible for managing the workforce and different roles that were emerging over time.

    Therefore, although personnel management literature often states particular dates or decades of transformation from one phase to another, as a matter of principle, such dates or decades are more for convenience and reference purposes than being actual historical events. The same recognition is used to provide a picture of the chronology of the evolution and development of human resource management as we see it today. Figure 1 displays the stages in the evolution of human resource management.

    Welfare stage in industrial age:

    Historically, the 1900s was a time of increasing technological and economic breakthroughs arising from continued advancement in general and scientific knowledge through creativity and innovations. Indeed, the advancements had the serious impact on economic growth and demand for goods and services in Europe and in Germany in particular for the preparations of World War I. More goods were demanded, and the massive production of goods could be done more efficiently than ever before, under one industrial roof. This was a common phenomenon across.

    Figure 1 Stages in the evolution and development of human resource management.

    Western Europe particularly in Britain, France, Spain, and Italy. For the Germans who were secretly preparing for war, the production of war materials created a chain of industrial networks with forwarding and backward linkages. Managing the increasing workforce in the emerging complex industrial production systems was an ever-more difficult challenge. The search for solutions, which included how to organize employees and ensure that their welfare was provided for, led to the need for better people management techniques that were not necessarily important only a few years before.

    Welfare services such as a canteen and other needs required some kind of officer whose sole purpose was to take care of workers. This is the genesis of employees’ welfare services in organizations and the famous title of welfare officers we have in some organizations even today.

    Change of focus from welfare to personnel administration:

    The 1920s and mid-30s are generally regarded as decades of personnel administration. The growing size of organizations and pressure to improve productivity called for the need to recruit, select, train, keep records, appraise, motivate, control, and improve production of job entry level of employees and those in the job as part of job orientation. These administrative tasks were best handled by welfare officers because of their experiences in welfare matters. However, since the roles of welfare officers changed in nature and scope and became more demanding in terms of knowledge, skills and behavioral attributes, the whole situation suggested that the title of welfare officer was not good enough to describe what was actually happening. To address these new dimensions of a welfare job, the title had to change from welfare officer to personnel administrator.

    Evolution and development of personnel management:

    This covers the period during and after World War II. In the 1940s and 50s, there was an ever-growing role for personnel administration to cope with the rising challenges and demands of the job which included craft, supervisory training and labor disputes that were threatening employees and organizational efficiency. These new dimensions in employee management were exacerbated by developments in academia, professional managers interested in academics and consultants where efforts were devoted to study behavioral factors in job performance.

    Such developments include human relations’ school, which was pioneered by Elton Mayo and Kurt Lewin, who emphasized on improving the work environment and work groups as a strategy to improve productivity. Treating employees as human beings rather than working tools was a new doctrine that was revealing other aspects of people management in other phases of personnel management. This period marked a shift in emphasis from managing an individual employee to managing groups/teams in the organization.

    Other contributions were from the work of Abraham Maslow on the human hierarchy of needs and the power of employee’s motivation on productivity. Later, Chris Argyris and Frederick Herzberg wrote about the concept of employee’s satisfaction and the significant impact this concept has had on the organizational practices in improving the quality of work in organizations. The organization development school driven by Bennis & Schein provided equally useful inputs to personnel practices particularly in areas of effective communication and the need to reduce conflict in the workplace.

    Therefore, to suit the fashion of the time, there appeared to be a difference between ‘administration’ and ‘management’. Likewise, there is a difference between ‘administrator’ and ‘manager‘, where the former appears to be dealing more with routine activities, the latter deals with more strategic issues. There is, however, an on-going debate in academia on the semantics and the actual substance of personnel jobs.

    During the 1950s and 60s personnel management as a professional discipline matured as characterized by most personnel management theories, practices, and processes we know today. In addition to the services provided in the earlier phases, other areas covered in the functions of personnel management, particularly in the 1960s, were organizational development, management development, systematic training and manpower planning. Better processes and techniques of employee selection, training, wages and salary administration and performance appraisal were introduced. The other area was industrial relations in which personnel managers became experts in labor law and represented their organizations in industrial relations disputes.

    Therefore, personnel management as a type of management in organizations has evolved into a distinctive discipline. Perhaps one of the most widely accepted descriptions of the meaning of personnel management is the one given by Michael Armstrong in 1995. This definition is not very different from the ones found in revised editions and other textbooks on human resource management throughout the 2000s. Armstrong (1995) defines personnel management as ‘the process and practice of getting people in an organization, assessing and rewarding for performance, and developing their full potential for the achievement of organizational objectives’.

    By looking at personnel management in this perspective, as may also be noted from other work by the same author, and many other experts including Dessler (2005) and Bhatia (2007) there are many functions that ought to be performed in a designated functional department (personnel department). However, as shall be observed later, these functions are not by themselves necessarily different from those under a human resource management conceptual framework.

    The personnel functions are summarised and explained below as follows.

    • Establishment of the organizational structure:

    This involves establishing the organizational structure in a way that will enable the realization of the intended mission, vision, goals, objectives, strategies, and tasks. It is like an African saying that ‘you scratch your back where your hand can reach’. No single organizational structure can suit all organizations because the suitability of an organizational structure will depend on where the organization is, and what its future prospects are. If the mission of the organization involves rapid growth and expansion, a tall bureaucratic structure may not be desirable because such a structure slows the decision-making process, which in turn, stifles flexibility, creativity, and innovation. A personnel officer who is fundamentally responsible for effective manning levels in the organization has the mandate to become part of the organizational structure design team.

    • Human resourcing:

    Resourcing is a concept that has emerged with the use of the term ‘human resource planning’ as we shall see later. It involves a process of enabling the organization to have the right people, doing the right jobs at the right time. This is in line with the challenges facing managers in staffing organizations. It is about planning for the number and quality of employees required under different job categories and to make sure that staffing process such as recruitment, selection, placement, promotions, transfers, and downsizing are effective.

    • Managing performance appraisal:

    The personnel department has to initiate the system, process, techniques and tools for individuals, teams and organizational performance measurement. It has to ensure that performance targets for individuals, teams, sections, and departments are set and agreed upon and measures to address performance gaps are in place and are working. This is not an easy task because it requires a value judgment about employees. Indeed, there are no other areas of personnel management that make personnel officers more uncomfortable and unpopular than the appraisal function. This is because whatever process or tool is used to appraise staff and reward them accordingly, there is always tacit or explicit dissatisfaction from staff based on the feelings that such decisions were biased. Progress has been made towards improving staff appraisal systems, which will be covered later under performance management.

    • Personnel training and development:

    Since the performance of the organization depends on the competence of the workforce, training and development are important, not only for the present job but also for the future job and organization. The head of the personnel department has to design tools for assessing the need for training that will be used to identify training and development gaps and develop effective strategies and programmes for training and developing staff. In most large organizations and more so in government ministries, there are departments and officers responsible for ensuring that personnel training and development functions are carried out effectively.

    • Compensation/Rewards management:

    The words ‘compensation’ and ‘reward’ are often used interchangeably in contemporary personnel management. Although in principle, the two concepts may mean the same thing, they have different philosophical roots. Whereas the former is based on the interpretation that work is not necessarily a good thing and hence those who work lose something which should be compensated, the later considers work positive and something which has to be rewarded depending on the quantity and quality of accomplishment. Therefore, employees need different types of compensations or rewards for the effort they expend on the job and enable the organization function. It is the duty of the human resource department through the responsible officers to evaluate different types and levels of jobs in order to develop appropriate compensations or rewards in terms of pay and other incentive packages.

    • Personnel relations:

    Relationships between an employer and employee and among employees in the workplace need to be nurtured to avoid conflicts and disputes which will ultimately lead to unproductive behavior. The personnel department is well placed for this job as it has staff trained in people management particularly in industrial legislation, labor laws, and conflict management. Some industrial organizations employ lawyers as industrial relations officers, but qualified personnel officers should be able to perform this role. However, other experts such as lawyers and professional counselors may be consulted where necessary.

    • Other routine personnel administration functions:

    There is a myriad of other personnel functions, which are basically routine work and constitute day-to-day administrative activities performed by personnel officers depending on the size and scope of the organization. These functions include but not limited to, health, transport, security and safety, pensions, deaths, and personal information system.

    The Evolution and Development of Human Resource Management - ilearnlot

  • Guide to Theories in Human Resource Management

    Guide to Theories in Human Resource Management

    Human resource management theorists or theories, principles, and techniques for people management in competitive organizations draw from theories found in different disciplines. Guide to Theories in HRM Study with PDF, PDF Reader, and Free Download. Indeed, it is impractical to present all the disciplines and relevant theoretical aspects. That has shaped the understanding of human resource management today. Therefore, it is believed that it is only important to give the reader a cursory view of some relevant theories underpinning human resource management, and whoever may be interested in knowing more about the genesis and developments of a specific theory may do so by taking extra homework.  Also learn, MIS, Guide to theorists or theories in Human Resource Management.

    Learn and Study, Guide to theorists or theories in Human Resource Management.

    Organization life cycle theory:

    Cameron & Whetton (1981) advanced organization life cycle theory which characterizes organizational development from formation, growth, maturity, decline, and death. According to the theory, the driving force in all these stages is the nature of the workforce. Also, at the maturity stage, the organization cannot continue to grow or survive if there is no organizational structure. That supports human resource creativity, innovation, teamwork, and high performance, which will withstand pressure from competitors.

    Role behavior theory:

    Role behavior theory aims to explain and predict the behavior of individuals and teams in organizations. Which, in turn, informs managers about decision-making. And what steps they take on people management as well as the expected consequences. Some of the key ideas focus on the need to improve the working environment including the resources to stimulate new behavior in employees for them to cope with new demands, it includes the use of rewards to induce and promote positive work behavior, and punishments to control negative behavior.

    Resource dependency theory:

    One of the challenges faced by managers during the economic recession in the 1970s is how organizations can best acquire scarce resources and effectively utilize them to remain competitive in the market. Also, the ability to utilize one’s resources including (financial, technological, and labor). And acquiring more from the external environment was one of the areas of concern in many organizations.

    The more organizations were able to harness resources, the more competitive they became. Therefore, resources were seen as the essence of organizational power (Emerson 1962). However, overdependence on external resources appeared to be risky due to uncertainties that cannot be controlled by the organization. Concerning useful labor, the emphasis shifted to seeing employees as scarce resources that should acquire effectively, utilize, develop and retain.

    Institutional theory:

    The word ‘institution’ means different things to different people depending on their Academic and professional orientation (Peters 2000). However, it is a discipline that combines politics, law, psychology, public administration, and economics amongst other things. To explain why certain decisions are made or actions were taken and their impact on the organization. Commons (1931: 648) defines ‘institutions’ as ‘collective action in control, liberation, and expansion of individual action’.

    Collective action covers areas such as customs, law, and procedures. The main objective of collective action is less or greater control of the acts of individuals. Which results in either gains or losses in the process of executing joint transactions. Control is about prohibitions of certain acts in such a way that the control of one person or organization leads to the liberty of others and hence better gains.

    According to Commons (1931), these institutions establish relationships of rights, duties, no rights, and no duties which influence the behavior of individuals. ‘The major role of institutions in society is to reduce uncertainty by establishing a stable (not necessarily efficient) structure to human interaction.’ Institutions could be formal and have explicit rules, contracts, laws, and rights (institutional arrangements) or informal in the sense of social conventions that are not designed by anybody.

    Therefore organizations should set an appropriate institutional framework. That will bind and influence the behavior of employees toward an organizational commitment to excellence. Also, put by Brunsson (1999): ‘the process of standardization of procedures affect behavior’. Employment contracts, performance agreements, and other employment-related instruments should, therefore, see as useful aspects of human resource management.

    Transaction cost theory:

    Transaction cost theory is based on the economic view of the costs of conducting business transactions. The thesis is that companies will grow if the costs of exchanging resources in the company are cheaper in comparison to competitors. Such costs include bureaucratic employment structures, procedures, and the enforcement of employment contracts. For that matter employment relationships that may lead to high costs of exchange, should minimize.

    Comparative advantage theory:

    The main architect of comparative advantage theory is the economist David Ricardo. Who talked about the specialization and division of labor among nations and firms. Ricardo postulated that nations should produce goods in which they have a domestic comparative advantage over others. Since then, organizations and nations have focused on strengthening internal capacity to have more advantages relative to competitors and hence to reduce production and distribution costs per unit. Improving internal capacities include having the best human resources that best utilize to produce cheaper and better quality goods and services.  

    General systems theory:

    No organization can survive without interacting with its environment. Organizations get inputs from the external environment, and the process and the outputs are released to the external environment. Which provides feedback to the organization. As well as, Customers who are part of the environment will give feedback by using different means including value judgment on quality, price, style, and fashion.

    Therefore organizations see as systems with components and parts that relate and interconnect in such a manner that the failure of a component or part leads to the failure of another. The system approach to understanding organizations considers the human resource department. As a component of the organization’s system that also has other departments such as accounting, engineering, marketing, etc.

    For the organization to grow and remain competitive, each department, section, or unit should support each other. One of the organization’s inputs from the environment is human resources. For example, if an organization makes an error with its recruitment strategy. It will hurt the whole organization.

    Similarly, if at the input processing stage, human resources do not utilize in the best possible way. The same will reflect in the quality and price of goods and services through feedback mechanisms. This may include the failure to sell goods or services at the expected prices.

    Human capital theory:

    The human capital theory was initially well developed by Becker (1964) and it has grown in importance worldwide because it focuses on education and training as a source of capital. It is now widely acknowledged that one of the key explanations for the rapid development of Asian countries in the 1970s and 80s is the high investment in human capital.

    Human capital theory changes the equation that training and development are ‘costs the organization should try to minimize into training and development as ‘returnable investments’ which should be part of the organizational investment capital. Therefore, human resource training and development decisions and evaluations have to do based on clearly developed capital investment models. 

    Strategic contingency theory:

    There is a growing body of knowledge stipulating that since an organization operates and thrives in a complex environment, managers must adopt specific strategies that will maximize gains and minimize risks from the environment.

    In this premise, the theory contends that there is no one best strategy for managing people in organizations. Overall corporate strategy and the feedback from the environment will dictate the optimal strategies, policies, objectives, activities, and tasks in human resource management.

    Organizational change theory:

    Gareth (2009: 291) defines organizational change as the process by which organizations move from their present state to some desired future state to increase their effectiveness. Organizations change in response to many developments taking place in the internal and external environment. Such as technology, policies, laws, customer tests, fashions, and choices that influence peoples’ attitudes and behavior.

    These developments influence different aspects of human resource management and in response, organizations have to change the way organizational structure, job design, recruitment, utilization, development, reward, and retention are managed. The organizational change theory suggests the improvement of organizational change and performance by using diagnostic tools appropriate for the development of an effective change strategy in human resource management.

    Organizational learning theory:

    Globalization has changed knowledge monopoly. Knowledge generated in one part of the world spreads faster than a decade ago. Today, what matters for organizational competitiveness is the ability to learn from emerging knowledge and adapt the learning to suit the organizational environment faster than others.

    Agyris & Schoen (1978) and Senge (1992) have emphasized the importance of total organizational learning whereby individuals and teams muster knowledge related to their work and the environment. And, share with the common vision, models, and strategies for addressing the present and future of the organization.

    Therefore, poor organizational learning leads to poor organizational adaptation to the environment and less competitiveness. Which leads inevitably to decline and ultimate collapse.

    Comparison:

    Schuler (2000) has summarised these theories into a more manageable framework (see Table 1). This framework enables us to compare human resource theories and their main objectives.

    Table 1: Human resource management theorists or theories.

    Human resource theories
    Human resource theories

    Source: adapted from Schuler (2000).

    Theories, as stated earlier and summarized in Table 1, are useful in shaping debates and professional practice in the process of evolution. And, the development of human resource management as a discipline as well as a profession. The usefulness of the conclusions reached from these theories will unfold. As we go through the process of the evolution of human resource management over the past hundred years.

    Guide to Theories in Human Resource Management ilearnlot
    Guide to Theorists or Theories in Human Resource Management
  • What is Management Information System (MIS)?

    What is Management Information System (MIS)?

    Learn and Study, What is Management Information System (MIS)?

    Management information system, or MIS, broadly refers to a computer-based system that provides managers with the tools to organize, evaluate and efficiently manage departments within an organization. In order to provide past, present and prediction information, a management information system can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently. Also learn, Concept of Investment, What is Management Information System (MIS)?

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    What is MIS? MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. MIS is the acronym for Management Information Systems. In a nutshell, MIS is a collection of systems, hardware, procedures and people that all work together to process, store, and produce information that is useful to the organization.

    #Management Information System Definition:

    The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number of ways. It is also known as the Information System, the Information and Decision System, the Computer-based information System.

    A management information system (MIS) is a broadly used and applied term for a three-resource system required for effective organization management. The resources are people, information, and technology, from inside and outside an organization, with top priority given to people. The system is a collection of information management methods involving computer automation (software and hardware) or otherwise supporting and improving the quality and efficiency of business operations and human decision making.

    As an area of study, MIS is sometimes referred to as information technology management (IT management) or information services (IS). Neither should be confused with computer science.

    The MIS has more than one definition, some of which are given below.
    1. The MIS is defined as a system which provides information support for decision making in the organization.
    2. The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision-making functions in the organization.
    3. The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization.
    4. The MIS is defined as a Computer-based Information System.

    Though there are a number of definitions, all of them converge on one single point, i.e., the MIS is a system to support the decision-making function in the organization. The difference lies in defining the elements of the MIS. However, in today s world MIS a computerized .business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization.

    In any organization, small or big, a major portion of the time goes in data collection, processing, documenting it to the people. Hence, a major portion of the overheads goes into this kind of unproductive work in the organization. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. Hence, the information is people-oriented and it varies with the nature of the people in the organization.

    The difficulty in handling these multiple requirements of the people is due to a couple of reasons. The information is a processed product to fulfill an imprecise need of the people. It takes time to search the data and may require a difficult processing path. It has a time value and unless processed on time and communicated, it has no value. The scope and the quantum of information are individual-dependent and it is difficult to conceive the information as a well-defined product for the entire organization. Since the people are instrumental in any business transaction, a human error is possible in conducting the same. Since a human error is difficult to control, the difficulty arises in ensuring a hundred percent quality assurance of information in terms of completeness, accuracy, validity, timeliness and meeting the decision making needs.

    In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:

    • Handling of a voluminous data.
    • Confirmation of the validity of data and transaction.
    • Complex processing of data and multidimensional analysis.
    • Quick search and retrieval.
    • Mass storage.
    • Communication of the information system to the user on time.
    • Fulfilling the changing needs of the information.

    The management information system uses computers and communication technology to deal with these points of supreme importance.

    Why the Need for MIS?

    The following are some of the justifications for having an MIS system:

    Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.

    MIS systems facilitate communication within and outside the organization: Employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.

    Record keeping: Management information systems record all business transactions of an organization and provide a reference point for the transactions.

    What is Management Information System (MIS) - ilearnlot

  • What to TAKE During the Job Analysis?

    What to TAKE During the Job Analysis?

    Learn and Understand, What to TAKE During the Job Analysis?

    Gathering job-related information involves lots of efforts and time. The process may become cumbersome if the main objective of it is not known. Any information can be gathered and recorded but may be hazardous for health and finances of an organization if it is not known what is required and why. Also Learned, Meaning and Definition, What to TAKE During the Job Analysis?

    Before starting to conduct a job analysis process, it is very necessary to decide what type of content or information is to be collected and why. The purpose of this process may range from uncovering hidden dangers to the organization or creating a right job-person fit, establishing effective hiring practices, analyzing training needs, evaluating a job, analyzing the performance of an employee, setting organizational standards and so on. Each one of these objectives requires the different type of information or content.

    While gathering job-related content, a job analyst or the dedicated person should know the purpose of the action and try to collect data as accurate as possible. Though the data collected is later on divided into two sets – job description and job specification but the information falls in three different categories during the process of analyzing a specific job – job content, job context and job requirements. Also Study, Explain Advantages and Disadvantages of Job Analysis!

    #Job Analysis and Data Collection:

    Job analysis involves collecting information on characteristics that differentiate jobs. The following factors help make distinctions between jobs:

    • Knowledge, skills, and abilities (KSAs) needed.
    • Work activities and behaviors.
    • Interactions with others (internal and external).
    • Performance standards.
    • Financial budgeting and impact.
    • Machines and equipment used.
    • Working conditions.
    • Supervision provided and received.

    Grouping jobs with related functions are helpful in the job analysis process by identifying the job family, job duties and tasks of related work.

    The following provides an example of how an organization may group related jobs:

    • Job family: Grouping of related jobs with broadly similar content.
    • Job. Group of tasks, duties, and responsibilities an individual performs that make up his or her total work assignment.
    • Task: A specific statement of what a person does, with similar tasks grouped into a task dimension (i.e., a classification system).

    A technical service job family, for example, could be identified as follows:

    • Job Family: Technical Service.
    • Job: Technical service representative.
    • Task: Provides technical support to customers by telephone.

    What to Take?

    • Job Content.
    • Job Context, and.
    • Job Requirements.

    #Job Content:

    It contains information about various job activities included in a specific job. It is a detailed account of actions which an employee needs to perform during his tenure. The following information needs to be taken by a job analyst:

    • Duties of an employee,
    • What actually an employee does,
    • Machines, tools, and pieces of equipment to be used while performing a specific job,
    • Additional tasks involved in a job,
    • Desired output level (What is expected of an employee?),
    • Type of training required.

    The content depends upon the type of job in a particular division or department. For example, job content of a factory-line worker would be entirely different from that of a marketing executive or HR personnel.

    #Job Context:

    Job context refers to the situation or condition under which an employee performs a particular job. The information takes will include:

    • Working Conditions
    • Risks involved
    • Whom to report
    • Who all will report to him or her
    • Hazards
    • Physical and mental demands
    • Judgment

    Well like job content, data collected under this category are also subject to change according to the type of job in a specific division or department.

    #Job Requirements:

    These include basic but specific requirements which make a candidate eligible for a particular job. The taking of data includes:

    • Knowledge of basic information required to perform a job successfully.
    • Specific skills such as communication skills, IT skills, operational skills, motor skills, processing skills and so on.
    • Personal ability including aptitude, reasoning, manipulative abilities, handling sudden and unexpected situations, problem-solving ability, mathematical abilities and so on.
    • Educational Qualifications including degree, diploma, certification or license.
    • Personal Characteristics such as the ability to adapt to different environment, endurance, willingness, work ethic, eagerness to learn and understand things, behavior towards colleagues, subordinates, and seniors, sense of belongingness to the organization, etc.

    For different jobs, the parameters would be different. They depend upon the type of job, designation, compensation grade and responsibilities and risks involved in a job.

    What to TAKE During the Job Analysis - ilearnlot

  • Explain the Process of Job Analysis!

    Explain the Process of Job Analysis!

    Learn and Study, Explain the Process of Job Analysis! 

    Job Analysis is a systematic process of gathering complete information about the job duties and responsibilities required to perform a specific job. The job analysis is concerned only with the job and not with the job holders, but however, the information about the job is gathered from the incumbents. Where to place the employees in order to best utilize their skills and talent? How to determine the need for new employees in the organization? How to eliminate unneeded jobs? How to set realistic performance measurement standards? How to identify the jobs and prepare a plan to fill them? Also learn, Methods, Purpose, Explain the Process of Job Analysis!

    Well, all this can be effectively done by a proper and thorough job analysis. Managers deal such kinds of challenges in day-to-day company operations where they need to fulfill effectively and efficiently fulfill the organization’s requirements related to human resource recruitment, selection, performance, satisfaction and cutting down and adding extra responsibilities and duties. And there is no scope where they can avert the risk of being wrong.

    An effective and right process of analyzing a particular job is a great relief for them. It helps them maintain the right quality of employees, measure their performance on realistic standards, assess their training and development needs and increase their productivity. Let’s discuss the job analysis process and find out how it serves the purpose. Also learned, Explain Advantages and Disadvantages of Job Analysis!

    #Job Analysis Process:

    Identification of Job Analysis Purpose: Well any process is futile until its purpose is not identified and defined. Therefore, the first step in the process is to determine its need and desired output. Spending human efforts, energy as well as money is useless until HR managers don’t know why data is to be collected and what is to be done with it.

    Who Will Conduct Job Analysis: The second most important step in the process of job analysis is to decide who will conduct it. Some companies prefer getting it done by their own HR department while some hire job analysis consultants. Job analysis consultants may prove to be extremely helpful as they offer unbiased advice, guidelines, and methods. They don’t have any personal likes and dislikes when it comes to analyzing a job.

    How to Conduct the Process: Deciding the way in which job analysis process needs to be conducted is surely the next step. A planned approach about how to carry the whole process is required in order to investigate a specific job.

    Strategic Decision Making: Now is the time to make the strategic decision. It’s about deciding the extent of employee involvement in the process, the level of details to be collected and recorded, sources from where data is to be collected, data collection methods, the processing of information and segregation of collected data.

    Training of Job Analyst: Next is to train the job analyst about how to conduct the process and use the selected methods for collection and recording of job data.

    Preparation of Job Analysis Process: Communicating it within the organization is the next step. HR managers need to communicate the whole thing properly so that employees offer their full support to the job analyst. The stage also involves preparation of documents, questionnaires, interviews and feedback forms.

    Data Collection: Next is to collect job-related data including educational qualifications of employees, skills, and abilities required to perform the job, working conditions, job activities, reporting hierarchy, required human traits, job activities, duties and responsibilities involved and employee behavior.

    Documentation, Verification, and Review: Proper documentation is done to verify the authenticity of collected data and then review it. This is the final information that is used to describe a specific job.

    Developing Job Description and Job Specification: Now is the time to segregate the collected data into useful information. Job Description describes the roles, activities, duties, and responsibilities of the job while job specification is a statement of educational qualification, experience, personal traits and skills required to perform the job.

    Thus, the process of job analysis helps in identifying the worth of the specific job, utilizing the human talent in the best possible manner, eliminating unneeded jobs and setting realistic performance measurement standards.

    This few Process of job analysis also Studying:

    Job analysis is as useful is not so easy to make. In fact, it involves a process. Though there is no fool-proof process of making job analysis, the following are the main steps involved in job analysis:

    1. Organisational Job Analysis: Job analysis begins with obtaining pertinent information about a job’. This, according to Terry is required to know the makeup of a job, its relation to other jobs, and its contribution to the performance of the organization.

    Such information can be had by dividing back­ground information in various forms such as organisation charts i.e., how the particular job is related to other jobs; class specifications i.e., the general requirement of the job family; job description i.e., starting point to build the revised job description, and flow charts i.e., flow of activities involved in a particular job.

    2. Selecting Representative Jobs for Analysis: Analysing all jobs of an organization is both costly and time-consuming. Therefore, only a representative sample of jobs is selected for the purpose of detailed analysis.

    3. Collection of Data for Job Analysis: In this step, job data features of the job and required qualifications of the employee are collected. Data can be collected either through questionnaire, observation or interviews. However, due care should be taken to select and use the method of data collection that is the most reliable in the given situation of the job.

    4. Preparing Job Description: The job information collected in the above ways is now used to prepare a job description. The job description is a written statement that describes the tasks, duties, and responsibilities that need to be discharged for effective job performance.

    5. Preparing Job Specification: The last step involved in job analysis is to prepare job specifi­cation on the basis of collected information. This is a written statement that specifies the personal qualities, traits, skills, qualification, aptitude etc. required to effectively perform a job.

    Explain the Process of Job Analysis - ilearnlot

  • Explain the Methods of Job Analysis, with Process!

    Explain the Methods of Job Analysis, with Process!

    Learn and Understand, Explain the Methods of Job Analysis, with Process!

    If you want to study first the Purpose of Job Analysis! So study for better understand. Then learn the Methods of Job Analysis! Now, Though there are several methods of collecting job analysis information yet choosing the one or a combination of more than one method depends upon the needs and requirements of an organization and the objectives of the job analysis process. Typically, all the methods focus on collecting the basic job-related information but when used in combination may bring out the hidden or overlooked information and prove to be great tools for creating a perfect job-candidate fit. Also learn, Meaning and Definition, Explain the Methods of Job Analysis, with Process!

    Selecting an appropriate job analysis method depends on the structure of the organization, hierarchical levels, nature of job and responsibilities and duties involved in it. So, before executing any method, all advantages and disadvantages should be analyzed because the data collected through this process serves a great deal and helps organizations cope with current market trends, organizational changes, high attrition rate and many other day-to-day problems.

    Let’s discuss few of job analysis methods that are commonly used by the organizations to investigate the demands of a specific job.

    Methods of Job Analysis:

    Most Common Methods of Job Analysis

    #Observation Method:

    A job analyst observes an employee and records all his performed and non-performed task, fulfilled and unfulfilled responsibilities and duties, methods, ways and skills used by him or her to perform various duties and his or her mental or emotional ability to handle challenges and risks. However, it seems one of the easiest methods to analyze a specific job but truth is that it is the most difficult one. Why? Let’s Discover.

    It is due to the fact that every person has his own way of observing things. Different people think different and interpret the findings in different ways. Therefore, the process may involve personal biases or likes and dislikes and may not produce genuine results. This error can be avoided by proper training of job analyst or whoever will be conducting the job analysis process.

    #This particular method includes three techniques: Direct observation, Work Methods Analysis, and Critical Incident Technique. The first method includes direct observation and recording of the behavior of an employee in different situations. The second involves the study of time and motion and is specially used for assembly-line or factory workers. The third one is about identifying the work behaviors that result in performance.

    #Interview Method:

    In this method, an employee is interviewed so that he or she comes up with their own working styles, problems faced by them, use of particular skills and techniques while performing their job and insecurities and fears about their careers.

    This method helps interviewer know what exactly an employee thinks about his or her own job and responsibilities involved in it. It involves analysis of job by the employee himself. In order to generate honest and true feedback or collect genuine data, questions asked during the interview should be carefully decided. And to avoid errors, it is always good to interview more than one individual to get a pool of responses. Then it can be generalized and used for the whole group.

    #Questionnaire Method:

    Another commonly used job analysis method is getting the questionnaires filled from employees, their superiors, and managers. However, this method also suffers from personal biasness. A great care should be taken while framing questions for different grades of employees.

    In order to get the true job-related info, management should effectively communicate it to the staff that data collected will be used for their own good. It is very important to ensure them that it won’t be used against them in anyway. If it is not done properly, it will be a sheer wastage of time, money and human resources.

    These are some of the most common methods of job analysis. However, there are several other specialized methods including task inventory, job element method, competency profiling, technical conference, threshold traits analysis system and a combination of these methods. While choosing a method, HR managers need to consider time, cost and human efforts included in conducting the process.

    Process Methods of Job Analysis:

    Job analysis data is collected in several ways with only the specification of the person who is going to carry out the job analysis. Often workers from the HR department participate in job evaluations; also depending on the different methods of job analysis even the managers, bosses, and employees participate. During complicated job analysis, the industrial engineers handle the time and motion studies.

    Another facet of job analysis is the contemplation of the technique used; some techniques of job analysis or methods are observations, interviews, questionnaires and other specific analysis methods. The applications of the techniques used in job analysis mostly depend on the type of organization, its fundamental requirements, and circumstances.

    The various methods of Job Analysis are:

    1. Observation:

    In the job analysis method of observation, the performance of the worker is monitored by a manager, supervisor or job analyst, industrial engineer; the performance is recorded to see whether the tasks and duties are properly done. Job analysis observation may either be continuous or intermittent sampling but the observation is always of limited use since most jobs do not have the capability of doing the observation of the complete job cycles.

    Hence observation is efficient in cyclic jobs and when used combined with other methods. The observation might be used by the supervisor or manager to be familiar with the job and its requirements. During other methods in job analysis, the observation method is immensely useful as it provides vital information about the job.

    2. Work Sampling:

    Work Sampling is a kind of observation; it does not need thorough concentration in all its minute aspects through the whole work cycle. As an alternative; the person doing the job analysis decides the matter and work pace on a specific workday according to the statistical sampling of various actions rather than by constant monitoring and detailed timing of each action. Work Sampling is most effective for regular monotonous jobs and cyclic repetitive jobs.

    3. Employee Diary/Log:

    In this method, the employee himself records his performance in a diary/log along with the frequency of the duty and the time needed to perform. This technique is useful in some ways but becomes tiresome for the employees to record all their duties and the timings. Even some employees believe that the employee diary/log method diverts them from their work and creates unnecessary distractions.

    4. Interviewing:

    In the interview technique of collecting data, the manager or the overseer monitors every job place and the worker performing it. Then a model question or interview form is made to ask the workers and note the answers and to get the proper analysis and complete comprehension of the job and its requirements; one has to talk and interview both the employee and the supervisor.

    This method is exhaustive when the interviewer has to converse with two or more employees in one job. Often the professional and managerial jobs are very difficult and complex to analyze; hence require complex longer interviews. Thus the interviewing method should be combined with any other method for proper assessment.

    5. Questionnaires:

    Questionnaires method is the most popular technique for collecting information in job analysis and a survey device is created and distributed amongst the employees and managers to read and answer. The merits of this method are that bulk information can be collected from the employees without much effort; that also in a short span of time.

    But the problems of job analysis is that it assumes the employee to answer the questions truthfully without any bias but that in reality is quite impossible; as opinions on their work and other things will always be influenced by their personal beliefs. Due to this problem, the job analysis questionnaire is mostly combined with the interviews and observations.

    6. Critical incident method:

    This method consists of observation and documentation of other instances and whether the behaviors were effective or futile to produce the desired results. The critical incident method of behavior includes; the reason of the incident and the circumstance, the work was done by the employee and how it was futile or useful, the assumed outcome of the behavior and also an analysis on the influence the behavior of an employee have on the outcome.

    This method vastly differs from the other job evaluation, methods of conducting job analysis as only here the employee behavior is not recorded when it is performed but later when the behavior has been evaluated to be futile or useful depending on the results.

    Here the behavior is described in retrospect and it is acknowledged that recording of past actions is more difficult and complicated than of present actions when the performance is continued.

    Explain the Methods of Job Analysis with Process - ilearnlot

  • Explain Advantages and Disadvantages of Job Analysis!

    Explain Advantages and Disadvantages of Job Analysis!

    Learn and Study, Explain Advantages and Disadvantages of Job Analysis!

    Basically anywhere asking this types of question, What is the Advantages and Disadvantages of Job Analysis? First looking What is Job Analysis?, then Objectives or Purpose of Job Analysis, after that looking study, and Explaining, the Advantages and Disadvantages of Job Analysis! Job analysis is crucial in all human activities but like all human inventions, it also suffers from various limitations. Introduction to Job analysis consists of job responsibilities, information, expertise, capabilities and personal traits and all this lead to success, for the workers. The basic reason for which the organizations require job analysis is to ensure proper selection measures for choosing the suitable applicants. Also learn, Meaning and Definition, Explain Advantages and Disadvantages of Job Analysis!

    A logical selection modus operandi is always necessary to make reasonable and trust-worthy job selections. A genuine selection procedure requires job analysis since it identifies the fundamental requirements for that specific job. The purpose of Job Analysis is to establish and document the ‘job relatedness‘ of employment procedures such as compensation, training, performance appraisal, and selection.

    What is Job Analysis?

    Job analysis helps to recognize and verify the requirements of a job and delineate the duties and obligations of the job. In job, evaluations done on the information collected about the job, the significance should always be given on the job and never on the worker or the individual. The basic notion of job analysis is that the evaluations and judgments are done depending on the job and not on the person.

    It is done through cross-examinations and surveys according to the necessities of the occupation and the analysis provides a specific explanation and requirements of the job.

    Objectives of Job Analysis:

    The aims of Job analysis is to always ascertain and record the job-related information of the employment measures like training, selection, payment and performance assessment. Job Analysis is used for classifying both training and requirement evaluations which consist of the training matter, evaluation exams to understand the usefulness of training, devices used for training and also the techniques of training. Also Learned or More info in here, Purpose of Job Analysis!

    #Advantages and Disadvantages of Job Analysis!

    Though job analysis plays a vital role in all other human-related activities every process that has human interventions also suffers from some limitations. The process of job analysis also has its own constraints. So, let us discuss the advantages and disadvantages of job analysis process at length.

    #Advantages of Job Analysis:

    Provides First Hand Job-Related Information: The job analysis process provides with valuable job-related data that helps managers and job analyst the duties and responsibilities of a particular job, risks and hazards involved in it, skills and abilities required to perform the job and other related info.

    Helps in Creating Right Job-Employee Fit: This is one of the most crucial management activities. Filling the right person in a right job vacancy is a test of skills, understanding, and competencies of HR managers. Job Analysis helps them understand what type of employee will be suitable to deliver a specific job successfully.

    Helps in Establishing Effective Hiring Practices: Who is to be filled where and when? Who to target and how for a specific job opening? Job analysis process gives answers to all these questions and helps managers in creating, establishing and maintaining effective hiring practices.

    Guides through Performance Evaluation and Appraisal Processes: Job Analysis helps managers evaluating the performance of employees by comparing the standard or desired output with delivered or actual output. On these bases, they appraise their performances. The process helps in deciding whom to promote and when. It also guides managers in understanding the skill gaps so that right person can be fit at that particular place in order to get desired output.

    Helps in Analyzing Training & Development Needs: The process of job analysis gives the answer to following questions:

    • Who to impart training?
    • When to impart training?
    • What should be the content of training?
    • What should be the type of training: behavioral or technical?
    • Who will conduct training?

    Helps in Deciding Compensation Package for a Specific Job: A genuine and unbiased process of job analysis helps managers in determining the appropriate compensation package and benefits and allowances for a particular job. This is done on the basis of responsibilities and hazards involved in a job.

    #Disadvantages of Job Analysis:

    Time Consuming: The biggest disadvantage of Job Analysis process is that it is very time-consuming. It is a major limitation especially when jobs change frequently.

    Involves Personal Biasness: If the observer or job analyst is an employee of the same organization, the process may involve his or her personal likes and dislikes. This is a major hindrance to collecting genuine and accurate data.

    Source of Data is Extremely Small: Because of small sample size, the source of collecting data is extremely small. Therefore, information collected from few individuals needs to be standardized.

    Involves Lots of Human Efforts: The process involves lots of human efforts. As every job carries different information and there is no set pattern, customized information is to be collected for different jobs. The process needs to be conducted separately for collecting and recording job-related data.

    Job Analyst May Not Possess Appropriate Skills: If job analyst is not aware of the objective of job analysis process & does not possess appropriate skills to conduct the process, it is a sheer wastage of company’s resources. He or she needs to be trained in order to get authentic data.

    Mental Abilities Can not be Directly Observed: Last but not the least, mental abilities such as intellect, emotional characteristics, knowledge, aptitude, psychic and endurance are intangible things that can not be observed or measured directly. People act differently in different situations. Therefore, general standards cannot be set for mental abilities.

    Explain Advantages and Disadvantages of Job Analysis - ilearnlot

  • Explain the Purpose of Job Analysis!

    Explain the Purpose of Job Analysis!

    Learn and Understand, Explain the Purpose of Job Analysis!

    Job Analysis information has been found to serve a wide variety of purposes. More recently, job analysis data have been used in areas such as compensation, training and performance appraisal among many others. Of particular interest here is the application of job analysis data in HR Selection. Also Learned, Meaning and Definition, Explain the Purpose of Job Analysis!

    As discussed already, job analysis involves collecting and recording job-related data such as knowledge and skills required to perform a job, duties, and responsibilities involved, educational qualifications and experience required and physical and emotional characteristics required to perform a job in the desired manner.

    The main purposes of conducting a job analysis process are to use this particular information to create a right fit between job and employee, to assess the performance of an employee, to determine the worth of a particular task and to analyze training and development needs of an employee delivering that specific job.

    Let’s understand the concept with the help of an example. If the job of an executive sales manager is to be analyzed, the first and foremost thing would be to determine the worth of this job. The next step is to analyze whether the person is able to deliver what is expected of him. It also helps in knowing if he or she is perfect for this job. The process doesn’t finish here. It also involves collection of other important facts and figures such as job location, department or division, compensation grade, job duties, routine tasks, computer, educational, communicational and physical skills, MIS activities, reporting structure, ability to adapt in a given environment, leadership skills, licenses and certifications, ability to grow and close sales, ability to handle clients, superiors and subordinates and of course, the presentation of an individual.

    Broadly speaking in the context of HR selection, job analysis data are frequently used to:
    • Identify employee specifications (KSA) necessary for success on a job.
    • Select or develop predictors that assess important KSAs and can be administered to job applicants and used to forecast those employees who are likely to be successful on the job.
    • Develop criteria or standards of performance that employees must meet in order to be considered successful on a job.

    By examining factors such as the tasks performed on a job as well as the KSAs needed to perform these tasks, one can obtain an idea of what ought to be measured by predictors used in employment screening. When predictors and criteria are developed based on the results of a job analysis, a selection system that is job-related can be developed. By using a job-related selection system we are in a much better position to predict who can and who cannot adequately perform a job. In addition, with a job-related selection system, we are far more likely to have an employment system that will be viewed by job applicants as well as the courts as being a “fair” one.

    #Better Understand the Purpose of Job Analysis:

    Job Analysis plays an important role in recruitment and selection, job evaluation, job designing, deciding compensation and benefits packages, performance appraisal, analyzing training and development needs, assessing the worth of a job and increasing personnel as well as organizational productivity.

    #Recruitment and Selection:

    Job Analysis helps in determining what kind of person is required to perform a particular job. It points out the educational qualifications, level of experience and technical, physical, emotional and personal skills required to carry out a job in desired fashion. The objective is to fit a right person at a right place.

    #Performance Analysis:

    Job analysis is done to check if goals and objectives of a particular job are met or not. It helps in deciding the performance standards, evaluation criteria, and individual’s output. On this basis, the overall performance of an employee is measured and he or she is appraised accordingly.

    #Training and Development:

    Job Analysis can be used to assess the training and development needs of employees. The difference between the expected and actual output determines the level of training that needs to be imparted to employees. It also helps in deciding the training content, tools and pieces of equipment to be used to conduct training and methods of training.

    #Compensation Management:

    Of course, job analysis plays a vital role in deciding the pay packages and extra perks and benefits and fixed and variable incentives of employees. After all, the pay package depends on the position, job title and duties, and responsibilities involved in a job. The process guides HR managers in deciding the worth of an employee for a particular job opening.

    #Job Designing and Redesigning:

    The main purpose of job analysis is to streamline the human efforts and get the best possible output. It helps in designing, redesigning, enriching, evaluating and also cutting back and adding the extra responsibilities in a particular job. This is done to enhance the employee satisfaction while increasing the human output.

    Therefore, job analysis is one of the most important functions of an HR manager or department. This helps in fitting the right kind of talent at the right place and at the right time.

    Explain the Purpose of Job Analysis - ilearnlot

  • Explain Job Analysis, Meaning, and Definition!

    Explain Job Analysis, Meaning, and Definition!

    Learn and Study, Explain Job Analysis, Meaning, and Definition!

    When we refer to Job Analysis, we simply mean a purposeful, systematic process for collecting information on the important work-related aspects of a job. In simple terms, job analysis may be understood as a process of collecting information about a job. Also Learned, The Steps of Manpower Planning with Features! Explain Job Analysis, Meaning, and Definition!

    The process of job analysis results in two sets of data:

    A) Job Description,

    B) Job Specification.

    As mentioned earlier Job Analysis is classified into two parts, Let us now discuss these two important parts:

    (A) Job Description:

    This is a very vital document which is usually explanatory in nature. It consists of both organizational as well as functional information. It provides information as to the scope of activities, the position of the job and the responsibilities. It gives the employees a very clear picture of what is required of him to meet the goals of his job.

    (B) Job Specification:

    Job Specification converts the job description to qualifications that are required for, in performing the job. This is usually a statement which consists of qualification, characteristics, traits etc, for an employee to possess to perform his duties.

    Some possible aspects of work-related information to be collected might include the following:

    1) Work Activities – What a worker does, how, why, and when these activities are conducted.

    2) Tools and Equipment used in performing work activities.

    3) The context of the work environment, such as work schedule or physical working conditions.

    4) Requirements of personnel performing the job, such as knowledge, skills, abilities (KSA) or other personal characteristics ( like physical characteristics, interests or personality).

    Job analysis (also known as work analysis) is a family of procedures to identify the content of a job in terms of activities involved and attributes or job requirements needed to perform the activities. Job analysis provides information to organizations which help to determine which employees are best fit for specific jobs. Through job analysis, the analyst needs to understand what the important tasks of the job are, how they are carried out, and the necessary human qualities needed to complete the job successfully.

    #Job Analysis – Definition:

    Job Analysis may be defined as the process of studying jobs in order to gather, analyze, synthesize and report information about job requirements. Note in this definition that job analysis is an overall process as opposed to a specific method or technique.

    Job analysis refers to the process of collecting information about a job. In other words, it refers to the anatomy of the job. Job analysis is performed upon ongoing jobs only. It contains job contents. For example, what are the duties of a supervisor, grade II, what minimal knowledge, skills, and abilities are necessary to be able to adequately perform this job? How do the requirements for a supervisor, grade II, compare with those for a supervisor, grade I? These are the questions that job analysis answers.

    Let us consider a few important definitions of job analysis.

    According to Jones and Deco, this “Job analysis is the process of getting information about jobs: especially, what the worker does; how he gets it done; why he does it; skill, education, and training required; relationship to other jobs, physical demands; environmental conditions”.

    Edwin B. Flippo has defined job analysis as the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of this analysis are job descriptions and job specifications”.

    In the opinion of Herbert G. Hereman III, et. al., “A job is a collection of tasks that can be performed by a single employee to contribute to the production of some product or service provided by the organization. Each job has certain ability requirements (as well as certain rewards) associated with it. Job analysis is the process used to identify these requirements”. Now, job analysis can be defined as an assessment that describes jobs and the behaviors necessary to perform them.

    Before going into these two sets let us talk about a few definitions of Job Analysis.

    • Job Analysis is a method of collecting and studying the information related to a particular job. It includes the operations and tasks of a specific job.
    • Another meaning of Job analysis is a complete examination of activities in a job. It can be considered a technical procedure that can be used to classify the duties and responsibilities of a job.
    • It can also be defined as a group of tasks which can be performed by a lone employee towards the production of some services or products of an organization.

    If we take it in a specific manner, Job Analysis involves the below steps:

    1) Recording and collecting the information related to a job.

    2) To check the accuracy of the job information.

    3) Note down the Job Description as per the data gathered.

    4) Use the data to determine the skills and knowledge that is required for a particular job, and.

    5) Updating the gathered information from time to time.

    Explain Job Analysis Meaning and Definition - ilearnlot

  • What is the Concept of Investment? Saving and Investing

    What is the Concept of Investment? Saving and Investing

    Concept of Investment – Investment is the employment of funds to get the return on it. In general terms, investment means the use of money in the hope of making more money. In finance, investment means the purchase of a financial product or another item of value with an expectation of favorable future returns. A study, PDF Reader with free Download PDF File. Also learn, Two Types: economic and financial investment, Difference between Saving and Investing, GST, What is the Concept of Investment?

    Learn and Understand, What is the Concept of Investment?

    What is Investment? An investment is an asset or item acquired to generate income or appreciation. In an economic sense, an investment is the purchase of goods that do not consume today but use in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later sell at a higher price for a profit, mutual funds.

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    Investment of hard-earned money is a crucial activity of every human being. Also, Investment is the commitment of funds that have been saved from current consumption with the hope that some benefits will be received in the future. Thus, it is a reward for waiting for money. Savings of the people invest in assets depending on their risk and return demands. Also Importance, Industrial Relations!

    Investment refers to the concept of deferred consumption, which involves purchasing an asset, giving a loan, or keeping funds in a bank account to generate future returns. Various investment options are available, offering differing risk-reward tradeoffs. An understanding of the core concepts and a thorough analysis of the options can help an investor create a portfolio that maximizes returns while minimizing risk exposure.

    There are two concepts of Investment:

    Economic Investment:

    The concept of economic investment means an addition to the capital stock of the society. Also, The capital stock of the society is the goods that use in the production of other goods. The term investment implies the formation of new and productive capital in the form of new construction; and, producers of durable instruments such as plants and machinery. Also, Inventories and human capital include in this concept. Thus, an investment, in economic terms, means an increase in building, equipment, and inventory.

    Financial Investment:

    This is an allocation of monetary resources to assets that expect to yield some gain or return over a given period of time. It means an exchange of financial claims such as shares and bonds, real estate, etc. Financial investment involves contracts written on pieces of paper such as shares and debentures. People invest their funds in shares, debentures, fixed deposits, national saving certificates, life insurance policies, provident fund, etc. in their view investment is a commitment of funds to derive future income in the form of interest, dividends, rent, premiums, pension benefits and the appreciation of the value of their principal capital. In primitive economies, most investments are of the real variety whereas in a modern economy much investment is of the financial variety.

    The economic and financial concepts of investment are related to each other; because, investment is a part of the savings of individuals; which flow into the capital market either directly or through institutions. Thus, investment decisions and financial decisions interact with each other. Also, Financial decisions are primarily concerned with the sources of money whereas investment decisions are traditionally concerned with the uses or budgeting of money.

    Wise investing requires knowledge of key financial concepts and an understanding of your personal investment profile and how these work together to impact investing decisions. Here we will understand the difference between saving and investing. Illustrate the risk/rate-of-return tradeoff, the importance of the time value of money and asset allocation; your personal risk tolerance, recognize your financial goals, and in defining an appropriate investment plan and asset mix for you and your family

    The Difference Between Saving and Investing:

    Even though the words “saving” and “investing” are often used interchangeably, there are differences between the two.

    Saving provides funds for emergencies and for making specific purchases in the relatively near future (usually three years or less). Also, the Safety of the principal and liquidity of the funds (ease of converting to cash) are important aspects of savings Rupees. Because of these characteristics, savings Rupees generally yield a low rate of return and do not maintain purchasing power.

    Investing, on the other hand, focuses on increasing net worth and achieving long-term financial goals. Investing involves risk (of loss of principal) and is to consider only after you have adequate savings.

    Savings v/s Investment Rupees
    SavingsInvestment
    SafeInvolve risk
    Easily accessibleVolatile in short time periods
    Low returnOffer potential appreciation
    Used for short-term goalsFor mid- & long-term goals
    What is the Concept of Investment - ilearnlot
    What is the Concept of Investment? Saving and Investing,