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1 CHAPTER 1 THE HUMAN RESOURCE MANAGEMENT FUNCTIONS

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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

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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