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CHAPTER 1THE HUMAN RESOURCE

MANAGEMENT FUNCTIONS

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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

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AREAS IN HRM• HR Utilization

– Recruitment– Selection– Placement– Appraisal– Compensation– Workplace planning

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AREAS IN HRM• HR Development

– Education– Training– Development

• HR Environment– Job enrichment– Job enlargement– Organization development

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GROWTH OF HR FUNCTION

• Industrial Revolution

• Human Relations Approach

• Recent Development

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HRM FUNCTIONS

• Human resource planning

• Recruitment

• Selection

• Compensation & benefits

• Performance appraisal

• Training and development

• Employee relations

• Safety & health

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CHANGING TRENDS IN HRM

• Technological changes

• Globalization and increase competition

• Employee education and expectation

• Workforce diversity

• Useful statistics

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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

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FUNCTIONS OF HR DEPT.

• Employment

• Training and Development

• Payment / Reward Systems

• Health and Safety

• Employee Services / Welfare

• Productivity Improvement Schemes

• Industrial Relations

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FACTORS INFLUENCE HR DEPT.

• Size of organization

• Unionization of the workplace

• Ownership of the company

• Philosophy of top management

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CHALLENGES IN HRM

• Environmental challenges

• Organizational challenges

• Individual challenges

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ENVIRONMENTAL CHALLENGES

• Rapid change

• Work force diversity

• Globalization

• Legislation

• Evolving Work and Family Roles

• Skills shortages and the Rise of the Service Sector

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ORGANIZATIONAL CHALLENGES• Competitive position: cost, quality,

distinctive capabilities

• Decentralization

• Downsizing

• Organizational restructuring

• Self-managed work teams

• Small businesses

• Organizational culture

• Technology

• Outsourcing

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INDIVIDUAL CHALLENGES

• Matching people and organization

• Ethical dilemmas and social responsibility

• Productivity

• Empowerment

• Brain drain

• Job insecurity

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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

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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

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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

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HR PLANNING PROCESS

• Labour demand– Product demand– Labour productivity

• Labour supply– Internal labour market– External labour market

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HR PLANNING PROCESS

• Labour demand exceeds labour supply

• Labour supply exceeds labour demand

• Labour demand equals labour supply

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HR FORECASTING TECHNIQUES

• Quantitative techniques– Trend analysis

• Qualitative techniques– Management forecast

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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

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HR INFORMATION SYSTEM

• Employees

• Applicant tracking

• Skills inventory

• Payroll

• Benefits administration

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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

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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

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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

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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

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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

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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

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TECHNIQUES FOR COLLECTING INFORMATION ON APPLICANTS

• Applicants form and CV

• Reference check

• Selection tests– Performance tests– Aptitude tests– Personality tests– Intelligence tests– Medical tests

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TECHNIQUES FOR COLLECTING INFORMATION ON APPLICANTS

• Selection interviews– Planning the interview– Conducting the interview– After the interview

• Assessment Centre Activities– Exercises– Social events

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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

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ISSUES AND PROBLEMS RELATING TO RECRUITMENT AND SELECTION

• Nepotism

• Employment of children

• Hiring older workers

• Discrimination in recruitment and selection

• Employment of foreigners

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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

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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

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CHAPTER 3JOB ANALYSIS

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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

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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

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TYPES OF JOB ANALYSIS

• Interview

• Observation

• Diaries

• Questionnaires

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JOB ANALYSIS METHOD

• Task Inventory Analysis

• Critical Incident Technique

• Position Analysis Questionnaire

• Functional Job Analysis

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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

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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

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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

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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

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CHAPTER 4COMPENSATION AND BENEFITS

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WHAT IS COMPENSATION?

• Total compensation has three components:– Base compensation– Pay incentives– Indirect compensation benefits

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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

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COMPENSATION TOOLS

• Job-based compensation plans

• Skill-based compensation plans

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WAGE SYSTEMS

• Time-related systems

• Piece-rated systems

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FACTORS AFFECTING LEVELS OF PAY• Legislation and government policy

• Unions

• Selection policy

• Employment conditions

• Company profitability

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FACTORS AFFECTING INDIVIDUAL LEVELS OF PAY

• Seniority

• Increase in the cost of living

• Performance

• Degree of skill

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CONDITIONS OF EMPLOYMENT

• Working hours

• Rest days

• Public holidays

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WORKING HOURS SYSTEM• Normal working hours

• Overtime working

• Shift work systems

• Alternative working hours scheduling

• Teleworking and homeworking

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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

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WHY PROVIDE BENEFITS?

• Statutory required

• Attract staff to join the organization

• Retain existing employees

• Increase morale of employees

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CLASSIFICATION OF BENEFITS

• Protection programmes

• Paid time-off

• Accommodation and enhancement benefits

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DESIGNING A BENEFIT SCHEME

• Eligibility and waiting periods

• Kinds of benefits

• Level of benefits

• Financing of the benefits

• Fixed package or employee choice

• Communication

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STATUTORY BENEFITS

• Maternity protection

• Time-off payments– A weekly rest day– Public holidays– Annual leave

• EPF Act

• Employees Social Security Act

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NON-STATUTORY BENEFITS

• Time-off payments

• Health care

• Insurance

• Financial services

• Subsidies and service

• Retirement benefits

• Allowances

• Educational fee assistance

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TRENDS IN BENEFIT PACKAGES

• Awareness and desirability of benefits

• Align benefits to strategic objectives

• Cafeteria benefit schemes

• Issues related to benefits

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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)

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CHAPTER 5PERFORMANCE APPRAISAL

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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.

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USES OF PERFORMANCE APPRAISAL

• Administrative process

• Developmental process

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FACTORS INFLUENCE EMPLOYEE’S PERFORMANCE

• Knowledge and skills

• Motivation

• Work environment

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SOURCES OF INFORMATION IN APPRAISAL

• The employee

• Employee’s manager

• Employee’s co-workers

• Employee’s subordinates

• Customers / Clients

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EMPLOYEE PERFORMANCE MANAGEMENT SYSTEM

• Objective setting

• Implementation of work and monitoring

• Appraisal of the individual workers

• Follow-up action

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PERFORMANCE APPRAISAL PROCESS

• Interview– Opening– Begin discussion

• Counselling– Non-directive counselling– Advice giving– Information giving– Teaching and coaching

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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

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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

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PROBLEMS IN PERFORMANCE APPRAISAL

• Rater errors and bias

• Influence of liking

• Organizational politics

• Individual or group focus

• Legal issues

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• Recent effect

• Halo effect

• Central tendency

• Prejudice and stereotype

• Fatigue

PROBLEMS IN PERFORMANCE APPRAISAL

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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

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CHAPTER 6TRAINING AND DEVELOPMENT

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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

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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

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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

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SYSTEMATIC TRAINING

• Identify training needs

• Set training objectives

• Design training programme

• Implement training programme

• Evaluate training programme

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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

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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

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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

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DESIGN TRAINING PROGRAMME

• Facilitators

• Venue

• Duration and scheduling of programme

• Number of participants

• Training methods

• Logistics

• Budget

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EVALUATING TRAINING AND DEVELOPMENT

• Trainees’ responses

• Trainee learning

• Application of new skill and knowledge

• Assessing the results

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LEARNING PRINCIPLES

• The learner must want to learn

• Active or passive learning

• Feedback or knowledge of results

• Learning is faster in teams

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CHAPTER 7EMPLOYEE RELATIONS

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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

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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

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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

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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

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TYPES OF UNIONS

• National and regional unions

• In-house unions

• Employer’s associations

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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

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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

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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

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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

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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

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INDUSTRIAL ACTION

• Picket

• Strike

• Lockout

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SETTLEMENT OF INDUSTRIAL DISPUTES

• Conciliation

• Arbitration

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EMPLOYMENT LAWS

• Employment Act

• Industrial Relations Act

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DISCIPLINE

• Penalties in a disciplinary system– Oral warning– First written warning– Final written warning– Suspension without pay– Suspension of increment– Demotion or downgrading– Dismissal

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EMPLOYEE PROBLEMS

• Transfer

• Promotion of employees

• Grievance handling

• Absenteeism of workers

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TERMINATION OF EMPLOYEE’S CONTRACT OF EMPLOYMENT

• Role of Industrial Court

• Resignation

• Expiry of fixed-term contract

• Retirement

• Redundancy and retrenchment

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TERMINATION OF EMPLOYEE’S CONTRACT OF EMPLOYMENT

• Dismissal of misconduct

• Dismissal for poor performance

• Frustration of contract

• Termination of probationers

• Constructive dismissal

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CHAPTER 8SAFETY AND HEALTH

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ACCIDENTS AT WORK

• Financial costs

• Losses of output

• Lowered morale

• Negative publicity

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TYPES OF ACCIDENTS

• Near miss

• Non-fatal

• Fatal

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CAUSES OF ACCIDENTS

• Technical causes

• Human causes

• Environmental causes

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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

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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

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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

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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

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IMPROVING EMPLOYEES’ HEALTH

• Wellness programmes

• Stress management

• Reducing drug and alcohol related problems

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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

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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

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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

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IMPROVING THE DIVERSITY• Commitment of top management

• Diversity training programs

• Support groups

• Accommodation of family needs– Day care– Alternative work patterns

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IMPROVING THE DIVERSITY• Senior mentoring programs

• Apprenticeships

• Communication standards

• Organized activities

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