Professional Documents
Culture Documents
BBA323 Human Resource Management Module-1
BBA323 Human Resource Management Module-1
TABLE OF CONTENTS
UNIT ONE
2.4. Conclusion
UNIT THREE
UNIT FOUR
4.5. Advertising
UNIT FIVE
5.0. Separation
5.2. Redundancy
5.3. Termination
5.4. Dismissal
5.5. Remedies
UNIT SIX
UNIT SEVEN
UNIT EIGHT
UNIT NINE
UNIT TEN
UNIT ELEVEN
11.3. Strikes
11.4. Grievances
11.6. Dismissal
11.7. Remedies
Human resource management (HRM) may sometimes be known as Personnel management (PM).
Both expressions are used often interchangeably in practitioner and academic circles.
The expression ‘Human Resource Management' is frequently being used in the management of
people in work organizations. The term ‘Personnel Managemet’ is sometimes used to describe the
same genre of management activity in such organizations.
It is clear over the past decade that, in the United Kingdom at least, the debate still rages about
whether, or what, differences may separate the two concepts. This unit examines some of the
arguments put forward by both sides in this debate, and concludes with the view that there is
insufficient evidence to indicate substantial differences between the two concepts. The assumption
is that the two expressions are so closely related in practice that they are, in effect, interchangeable.
Personnel and human resource management activities are carried out by all those in a leadership
role in an organization. Every manager or team leader is necessarily involved in concerns about
the way in which people are employed as well as about what they need to be doing, and how well.
In most situations such leaders fulfill their personnel/HR responsibilities within a clear framework
of HRM policy. However, the principal focus here will be on the work and responsibilities of
practitioners in the field of personnel and human resource management.
3. The design of formal systems in an organization to ensure the effective and efficient use of
human talent to accomplish organizational goals
It is that part of management which is concerned with people at work and with their relationships
within an enterprise. Personnel management aims to achieve both efficiency and justice ... It seeks
to bring together and develop into an effective organization the men and women who make up the
enterprise, enabling each to make his own best contribution to its success ... It seeks to provide
fair terms and conditions of employment, and satisfying work for those employed. (Statement on
Personnel Management and Personnel Policies 1963)'
Human resource management developed gradually in the 19th century as working conditions
became intolerable and it was considered that such exploitation was counterproductive.
Some owners, e. g. Robert Owen in Britain introduced principles of welfare and education into
profit-oriented business. Production was very different from early methods and enlightened factory
owners became more aware of the need to integrate the workforce into the newer production
process which meant a loss of traditional autonomy.
Notable aspects of HR function are its reference to justice as well as efficiently, implying a caring
role for the management in its relations with its employees. As well as referring to fair terms of
employment, the definition goes further by including satisfying work, implying management’s
responsibility for enabling employees to experience job satisfaction. Today’s approach would be
more likely to stress the contribution of satisfied employees to achieving corporate goals such as
customer satisfaction, cost-effectiveness and profitability.
Until the 1990s, personnel management in practice was as much about handling collective
relationships with employees and their representatives about mediating Individual employment
relationships. In terms of stakeholder relationships the main pressures on a Personnel Manager in
those days came principally from the managing director, trade union representatives and line
management colleagues. The capacity for the senior to management to introduce change and
flexibility in operations was hampered at this time due to such factors as:
The network of relationships that surrounded a senior personnel manager in the midtwentieth
century was predominant. The board, and especially the chief executive, would be looking to the
personnel manager to ensure that employee relations were both peaceful and predictable – in other
words, no unpleasant surprises by way of unexpected strikes or other employee sanctions, such as
a ban on overtime working. Senior line managers were particularly keen to ensure that there would
be no disruption to their output schedules.
Bodies such as ACAS, the Advisory, Conciliation and Arbitration Service, could intervene with
the personnel manager on behalf of individuals or groups, where grievances or disputes were
involved. Finally, the individual employees always had access to the personnel manager through
the organization’s grievance procedure.
It is not surprising that against this background 'personnel management came to acquire a
reputation for defending the status quo. Personnel managers in the 1970s and 80s were much more
concerned with the smooth-running of operations than with making proposals for change. It took
a number of external factors in the UK to bring about the requires change in the conduct of
employee relations
The situation changed radically in the late 1980s when several external factors combined to make
a major impact on workplace relations. These factors were primarily:
Trade union power in one of its most conservative areas- printing- was challenged by the
newspaper owner, Rupert Murdoch, who was prepared to print his daily newspapers abroad, if
unable to do so in London; the early signs of what we now call 'globalization' were beginning to
emerge; the challenge caused much anger and bitterness among the trade union movement, but it
succeeded in breaking the print unions' veto over the introduction of computer-led technology'
When the economy began to improve, and as the effects of new employer-friendly legislation
began to take hold, businesses everywhere were able to place the customer at the forefront of their
stakeholder rather than their employees; thus developed the concept of customer relations that is
now so pervasive in the UK economy.
The last decade of the twentieth century has sought to change the emphasis of `personnel
management', so as to be more concerned with primary business goals, and less with the implications
for employees of the consequences of pursuing those goals. The work environment today has
changed from the confrontational mixture of mid-century employee relations, with its emphasis
on highly regulated personnel procedures, to collaborative approaches based on small work-teams
dedicated to customer satisfaction, where workplace learning is paramount and the need for
centralised procedures less relevant. At the same time the external environment for all of the
private sector, and parts of the public sector, has become much more competitive. Not only are
customers and their requirements important, but so too are the actions of competitors. It is in this
new environment that the term 'Human Resource Management' sits more comfortably for many
people than 'Personnel Management'.
Use of HRM language helps to bypass 'politically incorrect' terms used in the past, such as man
power planning. However, these are not very convincing answers so far as the UK is concerned.
It is significant that in July 2000, when the professional body for personnel management in the UK
was awarded chartered status, it decided not to change its title to Human Resource Management,
but to continue as the Chartered Institute of Personnel and Development.
What are the principal primary distinctions between ‘personnel’ activities and ‘human resource’
activities? There are no pat answers to this question, but the following points have been made in
recent debates on this topic:
Hard HRM
The hard version of HRM is based on the classic models of management. It reflects a long-standing
capitalist tradition in which the worker is regarded as a commodity. It regards people as human
capital from which a return can be obtained by investing judicially in their development. HR are
another key resource for managers to do finance and other materials resources.
Emphasis is on:
Interests of management
Adopting a strategic approach that is closely integrated with business strategy
Obtaining added value from people by the processes of human resource development and
performance management
The need for a strong corporate culture expressed in mission and value statements and
reinforced by communications, training and performance management processes
Soft HRM
The soft model for HRM traces its roots to the Human Relations School. It emphasizes on
Communication
Motivation
Leadership
A policy is an expression of the organization’s values and beliefs concerning all major functions
of the enterprise. It is a guideline for doing something. A policy states not what the organization
intends to do, (i.e. goals), but the manner in which the organization intends to achieve these goals.
Policies are not objectives. They define the approach or philosophical values the organization
intends to adopt in managing its human resources.
They are principles or reference points upon which managers are expected to act when dealing
with human resource issues.
The co-operation of workers must be obtained if the business is to run smoothly. The workers must
have confidence in the firm and this may not be easy when technical advances produce a fear of
unemployment and unrest.
Policy must be determined by the board and must be clearly defined, and those employees who
have to administer the policy should be given an opportunity to contribute. This may be done in
joint consultative committees. In order to have a good policy, a knowledge of those factors an
employee regards as important is essential. This involves knowledge of the industrial application
of sociological and psychological theory, and the forces generated should be known and controlled
in order to ensure effective collaboration of individuals and groups to that company and individual
goals can be reached. 'Harmony of objectives' must be the goal.
Social scientists are being enrolled in industry to examine sociological problems. A recent
approach is to examine the organizational environment, the objectives and methods of
management, and the forms of company structure. It may be that these conditions limit what the
individual can achieve. Human resource policies, therefore, are concerned with providing an
effective organizational structure, manning it with appropriate personnel and securing optimum
working conditions; the object being to create and maintain a level of morale which evokes the
full contribution of all employees in ensuring that the company operates at maximum efficiency.
The following factors may be regarded as important and necessary in a human resources policy:
Remuneration
This must be at least the market rate for the job and give the employee a reasonable standard of
living.
Security
This is vital to the average worker; it is not so important to the young, or where there is full
employment, but stability of employment is essential and there must be guarantees against unfair
dismissal.
Opportunity
If this is not available, a worker may look elsewhere. Vacancies should therefore be filled within
a firm whenever possible or practicable. This does emphasize the need for good education and
training policies so that existing staff can be trained to fill vacancies.
Status
A person's feeling that he 'counts' or 'matters' and that he is a respected member of a group can
influence output and lead to the retention of workers.
Justice
This can be simply defined as confidence in being treated fairly. The security of the worker must
not be threatened and specific rules regarding punishment, judgment and appeals procedure must
be invoked. These should include guarantees of confidential access to the human resources
manager.
Democracy
In a capitalist structure it may not be easy to invoke the idea that a man has the right to a voice in
the way he is governed, and by whom he is governed. Attempts along these lines are the formation
of joint consultative committees and the establishment of procedures for regular consultation
between managers and employees.
General
To assist employees in developing social, educational and recreational amenities and to maintain
policies without discrimination between employees.
Why policies?
1. They develop a coherent approach to managing people which binds together the various
human resource strategies of the organization
2. They are the framework within which actions take place
3. They promote consistency and equity in the way in which people are treated
4. They facilitate decentralization and delegation because they provide guidance on what
managers should do in particular circumstances
Human resource policies can be implied (unwritten) or explicit (written). The latter are more
advantageous as they offer something concrete upon which managers can base their decisions. In
addition, policies should not be seen as permanent. They should be reviewed and changed to adapt
to changing situations.
Managers' relations with their workforce were based as much upon fear of upsetting them as upon
respect for their skills and know-how. Nowadays this situation has changed. The customer's needs
are the focus of attention today. The external market place – be it a competitive market or a public
service market – is the battlefield, rather than the internal one of workplace relations. This shift of
focus calls for a different role for and HR practitioners, but always one which endeavors to procure,
deploy, train and motivate people in the service of their organisation.
The relative influence on the HR practitioner can be analysed under two broad categories: those
that exert a direct influence on the job-holder, and those exerting indirect pressure.
Top management- there is pressure on the HR practitionet to devise and implement effective
human resource policies that will contribute to corporate goals.
Line managers- expectations will be for HR support for recruitment, staff training, competitive
salaries, advice on employment and effective personal administration.
HR colleagues — the senior person's own staff will have expectations of clear direction and
effective leadership of the HR function, including having an interesting and demanding job,
opportunities for learning and promotion, and adequate backup arrangements.
Existing workforce — the chief expectation of the organisation's employees is likely to focus on
fair treatment at work, opportunities for training and development, and the effective administration
of pay and conditions;
Those stakeholders who do not have a direct relationship with the HR director but who
nevertheless affect -what the jobholder may or may not do, include:
Customers/end-users
In service industries, in particular, where employees come face to face with their customers, there
are ample opportunities for the latter to experience poor levels of service; their reactions can bring
great pressures to bear on those responsible for staff training and competence; customers can affirm
a business's reputation, or they can destroy it; if customers go elsewhere, the very existence of the
business could be in doubt; most end-users want an effective and reliable service (or product) at
an attractive price, and the HR function has a key role to play in making this happen.
Shareholders/the community
In a business the shareholders will expect to see competitive outcomes from the management: a
healthy balance sheet, growing revenues from sales, stable or even reducing costs, adequate profits
and dividends, and a rising share value; where public services, such as health and education, are
concerned the community will expect adequate public funding to ensure access to facilities and a
fully satisfactory outcome.
Government/state bodies
Such bodies are expected to reflect public priorities for key services, including providing adequate
information about choices and performance; they may press for performance standards.
Trade unions
External trade union officers have an ever-present interest in the employment conditions of
organisations; they can exert pressure for the recognition of a union, where there is no independent
representation of employees; they have more direct involvement in the affairs of an organization
if they have representation rights for one or more groups of employees.
Potential employees
These as yet non-members of the organisation will have expectations of relevant information about
the organisation, the jobs on offer, the training and promotion opportunities, available, and fair
treatment at interview.
This group has a close interest in the recruitment activities of other, watching for changes in pay
levels, employee benefits and recruitment techniques; in a tight labour market, a competitor's
actions in poaching staff from another employer, or offering extra inducements to reduce staff
turnover, can challenge a HR manager to improve existing arrangements, with the inevitable
knock-on effect on costs.
3. State the reasons that led to the change from Personnel to Human Resource Management
Arguably the most important single resource is people. It is important, therefore, to ensure that
sufficient numbers of the appropriate calibre of people are available to the organisation in pursuit
of its objectives: Every organisation has to make some attempts to acquire, train, re-deploy and
dismiss employees in the course of its activities. Not all of these attempts can be regarded as human
resource planning, for they are much too haphazard. Human resource planning, in the sense used
here, is a much more rational exercise. This particular definition sees human resource planning as
a strategic activity, i.e. one that is concerned with securing resources on a long-term basis.
Limitations
The traditional attitude to HR planning is that it is a cost; there is greater consideration now towards
the idea that it is an investment. Therefore the best use of this investment should be made so as to
ensure that HR achieves personal satisfaction and the company achieves a maximum return on the
'costs' it represents.
It is important to stress the problem of uncertainty today; changes can occur in the following more
detailed analysis:
A company must be able to recruit and retain human resources of the type and calibre it requires
for efficient operation. Change is a dominant factor today. Processes, products, systems and
methods change quickly. The role of the computer is increasing and there is at present a shortage
of systems analysts and programmers, and this will continue for a number of years. New
techniques, e.g. operational research, influence the organizational structure of companies and alter
the pattern of manning. Some jobs need increased skills, others need less. Thus a high standard of
planning is needed. The rewards to a company are high as a great reduction in costs is possible;
reduction in one area in particular, labour turnover can save a great deal of money.
a. Exiting staff
b. New recruits
c. Potential staff
d. Leavers
Each of these categories requires different decisions to be made by the managers concerned, and
some of these are set out below:
CATEGORY DECISIONS REQUIRED
Existing staff Performance appraisal
Productivity
Development
Equal opportunities
Training
Remuneration
Promotion/career development
New recruits Recruitment methods
Selection procedures
Induction
Training
Terms of contract
Potential staff Recruitment methods
Public relations
Wage/salary levels
Employee benefits
Leavers Dismissals for poor performance
Retirements
Redundancy procedures
Labour turnover
The above list indicates some of the far-reaching implications of human resource planning
activities. Clearly, we are considering a process which affects every aspect of human resource
management: recruitment, training, remuneration, performance assessment, termination of
employment and so on. More than this, it is a process which is linked inextricably both to the
corporate aims of the organization and to the economic, social and political environment.
Organization should be designed to attain the objectives of the company. Functional objectives are
set and organization planned to attain them. Each department must be staffed so that the available
skills and abilities are equated with tasks to be done.
There may be changes in the external markets, in the supply of local labour skills, changes in
comparative earnings for each category of employee. Other relevant information includes output
per man hour and total man hours available. The human resource plan can then be prepared and
will also include consideration of policies on: recruitment; promotion and career planning; pay and
productivity; retirement, redundancy and redeployment; training and development; industrial
relations.
Reviews of the progress of plans will take place periodically, with yearly revisions as part of a
longer-term planning cycle. Monthly budget statements will be prepared and a comparison of
actual and planned targets will be made and variances noted. Information obtained will be then fed
back to earlier parts of the cycle which may then indicate the need for changes in the plans.
Human resource planning should be an integral part of corporate planning and top management
backing is essential. The skills of individuals must be continually developed in order to meet the
needs of technological, economic and social change.
The recruitment and selection processes must be continually reviewed and evaluated, as the cost
of the process is high. Many company reports now contain the average numbers of persons
employed over the year and the amount of wages and salaries paid to them.
The figure below shows some of the more important aspects of the main stages in human resource
planning. The starting point is the overall corporate objectives and plans of which human resource
plans are part.
The human resource demand forecast relies on sales forecasts. These are related to forecasted
production levels and required manpower is then determined.
The human resource supply forecast requires information of the current labour force, labour
turnover and retirement trends, training, skills available etc.
Man hours available will vary with shift patterns, overtime, sickness etc.
2.4. Assessing the demand for labour
Questions such as the above help the organisation to estimate the effective demand for labour.
Some existing employees undoubtedly could be used in such a venture, some new recruits would
also be required from amongst the local populations, and some jobs could be put out to third parties
such as leasing sub-contractors and professional advisers. Three other questions can be raised at
this stage:
If the organization requires people quickly, then it is more or less obliged to recruit trained staff
from other organizations, possibly at premium salary or wage. If the organization is to prepare its
existing staff for a new role on the Continent, then the timespan involved could be many months,
whilst new language skills and knowledge of new operations are acquired. Sometimes it is
important to act quickly to get the nucleus of the operation established, but once past this stage it
may be more economical to feed in ‘homegrown' staff to promote the further development of the
business.
At its simplest, the organization’s gross demand for labour can be shown as in the diagram
Corporate
objectives
organization’s
demand for labour
Demand for the
organization’s
Goods/services
The objectives of the organisation are translated into intentions and plans for assessing and
securing sufficient manpower resources, whilst the state of economic demand represents a
collection of external pressures on the organisation's awareness of its labour requirements.
Another factor in assessing the organization’s effective demand for labour is technology.
To what extent could tasks be carried out by machines or electronic devices? In a transport situation
it might be thought that a driver is always a necessary requirement, but in relation to metropolitan
railways there are perfectly adequate services using driverless trains (e.g. Docklands Light
Railway). In offices, to take another example, there has been a reduction in the demand for clerical
and administrative posts because of the advent of computers and word- processors, which are able
to undertake a far greater volume of work than any manual system. Such changes have not obviated
the need-for people but have certainly had a major effect on reducing the demand for particular categories
of job.
The accuracy of an organisation's forecasts of its demand for labour depends considerably on the
state of its external market for goods or services. If the organisation is operating in a relatively
stable market, where demand is consistent, the product is efficient and reliable, and there are few
competing products, then forecasting for all purposes becomes relatively straightforward.
If, however, the external market is a turbulent one, where demand fluctuates wildly, where
technological innovation is commonplace, and where the competition is intense, then forecasting
becomes an extremely difficult affair.
Under each of these areas a number of important questions need to be asked, relating to key aspects
of manpower recruitments and utilization. A typical analysis of supply will be a focus on the
following:
Job categories – What categories of staff do we have e.g. engineers, process workers, etc.)?
Performance – What levels of performance are we getting from our various categories of
employee?
Flexibility – How easy is it to transfer employees between jobs? Are individual skills transferable?
What about trade union views on this point?
Promotability – How many of our employees are ready for promotion into more demanding roles?
What training could be reasonably provided to assist promotions?
Age Profiles- do we have any age-related problems due to imbalances between experienced and
inexperienced staff?
Sex distribution – Have we an appropriate balance between the sexes, given the requirements of
our business?
Leavers – What is our labour turnover rate by staff category and department? How many people
are due for retirement? Are any redundancies likely? How many people left for reasons of
dissatisfaction? Are any trends noticeable?
Answers to the above questions can provide a reliable picture of the state of the organization’s
own labour force. The resulting information can be matched with the demand forecast for labour
in the various categories identified by the management. The overall outcome is likely to fall within
one of three possibilities:
1. The supply available more or less matches the forecast of demand by staff category
2. The supply exceeds forecast requirements in one or more categories
3. The supply falls short of requirements in one or more categories.
The first outcome is unlikely for all except small or very stable workforces. The second outcome
is more likely in an industry that is contracting, as in the European coal and steel-producing
industries, or that has suffered some short-term economic disaster, such as an international boycott.
The third outcome is likely to apply to most organisations most .of the time, that is to say, they are
always short of appropriately qualified personnel in one part or another of their business.
Labour turnover
A common index of labour performance used in organisations is Labour Turnover. This provides
information about the ratio of leavers to the average numbers employed during the course of a
year. It is usually expressed as follows:
(Number of employees leaving during the year/ Average numbers employed during the year)X 100
A turnover rate of 25 per cent would be considered perfectly satisfactory by most firms.
A turnover rate of 100 per cent would be considered a major problem. Whilst the labour turnover
index is useful in broad terms, it has some distinct disadvantages:
• It does not indicate in which areas of the organisation the rate of leavers is high
• It does not identify the length of service of the leavers
• It does not indicate any sudden changes in the numbers employed from one year to the
next.
These disadvantages mean that further questions have to be asked about the movement of people
through and out of the organisation. For example, which units are experiencing a high turnover of
staff? How long have the leavers served in the organisation? Are numbers employed in the year
concerned typical or do they represent an increase/decrease on previous years?
In addition to the labour turnover index, some organisations make use of a Labour Stability Index,
which links the leaving rate with length of service. The index is usually expressed as follows:
(Number of leavers with more than one year's service/Number employed one year ago) X 100
The results of applying this measure of performance are to identify the extent to which new recruits
leave, rather than longer-serving employees. However, it still does not identify which units are
producing more early leavers than most. It is also not very satisfactory to have a figure which
includes as 'long-serving employees' people with only just over one year's service!
If required, such an analysis could be further refined to show leavers by department or unit as well
as by length of service.
Advantages:
Disadvantages:
2.6. Conclusion
Planning for a rational approach to the demand and supply of labour to meet the organization’s
objectives is not easy. People are the most volatile resource available to organisations, and they
are recruited, employed and rewarded against a complex background of economic and social
forces, which make firm decisions problematic for human resource planning. What can be said,
however, is that organisations which do adopt a rational approach to manpower planning will be
better able than their competitors to maintain and renew a viable workforce capable of ensuring
the success of the enterprise.
The possible benefits from a planned approach to the acquisition, use and deployment of people
throughout the organisation include:
Quality of employees — believes in recruiting people who have the ability and potential to meet
the high standards of performance-
Promotion— to promote from within where possible as a means of satisfying its requirements for
high-quality staff
Discipline – employees have the right to know what is expected of them and what could happen
to them should they infringe the rules;
Grievances – the policy should state that employees have a right to raise their grievances with
their manager.
Other statements on this could be on smoking, AIDS, sexual harassment, age, redundancy, etc.
Job analysis
The analysis of jobs is the major foundation for the performance of functions of human resource
management
What is a job?
Jobs are the basic components of the organisation's structure and are the means by which it
achieves its objectives. It follows therefore that for any organisation to be successful, it must give
a great deal of care and attention to the way in which jobs are designed. A good person-job fit,
which is generally recognised as essential for motivated and high performing staff, can only be
achieved if there is sufficient clarity about the job in question. A person - job fit meaning
appropriate qualification and experienced job characteristics.
This is a process used to determine and describe the content of jobs in such a way that a clear
understanding of what the job is about is communicated to any one who might require the
information for management purposes.
Robbins states that JA is a systematic way to gather and analyse information about the content,
context and human requirements of jobs.
Job Description
This is a written statement of the content of any particular job derived from the analysis of that
job.
Personnel Specification
Where as the job description describes the content of a particular job, the personnel required or
person specification describes the attributes required of any employer to carry out the job described
to a satisfactory standards.
Competence
There are a number of important features of job analysis which need to be recognized at the outset.
On the Job
• Objective/Overall purpose
• Duties and work activities
• Responsibilities/Accountabilities
• Performance Standards
• Level of authority
• Machines and tools used
On the Job's Place in the Organisation (Organizational factors)
• Job Title
• Section/Department
• Reporting Relationships — supervisor and supervised
• Contacts — external and internal
On the Environment
a. Physical:
b. Location
c. Hazards involved
d. Physical effort applied
e. Social Environment
f. Isolated job e.g. laboratory work
g. Shift job
• Knowledge,
• Skills
• Qualifications requirements
• Education
• Professional qualifications
• Minimum experience
Other skills
• Communications skills
• Written presentation
• Computer sills
• Interpersonal skills
Other attributes
1) Honesty
2) Integrity
3) Dependability
4) Motivation
Selection / Recruitment
Before any part can be filled, it is important for the organisation to have a clear idea of the
requirement for the job. Without this information, it would be difficult to know what qualification,
experience and personal attributes to look for or what to pay. By providing a job description and a
personnel specification, the organisation will be better able to decide how and who should take up
the job.
Job Evaluation
Job evaluation is the assessment of a particular job to find its value in relation to other jobs in the
organization. Job evaluation creates a ranking or hierarch of jobs in the organization which among
other things, is used for establishing the salary structure. The latter is then used for compensating
jobs according to their value to the organization.
Performance management
This is the process of managing the performance of job holders to ensure achievement of goals. It
involves performance appraisal which is the measurement of job holder's performance levels.
Information on duties and work activities, accountabilities and performance standards is used for
this purpose.
A JA is necessary for human resource planning as it enables an organization to set short term
targets or objectives and it can aid the review of the organizations structure by clarifying the basic
needs of the job.
In order to train, there is need to find the training gap, i.e. the shortfall between the person
requirements of the job and what the job holder has. Information such as knowledge, skills and
qualifications on the job is used to find the training gap
The oganization structure is made up of jobs. In turn, jobs have to be designed. To assist in job
design information on work activities, duties, and responsibilities is required. Other types of
information needed include that on the environment of the job.
Induction
Induction is the training process of introducing an employee to the organization and the, job. All
the information collected in the JA is used to induct employees.
Labour Relations
While there is no legal requirement to give an employee a job description, it is sound management
to do so to reduce ambiguity on either side about what the post holder is required to do. Vagueness
in this area could cause problems in any subsequent issue relating to grievances, discipline,
redundancy or termination of employment. In short the content of job description forms part of the
terms and conditions of employment and is part of the contractual relationships between employee
and employer.
3.5. 3.4. Stages in conducting a job analysis
As already stated, JA is systematic in nature. It involves the following stages:
This consists of identifying the objectives of the JA and obtaining top management support.
This involves identifying the jobs concerned and the methodology, reviewing existing job
documentation and communicating the process to managers and employees.
3. Conducting the JA
These are the two documents made from the Job Analysis information. A Job Description is a
written statement of what a job holder does, how it is done and why it is done. A Job Specification
is statement of the minimum acceptable qualifications that an employee must possess to perform
a given job successfully. Drafts of the two are made and reviewed with managers and employees.
Recommendations are received from them and incorporated into the final documents.
This is done by periodically reviewing the two documents and updating them as changes occur in
jobs and in the structure.
Both managers and employees should have a better understanding of the work performed in a
particular job when the analysis is complete than they did before the analysis
− Job analysis should accommodate change
The system for analysis should be designed to accommodate change. Jobs are dynamic and
constantly undergoing change. The system should allow for easy revision of the data collected.
Frequently employees express the feeling that their jobs cannot be described. To some degree that
is correct. The critical aspects of all jobs, however, can and should be described in terms of
observable behaviours or work products.
The job analysis process and the resulting data should be understood by employees at all levels of
the organization. Since the data may be the basis or many personnel decisions employees need to
be confident that it is accurate and timely.
These are terms linked with job analysis. They should be defined to meet the needs of the
organization. Definitions for one organization will most likely differ from those of another
organization.
− The job analysis data should be the basis for major personnel decisions
A Job analysis system is most beneficial to an organization when the resulting data can support a
wide variety of personnel decisions.
The identification of observable data which will be extremely important in managing work.
There is an abundance of information available for every job from the lowest to the highest job.
Job analysis should identify the information which pertains to a job and organize it so it will be
useful in addressing multiple issues such as training, performance evaluation, compensation and
conflict resolution.
The overall aim of the recruitment and selection process should be to obtain at minimum cost the
number and quality of employees required to satisfy the human resource needs of an organization.
There are three stages involved in recruitment and selection. These are:
− Defining requirements
− Attracting candidates
− Selecting candidates
Once the organization’s recruitment activities have succeeded in attracting sufficient numbers of
relevant applicants from the external labour market, the aim of the subsequent selection activities
is to identify the most suitable applicants and persuade them to join the organisation. Even in times
of high unemployment, selection is very much a two-way process, with the candidate assessing
the organisation as well as the other way round.
From the organisation's point of view, selection is just as much a 'selling' operation as the initial
recruitment.
4.3. Job description
A Job Description is a result of Job Analysis. It is-a broad statement of the purpose, scope, duties
and responsibilities of a particular job. Job Descriptions provide basic information on the overall
purpose of the job and on the job holder's principal accountabilities.
The basic job description can be used for the following purposes:
a. To define the place of the job in the organization and to clarify for job holders and others
the contribution the job makes to achieving organizational or departmental objectives;
b. To provide the information required to produce person specifications for recruitment and
to inform applicants about the job;
c. To be the basis for the contract employment.
Generally, a Job Description can be used as a basis for recruitment, training, staff appraisal,
promotion, job evaluation, job enlargement, job enrichment and for restructuring the organization.
In effect the use of a Description is the same as that of the Job Analysis on which it is based.
a. Job title
b. Reporting to job holder
c. Overall responsibilities
d. Principal accountabilities
e. Nature and scope
f. Factor analysis
This covers:
This covers:
The sources for candidates are basically two: internal from within the organization, and external.
Internally candidates can be obtained from organizational databases, job posting, promotions and
job transfers, current employee referrals and recruiting former employees. External sources
include:
• Colleges and universities
• Schools
• Labour Unions
• Employment Agencies and Labour Exchange
• Professional and Trade Associations
• Competitors
• Media Sources
• Employer Associations
4.7. Advertising
Advertising is the most obvious method of attracting candidates. Alternative sources should
initially be examined since advertising is rather costly. Once a decision has been made to use
advertising a choice can be made between using an agency/consultants or the company doing it.
Factors to consider include cost, speed and the likelihood of providing good candidates.
Objectives of an Advert
a. Analyse the requirement in terms of how many jobs, job descriptions and specifications,
sources of suitable candidates, etc.
b. Decide who does what — decision on use coy staff or an agency/consultant; each has its
own merits and demerits.
c. Write the copy — which should contain:
d. The company name
e. The job
f. The person required
g. The location
h. The action to be taken
i. Design the advertisement
j. Plan the media
k. Evaluate the response
Of these four the application form is the most likely source of information about an applicant,
although CVs are becoming increasingly popular. Essentially a CV is an application form designed
by the candidate. On-line applications are becoming more widespread with the increasing use of
the internet.
Applications are usually sorted in the following way: applications are divided into three groups:
• Clearly suitable
• Possibles
• Unsuitable
Clearly suitable applicants are called for interview, possible contenders are held temporarily while
unsuitable applicants are rejected. If the numbers accepting the invitation for interview are
disappointing, then some of the possible contenders may be invited. In the current economic
climate it is more than likely that personnel departments will be overwhelmed with applications
from prospective employees. In this situation, only two categories are likely to be used – suitable
and unsuitable
Application forms
One of the biggest advantages of using application forms is that the information about candidates
comes in a standardised format. Every applicant is more or less likely to complete all sections of
the form and any omissions are fairly obvious. A well-designed application form should enable
applicants to give a full and fair account of themselves, and thus be provided with an opportunity
to demonstrate their suitability for the vacancy in question. The application form can be used as
the basis for the job interview since it is the fullest evidence about the candidate available prior to
the interview.
Sifting applications
a. List the applicants with details such as name, experience, educational qualifications etc.
b. Send standard acknowledgement letter or advertise in the media to acknowledge receipt.
Though this is expensive if the applicants are many. Organizations may not therefore
acknowledge these applications. They may acknowledge only a few after short listing
c. Compare the applications with the key criteria in the job specification i.e. qualifications,
training, experience, age etc and sort them out into:
1. Possibles
2. Marginal
3. Unsuitable
d. Scrutinize the "possibles" again and make a shortlist. This can be done by the human
resource alone or together with the manager
e. Invite candidates to the interview using a standard letter. Application form can be filled, in
at this stage (some organizations call this a preliminary interview for further sifting)
f. Review remaining possible and marginals to decide if they are to be held in reserve. If so
send a standard letter to keep them on hold. The standard regret letter is sent to the
unsuitable or a newspaper advert is sent when the people are too many.
Definition
a. Individual interview
b. Interviewing panels
c. Selection boards
Individual interviews
These involve a face-to-face discussion between an interviewee and interviewer. It has the
advantage of establishing the best rapport between two people. However, it gives more room for
biased decisions to be made.
Interviewing panels
This is where two or more people interview one candidate. In such an interview the panel is usually
made of the human resource manager and the concerned line managers with other line managers.
Generally speaking the greater the number of interviewers at any one time, the greater the
formality. Panel interviews are favoured in the public sector, where they are thought to enable all
the organizational interests concerned to play a part in the proceedings and to see that justice is
done.
Advantages:
a. Balanced decisions can be arrived at since the other panel members provide the checks and
balances can result in more comprehensive information being collected through questions by
the various panel's members.
b. The interviewers can discuss their joint impressions of the candidate and modify any
superficial judgments.
Disadvantages:
a. Unless well-planned questions tend to be unplanned and are delivered at random, this can
disorient the interviewee.
b. It is difficult to establish rapport where there are several interviewers. This can make the
interviewee nervous and unable to give quality responses to questions. This can result in
the selection of the very confident candidate who may not be very suitable at the expense
of the trained ones.
c. A dominating member (especially the chairperson) of the panel can bulldoze others into
accepting his judgments, which may be biased.
Selection boards
These are more formal and usually large interviewing panels convened by an official body. This
kind of panel is used where there are many people interested in the selecting decisions (e.g. the
civil service interviewing panels in the restructuring process. Its advantages and disadvantages are
the same as those of the interviewing panels.
Group selection
The above are supplemented by individual or panel interviews. The idea of the group interview is
to observe the candidate in a near real situation and judge them in areas such as:
a. Logical thinking
b. Realistic approach to problems
c. Confidence in group discussions
d. Willingness to consider other people views
e. Leadership qualities
f. Willingness to accept criticism.
Group interviews afford an opportunity to observe participants in a near work situation, but it is
time consuming due to the many activities to be undertaken. Also the validity of such interviews
has been put to question. Do the interviews really indicate a prediction of future performance? Not
always. This method has been proved to be effective only to the level of .28 or 28 percent.
Testing
Testing is another method of selecting candidates. There are various types of selection of tests.
Their objective is to measure individual abilities or characteristics. Tests involve the application
of standard procedures to subjects, which enable their responses to be quantified. A good test
should have the following characteristics:
Types of tests
Intelligence tests
These are the oldest and most frequently used psychological tests. The test scores are expressed in
the form of intelligence quotients or IQs. The IQ is the ratio of the mental age to the actual age
(chronological). When the two correspond the IQ is expressed as 100. There are equal numbers of
cases on either side of the mean, i.e. those with less or more than 100.It is difficult to define
intelligence and to define the instrument for measuring because intelligence is a highly complex
concept. Many tests are available.
Aptitude tests
These are tests designed to predict the potential an individual has to perform a job. Areas covered
include: clerical aptitude, numerical mechanical and dexterity.
Attainment tests
These are tests which measure abilities or skills that have already been acquired by training or
experience e.g. a typing or shorthand test.
Personality tests
The term personality is said to be the individual's behaviour and the way he/she interacts with the
environment. There are many types of personality tests (due to the many different theories of
personality). They include;
a. Self report personality questionnaires - these are the most commonly used. Traits to be
measured include sociability, adjustment, energy, etc.
b. Interest questionnaires - to supplement above. They assess preferences for types of
occupation.
c. Value questionnaires- assess beliefs of what is good or bad e.g. conformity,
independence.
Assessment centres
An assessment centre, despite its name, is a process, not a place. It is a process that incorporates
multiple forms of assessment- simulation exercises, in- tray exercises, psychological tests and
interviews.
Biological/physiological tests
Integrity tests
These are used to assess a candidates honesty e.g. (lie-detectors or polygraphs bar in USA) e.g.
questions on whether a person has ever thought about stealing or weather other people steal.
Limitations of testing
• They may be discriminatory e.g. based on rave, sex, physical disabilities, etc.
• They are costly to develop and administer
• They may be inappropriate for the environment e.g. using tests developed in the Western
World in Zambia (where education levels are low compared to Europe and USA).
Work Samples
This tool involves identifying a task or set of tasks that are representative of the job in question. The
tasks are then used for pre-employment testing. Examples include individual and group decision making
exercises, typing etc.
Biographical Data
References
These are references from two or more persons who know the candidate. Although they are
commonly used there is little evidence of the extent of their use as selection tools.
Reference can however be used to confirm information provided by the applicant and to obtain
views on the previous work performance or personal characteristics of the applicant.
Appointment of candidates
When a decision has been made on whom to employ the job offer is then made.
Forms of Employment
• The period of service is short but extendable (six months per period in Zambia)
• Normal disciplinary procedures not applicable
• Membership to Unions not permissible
• Termination of Service is easy
• Normal conditions and terms not applicable
• Period of employment short but renewable e.g. one, two or three years
• Package is usually good
• Gratuity payable on completion
• Terms and conditions different and more enhanced
• Usually given to highly qualified and experienced professional staff
An employment contract can be unwritten or written although the written form is more common
today as it sets outs clearly the rights, duties and obligations of each party to the agreement.
The Contract of Employment can be divided into Explicit and Implicit aspects. Explicit terms are
the visible features of the contract. These are:
Implicit terms are the unwritten features of the contract as reflected in:
Purpose of Induction
Induction is usually done at two or three levels. The first level is undertaken by the Human
Resource Department to introduce organizational wide aspects. The second is done by the Head
of the department to explain the department and its functions. The final part is done by the direct
supervisor to explain the work and work procedures associated with the job. A typical induction
programme would, contain:
In an organization new recruits are appointed and allocated to their initial posts. Existing staff may
remain in their current post, be redeployed or promoted. Some will leave, either because they have
to or because they choose to.
In the first group come those who have come to the end of a fixed-term contract, or whose job has
ceased to exist. Then there are those who have reached compulsory retirement age, or have been
dismissed for one reason or another. People leaving for serious health reasons also fall into this
category. Some choose to leave because they have been offered a job somewhere else, or for a
variety of other personal motives. In an expanding or unhappy organisation these elements of
change will be ever-present; in a moribund organisation the throughput of staff will be more or
less at a standstill. For good organisational health the best scenario is where there is a regular, but
controlled flow of people moving within and through the enterprise.
Human resource managers will always have to be aware of the need to persuade certain key
employees with particular skills and talents to stay with the organisation. This may be achieved by
offering better resources, greater job challenge, promotion or financial incentives. However, more
effort, and heartache, is likely to go into exiting employees, and certainly this is where disputes
and grievances can arise. The main grounds for involuntary leaving are as follows:
5.2. 5.1. Retirement and pension
Once men and women have reached their statutory retirement age, an organization is entitled to
enforce their retirement, though, of course, it need not do so.
Retirement refers to the time when an employee reaches the end of his working life. To qualify for
a State pension in the United Kingdom, a man must be 65 years of age, and a woman 60. Most
employers make provision for an occupational pension in addition to what is provided by the State.
An occupational pension is one where an employer makes contributions to a scheme based on a
percentage of the individual’s salary. This is obviously a very important benefit to the employee.
Most employers require the individual to make regular contributions as well by deduction from
pay. Not all employers offer a pension scheme, and even those that do so invariably insist on a
qualifying period of six months to a year of service before adding the individual to the scheme.
Recently the government has decided employees should have access to a pension arrangement at
work. Employers who do not provide an occupational pension scheme for their staff must now
make provision for a so-called stakeholder pension. This does not require the employer to make
any financial contribution to an individual's pension, but does require the employer to set up a
scheme with a pensions provider and to administer it on behalf of those employees who are not in
any occupational scheme. In all cases women employees must be given equal treatment with men.
At the age which an organisation decides to retire its employees may vary considerably from the
State scheme. Some organisations adopt a policy of flexible retirement in which employees may
leave early (e.g. after age 50 or 55), or may stay on after normal retirement age, depending on their
fitness and their continuing ability to fulfill their employment contract. Firms with a paternalistic
style of management tend to prefer a flexible approach, allowing employees to retire when they
want rather than when the company itself might do better to retire them and bring on younger staff.
Most organisations, however, prefer a fixed retirement age, because this makes human resource
planning easier and allows succession plans to be effected. In these cases a usual rule is to follow
the state limits, but some employers, (e. g. banks and Civil Service) set lower age limits.
Some commercial enterprises also provide favourable arrangements for purchases of shares by
retiring employees.
The fiction is that jobs become redundant, and not people, but the effect is the same. If there is no
work, then there is no need for workers! The most frequent cause of redundancy at the present
time is the organization’s intention to reduce its staffing levels in order to cut the costs or to take
advantage of technological advances which require fewer people to operate the business.In this
situation, the State sets minimum rates of redundancy/severance pay and minimum standards of
notice to, or consultation with employees, whose jobs may be terminated. However, before any
enforced redundancies are considered, many organizations will consider other options. These may
include:
• Restrictions on overtime
• Dismissal of part-time or short-term contract staff
• Restrictions on recruitment
• Redeployment within the organisation
• Retraining opportunities
• Retirement of staff over normal retirement age
• Early retirement of staff approaching normal retirement age
• Seeking voluntary redundancies.
Some of the above options may not be available in reality. For example, it may not be possible to
dismiss all contract staff, because they may be at a crucial stage in the project they are employed
on. Similarly, it may not be possible to consider redeployment of staff if their skills are not required
elsewhere in the organization. Thus, most organisations find themselves concentrating on
voluntary redundancies and retirements, as the most practicable propositions.
Decisions about which jobs should be cut tend to be guided by (a) demand for the work concerned,
and (b) the need for the work in the light of new machinery or methods. For example, if the demand
for programming has slumped, but not disappeared, it may be necessary to cut some jobs from the
programming team but not all of them. In this situation, the problem is to decide fairly who should
go and who may stay. However, if the need for programmers has disappeared because of the arrival
of brought-in software, then all the existing team could be declared redundant. So far as the
management is concerned, this is the least complicated situation, as no choices have to be made.
In situations where a choice between individual members of staff has to be made, there are certain
options available.
a. Last in, first out (LIFO) - this means that newcomers will be dismissed before longer-serving
employees. This sounds fair to individuals, but may not meet the organisation's needs.
b. Value to the organisation - the criterion here is aimed at retaining better performers but
dismissing those who are less effective in their jobs.
c. Volunteers - some staff will always be willing to discuss redundancy terms in order to take their
chances elsewhere.
The past decade has seen more employees recruited for a fixed term rather than on a permanent
basis The world of higher education is a prime example of a sector which has come to rely heavily
on staff appointed on short-term contracts. Public policy is changing on this point. The
Employment Relations Act 1999 has abolished the waiver to unfair dismissal which individuals on
fixed-term contracts were obliged to sign.
Employment may be terminated in a number of ways. The employee may be given notice, may be
sacked on the spot, or may be made redundant. The legal rules governing these different situations
will now be examined. It is important to note that the Employment Protection (Consolidation) Act
1978 provides that an employee continuously employed for between 4 weeks and 2 years is entitled
to not less than 1 week's notice, with further entitlement of 1 week for each succeeding year's
continuous employment up to 12 years. Thus an employee with 12 years' or more continuous
employment is entitled to not less than 12 weeks' notice. Employees with more than 4 weeks'
continuous employment must give not less than 1 week's notice. The phrase 'not less' is important;
there is nothing to stop an individual employee's contract entitling him to more than these periods.
It is, of course, possible for the employee to be given wages in lieu of notice. However, it is vital
to grasp that, even though an employee is given the notice which he is entitled to, he may still
claim for unfair dismissal. These provisions only apply to employees who are employed for 20
hours a week or more or whose contract normally involves employment for 20 hours or more a
week. However, in some situations employees who only work 12 hours or more a week are
covered, and the Act should be consulted for full details.
a. Where the employee was employed under a fixed term contract, e.g. for 1 year, which has
now ended without being renewed on the same terms;
b. Where the employee himself terminates his contract in circumstances where he is entitled
to do so because of the employer's conduct. (This is known as constructive dismissal.)
Once proved, it is for the employer to try to show that the dismissal was fair. It is this idea of
fairness which lies at the heart of the unfair dismissal laws, and not the idea of whether the
dismissal was in breach of contract. Accordingly, even though the employee was given the correct
notice and thus his contract was not broken, he may still claim for unfair dismissal.
The employer, to show the dismissal was fair, must prove that the dismissal was justified under
one of the five grounds set out in the Act. These are that the reason for dismissal:
a. Related to the employee's capabilities or qualifications for performing work of the kind he
was employed to do.
b. Related to the employee's conduct.
c. Was the employee was redundant?
d. Was it that the employee could not continue to work in the position he held without
breaking a legal duty or restriction.
e. Was it for some other substantial reason?
Even though the employer proves one of these reasons, the dismissal will still be unfair if he did
not act fairly in treating it as a reason for dismissing the employee. Thus the procedures adopted
by employers are of vital importance. ACAS has issued guidelines under the title of 'Disciplinary
practices and procedures in employment' which deal with, for instance, warnings to be given to
employees, the need for an investigation and hearing before any actual dismissal, and the provision
of a right of appeal. As these are guidelines only, a failure to observe them will not necessarily
mean that the employee is held to have been unfairly dismissed. However, their importance in the
human resource management field scarcely needs stressing.
One small but important point should be noted here. A dismissed employee is entitled to ask his
employer to provide, within 14 days of request, a written statement of reasons for dismissal. A
claim for unfair dismissal can also be made in certain specialized situations, each of which can
only receive a bare mention here. The situations are:
An employer may dismiss employees who are on strike provided that, in effect, he dismisses them
all. If he dismisses some but takes other back, those dismissed may claim for unfair dismissal.
Dismissal of an employee will be automatically fair if there was a practice, in accordance with a
union membership agreement (closed-shop) requiring all employees to belong to a specified
independent trade union and the employee has refused to join. However, if he had genuine religious
reasons for so refusing, the dismissal will be unfair.
Where, then, is the problem? It has to be found in the manner in which a manager discriminates in
favour of one individual, and therefore against the others. If a manager (man or woman) selects a
man for a promotion primarily because he or she is against the idea of working wives, that is prima
facie committing an unfair act. If an interviewing manager ignores, let us say, the patently better
quallifications and experience of an Asian accountant over a less-well qualified white candidate
and appoints the latter, that is also likely to be unfair discrimination. However, so much depends
on the circumstances of each case, and individuals usually challenge managers' decisions by
seeking external conciliation, e.g. via the Advisory, Conciliation and Arbitration Service (ACAS)
There is a limited amount of statute law governing unfair discrimination in the UK and leading
cases are beginning to appear from the Employment Appeal Tribunal and from the European
Court. Nevertheless, at present only unlawful discrimination on grounds of sex, marital status,
disability and race are covered by legal requirements. Issues such as discrimination on account of
age included, and neither is discrimination on religious grounds (except for Northern Ireland).
However, a wider range of issues can always be included in an equal opportunities policy, and the
Chartered Institute of Personnel and Development, for example, publishes a code of practice on
this matter.
Discrimination against various groups in an organization has been made unlawful and legislation
designed to avoid discrimination includes:
Direct discrimination – where an employer treats a person less favourably than another on
grounds of sex or of marital status. Examples of direct discrimination would be where an employer
did not allow women to compete for jobs beyond a certain level of seniority, or where single people
were always preferred to married persons when new vacancies were filled.
The major effect of the 1986 Act is to equalise the retirement age between the sexes. With effect
from November 1987, all employers have to set a common retirement date for their employees. At
present there is no obligation for employers to harmonise their pension rights, however. Thus,
although a woman employee may now be allowed to continue working until 65 years of age, her
employer is not bound to give her five extra years of pension benefits after her sixtieth birthday.
However, under the Employment Act 1989, a woman over 60 is entitled to a redundancy payment,
if her job is no longer required. The State retirement arrangements are still based on unequal
treatment of the sexes, with men receiving their pension at 65 and women at 60. The Act does not
require employers to set the same retirement age for all employers, so long as the grounds for
differential treatment are not discriminatory on grounds of sex. So, managers could be retired at
60, staff at 62 and manual workers at 65, as long as the rules apply to both sexes in each group.
There is no similar law in the rest of the UK, but employers who aim to be 'Equal Opportunity
Employers' with a publicly-stated policy on equal opportunities always include a reference to creed
in their policy statement e.g. in local government 'applicants for posts in the Authority will be
considered regardless of their race, sex, creed, etc._
Employers of more than twenty employees had to employ a quota of disabled persons up to 3 per
cent of the total staff - a figure that was generally well in excess of the total number of registered
disabled persons in the population (about 2 per cent)
Certain work was identified as being particularly suited to disabled persons, who should be given
such work ahead of other employees.
The 1944 Act was repealed by the new Act, which introduced some major changes. The 1995 Act
introduced a longer, more searching definition of 'disability', and relates it to the ability to carry
out the normal day-to-day activities of the employment. The quota provision was repealed and
replaced by a requirement not to discriminate against a disabled person at any stage of
employment, thus giving disabled employees some of the rights available under sex and race
discrimination laws. Discrimination against a disabled person may take three forms:
Direct discrimination, i.e. where the disabled person is treated less favourably than other persons
on the grounds of his or her disability, when such treatment cannot be justified by the employer.
Discrimination by victimisation, i.e. where a disabled person has brought evidence or made a
complaint against an employer, and is treated less favourably on account of complaining.
As the proportion of young people in the economy continues to fall, so there will be fewer workers
to pay for the key services of health, education and social welfare.
Nevertheless, at the present time many employing organisations are discriminating against would-
be job applicants on the grounds that they are too old, at the same time as they are telling others
that they are too young!
In a survey carried out for the CIPD in December 2006, it was found that whereas 75 per cent of
those aged 45-54 were in paid employment, only 39 per cent of those aged 55-64 were employed.
By comparison, at the other end of the age, range, 65 per cent of 16-24- year-olds were in
employment. A question relating to early retirements showed that 18 per cent of 55-64-year-olds
had taken early retirement, as against 9 per cent in the 45-54 group and 1 per cent in the 35-44
group.
Although most respondents over 55 wanted to retire completely by the state pension age, it was
significant that one in five wanted to work either full-or part-time after this age, mainly because
they found their work enjoyable. Most age groups reported that they had been discouraged from
applying for jobs in the previous twelve months because of age restrictions in job advertisements.
Surprisingly, these restrictions were felt across the spectrum - 13 per cent of 16-24 age range, and
35-44 age-range, and 9 per cent 55-64-year-olds. Ageism is not just confined to recruitment
practices, but even more so in subsequent employment. Nearly one quarter of all respondents
thought that their industry was not interested in employing or promoting people over the age of
40.
An important aspect of any EO Policy is monitoring. The employer needs to ascertain how many
employees fall into the categories concerned and where they work, what jobs they do and what
training and career development they might have received. This information can provide the basis
for assessing where arbitrary discrimination may be occurring. For example, in a well-known
British Bank, studied by Incomes Data Services in 1987, 53 per cent of the staff were women, yet
only 2.8 per cent of the managers were women, most of whom were employed in clerical roles.
This has led to an increase in training and career opportunities for women who wish to take
advantage of promotion prospects. Action on improving the number of applications from ethnic
minorities has also been taken as a result of ethnic monitoring of the recruitment process. In
particular, the Bank's aims have been as follows:
1. Increase number of women entering the Bank with expectations of being treated as equal with
their male counterparts
2. Women being promoted on the career ladders and being more assertive
3. More women in managerial positions
4. Eradicate the assumption that all men are career-minded and all women are not
5. Increase the number of black applicants to ensure that the Bank's image in the labour market
is one of a genuine equal opportunities employer.
All positive action programmes need to be carefully thought out if they are not to be counter-
productive. Those employees who are selected, or encouraged to join such a programme need to
see that they are neither being patronised nor being especially privileged, but are only being given
a fair chance to compete with others. Sensitivity particularly needs to be shown in treating racial
minorities, who, even when taken all together, make up barely 4 per cent of the working
population. If they appear to be receiving privileged treatment, the majority may quietly resent the
fact, and the cause of racial harmony can receive a setback. Dealing with prejudice against women
and racial minorities at work is no easy task, and few organisations are happy with their attempts
to eradicate it. The mere fact that women, who make up more than 40 per cent of the workforce,
are presently campaigning, through Opportunity Now, to increase the quality and quantity of
women's participation in Britain's economy is a reflection of the relative lack of success of anti-
discrimination legislation over the last fifteen years.
Women in management
Women are still greatly under-represented in middle and senior management This is neither fair
nor sensible, and an aspect of equal opportunities which leading organisations are attempting to
address. Davidson and Cooper (1993) estimated that, in the UK, women held less than 5 per cent
of senior management posts and perhaps some 26 per cent of all managerial-type positions. This
is in a situation where as already mentioned they make up more than 40 per cent of the total
workforce. The difficulties faced by women in breaking in to what is still very much a male
preserve have been referred to as 'the glass ceiling', an analogy to describe the subtly transparent
barrier that prevents women from gaining access to the more senior roles, in their organisations.
What in these circumstances can organisations do to achieve greater fairness for women and a
better balance of the sexes in managerial roles?
There are several possible actions that organisations can take to provide a fairer framework of
working conditions. These are more likely to succeed (i.e. to be fully accepted by both sexes) if
they are open to both to men and women, thus avoiding possible charges either of favouring men
or of patronising women. They include the following:
1. Increasing part-time opportunities for permanent staff (and thus freeing individuals to attend
to domestic and family responsibilities whilst in a permanent/career job)
2. Permitting flexible working hours, where this approach can be accommodated within the usual
demands of the lob
3. Making job-sharing more widely available, if this is practicable, given the demands of the job
4. Enhancing training opportunities for potential managers, especially in such skills as leadership,
assertiveness and time management, whilst encouraging women, in particular, to apply for
such training
5. Providing personal development opportunities in form of secondments, special projects and
other opportunities to undertake new challenges and extend experience in managerial roles
6. Developing senior management's awareness of (a) the benefits of more women managers
appointed on their merits, and (b) the potential loss to the organization, if well-qualified women
candidates are not appointed to more senior roles
7. Introducing career breaks for those who wish to take time out to focus on family
responsibilities
8. Providing, or paying for, crèche facilities for employees with family responsibilities
9. Ensuring that individuals' accrued rights (e.g. to pensions, holidays, etc.) are not disadvantaged
merely because the jobholder is a part-time employee or has had gaps in their service with the
organisation.
Because of its importance, employee motivation was the subject of an earlier chapter.
Employee Compensation
The most common system by which nonmanagerial employees are compensated is wages, which
are based on time increments or the number of units produced.
Nonmanagerial employees traditionally have been paid at an hourly or daily rate, although some
are now being paid biweekly or monthly. Employees who are compensated on a weekly or longer
schedule are paid salaries. Hewlett-Packard Company eliminated the daily rate of pay and now
considers all personnel at all levels to be salaried employees.
Wages
Some organizations try to motivate employees to improve performance by paying on the basis of
the number of units produced. This is a piecework system. Piece rates are calculated by dividing
the hourly wage for the job by the number of units an average employee is expected to produce an
hour. For example, if the rate of pay is $5 per hour and the average employee is expected to produce
25 units per hour, the piece rate is 20 cents per hour. A worker who produced 40 pieces under this
plan would earn $8 for the hour.
A daily rate of pay is easier than a piece rate to understand and use because time standards and
records of the employee’s output are not needed. Unions generally prefer the daily rate of pay over
systems that involve piecework or incentive payments. This preference is based on the belief that
a piecework system tends to reduce group cohesion.
Many factors determine the wage rate for a nonmanagerial job. Wages for certain jobs are affected
by the availability of and demand for qualified personnel, although unions and the government
may hinder the effects of supply and demand. Through strike threats and contract agreements, for
example, unions can prevent employers from lowering wage rates even when qualified personnel
are available.
The existing wage rates in competing companies or in the community also help determine wage
scales. Organizations typically conduct wage surveys to assess hourly rates, piecework or other
incentive rates, and fringe benefits offered by other organizations. If the wage rates of an
organization are too low, it may be unable to attract qualified personnel.
Many organizations determine the relative worth of a job and the wage adjustments for it by using
job evaluation systems. A job is compared with others within the organization or with a scale.
Under the ranking method, all jobs are ranked from highest to lowest, on the basis of skill,
difficulty, working conditions, contribution to goods or services, or other characteristics. This
simple plan is not totally objective. The personalities of the current jobholders often distort
rankings. Nor are unions enthusiastic about job evaluation. With such a system, the union
negotiator has almost no role to play.
Questions of course must not be biased or misleading. Persons skilled in interviewing are needed
and the services of the National Institute of Industrial Psychology may be utilized.
Recent legislation has greatly affected this area and dismissal is now more costly and more difficult
for the employer. Termination of contracts has been restrained by public policy.
Redundancy causes problems to employees and the human resources department can help
adjustment to the new conditions by instituting counselling services.
Services to assist the redeployment of workers can include, advice on their future direction,
financial arrangements, self-marketing and job-search techniques. Positive steps must be taken to
reduce the impact of redundancy and offset negative feelings which may be held against the
company.
6.10. Employee services
Many undertakings have paid more attention to the improvement of the environment in which
workers work and live. These are usually entitled employee services, and a number of them will
be briefly mentioned.
(a) Superannuation.
Many firms conduct pension schemes either as separate trust funds, where the firm’s contribution
(and the employee’s contribution in a contributory scheme) are invested and the scheme controlled
by trustees, or as life office schemes, where a contract is made with a life assurance office. A firm
may contract out of the state graduated pension scheme if it has its own scheme which gives a
pension at least equal to the maximum under the State scheme.
(b) Catering.
This can be a very important service and plays a part in securing suitable labour. Most canteens
are subsidized by the company, but its cost is allowable for purposes of taxation.
The human resources manager may have to decide whether the company shall use the services of
outside caterers, or provide the service itself.
Employees absent from work for certain periods may still be paid their full wage, or a proportion
of the wage.
These may include sports or recreational clubs, assistance with housing, special provision for
transport, assistance with tutorial fees and textbooks for those studying for professional
examinations.
The Act aims to encourage employers and employees to play a positive role in promoting safety.
A duty is thus laid on employees to take reasonable care for their own safety and that of others,
there is provision for the appointment of safety representatives and safety committees from among
the employees and the employer must issue a written statement of his safety policy. In furtherance
of this ‘positive safety’ aim, the idea of criminal sanctions for breach of Act is pushed into the
background. Although such sanctions exist, safety inspectors, who have statutory powers, will
generally first issue notices requiring, for instance, an improvement of some matter, before there
is resort to a prosecution. The primary job of inspectors is thus to provide detailed advice and
assistance, rather than to be law enforcers in the strict sense. Clearly, the role of the human
resources officer in encouraging this ‘positive safety attitude’ is of crucial importance. The Act
also established two bodies: the Health and Safety Commission, which has overall responsibility
for safety and whose role is one of advice, education, and research, and the Health and Safety
Executive, which is responsible for the actual operation of all safety law.
Finally, it should be noted that an employee injured at work has two other remedies open to him:
he may sue his employer for negligence and he may claim industrial injury benefit.
Safety officer
If a person is appointed to this position he may be responsible to the human resources officer or
other department head. He should have good experience of industry and knowledge of engineering
principles and the relevant law, and have a common sense approach to problems. Qualities required
include efficiency, high morale, courage, so that he can be respected, and he should be able to mix
well with other people. His duties will include:
• making routine, thorough inspections of plant and buildings etc, preferably with the
department manager concerned;
• seeing that all safeguards are in operation, that protective gear and fire escapes are clear;
• seeing newcomers are instructed in safety measures;
• keeping records of accidents and their causes and taking effective action where special
trends appear;
• advising on safety implications of plant layout, working methods, etc.
6.13. Conclusion
In the final analysis, equal opportunities at work boil down to two key issues:
• changing people's attitudes so that they become more objective and less their ideas about
people who are different from themselves;
• making the fullest use of the organisation's human resources.
The best thing about equal opportunities policies is that they have the potential to bring out the
best in the workforce. In this task personnel and human resource managers have a key role to play.
a) Indirect discrimination
b) Direct discrimination
2. Why are health and safety considered as important factors in human resource management?
The link between motivation theory and the practices of management is crucial to management’s
success. People are the greatest single asset available to an enterprise. In fact an organization is
people! Unfortunately, people are the only asset that can actively work against the organisation’s
goals. It is, therefore, only by collaborative efforts that people can find a release for their latent
energy and creativity in the service of the enterprise.
Such a definition excludes the operation of instinctive or reflex behaviour and focuses on
individual choice. Exercising choice is not just a rational process, but one which is considerably
affected by the emotions and deeply held-values of the individual.
The goals sought by individuals can be relatively tangible, such as monetary reward or promotion,
or intangible, such as self-esteem or job satisfaction. The rewards available to an individual are
generally classified under two headings- intrinsic and extrinsic rewards.
Briefly, intrinsic rewards are those that are derived from the individual’s own experience; extrinsic
rewards are those are conferred on a person from outside. An intrinsic would be a sense of
achievement or a feeling of self-esteem; an extrinsic reward would be a payrise or a promotion.
Whilst motivation as such is essentially a personal experience, managers, in particular, are keen to
find reliable links between individual motivation and effective performance. They are also
concerned to create the conditions under which organizational and personal goals may be
harmonized.
Motivation can be described as behaviour caused by some stimulus but directed towards a desired
outcome, as indicated in the figure below
In this model the stimulus could be a need, drive or incentive of kind, e.g. the need for food.
Appropriate behaviour would be to pull into a motorway restaurant or go to the larder. The goal
or desired outcome would be, at the very least, the relief of hunger pangs and, at best, the
enjoyment of a satisfying meal.
In relation to the illustration above a researcher would want to ask the following questions;
Theories that focus on the stimulus, i.e. on what specifically causes motivation, have been content
theories. Exponents include such well-known names as Maslow, Herzberg and McGregor.
Theories that focus on the behaviour have been called process theories.
Effective performance at work does not just depend on motivation. Numerous other factors, such
as individual knowledge and skill, the nature of the task, the management style adopted and the
organization climate, all play a part in the results people achieve.
The key feature of motivation is that it determines the extent to which an individual desires to
place his or her knowledge and skills at the disposal of others, and, more than that, to shrug off the
effects of obstacles and difficulties in so doing.
The theories suggested by Maslow, Alderfer, Herzberg, and McClelland are content theories.
Those that come under the labels of Expectancy Theory, Equity Theory, and Goal Theory are
primarily process theories.
Maslow’s general argument was that, other equal, people tend to satisfy their lowest level of felt
need before moving on to higher –level need. As Guest’s (1984) review of motivation theories
comments, however, research studies conducted in the 1960s and early 1970s showed little or no
support for the theories of Maslow… The major difficulty associated with Maslow’s model lies in
its apparent rigidity. Whilst few people would deny that there are lower-level and higher-level
needs, many would dispute that people do tend to satisfy their in a relatively systematic way from
the bottom to the top, as it were.
7.4. Alderfer’s theory
Clyton Alderfer (1972) followed up Malsow’s idea with some studies which led him to propose
his so-called ERG theory of motivation. This suggested that people’s needs are arranged along a
continuum, rather than in a hierarchy, and there are three rather than five groups of needs:
Existence, Relatedness and Growth. Existence needs correspond to Maslow’s lower -levels,
Relatedness corresponds to Maslow’s social needs, while Growth corresponds to Maslow’s higher-
level needs. Alderfer’s model is altogether more dynamic than Maslow’s. It allows for people to
deal with two sets of needs once, and also distinguishes between chronic or long-lasting needs and
episodic or occasional, needs.
His interpretation of the results led him to state his two-factor theory, or Motivation-Hygiene
Theory, of motivation. Several factors led persistently to employee satisfaction, while some others
led persistently to dissatisfaction. The satisfiers were called ‘motivators’ and the
dissatisfiers‘hygiene factors’. Motivators appeared to be closely connected to the job, whilst
hygiene factors were connected with the environment.
Motivators appeared to produce motivated behaviour, however, hygiene factors produced either
dissatisfaction on nil response. To take a motoring analog, hygiene factors can be considered as
filling up the petrol tank, i.e. the car will not go if there is no fuel, but refueling of itself does not
get the vehicle under way. For forward movement, the car electronics must be switched on and the
starter operated- this is the effect created by the motivators. As theory of motivation Herzberg’s
ideas have been effectively discredited mainly on the grounds that there is no evidence to support
his concept of two independent sets of factors in motivation. Critics (e.g. Campbell et al,1970)have
claimed that, in an empirical sense, Herberg’s work had been concerned more with job
satisfaction/dissatisfaction than job behaviour.
Nevertheless, his work has led to what might be called the job enrichment movement (adding
motivators to jobs) and, more recently to the quality of working life movement.
Achievement motivation
Achievement motivation is generally associated with the work of D.Mclelland and colleagues at
Harvard University, working from a list of some 20 needs identified by an ealier theorist, H.A.
Murray, McClelland focused his attentions on three particular needs.
Of these three, the need for achievement received the greatest emphasis in the research. This was
because this motive was perceived as having relatively stable tendency, and was activated by
external events in the individual’s situation.
McClelland (1961) found that individuals with a high n Ach factor tended to display the following
characteristic:
McClelland concluded that n Ach was developed more by the experiences of childhood and
cultural background than by inherited factors.
In view of the suggested characteristics of achieving type of person, McClelland’s ideas have been
applied in the selection of managers. The psychometric test known as the Thematic Apperception
test (TAT) has been widely used to elicit a person’s n Ach, n Aff and n pow tendencies. This test
asks subjects to look at a series of pictures, which they have to describe in terms of what is
happening, who are the people concerned, what will happen, and so on. The strength of
individual’s needs are inferred from their descriptions.
7.6. V. H. Vroom and expectancy theories
Vroom (1964). in an influential work, focused his individual behaviour in the work place.
He observed the work behaviour of individuals with the object of explaining the processes
involved. He assumed that much of the observed behaviour would be motivated, i.e. that it was the
result of preferences among possible outcomes and expectations concerning the consequences of
actions. His principle methodology was ‘objective observation’.
The essential elements of Vroom’s ideas have come be called ‘Expectancy Theory’. The crux of
this theory is that motivation behaviour is a product of two key variables;
Valence is the anticipated satisfaction from an outcome. This distinguishes it from value of the
outcome which is the actual satisfaction obtained. Expectancy is a momentary belief concerning
the likelihood that a particular act will be followed by a particular outcome. The product of valence
x Expectancy is force. Force is used in the sense of pressure to perform an act. Thus the basic
formula designed by Vroom can stated as follows;
Vroom’s ideas have been pursued by numerous other theorists to the extent that in a recent review
of motivation theory, Guest (1984) concluded that ‘Expectancy theory continues to provide the
dominant framework for understanding motivation at work’.
Lawler & Porter (1967), in particular, have extended Vrooms ideas by developing a model which
attempts to address two major issues;
1) What factors determine the effort a person puts into his job?
2) What factors affect the relation between effort and performance?
• effort
• the value of rewards
• the probability that rewards depend on effort
• performance
• abilities
• role perceptions
The rewards that individuals will find attractive, that is to say those which have a high valence for
them, may be intrinsic or extrinsic rewards. Vroom (1964) considered the question of job
satisfactions an aspect of motivation. The term ‘job satisfaction’ was regarded as ‘the conceptual
equivalent of the valence of the job or work role to the person performing it.’ In his opinion the
main variables affecting job satisfaction were:
1) Supervision
2) The work group
3) Job content
4) Wages
5) Promotional opportunities
6) Hours of work
In concluding his discussion on job satisfaction, Vroom comments that, ‘people’s reports of their
satisfaction with their jobs are…… directory related to the extent to which their jobs provide them
with such rewarding outcomes as pay, variety in stimulation, consideration from their supervisor,
a high probability of promotion, close interaction with co-workers, an opportunity to influence
decisions …….and control their pace of work.
In practical terms, therefore, managers who wish to make use of the ideas embodied in expectancy
theory will need to consider the following;
There are four main types of organizational rewards: membership and seniority, job status,
competency, and performance. Although Western culture dominates current thinking on this topic,
various rewards exist across cultures. For example, there is increasing evidence that individuals in
most cultures value some amount of performance based pay, rather than a fixed salary alone. One
survey reports that 65 percent of large employers throughout Asia already use some form of
performance-based reward system.
Incentives are most popular in Thai companies and least likely to be found in Indonesian firms.
The largest portion of most paychecks is based on membership and seniority. Employees receive
fixed hourly wages or salaries, and many benefits are the same for everyone in the firm. Other
rewards increase with the person’s seniority in the firm. Most organizations offer longer vacations
to those with higher seniority. Base pay sometimes increases with the number of years in a job.
Japanese firms usually move employees into a higher pay rate for each year on the job or their age.
Company pension plans emphasize seniority because those who leave within the first five years
typically forfeit some or all of the company’s contribution to the pension plan.
Some firms offer special perquisites to employees above a certain seniority level
Membership-based rewards may attract job applicants, particularly when the size of the reward
increases with seniority. Seniority-based rewards reduce turnover because the cost of quitting
increases with the employee’s length of service. One problem with membership-based rewards is
that they do not directly motivate job performance.
Another problem is that membership-based rewards discourage poor performers from leaving
voluntarily because they seldom have better job offers. Instead, the good performers are lured to
better-paying jobs. Lastly, golden handcuffs—financial incentives that discourage people from
leaving the organization—tend to undermine their loyalty and job performance to that
organization.
Almost every organization rewards employees for the status of their jobs in the organization. Firms
with many employees typically use job evaluation systems to evaluate the worth of each job in
terms of its required skill, effort, responsibility, and working conditions. Jobs that require more
skill and effort, have more responsibility, and have difficult working conditions would have more
value and consequently would be placed in higher pay grades. Organizations that don’t rely on job
evaluation still tend to reward job status based on pay survey information about the external labor
market.
A senior engineer typically earns more than, say, a purchasing clerk because the work performed
by the engineer is worth more to the organization. It has more value (calculated by a job evaluation
system or pay survey) and therefore employees in that job receive more status-based rewards in
the organization. People in some higher status jobs are also rewarded with larger offices, company-
paid vehicles, and exclusive dining rooms.
Companies reward job status to maintain feelings of equity. Job evaluation systems try to maintain
internal equity; that is, to ensure that employees feel their pay is fair when compared to how much
other jobs in the organization are paid. This process also minimizes pay discrimination. Pay
surveys generally try to maintain external equity; that is, to ensure that employees feel their pay is
fair when compared to how much people in other organizations are paid. Job status-based rewards
also motivate employees to compete for positions further up the organizational hierarchy.
Despite these advantages, job status-based rewards have received much criticism. They motivate
employees to increase their job’s worth by exaggerating job duties and hoarding resources. These
political behaviors may increase the job’s pay rate through a job evaluation system, but they don’t
help the organization. Job status-based rewards also cause employees to focus on narrowly defined
tasks rather than broader organizational citizenship and customer service behaviors. Job status-
based benefits, such as executive dining rooms and golf memberships, create a psychological
distance between employees and management, thereby inhibiting communication between these
groups. Some companies try to minimize these problems by closing executive dining rooms and
removing other status-based benefits. There is also a strong trend away from rewarding employees
for their job status and toward competency-based rewards.
Competency-Based Rewards
The emerging reward system strategy is to pay employees more for their competencies than for
the tasks they perform at a particular time. Competencies are the underlying characteristics of
people that lead to superior performance. Competency-based pay rewards employees for their
skills, knowledge, and traits that lead to desired behaviors.
Employees are expected to have several competencies, and these competencies are evaluated by
observing specific behavior patterns. How does competency-based pay differ from job status-
based pay? Companies with traditional status-based rewards have many pay grades, each with a
narrow range between the lowest and highest pay. Employees might see their pay increase
somewhat by moving within a pay grade, but they are mainly rewarded through promotions to a
higher job and a higher pay grade. In contrast, companies with competency-based systems use
fewer pay grades with very wide ranges between the lowest and highest pay rates within each
grade. These wide pay ranges allow more room to reward employees for their competencies rather
than the specific jobs they hold. For example, some competency-based systems allow highly
competent employees to earn more than their supervisors or team leaders. Similarly, this motivates
employees to acquire skills and knowledge by moving laterally through several jobs, rather than
waiting for promotions up a career ladder.
Skill-based pay (SBP) plans represent a variation of competency-based pay. In SBP plans,
employees earn higher pay rates with the number of skill modules they have mastered. Through
special training and job rotation, employees learn how to operate another machine or complete
another set of tasks. The employee’s pay rate depends on the number of skill modules that he or
she has mastered, not on the specific job performed on a particular day.
Competency-based rewards have been praised for developing a better-skilled and more flexible
workforce. Customer needs are met more quickly because employees can move into different jobs
as demands require. Product or service quality tends to improve because employees who have
work experience in several jobs are more likely to know where problems originate. Moreover,
employees find it easier to discover ways to improve the work process as they learn more skills
and tasks in that process.
Competency-based rewards are also consistent with the emerging view that people are hired into
organizations, not specific jobs. Rather than paying people for their ability to perform a specific
job, competency-based rewards ensure that the best-paid employees are those who can adjust to
new situations because they possess the capabilities across jobs and circumstances.
However, SBP plans are expensive because they motivate employees to spend time learning new
tasks. Also, it’s not uncommon to have most employees eventually reach the highest pay rate
because few firms have established ways to reduce pay rates when employees get rusty on specific
skills.
Performance-Based Rewards
In the early 1990s, 90 percent of a typical manager’s pay at Sears Roebuck and Co. was straight
salary. Now it’s 80 percent and dropping as the retail giant moves to performance-based pay. For
some top executives, performance bonuses can exceed their base salary. “1 wanted to move away
from an entitlement mentality—put pay at risk and increase it over time to motivate and drive
people,” says Sears CEO Arthur Martinez.
Sears is following the trend toward performance-based rewards rather than purely membership and
seniority-based rewards. Although this shift is most apparent in North America, companies in
Europe and Asia are also paying employees more for their performance than ever before. For
instance, in a recent survey of 210 large firms in Tokyo, Japan, 24 percent currently awarded pay
increases on the basis of performance rather than seniority.
Performance-based rewards are not new, but they now come in more flavors than ever before.
Individual rewards
Individual rewards have existed since the time of Babylon in the 20th century B.C. The oldest of
these is the piece rate, which calculates pay by the number of units the employee produces.
Commissions pay people based on sales volume rather than Units produced. Many real estate
agents and automobile salespeople are paid straight commission. Royalties pay individuals a
percentage of revenue from the resource or work ascribed to them. For instance, some mining
companies pay royalties to their exploration geologists from the mineral deposits they discover.
Merit pay—increasing the individual’s pay based on performance appraisal results—was common
during times of high inflation. However, merit pay has been replaced in many firms by reearnable
bonuses for accomplishing specific tasks or achieving certain goals. Although these bonuses are
often determined from team or organizational performance, they may also result from satisfactory
completion of individual goals.
Team rewards
Organizations increasingly rely on teams to get the work done. Consequently, they are rewarding
team performance to support these team-based structures. Some teams are rewarded with special
bonuses or gifts if they collectively achieve specific goals. At the San Antonio Marriott River
Center, for example, general manager Arthur Coulombe offered sales staff a four-day trip to Padre
Island, Texas, if they achieved $1 million in group room revenue over a six-month period.
Coulombe sent buckets of sand or fishing lures to employees’ homes every couple of weeks to
remind them of the reward. The sales team brought in $1.5 million in revenue, well beyond
anyone’s expectations.
A gainsharing plan is a type of team reward that motivates team members to reduce costs and
increase labor efficiency in their work process. Gainsharing plans use a predetermined formula to
calculate cost savings and pay out a bonus to all team members. Typically, the company shares the
cost savings with employees for one or two years. For example, 911 dispatchers in Howard County,
Maryland, were recently awarded bonuses up to $400 for significantly reducing the time to answer
a call and send out an emergency crew. The increased productivity avoided hiring two more
dispatchers, and employees shared the savings with taxpayers.
Organizational rewards
J. Robert Beyster believes that the best way to motivate employees is to instill an “ownership
culture.” The founder and chief executive officer of San Diego-based Science Applications
International Corp. (SAIC) has done that by forming an employee stock ownership plan (ESOP)
in which employees own over 90 percent of the company’s stock.
Beyster believes that this ownership has helped the company’s phenomenal success. From just 6
employees in 1969, SAIC now employs 25,000 people and has annual revenues of $3.4 billion.
“We turn employees into stakeholders,” Beyster says. “I really believe it makes a difference, and
I think it’s fair.”
• Rewards punish—Kohn suggests that there are punitive features built into every reward.
First, when rewarding people, we are also demonstrating our control over them. This can
eventually assume a punitive quality by making the reward recipient feel subservient.
Second, after being rewarded, employees come to expect that reward in the future. If their
expectation is not met, they feel punished.
• Rewards rupture relationships—Kohn complains that individual rewards create
jealousies and competition. In other words, rewards usually lead to feelings of inequity
because people invariably compare their rewards to others. Team rewards aren’t any better
because they encourage peer pressure. Rewards also create a psychological distance
between the person giving and receiving the reward. Taken together, rewards disrupt the
collaboration needed for organizational learning.
• Rewards ignore reasons—Employers need to spend time discovering the cause of
behavior problems. Instead, according to Kohn, they use incentives as quick fixes. We can
see this in situations where companies use incentives for the most trivial reasons. For
example, an Arizona company hands out cash to employees who arrive early at company
meetings and fines those who arrive late. The company would be better off identifying the
causes of lateness and changing the conditions, rather than using money to force a solution
to the problem.
• Rewards discourage risk taking—Kohn cites evidence that rewards motivate people to
do exactly what is necessary to get the reward and nothing more. Incentives dampen
creativity because employees no longer explore new opportunities outside the realm of
rewarded behaviour or results. In other words, rewards motivate employees to get rewards,
not to discover better ways to help the organization.
• Rewards undermine intrinsic motivation—Kohn’s greatest concern with reward
systems is that they kill a person’s motivation found in the work itself. This intrinsic
motivation relates to fulfilling growth needs, which are the most powerful and sustaining
sources of motivation. Kohn reports studies indicating that employees are less intrinsically
motivated to perform a task after they have received an extrinsic reward for performing it.
Critics point out that these studies were not conducted in real work situations. However,
until more precise research indicates otherwise, we should be concerned about the risk of
losing intrinsic motivation when extrinsic rewards are introduced.
Should we abandon rewards, based on Alfie Kohn’s arguments? Probably not. Organizational
behavior scholars have known for years that performance- based rewards are imperfect. Even with
these concerns, the OB literature generally concludes that properly implemented financial rewards
do motivate employees. And what about Alfie Kohn’s criticisms? Our opinion is that they must be
viewed as caveats of performance based rewards, but not an outright dismissal of them.
One additional argument for performance-based rewards comes from the economic concept called
agency theory. According to agency theory, company owners (principals) and the executives and
employees representing the owners (agents) have different goals and interests. For example,
companies typically want to provide a good return on investment to stockholders, serve customers
effectively, and meet government obligations. Agency theory argues that agents will not support
the owner’s goals unless they happen to coincide with their personal goals or there is a compelling
incentive to fulfill those goals. Reward systems are designed to successfully align employee goals
and actions with the owner’s interests.
Reward systems do motivate—but only if the problems that often plague performance based
reward systems in organizational settings can be avoided. Here are some of the more important
strategies.
Rewards won’t work unless companies learn how to measure employee performance and tie that
information to the reward. This strengthens the performance-to-outcome expectancy because
accurate performance measurement increases the probability that employees who perform well are
correctly identified and thereby receive larger rewards.
Companies need to align rewards with performance within the employee’s control. For example,
Sears rewards senior executives for corporate performance because they have some control over
the company’s overall success. Bonuses for department sales managers, on the other hand, are
based on profits and customer satisfaction in their departments but not on Sears’ overall corporate
performance. Reward systems also need to correct for situational contingencies. Salespeople in
one region may have higher sales because the economy is stronger there than elsewhere, so sales
bonuses need to be adjusted for these economic factors.
Organizations should use team (or organizational) rewards rather than individual rewards when
employees work in highly interdependent jobs. One reason is that individual contributions can’t
be identified or measured very well in these situations. For example, you can’t see how well one
employee in a chemical processing plant contributes to the quality of the liquid produced. It is a
team effort. A second reason is that team rewards tend to make employees more cooperative and
less competitive. People see that their bonuses or other incentives depend on how well they work
with co-workers, and they act accordingly.
The third reason for having team rewards in team settings is that they support employee
preferences for team-based work arrangements.
Employers often introduce a reward without considering whether employees really value it. This
point relates to the valence concept in expectancy theory. If a reward isn’t valued, then it won’t
motivate. Moreover, we need to determine whether there are countervalent factors related to the
reward that undermine its motivational value. A British firm failed to do this when it asked staff
to choose an employee-of-the- month. Everyone thought that the incentive was so tacky that they
chose the worst employees for the award. “The company was surprised at the choices,” explains a
consultant familiar with the case, “but it didn’t dawn on them what was going on.” Employees
may have appreciated praise, but the “uncool” nature of this reward easily offset its benefits.
Reward systems are not the only way to motivate people. Organisational Behaviour scholars
usually emphasize the job itself as the preferred source of motivation. It is also an important factor
in work efficiency, work-related stress, and various other employee outcomes. The process of
assigning tasks to a job, including the interdependency of those tasks with other jobs, is called job
design. A job is a set of tasks performed by one person. Some jobs have very few tasks, each
requiring limited skill or effort. Other jobs include a very complex set of tasks and can be
accomplished by only a few highly trained tradespeople or professionals.
In the appraisal situation, individuals are entitled to ask what aspects of their job are being assessed
and against what criteria. An individual will also want to know how the process of appraisal will
be carried out, and what opportunities they themselves will have to contribute to it. In most cases
the appraisal is conducted by the employee's immediate manager, but for some management posts
the appraisal may involve the manager's own colleagues, where so-called 360' appraisal is
employed.
8.2. Standards
The most crucial aspect of performance appraisal is identifying the standard of effective
performance. In performance evaluation systems, it is customary to refer to standards as criteria—
ways of identifying success in an activity. A criterion for a student is the grade earned in a course
or the grade point average after one year at college. An important and necessary step in developing
a performance appraisal system is the development of criteria that indicate successful performance.
Primary sources of individual job performance criteria are the organization’s overall objectives
and strategies. It is an important principle that individual performance should contribute to
organizational performance. Although this principle seems self—evident, it remains difficult to
implement, particularly when organizational objectives change.
Information
Information enables managers to judge the performance of subordinates. Managers must decide
three issues regarding performance information: the source, the schedule, and the method.
Sources of Information
Some organizations use group ratings to appraise managerial personnel; members of the group
could include superiors, subordinates, and peers. Although some companies use peer appraisal
systems, lack of success with this method is not unusual. Peers need mutual cooperation to do their
jobs, and performance appraisal undermines the spirit of cooperation.
There is some interest in using self-appraisals. The major claims in support of this approach are
that it improves the employee’s understanding of job performance, increases the personal
commitment of employees because of their participation in the performance appraisal process, and
reduces the hostility between superiors and subordinates over ratings. Some employers fear that
self-appraisals would be unusually high and not sufficiently critical of current performance.
There is some support for the use of multiple appraisers. The major advantage of using superior,
peer, and self-ratings is that this provides a great deal of information about the appraisee. In making
decisions about promotion, training/development, and career planning, as much information as
possible is needed to suggest the best alternative courses of action for the employee.
Schedule of Appraisal
In general, long-term employees receive one formal appraisal a year. Recent hirees usually are
appraised more frequently than other employees. The time to appraise depends on the situation
and on the intent of the appraisal. If performance appraisals are either too far apart or occur too
frequently, the appraisee may not be able to use the feedback to make improvements.
An appraisal program conducted solely for the sake of appraising employees soon will lose impact
unless it becomes integrated with the main emphasis of the organization. The performance
appraisal program should be considered a continual process that focuses on task accomplishment,
personal development, and the organization’s objectives.
The most likely reason for the adoption of staff appraisal is to draw present performance in the job
in order to (a) reward people fairly’ and (b) identify those with potential for promotion or transfer.
Appraisal forms
There are various ways in which appraisal forms can be devised. The key elements however, are
the following:
Where the appraisal focuses on the job, the appraisal form is more likely to ask the appraiser to
look for success in achieving job targets or objectives than to comment on the job-holder's personal
attributes. Where the focus is on the person rather than on the job, the reverse is true, i.e. the
appraiser is expected to give an account f the jobholder's qualities and attitudes rather than of his
or her relative success in achieving results. Thus, the focus of the appraisal will determine the
nature of thecriteria against which individual performance will be judged, as well as of the ratings
or measures to be used.
Forms which seek information about the person rather than about his performance in the job are
typified by an emphasis on:
• Generalized criteria
• Generalized ratings of performance
• Box-ticking as method of describing performance.
Appraisal criteria are generally either person-oriented or results oriented. Within each of these
orientations appraisers still have to 'measure' individual performance. They do so by using one or
more scales for rating performance. The principal options available are:
Linear or Graphic Rating Scales, in which the appraiser is faced with a list of characteristics or
job duties and is required to tick or circle an appropriate point on a numerical, alphabetical or other
simple scale.
Behavioural Scales, in which the appraiser has a list of key job items against which are ranged a
number of descriptors, or just two extreme statements of anticipated behaviour.
Free Written Reports, in which appraisers write essay-type answers number of questions set on
the appraisal document.
Behavioral anchored rating scales (BARS) are constructed through the use of critical incidents.
Once the important areas of performance are identified and defined by employees who know the
job, critical—incident statements are used as criteria to discriminate among levels of performance.
The form for a BARS usually covers 6 to 10 specifically defined job behaviors, each uniquely
described. Each description is based on observable behaviors and is meaningful to the employees
being evaluated.
Despite the time, cost, and procedural problems of developing and implementing BARS, this
system possesses some advantages. Specifically, a BARS program could minimize subordinate or
superior defensiveness toward evaluation. By being involved in the development of BARS,
subordinates have input into how they are to be appraised. The BARS development steps could
include both superiors and subordinates. In a sense, then, all of the parties involved can contribute
to the creation of the evaluation criterion.
Another advantage of using BARS is that the appraisal program concentrates on job specific and
job-relevant behaviors. Many performance appraisal programs are abstract and not meaningful to
either party involved in the process. Thus, when providing feedback to employees, the appraiser
must convert the ratings to examples of actual job behavior. There are, in many cases, variances
in appraisers’ ability to make these conversions from the rating scale to meaningful job behaviors.
BARS contain behaviors that scale to meaningful job behaviors that the superior can use in
developing the appraisal counseling interview.
Finally, since job-knowledgeable employees participate in the actual development steps, the final
rating form is assumed to be reliable and valid and to cover all aspects of the job. (A common
problem of many performance appraisal techniques is that they do not evaluate all aspects of a
job.) The use of BARS also provides valuable insights for developing training programs. The skills
to be developed are specified in actual behavioral incidents rather than abstract or general skills.
Trainees could learn expected behaviors and how job performance is evaluated.
Judging from research studies into appraisal, the majority of managers do not like conducting
annual appraisals of their staff. McGregor (1957) in an article on appraisal interviews commented
that 'Managers are uncomfortable when they are put in the position of playing God'.
• Appraisers were reluctant to conduct appraisals, finding ways of evading full completion
of the appraisal forms
• Appraisers were extremely reluctant to carry out face-to-face interviews
• There was inadequate follow-up to the appraisals, in terms of their effect on transfers, etc.
Appraisal styles
TELL & SELL approach, in which the manager tells his/her subordinate how he/she is doing, and
endeavours to persuade him/her to accept what has been led for him/her in terms of improvement.
TELL & LISTEN approach, where the manager tells his/her subordinate how/she is doing, but
then sits back and listens to the individual's point of view about the appraisal and about any follow-
up action required.
PROBLEM-SOLVING approach, in which the manager effectively puts aside the role of judge
in order to join the subordinate in mutual reflection on progress and mutual discussion about
required act
Conclusion
1. Degree of change in the external environment (e.g. technological change, new legislation,
etc.)
2. Degree of internal change (new processes, new markets, etc.)
3. Availability of suitable skills within the existing work-force
4. Adaptability of existing workforce
5. The extent to which the organisation supports the idea of internal career development
6. The commitment of senior management to training as an essential part of economic success
7. The extent to which management see training as a motivating factor in work
8. Knowledge and skills of those responsible for earring out the training.
Many organisations meet their needs for training in an adhoc and haphazard way.
Training in these organisations is more or less unplanned and unsystematic. Other organisations
set about identifying their training needs, then design training activities in a rational manner, and
finally assess the results of training. Such organisations are engaging in a systematic approach to
the training and development of their employees.
Development
The focus is on long term individual or organization development through continuous learning and
growth. Development will be seen as any learning activity which is directed toward the future
needs rather than present needs, and which is concerned more about career growth rather than
immediate performance. The focus of development tends to be primarily on an organisation's
future manpower requirements, and secondly on the growth needs of individuals in the workplace.
Examples of development needs might be the need for managers to be able to utilize the facilities
offered by microcomputers in the operation of the business, the need for replacing senior staff with
potential candidates from within the organisation, and the need for preparing employees to accept
change.
Training
Training refers to a planned process to modify attitude, knowledge or skill behaviour, through
learning experiences, to achieve effective performance in an activity or range of activities. It is
essentially concerned with short-term performance with regard to a job.
Necessarily, training provides the preparation to the development of particular skills e.g.
3. Education
This has been defined as activities that aim to develop knowledge, normal values and
understanding required in all spheres of life rather than a knowledge and skill relating only to a
sphere of activity. As such, it encompasses the concept of why things happen, rather than simply
how they happen (or can be made to happen). This can help to make to skills more transferable. In
other words education is also about the wider knowledge underpinning process and procedures as
well as their contexts. The focus of 'education' is primarily on the individual and his or her needs,
and secondly on the community as a whole, i.e. on society's needs. Examples of individual needs
are the need to be literate, the need to be prepared for some occupation and the need to make the
most of one's personal gifts and talents. Society's needs can include the need for respect for law
and order, the need for a variety of talents to sustain economic activities and the need to protect
itself from external aggression.
4. Learning
Refers to a process by which individuals acquire knowledge, skills and behaviours or attitudes that
they use to deal with all aspects of life. It should be noted that learning underpins the way in which
effective training and education is provided. As such, failure to understand the processes involved
can easily render such a provision ineffective.
The purpose of training and development needs to be clearly understood as a basis for its
appropriate use. It is
Since all organizations are faced with rapid and on - going change; there is need for them to be
proactive and adopt a positive attitude by seeking to incorporate training and development within
the strategic plan.
a) Internal forces
• New ways of doing things
• New people and equipment in carrying out processes
• Financial pressures, such as budgeting constraints
b) External forces
• Knowledge
• Understanding
• Skills: manual, social, intellectual
• Attitudes
If the employee does not have the of understanding of the job or does not have any knowledge
about it, training becomes a must.
1. Training can be expensive, and of what is required can result in significant haste of
organizations resources.
2. An accurate training analysis enables limited training budget to be directed towards
activities that will achieve optimum benefits for the organization
3. Accurate information about training needs is essential so as develop the specification of
learning objectives and design appropriate training programmes
4. An organization's training plan should be based upon the assessment of training needs and
their prioritization
As such, training programmes should be implemented under a human resource plan that has
identified needs both present and future, on the demand side and match them to resources on the
supply side. The result of the match is identification of the training gap, which has to be bridged
through a mixture training existing staff and the recruitment of new staff with the necessary skills.
The former require improvements in, or additions to, knowledge, understanding, skills and
attitudes; the latter require attitudinal changes (e.g. personal adaptability more than anything else.
Note that this view of individual training needs appears to take no account of what the employee
personally desires.
Within any group of employees doing same work, there will be differences in individual training
needs, which are influenced by differences in aptitude or previous experience.
The major methods of assessing these (i.e. training needs) on employee- by-employee basis are:
• The performance appraisal process i.e., with each employee's individual on- going training
and development requirements being identified and discussed at the annual appraisal
interview.
• In the absence of a formal appraisal system, it is vital to examine an employee's individual
output and quality records
• By questionnaire, usually with a checklist of training topics, this asks how they would
benefit from further training. Supervisors are given similar questionnaires for each member
of their work group
By corporate needs, as apposed to individual needs, we are concerned with training and
development designed to meet organizational objectives i.e. at section, departmental and whole
organization levels. The focus is on groups of staff and their common needs as defined by
management. There are three particular aspects to this:
2. A concern with consolidating or introducing new core values such as quality (management or
customer services orientation)
3. A concern to ensure the effective, introduction of new production / services and working
practices e.g. such as introduction of a new financial management system or use of new equipment
Once training / development needs have been identified, the particular form of activities that will
enable them to be met must be considered. To do this demands that we are clear about
a. The knowledge
b. Skills
c. Behaviours that needs to be developed
1. Preparatory
• Determining the scope of the survey (e.g. whole organisation? single function?)
• Agreeing objectives of survey (e.g. 'improve sales representatives product knowledge',
'improve managers' negotiating skills')
• Agreeing time-scale, resources, etc.
2. Data collection:
• Organization-level information
• Occupational-group level
• Job-level
• Individual performance
3. Interpretation of data:
4 Recommendations:
• Training proposed
• Resources required
• Time-scale
• Evaluation arrangements
• Estimated costs.
5. Action plan:
Once the scope, objectives and timescale of the survey have been agreed, the next priority is to
collect sufficient and relevant information. The two basic questions at this stage are 'What do we
need to know?' and 'Where do we find it?' The answer to the first question arises from the
objectives set at the preparatory stage. So, if the principal objective is concerned with improving
managers' negotiating skills, then we need to know the following:
The information necessary for answering the second question may be obtained partly from
documentary evidence, such as job descriptions, collective agreements and personnel manuals,
partly from appraisal reports, and partly from interview with relevant personnel.
The analysis and interpretation of the information collected for the purpose assessing training
needs straddles two key points: firstly, the standard performance required; secondly, the level of
performance achieved by those concerned. If performance standards have not been found, perhaps
because of' some recent change in technology, for example, then agreement on an interim standard
should be achieved. Where standards are already in force, and are still acceptable, then the analysis
of results should be able to distinguish where any shortfalls are occurring and whether these can
be made good by training, as opposed to some other solution, such as job redesign. Evidence that
may point to training need could include one or more of the following trends:
Standards on competence-based training and development can provide a useful basis of evidence
for assessing training needs.
A systematic survey and analysis of training needs will be concluded by making appropriate
training proposals in the form of a plan, indicating what training is proposed, who should conduct
it, when, where and at what cost.
Training plans
Training plans are central to the training process. A training plan is a systematic statement of
training intentions and the means by which they are to be achieved and measured. A plan may
embrace the organization as a whole, or just a small part of it.
Either way it will typically contain information under the following headings:
1. Training policy
2. Assessment of needs
3. Internal factors
4. External factors
5. Training plan
6. Implementation
7. Evaluation
Training methods
When we talk about training methods we are essentially discussing the mean which we intend to
communicate information, ideas, skills, attitudes and fee to learners. Thus methods are a crucial
element in the trainer's success. The choice of various methods of training is a key feature of
effective employee's development. The basic distraction is between on-the job and off-the-job
methods.
On-the-job training
Demonstration:
This is where an experienced instructor demonstrates to trainees how to carry out a particular task.
Demonstration is an essential preliminary to operating most machines and equipment. The major
disadvantage with this approach is that the leaner is not provided with an understanding of why
something is done. Also, the leaner may pick up bad habits and good ones.
Coaching:
This is a process by which a trainee learns by carrying out tasks under guidance from an
experienced person. The instructor gives guidance and feedback to the trainee, and provides
encouragement and assistance in overcoming difficulties.
Project:
Assigning to trainees the task of investigating problems and analyzing potential solutions to those
problems is a popular method of learning in the Office. So much knowledge of work practices,
analytical and problem solving skills can be developed, etc.
Job rotation:
Normally, this takes the form of a series of relatively short-term training period in a number of
pre-determined positions in different parts of the company. It develops right skills by running
smaller profits centres or strategic business units.
Attachments / Secondments:
The purpose of this method is to broaden the experience of staff / employees. Here a member of
staff is attached to other divisions of the same business or, in some cases, to other
organizations’staffs that is undergoing development programmes.
Mentoring:
This involves a young manager taking guidance from an experienced manager, and it should be a
two- way process. The junior manager gains from the experience of the more experienced
manager; who in turn gains from having an enthusiastic helper with fresh ideas
Off-the-job training
Case studies: Here, trainees are presented with the task of solving simulated business problems
described as case studies. These help to illustrate points that are difficult to explain by other
development of problem solving skills and analytical skills
In-tray exercises: Students are provided with such things as letters from customers, memos from
staff, requests for information, etc and they are observed how best to deal with this workload.
Management games:
Here students are presented with business situations and data that they are required to analyse
before making decision. Their decisions are fed into the computer that gives a report that forms a
basis for a new situation that must then be analysed.
a) Role-playing: Here trainees act out business situations from prepared briefs. This is the
technique most suited to developing skills in dealing with people. Feedback can be provided by
means of video recording and replay of closed circuit television (CCTV).
Courses like MBAs, DMS as well as other education courses are popular ways of developing both
professional skills and understanding or management skills. The following modes are used:
• Distance learning
• Evening classes
• Full time
d) Programmed Instruction:
Under this form of training, there is no direct involvement of an instructor, but programmed
instruction is provided through a combination of following:
“Any attempt to obtain information (feedback) on the effects of a training programme and to
assess the value of the training in the light of that information.”
• Contents,
• Objectives,
• Assessments, as well as
• Criteria by which to evaluate training
Evaluation criteria could be subsequent behaviour of trainees and the organizational benefits.
Hamblin in his book suggests that there are five levels at which evaluation can take place and they
are:
1. Reaction of trainees
2. New skills and knowledge that have been acquired
3. Job behaviour
4. Organization
5. Ultimate value i.e. profitability, growth or survival etc.
Training intervention
The organization has to determine exactly what it hopes to achieve by training and development
intervention. There are five stages for the organization to consider:
Determination of the development-training objective: This will specify the task, procedures,
techniques, skills and ability that employees should be able to perform /exhibit and the standards
required.
• Capability of employees
• Estimated likelihood of transfer of learning / development to the work situation
• Available resources
• Employee consideration
Planning and implementation: Here, careful briefing of employees and their managers should
take place, in order that they know what is happening, when and why.
Evaluation of the programme: The aim is to evaluate the effectiveness of the investment, in
terms of resources, and find out whether it has achieved the stated objectives.
Reviewing the system: regular reviews to ensure that it are still satisfying the organization's
training and development needs.
• Individual employees
• Trade union representatives
• Government and government bodies
• Managers
• Employers’ association representatives
• Courts and tribunals
Individual employees tend to see employee relations in terms of the opportunity to:
Third parties, such as Government ministers, arbitrators, judges and civil servants may see
employee relations more in terms of:
With differing perspectives such as the above, it is not surprising that some degree of conflict is
inherent in employee relations. In certain cases, this potential for conflict has broken out with
savage and long-lasting results, as the paragraphs on strike statistics indicate. Nevertheless, there
can also be a substantial amount of common interest, and much of employee relations are
concerned with finding out what are these areas and how they can be turned to mutual advantage.
The main sources of conflicts can be summarized under the following headings:
Money
The ratio of profits to wages- a conflict between workers and managers, or between workers
themselves, where the sum of money has to be shared.
Job
Rates of pay are different for each job and sometimes one group 'claims' a job, possibly to
safeguard their future security, or loss of earnings, if the job is given to others. This 'right' to do
the job can lead to disagreement between groups on 'demarcation lines' between jobs, and
frequently occurs (e.g. should a metal worker or a wood-worker fit a wooden frame to an aluminum
surround?).
Goals
Managers are concerned with efficiency and workers with security. Managers may want newer,
more efficient machinery, this may displace workers as less are needed. Conflict may occur
between marketing and production managers as their policies and interests often differ.
Environmental factors
Downward fluctuations in the market for a product are a threat to workers' security. Such problems
may cause conflict even within a union, if the rank and file do not think their leaders are doing
sufficient to secure their jobs.
The socio-technical system organizes people in a particular way which often leads to a boring job,
no control of the pace of work, no responsibility or group identity.
Collective bargaining is the process whereby procedures are jointly agreed and wages and
conditions of employment are settled by negotiations between employers, or associations of
employers, and workers’ organizations. (ACAS 1980). It is an important technique or mechanism
for resolving goal conflicts and may be said to have these main features:
• It is a joint activity where each side recognizes the right of the other to be present on equal
terms;
• The respective interests of those represented in collective bargaining should be identified
so common interests can be noted and means found to reconcile areas of conflict;
• The result is the joint regulation of the work situation by establishing a framework of rules
and practice to govern relationships between the management and workforce.
• The aim, as in every form of bargaining, is to reach agreement eventually
• The voluntary nature of the activity, i.e. not imposed by law
Collective bargaining process
The process of negotiating collective agreements does not occur in a vacuum. It forms part of a
continuous relationship between rank-and–file employees and their management (also employees).
The aim of the process is to achieve a workable relationship with management, founded on mutual
respect, in which tangible benefits are realized on agreed terms and not just on management’s
whim. Management representatives see collective bargaining as one method of attaining corporate
objectives relating to pay and the conduct of employee relations. By the time bargaining begins,
there are already several divergent attitudes at work when it comes to agreeing what is to be
negotiated and The first step towards effective collective bargaining is for employers to recognize
trade unions, who both agree to negotiating procedures resulting in collective agreements, which
may be for a company, a unit, or the industry a whole. The policy of the government has been to
encourage and support collective bargaining and most employers negotiate with unions to agree
terms and conditions of employment for 'blue collar' and 'white collar' workers. Collective
agreements between unions and employers cover many issues and may relate to a whole industry,
a company, or a single unit. In some industries joint negotiating bodies have been set up with
formal constitutions. Other industries have more informal meetings between employers and
unions. It is important that these agreements should be continually reviewed as they may soon
become out of date. The pluralist approach still seems dominant, in that there seems to be an
acceptance of the inevitability of conflict in industry and the need to negotiate joint solutions.
Management still consider only they should determine some issues (e.g. hire and use of labour).
Issues submitted to collective bargaining by management usually cover wage rates, hours of work,
holidays, etc. The strength of the two sides determines the result. Strength depends upon:
Although the aim of bargaining is to reach agreement eventually, there is usually a degree of
conflict between the parties concerning both the means by which agreement may be reached, and
the terms on which it is reached. As a general rule, managers, as buyers of labour, seek to achieve
agreement at a minimum cost to the organisation and with the maximum pay-off from improved
productivity and/or improved employee relations. The trade union representatives, as agents for
labour, look for an agreement that incorporates the best possible terms of employment with the
minimum number of concessions on working practices. This kind, of representation of managers
as buyers, and unions as agents, of labour implies a pluralist view of industrial relations. This
means that the different, indeed opposing, perspectives of the management and union negotiators
are accepted as part of the reality that has to be faced in reaching eventual agreement. A rather less
adversarial view is the so-called 'unitary' perspective, which sees common interests, and hence
common aims, as paramount. Organisations adopting this perspective emphasise the common
interests of employees and management alike, and seek to find mechanisms for enhancing
collaboration, such as joint consultation, team briefings and quality circles.
This situation is likely to change in the future, as there is now the possibility of obtaining statutory
recognition of a trade union in specified cases. Under the Employment Relations Act 1999, there
is provision for a trade union to apply to the Central Arbitration Committee (CAC) for statutory
recognition in cases where it can demonstrate (a) that it has at least 10 per cent of the workforce
in membership, (b) that it has tried unsuccessfully to gain voluntary recognition from the employer.
A recent example of this situation is the case of the Honda car company's factory at Swindon,
where the AEEU engineering union tried for some time to secure voluntary recognition for the
company's 3000 workforce. Honda had been the only non-unionised car manufacturer in Britain
since it first opened its factory in 1985. The company adopted a unitary approach to employee
relations based upon in-house arrangements between the management and employee
representatives, which had produced attractive outcomes for both the company and its employees.
This paternalistic situation changed when the AEEU sought CAC support for recognition, and was
awarded the appropriate rights. Such a decision is only made after a thorough and independent
ballot of all the employees concerned to assess their readiness to be represented by an outside trade
union. In the Honda case it was confirmed by the CAC Case Manager that more than 1400
employees had already joined the union, so the 10 per cent minimum was met easily, and the
company said they would not oppose recognition.
In cases where the union is seeking a voluntary recognition agreement from an employer, then the
latter can ask ACAS to conduct a secret ballot of employees to assess the degree of support for
representation by the union concerned. Where there is insufficient support from among the
workforce to justify full recognition rights, the employer may nevertheless grant certain
representational rights to the union on behalf of those employees who are already members.
11.2. Definitions
Collective disputes: (henceforth referred to simply as 'disputes'), involving issues taken up on
behalf of groups of employees by their representatives0
This unit will deal with disputes, since they have a far greater impact on employee relations than
individual grievances, and because they are specifically referred to in a number of labour law
statutes. The present legal definition of a collective dispute is based on the meaning given to the
term 'trade dispute' in the Trade Union & Labour Relations (Consolidation) Act, 1992 (TULRCA).
To be considered a dispute the following conditions must be fulfilled:
Furthermore, a trade union will be held liable for unofficial industrial action initiated by workplace
representatives (shop stewards, etc.) unless it repudiates the action in writing at the highest level
to the members concerned, their leaders and the employer concerned
Where immunity is not provided, or where it does not apply (e.g. in the case of other civil wrongs
committed by strikers), the persons who have suffered loss as a result may sue the union or the
officials concerned for damages. The damages that may be awarded are limited by legislation, but
could be substantial. Other action that may be taken is for persons affected to seek an injunction
(an order restraining somebody from doing something) from the courts. If an injunction is
disobeyed, the union concerned may be declared to be in contempt of court and face heavy fines.
If the fines are not paid, the union's funds may be liable to seizure by the courts. The law, therefore,
is playing an increasing role in disputes.
The Service shall be charged with the general duty of promoting the improvement of industrial
relations, and ... encouraging the extension of collective bargaining and ... the reform of collective
bargaining machinery. (EP Act 1975)
Employee relations were at a low ebb when these terms of reference were drawn up. Over the next
twenty years the situation changed considerably, and ACAS saw a change of emphasis away from
collective bargaining to broader issues of organizational effectiveness. In its annual report for
1999/2000, ACAS set out its mission statement as:
To improve the performance and effectiveness of organisations by providing an independent and
impartial service to prevent and resolve disputes and to build harmonious relationships at work.
This unitary emphasis derived directly from the Trade Union and Labour Relations Act 1992. This
has recently been repealed by the Employment Relations Act 1999 which has restored part of the
original terms of reference, so that the present mission of ACAS is to promote the improvement
of industrial relations'.
In relation to collective disputes between employers and trade unions, ACAS offers three main
services - conciliation, mediation and arbitration. The distinctions between these three are briefly
as follows:
Conciliation - ACAS offers help and advice aimed at bringing the disputing parties to the point
where they themselves can agree a mutually acceptable solution. This approach is voluntary, and
the agreements reached are responsibility of the parties.
Mediation - ACAS, in the form of an experienced and independent mediator, takes a more
proactive role than in conciliation, suggesting possible solutions and drawing up proposals. As
with conciliation any decision to agree a way forward is taken by the parties themselves. The
mediator does not impose a decision.
Arbitration - in this situation, the parties acknowledge that they cannot agree mutually acceptable
solution and jointly ask a third party to make the decision for them. ACAS can appoint a single
arbitrator or a board of arbitration. It can also refer certain cases to the Central Arbitration
Committee. The last named is essentially a senior tribunal. It usually sits as a chairman (legally-
qualified) plus two experienced lay arbitrators representing both sides of industry. Its awards are
not legally binding, but are always accepted by the parties in practice.
ACAS's success in assisting disputing parties towards an early solution of difficulties can be
measured by the number of cases in which a settlement was achieved out of all the requests that
were received. The figure below shows just how successful the Service has been over recent years,
and points to the value of building up a core of experienced staff capable of handling the range of
issues in dispute. In every sense of the phrase, people are ACAS's prime resource, and their
expertise is sought after by employers and trade unions alike.
2000-2001 1999-2000 1998
Requests received 1472 1500 1301
Requests withdrawn 58 81 45
Conciliation completed 1226 1247 1214
Settlements 1139 1152 1110
Conciliation unsuccessful 84 95 104
11.5. Strikes
Definition
A strike is a form of industrial action taken by the employees against their employer by means of
stopping work.
Most strikes are a result of the parties’ inability to achieve a settlement of some dispute over wages
and other conditions of employment. Employees who take strike action are effectively breaking
their contract of employment and are liable to be sued by their employer or others affected by their
action, such as customer or supplier. In order to permit strike action under certain conditions, the
law provides a degree of protection to employees against actions for breach of contract. So-called
'protected industrial action' can only be called upon after the employees' representatives or their
trade union officers have exhausted all the usual disputes procedure. The union then has to ballot
its members on the question of strike action, and if the proposed action is supported by the
employees, the union has to give appropriate notice of the strike (at least one week) to the
employer.
This means that the strike is 'official' and protected by the law. It is generally unfair to dismiss
strikers in this situation. Where strike action is taken without the above procedures, it is considered
an 'unofficial' or 'wildcat' strike and the employees involved are not protected from being sued for
breach of contract, nor indeed from being dismissed by the employer.
Strikes are only protected where they involve a dispute between employers and employees over
terms and conditions of employment. They are not protected where a strike is taken on political
grounds, or in support of workers at a different employer. The UK government has kept detailed
statistics on the number and nature of strikes for man years.
Strikes, whether official, or unofficial, are only recorded where at least ten workers are involved
or where the strike lasts for at least one day. The official statistics for strikes produced over the
last 30 years provide an interesting picture of the changing nature of employee relations in Britain,
as the figure below indicates.
The official figures show the sorry state of industrial relations in Britain during the period 1970-
80, when there was a rash of lengthy strikes in key industries such as mining, railways and printing.
The 1980s saw a significant reduction in the number of working days lost even though the number
of stoppages was still in excess of 1000. Since 1990 the situation has improved dramatically with
far fewer stoppages and fewer workers involved. Particular strikes can produce a substantial loss
of working days where they linger on even if the numbers taking part are relatively small. By the
end of the century, the combined effects of global competition on the UK, and the legal restrictions
on industrial action, had produced a much less adversarial spirit between employers and
employees.
The official statistics published by the Department of Employment use a range of measures of
strike activity, of which the following are the most important:
Although the official statistics provide few clues to the wider context in which strikes occur, they
do supply some evidence concerning the prima facie cause of stoppages. This is provided by an
analysis of the principal causes of stoppages. which have been identified as follows:
11.6. Grievances
A grievance is an individual dispute between an employee and his or her employer. However, since
individuals and their problems are as much a part of employee relations as collective issues, then
it is in the interests of both management and trade unions to have a written procedure for dealing
with grievances. There is also the point, of course, that individual disputes, if left to fester, may
themselves lead to a collective dispute. The main object of a grievance procedure is to settle the
issue at the earliest possible stage.
Once a grievance has passed beyond the first stage, it necessarily gathers greater formality. Hence
written records should be kept after that stage. Such records will be extremely useful if the
grievance turns eventually into a collective dispute involving the use of the organisation's
collective disputes procedure.
Whilst grievances are almost inevitable in any organisation, their numbers can be kept to a
minimum by maintaining effective communication between employees and their immediate
supervisors/managers. It is helpful if conditions of employment, in the broadest sense, are open to
discussion at any time on an informal basis, in addition to any formal negotiations that may take
place as part of collective bargaining. A firm with a well-motivated workforce and adequate
communication procedures can expect little in the way of grievances.
• Be in written form
• Specify to whom it applies
• Provide for the speedy progress of disciplinary hearings
• Indicate the various forms of disciplinary action that may be taken (warnings, dismissal,
etc.)
• Specify appropriate levels of authority for exercising disciplinary action
• Ensure that individuals are informed of the disciplinary charges made against them
• Permit such individuals to state their case and to be accompanied by a friend or trade union
representative (Employment Relations Act 1999)
• Ensure the proper investigation of every case before disciplinary action is implemented
• Ensure that individuals are informed of the reasons for the action being taken against them
• Ensure that no individual is dismissed for a first offence except in cases of gross
misconduct
• Provide for a right of appeal.
An example of an approach to discipline is given below. In this example, taken from local
government, the references to discipline are set out in a handbook on disciplinary procedures. A
sound standard of discipline is essential for the efficient and orderly conduct of the county Council’s affairs
and for the safety and well being of its employees.
The procedures take full account of the ACAS code of Practice on Disciplinary Practice and Procedures in
Employment….
…employees from time to time may engage in actions which can lead to disciplinary proceedings. These
actions can be grouped in to three broad areas covering poor performance, misconduct and gross
misconduct
Misconduct [means]:
a. Breaches, infringements or non-observance of any of the general rules ... or of the specific working
rules ... e.g. poor attendance, bad time-keeping ...
b. Failure to obey the lawful and reasonable instruction of a supervisor
c. Unreasonable or unacceptable conduct, e.g. abusive behaviour, being under the influence of alcohol
...
d. Threatened violence on a colleague or member of the public whilst at work
... behaviour which, in the County Council's view, subject to investigation, warrants immediate dismissal
... Instances could be ...
a. Falsifying various claim sheets such as time-sheets, bonus sheets, car allowance ... etc ...
b. Malicious damage to County Council property ...
c. Sexual misconduct in work which demands high levels of personal behaviour, e.g. in work with
children ...
A key issue in any disciplinary procedure is that of authority to act. In order to achieve fairness
and consistenrcy, individual managers and supervisors need to know what the limits of their
authority are when it comes to disciplinary action. The options available to organisations are as
follows:
11.8. Dismissal
A dismissed employee, provided he is not within the 'excluded classes' (see below) may bring a
claim before an Industrial Tribunal that he was unfairly dismissed. The legal rules here are once
again contained in the Act. The employee must first prove that he has actually been dismissed.
This will not usually be difficult, but it should be noted that the term 'dismissed' here includes:
• Where the employee was employed under a fixed term contract, e.g. for 1 year, which has
now ended without being renewed on the same terms;
• Where the employee himself terminates his contract in circumstances where he is entitled
to do so because of the employer's conduct. (This is known as constructive dismissal.)
Once proved, it is for the employer to try to show that the dismissal was fair. It is this idea of
fairness which lies at the heart of the unfair dismissal laws, and not the idea of whether the
dismissal was in breach of contract. Accordingly, even though the employee was given the correct
notice and thus his contract was not broken, he may still claim for unfair dismissal.
The employer, to show the dismissal was fair, must prove that the dismissal was justified under
one of the five grounds set out in the Act. These are that the reason for dismissal:
1. Related to the employee's capabilities or qualifications for performing work of the kind he was
employed to do.
2. Related to the employee's conduct.
3. Was that the employee was redundant.
4. Was that the employee could not continue to work in the position he held without breaking a
legal duty or restriction.
5. Was for some other substantial reason.
Even though the employer proves one of these reasons, the dismissal will still be unfair if he did
not act fairly in treating it as a reason for dismissing: the employee. Thus the procedures adopted
by employers are of vital importance. ACAS has issued guidelines under the title of 'Discipline
practices and procedures in employment' which deal with, for instance: warnings to be given to
employees, the need for an investigation and hearing before any actual dismissal, and the provision
of a right of appeal. As these are guidelines only, a failure to observe them will not necessarily
mean that the employee is held to have been unfairly dismissed. However, their importance in the
human resource management field scarcely needs stressing.
One small but important point should be noted here. A dismissed employee is entitled to ask his
employer to provide, within 14 days of request, a written statement of reasons for dismissal.
A claim for unfair dismissal can also be made in certain specialized situations:
An employer may dismiss employees who are on strike provided that, in effect, he dismisses them
all. If he dismisses some but takes others back, those dismissed may claim for unfair dismissal.
Dismissal of an employee will be automatically fair if there was a practice, in accordance with a
union membership agreement (closed-shop) requiring all employees to belong to a specified
independent trade union and the employee has refused to join. However, if he had genuine religious
reasons for so refusing, the dismissal will be unfair.
11.9. Remedies
The primary remedy is re-instatement, where the employee is given his old job back.
Reengagement maybe ordered instead, where the employee is to be given a job which is
comparable to his old one. Where neither of these remedies are ordered, the tribunal will award
compensation. There are two elements in this; the basic award, payable in all cases irrespective of
whether the employee has suffered financial loss, and the compensatory award, which is related to
the tribunal within 3 months of dismissal. The 'excluded classes' (referred to above) are employees
with less than 52 weeks of continuous employment and those who have reached the age of 65
(men) or 60 (women) or, alternatively, have reached the normal retirement age. In addition, the 20
hours a week provisions apply here also.
11.10. Revision Questions
1. What is do the following terms mean (i) Strike (ii) Grievances (iii) Dismissal
2. As a manager of a company, what solutions would you recommend to the case of an unfairly
dismissed employee?
3. Poor performance, misconduct and gross misconduct are some of the problems that are found
in companies. Define the above three terms.
12.BIBLIOGRAPHY
1. Armstrong. M- Handbook of Personnel Management practice
Management
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