Functions of the human resource department.

Recruitment

Recruitment is the activities or practices that define the desire characteristics of applicants for

specific jobs. This is a very important function of the Human Resource Department, as recruiting

the wrong people for the job can lead to low labour productivity and loss of revenue for the firm.

With this in mind, firms often draft a recruitment pan. This plan outlines the steps that will be

taken to recruit individuals for a particular job.

Recruitment plan

The recruitment plan contains five stages which are:

1. Job analysis – this is the examination of what the job entails: this is, the responsibilities,

skills, training and tasks that are required for the job. In order to ascertain this

information, the Human Resource Department must conduct the necessary research about

the job. The job analysis, when completed, is used as the standard against which the

applicant will be measured in the interview.

2. Job evaluation – here, an assessment of the worth of the job is done. The aim of this

process is to assess whether the reward being given for the job is fair when compared

with those for other jobs in the organization. This will enable the firm to determine the

appropriate salary and wage levels for the particular job.

3. Job description – having completed the job analysis, the firm can describe the position

that is available. It would give information about the purpose, duties, tasks and

responsibilities of the position. The job description can be used to measure performance

of the person employed.

 4. Person or job specification – in this stage, the profile of the person to fit the job is

outlined. It states the years of experience, minimum qualifications and character of the

person required for the job. Like the job description, this is also used to assist in the

recruitment of a suitable person for the job.

5. Job advertisement – the final stage of the recruitment plan is where the particular job is

communicated, whether internally or externally. The main aim of job advertisement is to

attract a cohort of suitable applicants for the job in question.

Recruiting internally versus externally

Having drafted the recruitment plan, management now has to decide how applications for the

post will be solicited. In many firms, the general rule is that the post must first be advertised

internally (for example, over the intranet) and if it is not filled then the post would be advertised

to the wider population. Irrespective of this, the firm will have to decide whether to recruit

internally or externally. In making this decision, there are certain factors that must be taken into

consideration and the firm would have to weigh the advantages and disadvantages of each option

and then make a decision.

Factors influencing recruitment decisions

 The amount of time that is available to fill the post. If the post has suddenly become

vacant and it demands a quick replacement, then management may not have enough time

to go through external recruitment.

  The level of skills that are available internally is also another deciding factor. If there is

no one in the organization with the requisite skill and experience needed for the post, then

attention may have to be turned to the external route.

 The type and nature of the job may also be a deciding factor. The skill required for this

particular job may not be available anywhere in the firm and so must be sought from

outside.

 The composition of the external labour market. The firm may need to do an assessment of

the external labour market to decide whether or not the applicant that it is looking for will

be available The firm may also need to consider the impact that an external recruitment

may have on the level of motivation of the existing staff.

Advantages of internal recruitment

 Improves employees’ morale as this is seen as a reward for hard work done.

 May be cheaper, since large sums of money would not have to be spent on advertisement.

 Employees benefit from job enlargement and rotation and they can get full use of their

potential.

 The entire process is less time consuming.

Disadvantages of internal recruitment

 There may be an absence of new ideas.

 The firm incurs the cost of training if the skill of the internal staff is not sufficient.

 Narrow applicants base, as more people could be recruited from outside.

  Promoting internal staff will create vacancies that will still need to be filled.

 People who are not chosen may create some animosity for others, which can result in

conflict.

Advantages of external recruitment

 Offers more choice, as there is a greater variety of applicants.

 ‘New blood’ can be injected into the organization. This can result in new ideas and

different approaches to the job.

Disadvantages of external recruitment

 Advertisement costs may be high.

 May lead to morale issues within the firm.

Selection

Job advertisement usually creates another challenge for employers – which is choosing the most

suitable candidate(s) for the job from the myriad of applicants. This process may be different for

some businesses but the general stages are outlined below:

Applications

Once a job is advertised, potential workers are required to submit an application letter

accompanied by their curriculum vitae or résumé. Some firms may request that the applications

be mailed or dropped off. However, with the development of technology, a number of firms are

requesting that applications be sent via e-mail. Some organizations have also created a general
structured application form which should be completed by applicants. Once applications are

received, the firm can move to the next stage.

Short listing

This particular step is used when the number of applications far outweighs the available positions

in the firm. The Human Resource Department has to sift through these applications to select a

manageable list of applicants who best fit the requirements for the job. This is not the final

process but these people will be brought in for an interview after which further ‘trimming’ of the

list will be carried out. To cut costs, some firms will only reply to these people inviting them to

an interview.

Interview

This is where both the employer and the applicant have a chance to interact so that a two-way

exchange of information can take place. The employer has the chance to clarify points made in

the application letter and résumé. It also presents an opportunity for the employer to assess each

applicant’s deportment, articulation and persona. The main purposes of the interview for the

employer and applicants are to:

 Give employers an opportunity to decide the suitability of the applicants for the job.

 Give applicants a chance to garner more information about the job and the firm.

Testing

In some organizations, before a final decision is made regarding employment, applicants are

tested. This is particularly important where the people being employed are expected to come to
the job with prior information and knowledge or the firm wants to ascertain what its training

needs are.

Employment

Once the most suitable applicant for the job is chosen, the final part of the selection process is to

communicate with them and give them a date for work to begin.

Compensation

Developing a fair and attractive remuneration package is also an important function of human

resource management. Without fair and proper remuneration, the firm is running the risk of

industrial action, low productivity and low performance. The preceding functions of the Human

Resource Department all lead up to the type of pay structure that best suits the job offering. The

compensation package that is chosen will depend on the job analysis and job evaluation that

were carried out at an earlier stage. These two very important pieces of information give the firm

a very good idea of the worth of the job and the level of compensation in the market. The firm

may choose to pay the worker based on the going rate in the market or above the market rate.

While paying above the market rate might add to cost, it could be used to attract and keep highly

skilled workers who could in turn contribute significantly to the performance of the organization.

However, whichever of the two options is chosen, the firm should ensure that the pay package is

fair. The compensation package may also be influenced by the complexity of the job, working

conditions, educational requirements, years of experience and the amount of responsibility that

comes with the job.

Types of compensation
Compensation to employees may take different forms, including:

 Wages and salaries – this is possibly the most popular type of compensation. The terms

are often used interchangeably, with little, if any, difference at all. A ‘salary’ is defined as

a fixed payment to an employee for work done. This payment is often made on a monthly

basis and made to white-collar workers. ‘Wages’ are often paid weekly, fortnightly or

monthly and can be based on an hourly rate and are usually paid to manual or unskilled

workers or labourers.

 Allowances – these are often paid in addition to the regular or basic salary. They are paid

as part of the salary package or to settle out-of-pocket expenses incurred in carrying out

duties for the firm. This may include travelling allowances, housing allowances or car

upkeep and taxi and supper allowance.

 Pension fund – this is a pool of contributions made by either the employer or the

employee or both. This fund will be used to pay workers after retirement in the form of

pension. Pension funds are usually managed by an external financial institution and the

funds collected are invested to earn greater returns.

 Health insurance – this is usually a part of the fringe benefits offered to employees.

Health insurance is a coverage of employees which includes the payment of medical

expenses. This payment is made by the firm entirely or by both employees and employer

in an agreed percentage.