This theory was introduced in 1950 and implemented till date.
Human capital is a stock of knowledge, abilities, habits, social and personality attributes including creativity embodied in the ability to perform labor so as to produce economic value. It is also a collection of resources such as all knowledge, talent, skills, abilities, experiences, intelligence, training, judgment possessed individually and collectively by individual in a population. These are the resources are the total capacity of the people that represents a form of wealth which can be directed to accomplish the goals of the firm or organization. Employees are just like our assets. Human Relation Theory: This theory was introduced in 1920 by Elton Mayo which is known as Father of Human relation theory. It depends on development of employees. Characteristics of Human Relation Theory: 1. Money is not only the motivational factor. 2. Employees Empowerment. 3. Happy customer is a satisfied worker and satisfied worker is a productive worker. 1. Money is not motivational factor: It is means that there are so many factors for motivating employee of the organization not only the money. Money is not everything. There are two types of benefits: a. Monetary Benefit:
The benefit which is convertible into cash is called monetary
benefits. b. Non-Monetary Benefit: The benefits which in not convertible in cash and offered in form of facility is called Non-monetary benefits. All the facilities are offered to employee but not convertible in cash. Example: Transport facility. House facility. Medical facility. These are the other factors which motivate the employee of the organization and employee give good response in return. 2. Employees Empowerment: Employee empowerment is giving employees a certain degree of responsibility for decision-making regarding their specific organizational tasks. It allows decisions to be made at the lower levels of an organization where employees have a unique view of the issues and problems facing the organization at a certain level.. Advantages: Employee empowerment provides some distinct advantages. Employee empowerment should lead to increased organizational responsiveness to issues and problems and an increase in productivity. It should also lead to a greater degree of employee commitment to organizational goals, since employees can take some degree of ownership in the decisions made towards goal achievement. 3. Happy worker is a satisfied worker and satisfied worker is a productive worker:
It means creating conditions under which workers feel happy
about their work results in greater productivity and other positive work behaviours. Happy individuals are more likely than their less happy peers to have fulfilling, positive relationships, superior work performance and robust health. Happier people tend to get better performance evaluations and higher pay. Contingency Theory: A contingency theory is an organizational theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Example:
Scientific Management Theory:
This theory was introduced by Fredrik Taylor in 1920. It is based on
organizational growth. It is also called taylorism. It is a theory of management that analyzes and synthesizes workflows. Its main objective is improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management. Important Points:
What is work to be done?
How is the work to be done right now? Comparison of option 1 and 2. Implementation of best one.
Organizational Behavior Model:
There are two types of variable which are as following: Dependent variable. Independent variable. Dependent Variable: The variable which depends on other variable is called dependent variable. Productivity Absenteeism Turnover Organizational citizenship behavior Job satisfaction 1. Productivity:
Transferring the input into output at a lower cost is called
productivity. 2. Absenteeism: Failure to report. The activity which depends on previous activity is called assembly line production. Types: a. Wanted absenteeism: The absenteeism in which organization want to show the absenteeism in some specific case. b. Un Wanted absenteeism: In which organization is suffering and does not want absenteeism. 3. Turnover: Permanent withdrawal from an organization. No link from organization. Turnover = Avg. No. of employees hiring during a year/ Avg. No. of employees leaved during a year100 If turnover will exceed 4% then it will show negative impact on goodwill If turnover will not exceed 4% then it will show positive impact on goodwill 4. Organizational citizenship behavior: The behavior in which employees will done extra services without any cost is called OCB. Example: Training of employee. Employee show OCB when they satisfy from job.
5. Job satisfaction: It is impossible to measure Soft skills. Independent Variable: The variable which is not depend on other variable is called independent variable.