Benefits-Drawbacks

What Is Off The Job Training ?

Off the job training is conducted outside the company or workplace. In this method, trainees learn through lectures, case studies, conferences, demonstration, modeling, computer, role play etc.

Benefits Or Advantages Of Off The Job Training

The main advantages of off the job training can be described as follows:

1. Effective Method

Off the job training is well organized and conducted by experts and specialists which makes the training program more effective.

2. High Productivity

It is conducted out side the organization or workstation and trainees are not involved in the production process. Only trained and skilled workers are placed at the work place. So, productivity will be higher.

3. Minimize Errors

Under this method, newly appointed employees are trained outside the production area and skilled and trained manpower perform the job. So, it lowers the production errors.

4. Economical

In this method, a large number of employees can be participated and orientation can be provided at a time. It helps to reduce training costs. So, it is a cost effective method.

5. No Disturbance

Trainees are not allowed to work in the actual work place. So, production process will not be disturbed and existing employees can do their jobs smoothly.

Disadvantages Or Drawbacks Of Off The Job Training

Some of the major drawbacks of off the job training are as follows:

1. More Expensive

This method of training may be very expensive due to extra space, accommodation and transportation costs and experts' fees etc.

2. Less Effective

Off the job training is less effective than on the job training method because it is conducted outside the working environment. Employees need extra induction training to handle their job.

3. Dissatisfaction

Training is conducted artificially outside the work place. So, employees cannot learn properly in this training method. Dissatisfaction may arise among the employees.

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4. No Production

Trainees cannot take part in the production process. So, potential output and time is lost in this method of training.

Advantages And Disadvantages Of On The Job Training

What Is On The Job Training ?

On the job training is conducted at the actual work place which helps the newly appointed employees to learn by performing the job. Simplicity, economical, time saving, quick learning etc, are some advantages of this training method. On the other hand, it has some drawbacks such as possibility or production error, low productivity,disturbance etc.

Advantages Or Benefits Of On The Job Training (OJT)

Some of the notable advantages of on the job training can be highlighted as follows:

1. Simple Method

OJT is very simple and easy method of providing training. So, it is the most common and widely used method to train the fresh employees.

2. Economical Method

Under OJT method, training is conducted in the workplace by actually performing the jobs. It does not need extra space, materials, resources and time for training. So, it is cost effective method of learning.

3. Time Saving

Employees learn their jobs and duties by performing at the workplace. So, they can gain more knowledge in the short period of time. So, on the job training is time saving method of conducting training.

4. Quick Learning

OJT helps new employees to learn at the actual workplace with actual materials and equipment. Hence, it helps them to learn quickly.

5. Immediate Productivity

On the job training follows the principle of "Learning By Doing". So, employees are actually working at the time of training. Therefore, immediate productivity is possible while conducting training within the workstation.

Disadvantages Or Drawbacks Of On The Job Training (OJT)

The main disadvantages of on the job training can be highlighted as follows:

1. Low Productivity

Rate of production and quality of product may be affected while conducting training at the workplace.

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2. Production Errors

There will be a high chance of errors in production process because newly appointed workers are not skilled and experienced.

advantages disadvantages on the job training

3. Disturbance

Learning process of trainees may disturb the work process of existing employees in the workplace.

4. Chance Of Accident

Under on the job training, trainees are required to work with different machines and equipment. It maximizes the chance of accident (especially in the manufacturing industries).

Pros And Cons Of On The Job Training In Short

Pros:

- It is simple and commonly used training method

- It is economical and time saving

- It helps employees to learn quickly

- It can be conducted in short period

- Trainees can get immediate feedback

Cons:

- It may create disturbance at the workplace

- It may lower productivity and quality

- It increases the chance of errors in the production process

- It maximizes the possibility of accident

Benefits Of Employee Training

Main advantages or benefits of employee training can be expressed as follows:

1. Higher Performance

Training helps to upskill employees by enhancing their skills and knowledge. So, they show high performance at the workplace. Training also helps the employees to develop decision making and problem solving skills.

2. Higher Productivity

Well trained employees are more committed and motivated towards the job. So, they make proper utilization of resources and minimize wastage. This definitely leads to higher productivity.

3. Quality Of Work

Properly trained employees are aware of faults and operational errors. So, training helps to maintain quality of work by minimizing faults and errors.

4. Less Supervision

Well trained employees can perform their job effectively and efficiently because they are motivated and devoted towards their job. So, self-reliant employees need less supervision.

5. Cost Minimization

Because of higher productivity, regular production, minimization of wastage and less supervision costs, training helps to reduce overall production and administrative costs of the business.

6. Customer Satisfaction

Employee training ensures productivity improvement and better customer service. So, it helps to improve customer satisfaction.

7. High Morale

Training and development programs provide opportunity for employees to learn and improve their skills and potential. It helps to reduce absenteeism and dissatisfaction. So, training helps to increase employee morale.

8. Adjust The Change

Proper training helps the employees to cope up with the situation and adjust themselves according to the environment.

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Advantages And Disadvantages Of Off The Job Training

9. Job Satisfaction

Employee training and development programs helps to increase job satisfaction among the staffs.

10. Advantages Of New Technology

Training helps the employees to adopt and take advantage of latest technologies. It helps them to be updated with cutting-edge technology.

11. Increase Goodwill

Proper training ensures productivity improvement, customer satisfaction and lower labor turnover. It helps to increase the goodwill and image of the firm.

Advantages And Disadvantages Of External Recruitment

Advantages Of External Recruitment

Main benefits or advantages of external recruitment method and sources can be expressed as follows:

1. Highly Qualified Candidates

External recruitment increases the chance of finding highly skilled, experienced and qualified personnel because of the large pool of applicants.

2. Wider Choice

It provides wider choice to find a suitable staff because of the large number of candidates. A company can select most talented and capable candidate for its vacant position.

3. Arrival Of Fresh Talent

External recruitment encourages to bring fresh talents with new skills and creative ideas for better performance of the job.

4. Better Competition

Recruiting from outside helps to face the competition because of the capability and risk taking ability of the candidate.

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5. Improved Diversity

It hires the people of different race, religion, gender, age etc on the basis of their skills and capabilities. So, it helps to improve diversity requirements.

6. Less Training And Development Cost

Recruiting from outside minimizes the training and development costs because it hires well trained and experienced candidates according to the requirement of the job.

Disadvantages Of External Recruitment

Major drawbacks or disadvantages of external recruitment method and sources can be highlighted as follows:

1. Expensive Process

External recruitment is a costly process of hiring employees. A lot of money is required for vacancy announcement (advertisement), shortlisting, conducting interview and for final selection.

2. Time Consuming

It is time consuming and lengthy process to recruit staff from outside the company. Various steps such as advertising, applications processing, shortlisting, interview, and selection should be performed to complete external recruitment.

3. Poor Employee Morale

It may decrease the morale of current employees because of highly qualified new candidates which leads to decrease in performance, productivity and quality.

advantages disadvantages of external recruitment

4. Adaptability Problem

It requires longer adjustment period for new candidates. They may have to face several challenges to adopt themselves in the new environment.

5. Risky

External recruitment is riskier than recruiting from inside the organization because of little information and unknown nature of fresh candidate.

Pros And Cons Of External Recruitment In Short

Pros:

- It increases the chance of finding skilled and qualified employees

- It encourages fresh talent

- It minimizes training and development costs

- It helps to enhance diversity

- New ideas and skills of new personnel can increase organizational efficiency

Cons:

- It is costly and time consuming

- It may discourage existing employees in the organization

- There may be a adaptability problem for fresh employees

Disadvantages Of Internal Recruitment

Major drawbacks or disadvantages of internal recruitment method or sources can be highlighted as follows:

1. Internal Conflict

There is a high chance of favourism while hiring employees through internal recruitment method. So, it can create conflict among the employees in the organization.

2. Lack Of Fresh Perspective

Internal recruitment hires employees from within the organization. So, it lacks new ideas, talents, values and freshness in the work.

3. Limited Choice

Recruiting internally limits the pool of applicants by avoiding the arrival of skilled and talented candidates outside the organization.

4. Increased Training Costs

Internal recruitment may increase the training and development costs of promoted employees.

5. Overstaffing

There may be a chance of overstaffing because of the tendency of referring friends and relatives in the organization.

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6. Lack Of Diversity

Recruiting internally fails to bring new perspective and diversity in the organization.

7. Resentment

Internal recruitment may create resentment among workers who are not recruited or appointed.

Advantages Of Internal Recruitment

Keshav Poudel

Main benefits or advantages of internal sources and methods can be expressed as follows:

1. Easy And Quick Process

Internal recruitment method is easy and quicker process of hiring employees in the organization. It requires less paper work and less time to recruit the candidate. So, it is a simple and mostly used method of hiring people.

2. Cheaper Method

This is another benefit of internal recruitment. This method avoids advertisement costs and agency fees for hiring employees from outside. So, it is a cheaper process of hiring or selecting employees.

3. Increased Employee Morale

It helps to maintain high employee morale in the organization because there is a room for reward, promotion and advancement for better performance.

4. Good Labor Relation

It provides opportunity for advancement and progress to the employees. So, it helps to establish better labor relation between management and workers.

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5. Better Performance

Internal recruitment helps to motivate employees by rewarding their hard work. So, it helps to boost their performance for better output.

6. Less Risky

Internal recruitment process minimizes the risk of hiring unsuitable and wrong candidate from outside the organization.

Advantages Of Job Evaluation

Main benefits or advantages of job evaluation can be studied as follows:

1. Rating Of Jobs

Job evaluation helps to determine the worth or value of different types of jobs in the organization. So, it is a scientific technique to rate the jobs according to their importance and nature.

2. Rational Wage Structure

Job evaluation helps to develop sound wage policy in the organization. It helps to establish rational wage policy according to the nature and value of the jobs.

3. Specialization

Job evaluation promotes division of labor and specialization by defining the job in terms of nature and complexity.

4. Harmonious Relationship

Job evaluation helps to establish harmonious relationship between manager and employees by eliminating wages controversies. It also helps to maintain good labor relation in the organization.

5. Training And Development

Job evaluation helps the management to identify the training and development needs of different jobs by ranking them according to their importance.

6. Cost Minimization

Job evaluation helps to reduce labor turnover rate by fixing proper pay structure and by maintaining good labor relation. It helps to improve production rate which minimizes the cost of production.

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7. High Employee Morale

Proper placement, uniform pay structure and job classification is possible because of job evaluation. It helps to motivate and maintain high employee morale in the organization.

Benefits Of Job Analysis

Major advantages or benefits of job analysis can be highlighted as follows:

1. Manpower Planning

Job analysis provides job-related information to the management which helps to determine the job, prepare human resource information system and human resource inventory. So, it is the foundation of manpower planning in the organization.

2. Recruitment And Selection

Job analysis helps to recruit and select competent manpower for the job according to the job description and job specification. So, it helps to establish effective hiring policy in the organization.

3. Proper Placement

Job analysis ensures proper placement of employees according to their knowledge, skill and capacity. It helps to improve the performance.

4. Training And Development

Job analysis helps to design effective training and development program by identifying the needs of the jobs and employees. It helps to enhance employee performance.

5. Job Evaluation

Job evaluation is conducted with the help of job-related information provided by job analysis.

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6. Performance Appraisal

Job analysis helps the management to evaluate employees' performance by comparing their performance with the set standards. It helps to determine the variations and take appropriate steps to improve their performance.

7. Job Design

Job-related information received from job analysis helps the management in designing or redesigning the jobs.

8. Organizational Structure And Design

Job analysis helps to maintain proper balance between responsibility and authority in the organization. So, it ensures effective organizational design and structure.

9. Safety And Health

Jon analysis always gives emphasis on the safety and health of the employees. It helps to maintain safety and healthy working environment by eliminating unsafe environment at the workplace.

10. Compensation Management

Job analysis helps in designing compensation package for each job. It helps the management to make compensation decisions.

Benefits Of Human Resource Planning

Major benefits or advantages of HR planning can be highlighted as follows:

1. Forecasting Human Resource Need

Human resource planning helps to determine the future needs of human resource in the organization. It helps the organization to fulfill the manpower requirements for smooth operation.

2. Recruitment And Selection

Human resource planning helps to recruit and select the most desirable and competent manpower to fulfill the vacant positions of the organization.

3. Meet Expansion And Diversification

Human resource planning helps the organization to cope with the future changes. It helps to meet future expansion and diversification needs of the company.

4. Training And Development

HR planning helps to enhance the efficiency of the employees by giving suitable training and organizing development campaigns.

5. Formulate Policy

HR planning helps to formulate different policies in the organization. employee transfer policy and promotion policy are designed with the help of HR planning.

6. Optimum Use Of Manpower

Human resource planning ensures optimum use of human resource in the organization. It maintains balance between distribution and allocation of manpower.

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7. Cost Minimization

HR planning ensures higher productivity through effective use of human resource in the organization. Higher level of productivity reduces the cost of production. So, HR planning is helpful in overall cost minimization.

Benefits Of Human Resource Management (HRM)

Main benefits or advantages of human resource management (HRM) can be expressed as follows:

1. Improves Performance

Human resource management is concerned with the proper utilization of human resource in the organization. It follows the principle of "the right man for the right job" according to the skill and knowledge of employees. It helps to increase employee performance.

2. Reduces Employee Turnover

Human resource management helps to reduce employee turnover rate in the organization by providing growth opportunities and maintaining good working environment in the organization.

3. Training And Development

Human resource management helps to enhance employee's skills and qualities by providing training programs and organizing development campaigns. Training and development programs helps to develop potentiality of the human resources in the organization.

4. Conflict Management

Human resource management helps to manage conflict between the employees and the company. HRM plays the role of mediator and takes the appropriate step to handle the misunderstanding or conflict in the organization.

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5. Employee Satisfaction

Human resource management (HRM) provides career development opportunities to the employees. It helps to enhance potentiality and provide growth opportunity through training and development programs. HRM helps to address employees' dissatisfaction by solving their problems.

6. High Employee Moral

Human resource management helps to maintain high employee moral by creating healthy working condition, proper work design and motivating them towards their job.

Advantages Of Cost Volume Profit Analysis

Main benefits or advantages of cost volume profit (CVP) analysis can be studied as follows:

1. Decision Making

CVP analysis helps the management to make sound decision regarding distribution channel, make or buy decision, pricing, production method etc. by showing the relationship between cost, volume and profit.

2. Fair Pricing

Cost volume profit (CVP) analysis helps to fix optimum price of the product and services by comparing the competitor's product price.

3. Determination Of Break Even Point

CVP analysis helps to calculate the break even point at which total revenues are equal to total costs.

4. Determination Of Margin Of Safety

CVP analysis helps to determine the margin of safety (position above the break even point).

5. Profit Planning

CVP analysis assists management in profit planning by estimating the profit at different output levels.

6. Cost Control

CVP analysis is an effective tool to control unnecessary production and distribution costs.

7. Budgeting

Management can prepare budget on the basis of CVP analysis because it provides relevant data and information about cost, volume and profit.

8. Product Selection

Cost volume profit analysis helps to select the most profitable product by analyzing the relationship between revenues and costs.

Advantages And Disadvantages Of Absorption Costing

Benefits Or Advantages Of Absorption Costing System

The main advantages of absorption costing system can be studied as follows:

1. Fair Pricing

Absorption costing covers both variable costs and fixed costs while determining the cost of unit of a product. So, it is suitable method to determine the fair price of product and services.

2. Importance Of Fixed Cost

Absorption costing system recognizes the importance of fixed manufacturing costs and treats them as product cost.

3. Easy To Operate

Absorption costing system of product costing is simple method which can be installed and operate easily without any complication. It consumes less time and costs to operate.

4. Accurate Profitability

Absorption costing system helps to determine accurate profitability in the case of seasonal production and sales.

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5. No Separation Of Costs

There is no need to separate costs into variable costs and fixed costs in this system.

advantages disadvantages absorption costing

6. Preparing Final Accounts

Absorption costing helps to prepare income statement and final account of the company.

Drawbacks Or Disadvantages Of Absorption Costing

Main disadvantages of absorption costing system can be expressed as follows:

1. Not Suitable For Decision Making

Absorption costing does not provide detailed information about fixed and variable costs. Therefore, it may not be useful for management for planning and decision making purpose.

2. Not Suitable For Flexible Budget

Flexible budget cannot be prepared with the help of absorption costing because it does not make distinction between fixed and variable costs.

3. Artificial Profitability

In absorption costing, more profit can be shown by moving fixed manufacturing costs from income statement. It misleads the users.

Disadvantages Of Inadequate Working Capital

Keshav Poudel Business , Finance

Major drawbacks or disadvantages of inadequate working capital can be highlighted as follows:

1. Lack Of Solvency

Inadequate working capital creates problem for making payment of salary, wages and short-term liabilities of a firm. It weakens the solvency position of the company.

2. Liquidity Problem

A firm cannot maintain proper liquidity because of the shortage of working capital.

3. Opportunity Loss

A business firm may lose new opportunities due to insufficient amount of working capital. Business expansion is also impossible.

4. Damage Goodwill

A firm fails to meet its financial obligations due to inadequate working capital. It affects or damages the goodwill of the firm.

5. Inefficiency

A firm cannot utilize its fixed assets and other production facilities effectively because of the shortage of fund. So, production process will be disturbed and leads to inefficiency.

disadvantages inadequate working capital

6. No Discount

It is impossible to purchase raw materials and other requirements in bulk quantity because of poor liquidity. So, opportunity of trade discount and cash discount cannot be availed.

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7. No Attraction Of Investors

A firm cannot attract investors and lenders due to poor liquidity and solvency position.

8. Low Rate Of Return

Due to inadequate amount of working capital, a firm cannot function properly. It leads to low rate of return on investment.

Advantages Of Adequate Working Capital

Keshav Poudel Business , Finance

Main benefits or advantages of maintaining adequate level of working capital can be explained as follows:

1. Maintains Solvency

Adequate working capital ensures smooth operation of business activities without interruption. Because enough working capital strengthens the solvency position of the firm.

2. Maintains Goodwill

Maintaining adequate working capital facilitates prompt payment of short-term liabilities. Timely payment of raw materials, salary and other overheads helps to maintain the goodwill of the company.

3. Discount Facility

Bulk purchase of raw materials is possible because of sufficient working capital. Because of large volume purchase and prompt payment, the firm can avail of the discount facility.

4. Maintains Liquidity

Sufficient working helps to maintain proper liquidity in the business.

5. Regular Supply

Regular supply of raw materials and accessories is possible due to adequate working capital. It ensures regular production without a break.

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6. Loan Facility

Adequate working capital helps the company to obtain loan from financial institutions. Banks and other financial institutions provide loan on the basis of solvency, liquidity and goodwill of the company.

7. Face Crisis

Maintaining adequate level of working capital helps the business firm to survive at the time of crisis and emergencies.

8. Increase Efficiency

Sufficient working capital ensures smooth operation, maintains solvency and increases the goodwill. These factors create high morale which helps to increase efficiency of the firm.

Advantages And Disadvantages Of Internal Rate Of Return

Advantages Of Internal Rate Of Return (IRR)

Main benefits or advantages of internal rate of return (IRR) method of evaluating investment proposals can be expressed as follows:

1. Use Of Time Value Of Money

One of the main advantages of IRR is that, it considers time value or future earning capacity of money. Therefore it is a scientific method of capital budgeting.

2. Rate Of Return

Internal rate of return (IRR) method determines exact rate of return of the capital project.

3. Easy To Make Decision

It is easy to select appropriate investment alternative with the help of IRR technique. The project with higher IRR will be selected and others will be ignored.

4. Importance To Cashflow

IRR method treats equally to the cashflows of every years.

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5. Focus On Profitability

IRR selects most profitable project only. So, it is beneficial to the shareholders and the owners.

6. No Cost Of Capital

Cost of capital is not required while calculating IRR.

Disadvantages Of Internal Rate Of Return (IRR)

Main drawbacks or disadvantages of IRR can be expressed as follows:

1. Complexity

It is difficult to calculate and understand IRR method of capital budgeting. Trial and error method makes it more complicated.

2. Different Result

Results of NPV and IRR may not be matched because of size and life of the projects. Results also may differ due to the timings of cashflows also.

3. Unsuitable

IRR is not suitable for the comparison of mutually exclusive projects.

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