UGC NET Study Notes on Staffing Approach || Commerce || Management || Labour Welfare

Staffing is one of the important management activities. It refers to the process of finding the right person for the right job having the right set of skills and qualifications, at the right time.

• Staffing is a continuous process of finding the employees from various sources (including internal and external hiring), selecting the candidates with required skills and qualifications and evaluating the employees at regular intervals of time.
• Staffing also involves finding and filling up senior management roles with the existing employees. This is done in order to motivate the employees and promote the culture of the organization.

Staffing Approaches:

• Primarily there are three staffing approaches that multinational companies use in staffing decisions. They are as follows:
  • Ethnocentric approach
  • Polycentric approach
  • Geocentric approach
• Recently, Regio centric approach has been formulated. It is gaining momentum in the startup environment.

1. Ethnocentric Approach

• The ethnocentric approach of staffing gives much importance to the culture and policies of the organization.
• The multi-national organizations that follow this approach appoint personnel from the home country to the upper management positions in all its operating units in different countries and are all called parent company nationals.
• The main advantages of this approach are as follows:
  • The process of communication would be smooth with the head office.
  • The decisions can be taken and implemented on a real-time basis.
• Familiarity with the practices and policies of the organization. The culture of the organization can be maintained easily.
• The main disadvantages of this approach are as follows:
  • Adapting to a foreign language would be a major problem.
  • It takes time to get used to the new political, cultural and legal environments.

Example: Let us understand the ethnocentric approach with an example. Consider a company ABC, a smartphone manufacturing company that has its headquarters in China. The company wants to expand its operations in India. But at the same time, it wants to retain the culture and practices of the organization. So, it appointed the top management positions with the parent company nationals. They will report to the head office at regular intervals. The company took the help of a local consulting firm in India to appoint the personnel for other senior level and entry-level positions.

2. Polycentric Approach

• The polycentric staffing approach gives much importance to the legal norms and practices of the country where it is operating and appoints all the upper management positions from the local country.
• The main advantages of this approach are as follows:
  • The managers will be familiar with the legal, political and cultural environments. They can give suggestions to the head office during decision making which may prevent legal implications.
  • Increases the motivation of employees and they can put forward their suggestions without any hesitation.
  • This will help the head office to know the requirements of employees and take steps accordingly to retain the talent.
• The main disadvantages of this approach are as follows:
  • The organization may lose control over its operating unit.
  • Difficulties and delays in the communication process.

Example: The polycentric approach can be better understood with the following example. Consider an E-commerce company QPR, which has its headquarters in the USA. It wants to expand its operations in India and Australia. The staffing department worked on the idea and appointed two personnel Rakesh and Watson. Rakesh is of Indian origin and had worked on his own startup earlier. Watson belongs to Australia and worked with many organizations in senior roles. Rakesh and Watson will lead the company in India and Australia respectively.

3. Geocentric approach

• The geocentric staffing approach does not focus on the nationality of top-level management.
• The multi-national companies that follow this approach appoint the most qualified employees selected from a global pool of candidates to top-level management positions and are called third-country nationals.
• The main advantages of this approach are as follows:
  • This will help the organization to grow locally and globally.
  • There will be a collective decision making.
• The main disadvantages of this approach are as follows:
  • There may be a conflict among managers while making a decision as all of them belong to different nationalities.
  • Politics for promotions may start as the managers are of the same designations but different nationalities.

Example: To understand the geo-centric approach, let us take the tech-giant, Google as an example. The founders of Google appointed Sundar Pichai as its chief executive officer (CEO). Google is an American based tech company that has its operations in many countries. It appointed Sundar Pichai of Indian origin as its CEO. It clearly shows that the company gives no importance to the nationality of an individual while appointing for top-level management positions. The organizations which follow this approach, select a person based on their skillset and previous achievements in the organization.

4. Regio-centric approach

• The regio-centric staffing approach is similar to the polycentric approach, but it takes a specific region into consideration rather than a specific country.
• In this approach, top-level management positions are held by employees from a particular region where the unit is performing its operations.

Example: Let us take the PQRS company as an example to understand the region-centric approach. PQRS company is a Japanese company that works on kitchen accessories. It wants to expand its operations in India. The company decided to establish two manufacturing units, one unit in north India and the other in south India. The company wants to match the local needs of the people. It appointed Piyush and Mohan, who belong to north and southern regions to lead the units in the north and south India respectively.

Importance of staffing

• It helps the organization in listing out the efficient workforce and offering them better salaries and incentives. These individuals can be trained on other skills or can be absorbed into management. This will motivate the employees to upskill themselves.
• Staffing helps the organization to improve its performance by appointing the right person for the right job.
• It forecasts the requirement of the workforce by taking the historical data and the current undergoing projects that the company is dealing with and plan the hiring process accordingly.
• The staffing department is responsible for succession planning. It develops the employees to take up managerial positions of the organization. This will stop the external hiring for senior roles and help the organization grow without any conflicts.
• It works on the training needs of the organization according to the changing technological needs. This will help the organization to take up new projects.
• The staffing department takes labour laws into consideration while planning the recruitment process to prevent legal implications.

Summary:

• Staffing is placing the right person at the right job and helping the organization.
• The staffing department takes the legal, cultural and political aspects of a country or region into consideration while planning the recruitment process.
• The staffing department is responsible for succession planning and this will motivate the employees to upskill themselves.

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