Here is the conversation of the issue. http://dspace.2283337.n4.nabble.com/Add-New-E-Person-from-Administrator-is-useless-td4666055.html
The process doesn't make sense in first glance.
When Administrator creates a new user. Email is sent to admins notifying user creation. Then You must inform user that you have registered him with a link to login form so as to press the "Forgot password" link and set his password.
- Admin should give the password and email should be sent to user with password
- OR user should be notified with a random password and a link to reset it