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1
CHAPTER 1THE HUMAN RESOURCE
MANAGEMENT FUNCTIONS
2
WHAT IS HRM?
• Activities and practices to plan for, attract, select, develop and retain human resources, to achieve the organization’s goals
• The objective is to determine the best use of the talent and skills available to accomplish the organizational goals
3
AREAS IN HRM• HR Utilization
– Recruitment– Selection– Placement– Appraisal– Compensation– Workplace planning
4
AREAS IN HRM• HR Development
– Education– Training– Development
• HR Environment– Job enrichment– Job enlargement– Organization development
5
GROWTH OF HR FUNCTION
• Industrial Revolution
• Human Relations Approach
• Recent Development
6
HRM FUNCTIONS
• Human resource planning
• Recruitment
• Selection
• Compensation & benefits
• Performance appraisal
• Training and development
• Employee relations
• Safety & health
7
CHANGING TRENDS IN HRM
• Technological changes
• Globalization and increase competition
• Employee education and expectation
• Workforce diversity
• Useful statistics
8
HR DEPARTMENT
• To support managers’ HR responsibilities
• Help the organization to meet its objectives by designing HR programs
• Managers and the HR Department need to work together
9
FUNCTIONS OF HR DEPT.
• Employment
• Training and Development
• Payment / Reward Systems
• Health and Safety
• Employee Services / Welfare
• Productivity Improvement Schemes
• Industrial Relations
10
FACTORS INFLUENCE HR DEPT.
• Size of organization
• Unionization of the workplace
• Ownership of the company
• Philosophy of top management
11
CHALLENGES IN HRM
• Environmental challenges
• Organizational challenges
• Individual challenges
12
ENVIRONMENTAL CHALLENGES
• Rapid change
• Work force diversity
• Globalization
• Legislation
• Evolving Work and Family Roles
• Skills shortages and the Rise of the Service Sector
13
ORGANIZATIONAL CHALLENGES• Competitive position: cost, quality,
distinctive capabilities
• Decentralization
• Downsizing
• Organizational restructuring
• Self-managed work teams
• Small businesses
• Organizational culture
• Technology
• Outsourcing
14
INDIVIDUAL CHALLENGES
• Matching people and organization
• Ethical dilemmas and social responsibility
• Productivity
• Empowerment
• Brain drain
• Job insecurity
15
LABOUR LAWS AND ENFORCEMENT
• The Employment Act 1955
• The Sabah Labour Ordinance
• The Sarawak Labour Ordinance
• The Wages Councils Act 1947
• The Employees Provident Fund Act 1991
• The Workman’s Compensation Act 1952
• The Employees Social Security Act 1969
16
LABOUR LAWS AND ENFORCEMENT
• The Occupational Safety and Health Act 94
• The Factories and Machinery Act 1967
• The Children and Young Persons Act 1966
• The Employment (Restriction) Act 1968
• The Trade Unions Act 1959
• The Industrial Relations Act 1967
• Pembangunan Sumber Manusia Bhd. Act 01
• The Skills Development Fund Act 2004
• The National Skills Development Act 2006
17
CHAPTER 2PLANNING THE ORGANIZATION’S
HUMAN RESOURCES
18
HR PLANNING PROCESS• Process of reviewing and identifying future
human resource needs of an organization
• HR planning helps managers reduce uncertainty about future
• To ensure that the required number of qualified employees is available at the right time
19
HR PLANNING PROCESS
• Labour demand– Product demand– Labour productivity
• Labour supply– Internal labour market– External labour market
20
HR PLANNING PROCESS
• Labour demand exceeds labour supply
• Labour supply exceeds labour demand
• Labour demand equals labour supply
21
HR FORECASTING TECHNIQUES
• Quantitative techniques– Trend analysis
• Qualitative techniques– Management forecast
22
HR INFORMATION SYSTEM
• Systems used to collect, record, store, analyze and retrieve data concerning an organization’s human resources
• Contains computer hardware and software applications that work together to help managers make HR decisions
23
HR INFORMATION SYSTEM
• Employees
• Applicant tracking
• Skills inventory
• Payroll
• Benefits administration
24
HRIS SECURITY AND PRIVACY
• Limit access to HRIS by controlling access to the computer and its data files
• Use passwords and special codes
• Grant permission to access employees information only on a need-to-know basis
• Develop polices and guidelines
• Allow employees to examine their personal records
25
RECRUITMENT PROCESS
• Recruitment is the process of attracting suitable people to apply for job vacancies
• Attracting applicants– Internal
• Employee audit or inventory• Job posting and bidding
26
RECRUITMENT PROCESS
• Attracting applicants– External
• Employment agencies and consultants• Campus recruitment exercise• Employee referrals• Unsolicited applicant files• Advertising in the mass media• Recruitment through the internet
27
INTERNAL RECRUITMENT• Advantages:
– Employment record of applicant available– No induction needed– Little or no cost involved– Employees’ morale and motivation increased
• Disadvantages:– Filling a vacancy may lead to a more gap– No suitable candidates– Supervisors may be reluctant to release key
employees
28
EXTERNAL RECRUITMENT• Advantages:
– Avoid inbreeding– Possible to widen choice of applicants by
having a pool of candidates
• Disadvantages:– High costs of recruitment process– Frustration amongst existing employees
29
SELECTION PROCESS
• The process of choosing the most suitable applicant from a group of applicants, for an available vacancy
• Collect information of applicants
• Each applicant will be assessed
30
TECHNIQUES FOR COLLECTING INFORMATION ON APPLICANTS
• Applicants form and CV
• Reference check
• Selection tests– Performance tests– Aptitude tests– Personality tests– Intelligence tests– Medical tests
31
TECHNIQUES FOR COLLECTING INFORMATION ON APPLICANTS
• Selection interviews– Planning the interview– Conducting the interview– After the interview
• Assessment Centre Activities– Exercises– Social events
32
RECRUITMENT AND SELECTION PROCESS
• Make decision to recruit new employee
• Conduct job analysis
• Source for applicants
• Collect information on applicants
• Select most suitable applicant
• Offer employment to successful applicant
• Hold induction once employee reports for duty
33
ISSUES AND PROBLEMS RELATING TO RECRUITMENT AND SELECTION
• Nepotism
• Employment of children
• Hiring older workers
• Discrimination in recruitment and selection
• Employment of foreigners
34
MAKING A JOB OFFER
• Contract of employment– Implied terms of a contract of employment– Express terms in a contract of employment– Changing the terms in a contract of
employment– Types of employment contract
35
INDUCTION
• Purpose of induction
• Contents of a formal induction programme
• Organizing the induction programme
• Scheduling of induction
• Duration of an induction programme
• Ensuring the effectiveness of an induction programme
• Potential problems relating to induction programme
36
CHAPTER 3JOB ANALYSIS
37
JOB ANALYSIS
• Technique of studying a job to identify the skills, knowledge, experience and other requirements necessary to perform the job
• Identifies the tasks, duties and responsibilities of a particular job
• Should be re-analyzed on a regular basis
38
CONDUCTING JOB ANALYSIS
• Determine the desired applications of the job analysis
• Select the jobs to be analyzed
• Gather the job information
• Verify the accuracy of the job information
• Document the job analysis by writing a job description
39
TYPES OF JOB ANALYSIS
• Interview
• Observation
• Diaries
• Questionnaires
40
JOB ANALYSIS METHOD
• Task Inventory Analysis
• Critical Incident Technique
• Position Analysis Questionnaire
• Functional Job Analysis
41
JOB DESCRIPTION
• A written profile of a job
• The process of preparing job descriptions helps to identify unnecessary tasks, overlapping responsibilities and even the existence of functions for which no one has responsibility
42
JOB DESCRIPTION
• Job title, location and grading
• Relationships
• Brief statement on the purpose of the job
• List of duties and responsibilities
• Terms and conditions of employment to be given to the job-holder
• Negative aspects of the job
43
JOB SPECIFICATION
• Also known as person specification or worker characteristics
• Describe the profile of a person who should be able to succeed in the job and will guide the recruitment officer to the best candidate
44
JOB SPECIFICATION
• Knowledge, skills and abilities required to do the job
• Educational qualifications and work experience required
• Physical requirements of the job
• Personality requirements
• Career path
45
CHAPTER 4COMPENSATION AND BENEFITS
46
WHAT IS COMPENSATION?
• Total compensation has three components:– Base compensation– Pay incentives– Indirect compensation benefits
47
DESIGNING A COMPENSATION SYSTEM
• Internal vs External Equity
• Fixed vs Variable Pay
• Performance vs Membership
• Job vs Individual Pay
• Egalitarianism vs Elitism
• Below-market vs Above-market Compensation
• Monetary vs Nonmonetary Awards
• Open vs Secret Pay
• Centralization vs Decentralization of Pay Decision
48
COMPENSATION TOOLS
• Job-based compensation plans
• Skill-based compensation plans
49
WAGE SYSTEMS
• Time-related systems
• Piece-rated systems
50
FACTORS AFFECTING LEVELS OF PAY• Legislation and government policy
• Unions
• Selection policy
• Employment conditions
• Company profitability
51
FACTORS AFFECTING INDIVIDUAL LEVELS OF PAY
• Seniority
• Increase in the cost of living
• Performance
• Degree of skill
52
CONDITIONS OF EMPLOYMENT
• Working hours
• Rest days
• Public holidays
53
WORKING HOURS SYSTEM• Normal working hours
• Overtime working
• Shift work systems
• Alternative working hours scheduling
• Teleworking and homeworking
54
EMPLOYEE BENEFITS• Group membership rewards that provide
security for employees and their family members
• Sometimes called indirect compensation
• Protect employees from risks that could jeopardize their health and financial security
55
WHY PROVIDE BENEFITS?
• Statutory required
• Attract staff to join the organization
• Retain existing employees
• Increase morale of employees
56
CLASSIFICATION OF BENEFITS
• Protection programmes
• Paid time-off
• Accommodation and enhancement benefits
57
DESIGNING A BENEFIT SCHEME
• Eligibility and waiting periods
• Kinds of benefits
• Level of benefits
• Financing of the benefits
• Fixed package or employee choice
• Communication
58
STATUTORY BENEFITS
• Maternity protection
• Time-off payments– A weekly rest day– Public holidays– Annual leave
• EPF Act
• Employees Social Security Act
59
NON-STATUTORY BENEFITS
• Time-off payments
• Health care
• Insurance
• Financial services
• Subsidies and service
• Retirement benefits
• Allowances
• Educational fee assistance
60
TRENDS IN BENEFIT PACKAGES
• Awareness and desirability of benefits
• Align benefits to strategic objectives
• Cafeteria benefit schemes
• Issues related to benefits
61
REWARD SYSTEMS• Non-financial rewards
– Performance awards– Letters of appreciation– Sponsorship to seminars, conferences and
overseas tours– Rewards for long service
• Financial rewards– Salary increases– Bonus and profit sharing– Rewards for salespeople (commissions)
62
CHAPTER 5PERFORMANCE APPRAISAL
63
DEFINITION
• Performance appraisal involves:– Identification
• Determining what areas of work the manager should be examining when measuring performance
– Measurement• Making managerial judgements of how ‘good’ or ‘bad’
employee performance
– Management• The overriding goal of any appraisal system.
64
USES OF PERFORMANCE APPRAISAL
• Administrative process
• Developmental process
65
FACTORS INFLUENCE EMPLOYEE’S PERFORMANCE
• Knowledge and skills
• Motivation
• Work environment
66
SOURCES OF INFORMATION IN APPRAISAL
• The employee
• Employee’s manager
• Employee’s co-workers
• Employee’s subordinates
• Customers / Clients
67
EMPLOYEE PERFORMANCE MANAGEMENT SYSTEM
• Objective setting
• Implementation of work and monitoring
• Appraisal of the individual workers
• Follow-up action
68
PERFORMANCE APPRAISAL PROCESS
• Interview– Opening– Begin discussion
• Counselling– Non-directive counselling– Advice giving– Information giving– Teaching and coaching
69
BENEFITS OF PERFORMANCE APPRAISAL
• Employer perspective– Individual differences in performance can
make a difference to company performance– May be needed for legal defense– Provides a rational basis for constructing
bonus– Can help to implement strategic goals– Providing individual feedback– Can include teamwork and teams
70
BENEFITS OF PERFORMANCE APPRAISAL
• Employee perspective– Performance feedback is needed and desired– Improvement in performance requires
assessment– Differences in performance levels across
workers be measured and have an effect on outcomes
– Can motivate workers to improve performance
71
PROBLEMS IN PERFORMANCE APPRAISAL
• Rater errors and bias
• Influence of liking
• Organizational politics
• Individual or group focus
• Legal issues
72
• Recent effect
• Halo effect
• Central tendency
• Prejudice and stereotype
• Fatigue
PROBLEMS IN PERFORMANCE APPRAISAL
73
EFFECTIVE PERFORMANCE APPRAISAL
• Conduct appraisal in private
• Allow enough time for employee to discuss issue
• Refer to performance not individual
• Provide specific not general behaviour
• Give feedback in a good manner
• Avoid loaded terms which produce emotional reactions
74
CHAPTER 6TRAINING AND DEVELOPMENT
75
DEFINITION OF TRAINING• Organizational activity which aims to
improve an employee’s current performance
• The attempt by an organization to change employees through the learning process
• Training programmes are designed to change attitudes, develop skills or impart knowledge
76
WHAT WILL HAPPEN IF NO FORMAL TRAINING?
• Learning on the job will take longer
• Costs of wasted materials, sales and customers lost
• Management time cost taken
• Lowered morale, demotivated
• Accident-related costs
• High turnover
77
BENEFITS OF TRAINING
• Increase worker’s productivity
• Increase worker’s job satisfaction
• Keeps worker’s skills and knowledge up-to-date
• Helps to motivate workers
78
SYSTEMATIC TRAINING
• Identify training needs
• Set training objectives
• Design training programme
• Implement training programme
• Evaluate training programme
79
TRAINING NEEDS AND TRAINING PLANS
• Individual workers face difficulties in performing job satisfactorily
• New workers are recruited
• New technology and procedures are introduced
• Individuals are transferred or promoted
• Major change in the organization
80
DESIGNING TRAINING PLANS
• Identify a performance problem
• Decide whether the problem is serious enough
• Identify the cause of the problem
• Generate alternative solutions to the problem
• Choose the best solution and implement
81
SET TRAINING OBJECTIVES
• Purpose of training is to improve employee’s abilities and performance on the job
• Consists of three parts:– Terminal behaviour– Standards to be achieved– Conditions of performance
82
DESIGN TRAINING PROGRAMME
• Facilitators
• Venue
• Duration and scheduling of programme
• Number of participants
• Training methods
• Logistics
• Budget
83
EVALUATING TRAINING AND DEVELOPMENT
• Trainees’ responses
• Trainee learning
• Application of new skill and knowledge
• Assessing the results
84
LEARNING PRINCIPLES
• The learner must want to learn
• Active or passive learning
• Feedback or knowledge of results
• Learning is faster in teams
85
CHAPTER 7EMPLOYEE RELATIONS
86
UNDERSTANDING EMPLOYEE RELATIONS
• Good employee relations involve providing fair and consistent treatment to all employees
• To foster good employee relations, managers must listen to and understand what employees are saying and experiencing
87
UNDERSTANDING EMPLOYEE RELATIONS
• Effective employee relations require cooperation between managers and employee relations representatives
• ERR will try to ensure that company policies and procedures are followed and advise both supervisors and employees on specific employee relations problems
88
TRADE UNIONS
• A group of seven or more workers can form a trade union
• Application for registration with DG of Trade Unions
• The application form must be signed by all members
• Send together with the union’s constitution
• The important criterion for a union to be registered is its intended member
89
TRADE UNIONS
• All workers above 16 years have the right to join an appropriate union
• Workers between 16 and 21 have lesser rights to participate in union activities
• Specified groups of workers are restricted from joining trade unions
90
TYPES OF UNIONS
• National and regional unions
• In-house unions
• Employer’s associations
91
ROLE OF TRADE UNIONS• Protect their members’ right
• Will take action to stop such unfair practices
• Advise members on their right
• Encouraging government to pass legislation
• Introduce policies
• Three-pronged approach:– Individual employers– National issues– Individual members
92
COLLECTIVE BARGAINING
• The process whereby employers and employees negotiate over the terms and conditions on employment
• Union is required by law to gain formal recognition from the employer before any negotiation can be made
93
COLLECTIVE BARGAINING• One of the main functions of trade unions
• The best method of regulating the terms and conditions of employment
• Once an agreement is reached between the two parties, there will be no discrimination between them
94
COLLECTIVE BARGAINING• May be carried out between an individual
employer and a trade union of employees
• Or between the union of employees and the union of employers
• This process is regulated by the Industrial Relation Act
95
COLLECTIVE AGREEMENTS• Written agreement between an employer
and a trade union relating to terms and conditions of employment
• Agreement must specify their duration, not less than three years
• Must be deposited with Industrial Court
• Most agreements include clauses on wages, working hours and other benefits to be given to the workers
96
INDUSTRIAL ACTION
• Picket
• Strike
• Lockout
97
SETTLEMENT OF INDUSTRIAL DISPUTES
• Conciliation
• Arbitration
98
EMPLOYMENT LAWS
• Employment Act
• Industrial Relations Act
99
DISCIPLINE
• Penalties in a disciplinary system– Oral warning– First written warning– Final written warning– Suspension without pay– Suspension of increment– Demotion or downgrading– Dismissal
100
EMPLOYEE PROBLEMS
• Transfer
• Promotion of employees
• Grievance handling
• Absenteeism of workers
101
TERMINATION OF EMPLOYEE’S CONTRACT OF EMPLOYMENT
• Role of Industrial Court
• Resignation
• Expiry of fixed-term contract
• Retirement
• Redundancy and retrenchment
102
TERMINATION OF EMPLOYEE’S CONTRACT OF EMPLOYMENT
• Dismissal of misconduct
• Dismissal for poor performance
• Frustration of contract
• Termination of probationers
• Constructive dismissal
103
CHAPTER 8SAFETY AND HEALTH
104
ACCIDENTS AT WORK
• Financial costs
• Losses of output
• Lowered morale
• Negative publicity
105
TYPES OF ACCIDENTS
• Near miss
• Non-fatal
• Fatal
106
CAUSES OF ACCIDENTS
• Technical causes
• Human causes
• Environmental causes
107
ENSURING A SAFE WORKPLACE
• Safety policies– A statement of organization’s commitment– An explanation of who’s responsible – A description of procedures
• Safety programmes– Commitment from all employees– Officer in-charge of safety
108
ENSURING A SAFE WORKPLACE
• Safety programmes– Record keeping– Safety training– Safety and healthy living campaigns– Incentive and reward schemes– Provision of personal protective equipment– Disciplinary system
109
OCCUPATIONAL SAFETY AND HEALTH ACT
• Ensure the safety of all employees and any other person at the workplace
• Draft and disseminate a safety policy
• Appoint a safety committee
• Appoint a dedicated, qualified safety and health officer
• Provide appropriate training, supervision and information
• Report serious accidents to DOSH
110
SEXUAL HARASSMENT
• An unwanted conduct of a sexual nature having the effect of verbal, non-verbal, visual, psychological or physical harassment
• Not acceptable behaviour and any employee found guilty of such conduct will be punished
111
IMPROVING EMPLOYEES’ HEALTH
• Wellness programmes
• Stress management
• Reducing drug and alcohol related problems
112
EMPLOYEE ASSISTANCE PROGRAMS
• Programs designed to help employees whose job performance is suffering because of physical, mental or emotional problems
• Four steps involve:– Identify troubled employee– EAP counseling– Solve the problem– Depend on the outcome of the treatment
CHAPTER 9INTERNATIONAL
HUMAN RESOURCE MANAGEMENT
113
GLOBALIZATION• Stage 1: Domestic Operations
• Stage 2: Export Operations
• Stage 3: Subsidiaries or Joint Ventures
• Stage 4: Multinational Operations
• Stage 5: Transnational Operations114
DIVERSITY OF WORK FORCE• Demographic trends
• Diversity as an asset– Greater creativity– Better problem solving– Greater system flexibility
115
INTERNATIONAL HRM ISSUES
• Career blockage
• Culture shock
• Lack of pre-departure cross-cultural training
• Overemphasis on technical qualification
• Getting rid of a troublesome employee
• Family problems
116
IMPROVING THE DIVERSITY• Commitment of top management
• Diversity training programs
• Support groups
• Accommodation of family needs– Day care– Alternative work patterns
117
IMPROVING THE DIVERSITY• Senior mentoring programs
• Apprenticeships
• Communication standards
• Organized activities
118