Topic 2: STRATEGIC HUMAN RESOURCE MANAGEMENT

Strategic management: Is a process, an approach that addresses the competitive challenges an organisation faces. The managing of the ‘pattern or plan that integrates an organisations major goals, policies and action sequences into a cohesive whole’

Strategic Human Resource Management: the pattern of planned HR deployments and activities intended to enable an organisation to achieve its goals

There are two broad schools of thought that explain SHRM:

1. One school, the external market-orientated approach, argues that HR practice choices need to be made so they fit the external market, societal and organisational contexts HR policies are chosen based on those that best achieve organisational strategy, goals and outcomes by taking into account external factors such as the economy, politics, legislation and labour market.

2. The second school, is based on the resource-based view (RBV) of the firm Organisations need to obtain and utilise their resources, including their people, so they become the best organisation in their sector (Therefore, success is founded upon the ability to build resources)

Components of the strategic management process

Two distinctive interdependent phases:

1. Strategy formulation: the process of deciding on a strategic direction by defining a company’s mission and goals, its external opportunities and threats and its internal; strengths and weaknesses.

2. Strategy implementation: the process of devising structures and allocating resources to enact the strategy a company has chosen.

Both these phases must be performed effectively. Further, organisations have recognised that the success of the strategic management process depends largely on the extent to which the HR function is involved.

Linkage between HR and the strategic management process

Strategic Choice: the organisations strategy; the ways in which an organisation will attempt to fulfil its mission and achieve its long-term goals.

- Involves deciphering ‘where to compete’, ‘how to compete’, and ‘with what will we complete’.

Role of HR in Strategy Formulation

Often the ‘with what will we compete’ questions present ideal avenues for HR to influence the strategic management process. Four levels of integration seem to exist between the HR function and the strategic management function:

1. Administrative Linkage (Simply administrative tasks)- Lowest level of Integration- The HR functions attention is focused on day-to-day activities. - No time or opportunity for HR executives to take a strategic look at issues- Company’s strategic planning function exists without HR input- HR department is completely divorced from any component of the strategic management

process in both strategy formulation and implementation.

2. One-way Linkage- The firms strategic business planning function develops plans and then advises the HR

function of the plan- Although it doe recognise the importance of human resources in implementing the strategic

plan, it precludes the company from considering HR issues while formulating the strategic plan.

- This level of integration often leads to strategic plans that the company cannot successfully implement.

3. Two-way linkage- Allows for the consideration of HR issues during the strategy formulation process. This

occurs in 3 sequential steps:o Strategic planning team informs the HR function of the strategies being considered;o The HR executives then analyse the HR implications of each strategy and present

their reports to the planning team;o After the strategic decision is made, the strategic plan is passed on to the HR

executives, who develop programs to implement the plan. o Both functions are interdependent.

4. Integrative Linkage- Is dynamic and multifaceted, and is based on continuing rather than sequential interaction. - Most cases, the HR executive is an integral member of the senior management team. - Rather than transferring information every now and then, the HR function is built into the

strategy formulation and implementation processes.

STRATEGY IMPLEMENTATION

After an organisation has gone through the process of strategy formulation and made its strategic choice, it has to execute that strategy. The strategy a company pursues dictates certain HR needs.

5 important variables determine success in strategy implementation:

1. Organisational structure2. Task design3. Types of information and information systems4. The selection, training and development of people; and 5. Reward systems.

HR Practices

The HR function can be thought of as having 6 menus of HR practices from which a company can choose the most appropriate to implement its strategy. Each of these menus refers to a particular functional area of HRM:

1. Job analysis and design2. Employee recruitment and selection3. Employee learning and development4. Performance management5. Pay structure, incentives and benefits6. Industrial relations

Business-level strategy

Business-level strategy deals with decisions and actions pertaining to each business unit, the main objective of a business-level strategy being to make the unit more competitive in its marketplace. This level of strategy addresses the question, ‘How do we compete?’ Although business-level strategy is guided by ‘upstream’, corporate-level strategy, business unit management must craft a strategy that is appropriate for its own operating situation.

In the 1980s, Porter (1980, 1985) made a significant contribution to our understanding of business strategy by formulating a framework that described three competitive strategies: cost leadership, differentiation and focus.

The low-cost leadership strategy attempts to increase the organization’s market share by having the lowest unit cost and price compared with competitors.

The simple alternative to cost leadership is differentiation strategy. This assumes that managers distinguish their services and products from those of their competitors in the same industry by providing distinctive levels of service, product or high quality such that the customer is prepared to pay a premium price.

With the focus strategy, managers focus on a specific buyer group or regional market. A market strategy can be narrow or broad, as in the notion of niche markets being very narrow or focused. This allows the firm to choose from four generic business-level strategies – low-cost leadership,

differentiation, focused differentiation and focused low-cost leadership – in order to establish and exploit a competitive advantage within a particular competitive scope (Figure 2.4).

Miles and Snow (1984) have identified four modes of strategic orientation: defenders, prospectors, analysers and reactors. Defenders are companies with a limited product line and a management focus on improving the efficiency of their existing operations. Commitment to this cost orientation makes senior managers unlikely to explore new areas. Prospectors are companies with fairly broad product lines that focus on product innovation and market opportunities. This sales orientation makes senior managers emphasize ‘creativity over efficiency’. Analysers are companies that operate in at least two different product market areas, one stable and one variable. In this situation, senior managers emphasize efficiency in the stable areas and innovation in the variable areas. Reactors are companies that lack a consistent strategy–structure–culture relationship. In this reactive orientation, senior management’s responses to environmental changes and pressures thus tend to be piecemeal strategic adjustments. Competing companies within a single industry can choose any one of these four types of strategy and adopt a corresponding combination of structure, culture and processes consistent with that strategy in response to the environment. The different competitive strategies influence the ‘downstream’ functional strategies.

Topic 3: Australian Employment Relations

Explain the terms Conciliation and Arbitration, Awards, Enterprise Bargaining, Collective Agreements and Individual Contracts

The public policy debate was really started by the Business Council of Australia in the late 1980s, when it led a major employer offensive against Australia’s traditional laws and institutions of industrial relations. They believed the current system had encouraged ‘third parties’ to intervene in relations between employees and their managers, resulting in conflict and low trust.

Conciliation: Process by which a third party conciliator attempts to resolve a dispute through discussion and negotiation

Arbitration: Process by which a third party hears evidence in connection with a dispute and makes a binding determination.

Awards: Written determinations created by federal or state industrial tribunals, specifying the minimum terms and conditions of employment, such as hours of work, minimum pay and types of leave allowable.

Enterprise Bargaining: bargaining over wages and conditions at the enterprise level

- Introduced by the Australian Industrial Relations Commission (AIRC) in 1991

Collective Agreements: agreements over wages and conditions covering groups or categories of employees. (Example of progression of deregulation)

- Under Industrial Relations Reform Act 1993: could bargain for collective agreement without unions.

Individual contracts: employment contracts covering the terms of employment for a single employee.

- Howard government passed Workplace Relations Act 1996 (Cth)- Shifted towards individualisations (de-unionising) through the introduction of individual

contracts (AWA)

Explain the evolution of Employment Relations in Australia (from highly centralised method of Conciliation and Arbitration through to current system of enterprise-level bargaining with minimum

employment standards)

Employment relations: the study of the formal and informal rules that regulate the employment relationship and the social processes that create and enforce these rules.

Employment Relations Institutions: rule-making bodies that create and enforce the rules of the employment relationship.

Traditional system: Founded on conciliation and arbitration and the activities of unions.

Since the 1990s the Australian industrial relations system has undergone:

- Significant legislative change- Significant structural change- Significant declines in union density and power- Significant increases in non-standard forms of employment- A shift away from a centralised industrial relations system to a decentralised system focused

on enterprise bargaining

The Conciliation and Arbitration Act 1904 established the conciliation and arbitration system which operated until 1988. The system was technically limited to industrial disputes beyond the borders of regional states

However, the practice of unions serving logs of claim on employers from different states (artificially creating an ‘interstate’ dispute) meant that it became the main avenue for dispute settlement and award negotiation – most disputes were settled by negotiation not arbitration

In 1988, the Hawke Labor government passed the Industrial Relations Act 1988

More significant changes again were introduced in 1993 by the Keating Labor government in the form of the Industrial Relations Reform Act 1993

- Allowed federal non-union collective agreements to be certified for the first time- Incorporated a limited right to protected industrial action during a designated ‘bargaining

period’

Work Choices Legislation

In 1996, the Howard Liberal-National coalition introduced the Workplace Relations Act (WRA) 1996 which:

- Limited the power of the Australian Industrial Relations Commission (AIRC)- Made it possible to register individual contracts known as Australian Workplace Agreements

(AWAs)

In 2005, the Howard Liberal government passed the highly controversial ‘Work Choices’ amendments to the WRA 1996 that had previously been rejected by the Senate, including:

- Creation of a national system of industrial relations under the corporations power of the Constitution, thus removing state control of industrial relations and allowing the federal government to set minimum terms and conditions without recourse to awards for 85% of the workforce

- The ability for AWAs to undercut award/collective agreement conditions- Significant restrictions on union activities- Reduced role for the AIRC- Exempted businesses with fewer than 100 employees from unfair dismissal laws- Introduced 5 minimum employment conditions

Work Choices was deeply unpopular in Australia and, combined with a strong union media campaign called ‘Your Rights at Work’, contributed to Liberal-National coalition losing the 2007 election

Transition to ‘Fair Work’

After Labor’s election victory in 2007, the new Rudd Labor Government pledged to ‘roll back’ Work Choices and implement a ‘fair and balanced’ industrial relations policy

The new policy (the Fair Work Act 2009) was less of a recasting of the industrial relations system and more of a retreat from the excesses of Work Choices

Fair Work Act (FWA) 2009

The main features of the FWA were:

- Fair Work Australia was established as the new employment regulator along with the office of the Fair Work Ombudsman to promote and enforce compliance with the new laws

- AWAs were abolished but individual common law contracts remained- Ten new National Employment Standards (NES) were established as minimum employment

conditions for all workers under the federal scheme- The introduction of a new system of modern awards to provide an additional safety net- Unfair dismissal protection was extended to cover all employees except those working in a

small business (15 employees or less) or on probation- Employees earning more than approximately $100 000 per year were now able to be on

arrangements not based on an award- Employers and unions are now required to bargain in good faith but are not compelled to

reach an agreement. However, FWA can issue a ‘workplace determination’ where a good faith bargaining order is ignored

- Union officials are able to enter workplaces to talk with employees provided that they hold a permit issued by FWA and abide by conditions of the permit (including giving notice)

Employees must be Better Off Overall (BOOT test) under an agreement than they would be under an award in order for the agreement to be registered

Topic 4: The legal context of HRM

Demonstrate awareness of the various laws that impact on the management of labour (such as Discrimination, Sexual Harassment, Health and Safety (including creating a safety culture/climate,

Bullying and Unfair Dismissal)

The Equal Employment Opportunity Laws

Equal employment opportunity (EEO): the government’s attempt to ensure that all individuals have an equal opportunity for employment, regardless of characteristics such as race, colour, religion, gender or national origin.

Anti-Discrimination Law in the Workplace

Direct discrimination: when someone is treated less favourably on the basis of a particular characteristic (e.g. gender) than someone with a different characteristic in circumstances that are materially the same

Indirect discrimination: when a compulsory requirement is attached to a job (which has nothing to do with the real performance of the job) that would prevent substantial proportions of particular groups or individuals from being able to comply.

Anti-discrimination Act (NSW)

- Sexual harassment

Affirmative Action

Affirmative action programs: associated with the provision of quotas and other forms of reparation to compensate for past injustices suffered by a class or group of persons. This has most famously occurred in the US in the case of African American people.

- Workplace Gender Equality Act 2012

Unfair dismissal

- Fair Work Act 2009

Topic 5: Diversity, WLB and employee retention

Discuss the various flexible working arrangements that can enhance work-life balance

Family-friendly programs: HR policies such as flexible hours, part-time work, job sharing, telecommuting or working from home, use of employee sick days to attend to family commitments, employee assistance programs and relocation services.

What are flexible working arrangements?

Flexible working arrangements can include:

- Flexible location – for example, working from home or somewhere else more convenient, instead of the office.

- Flexible hours – for example, changing start or finish times to accommodate personal or family commitments.

- Flexible patterns – for example, working longer days to provide for a shorter working week.- Flexible rostering – for example, split shifts.

Benefits of flexible working arrangements

Giving your employees the flexibility they want, while still ensuring your business needs are met, can help you create a positive workplace.

By improving work-life balance for your staff, flexible arrangements can help you:

- improve staff morale, motivation and productivity- be an employer of choice- reduce staff turnover and absenteeism- Reduce staffing costs.

Managing flexible working arrangements

To manage arrangements effectively:

- develop a clear policy on flexible working arrangements and keep it up to date- make sure all your staff are aware of the policy and their rights- stay informed about your rights and responsibilities- Encourage all staff to talk to you about flexible arrangements.

Define job satisfaction (including sources of job satisfaction) and organisational commitment

Process of Job Withdrawal

Job withdrawal: a set of behaviours that dissatisfied individuals enact to avoid the work situation.

Causes of job dissatisfaction Job dissatisfaction Job withdrawal Manifested withdrawal

Behaviour Change

- Try to change conditionso Through unionso Whistleblowing

Physical change

If the job conditions cannot be changed, a dissatisfied employee may solve the problem by leaving the job (internal transfer or turnover)

- Employee turnover- Absenteeism- Lateness

Psychological withdrawal

When dissatisfied, they may psychologically disengage themselves from their jobs. Although they are physically on the job, their minds may be somewhere else

This can take several forms

1. If the primary dissatisfaction has to do with the job itself, the employee may display a considerably low level of job involvement (the degree to which people identify themselves with their job)

2. Low level of organisational commitment (the degree to which an employee identifies with the organisation and is willing to put forth effort on its behalf).

Job Satisfaction

The key driving force behind all the different forms of job withdrawal is job satisfaction

Job Satisfaction: A pleasurable feeling that results from the perception that a person’s job fulfils or allows for the fulfilment of that person’s important job values. Three important aspects

1. Job satisfaction is a function of values: what a person consciously or unconsciously desires to obtain

2. Emphasises that employees have different views about which values are important3. Perception of circumstances play a major role

a. Perception is influenced by persons frame of reference (standard comparison point)

Sources of Job Satisfaction

Personal disposition

Disposition is an emotion that ultimately resides within the person; thus, it is not surprising that many who have studied these outcomes have focused on individual differences.

Negative affectivity: a dispositional dimension that reflects pervasive individual differences in satisfaction with any and all aspects of life.

- Individuals high in negative affectivity report higher levels of aversive mood states, including anger, contempt, disgust, guilt, fear and nervousness across all contexts

o Tend to focus on the negative aspects of themselves and others (implies some people bring dissatisfaction to work with them)

- Although low negative affectivity relates to higher levels of job satisfaction, when people with low negative affectivity are dissatisfied with their work, their behavioural reaction is much stronger

Tasks and Roles

Many aspects of a task have been linked to dissatisfaction. Three main aspects of tasks that affect job satisfaction:

1. Complexity a. Boredom generated by simple, repetitive jobs that do not mentally challenge rhe

worker leads to frustration and dissatisfaction. 2. The degree of physical strain and exertion in the job3. The value employees put on the task

Ways to reduce task-based dissatisfaction:

1. Job enrichment: ways in which to add complexity and meaningfulness to a persons work2. Job design (meaningful, varied work rather than tedious, exhausting work)3. Job rotation: the process of systematically moving a single individual from one job to

another over the course of the time. The job assignments may be in various functional areas of the company or movement between jobs in a single functional area or department.

Further, every individual plays a role in an organisation. Three aspects of organisational roles stand out as significant influences on job satisfaction:

1. Role ambiguity: the level of uncertainty about what an organisation expects from an employee in terms of what to do and how to do it

2. Role conflict: recognition of incompatible or contradictory demands by the person occupying the role

3. Role overload: a state in which too many expectations or demands are placed on a person

Ways to reduce role based dissatisfaction:

1. Role analysis technique: a method that enables a role occupant and other members of the role occupant’s role-set to specify and examine their expectations for the role occupant.

Supervisors and co-workers

These are two primary sets of people who affect job satisfaction. A person may be satisfied with a supervisor or co-worker because of 1 of these 3 reasons:

1. Similar values2. They provide social support3. May help employee attain a valued outcome

Pay and benefits

Discuss strategies to improve employee retention

It is well recognised that human resource management strategies are able to influence the development and retention of employees. Retention and development of ‘intellectual capital’ or knowledge possessed by employees represents a ‘key source of sustainable competitive advantage for organisations’.

The issue of employee retention has become a hot topic among HR researchers and practitioners. Two major reasons for the growing importance of retention have been identified: the ongoing rise in employee turnover rates in many industries and the increasing costs associated with employee turnover.

Some suggested employee retention strategies

1. Employers must provide a clear and exciting strategic vision and communicate this effectively to employees

2. Employers must maintain ongoing and regular communication with staff and a commitment throughout the organisation to address workplace issues.

3. Employers should create work environments that are supportive, encouraging, challenging and provide opportunities to stretch employees as not just workers but humans.

4. Employers must demonstrate integrity and ethical behaviour, managing in ways that are sustainable and socially responsible.

5. Employers must understand and manage the diversity of their workforce. 6. A company’s leaders need to demonstrate strong business skills and relevant industry

training.

For organisations striving to improve employee attraction and retention, it is important to recognise that the leadership and management team as well as other organisational characteristics such as strategy, culture and reputation are key influences on employee attitudes.

Here are some effective methods employers utilize in order to keep employees happy and part of their organization instead of looking for employment opportunities elsewhere.

Training. Training employees reinforces their sense of value (Wingfield, 2009). Through training, employers help employees achieve goals and ensure they have a solid understanding of their job requirements (Maul, 2008).

Mentoring. A mentoring program integrated with a goal-oriented feedback system provides a structured mechanism for developing strong relationships within an organization and is a solid foundation for employee retention and growth (Wingfield). With a mentoring program, an organization pairs someone more experienced in a discipline with someone less experienced in a similar area, with the goal to develop specific competencies, provide performance feedback, and design an individualized career development plan (Goldenson, 2007).

Instil a positive culture. A company should establish a series of values as the basis for culture such as honesty, excellence, attitude, respect, and teamwork (IOMA, 2008). A company that creates the right culture will have an advantage when it comes to attracting and keeping good employees (Main).

Use communication to build credibility. No matter what the size of the organization, communication is central to building and maintaining credibility. Many employers get communication to “flow up” through a staff advisory council (or similar group) which solicits and/or receives employees’ opinions and suggestions and passes them on to upper management (IOMA). It’s also important for employees to know that the employer is really listening and responds to (or otherwise acknowledges) employee input.

Show appreciation via compensation and benefits. Offering things like competitive salaries, profit sharing, bonus programs, pension and health plans, paid time off, and tuition reimbursement sends a powerful message to employees about their importance at the organization. The rewards given to employees must be meaningful in order to impact their perception of the organization and therefore have a marked influence on its retention efforts. Moreover, if an organization promises a reward, it should keep that promise (Gberevbie, 2008).

Encourage referrals and recruit from within. Having current employees offer referrals could help minimize confusion of job expectations. Current employees can realistically describe a position and the environment to the individual he/she is referring. Another way an employer can lessen the impact of turnover is to hire from within, since current employees have already discovered that they are a good fit in the organization (Branham, 2005).

Coaching/feedback. It’s important for companies to give feedback and coaching to employees so that their efforts stay aligned with the goals of the company and meet expectations. During an employee’s first few weeks on the job, an employer should provide intensive feedback. Employers should also provide formal and informal feedback to employees throughout the year (Branham).

Provide growth opportunities. An organization should provide workshops, software, or other tools to help employees increase their understanding of themselves and what they want from their careers and enhance their goal-setting efforts (Branham). It’s important to provide employees with adequate job challenges that will expand their knowledge in their field (Levoy, 2007). According to Right Management, employees are more likely to stay engaged in their jobs and committed to an organization that makes investments in them and their career development.

Make employees feel valued. Employees will go the extra mile if they feel responsible for the results of their work, have a sense of worth in their jobs, believe their jobs make good use of their skills, and receive recognition for their contributions (Levoy).

Employees should be rewarded at a high level to motivate even higher performance . The use of cash payouts could be used for on-the-spot recognition. These rewards have terrific motivational power, especially when given as soon as possible after the achievement. It’s important for employers to say “thank you” to employees for their efforts and find different ways to recognize them. Even something as simple as a free lunch can go a long way towards making employees feel valued.

Listen to employees and ask for their input as to what rewards might work best at your organization. Conduct meetings and surveys to enable employees to share their input (Branham). Most team members will work harder to carry out a decision that they’ve helped to influence.

Lower stress from overworking and create work/life balance. It’s important to match work/life benefits to the needs of employees. This could be in the form of offering nontraditional work schedules (such as a compressed work week, telecommuting, and flextime) or extra holidays. When work-life balance is structured properly, both the employee and employer come out ahead. For example, the employer will experience more productivity in the workplace because employees will be less stressed, healthier, and thus, more productive (Wingfield). Encouraging employees to set work/life goals, such as spending more time with their children, communicates that you really do want them to have a life outside of work and achieve a healthy work/life balance.

Foster trust and confidence in senior leaders. Develop strong relationships with employees from the start to build trust (Stolz, 2008). Employees have to believe that upper management is competent and that the organization will be successful. An employer has to be able to inspire this confidence and make decisions that reinforce it. An employer cannot say one thing and do another. For example, an employer shouldn’t talk about quality and then push employees to do more work in less time. In addition, employers need to engage and inspire employees by enacting policies that show they trust them, such as getting rid of authoritarian style of management (Branham).

Topic 6: The analysis and design of work

Explain the process of job analysis

Explain the terms job description and job specification

Explain the mechanistic and motivational approaches to job design, and the advantages and disadvantages of each

Job analysis: the process of getting detailed information about jobs

Job analysis is the procedure through which you determine the duties and nature of the jobs and the kinds of people who should be hired for them. You can utilize the information it provides to write job descriptions and job specifications, which are utilized in recruitment and selection, compensation, performance appraisal, and training

Importance of Job analysis to HR Managers

Job analysis is at the core of all HR practices. Almost every HR program requires some type of information that is leaned from job analysis:

1. Work redesign: To redesign work, detailed information about the existing jobs must be available

2. HR planning: HR planning requires finding the required number of qualified employees to fit specific jobs. Thus, requires accurate information about the levels of skill required in various jobs.

3. Selection: To identify which applicants are most qualified, it is first necessary to determine the tasks that will be performed by the individual hired and the knowledge, skills and abilities that individual must have to complete the job

4. Employee learning and development: 5. Performance management: Through job analysis, the organisation can identify the

behaviours and results that distinguish effective performance from ineffective performance.6. Career planning7. Job evaluation.

The Importance of Job Analysis to Line Managers

Job analysis is clearly important to the HR departments various activities, but its importance may not be as clear to line managers. There are many reasons for this:

1. Many line managers don’t possess the appropriate management training and may fail to appreciate the importance of the link between the strategic goals of the business and how these relate to HRM practice and desired employee role behaviours (A KEY PART OF JOB ANALYSIS IS UNDERSTANDING THIS LINK)

Job analysis Information

When preparing for job analysis, it is important to consider the nature (or types) of information required and the potential sources of information that will be used in the job analysis.

Nature of Information

Two types of information are most useful in job analysis:

1. Job Description: a list of tasks, duties and responsibilities that a job entailsa. These are observable actions

2. Job Specification: a list of the knowledge, skills, abilities and other characteristics that an individual must have to perform the job.

a. Also referred to as Human Capital

Sources of job information to conduct a job analysis are:

1. External sources of job analysisa. Job analysis information from competitor such as job description and specification…b. Other on-line job descriptions

2. Internal sources of job analysisa. Job incumbents: observation, interview, questionnaireb. Supervisor of job: interview, questionnairec. Job analystd. HR information management systeme. Existing job descriptionsf. Manuals, publicationsg. Expertsh. Records/file/manualsi. Plans and blueprintsj. SMEs (Subject Matter Experts): people who have in-depth knowledge of specific job

under analysis, job skills, and abilitiesk. Outside consultant

Job Analysis Methods

Job analysis traditionally has been conducted in a number of different ways. Also, firms differ in their needs and in the resources they have for conducting job analysis.

Methods of Collecting Job Analysis Information

Introduction

An HR specialist (an HR specialist, job analyst, or consultant), a worker, and the worker' supervisor usually work together in conducting the job analysis.

Job analysis data is usually collected from several employees from different departments, using interviews and questionnaires. The data is then averaged, taking into account the departmental

context of the employees, to determine how much time a typical employee spends on each of several specific tasks.

The Interview

The three types of interviews managers use to collect job analysis data are: individual (to get the employee's perspective on the job's duties and responsibilities, group (when large numbers of employees perform the same job), and supervisor (to get his/her perspective on the job's duties and responsibilities).

The pros of using an interview are that it is: simple, quick, and more comprehensive because the interviewer can unearth activities that may never appear in written form.

Questionnaire

Structured or unstructured questionnaires may be used to obtain job analysis information

Questionnaires can be a quick, efficient way of gathering information from a large number of employees. But, developing and testing a questionnaire can be expensive and time consuming.

Observation

Direct observations are useful when jobs consist of mainly observable physical activity as opposed to mental activity.

Reactivity can be a problem with direct observations, which is where the worker changes what he/she normally does because he/she is being watched

Managers often use direct observation and interviewing together.

Participant Diary / Logs

The employee records every activity he/she engages in, in a diary or log along with the amount of time to perform each activity to produce a complete picture of the job.

Employees may try to exaggerate some activities and underplay others.

Quantitative Job Analysis Techniques

Position Analysis Questionnaire (PAQ) is a questionnaire used to collect quantifiable data concerning the duties and responsibilities of various jobs, see Figure 3-5, on five basic activities: a) having decision-making/communication/social responsibilities, b) performing skilled activities, c) being physically active, d) operating vehicles/equipment, and e) processing information.

Department of Labor Procedure (DOL) is a standardized method for rating, classifying, and comparing virtually every kind of job based on data, people, and things. Table 3-1 shows a set of basic activities, and Figure 3-6 gives a sample summary.

3. Functional job analysis: 1) rates a job on data; people; things; the extent to which specific instructions are necessary to perform the task; the extent to which reasoning and judgment are

required to perform the task; and mathematical ability required to perform the task; and 2) identifies performance standards and training requirements.

Using Multiple Sources of Information

Likely, no one job analysis method will be used exclusively. A combination is often more appropriate.

Where possible, collect job analysis data using several types of collection techniques and respondents.

Potential inaccuracies in peoples' judgments could lead to inaccurate conclusions

JOB DESIGN

So far, we have approached the issue of managing work in a passive way, focusing only on understanding what gets done, the way it gets done and the skills required to get it done. While this is necessary, it is a static view of jobs, in that jobs must already exist and that they are already assumed to be structured in the ‘one best way’. However, a manager is often faced with a situation in which the work unit does not yet exist, requiring jobs within the work unit to be designed from scratch.

Job deign is the process of defining the way work will be performed and the tasks that will be required in a given job

Job deign: changing the tasks or the way work is performed in an existing job.

Research have identified four basic approached hat have been used among the various disciplines that have dealt with job design issues. All jobs can be characterised in terms of how they fare according to each approach; thus, the manager needs to understand the trade-offs between emphasising one approach over another. Two of these approached are:

Topic 7: The legal context of HRM

Effective workforce planning, or HR planning, is an aspect of human resource management (HRM) that is integral to organisational strategic planning. Increasingly, companies are using sophisticated software to facilitate their HR planning.

Developments such as globalisation and changes in society and technology have many implications for HRM. Two of the major ways is through:

- Consumer markets- Labour markets

There are three keys to effective utilisation of labour markets to one’s competitive advantage.

- Organisations must have a clear idea of their current configuration of human resources- Organisations must have a plan as to where they are going in the future and be aware of

how their present configuration of human resources relates to the configuration that will be needed in the future

- Where there are discrepancies between the present configuration and the configuration required for the future, organisations need programs that will address these discrepancies.

The Human Resource Planning Process

Human Resource Planning (also workforce planning): the process through which organisational goals are translated into HR goals concerning staffing levels and allocation. Human resource planning involves forecasting HR needs for an organisation and planning the necessary steps to meet these needs.

From these goals, an integrated set of policies and programs may be developed.

The process consists of developing and implementing plans and programs to ensure that the right number of employees, with the appropriate skills, is available at the right time and place.

The HR planning process is directly linked to strategic business planning. HR planning helps to ensure that the organisation will fulfil its future business plans in terms of financial objectives, output goals, technologies and resource requirements.

HR planning is the process that a company uses to ensure there are capable employees with the necessary knowledge, skills and abilities required to fulfil specific work roles and, thereby, the organisations strategic goals.

A strategic approach to HR planning means that:

- There is a focus on planning at the organisational level- HR issues are considered to be part of the organisations strategic business planning

processes- The HR planning process has an emphasis on the organisational ‘bottom line’

- HR strategies- such as staffing, employee learning and development, managing performance and compensation – are integrated so that the activities in each functional area support and are consistent with those in other human resource areas.

- HR managers, as well as all other managers, work together to develop and implement the organisations strategic business plans

- Employee needs and wishes for career development are integrated with organisational goals.

The HR process involves

- Forecasting;- Goal setting; and- Strategic planning; followed by- Program implementation and evaluation

Forecasting

Forecasting: The attempt to determine the supply of and demand for various types of human resources to predict areas within the organisation where there will be future labour shortages or surpluses.

Forecasting, on both the supply and demand sides, can be done using either statistical methods or judgemental methods.

Determining labour demand

Typically, demand forecasts are developed around specific job categories and skill areas relevant to the organisations current and future state. Once the job categories or skills are identified, the planner needs to seek information that will help him or her predict whether the need for people with those skills or people in that job category will increase or decrease in the future. Organisations differ in the sophistication with which such forecasts are derived.

Determining Labour Supply

Once a company has projected labour demand, it needs to get an indicator of the firms labour supply. Determining the internal labour supply calls for a detailed analysis of how many people are currently in various job categories (or who have specific skills) within the company. This analysis is then modified to reflect changes in the near future caused by retirements, promotions, transfers, voluntary turnovers and terminations.

As in the case of labour demand, projections for labour supply can be derived either from historical statistical models or through judgemental techniques. One type of statistical procedure that can be employed for this purpose involves transitional matrices.

- Transitional matrices: matrices showing the proportion (or number) of employees in different job categories at different times.

Determining Labour Surplus or Shortage

Once forecasts for labour demand and supply are known, the planner can compare the figures to ascertain whether there will be a labour shortage or labour surplus for the respective job categories. Once this is determined, the organisation can determine what it is going to do about these potential problems

Goal setting and strategic planning

The second step in the HR planning process is goal setting and strategic planning. The purpose of setting specific quantitative goals is to focus attention on the ‘problem’ and provide a benchmark for determining the relative success of any programs aimed at redressing a pending labour shortage or surplus.

The goal should come directly from the analysis of labour supply and demand and should include a specific figure about what should happen with the job category or skill area and a specific timetable for when results should be achieved.

There are many mays to deal with labour shortages and surplues.

Downsizing

Downsizing: the planned elimination of large numbers of personnel, designed to enhance organisational effectiveness. There are three major types of downsizing strategy:

1. Workforce reduction: a type of downsizing strategy, using a cost-cutting approach emphasising short-term results and redundancies

2. Organisational redesign: restructuring or transforming of the organisation, with elimination of functions, layers and work processes (often a type of downsizing strategy)

3. Systematic change: a program of organisational cultural change involving all staff (often a type of downsizing strategy).

Early retirement programs

Another popular means of reducing a labour surplus is to offer an early retirement program.

Employing temporary workers

While downsizing was the popular method for reducing a labour surplus, Koukoulaki describes the employment of temporary workers and outsourcing as a flexible human resource management initiative to eliminate labour shortages.

Outsourcing

Overtime and expanding worker hours

Program implementation and Evaluation

The programs developed in the strategic choice stage of the process are put into practice in the program implementation stage. A critical aspect of program implementation is to make sure that some individual is held accountable for achieving the stated goals and has the necessary authority and resources to accomplish this goal. It is also important to have regular progress reports on the implementation to be sure that all programs are in place by specified times and that the early returns from these programs are in line with projections.

The final step is to evaluate the results. Although the bottom-line evaluation is critical, it is also important to go beyond it to see which f the specific parts of the planning process contributed to success or failure.

HUMAN RESOURCE INFORMATION SYSTEMS

An effective HR planning system relies on reliable and valid information about the organisations current and potential workforce.

Human resource information systems (HRIS): systems to collect, store, manipulate, analyse, retrieve and distribute information related to a company’s human resources.

These systems use technology to allow faster access to information and decision making. Thus, HRIS may lead towards a form of ‘virtual human resource management’, as the computerisation of HR activities in organisations may streamline operational aspects of HRM and reduce much of the administrative burden of this functional area.

HRIS in organisations today tend to be software-enabled systems that are developed by specialist vendors and promoted to organisations and HR professionals. There is a wide range of HRIS applications available from consulting firms, software houses and organisations that employ HRIS developers.

In many large organisations, HRIS have been used for 3 broad functions:

- Transaction processing, reporting and tracking- Decision support systems (‘what if’ functions – helps solve problems); and- Expert systems (computer systems incorporating the decision rules of people deemed to

have expertise in a certain area)-

Employee self-service

A major trend in HRIS is the increasing use of employee self-service (ESS) applications.

ESS: enable employees to directly enter their personal data into the HRIS and directly access information, such as leave entitlements or pay details.

INFORMATION TECHNOLOGY USED IN HRM

1. Interactive voice technology2. The internet3. Networks and client-server architectures

a. Network of computersb. Common form of network is client-server architecture (means of consolidating data

and applications into a single system (the client).4. Relational databases

a. Databases contain several data files (topics) that are made up of employee information (records) containing data fields. A data field is an element or type of information such as employee name, tax file number or job classification.

b. In a relational database, information is stored in separate files, which look like tables. These files can be linked by common elements (fields) such as name, ID number or location

5. Imaginga. Imaging (or scanning)

6. Blue-ray disc technology7. GroupWare, intranets and portals8. Global positioning systems (GPS)

HRIS: Software applications for HRM

The technologies through which HR meets stakeholders needs vary depending on the need being satisfied. Selection systems ensure that applicants selected for employment have the necessary knowledge, skills and abilities to provide value to the organisation. Employee learning and development systems meet the needs of both line managers and employees by providing employees with development opportunities to ensure they are constantly increasing their human capital and, consequently, providing increased value to the company. Performance management systems make clear to employees what is expected of them and ensure line managers and strategic planners know which employee behaviour will be in line with the company’s goals. Finally, reward systems similarly benefit all stakeholders. These systems ensure managers and employees will use their skills for organisational benefit and provide strategic planners with ways to ensure all employees are acting in ways that will support the strategic plan. Obviously, reward systems provide employees with an equitable return for their investment of skills and effort.

There are specific purposes within HRM activities for which software applications can be particularly useful. In the following sections, we review the software applications available for HR planning, staffing, performance management, learning and career development, and compensation and benefits packages.

HR Planning Applications

Two principle computer applications are related to HR planning: ‘succession planning’ and ‘forecasting’

Succession Planning: The identification and tracking of high-potential employees capable of filling higher level managerial positions.

- Ensures that the company has employees who are prepared to move into positions that become available because of retirement, promotion, transfers, terminations or expansion of the business.

Forecasting includes predicting the number of employees who have certain skills and the number of qualified individuals in the labour market.

HR planning involves company-specific calculations involved in determining future employee turnover, growth rates and promotional patterns. They usually contain several data files, including a ‘starting population’ file, ‘exit-rate’ file, ‘growth-rate’ file and promotion patterns.

- Starting Population File: lists employees by job classification within each job familyo Usually include all active, regular, full-time employeeso However, may include only specific populations of employees. Such as job grade,

gender, age, service, training and experience information. - Exit-rate data: includes promotion patterns, training completion rates, turnover rates and

hiring rates. - Growth-rate data: includes the percentage increase in the number of employees within the

job or demographic characteristic (e.g. females) that are of interest.- Promotion patterns: include the rate of movement into and out of each position

Information regarding starting population and exit and growth rates is useful for conducting workforce profile analysis and workforce dynamics analysis.

Workforce Profile Analysis

To determine future labour supply and demand, it is necessary to identify the characteristics of the current workforce, a process known as a ‘workforce profile review’.

Workforce dynamics analysis

A workforce dynamics analysis involves analysing employee movement over time. Promotion, demotion, transfer and turnover data are used. Employee movement data can also be used to forecast the effects of job terminations or hiring on the future workforce.

Staffing Applications

Common software applications used in the area of staffing include applicant tracking, recruitment practices tracking, help in meeting equal employment opportunity reporting requirements and aid in maintaining databases of employee information.

Performance Management Applications

Employees’ performance ratings, disciplinary actions and work-rule violations can be stored in electronic databases. Personal computers are also increasingly being used for monitoring the actual performance and productivity of service employees (E.g. call centres).

One of the disadvantages of monitoring is that employees sometimes find it demoralising, degrading and stressful. To avoid the potential negative effect of performance monitoring, managers must communicate why employees are being monitored. Non-management employees also need to be involved in monitoring and coaching less-experienced employees.

Learning and Career Development Applications

Applications for employee learning and development have been used primarily to track information related to training administration (e.g. course enrolments, tuition reimbursement summaries and training costs), employees’ skills and training activities.

Important database elements for training administration include training course completed, certified skills and educational experience. Training cost information can be used by managers to determine which departments are exceeding their training budgets. This information can be used to reallocate training dollars during the next budget period. Databases are also available that provide professional employees, such as doctors, engineers and lawyers, with access to summaries of journal articles, legal cases and books to help these employees keep up to date.

Compensation and Benefits Applications

Applications in compensation and benefits include:

1. Payroll2. Job evaluation3. Salary surveys4. Salary planning5. International compensation6. Benefits management7. Using compensation and benefits applications for decision making

Topic 8: Recruitment and Selection

Explain the various selection methods commonly used by organisations [referrals, biographical data, physical ability tests, cognitive tests, personality inventories, work samples, assessment centres, honesty tests, drug tests and interviews]

Critically analyse the advantages and disadvantages of each selection method

Explain the criteria used to evaluate selection methods [reliability, validity, generalizability, utility and legality]

Explain the importance of recruiter traits, and the impact they might have on the above criteria

SELECTING

Employee selection decisions made over the course of a organisations history are instrumental to its ability to survive, adapt and grow. The competitive aspects of selection decisions become especially critical when organisations are confronted with ‘tight’ labour markets or when competitors tap the same labour market. If one company systematically skims off the best applicants, the remaining companies must make do with what is left.

Types of Selection Methods

1. Interviews2. References and biographical data3. Physical ability tests4. Cognitive ability tests5. Personality inventories6. Work samples7. Honesty tests and drug tests

Selection Method Standards

Employee selection is the process by which companies decide who will or will not be allowed into their organisations. Several generic standards should be met in any selection process. We focus on five:

1. Reliability

Reliability: the consistency of a performance measure; the degree to which a performance measure is free from random error. One important type of reliability is inter-rater reliability (the consistency among individuals who evaluate the employee’s performance).

2. Validity

Validity: The extent to which a performance measure assesses all the relevant – and only the relevant – aspects of job performance.

Predictive validation: a criterion-related validity study that seeks to establish an empirical relationship between applicants test scores and their eventual performance on the job.

Concurrent validation: a criterion-related validity study in which a test is administered to all the people currently in a job and then incumbent’s scores are correlated with existing measures of their performance on the job

o The logic behind this strategy is that if the best performers currently on the job perform better on the test than those who are currently struggling on the job, the test has validity.

Content validation: a test-validation strategy performed by demonstrating that the items, questions or problems posed by a test are a representative sample of the kinds of situations or problems that occur on the job.

o A test that is content valid exposes the job applicant to situations that are likely to occur on the job and then tests whether the applicant currently has sufficient knowledge, skill or ability to handle such situations.

3. Generalisability

Generalisability: The degree to which the validity of a selection method established in one context extends to other contexts. There are three primary ‘contexts’ over which we might like to generalise:

1. Different situations (jobs or organisations)2. Different samples of people3. Different time periods

4. Utility

Utility: is the degree to which the information provided by selection methods enhances the effectiveness of selecting personnel in real organisations.

In general, the more reliable, valid and generalizable the selection method is, the more utility it will have. On the other hand, many characteristics or particular selection contexts enhance or detract from the usefulness of given selection methods, including when reliability, validity and generalizability are held constant.

5. Legality

Recruiters

In many cases, by the time a recruiter meets some applicants, the applicants have already made up their minds about what they desire in a job, what the current job has to offer and their likelihood of receiving a job offer. Moreover, many applicants approach the recruiter with some degree of scepticism. Knowing that it is the recruiters job to sell them on a vacancy, some applicants may discount what the recruiter says relative to what they have heard from other sources. For these and other reasons, recruiters characteristics and behaviour seem to have less impact on applicants job choices than we might expect.

Recruiter’s functional area

Most organisations must choose whether their recruiters are specialists in human resources or experts at particular jobs.

Recruiters Traits

Two traits stand out when applicant’s reactions to recruiters are examined

1. ‘Warmth’: reflects the degree to which the recruiter seems to care about the applicant and is enthusiastic about his or her potential to contribute to the company

2. ‘Informativeness’: applicants respond more positively to recruiters who are perceived as warm and informative.

Recruiters Realism

Since the recruiters’ job is to attract candidates, there is some pressure to exaggerate the positive features of the vacancy while downplaying negative features. Applicants are highly sensitive to negative information. Research suggests that the highest quality applicants may be less willing to pursue jobs when this type of information is revealed.

Many studies have looked at the capacity of realistic job preview.

- Realistic job preview: accurate information about the attractive and unattractive aspects of a job, working conditions, company and location, to ensure that potential employees develop appropriate expectations.

Enhancing Recruiter Impact

Although research suggests that recruiters do not have much influence on job choice, this does not mean that recruiters cannot have an impact. Several steps can be taken:

1. Recruiters can provide timely feedback; recruiters need to void behaviours that might convey the wrong organisational impression; recruiting can be done in teams rather than by individuals.