TOPIC 9 – CH 7 HUMAN RESOURCE MANAGEMENT Robbins, S.P., DeCenzo, D. A., and Coulter, M., (2015), Fundamentals of Management: Essential Concepts and Applications, Global Edition (9th ed.) Upper Saddle River , New Jersey, Pearson. BPA10202 / BPK20502

Learning Outcomes Describe the key components of the human resource management process and the important influences on that process. Discuss the tasks associated with identifying and selecting competent employees. Explain how employees are provided with needed skills and knowledge. Describe strategies for retaining competent, high- performing employees. Discuss contemporary issues in managing human resources.

LO 1 Describe the key components of the human resource management process and the important influences on that process.

Human Resource Management The quality of an organization is to a large degree determined by the quality of the people it employs. Staffing and HRM decisions and actions are critical to ensuring that the organization hires and keeps the right people. Getting that done is what human resource management (HRM) is all about.

HRM Process and Influences

HRM Process and Influences The first three activities in the HRM process address employment planning: adding staff through recruitment, reducing staff through downsizing, and the selection process Once you select competent people, you need to help them adapt to the organization and ensure that their job skills and knowledge are kept current—which is accomplished by the next two activities in the HRM process: orientation and training

HRM Process and Influences The last steps in the HRM process identify performance goals, correct performance problems if necessary, and help employees sustain a high level of performance over their entire work lives. The activities involved include performance appraisal, compensation and benefits.

The Legal Environment

The Legal Environment The primary environmental force that affects an organization is the legal environment. HRM practices are governed by laws, which vary from country to country, and further vary within state or provinces. As a manager, it will be important for you to know what you legally can and cannot do. Malaysia Labour Law consists of Hiring, Firing, Sexual Harrassment, Occupational Safety, EPF, SOCSO, Dispute, Pension, Workmen's Compensation, Salary Act and Statutory Holiday.

Affirmative Action Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups

LO 2 Discuss tasks associated with identifying and selecting competent employees.

Identifying and Selecting Employees HRM Process: employment planning recruitment and downsizing Selection Employment planning is the process by which managers ensure that they have the right number and kinds of people in the right places at the right times, people who are capable of effectively and efficiently completing those tasks that will help the organization achieve its overall goals

Identifying and Selecting Employees This process translates the organization’s mission and goals into an HR plan that allows the organization to achieve those goals by: Assessing current and future human resource needs, and Developing a plan to meet those needs

Conducting Employee Assessments Managers conduct an employee assessment by first reviewing the current human resource status through generating a human resource inventory, which generally lists the name, education, training, prior employment, languages spoken, capabilities, and specialized skills of each employee in the organization

Conducting Employee Assessments Another part of the assessment is job analysis, a process in which workflows are analyzed and the skills and behaviors necessary to perform jobs are identified. The job analysis helps determine the kinds of skills, knowledge, and attitudes needed to successfully perform each job. This information is then used to develop or revise job descriptions and job specifications

Conducting Employee Assessments A job description is a written statement that describes what a job holder does, how it’s done, and why it’s done. It typically includes job content, job environment, and conditions of employment

Conducting Employee Assessments The job specification states the minimum qualifications that a person must possess to perform a given job successfully. It identifies the knowledge, skills, and attitudes needed to do the job effectively. The job description and job specification are important documents as managers begin recruiting and selecting. They focus the manager’s attention on the list of necessary qualifications, assist in determining whether candidates are qualified, and help ensure that the hiring process does not discriminate.

Determining Future Employment Needs The organization’s strategic direction determines future human resource needs. Demand for human resources (employees) is a result of demand for the organization’s products or services After assessing both current capabilities and future needs, managers can estimate shortages—both in number and in kind—and highlight areas in which the organization is overstaffed.

Determining Future Employment Needs If job openings exist, they can begin recruitment— that is, the process of locating, identifying, and attracting capable applicants. In contrast, if employment planning indicates a surplus, managers may want to reduce the labor supply and initiate downsizing or restructuring activities.

Recruiting Applicants

Handling Layoffs

Selecting Job Applicants

Selecting Job Applicants The selection process seeks to predict which applicants will be successful if hired A decision is correct when: The applicant who was hired proved to be successful on the job, When the applicant who was not hired would not have been able to do the job.. Minimise Reject errors – reject applicants who would have performed successfully Accept errors – hired applicants who performed poorly

Selecting Job Applicants Reject errors mean increased selection costs because more applicants have to be screened but also can open the organization to charges of employment discrimination Accept errors cost the organization in wasted training, the costs generated or profits forgone because of the employee’s incompetence, severance, and the additional recruiting and selection screening. The major intent of any selection activity is to reduce the probability of making reject errors and accept errors while increasing the probability of making correct decisions. Use reliable and valid selection procedures

Reliability and Validity The degree to which a selection device measures the same thing consistently. Validity: The proven relationship between a selection device and some relevant criterion.

Selection Devices Managers use a number of selection devices to reduce accept and reject errors. The best-known include written tests, performance- simulation tests, and interviews The interview is the most universal selection device, along with the application form. Interviews can be reliable and valid selection tools when structured, well organized, and limited to relevant questioning To increase job satisfaction among employees and reduce turnover, managers should consider a realistic job preview (RJP), which includes both positive and negative information about the job and the company

LO 3 Explain how employees are provided with the needed skills and knowledge

Orientation An orientation process introduces new hires to the organization Job orientation expands on the information the employee obtained during the recruitment and selection stages, clarifies the new employee’s specific duties and responsibilities Work unit orientation familiarizes an employee with the goals of the work unit, makes clear how his or her job contributes to the unit’s goals, and provides an introduction to his or her coworkers Organization orientation informs the new employee about the organization’s goals, history, philosophy, procedures, and rules

Providing Skills and Knowledge Employee training is a learning experience that seeks a relatively permanent change in employees by improving their ability to perform on the job. Training may involve what employees know, how they work, or their attitudes toward their jobs, coworkers, managers, and the organization The questions in Exhibit 7-6 suggest the kinds of signals that can warn a manager when training may be necessary

Providing Skills and Knowledge

Employee Training Methods

LO 4 Describe strategies for retaining competent, high-performing employees

Retaining Competent Employees Retaining employees, especially competent, high- performing employees, is essential. Two HRM activities that play a role in this are managing employee performance and developing an appropriate compensation and benefits program. A performance management system establishes performance standards that are used to evaluate employee performance. Exhibit 7-8 illustrates specific appraisal techniques for evaluating an employee’s performance

Retaining Competent Employees

Retaining Competent Employees (a) through (f) are ways to evaluate employee performance against a set of established standards or absolute criteria, but (g), a multi-person comparison, is a way to compare one person’s performance with that of one or more individuals and is a relative, not absolute, measuring device.

Issues with Performance Evaluation Systems Performance evaluation systems may be outdated to due downsizing, because supervisors may have more employees to manage, making it difficult to have extensive knowledge of each one’s performance. They also might be outdated due to the popularity of project teams and employee involvement. There are several reasons why an employee’s performance might not be up to par, and each has its own action. Job mismatch (hiring error) – reassigned to a better-matched job Discipline problem, and lack the desire to do the job – employee counseling / disciplinary/punitive action (verbal and written warnings, suspension, and even termination)

Compensating Employees The goal of compensation administration is to design a cost-effective pay structure that attempts to ensure that pay levels will be perceived as fair by all employees Essentially, the higher the knowledge, skills, and abilities (KSAs)—and the greater the authority and responsibility—the higher the pay. Factors that influence the compensation and benefit packages that different employees receive are summarized in Exhibit 7-9.

Compensating Employees

LO 5 Discuss contemporary issues in managing human resources

Contemporary Issues Today’s managers face Downsizing, Workforce diversity, Sexual harassment, Workplace spirituality, and HR costs.

Managing Downsizing Downsizing is the planned elimination of jobs from an organization. A negative consequence is layoff-survivor sickness , a set of attitudes, perceptions, and behaviors of employees who survive involuntary staff reductions. Symptoms include job insecurity, perceptions of unfairness, guilt, depression, stress from increased workload, fear of change, loss of loyalty and commitment, reduced effort, and an unwillingness to do anything beyond the required minimum. Exhibit 7-10 summarizes some ways that managers can reduce the trauma associated with downsizing

Managing Downsizing

Workforce Diversity Nontraditional recruitment sources Non-discriminatory selection Accommodation of diverse needs Diversity consciousness workshops Mentoring programs

Sexual Harassment Any unwanted action or activity of a sexual nature that explicitly or implicitly affects an individual’s employment, performance, or work environment Organizations and managers must educate all employees on sexual harassment matters, have mechanisms available to monitor employees, and refrain from taking action against a harasser until a thorough investigation has been conducted and the results reviewed by an independent and objective individual

Workforce Spirituality In the context of work, spirituality draws on the ethics, values, motivation, work/life balance, and leadership elements of an organization. Several characteristics that tend to be associated with a spiritual organization are listed in Exhibit 7-11

Workforce Spirituality

Controlling HR Costs Health Care Pensions

DISCUSSION QUESTIONS

7-1 How does HRM affect all managers? The quality of an organization is determined by the quality of people it employs. Staffing and human resources management decisions and methods are critical to ensuring that the organization hires and keeps the right personnel. Many small business managers must do their own hiring without the assistance of HRM. Managers in larger organizations are frequently involved in HRM activities.

7-2 Should an employer have the right to choose employees without governmental interference? Support your position. Students’ positions will vary. They should seek a balance in their answer. While no businessperson likes someone from the “outside” telling him/her what to do, the reality is that the government interference “balances” the power relationship between an employer and a job candidate.

7-3 Some critics claim that corporate HR departments have outlived their usefulness and are not there to help employees but to shield the organization from legal problems. What do you think? What benefits are there to having a formal HRM process? What drawbacks? HR departments are critical to the success of organizations since human resources are the true assets of the company. When HR is involved with strategic decisions of recruiting, staffing, planning and retaining stat candidates and employees, then you are an integral part of organizations. Formalizing processes add to job-related criteria which also minimizes legal challenges. If they are organized and autonomous, HR should be essential without drawbacks.