HUMAN RESOURCES MANAGEMENT

HRM deals with acquisition, retention, development and effective utilization of human
resources. HRM is a strategic and coherent approach to management of an organization’s
most valued assets i.e. the people who individually and collectively contribute to
achievement of its objectives.

In less academic terms, HRM deals with getting people, activating them, preparing them
and keeping them. The weakness of this definition is that it does not acknowledge
separation.

According to Fllipo, HRM is used synonymously with personnel management, it is the

planning, organizing, directing and controlling the procurement, development,
compensation, integration, maintenance and separation of human resources to the end,
that individual, organizational and societal objectives are achieved.

HRM is concerned with the “people” dimensions of an organization. Every organization

is made up of people and therefore acquiring their services, developing their skills,
motivating them to high levels of performance and ensuring that they continue to
maintain their commitment to the organization are essential elements for achieving
organizational objectives.

The success of any organization depends on its ability to attract and keep good people.
Organizations that are able to acquire, develop, stimulate and keep outstanding workers
will be both effective (able to achieve their goals) and efficient (using the least amount of
resources necessary). Those organizations that are inefficient or ineffective risk the
hazard of either stagnating or going out of business.

Functions of HR Managers

HR managers perform two functions:-

General management functions of:
a) Planning
b) Organizing
c) Directing
d) Controlling

Specific human resource management functions:

a) Procurement
b) Development
c) Compensation
d) Integration
e) Maintenance
f) Separation

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Characteristics of Human Resource Management

Human Resource management is a process and philosophy of acquisition, development,

utilization, and maintenance of competent human force to achieve goals of an
organization in an efficient and effective manner.

Concept of HRM contains two versions – the hard version and the soft version. The hard
version or variant emphasizes the need to manage people in ways that will obtain added
value from them and thus achieve competitive advantage.

On the other hand, soft version is concerned with treating employees as valued assets, a
source of competitive advantage through their commitment, adaptability and high quality.
Today’s HRM is a combination of both the versions. HRM is management of human
energy and capabilities.

1. It is an art and a science

The art and science of HRM is indeed very complex. HRM is both the art of managing
people by recourse to creative and innovative approaches; it is a science as well because
of the precision and rigorous application of theory that is required.

2. It is pervasive

Development of HRM covers all levels and all categories of people, and management and
operational staff. No discrimination is made between any levels or categories. All those
who are managers have to perform HRM. It is pervasive also because it is required in
every department of the organization. All kinds of organizations, profit or non-profit
making, have to follow HRM.

3. It is a continuous process

First, it is a process as there are number of functions to be performed in a series,

beginning with human resource planning to recruitment to selection, to training to
performance appraisal. To be specific, the HRM process includes acquisition (HR
planning, recruitment, selection, placement, socialization), development (training and
development, and career development), utilization (job design, motivation, performance
appraisal and reward management), and maintenance (labour relations, employee
discipline, grievance handling, welfare, and termination). Second, it is continuous,
because HRM is a never-ending process.

4. HRM is a service function

HRM is not a profit centre. It serves all other functional departments. But the basic
responsibility always lies with the line managers. HRM is a staff function – a facilitator.

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The HR Manager has line authority only within his own department, but has staff
authority as far as other departments are concerned.

5. HRM must be regulation-friendly

The HRM function has to be discharged in a manner that legal dictates are not violated.
Equal opportunity and equal pay for all, inclusion of communities in employment and
non-violation of human rights must be taken care of by the HRM.

6. Interdisciplinary and fast changing

It is encompassing welfare, manpower, personnel management, and keeps close

association with employee and industrial relations. It is multi- disciplinary activity
utilizing knowledge and inputs from psychology, sociology, economics, etc. It is
changing itself in accordance with the changing environment. It has traveled from
exploitation of workers to treating them as equal partners in the task.

7. Focus on results

HRM is performance oriented. It has its focus on results, rather than on rules. It
encourages people to give their 100%. It tries to secure the best from people by winning
the whole hearted cooperation. It is a process of bringing people and organization
together so that the goals of each are met. It is commitment oriented.

8. People-centered

HRM is about people at work both as individuals and a group. It tries to help employees
to develop their potential fully. It comprises people-related functions like hiring, training
and development, performance appraisal, working environment, etc.

HRM has the responsibility of building human capital. People are vital for achieving
organizational goals. Organizational performance depends on the quality of people and
employees.

9. Human relations philosophy

HRM is a philosophy and the basic assumption is that employees are human beings and
not a factor of production like land, labour or capital. HRM recognizes individuality and
individual differences. Every manager to be successful must possess social skills to
manage people with differing needs.

10. An integrated concept

HRM in its scope includes personnel aspect, welfare aspect and industrial relations aspect
in itself. It is also integrated as it is concerned with not only acquisition, but also
development, utilization, and maintenance.

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Features of HRM

a) It emphasizes on strategic management of people which achieves integration between

business strategy and the HR strategy
b) A comprehensive approach is adopted in development of HRM policies and practices
c) It places importance in gaining commitment to organizational goals, mission and
values its commitment – oriented
d) It treats people as assets rather than costs i.e. people are regarded as a source of
competitive a development and as human capital to be invested in through the
provision of leaning and development opportunities
e) Its approach to employee relations is unitarist rather than pluralist i.e. it is believed
that employees share the same interest as employers
f) HRM is a line management responsibility

Evolution of the field of HRM

HR departments were once called health & happiness departments. Individuals in the HR
department were those past their prime. The department was seen as unimportant but
necessary in an organization. HR officers were responsible for organizing picnics,
birthdays, weddings, company anniversaries, parties etc.
However, some changes took place that necessitated a shift in personnel approaches e.g.
 The rise of modern labour unions
 The increasing educational level of societal members
 Increased competition among firms
 F.W. Taylor demonstrating that we have first class workers and other works
 Increasing demand of the less privileged members of society
 Increased technological changes

The role of the HR manager has changed over the years;

 1930s (welfare officer)

 1950s (recruitment specialist)

 1970s (industrialization negotiator)

 1980s (HR specialist)

 1990’s/2000’s (visionary/corporate philosopher)

Thus time has moved the Personnel Manager from a welfare officer in 1930 to a
visionary/corporate philosopher in the 1990s and 2000. Prior to 1930s many
organizations held workers as machines in the production process. In the 1930s and
1940s some large e;mployers, out of humanitarian grounds decided to include some

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welfare services into the contract of employment. Thus they employed welfare officers
and welfare services include allowances and time offs etc

These welfare services gave the employers a good image in the eyes of potential and
current employees vis a vis competition.

The 1950s & 1960s were characterized by economic boom in many parts of the world.
Skilled workers were few and in high demand. The work of the HRM was to recruit for
the organization

The 1970s were characterized by economic recession and employers needs to shed off
excess workers. Many employees joined trade unions to negotiate for better terms and
conditions of employment.

The HRM played the role of industrial relations negotiator to negotiate against what
employers considered to be excessive demands by trade unions.

The 1980s and 1990s were years of economic hardships. Governments amended laws to
allow employers to minimize costs through reduction of workforce. Trade unions lost
their powers. The role of the HRM turned to be supplying labour at the lowest cost
possible.

From the mid 1990s the role of the HRM turned to be not only supplying personnel to the
organization but also being a corporate philosopher for the organization.

Objectives of the HRM Function

The contributions HRM makes to organizational effectiveness include the following:

 Helping the organization reach its goals

 Employing the skills and abilities of the workforce efficiently

 Providing the organization with well-trained and well-motivated employees

 Increasing to the fullest the employee’s job satisfaction and self-actualization.

 Communicating HRM policies to all employees

 Helping to maintain ethical policies and socially responsible behavior

 Managing change to the mutual advantage of individuals, groups, the enterprise and
the public

 Achieving quality of work life

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Challenges of HRM

Environmental and contextual changes present a number of competitive challenges to

organization which mean that HR has to be involved in helping to build new capabilities.
These challenges include: organization must find a way to handle these challenges

1. Globalization -which requires organizations to move people, ideas, production and

information around the world to meet local needs. New and important factors must be
considered when making strategy e.g. volatile political situations, contentious global
trade issues, fluctuating exchange rates and unfamiliar cultures.
2. Profitability through growth – the drive for revenue growth means that company must
be creative and innovative and this means encouraging the free flow of information
and shared learning among employees
3. Technology – the challenge is to make technology a viable productive part of work
setting. This involves preparing employees adequately through development to
embrace increasing technology
4. Intellectual capital – this is the source of competitive development for organization.
The challenge is to ensure that firms have capability to fight assimilate, compensate
and retain human capital in the shape of talented individuals they need who can drive
a global organization that is both responsive to its customers and opportunities of
technology. They have also to consider how social capability of the organization that
is the ways in which people interact can be developed. Organization have to focus on
organization capital i.e. knowledge they own and how it should be managed.
5. Change – the greatest challenge because face is adjusting to is embracing non stop
change. They must also be able to learn rapidly and continuously and take on new
strategic imperatives faster and more comfortably should be on a position to adopt
change and manage it easily, effectively, efficiently using the most economical
techniques

Other Challenges
 Changing mix of the work force
 Changing values of the workforce
 Changing expectations of employees
 Changing levels of productivity
 Changing demands of the Government
 Epidemics e.g. HIV/AIDS, Ebola
 Regional conflicts
 Natural disasters
 Leaner workforce
 Formulating HR policies and strategies
 Good knowledge of labour laws

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Similarities and Differences between Personnel and HR Management

Similarities

1. Personnel management strategies like HRM strategies flow from the business strategy
2. Personnel management like HRM recognizes that line managers are responsible for
managing people. The personnel function provides necessary advice and support
services to enable managers to carry out their responsibilities
3. The values of personnel management and HRM are identical with regard to respect. A
individual, balancing organization and individual needs and developing people to
achieve the maximum level of competence both for their own satisfaction and to
facilitate the achievement of organizational objectives
4. Both personnel management and HRM recognize that of most essential functions as
that of matching people to even changing organizational requirements i.e. placing
and developing the right people in for the right jobs
5. The same range of techniques in selection competency analysis, performance
management, training, management development and reward management is used in
both HRM and personnel management
6. Personnel management like HRM attaches importance to process of communication
and participation within an employee relations systems

Differences

1. Personnel management is an activity aimed primarily at non managers where as HRM

is more concerned with managerial staff
2. HRM is much more of an integrated line management activity whereas personnel
management seeks to influence line management
3. HRM emphasize the importance of senior management being involved in
management of people whereas personnel management has always been suspicious of
organizational development and related unitanist, social-psychologically oriented
ideas

ENVIRONMENT OF HUMAN RESOURCE MANAGEMENT

HRM processes in an organization do not operate in a vacuum. They are influenced by
and influence the external environment (outside the organization) and internal
environment (inside the organization).

EXTERNAL ENVIRONMENTAL FACTORS

Government Law and Regulations
A powerful external environmental influence is government law and regulations, which
affect organizations directly. Government regulations influence HRM activities, policies,
and programs. When an organization makes decisions about hiring, promotion, managing
diversity, performance evaluation, downsizing, and discipline, it must weigh the impact

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of government regulations. The government regulates and influences some aspects of
HRM more directly than others. Major areas of legislation and regulation include:

 Equal employment opportunity and human rights legislation, which directly
affects recruiting, selection, evaluation, and promotion, and indirectly affects
employment planning, orientation, career planning, training, and development.
 Employment of illegal aliens.
 Discrimination based on sex, age, and disability.
 Compensation regulation, which affects pay, hours of work, unemployment,
and similar conditions.
 Benefits regulation, which affects pensions and retirement.
 Workers’ compensation and safety laws, which affect health and safety.
 Labor relations laws and regulations, which affect the conduct of collective
bargaining,
 Privacy laws.

John Dunlop lists a number of the problems government regulation imposes on

management. All of these make the operating and HR managers’ job more difficult:
 Regulation encourages simplistic thinking on complicated issues. Small enterprises
are treated like large ones. Different industries are regulated alike.
 Designing and administering regulations is an incredibly complex task, leading to
very slow decision making.
 Regulation does not encourage mutual accommodation but rather leads to
complicated legal maneuvering.
 Many regulations are out of date and serve little social purpose, yet they are not
eliminated.
 There is increasing evidence of regulatory overlap and contradictions among different
regulatory agencies.

The Union
The presence of a union directly affects most aspects of HRM-recruiting, selection,
performance evaluation, promotion, compensation, and benefits, among others. A union
is an organization that represents the interests of employees on such issues as working
conditions, wages and salaries, fringe benefits, employees’ rights, grievance processes,
and work hours. Unions differ, just as people and other organizations differ. There are
cooperative unions and combative unions, just as there are sensitive organizations and
socially irresponsible organizations. At one time, unions were concentrated in a few
sectors of the economy, such as mining and manufacturing, and were influential in only a
few sections of the country, primarily the highly industrialized areas. It is no longer
useful to think of the unionized employee as a blue-collar factory worker. Engineers,
nurses, teachers, secretaries, salespersons, college professors, professional football
players, and even physicians belong to unions. In sum, unions often play a significant
role in HRM programs.

Competitiveness

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The extent of competition in your industry affects your company's ability to recruit
qualified workers. Industry giants find that candidates seek them out. There is no need to
spend money advertising each recruitment in such a case, because candidates will visit
the company website of their own accord. Small businesses typically don't have the same
branding power or company reputation, though, and need to actively seek qualified
candidates for critical positions. In such a scenario, a human resources department will
need to focus on developing recruitment materials and attending job fairs to promote the
company and attract applicants. Similarly, HR should develop programs and incentives to
retain key employees. At the organizational level, competitiveness is an important issue.
How effectively do the workers produce the product?
How good is the quality of the services or goods provided? Can employees handle new
technology and produce the product at lower costs? Does the firm have the human
resources needed to increase the size of the manufacturing facility to handle global
demand? Will the push to work harder and faster raise turnover, absenteeism, and the
number of defects? An increasing amount of research suggests that the way organizations
implement and modify their HRM activities can provide them with competitive
advantages. A competitive advantage is defined as having a superior marketplace position
relative to competitors. Sustainable competitive advantage requires a firm to deal
effectively with employees, customers, suppliers, and all competitors. Pfeffer identified
16 HRM activities that he recommends to enhance and sustain a firm’s competitive
advantages. Sustaining competitive advantage is extremely difficult over long periods.
Competitors, by learning about other firms, can also adopt and, in some cases, improve
on successful HRM activities. Although it is difficult for competitors to have total access
to a firm’s HRM policies, programs, and approaches, it is possible to learn through laid-
off employees, customers, communication materials, and other procedures what a
company does in the HRM area. If a firm has a strong culture noted for the fair, equitable,
and productive treatment of human resources, it will be less susceptible to losing all or
any of its competitive advantage. Certainly, a few HRM activities can be copied, but the
imitation of an entire culture and system of HRM is extremely difficult.

Geographic Location of the Organization

The location of the organization influences the kinds of people it hires and the HRM
activities it conducts. A hospital, plant, university, or government bureau located in a
rural area confronts different conditions than one located in an urban area. For example,
the workforce in a rural area might be more willing to accept a bureaucratic organization
style. Recruiting and selection in rural areas will be different in that there may be fewer
applicants. Yet the organization may find a larger proportion of hirable workers ingrained
with the work ethic. An urban location might be advantageous for recruiting and holding
professional workers. Urban locations provide a bigger labor force but generally call for
higher wages. Late shifts may be a problem because workers may not feel safe at night in
the parking lots or going home. Geographic location, therefore, influences the kinds of
workers available to staff the organization. The location or setting is extremely
significant for companies operating in other countries. The employees may speak a
different language, practice different religions, have different attitudes toward work, and
so on.

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Educational Factors
Examples include the number of skilled employees available, attitudes toward education,
and literacy level. Educational deficiencies in some countries can lead to a scarcity of
qualified employees, as well as a lack of educational facilities to upgrade potential
employees.

Behavioral Factors
Societies differ in factors such as attitudes toward wealth and profits, managerial roles,
and authority.

Legal-Political Factors
Laws and political structures differ and can encourage or discourage private enterprises.
Nations also differ in degree of political stability. Some countries are very nationalistic in
their business practices. Such countries can require local ownership of organizations or, if
they are so inclined, expropriate foreign concerns.

Economic Factors
One of the biggest external influences is the shape of the current economy. Not only does
it affect the talent pool, but it might affect your ability to hire anyone at all. One of the
biggest ways to prepare against economic conditions is to not only know what’s
happening in the world around you, but also create a plan for when there is an economic
downturn. All companies can make due in a bad economy if they have a rainy day fund
or plan to combat the harsh environment. Economies differ in basic structure, inflation
rate, constraints on ownership, and the like. The nations of the world can be divided into
three economic categories: fully developed, developing, and less developed. The fully
developed nations include the United States, Canada, Australia, Japan, and most
European countries (the United Kingdom, Germany, France, Belgium, Luxembourg, the
Netherlands, Switzerland, Italy, Sweden, Denmark, Norway, Finland). In these countries,
managers will find fewer differences in educational, behavioral, economic, and legal-
political factors than they are likely to encounter in developing or less developed
countries.

The developing nations are those that are well along in economic development but cannot
yet be said to be fully developed. Examples include Brazil, Mexico, Argentina,
Venezuela, Spain, Nigeria, India, and Eastern Europe. Third world nations-the less
developed countries-are the most difficult to work in because of significant constraints in
terms of education, economic system, political structure, and the general infrastructure.
The remaining 180 or so countries in the world are in this group. To be successful abroad,
managers must learn all they can about the countries in which they will be working.
There are many sources of this kind of information. Knowledge of differences among
nations in (1) educational, (2) behavioral, (3) legal-political, and (4) economic factors is
essential for managerial success abroad. It is equally important (and more difficult) for
the enterprise to obtain managers with proper attitudes toward other countries and their
cultures. A manager with the wrong set of attitudes may try to transfer North American
ways of doing things directly to the host country, without considering the constraints in
these four factors. The more significant the differences, the more likely they are to cause

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problems for the imperceptive manager. The physical location of the organization (rural
or urban, at home or abroad) can have a significant impact on how HRM programs are
used and which activities are conducted. The manager using a diagnostic orientation will
be better able to closely examine, consider, and understand the complexities involved
with different physical locations.

Technological Advancements

This is considered an external influence because when new technologies are introduced
the HR department can start looking at how to downsize and look for ways to save
money. A job that used to take 2-4 people could be cut to one done by a single person.
Technology is revolutionizing the way we do business and not just from a consumer
standpoint, but from an internal cost-savings way.

Workforce Demographics – As an older generation retires and a new generation enters

the workforce the human resources department must look for ways to attract this new set
of candidates. They must hire in a different way and offer different types of
compensation packages that work for this younger generation. At the same time, they
must offer a work environment conducive to how this generation works.

Those involved in human resource management does more than hiring and firing, they
make sure that every type of external influence is listened to and proper procedures are
followed to avoid lawsuits and sanctions.

Compensation

Labor supply drives the amount of compensation a business must offer to attract
employees. In an oversaturated market, when unemployment is high and many more
qualified candidates exist than job opportunities, the amount of compensation you must
provide is less than when a shortage of candidates exists and you are competing against
multiple other companies to recruit employees. HR must continually evaluate the
compensation structure by conducting industry- and location-specific salary surveys to
ensure wages remain competitive enough to attract and retain key staff members but low
enough that the business remains financially competitive. HR must also ensure that the
internal compensation structure is fair -- for example, experienced workers with
specialized qualifications should earn more than recent college graduates performing the
same tasks.

INTERNAL ENVIRONMENTAL FACTORS

Strategy
A strategy indicates what an organization’s key executives hope to accomplish in the
long run. As a plan, a strategy takes the firm into the area of competition in the
environment and into alignment with the resources of the firm. There are companies that
believe that the long-term success of their firms is linked to helping their employees
achieve a work-life balance. These companies have instituted programs designed to help
employees feel safe and better about such issues as child care, families, and home life.

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Goals

The goals of organizations differ within and among departments. All departments
probably have goals that include employee satisfaction, survival, and adaptability to
change. The differences arise in the importance the decision makers place on the different
goals. In some organizations, profit is of such major importance that other goals, such as
increased employee satisfaction, are not well developed. In these organizations where
profits take precedence, HRM goals involving the human resources are paid only
minimal attention. The result of such negligence is typically problems in the effectiveness
area of the diagnostic model (e.g., high absenteeism, performance decrements, high
grievance rates). In other organizations, HRM-related goals are highly regarded by
decision makers. Thus, how much the HRM function is valued and how it is implemented
is affected by these goals.

Diversity
Refers to any mixture of themes characterized by differences and similarities. The public
is accustomed to thinking of diversity in terms of workforce demographics, but diversity
in organizations is much more than just demographics. It is important not only to address
the issue of how people differ but also to understand similarities. All human beings share

some commonalities. Today more and more firms realize that when they deal with the
diversity of the workforce, they are focusing on the collective picture of differences and
similarities.

Organization Culture
Organization culture refers to a system of shared meaning held by members that
distinguishes the organization from other organizations. The essence of a firm’s culture is
shown by the firm’s way of doing business, the manner in which it treats customers and
employees, the extent of autonomy or freedom that exists in the departments or offices,
and the degree of loyalty expressed by employees about the firm. Organization culture
represents the perceptions held by the organization’s employees. Is there a sense of
shared value? Is there a common value system held by employees? These are the kinds of
questions asked to arrive at a picture of the firm’s culture. Culture can have an impact on
the behavior, productivity, and expectations of employees. It provides a benchmark of the
standards of performance among employees. For example, it can provide clear guidelines
on attendance, punctuality, concern about quality, and customer service.

Nature of the Task

Many experts believe that the task to be performed is one of the two most vital factors
affecting HRM. They describe HRM as the effective matching of the nature of the task
(job) with the nature of the employee performing the task. There are perhaps unlimited
similarities and differences among jobs that attract or repel workers and influence the
meaning of work for them. Some of the most significant are the following:

 Degree of knowledge and ability to use information technology Advantages in

informational and computer technology have resulted in a need for employees

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 with the skill to use these technologies. Instead of physical lifting and moving as
requirements of a task, the use of “knowledge skills” has become significant.
“Knowledge workers” are now expected to plan, decide, and solve problems
using databases, computer programs, and other technology-driven information
sources (e.g., Internet and intranet).

 Degree of empowerment Empowering employees to complete job tasks means

that power or authority to make relevant and meaningful decisions is delegated. In
fact, the empowered worker can complete his or her job task because he or she
has information, knowledge, and power.

 Degree of physical exertion required Contrast the job of ditch digger with that
of a computer programmer. In general, most people prefer work involving
minimal physical exertion.

 Degree of environmental unpleasantness Contrast the environment of a coal

miner with that of a bank teller. People generally prefer physically pleasant and
safe conditions.

 Physical location of work Some jobs require outside work; others, inside work.
Some jobs require the employee to stay in one place. Others permit moving about.
There are individual differences in preference for physical location.

 Time dimension of work Some jobs require short periods of intense effort; others
require long hours of less taxing work. In some jobs, the work is continuous; in
others, it is intermittent.
 Human interaction on the job Some jobs require interaction with others.
 Degree of variety in the task The amount of freedom and responsibility a person
has on the job determines the degree of autonomy provided for in the work.

 Task identity The degree of wholeness in a job-the feeling of completing a whole

job as opposed to contributing to only a portion of a job-is its task identity.

 Task differences and job design Because jobs are not created by nature,
specialists can create jobs with varying attention to the characteristics such as
variety, autonomy, task identity, and similar job factors. How do these task factors
affect HRM-type decisions? They obviously affect recruiting and selection, since
employees will probably be more satisfied and productive if their preferences are
met.

Work Group
Groups play a major role in the life of an individual. You probably belong to family,
friendship, and student groups. Once a person joins an organization, his or her
experiences are largely influenced by a work group. A work group consists of two or
more people who consider themselves a group, who are interdependent with one another

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for the accomplishment of a purpose, and who communicate and interact with one
another on a more or less continuous basis. In many cases (but not always), they work
next to each other.
An effective group is one in which:
 Members function and act as a team.
 Members participate fully in group discussion.
 Group goals are clearly developed.
 Resources are adequate to accomplish group goals.
 Members furnish many useful suggestions leading to achievement of goals.

Most effective work groups are small (research indicates that 7 to 14 members is a good
range), and their members have eye contact and work closely together. Effective groups
also generally have stable membership, and their members have similar backgrounds.
Their membership is composed of persons who depend on the group to satisfy their
needs. Although the effective group supports management and the organization’s goals, it
can also work against them. This is usually the case when the group perceives the
organization’s goals as being in conflict with its own. If the work group is effective and
works with management, the manager’s job is easier, and objectives are more likely to be
achieved. If the group is working against the manager, an effort must be made to change
the group’s norms and behavior by the use of the manager’s leadership and the manager’s
power to reward discipline and by the transfer of some group members.

Work groups are directly related to the success of HRM activities. If a work group
opposes HRM programs, it can ruin them. Examples of programs that can be successes or
failure depending on the support or resistance they receive from work groups include
incentive compensation, profit sharing, safety, and labor relations. Operational and HR
managers who desire success in such programs should at least consider permitting work-
group participation in designing and implementing HRM.

Leader’s Style and Experience

The experience and leadership style of the operating manager or leader directly affects
HRM activities because many, if not most, programs must be implemented at the work-
unit level. Thus, the operating manager or leader is a crucial link in the HRM function.
Leaders must orchestrate the distinctive skills, experiences, personalities, and motives of
individuals. Leaders also must facilitate the interactions that occur within work groups. In
his or her role, a leader provides direction, encouragement, and authority to evoke desired
behaviors. In addition, leaders reinforce desirable behavior so that it is sustained and
enhanced. The leader is an important source of knowledge about the tasks, the
organization, and the HRM policies, programs, and goals. The experience and operating
style of a leader will influence which HRM programs are communicated, implemented,
and effective.

Mergers and Acquisitions

Whenever one company attempts to merge with another, numerous internal changes
inevitably take place. In many cases, human resources plays a vital role in helping to

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consolidate the two separate entities into one successful business. This means the entire
human resource system must evolve to accommodate any new business restructuring and
policy changes. Primary responsibilities typically left to human resources include
questions regarding compensation packages, conflict resolution, elimination of positions,
performance reviews, organizational goals and changes in management.

Company Downsizing

For many businesses, it has become common practice to periodically downsize their
workforce. Churning is a term that refers to a constant turning over of a workforce by
getting rid of workers with undesirable skills and replacing them with new talent.
Inevitably, this practice has a huge impact on how human resource systems operate.
Human resource managers constantly need to find ways to maintain company morale,
while at the same time evaluating the skills of their workforce to determine who gets to
keep their job, who gets fired, and who gets hired.

Re-engineering

As businesses adopt new technologies, their operations need to evolve to accommodate

new ways of doing things. One way of accomplishing this is through re-engineering.
With re-engineering, all business processes are reviewed, such as accounting, production,
sales and human resources. Re-engineering affects human resource systems in two ways.
First, the ways goals are accomplished by human resources drastically changes. Also, the
human resources department will be responsible for not only designing and implementing
the changes brought about by re-engineering, but also motivating the employees to be
committed to these changes.

Outsourcing

In recent years, more businesses have been choosing to outsource their operations than
ever before. Outsourcing can affect human resource systems in one of two different ways.
In some instances, the human resource department will take on the added responsibility
for acting as the liaison between the domestic operations and its outsourced departments.
In other cases, the entire human resource system itself may be outsourced. With either
scenario, outsourcing will have a huge impact on human resource systems.

HUMAN RESOURCE PLANNING

This is the process of determining an organization’s human resource needs. It is also the
process of systematically reviewing human resource requirements to ensure that the
required number of employees, with required skills are available when and where they
are needed. It involves matching internal and external supply of people with job
openings, anticipated in the organization over specified period of time.

HR planning has 2 components:

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i) Requirements
ii) Availability

Forecasting HR Requirements

This involves determining the number and types of employees needed and these
projections reflect various factors such as production plans and changes in productivity

Forecasting HR availability

In order to forecast availability, HR manager looks to both internal and external sources.
When employee requirements and availability have been analyzed the firm can determine
whether it will have a surplus or shortage of employees.

Ways must be found to reduce the number of the employees if a surplus is projected.
Some of these methods includes: restricted hiring, lay off, reduced hours, early retirement

If worker shortage is forecasted firm must obtain proper quantity and quality of workers
from outside the organization. In this case, external recruitment and selection are
required.

Surplus when surplus of employee is forecast, following methods may be used to correct
the situation

a) Restricted hiring

This approach reduces workforce by not replacing those who leave, new workers are
hired only when overall performance of the organization is affected

b) Reduced hours

An organization reduce total number of hours worked e.g. instead of having 40 hours
week, the management may decide to cut each employees time to 30 hours. These cut
back normally applies only to hourly employees because management and other
professionals are exempt employees and therefore not paid on an hourly basis.

c) Early retirement

Some employees will be delighted to retire but others will be some what reluctant. Those
that are reluctant may be willing to accept retirement of the total retirement package is
made sufficiently attractive

d) Lay offs and down sizing

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At times a firm has no choice but to lay off part of its workforce. Lay offs has become a
way of life since economic down turn began in 2000. It is a very difficult decision for
organization to make but may have to embark on that if there is no other alternative.

Positive consequences of retrenchment

 People may discover their full potential when they leave employment
 Creativity and entrepreneurial spirit is enhanced
 The organization is able to eliminate employees who do not add value to the
organization
 Through retrenchment the organization can get rid of employees who are
untrainable and incapable of learning
 Employees who feel underutilized in the organization can look for other work to
do where they can utilize their skills
 The employer is able to get an optimal number hence efficiency is achieved
 A performance culture is created because retrenchment serves as a wake up call
for non-performers

Negative consequences of retrenchment

 Traumatizing experience to the victim

 Regular income ceases, hence employees are not able to meet their bills
 It affects employees’ standard of living
 Heavy workload to the remaining employees which may be a cause of fatigue
 The morale of the remaining employees goes down
 The image of the organization is affected since the employees who leave may bad
mouth the org

How an Organization can Deal with Shortage

When firms are faced with a shortage of workers they have to intensify their efforts to
recruit the necessary people to meet the needs of the firm. Some possible actions include:

a) Creative recruiting
b) Compensation incentives
c) Training programmes
d) Different selection standards

HR Forecasting Techniques (Methods)

HR professionals use several techniques for forecasting HR requirements and

availability. These techniques include

Zero-Base Forecasting
This approach uses the organization’s current level of employment as the starting point in
determining future employment needs. The need for new employees may arise due to
retirement, dismissals, resignations or other separations. If one of these situations creates

17
a vacancy it is not automatic that the position will be filled. An analysis should be made
to determine whether there is any justification to fill the position. This means that this
approach is concerned with justifying employment decisions.

Bottom-up Approach
This approach forecasts progress upwards in the organization from small units or sections
to ultimately provide an aggregate forecast of manpower needs. It reasons that in order to
know manpower requirements, the supervisor or manager in each unit or section is the
most knowledgeable person about personnel requirements. This approach requires that
each level in the organization should forecast for its employment needs and once this is
done the requirements are passed on to the personnel department for analysis.

Predictor Variables/Trend Projection Technique

This approach uses past employment needs as a predictor for future manpower
requirements. It is useful in organization involved in marketing. One predictor of
employment is sales volume because there exists the relationship between sales demand
and the number of employees needed e.g. if sales demand increases, the number of
employees required will rise. In this way one can approximate the number of employee
required at different demand levels. However, employment levels can also be determined
by other independent variables other than sales like the efficiency level of the present
employees.

Expert Estimate Technique

Here an expert is called upon to forecast the manpower requirements in the long run
based on his or her experience and intuition. The HR manager may do this by thinking
about past employment levels and questioning future needs which is a quite informal
system. The expert estimate technique can be more effectively if the experts use the
Delphi technique. The Delphi technique consists of a series of intensive interrogations of
each individual expert through a series of questionnaires to get the desired result. The
interaction among the experts is accomplished through an intermediary who gathers the
data requests of the experts and summarizes them a long with the experts answers to the
primary question. The developers of the Delphi technique contend that the procedures are
more conducive to independence, and though allow more gradual formulation to a
considered opinion.

Simulation
This is a technique for experimenting with a real world situation through a mathematical
model representing that situation. A model is an abstraction of the real world thus a
simulation model is an attempt to represent a real world situation through mathematical
logic to predict what will occur. Simulation assists managers by permitting them to ask
many what if questions without having to make a decision resulting in real world
consequences. In HRM a simulation model might be developed to represent the inter-
relationships among employment levels and many other variables. The manager could
then ask what if questions such as this;
What would happen if we put 10% of the present workforce on overtime?
What would happen if the plaint utilized tow shifts or three shifts?

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The purpose of the model is to permit managers to gain insight into a particular problem
before making the actual decision.

Use of Mathematical Models

One of the most useful predictors of employment levels is sales volume. The relationship
between demand and the number of employees needed is a positive one.

As sales increase so does the number of employees and vice versa. Using such a method
managers can approximate the number of employees required at different demand levels.

Forecasting HR Requirements

This is an estimate of number of kinds of employees the organization will need at future
dates in order to realize its stated goals. Before HR requirements can be projected,
demand for the firms goods or services must be forecasted. The forecast is them
converted into people requirements for the activities necessary to meet these demand.

Forecasting HR Availability

The determination of whether the firm will be able to secure employees with necessary
skills and from what sources, it is called an availability forecast. It helps to show whether
needed employee may be obtained from within the company, from outside organization
or from a combination of the two sources.

JOB ANALYSIS

This is the systematic process of determining the skills, duties and knowledge required
for performing jobs in an organization. In today’s rapidly changing work environment the
need for a sound job analysis system is critical. New jobs are being created and old jobs
are being re-designed or eliminated. A job analysis that was conducted a few years ago
includes obsolete data. A job consists of a group of tasks that must be performed for an
organization to achieve its goals. A position is the collection of tasks and responsibilities
performed by one person and there is a position for every individual in an organization.
The purpose of job analysis is to obtain answers to six important questions

1. What physical and mental tasks does the worker accomplish

2. When is the job to be completed
3. Where is the job to be accomplished
4. How does the worker do the job
5. Why is the job done
6. What qualifications are needed to perform the job

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Job analysis provides a summary of a job’s duties and responsibilities its relationship to
other jobs, the knowledge and skills required working conditions under which it is
performed

Job analysis is therefore most often performed because of changes in the nature of job.
Job analysis information is used to prepare both job descriptions and job specifications.

Job Description

Job description is a document that states the tasks, duties and responsibilities of the job. It
is important that job descriptions be accurate and relevant. Interviewers would fail to
select the best qualified worker if this information were not available. They should
provide concise statements of what employees are expected to do on the job and indicate
how employees do it and the conditions under which the duties are performed. Items
frequently included in a job description include

 Major duties performed

 Percentage of time devoted to each duty
 Performance standards to be achieved
 Working conditions and possible hazards
 Number of employees performing the job and to whom they report
 The machines and equipment used on the job

Parts of a Job Description

1. Job identification
2. Date of the job analysis
3. Job summary
4. Duties performed
5. Relation to other jobs
6. Supervision
7. Machine, tools and equipment
8. Working conditions
9. Hazards

Job Identification
This includes the job title, the department, the reporting relationship, a job number or
code. A good title will closely approximate the nature of the work content and will
distinguish that job from others.

Date of the Job Analysis

The job analysis date is placed on the job description to help in identifying job changes
that would make the description obsolete. Some firms have found it useful to place an
expiry date on the document because this practice ensures periodic review of job content
and minimizes the number of obsolete job descriptions

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Job Summary
The job summary provides a concise overview of the job. It is generally a short paragraph
that states the job content

Duties Performed
The body of the job description outlines the major duties to be performed. Usually one
sentence beginning with an action verb such as receives, performs, establishes etc
adequately explains such duty

Relation to Other Jobs

This helps to locate the job in the organization by indicating the job immediately below
or above it in the job hierarchy. It also gives an idea of the vertical relationships of the
work flow and procedures.
Supervision
Under it is given the number of persons to be supervised a long with their job titles and
the extent of supervision involved that is general, intermediate or close supervision

Machines Tools and Equipment

This defines each major type or trade name of the machines, tools and raw materials used

Working Conditions
This usually gives as information about the environment in which a job holder must
work. This includes cold, heat, dust, wetness, moisture, fumes, oily, odour etc

Hazards
This gives in the nature of risks to life and limb and their possibilities of occurrence of
such risks

Importance of job description

1. It describes a job to potential candidates

2. It guides newly hired employees on what they are expected to do
3. Provides point of comparison when performing the performance appraisal

Job Specification

This is a standard of personnel and it designates the qualities required for an acceptable
performance. It is a written record of the requirements sought in an individual worker for
a given job. It refers to a summary of the personal characteristics required for a job. It is a
statement of the minimum acceptable human qualities necessary for the proper
performance of a job. Items included in the job specification are factors that can be
shown to be job related such as educational requirements, experience, personality traits
and physical abilities. In practice job specifications are often included as a major section
of job descriptions.

Importance of Job Specification

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1. It keeps interviewers attention on list of necessary qualifications
2. Assists in determining whether candidates are essential qualified

Reasons for Conducting Job Analysis

1. Human resource planning
2. Staffing
3. Training and development
4. Performance appraisal
5. Compensation and benefits
6. Safety and health
7. Employee and labour relations
8. Legal considerations
9. Maintenance and separation

Human Resource Planning

A major use of job analysis date is found in the area of HR planning. Each job requires
different knowledge, skills and abilities. Effective HR planning must take this job
requirement into consideration.

Staffing
All areas of staffing would be up-hazard if the recruiter did not know the qualifications
needed to perform the various jobs. Lacking up to date job descriptions and specifications
a firm would have to recruit and select employees for jobs without having clear
guidelines. This practice would have disastrous consequences such a practice would
make an organization or would land an organization into a big mess as well as loose a lot
of funds.

Information contained in a job specification therefore helps in matching the right people
for the right jobs. Information contained in job description helps in enlightening the
potential candidate about all the factual information about the job and the organization
that they need to know before joining the organization so that they can select themselves
out. If they are not comfortable with either the job or the organization.

Training and Development

Job specification information often proves beneficial in identifying training and
development needs. If specification suggests that the job requires a particular knowledge
skill or ability and the person filling the position does not possess all the qualifications
required then it means there is a training need hence training and development are in
order. They should be directed at assisting workers in performing duties specified in their
present job descriptions or preparing them for broader responsibilities.

Performance Appraisal
Employees should be evaluated in terms of how well they accomplish the duties specified
in their job descriptions and any specific goals that may have been established. A

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manager who evaluates an employee on factors not clearly pre-determined can be
accused of discrimination.

Compensation and Benefits

In the area of compensation it is helpful to know the relative value of a particular job to
the company before a dollar value is placed on it. From an internal perspective the more
significant its duties and responsibilities, the more the job is worth. Jobs that require
greater knowledge. Skills and abilities should be worth more to the firm. Job evaluation is
an exercise that determines the value of jobs to the organization. This can be based on
some universal compensable factors which include effort, skill, responsibility and
working conditions. These are all contained in job description.
Safety and Health
Information derived from job analysis is also valuable in identifying safety and health
considerations. Employers are required to state whether a job is hazardous. Information
contained in a job description should reflect this condition. In certain hazardous jobs
workers may need specific information about the hazards in order to perform the jobs
safely.

Employee and Labour Relations

Job analysis information is also important in employee and labour relations. When
employees are considered form promotion, transfer pr demotion, the job description
provides a standard for evaluation and comparison of talent. Regardless of whether the
firm’s unionized information obtained through job analysis can often lead to more
objective HR decisions.

Legal Considerations
A well prepared job analysis is important for supporting the legality of employment
practices. Job analysis data are needed to defend decisions involving promotion, transfers
and demotion

Job Analysis Methods

 Observation
 Questionnaires
 Interviews
 Employee recording
 Combination of methods

Job analysis has traditionally been conducted in a number of different ways because
organizational needs and resources for conducting job analysis differ. Selection of a
specific method would be based on the purpose for which the information is to be used
e.g. job evaluation, pay increases, development etc and the approach that is most feasible
for a particular organization.

Observation
When using the observation method the job analyst watches the worker perform job tasks
and records his or her observation. The job analysis could either watch the employee

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directly as he/she works or may watch a film. This method is used primarily to gather
information on jobs emphasizing manual skills such as those of machine operators.
Analyzing managerial jobs using this method may prove difficult. It can also help the
analyst identify inter-relationships between physical and mental tasks.

Observation alone is usually an in sufficient means of conducting job analysis

particularly when mental skills are dominant in a job.

Questionnaires
Questionnaires are typically quick and economical to use, the job analyst may administer
a structured questionnaire to employees to identify the tasks they perform. In most cases
employers may lack verbal skills, a condition that make this method less useful. Also
some employees may tend to exaggerate the significance of their takes suggesting more
responsibility than actually exists. Follow-ups may become difficult of something is not
clear since questionnaires are mostly anonymous.

Interviews
An understanding of the job may also be gained through interviewing both the criteria
should take into account such factors as quality and quantity of output accident
frequency, regularity or otherwise in attendance grades obtained during training, speed of
promotion in an organization, professional achievements, formal ratings determined by
the supervisor etc

Employee Recording
Job analysis information is gathered by having employees describe their daily work
activities in a diary or log. Employees are expected to record each activity or task as soon
as they complete it on every working day. This requires job holders to record their daily
activities. It is time consuming and expensive too because it may extend over long
periods of time
The job analyst goes through the diary log and analyses that particular job. With this
method the problem of employee exaggerating job importance may have to be overcome
because information contained in the diary/log shows what the employees have actually
done

Technical conference method

This method uses supervisors with extensive knowledge of the job. Specific job
characteristics are obtained from experts. Although it is a good data gathering method it
often overlooks incumbent perceptions about what they do on their job.

Steps in Job Analysis

1. Collection of background information

The makeup of a job, its relation to other jobs and its requirements for competent
performance are essential information needed for a job evaluation. This information
can be obtained by reviewing available background information such as organization

24
 charts which show how the job in question relates to other jobs and where they fit into
the overall organization. Class specifications can also be reviewed which describe the
general requirements of the class of job to which the job under analysis belongs.

The existing job descriptions can also provide a starting point from which to build the
revised job description
2. Selection of representation position to be analyzed
Since the analysis of all jobs could be time consuming flow representative poisons
should be analyzed.

3. Collection of job analysis data

Job data on the features of the job and the required employee qualifications and
requirement should be collected either from the employees who actually perform the
job or from those who watch the workers do the job e.g. supervisors thereby acquiring
knowledge about it

4. Preparation of job description

The information collected it’s to be developed in the form of a job description. This
sis a written statement that describes the main features of the job as well as the
qualifications which the jobs incumbents must possess

5. Developing job specifications

This entails specifically mentioning what personal qualities, traits, skills and
background that is necessary to get the job done

RECRUITMENT AND SELECTION

Recruitment is the process of attracting individuals on a timely basis, insufficient number

and with appropriate qualifications and encouraging them to apply for jobs within an
organization. Finding the appropriate way of encouraging qualified candidates to apply
for employment is extremely important when a firm needs to hire employees.

There are two types of recruitment sources

 Internal
 External

Internal Sources
Many large organizations attempt to develop their own low level employees for higher
positions. These promotions can occur through an internal search of current employees
who have bid for the job. Been identified through the organizations HRM system or even
been referred by a fellow employee.

Advantages

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1. It is good public relations
2. It builds morale
3. It encourages good individuals who are ambitious
4. It improves the probability of a good selection because information on the
individual’s performance is readily available
5. It is less costly than going outside to recruit
6. Those chosen internally already know the organization
7. When carefully planned promoting from within can also act as training device for
developing middle and top level managers e.g. through on the job training techniques

Disadvantages

1. They could be dysfunctional of the organization uses less qualified internal sources
only because they are there when excellent candidates are available on the outside
2. Internal searches may generate in fighting among rival candidates for promotion
3. It decreases morale levels of those not selected
4.
5. It causes excessive in breeding i.e. it hinders new blood with current ideas,
knowledge and enthusiasm

Employee referrals and recommendations one of the better sources for individuals who
will perform effectively on the job is a recommendation from a current employee

Advantages

1. Employees rarely recommend someone unless they believe the individual can
perform adequately. Such a recommendation reflects on the recommender and when
someone’s reputation is at stake, we can expect the recommendation to reflect
considered judgment

2. Employee referrals may receive more accurate information about their potential jobs.
The recommender often gives the applicant more realistic information about the job
than could be conveyed through external sources. This information therefore reduces
unrealistic expectations and increases job survival
3. Employee referrals are an excellent means of locating potential employees in those
hard to fill positions

Disadvantages

1. Recommenders may confuse friendship with job performance competence. This is

because individuals often like to have their friends from them at their place of
employment for social and economic reasons
2. Employee referrals may lead to nepotism i.e. hiring individuals related to persons
already employed by the organization’s racisms, tribalism etc

26
3. Employee referrals may minimize an organization’s desire to add diversity to the
workplace

External Sources of recruitment

1. Advertisements
This is one of the most popular methods used for getting employees from external
sources. The type of job often determines where the advertisement is placed. The
higher the position in the organization, the more specialized the skills or the shorter
the supply of that resource in the labour force, the more widely dispersed the
advertisement is likely to be. The search for a top executive might include
advertisements in national publications, the local daily newspapers or can be posted
on executive advertisements of lower level jobs usually appear in local daily
newspapers, trade journals or on internet job sites. There are three variables that
influence the response rate to advertisements:

 Identification of the organization

 Labour market conditions
 The degree to which advertisements includes specific requirements

Employment Agencies

There are three forms of employment agencies

a) Public or state agencies
b) Private employment agencies
c) Management consulting firms

The major difference between these is the type of clientele served. All states provide a
public employment services. The major different between public and private employment
agencies is

a) Image – that is private agencies are believed to offer positions and applicants of a
higher caliber

Private agencies may provide a more complete line of services i.e. they may advertise the
position, screen applicants against the criteria specified by the employer and provide a
guarantee covering six months or one year as protection to the employer should the
applicant not perform satisfactorily.

The third agency consists of management consulting, executive search or head hunter
firms. These are specialized private employment agencies that specialize in middle level,
top level executive placement as well as hard to fill positions such as actuaries. In
addition to the level at which they recruit the features that distinguish executive search
agencies are their fees, their nationwide contacts and the thoroughness of their
investigations. Executive search firms do preliminary screening. They seek out highly
effective executives who have the right skills, can adjust to the organization and those

27
that are willing to consider new challenges and opportunities. These firms can screen
candiddate4s and at the same time keep the prospective employer anonymous. In the final
stages senior executives is the prospective firm can move into the negotiations and
determine the degree of mutual trust.

Schools Colleges and Universities

Educational institutions at all levels offer opportunities for recruiting recent graduates.
Most educational institutions operate placement services where prospective employers
can review credentials and interview graduates. Most also allow employers to see a
prospective employees performance through cooperative arrangements and internships.
High schools or vocational technical schools can provide lower level applicants. Business
or secretarial schools can provide administrative staff personnel whereas graduate schools
can provide professional and managerial level personnel. Although educational
institutions are usually viewed as sources for inexperienced entrants to the workforce it is
not uncommon to find individuals with considerable work experience using an
educational placement service. They may be workers who have recently returned to
school to upgrade their skills or former graduates interested in pursuing other
opportunities.

Professional Organizations

Many professional organization including labour unions operate placement services for
the benefits of their members. Professional organizations publish rosters of job vacancies
and distribute these lists to members. It is also common practice to provide placement
facilities at regional and national meetings, seminar and workshops where individuals
looking for employment and company’s looking for employees can find each other
building a network of employment opportunities.

Unsolicited Applicants

Unsolicited applicants whether they reach the employer by letter, email, telephone or in
person constitute as source of prospective applicants. The number of unsolicited
applicants depends on economic conditions the organization image and the job seekers
perception of the type of jobs that might be available. Even if the company has no current
openings the application can be kept on file for later needs. Unsolicited applications made
by unemployed individuals generally have a short life. Those individuals who have
adequate skills and who could be prime candidates for a position in the organization if a
position where currently available, usually find employment with some other
organization that does have an opening. However, in times of economic stagnation,
excellent prospects are often unable to locate the type of job they desire and may stay
actively looking in the job market for a long time.

Cyber Space/Internet Recruiting

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Internet recruiting has become very popular lately such that newspaper adverts and
employment agencies may be on their way to extinction as primary sources for conveying
information about job openings and finding job candidates. Nearly four out of five
organizations currently use the internet to recruit new employees by adding a recruitment
section to their website. Large organizations although plan a lot of internet recruiting
often develop dedicated sites specifically designed for recruitment. They have the typical
information you might find in an employment advert that is qualification sought,
experience required benefits provided and they also include the organization’s product,
services, corporate philosophy and mission statement. This information increases the
quality of applicants as those whose values don’t match with the organization tend to
self-select themselves out. The best designed of those websites include an on-line
response phone such that applicant need not to send a separate ‘resume’ by mail, email or
fax. Applicants fill in a resume page and press the submit button.

Aggressive job candidates are also using the internet. They set up their own web pages
called websumes to sell their job candidacy. When they learn of a possible job opening
they encourage potential employees to check them out in their websites. Their applicants
have standard resume information supporting documentation and sometimes a video
where they introduce themselves to potential employers. These same websumes are also
frequently searched by recruiting firms that scan the internet in search of viable job
candidates.

Advantages

1. Internet recruiting provides a low cost means for most businesses to gain
unprecedented access to potential employees worldwide
2. It is a way to increase diversity i.e. getting potential employees from across the globe
3. Due to a wide search, internet recruiting provides people with unique talents
4. As computer prices fall, access costs to the internet decrease and therefore many
potential employees access internet hence organization can advertise higher level jobs
as well as low level jobs

Disadvantages

1. There is not any personal touch on contact between the potential employee and the
organization
2. Not all potential candidates can access the internet therefore the selection choice may
not be very wide

Competitors in the Labour Market

When recent experience is needed, competitors and other firms in the same industry or
geographic area maybe the most important source of recruits. The most highly qualified
applicant often come directly from competitors in the same labour market as people
typically do not enter the workforce loaded with experience and job skills. Smaller firms
in particular look for employees trained by large organizations that have greater

29
developmental resources. The fact that approximately 5% of the working population is at
anyone time either actively seeking or receptive to a change of position emphasizes the
importance of these sources. Even organization that have policies of promotion from
within occasionally look elsewhere to fill positions.

Former Employees of the Organization

At one time, when employees quit a company their managers and colleagues tend to view
them as being disloyal, ungrateful, and would be punished with no return policies. The
common attitude is that if you leave your firm you do not appreciate what the company
has done for you. This is a thing of the past because today’s smart employers try to get
their best ex-employees to come back. The advantage of tracking former employees is
that the firm knows their strength and weaknesses and also these ex-employees know the
firm. Recruiting and hiring a former employee can be a tremendous benefit and can
encourage others to stay with the firm. It sends the message that things are not always
greener on the other side of the fence.

Persons with Disabilities

Individuals with disabilities have historically faced stigmas and stereo-typing and this
was reflected in recruitment and hiring. Disabilities Act has helped change this situation.
Attitudes also change as our population ages and the likelihood disability increases. One
can always identify more closely with the problems of a given group when one becomes
part of that group. society benefits when people with disabilities are recruited and hired.
The economy becomes stronger and the government supports fewer people. Disabled
individuals can be valuable because forced to learn new or different ways of doing things,
they are often able to apply these skills to their work. Their presence in a work group can
add to its diversity and increase the flow of new ideas.

Older Individuals

This includes those who are retired and older workers in general. Although these workers
are often victims of negative stereotyping the facts support the notion that older people
can perform many jobs extremely well. Management surveys indicate that most
employers have high opinions of their older workers. They value them for many reasons.
Compared to younger workers many older employees have more positive work habits,
lower absenteeism rates and higher levels of commitment to the organization.

Self Employed Workers

These may also be a good potential recruitment because they may be true entrepreneurs
who are hardworking and creative. For many firms these qualities may be essential for
continued competitiveness. Such individuals may constitute a source of applicants for any
number of jobs requiring technical, professional, administrative or entrepreneurial
expertise within a firm.

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Job Fairs

A job fair is a recruiting method engaged in by a single employer or groups of employers

to attract a large number of applicants for interviews. From an employer’s viewpoint a
primary advantage of job fairs is the opportunity to meet a large number of candidates in
a short time. Conversely applicants, may have convenient access to a number of
employers. Many commercial firms operate job fairs but government agencies, charitable
organization and businesses alliances frequently sponsor them. Job fairs offer the
potential for a much lower cost per hire than other traditional approaches. Job fairs
however, are likely to attract a large number of unqualified individuals.

Internships

An internship is a special form of recruitment that involves placing a student in a

temporary job with no obligation either by the company to hire the student permanently
or by the student to accept a permanent position with the firm following graduation. More
companies are now using internships as a recruiting technique especially where
candidates have proved to the organization that they can truly perform and get committed
to that organization. However, employers are becoming selective because most of the
students hired these days are high achievers. An internship typically involves a temporary
job during the school year.

Benefits of Internship

1. During the internship the student gets to view business practices first hand
2. The intern contributes to the firm by performing needed tasks
3. Through this relationship a student can determine whether a company could be a
desirable employer
4. Having a relatively lengthy of time to observe the students job performance, the firm
can make a better judgment regarding a persons qualifications. Studies show that
students with internship experience are able to find jobs more easily and they
progress much further and faster in the business world than those without
5. Internships also provide opportunities for students to bridge the gap from business
theory to practice
6. Internships serve as an effective public relations tool that provides feasibility for the
company and assists in recruitment.

Open Houses

Open houses are a valuable recruiting tool especially during periods of low
unemployment. Here firms gather recruiters and potential candidates in warm casual
environment that encourages on the spot job offers.

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Open houses are cheaper and fast then hiring through recruitment agencies and they are
also more popular than job fairs. There are pros and cons to holding a truly open house. If
the event is open it may draw a large turnout but it may also attract a number of
unqualified candidates. Some companies prefer to control the type of candidates they host
and so they conduct invitation only sessions. In this scenario the HR staff screen resumes
in response to job adverts then invites only pre-selected candidates. Advertising of open
houses may be through both conventional media and the internet where a firm might
feature its open house on its home page.

Walk in Applicants

If an organization has the reputation of being a good place to work it may be able to
attract qualified prospects even without extensive recruitment efforts. Acting on their
own initiative when qualified workers may seek out a specific company to apply for a job
unsolicited applicants who apply because they are favourably impressed with the firms
reputation often prove to be valuable employees.

Event Recruiting

Even recruiting gives an organization an opportunity to reflect its image. Here an

organization makes an arrangement to send its recruiters to an event that could be taking
place e.g. in a higher institution of learning to source for potential candidates. Graduation
is a common event where the credentials of the candidates are reviewed and the best
performing candidates are picked upon.

Advantages of External Recruitment

 Free flow of new ideas into the organization
 Increased productivity as a result of new employees trying to prove their performance
and potential
 Less training costs because these employees are already experienced

Disadvantages
 Expensive – because of recruitment costs
 The organization is not sure of their full potential and performance
 Reality shock as a result of unrealistic expectations
 Take time to settle down

Alternatives to Recruitment

 Outsourcing
 Overtime
 Multi-skiling (job enlargement)
 Contingent workers (temporary and part time)
 Employee leasing

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Even when human resource planning indicates a need for additional employees a firm
may decide against increasing the size of its work force. Recruitment and selection costs
are significant when you consider all the related expenses e.g. the search process,
interviewing agency fess, relocation and processing of a new employee. A firm should
consider its alternative carefully before engaging in recruitment.

Alternatives to recruitment commonly include:

1. Outsourcing

This is the process of transferring responsibility for an area of service and its objectives
to an external provider. Subcontracting of various functions to other firms has been a
common practice for decades. This decisions may make sense when the subcontractor
can perform a given function e.g. maintenance, cleaning etc with perhaps even greater
efficiency and effectiveness. Management should understand however that there may be
no retreat. Once a decision to outsource is made and internal systems disassembled it may
be difficult or even impossible to reverse practice. Therefore should outsource contract is
vital. Within the past few years outsourcing has become a widespread and increasingly
popular alternative involving almost every business area including human resources.

2. Contingent Workers

These are part-time temporary or independent contractors. Due to global competition and
changing technology organizations are not able to do accurate forecasting of their
employment needs in advance. To avoid hiring people one day and resulting to lay offs
the next, firms look to the benefits of flexible employment strategies. The cost factor also
prompts the organization to use the services of such contingent workers. To avoid some
of these expenses and to maintain flexibility as work loads vary, many organizations
utilize part time or temporary employees. Companies that provide temporary workers
assist their clients in handling excess or special workloads. These companies assign their
own employees to their customers and fulfil all the obligations normally associated with
an employer. Client firms avoid the expenses of recruitment, absenteeism, turnover and
employee benefits.

3. Employee Leasing

The leasing firms have got employees who are specialists in providing various services
and these employees are usually sent to the various client firms. The employees are
accountable to the leasing firm for everything including salaries and benefits as well as
other issues that concern or affect employee/employer relationship. Because leasing
companies provide workers for many organization they often enjoy economies of scale
that permit them to offer a wider selection of benefits at considerably lower costs due to
the large number of employees in their pool. Workers also frequently have greater
opportunities for job mobility. If a client organization business suffers a down turn the

33
leasing company offers job security. It can transfer employees to another client avoiding
lay offs and loss of seniority.

A potential disadvantage to the client is erosion of employee loyalty because workers

receive pay and benefits from the leasing company.

4. Overtime

This is the most commonly used method of meeting short term fluctuations in work
volume. Overtime may help both the employer and employee. The employer benefits by
avoiding recruitment, selection and training costs. The employees gain from increased
income during the overtime period. There are potential problems with overtime however
some managers believe that when employees work for unusually long periods the
company pays more and receives less in return. Employees may become fatigued and
lack the energy to perform at a normal rate. Consciously or not employees may pace
themselves to ensure overtime. They may also be accustomed to the added income
resulting from overtime pay. Employees may even elevate their standard of living to the
level permitted by this additional income then when overtime is limited the employee
morale deteriorates a long with their pay. This possibility has become reality to an
increasing number of employees as many organizations are reducing bonus and overtime.

(5) Multi-skilling/ job enlargement.

This is whereby employees’ duties are increased such that they can handle extra duties
that they were not initially performing.

External Environment of Recruitment

 Labour market conditions

 Legal considerations
 Political interference
 Trade unions
 Corporate image
 Economic factors

Internal Environment of Recruitment

 Organizational policies
 Nepotism

External Environment of Recruitment

Factors external to the organization can significantly affect the firms recruitment efforts.
Of particular importance is the demand for and supply of specific skills in the labour

34
market. If demand for a particular skill is high relative to supply an extraordinary
recruiting effort maybe required. These external factors include:

1. Labour Market Conditions

A firm’s recruitment process may be simplified when unemployment rate in an

organization’s labour market is high. The number of unsolicited applicants is usually
greater and the increased size of the labour pool provides a better opportunity for
attracting qualified applicants. Conversely as the unemployment rate drops recruitment
efforts must be increased and new sources explored.

2. Legal Considerations

Legal matters also play a significant role in recruitment practices. This is not surprising
since the candidate and the employer first make contact during the recruitment process.
One survey found that about ¼ of all discrimination claims resulted from employers’
recruitment and selection action. Therefore it is essential for organization to emphasize
non-discriminatory practices at this stage. Affirmative action and equal employment
opportunity guidelines imposed by the government ensure that organizations avoid any
discriminative actions in regard to recruitment and selection.

3. Corporate Image

The firm’s corporate image is another factor that affects recruitment. If employers believe
that their employer deals with them fairly the positive word of mouth support they
provide is of great value to the firm. It assists in establishing credibility with prospective
employees. Good reputations earned in this manner may help attract better and more
qualified applicants. A firm’s positive public image encourages prospective employees to
respond to its recruitment efforts and enhances its recruitment success.

4. Political Interference

This affects recruitment where prominent people in the government or politicians insist
on their preferred candidates being given prominence priority whenever there are
vacancies in the organization. This may compromise on quality in that most of these
candidates are usually not qualified. Yet the most qualified who could be out there are
left out.

5. Trade Unions

These interfere with recruitment efforts by ensuring that their members are considered
first whenever there are vacancies in the organization. This may hinder qualified
candidates who may not be union members from being considered.

6. Economic Factors

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When there is an economic ‘boom’ firms engage in many recruitment activities whereas
economic recession prompts organization to lay off workers as well as downsize.

Internal Environment of Recruitment

1. Organizational Policies

An organizations policy can have a significant impact on recruitment. Those firms that
stress a policy of promotion from within its own ranks may limit those qualified
candidates who may be available from external sources. Promotion from within is the
policy of filling vacancies above entry level positions with current employees.

When an organization emphasizes promotion from within its workers have an ‘incentive
see’ co-workers promoted, they become more aware of their own opportunities and this
increases employee morale. Frequently new blood provides new ideas and innovation that
must take place for firms to remain competitive. In such cases, even organization with
promotion from within policies may opt to look outside the organization for new talent.

2. Nepotism

Company policies related to the employment of relatives may also affect a firm’s
recruitment efforts. The content of such policies varies greatly but it is common for firms
to have anti-nepotism policies that discourage the employment of close relatives
especially when related employees would work in the same department under the same
supervisor or in supervisor subordinate roles. However when the labour market is tight a
firm may decide that it makes more sense to keep relatives on board than to loose them to
a competitor.

SELECTION
It is the process of choosing the best employees out of the many recruits.

SELECTION PROCESS

There is no standard selection process because it differs from job to job and from
company to company. Selection process consists of the following steps:
The following steps make up the selection process.

a) The preliminary interview

b) Review of application and resumes
c) Selection tests
d) Employment interviews
e) Reference and background checks
f) Selection decision
g) Medical examination
h) Job offer

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i) Preliminary Interview
The selection process begins with a preliminary interview. The basic purpose of this
initial screening of applicants is to eliminate those who do not meet the position
requirements. At this stage the interviewer asks a few straight forward questions. In
addition to eliminating unqualified job applicants quickly a preliminary interview may
produce other positive benefits for the firm. It is possible the position for which the
applicant applied is not the only one available. A skilled interviewer will know about
other vacancies in the firm and may be able to steer the prospective employee to another
position. These interviews can also be affected via telephone or video tapes.

ii) Review of Applications and Resumes

Having the applicant complete an application form or an application for employment may
either precede or follow the preliminary interview. The employer then evaluates it to see
whether there is an apparent match between the individual and the position. A well-
designed and well used application form can be helpful since essential information is
included and presented in a standardized format.

The specific information requested on an application for employment may vary from firm
to firm and even by job type within an organization. The application form provides
preliminary information as well as aid in the interview by indicating areas of interest and
discussion. It is a good means of quickly collecting verifiable basic historical data from
the candidate.

It serves as a convenient device for circulating information about the applicant to

appropriate members of management. It serves as a usual device for storing information
for future reference. Information is generally provided on the following items ;

1. Biographical Data
This may include name, father’s name, date and place of birth, age, sex nationality,
height, weight, physical disability if any, marital status, number of dependants etc.

2. Educational Attainment
Includes education (subjects offered and grades secured, training acquired in special
fields and knowledge gained from professional or technical Institutions.

3. Work Experience
Includes previous experience, the number of jobs held with same or other employers,
including the nature of duties and responsibilities and the duration of various
assignments, salary received, grades and reasons for leaving the present employer.

4. Salary and Benefits ie present and expected .

5. Personal Items
Association memberships, extracurricular activities, sports, hobbies and any other
pertinent information supporting a candidate’s suitability for a post.

6. Other Items

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 May include names and addresses of previous employers, references etc

NB: The data submitted in an application form should help predict the
Candidate’s chances for being successful on the job. The information sought should
be relevant to the objective of selection.

To ensure that the information given by the applicant is true, the application form usually
carries a threat of discharge at any time after employment if the information furnished in
it proves to be false. The questions included in an application form should be valid and
necessary. They should not by their wording or nature encourage dishonest answers.

It should be complete enough to relieve the interviewer of the burden of recording

considerable factual data.

iii) Selection Tests

Recognizing the shortcomings of other selection tools, an increasing number of firms
have added pre-employment tests to their hiring process. These tests rate the
personality, abilities and motivation of potential employees allowing managers to
choose candidates according to how they will fit into the open positions and corporate
culture. Tests alone are not sufficient as an evaluation tool therefore firms need to use
them in conjunction with other selection tools including interviews.

Medium sized and large organizations use tests more than small companies. Large
organizations are likely to have trained specialists to run their testing programs.

Advantages of Selection Tests

1. Research indicates that tests are reliable and accurate means to predict on the job
performance.
2. The cost of employment testing is small in comparison to ultimate hiring cost.
Hiring costs include advertising, recruiting, interviewing and training expenses
3. Organizations use tests to identify aptitudes and job related skills that interviews
cannot recognize.

Problems using selection tests

1. Job performance depends on an individual’s ability and motivation to do the
work. Selection tests may accurately predict an applicant’s ability to perform the job
but they are less successful in indicating the extent to which the individual will be
motivated to perform it.
2. Legal liabilities – pre-employment testing carry legal liabilities eg a law suit
from rejected applicants who claim a test was not job related or that it unfairly
discriminated against a protected group violating employment laws.
3. Test anxiety – applicants often become quite anxious when confronting a
hurdle that might eliminate them from consideration. The test administrators
reassuring manner and a well organized testing operation should serve to reduce this
threat

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iv) Interviews

This is the most widely used selection tool. Interviews are used for a variety of purposes
including selection, appraisal, disciplinary action, counseling and general problem
solving Employment interview is a goal oriented conversation in which the interviewer
and applicant exchange information. Interview is a selection technique which enables the
employer to view the total individual and directly appraise him and his behavior. It is a
method by which an idea about an applicant’s personality including his intelligence,
interests and general attitudes towards life can be obtained by a face to face contact.

An interview is an attempt to secure maximum amount of information from the candidate

concerning his suitability for the job under consideration. It tries to achieve an appraisal
of an applicant, his previous experience, education, training and family background it
enables the interviewer to judge certain qualities eg manners, neatness and appearance,
ability to speak, meet other people pleasantly, making a good impression on others, of
the prospective candidate before he is selected.

Types of interviews

1. Patterned or Structured Interview

This is the most common method of interview. It is based on the assumption that to
be most effective every pertinent detail bearing on what is to be accomplished what
kind of information is to be sought, how much time is to be allotted to it must be
worked out in advance. Questions are asked in a particular order with very little
deviation.

2. Non-directive or Free Interview

It is unstructured and is relatively non-planned as to format. In such an interview, the
applicant is asked some very general questions and he may reply to these in any way
he likes for a considerable length of time. The interview is not directed by questions
or comments as to what the candidates should be asked.

3. Depth or Action Interview

It is semi-structured in nature and utilizes questions in key areas which have been studied
in advance by the interviewer. The typical subject discussed at such interviews include a
candidates home life, education, previous experience, hobbies, recreational interests etc.
The interviewer provides instructional information about his organization, the nature of
work, pay, opportunities for advancement, job demands etc. The idea of such an
interview is to get a true picture of the interviewer by intensively examining his
background and thinking so that a correct evaluation and decision may be made.

4. Group Discussion Interview

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In this type of interview groups rather than individuals are interviewed. The interviewees
are given certain problems and are asked to reach a specific decision within a particular
time limit. The applicants enter into group discussions knowing that the interviewee is a
test but do not know which qualities are being measured or tested. A few observers watch
the activities of the interviewees i.e. those who take a lead in the discussions, those who
try influencing others, those who summarize and clarify issues, those who speak
effectively etc.

5. Panel or Board Interview

In this type of interview, a candidate is interviewed by a number of interviewers.

Questions may be asked in turn or asked in random order as they arise on any topic.

6. Stress Interview

In the stress interview, the interviewer assumes a hostile role towards the applicant. He
deliberately puts him on the defensive by trying to annoy, embarrass or frustrate him.
Usually the interviewer in such circumstances asks questions rapidly, criticizes the
interviewees answers interrupts him frequently, keeps the candidate waiting indefinitely
and then subjects him to interrogation, questioning whatever he might state or too many
questions are asked at a time by many interviewers etc. The purpose is to find out how a
candidate behaves in a stress situation, whether he bases his temper, gets confused
frightens.

v) Reference and background checks

Reference checks are validations that provide additional insight into the information
furnished by the applicant and allow verification of its accuracy. In fact applicants are
often required to submit the names of several references that can provide additional
information about them. Most organizations place more emphasis on professional
references included in background investigations. Background investigations involve
obtaining data from various sources, including previous employers and business
associates. These professional references and academic institutions are a valuable source
of information about applicants. The principal reason for conducting background
investigation is to hire better workers. However, there are other critical reasons as well.

The intensity of background investigations depends on the nature of the open position’s
tasks and its relationship to customers and clients. To be legally safe, employers should
ask applicants to sign a liability waiver permitting a background investigation. A
comprehensive waiver releases former employers, business references and others from
liability. The waiver can also authorize checks of court records and the verification of the
applicant’s educational history and other credentials. The employer should fully
document the results of all reference and background checks. The high incidence of
credential fraud provides a compelling reason for firms to conduct background
investigations. Small firms may not possess the staff to screen backgrounds of

40
prospective employees thoroughly. Even large organizations may prefer to utilize the
specialized services of professional screening firms. Firms can outsource their
background checking duties to a handful of third party investigators. Regardless of how
they are accomplished, background investigations have become increasingly important in
making sound selection decisions and avoiding charges of negligent hiring and retention.
The investigations may provide information critical to selection decisions since firms can
verify virtually every qualification an applicant lists. Some common terms in relation to
reference checks include;

Negligent hiring- the liability an employer incurs when it fails to conduct a reasonable
investigation of an applicant’s background and then assigns a potentially dangerous
person to a position where he or she can inflict harm.

Negligent retention- when a company keeps persons on the payroll whose records
indicate strong potential for wrongdoing and fails to take steps to defuse a possible
violent situation.

Negligent referral- when a former employer fails to offer a warning about a particularly
severe problem with a past employee.

vii) Selection decision

Management should notify both successful and unsuccessful candidates of selection

decisions as soon as possible. This action is simply a matter of courtesy and good public
relations. Any delay may also result in the firm losing a prime candidate, as top prospects
often have other employment options. If currently employed by another firm, the
successful candidate customarily gives between two and four weeks’ notice. Even after
this notice, the individual may need some personal time to prepare for the new job. This
transition time is particularly important if the new job requires a move to another city.
Thus the amount of time before the individual can join the firm is often considerable.
Employers may reject applicants at any time during the selection process. Research has
indicated that most people can accept losing if they lose fairly. Problems occur when the
selection process appears to be less than objective. It is therefore important for firms to
develop and utilize rational selection tools. Increasingly, time constraints prevent firms
from spending much time explaining a decision to an unsuccessful candidate. A rejection
letter is a more likely method. However, a letter with a personal touch may reduce the
stigma of rejection and avoid the applicant’s having a negative feeling about the
company.

vi) Medical examination

All medical exams must be directly relevant to the job requirements and that a firm
cannot order a medical exam until the applicant is offered employment. Typically a job
offer is contingent on the applicant’s passing of this examination. The basic purpose of
the medical examination is to determine whether an applicant is physically capable of
performing the work.

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viii) Job offer

PLACEMENT AND INDUCTION

Placement

This is determination of the job to which the accepted candidate is to be assigned and his
actual assignment to that job. A proper placement of a worker reduces employee
turnover, absenteeism and accidental rates as well as improving morale.

Principles for consideration during placement

i) Right people should be placed on right jobs

ii) A candidate should be placed on the job according to the job requirement

iii) A job should be offered to candidates who have required qualifications and
experience

iv) At the time of placement, candidate should be educated about the job, working
conditions, target output, expectations of job etc

Note: placement manager should help to develop a sense of loyalty and cooperation in the
employees so that they perform better and contribute to the effective realization of
organizational goals.

INDUCTION

Induction is the process of receiving and welcoming employees when they first join a
company and giving them the basic information they need to settle down quickly and
happily and start work. Induction has four aims:

 To smooth the preliminary stages when everything is likely to be strange and

unfamiliar to the starter;
 To establish quickly a favourable attitude to the company in the mind of the new
employee so that he or she is more likely to stay;
 To obtain effective output from the new employee in the shortest possible time;
 To reduce the likelihood of the employee leaving quickly

Importance of Induction

1. Reducing the cost and inconvenience of early leavers

The costs can include:

42
 Recruitment costs of replacement;
 Induction costs (training etc);
 Costs of temporary agency replacement;
 Cost of extra supervision and error correction;
 Gap between the employee’s value to the company and the cost of the employee’s
pay and benefits

2. Increasing Commitment

A committed employee is one who identifies with the organization, wants to stay with it
and is prepared to work hard on behalf of the organization. The first step in achieving
commitment is to present the organization as one that is worth working for and to ensure
that this first impression is reinforced during the first weeks of employment.

3. Clarifying the Psychological Contract

Consists of implicit, unwritten beliefs and assumptions about how employees are
expected to behave and what responses they can expect from their employer. It is
concerned with norms, values and attitudes. The psychological contract provides the
basis for the employment relationship, and the more this can be clarified from the outset,
the better. Induction arrangements can indicate what the organization expects in terms of
behavioural norms and the values that employees should uphold. Induction provides an
opportunity to inform people of the way things are done so that misapprehensions are
reduced even if they cannot be eliminated.

4. Accelerating Progress up the Learning Curve

New employees will be on a learning curve – they will take time to reach the required
level of performance. Clearly, the length of the learning curve and rates of learning vary,
but it is important to provide for it to take place in a planned and systematic manner from
the first day to maximize individual contributions as quickly as possible.

5. Socialization

New employees are likely to settle in more quickly and enjoy working for the
organization if the process of socialization takes place smoothly. The social aspects of
work (relationships with colleagues) are very important for many people. The extent to
which employees can directly influence the quality of socialization may often be limited,
but it is a feature of introduction to the organization to which they should pay attention as
far as this is possible, during the induction arrangements.

INDUCTION ACTIVITIES

1. Reception

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Most people suffer from some feelings of anxiety when they start a new job.
General fears may be alleviated by ensuring that the first contacts are friendly and
helpful.

The following checklist for reception is recommended;

 Ensure that the person whom the new employee first meets (ie. the receptionist,
personnel assistant or supervisor) knows of their pending arrival and what to do
next.
 Set a reporting time, which will avoid the risk of the starter turning up before the
reception or office staff arrive.
 Train reception staff in the need for friendly and efficient helpfulness towards the
new employee.
 If the new employee has to go to another location immediately after reporting,
provide a guide, unless the route to the other location is very straightforward.
 Avoid keeping the new employee waiting without knowing what to do next.

2. Documentation

A variety of documents may be issued to new employees, including safety rules and
safety literature, a company rule book containing details of disciplinary and grievance
procedures and an employee handbook.

The Employee Handbook

An employee handbook is useful for this purpose. It should convey clearly and simply
what new staff needs to know;

 A brief description of the company – its history, products, organization and

management;
 Basic conditions of employment – hours of work, holidays, pension scheme,
insurance;
 Pay – pay schemes, when paid and how, deductions, queries;
 Sickness – notification of absence, certificates, pay;
 Leave of absence;
 Company rules;
 Disciplinary procedure;
 Capability procedure;
 Grievance procedure;
 Promotion procedure;
 Union and joint consultation arrangements;
 Education and training facilities;
 Health and safety arrangements;
 Medical and first-aid facilities;
 Restaurant and canteen facilities;
 Social and welfare arrangements;

44
 Telephone calls and correspondence;
 Rules for using email;
 Traveling and subsistence expenses
3. Company induction – initial briefing

Company induction procedures, however, should not rely on the printed word. The
member of the personnel department or other individual who is looking after new
employees should run through the main points with each individual or, when larger
numbers are being taken on, with groups of people. In this way, a more personal touch is
provided and queries can be answered.

When the initial briefing has completed, new employees should be taken to their place of
work and introduced to their manager or team leader for the departmental induction
programme. Alternatively, they may go straight to a training school and join the
department later.

4. Introduction to the workplace

New employees will be concerned about who they are going to work for (their immediate
manager or team leader), who they are going to work with, what work they are going to
do on their first day, and the geographical layout of their place of work (location of
entrances, exists, lavatories, restrooms and the canteen).

Some of this information may be provided by a member of the HR department, or an

assistant in the new employee’s place of work. But the most important source of
information is the immediate manager, supervisor or team leader.

The departmental induction programme should, wherever possible, start with the
departmental manager, not the immediate team leader. The manager may give only a
general welcome and a brief description of the work of the department before handing
new employees over to their team leaders for the more detailed induction. But it is
important for the manager to be involved at this stage.

The detailed induction is probably best carried out by the immediate team leader, who
should have five main aims:

 To put the new employee at ease;

 To interest the employee in the job and the organization;
 To provide basic information about working arrangements;
 To indicate the standards of performance and behaviour expected from the employee;
 To tell the employee about training arrangements and how he or she can progress in
the company

The team leader should introduce new employees to their fellow team members. It is best
to get one member of the team to act as a guide.

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5. Formal induction courses

Formal induction courses enable new employees to be assembled in groups so that a

number of people can be given consistent and comprehensive information at the same
time, which may not be forthcoming if reliance is placed solely on supervisors. A formal
course is an opportunity to deliver messages about the organization, its products and
services, its mission and values, using a range of media such as videos and other visual
aids that would not be available within departments. But formal induction courses cannot
replace information on induction arrangements at the workplace, where the most
important need of settling people well can best be satisfied.

Arrangements

Decisions will have to be made about who attends the induction course and when. It is
normal to mix people from different departments but less common to have people from
widely different levels on the same course. In practice, managers and senior professional
staff are often dealt with individually.

Ideally, induction courses should take place as soon as possible after starting, if there are
sufficient new employees available, this could be half the first day or a half or whole day
during the first week. If a lot of information is to be conveyed, supplementary half or
one-day courses may be held later. However, the course may have to be delayed until
sufficient numbers of new employees are available. If such delays are unavoidable, it is
essential to ensure that key information is provided on the first day by personnel and the
departmental supervisor. Organizations with branches or a number of different locations
often hold formal induction courses at headquarters, which helps employees to feel that
they are part of the total business and gives an opportunity to convey information about
the role of head office.

Content
The content of formal induction courses may be selected according to the needs of the
organization from the following list of subject areas:

 Information about the organization – its products/services, structure, mission and core
values;
 Learning arrangements and opportunities – formal training, self-managed learning,
personal development plans;
 Performance management processes – how they work and the parts people play;
 Health and safety – occupational health, prevention of injuries and accidents,
protective clothing, basic safety rules;
 Conditions of service – hours, holidays, leave, sick pay arrangements,
maternity/paternity leave;

46
 Pay and benefits – arrangements for paying salaries or wages, the pay structure,
allowances, details of performance, competence or skill based pay schemes, details of
profit sharing, gain sharing or share ownership arrangements, pension and life or
medical insurance schemes;
 Policies, procedures and working arrangements – equal opportunities policies, rules
regarding sexual and racial harassment and bullying, disciplinary and grievance
procedures, no-smoking arrangements;
 Trade unions and employee involvement – trade union membership and recognition,
consultative systems, agreements, suggestion schemes.

6. On-the-job induction training

Most new employees other than those on formal training schemes will learn on the job,
although this may be supplemented with special off-the-job courses to develop particular
skills or knowledge. On-the-job training can be haphazard, inefficient and wasteful. A
planned, systematic approach is very desirable. This can incorporate:

 Job skills analysis to prepare a learning specification;

 An initial assessment of what the new employee needs to learn;
 The use of designated colleagues to act as guides and mentors – these individuals
should be trained in how to carry out this role;
 Coaching by team leaders or specially appointed and trained departmental trainers;
 Special arrangements

These on-the-job training arrangements can be supplemented by self-managed learning

arrangements, by offering access to flexible learning packages and by providing advice
on learning opportunities.

TRAINING AND DEVELOPMENT

Training is the process of raising knowledge and skills of an employee for doing
particular jobs. It is organized activity designed to create a change in the thinking and
behaviour of people and to enable them to do their jobs in a more efficient manner.
In industry, it implies imparting technical knowledge, manipulative skills, problem
solving ability and positive attitudes

Difference between Training and Education

Training should be distinguished from education.

1. Training is any process by which attitudes, skills and abilities of employees to

perform specific jobs are raised

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 Education is the process of raising general knowledge and understanding of total
environment. Therefore education is wider in scope and mere general i
n purpose than training
2. Training is job oriented or vocational having a move immediate objective than
education
3. The major burden of training falls upon employers while cost of education is borne by
society and individual
4. Education generally refers to formal instructions in school or college while as training
is generally imparted at the work place

Difference between Training and Development

Very often training and development are considered as synonymous but there is a
difference between the two.

1. Training implies the act of raising knowledge and skills required for efficient
performance of a particular job. Development means growth of an individual in all
respects.

An organization makes arrangement for development of its executive so as to

improve efficiency of management. All executive development programs for
managerial jobs. Managers need generalized knowledge rather than technical skills on
a particular job. Therefore, training of executive as often known as development.

2. Training is largely job centered while development is career bound. Training is meant
for employees

Need for Training

1. Non availability of trained personnel

It is difficult to find properly trained workers for various categories of jobs in an

organization. This sometimes makes it necessary to select workers with little or no
training for kind of work to be handled by them. In countries with inadequate facilities
for technical training or vocational education, employers themselves are required to make
arrangements to impart training to untrained workers

2. Suitability for organizational needs

Even where a worker is well trained for job to be assigned to him, he needs to be given
some special training consistent with specialized job requirements of organization. The
type of training imparted in vocational school is of a general nature hence needs to be
supplemented with a special training peculiar to each job.

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3. Proficiency on latest methods

Rapid scientific and technological developments have made it necessary to provide

continuous training facilities in organization itself. This is because even when a worker
has been trained in one set of work methods, he finds that where he has learnt at
considerable expense of time and effort has already become outdated due to invention of
never methods. In absence of proper training facilities in the latest method, workers of
organization might face danger of getting out of touch with latest methods. In matter of
learning new methods, one has to keep running even to remain at the same level of
proficiency.

4. Job satisfaction

Training gives employee confidence in handling the job assigned to him. It enables him
to achieve level of performance required by job to be handled by him. It instills self
confidence and boosts morale of employee which makes him more productive and
committed to organizational goals.

5. Higher output of quality goods

Training helps employee to raise quantity and quality of his output through improvement
in work methods and skills

6. Fewer accidents

Training helps in reducing number of accidents and breakdowns. A person who has learnt
how to do a job even before he is put on it will handle machines move competently than
untrained person.

7. Low spoilage rate

It reduces spoilage rate and wastage of material. This is because it makes a substantial
raise in skills such that even in the midst of vast changing technology, workers do not go
out of touch with modern machines

8. Reduction in number of complaints

A trained worker never complains about his work or their machines and tools given to
him to perform it. Only untrained worker may do so.

9. Better use of resources

With trained workers, the organization can apply its physical, financial and HR in a better
and more economical way

10. Management by exception

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Trained workers develop sharper reflexes and a greater capacity for diagnosis and
analysis of day to day problems. They need not rush to supervisor every now and then for
advice to solve routine problems. This considerably reduces the work load of supervisors
who can practice management by exception and devote the time and energy to tackling
larger and move important issues. An organization having trained workers will not have a
problem of shortage of personnel. Temporary or permanent absence of a few workers will
not make any difference to normal functioning of the organization or firm.

11. Healthy interpersonal relations

Raising complexity of organization has led to interpersonal and inter group problems due
to loss of contact between management and employees. Proper human relations training
of which many new techniques have been developed can help in overcoming such
problems

Identification of Training Needs

Training is a mean to raise effectiveness of employee in their present job and to prepare
them for promotion to position with greater responsibilities. It should therefore be related
to needs of organization and employees concerned. The organization will need trained
personnel when it seeks to diversify its product line necessitating introduction of new
technology or because it wishes to create jobs calling for specialized training. Identifying
training needs of employees of any organization a 3 step approach is undertaken
according to McGhee and Thay;

Organizational Analysis

This consists of identifying the areas where training of employees is called for. Employee
training needs will depend on objectives organization structure, existing personnel and
future plans of organization. This will highlight what activities will be undertaken by
organization and whether employees with their existing skills would be able to perform
them efficiently. In case there is any deficiency in skill levels in any department, suitable
steps could be taken e.g. realignment of organization. Greater decentralization,
recruitment of trained personnel etc

Task Analysis

This calls for detailed examination of each job, activities to be performed to accomplish
required standards and working conditions under which it is to be performed. This will
indicate what kind of jobs are performed and what types of employees will be able to
perform them

Worker analysis

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This analyses skills, abilities and what kind of training and development facilities that
each employee requires to enable him to perform better. The ideal way to identify such
needs is to observe employees at work interview with individual employees, their
supervisors and colleagues and past records techniques.

ON THE JOB TRAINING METHODS

1. Orientation/induction training

This is meant for new employee and its objective its to adopt them to specialized job
requirements and work methods of the organization. In this training, new employee is
given a job description and also provides with a set of policies, rules and procedures
which have bearing on his performance as an employee. He is also told who his superiors
and subordinates are

2. Apprenticeship training

Here, a worker is appointed as an apprentice. He is placed under the charge of qualified

senior worker. He learns methods of work by observing and assisting his senior. In-
skilled trades apprenticeship training in the most common. Electricians, plumbers,
machine operators etc usually learn their jobs through such training. The period of
apprenticeship differs from job to job. During this kind of training, worker is paid less
than a qualified worker.

3. Delegation

It is a process whereby the superior assigns certain responsibilities to his subordinates

and also delegate to here authority in equal measure. It forces subordinate to make his
own decisions without looking up to his superior every now and then and also display
leadership qualities. Delegation enables superiors to train their subordinates in a specific
job by making them take their own decisions and also feel a sense of accomplishment
when a given task is successfully performed

4. Promotion and transfers

Promotion or transfer in the case of an employee may cause a significant change in the
nature of his duties and responsibilities. While its true that an employee must be properly
trained before he is promoted or transferred to a new job, it may sometime be risky to try
out a promotion or transfer as a means of training because in such a ease, its bound to be
temporary affair so long as employee concerned does not satisfactorily establish his in
credentials for the new job.

5. Refresher training/retraining

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Rapid technological and scientific can make employees obsolete in course of time. This is
because, with change in technologies and work methods, job requirements also change.
Therefore even those employees are adequately qualified have to undergo training in the
use of new methods and techniques. Refresher training enables employees to refresh their
memory of things they learnt a long time ago.

6. Vestibule training

The word vestibule means a passage or room between outer door and interior of a
building. It means training organized in a school or in an industrial plant to train new
workers in specific skills so as to prepare them to handle their jobs. It is introduced when
number of workers to be trained is large, when volume of training is enormous and line
supervisor because of heavy responsibilities is not in a position to spare time to attend to
training.

7. Job rotation

May be vertical in which case. It is the same as promotion a horizontal in which case it
may be called transfer. The objective of job rotation is employee development through
provision of diversified training. It may take different forms e.g. employee selected for
training, may be assigned jobs after the other in different departments. Each such shifting
assignments is to train employee in work procedures of different departments. Another
form of job rotation requires selected employee to observe work of different departmental
heads. Here employee himself does not do anything in department to which he is sent. He
just observe how various department heads perform their functions.

8. Creation of assistant to positions

To broaden outlook of trainee and to prepare him for wider managerial responsibilities he
may be posted as an assistant to different department heads. Objective of this is to enable
trainee to acquire actual managerial experience in each department of organizational. In
this task he is helped by superior who assigns trainee duties according to his abilities and
skills and he is always available to offer advice and guidance

9. Committee or board membership

Committee is a specific type of meeting in which members as a group are delegated to

each member irrespective of his placement in organizational hierarchy. Thus if a
supervisor and his subordinate are both made member of committee, they will have equal
authority in deliberations of committee. The size of committee should not be too large. It
should neither be too small to avoid conflict of power. Committee meetings are a useful
training device and if conducted properly they enable members to interact with another,
pull their ideas and experience with a view to solving various organizational problems.

Advantages of on the job training

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1. It is less costly
2. There is similarity of retrieval environment to the learning environment meaning that
there is no transfer of learning problems or need for trainees to adjust to real work
situation.

Disadvantages

1. Institution may be ill equipped in training or inefficient

2. Trainee may be exposed to old or poor method instead of more efficient methods of
learning
3. May react to high rates of spoilage or scrap materials
4. Valuable equipment may be damaged
5. Mostly normal working conditions are stressful and can inhibit leaning. They can be
noisy busy or confusing and can expose trainee to poor comments from other workers

OFF THE JOB TRAINING METHODS

This takes place away from normal work situation usually employing specially
simplified tools and equipment. It may take place on employer’s premises at training
centre or at a college. They include

1. Training by management institutions

In western countries, bed personnel including those belonging to managerial cadres are
generally better educated but not as well as those in other distinguished profession such
as law, accounting etc. However, during last few decades a great deal of attention has
been given to equipping the bed personnel in various tasks handled by them at their place
of work. In Kenya personnel belonging to older generation are generally without any
formal education or training in their respective fields. However after independence there
has been considerable growth in number of institutions imparting technical and other
training that equips managerial and technical personnel with the skills they require for
their respective jobs.

2. Lectures, seminars, conference etc

Lecture courses may be used to impart knowledge as also develop analytical abilities
among workers. Large organization may employ qualified and trained persons to conduct
specific lecture courses suited to needs of different categories of workers. However, small
organization which can’t afford such expenditure can avail the services of experts
employed by educational and other professional bodies for such lecture courses.
Conferences provided occasion for formal interchange of views among employees of
different organization. Proposals or ideas developed by various speakers are thrown open

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for discussion among participants and consensus is reached taking into account the
various view points expressed. Seminars and workshops provided by educational
institution and professional bodies may also be of great help in training bed personnel.

3. Case study

A case is written account of an actual organizational situation in its historical,

environmental, operational, financial and human aspects. Case study enables trainees to

a) Pinpoint the problems

b) Identify and analyze causes there of
c) Suggest alternative solutions
d) Indicate which of alternatives would be the best under prevailing
conditions

The factors that are immediately affecting problem situation at hand are comprehensively
studied because it may not be possible to make detailed study of all aspects of any
organizational situation. Discussion of a case is generally n groups. Each member is
asked to present his analysis suggest alternative solution and offer comments on analysis
by others. Since there can’t be an ideal solution to any problem, group discussion can be
quite stimulating with each member trumpeting his own analysis and trying to find
loopholes in alternatives offered by others. Case study aims to develop analytical abilities
hence facilitating decision making.

4. Role playing

It is a training method under which participants assume certain roles and enact them
spontaneously in classroom condition. It lends to emphasize feelings and relationship
between people. In a role playing sessions, participants are assigned the votes by turns,
while 2 or more trainees enact roles assigned to them others act as observers and critics.
As a training technique it enables participants to broaden their experience by trying
alternative approaches to a problematic situation.

5. Management games

It is a training method that involves a group exercise in decision making as regards an

administrative problem situation it is similar to role playing the only difference is that
role playing seeks to emphasize feelings and relationships between people while
management games are more concerned with administrative problems. A management
game involves number of participants working in small groups which are in competition
with one another. The trainee specifies the various situations of game and any decision
making by groups with regard to areas or departments entrusted to them will have to be
within parameters of a system which is not fully known to them. A management game
can highlight strong and weak points in an organization as regards its communication

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system group relationships and human factor in decision making etc. Since decision
making by each group is to affect the decisions by other groups, feedback provided by
trainer helps them to evaluate and modify their decisions so as to achieve the optimum
results.

6. Brain storming

This is a problem solving technique which consists of evaluation of ideas put forward by
group of people who are convened especially for this purpose. It facilitates a pooling of
knowledge and experience of different people who are experts in their respectful fields
with a view to solving complex problem. It therefore enables a problem situation to be
looked at from different points of view making it easier to find an optimum solution.

Advantages of off the job training

1. Training is normally given by a special instructor and is therefore of a high quality

2. Special equipment simplified if possible can be used
3. Trainee can learn in planned phases using special exercises to enable him/her master
particularly difficult aspects
4. It’s free from pressures of working environment
5. Trainee is not at risk of damaging valuable equipment
6. It is easier to calculate cost of training
7. Trainee learns correct methods from onset
8. Most training centres are up to date both in facilities and personnel

Disadvantages

1. Sometimes the transfer of learning is difficult

2. Not all training can be conducted off the job
3. Higher costs of training

PERFORMANCE MANAGEMENT

Definition
This means the integration of employee development with results based assessment. It
encompasses performance appraisal, objective setting for individuals and departments,
appropriate training programmes and performance related pay. Performance management
emphasis development and the initiation of self-managed learning plans as well as the
integration of individual and corporate objectives.

Performance management is a strategic and integrated approach to delivering sustained

success to organizations by improving the performance of the people who work in them
and by developing the capabilities of teams and individual contributors.

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Performance is a record of outcomes achieved. Performance management is a means of
getting better results from the organization, teams and individuals by understanding and
managing performance within an agreed framework of planned goals, standards and
competence requirements. It is a process of establishing shared understanding about what
is to be achieved, and an approach to managing and developing people in a way that
increases the probability that it will be achieved in the short and longer term.

Performance management is a broad process that requires managers to define, facilitate

and encourage performance by providing timely feedback and constantly focusing
everyone’s attention on the ultimate objectives.

Principles of performance management

i) It translates corporate goals into individual, team, department and divisional
goals
ii) It helps to clarify corporate goals
iii) It is a continuous and evolutionary process in which performances improves
over time
iv) It relies on consensus and cooperation rather than control or coercion
v) It encourages self-management of individual performance
vi) It requires management style that is open and honest and encourages two-way
communication between superiors and subordinates
vii) It requires continuous feedback
viii) Feed back loops enable the experience and knowledge gained on the job and
individuals to modify corporate objectives
ix) It measures and assess all performance against jointly agreed goals
x) It should apply to all staff; and it is not primarily concerned with linking
performance to financial rewards.

PERFORMANCE APPRAISAL

Performance appraisal is concerned with determining how well employees are doing their
jobs, communicating that information to the employees and establishing a plan for
performance improvement.

Reasons for Performance Appraisal

1. For making administrative decisions relating to promotions, firings, layoffs and
merit pay increases. It helps a manager decide what increases of pay shall be given
on grounds of merit.
2. For determining the future use of an employee.
3. Appraisal can provide needed input for determining both individual and
organizational training and development needs, through identifying strengths and
weaknesses.
4. Appraisal encourages performance improvement. They may motivate the
employee to do better in his current job due to knowledge of results, recognition of
merit and the opportunity to discuss work with his manager.

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5. Appraisals help to identify can individual’s current level of performance.
6. Information generated by appraisal can be used as an input to the validation of
selection procedures.
7. Appraisal information is an important input to human resource planning and
succession planning, career planning and so on.

1. GOAL - SETTING OR MANAGEMENT BY OBJECTIVES

This is more commonly used with professional and managerial employees. Other
terminologies used for this include; management by results, performance management,
results management and work planning and review programmes.

The MBO process consists of the following steps:-

a) Establishing clear and precisely defined statements of objectives for the work to
be done by an employee.
b) Developing an action plan indicating how these objectives are to be achieved.
c) Allowing the employee to implementing the action plan
d) Measuring objective achievement
e) Taking corrective action when necessary
f) Establishing objectives for the future.

2. MULTI-RATER ASSESSMENT / MULTI-SOURCE ASSESSMENT

This is currently a very popular method of performance appraisal. It is also known as
360-degree feedback. 360-degree feedback is “The systematic collection and feedback of
performance data on an individual or group derived from a number of the stakeholders on
their performance. With this method, managers, peers, customers, suppliers or colleagues
are asked to complete questionnaires on the employee being assessed. The person being
assessed also completes a questionnaire. Data on ones performance is analysed and the
result shared with the employee appraised, who in turn compares the results with his
assessment.

3. RANKING METHODS.
The core element of the use of rankings is that employees are compared to each other,
and given some number that supposedly indicates whether they are better than, about the
same or less effective than their colleagues. It is used to determine who will get a pay
rise from a limited resource pool, or for other decision-making processes. In ranking
methods, especially the simplest form, the supervisor lists all subordinates in order, from
the highest to the lowest in performance.

4. RATING SCALES

A. GRAPHIC RATING-SCALE

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With this method, the rater assesses an employee on factors such as quantity of work,
dependability, job knowledge, attendance, accuracy of work and cooperativeness.
Graphic rating scales include both numerical ranges and written descriptions.

5. WORK STANDARDS APPRAISAL APPROACH

This approach is used most frequently for production workers, and is basically a form of
goal setting for these employees. It involves setting a standard or an expected level of
output and then comparing each employee’s performance to the standard. Work standards
should reflect the average output of a typical employee. Work standards attempt to define
a fair days work.

6. ESSAY APPROACH
This requires that the evaluator describe an employee’s performance in written narrative
from. A typical essay appraisal question might be “Describe, in your own words, this
employee’s performance, including quantity and quality of work, job knowledge and
ability to get along with other employees. What are the employees strengths and
weaknesses?’

7. CRITICAL – INCIDENT APPRAISAL

This requires the evaluator to keep a written record of incidents as they occur. The
incidents recorded should involve job behaviours that illustrate both satisfactory and
unsatisfactory performance of the employee being rated. The recorded incidents provide a
basis for evaluating performance and providing feedback to the employee.

8. THE CHECKLIST
In the checklist method, the rater makes yes-or-no responses to a series of questions
concerning the employee’s behaviour. The checklist can also have varying weights
assigned to each question.

Sample checklist questions

YES NO
i) Does the employee lose his or her temper in public? -
-
ii) Does the employee play favourites? -
-
iii) Does the employee praise employees in public when they have done a good job? - -
iv) Does the employee volunteer to do special jobs? - -

9. ASSESSMENT CENTRES
This is a special form of appraisal intended to identify potential for promotion. It consists
of a series of exercises such as leaderless group discussions, role-playing, business games
and ten-minute speeches. A group of candidates is brought together at a fairly isolated
spot where they go through the exercises over a period of one to three days. They are
judged by assessors who are usually managers of the company who have received
appropriate training.

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10. THE OPEN-ENDED METHOD
This is a recent innovation, introduced because of dissatisfaction with rating scales. The
method emphasizes the way the job is performed and expects the manager to write a few
sentences about the subordinate rather than pick ticks in columns. The method cannot be
used directly to decide pay but it fulfils the other purposes of appraisal as well. It is more
intellectually demanding and is best suited where the subordinate’s jobs are relatively
unstructured.

ERRORS IN PERFORMANCE APPRAISAL

There are many possible sources of error in the performance appraisal process. One of the
major sources is mistakes made by the rater. There is no simple way to eliminate these
errors, but making raters aware of them is helpful. The most common errors committed in
performance appraisal include: the halo effect; leniency; strictness; the central tendency
error; the recency effect; and the contrast error.

1. The Halo Effect

The halo effect occurs when a manager rates an employee high on all items because of
one characteristic. For example, if a worker has few absences, her supervisor might give
her a high rating in all other areas of work, including quantity and quality of output,
because of her dependability. The manager may not really think about the employee's
other characteristics separately. The opposite of a halo error is a horn error, where
negative performance in one-dimension influences any positive aspects of the employee's
performance.

An appraisal that shows the same rating on all characteristics may be evidence of the halo
or horn effect. Clearly specifying the categories to be rated, rating all employees on one
characteristic at a time, and training raters to recognise the problem are some means of
reducing the halo and horn effects.

2. The Leniency Error

A second common and often intended rating error is called leniency error - or the process
of being 'too easy'. Leniency bias may exist because supervisors are concerned about
damaging a good working relationship by giving an unfavourable rating. Or they may
wish to avoid giving negative feedback, which is often unpleasant, so they inflate the
ratings.

3. The Error of Strictness

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At the opposite extreme of leniency is the error of strictness in which ratees are give
unfavourable ratings regardless of performance level. Raters with low self-esteem or
raters who have personally received a low rating are most likely to rate strictly. Rater
training, which includes reversal of supervisor subordinate roles and confidence building,
will reduce this error.

4. The Central Tendency Error

Rather than using extremes in ratings, there is a tendency on the part of some raters to
evaluate all ratees as average even when performance actually varies. This bias is referred
to as the error of central tendency. Raters with large spans of control and little
opportunity to observe behaviour are likely to rate the majority of employees in the
middle of the scale, rather than too high or too low. This is a 'play-it-safe' strategy.
Central tendency can also be a by-product of the rating method. The forced-distribution
format requires the most employees be rated 'average'.

5. The Recency Effect

As the typical appraisal period [six months to a year] is far too long for any rater to
adequately remember all performance-relevant information. As the appraisal interview
draws near, the rater searches for information cues as to the value of performance.
Unfortunately, recent behaviours or outputs are more salient. As a result, recent events
are weighted more heavily than they should be. Called the recency of events error, this
bias can have serious consequences for a ratee who performs well for six months or a
year but then makes a serious or costly error in the last week or two before evaluations
are made.

Employees and managers can minimise this error by keeping ongoing behavioural or
critical incident files in which good and poor behaviours and outputs are recorded.
Although time consuming, they ensure that information for the entire period is
incorporated into the appraisal.

6. The Contrast Error

Rating should be done on the basis of standards that are established before the rating. The
contrast error is the tendency to rate people relative to other people rather than to
performance standards. For example, if everyone else in a group is doing a mediocre job,
a person performing somewhat better may be rated as excellent because of the contrast
effect.

But in a group performing well, the same person might have received only a poor rating.
Although it may be appropriate to compare people at times, the rating should reflect
performance against job requirements, not against other people.

COMPENSATION

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A person may opt for employment in an organization to satisfy various needs and desires.
He may do so to satisfy economic needs, security needs, social needs, recognition and
status needs etc. But satisfaction of economic therefore need most occupy an important
place in list of priorities. It is therefore only proper that policies with respond to wage and
salary administration and supplementary benefit to employee should form a vital part of
presumed policy of organization. Satisfactory compensation schemes will enable
organization not only to attract capable and competent persons but also to retain them for
long periods.

In the absence policy in this respect, wage rates may be used on personal and arbitrary
decisions in that case, it may not ensure adequacy and equity in compensation schemes
and thus results in low morale intra and inter group rivalries among employees.

Elements of Good compensation policy

1. Levels of adequacy of wage payment

2. Equity in wage payment
3. Recognition of efficiency of performance
4. Incentive payment

1. Levels and adequacy of payment

Levels of pay in case of employee will generally depend on

a) Competitive wage rate prevailing in the labour market on area which organization is
situated
b) Wage rates prevailing in industries to which the organization belong
c) Financial position of organization
d) Management policies

The wage rates prevailing in local labour market in industry as a whole may be known
through a survey. Various government agencies also periodically publish information
relating to wage rates. But its not necessary for an organization always to follow rates of
wages prevailing in local labour market or industry. It may also lay down rates of its own
in view of need to attract and retain competent and capable persons.

While rates based on those prevailing in labour market or industry, will enable
organization to negotiate with trade unions, payments at higher rate will enable it to
retain competent workers. Sometimes wages at higher or lower rates may be paid keeping
in view location of organization, level of technology in use, different in skills or nature of
jobs

2. Equity in wage payment

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While adherence to wage rates, prevailing in the labour market or industry may be
unaffordable in certain cases, the organization has also to ensure that there’s an equitable
pay structure as between the different categories of employees and nature of jobs
performed by them. Psychologically, an employee is often more interested on what his
fellow colleagues are receiving as compared to himself. There is no doubt, there will be
difference in wages and salaries of different workers depending on relative worth of jobs
handled by them, levels of education, skill and experience, nature of jobs and
responsibilities as well as working conditions including occupational risks.

However, care should be taken to see that any difference in wage payment are result of
objective evaluation and in accordance with relative worth of each job organization and
not because of personalized and arbitrary decisions of the management.

3. Recognition of efficiency of performance

It is a major factor in determination of wages payable to any employee. A new and

relatively inexperienced employee can’t be as prefect in his job as one who has been at it
for a number of years. Wage rates in case of employee with higher efficiency level may
be raised on the basis of performance appraisal.

Another way to do so is to pay according to piece rate system. However, assessment of

efficiency level is accurate only where output can be measured in quantitative terms. In
case of managerial and supervisory jobs, such measurements may not be possible, still
efficiency in such jobs may be appropriately rewarded by having a range of pay or salary.
Scale for each job such that a newly appointed person will be paid at the minimum of
scale.

Improvement in performance may be compensated by increments granted year after year.

Objectives of compensating policy

From the view point of employers

1. Employers can systematically estimate labour costs and exercise perfect control over
labour costs
2. Employers can influence and explain trade union members as well as employees the
basis of wage programme because its based on systematic analysis of job components
and wage facts
3. A sound wage administration can go a long way in reducing friction and grievance of
employees over wage differentials and inequalities
4. Good salary administration attracts a highly qualified people into organization
5. A sound salary administration is necessary for building up morale and raise
motivation of employees. Quite obviously result is raised output and profits

From employees view point

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1. Under a good salary administration employees are paid equitably i.e. they are paid
according to their skills and abilities
2. Favourism is considerably reduced when wage and salary administration is good
3. Employees motivation is enhanced and morale is stepped up when administration of
salary is effective

Dales Beach summarizes purpose of wage administration under the following categories:-

a) To recruit, select and induct people

b) To control payroll costs of the firm
c) To satisfy people, reduce employee turnover, grievances and friction over pay
d) To motivate people to perform better

FACTORS INFLUENCING WAGE AND SALARY STRUCTURE

Every organization has unique wage and salary structure of its own. While framing wage
and salary policy, the top management should ensure that the wage structure is attractive
and compensation package priorities a reasonable standard of living for its employees.
The following factors should be considered for salary administrative by top management

1. Firms’ capacity to pay

Generally those firms that enjoy high profits, high stock turnover and higher rate of
return on investment can afford to pay higher wages than those firms running at losses or
enjoying fewer profits. The wage structure thus depends on firm’s ability to pay.
However, a firm is supposed to pay amount of wages which its competitors are paying. In
addition to profits, organization capacity to pay is influenced by economic conditions
such as boom, recession etc

2. Demand for and supply of labour

If the demand for labour in relation to supply is higher the supply of skilled labour is low,
then wage rates tend to be high and vice versa. Demand and supply of labour may vary at
the national, regional, local and organizational levels.

3. Existing market rate

This is also known as going rate or comparable wage rate. Some organization have
tendency to pay a higher rate than market in order to maintain good will and ensure
adequate supply of labour e.g. most multinational corporations. Contrary to other
organizations pay lower wages than market rate either because they can’t afford to pay
high wages or because labour is readily available.

However, to retain, attract and maintain a sufficient quantity and quality of manpower, a
firm should consider existing wage in the market

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4. Cost of living

It is important to make adjustments to wage and salary structure based on increase or

decrease in cost of living index. When cost of living raises, workers demand raise in pay
to offset the erosion of real wages. When cost of living index raises substantially this may
call for a revision of wage structure.

5. Living wage

This enables employee to satisfy their needs. Normally employers tend to pay wages to
employees according to their productivity rather than their needs.

Note: living wage as a factor is controversial because different employees have different
living wages due to their different needs

6. Job requirements

As a general principle, the more difficult a job, the higher the wages. Jobs are graded
according to relative skills required, effort needed, responsibility and authority imposed
upon job holder and working conditions

7. Productivity of labour

Labour productivity is measured in terms of output per man hour. But the problem is that,
its not easy to measure labour productivity because productivity is a function of several
factors e.g. better management, technological improvements, better methods of
production and marketing, greater skills, good labour relations etc

Productivity in industry can be measured at several levels such as job, plant, industry,
national and economic levels. It is therefore difficult to device productivity index that
would measure productivity of only one factor of production i.e. labour

8. Managerial attitudes

Top management desire to maintain or enhance companies’ prestige has been a major
factor in the wage policy of a number of organizations. Desire to improve or maintain
morale, attract high caliber employees, reduce turnover and provide high living standard
all affects the wage structure policy decisions of management

9. Psychological and social factors

Employee perceives that higher wages are identified with success at work place and low
wages may result in the inferiority complex and job security. Sociologically and ethically

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employees should feel that equal pay for equal work and that pay should be able to
compensulate with efforts involved in a job wage equity, fairness and justice are essential
in meeting the psychological and social satisfaction of employees.

10. Trade union bargaining power

A stronger and more powerful trade union with huge membership, financial strength and
headed by a strong leader would ensure higher wage rates and vice versa. Such trade
unions may force management to raise wage rate faster that rises in productivity and thus
results in losses and subsequent unemployment of some workers. Management should
therefore be careful in dealing with strong trade union whose bargaining power is high

INDUSTRIAL RELATIONS

Trade unions

This is a voluntary association of employees formed to protect and promote on their

interests through collective action

Definition by scholars

1. By Sydney and Beatrice Webb

Trade union is a continuous association of wage earners for purpose of maintaining or

improving the conditions of tier working lives

2. G.D.H. Cole

A trade union means an association of workers in one or more occupations i.e. an

association carried on mainly for the purpose of protecting and advancing the members
economic interest in connection with their daily work

3. Edwin B. Flippo

Trade union is an organization of workers to promote, protect and improve through

collective action the social, economic and political interests of its members

4. Cunnison

Trade union is a monopolistic combination of wage earners who stand to employers in a

relation of dependence for the same of their labour and even for its production and that
the general purpose of association is in view of that dependence to strengthen their power
to bargain with the employers.

Trade unions function on basis of 3 important principles

 Unity is strength

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 Equal pay for equal work
 Security of service

Reasons for joining trade unions

 To get economic security ensure steady flow of income

 To restrain management from taking any action which is irrational, illogical,
discriminatory or detrimental to interests of employees
 To restrain management in showing favoritism in the assignment of duties and
responsibilities, transfers, promotions, and maintenance of discipline in some corners
at cost of other units. Also in issues of layoffs, retirements, rewards and punishment
so that there is no bias in all these aspects
 To fall inline with other workers in a better way and to gain respect in the eyes of
their peers
 Secure protection from economic hazard beyond their control e.g. accidents, death,
unemployment, old age etc
 To communicate their aims, ideas, feelings, views, dissolutions, frustrations and
dissatisfaction with management and organizations
 To get a job through good offices of trade unions

Management is not allowed to join trade unions. Also the wage earner does not join trade
unions as their employment is for a short time. Thus trade union is only for the
unionizable members (salary earners)

Objectives of trade unions

Although each union is a unique organization seeking it own objectives, several board
objectives characteristic the union movement as a whole. These include:

1. To secure and if possible improve living standard and economic status of its members
2. To enhance and if possible guarantee individual security against threats and
contingencies that might result from market fluctuations, technological change or
management decisions
3. To influence power relations in social system in ways that favour and do not threaten
union gains or goals
4. To advance the welfare of all employees who work for a living whether union
members or not
5. create mechanisms to guard against the use of arbitrary and inhuman policies and
practices in work place

How trade unions achieve their objectives through the following methods:

a) Negotiated agreements with management

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These negotiations deal with salaries, wages, hours of work, terms and conditions of
employment, personal and job security, employee benefits and services, medical care,
retirement benefits etc

b) Collective bargaining

A trade union achieves its objectives through collective bargaining

c) Grievance processing and handling procedures

A trade union should see that a proper grievance processing and reddressal procedures is
existing within the organization and as soon as grievance reaches C.E.O it’s dealt with
satisfactorily

d) Arbitration

It is a process by which unsettled or unresolved dispute can be solved or settled by an

outside agency.

e) Insurance

Mutual insurance through common contribution is another way to achieve the union
objectives especially regarding financial needs of workers when there is stoppage of work
e.g. due to strikes

f) Political pressure

This is another source with help of which pressure is exercised through legislators who
are capable of bringing about changes in labour laws

g) Recruitment

Through a special arrangement, a trade union may exercise some control over hiring,
supervision and discharge of workers

Collective Bargaining

This is a process by which employers and representative of employees attempt to arrive at

an agreement covering the conditions under which employees will contribute and be
compensated for their services. It is called collective because both employer and the
employee act as a group rather than individuals. It is described as bargaining because the
methods of reaching an agreement involves proposals and counter proposals, offers and
counter offers

Types of bargaining

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1. Distributive bargaining

This is a straight out haggling, over the disturbance of a pie. Here, economic issues like
wages and salaries and remuneration are, discussed. Under distributive bargaining one
party’s gain is another party’s loss

2. Integrative bargaining

This is a negotiation of an issue on which both parties may gain or at least neither one
looses. Discussion over a better job evaluation system or better training employees are
e.g. of integrative bargaining win-win/loss-loss situation

3. Attitudinal structuring

Here, some attitudes like trust or distrust, friendliness or hostility between labour and
management are shaped and reshaped. When there is a back log of bitterness between
both parties, industrial relations could not be smooth and harmonious. Collective
bargaining in terms of attitudinal structuring is called for in this case

4. Intra – organizational bargaining

This is a type of maneuvering to achieve consensus with workers and management. Even
within union, they may be different between different groups e.g. skilled workers may
feel they are neglected, women workers may feel that their interests are not properly
looked after marketing manager may wage union to produce and stop strike to protect the
interest of customers where as finance management may claim that any wages may be
disastrous to company financial position. Trade unions try to achieve consensus among
conflicting groups within union

UNFAIR LABOUR PRACTICES - EMPLOYER

It is an unfair labour practice:
• To interfere with, restrain, or coercing employees in exercising their legally
sanctions rights of self organisation.

• For company representatives to dominate or interfere with either the formation or

the administration of labour unions.

 The above two can be through bribing employees, using company

spy system, moving business to avoid unionization, and black
listing union sympathizers.

 Discriminating employees for their legal union activities

 Discharging or discriminating against employees simply because the latter filed

unfair practices against the company

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  Employers refusing to bargain collectively with their employees’ duly chosen
representatives

UNFAIR LABOUR PRACTICES – UNIONS

 Restraining or coercing employees from exercising their guaranteed bargaining

rights – e.g.. Staging an anti union employee will lose his or her job once the
union gain recognition

 Cause an employer to discriminate in any way against an employee in order to

encourage or discourage his or her membership in an union ( except in closed or
union shop)
• Refuse to bargain in good faith with the employer about wages, hours and other
employment conditions.
• Certain strikes and boycotts are also unfair practices

• Engage in “featherbedding” (requiring an employer to pay an employee for

services not performed

• Charging excessive or discriminatory membership fees

• Inducing, encouraging, threatening or coercing any individual to engage in
strikes, refusal to work, or boycott where the objective is to:
• Force or require an employer or self employed persons to recognize or join
any labour organisations
• Force or require an employer to cease using products or doing business
with another person
• Force an employer to apply pressure to another employer to recognize a
union which is not in your industry

THE RIGHTS OF AN EMPLOYEE IN INDUSTRIAL RELATIONS

 To belong or not to belong to a union ( except for union shops)

 Employees can present grievances directly to an employer

 Employees authority to make any subtraction of union dues from his/her pay
cheque
 Nominate candidates for union office

 Vote in union elections

 Attend union meetings

 Examine the union accounts and records

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EMPLOYEE HEALTH AND SAFETY

Employee safety and health program occupy an important position in HR management.

Psychologists, social scientists, sociologists and industrial engineers are nowadays move
concerned with employee health and safety because they have realized that health
employee is a productive employee

Psychologists are concerned with theoretical considerations of accidents, their causes,

ways of controlling and preventing accidents through proper selective placement and
training of the employees on the industrial organizations

Engineers and safety officers are primarily concerned with rendering suitable and
necessary advice to employees and executive regarding maintenance of health and safety
of employees

The importance of accident prevention and safety has risen in the recent past because
modern industrial workers are subject to the mechanical, chemical, electrical and
radiation hazards

Employee safety
 Deals with safety hazards aspects of work environment that have the potential of
causing immediate and sometimes violent harm or even death
 Employee health deals with health hazards – aspects of work environment that
slowly and cumulatively (often irreversible) lead to deterioration of health
 The person may develop chronic or life threatening illness or become
permanently disabled

 Typical causes are physical and biological hazards, toxic and carcinogen dust and
chemical, stressful work conditions; these can cause cancer, heavy metal and
other poisoning respiratory disease, cyclonical disorders like depression

Industrial accidents

It is defined by factories act as an occurrence in an industrial establishment causing

bodily injury to a person which makes him unfit to resume his duties in the next 48 hours.
It is an occurrence which interrupts or interferes with orderly progress of work in an
industrial establishment.

Causes of accidents

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The nature and causes of accidents vary from industry to industry e.g. in construction
industry, accidents may be seen in terms of falling employee form a height while engage
in construction work. Coal rocks may fall on employee is drilling in coal mine. An
employee may be electrocuted on a plant due to short circuit etc

These causes may include:

Work-related causes

These include also referred to as unsafe conditions of work

1. Unsafe and defective equipment

2. Hazardous arrangements or procedure in or around the machines and equipment
3. Inadequate safety devices
4. Improper lighting
5. Poor house keeping
6. Improper/inadequate ventilation/air pollution
7. Improperly guarded equipment
8. unsafe storage, congestion, overloading etc

NOTE: unsafe equipment and machinery accounts for more than 1/3 of industrial
accidents and hence these are labeled as high risk zones for accidents

Unsafe acts

Accidents may be also result of unsafe acts on the part of employees. Lack of knowledge
or skill in handling the equipment, physical incapacities, and wrong acts of employees
result on industrial accidents. These unsafe acts include:

1. Failure to use safety/protective equipment provided by the organization

2. Making safety devices inoperative by adjusting, removing or disconnecting them
3. Using unsafe equipment
4. Throwing materials on floor carelessly
5. Failure to consider safety warning in works spot
6. Using unsafe procedures in handling, unloading, combining and mixing etc
7. Improper cleaning, oiling, repairing etc of the dangerous equipment
8. destructions, teasing, abusing, quarreling and day dreaming on part of employee

Psychological causes

Accidents normally occur during closing hours of the work. This is because workers got
fatigue at the widening up hours of the day and in the process make mistakes.
Psychological factors e.g. fatigue, anxiety, tiredness, overwork, monotony, boredom, lack
of self confidence, frustrations etc may also cause industrial accidents

Environmental causes

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Accidents may arise out of unsafe situational or environmental conditions. These include

 Slippery floors
 Rough floors
 Fumes etc
 Excessive lights
 Humidity
 Dust

Prolonged working hours, excessive noise and carelessness in handling inflammable

materials e.g. explosives

Safety programme

To prevent industrial accidents and to ensure employee safety, almost every employer
should launch a safety programme considering the following points:

1. Safety program should have top management approach and support

2. Supervisory personnel should be entrusted with responsibility of a safety program
3. Safety should be given due consideration like other areas such as wages and salary
administration, recruitment, selection, training etc
4. A definite safety program should be developed to educate all employees in safety, and
to secure their active cooperation in order to eliminate industrial accidents
5. In all phases of management like planning, organizing, procurement of raw materials,
supervision and operation safety should be included

Responsibilities of the employer in health and safety

 Provide a working environment that is free from recognized hazards that are
causing or likely to cause death or serious physical harm to employees and
comply with standards, rules, and regulations
 Familiarize yourself and your employees with mandatory health and safety
standards

 Examine work place conditions to ensure they conform with applicable standards
 Minimize or reduce safety and health hazards
 Ensure that employees have and use safety tools and equipment ( including
appropriate personal protective equipment) and that such equipment is properly
maintained
 Employ color codes, posters, labels , or signs in several languages to warn
employees of potential hazards

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  Establish or update operating procedures and communicate them so that
employees follow safety and health requirements
 Provide medical examinations for trades required by law

 Refrain from discriminating employees who properly exercise their rights in

health and safety
 Safety training - should be part of the orientation programme and at different
points during the employees career – voluntary training or compulsory training
which is required by government regulations
 Inspection and research – inspect workplace with the goal of reducing accidents
and illness, carry out accident research

Rights of the employee

 Employees have a right to seek safe workplace without fear of punishment.

 Complaining to an employer, union or labour ministry, or any other relevant
government agency about job safety and health hazards
 Filing safety or health grievances
 Participating on workplace safety and health committees or in union activities
concerning job safety and health
 Review copies of appropriate workplace standards, rules and regulations, and
requirements that the employer should have available in the workplace

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