Business Functions - Chaper 1-9-162-191

Chapter 6
THE HUMAN RESOURCE FUNCTION
Learning outcomes
When you have completed this chapter you should be able to:
• define HRM (human resource management) and an HRM system
• explain the role of HR (human resources) in a business context
• explain the HR function as a subsystem of an organisation
• describe each of the components of the HRM system in detail (this includes planning, staffing,
training and development, performance management and compensation and rewards)
• explain the concept of HR maintenance and its various components
• describe how the HRM function interacts with the other business functions.
6.1 Introduction
The human resource (HR) or personnel function is one of the functions of a business
identified in Chapter 1. It differs from the other functions in the sense that the tasks and
activities related to personnel also form part of all the other functions of the business.
Each individual who has authority over other employees, from top management to
supervisors, is involved in personnel work to a certain degree.
Copyright © 2019. Juta & Company, Limited. All rights reserved.
Most businesses operate on a continuous basis. This means that they do not simply exist
for a few months and then stop their business. They usually plan to be in business for
a longer period of time. As time goes by, businesses grow and employees resign, get
promoted or retire. Those lost have to be replaced to enable the business to continue
with its activities as before. Just like the heart supplies your body with blood to enable
it to live, the HR function supplies the business with people to enable it to do business
continuously.
van, Noordwyk, A.. Business Functions, Juta & Company, Limited, 2019. ProQuest Ebook Central,
http://ebookcentral.proquest.com/lib/ujlink-ebooks/detail.action?docID=6483217.
Created from ujlink-ebooks on 2021-03-18 11:50:51.
Business functions_3ed.indb 162 2018/12/15 6:36 PM

Chapter 6 The human resource function
Quote
There are certain business activities that aren’t necessarily heavily reliant on people, but in
the service industry, increasingly, people are all you have got. For example, can you tell me of
a bank that has a cheque account that blasts every other bank’s cheque accounts out of the
water? Can you tell me of any company that has a credit card that is so unique and different
that everybody wants that credit card and no other one, or an ATM that does such wondrous
things that you’ll never go to another bank? Not at all. So, at the end of the day, all we’ve got to
differentiate us from our competitors is our people.
Tom Boardman, CEO of Nedbank, on the statement: ‘People are our most important asset’
This chapter will investigate the HR function as the formal part of the business responsible
for all aspects of the management of human resources, including all activities employed
to attract, acquire, develop, reward and manage human resources to achieve the goals of
the business.
6.2 Definition and scope of human resource management

(HRM)
From the numerous textbook definitions that exist in the HRM (human resource
management) literature, Price provides a working definition that is specifically linked
to a business context.
Definition
Human resource management (HRM) is a philosophy of people management based on the belief
that human resources are uniquely important to sustained business success. An organisation gains
competitive advantage by using its people effectively, drawing on their expertise and ingenuity to
meet clearly defined objectives. HRM is aimed at recruiting capable, flexible and committed people,
managing and rewarding their performance, and developing key competencies.
This working definition is particularly useful because it emphasises the shared

responsibility of managing people, the role of the HR function in the business and the
range of practices it is responsible for.
One of the primary objectives of the HR manager is to ensure that a business employs
the right number and type of employees at the required time. To achieve this, the HR
manager must carry out functions such as:
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BUSINESS FUNCTIONS: An Introduction
• human resource planning (the process of ensuring that the business has the right
skills at the right time)
• recruitment (to seek and find potential employees)
• selection (to choose the most suitable person for a specific post)
• placement (when the employee is placed in the post)
• orientation (when the new employee is introduced to the business, its procedures,
the work environment and to all the other employees).
In addition to this, the HR manager is also usually responsible for the best utilisation
and maintenance of labour as a production factor in the business. This includes the
training, development and maintenance (including salary, labour relations, personnel
administration and working conditions) of personnel.
Even though all businesses are not of the same size, ranging from one-person concerns
and small partnerships to large companies, there are always HR activities to be carried
out and managed. This does not mean, however, that each business has a separate HR
division. A small business (for example, with fewer than 20 employees) is unlikely to
have a separate HR division. In such a case, the owner or manager will normally decide
how the HR function will be managed.
There are many different options, for example:
• one person may be appointed to handle all the HR tasks
• one person may be appointed to handle all the HR tasks in conjunction with another
function, such as the financial function
• the manager could handle it herself or himself
• the manager could make use of temporary employees
• the manager could outsource the HR function (making use of an external company to
manage it).
In larger businesses, it is not possible for the owner and line managers to handle all staff
matters effectively themselves. They need expertise and assistance and an HR division is
usually established.
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6.3 Human resource management in the business context

There is an established and increasing body of research evidence that confirms the
connection between how businesses manage their people and the economic bottom
line results they achieve. Most businesses today recognise the importance of people in
meeting their goals and that their employees can assist in gaining and maintaining a
competitive advantage. A comprehensive HR strategy is not only essential in achieving
the overall strategic goals, but also to show that the HR function actively supports the
direction that the business is moving in.
An organisation’s strategic HR choices are the options available to it in designing its HRM
system. Essentially, the HRM system can be defined as follows:
Definition
The HRM system is an overall approach to management, comprising the philosophies, policies
and practices related to the activities of staffing, retention, development, adjustment and
managing change.
Who is responsible for designing the HRM system and managing its central activities?
It is generally accepted that, when it comes to managing people, all managers are
responsible, not just the HR department. Line management must be concerned to some
degree with the activities of the HRM system (refer to Table 6.1), whereas the objective
of the HR department is to optimise the usefulness of the system, to link it with larger
organisational needs and to help line managers to manage employees more effectively.
For example, the HR department may develop the format and procedures for a 360-degree
performance evaluation system to help evaluate employee performance, but it is the line
manager who will conduct the actual evaluation.
Table 6.1: Central activities in the human resource management system in which line
managers need to be involved
Activity Description
Staffing • Identifying work requirements within the business

• Determining how many people are needed to do the work and what skills
mix is necessary
• Recruiting, selecting and promoting qualified staff
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Retention • Rewarding and recognising employees for effective job performance

• Ensuring harmonious working relations between teams, employers and
managers
• Establishing and maintaining a safe and healthy work environment
Development • Maintaining and enhancing employees’ job-related competencies through
improving their knowledge, skills and abilities
Adjustment • Maintaining compliance with business strategies and HR policies (eg through
discipline)
Managing change • Enhancing the business’s ability to anticipate and respond to developments in
its external and internal environments
• Enabling employees at all levels to cope with the changes
6.4 The human resource management process

Human resource management (HRM) is the system of philosophies, policies, programmes,
practices and decisions that affect the attitudes, behaviour and performance of the
people of an organisation, so that people feel satisfied, perform and contribute to the
organisation, thereby achieving its strategic objectives. Practices include:
• human resource planning
• job analysis
• job profiling
• job design
• recruitment
• selection
• orientation
• training and development
• performance management
• compensation
• grievance management
• management of discipline
• maintaining labour relations.
As can be seen in Figure 6.1, these practices are part of the process of planning and
organising the HRM system, activating and leading the HRM system, and controlling the
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system to achieve the necessary HR outcomes, and hence the long-term success of the
business. The various components of the HRM system will be discussed throughout this
chapter, and are illustrated in Figure 6.1.
The HRM system Outputs

Inputs
Individual level
• Organisational
• Performance
strategy
Staffing Training and • Commitment
• Organisational
development • Creativity
structural
• Satisfaction
arrangements
• Systems and HRM strategy Performance
Group level
processes and planning management
• Synergy
• Organisation
• Cooperation
culture and Monitoring
Compensation • Good relations
climate and control
and rewards
• Managers
Organisational level
• Employees
• Staff retention
• Information Individual and
• Low absenteeism
• Finance collective labour
• Cost-effectiveness
• Other resources relations
• Legal compliance
Figure 6.1: The HRM process
6.5 Human resource management strategy and planning

As mentioned earlier, a business needs to employ new staff members at various times. In
order to do this, the HR manager must first determine what type of people (qualifications
and experience) and how many people are needed for the business to expand or continue
productively. Information on the vacant positions must be obtained and for that the
foundations for HR planning should be used. The foundations are job design and job analysis.
6.5.1 Job design

This essentially entails the dividing of the work that needs to be done into jobs by
organising the content, functions and relationships of jobs in a way that will meet
the needs of both the business and the employee. The three job design dimensions of
content, functions and relationships are not only relevant to individual jobs, but also to
the increasing use of work teams.
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6.5.2 Job analysis

This refers to the study of what is done, when, where, how, why and by whom in existing
or new jobs. The resulting information can be used for the writing or updating of job
descriptions (which are the written statements of the duties and responsibilities of a
specific job) and job specifications (which are the lists of the qualifications, experience
and skill requirements for a given job).
In the following example, the owner of a small clothes business cannot cope with the
amount of work by himself any more. He decides to get assistance, but is not sure exactly
what type of people he needs and how many.
Example
The owner starts by doing a job analysis, in other words, he collects all the important data about
the work. He makes a list of all the tasks that must be performed in the business. Then he groups
all the tasks that logically belong together and that can be done by one person, such as the tasks
to do with money, income and expenditure. Such a combination of tasks can become one person’s
job.
List of tasks
1. Conduct market research to determine what sizes, types and quantities of clothing are to be
purchased.
2. Purchase inventory.
3. Exhibit clothes.
4. Maintain inventory at optimum levels.
5. Sell the clothes.

6. Keep record of accounts.
7. Keep the books up to date.
8. Calculate ordering and inventory quantities.
9. Market the department.
10. Co-ordinate continually with the owner.
Grouping of tasks
Person 1: Tasks 1, 2, 4, 9 and 10. This could be a head of department.
Person 2: Tasks 3 and 5. This could be a salesperson.
Person 3: Tasks 6, 7 and 8. This could be an accounting clerk
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Now, the owner has the option of appointing three people to do these tasks. If however, the
business is too small or does not warrant this number, some of the jobs could be linked and only
two people could be appointed. An accounting clerk could also be appointed on a temporary
basis, for example, for one day a week.
Job specifications and job descriptions can now be drawn up for these people (see Table 6.2). Job
descriptions should be drawn up (and kept up to date) so that the work poses a challenge and
keeps an employee busy for the whole day.
Table 6.2: Job analysis, description and specification
Job analysis
A process to collect all the important data about the work
Job description Job specifications
A statement containing information about the job A statement of the qualifications required by the
itself. It includes detail on the following: person to do the job. It includes detail on the
following:
Job status: Permanent Qualification: BCom with Accounting and
Job title: Accounting clerk Financial Management III
Location: Administration section Experience: Two years in similar position
Job summary: Manage and attend to all Training: Inventory control
administrative and financial matters Physical exertion: Count inventory on high
Duties: Keep record of accounts, keep the books shelves (use ladder)
up to date and calculate ordering and inventory Responsibility: All administrative and financial
quantities matters
Equipment: Computer Personality: Friendly, confident, honest and

Supervisor: UR Boss (owner of business) hardworking
Job environment: Private office with air conditioner
Dangers: None
In your job description you can include any additional information, if you think it is
appropriate. When a task takes up less than 5% of the job holder’s time, it is not necessary
to list it.
Remember that you will probably use the job specification when advertising the position,
so adapt it to your specific needs. Put in all the qualifications and attributes that you want
the candidate to possess.
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The job description and specification are important aids for a manager. They are not only
used for appointing new employees, but also for:
• control purposes
• performance evaluation
• promotions
• the identification of training needs
• the establishment of salary scales.
Now that you know exactly what type of people you need in the business, you have to find
the people to fill the vacant positions. The second step of the HRM system will now take
place, namely staffing.
6.6 Staffing
Staffing an organisation involves bringing suitable people in, who will not only fit into a
particular job, but also into the business as an organisation. The appointment of suitable
staff, their integration into the organisation, their day-to-day management and their
retention are what determine the success and survival of any organisation. In fact, some
of the most important decisions that managers make concern staffing because they
impact on how effectively work is done. The staffing process involves:
• recruitment
• selection
• employment and placing

• orientation.
The staffing process therefore flows out of the planning process described in the previous
section and requires the job to be analysed to ensure that a suitable person is ultimately
appointed. With the planning and preparation completed, recruitment can commence.
6.6.1 Recruitment
Recruitment is about attracting a pool of potential candidates from which the ideal
candidate can be selected, and doing so as cost-effectively as possible. When recruiting,
it is important that the activity should be seen in the context of the total HR function
and, in particular, it should be integrated with selection. Any relevant legal requirements
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should be adhered to and the process should be managed from the perspective that it is
a two-way process. Just as organisations are searching for candidates, so too are people
searching for suitable organisations for which to work.
6.6.1.1 Recruitment strategies

In the recruitment process of finding and matching people to specific job requirements,
Price identifies three broad strategies that businesses can follow:
1. The ‘right person’ approach

This is the traditional and most common approach. It seeks to pin down the right or
best person according to a set of criteria on required skills and qualities considered
to be essential or desirable for job performance. The approach implies that jobs are
stable and long term, and that people are the variable element that can be brought in
at any stage of their careers. The approach is appropriate for large organisations and
work environments where jobs can be defined tightly, where the job is discrete and
separable from other functions, and where the job is best done by an individual with
a specific range of skills. It is less appropriate for work environments where diversity
needs to be leveraged.
2. The ‘culture fit’ approach

This approach seeks to fit the person to the organisation from a perspective that
people are permanent, but jobs can be varied. Jobs and their content are reshaped
to make the best use of the individual employee’s skills within the needs of the
business. In this approach, personal qualities necessary to fit in with the culture of
the organisation are regarded as more important than technical skills. This approach
is found in traditional large Japanese companies, where recruitment focuses on young

people who can be socialised into the company’s way of working. It is also used in
smaller businesses and environments where a premium is placed on attracting
creative and innovative employees.
3. The ‘flexible person’ approach

This approach seeks to recruit people who are versatile and adaptable, prepared for
future change and able to contribute outside the confines of rigid skills and ability
profiles. It is a far more demanding approach that reflects a long-term strategy to talent
management, encouraging diversity and adding to the total pool of competencies in
the organisation’s human capital.
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6.6.1.2 Recruitment sources and methods

Required talent can be found in the current pool of employees (internal recruitment) or
from outside labour pools (external recruitment).
• Internal recruitment
It is often desirable, particularly for positions above the entry level, to consider
current employees for purposes of maintaining morale, talent retention, and career
and succession planning. For the HR manager, internal recruitment may present
challenges due to line managers’ common reluctance to support the potential release
of subordinates for transfers or promotion. Consequently, for promotion-from-
within policies to be successful, strong top management support is needed. Common
methods for internal recruitment include job posting, which entails the publishing
of vacancies on company newsletters, bulletin boards or intranets, and employee
referrals, where current employees refer potential candidates and receive some
financial reward if such a candidate is successfully hired.
• External recruitment
External recruitment is often a two-way process where not only the organisation
attempts to attract prospective employees, but also where job seekers actively pursue
potential employment in a specific organisation. For external recruitment to be
effective, some conditions need to be met:
– The timing of recruitment efforts and candidates’ job search efforts have to
coincide.
– There must be a common communication medium – advertisements should be

placed in media that potential candidates are likely to peruse.
– Candidates must perceive that there is a match between their personal

characteristics and the stated job requirements.
– Candidates must be motivated to apply for the vacancy.
These conditions need to be considered by the HR department in selecting the appropriate

recruitment method. Commonly used external recruitment methods are:
• direct applications, including the blue-collar ‘gate hires’, walk-ins at the business
premises, or dropping off or mailing applications and CVs to the target business
• university campus recruiting, where organisations interact and build specific

relationships with universities for potential recruits
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• advertising in local or national newspapers, trade journals, magazines or on radio
• recruitment/employment agencies (see Association of Personnel Services

Organisation, www.apso.co.za)
• executive search firms, a method that is usually limited to very senior appointments
due to the cost involved and typical confidentiality related to what is commonly
referred to as ‘headhunting’
• online recruiting on the Internet, which has revolutionised recruitment practice,

with more than 30 000 job search sites and millions of job listings (major websites
are Monster.com, HotJobs.com, Careerbuilder.com and so on).
The question that arises is which of these methods one should use. Lower-level posts,
such as officials, artisans and junior sales staff could be advertised in a local newspaper.
If you are looking for a specific type of employee, you have to advertise specifically.
Specialised periodicals can be used. If you are looking for an HR person, you could use
HR periodicals, magazines or professional associations. When middle- and higher-level
positions are vacant, you may wish to advertise more widely, such as in the weekend
newspapers or national periodicals.
In the course of the recruitment campaign, potential applicants should be informed

about the business and the positions available. Both positive and negative aspects should
be pointed out. Begin by pre-screening potential candidates and attracting them to the
business. They may be invited to visit and find out more about the business and working
conditions, which should be arranged and handled professionally. Even if the visitor does
not apply for the post, it creates a positive impression of the business.
To advertise a position, you need to compile an advertisement. It should include:
• the job title
• the salary
• important features of the work
• requirements of the successful candidate
• the fringe benefits
• application procedures
• the name of the person in charge of the applications
• a brief description of the business.
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Of course, you may omit some information and add other details to suit your needs. Look
at current advertisements to give you more ideas. There is an example on the following
page. During the recruitment campaign, candidates apply for available posts. Applications
are accepted until a pre-determined date on which applications close. Figure 6.2 provides
an example of an advertisement for a job.
University of South Africa

Administrative assistant
Department of ICT
(Ref. No. Admin Ass/P1234/Apr15)
Applicants for this position are required to indicate in detail on their application formal CVs to what
extent their qualifications and experience meet the requirements of the post set out below.
Requirements:
• Grade 12 and 3 years relevant experience
• Good communication skills, oral and written
• Computer literacy/highly computer literate (MS Word, Excel, Group Wise)
• Excellent communication and interpersonal skills
• Excellent administrative skills (especially meeting and workshop preparations)
• Ability to take initiative, work accurately, independently and in a team
• Ability to work under pressure and solve problems
• Experience of digital filing systems
Recommendations:
• Knowledge of structure and procedures at a tertiary institution
Duties:
• General office administration

• Liaision with internal and external clients and stakeholders
• Handling enquiries and communications
• Perform any other work-related duties
Assumption of duty: January 2016

Post Grade: P11
Salary: To be determined
Current fringe benefits will apply.
Enquiries: Ms P Madikwe 012 412 0000 (Directorate: HR Provisioning & Administration)
Applications, on the prescribed forms, are invited and should reach the Directorate: HR Provisioning &
Administration, Room 1-12, OR Tambo building, UNISA, 0003 on or before 25 October 2015.
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Certified copies of all educational qualifications must accompany applications. Applications submitted
without copies attached will not be considered.
Application forms are obtainable on www.unisa.ac.va. UNISA reserves the right not to make an
appointment.
Appointments will be made in accordance with Unisa’s Employment Equity Policy.
Correspondence will be limited to short-listed candidates only. If you have not been contacted within
two months after the closing date of this advertisement, please accept that your application was not
successful.
Mr AN Other
EXECUTIVE DIRECTOR: HUMAN RESOURCES
Figure 6.2: A job advertisement
6.6.2 Selection
The next step will be to start the selection process. Selection is the process of selecting
the most suitable candidate from the pool of candidates recruited. Making the right
selection decision is good business practice, as it contributes to the sustained, optimal
use of human resources.
Various selection methods may be used and it is advisable to use not only one, but a
combination, as each selection method has particular advantages and disadvantages.
Whichever methods you use, they should give you the information you require. Cost-
efficiency should also be taken into account. According to Pieters, selection can be done
by means of application forms, interviews, psychometric tests, assessment centres,
medical examinations and references.
• Application forms
These consist of a list of general questions, aimed at collecting biographical data, and
specific questions on the requirements of the vacant post. This enables you to obtain a
general impression of how suitable a person is and to determine whether the person
meets the minimum requirements of the post. You should be familiar with the latest
legislation about faith, age, gender and so forth. Questioning candidates about certain
issues, such as these, is not acceptable.
• The interview
This is a discussion between the applicant and the employer, aimed at obtaining
further information about the applicant. (The employer may also ask other managers
and/or specialists to sit on the selection interview panel to assist with the process.)
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Simultaneously, the interview gives the applicant the opportunity to obtain more
information about the business and the job in question.
• Psychometric testing
This is used to obtain information about the personality of the applicant or to make
sure that the information obtained during the interview is correct. These tests must
be performed by professionals in this field and include personality and aptitude tests.
• Assessment centres
Here, the job content is investigated and the aptitude and behaviour required of
the incumbent are identified. Exercises are designed for the applicant to do. The
behaviour of the applicant is observed and recorded by trained assessors. This
gives the applicants the opportunity to show their specific skills, characteristics and
behaviour. Examples of these exercises are ‘inbasket tests’ and ‘case studies’.
• Medical examinations
These used to be quite popular as part of the selection process, but are seldom used
today because they are regarded as discriminatory. However, with certain physically
demanding jobs, such as mining, they are required and are the norm.
• References
Information about the applicant’s job history is supplied by previous employers,
managers or supervisors, with the applicant’s permission.
The selection procedure is not the same for all businesses. It differs according to needs
and preferences, but for most purposes, these steps can be followed:
Step 1: Conduct a preliminary selection interview

Determine whether the qualifications and interests of the applicant are suitable for the
requirements of the post. The idea is to get an overall impression of the candidates and to
provide them with general information about the business. Applicants who have not yet
completed application forms are asked to do so.
Step 2: Application form

The application form is designed around the specific needs of the business. Personal
information (such as qualifications, training and experience) is evaluated and compared
with the job specifications. If you do not have an application form, look at other businesses’
application forms and create your own according to your requirements.
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Step 3: Selection tests

The type of work will determine the tests that need to be done. These are designed to
obtain additional information, including intelligence, computer skills, personality traits
and other special abilities that could not be obtained from the application form. Various
tests exist for testing clerical aptitude, vision, interest and intellectual ability. These tests
are done by specialists and it is advisable to spend some money at this stage on having
the tests done professionally rather than appointing the wrong person and experiencing
great frustration at a later stage.
Step 4: Check references

Any information that is not yet known can be obtained from previous employers or
referees. (A referee is a person whose name the applicant provides and from whom you
can obtain more information on the applicant.) This information can be obtained by
telephone, letter or a personal visit. This step is essential to determine the credibility of
the applicant and should not be neglected. You can learn much from previous employers.
Remember, however, to ‘read between the lines’ when you speak to previous employers,
because they may gloss over important defects in the applicant’s character.
Step 5: Final interview

During this interview, all the information gathered during the selection process is
integrated and you should aim to clarify uncertainties. Usually, a team is present at
this interview – a panel that should include the line manager, the HR manager, a union
representative and anyone else that this team considers necessary, such as a specialist in
the field of the vacant post. This person could assist with specialist job knowledge. The
candidate is also given an opportunity to ask questions and clarify any uncertainties.
The objectives of the final interview are to determine whether the person is suitable and
would be able to get along with the manager and the other employees in the section. Look
at the person as a whole, including the good and the bad points, and remember that no one
is perfect. Past performance is usually a good indication of what to expect in the future.
Prepare the questions that you want to ask, for example:
• Why are you applying for the post?
• How do you view your role in the business?
• How would you contribute towards making the business more productive?
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Step 6: Medical examination

The candidate must be physically suitable for the job to be done. If there is any problem,
it should be identified in good time. High medical claims and absenteeism will then be
avoided.
Step 7: Final choice

The candidate who is ultimately selected is usually the one whose qualifications,
experience and personality correspond with the job specification. Be objective and
remember that you need someone who can do the job.
Step 8: Final offer

Make an offer in writing to the chosen candidate. In the letter you could congratulate
the person, give a starting date, salary scale and other benefits attached to the job. The
administration and actual appointment is handled by the HR section.
The applicant must now decide, within a stated time frame, whether to accept the offer
or not. The offer may also be negotiated, depending on the wish of the owner or manager.
Conclude a contract with the employee. The contract usually contains the basic policy
and conditions of service of the business. Working hours, leave and overtime are also
usually specified in this document. If the offer is not accepted, the next most suitable
candidate should be considered.
Step 9: Appointment
When the candidate accepts the offer, top management authorises the appointment and the
HR section finalises all administrative matters. The selection process comes to an end here.
6.6.3 Employment and placing

Employment involves not only the process by which the new employee reports to the
workplace, but also the accompanying administrative tasks that have to be performed.
The HR manager ensures that the necessary forms, such as unemployment insurance,
tax and medical aid (where applicable), are completed and that any other outstanding
information is obtained from the employee. Arrangements for the transport of the
newcomer’s furniture and work items are also made where applicable.
Placement, which is the second last step in the process of providing human resources,
now follows. This is the process by which the new employee is placed in the post applied
for. The most suitable employee is allocated where his or her expertise can best be
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utilised to the benefit of the business in carrying out those tasks allocated to him or her.
Placement also occurs when an employee is promoted, transferred or demoted. A good
recruitment and selection process should automatically lead to effective placement.
6.6.4 Orientation
The orientation process should already be in progress at this stage. The orientation
(also known as incorporation or induction) of newcomers is the process by which new
employees are firstly introduced to the business, its procedures, environment and work
situation and, secondly, to their co-workers, subordinates and superiors.
This is an opportunity that you should use to motivate new employees and put them
at ease. There are many benefits for the business in the long term if new employees
understand from the very outset how the business works and if they can communicate
effectively with other people in the business. This will also make a new employee happy
and, therefore, productive.
Proper orientation needs an orientation programme. List all the things you should do
regarding the new employee before he or she arrives at the business, on the first day,
during the first two weeks and during the first six months.
There are many things that you can do during these orientation stages. The following are
some suggestions.
• Before the new employee arrives at the business

Congratulate the appointee. Send a formal letter of welcome and information

brochures about the business to the successful candidate. Information such as
working hours, dress code, schools and estate agents in the area and the general
policy of the business is usually appreciated. Ensure that the office or workspace is in
order and that the necessary furniture, equipment and stationery are in place before
he or she arrives. Inform the other employees about the newcomer and explain what
he or she will be doing.
• On the first day

Be available to meet the newcomer and to introduce him or her to the other employees.
Speak informally to put the new employee at ease. Show him or her the office space or
work areas. Finalise administrative matters, such as the completion of the necessary
forms. Get the newcomer to begin working as soon as possible. If necessary, appoint
someone to orientate him or her. Check about transport and accommodation.
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• During the first two weeks

Newcomers should be introduced systematically to:
– the activities of the section and how it supports the business as a whole
– their duties and responsibilities (refer to the job description)
– how, when and where they are paid
– working hours, leave policy, meal and tea breaks
– the use of the telephone
– dress code
– recreation facilities.
• During the first six months

To ensure that the maximum is gained from newcomers, orientation does not end
after two weeks. They have to develop and become more productive. Identify any
shortcomings and training needs and see that something is done about them.
An orientation programme can leave a positive and lasting impression of an employer.
It is an opportunity that management should take advantage of to motivate and to
inspire loyalty. Understanding each other and communicating well from the start can
have many beneficial consequences in the long run.
6.7 Training and development

Training and development is about the organisation providing assistance to employees
so that they become effective in their jobs. It is not only about extending the knowledge
and skills of employees, but also about modifying their attitudes to the job and adjusting
their behaviour in the organisation. Managers who speak of their people being their most
important resource can demonstrate this through a commitment to developing their
staff. Training and development can also play an extremely important part in motivating
employees.
A distinction needs to be made between training and development:
• Training consists of a planned programme of activities designed to help improve

current performance at individual, group and organisational level by helping
employees to acquire and improve job-related skills.
• Development programmes have a longer-term focus on improving employees’

competencies in preparation for future jobs.
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Although line managers are ultimately responsible for the training and development of
their staff, the HR function is central to co-ordinating the corporate talent development
strategies. Key responsibilities include:
• statutory compliance with skills development legislation and developing a corporate

work skills plan
• developing and maintaining a system that ensures that employees are appropriately trained
• monitoring and maintaining a list of training providers appropriately accredited with

relevant bodies (for example SETA and ETQA)
• co-ordination of all training and development offered to employees either internally

or externally, including ABET, learnerships, mentoring, coaching and ‘corporate
university’, where a large employer partners with a university for meeting the specific
training needs of the organisation
• conducting training needs assessments and the design and provision of in-house
training interventions when appropriate
• monitoring and evaluating the effectiveness of training and development against

strategic objectives
• measuring and reporting the return on investment (ROI) of training programmes as

economic value.
In South Africa, we face various macro-economic challenges, such as profound skills

shortages, high illiteracy levels and ineffective national education and training
systems. In response to these challenges, the South African government embarked on
a comprehensive human resource development strategy. This includes the introduction
of the Skills Development Act 97 of 1998 and the Skills Development Levies Act 9 of
1999, the implementation of which has a major impact on the training and development
role of the HR function. Beyond the challenges of legal compliance that the regulatory
framework imposes, the training and development of employees in themselves should
be strategic business objectives of organisations that recognise that the availability of
qualified talent is essential for economic survival.
6.8 Career and performance management

6.8.1 Career management
Career management refers to the process of planning and shaping the progression of
employees within the organisation according to business needs and employee preferences.
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Although, in the modern workplace, the ultimate responsibility for career development
rests with the individual, the HR function has a complementary responsibility to assist
employees in managing their own careers. These include:
• creating an environment where continuous learning is valued and rewarded
• providing professional HR development and specialist expertise for development

programmes, training and education
• designing HR policies that are supportive of family friendliness and the requirements
of dual-career couples in the organisation
• communicating the business’s mission, objectives and future strategies so that

employees can realistically plan to share in its future
• ensuring the integration of career development components with comprehensive

HRM systems
• creating growth opportunities and time for employees to learn
• training managers in coaching, mentoring and performance management skills
• developing and implementing career pathing.
Career pathing is a process of mapping logical and possible sequences of positions to

which an employee can be promoted, transferred or rotated. To be successful, career
paths should represent real progression possibilities, be flexible and responsive to
changes in job content and work priorities, and specify the skills and knowledge required
to perform in each position along the paths.
Cascio suggests three main reasons why career management systems sometimes fail in
practice:
1. Employees believe that their managers do not really care about their career
development.
2. Neither employees nor the organisation are fully aware of employees’ needs and
organisational constraints.
3. Career plans are developed without regard for support systems necessary to fulfil them.
6.8.2 Performance management

In the HRM system, employee performance is the final outcome after appointing someone.
Performance management as a holistic process brings together many of the elements
discussed so far that make up the successful practice of people management.
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Definition
Performance management is a strategic and integrated approach to increasing the effectiveness of
organisations by improving the performance of the people who work in them and by developing
the capabilities of individual contributors.
Since the performance of every employee contributes to the realisation of the business’s
strategic goals, it follows that the performance of every employee should be managed.
This, again, is the primary responsibility of every employee’s line manager, and the role
of the HR function is to design, develop, implement and maintain the tools and practices
that will assist line management to execute this task effectively.
The process of performance management essentially entails three elements, namely:

1. defining performance by setting clear goals, deciding how to measure goal
accomplishment and providing regular progress assessment. Performance appraisal
is an integral part of this element
2. facilitating performance by identifying and eliminating obstacles to good
performance and by providing resources to accomplish objectives
3. encouraging performance by providing sufficient rewards and recognition that
employees really value, in a timely and fair manner.
After performance has been managed, it is necessary to compensate and reward the
individuals that have met or exceeded the goals set out for them. Rewards also need to be
given to those individuals who have increased their effectiveness.
6.9 Compensation and rewards

High performance must be rewarded and, equally, poor performance must be corrected
through a combination of counselling, training and development. An individual can be
rewarded in various ways, such as recognition, allocation of more challenging work
assignments, promotions, financial rewards, public recognition or simply saying ‘thank you’.
6.9.1 Reward and recognition

The reward system is very much at the heart of any employment relationship. In its
simplest form, this relationship is usually based on an economically motivated process
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where certain inputs (physical and mental work behaviour) are exchanged for some
outputs (rewards) that are considered to be desirable in satisfying individual needs or
goals. The utilisation of rewards can, therefore, be a very important and powerful tool
for shaping and determining work behaviour aimed at attaining the strategic objectives
of an organisation. In the business context, rewards are called compensation and the HR
function plays a key role in determining the total compensation system of the business.
Financial rewards include wages, salaries, bonuses and benefits (for example pension and
medical aid contributions). Non-financial rewards can include anything of value that will
enhance the employee’s self-respect and esteem by others (for example opportunities
for training and development or a desirable working environment, such as a large office
with a pleasant view).
Definition
Compensation is the financial and non-financial extrinsic rewards provided by an employer for
the time, skills and effort made available by the employee in fulfilling job requirements aimed at
achieving organisational objectives.
6.9.2 Incentives and benefits

A total compensation package includes three components, namely:
1. base compensation, comprising the regular fixed pay received as salary or wages
according to the salary structure
2. pay incentives that are designed to reward employees for good performance
3. benefits or indirect compensation.
Incentive compensation differs from other forms of compensation in that it constitutes

an additional reward for outstanding efforts aimed at achieving organisational goals. It is
usually financially based, and its widespread use stems from the general belief that pay
is able to motivate individuals or groups of employees to exceed minimum performance
requirements and increase organisational effectiveness. These could include bonuses,
sales commission, paid holidays, profit sharing and share options.
Benefits, on the other hand, are linked to employment rather than to performance and
may be described as an indirect form of compensation that is mainly intended to improve
the quality of work life for an organisation’s employees.
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A basic benefits package typically covers three broad areas, namely:

1. time benefits, such as leave
2. risk benefits, such as medical aid and group life insurance
3. security benefits, such as pension plans and provident funds.
Within these areas, a broad range of possible benefits may be incorporated in a total
compensation package. Whilst the provision of some of these benefits (such as a
retirement plan and accident and death insurance) are required by law, the possible range
of employer provided benefits is bound only by the limits of creativity of compensation
specialists (and the scrutiny of the South African Revenue Service).
6.10 Human resource maintenance

It costs a business a lot of money, time and human resources to employ suitable
employees. Management and supervisors should, therefore, do everything in their power
to make the best use of employees and motivate them to ensure that they remain in the
service of the business. HR maintenance involves all those activities that make the work
situation acceptable to the employee. In order to accomplish this, one needs to look at
salaries, performance management, personnel administration, working conditions and
labour relations.
Some of these activities, such as salaries and performance management, have been
discussed while looking at the HRM system. The other activities, namely personnel
administration, working conditions and labour relations will now be discussed.
6.10.1 Labour relations

Labour relations are concerned with the creation, maintenance, amendment and
administration of rules, control processes, ideologies, interactions and relationships in
the workplace.
There are three participants to consider: labour, management and government.

1. Labour is the human effort which is offered with the aim of acquiring an income.
2. Management (in this case, the employer) firstly aims to run the business profitably so
that it can continue to exist and grow. The second function of management is to utilise
the available production factors optimally. Special attention should be given to labour,
which is usually the most important resource. The ability to control and utilise this
resource will, to a large extent, determine the success of the business.
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3. The role of government differs from country to country, depending on the prevailing
socioeconomic and political dispensation. Government’s role includes providing the
legislative framework for labour relations.
The labour relations system is, therefore, a three-way relationship between labour,
management and government. It is in the interests of both labour and management to
strive for a climate free of conflict and to settle the conflicts that do arise in an orderly
way, with the help of appropriate institutions.
In many cases, employees are members of a union. This is a permanent representation

of employees in an industry, business or profession, established to regulate matters of
economic interest by way of negotiations with management so as to improve working
conditions and general living standards.
Since a poor relationship with a union can cause much harm to a business, most employers
conclude a memorandum of recognition with the unions. The memorandum includes
provisions about grievance procedures, mediation, safety measures, use of notice boards
and the administration of the agreement. To make this agreement binding, it must comply
with the common law requirements of a valid contract. The proposed provisions should
not clash with labour legislation, otherwise the agreement becomes invalid. Recognition
of a union implies an agreement, a relationship and a process.
It is essential to keep up to date with the relevant labour legislation, especially the issues
contained in the Labour Relations Act 66 of 1995. You can find all the details on the
website of the Department of Labour at http://www.labour.gov.za. Other information
that you can find there includes forms, sample documents and guidelines covering many
labour relations issues.
6.10.2 Personnel administration

The quality of decisions taken by management about employees is dependent on the
availability, completeness and accuracy of information pertaining to each person. The HR
division is responsible for thorough record-keeping of all relevant HR data, such as age,
qualifications and so on, and of each person’s service record in the business, including
promotions, merits, transfers and so on.
This data should be stored in a way that it is quickly accessible when management makes
decisions about promotions, transfers, rationalisation, training, development and other
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similar changes. Larger businesses mostly use a computerised database for this function,
but a filing system will work equally well in a small business.
Employees must be familiar with the policy of the business. In most businesses, this
policy is contained in a personnel manual which is available to employees at all times.
Details contained in the manual include conditions of service, leave codes, rights and
privileges of employees, and disciplinary and grievance procedures. Since we operate in
a dynamic environment, the manual needs to be updated constantly.
It goes without saying that management must not deviate from what is contained in the
manual. This could lead to conflict and unhappiness. Communication with employees
in this regard is extremely important. In many cases, it is more advantageous for the
employer to first discuss or negotiate any policy or other changes to the manual with
employees before they are implemented.
6.10.3 Working conditions

It is essential that working conditions should be pleasant and safe before one can
expect employees to be motivated and productive. Unsafe, unhygienic and unpleasant
conditions may result in an employee being injured or becoming ill. The consequences of
bad working conditions are usually greater absenteeism, a fall in productivity and a drop
in profits.
Accidents in the work situation are caused by unsafe conditions and unsafe practices.
These types of conditions and practices must be eliminated. According to the National
Occupational Safety Association (NOSA), the elimination of unsafe conditions should
come first. Examples of unsafe conditions are:
• unsafe constructions
• slippery and otherwise dangerous surfaces
• overcrowding in workshops
• a lack of protective clothing
• inadequate ventilation
• poor lighting in work areas.
Although these conditions cause the smallest number of accidents, they are situations
that can be remedied permanently and at relatively low cost. It is management’s
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responsibility to ensure that the workplace is safe and hygienic and that personnel use
the appropriate protective clothing and equipment.
Unsafe practices, on the other hand, are the result of human error and are more difficult
to change. It is mostly an attitude or disposition that has to change, which is not so easy.
Management should, therefore, first do everything possible to ensure that the working
environment is safe before it can expect personnel to work safely.
Accidents caused by human error refer to unsafe acts (practices), while accidents resulting
from technical failures refer to unsafe conditions. Examples of unsafe practices are:
• working too fast
• working without authorisation
• sitting or working on moving equipment
• taking chances/risks
• moving in unsafe places
• refusing to wear protective clothing.
To prevent accidents, you have to know their causes. There are five basic causes; these
are divided into the following two categories:
Personal factors
These include a lack of knowledge and/or skills, physical or psychological distractions,
and incorrect attitude or motivation.
Work factors
These include unsafe conditions in the physical environment, and inadequate working
standards.
Managers at all levels must exercise constant control over employees to ensure that the
above factors do not arise. It is important to be on the lookout constantly for anything
that might cause an accident. As far as safety is concerned, it is vital to take preventive
action at all times.
There are various ways in which one can help ensure that employees remain healthy and
productive, for example:
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• a clean workplace, recreation room and cloakroom
• sufficient leave, acceptable working hours and little or no over-exertion
• providing first aid in case of an accident or illness
• a suitable and pleasant workplace
• ergonomically designed office equipment, especially desks and chairs
• sufficient lighting that eliminates reflection and, where possible, uses natural daylight
regulated by means of blinds
• limiting noise – and noise intensity – by isolating machines and pipes, making use of
carpeted and cork floors and/or acoustic tiles
• temperature regulation by means of air conditioning, especially where large

fluctuations occur, as excessive heat results in discomfort and fatigue.
Employers are compelled by law to provide an environment that complies with certain of
these factors. You would be well advised to read the Occupational Health and Safety Act
85 of 1993 to ensure that your business does indeed comply. A business cannot afford to
neglect the maintenance of its most important resource – its human resources.
There are many other HR issues related to basic conditions of employment, such as the
Unemployment Insurance Fund (UIF), for example. If you wish to know more about
these, you should visit the Department of Labour’s website (http://www.labour.gov.za)
to get the latest information. There you will find information on just about everything
that you need.
6.11 Interaction of human resources with other business

functions
The proposed strategic role of the HR function as business partner has specific
implications for the interaction and collaboration between the HR function and other
business functions. Business partnering refocuses attention on some basic issues about
how HR is to achieve its aims: supporting line managers, aligning HRM activities with the
business and delivering efficient services to the entire organisation.
The Chartered Institute of Personnel and Development (CIPD) suggests that the HR function
can strengthen the partnership with other business functions through the following actions:
189

• The performance measures that business leaders use (for example sales costs,
production and utilisation) should be widely available and discussed in the HR team.
• Senior HR professionals should regularly ask how the business is performing, what
the hot issues are and what is being done.
• HR should ask to be involved from the outset in the business planning process.
• The personal objectives of strategic HR partners should be set in line with their line
manager customers. For example, if an operations director’s objective is to reduce
parts shortages, that might also be a strategic HR partner’s objective.
• Appraisals should be arranged so that HR business partners are appraised jointly by

their HR manager and their line customers.
• An ongoing debate about how HR is performing should be maintained. Ask the

organisation’s leaders, line managers, HR professionals and other functions. All of HR
should be listening and responding to its stakeholders.
6.12 Summary
Human assets are pivotal to business success, and the effective management of people is
a shared responsibility between line management and the HR specialists.
This chapter started by defining HRM and evaluating HR within a business context. The
HRM process was explained and within this process the HRM system was identified. Each
of the various role players in the HRM system was then discussed.
Besides recruiting and employing new employees, management must also retain these
employees. Aspects such as labour relations, personnel administration and working

conditions were investigated. Lastly, the ways in which HR as a function fits with all the
other functions of a business was explained.
190

Self-evaluation
Question 1
1. Sweets from Mars has decided to launch a new energy health bar, low in calories and
high in vitamin content, named Moon Bites. The management team of Sweets from
Mars decided to recruit Billy Joel, a reputable marketing manager, for his powerful
marketing skills. Billy Joel and his marketing team think a fitness and fun day at the
Free State Rugby Stadium will help to create a buzz for Moon Bites.
2. Sweets from Mars has decided to recruit Billy Joel to assist the company in this
new product. Identify the recruitment strategy used by Sweets from Mars when
considering Billy Joel for the post. Justify your answer from the case study. List the
other two recruitment strategies that a business can use.
Question 2
Clicks is driven to reward and recognise their staff’s performances and have invested in
providing all employees with an above-average fixed salary.
1. Identify two additional compensation components that Clicks will need to consider,
together with an example of each.
2. To keep the staff’s morale high, top management decided to first recruit employees
internally for any new posts available. List two internal recruitment methods that
Clicks can use.
3. List the external recruitment methods any company can use.
4. Explain the difference between a job description and a job specification.
191

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Chapter 6

THE HUMAN RESOURCE FUNCTION

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6.2 Definition and scope of human resource management

This working definition is particularly useful because it emphasises the shared

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• recruitment (to seek and find potential employees)

• placement (when the employee is placed in the post)

There are many different options, for example:

• one person may be appointed to handle all the HR tasks

function, such as the financial function

• the manager could handle it herself or himself

• the manager could make use of temporary employees

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6.3 Human resource management in the business context

Staffing • Identifying work requirements within the business

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Retention • Rewarding and recognising employees for effective job performance

6.4 The human resource management process

• human resource planning

• training and development

• maintaining labour relations.

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The HRM system Outputs

Figure 6.1: The HRM process

6.5 Human resource management strategy and planning

6.5.1 Job design

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6.5.2 Job analysis

5. Sell the clothes.

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Table 6.2: Job analysis, description and specification

Equipment: Computer Personality: Friendly, confident, honest and

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• the identification of training needs

• the establishment of salary scales.

• employment and placing

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6.6.1.1 Recruitment strategies

1. The ‘right person’ approach

2. The ‘culture fit’ approach

is found in traditional large Japanese companies, where recruitment focuses on young

3. The ‘flexible person’ approach

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6.6.1.2 Recruitment sources and methods

– There must be a common communication medium – advertisements should be

placed in media that potential candidates are likely to peruse.

– Candidates must perceive that there is a match between their personal

– Candidates must be motivated to apply for the vacancy.

These conditions need to be considered by the HR department in selecting the appropriate

• university campus recruiting, where organisations interact and build specific

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• advertising in local or national newspapers, trade journals, magazines or on radio

• recruitment/employment agencies (see Association of Personnel Services

• online recruiting on the Internet, which has revolutionised recruitment practice,

In the course of the recruitment campaign, potential applicants should be informed

To advertise a position, you need to compile an advertisement. It should include:

• the job title

6.2 Definition and scope of human resource management

Congratulate the appointee. Send a formal letter of welcome and information