Few executives would argue with the fact that people are vital for the effective operation of a company. Managers often say that people are their most important asset. Yet the human assets are virtually never shown on the balance sheet as a distinct category, although a great deal of money is invested in the recruitment, selection, and training of people. They refer to this process as “human resource accounting”. This approach is not without its problems, and there is conflict among management experts, between the proponents of human resource accounting and the financial people who have to develop the system for measuring human assets. What is important here is the recognition that staffing is a crucial function of managers, one that may well determine the success or failure of an enterprise.
The managerial function of staffing is defined as filling, and keeping filled, positions in the organization structure. This is done by identifying workforce requirements, inventorying the people available, and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating and training or otherwise developing both candidates ad current jobholders so that they can accomplish their tasks effectively and efficiently. It is clear that staffing must be closely linked to organizing, that is, to the setting up of intentional structures of roles and positions.
First, the staffing of organizational roles includes knowledge and approaches not usually recognized by practicing managers, who often think of organizing as just setting up a structure of roles and give little attention to filling these roles. Second, making staffing a separate function facilitates placing an even greater emphasis on the human element in selection, appraisal, career planning and manager development. Third, an important body of knowledge and experience has been developed in the area of staffing. The fourth reason for separating staffing is that managers often overlook the fact that staffing is their responsibility and not that of the personnel department. To be sure, this department provides a valuable assistance, but it is the job of managers to fill the positions in their organization and keep them filled with qualified people.
The present and projected organization structure determines the number and kinds of managers required. These demands for managers are compared with available talent through the management inventory. On the basis of this analysis, external and internal sources are utilized in the processes of recruitment, selection, placement, promotion and separation. Other essential aspects of staffing are appraisal, career strategy and training and development of managers.
Staffing, as seen in the model, affects leading and controlling. For instance, well-trained managers create an environment in which people, working together in groups, can achieve enterprises, objectives and at the same time accomplish personal goals. In other words, proper staffing facilitates leading. Similarly, selecting quality managers affects controlling for example, by preventing many undesirable deviations from becoming major problems.
Staffing requires an open system approach. It is carried out within the enterprises which, in turn, are linked to the external environment. Therefore, internal factors of the firm – such as personnel policies, the organizational climate, and the reward system – must be taken into account. Clearly, without adequate rewards it is impossible to attract and keep quality managers. The external environment cannot be ignored either; high technology demands well–trained, well-educated and highly skilled managers. Inability to meet the demand for such managers may well prevent an enterprise from growing at a desired rate.
The number of managers needed in an enterprise depends not only on its size but also on the complexity of the organization structure, the plans for expansion, and the rate of turnover of managerial personnel. The ratio between the number of managers and the number of employees does not follow any law. It is possible by enlarging or contracting the delegation of authority, to modify a structure so that the number of managers in a given instance will increase or decrease regardless of the size of an operation.
Although the need for determining the number of managers required has been stressed here, it is clear that numbers are only part of the picture. Specifically, the qualifications for individual positions must be identified so that the best suited managers can be chosen.
It is common for any business as well as for most non-business enterprises to keep an inventory of raw materials and goods in hand to enable it to carry on is operations. It is far less common for enterprises to keep an inventory of available human resources, particularly managers, despite the fact that the required number of competent managers is a vital requirement for success. Keeping abreast of the management potential within a firm can be done by the use of an inventory chart, which is simply an organization chart of a unit with managerial positions indicated and keyed as to the promotability of each incumbent.
At a glance the controller can see where he or she stands with respect to the staffing function. The controller’s successor is probably the manager of general accounting, and this person, in turn, has a successor ready for promotion.