Fayol’s 14 Principles of Management

6.Subordination of Individual(Interest to General Interest

  • In a firm, an individual is concerned with making the most of his own satisfaction through more money, recognition, status, etc. but Fayol told that organisational or general in interest are more important.
  • If something is more beneficial for organisational point of view that must be considered.

7. Remuneration

  • The remuneration paid to the employees of the firm should be fair and with no discrimination in terms of sex, colour, caste, creed or region.
  • It should be based on general business conditions, cost of living, productivity and efficiency of the concerned employees and the capacity of the firm to pay.
  • Just fair and adequate remuneration increases employee effectiveness and confidence which maintains good relations between them and the management.
  • If the compensation is not sufficient, it will lead to dissatisfaction and employee relinquishment.

8. Centralisation

  • Centralisation refers to concentration of decision -making power at the top level of management, whereas decentralization refers to giving decision making power at low level of management.
  • If subordinates are given a great role and importance in the management and organisation of the firm, it is known as decentralisation but if they are given a small role and importance, it is known as centralisation.
  • The management must decide the degree of a centralisation or decentralisation of authority based on the nature of the circumstances, size of the undertaking, the category of activities and the characteristics of the organisational structure.
  • The objective should be to make optimum utilization of all the human resource available.

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