Single Ownership (Proprietorship) Companies Partnership Companies Joint Stock Companies Co-operative Societies/Organizations Public Sector Companies
SINGLE OWNERSHIP (PROPRIETORSHIP) The business is owned by one person called the proprietor. Proprietor provides the capital (money) to start and run the business. Business mostly depends upon the expertise and skill of the owner. Proprietor has absolute control over the business All profit goes to the proprietor. Ownership of the company passes on to the legal heirs of the owner.
ADVANTAGES Easy to form the company. Simple organization structure. Decision making is usually fast. Owner is motivated to give his best effort for the business/company. Business can be started with small capital. Easy to wind up business in the case of losses.
DISADVANTAGES Owner is fully and personally liable for all the losses and debts of the company. If the owner does not not have enough money, expertise and ability, the business may sometimes perish. Difficult to get loans from banks. Limited opportunity for growth of employees. No guarantee for continuity of employment. Low employee motivation and innovation, poor salary and other facilities. Inability to expand business due to lack of fund and skill.
APPLICATION Businesses that need small investment like retail shops, trading, small services business, small engineering firms, clinics etc. Businesses with low risk.
PERSONNEL MANAGEMENT Every industry or business depends upon its employees as its human resources. The personnel management is concerned with acquiring and managing these human resources in the most efficient manner for meeting the goals of the organization
FUNCTIONS OF PERSONNEL MANAGEMENT Job Evaluation Staffing Training Merit Rating Industrial Relation Safety Health and Welfare Re-Training Human Resource Development Control over employee cost
JOB EVALUATION Every category of job in the organization is to be evaluated to get a clear picture of the requirements for every job regarding educational/technical qualification, experience, specialized skill requirement, physical and mental abilities etc.
STAFFING Personnel management is responsible for staffing or appointing employees in the required number and of the required quality as required by different positions in the organization. The staffing activity includes advertising, recruitment, testing, interviewing, selection and placement.
TRAINING Selected employees are to be given adequate training to enable them to understand the organization and impart necessary skills, if any, to carry out the work assigned to them. The type and duration of training depend upon the level at which an employee is appointed, the skill requirements specific to the job etc.
MERIT RATING The performance of every employee is to be evaluated scientifically and periodically. Performance is required for several purposes like promotion, incentives, deputation, demotion etc. It is the responsibility of the personnel management
INDUSTRIAL RELATION Healthy trade union activities Group activities like quality circles and kaizen teams are to be implemented to encourage employees to work in groups. A very healthy industrial climate is to be established and maintained by implementing incentive schemes, employee participation, suggestion schemes, adequate grievance handling procedures etc.
SAFETY Adequate safety standards, safety training, safe environment and safety equipments are to be provided to ensure good industrial safety.
HEALTH AND WELFARE Maintaining good health of employees is very important. Periodic health check-ups, adequate medical attention in case of accidents must be provided. Welfare facilities like canteen, recreation facilities, sports clubs, arts clubs, housing, transport etc are to be provided.
RETRAINING Technology used today may not be relevant tomorrow. To keep up with changing market needs, either personnel with new skills are to be employed or existing employees are to be re-trained in new technology. Retraining of existing employees is several times better than new recruitments. Hence, personnel management should be adequately prepared to re-train employees.
HUMAN RESOURCE DEVELOPMENT Aims at the overall development of every employee for meeting the challenges faced by the company. Employees are resources of the company. They are to be maintained at optimum level technologically, mentally, physically and socially.
CONTROL OVER EMPLOYEE COST Employee cost consists of salaries, wages and benefits for the employee forms a major portion of the operational expenses of the company. Personnel management should always keep the employee cost under control.
PARTNERSHIP COMPANIES Company is owned by more than one person. Minimum 2 and maximum 10 persons can form a partnership company. The partnership is started as per a partnership agreement or partnership deed signed by all partners. The partnership agreement gives details about the type of partnership, business involvement, investment in capital etc
General partners will have unlimited and personal liability for the losses and debts of the company. Limited partners have only limited liability. The firm is not a legal person. Individuals with a common purpose put together their money and expertise to start and manage the business. Registration of the firm with registrar of companies is not compulsory.
TYPES OF PARTNERSHIPS General or Equal Partnership Limited Partnership Active Partnership Sleeping Partnership
TYPES OF PARTNERSHIP All partners have equal and unlimited liabilities. This means that every partner is equally and personally liable for the losses, debts and liabilities of the firm.
LIMITED PARTNERSHIP Limited partners will have only limited liability to the extent of their investment in the company. Other partners will have unlimited liabilities for the losses and debts of the company. This will be clearly specified in the partnership agreement. Rules in some countries (India) permit all partners to be limited partners, with limited liability for all.
SLEEPING PARTNERSHIP A sleeping partner does not actively involve in managing the business and does not participate in the decision making process. However he gets a share of the profit as agreed in the partnership agreement.
ADVANTAGES It is comparatively easy to start a partnership firm. There are no complicated legal procedures for starting a company. One has to prepare a written partnership agreement only. Compared to single ownership companies, partnership companies can have larger capital and wider expertise. Motivation among partners to succeed is high. Partners have full control over the business.
DISADVANTAGES Unlimited and personal liability to all general partners for losses and liabilities of the company. Wrong decision by one partner will lead to downfall of the business affecting all partners equally. Partners may have disagreements. No guarantee for continuity of stability
Difficult to borrow money from banks. Death of a partner will affect the continuity of business. Low employee motivation, poor salary and other facilities. Shorter life span and low stability for the company.
APPLICATION Small businesses requiring specialized skills eg law firms, small engineering firms etc. Quick starting of a company to take advantage of favourable market situation and high demand for product or services. Eg. Software companies.