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Functional Area 01

HR OPERATIONS

International Human Resource Certification Institute

IHRCI® www.ihrci.org
 Associate Professional in Human Resources – International (aPHRi) Workbook

Module One: HR Operations

2024 Edition

Copyright © 2024 by International Human Resource Certification Institute

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Introduction

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Table of Contents
Introduction ................................................................................................................................ 3
Table of Contents........................................................................................................................ 4
1. Human Resource Management...................................................................................... 7
1.1. Human Resources (HR) Department ................................................................... 7
1.2. HR Functions and Responsibilities....................................................................... 8
1.3. HR Responsibilities of Line Managers ................................................................. 9
1.4. HR Audits ........................................................................................................... 11
2. Strategic Management ................................................................................................. 12
2.1. Mission, goals, and strategies ........................................................................... 13
2.2. Environmental Scanning .................................................................................... 14
2.3. Strategy Formulation ......................................................................................... 16
2.4. Strategy Implementation................................................................................... 17
2.5. Strategy Evaluation ............................................................................................ 17
3. Organization Culture..................................................................................................... 17
3.1. Type of Culture .................................................................................................. 17
3.2. Layers of Culture ................................................................................................ 18
3.3. Values in Culture................................................................................................ 18
3.4. Culture Analysis ................................................................................................. 19
3.5. Culture and Climate ........................................................................................... 20
4. Organization Structure ................................................................................................. 20
4.1. Span of Control .................................................................................................. 21
4.2. Chain of Command ............................................................................................ 21
4.3. Bureaucracy ....................................................................................................... 22
4.4. Type of Structures ............................................................................................. 22
4.5. Organizational Charts ........................................................................................ 25
4.6. Levels of Management ...................................................................................... 25
5. HR Organization ............................................................................................................ 26
5.1. Service Centers .................................................................................................. 26
5.2. Corporate HR ..................................................................................................... 27
5.3. Embedded HR .................................................................................................... 28
5.4. Centers of expertise (CoE) ................................................................................. 28
5.5. Operational Executors ....................................................................................... 29
6. Business Functions ....................................................................................................... 31
6.1. Inbound logistics: .............................................................................................. 32
6.2. Operations ......................................................................................................... 32
6.3. Services .............................................................................................................. 32
6.4. Outbound Logistics ............................................................................................ 32
6.5. Marketing and Sales .......................................................................................... 32
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6.6. Procurement ...................................................................................................... 32

6.7. Technology Management .................................................................................. 32
6.8. Human Resource Management ......................................................................... 33
6.9. Infrastructure..................................................................................................... 33
7. Business HR Issues ........................................................................................................ 34
7.1. Mergers and Acquisitions (M&A) ...................................................................... 34
7.2. Total Quality Management ................................................................................ 34
7.3. Downsizing ........................................................................................................ 34
7.4. Reengineering.................................................................................................... 35
7.5. Outsourcing ....................................................................................................... 35
7.6. Supply Chain Management ............................................................................... 35
Part Two: Job Analysis and Design ........................................................................................... 37
1. Work Flow Analysis....................................................................................................... 37
1.1. Outputs .............................................................................................................. 37
1.2. Activities ............................................................................................................ 38
1.3. Inputs ................................................................................................................. 38
2. Job Analysis .................................................................................................................. 39
2.1. Applications of Job Analyses ............................................................................. 40
2.2. Elements of a Job Analysis ................................................................................ 44
2.3. Job Specification ................................................................................................ 48
3. Job Design..................................................................................................................... 49
3.1. Designing Efficient Jobs ..................................................................................... 50
3.2. Designing Jobs That Motivate ........................................................................... 50
3.3. Designing Ergonomic Jobs ................................................................................. 53
3.4. Designing Jobs That Meet Mental Capabilities and Limitations ....................... 53
4. Job Classification .......................................................................................................... 54
4.1. Exempt vs. Non-exempt .................................................................................... 54
4.2. Salary vs. Wage .................................................................................................. 54
4.3. Full-time vs. Part-time ....................................................................................... 55
4.4. Alternative staffing ............................................................................................ 55
Part Three: Employee Communication .................................................................................... 58
1. Personnel Management ............................................................................................... 58
1.1. Department Support ......................................................................................... 58
1.2. Documentation .................................................................................................. 58
1.3. Employee Relations ........................................................................................... 58
2. Employee Communication ........................................................................................... 58
2.1. Formal Communication ..................................................................................... 59
2.2. Informal Communication .................................................................................. 59
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2.3. Communication Channel ................................................................................... 60

2.4. Intercultural Communication ............................................................................ 63
3. Direction in Formal Communication ............................................................................ 64
3.1. Downward communication: .............................................................................. 65
3.2. Upward communication .................................................................................... 65
3.3. Lateral or horizontal communication: ............................................................... 66
3.4. Diagonal or Cross-wise ...................................................................................... 66
4. Employee Policies ......................................................................................................... 67
4.1. Employee Handbook ......................................................................................... 68
4.2. Policies Manual.................................................................................................. 68
4.3. Code of Conduct ................................................................................................ 68
4.4. Work Rules......................................................................................................... 68
Part Four: HR Information Management ................................................................................. 69
1. Employee Records Management ................................................................................. 69
1.1. Type of Employee Records ................................................................................ 69
1.2. Recordkeeping Policy......................................................................................... 69
1.3. Maintain accurate records................................................................................. 70
1.4. Other Considerations ........................................................................................ 72
2. HR Data ......................................................................................................................... 73
2.1. Data, Information, and Insights ......................................................................... 73
2.2. Data Collection .................................................................................................. 74
2.3. Essentials of Statistics ........................................................................................ 77
2.4. Reporting ........................................................................................................... 79
2.5. Data Visualization .............................................................................................. 79
3. Human Resource Information System (HRIS) ............................................................... 81
3.1. Benefits of HRIS ................................................................................................. 82
3.2. Types of HRIS ..................................................................................................... 84
3.3. Core HR .............................................................................................................. 86
3.4. Self-Services....................................................................................................... 88
3.5. Knowledge Management (KM) ......................................................................... 89
3.6. Talent Management Systems ............................................................................ 89
3.7. Workforce Analytics .......................................................................................... 91
4. HR and Social Media ..................................................................................................... 95
4.1. Social Media Helps Company Branding ............................................................. 95
4.2. Monitor Employees Activities ........................................................................... 95
4.3. Communication with Employees....................................................................... 96
Reference.......................................................................................................................... 97
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Part One: HR and Business Environment

1. Human Resource Management

Many organizations refer to Human Resource Management as involving “people practices”.
The concept of “human resource management (HRM)” implies that employees are
resources of the employer. As a type of resource, human capital means the organization’s
employees, described in terms of their training, experience, judgment, intelligence,
relationships, and insight—the employee characteristics that can add economic value to
the organization. In other words, whether it manufactures automobiles or forecasts the
weather, for an organization to succeed at what it does, it needs employees with certain
qualities, such as particular kinds of training and experience. This view means employees
in today’s organizations are not interchangeable, easily replaced parts of a system but the
source of the company’s success or failure. By influencing who works for the organization
and how those people work, human resource management therefore contributes to basic
measures of an organization’s performance, such as quality, profitability, and customer
satisfaction.

HRM is critical to the success of organizations because human capital has certain qualities
that make it valuable. In terms of business strategy, an organization can succeed if it has a
sustainable competitive advantage (is better than competitors at something and can hold
that advantage over a sustained period). Therefore, we can conclude that organizations
need the kind of resources that will give them such an advantage.

1.1. Human Resources (HR) Department

In all but the smallest organizations, a human resources (HR) department is
responsible for the functions of human resource management. On average, an
organization has one or two full-time HR staff persons for every hundred employees
on the payroll. One way to define the responsibilities of HR departments is to think of
HR as a business within the company with three product lines:

1.1.1. Administrative and transactions

Handling administrative tasks (for example, hiring employees and answering questions
about benefits) efficiently and with a commitment to quality. This requires expertise
in the particular tasks.

1.1.2. Business partner

Developing effective HR systems that help the organization meet its goals for
attracting, keeping, and developing people with the skills it needs. For the systems to
be effective, HR people must understand the business so it can understand what the
business needs.

1.1.3. Strategic partner

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Contributing to the company’s strategy through an understanding of its existing and

needed human resources and ways HR practices can give the company a competitive
advantage. For strategic ideas to be effective, HR people must understand the
business, its industry, and its competitors.

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2021) Fundamentals of Human
Resource Management (9th Edition). New York, NY: McGraw-Hill.

1.2. HR Functions and Responsibilities

Another way to think of HR responsibilities is in terms of specific activities. The
following table details the responsibilities of human resource departments. These
responsibilities include the practices introduced as above plus two areas of
responsibility that support those practices:

1.2.1. Establishing and administering personnel policies and

1.2.2. Ensuring compliance with labor laws.

Although the human resource department has responsibility for these areas, many of
the tasks may be performed by line managers or others inside or outside the
organization. No two human resource departments have precisely the same roles
because of differences in organization sizes and characteristics of the workforce, the
industry, and management’s values. In some companies, the HR department handles
all the activities listed in the table. In others, it may share the roles and duties with
managers of other departments such as finance, operations, or information.
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Function Responsibilities

Analysis and design of work Work analysis; job design; job descriptions

Recruitment and selection Recruiting; job postings; interviewing; testing;

coordinating use of temporary labor

Training and development Orientation; skills training; career development

programs

Performance management Performance measures; preparation and administration

of performance appraisals; discipline

Compensation and benefits Wage and salary administration; incentive pay;

insurance; vacation leave administration; retirement
plans; profit sharing; stock plans

Employee relations Attitude surveys; labor relations; employee handbooks;

company publications; labor law compliance;
relocation and outplacement services

Personnel policies Policy creation; policy communication

Employee data and information Record keeping; HR information systems; workforce

analytics

Compliance with laws Policies to ensure lawful behavior; reporting; posting

information; safety inspections; accessibility
accommodations

Support for strategy Human resource planning and forecasting; talent

management; change management

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2021) Fundamentals of Human
Resource Management (9th Edition). New York, NY: McGraw-Hill.

1.3. HR Responsibilities of Line Managers

Line managers are often referred to as supervisors, if at a more entry-level stage. Line
managers are more hands-on oriented and responsible for getting the work done,
maintaining employee performance and handling disciplinary issues. Line managers
play a central role in human resource management.

Line managers play an important role in practicing HR initiatives, because they are the
responsible managers for implementing HR practices in the production of products or
the provision of services. HR initiatives such as training have always been considered
as one of line managers’ job. Line managers are also expected to create a synergy
between human, financial and physical with the allocation of time, money, and energy
to enhance the development of their subordinate.
10

In fact, the primary responsibility for the role of HR belongs to the CEO and to every
line manager who must achieve business goals. Line managers have ultimate
responsibility for both the processes and the outcomes of the company. They are
answerable to shareholders for creating economic value, to customers for creating
product or service value, and to employees for creating workplace value. It follows
that they should lead the way in fully integrating HR into the company’s real work.
Indeed, to do so, they must become HR champions themselves. They must
acknowledge that competitive success is a function of organizational excellence. More
important, they must hold HR accountable for delivering it.

Although many organizations have human resource departments, HR activities are by

no means limited to the specialists who staff those departments. In large
organizations, HR departments advise and support the activities of the other
departments. In small organizations, there may be an HR specialist, but many HR
activities are carried out by line managers. Either way, non-HR managers need to be
familiar with the basics of HRM and their role in managing human resources.

The following figure shows some HR responsibilities that line managers are likely to be
involved in. Organizations depend on supervisors to help them determine what kinds
of work need to be done (job analysis and design) and how many employees are
needed (HR planning). Supervisors typically interview job candidates and participate
in the decisions about which candidates to hire. Many organizations expect
supervisors to train employees in some or all aspects of the employees’ jobs.
Supervisors conduct performance appraisals and may recommend pay increases. And,
of course, supervisors play a key role in employee relations because they are most
often the voice of management for their employees, representing the company on a
day-to-day basis. In all these activities, supervisors can participate in HRM by taking
into consideration the ways that decisions and policies will affect their employees.
Understanding the principles of communication, motivation, and other elements of
human behavior can help supervisors inspire the best from the organization’s human
resources.
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The tension between HR and line managers becomes an obstacle to putting strategy-
aligned policies and procedures into action. Managers are left feeling frustrated and
their teams are left in the dark. As a result, companies find it harder to pursue their
goals than they may have hoped.

To address this issue, HR and the line must find a smarter way of working together.
The most successful organizations give managers better sight of strategy-aligned HR
information, such as reward policies or grading procedures. This enables managers to
be clearer with their teams and make decisions more efficiently.

In turn, HR departments spend less time responding to requests for information,

seeing as the managers already have access to it. This enables them to spend more
time pursuing their strategic objectives.

1.4. HR Audits
The HR Audit is the process of evaluating the performance of Human Resource
Department and its activities undertaken and the policies followed towards the
accomplishment of organizational goals. An HR compliance audit generally consists of
two main parts:

• An evaluation of the organization's operational HR policies, practices and

processes with a focus on key HR department delivery areas (e.g., recruiting—
both internal and external, employee retention, compensation, employee
benefits, performance management, employee relations, training and
development).

• A review of current HR indicators (e.g., number of unfilled positions, the time it

takes to fill a new position, turnover, employee satisfaction, internal grievances
filed, number of legal complaints, absenteeism rates).

HR usually conducts an audit by using a questionnaire that asks for the evaluation of
specific practice areas. This document helps guide the audit team in scrutinizing all
critical areas of an organization's HR practices. The audit may also include interviewing
or using questionnaires to solicit feedback from selected HR employees and other
department managers to learn whether certain policies and procedures are
understood, practiced and accepted.

An HR audit can be structured to be either comprehensive or specifically focused,

within the constraints of time, budgets and staff. There are several types of audits, and
each is designed to accomplish different objectives. Some of the more common types
are:

1.4.1. Compliance

Focuses on how well the organization is complying with current federal, state, and
local laws and regulations.
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1.4.2 Best practices

Helps the organization maintain or improve a competitive advantage by comparing its

practices with those of companies identified as having exceptional HR practices.

1.4.3. Strategic

Focuses on strengths and weaknesses of systems and processes to determine whether

they align with the HR department’s and the organization's strategic plan. See
Engaging in Strategic Planning.

1.4.4. Function-specific

Focuses on a specific area in the HR function (e.g., payroll, performance management,

records retention).

2. Strategic Management
Management today are looking at HRM as a means to support a company’s strategy—its
plan for meeting broad goals such as profitability, quality, and market share. This means
they use their knowledge of the business and of human resources to help the organization
develop strategies and to align HRM policies and practices with those strategies.

Strategy can make a difference in how well an organization performs. It helps managers in
organizations of all types and sizes face continually changing situations. Strategic
management is the management of an organization’s resources to achieve its goals and
objectives. Strategic planning is the process of an organization deciding their corporate
direction, objectives and priorities, and then aligning their resources to accomplish the
actions necessary to meeting them. The strategic management process involves strategic
planning, implementation, and evaluation as follow:

Robbins, S.P., De Cenzo, D.A., & Coulter, M. (2017). Fundamentals of Management:

Management Myths Debunked!, Global Edition (10e). London, England: Pearson Higher Ed.
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2.1. Mission, goals, and strategies

A mission statement is a guiding light for a business and the individuals who run the
business. c) Once its mission has been identified, the organization can begin to look
outside the company to ensure that its strategy aligns well with the environment.
Mission is usually made up of three parts:

2.1.1. Vision (big picture idea of what you want to achieve)

Your vision communicates what your organization believes are the ideal conditions for
your organization – how things would look if the issue important to you were perfectly
addressed. This utopian dream is generally described by one or more phrases or vision
statements, which are brief proclamations that convey the organization's dreams for
the future. By developing a vision statement, your organization makes the beliefs and
governing principles of your organization clear to the greater community (as well as to
your own staff, participants, and volunteers).

2.1.2. Mission (general statement of how you will achieve your vision)

Developing mission statements are the next step in the action planning process. An
organization's mission statement describes what the group is going to do, and why it's
going to do that. Mission statements are similar to vision statements, but they're more
concrete, and they are definitely more "action-oriented" than vision statements. The
mission might refer to a problem without going into a lot of detail. They start to hint -
very broadly - at how your organization might go about fixing the problems it has
noted.

While vision and mission statements themselves should be short, it often makes sense
for an organization to include its deeply held beliefs or philosophy, which may in fact
define both its work and the organization itself. One way to do this without sacrificing
the directness of the vision and mission statements is to include guiding principles as
an addition to the statements. These can lay out the beliefs of the organization while
keeping its vision and mission statements short and to the point.

2.1.3. Value (how you will behave during the process)

Whether written to be effective or ineffective, Mission Statements and Vision

Statements are relatively common in this sector. But that is where most organizations
stop. Vision and Mission Statements of where we are headed, and what we will do to
get there. It is the rare organization that takes the time to then define HOW they will
do that work - the talk they want to walk.

The only way we can create an amazing future for our communities is if we do our work
in a way that reflects universally shared values. This ensures we do not squander our
time and resources rationalizing our actions. It helps to ensure we are not potentially
squandering our community's goodwill.

Further, if your goal is to create the future of your organization - the lofty goals of your
14

vision statement - then you will want to ensure your work reflects the values you want
to see in your organization.

A Values Statement provides the tools for the organization to accomplish that. First, the
Values Statement will look outside the organization, to the visionary outcomes you
want to create for your community, such as “what values will need to be present in the
community for your vision to come to pass?”, “what values would the community need
to emphasize?”, and “what values would have to be the norm?”

From there, the Values Statement will look inside, to see how your own work will
model those values, to teach those values by example: How will your work reflect
those values? How will you ensure you are modeling those values to the community?
When you have a tough decision to make, will you always err on the side of those
values?

2.1.4. Strategic goals

Strategic goals are goals created to identify the intended accomplishment of a

business strategy. When companies create strategic goals, they directly identify what
they see as the outcome of their business efforts. Strategic goals are most commonly
created when a company is mounting a new strategy. For example, if a company
adopts a new advertising campaign in an attempt to draw buyers to their products,
they may also create a strategic goal, or desired endpoint, of their new advertising
efforts.

2.1.5. Strategic issues

The creation of a strategic goal begins with the identification of strategic issues.
Strategic issues are strategy-related problems standing in the way of a company's
success. For example, failure to reach the intended audience with advertising attempts
could be a strategic issue that the company in question wants to address.

2.2. Environmental Scanning

Once the firm has specified its objectives, it begins with its current situation to devise
a strategic plan to reach those objectives. Environmental scanning is a useful
technique to identify the key internal and external factors that are important to
achieving the objective.

2.2.1. Internal Analysis (Strength and Weakness)

Organizations conduct an internal analysis, which provides critical information about

an organization’s specific resources and capabilities. An organization’s resources are its
assets—financial, physical, human, and intangible—that it uses to develop,
manufacture, and deliver products to its customers.

In comparison to assets, its capabilities are its skills and abilities in doing the work
activities needed in its business. The major value-creating capabilities of the
 15

organization are known as its core competencies. Both resources and core
competencies determine the organization’s competitive weapons.

After completing an internal analysis, managers should be able to identify

organizational strengths and weaknesses. Any activities the organization does well or
any unique resources that it has are called strengths. Weaknesses are activities the
organization does not do well or resources it needs but does not possess.

2.2.2. External Analysis (Opportunity and Threat)

Organizations conduct an external analysis so they can:

• Know what the competition is doing, how pending legislation might affect the
organization, and how stable the local labor supply is in locations where it
operates.

• Examine all components of the environment—that is, economic, demographic,

political/legal, sociocultural, technological, and global—to see the trends and
changes.

• Pinpoint opportunities that the organization can exploit and threats that it must
counteract.

2.2.3. SWOT Analysis

The combined external and internal analyses are called the SWOT analysis because,
together, they are an analysis of the organization’s strengths, weaknesses,
opportunities, and threats. After completing the SWOT analysis, managers are ready
to formulate appropriate strategies that:

• Exploit an organization’s strengths and external opportunities, and

• Buffer or protect the organization from external threats.

Mintzberg, H., Lampel, J.B., Quinn, J., Ghoshal, S. (2014). The Strategy Process:
Concepts, Contexts, Cases, 5/E . London: Pearson.
16

In other words, the aim of any SWOT Analysis is to identify the key internal and
external factors that are important to achieving the objective.

2.3. Strategy Formulation

Once a clear picture of the firm and its environment is in hand, specific strategic
alternatives can be developed. While different firms have different alternatives
depending on their situation, there also exist generic strategies that can be applied
across a wide range of firms. Michael Porter identified cost leadership, differentiation,
and focus as three generic strategies that may be considered when defining strategic
alternatives. Porter advised against implementing a combination of these strategies for
a given product; rather, he argued that only one of the generic strategy alternatives
should be pursued.

2.3.1. Cost leadership Strategy

Cost leadership is to drive cost down through all the elements of the production of the
product from sourcing, to labor costs. This strategy involves the organization aiming to
be the lowest cost producer and/or distributor within their industry. The organization
aims to drive cost down for all production elements from the sourcing of materials, to
labor costs. To achieve cost leadership a business will usually need large scale
production so that they can benefit from "economies of scale". Large scale production
means that the business will need to appeal to a broad part of the market. For this
reason a cost leadership strategy is a broad scope strategy.

2.3.2. Differentiation Strategy

Differentiation is to focus its effort on particular segments and charge for the added
differentiated value. To be different, is what organization striving for; companies and
product ranges that appeal to customers and "stand out from the crowd" have a
competitive advantage. Porter asserts that businesses can stand out from their
competitors by developing a differentiation strategy. With a differentiation strategy the
business develops product or service features which are different from competitors and
appeal to customers including functionality, customer support and product quality. New
concepts which allow for differentiation can be protected through patents and other
intellectual property rights; however patents have a certain life span and organization
always face the danger that their idea which gives them a competitive advantage will
be copied in one form or another.

2.4.3. Focus (Niche) Strategy

Focus or Niche is to form a competitive advantage for this niche market and either
succeeds by being a low cost producer or differentiator within that particular segment.
Under a focus strategy a business focuses its effort on one particular segment of the
market and aims to become well known for providing products/services for that
segment. They form a competitive advantage by catering for the specific needs and
 17

wants of their niche market. A focus strategy is known as a narrow scope strategy
because the business is focusing on a narrow (specific) segment of the market.

2.4. Strategy Implementation

The strategy likely will be expressed in high-level conceptual terms and priorities. For
effective implementation, it needs to be translated into more detailed policies that can
be understood at the functional level of the organization. The expression of the
strategy in terms of functional policies also serves to highlight any practical issues that
might not have been visible at a higher level. In addition to developing functional
policies, the implementation phase involves identifying the required resources and
putting into place the necessary organizational changes.

2.5. Strategy Evaluation

Strategy Evaluation is as significant as strategy formulation because it throws light on
the efficiency and effectiveness of the comprehensive plans in achieving the desired
results. The significance of strategy evaluation lies in its capacity to co-ordinate the
task performed by managers, groups, departments etc, through control of
performance. Strategic Evaluation is significant because of various factors such as -
developing inputs for new strategic planning, the urge for feedback, appraisal and
reward, development of the strategic management process, judging the validity of
strategic choice etc.

3. Organization Culture
Organization culture is a set of shared values, the unwritten rules which are often taken
for granted, that guide the employees towards acceptable and rewarding behavior.. It sets
the foundation for strategy. For a strategy within an organization to develop and be
implemented successfully, it must fully align with the organizational culture. Thus,
initiatives and goals must be established within an organization to support and establish
an organizational culture that embraces the organization’s strategy over time.

Just like people, organizations have their own personalities, values and overarching
attitudes. When the personality of the organization is understood, along with its culture,
attracting and hiring employees who fit – and therefore may be more likely to be
comfortable and excel in an organization – can become easier.

3.1. Type of Culture

3.1.1. National Cultures

National cultures comes a host of differences in assumptions, outlook, and rules that
can challenge communication and comprehension.

3.1.2. Subcultures

There can be significant distances between subcultures within the same national
culture. Subcultures may be defined by ethnicity, geographic region, race, religion, or
18

class.

3.1.3. Organizational/Corporate Cultures

Organizational culture is defined by all of the life experiences, strengths, weaknesses,

education, upbringing, and so forth of the employees. While executive leaders play a
large role in defining organizational culture by their actions and leadership, all
employees contribute to the organizational culture.

3.1.4. Industry Cultures

Industry cultures have shared assumptions based on technological and social histories
of the industry.

3.1.5. Professional or Functional Cultures

Professional and functional cultures have shared assumptions based on specifics as

they relate to a special function or occupation.

3.2. Layers of Culture

3.2.1. Level 1-Artefacts: Described as being the ‘easiest’ level to observe, called explicit
culture.

3.2.2. Level 2-Espoused Values: To better understand and to help decipher why the
initial observations in Level 1 are taking place, one needs to ask ‘insiders’ of the
organization to try and explain.

3.2.3. Level 3-Shared Tacit Assumptions: To help understand this ‘deeper’ level of
culture, one needs to investigate the history of an organization.

3.3. Values in Culture

The word "value" means worth. It also refers to an ethical precept on which we base
our behavior. Values are basic convictions that people have regarding what is right and
wrong, good and bad, important or unimportant. Values are shaped by the culture in
which we live and by our experiences. However, there are values that are held high by
most cultures. These include fairness and justice, compassion and charity, duties and
rights, human species survival and human well-being.

Organizational culture and values are closely related because organizations are
generally founded with certain values in mind. These values tend to influence the
organizational structure, but they may change over time as different people take on
different roles in the organization and the overall culture changes. Organizational
culture and values, then, both affect each other over time and tend to change if a
conflict exists between them.
 19

3.4. Culture Analysis

Three important levels of cultural analysis in organizations are: observable culture,
shared values, and common assumptions. These levels may be envisioned as layers.
The deeper one gets, the more difficult it is to discover the culture.

External Organizational Climate

OBSERVABLE CULTURE

SHARED VALUES

COMMON ASSUMPTIONS

Internal

Schemerhorn, J., Hunt, J., & Osbom, R. (2008). Organizational Behavior. Hoboken, NJ:
John Wiley & Sons.

3.4.1. Observable Culture

The first level concerns observable culture, or “the way we do things around here.”
These are the methods the group has developed and teaches to new members. The
observable culture includes the unique stories, ceremonies, and corporate rituals that
make up the history of a successful work group.

3.4.2. Shared Values

The second level of analysis recognizes that shared values can play a critical part in
linking people together and can provide a powerful motivational mechanism for
members of the culture.

Many consultants suggest that organizations should develop a “dominant and coherent
set of shared values.” The term shared in cultural analysis implies that the group is a
whole. Every member may not agree with the shared values, but they have all been
exposed to them and have often been told they are important. At Hewlett-Packard, for
example, “quality” is part of everyone’s vocabulary. The firm was founded on the belief
that everyone could make a creative contribution to developing quality products.

3.4.3. Common Assumptions

At the deepest level of cultural analysis are common assumptions, or the taken-for-
granted truths that collections of corporate members share as a result of their joint
20

experience. It is often extremely difficult to isolate these patterns, but doing so helps
explain why culture invades every aspect of organizational life.

3.5. Culture and Climate

Organizational Culture is a system of shared meaning. Just as tribal cultures have rules
and taboos that dictate how members will act toward each other and outsiders,
organizations have cultures that govern how its members should behave. A strong
organizational culture usually provides a sense of identity for employees and a
commonality of values and goals that leads to effective change management and
problem solving. Organizational climate, on the other hand, is often defined as the
recurring patterns of behavior, attitudes and feelings that characterize life in the
organization, while an organization culture tends to be deep and stable. Although
culture and climate are related, climate often proves easier to assess and change.

In other words, climate consists of the day to day feelings of the members of the
organization and is highly susceptible to changes within the organization. The climate
will be very good for a time if the staff receives raises or if the company is furnished
with new equipment. Conversely, if budget cuts occur or the number of staff reduced
the climate will suffer. These conditions are all temporary, whereas culture is more
permanent and lasting. Culture can and does change, but at a much slower rate than
climate. It is a powerful force that can encourage and support an individual effort or
thwart them before they are started. Organizational culture can be used to both
explain and create end results.

All companies have an organizational culture, which represents the intangible force
that centers on a company’s values and beliefs. Individuals typically work at a company
with which their values match the most. One result of organizational culture is to
develop a climate by which a company can measure successes attached to this
intangible force. This starts the relationship between the organizational culture and
climate. While organizational culture is often a naturally occurring phenomenon in
organizations, the organizational climate often takes more work to implement.

A company’s organizational culture and climate are not always static. As a company
evolves, so does its culture. This often leads to changes in the organizational climate as
managers and employees change, along with the values and beliefs in the business.
The organizational climate must adjust as necessary to ensure the company measures
the correct factors.

4. Organization Structure
Organizing is the function of management that determines what needs to be done; how it
will be done; and who is to do it. It creates the organizational structure. Organizational
structure is not simply an organization chart. Structure is all the people, positions,
procedures, processes, culture, technology and related elements that comprise the
organization. It defines how all the pieces, parts and processes work together (or don’t in
some cases). This structure must be totally aligned with strategy for the organization to
achieve its mission and goals. Structure supports strategy.
 21

If an organization changes its strategy, it must change its structure to support the new
strategy. When it doesn’t, the structure acts like a bungee cord and pulls the organization
back to its old strategy. Strategy follows structure. What the organization does defines the
strategy. Changing strategy means changing what everyone in the organization does.

The choice of organizational structure reflects where decisions are made, how work gets
completed, and ultimately how quickly and cheaply the firm’s products can be made.
Organizational structure determines how the roles, power and responsibilities are
assigned, controlled, and coordinated, and how information flows between the different
levels of management.

4.1. Span of Control

Span of control (span of management or span of authority) is an upper limit to the
number of subordinates who can be effectively supervised by one person. Beyond a
certain number of subordinates, the effectiveness and efficiency of supervision
decreases.

Flat organizational structures have relatively few levels from top to bottom. Thus, they
have wide spans of control. Flat structures provide fast information flow from top to
bottom of the organization and increased employee satisfaction. Tall organizational
structures have many levels between top and bottom. Hence, they have relatively
narrow spans of control. Tall structures are faster and more effective at problem
resolution than flat structures because of increased frequency of interaction between
superior and subordinate and the greater order imposed by the hierarchical structure.

4.2. Chain of Command

The delegation of authority creates a chain of command, the formal channel that
defines the lines of authority from the top to the bottom of an organization. Chain of
command specifies a clear reporting relationship for each person in the organization
and should be followed in both downward and upward communication.

Centralization is the retention of decision-making authority by a high-level manager.

Centralization concerns the concentration of authority in an organization and the
degree and levels at which it occurs. Decentralization is the process of distributing
authority throughout an organization. In a decentralized organization, an organization
member has the right to make a decision without obtaining approval from a higher-
level manager. Decentralization in the same way as delegation, that is, as a good way to
improve motivation and morale of lower-level employees. Neither centralization nor
decentralization is good or bad in itself. The degree to which either is stressed depends
upon the requirements of a given situation.

• Decisions cannot be decentralized to those who do not have necessary

information, e.g., knowledge of job objectives or measures for evaluation of job
performance.

• Decisions cannot be decentralized to people who do not have the training,

experience, knowledge, or ability to make them.
22

• Decisions requiring a quick response should be decentralized to those near the

action.

• Decentralization should not occur below the organizational level at which

coordination must be maintained (e.g., each supervisor on an assembly line
cannot be allowed to decide the reporting time for employees).

• Decisions that are of critical importance to the survival of the organization should
not be decentralized.

• Decentralization has a positive influence on morale.

4.3. Bureaucracy
Bureaucracy is a term applied by German sociologist Max Weber (writing in the 1900s)
to a type of organizational hierarchy characterized by clear rules, sharply defined lines
of authority, and a high degree of specialization. It represents authority and
responsibility within the organization.

Authority is the right or power assigned to a job holder in order to achieve certain
organizational objectives. It indicates the right and power of making decisions, giving
orders and instructions to subordinates. Authority is delegated from above but must be
accepted from below i.e. by the subordinates.

Responsibility indicates the duty assigned to a position. The person holding the
position has to perform the duty assigned. It is his responsibility. The term
responsibility is often referred to as an obligation to perform a particular task assigned
to a subordinate. In an organization, responsibility is the duty as per the guidelines
issued.

Accountability is the liability created for the use of authority. Accountability is the
obligation of an individual to report formally to his superior about the work he has
done to discharge the responsibility.

Responsibility may be bestowed, but accountability must be taken. In other words,

responsibility can be given or received, even assumed, but that doesn’t automatically
guarantee that personal accountability will be taken. Which means that it’s possible to
bear responsibility for something or someone but still lack accountability.

4.4. Type of Structures

Developing an organizational structure involves defining the framework around which
the business operates and provides guidance to all employees by laying out the official
reporting relationships that govern the workflow of the company. It is therefore
important for every organization to have a well-structured organization chart indicative
of how an organization functions, how it is managed, how information flows and is
processed within an organization, and how flexible or responsive the organization is.
 23

Daft, R.L. (2013). Organization Theory and Design. Mason, OH: South-Western,
Cengage Learning.

4.4.1. Functional Structure

Functional structure is set up so that each portion of the organization is grouped

according to its purpose. In this type of organization, for example, there may be a
marketing department, a sales department and a production department. The
functional structure works very well for small businesses in which each department can
rely on the talent and knowledge of its workers and support itself. However, one of the
drawbacks to a functional structure is that the coordination and communication
between departments can be restricted by the organizational boundaries of having the
various departments working separately.

4.4.2. Divisional Structure

Divisional structure typically is used in larger companies that operate in a wide

geographic area or that have separate smaller organizations within the umbrella group
to cover different types of products or market areas. For example, the now-defunct
Tecumseh Products Company was organized divisionally--with a small engine division, a
compressor division, a parts division and divisions for each geographic area to handle
specific needs. The benefit of this structure is that needs can be met more rapidly and
more specifically; however, communication is inhibited because employees in different
divisions are not working together. Divisional structure is costly because of its size and
scope. Small businesses can use a divisional structure on a smaller scale, having
different offices in different parts of the city, for example, or assigning different sales
teams to handle different geographic areas.

4.4.3. Process Structure

24

The process structure divides up the organization around processes, such as research,
manufacturing and sales. Unlike a purely functional structure, a process-based
organization considers how the different processes relate to each other and the
customer. The sales process doesn't begin until the manufacturing process produces
something to sell; manufacturing, in turn, waits on research and development to create
the product. Process-based structures are geared to satisfying the customer -- the end
result of all the processes -- but they only work if managers understand how the
different processes interact.

4.4.4. Matrix Structure

The third main type of organizational structure, called the matrix structure, is a hybrid
of divisional and functional structure. Typically used in large multinational companies,
the matrix structure allows for the benefits of functional and divisional structures to
exist in one organization. This can create power struggles because most areas of the
company will have a dual management--a functional manager and a product or
divisional manager working at the same level and covering some of the same
managerial territory.

A matrix structure is a blend of functional and project based organizations that

maximize the strength of each structure. There are three types of matrix organizations:
weak, strong and balanced. Weak organizations are characterized by projects that have
part-time members, limited control over authority, budget and decisions and multiple
lines of responsibility. Strong matrices have dedicated resources, internal control of
budget, and moderate levels of control over assets, resources and decision making
authority. Balanced matrix organizations represent shared leadership between
functional managers and project managers.

In this structure, decision making is decentralized and an employee participating in a

project may have two bosses: one from the product side and one from the geographic
side. The matrix structure requires a great deal of communication and coordination
among managers because lines of authority are not always clear.

4.4.5. Network Structure

In the network structure, managers coordinate and control relationships with the firm
that are both internal and external. The concept underlying the network structure is
the social network—a social structure of interactions.

Open communication and reliable partners (both internally and externally) are key
components of social networks. Because the network structure is decentralized, it has
fewer tiers in its organizational makeup, a wider span of control, and a bottom-up flow
of decision making and ideas.

On the other hand, this more fluid structure can lead to a more complex set of
relationships in the organization. For example, lines of accountability may be less clear,
and reliance on external vendors can be quite high. These potentially unpredictable
variables essentially reduce the core company’s control over its operational success.
 25

4.5. Organizational Charts

An organizational chart is the most common visual depiction of how an organization is
structured. It outlines the roles, responsibilities and relationships between individuals
within an organization. An organizational chart can be used to depict the structure of
an organization as a whole, or broken down by department or unit.

Organizational charts can be used to represent the organizational structure diagram

showing reporting relationships a graphic representation of how authority and
responsibility is distributed within a company; includes all work processes of the
company.

4.6. Levels of Management

In organizations, there are generally three different levels of managers: first-level
managers, middle-level managers, and top-level managers. These levels of managers
are classified in a hierarchy of importance and authority, and are also arranged by the
different types of management tasks that each role does. In many organizations, the
number of managers in every level resembles a pyramid, in which the first-level has
many more managers than middle-level and top-level managers, respectively. Each
management level is explained below in specifications of their different responsibilities
and likely job titles.

4.6.1. Top-level managers

Typically consist of board of directors, president, vice-president, chief executive

officers, etc. These individuals are mainly responsible for controlling and overseeing all
the departments in the organization. They develop goals, strategic plans, and policies
for the company, as well as make many decisions on the direction of the business. In
addition, top-level managers play a significant role in the mobilization of outside
resources and are for the most part responsible for the shareholders and general
public.

4.6.2. Middle-level managers

These personnel typically consist of general managers, branch managers, department

managers. These individuals are mainly responsible to the top management for the
functioning of their department. They devote more time to organizational and
directional functions. Their roles can be emphasized as executing plans of the
organization in conformance with the company's policies and the objectives of the top
management, they define and discuss information and policies from top management
to lower management, and most importantly they inspire and provide guidance to
lower level managers towards better performance.

4.6.3. First-level managers

Typically consist of supervisors, section officers, foreman, etc. These individuals focus
more on the controlling and direction of management functions. For instance, they
26

assign tasks and jobs to employees, guide and supervise employees on day-to-day
activities, look after the quantity and quality of the production of the company, make
recommendations, suggestions, and communicate employee problems to the higher
level above, etc.

5. HR Organization

An HR structure must match the business structure. A holding company business

structure would lead to a decentralized and dispersed HR organization. A single-
business company would have an HR department organized by functions (staffing,
training, rewards, organization design, etc.). But, since most large organizations
diversify and operate with a multiple-business-unit structure, most HR departments are
governed by more complex organization structures. Most large HR departments are
emerging into five distinct roles and responsibilities, each with unique contributions.

Ulrich, D., Young, J., & Brockbank, W. (2008). The twenty-First-Century HR

Organization, Human Resource Management, 47(4), 829-850.

HR departments increasingly are split into transactional work and transformational

work. Transactional duties are standardized, routine and administrative, and are
handled through service centers, e-HR and outsourcing. Transformational work, which
is differentiated and strategic, is centered in embedded HR and HR centers of expertise.

5.1. Service Centers

Service centers emerged in the late 1990s as HR leaders realized that many
administrative tasks are more efficiently done in a centralized, standardized way.
 27

Employees are increasingly willing to find answers to routine, standard questions

through a service center, and technology enables these centers to access employees as
well or better than other ways. Service centers enjoy economies of scale, enabling
employee needs and concerns to be resolved by fewer dedicated HR resources. In
addition, service centers require a standardization of HR processes, thus reducing
redundancy and duplication. Service centers offer new ways to do traditional HR work
like employee assistance programs, relocation administration, benefits claims
processing, pension plan enrollment and administration, applicant tracking, payroll and
learning administration.

Human Resource Information System (HRIS) or Electronic Human Resource

Management (E-HRM) has gained use as technology enables employees to manage
much of their own HR administrative work. They can access information on HR policy
and usage, such as vacation days allotted and taken, retirement provisions, job or
career opportunities and qualifications needed, and their own skill levels (via self-
assessment surveys). They can also take care of many routine transactions whenever
they wish, because automated systems don’t keep office hours. About 60 percent of
employee HR questions or transactions can be answered online by employees
themselves.

Outsourcing draws on the premise that knowledge is an asset that need not be owned
to be accessed. HR expertise can be shared across boundaries by means of alliances,
where two or more firms get together to create a common service, or by outright
purchase from vendors who specialize in offering it. Vendors take advantage of
economies of both knowledge and scale. Economy of knowledge allows them to keep
up with the latest research on HR issues and with the latest technology, so as to offer
transaction support that accesses the most recent ideas and is delivered in the most
efficient way. Economies of scale make it possible to invest in facilities and technologies
beyond what is realistic for a single company.

5.2. Corporate HR
HR professionals who perform corporate HR roles address six important areas of need
within the emerging HR organization:

• They create a consistent culture face and identity to serve external stakeholders
like customers, investors and communities.

• They shape the programs that implement the CEO’s agenda such as innovation,
globalization or customization.

• They ensure that all HR work done within the corporation is aligned to business
goals.

• They arbitrate disputes between centers of expertise and embedded HR.

• They take primary responsibility for nurturing corporate-level employees.

• They ensure HR professional development.

28

5.3. Embedded HR
In complex organizations, some HR professionals work in organization units defined by
geography, product line or function. These HR professionals, whom we call “embedded
HR,” go by many titles: relationship manager, HR business partner, HR generalist.
Whatever their specific title, they work directly with line managers and with the
leadership team of an organizational unit to clarify strategy, perform organization
audits, manage both the talent and the organization, deliver supportive HR strategies
and lead their HR function.

• They engage in business strategy discussion, represent employee interests and

explore the implications of change.

• They define requirements to reach business goals and identify where problems
may exist.

• They select and implement the HR practices that are most appropriate to the
delivery of the business strategy.

• Finally, they measure and track performance to see whether the HR investments
made by the business deliver the intended value.

5.4. Centers of expertise (CoE)

Centers of expertise or centers of excellent (CoE) operate as specialized consulting
firms inside the organization. Depending on the size of the enterprise, they may be
corporate-wide or regionally based—Europe, for example, or by country. They often act
like businesses with multiple clients —the business units—using their services. In some
cases, a fee for use or a “chargeback” formula plus an overhead charge for basic
services may fund them. The financing of centers of expertise is sometimes set to
recover costs, and in other cases is pegged at market prices. Typically, businesses are
directed to go to the center by their embedded HR units before contracting for
independent work from external vendors. If, in working with the center experts, the
decision is made to go to outside vendors, the new knowledge provided by these
vendors is then added to the menu for use throughout the enterprise. CoE HR
professionals play a number of important roles:

• They create service menus aligned with the capabilities driving business strategy.

• They diagnose needs and recommend services most appropriate to the situation.

• They collaborate with embedded HR professionals in selecting and implementing

the right services.

• They create new menu offerings if the current offerings are insufficient.

• They manage the menu.

• They shepherd the learning community within the organization.

 29

5.5. Operational Executors

A large number of HR departments have attempted to operationalize the above model
with shared services (service centers and centers of expertise) and embedded HR. But
many of these departments are finding that some work continues to fall through the
cracks.

While embedded HR professionals are asked and expected to be strategic and conduct
organization diagnosis, they often find themselves overwhelmed by operational HR
work that conflicts with their main purpose. This renders them unable to make time to
be strategic. They report that they spend a growing amount of time doing individual
casework (e.g., handling disciplinary issues), performing operational tasks (e.g., setting
up and attending recruiting interviews), doing analysis and reporting (e.g., managing
compensation reviews), delivering initiatives (e.g., creating development experiences),
or implementing business initiatives (e.g., doing the analysis and execution for a new
organization structure).

Service centers typically do not perform these operational tasks because they require
personal attention; centers of expertise do not do them because they usually require
deep and unique knowledge of the business and strong internal business relationships.
Line managers do not do them because they lack the technical expertise. Hence,
embedded HR professionals feel drawn into this operational work by the volume of it,
even when they have the skills and self-confidence to be more strategic and are
encouraged to focus on their transformational role.

A second driver is the velocity of program change emanating from corporate HR or

centers of expertise. Particularly in times of corporate change and transformation,
embedded HR professionals are expected to keep up with a wide number of corporate
initiatives—from new measures and measurement to required corporate training and
communication programs to new modifications to the performance management and
development system. As a result, many embedded HR people are encouraged to do
strategy by their line management but required to do implementation by corporate HR.
Some HR executives might be led to say, “We are asked to be business partners and
strategists, but we end up acting as ‘pairs of hands’ for corporate HR.”

It is also the case that often these embedded HR professionals come from an
implementation background and lack the skill or self-confidence (or both) to
comfortably function at a more strategic level. For these individuals, the urgency (and
comfort) of immediate operational requirements outweigh the importance (and
developmental interest) of the more strategic future. Too often HR professionals in
centers of expertise offer insight and menus of choice, but they do not facilitate or
partner in the operational implementation of these ideas. Service centers deal with
administrative challenges, but they, too, do not deal with implementation of new
administrative systems and practices at the business level.

What has been missing in some HR restructurings is the capacity to deliver and
implement the ideas from the center, while maintaining focus on the business and its
customers. While this work ideally occurs through an integrated team, someone needs
30

to be charged with this team and how it works. We are finding that companies are
responding to these missing implementation requirements in different ways:

One company established the role of junior business partners to be assigned to the HR
generalists or business partners. These individuals would be required to turn the
strategic ideas into operational practice within the business.

Another company created a team of HR operational consultants who were assigned to

a business to help turn the strategy into action. They were focused on project work
with an emphasis on implementing specific projects within the business. The consulting
pool had HR professionals who were gifted at making HR initiatives happen, and it
secondarily served as a preparatory and testing ground for individuals slated as
potential incumbents for senior embedded HR professional roles.

Another company uses a case advisor who comes from the service center to follow
through on employee requests.

As an international company transforms into a truly global company, there is a greater

need for common practice in how people are developed for succession management
and for the development of leadership competencies. Thus, the centers of excellence
deliver a steady flow of innovative HR practices with the expectation that embedded
HR groups within business units will implement them. But embedded groups are
already extremely busy managing the strategic and day-to-day requirements of their
business units. Tensions have inevitably arisen. The company may begin to think
through how it might establish an operations HR unit that would provide support to
both the centers of expertise and to embedded HR units.

Some companies create a fifth leg called the HR consulting pool. The consulting pool
operates as a team of high-performing midlevel HR professionals and is managed as a
cohesive unit. The unit reports to the head of regional (e.g., embedded) HR. Team
members are deployed to assist joint center and embedded HR teams to implement
solutions to important HR projects—for example, to develop and implement a strategy
to reduce workforce turnover rate. Historically, center and embedded HR professionals
would have worked together to scope the need but would not have had the resources
to actually implement. Inevitably, the problem—while well defined—would not be
effectively addressed and would often be delegated to line management, the worst
possible outcome. The operational HR pool solves this problem and has been
responsible for a number of important deliverables.

Each of these companies, and many others, are experimenting with how to solve this
common problem: how to make sure that HR implements state-of-the-art strategies
tailored to the needs of the business. Dave Ulrich and the other scholars call this an
operational executor role. These HR professionals will be required to meld what the
business requires for success (driven by the embedded HR professionals) with
innovative and state-of–the-art HR practices (driven by the centers of expertise) into an
operational plan that can be executed in a timely way.

Operational HR roles require a particular set of competencies. These roles are best for
 31

people who are execution and implementation oriented rather than focused on
strategic relationships (embedded HR) or new knowledge creation (centers of
expertise). However, operational HR roles can also be excellent developmental
opportunities for both embedded and center professionals. Over time, HR
organizations will find that operational HR is best considered a mix of long-timers
(people who like to do this work) and rotational resources.

6. Business Functions
HR professionals should view themselves as Business Partners first with a specialty in
Human Resources, an expertise in Aligning HR with the other business functions and the
ability to deliver workforce success. Michael Porter classified the generic value added
activities into two classes which are presented in the following figure. These activities and
business functions are: primary activities which are classified as product and market
related activities and support activities that are related to infrastructure, technology,
procurement, and human resource management.

Porter, M. (1985). Competitive advantage: creating and sustaining superior performance.

New York, NY: The Free Press.

Core business function can be classified into product related and market related activities
which are described below:

Product related activities: The activities that the organization performs to add value to the
products and services itself. The activities are classified as:
32

6.1. Inbound logistics:

For the production and development activities, organizations need inputs as goods
which are received from the suppliers. Inbound logistics refer to all the activities
related to receive goods from the suppliers, decision about the transportation
scheduling, storing the goods as inventory, managing the inventory, and make the
inputs ready to use for the production of end products.

6.2. Operations
These include the production process, development activities, testing, packaging,
maintenance, and all other activities that transform the inputs into finished product.

6.3. Services
Organization offers the services after the products and/or services have been sold.
These service activities enhance the product’s value in the form of after sales
guarantees, warranties, spare parts management, repair services, installation,
updating, trainings, etc.

Market related activities: The activities that the organization performs to transfer the
finished products or services to the customers. The activities are classified as:

6.4. Outbound Logistics

The finished products are developed using the product related activities. Now
activities are required to transfer the finished products to the customers via
warehousing, order fulfillment, transportation, and distribution management.

6.5. Marketing and Sales

These activities include the advertising, channel selection, product promotion, selling,
product pricing, retail management, etc. The activities are performed to make sure
that the products are transferred to the targeted customer groups. Marketing mix can
be an instrument to take the competitive advantage to the target customers.

Supporting business processes that the organization performs to assist the primary
activities to gain the competitive advantage. The activities are classified as:

6.6. Procurement
This is the purchasing activity of the inputs to transform these into finished products
or services. Procurement adds value by the acquisition of appropriate goods or
services at the best price, at the right time, and in the desired place with the desired
quality and quantity.

6.7. Technology Management

This is very important in today’s technological driven environment. Technology can be
used in production to reduce cost, to develop new products, increase customer
 33

service facility, build up cost effective process, etc. It supports the value chain
activities such as research and development, process automation, process design, etc.

6.8. Human Resource Management

The key roles of HR are to support the attainment of the overall strategic business
plan and the objectives. As a strategic business partner HR designs the work positions
by hiring, recognition, reward, appraisal systems, carrier planning, and employee
development. They act as an advocate of the employees to motivate them and create
a happy working environment. For the organizational changing situation, HR executes
the strategic needs of the organization with minimum employee dissatisfaction and
resistance to change.

6.9. Infrastructure
This includes the accounting, financing, internal audit, corporate planning, legal and
compliance, public affairs, quality management, etc. These are required to perform
the value added activities efficiently to drive the organization forward to meet the
strategic plan and the objectives.

6.9.1. Accounting

The Accounting function involves the collection, recording, presentation and analysis
of financial data. This may include 'management accounts' for the directors of the firm
to view on a regular basis or the public or 'financial accounts' for anyone to view (if
the firm is a public limited company).

6.9.2. Finance

The Finance function, on the other hand, is concerned with raising the money
required for all business operations and the decision-making on how and where that
money should be spent.

6.9.3. Internal Audit

The role of internal audit is to provide independent assurance that an organization’s

risk management, governance and internal control processes are operating effectively.

6.9.4. Corporate Planning

Corporate Planning leads the structured, collaborative planning and reporting

approach that supports Council, Executive Team and departments in building aligned,
agile plans that cascade across a diverse set of programs and services. Aligning
corporate and department business plans with Council's vision and goals
operationalizes our movement toward our desired outcomes and supports strategic
thinking in our day-to-day decisions.

6.9.5. Legal and Compliance

34

A legal department is essential in ensuring that a company or establishment properly

discharges its business affairs. Its members vigorously strive to safeguard its interest in
relation to all parties whether within or outside the company. The general
responsibility of the compliance function is to provide an in-house compliance service
that effectively supports business areas in their duty to comply with relevant laws and
regulations and internal procedures.

6.9.6. Public Affairs

Public affairs work combines government relations, media communications, issue

management, corporate and social responsibility, information dissemination and
strategic communications advice. Practitioners aim to influence public policy, build
and maintain a strong reputation and find common ground with stakeholders.

7. Business HR Issues
The specific ways in which human resource professionals support the organization’s
business vary according to their level of involvement and the nature of the business
operations.

7.1. Mergers and Acquisitions (M&A)

Often, organizations join forces through mergers (two companies becoming one) and
acquisitions (one company buying another). HR should have a significant role in
carrying out a merger or acquisition. Differences between the businesses involved in
the deal make conflict inevitable. Training efforts should therefore include
development of skills in conflict resolution and due diligent. Also, HR professionals
have to sort out differences in the two companies’ practices with regard to
compensation, performance appraisal, and other HR systems. Settling on a consistent
structure to meet the combined organization’s goals may help bring employees
together. Merger and acquisition deals are fraught with people risk when the
companies involved are unable to manage uncertainty and embrace change. This
results in declining business performance and the potential loss of transaction value.
HR have to assess the risk before and during the M&A.

7.2. Total Quality Management

Total quality management (TQM) refers to a companywide effort to continually
improve the ways people, machines, and systems accomplish work. Quality
improvement can focus on the HRM function itself. One area where managers are
increasingly pressing for improvement is performance management. Business
consultants note that many companies have grown dissatisfied with the ways they
measure and reward performance, believing that the traditional practices do not yield
measurable benefits.

7.3. Downsizing
Downsizing presents a number of challenges and opportunities for HRM. In terms of
challenges, the HRM function must “surgically” reduce the workforce by cutting only
 35

the workers who are less valuable in their performance. HR should maintain open
communication with remaining employees to build their trust and commitment,
rather than withholding information.

7.4. Reengineering
Reengineering refers a complete review of the organization’s critical work processes to
make them more efficient and able to deliver higher quality. Reengineering affects
human resource management in two ways. First, the way the HR department itself
accomplishes its goals may change dramatically. Second, the fundamental change
throughout the organization requires the HR department to help design and
implement change so that all employees will be committed to the success of the
reengineered organization. Employees may need training for their reengineered jobs.
The organization may need to redesign the structure of its pay and benefits to make
them more appropriate for its new way of operating. It also may need to recruit
employees with a new set of skills. Often, reengineering results in employees being
laid off or reassigned to new jobs, as the organization’s needs change. HR
professionals should also help with this transition, as they do for downsizing.

7.5. Outsourcing
Outsourcing refers to the practice of having another company (a vendor, third-party
provider, or consultant) provide services. Outsourcing gives the company access to in-
depth expertise and is often more economical as well. Not only do HR departments
help with a transition to outsourcing, but many HR functions are being outsourced.

There are many ways in which outsourcing human resources can be done:

7.5.1. Business process HR outsourcing

Business process HR outsourcing (also known as BPO), where an external supplier

manages discrete HR activities, such as payroll administration or recruitment, or
perhaps the whole human resources function.

7.5.2. Shared service HR outsourcing

Shared service HR outsourcing, where only the transaction or administrative elements

of HR’s activities are subcontracted to an external supplier. This may include the
personal interface with employees.

7.5.3. Application (and facilities) service HR outsourcing

Application (and facilities) service HR outsourcing, where external providers look after
the technological (and physical) infrastructure to support human resources activities.

7.6. Supply Chain Management

A supply chain is a network of entities and people that work directly and indirectly to
move a good or service from production or goods to the final consumer. Supply chain
36

management represents an effort by suppliers to develop and implement supply

chains that are as efficient and economical as possible. From raw material to finished
goods or ready goods for the next process, it is also HR’s job to provide workforce
information and analytics on the health of the process and the health of the talent
across the organization.
 37

Part Two: Job Analysis and Design

Work analysis and job design were introduced in 1911 by Frederick W. Taylor in his book
"Scientific Management," and have become integral parts of human resources management.
With the constantly changing nature of work, many researchers have argued that work
analysis and job design are no longer relevant. But even with continuous changes, they are
still essential for recruiting and hiring, employee performance, productivity management and
employment law compliance.

1. Work Flow Analysis

Before designing its work fl ow, the organization’s planners need to analyze what work
needs to be done. The following Figure shows the elements of a work flow analysis. For
each type of work, such as producing a product line or providing a support service
(accounting, legal support, and so on), the analysis identifies the output of the process,
the activities involved, and the three categories of inputs (materials and information,
equipment, and human resources).

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2021) Fundamentals of Human
Resource Management (9th Edition). New York, NY: McGraw-Hill.

1.1. Outputs
Outputs are the products of any work unit, say, a department or team. Outputs may
be tangible, as in the case of a restaurant meal or finished part. They may be
intangible, such as building security or an answered question about employee
benefits. In identifying the outputs of particular work units, work flow analysis
considers both quantity and quality. Thinking in terms of these outputs gives HRM
professionals a clearer view of how to increase each work unit’s effectiveness.
38

1.2. Activities
Work flow analysis next considers the work processes used to generate the outputs
identified. Work processes are the activities that a work unit’s members engage in to
produce a given output. They are described in terms of operating procedures for every
task performed by each employee at each stage of the process. Specifying the
processes helps HRM professionals design efficient work systems by clarifying which
tasks are necessary. Knowledge of work processes also can guide staffing changes
when work is automated, outsourced, or restructured.

1.3. Inputs
Finally, work flow analysis identifies the inputs required to carry out the work
processes. As shown in the Figure, inputs fall into three categories: raw inputs
(materials and information), equipment, and human resources (knowledge, skills, and
abilities).

In the advertising industry, for example, technology has changed the relative
importance of inputs. The stars of the ad business used to be the creative minds who
dreamed up messages for television ads that would get people talking (and buying).
But as consumers turn their attention to digital media, ad agencies need people who
understand the

latest in social media and who can not only generate a stream of messages but also
can measure the reactions streaming back from consumers. Data and skill in analyzing
data are today’s hotly demanded inputs for advertising. Another way to understand
the importance of identifying inputs is to consider what can go wrong.

Work flow takes place in the context of an organization’s structure. It requires the
cooperation of individuals and groups. Ideally, the organization’s structure brings together
the people who must collaborate to create the desired outputs efficiently. The structure
may do this in a way that is highly centralized (that is, with authority concentrated in a few
people at the top of the organization) or decentralized (with authority spread among
many people). The organization may group jobs according to functions (for example,
welding, painting, packaging), or it may set up divisions to focus on products or customer
groups.

Although there are an infinite number of ways to combine the elements of an

organization’s structure, we can make some general observations about structure and
work design. If the structure is strongly based on function, workers tend to have low
authority and to work alone at highly specialized jobs. Jobs that involve teamwork or
broad responsibility tend to require a structure based on divisions other than functions.
When the goal is to empower employees, companies then need to set up structures and
jobs that enable broad responsibility, such as jobs that involve employees in serving a
particular group of customers or producing a particular product, rather than performing a
narrowly defined function. The organization’s structure also affects managers’ jobs.
Managing a division responsible for a product or customer group tends to require more
experience and cognitive (thinking) ability than managing a department that handles a
 39

particular function. In contrast, managing a functional department requires skill in

managing conflicts and aligning employees’ efforts with higher-level goals, because these
employees tend to identify heavily with their department or profession.

2. Job Analysis
Human resource management in organizations virtually always requires an in-depth
understanding of the work that people do in that organization. The process by which this
understanding is developed is a job analysis; a job description is the documentation of the
results of that analysis. While these two terms are often used interchangeably, we strongly
recommend against such usage, as job analysis is a process and a job description is a
product of that process. Simply put, a job analysis is a systematic process for collecting and
analyzing information about a job.
In a more comprehensive and detailed definition, Scholars defined job analysis as ‘‘the
collection of data on (a)‘job-oriented’ behavior, such as job tasks and work procedures;
(b) more abstract ‘worker-oriented’ behavior, such as decision making, supervision, and
information processing; (c) behaviors involved in interactions with machines, materials,
and tools; (d) methods of evaluating performance, such as productivity and error rates; (e)
job context, such as working conditions and type of compensation systems; and (f)
personnel requirements, such as skills, physical ability, and personality traits’’ This
definition of job analysis focuses on the systematic collection of data on the observable job
behaviors of employees and what is accomplished by these behaviors and what
technologies are required to do so.

Brannick, M.T., Levine, E.L., & Morgeson, F.P. (2014). Job and Work Analysis: Methods,
Research, and Applications for Human Resource Management (2nd edition). Thousand
Oaks, CA: SAGE Publications.

Given the importance that job analyses play in the management of human capital, it is
surprising that job analyses are not regarded as a more critical tool in the field of human
40

resources. Over three decades ago, a researcher observed, ‘Although job analysis is an
essential feature of every activity engaged in by industrial-organizational psychologists, the
subject is treated in most textbooks in a manner which suggests that any fool can do it and
thus is a task which can be delegated to the lowest level technician’. Unfortunately, the
situation has not much changed, and this important function is not given the proper
degree of attention and respect either by psychologists or HR professionals.
2.1. Applications of Job Analyses
A variety of important reasons support conducting job analyses in the workplace.
These include recruitment, candidate selection, employee training and development,
performance management, organizational management and planning, and litigation
protection. Each of these will be briefly reviewed.
2.1.1. Recruitment
The first external application of job analysis is in recruitment, when the job description
becomes the basis for recruiting applicants. In beginning to fill a vacant job, the
recruiter needs to know the job responsibilities as well as the skills and other
characteristics required of candidates. Not only is it necessary for the recruiter to know
these things, but candidates need to know the kind of job for which they are applying.
The need for a job description should be obvious to all.
2.1.2. Candidate Selection
In our experience, candidate selection accounts for most job analyses. Employers need
to know in some detail the work activities involved in each job vacancy and, most
importantly, the knowledge, skills, and abilities— the competencies— required to fill
that job successfully. While most employers maintain files of job descriptions, there is
widespread understanding that many, if not most, of these job descriptions are dated
and need to be redone, especially for jobs deemed to be critically important.
The work activities of a job change over time, as do the requirements for successfully
carrying out those activities. As an example, consider the impact that the computer has
had on the work activities both in the office and on the shop floor. Administrative
positions that once had a heavy dose of taking shorthand and transcription are now
given over to a very different set of activities, ones that require a rather different set of
requirements. Similarly, the introduction of the computer onto the shop floor and into
the warehouse has produced an equally large impact on the work activities. The
tightening of bolts on the assembly line is now done by a computer-driven robot, the
contents of the warehouse are all bar coded, and most jobs require computer skills for
success. Such changes are ongoing and have enormous impact on the competency
requirements for hiring. And these changes can be specified only by a careful job
analysis.
Further, it is important to recognize that many skills are specific to a given occupation
and that these occupationally specific skills are only be identified by a job analysis.
One use of job analyses is in developing behavioral interviewing protocols for candidate
screening. The job description that is the end-product of the job analysis should
provide a clear picture of the work and activities and the requirements. These then
 41

should provide the basis on which to develop a behavioral interviewing protocol—

questions inquiring into a candidate’s experience in such work activities and seeking to
establish the degree to which the candidate has the necessary requirements to
perform the important work activities. This is a method for developing a behavioral
interview much preferred to the more generic approach that lacks a specific job-
relevant focus.
Another important use of job analyses is as the criteria for validity studies of any pre-
employment selection procedure, especially psychological tests. The Standards for
Educational and Psychological Testing specify that the job requirements involved in
studies of predictor-criteria relationships should be ‘‘determined by a job analysis’’. In
other words, the validity of a psychological test or any procedure for selecting job
candidates must be determined by the correlation of that procedure with an important
aspect of job performance as identified by a job analysis.
2.1.3. Employee Training and Development
Once a current job analysis becomes available, the competency of current employees
in that job becomes apparent. Employees without a high level of the identified
necessary competencies will be less productive than they otherwise should be. For
example, if a new applicant tracking system is introduced in the HR function, someone
has to be hired to manage that system. But, implicit in that decision, is the question of
the competency of the existing HR staff to use that new system. Without knowing the
answer to that question, the positive impact of the introduction of this new system will
be less than intended. Thus, the job analysis used for the new hire should lead to an
analysis of the competencies of the existing staff, and a training and development
program should be instituted to produce the necessary competencies.
The job analysis can impact on the individual training and development level as well. It
is rare that even those candidates who are the best fit developed through the job
analysis are a perfect fit. The selection process should have identified both the
candidate’s strengths— those that led to the selection—and weaknesses— those that
need to be addressed by some training and development process. This might be part of
a supervisory or mentoring process or by some actual training, either on the job or
somewhere else. In a somewhat dated example, a very experienced travel agent with
an established clientele was hired by a large travel agency. The agent, despite her
considerable experience, has little experience using the computer booking system that
had been identified as an important requirement in the job analysis. Her experience
and list of clients were sufficient to outweigh her lack of skill with the system, a lack
that could be remedied by taking a week-long training course, which was an acceptable
solution to both parties. Clearly in this case, as in all training decisions, the job analysis
is the starting point.
2.1.4. Performance Management
Another important use of job analysis is in performance management. Job analyses
play an important role in developing or modifying compensation systems and in
performance appraisal. Determining the various levels of performance on a given job is
an essential aspect of every job analysis. The knowledge of what constitutes an
outstanding level of performance, an average level, and a borderline level is a critical
42

aspect of performance management and should be the basis for setting pay and
bonuses, the need for training and development, and for virtually all other aspects of
the HR function.
Job analyses have been used not only to set pay levels but also to help determine
whether different jobs require different requirements or effort, or involve different
working conditions. In either case, such differences merit different pay scales. Jobs that
involve equivalent factors, however, should lead to equal pay.
The pay level a job warrants is also important, and the job characteristics as
determined by the job analysis are frequently used to determine the level of pay.
Among the factors included in such decisions are
⚫ Level of education, training, or experience required
⚫ Degree of creativity involved
⚫ Strength or stamina necessary
⚫ Amount of responsibility
⚫ Degree of independence of action
⚫ Scope of influence
⚫ Intellectual demands, including problem solving
⚫ Risk of death, injury, or sickness
Presumably the level of each of these factors can be identified by a job analysis and
then combined in some meaningful way to determine the level of the job among the
various jobs in that organization. The job description and the combined evaluation of
these various factors provide the basis for establishing a compensation system that is
then priced according to the data produced by a salary survey of similar jobs in the
local job market.
Since such comparisons are fraught with uncertainties, they have become the basis of a
considerable amount of litigation about the equality of pay for different jobs. As just
one example of the ambiguities involved, consider the difficulties inherent in
attempting to use job analysis to justify equal pay of elementary school teachers and
truck drivers. While there is some evidence that sophisticated statistical analysis of the
results of job analyses can be used successfully to predict market compensation rates,
this can be done only for blue-collar jobs. Further, it is often argued that such an
approach captures only existing discriminatory pay polices and does little to advance
the cause of equal pay for equal work. It is safe to conclude that setting compensation
systems on the basis of job analysis is a complex and difficult process.
Job analyses are also used in the performance appraisal process. For this process, job
analyses should highlight the various work activities involved in performing a job and
the relative importance of each activity. A rational performance appraisal system would
evaluate the quality of the work performed by the individual being appraised according
to the various importance ratings. It should be far more critical for that employee being
 43

rated to perform the important tasks more competently than for him or her to perform
those of lesser importance competently. Unfortunately, this does not always seem to
be the case, and often employees feel that they are downgraded for not attending to
rather trivial tasks, ones not critical to fulfilling the organization’s mission. This leads to
a feeling on the part of employees that the performance appraisal process is an
unimportant managerial task, so they often discount the entire process.
2.1.5. Organizational Management and Planning
As we noted above, the appropriateness of job descriptions tends to decay over time.
Changes in the marketplace require new behaviors, technology changes jobs with warp
speed, and incumbents begin to do their jobs in idiosyncratic ways. As a result of these
and other changes, job descriptions become obsolete. Further, mergers and
acquisitions lead to a need to integrate different human resources management
systems. And a new CEO comes in and decides to rationalize the HR function, to update
the job descriptions, create a new compensation system, one based on equal pay for
equal work, none of which can be accomplished without starting with a job analysis.
When one of us became the CEO of a large professional association, he quickly learned
about employee discontent over what appeared to be favoritism in assigning job titles,
compensation, and a variety of other benefits. It appeared that the only way to deal
with this unrest was through an organization-wide review and rationalization,
beginning with job analyses. To win employee acceptance of the process, the staff was
promised that no one would suffer financially or in status.
The organization had almost five hundred employees, and the HR function was
inadequate to perform the required work. A national HR consulting firm was engaged
to create an organization-wide series of job analyses, draft current job descriptions
based on these analyses, create a uniform set of job titles, and recommend a
compensation system based on the job content involved and a regional salary survey.
This was done over a period of several months and was widely accepted by both rank-
and-file employees and the organization’s board of directors. Moreover, this work
enabled the organization to identify where additional resources were needed and
where redundancy would provide some resources to fill those gaps. But all of this
depended on the first step— the job analyses.
2.1.6. Litigation Protection
Still another use of job analyses is to reduce an organization’s exposure to litigation
based on allegations of discriminatory hiring practices. In order to ensure that all
individuals are treated fairly in the workplace, including in hiring, pay, training, and
other conditions of employment, we need to base all of our decisions on job-related
qualifications. The only way to be able to do this is through the use of job analyses. For
example, if we wish to hire a plumber, we need to ascertain that applicants can run
pipe and have a license to do so, requirements based on the job analysis. Simply stated,
if we are to hire people based on the qualifications to perform a job, we first must
determine what those requirements for doing that job are—and conducting a job
analysis is the only legal way to do this.
As we noted above, the Uniform Guidelines are quite explicit in requiring ‘‘an analysis
44

of important work behaviors required for successful performance’’ as the basis for any
hiring action. Any selection process should begin with such a job analysis that
establishes the criteria against which applicants should be compared. Further, the job
analysis establishes the criteria for establishing the validity of any assessment measure
to be used in the selection process. Scholars provide a more detailed discussion of the
use of criteria to establish the validity of psychological tests and a catalogue of
commonly used tests.
While there is no absolute or certain shield against litigation, basing selection decisions
on a careful, thorough, and current job analysis and using only well-validated selection
procedures based on those job analyses will go a long way to deter frivolous filings.
One additional point is the critical importance of a careful, contemporaneous record
documenting what was done and why it was done. In our experience, one of the major
problems that our clients experience in defending themselves in HR litigation is the
failure to document properly what was done.
This catalogue of the uses of job analyses is far from complete, as we have not included
the use of job analyses in research on the nature of work and how work is changing,
studies of the structure of work, and so on. But the focus of this book is on providing
useful tools for the practicing HR professional and such conceptually focused research
is of little practical use to this audience.
2.2. Elements of a Job Analysis
2.2.1. Terms and Definition of Job Analysis
Various authors use terms such as job, position, and task to men different things.
Position: The duties and tasks carried out by one person. A position may exist even
where no incumbent fills it; it may be an open position. There are at least as many
positions in an organization as there are people.
Job: A group of positions with the same major duties or tasks: if the positions are not
identical, the similarity is great enough to justify grouping them. A job is a set of tasks
within a single organization or organizational unit.
Occupation: An occupation is a class of roughly similar jobs found in many
organizations and even in different industries. Examples include attorney, computer
programmer. Mechanic, and Gardener.
Job family: A group of jobs similar in specifiable ways, such as patterns of purposes,
behaviors, or worker attributes. An example of a job family might he clerical and
technical,” which could include receptionists, accounting clerks, secretaries, and data
entry specialists.
Element: The smallest feasible part of an activity or broader category of behavior or
work done. It might be an elemental motion, a part of a task, or a broader behavioral
category; there is little consistency in meanings of this term.
Task: A step or component in (lie performance of a duty. A task has a clear beginning
and ending; it can usually be described with a brief statement consisting of an action
verb and a further phrase.
 45

Duty: A relatively large part of the work done in a position or job. It consists of several
tasks related in time, sequence, outcome, or objective. A clerical duty might be “sorting
correspondence.” One task in correspondence sorting might be ‘identify letters
requiring immediate response.’
Job Description (JD): A written report of the results of job analysis. JD is a list or form
of a job’s duties, responsibilities, reporting relationships, working conditions,
performance criteria, and supervisory responsibilities. JD is the result and one product
of a job analysis.
Job Specification: A list of a job’s “human requirements”: the requisite education,
skills, knowledge, and so on – another product of a job analysis. Job Specification
should address what knowledge, skills, abilities, and other characteristics (KSAOs) do
job holders need to perform these tasks effectively.
Traditional job analysis has four typical components:
⚫ A description of the work activity (WA) or tasks involved in doing the job;
⚫ The knowledge, skills, and abilities (KSA) or competencies necessary to perform
the job;
⚫ Data on the range of job performance; and
⚫ The characteristics of the workplace.
The data contained in these four components provide the basis for drafting the job
description, which should provide an integrated narrative picture of the job and what is
required to fill that job successfully.
2.2.2. Work Activity (WA)
The process of a job analysis typically begins with a description of the major job
functions, the activities in which a job incumbent regularly engages— the reasons why
the job exists. One inherent problem in describing work activities is the level at which
the activity is described. At the most basic level are the job elements, “the smallest unit
into which work can be divided without analyzing separate motions, movement, and
mental processes’’.
A more useful approach is that of Functional Job Analysis, which specifies an action
verb, which describes the action performed in observable terms; (2) the outcomes or
results of that action; (3) the tools or other equipment used; and (4) the amount of
discretion allowed the worker in that action. Two examples should serve to clarify
some of the issues in this approach to WA. In the first, ‘‘The assembler takes one end of
the red wire and one end of the green wire and joins them together with a screw nut.’’
In the second, “The surgeon takes the scalpel and makes a long incision into the chest
of the comatose patient.’’ In both examples, the action is described clearly, the tools
involved are specified, the outcomes are clear, and the level of discretion is implicit and
very different. These examples represent both the approach and content of the
approach, sometimes referred to as major job requirements, to describing the WA that
we advocate.
46

There two aspects to the WA process: one is the importance of the action to the
success of performing the job and the other is the frequency with which that action is
performed. Obviously, important and frequent actions constitute the bulk of the WA.
But important but infrequent actions often need to be included. For example, while
most police officers never draw and fire their handguns in the course of their careers,
when such action is required it is critical to the success of that job. Thus, descriptions
of WA should identify both the importance and frequency of actions, especially when
highly important WA occur infrequently.
2.2.3. Knowledge, Skills, and Ability (KSA)
The second question that every job analysis must address concerns the knowledge,
skills, and abilities (KSA) or competencies necessary to perform these WA.
Knowledge is defined as an organized body of information, usually of a factual or
procedural nature, that, when applied, makes the successful performance of a job
action possible. Knowledge is usually not demonstrated in the action itself but rather
by prior education, training, or testing. In observing the action, the knowledge base is
assumed and inferred rather than directly observed.
In the above example of the assembler, he or she would need to have sufficient
knowledge of the English language to follow directions, know the difference between
red and green, and know how to use a screw nut to join the two ends together. The
knowledge needed by a surgeon is far more complex and would include an intimate
understanding of the anatomy and physiology of the human body, how to monitor the
patient’s vital signs, choosing the correct scalpel for the procedure, and so on. In both
cases, however, each set of knowledge forms the basis of the success of executing the
job action.
Skill, the second necessary component for the successful execution of the job action, is
defined as the proficiency in the manual, verbal, or mental manipulation of people,
ideas, or things. A skill is always directly observable and a certain level of skill is
typically set as a standard or baseline for the successful performance of the action.
In our continuing example, the assembler must have sufficient eye-hand coordination
to pick up the two ends of the wire and the screw nut and adequate finger dexterity to
twist the wires together either by hand or mechanically and insert the twisted ends
into the wire nut. The skill set of the surgeon includes a high level of eye-hand
coordination, sufficient hand steadiness to manipulate the scalpel without untoward
injury to the patient, sufficient finger dexterity to suture major bleeding, and so on.
Thus, every job action involves an identification of the required skills and the necessary
level of those skills.
Ability is defined as the present capacity to execute a job action, to perform a job
function by applying an underlying knowledge base and the necessary skills
simultaneously. Knowledge, like ability, is not observable directly but rather is an
inferred, higher-order construct, such as problem solving, spatial ability, intelligence,
and so on. For lower-level jobs, it is relatively easy to describe the KSA required in
terms of just K and S. Abilities are typically invoked in describing higher-level technical,
professional, and managerial jobs as the WAs become more conceptual, abstract, and
 47

complex, despite the fact that they do not meet the requirements of the Uniform
Guidelines of being observable.
Thus, the assembler job could be described readily in terms of the limited knowledge
and skill required, while we might invoke such characteristics as systems-orientation,
decisiveness, meticulousness, and awareness of the operating room environment as
necessary characteristics of a successful surgeon. While most observers would agree
that these characteristics are important to surgical success, a number would question
whether these characteristics are best understood as abilities.
As a result of such questions, many experts in job analysis add a fourth factor, O for
Other, to the KSA paradigm, leading to a KSAO approach to job requirements. We
believe that both the KSA and the KSAO labels are rather awkward and difficult to
apply. Rather, we have chosen to use the term competencies as a substitute for these
other labels.
We have further proposed an approach in which we separate the technical
requirements necessary for job success from the personal/interpersonal requirements.
We insist that the more work-related characteristics can and should be included in the
job requirements analysis, while the more basic, underlying personality characteristics
should be treated separately. Thus, in the case of the surgeon, being systems-oriented
and being aware of the OR environment would be regarded as abilities, while being
decisive and meticulous would be categorized as more long-standing
personal/interpersonal characteristics, ones that would be evidenced more generally in
that person’s life.
Until recently it was very difficult to identify the personal/interpersonal requirements
of job success. The development of the Big Five approach to describing these
psychological factors and its widespread adoption, especially in selection, has made
this task much easier. The Big Five, also known as the five-factor approach, is based on
over a half-century of empirical research that has conclusively shown that five basic
factors describe the spectrum of human behavior, and that these characteristics are
quite stable over time and are, in various combinations, predictive of on-the-job
performance.
These five factors are: (1) Neuroticism; (2) Extroversion; (3) Openness to New
Experience; (4) Agreeableness; and (5) Conscientiousness, typically abbreviated as
NEOAC, called “Big Five”.
For example, it is difficult to think of a successful accountant who is not highly
conscientious or a successful sales representative who is not extroverted. Using the Big
Five provides job analysts with a uniform vocabulary for describing these intangible but
critically important job requirements.
“Competence” is commonly used for describing the job in terms of the measurable,
observable, behavioral KSAOs that an employee doing that job must exhibit to do the
job well.
2.2.4. Levels of Job Performance
After developing clarity of the WA involved in a job and the necessary competencies, a
48

job analysis must identify the necessary range of adequate job performance. Most job
analyses focus on identifying what constitutes a high level of job performance in order
to identify the competencies that separate stars from the rest of the pack. When we
are trying to understand these factors to meet promotion or training and development
requirements, this is an appropriate approach; but what if we intend to use the job
analysis for candidate selection?
Here, a very different dynamic is in play. When we examine the job performance of
incumbents, we typically learn what an experienced job holder can accomplish. But
few, if any, new hires are likely to be as productive or as competent as the typical
incumbent. Thus, in establishing the job performance requirements, we must set more
modest initial levels for new hires, a process that requires a fair degree of judgment.
One additional point, in selecting supervisors and managers from an existing
workforce, it is often the case that a top performer is chosen without recognizing that
supervisory and managerial tasks require different skills than performing the tasks
being supervised do, so such selections often do not work out satisfactorily. From this
discussion it should be clear that job performance levels need to be set as a function of
the use to which they are to be put, and that there is no substitute for common sense
in setting those limits.
2.2.5. Workplace Characteristics
Workplaces vary enormously in their norms, climate, and culture, in the level of
discomfort that workers can experience, the inherent risks posed by working there, and
other noteworthy factors. A competent and thorough job analysis identifies the
important workplace characteristics. Many approaches to job analyses pay scant
attention to describing the workplace setting unless it varies significantly from the
typical factory, office, or warehouse. We, on the other hand, strongly believe that an in-
depth understanding of the characteristics of the workplace should be an integral part
of a competent job analysis.
Once the four elements of the job analysis— the work activities (WA), the job
competencies (previously KSAs), the range of job performance, and the workplace
characteristics— have been identified, they can be combined in a thematic fashion into
a job description. We now turn our attention to the various methods of actually
conducting a job analysis.
2.3. Job Specification
Job specification is a statement of employee characteristics and qualifications required
for satisfactory performance of defined duties and tasks comprising a specific job or
function. Job specification is derived from job analysis. In other word, Job specification
as a statement of minimum qualification that person must possess to perform a given
job successfully.
While the job description describes activities to be done, it is job specifications that list
the knowledge, skills, and abilities an individual needs to perform a job satisfactorily.
Knowledge, skills, and abilities (KSAs) include education, experience, work skill
requirements, personal abilities, and mental and physical requirements. Job
specifications for a data entry operator might include a required educational level, a
 49

certain number of months of experience, a typing ability of 60 words per minute, a

high degree of visual concentration, and ability to work under time pressure. It is
important to note that accurate job specifications identify what KSAs a person needs to
do the job, not necessarily what qualifications the current employee possesses.
Usually, the information of a job specification includes
2.3.1. Experience:
Number of years of experience in the job you are seeking to fill. Number of years of
work experience required for the selected candidate. Note whether the position
requires progressively more complex and responsible experience, and supervisory or
managerial experience.
2.3.2. Education:
State what degrees, training, or certifications are required for the position.
2.3.3. Required Knowledge, Skills, Abilities, and Characteristics (KSAOs):
State the skills, knowledge, and personal characteristics of individuals who have
successfully performed this job. Or, use the job analysis data to determine the
attributes you need from your “ideal” candidate. Your recruiting planning meeting or
email participants can also help determine these requirements for the job
specification.
Job specifications information must be converted into employee specification
information in order to know what kind of person is needed to fill a job. Employee
specification is a like a brand name which spells that the candidate with a particular
employee specification generally possess the qualities specified under job specification.
Employee specification is useful to find out the suitability of particular class of
candidates to a particular job. Thus, employee specification is useful to find out
prospective employees (target group) whereas job specification is useful to select the
right candidate for a job.
3. Job Design
Although job analysis, as just described, is important for an understanding of existing jobs,
organizations also must plan for new jobs and periodically consider whether they should
revise existing jobs. When an organization is expanding, supervisors and human resource
professionals must help plan for new or growing work units. When an organization is trying
to improve quality or efficiency, a review of work units and processes may require a fresh
look at how jobs are designed.
These situations call for job design, the process of defining how work will be performed
and what tasks will be required in a given job, or job redesign, a similar process that
involves changing an existing job design. To design jobs effectively, a person must
thoroughly understand the job itself (through job analysis) and its place in the larger work
unit’s work flow process (through work flow analysis).
As shown in the following figure, the available approaches emphasize different aspects of
the job: the mechanics of doing a job efficiently, the job’s impact on motivation, the use of
50

safe work practices, and the mental demands of the job.

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2021) Fundamentals of Human
Resource Management (9th Edition). New York, NY: McGraw-Hill.

3.1. Designing Efficient Jobs

If workers perform tasks as efficiently as possible, not only does the organization
benefit from lower costs and greater output per worker, but workers should be less
fatigued. This point of view has for years formed the basis of classical industrial
engineering, which looks for the simplest way to structure work in order to maximize
efficiency. Typically,, applying industrial engineering to a job reduces the complexity of
the work, making it so simple that almost anyone can be trained quickly and easily to
perform the job. Such jobs tend to be highly specialized and repetitive.
In practice, the scientific method traditionally seeks the “one best way” to perform a
job by performing time-and-motion studies to identify the most efficient movements
for workers to make. Once the engineers have identified the most efficient sequence
of motions, the organization should select workers based on their ability to do the
job, then train them in the details of the “one best way” to perform that job. The
company also should offer pay structured to motivate workers to do their best.
Industrial engineering provides measurable and practical benefits. However, a focus
on efficiency alone can create jobs that are so simple and repetitive that workers get
bored. ‘Workers performing these jobs may feel their work is meaningless. Hence,
most organizations combine industrial engineering with other approaches to job
design.
3.2. Designing Jobs That Motivate
Especially when organizations must compete for employees, depend on skilled
 51

knowledge workers, or need a workforce that cares about customer satisfaction, a

pure focus on efficiency will not achieve human resource objectives. Employers also
need to ensure that workers have a positive attitude toward their jobs so that they
show up at work with enthusiasm, commitment, and creativity To improve job
satisfaction, organizations need to design jobs that take into account factors that
make jobs motivating and satisfying for employees.
3.2.1. Job Enlargement
In a job design, job enlargement refers to broadening the types of tasks performed.
The objective of job enlargement is to make jobs less repetitive and more interesting.
jobs also become enlarged when organizations add new goals or ask fewer workers to
accomplish work that had been spread among more people. In those situations, the
challenge is to avoid crossing the line from interesting jobs into jobs that burn out
employees.
Job extension is enlarging jobs by combining several relatively simple jobs to form a
job with a wider range of tasks. An example might be combining the jobs of
receptionist, typist, and file clerk into jobs containing all three kinds of work. This
approach to job enlargement is relatively simple, but if all the tasks are dull, workers
will not necessarily be more motivated by the redesigned job.
Job rotation does not actually redesign the jobs themselves, but moves employees
among several different jobs. This approach to job enlargement is common among
production teams. During the course of a week, a team member may carry out each
of the jobs handled by the team. Team members might assemble components one
day and pack products into cases another day. As with job extension, the enlarged
jobs may still consist of repetitious activities, but with greater variation among those
activities.
3.2.2. Job Enrichment
The idea of job enrichment, or empowering workers by adding more decision-making
authority to their jobs. The ways to enrich a manufacturing job might include giving
employees authority to stop production when quality standards are not being met
and having each employee perform several tasks to complete a particular stage of the
process, rather than dividing up the tasks among the employees. For a salesperson in
a store, job enrichment might involve the authority to resolve customer problems,
including the authority to decide whether to issue refunds or replace merchandise.
In practice, however, it is important to note that not every worker responds positively
to enriched jobs. These jobs are best suited to workers who are flexible and
responsive to others; for these workers, enriched jobs can dramatically improve
motivation.
3.2.3. Self-Managing Work Teams
Instead of merely enriching individual jobs, some organizations empower employees
by designing work to be done by self-managing work teams. Team members typically
have authority to schedule work, hire team members, resolve problems related to the
team’s performance, and perform other duties traditionally handled by management.
52

Teamwork can give a job such motivating characteristics as autonomy skill variety and
task identity. When teams are self-managed and team members are highly involved in
decision making, teams are more productive, employees more satisfi ed, and
managers are more pleased with performance. Teams also tend to do better when
each team member performs a variety of tasks and when team members view their
effort as significant.
3.2.4. Flexible Work Schedules
One way in which an organization can give employees some say in how their work is
structured is to offer flexible work schedules. Depending on the requirements of the
organization and the individual jobs, organizations may be able to be flexible about
when employees work.
Flextime is a scheduling policy in which full-time employees may choose starting and
ending times within guidelines specified by the organization. The flextime policy may
require that employees be at work between certain hours, say, 10:00 am and 3:00 pm.
Employees work additional hours before or after this period in order to work the full
day, One employee might arrive early in the morning in order to leave at 3:00 pm to
pick up children after school. Another employee might be a night owl who prefers to
arrive at 10:00 am and work until 6:00, 7:00, or even later in the evening. A flextime
policy also may enable workers to adjust a particular day’s hours in order to make
time for doctor’s appointments, children’s activities, hobbies, or volunteer work. A
work schedule that allows time for community and family interests can be extremely
motivating for some employees.
Job sharing is a work option in which two part-time employees carry out the tasks
associated with a single job. Such arrangements can enable an organization to attract
or retain valued employees who want more time to attend school or to care for family
members. The job requirements in such an arrangement include the ability to work
cooperatively and coordinate the details of one’s job with another person.
A compressed workweek is a schedule in which full-time workers complete their
weekly hours in fewer than five days. For example, instead of working eight hours a
day for five days, the employees could complete 40 hours of work in four 10-hour
days. This alternative is most common, but some companies use other alternatives,
such as scheduling 80 hours over nine days (with a three-day weekend every other
week) or reducing the workweek from 40 to 38 or 36 hours. Employees may
appreciate the extra days available for leisure, family, or volunteer activities. An
organization might even use this schedule to offer a kind of flexibility—for example,
letting workers vote whether they want a compressed workweek during the summer
months. This type of schedule has a couple of drawbacks, however. One is that
employees may become exhausted on the longer workdays. Another is that if the
arrangement involves working more than specific hours during a week, the labor law
may require the payment of overtime wages.
Telework. Flexibility can extend to work locations as well as work schedules. The
broad term for doing one’s work away from a centrally located office is telework, or
telecommuting.
 53

For employers, advantages of telework include less need for office space and the
ability to offer greater flexibility to employees who are disabled or need to be
available for children or elderly relatives. The employees using telework arrangement
may have fewer absences from work than employees with similar demands who must
commute to work. Telecommuting can also support a strategy of corporate social
responsibility because these employees do not produce the greenhouse gas emissions
that result from commuting by car. Telework is easiest to implement for people in
managerial, professional, or sales jobs, especially those that involve working and
communicating on a computer. A telework arrangement is generally difficult to set up
for manufacturing workers.
According to research, productivity was higher among the workers who chose to work
at home, presumably because they had fewer distractions but also because they
tended to use some of the time saved on commuting to work longer hours.
However, no interpersonal communication can damage company culture. That
absence of social interaction between employees can leave them disconnected from
each other. Teleworking frequently could lead to a decreased loyalty or engagement
to the company itself.
3.3. Designing Ergonomic Jobs
The way people use their bodies when they work—whether toting heavy furniture
onto a moving van or sitting quietly before a computer screen—affects their physical
well-being and may affect how well and how long they can work. The study of the
interface between individuals’ physiology and the characteristics of the physical work
environment is called ergonomics.
The goal of ergonomics is to minimize physical strain on the worker by structuring the
physical work environment around the way the human body works. Ergonomic job
design has been applied in redesigning equipment used in jobs that are physically
demanding. Such redesign is often aimed at reducing the physical demands of certain
jobs so that anyone can perform them. In addition, many interventions focus on
redesigning machines and technology—for instance, adjusting the height of a
computer keyboard to minimize occupational illnesses, such as carpal tunnel
syndrome. The design of chairs and desks to fit posture requirements is very
important in many office jobs. One study found that having employees participate in
an ergonomic redesign effort significantly reduced the number and severity of
cumulative trauma disorders (injuries that result from performing the same
movement over and over), lost production time, and restricted-duty days.
3.4. Designing Jobs That Meet Mental Capabilities and Limitations
Just as the human body has capabilities and limitations, addressed by ergonomics, the
mind, too, has capabilities and limitations. Besides hiring people with certain mental
skills, organizations can design jobs so that they can be accurately and safely
performed given the way the brain processes information. Generally, this means
reducing the information-processing requirements of a job. In these simpler jobs,
workers may be less likely to make mistakes or have accidents. Of course, the simpler
jobs also may be less motivating.
54

3.4.1. Filtering information

There are several ways to simplify a job’s mental demands. One is to limit the amount
of information and memorization that the job requires.
3.4.2. Clear displays and instructions
Organizations can also provide adequate lighting, easy-to-understand gauges and
displays, simple-to-operate equipment, and clear instructions.
3.4.3. Memory aids
Often, employees try to simplify some of the mental demands of their own jobs by
creating checklists, charts, or other aids. Finally, every job requires some degree of
thinking, remembering, and paying attention, so for every job, organizations need to
evaluate whether their employees can handle the job’s mental demands.
4. Job Classification
4.1. Exempt vs. Non-exempt
Certain types of employees, who are classified as exempt employees, are not entitled
to overtime pay as guaranteed by regulation. If an employee is classified as exempt
(vs. non-exempt) their employer is not required to pay them overtime pay.
4.2. Salary vs. Wage
The essential difference between a salary and wages is that a salaried person is paid a
fixed amount per pay period and a wage earner is paid by the hour. Someone who is
paid a salary is paid a fixed amount in each pay period, with the total of these fixed
payments over a full year summing to the amount of the salary. This person is
considered to be an exempt employee. There is no linkage between the amount paid
and the number of hours worked. Someone receiving a salary is usually in a
management or professional position.
Someone who is paid wages receives a pay rate per hour, multiplied by the number of
hours worked. This person is considered to be a "non-exempt" employee. For
example, a person who is paid a wage of $20 per hour will receive gross pay of $800
($20/hr x 40 hours) if he works a standard 40 hour week, but will only receive gross
pay of $400 ($20/hr x 20 hours) if he works 20 hours in a week. A person who
receives wages is also entitled to overtime pay of 1.5x his normal rate of pay if he
works more than 40 hours per week.
There is also a difference between salary and wages in regard to the speed of
payment. If a person is paid a salary, he is paid through and including the pay date,
because it is very simple for the payroll staff to calculate his salary, which is a fixed
rate of pay. However, if a person is paid wages, he is usually paid through a date that
is several days prior to the pay date; this is because his hours may vary, and the
payroll staff needs several days to calculate his pay.
If a person is paid wages and there is a gap between the last day worked for which he
is paid and his pay date, that gap is paid in his next paycheck. This gap does not exist
 55

for a salaried worker, since he is paid through the pay date. Thus, pay is much more
likely to be accrued in a company's financial statements for a person being paid wages
than for someone being paid a salary.

4.3. Full-time vs. Part-time

4.3.1. Full-time jobs
A full-time employee has ongoing employment and works around 38 hours per week.
The exact hours of work are usually set out in an Award or in the contract with the
employer. Full-time employees are entitled to benefits such as sick leave and annual
leave, minimum notice requirements for termination, redundancy, flexible working
hours and overtime pay for working outside regular hours for some employees.
4.3.2. Part-time jobs
A part-time employee works less than 38 hours on regular hours each week and are
entitled to the same benefits as full-time employees, on a pro rata basis. For example
if you work 3 days a week you are entitled accrue leave for those 3 days.
4.3.3. Casual jobs
Casual employees work irregular hours and have no guaranteed hours of work, are not
entitled to leave and you are not required to provide statutory notice for termination,
unless otherwise stated by a relevant Award or agreement.
4.4. Alternative staffing
Many staffing approaches including part-time and casual jobs are possible other than
conventional full-time arrangements where the organization directly hires, supervises,
and provides compensation and benefits to regular employees.
56

4.4.1. Contractors
Independent contractors are self-employed individuals hired on a contract basis for
specialized services.
4.4.2. Temporary employment
Temporary employees hired to work on a specified job to supplement the regular
workforce on a short-term basis or for a specific period of time. Temporary floaters are
hired to work directly on the company's payroll on a short-term basis or for a specific
period of time to rotate among several positions or departments as needed.
4.4.3. On-call employment
On-call are workers who report to work only when needed.
4.4.4. Part-time employment
Part-time employees scheduled to work less than a regular workweek on an ongoing
basis; benefit eligibility depends on various factors.
4.4.5. Seasonal employment
Seasonal workers are part-time or "casual" workers hired to perform seasonal work in
a variety of industries.
4.4.6. Co-employment
Co-employment, or joint employment, generally describes a situation in which an
organization shares joint responsibility and liability for their alternative workers with
the alternative staffing supplier.
4.4.7. Temp to lease
A worker who seeks employment through a temporary agency is the most common
type of leased employee. A temporary agency is a company that contracts with
businesses to provide workers on a contingent basis. These temporary agencies handle
all payroll, tax, and other human resources functions for the workers.
Other leased employees (other than workers from temporary agencies) are employed
by employee leasing firms (also called "professional employer organizations") that
supply companies with an entire work force of employees for extended amounts of
time, rather than on day-to-day basis. The leasing firm takes over all payroll, tax, and
other human resources functions for the workers.
4.4.8. Outsourcing
Outsourcing or managed service is an independent company with expertise in
operating a specific function contracts with a company to assume full operational
responsibility for the function (as opposed to just supplying personnel); functions may
be peripheral to the core business (e.g., security, landscaping, food services) or closer
to operations (such as managing all flexible staffing programs or the IT function).
 57

4.4.9. Work made for hire

Work made for hire is something that was created by an employee while on the job, or
by an independent contractor who was hired to create the work. The copyright on
work made for hire belongs to the employer or the party who commissioned the work.
If a work is a work made for hire, the employer or other person for whom the work
was prepared is the initial owner of the copyright unless there has been a written
agreement to the contrary signed by both parties.
58

Part Three: Employee Communication

1. Personnel Management
Personnel Management is basically an administrative record-keeping function, at the
operational level. Personnel Management attempts to maintain fair terms and conditions
of employment, while at the same time, efficiently managing personnel activities for
individual departments etc. It is assumed that the outcomes from providing justice and
achieving efficiency in the management of personnel activities will result ultimately in
achieving organizational success. The key functions of personnel management are:
1.1. Department Support
A personnel administrative specialist provides support to the staff of the personnel
department by ensuring the department accomplishes assigned responsibilities on a
daily basis. This can include coordinating events, arranging meetings and travel plans,
creating presentations, preparing reports, answering departmental phones and taking
messages for other department staff when they are unavailable.
1.2. Documentation
Along with supporting other members of the personnel department, these
professionals prepare and maintain all related documentation and employee files for
an organization. This includes confidential electronic and paper documentation, such
as employment contracts, performance reviews, as well as benefits and compensation
information. This documentation is confidential and is required to be secured by the
personnel administrative specialist. These professionals often hold all keys and
passwords for this information, and access the information for other department staff
as requested. This can include creating and compiling personnel reports, and
retrieving employee files as requested.
1.3. Employee Relations
Personnel administrative specialists are often the gatekeeper of the human resources
or personnel department, and assist employees as much as possible unless there's a
need to direct questions and concerns to other department staff. These professionals
assist the personnel staff by handling some employees relations functions. This can
include new employee orientation, enrolling employees in company programs,
employee relationship counseling, as well as answering employee questions regarding
their benefits and compensation.
2. Employee Communication
Employee communication is essential for good personnel management. They are
important competencies used in the entire personnel administration process, from hiring
and communicating work expectations to employee services. Communication plays a very
important role in our life, as people interchange their ideas, information, feelings, opinions
by communicating. Communication could be verbal – spoken or written, or non-verbal i.e.
by means of sign language, body movements, facial expressions, gestures, eye contact or
even with the tone of voice. Someone said correctly “The very attempt of, not to speak,
 59

speaks a lot”.
In an organization, communication could be categorized into – formal and informal. In this
article excerpt, we are going to discuss about the difference between formal and informal
communication.

Formal Communication Informal Communication

Definition Perceived Intentional Message Random Message

Perceived Intentional Setting Relational Setting
Situation Strong Weak

Style Speech Conversation

Publication Personal Note
E-mail Blast Informal comment
Example Policies & Procedures Grapevine
Memoranda Chatting
Report Sharing

2.1. Formal Communication

The communication in which the flow of information is already defined is termed as
Formal Communication. The communication follows a hierarchical chain of command
which is established by the organization itself. In general, this type of communication is
used exclusively in the workplace and the employees are bound to follow it while
performing their duties.
Example: Requests, commands, orders, reports etc.
The formal communication is of four types:
⚫ Upward or Bottom-up: The communication in which the flow of information goes
from sub-ordinate to superior authority.
⚫ Downward or Top-down: The communication in which the flow of information
goes from superior to sub-ordinate.
⚫ Horizontal or Lateral: The communication between two employees of different
departments working at the same level.
⚫ Crosswise or Diagonal: The communication between the employees of two
different departments working at different levels.
2.2. Informal Communication
The communication which does not follow any type of pre-defined channel for the
transmission of information is known as informal communication. This type of
communication moves freely in all directions and thus it is very quick and rapid. In any
organization, this type of communication is very natural as people interact with each
60

other about their professional life, personal life and other matter.
Example: Sharing of feelings, casual discussion, gossips etc.
The informal communication is of four types:
⚫ Single Strand Chain: The communication in which one person tell something to
another, who again tells something to some other person and the process goes on.
⚫ Cluster Chain: The communication in which one person tells something to some of
its most trusted people and then they tells them to their trustworthy friends and
the communication continues.
⚫ Probability Chain: The communication happens when a person randomly chooses
some persons to pass on the information which is of little interest but not
important.
⚫ Gossip Chain: The communication starts when a person tells something to a group
of people and then they pass on the information to some more people and in this
way the information is passed on to everyone.
2.3. Communication Channel
There are two sets of characteristics of organizational communication—internal and
external channels and formal and informal channels. Internal communication is shared
by people at all levels within a company. External communication occurs between
parties inside a company and parties outside the company, such as suppliers, customers,
and investors. Both internal and external forms of communication include everything
from formal e-mail and official reports to face-to-face conversations and casual phone
calls. External communication also takes such forms as customer and supplier Web sites,
news releases, and advertising.
There are so many different internal communication channels to choose from in today’s
globalized and high-tech workplace, and each channel comes with its pros and cons. No
two channels were created equal, you have to choose wisely depending on your
message content, audience, severity, and timing.
2.3.1. Handbook
The employee handbook is used to communicate standard operating procedures,
guidelines and policies. The handbook is also used to communicate the organization's
mission, vision and values, helping to establish an organizational culture and
employment brand. While most employee handbooks have been traditionally in print
format, more organizations are moving toward electronic format, allowing for easy
updating, documentation and review, especially when all employees have access to
computers.
2.3.2. Newsletters
Newsletters are used to communicate new information about the organization, its
products and services, and its employees. Newsletters may be in print or electronic
format and may be sent to the employee as well as to his or her family, especially when
 61

the news directly affects family members. Newsletters may be published on a regular
basis (weekly, monthly, quarterly) or whenever the organization has news to report.

Miller, K. (2014). Organizational Communication: Approaches and Processes (7th Revised

edition). Belmont, CA: Wadsworth Publishing Co Inc.

2.3.3. Town hall meetings

Town hall meetings are an option to gather employees together to share news,
celebrate successes or communicate companywide information that affects all
employees. These meetings are most effective when employees are physically located in
one geographic area, but for some critical meetings, employees may be brought to one
central location. Alternately, town hall meetings may be held in various locations when
employees are widely dispersed geographically or may be held electronically via
webinars or teleconferences.
2.3.4. E-mail
Electronic communication is a fast and easy way to reach many employees at one time.
It may be best used when information is urgent, such as in emergencies. E-mail
communication presents some difficulties because tone of voice and inflection are
absent, making an ironic or sarcastic remark appear rude or harsh, which may not be
the intended message.
2.3.5. Face-to-face meetings
Face-to-face meetings with employees are one of the best ways to relay sensitive
information. During layoffs or restructuring or when handling employee performance
62

issues, face-to-face communication is generally preferred.

2.3.6. Telephone
The telephone is another way to communicate information to employees. Whether it be
in more traditional conversations when face-to-face communication is not physically
possible or in more state-of-the-art communication via webinars or voice mail blasts,
the telephone is a staple in communication vehicles.
2.3.7. Surveys/polls
Two-way communication is vital to any effective communication strategy, and
developing formal tactics to listen to employees is essential. Employers can elicit fast
feedback through surveys and polls about issues (like a new benefit or policy) or general
concerns.
2.3.8. Stories
Storytelling creates a picture through words so the message becomes memorable.
Organizational leaders are beginning to understand how storytelling can be used as a
powerful business tool to impart company culture, to create an employment brand, and
to build trust and loyalty among employees.
2.3.9. Social media
Many individuals regularly use social media sites like Twitter, LinkedIn and Facebook,
not only for recreational purposes but as a business communication tool. Social media
can help recruiters source top talent, help sales people identify potential contacts and
allow employees to keep in touch with their leaders. HR professionals should ensure
that company policies are updated so that social media is used appropriately in the
workplace.
2.3.10. Virtual team meetings
Organizations may have employees located across the city or across the globe and may
need to rely on virtual team meetings to get work done. Setting expectations and
establishing protocols are vital steps in ensuring that communication will be effective.
Since written communication, whether in print or in electronic format, can hide tone of
voice, inflection and other nuances of communication, many work teams rely on
videoconferences and Internet-based technologies to make virtual meetings more
productive.
2.3.11. The "grapevine"
One of the most used and undermanaged tools for employee communication is the
proverbial grapevine. Water cooler discussions are still a mechanism for employees to
hear the latest news unfiltered by management, and they continue to be a source for
employees in learning the inside story. Employers must be mindful that whatever formal
communication strategy is used, the grapevine still exists and will be tapped by
employees at all levels. The grapevine should not be discounted when considering the
best tool to listen to and learn about employee issues.
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2.3.12. Private, Group Messaging, & Chat Tools

Collaborative spaces with private, group messaging, and chat capabilities provide the
perfect business communication tools to keep teams working together. Such spaces are
important when business communication managers need updates on the progress of
projects or when they need to communicate with team members.
2.3.13. Discussion Forums
A discussion forum that brings together everybody, management and employees, and
allows for an open discussion on any topic. Such a space will help in knowledge
dissemination and bring everybody closer together. Discussion forums are also great for
archiving organizational knowledge that may not be easily disseminated on blogs but
exists among individual employees.
2.4. Intercultural Communication
Intercultural communication is necessary in business today and is a skill that will
become increasingly required as businesses expand globally. Understanding a culture
includes respecting it’s customs, traditions and etiquette. An ideal intercultural
communicator is able to recognize examples of cultural differences in both verbal and
nonverbal behaviors, and use that information to better communicate with others.
It is possible to communicate effectively with people from different cultures but not
without effort. To be an ideal intercultural communicator you must understand that
there is not a "right way" for a culture to interact. This hub will focus on the differences
between high context and low context communication, the degree to which the speaker
relies on other factor than explicit speech to interpret meanings.
High-context culture and the contrasting low-context culture are terms presented by the
anthropologist Edward T. Hall in his 1976 book “Beyond Culture”. It refers to a culture's
tendency to use high-context messages over low-context messages in routine
communication. This choice of speaking styles translates into a culture that will cater to
in-groups, an in-group being a group that has similar experiences and expectations,
from which inferences are drawn. In a higher-context culture, many things are left
unsaid, letting the culture explain. Words and word choice become very important in
higher-context communication, since a few words can communicate a complex message
very effectively to an in-group (but less effectively outside that group), while in a low-
context culture, the communicator needs to be much more explicit and the value of a
single word is less important.

2.4.1. Low context

Low context refers to societies where people tend to have many connections but of
shorter duration or for some specific reason. In these societies, cultural behavior and
beliefs may need to be spelled out explicitly so that those coming into the cultural
environment know how to behave.

2.4.2. High context

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High context refers to societies or groups where people have close connections over a
long period of time. Many aspects of cultural behavior are, not made explicit, because
most members know what to do and what to think from years of interaction with each
other. High context is more common in Eastern cultures than in Western cultures.

German American French Mexican

German Swiss English Spanish Greek Japanese
Scandinavian Canadian Italian Arab Chinese

Lower Context Higher Context

Low Context High Context

Communication Communication
• Specific • Less direct
• Detailed Emphasis on:
• Precise • Human relations
Poorer at decoding Communication
• Unspoken message • Non-verbals
• Body language • Feelings of others

3. Direction in Formal Communication

Some of the most important types of direction in formal communication are: 1).
Downward 2). Upward 3). Horizontal or Lateral and 4). Diagonal or Cross-wise! Formal
communication is designed by the management.

Upward to a
supervisor
Diagonally
to a
different
department
Laterally to
Communication
a coworker

Downward
to a
subordinate

It is an official communication which takes place through the line of authority or chain of
command. The basic purpose of designing such communication is to connect various sub-
 65

systems of organization and coordinating their functioning for achieving organizational

goals. Such communication is official and part of formal organization which operates
through formal relationship of superior and subordinate.
3.1. Downward communication:
Communication in the first place, flows downwards. That is why, traditionally this
direction has been highlighted or emphasized. It is based on the assumption that the
people working at higher levels have the authority to communicate to the people
working at lower levels. This direction of communication strengthens the
authoritarian structure of the organization. This is also called Down Stream
Communication. Limitations of Downward Communication:
3.1.1. Distortion/Dilution:
Quite often the communication originating at the highest level gets distorted or
diluted on the way to the lower levels. Sometimes the messages may get lost. It has
to be ensured that the receiver fully understands the purport/ instructions/directions
coming from above. This requires an efficient feedback system.
3.1.2. Delay
Another drawback of downward communication is that often it becomes time-
consuming. The more the levels the greater the chances of delay. That is why
sometimes managers choose to send their massages directly to the person
concerned.
3.1.3. Filtering
Sometimes managers may withhold some valuable information from the employees.
In such a situation the employees become frustrated, confused and powerless. This
may spoil the employer-employee relationship.
3.2. Upward communication
The function of upward communication is to send information, suggestions,
complaints and grievances of the lower level workers to the managers above. It is,
therefore, more participative in nature. It was not encouraged in the past, but
modern managers encourage upward communication. This is a direct result of
increasing democratization. This is also called Up Stream Communication. Limitations
of upward communication:
3.2.1. Psychological
Certain problems, primarily of psychological nature, may come up in upward
communication.
3.2.2. Hierarchical
Many managers do not like to be ‘told’ by their juniors. They may not be patient
enough to listen to them or may even suppress the message sent to them from
below. In such a situation the employees may feel let down.
66

3.2.3. Ombudsperson
In order to tide over such problems an Ombudsperson plays an important role. The
concept of Ombudsman or Ombudsperson was first used in Sweden to go into the
complaints of lower level employees against government officials or agencies.
Now a number of companies in many countries have established positions for
persons to investigate employees, complaints and grievances. An Ombudsperson,
therefore, effectively mediates between the employers and the employees and
smoothens upward communication.
3.2.4. Suggestion System
In order to improve communication in the organization, many companies use
suggestion systems. "Suggestion systems are programs designed to enhance upward
communication by soliciting ideas for improved work operations from employees."
Employees can express their recommendation by putting the written ideas in the
suggestion box. Sometimes, company has a reward for employee who has the best
suggestion. Another model related to suggestion systems is query systems.
Employees can find an answer for the frequently asking question.
3.3. Lateral or horizontal communication:
This type of communication can be seen taking place between persons operating at
the same level or working under the same executive. Functional managers operating
at the same level, in different departments, through their communication, present a
good example of lateral communication. The main use of this dimension of
communication is to maintain coordination and review activities assigned to various
subordinates.
Occasions for lateral communication arise during committee meetings or conferences
in which all members of the group, mostly peers or equals, interact. The best example
of lateral communication can be seen in the interaction between production and
marketing departments.
3.4. Diagonal or Cross-wise
Diagonal or crosswise communication takes place when people working at the same
level interact with those working at a higher or lower-level of organizational hierarchy
and across the boundaries of their reporting relationships. Advantages of diagonal
communication:
3.4.1. Coordination:
This crosswise communication serves the important purpose of coordination through
informal meetings, formal conferences, lunch hour meetings, general notices etc.
3.4.2. Practicable:
As we know not all communication takes place strictly on the lines of organizational
hierarchy, i.e., downwards or upwards.
3.4.3. Morale boosting:
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By providing opportunities to lower level workers to interact with managers in informal

meetings it gives their morale a boost and further commitment to the organization.
More and more organizations are now encouraging crosswise communication and
building up bonhomie.
The Limitations of Diagonal or Cross-wise are:
3.4.4. Fear of infringement:
The superior may feel it an infringement that his subordinate has been given undue
importance and that he has been by passed.
3.4.5. Resistance to compliance:
The superior may not implement the suggestion as he has not been consulted.
3.4.6. Anarchy
The lack of accepted procedures may lead to internal anarchy and external animosity.
4. Employee Policies
Internal Policies and Procedures are an essential aspect of running a business. Primarily
they provide a framework to help employees fulfil their role safely and within the
expectations of their employer. Company policies cover everything from reporting an
absence, employee confidentiality, social media practices, health and safety, and more.
For most organizations, the challenge is not deciding what the policies should be.
Moreover, it’s about how to implement them. The end goal is for every employee to
understand each policy, and specifically, how they relate to them.
Effective internal communications will ensure your policies are embedded throughout
your organization – and not just filed away, never to be seen again. Create a safe and
welcoming environment for everyone. Here are some most used HR policies and
procedures in globe:

Reed, S.M. (2017). A Guide to the Human Resource Body of Knowledge (HRBoK).
Hoboken, New Jersey: John Wiley & Son.
68

4.1. Employee Handbook

An employee handbook is written with employees as the intended audience. It is most
often written using a straightforward layout for easy referencing of company policies
and procedures and is a vehicle for familiarizing employees with basic company policies
and benefit programs, as well as the general expectations of the company, including
acceptable and unacceptable behavior and disciplinary measures.
4.2. Policies Manual
A policies and procedures manual is a comprehensive text that details every aspect of
company policy, the procedures for following those policies and the forms needed to
complete each process. A policies and procedures manual is a reference tool for
managers and supervisors. This tool is much more complete in detail than the
employee handbook and should be used for back-up when more information is needed
to explain a policy or when a deeper understanding of a process is desired. As a benefit
to management, the manual can contain references to federal and state laws that
correlate to each policy. Managers and supervisors then have access to the rationale
for the policies, thus providing them with assistance for enforcement.
A policy is a guiding principle used to set direction in an organization. A procedure is a
series of steps to be followed as a consistent and repetitive approach to accomplish an
end result. Together they are used to empower the people responsible for a process
with the direction and consistency they need for successful process improvement.
4.3. Code of Conduct
It also called code of ethics or code of practice. A code of conduct lays out an
organization's expectations and guiding principles for appropriate workplace behavior.
This Code of Conduct sets out the fundamental standards to be followed by employees
in their everyday actions on behalf of the organization. Code of conduct gives guidance
in areas where staffs need to make personal and ethical decisions.
4.4. Work Rules
While policies are broad guidelines that reflect the aims and objectives of the
organization, rules are meant more for day to day operations to proceed smoothly
without any glitches. Rules are meant to guide the behavior and attitude of the
employees to help them behave according to situations arising in day to day
operations. These rules make sure that there is no inconvenience to any employee and
they can work with their full efficiency. For example, if employees are asked not to
smoke in the premises of a factory or keep their mobiles switched off during a meeting,
these are considered rules.
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Part Four: HR Information Management

1. Employee Records Management
Employers typically keep a number of different employee records (often called personnel
files) as a way of documenting an employee’s relationship with a company. In certain
instances, documentation in a personnel file can provide important supportive data- for
example, to show an employee’s discipline history in support of a termination in
subsequent litigation. The personnel file can also track performance goals, leaves of
absence, and any employment-related agreements. In addition to being a good business
practice, employers may be required to keep certain types of employee records in order to
comply with specific provisions under labor laws in different countries.

1.1. Type of Employee Records

1.1.1. Basic Information: Employee’s full name, social security number, address, and
birth date.
1.1.2. Hiring Documents: Job descriptions, employment applications, and resumes.
1.1.3. Job Performance and Development: Performance evaluations, corrective
action or disciplinary letters, awards, promotion records, and records of education or
trainings.
1.1.4. Employment-Related Agreements: Employment agreements, union contracts,
non-competition agreements, confidentiality or nondisclosure agreements.
1.1.5. Compensation: Documents related to compensation and benefits information,
such as beneficiary forms, payroll records, and time cards for prior year(s).
1.1.6. Termination and Post-Employment Information: It is a good idea to keep
information related to an employee’s termination on file should a dispute later arise.
1.1.7. Confidential Files: (Certain records should be kept in a confidential file
separate from the personnel file)
1.1.8. Medical records and documents that relate to an injury or disability
1.1.9. Material relating to Workers’ Compensation claims
1.1.10. Family and Medical Leave documents
1.1.11. Employment verification information
1.1.12. Wage garnishment documentation
1.1.13. Documents pertaining to sensitive matters, such as harassment investigation
records or any information pertaining to an employee’s religion
1.2. Recordkeeping Policy
It is important to develop a policy that outlines the procedures for how your
company will manage employee records and files. Keep in mind that your policy
must comply with the related laws. Some states, for instance, require employers to
70

provide employees with access to their files. Consider the following points when
developing your company’s employee records policy:
1.2.1. What types of records will be maintained?
Identify documents and forms that should be kept in either a personnel file or
confidential file.
Establish a regular timeframe for reviewing and updating employment records, as
well as for disposing of records that no longer need to be retained.
Your employee records policy should clearly state which records to maintain and how
long certain documents should be kept.
1.2.2. How will access to records be controlled?
Identify staff who have authorization to access personnel and confidential files. Be
sure that safeguards are in place that restrict access to those individuals. These
safeguards can be physical (such as locked cabinets) or technical (such as special
username and password access).
Define the specific circumstances by which an employee may access or copy files,
including the specific records which may be reviewed. Files should be accessed
under supervision of management.
Generally, employees should not be permitted to remove or change any documents
contained in their personnel files. If an employee disagrees with a record, consider
allowing them to submit a written statement regarding the disagreement and adding
it to his or her file.
Develop procedures for handling third party requests for disclosure of employee
information, and what information may be released. Consider obtaining the
employee’s prior written authorization to release such information.
1.3. Maintain accurate records
The importance of an accurate employee record stretches far beyond the legal
ramifications of that information not being current. For employers, keeping accurate
records can help recruitment, identify gaps in skills, and save time while performing
administrative duties. If you're looking for one way to improve your Human
Resources department and ease your burden during inspections, consider these
reasons to improve the accuracy of your employee records.
1.3.1. Prevent Litigation
No employer likes to dwell on the possibility of litigation, but a termination may
result in legal action and a complete employee record can provide documentation
and justification for your actions as a company. Employee records must be
maintained at least one year after employee termination and, if kept up-to-date,
they can be invaluable for preventing a frivolous lawsuit. An accurate and updated
employee record not only records employee information, but also issues that led to
termination or reprimands.
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1.3.2. Ensure Competency

While some industries, like healthcare and public works, focus on competency, it's an
important concept for all businesses. Employees need to be properly trained and
educated on their job duties before working independently to prevent mistakes or
injuries. Keeping an accurate employee record of staff training helps document that
you have not only given employees the correct information to do their job, but also
that the employee agrees to having been trained. When scheduling or cross-training,
a well-kept employee file can help determine who is competent in various areas and
able to help other departments. During inspections, you can verify training.
Competency is a key benefit of an accurate employee record.
1.3.3. Continue Networking
Just because an employee leaves your company doesn't mean that's the last you've
heard from them. During subsequent job hunts and strategic moves, you may run
into that employee professionally. They may be your new sales representative, board
member, or applicant for an advertised job. Having accurate, secure, and complete
employee records can help jog your memory when an old face pops up for a
reference or a new job, even after their manager has left. Often, employers receive
calls about former employees for new job opportunities and a quick look at their
employee record can yield vital information about the employee's work ethic.
Keeping employee records past the date they work with the company can help
identify other workers in your industry that may return to your company in the
future.
1.3.4. For Employee and Managerial Review
Accurate employee records offer a global view of the employee and their time at a
company. Whether you're training a new manager and want them to understand the
employment history of their new employees or have an employee asking to see their
file, accurate employee records are essential for presenting a non-biased look at an
employee's work history. When needed, having the ability to understand an
employee's career in one file can save time.
1.3.5. Meet Legal Requirements
Keeping employee files isn't just a convenience for businesses, it's also a legal
responsibility. Maintaining tax information, wage information, employee
demographics, and other required documentation is essential to meeting your legal
obligations. When regulators ask for employee information, having it available in a
single, easy to find place is essential.
Maintaining accurate employee records is far from a burden. In fact, with an effective
HRIS, it can be both easy and secure. Employee records can help employers by
meeting legal obligations and avoid litigation and it can help new managers
understand their employee's background. Employers still need to be diligent in
establishing and maintaining their employee records to help their business and their
employees thrive in today's workforce.
Consider an investment in an HRIS (human resources information system) to help
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you automate and track all employee records, including benefits and carrier
information. HRIS can help you maintain control of employee information while
staying compliant.

1.4. Other Considerations

When collecting and maintaining information to be kept in employee personnel files,
you should be careful to comply with all applicable laws, including any requirements
as to what information should be collected, what your company may or may not do
with that information, and how long employee records should be kept.
1.4.1. Human Resources Information System
Consider an investment in human resources information system (HRIS) to help you
automate and track all employee records, including benefits and carrier information.
An easy-to-use HR software solution can help you maintain control of employee
information while staying compliant.
1.4.2. Consumer Protection
Many international laws protect an individual's right to privacy and protection from
unauthorized disclosure of personal information. One of the important pieces of
personally identifiable information collected by employers is an employee's Social
Security or Identity Number. Employers use the number to report an employee's
earnings, including payroll taxes and benefit contributions. By controlling who has
access to paper files and electronic files containing an employee's personally
identifiable information, an employer manages records and prevents fraud.
1.4.3. Decision-Making
Employee records management includes standard operating procedures. For
example, an employer develops a protocol for handling each type of employee
record. Employees need a standard protocol for deciding what information to save,
discard or preserve for each record.
1.4.4. Role Assignment
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Information technology personnel assist an employer with managing records by

controlling the roles of employees in their organization's information system. For
example, through role assignment, a computer programmer can authorize only
people with a business need to view an employee's personally identifiable
information when they log in to the information system.
1.4.5. Storage
Records management also requires adequate physical storage. For example,
employers must maintain employee records, such as payroll records, to comply with
federal laws. To keep records, employers must choose how to store them and
prevent long-term damage or destruction. Employers must provide spaces where
paper files are free from fire and water damage. A file storage area must also be
locked to prevent unauthorized access.
2. HR Data
The intersection of data and human behavior has led to the consumerization of workforce
analytics tools. Historically, IT had access to business data and HR relied on them to create
workforce reports. But as technology has advanced, these tools have become increasingly
easy to use.

HR involves practical application of up-to-date understanding in the context of ’real world’

organizations. Reliable knowledge built on accurate information is needed. To undertake
effective HRM, it is important that good-quality information underpins decisions and
informs the actions of those involved in the employment relationship, such as trade
unions, individual employees, outsourced service providers and professional
organizations.

In the context of HR, knowledge, data and information play a vital role in implementing
important strategies for management of human resources by referring to the facts and
figures related with the human resources and demographic profiles.

2.1. Data, Information, and Insights

2.1.1. Data

Data consists of raw and unprocessed facts and may include numbers, images, audio
or video files, readings from machines, etc. Data represent the “facts” of transactions
that occur on a daily basis. A transaction can be thought of as an event of
consequence, such as hiring a new employee for a particular position for a specified
salary.

2.1.2. Information

Every business generates data, practically at every moment, but in its raw form, it isn’t
particularly useful. That’s why we process and analyze data so that we can harvest
information from it. Information is a collection of data points that helps us to
understand what is being observed and measured. Essentially, information is data that
74

has been processed, aggregated, and organized in order to reveal meaning. An

interpretation of data always has some goal and context such as making a hiring
decision for a particular department or understanding of the performance of the
company to make an improvement.

2.1.3. Insights

When information is seen in a context and knowledge and experience are brought in
to interpret it, you get business insights. Information helps us to observe what is
happening, while insights explain why. These business insights help to arrive at
decisions and define strategy. Insights dive deeper into data and connect dots that
may seem unrelated to shed light on the questions under consideration.

2.2. Data Collection

Data are pieces of information used to analyze something. Two types of data used in
workforce analysis are qualitative and quantitative data. Although there are several
differences, the most apparent difference is that quantitative data involves numbers.

Quantitative data refer to the information that is collected as, or can be translated
into, numbers, which can then be displayed and analyzed mathematically.

Qualitative data are collected as descriptions, anecdotes, opinions, quotes,

interpretations, etc., and are generally either not able to be reduced to numbers, or
are considered more valuable or informative if left as narratives.

Qualitative information for human resources includes surveys, interviews, opinions

and academic literature, while quantitative information includes statistics and
numerical calculations relating to human resources research. Human resources
researchers collect qualitative information and analyze it using quantitative
information. Gathering qualitative data from employees and managers provides "real-
time" information about employee morale, team building and reveals problem areas
within an organization, its management, and employee performance and training.
Quantitative information includes statistical tables, mathematical charts, salary
benchmarking and reports breaking down survey and interview results by
percentages of participants.

HR departments conduct research for determining salary benchmarks for their

industries, researching the cost and coverage of health benefits, and for surveying
employees and management. Quantitative and qualitative information are helpful for
identifying trends and areas for improvement within a workplace. Human resources
recruiters and retention specialists gather and tabulate such information for
maintaining competitive compensation and benefits. Information gathered is
tabulated, analyzed and presented to executive management with recommendations.
Human resources researchers also use quantitative information for determining hiring
trends and developing demographics for locating job candidates. Surveying
employees assists human resources with identifying morale issues, improving
employee performance, and reorganizing departments and work flow for improving
 75

efficiency.

Othman, S. (2014). Benefits of Combining Qualitative & Quantitative Methods.

Available on shayaaresearch.blogspot.tw.

While the Quantitative design strives to control for bias so that facts can be
understood in an objective way, the Qualitative approach is striving to understand the
perspective of the program stakeholders, looking to firsthand experience to provide
meaningful data. The accumulation of facts and causes of behavior are addressed by
quantitative methodology as the qualitative methodology addresses concerns with
the changing and dynamic nature of reality. Quantitative research designs strive to
identify and isolate specific variables within the context (seeking correlation,
relationships, causality) of the study as the Qualitative design focuses on a holistic
view of what is being studied (via documents, case histories, observations and
interviews). Quantitative data is collected under controlled conditions in order to rule
out the possibility that variables other than the one under study can account for the
relationships identified while the Qualitative data are collected within the context of
their natural occurrence.

Both Quantitative and Qualitative research designs seek reliable and valid results.
Data that are consistent or stable as indicated by the researcher's ability to replicate
the findings is of major concern in the Quantitative arena while validity of the
Qualitative findings are paramount so that data are representative of a true and full
picture of constructs under investigation. By combining methods, advantages of each
methodology complements the other making a stronger research design with
resulting more valid and reliable findings. The inadequacies of individual methods are
minimized and more threats to Internal Validity are realized and addressed.

Human resources departments use qualitative and quantitative information for

investigating employee performance problems and personnel issues. Qualitative data
can assist human resources departments with identifying personnel problems and
76

sources of employee morale problems. Quantitative information including attendance

records and production reports assist with identifying individual and team problems
within an organization. Workplace safety officers evaluate quantitative data reporting
employee injuries and equipment failures for identifying and reducing potential for
workplace injuries. Qualitative and quantitative information used together provide a
full range of information for the topic or circumstances being researched. Qualitative
information provides multiple points of view about a research topic, while
quantitative data provides direct and objective information.

There are several techniques that are commonly used for the purposes of collection
of data

2.2.1. Interviews

There are two types of interviews which can be used for collection of data for HR
analysis, viz., individual interviews (with groups of employees who do the same job)
and supervisory interviews (with one or more supervisors who are thoroughly
knowledgeable about the job being analyzed) The interviewer has to collect accurate
and complete data and information by creating favorable attitude among employees
and supervisors. There are several basic attitudes and techniques that will serve to
secure maximum of accurate and complete information. These attitudes and
techniques will also help to reduce the natural suspicion of both employee and
supervisor toward the interviewer.

2.2.2. Direct Observation

Direct observation is particularly useful in jobs that consists primarily of observable

physical activity like draftsman, mechanics etc. One approach to this method is by
observing the worker on the job during a complete work cycle. In this process, notes
should be taken regarding all the job activities observed. The next stage is
interviewing the worker and getting the additional information from him.

2.2.3. Maintenance of Long Records

In this technique the workers are asked to maintain and keep daily records or list of
activities they are doing on that day. For every activity he engages in the employee
records the activity in the list given. This technique provides comprehensive job
information and it is much useful when it is supplemented with subsequent
interviews.

2.2.4. Questionnaires and survey

A questionnaire is a set of written questions used for collecting information.

Advantages of questionnaires include increased speed of data collection, low or no
cost requirements, and higher levels of objectivity compared to many alternative
methods of primary data collection. However, questionnaires have certain
disadvantages such as selection of random answer choices by respondents without
properly reading the question.
 77

There is much confusion around the terms survey and questionnaire. A questionnaire
is a series of questions used for gathering information that is used to benefit a single
individual. While more than one individual might complete the questionnaire, the
responses are not aggregated for analysis. A survey, on the other hand, is the process
of gathering information for statistical analysis to benefit a group of individuals. The
responses are aggregated to draw a conclusion.

Put another way, a survey is the process of collecting and analyzing the data, where
the questionnaire is the set of questions used to gather the information.

2.2.5. Critical Incident Technique

The critical incident technique for job analysis is especially useful for scientific
analysis, and selection research. In this technique, incidents are short examples of
successful or unsuccessful job behavior. After many incidents are collected they are
classified into behavioral categories. These categories describe specific desired job
behaviors and can be useful in recruitment and selection decisions. The categories
also include a list of the specific behaviors that make the difference between effective
and ineffective performance on the job. They, therefore, specify precisely what kinds
of performance should be appraised. It is also useful for testing the effectiveness of
the job description and job specification.

2.2.6. Focus group

A focus group is a gathering of deliberately selected people who participate in a

planned discussion that is intended to elicit target perceptions about a particular
topic or area of interest in an environment that is non-threatening and receptive. The
focus group is a collective on purpose. Unlike an interview, which usually occurs with
an individual, the focus group method allows members of the group to interact and
influence each other during the discussion and consideration of ideas and
perspectives.

2.3. Essentials of Statistics

When you get a big set of data there are all sorts of ways to mathematically describe
the data. The term "average" is used a lot with data sets. Mean, median, and mode
are all types of averages. Together with range, they help describe the data.

2.3.1. Mean
When people say "average" they usually are talking about the mean. You can figure out
the mean by adding up all the numbers in the data and then dividing by the number of
numbers. For example, if you have 12 numbers, you add them up and divide by 12. This
would give you the mean of the data. For example, if you have three people, one of
whom earns $1, one of whom earns $2, and one of whom earns $1000, the mean
salary is $334.33 ($1003/3).
2.3.2. Median
78

The median is the middle number of the data set. It is exactly like it sounds. To figure
out the median you put all the numbers in order (highest to lowest or lowest to
highest) and then pick the middle number. If there is an odd number of data points,
then you will have just one middle number. If there is an even number of data points,
then you need to pick the two middle numbers, add them together, and divide by two.
That number will be your median.
For example, the median salary rate is the salary that is exactly in the middle if EVERY
person is placed in rank according to salary (let's say lowest to highest salary). In the
example above, you'd have: person A $1; person B $2; person C $1000
The median salary is $2. Half the people have salaries above the median and half the
people have salaries below the median. The median is useful when salaries are
unequal. For example, when someone is paid a lot more than others, like in this
example, the mean is strongly influenced. When you say the average is $334, it looks
like everyone is doing OK. The median is more reflective (so, you know, for example,
that half the people do worse than $2) in this case.
For salary data, the median salary (or net compensation) is the salary "in the middle."
That is, half of the employees earned below this level.
2.3.3. Mode
The mode is the number that appears the most. There are a few tricks to remember
about mode:
If there are two numbers that appear most often (and the same number of times) then
the data has two modes. This is called bimodal. If there are more than 2 then the data
would be called multimodal. If all the numbers appear the same number of times, then
the data set has no modes.
Imagine that you live in a small town where most of the people are employed by a
factory and earn minimum wage. One of the factory owners lives in the town and his
salary is in the millions of dollars. If you use a measure like the average to try to
compare salaries in the town as a whole, the owner's income would severely throw off
the numbers. This is where the measure of mode can be useful in the real world. It tells
you what most of the pieces of data are doing within a set of information.
2.3.4. Range
Range is the difference between the lowest number and the highest number. Take, for
example, math test scores. Let's say your best score all year was a 100 and your worst
was a 75. Then the rest of the scores don't matter for range. The range is 100-75=25.
The range is 25.
For example, the wages for Pharmacists in the United States are generous, with
average pay above six figures ($107K) per year. Total cash earnings of Pharmacists
range from $83K on the low end to $133K on the high end. Thus, the pay range is $50K
($133K-$83K).
2.3.5. Percentile
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A percentile is best described as a comparison score. It’s a common term in all kinds of
testing of data, but many will be most familiar with percentiles as they relate to
personality assessment or salary survey. If you scores at the 75th percentile (P75) on
the IQ test, you did "as well or better than" 75% of the ones taking the test (norm
group).
2.3.6. Quartiles
Quartiles are values that divide a set of data into four equal parts. For example, the
owner of a super market recorded the number of customers who came into his store
each hour in a day. The results were 12, 8, 10, 7, 15, 3, 6, 7, 12, 8, and 9. The ascending
order of the data is 3, 6, 7, 7, 8, 8, 9, 10, 12, 12, 15. The lower quartile is 7, the median
(second quartile) is 8, and the upper quartile is 12.
2.4. Reporting
The information contained in the HRIS is important to making business decisions. The
right reporting tools are critical to the success of the HRMS providing information to
the organization. Most HRMS applications provide a standard set of reports intended to
be run and printed as a list of information. The most common of these are the
birthday; new hire list and government regulatory reports. These lists tend to be a
snapshot of the data and static in nature meaning that as the data changes in the
system, the reports must be re-run to reflect any data changes. HRMS applications also
provide tools to create ad hoc lists or queries, users can develop “ad hoc" reports to
create specific, customized reports. Query tools allow for the creation of reports that
are custom to the company’s needs allowing complete control and flexibility of the
report’s contents. Query tools are intended for non-technical users and are typically
designed with easy-to-use features.
As an alternative to the static list, there are tools that allow for more dynamic means of
data creation. While traditional systems store data in rows and columns similar to a
spreadsheet, these tools store data in “cubes” so the data can be interrogated in
various means for analytical purposes. Often the reports these tools create are at a
summary level and, through the technology, allow one to “drill down” on a data point
into more specifics of the information presented. These types of reporting tools are
frequently used in dashboards and intranet applications designed for use by business
decision makers.
2.5. Data Visualization
Data visualization for Human Resources offers an impactful way to present and
communicate information to stakeholders. In today’s world, businesses can no longer
succeed without the use of data. HR, in particular, uses analytics to help to guide
talent, leadership, and hiring decisions for companies. A well-designed visualization of
your key HR data brings life and meaning to insights that exceed what can be achieved
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with bulleted or numbered points on a presentation.

2.5.1. Histograms
Histograms are a type of bar chart that plots the distribution of a numeric variable’s
values as a series of bars. Each bar typically covers a range of numeric values called a
bin or class and each bar’s height indicates the frequency of data points with a value
within the corresponding class. Histograms are used for showing general distribution of
dataset variables. You can see roughly where the peaks of the distribution are, whether
the distribution is skewed or symmetric, and if there are any outliers. This HR
dashboard example include histograms "Employee Distribution by Age" and "Employee
Distribution by Department", and area charts "Employee Distribution by Years in
Company" and "Employee Distribution by Growth".
2.5.2. Venn Diagram
Venn diagrams define all the possible relationships between collections of sets and can
help simplify complicated processes. The most basic Venn diagrams simply consist of
multiple circular boundaries describing the range of sets. The overlapping areas
between the two boundaries describe the elements which are common between the
two, while the areas that aren’t overlapping house the elements that are different.
Think of the qualities HR looks for that will help short-list candidates for a position,
such as experience, professional skills and leadership competence. All of these qualities
are different and may or may not be present in some candidates. However, a Venn
diagram of this scenario helps indicate very simply that the best candidates will have all
of these qualities combined.
2.5.3. Pareto Chart
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The name comes from the Pareto Principle – that 80% of effects come from 20% of
causes – and this chart is most commonly used in quality assurance. The Pareto chart
incorporates both a line graph and a bar graph; individual values are represented in
descending order in bar form, while the line is the cumulative sum of the individual
values. In HR, using this chart enables you to focus on solving the few causes that are
generating the most problems to achieve a significant impact quickly.
2.5.4. Scatter Diagram
The scatter diagram graphs pairs of numerical data, with one variable on each axis, to
look for a relationship between them. If the variables are correlated, the points will fall
along a line or curve. The scatter diagram is also called “X-Y graph,” so remember that
it will have data identified in variables of X and Y.
2.5.5. Trend Diagram
Trend diagrams are used to show trends in data over time. All processes vary, so single
point measurements can be misleading. Displaying data over time increases
understanding of the real performance of a process, particularly with regard to an
established target or goal. Trend diagrams are typically used to identify patterns with
data points that correlate with periods of time in order to analyze cycles or trends.
2.5.6. Fishbone Chart
The fishbone chart is a visual way to look at the cause and effect to help find reasons
for variations, defects, or failures. The diagram looks like a fish’s skeleton with the
problem at its head and the causes for the problem feeding into the spine. A fishbone
diagram is useful in brainstorming sessions to identify possible causes of a problem and
in sorting ideas into useful categories.
2.5.7. Pie Chart
The most basic and the one we’re all familiar with: Pie charts are generally used to
show percentage or proportional data and usually the percentage represented by each
category is provided next to the corresponding slice of pie. Pie charts are good for
displaying data for around six categories or fewer. HR often uses pie charts to
demonstrate statistical breakdowns of a workforce, by salary range, age groups, survey
responses, etc.
3. Human Resource Information System (HRIS)
Human Resource Information System (HRIS) can be briefly defined as integrated systems
used to gather, store, and analyze information regarding an organization’s human
resources. But, as is the case with any complex organizational information system, an HRIS
is not limited to the computer hardware and software applications that comprise the
“technical” part of the system; it also includes the people, policies, procedures, and data
required to manage the human resources function. Thus, a functional HRIS must create an
information system that enables an assimilation of the policies and procedures used to
manage the firm’s human capital as well as the procedures necessary to operate the
computer hardware and software applications.
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HRIS is an information system (IS) used to acquire, store, manipulate, analyze, retrieve, and
distribute information regarding an organization’s human resources. The purpose of the
HRIS is to provide service, in the form of accurate and timely information, to the “clients”
of the system. As there are a variety of potential users of HR information, it may be used
for strategic, tactical, and operational decision making (e.g., to plan for needed employees
in a merger); to avoid litigation (e.g., to identify discrimination problems in hiring); to
evaluate programs, policies, or practices (e.g., to evaluate the effectiveness of a training
program); and/or to support daily operations (e.g., to help managers monitor time and
attendance of their employees). All these uses mean that there is a mandatory
requirement that data and reports be accurate and timely and that the “client” can
understand how to use the information.

Because of the complexity and data intensiveness of the HRM function, it is one of the last
management functions to be targeted for automation. This fact does not mean that an
HRIS is not important; it just indicates the difficulty of developing and implementing it
compared with other business functions—for example, billing and accounting systems.
Powered by information systems and the Internet, today almost every process in every
function of HRM is being computerized.

HRIS is often to be used for administrative purposes in organizations. This purpose is

related to administrative and operational efficiency, which reduces costs and time.
Traditionally, HR in any organization faces several challenges such as information storage
and retrieval (How to manage large quantities of paper?), hiring & firing (How to deal with
applicant tracking, black lists, social security issues, and other reports for the
government?), training (How to develop training programs that fit the new digital
economy?), performance tracking (How to track employee performance worldwide?), and
cost figures (How to lower the business information system costs?).

Organizations vary in the types of information that they consider useful and important to
collect. Organizations develop at least two kinds of human resource information systems.
The first HRIS replaces many of the administrative functions once performed by people in
the organization. Human resource information systems, which perform administrative tasks
faster than people and require fewer employees, are designed to produce a wide range of
vital information at the lowest cost. Companies, in some instances, have implemented
human resource information systems as a tool and approach to downsizing. The second
HRIS is based on organizational reengineering. HRIS that reengineer organizational
processes are based on optimization of the way in which HR managers use information.
HRIS with reengineered processes often include interactive employee information kiosks or
Internet-based Web applications. Reengineered HRIS provide employees and managers the
opportunity to interact with the organization’s databases to apply for jobs, review
organizational regulations, and to facilitate communications between employees,
managers, and labor unions.

3.1. Benefits of HRIS

The systems and process focus helps organizations keep the customer perspective in
mind, since quality is primarily defined and operationalized in terms of total customer
satisfaction. Today’s competitive environment requires organizations to integrate the
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activities of each functional department while keeping the customer in mind. An

effective HRIS helps by providing the technology to generate accurate and timely
employee information to fulfill this objective. There are several advantages to firms in
using HRIS. They include the following:

• Providing a comprehensive information picture as a single, comprehensive

database; this enables organizations to provide structural connectivity across units
and activities and increase the speed of information transactions
• Increasing competitiveness by improving HR operations and improving
management processes
• Collecting appropriate data and converting them to information and knowledge for
improved timeliness and quality of decision making
• Producing a greater number and variety of accurate and real-time HR-related
reports
• Streamlining and enhancing the efficiency and effectiveness of HR administrative
functions
• Shifting the focus of HR from the processing of transactions to strategic HRM
• Reengineering HR processes and functions
• Improving employee satisfaction by delivering HR services more quickly and
accurately to them

The ability of firms to harness the potential of HRIS depends on a variety of factors,
such as:

• the size of the organization, with large firms generally reaping greater benefits;
• the amount of top management support and commitment;
• the availability of resources (time, money, and personnel);
• the HR philosophy of the company as well as its vision, organizational culture,
structure, and systems; managerial competence in cross-functional decision
making, employee involvement, and coaching; and
• the ability and motivation of employees in adopting change, such as increased
automation across and between functions

In assessing the benefits and impact of an HRIS to an organization, typical accounting

methods do not work with the HRM function. While there are several tangible benefits
in implementing an HRIS, such as payroll efficiencies and reduction in labor costs due to
automation, there are several intangible or hidden benefits as well. They include
employee satisfaction with streamlined and efficient HR processes and freeing up HR
from routine, administrative matters to focus on strategic goals.

Furthermore, HR practices can help organizations untangle the rigidity and inertia
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associated with the mechanistic, routine nature of enterprise resource planning (ERP).
ERP software applications are a set of integrated database applications or modules that
carry out the most common business functions, including HR, general ledger, accounts
payable, accounts receivable, order management, inventory control, and customer
relationship management. Obviously, HRM’s emphasis on knowledge management,
human capital stewardship, and relationship building can provide considerable
assistance in the implementation and use of ERPs. Therefore, active engagement of HR
professionals in the introduction and ongoing functioning of an ERP is important so that
organizations can realize the strategic benefits associated with these systems.

Kavanagh, M.J. & Thite, M. (2015). Human Resource Information Systems: Basics,
Applications, and Future Directions. Thousand Oaks, CA: SAGE.

3.2. Types of HRIS

There are multiple typologies for the classification of computer-based systems;
however, we are going to define the most basic types of systems and then apply them
to their development and use within an HRIS. One of the earliest books in the field of
computer-based systems placed systems under three basic categories: Electronic Data
Processing (EDP), Management Information Systems (MIS), and Decision Support
Systems (DSS). EDP is primarily electronic storage of information and was first applied
to automate paperwork.

3.2.1. EDP
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The EDP category of HRIS was the earliest form introduced in the HR field and fits in
with the transactional level of HR activities. The EDP’s basic characteristics include:

• A focus on data, storage, processing, and flows at the operational level

• Efficient transaction processing
• Scheduled and optimized computer runs
• Integrated files for related jobs
• Summary reports for management

3.2.2. MIS

The MIS type of HRIS emerged as technology improved over time, and it fits the
traditional level of HR activities, such as recruitment, selection, and compensation. The
characteristics of MIS include:

• An information focus, aimed at middle managers

• Structured information flows
• Integration of EDP jobs by business function (production MIS, marketing MIS ...)
• Inquiry and report generation (usually with a database- a collection of information
that is organized so that it can easily be accessed, managed, and updated. In one
view, databases can be classified according to types of content: bibliographic, full-
text, numeric, and images.)

3.2.3. DSS

HRIS at DSS level began to emerge in the cost-effectiveness era of HRM development,
and it fits the transformational level of HR activities—adding value to organizational
processes. DSS are focused still higher in the organization, with an emphasis on the
following characteristics:

• Decision focused, aimed at top managers and executive decision makers

• Emphasis on flexibility, adaptability, and quick response
• User initiated and controlled
• Support for the personal decision-making styles of individual managers

There is another type of HRIS which should be used in organizations to maximize the
effect of computer-generated knowledge on managerial decision making. There are
numerous reports generated on a regular basis from both the EDP and the MIS types of
HRIS—for example, overtime and benefits usage. The critical question is: “how many of
these reports are used by either line managers or HR professionals in their daily work,
particularly in their decision-making capacity?” All HRIS software is designed to
generate a standard set of reports, but surveys and reports from both managers and HR
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professionals indicate that many of these reports are typically discarded. Thus, it is
apparent that another type of HRIS exists—the human resources management decision
system (HRMDS). This type of system could be described as the ideal system since it
provides critical information for decisions involving the human resources of the
company, and thus, should be used as a standard for the development and application
of any HRIS. This type has the following characteristics:

• Report formation and generation based on identified managerial needs for

decision making
• Categorization of reports by management level
• Timing of report generation based on frequency of managerial use: daily, weekly,
monthly
• Historical information retained and reported in a timely manner so that managers
and HR professionals can see the results of their use of the information in their
previous decisions

3.3. Core HR
There are at least thirteen common human resource information subsystems.

3.3.1. Recruitment and Selection

The recruitment and selection system ensures that the list is current all the time and
can be viewed by a prospective applicant anytime; generates various statistics like jobs
with high turnover and the average time it takes to fill a vacancy; and tests and
evaluates candidates’ personality, knowledge, and skills at different company locations.

3.3.2. Personnel Administration

The personnel administration subsystem warehouses information about employee

names, birth dates, service dates, race, sex, salary, department code, job code, location
code, and employment status.

3.3.3. Time and Labor Management

The time and labor management subsystem tracks and identifies work schedule
patterns, absenteeism, and tardiness, allocates resources, and determines procedures
to administer either time-related or knowledge-related tasks or functions based upon
an employee knowledge profile.

3.3.4. Training and Development

The training and development subsystem provides programmed instructions and self-
paced training to employees; plans classes, sets up training schedules, organizes
training courses’ activities, and collects fees; and tracks the developmental plan of each
employee within the company and their learning progress.
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2.3.5. Pension Administration

The pension administration subsystem streamlines plan set-up, record keeping,

pension calculations, and retiree payments and statements.

3.3.6. Compensation and Benefits Administration

The compensation and benefits administration subsystem provides information on

flexible and non-flexible healthcare plans, short and long-term disability plans, savings
plans, retirement plans, pension plans.

3.3.7. Payroll Interface

The payroll interface subsystem streamlines payroll and accounting by providing data
on salary, wages, and benefits.

3.3.8. Performance Evaluation

The performance evaluation subsystem aids management with periodic evaluations of

employees. This subsystem performs multiple review functions including auditing and
analyzing employee competency; analyzing the congruence between employee
performance and organizational objectives; and measuring and monitoring the
employer’s learning progress and performance.

3.3.9. Outplacement

The outplacement subsystem provides support information for discharged or displaced

employees such as links to self-help books, career counselors, and training programs on
job search techniques, resume development, interviewing strategies, and negotiating
salary.

3.3.10. Labor Relations

The labor relations subsystem includes information about work policies on privacy,
sexual harassment, and workforce diversity.

3.3.11. Expense and Travel Administration

The expense and travel administration subsystem facilitates and automates employee
reimbursement for business expenditures on travel, entertainment, and supplies.

3.3.12. Organizational Management

The organizational management subsystem provides information about all job

positions in a company, their hierarchy, and job descriptions; generates decisions on
employee hiring, promoting, transferring, retiring, and firing; and reporting
requirements of various employment laws.

3.3.13. Health and Safety

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The health and safety subsystem provides information about the federal, state, and
local health and safety regulations relevant to the organization or workplace as well as
information on the company’s safety record, injury/illness prevention plan, safety
compliance procedures, and worker compensation.

Numerous organizations have shifted the responsibility of updating employee records

from human resource staff to the employees themselves. Self-service systems require
less direct management and more technological oversight and support. Web-based
HRIS allow for global access for telecommuting and traveling employees. Common self-
service web-based HRIS applications include Personal Information, Banking
Information, Benefits Inquiries and Open Enrollment, Time Entry and Time Off, Cross
Application Time Entry, Travel Expenses, Electronic Pay-stubs, Organization Directory,
Employment and Salary Verification, Training Overview and Enrollment, and Change
Password.

3.4. Self-Services
The use of technology to offer services that would be performed by an HR
representative. Commonly called Manager Self-Service (MSS) and Employee Self-
Service (ESS), these fall into two (2) categories, informational and transactional

3.4.1. Informational Self-Service

Informational Self-Service refers to tools that are offered to provide information to

employees. These tools are commonly referred to as “Knowledge Management”
systems. They contain information about HR policies, processes and can include
benefits and compensation information. They are informational in that employees
cannot perform a transaction within these systems; they are used for reference
purposes only. These can be present in either centralized or decentralized service
delivery models and are almost always found when HR services are outsourced.

3.4.2. Transactional Self Service

These tools are offered for managers and employees to change information captured in
HRIS. Employee Self-Service applications include information that the employee
changes, which is typically personal in nature. Common changes that occur in an ESS
system are employee address, emergency contact, tax withholdings and benefit
elections. Manager Self-Service applications include information that a manager
changes, which is related to the employees they manage. These most often replace
paper-based processes for change of employee information like job changes,
promotions, transfers and pay changes. MSS applications can also include processes for
supporting performance reviews, compensation events and staff planning.

MSS applications commonly use workflow to automatically manage the approval and
the routing of information changes. Workflow is a technology that routes an
information change to another person for verification or approval before it records the
change in the system of record. ESS/MSS applications can be present in either
centralized or decentralized service delivery models and are almost always found when
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HR services are outsourced.

HR self-service benefits include the accuracy of information, consistency of process and

reduction of time HR professionals spend in administrative activities.

3.4.3. HR Portals in Self-Service

A portal is a Web application that resides on the intranet (internally) or Internet

(externally) that is designed to aggregate and personalize information for access from a
single source. The HR portal in an intranet application is used to perform informational
or transactional self-service. Based on an employee’s role in the organization as defined
within their security authorizations, the HR portal will present the applications and
information the person is allowed to access. Through the use of single sign on
technology, an employee can access an HR application through the portal without
having to log into that application, thereby simplifying the process for the employee
and eliminating the need for multiple passwords. The other benefit of an HR Portal is
that information can be distributed throughout the organization while being centrally
maintained. Policy information and corporate communications can be accessed by all
employees regardless of location even though the actual information is stored centrally.

3.5. Knowledge Management (KM)

Knowledge Management (KM) is the umbrella term for the management of
unstructured information - that is, all kinds of documents. KM can be defined as the
process of capturing, distributing and using knowledge effectively. In order to
effectively share an organization’s information assets (think: policies, procedures but
also expertise and experiences), that knowledge needs to be identified, captured,
evaluated and easily retrieved.

3.6. Talent Management Systems

The systems that support the processes of onboarding, recruiting, performance
management, compensation management, succession planning and learning
management are commonly referred to as Talent Management Applications.

3.6.1. Applicant Tracking Systems (ATS)

Recruiting Applications, also known as Applicant Tracking Systems (ATS) or talent

acquisition systems, support the process of sourcing and selecting candidates for open
jobs. They include the creation of requisitions for the recruitment of a particular job
and storing and tracking the résumés of applicants and can include screening of
candidates via assessments. Recruiters can use search tools and queries to weed
through the mountain of applications for a particular job. Hiring managers are
presented candidates for their positions electronically.

Recruiting applications provide benefits on the compliance side as well. Tracking for
Affirmative action purposes becomes streamlined. The total cost of sourcing and
selecting candidates can be reduced with a recruitment management system. ATS can
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help employers track demographic information demographics and ensures compliance.

HRIS job and organizational information can be interfaced to the recruitment systems
for consistency purposes.

3.6.2. Onboarding

Onboarding refers to the process of hiring the employee into the organization.
Applications that support this process include online self-service for new hire
paperwork, drug screening, background checks, ordering of equipment (workstations,
PC’s, phone, company credit cards), and integration with security systems to establish
an ID and access. Integration with a core HRMS automates setting up of the new hire in
that system. Onboarding systems provide benefits to a company by reducing the
amount of time that it takes to bring an employee into the company, making them a
more productive worker in less time and reducing the total cost of hire. Many recruiting
systems include onboarding modules.

3.6.3. Performance Management

Performance Management refers to those applications that manage the process by

which employee’s performance is evaluated. These applications can support annual, as
well as more frequent review cycles, and they typically include a process for the setting
of goals for the organization and the individual. As a result the individual’s goals are
aligned with the organization goals. These systems include the ability for an employee
to perform online self-assessments, as well as manager reviews of their employees.
Online automated confidential peer reviews (known as 360 assessments) can also be
managed through these applications. These applications rely on the job and
organizational management data in the HRMS to build goals of various organizational
units and to establish workflow for management approval. These systems provide
benefits to the company by eliminating paper-based manual processes, providing
information for job and pay decisions and ensuring compliance of the performance
management processes.

3.6.4. Competency Management

Competency Management provides the ability to create a set of competencies by job.

Ideally the integration of the application will allow the sharing of competencies with
performance management for the evaluation of an employee based on the
competencies, compensation for the evaluation of jobs and to determine
appropriateness of pay, career planning for the identification of career paths, and
succession planning to identify successors to jobs based on competencies either
demonstrated through a performance evaluation or those tied to previous jobs held.
Learning management systems also use competencies for linkages to training activities.

3.6.5. Learning Management

Learning Management includes all of the functions around training employees. It

includes establishment of courses and curriculum, scheduling of training events,
delivering online training courses and tracking the training taken. It also supports the
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ability to prescribe learning plans based on the jobs a person is performing or career
paths for them to pursue. These systems can provide hard dollar benefits to the
organization by offering instructor-led training activities as online courses, eliminating
the time and travel expenses associated with face-to-face training and the need for
instructors. Other benefits of online training include less time away from ones job and
greater availability of training.

3.6.6. Succession Planning

Succession Planning features the ability to assess an employee’s fit for their current job,
readiness to take on a new job and be potential successors for others. In an integrated
suite, performance management and compensation data is included to provide a full
picture of the employee’s fit to current and future jobs. Oftentimes this is done in a
graphical way using organizational charts. When integrated with a learning
management system, a person can be given learning assignments to better qualify
them for new job assignments.

3.6.7. Compensation Management

Compensation Management refers to those applications that support the job and pay
processes within the compensation department, as well as employee pay actions.
Within the compensation department these applications support the processes
surrounding job creation and evaluation. They include features such as online job
descriptions, integration with salary survey providers, and establishment of pay
ranges/bands for jobs and support of market pricing or point-based evaluation
methods. These systems benefit a company by providing accurate and timely
information for the compensation professional and management with regards to how
to create and establish pay practices.

Employee pay actions are supported for merit pay, incentive pay and bonus payments.
Typically these solutions allow for the provisions of salary plans that are tied to jobs.
The employee participates in that salary plan by virtue of being assigned to the job.

Pay for performance processes, also known as merit increase, are typically automated
in compensation management systems through manager self-service. Using information
found within the core HRMS for job, pay and organizational structure, a manager can
make pay actions on their employees. These systems allow for budget management
within the merit process for determination and allocation of available budget. These
systems eliminate the need for manual spreadsheet based processes, improve accuracy
and eliminate the need for manual entry or complex interfaces to the HRMS for the
reflecting of these pay actions.

3.7. Workforce Analytics

Workforce analytics refer to strategies for combining data elements into metrics and for
examining relationships or changes in metrics. There is a fundamental distinction
between “HR metrics” and “workforce analytics”. Metrics are data (numbers) that
reflect some detail about given outcomes, e.g., success in recruiting new employees.
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These metrics reflect characteristics of the organization’s HR programs and activities.

Analytics refer to strategies for combining data elements into metrics and for examining
relationships or changes in metrics.

3.7.1. Benchmarking

The Saratoga Institute’s benchmarking efforts were the first to develop information on
standard HR metrics regarding the use and management of human capital.
Benchmarking data is useful in that it provides insights into what is possible.

However, a challenge in using HR metrics as benchmark data is that an organization’s

human resource practices and the use of its HR staff reflect current challenges facing
that organization. As a result, most organizations have an HR department, but the
specific functions performed by these departments vary widely across organizations.

Consequently, direct comparisons of HR benchmarking data from one’s own

organization to data from other organizations may not provide realistic guidelines for
either goal setting or forecasting the potential effectiveness of remedial actions an
organization might undertake.

3.7.2. Data Mining and “Big” data

Interest in data mining human capital information has been on the rise since the
implementation of integrated HRIS and digitized HRM processes.

Data mining refers to efforts to identify patterns that exist within data and that may
identify unrecognized causal mechanisms that can be used to enhance decision making.
To identify these causal mechanisms, data mining uses correlation and multiple
regression methods to identify patterns of relationships in extremely large datasets.
Data mining has a number of important applications, but the caveat with its use is that
it can also uncover spurious and nonsensical relationships (e.g., taller employees make
better leaders; older employees have longer tenures).

Current interest in Big Data reflects efforts to analyze the extremely large data sets
created by many transaction systems. Often these datasets can be many terabytes (210
gigabytes) or more. Many web based applications and transaction sites, like those
generated by Amazon.com, Google, and many social media sites generate large
numbers of transactions. Efforts in Big Data reflect attempts to mine these very large
data sets for patterns that can provide addition insight for managers about customer
preferences or process characteristics that managers can use to drive greater sales,
higher customer satisfaction and reduce costs.

3.7.3. Predictive Analysis

Predictive analysis involves attempts to develop models of organizational systems that

can be used to predict future outcomes and understand the consequences of
hypothetical changes in organizations For example, if the organization discovered a
correlation between employee job satisfaction and turnover, HR could use this data to
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suggest modifications to the employees’ work situation or their benefits.

Efforts to develop balanced scorecards (BSC) are examples of elementary predictive

systems. They involve identifying leading indicators of important organizational
outcomes and the nature of the relationships expected to lead to them. Engaging in
efforts to test the assumptions in these models over time can lead to enhancements in
the quality of the models’ underlying predictive analyses, either by identifying
additional leading indicators or better specifying the nature of the relationships
between predictors and outcomes.

3.7.4. Operational Experiments

The evidence-based management movement argues that managers should base their
decisions on data drawn from the organization and evidence about the actual
functioning of its systems rather than using personal philosophies or untested personal
models or assumptions about “how things work.” One of the most effective methods
for developing the evidence on which to base decisions is through operational
experiments conducted within the organization.

Google uses operational experiments to test the effectiveness of the ad words used on
its Web site. Rather than simply relying on intuition or “expert judgment” about which
ad wording is more effective, it creates an experiment. It configures its site to alternate
the presentation of competing ad text to visitors to its site and then tracks the number
of “click-through” on the ad for a period of time. Given the large number of daily hits,
Google can get objective data on the effectiveness of the various ads in a relatively
short time and then adopt the ad wording demonstrated to be most effective.

3.7.5. Workforce Modeling

Workforce modeling attempts to understand how an organization’s human capital

needs would change as a function of some expected change in the organization’s
environment. This change may be a shift in the demand for the organization’s product,
entry into a new market, divestiture of one of the organization’s businesses, or a
pending acquisition of or merger with another organization. This process involves
establishing a human resources planning program.

3.7.6. Strategic Realignment

Strategic realignment involves the set of activities most commonly known today as
human resource planning. These planning efforts focus on long-term plans for needed
strategic changes in the organization. Strategic realignment also extends the use of
HRM analytics to planning for new situations and circumstances, i.e., mergers,
acquisitions, divestitures (disposal of company assets or a business unit through a sale,
exchange, closure or bankruptcy), or entries into new geographic or product markets.

3.7.7. HR Reporting

For individuals conducting metrics and analytics work, paying attention to the
94

capabilities and needs of the targeted audience is critically important. The information
reported must be relevant to the issues facing the managers who receive it. Further,
simply providing numbers to managers is unlikely to be of much use to them until they
can understand the meaning of the information for their decision situations.

HR metrics and analytics information can be reported in a number of ways. Generally, a

combination of “push” and “pull” means of communication will work for most
organizations. Push systems like email are excellent for getting information to decision
makers. Pull systems are ways of making information available to managers so that they
can access any of it at a point in time when it will be most useful for their decision
making, e.g., posting HR metrics and analytics analyses and reports on internal
company Web sites.

Please note that the primary objective of developing capabilities in HR metrics and
workforce analytics is to increase organizational effectiveness. It is not simply to
generate a static menu of HR metrics reports or dashboards. Dashboards are a
component of reporting. Dashboards reflect efforts to align real-time analysis of
organizational and HR processes as well as an increased capacity to aggregate
organizational data.

3.7.8. Common HR Metrics

HR metrics can help pinpoint where human capital issues exist and allow HR staff to
monitor trends. Information from appropriate HR metrics can be used to assess, plan
and improve HR as well as to contribute to achieving business strategies and objectives.
There are some commonly used HR metrics as follows:

Cost per hire: Recruitment costs/Cost of compensation + Cost of benefits

Yield ratio: Percentage of applicants that make it to the next stage of the application
process.

Benefit cost per employee: Total cost of employee benefits/Total number of employees

Compensation cost per employee: Total cost of compensation for the year/Average
number of employees

Training hours: Total training hours/Total number of employees

Revenue per employee: Revenue/Total number of employees

Rate of performance goals met: Number of performance goals met/Total number of

performance goals

Tenure: Average number of years in service of all employees

Absence rate: Number of days absent (month)/Average number of employees (month)

x number of workdays
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Annual turnover: Number of employees leaving during a 12-month period/Average

number of employees during the same period.

4. HR and Social Media

In the age of social networking or social media, information sharing has become far more
powerful than simply a means of increasing efficiency through self-service. Creative
organizations are enabling information sharing online to permit a free flow of knowledge
among the organization’s people.

Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2021) Fundamentals of Human
Resource Management (9th Edition). New York, NY: McGraw-Hill.

One of the biggest advantages of HR using social media on the job is that it makes the
recruiting process easier and more successful for the company. HR can post job openings
on all the company’s social media sites, including links to the listings on the company
website. This makes it easier for the company to get the notice out to the public when
jobs become available and for candidates to apply for those open jobs. Companies are also
seeing more success using social media to recruit new employees as they can browse the
social media sites of potential candidates to determine if he or she will fit in with the
company culture.

4.1. Social Media Helps Company Branding

When it comes to reinforcing the brand of a company, social media is becoming the
go-to place for marketing teams and human resource departments. When an issue
arises with the image of a company due to a customer complaint or other reason, the
HR department can take to social media to reinforce the brand of the company and
make sure the outcry does not get out of control and turn into a viral frenzy.

4.2. Monitor Employees Activities

On the downside, for at least some people, social media allows HR executives to
monitor the activities of their employees. If employees are posting to their personal
96

social media accounts during the day and those posts do not relate to work, or relate
in a negative way, then the company can enforce its social media policy. Some
companies allow employees to use social media throughout the day so long as their
posts relate to the company in a positive way. For example, members of the media
(newspapers, TV stations and radio stations) encourage their employees to post on
social media regularly in order to keep the public informed.

4.3. Communication with Employees

Another way social media has impacted human resources is that companies are now
beginning to communicate with their employees using social media. Some companies
will talk to employees on Twitter to discuss company events so the public can learn
about them. Other companies use messaging apps such as Google Hangouts to talk
with employees in one location or all over the world.
 97

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