Principles of management

(Henri fayol)

Sincere Efforts By-

Somya Chaturvedi
XII-D
INTRODUCTION
Before getting ahead, just what is management, let alone principles of management? A
manager’s primary challenge is to solve problems creatively, and one should
view management as “the art of getting things done through the efforts of other
people.” The principles of management, then, are the means by which one actually
1

manages, that is, get things done through others—individually, in groups, or in

organizations. Formally defined, the principles of management are the activities that
“plan, organize, and control the operations of the basic elements of [people], materials,
machines, methods, money and markets, providing direction and coordination, and
giving leadership to human efforts, so as to achieve the sought objectives of the
enterprise.” For this reason, principles of management are often discussed or learned
2

using a framework called P-O-L-C, which stands for planning, organizing, leading, and
controlling.
Managers are required in all the activities of organizations: budgeting, designing,
selling, creating, financing, accounting, and artistic presentation; the larger the
organization, the more managers are needed. Everyone employed in an organization is
affected by management principles, processes, policies, and practices as they are either
a manager or a subordinate to a manager, and usually they are both.
2The fundamental notion of principles of management was developed by French
management theorist Henri Fayol (1841–1925). He is credited with the original
planning-organizing-leading-controlling framework (P-O-L-C), which, while
undergoing very important changes in content, remains the dominant management
framework in the world. See H. Fayol, General and Industrial Management (Paris:
Institute of Electrical and Electronics Engineering, 1916).
ABOUT HENRI FAYOL :
 Born : 07/29/1841
 Death : 11/19/1925
 Birthplace : Turkey

Henri Fayol (29 July 1841 – 19 November 1925) was a French mining engineer, mining
executive, author and director of mines who developed general theory of business
administration that is often called Fayolism. He and his colleagues developed this
theory independently of scientific management but roughly contemporaneously.

Fayol was born in 1841 in a suburb of Istanbul. His father (an engineer) was in the
military at the time and was appointed superintendent of works to build Galata Bridge,
which bridged the Golden Horn. The family returned to France in 1847, where Fayol
graduated from the mining academy "École Nationale Supérieure des Mines" in Saint-
Étienne in 1860.
In 1860 at the age of nineteen Fayol started working at the mining company named
"Compagnie de Commentry-Fourchambault-Decazeville" in Commentry as the mining
engineer. He was hired by Stéphane Mony, who had decided to hire the best engineers
from the Saint-Étienne Mining School. Fayol joined the firm as an engineer and trainee
manager.
Fayol's work was one of the first comprehensive statements of a general theory of
management. He proposed that there were five primary functions of management and
fourteen principles of management
Following is a brief comment on various facets of Fayol’s work:
(a) Fayol’s classification of business functions:
According to Henry Fayol, all the activities of a business enterprise could be divided
into the following six groups:
(i) Technical activities (relating to production)

(ii) Commercial activities (relating to buying, selling or exchange).

(iii) Financial activities (relating to search for and optimum use of capital i.e. finances)

(iv) Security activities (relating to protection of the properties and personnel of the
enterprise)

(v) Accounting activities (relating to a systematic recording of business transactions,

including statistics also).

(vi) Managerial activities

Point of comment:
In Fayol’s view, the first five groups of activities of a business enterprise were well-
known. Hence, he had concentrated his attention only on an analysis of the sixth group
of activities viz., managerial.

(b) Fayol’s classification of managerial functions:

Henry Fayol classified managerial functions, as consisting of the following:
1. Planning

2. Organising

3. Commanding

4. Coordinating

5. Controlling
(c) Qualities required in managers:
Fayol mentions the following qualities required in managers; to enable them to become
better and more efficient:
1. Physical

2. Mental

3. Moral

4. Education

5. Technical

6. Experience

(d) General principles of management:

By far, the most significant contribution by Fayol is the general principles of
management listed by him, in his monograph titled ‘General and Industrial
Administration. Based on his long managerial experience, Fayol advocates fourteen
general principles of management.
FAYOL’S PRINCIPLES OF MANAGEMENT:
1. Division of work:
The principle of ‘Division of Work’ means to divide a given activity or work into
small pieces or parts so that each part is handled with great ease and efficiency.
The principle of ‘Division of Work’ means to divide a given activity or work into
small pieces or parts so that each part is handled with great ease and efficiency.

This principle states that every work should be divided into the smallest possible
part and each such part is to be performed by an individual person (laborer).
Instead of assigning the whole work to an individual, it’s better to assign one task to
one person. Before assigning the task to anyone it must be assured that he possesses
the required knowledge, skill, capability and will to perform the task effectively and
efficiently. If the same task is performed by a person again and again he gains
specialization in that task and can perform with greater ease and minimizes wastage
of resources and time.

Fayol has emphasized on this issue because specialization and minimization of

wastage is a key to success for each and every organization. He was of the view that
every work should be divided into the smallest possible part and then is to be
assigned to an individual to gain success and specialization. This principle also
guarantees specialization, efficiency and maximum production with minimum time
and least efforts.

Positive impacts of this principle:

Ø Specialization,
Ø Minimization of wastage,
Ø Improved efficiency.

Consequences of violation of this principle:

Ø Overburden on a single employee,
Ø Conflicting situations,
Ø Wastage of time and resources,
Ø Chaos and confusion.

2. Authority and Responsibility:

Authority is the power to give orders and get it obeyed or in other words it is the
power to take decisions.

Responsibility means state of being accountable or answerable for any obligation,

trust, debt or something or in other words it means obligation to complete a job
assigned on time and in best way.

Authority and responsibility are closely related and this principle states that these
two must go hand in hand. It means that proper authority should be delegated to
meet the responsibilities.

A match should be there between these two because of two main reasons:--

 Firstly, if a person is given some responsibility without sufficient authority he can’t

perform better, and also could not accomplish the desired goal.

 Secondly, if there is excess authority being delegated to an individual without

matching responsibility then the delegated authority will be misused in one way or
the other.

This is an important and useful principle of management because if adequate

authority is not delegated to the employees they cannot discharge their duties with
efficiency and this in turn will hamper the achievement of the organizational goal.
Sometimes the relation between management and employees is also badly effected by
non delegation of proper authority.

Positive impacts of this principle:

 No misuse of authority.
 Helps to complete job effectively and efficiently.
 Individuals can be held accountable.
 Systematized and effective achievement of organizational objectives.

Consequences of violation of this principle:

 Misuse of authority.
 Responsibility can’t be discharged effectively.
 No one can be held accountable.
 Conflicts between management and employees.
 3. Discipline:
Discipline means obedience, respect for authority, and observance of established rules.
Fayol has emphasized that a sense of discipline should be present in all employees of the
organization at all level so that the organization can perform and achieve its objectives in the best
possible way.

For maintaining discipline in the organization managers should consider:

· Clear explanation of the rules;

· Effective supervision;
· Reward system on better obedience;
· Possible provision for penalty on non-obedience.

A sense of discipline is needed in all employees at all level in the organization for the smooth
functioning of the organization as well as the achievement of the organizational objectives. Some
employees inherently possess this quality but some employees need to be induced with the sense
of discipline, and the manager must give proper attention to this type of individuals to maintain
and improve discipline in the organization.

Top level managers and officers are greatly responsible for maintaining discipline in the
organization and for this first of all they have to strictly accept the rules of the organization and
follow them so that other employees get encouraged to accept and follow the rules.

Positive impacts of this principle:

Ø Helpful in achieving organizational objectives.

Ø Improved efficiency.
Ø Cordial relation between management and employees.
Ø Better working environment in the organization.
Ø Minimization of wastage;

Consequences of violation of this principle:

Ø Height of disorders.
Ø Confusion and chaos.
Ø Wastage of time and resources.
Ø Conflicting situations

4. Unity of Direction:

This principle states ‘One Head One Plan’. It means that all the employees having same
objective must be directed towards the achievement of the common goal and thus must
 have one head and one plan. This principle makes it necessary that there should be unity
of action.

There are different divisions in the organization for different activities and thus the efforts
of the employees of one division having the common objective must be directed towards the
achievement of these objectives, taking into account the threats, opportunities for that
division.

The application of this principle helps in establishing co-ordination and uniformity in the
activities as well as in the organization. It also reduces the duplication of activities in the
organization and thus helps in minimizing the wastage of resources.

This principle is often confused with the principle of ‘Unity of Command’ as both sound the
same. But the difference between them is quite clear as ‘Unity of command’ is concerned
with taking command from one boss whereas the principle of ‘Unity of Direction’ is
concerned with the direction of the efforts of the employees of one division towards the
achievement of the objectives of that division.

Positive impacts of this principle:

 Efficient achievement of organizational objective;

 Better coordination among the employees;
 Efforts of employees are directed in a better way; and
 Systematic working environment is developed in the organization.

Consequences of violation of this principle:

 Decrease in organizational efficiency;

 Lack of coordination;
 Wastage of resources;
 Difficulty in achievement of organizational objective; and
 Duplication of activities.

5. Unity Of Command:
Fayol’s principle of unity of command means that a group of employees or an individual
employee should receive orders from a single manager. If more than one boss passes orders
then the employees may get confused to follow instructions of many bosses. All the leader’s
approach may not be similar, different managers have different leadership styles. More
importantly, communication barriers and the work procedure may also differ from one boss
to another. All such factors highly bring dissatisfaction in the work group.

Applying the principle unity of command in the organizations promotes good relations in
between superiors and subordinates; it highly reduces conflicts while assigning tasks. By
 introducing single head, single plan concept organizations can reach the desired objectives
without difficulty. It reduces the confusions in the work group that whose orders they
should follow.

6. Subordination of Individual Interest to General Interest

This principle states that general interest is superior to the individual interest. And the
manager must try to integrate the individual goal with the organizational goal in such a
manner so that both the objectives are accomplished with efficiency and effectiveness. The
manager directs the employees in such a manner that they work for their objective and
ultimately the organizational objective is achieved.

Each and every individual joins the organization with certain expectations and objective.
And everyone works to achieve his objective. If the objectives of the individual employee is
in the direction of the achievement of the overall organizational objective then there is no
problem, but where the employee has an objective which drives him in the opposite
direction from that of the organizational objective, the manager must try to reconcile the
goals of both, the individual with the organization so as to achieve the objectives. The
manager must try to achieve the organizational objective in such a manner that the
individual objectives are also achieved.

All this leads to satisfaction among the employees which helps to maintain a cordial
relation among the employees and the management. This also facilitates to increase the
efficiency of the employees, and leads to harmony in the organization.

Positive impacts of this principle:

 Achievement of organizational objective;

 Coordination between individual and organizational goal;
 Harmony in the organization;
 Increases employee’s respect for the organization.

Consequences of violation of this principle:

 Difficulty in achievement of organizational goal;

 Conflicting situations in the organization;
 Wastage of efforts, time and resources; and
 Delay in work.

7. Remuneration of Employees:
Every individual joins the organization with the main aim of earning his bread and butter.
The wages or salary which he earns for his work helps him to fulfill the basic and other
needs of life. The wages or salary must be in equality with the work done by him so that he
gets satisfied and can perform better.

Fayol is of the view that each employee must get fair remuneration so that the employee as
well as the owner gets the same amount of satisfaction. The remuneration system must be
such which provides for the adequate remuneration to the employees, motivates the
employee to perform better, and may ensure safety & security, raise standard of living of
the employees.

A fair wage system is one that guarantees equality between the work done and the payment
received. Such a system satisfies the owner in terms of the work completed by an individual
employee and satisfies the employee in terms of payment received by him. This creates a
healthy organizational environment and relation between the management and the
employees.

Positive impacts of this principle:

 It creates good relation between workers and management;

 Employees get motivated;
 It declines the labor turnover rate;
 Employees feel satisfied with their wages and thus contribute their best effort;
 It raises the standard of living of the employees; and
 It develops the society indirectly.

Consequences of violation of this principle:

 Employee’s efficiency decreases;

 Conflict between management and employees;
 Labor turnover rate will be more;
 The immediate result is incomplete work; and
 Hard to achieve organizational objective.

8. Centralization and Decentralization

When the power to take decision rests with the top management it is called as
‘Centralisation’.

When the power to take decision is given to the person performing the job it is called as
‘Decentralisation’.
Fayol is of the opinion that there should be a proper balance between centralisation and
decentralisation. An organization must not be completely centralized or decentralized, there
should be a match between the two depending upon the size, nature and location of
business.

The top management must keep the authority to take important decisions of the
organization but adequate authority must be delegated to the lower level employees to take
the department level decisions. This will facilitate the proper and timely functioning in the
organization. And the top management will be free from extra burden of taking and
handling each and every affair of the organization. All the lower level problems will be
handled at that level only, this also gives a feeling of superiority to the lower level
employees which motivates them to perform better.

Positive impacts of this principle:

 Facilitates proper functioning of the organization;
 Timely completion of work;
 No extra burden on the top management;
 Motivates the lower level employees; and
 Decisions will be taken at the level of action.

Consequences of violation of this principle:

 Over burden on the top management;
 Difficulty in the achievement of organizational objective;
 Delay in action, because the decisions of top management are to be waited.
 Sometimes it creates conflict between the management and the employees; and
 Ego clashes in case of different decision by lower level and top level management.

9. Scalar Chain:

Scalar chain is the formal line of authority which moves from highest to lowest rank in a
straight line. This chain specifies the route through which the information is to be
communicated to the desired location/person.

Fayol emphasized that every information in the organization must flow according to this
chain to facilitate clear communication of orders of the superiors and feelings of the
subordinates. This chain must be strictly followed in the organization. Fayol also stated
that there should be no overlapping of steps during the communication process.

Fayol’s Ladder: This principle was explained by Fayol with the help of a ladder diagram
which showed the flow of information.

For example, in an organization there are employees A, B, C, D, E, F, G, H, I, at various

posts. If employee ‘C’ has to communicate with employee ‘G’ using the scalar chain, the
route should be like CBAFG. Thus there will be four steps for the information to
reach from employee ‘C’ to the employee ‘G’.

Due to more clear system of authority and communication, problems can be solved easily,
also the accountable person can be held quickly without any confusion and delay. Though
this principle is very effective and clear, but it consumes a lot of time. In case of emergency,
information will take a lot of time to reach the desired position which may delay the action
as well as decision.

Gang plank:

For overcoming this limitation of scalar chain, fayol introduced the concept of ‘Gang Plank’.
According to this concept, two executives of the organization of different department at the
same level can communicate directly in case of emergency, so that speedy decisions and
actions could be taken. In case of the above example, if employee ‘C’ has to contact
employee ‘G’, he can easily and directly communicate the information to ‘G’ using this Gang
plank (‘C’‘G’). This reduces a lot of time and helps in effective performance.

Positive impacts of this principle:

 Clear communication of information;
 Better relation among employees;
 Systematic communication in the organization; and
 Faster solution to organizational problems.

Consequences of violation of this principle:

 Bitterness in the relation of employees because of ignoring the close supervisors.
 Improper communication of information;
 Difficulty in finding the responsible person.

10. Order:

Here the word Order does not mean any command but is used in different context. “Order”
means right arrangement of things and activities. In other words, order is a normal, correct,
or fit condition.

This principle states that there should be a proper order for everything. Fayol is of the view
that in every organization there should be a fixed place for everything to facilitate smooth
working and avoid wastage of resources.

According to Fayol in every organization two different orders are necessary.

Material Order: This order specifies that there should be a proper place for all physical
resources. It states “A proper place for everything and everything at its proper place”. This
will eliminate any kind of confusion regarding the search of material as the place of
materials is already fixed and thus reduces wastage of material, time and efforts.

Social order: This order specifies that there should be a proper place for all human
resources in accordance with their designations. It states “An appointed place for every
 employee and each employee at his/her appointed place”. This order is based on the basic
assumption of “Right man for the right job”

This principle is very important for any organization as an effective order decides the overall
working, efficiency and effectiveness of the organization. If an order is maintained for each
and every resource then there will be no confusion and delay in working and thus this also
helps in eliminating the wastage of time, resource and efforts. Consequently it also helps in
controlling the use of financial resources.

Positive impacts of this principle:

 No wastage of time and energy.
 Better handling of resources.
 Smooth and systematic working in the organization.
 Increased productivity.
 Efficiency in work.
 Proper use of financial resources.

Consequences of violation of this principle:

 Delayed operations.
 Scattered physical and human resources.
 Wastage of time and energy.
 Wastage of financial resources.
 No proper accountability.
 Reduction in efficiency of controlling process.
 Reduced operational efficiency.

11. Equity:
The management principle of equity says that all the employees or workers of the
organization must be treated fairly, equally and impartially. Maintaining equity in the
organizations come from the organization’s culture; adopting and maintaining equity
maximizes employee loyalty and trustworthiness.

The combination of kindliness and justice is very important to achieve equity and to adopt
in the organization culture. If an organization follows ethics and right organization culture
then it is not necessary to put extra efforts to maintain equity in the workplace. If all the
employees not treated equally and giving preference over few employees or a particular
group then it leads to conflicts and revolutions.

Misunderstanding and misinterpretations from the minds of employees must be cleared

with proper communication and with regular interactions. If something is done favorable
towards a particular employee then the managers must give clarity to the other employees
that what situations made them do it; and it must be justified.

12. Stability of Personnel:

STABILITY' means no frequent change, termination and transfer etc. It means that, in an
organisation whenever an employee is appointed for a job, he/she shouldn't be removed
from that position frequently. The management of the organisation should ensure that
there must be stability in the job and frequent changes and shuffling of position should be
avoided.

When one feels secure at his job, he/she contributes maximum of his capability towards
the organisational objectives. Stability also helps the employee to know each and every
aspect of the job with the passage of time which consequently helps in performing the job
with greater efficiency and minimum wastage. It creates a sense of belonging-ness towards
the job and the organisation.

An organisation following the principle of stability achieves its objectives effectively and
efficiently with the maximum contribution from their employees. The employees of such
organisation always feel satisfied and thus are the productive factor for the organisation.
But if this principle is violated i.e. if the employees are frequently transferred from one
position to another or employee turnover, they will feel dissatisfied and will not perform
with their full potential leading to non-achievement of the organisational objectives or
under utilisation of resources as well as wastage.

Positive impacts of this principle:

 Develops sense of belonging-ness towards the organisation.
 Improves the efficiency level of employees.
 Minimises the wastage of resources.
 Employees satisfaction.
 Better accountability.
 Saves time.

Consequences of violation of this principle:

 Non-achievement of the organisational objectives
 Lack of employees participation.
 Wastage of resources and time.
 Dissatisfaction
 Adds to cost.
 13. Initiative:

‘Initiative’ means to start, to begin or to instruct in a project. Here, in this principle fayol
suggested that each employee should be given an opportunity to take some initiative in
framing the functional plan as well as in determining the steps to be taken at each level for
proper execution of the plan.

Management must welcome the employees for taking initiatives in forwarding valuable
suggestions before the plans are set up for them. When the plans are set up in consultation
with the employees they will feel as if it is their own plan and they have to complete it,
which will stimulate them to work whole heartedly. This will reduce wastage, absenteeism
and maintain a cordial relation between employees and management.

This principle helps the management to know more ways of executing the predetermined
plan as the employees give various suggestions. When the employees are involved in such a
way in the management they feel satisfied and take each and every necessary step to
accomplish the plan. This will make the working environment more interesting, more
cooperative and more effective.

Positive impacts of this principle:

Ø Timely achievement of objectives when they are set in consultation with employees.
Ø Develops sense of belongingness in employees.
Ø Ensure maximum participation of employees.

Consequences of violation of this principle:

Ø Employees will feel that the plans and goals are not for their benefit and thus will not
work with full potential.
Ø Lacks maximum participation from employees.
Ø Conflict between the management and employees.

14. Espirit De Corps:

'ESPIRIT DE CORPS' here means team spirit and team work. This principle emphasizes on
team work. 'UNITY IS STRENGTH' is the essence of this principle. Fayol suggested that
there should be a team spirit in the organisation and all the employees must consider
themselves as member of the organisation.

The organisation should be considered as a team and all the employees as its member.
When the employees are considered as member, it develops a feeling of belongingness
among them and thus each of them contributes to the achievement of the organisational
goal. This sense of togetherness helps the employees to perform with greater efficiency and
positive attitude towards the work.
 This principle is based on two theories - “Unity is strength” and “Unity of staff is the
foundation of success in any organisation”. Thus, this principle states that both the
workers and management should work together to accomplish the objectives. The reason
behind this principle is that, team contribution is always better than individual
contribution.

This principle is very helpful in the organisation as well as in our daily life because this
brings a sense of belongingness and association wherever human beings are involved.

Positive impacts of this principle:

Ø Achievement of group goals.
Ø Development of team spirit.
Ø High morale of employees.
Ø Cooperation and coordination in the organisation.

Consequences of violation of this principle:

Ø Non-achievement of the organisational objectives.
Ø Conflicting environment in the organisation.
Ø Lacks maximum participation from employees.

Point of comment:
There is no doubt that Fayol’s work on management is of a pioneering and practical
nature. Due to his outstanding contribution to management, scholars accord him the
status of the ‘father of modern management theory’.
ABOUT THE ORGANISATION:
HELION VENTURES PVT LTD.

Helion Ventures Partners is an Indian focused venture capital firm based in Mauritius.

Created in 2006, Helion was founded by Rahul Chandra, Ashish Gupta, Kanwaljit
Singh and Sanjeev Aggarwal. The firm focuses on technology startups in the early to
middle stages. According to The Economic Times, in 2012 Helion was India's "largest
domestic venture capital firm".
The company has created three funds: a $140 million fund in 2006, a $210 million
fund in 2008, a $255 million fund in 2012. Although Helion is focused primarily on
technology companies, it has also funded companies in the environmental technology,
education, financial services, and health care sectors.
By January 2017, Helion had exited the following companies. In
2010, MakeMyTrip had an initial public offering. In 2013, Naspersbought Redbus.in,
and Moody's Investors Service bought Amba Research. In 2016 Equitas listed on the
Bombay stock exchange, Azure Power listed on the NYSE, and Zettata was acquired
by Target Corporation.
 PARTNERING WITH ENTREPRENEURS TO BUILD WORLD
CLASS COMPANIES

Founded in 2006, we are an early to mid-stage, India focused venture fund with over $600 million
under management.

We partner with entrepreneurs through their journey in building world-class companies, backed by
the rich & deep operating experience of our team.

Helion is proud to have partnered with over sixty companies.

We invest in technology and technology-powered businesses such as eCommerce, Online services,

Mobility, Enterprise Software and Outsourcing.

What do our entrepreneurs say?

 H elion team is always ready to take time out and help. The interactions are supportive rather than prescriptive.

 T hey offer very practical advice, helpful in defining and executing strategy. The team has deep expertise in multiple areas.

 E ntrepreneurs get multiple and often unique perspectives. Complex issues get simplified and resolved.

 G reat team. Very engaged. Transparent and above board. You always know where they stand on any issue.
APPLICATION OF PRINCIPLES-

1. DIVISION OF WORK-

 Are people specializing in the work they are doing?

 Do you need to restructure the division of labour in your organization?

The entire organisation is divided into four divisions namely- Investment, Finance, IT &
Administration and Human Resource. Based on the responses received to the
questions, it can be said that there is clear division of work in the organisation based on
their skillset. The responsibilities and skill set needed for various functions are as under:

Investment Team: Fund raising, identification of investment opportunities by analyzing

the business plan of various startups, board management and divestment. Investment
team members are qualified MBA from Ivy League universities.

Finance Team: Accounting, investor reporting, taxation, audits, due diligence of startups
and treasury management. Finance team members are Chartered accountants and
commerce graduates.

IT & Administration: IT hardware & software management, Office administration,

facility management. IT team members are networking professional and IT engineers.

Human Resource: Resource hiring, training, performance appraisal and payroll

management. HR team members are MBA in HR and graduates.

2. AUTHORITY AND RESPONSIBILITY-

Do you have all the authority connected with your work?

Do you have clearly defined goals, objectives and key responsibility areas (KRA’s)

Helion defines organzational goals at the beginning of the year. Based on the same, goals
for each department are set up. Individual employees are given objectives based on their
functions. Based on the same, employees become clear about their responsibility in the
organization. Each departmental head has complete authority to take decisions regarding
functioning of their own department. They also have the authority related to the budget
needed to achieve their objectives like recruitment and expense budget etc.

3. DISCIPLINE:

How often are you successful in meeting the deadlines of the tasks assigned to you?
In Helion employees are encouraged to respect each other’s time and organizational
deadlines. Some of the rules are- starting and ending board meetings in time, punctuality in
office timings, completing investor reporting, holding board meetings as per the deadlines,
etc. Employees are supposed to maintain dignity and decorum in common areas like canteens
and meeting rooms.

4. UNITY OF COMMAND-

 Are there too many conflicts at the managerial level with regards to who is reporting to
whom?

Each employee at Helion gets orders from their respective Department Heads. All the
Department Heads then report to the Chief Executive Officer (CEO). Clearly defined roles
and responsibilities and division of work results in Unity of Command in the organistaion.

For e.g. - All employees of finance function gets orders from the Chief Financial Officer
(CFO) only.

Based on the survey, employees also feel Unity of Command is an important factor in the
discharge of their responsibilities towards the firm. Further, this also helps them achieve
their individual objectives which keeps them motivated.

5. UNITY OF DIRECTION-

Do you have a clear understanding of the vision and mission of your organisation?

At Helion, the company’s Board of Directors define short-term, medium-term and long term
objectives of the company. The company sets up SMART goals (specific, measurable,
achievable, realistic and time-bound). The Departmental Heads formulate their objectives
which are in line with the organisational objectives.

E.g. - Growing assets under management by 100%, improvement in rate of return by 5%,
10% saving in IT and Admin cost, two trainings per employee each year, etc.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO GENERAL INTERESTS-

 Do you have employees or managers who are placing personal interest above
company’s interests?

 Do you give top priority to the interests of the company?

The focus of the organization is on individuals who are giving their all to the company. The
interests of the company are placed above the interests of the individual. The manager directs
the employees in such a manner that they work for their objective and ultimately the
organizational objective is achieved. All this leads to satisfaction among the employees which
helps to maintain a cordial relation among the employees and the management. This also
facilitates to increase the efficiency of the employees, and leads to harmony in the
organization.

Employees at Helion, at times, willingly cancel their personal leaves in order to meet
oragnisational deadlines or for some oraganisational emergency.

6. REMUNERATION TO EMPLOYEES:

Are your employees happy with the monetary remuneration and is it as per industry
standards?

At Helion, the HR Department conducts Annual Compensation Survey and according to

which remuneration of the employees is fixed. Helion operates at the 90th percentile of the
competitors’ basket. Company also has certain bonus plans which are awarded to the
employees on achieving the targets. The firm also award Employee Stock Options due to
which employees get monetary benefits if the company does well.

8. CENTRALISATION AND DECENTRALISATION:

Are major decisions taken only by the higher authorities?
According to the survey conducted, it was observed that the Management at Helion is
quite systematic and there are different tiers of management-
 The Top Level- consisting of Board of Directors, CEO, CFO, IT Head, HR Head, etc.
 The Middle Level- consisting of Finance Manager, IT Manager, HR Manager, etc.
 The Supervisory Level- consisting of Finance Executive, IT Executive, HR Executive, etc.
The Strategic Organisational decisions are taken by the Top Level Management only and
there is Centralisation of Power. Furthermore, enough authority is delegated to the
junior levels as well for the smooth functioning of the organisation. This does away with
the need of repeated instructions.

9. SCALAR CHAIN:
Does your superior’s superior directly communicate with you?
Helion encourages skip-level communication. The subordinates have the freedom to
directly communicate with the superiors regarding important issues. However, it is
considered appropriate for them to first inform their immediate superiors. Grapevines
are discouraged in the company. Employee Town Halls are also conducted at regular
intervals for important communication. In cases of urgency, employees use the parallel
mode of communication which is known as Gang Plank.

10. ORDER:
Does your organisation work in an orderly manner?
Helion has set rules in place to ensure proper conduct of its operations. For example,
there is a leave policy in place. The swipe card system is implemented to ensure
punctuality. Expense statements of the employees are approved by their managers.
There is policy in place to control travel and entertainment expenditure. The company
also has a system of internal auditing in place to ensure compliance of various policies.

11. EQUITY:
Are you treated fairly by the organisation?

Helion’s HR Department places a lot of emphasis on treating all employees with equality
and fairness. Company’s culture promotes diversity. Company follows meritocracy at all
levels of the organisation. There is no discrimination on the bases of race, gender, caste
and creed. HR Department consults employees at all levels while developing Human
Resource Policies. The policies, rules and regulations regarding travel, leaves, office
timings, etc. are uniform across all the levels of organisation. Remuneration is equal for
employees doing similar work.

12. STABILITY OF PERSONNEL:

How long would you want to serve the organisation?

Helion believes that employee satisfaction is the only solution to reduce the rate of
attrition and cost of training the new employees, sometimes attrition may result in
expensive mistakes and rejection of projects due to hiring new employees. One of the
main KRA’s for Chief Human Officer is giving priority to reduce the attrition rate and
taking necessary actions in order to retain the employees.
 In order to improve employee retention, Helion focuses on training and development,
job rotation and providing long term incentives to its employees. Exit interviews are
conducted for employees leaving the organisation so that necessary corrective actions
can be taken. People are also given long service awards.

13. INITIATIVE:
Does your boss give importance to your suggestion?

Helion believes in identifying and encouraging skilled and talented employees to

encourage them to put their efforts in a unique way; it results in innovations and
creations. As long as freedom is given in the work environment it automatically brings
out hidden talents, skills, and commitment.
At Helion, employees who come up with innovative ideas in making investments in
different sectors are awarded. Company also organises- ‘Idea of the month’ contest to
motivate employees and deliver the message of the importance of innovation in order
to be at par with the fast changing economy.

14. ESPIRIT DE CORPS:

Do you get necessary support from your peers in the organisation?

Helion’s Performance Appraisal System assigns weightage to accomplishment of both

individual and team goals. Employees are encouraged to work as a team on critical
projects.

Cross-functional teams are also formed as and when required. The company also organises
team events to promote a culture of teamwork in the organisation like- sports events,
cultural events, trainings and seminars.