REVIEWS IN DIFFERENT CONTROLLING MECHANICS

Control mechanisms play an important role in any business organization, without which the roles
of managers get constrained. Control is required for achieving the goals in a predefined manner
because it provides the instruments which influence the performance and decision-making
process of an organization. Control is in fact concerned with the regulations applied to the
activities within an organization to attain expected results in establishing policies, plans, and
practices.

Control mechanisms can be set according to functions, product attributes, geographical

attributes, and the overall strategic and financial objectives.

Objectives of Control
There are three major objectives for having a control mechanism in an international firm. They
are −

• To get data and clues for the top management for monitoring, evaluating, and adjusting
their decisions and operational objectives.
• To get clues based on which common objectives can be set to get optimum coordination
among units.
• To evaluate the performance metrics of managers at each level.

In 1916, Henri Fayol defined management control as follows −

“Control of an undertaking consists of seeing that everything is being carried out in accordance
with the plan which has been adopted, the orders which have been given, and the principles
which have been laid down. Its object is to point out mistakes in order that they may be rectified
and prevented from recurring”

Types of Control Mechanisms

There are various modes of control. The most influential ones are the following −

1. Personal Controls
Personal controls are achieved via personal contact with the subordinates. It is the most widely
used type of control mechanism in small firms for providing direct supervision of operational
and employee management. Personal control is used to construct relationship processes between
managers at different levels of employees in multinational companies. CEOs of international
firms may use a set of personal control policies to influence the behavior of the subordinates.
2. Bureaucratic Controls
These are associated with the inherent bureaucracy in an international firm. This control
mechanism is composed of some system of rules and procedure to direct and influence the
actions of sub-units.

The most common example of bureaucratic control is found in case of capital spending rules
that require top management’s approval when it exceeds a certain limit.

3. Output Controls
Output Controls are used to set goals for the subsidiaries to achieve the targeted outputs in
various departments. Output control is an important part of international business management
because a company’s efficiency is relative to bureaucratic control.

The major criteria for judging output controls include productivity, profitability, growth, market
share, and quality of products.

4. Cultural Controls
Corporate culture is a key for deriving maximum output and profitability and hence cultural
control is a very important attribute to measure the overall efficiency of a firm. It takes form
when employees of the firm try to adopt the norms and values preached by the firm.

Employees usually tend to control their own behavior following the cultural control norms of the
firm. Hence, it reduces the dependence on direct supervision when applied well. In a firm with a
strong culture, self-control flourishes automatically, which in turn reduces the need for other
types of control mechanisms.

Approaches to Control Mechanisms

There are seven major approaches for controlling a business organization. These are discussed
below −

Market Approach
The market approach says that the external market forces shape the control mechanism and the
behavior of the management within the organizational units of an MNC. Market approach is
applied in any organization having a decentralized culture. In such organizations, transfer prices
are negotiated openly and freely. The decision-making process in this approach is largely
directed and governed by the market forces.
Rules Approach
The rules approach applies to a rules-oriented organization where a greater part of decision-
making is applied to strongly impose the organizational rules and procedures. It requires highly
developed plan and budget systems with extensive formal reporting. Rules approach of control
utilizes both the input and output controls in an organized and exclusively formalized manner.

Corporate Culture Approach

In organizations that follow the corporate culture approach, the employees internalize the goals
by building a strong set of values. This value-syndication influences the operational mechanism
of the organization. It has been observed that even when some organizations have strong norms
of behavioural controls, they are informal and less explicit. Corporate culture approach requires
more time to bring the aimed changes or adjustments in an organization.

Reporting Culture

Reporting culture is a powerful control mechanism. It is used while allocating resources or while
the top management wants to monitor the performance of the firm and the employees.
Rewarding the personnel is a common practice in such approaches of control. However, to get
the maximum out of reporting approach, the reports must be frequent, correct, and useful.

Visits to Subsidiaries
Visiting the subsidiaries is a common control approach. The disadvantage is that all the
information cannot be exchanged via visits. Corporate staff usually and frequently visit
subsidiaries to confer and socialize with the local management. Visits can enable the visitors to
collect information about the firm which allows them to offer advice and directives.

Management Performance Evaluation

Management performance Evaluation is used to evaluate the subsidiary managers for the
subsidiary’s performance. However, as decision-making authority is different from the
operational managers, some aspects of control cannot be managed via this approach. Slow
growth rates of firms and risky economical and political environment requires this kind of
approach.

Cost and Accounting Comparisons

Cost and Accounting Comparisons is a financial approach. It arises due to the difference in
expenditure among various units of the subsidiaries. A meaningful comparison of the operating
performances of the units is necessary to get the full output from this approach. Cost accounting
comparisons use a set of rules that are applicable to the home country principles to meet local
reporting requirements.

Constraints of Control Approaches

Control mechanisms can never be uniform in every country. International firms have to face
severe constraints based on which they modify their control mechanisms in every country. Here
is a list of major constraints that affect an organization in setting its managerial control
mechanism −

• Distance − Geographical distances and various forms of cultural disparities is a big

constraint of control systems. Nowadays, email and fax transmissions have replaced the human
communication, changing the meaning of distance among units and employees of an
organization.
• Diversity − It is hard to apply a common control system to everyone due to diversity. It
requires the managers to be locally responsive to address the needs of the country in which the
firm operates. Diverse attributes may exist in the form of labor, cost, currency, economic factors,
business standards, etc.
• Degree of Uncertainty − Data relating to the reporting mechanism may be inaccurate
and incomplete, raising serious challenges to control mechanisms. Due to uncertainities, control
mechanisms must focus on setting goals and developing plans to meet the goals.

REVIEW OF PURCHASING OPERATIONS:

Purchase is one of the most crucial functions in a manufacturing organisation. In most of the
manufacturing and trading organisation, purchases comprises of about 50-70% of the cost. So it
becomes very important to have an efficient and effective internal control over the purchasing
activities of an organisation.

The objectives of review of internal control system includes to ascertain:

. Whether controls are in place in the process to ensure that accountability is established as early
as possible at all points along with the accountability chain.

. Whether segregation of duties, risk mitigating controls, exists within transaction processing
authorization. 3. Whether the quantity and quality of goods and services received is documented
and agrees withthe requisition and performance expectations such as service level agreements,
contract terms, and vendor performance.

. Whether transactions are properly verified before disbursement, transactions and activities are
properly authorized, transactions and events are properly recorded. 5. Whether accountability for
refundsand credits are maintained. Whether staff understands their duties, responsibilities, and
accountabilities.

. Whether procurement practices and procedures are documented, and in compliance with central
and state laws and other requirements such as contract terms and conditions. Procurement
records for authorizations and transactions are maintained in accordance with established
requirements.

. Whether accounting records are protected from theft, obsolescence, or destruction. Whether
assets are safeguarded from loss through watchful and responsible care and reconciliation
functions.

Different procedural aspects relating to review of purchasing operations

Segregation of duties in purchase operations

To ensure proper segregation of duties, assign related buying functions to different people.
Ensure proper segregation, no single person has complete control over all buying functions.

It is always preferable to have different people who-

a)Approve purchases

b)Receive ordered materials

c)Approve invoices for payment

d)Review and reconcile financial records

e)Perform inventory counts

If segregation of duties does not exist in purchase operations, which may result into unauthorized
or unnecessary purchases, improper charges to department budgets, purchase of goods at
excessive price, use of goods for personal purposes.

Accountability, authorization and approval mechanism

In an efficient purchase system, the mechanism of authorization, review and approval should
prevail. All purchases should be done on the basis of signed agreements, contract terms and
purchase orders.

It will be advisable to-

1 Comply with ethical buying practices and policy.

2 Review and update signature authorizations periodically.

3 Obtain pre-approval of consultant agreements by purchasing.

4 Verify receipt of goods and services against contract/ purchase order and invoice information.

5 Reconcile ledgers for accuracy of recorded transactions.

6 Monitor to ensure that invoices are paid in a timely manner.

In case the mechanism of ascertaining accountability does not exist. It may result into
unauthorized or unnecessary purchases, purchases at higher rate, misappropriation of funds.

PHYSICAL CONTROL OVER OF ASSETS

Once the purchases are done, it is very necessary to secure the material in a safe location.To
ensure that the resources are accounted for, it is necessary to periodically verify the inventory
and compare results with the books.

To ensure security of assets, it is advisable/suggested to-

1 secure goods in a restricted area.

2 Restrict inventory access to appropriate staff.

3 Lock goods and materials, and provide key or combination to as few people as possible.

4 Keep inventory records and periodically calculate beginning and ending inventory amounts.

If physical control over assets does not exist and proper care is done, it may result into theft of
goods, inventory shortages, additional costs incurred for replacement of goods.

REVIEW AND RECONCILIATION

Review and reconciliation is a very important and crucial part of purchase internal control
system. Timely review of supplier’s invoice, packing slips and purchase orders is very important
to ensure accuracy of the information for prior payment, correct quantity ordered and price
charged. Monthly ledger reconciliation enables to find improper charges and validate appropriate
financial transactions and activities.

It is advisable/suggested to-

Review supplier’s invoices for accuracy by comparing and making changes to purchasing orders.

Verify and authenticate that the goods and services purchased have been received.
Perform monthly reconciliation of operating ledgers to ensure accuracy as well as timeliness of
expenses. In case review and reconciliation process is missing, it may cause into improper
charges to department budgets, disallowances resulting from costs charged to incorrect
accounts/funds, payments made for services or items not provided.

Review on Management Information Systems (MIS)

Management information systems(MIS) is an organized, diverse and automated information
system that is concerned with the process of gathering ,storing and transferring relevant
information to support the management operations in an organization. The data is distributed
among the various departments in an organization. The processing of data takes place in various
forms such as graphs, diagrams, charts, reports to generate accurate and relevant information for
the management. MIS provides central storage of all the business information. MIS is used
across all levels in an organization. There are different types of management information
systems. This paper focuses on decision making information system.MIS plays a vital role in not
only collecting and man-aging information, but also representing it in various formats useful for
the management to make important organizational decisions.

NEED FOR MIS

Organizations found it difficult to manage the information as a whole, before computer

technology bloomed. Developments in computer technology made it possible for the managers to
easily gather, integrate, store and manage the information in the form they require depending
upon their needs and timing. Information is used simultaneously by many people. The
information needs to be current, accurate, concise, timely, complete, well presented and storable.
For organizational productivity, solely depending on personal computers is not reliable until it is
used efficiently and effectively. Also, advanced technological systems for integrating and sorting
the data can be costly unless the senior management provisions it to the staff. Thus, information
systems came into picture.

Information system is a mechanism that ensures information is available to the managers as per
their need and time. It provides relevant information for decision making. Management
information is an important input at every level in the organization for decision making,
planning, organizing,implementing, and monitoring and controlling.
CONCEPT OF MIS

Information is a set of classified and interpreted data used in decision making and it has also
been defined as “some tangible or intangible entity which serves to reduce uncertainty about
future state or events” . There are different levels of decision making, for which information can
be described as:

1. Source
2. Data
3. inferences and predictions drawn from data
4. value and choices
5. action which involves course of action

Management information system has a purpose to meet the general information needs of all the
managers in an organization or in some subunits of the organization. A subunit can be based on
functional areas or can be viewed at management levels.

A management information system has also been defined as ''an integrated user machine system
for providing information to support operations, management and decision making functions in
an organization. The system utilizes computers, manual procedures, models for analysis,
planning, control and decision making, and a database'' . All these definitions give a concise
understanding of MIS as a whole.

THE MIS MODEL

The working of the MIS model starts with data and information coming from different sources.
The data provided by accounting information system is stored in the database. The data and the
information are entered from the environment. Data based information is sent to the report
writing software for generating periodic and special reports , as well as to the mathematical
model for simulation of the various aspects of the organization’s operations. The output from the
report writing software and the mathematical model is then sent to the people who are
responsible for solving the problems. To solve the problem, effective decision making is required
for productivity. There are decision makers which may or may not exist in the firm’s
environment. The environment might consist of other organizations to which the firm has
collaborated such as suppliers, to from an Inter Organizational Information System(IOS). In such
case, MIS supplies information to the other member of the IOS .
ROLE OF MIS IN DECISION MAKING

Decision - making is the process by which organizational members choose specific course of
action out of several alternatives in response to opportunities and threats . The outcome of the
decision making process either results in a good or a bad decision. A Good decision results in
successful productivity of the organization and in the courses of actions that help an individual,
group or organization to be effective, while a bad decision results in ineffective and inefficient
choice of course of action thereby leading to poor or no productivity and overall loss of time,
effort, finance and labour. Every organization grows, prospers or fails as a result of decisions
made by its members. The success of decision-making is highly dependent partly on available
information, and partly on the components of the process which are known as functions. For
example, if managerial objectives are absent or unclear, probably due to inadequate information,
there is no basis for a search. Without the information, the search has no meaning because there
will be no alternatives to compare search results, which will thereby yield an undesired result due
to random choice of a particular course of action

MIS can be viewed in another way wherein it acts a means for transformation of data, which in
the decision making process is used as information. The data is flooded in the MIS process
which comes out in the form of information and this information is an input to the user
processes. The data is processed into information for a specific purpose and it provides several
alternatives of course of action for decision making, out of which one course of action is selected
which is nothing but the decision taken.
 REVIEW OF SELLING AND DISTRIBUTION POLICIES

Introduction:

Selling and distribution function are one of the most important function for an organization. The
survival of an organization largely depends on the effectiveness of selling and distribution
function.

Selling policy is such type of policy which consists of internal rules, principles and procedures
which help to define the efficient way of support for the established sales process, as well as the
wanted behavior of all the participants in that process, in order to ease the communication and
cooperation with the future or potential clients. The integral parts of the sales policy are:

– Customer categorization

– Delivery policy

– Price policy

– Charging policy

– Supply policy

– Complaints policy

– Customer loans

– Code of behavior towards customers

– Reports on customer visits

– Indicators of sales success

Distribution policy is the marketing tool that links production with consume. The definition of
this policy will allow determining the way we are going to make the product arrive at the final
consumer, which will depend on the distribution chain link we are at (producer, intermediary or
retailer).

Management of distribution channels involves efficient channel design, conflict management and
implementation of sophisticated channel information systems which will enhance the process of
making the products available to the end consumer in a timely manner.

Review of sales and distribution function is very important from internal control point of view
and it requires a detailed understanding of company business.

Objectives of review of Selling and Distribution Policies:

The following are the objectives of reviewing of selling and distribution policies-

1. To determine whether sales and distribution policies are properly made, documented and
followed.

2. To determine whether sales and distribution policies are approved by the appropriate
authority.

3. To determine whether the sales and distribution policies are matching the objectives of
the organization.

4. To determine whether maker checker and approver concept exist in the framing, approval
and implementation of such policies.

5. To determine whether sales and distribution policies are enough in order to serve the
customers of all regions.

Reasons for reviewing selling and distribution policies:

The selling and distribution polices are being reviewed because of the following reasons-

1. Execution of orders without delay.

2. Satisfactory action against complaints from customers.

3. Collection of credit sales.

4. Maximum contribution to profit.

5. Enforce proper supervision of distribution and sales-force.

6. To locate responsibility.

Review Procedure of Selling And Distribution Policies:

 Sales Process
A sales process review enables us to discover areas where sales performance can be
improved, new sales techniques to introduce, or any training required to help transition
your staff to an inbound sales approach.

It is checked how long sales process take from the first contact to deal closed and whether
such process has been completed within time limits or not. Also it is verified if the sales
of sold stock have been done as per the schedule. If not then the list of the delay dispatch
of the stock along with the reason of delay is recorded.

 Audit Of Sales Content

On doing the review of sales process, the contents of such process are audited and
accordingly missing assets are identified and the possible improvement to current
materials is checked.

 Awarding the Transport Contracts

With respect to dispatch of the stock under sales process, it is verified to which authority
the transportation contract is given and whether the detail of such transportation services
(such as name of the authority, whether they are eligible for taking transportation
contracts as per the law and procedure).
The quotations provided by such authority is proper as per the requirements of the
Company and same has been documented or not.

 Sales Return
When sales return takes place then it is checked whether the mechanism of sales return
has been followed by all the companies. Also whether the receipt or invoice has been
provided to the customer for the sales return.

When the sales return takes place then it is verified whether the retuned goods has been
inspected before accepting the same. Once the retuned goods are accepted then it is
verified if inward return note has been prepared promptly against each sales return. Also
 it is checked if the sales return has been analyzed with reference to the reason and
necessary actions taken.

 Claims By Customer

For poor quality of the products or for delay in delivery of the products, when the claim is
made by the customer then it is verified if such claim is proper or not. If yes then whether
it is approved by the authorized manager.

With respect to the claims, it is verified whether the customers are eligible for making the
claims in relation to the quality of products or delay in delivery of products. Also the
authorized manager approves such claims after proper examination of the matter.

 Review Of Sales Commission

While reviewing, it is verified whether the sales commission given to the parties is
appropriate and as per the terms and conditions of the contract. The sales commission is
tallied with the sales done by the companies during the review process.

 Review Of Export Sales

The export sales are verified and accordingly the reason for overdue bills with respect to
the said sales is analysised. Further, the loss of overdue interest due to delay in realization
of the export bills is checked and verified.
Further, the norms of the export trade, process of order booking to production planning,
realization, settlement benefits, claims etc. are checked and verified.

 Review Of Marketing

While reviewing the marketing with respect to international and national level, it’s
checked whether the standard price lists are maintained. Also it is checked whether a
special approval is required from a senior manager in case of sales which would take
place at prices lower than the standard price.

Further it is checked whether there is a well defined policy in respect of making the sales
to the employees at concessional prices. If yes then whether there is any limits in this
regard. It is verified as to whether a written sale order is prepared timely and properly on
receipt of an order from a customer.
 With respect to the sales order, it is reviewed as to whether there is a proper authorization
of credit, price, quantity and other important terms of the sale order. It is checked whether
there is a system of fixing credit limit for those customers who orders the products on
credit. If yes then whether is being approved as per the terms and conditions of sales
policy. Also it is analyzed whether such limits are reviewed periodically.

With regard to the dispatch of the goods, it is reviewed whether the dispatch document is
prepared properly at the time the goods are dispatched to the customer. When the
consignment of goods are dispatched from the premises then whether there is a system of
checking each such consignment before leaving the premises.

Annual Report of Raymond Limited Company:

Raymond Limited incorporated in India is a leading Indian Textile, Lifestyle and Branded
Apparel Company. The Company has its wide network of operations in local as well foreign
market. The Company sells its product through multiple channels including wholesale,
franchisee, retail etc.

For the financial year 2017-18, the annual report was issued by the Company. In the said report
all the policies (including selling and distribution policies) were reviewed and notes were issued
for it.

The selling and distribution policies are applied consistently to all the periods presented in the
financial statements.

Sales are recognized when substantial risk and rewards of ownership are transferred to customer,
In case of domestic customer, generally sales take place when goods are dispatched or delivery is
handed over to transporter, in case of export customers, generally sales take place when goods
are shipped on board based on bill of lading.

With referred to sale of goods, the Company operates a loyalty program where customers
accumulate points for purchases made which entitle them to discounts on future purchases.
Revenue related to the award points is deferred and recognized when the points are redeemed.
The amount of revenue is based on the number of points redeemed relative to the total number
expected to be redeemed.
The Company recognizes provision for sales return, based on the historical results, measured on
net basis of the margin of the sale.

Export Incentives under various schemes are accounted in the year of export.

References:

1. https://www.equinetmedia.com/blog/how-to-conduct-a-b2b-sales-process-review.

2. Company Account And Auditing Practices – ICSI Publications.

3. Company Accounts And Auditing Practices – Sangeet Kedia.

4. https://www.tutorialspoint.com/sales_and_distribution_management/sales_and_distributi
on_management_introduction.htm
 REVIEW OF MANUFACTURING OPERATIONS

• Manufacturing operations convert inputs like material labour capital into some intangible
output.

• Manufacturing processes are the primary processes and can be grouped under three basic
categories, namely forming machining and assembly. The objective of each process is to
change the shape or physical characteristics of the raw material.

– Forming processes

– Machining processes

– Assembly processes

– Finishing Processes

FORMING PROCESS:

Forming Processes: In the metal industry, some of the primary forming operations may take
place such as the rolling of basic shapes in steel, aluminum etc..

Molding or moulding (see spelling differences) is the process of manufacturing by shaping

liquid or pliable raw material using a rigid frame called a mold or matrix. This itself may have
been made using a pattern or model of the final object. ... The liquid hardens or sets inside the
mold, adopting its shape.

MACHINING PROCESS

Machining is any of various processes in which a piece of raw material is cut into a desired final
shape and size by a controlled material-removal process.
ASSEMBLY PROCESS:

An assembly line is a manufacturing process (often called a progressive assembly) in which

parts (usually interchangeable parts) are added as the semi-finished assembly moves from
workstation to workstation where the parts are added in sequence until the final assembly is
produced.

FINISHING PROCESS:

Surface finishing is a broad range of industrial processes that alter the surface of a manufactured
item to achieve a certain property. ... Surface finishing processes can be categorized by how
they affect the work piece: Removing or reshaping finishing. Adding or altering finishing.

OBJECTIVE OF REVIEW MANUFACTURING OPERATION

1. Whether the organization have any manufacturing process management system.

2. Whether the policies and procedure for production planning well defined and Well
documented.

3. Whether the organization have a written scrap policy.

4. Whether security policies are documented or not.

TYPES OF MANUFACTURING OPERATION

• Repetitive manufacturing operation

• Discrete manufacturing operation

• Job shop manufacturing operation

 • Process (continuous) manufacturing operation

• Process (batch) manufacturing operation

Repetitive manufacturing (REM) is the production of goods in rapid succession

Repetitive manufacturing can be used for mass production by both discrete and process
manufacturers.

Discrete manufacturing is an industry term for the manufacturing of finished products that are
distinct items capable of being easily counted, touched or seen.

A job shop is a type of manufacturing process in which small batches of a variety of custom
products are made.

Review of Personnel Policies

 Personnel policies are guidelines that an organization or company creates to manage its
workers. Personnel policies describe the type of job performance and workplace behavior
an organization expects from its employees, and what type of compensation and
opportunities for advancement it is offering in return.It is a critical examination and
evaluation of policies, programs and procedures in the area of Human Resource functions
and its management.
The purpose of Personnel Policies is to check that whatever planning related to HR i.e.
 The managerial Policies, procedures and rules
 Policies regarding Recruitment selection etc.

have come out to be the worth for the benefit of the organization or not.

Objectives

1. Optimum Use of Human Resources:

Every organization tries to make use of the available human resources to the best of their
capabilities. Right men should be selected for the right jobs. With the help of personnel
policiesjobs are defined and responsibilities of the personnel are specified so that there are no
square pegs in the round holes.

2. Training of Everyone:
The other main object of personnel policies is to train and develop everyone so as to make them
competent for doing their job. A trained worker can do his job more efficiently. The personnel
policies must encourage healthy and constructive competition among the workers and also
provide an opportunity for development and growth of an individual.

3. Sound Industrial Relations:

Personnel policies aim at creating sound industrial relations and tend to establish conditions for
mutual confidence and understanding. Workers are encouraged to put forward constructive
suggestions and are given participation through management councils and work committees.
Many operational problems are avoided by having well formulated policies.

4. Respecting Human Dignity:

Personnel policies ensure fair treatment to all irrespective of caste, color and creed and aim at
respecting the human dignity. Workers are offered good and healthy working conditions.

Principles of Personnel Policies

Carefully defined personnel policies serve as an establishing influence to prevent the waste of
energy in following programs not in harmony with the company objectives”.

Due to the importance of personnel function in the management, it becomes essential to

formulated personnel policies.

1. Principle of Right Placement:

There is a common saying that there should be square pegs for the square holes and round pegs
for the round holes. Only those persons should be selected who are physically and mentally fit
for the job so that they can become our asset in the future.

2. Principle of Development:
All workers should be given the opportunity to develop so that their monetary position as well as
their social status is enhanced. Workers tend to be sincerer and more hardworking when they are
aware of the chances of promotion in the organization.

3. Principle of Participation:
This principle states that we should consider the organization a co- ordinated team. If workers
participate in the formulation of policies, a large number of problems which arise due to
misunderstanding can be avoided.

4. Principle of Mutual Interest:

The workers should feel that interest of management is common with theworkers. This will
provide motivation to the workers to put in hard work which will entitle them to earn higher
wages and non-monetary benefits.

5. Principle of Good Working Conditions:

Workers should be given better tools, good working conditions, and adequate wages and there
should be impartial appraisal of their work.

6. Principle of Flexibility:

A personnel policy must be such that it can be changed with the change in circumstances.
Technological changes are taking place at a very fast speed in the industries and for that
reason a constant review of such policies is necessary.

Now here are some of the reviews of the personnel policies –

 1. Review of Employee Relations
It includes reviewing the level of employee satisfaction. Employee satisfaction can be measured
by turnover rate i.e. number of employee complaints filed and resolved, the status of action plans
from recent employee opinion surveys, and the effectiveness of performance management
system.

2. Review of Safety and Risk Management

One of the important goals of HR department is to maintain a safe and Healthy work
environment for its employees. It includes reviewing the effectiveness of organization in terms of
policies made in order to reduce workplace injuries and effectiveness in training to help
employees in getting a safe and healthy work environment.
3. Review of Compensation and Benefits
It benefits includes reviewing and analysing the compensation practices. Ensuring that the
employees of the organization are getting a satisfactory pay in both monetary and Non-monetary
terms.

4. Review of Recruitment and Selection Practices

As HR department involves hiring of employees and workforce hence it is important to ensure
that the company’s policies are effective in terms of hiring the employees. Reviewing HR
employment function involves a review of the way applicants are received. A review should
reveal how knowledgeable the engaged employment specialists are concerning fair employment
practices in recruiting and hiring candidates.
5. Review of HR Departmental Practices
Review of HR policies in its totality and in relationship to other departments is also required. An
ineffective HR program can undermine an organization’s ability to achieve its mission by
stunting its competitiveness in market, increasing financial costs, and putting the organization at
risk for lawsuits due to non-compliance or misconduct.

Sources of Personnel Policies

The following are the principal sources of Personnel Policies:

1. Past experience.

2. Personnel Policies of similar concerns.

 3. The philosophy of Board of Directors.

4. Suggestions of employees.

5. Policies of the Government.

6. Objectives of organization.

7. International conditions.

8. Business environment.

9. Day to day experience of dealing with personnel problems.

CASE STUDY OF DABUR INDIA LIMITED

The major HR practices includes review of the policies regarding:

 Recruitment
 Selection
 Training
 Development
 Compensation
 Employee Engagement

1. Recruitment

‘The process of identification of different sources of personnel is known as recruitment.’

Dabur recruits its employees through a very strict and rigorous process.Its HR Planning includes
setting up of detailed list of roles and responsibilities that is required from the candidates
The company uses Internal and External channels for recruitment.

Internal Channels

 Transfer: shifting of employees from one job to another having similar responsibilities
and status.
 Promotion: transfer of an employee to a job that carries higher pay and status.
 Re-employment of Ex-employees: employing the people who had left the organization
earlier due to some reasons.
External channels

 Campus Recruitment: recruitment from educational institutions is a well-established

practice.
  Advertising:Job advertising is done as it helps in approaching candidates.

2. Selection

For the purpose of selecting employees, the company uses following technique:
 Receiving applications via recruitment
 Evaluating the received applications
 Employment Test i.e. Intelligence, personality and Interest tests.
 Assessing candidates through Interview
 Hiring Decision

3. Training and Development

Training and development procedure in Dabur include the following:

 Dabur ED (Employee Development) training program develops future leaders
through an intense learning program giving exposure of various aspects
of business.
 The ED trainee will be followed by a structured four months training program
followed by two months on the job experience.

4. Compensation

Dabur offers compensation packages on the basis of the Technical skills and Experience of the
candidates.
Medical benefits that were aimed keeping the employees healthy and motivated, so as to reach
expected productivity levels.
For all employees they gave them the opportunity to continue their education while working.

5. Employee Engagement

Dabur focuses on the concept of team-work. The company provides a wide range of activities to
help boost confidence of its employees and also offers a flexible and interactive platform to its
employees for engaging them in the decision-making policies of the organization.

References

 Human Resources Management by T.N. Chhabra, Monica S. Chhabra

 https://www.scribd.com/search?content_type=tops&page=1&query=review%20of%20pe
rsonnel%20policies%20in%20budget%20and%20control
 https://managementmania.com/en
 http://www.yourarticlelibrary.com/
 APPRAISAL OF MANAGEMENT DECISION

Management decision making

Decision making is an essential aspect of modern management. It is a primary function of
management. A manager takes hundreds of decisions consciously and subconsciously. It
represent a well balanced judgment and a commitment to action. Decision making pervades all
managerial actions and a continuous process. It is an indispensable component of management
process itself.

Management decision making process steps:

 Define the problem
 Identify limiting factors
 Develop potential alternatives
 Analyze the alternatives
 Select the best alternatives
 Implement the decision
 Establish a control and evaluation system

Objectives of appraisal of management decisions

 The main objective of appraisal of management decision is to see how decisions are
taken.
 Whether decisions taken are meeting the organization objectives.
 Whether documentation is made to substantiate the decision making process.

Management decision making appraisal process:

Following are the process of appraisal of management decisions:

1. In appraisal of management decision, one of the most important things is too see whether
the objectives are well defined. Objectives and outputs should be set out clearly and
relate to the strategy. They should be defined so that it can be established by evaluation
after the event whether and to what extent objectives have been met. Ideally objectives
should be SMART i.e. specific, measurable, agreed, realistic and time dependent.
2. Check while taking the decisions how many options have been considered. Following
factors could influence the choice of alternatives:
 Risk
 Timing
 Scale and location
 Degree of private sector involvement
 Capacity of market to deliver the required output
 Alternative asset uses
 Environmental equality

3. Successful problem solving requires thorough examination of challenge, and a quick

answer may not result in a permanent solution. Thus a manager should think through and
investigate several alternative solutions to a single problem before making a quick
decision. Techniques like brainstorming, Delphi, nominal group may be used to develop
alternative solution.

4. Whether potential options are analyzed reviewed in terms of

value costs, benefits, risk and uncertainties of options:

While evaluating various options, it is necessary to decide the relative merits of each
idea. Managers must identify the advantages and disadvantages of each alternative
solution before making a final decision.
Regardless of method used, a manager needs to evaluate each alternative in terms of its:
 Feasibility
 Effectiveness
 Consequences

5. Whether the options are selected after due analysis and a

consensus decision is taken:

After a manager has analyzed all the alternatives, it is necessary that the best one should
selected. While reviewing the management decision making, it is necessary to see which
options have been selected. If an option other than the best option have been selected, it is
necessary that justification need to be given. While reviewing whether the selected
decision is best of not, justification given may be evaluated.
6. Whether the selected alternative implemented efficiently:
Managers are paid to make decisions, but they are also paid to get results from these
decisions. Positive results must follow decisions. Everyone involved with the decision
must know his or her role in ensuring a successful outcome. To make certain that
employees understand their roles, managers must thoughtfully devise programs,
procedures, rules or policies to help them in problem solving process.

7. Review of management decision control and evaluation system:

Ongoing actions need to be monitored. An evaluation system should provide feedback on

how well the decision is being implemented, what the results are, and what adjustments
are necessary to get the results that were intended when the solution was chosen.
If a manager’s plan has not resolved the problem, he needs to figure out what went
wrong. A manager may accomplish this by asking the following questions:
 Was the wrong alternative selected? If so, one of the other alternatives
generated in the decision making process may be a wiser choice.
 Was the correct alternative selected, but implemented improperly? If so, a
manager should focus attention solely on the implementation step to ensure that
the chosen alternative is implemented successfully.