HUMAN RESOURCE DEVELOPMENT

Module Guide

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MANCOSA
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 This Module Guide,
Human Resource Development (NQF level 8)
module guide will be used across the following programmes:

 Postgraduate Diploma in Business Management

 Master of Business Administration
 MBA - Human Resource Development

Human Resource Development

Preface.................................................................................................................................................................... 2

Part 1: Introduction To Human Resource Management ................................................................................... 8

Unit 1: A Strategic Approach to Human Resource Management ...................................................................... 9

Unit 2: Human Resource Planning, Recruitment, Selection, Induction and Training ....................................... 22

Unit 3: Performance Management................................................................................................................... 38

Unit 4: Compensation ...................................................................................................................................... 47

Unit 5: Employee Relations and Legislation .................................................................................................... 55

Unit 6: H R Risk Management ......................................................................................................................... 65

Part 2: Introduction to Human Resource Development.................................................................................. 76

Unit 7: Introduction to Human Resource Development ................................................................................... 77

Unit 8: A Strategic Approach to Human Resource Development (HRD) ......................................................... 83

Unit 9:Talent Management Strategy ................................................................................................................ 91

Unit 10: The Learning Organisation................................................................................................................. 97

Unit 11: Organisational Development ............................................................................................................ 105

Unit 12: Human Resource Technology .......................................................................................................... 115

Unit 13: Human Resource Measurement ...................................................................................................... 123

Bibliography................................................................................................................................................... 134

APPENDIX A: ..................................................................................................................................................... 138

RECRUITMENT - A SPECIALIST RECRUITER’S PERSPECTIVE.................................................................... 141

APPENDIX B ...................................................................................................................................................... 142

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List of Content
List of Figures

Figure 1.1: The Strategic Management Process (adapted from Noe et al, 2015) ............................................ 13

Figure 2.1Workforce planning systems category areas (Nel and Werner, 2014).............................................. 26

Figure 2.2 Recruitment Selection Process ........................................................................................................ 28

Figure 2.3.......................................................................................................................................................... 31

Figure: 2.4The Induction Process ..................................................................................................................... 32

Figure 2.5 Key steps in conducting training-needs analysis (Meyer et.al. 2012) .............................................. 35

Figure 4.1 A model for a new compensation system (Nel and Werner, 2014) .................................................. 52

Figure 5.1 Levels of employment Law in South Africa(Nelet.al, 2011) ............................................................. 59

Figure 8.1 A strategically-oriented cycle of HRD activities (Millmore et.al, 2007) ............................................. 88

Figure: 8.2 A Continuum of Strategic Maturity (Millmore et.al, 2007) ............................................................... 88

Figure 10.1 Generic model of learning organisation Implementation (Meyer et.al; 2012)............................... 102

Figure 11.1 Organisation Development’s Five Stages (Brown, 2014) ............................................................ 113

Figure 12.1 E-Learning implementation Process (Meyer et.al, 2012) ............................................................. 121

List of Tables

Table 4.1 The elements of total compensation(Nel and Werner 2014)............................................................. 51

Table 12.1 Major Characteristics (Brown, 2014) ............................................................................................. 109

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Preface
A. Welcome
Dear Student
It is a great pleasure to welcome you to Human Resource Development (HRD801). To make sure that you share
our passion about this area of study, we encourage you to read this overview thoroughly. Refer to it as often as
you need to, since it will certainly make studying this module a lot easier. The intention of this module is to develop
both your confidence and proficiency in this module.

The field of Human Resource Development is extremely dynamic and challenging. The learning content, activities
and self- study questions contained in this guide will therefore provide you with opportunities to explore the latest
developments in this field and help you to discover the field of Human Resource Development as it is practiced
today.

This is a distance-learning module. Since you do not have a tutor standing next to you while you study, you need
to apply self-discipline. You will have the opportunity to collaborate with each other via social media tools. Your
study skills will include self-direction and responsibility. However, you will gain a lot from the experience! These
study skills will contribute to your life skills, which will help you to succeed in all areas of life.

We hope you enjoy the module.

MANCOSA does not own or purport to own, unless explicitly stated otherwise, any intellectual property rights in or
to multimedia used or provided in this module guide. Such multimedia is copyrighted by the respective creators
thereto and used by MANCOSA for educational purposes only. Should you wish to use copyrighted material from
this guide for purposes of your own that extend beyond fair dealing/use, you must obtain permission from the
copyright owner.

B. Module Overview
 The module is a 15 credit module at NQF level 8

Structure of Each Part

Each part is structured as follows:
 Specific Learning Outcomes
 Essential (Prescribed) Reading
 Brief Overview of Relevant Theory
 Questions for Reflection

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Specific Learning Outcomes

These are listed at the beginning of each part. These detail the specific outcomes that you will be able to
competently demonstrate on successful completion of the learning that each particular section requires.

Brief Overview of Relevant Theory

Each part contains a very brief overview of theory relevant to the particular HRM or HRD topic. Once you have
read the overview, you need to explore the relevant topic further by reading the prescribed textbooks and journal
articles listed under “Essential Reading” for each part.

Electronic Learning Resources

Additional electronic learning resources are available to supplement your learning. These are detailed in the
document “Electronic Learning Resources”. These resources seek to build on, and expand, the learning that is
facilitated in this Study Guide. They include video podcasts, individual activities, as well as additional
recommended reading and Think points.

C. Learning Outcomes and Associated Assessment Criteria of this Module

LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE

 Identify that HR strategy is derived and  HR Strategy is identified to understand how it is derived
aligned from the objectives of the and aligned with the organisational strategic plan in order
organisation to improve organisational competitiveness

 Understand that a talent culture and  Talent culture and strategy is analysed to understand how
strategy is aligned to the philosophy, it aligns to the philosophy, principles and organisational
principles and organisational objectives objectives that prepare an organisation to optimally recruit,
assess, select, train, develop, engage, retain and promote
employees

 Identify and address people factors that  People factors is identified to understand how to address
can have a positive or negative effect on positive or negative effects of organisational culture on
organisational objectives organisational objectives

 Identify that human resource planning is  Human resource planning is identified to understand how
a systematic identification and analysis it and analyses the current and future organisational
of organisational capability to attain the capabilities for an organisation to achieve its goals
strategic objectives

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 Understand that learning and  Learning and development is identified to understand the
development is the process to building process to building organisational capability for optimal
organisational capability for optimal organisational performance and sustainability
organisational performance and
sustainability

 Identify that performance management  Performance management is identified to understand the

is the process of directing, developing, management tool to plan, monitor, measure and review
supporting, aligning and improving performance of indicators to ensure efficiency,
performance enabling the sustained effectiveness and impact of service delivery
achievement of organisational objectives

 Understand that compensation is a  Compensation is explored to understand how the tool can
strategy and system to offer fair levels of assist the organisations strategic goals and ensure fair and
pay, benefits and recognition equitable pay structures

 Understand that employee wellness is a  Employee wellness is examined to understand how the
strategy to ensure that a safe, healthy organisation can implement a strategic and integrated
work and social environment is created approach to wellness to ensure that a safe, healthy work
and maintained and social environment is created and maintained

D. Learning Outcomes of the Units

You will find the Unit Learning Outcomes on the introductory pages of each Unit in the Module Guide. The Unit
Learning Outcomes lists is an overview of the areas you must demonstrate knowledge in and the practical skills
you must be able to achieve at the end of each Unit lesson in the Module Guide.

E. How to Use this Module

This Module Guide was compiled to help you work through your units and textbook for this module, by breaking
your studies into manageable parts. The Module Guide gives you extra theory and explanations where necessary,
and so enables you to get the most from your module.

The purpose of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the entire guide
to get an overview of its contents. At the beginning of each Unit, you will find a list of Learning Outcomes and
Associated Assessment Criteria. This outlines the main points that you should understand when you have
completed the Unit/s. Do not attempt to read and study everything at once. Each study session should be 90
minutes without a break

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This module should be studied using the prescribed and recommended textbooks/readings and the relevant
sections of this Module Guide. You must read about the topic that you intend to study in the appropriate section
before you start reading the textbook in detail. Ensure that you make your own notes as you work through both the
textbook and this module. In the event that you do not have the prescribed and recommended textbooks/readings,
you must make use of any other source that deals with the sections in this module. If you want to do further reading,
and want to obtain publications that were used as source documents when we wrote this guide, you should look
at the reference list and the bibliography at the end of the Module Guide. In addition, at the end of each Unit there
may be link to the PowerPoint presentation and other useful reading.

F. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide, a list of
prescribed and recommended textbooks/readings which may be supplemented by additional readings.

G. Prescribed and Recommended Textbook/Readings

There is at least one prescribed and recommended textbooks/readings allocated for the module.
The prescribed and recommended readings/textbooks presents a tremendous amount of material in a simple,
easy-to-learn format. You should read ahead during your course. Make a point of it to re-read the learning content
in your module textbook. This will increase your retention of important concepts and skills. You may wish to read
more widely than just the Module Guide and the prescribed and recommended textbooks/readings, the
Bibliography and Reference list provides you with additional reading.

This textbook will provide you with a strategic understanding of Human Resource Management (HRM) and
introduce you to Human Resource Development (HRD).

The prescribed and recommended textbooks/readings for this module are:

Prescribed
 Meyer, M. et. al. (2012). Managing Human Resource Development. Lexis Nexis
 Noe, R.A. et al. (2016). Human Resource Management: Gaining a Competitive Advantage. 10th edition.
McGraw Hill.

Recommended
 Use EBSCO and Emerald as well to locate journal articles pertaining to specific chapters and sections
covered in this module.
 Use the listed Journal Articles & Reports at the beginning of each unit

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H. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to help you
study. It is imperative that you work through them as they also provide guidelines for examination purposes.

Special Feature Icon Explanation

The Learning Outcomes indicate aspects of the particular Unit you

LEARNING OUTCOMES
have to master.

The Associated Assessment Criteria is the evaluation of the

ASSOCIATED
students’ understanding which are aligned to the outcomes. The
ASSESSMENT
Associated Assessment Criteria sets the standard for the successful
CRITERIA
demonstration of the understanding of a concept or skill.

A Think Point asks you to stop and think about an issue. Sometimes
THINK POINT you are asked to apply a concept to your own experience or to think
of an example.

You may come across Activities that ask you to carry out specific
tasks. In most cases, there are no right or wrong answers to these
ACTIVITY
activities. The purpose of the activities is to give you an opportunity
to apply what you have learned.

At this point, you should read the references supplied. If you are
READINGS unable to acquire the suggested readings, then you are welcome to
consult any current source that deals with the subject.

PRACTICAL
Practical Application or Examples will be discussed to enhance
APPLICATION OR
understanding of this module.
EXAMPLES

You may come across Knowledge Check Questions at the end of

KNOWLEDGE CHECK each Unit in the form of Knowledge Check Questions (KCQ’s) that
QUESTIONS will test your knowledge. You should refer to the Module Guide or
your textbook(s) for the answers.

You may come across Revision Questions that test your

REVISION QUESTIONS
understanding of what you have learned so far. These may be

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attempted with the aid of your textbooks, journal articles and Module
Guide.

Case Studies are included in different sections in this Module

CASE STUDY Guide. This activity provides students with the opportunity to apply
theory to practice.

You may come across links to Videos Activities as well as

VIDEO ACTIVITY
instructions on activities to attend to after watching the video.

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PART 1:
Introduction to Human Resource
Management

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Unit
1: A Strategic Approach to
Human Resource Management

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

1.1 Introduction  Introduce topic areas for the unit

1.2 Overview of Strategic Human Resource  Critically discuss the importance of integrating an
Management organisation’s human resource management strategy
with the overall business strategy
1.2.1 Formulating HR management strategy  Discuss the strategic management phases of
strategy formulation
1.2.2 Strategy Implementation  Discuss the strategic management phases of
strategy implementation
1.2.3 Strategy Evaluation and Control  Discuss the strategic management phases of
strategy evaluation and control

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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1.1 Introduction
The role human resource management (HRM) plays within organisations has changed dramatically. Having
excluded HRM from participating actively in business decisions for most of its existence, organisations now require
HRM to play an active role in the fight to be successful and remain competitive. HR professionals must play a
number of new roles to be successful, one being the strategic-partner role which involves linking the HRM
practices, systems, policies with the strategic initiatives of the company. This process is known as strategic human
resource management. Despite the benefits that can be derived from this process, the strategic use of human
resources within companies frequently remains an after-thought (Grobler et.al., 2014).

Given the fact that HRM goes beyond the administrative tasks of personnel management and encompasses a
broad vision of how management would like the people resources to contribute to the success of the organisation,
the adoption of a professionally accepted HRM standard for South Africa, according to the SABPP (2013), can
help all South African organisations move up the change curve more rapidly. They believe that a set of clear, formal
standards for HR will set the minimum requirement for what is considered good HR management practice in any
organisation. The project is being managed by the South African Board for People Practices (SABPP), which is
the HR professional and quality assurance body of South Africa.

The purpose of the national HR standards development initiative, therefore, is to formulate a consistent set of HR
Standards for South Africa, including HR metrics to measure the bottom-line impact of HR on business. While still
recognising unique operating contexts, industry and company differences, national standards will create a
consistent framework for high quality HR work practised by true professionals throughout the country. All
participating HR Directors, their companies and professional bodies will be acknowledged as the pioneers in setting
HR standards for South Africa (SABPP).

1.2 Overview of Strategic Human Resource Management

Strategic human resource management can be thought of as “the pattern of planned human resource deployments
and activities intended to enable an organisation to achieve its goals.” (Noe et.al., 2015).

Figure 1.1 provides an overview of the strategic management process, and how HRM should be aligned with this
process.

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The Strategic Management Process

Strategy Formulation Strategy Implementation

HR Practices
External Recruitment & Selection
Analysis Training & Development
Opportunities Performance Management
Threats Compensation & Incentives
Employee Relations

Mission Goals Strategic Human Firm

Choice Resource Performance
Needs

Internal Human Human

Analysis Resource Resource
Strengths Capability Actions
Weaknesses Skills Behaviours Strategy
Abilities Results Evaluation
Knowledge

Emergent Strategies

0-1Figure 1.1: The Strategic Management Process (adapted from Noe et al, 2015)

As an organisation grows, and maintaining effective and efficient management practices become more complex
the need for regarding HRM as a strategic imperative is realised. This new strategic accountability implies that
HRM must be able to provide evidence that it contributes to the mission and goals of the organisation, and
ultimately ‘the bottom line’.

Strategic human resource management (SHRM) is the development of a consistent, aligned collection of practices,
programmes and policies to facilitate the achievement of the organisation’s strategic objectives. SHRM includes
all people management activities and it is crucial to ensure that it is aligned to and supports the overall
organisational strategy. This will result in ensuring that the function of managing people is a priority and that all HR
policies, activities and programmes are in line with the organisational strategy (Nel and Werner; 2014).

It is critical that SHRM is aligned with the organisational strategic plan in order to improve organisational
competitiveness.

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Case study Example

The Saatchi & Saatchi case
Saatchi & Saatchi was one of the most famous businesses in the global advertising industry for over thirty years,
but rapid expansion in the 1980s saw the company face disaster. The 1980s boom experienced by the agency
was quickly followed by a bust that exposed the gaping debts at the agency, hitting the company’s share price
hard. This resulted in the organisation’s founders – the Saatchi brothers – being sacked by the board, and, after
several failed chief executive appointments, Kevin Roberts was brought in to lead the organisation in 1997.

The ‘strategic problem(s)’ Roberts faced was essentially one of firm viability. Although advised to make wholesale
redundancies in order to reduce headcount costs, he refused to do so, instead he focused on restoring firm viability
through a strategic orientation of Saatchi & Saatchi as an ‘ideas company’. This involved moving away from its
status as an ‘advertising agency’ to a company that transformed its clients’ business model, brands and reputation
through the use of an ideas brief and brand navigation rather than relying upon a simple advertising campaign.
The shift was demonstrated in the new ways Saatchi pitched for business. Instead of traditional pitches focusing
on advertising campaigns, it broadened its focus to include the client’s business strategy. The decision to reorient
the company as an ideas company was not an original one, since the possibilities of developing this strategy were
being generally mooted within the industry at the time when Saatchi & Saatchi was facing problems. However, the
organisation was able to gain first-mover advantage through being the first to use it so extensively as a form of
strategic leverage. This was critical in order for it to retain its status as a roster agency for global clients such as
Proctor and Gamble, General Mills and Toyota.

However, whilst it could be stated that viability was largely secured through this strategic change, it could also be
argued that it also rested upon the ability of the existing staff to enact it. The Saatchi example, therefore, shows
that an important relationship existed between strategy and staff competencies; whilst there is an important need
to identify the ‘right’ strategy that will leverage the organisation against its competitors, this will be dependent upon
the existence, maintenance, or acquisition (at the right price and right number) of staff capable of enacting it. In
this case, Saatchi staff were not being asked to do something they could not do.

Source: (Grobler et.al, 2014)

1.2.1 Formulating HR Management Strategy

This process involves deciding on an appropriate strategic direction by defining a company’s mission and goals,
its external opportunities, threats, and its internal weaknesses and strengths for the management of HR within the
context of the organisation’s environment. Strategic choices must be made preferably within the context of
environmental constraints. An organisation’s success is dependent upon its ability to match or fit the variability of

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the environment in which it operates. There must be a fit between the organisation and its environment for any
particular organisation’s strategy to work. This entails a focus that includes:
 A scanning of the environment to create the necessary fit.
 Considering the organisation’s mission in terms of its HRM approach.
 Deciding on an appropriate HRM strategy.
 Establishment of a HRM business plan.

This focus is essential because the HRM strategy and the HRM business plan must fit into a particular
organisation’s strategy. In other words, the HRM business plan’s purpose should be basically to operationalise or
bring about the concept of fit between general business strategy and the HRM strategy (Nel and Werner, 2014).

It is of utmost importance that all people-related business issues be considered during strategy formulation. These
issues are identified in the HRM function. Mechanisms or structures for integrating the HRM function into strategy
formulation may help the strategic planning team make the most effective strategic choice. Once that strategic
choice is determined, HRM must take an active role in implementing it(Noe et. al., 2015).

1.2.2 Strategy Implementation

After an organisation has chosen its strategy, it has to execute that strategy (Noe et.al., 2015). In other words, at
this stage the organisation has to operationalise options and choices made in the planning process (Nel and
Werner, 2015).

The basic premise behind strategy implementation is that “an organisation has a variety of structural forms and
organisational processes to choose from when implementing a given strategy” and these choices make an
economic difference (Noe et.al., 2015).

The role of the HR function thus becomes one of ensuring that the organisation has the proper amount of
employees with the right KSA’s required by the strategic plan, and also the developing control systems that ensure
those employees are acting in ways that promote the achievement of the goals specified and agreed upon in the
strategic plan (Nel and Werner, 2015).

1.2.3 Strategy Evaluation and Control

Thus far we have focused on the planning and implementation of strategy. Evaluation and Control could be
regarded as the last component in the strategic management process. An effective and successful organisation
will constantly monitor the effectiveness of both the strategy and the implementation processes. This monitoring
makes it possible for the company to identify problem areas and either revise existing structures and strategies, or
devise new ones (Nel and Werner, 2014).

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Think Point
Have You Completed the ‘Essential Reading’ for this Unit?
Now that you have been introduced to this unit, source and work through the textbook
parts and journal articles listed in the “Essential Reading” list at the beginning of this
unit. It is essential that you read all of the textbook parts and journal articles listed.

HALCROW
Halcrow Group Limited is a multidisciplinary consultancy group specialising in the provision of planning, design,
and management services for infrastructure development throughout the world. Within this the Group’s main
interests are transportation, water, property and consulting. Although Halcrow has a background in civil engineering
and associated specialisms, in recent years the group has extended its range of disciplines to cover architecture,
project management, environmental science, transport planning and other non-engineering but related skills.

Unlike many organisations, Halcrow does not have a mission statement, arguing that their ‘purposeto sustain and
improve the quality of people’s lives’ describes their approach better.

This purpose is underpinned by a series of values which outline those things that are important to the Group: ‘Skills
and innovation; Enjoying what we do; Delivering within time and budget’, codes of business behaviour and
business principles.

Halcrow’s first projects outside the UK, were undertaken in the 1980s, such work now accounting for nearly 40 per
cent of an annual turnover in excess of 200 million with the Group currently undertaking projects in over 70
countries. Recent projects in which Halcrow have been involved include the Channel Tunnel Rail Link, road
construction near the Stonehenge World Heritage Site, the International Congress Centre in Rome, Kuala Lumpur
International Airport, new and refurbished stands for Chelsea Football Club, coordination of wetland conservation
and river basin management for the Danube and its tributaries and managing pollution risk from the animal mass
burial sites arising from the UK’s 2001 foot and mouth disease outbreak.

Halcrow was founded in 1868 by Thomas Meik, the company becoming Sir William Halcrow &Partners in 1941. In
1985 a private limited company bearing the same name was formed, the most recent change being in 1998, when
the various Halcrow Group Limited. The Halcrow Trust owns 90 per cent by its employees. Halcrow has grown
extensively over the past decade and now operates through a network of 29 UK and 32 international offices. As
part of this growth, the number of employees has increased from 1700 to nearly 5000 worldwide. Approximately
80 percent of Halcrow’s employees are classified by the Group as professional and technical (P&T) staff who have
a minimum of an undergraduate degree in engineering or a related subject. The majority are engineers who are
also members of a relevant professional institution or are undergoing training to gain membership. The remaining
20 per cent of employees, including those in human resources, are classified by Halcrow as non-P&T and provide
corporate support services.

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Halcrow Group’s strategy

As a result of restructuring to meet the future needs of the business environment, Halcrow’s operations were
brought together in 2001 as four main business groups: Consulting, Property, Transport and Water. These operate
as a matrix structure across the Group’s eight geographical regions, this structure facilitating appropriate
employees or teams to be brought together for specific projects throughout the world. Each of the four business
groups is led by a management team comprising five people including a Group board director or managing director.
Within each business group, P&T staff are assigned to technical skills groups the leader of whom is responsible
for their training and career development. Employees are also assigned to an office in one of the regions. These
vary in size from less than ten to more than 500 employees. The business groups and regional offices are
supported by Corporate Support Services, comprising all the corporate and business support functions,

Including human resources, and located predominantly within the UK. At the time of writing the human resource
function had 31 employees divided between three teams: Personnel (22), Pensions (3) and Training (6) with a
director at the executive level.

In 2004, Halcrow launched its change programme, ‘Act now’, which was designed to help the Group ‘to continue
to develop in a dynamic and sustainable way’. The focus of ‘Act now’ was to align employees’ behaviours and
approaches to Halcrow’s purpose, values, codes of behaviour and business principles thereby improving individual,
team and overall business performance. This was summarised in Act Now: Your pocket Guide to Halcrow’s Change
Programme as:

To take Halcrow’s existing personality, strengthen all those things that are good about it, for example, our…
 Technical competence
 Dependability
 Friendliness
 Reputation for being a safe pair of hands
 Commitment
 Pride in one’s profession
…and give it some added extras
 Passion
 Dynamism
 Fleetness of foot
 Better listening skills
 Excitement
 Innovation
 Confidence (with a clear sense of self)

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 Being more celebratory

 Consistent delivery to expectation
 Greater commercial edge
 Being performance driven
This change programme is intended to be continuous rather than having a specific end date. It emphasises the
need for flexibility and the sharing of good practices and learning throughout the Group, the centrality of
employees to achieving this, and the need to monitor and evaluate.
SHRM at Halcrow

The ‘Act now’ change programme is central to everything that Halcrow planned to do in relation to the HRM
strategy. The overriding concern is to change the organisation’s culture. It is often said that the group is full of
people who are professional engineers and who take pride in a job well done.

In essence, technical excellence takes precedence over commercial success. By the very nature of their training,
Halcrow people tend to be concerned with ‘detail’ rather than seeing the bigger picture. This has served the Group
well. But a recent client satisfaction survey commissioned by the Group did not show Halcrow in a uniformly glowing
light. It reported that Halcrow emerged as technically excellent and a ‘safe pair of hands’ but that clients were
looking for much more than technical competence and a track record. They wanted business partners whose
behaviours were aligned to their own needs. In addition, the Group was also seen as rather ‘grey’. The challenge
for Halcrow is to retain the reputation for technical excellence and reliability while becoming increasingly
commercially aware, flexible and, above all, more responsive to customer needs.
Halcrow has designed several key HRM initiatives to support the change programme. These are:
 The development of core competences. This is seen as important because Halcrow employees have
traditionally emphasised the importance of professional qualifications above all else. The development of a
core competence programme is designed to move the emphasis from what people know to what they can do.
 The introduction of 360-degree appraisal. It is envisaged that this will make a significant contribution to the
‘Act now’ culture change initiative. The Group’s culture has always tended to reinforce the importance of
hierarchy in that employees have been very conscious of their position in the organisation. In addition, there
had been something of an ‘ignore deflect culture’ in which people sought to evade responsibility for mistakes
rather than being open enough to learn from them. By opening up the system of employee appraisal to people
above and below the individual being appraised and by seeking the views of significant other stakeholders,
particularly customers, Halcrow management believe that a far greater degree of openness will be developed.
 The instigation of a profit share bonus scheme. This is particularly designed to create in employees a greater
awareness of the Group’s profit performance. In the view of senior Halcrow management, this has the potential
to make a major contribution to fostering in Halcrow employees more commercially aware values. In view of
the fact that senior management have set clear targets for increases in Halcrow’s profit performance, greater

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knowledge of the Group’s profitability is seen as an effective way of focusing the minds of employees on profit
performance.
 The development of ‘ideas labs’. This is an important part of the Halcrow management of innovation
programme which is designed to promote innovative thinking and enable commercially valuable ideas to be
implemented. It is designed to:
- Add value to the business;
- Encourage cross-fertilisation between disciplines; and
- Give staff ownership of the ideas put forward.

Overall, the key change issue that is driving SHRM, is the need for Halcrow to be more responsive in the light of a
more competitive industry. Therefore, the principle aim of the new HR initiatives is to generate more competitive
employee behaviours which, in turn, is envisaged will generate better all-round employee business performance.
There are other critical issues facing HR at Halcrow. An important one of these is a consequence of customer
feedback. Increasingly this shows that customers are taking technical excellence for granted when making
decisions about which consultancy group to employ. In view of Halcrow’s reputation for technical excellence among
customers, this is bad news for the Group. As the HR director explained the world has moved on. Clients are now
more demanding and want more all the time. Among the most demanding clients are the public sector. In the UK,
Halcrow management feel that the UK government’s Private Finance Initiative (PFI)has contributed to change in
the industry. (The PFI is a mechanism developed by the government to raise money to pay for new buildings and
services. Under PFI schemes a public authority buys the services of private-sector companies to design, build,
finance, and operate a public facility, such as a hospital. The private-sector companies borrow the money for the
scheme and then the government pays an annual fee to the companies under a long-term operating contract for
the services).

Three examples of the more demanding nature of clients are evident, each of which demands an HR response.
The first is clients asking for an assurance that the staff commencing work on a project will stay with the Group for
the duration of the project. This is a key issue in an industry where the reputation of the consultancy is such that,
in effect, the staff appointed to a project can be more important factor in the client’s decision to engage a particular
consultancy than the consultancy group itself.

The implications for HR are twofold.

First, it must assure both external and internal clients that succession planning is in place. In the past this was not
an HR strength at Halcrow or other similar consultancies, but is an issue that is now receiving more attention.
The second implication is the problem of retention. There is a shortage of high-quality consultants throughout the
construction and engineering sectors and competition for consultants is high. Like the sector in general, staff
turnover is high at Halcrow. This is an issue that senior management know must be addressed. The problem is
exacerbated by the declining number of construction-related graduates in the UK, the number of students studying
relevant courses in the UK dropping by 10 per cent in the late 1990s.

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 Human Resource Development

The second example of the more demanding nature of clients is the requirements that companies state their policy
and practice on employee diversity and equal opportunities. Again, this presents a problem for companies in this
sector, like Halcrow, which has been traditionally male dominated and has, until recently, employed considerable
numbers of expatriates in its overseas operations. In the UK construction industry as a whole, the proportion of
women employed is less than 9 per cent.

The third example of client demands is the requirement that companies offer assurances over corporate
governance. In the light of corporate scandals such as Enron and Parmalat, this is understandable. The HR
response to this is to ensure that global training of key staff to ensure compliance with industry standards take
place. In addition, organisational structure issues, such as the revision of reporting relationships to ensure greater
transparency, are receiving attention.

The level of staff turnover at Halcrow and decline in the number of graduates entering the construction-related
industry has shaped another HR priority for the Group. This is to define more clearly a people statement that states
more precisely what is meant by ‘employer of choice’. In particular, Halcrow is concerned about losing high-quality
graduates to the financial sector, both at the time of graduation and after they have worked with the Group for a
short period. High-quality graduates can earn more money in financial services. In addition, younger graduates are
more concerned with the work-life balance issues and their own staff development than were their predecessors.
A measure of the significance of this issue to Halcrow is the large number of graduates employed each year, this
being 133 in 2003. There is also worry over an ageing workforce in the construction industry in general.

It is felt by the HR director that employees and employee issues at Halcrow need to be higher on the list of Group
priorities. Staff turnover is now a key performance indicator for the HR director. In her view ‘it is no good imposing
things upon people at Halcrow – the Group need to win hearts and minds.’

This is typical of companies employing a high proportion of professional staff who tend to define, and act upon,
their own standards of professional behaviour.

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Revision Questions

Making reference to the case study provide a brief overview of Halcrow

Group’s strategy.

1. The HR function at Halcrow has been largely administrative rather than

strategic, a situation that is now changing because of the HR challenges
that Halcrow faces.

a. Discuss how managing human resources strategically will provide a

competitive advantage to Halcrow.

2. Evaluate the contribution of Halcrow’s ‘Act now’ change programme in

contributing to the emerging HR strategy.

3. Consider the organisation for which you work;

a. Does the HR function fulfil the role of a strategic-partner?

b. Which of the HR practices implemented within your organisation are

consistent with the business strategy? Which HR practices are
inconsistent with the business strategy?

c. Make recommendations to the HR director for the improvement of your

organisation’s approach to SHRM

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Unit
2: Human Resource Planning,
Recruitment, Selection, Induction
and Training

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

2.1 Introduction  Introduce topic areas for the unit

2.2 Overview of HR or Workforce  Critically discuss the alignment of human resource planning
Planning with an organisation’s strategy

2.3 Steps in the workforce planning  Assist an HR practitioner to carry out the steps in the
process workforce planning process

2.4 The HR Recruitment Process  Choose whether internal or external recruitment sources and
methods would be preferable for an organisation

2.5 Selection  Critically discuss and effectively apply the steps in the
selection process within an organisation

2.6 Induction  Describe the stages of induction and its application within an
organisation and the significance of the follow-up and
evaluation of the induction programme

2.7 Training and Development  Distinguish between the concepts of training and
development

 Justify and explain the purpose of training needs analysis

 Indicate and apply the key steps in a generic model of the

needs analysis process

 Discuss and apply the skills audit process within an

organisation

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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2.1 Introduction
Human resource managers are at the forefront of the worldwide war for competitive advantage. Organisations
need to find the best set of workers for meeting their strategic objectives, attract those workers to their companies,
and then get them to stay long enough to obtain some return on their investment.

Organisations have to strive to make sure that the decisions they make with respect to who gets accepted or
rejected for jobs promote the best interests of the company and are fair to all parties involved.

The purpose of this part is to examine factors that influence the supply and demand for labour, focus on what
human resource managers can do in terms of planning and executing human resource policies, and familiarise
you with the selection, induction and training process that give firms competitive advantage in a dynamic
environment (Noe et.al, 2015).

2.2 Overview of HR or Workforce Planning

Human Resource Planning or Workforce Planning is an organisational process that involves proactively planning
ahead to ensure your company is staffed. Within the next decade organisations can expect to experience the
following:
 An ageing workforce which will create an increasing need for talented employees with the skills and
competencies needed
 A more diverse workforce
 Increased competition for highly skilled employees
 Technology playing an ever-increasing role in improving efficiency and productivity

The attainment of HR is fast becoming a vital ingredient in strategic organisational success. It is imperative that
companies develop processes, policies, procedures, and strategies to compete aggressively

Figure 2.1 shows that there is a clear link between HR strategies and organisational strategies. This integrative
model presented below shows the flow of activities in executing workforce planning effectively by means of
integrating recruitment of labour with the objectives of the organisation (Nel and Werner, 2014).

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 Human Resource Development

Forecasting elements

Recruiting Retention Re-deployment Leadership

Employee development
Figure

Intergrated Organisational Process i.e. HR and Organisational policies and procedures

HR objectives Functional objectives

Future supply Forecasted demand

Talent surplus Gaps Talent shortage

Talent pool Organisational goals Action plan to fill

gaps - recruiting

0-1Figure 2. 1Workforce planning systems category areas (Nel and Werner, 2014)

2.2.1 The Talent Demand and Supply Forecast

Talent forecasting is a process for predicting changes in the demand for and the supply of talent.
Forecasts are broken down into:
 Estimated increases or decreases in company growth, output and revenue
 Estimated changes in talent needs that result from organisational growth
 Projections of future vacancies (Nel and Werner, 2014).

2.2.2 Talent Projection and Action Plans

It is important to plot a time series analysis projection using past information about the number of people employed
by the organisation over time on a graph, so that HR trends and requirements can be forecast into the future. This
technique is known as the trend projection.

Talent action plans outline which specific actions all managers have to take in terms of talent management. These
plans aim to attract, retain, redeploy and develop the talent a company needs in order to meet the forecasted
quantity and quality of employees. (Nel and Werner, 2014).

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2.2.3 The Integration Plan

For a company to meet its forecasted staffing needs, action plans must be fully implemented. They must be
integrated into every aspect of workforce management, including communication and the identification of potential
supporters and resisters concerning an integrative model for recruitment (figure 2.1) (Nel and Werner, 2014).

2.3 Steps in the workforce planning process

The following steps are involved in the workforce planning process:
 Forecasting labour demand
 Forecasting techniques
 Forecasting labour supply
 Implementation of the workforce plan (Nel and Werner, 2014)

2.4 The Human Resource Recruitment Process

As discussed above, it is difficult to anticipate exactly how many (if any) new employees will have to be hired in a
given year in a given job category. The role of human resource recruitment is to build a supply of potential new
hires that the organisation can draw on if the need arises.

Therefore, the primary purpose of human resource recruitment is identifying and attracting potential employees.
It thus creates a buffer between planning and actual selection of new employees. (Noe et. al., 2015).

2.4.1 Recruitment Policies

Recruitment policies reflect the organisation’s general business strategy and describes how organisations recruit
employees of the highest calibre in accordance with employment legislation, best practice and within available
resources.

A company’s recruitment policy usually includes information on the following aspects:

 Whether internal or external recruitment will take place
 If relatives of existing employees may be hired
 If part-time, or any type of flexitime workers will be considered.
 If people over retirement age may be employed. (Nel and Werner, 2014).

THINK POINT
1. Discuss the relative merits of internal vs external recruitment.
2. What factors might lead an organisation to decide to switch from internal to
external recruitment or vice versa.

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2.5 Selection
Having formulated the matching strategy and structures of the organisation the next logical step is staffing. This
includes hiring different people, transferring people from other branches or even promotions. These people need
to be selected to have the right person in the right job at the right time (Nel and Werner, 2014).

Selection is therefore the process by which companies decide who will or will not be allowed into organisations
(Noe et. al., 2015).

The selection process is a series of steps through which applicants pass. These steps represent the ‘tools’, or
methods of selection. The steps are mainly a number of eliminators, because as applicants drop out of the process
at each step, the applicant pool becomes smaller (Nel and Werner, 2014).

Recruiting process completed Employment tests

Initial screening Reference checks

Gather information about applicant Final selection by line managers

Evaluate qualification of each applicant Medical checks

Application blank Appointment

Interview/s Placement on the job (induction begins)

0-2Figure 2.2 Recruitment Selection Process

The selection decision must focus on competency-related issues if the selection process is to contribute to the
organisation’s success. Nel and Werner (2014)

Case study - Example

Kinaxis Chooses Sales Reps with Personality
Kinaxis is a software company headquartered in Ottawa, Ontario, that sells to clients around the world. Its specialty
is software for supply chain management – all the processes and relationships through which companies obtain
supplies as needed and get their products to customers on time and at minimal cost. This is a sophisticated type
of product, tailored to a company’s specific needs. Therefore, Kinaxis depends on salespeople who understand

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Human Resource Development

how businesses work, who listen carefully to identify needs, and who provide excellent customer service to
maintain long-term business relationships.

Recently Bob Dolan, vice president for sales at Kinaxis, needed to hire a sales team to serve clients in North
America. The company had just one salesperson serving the continent, and Dolan wanted to add four more. He
received about 100 resumes and wanted to select from these. He started by reviewing the resumes against job
requirements and selected 20 candidates for a first round of interviews. The interview process helped Dolan cut
the list of candidates in half, so he needed another way to narrow his options.

Dolan decided his next step would be personality testing. He hired a firm called Opus Productivity Solutions to
administer a test called PDP ProScan to the remaining 10 candidates. In addition, Dolan himself took the test and
had his current sales rep do the same. The existing salesperson was doing an excellent job, so the results of his
test could help Dolan and Opus pinpoint the characteristics of someone likely to succeed in sales at Kinaxis. Based
on analysis of all the results, Opus created a benchmark of traits associated with success in the job.

Representatives, from Opus also discussed the test results with each candidate, giving each one a chance to
disagree with the scores. No one did. Dolan observed that all the candidates scored high in assertiveness and
extroversion, not surprising for people in sales. In addition, two of them scored above the benchmark in conformity
and below the benchmark in dominance. Those results suggested to Dolan that these candidates might be so
eager to please that they would be quick to give in to whatever customers requested – a pattern that could become
costly for the company. Dolan eliminated those two candidates.

That meant Dolan still had eight candidates to fill four positions. He asked each one to give him the names of major
accounts he or she had signed up in the previous two years. Four candidates were able to come up with three or
four large clients.

Those were the candidates Dolan hired. Since then, Dolan says his experience with personality testing has only
reinforced his belief that this selection method helps Kinaxis identify the best candidates. For example, one sales
rep had scored low on “pace”, indicating that the individual might lack the patience needed for the slow cycles
required to close a sale of a complex software system. Dolan hoped the issue could be overcome if he provided
enough coaching, but in fact, the sales rep sometimes behaved impatiently, annoying prospects. After three years
of trying to help him grow into the job, Dolan laid him off.

The company’s commitment to careful selection is expressed on its website:

“The Kinaxis recruitment process enables us to explore the potential of a partnership between our company and
each employee] by determining if there is solid alignment between your career aspirations, your values, and your
professional skills and the Kinaxis vision, culture, and passion.” (Noe et.al. 2015)

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 Human Resource Development

ACTIVITY 2.1
1. Making reference to the Kinaxis case study above;

2. Highlight the selection methods used by Bob Dolan for hiring salespeople

3. Discuss the advantages for Kinaxis of using personality tests to help select sales
representatives. What were the disadvantages

4. What improvements would you recommend to the process for decisions to hire
sales reps in the future

2.6 Induction
Induction is the last step in the staffing process and provides an overview of the organisation’s culture. It is an early
opportunity for employers to set the right expectations with new employees. From an employee perspective, it
familiarises them with the systems and processes of the new workplace and encourages learning.Although
induction means to introduce or to initiate, it is part of the socialisation process that is aimed at fully absorbing an
employee into the organisation and turning them into a productive worker with minimum delay. Some organisations
have been using the term ‘engagement’ to refer to the broader view of the whole process of induction.Orientation
means to become familiar with or adjusted to facts or circumstances. It is the process of informing new employees
about what is expected of them in the job and helping them cope with the stresses of transition.The broad purpose
of employee induction then is to introduce the new employees to the organisation’s goals and objectives and is
short-term focused.

Strategic planning

HR workforce planning

Shortage of certain
qualified employees

Recruitment

Selection
Selected employee’s
induction
Development
Training

Employee is now a member

of the workforce

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Human Resource Development

0-3Figure 2.3
2.6.1 Topics covered in the employee induction programmes
The topics covered in the Induction programmes include:
General topics:
Company history
Company structure
Layout of physical facilities ANTI
Products or services
Company policies and procedures
Disciplinary regulations
Safety procedures
Pay scales and pay days
Holidays
Employee benefits

Job-related issues:
Introductions to supervisor and co-workers
Job location
Job tasks
Job objectives
Relationship to other jobs (Nel and Werner, 2014)

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 Human Resource Development

2.6.2 The Induction Process

ANTICIPATORY STAGE

New recruit has expectations about the

organisation and the job

Employer uses realistic job preview (RJP)

ENCOUNTER (ORIENTATION STAGE)

New recruit needs information on policies,

etc. and coping with stress

Employer uses ROPES, general company

orientation, and departmental orientation

SETTLING-IN (SOCIALISATION) STAGE

New recruit adjusts to organisational culture

0-4Figure: 2.4The Induction Process

(ROPES – Realistic Orientation Programmes for New Employee Stress)

(Nel and Werner, 2014)

2.6.3 On Boarding and Socialisation

On boarding or socialisation refers to the process of helping new hires adjust to social and performance aspects
of their new jobs (Noe et.al., 2015).

To get newly recruited and hired employees up to speed quickly, many organisations have improved and enhanced
the traditional induction programme to include technical skills, training, industry background, and soft skills training.
This is important to help employees adjust to their jobs by establishing relationships to increase satisfaction,
clarifying goals and expectations to improve performance, and providing feedback, coaching, and follow-up
activities to reduce turnover (Noe et.al., 2015).

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On boarding then is a socialisation process designed to shorten the productivity curve, to help new employees
reach capacity quicker, increase employee engagement and decrease turnover by helping new employees to build
stronger relationships and establish credibility earlier (Nel and Werner, 2014).

On boarding at Sierra Nevada Corporation– Example

New hires at Sierra Nevada Corporation, a company in the defence and aerospace industry, are contacted by the
company’s talent acquisition and training teams before orientation. The programme includes a review of the
company’s history, culture, vision, and values. New hires’ first day on the job includes a meet-and-greet lunch date
with their manager. Employees continue onboarding for 90 days, which includes e-learning, mentoring, on-the-job
training, and a performance review.
(Noe et.al., 2015)

2.6.4 Follow-up and Evaluation of the Induction programme

Regular checks should be initiated and conducted by the line manager after the new employee has been on the
job one day, and again after one week. An HR representative should check in with the employee after one month.
The following methods can be employed to strengthen evaluation:
 Unsigned questionnaires completed by all new employees
 In-depth interviews of randomly selected new employees
 Group discussion sessions with new employees who have settled comfortably into their jobs
 Arrange meetings with longer serving employees on a structured and scheduled basis, such as refresher
courses when they return from leave each year
 Give feedback on the organisation’s progress and get feedback from the employee (Nel and Werner, 2014).

2.7 Training and Development

Training refers to a planned effort by a company to facilitate learning of job-related competencies, knowledge,
skills, and behaviours by employees. The goal of training is for employees to master the knowledge, skills, and
behaviours emphasized in training and apply them to their day-to-day activities.

Traditionally companies have relied on formal training through a course, programme, or event to teach employees
the knowledge, skills, and behaviours they need to successfully perform their jobs.

Formal training refers to training and development programmes, courses, and events that are developed and
organised by the company. Typically, employees are required to attend or complete these programmes, which can
include face-to-face training programmes (such as instructor-led courses) as well as online programmes (Noe et.al,
2015).

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2.7.1 Training Needs Analysis

A key characteristic of training that contributes to competitiveness is that they are designed according to the
instructional design process. Training design process refers to a systematic approach for developing training
programmes (Noe et.Al., 2015)

The terms “analysis” and “assessment” are often used interchangeably in the context of determining training needs.
“Training-needs analysis” can be defined as a process of identifying an issue or problem, collecting, analysing and
interpreting data, and using the information obtained to select or design an appropriate HRD intervention to address
the issue or problem (Meyer et.al, 2012).

The implementation of the Skills Development Act of 1998 requires organisations (with some exceptions, including
small and micro enterprises) to submit a workplace skills plan to the relevant SETA for approval and for recovery
of part of the levy.
This workplace skills plan is a comprehensive document which requires the employer to give detailed information
regarding:
 The current skills profile by number of employees in population groups and educational levels
 The skills priorities and the number of beneficiaries in population, gender and occupational groups
 The process used to develop the workplace skills plan
 The steps used to consult employees about the plan, for instance, whether a training committee has been
established
 The plan’s relationship to the organisation’s employment equity plan

A proper analysis of the organisation’s training needs and skills requirements in the form of a skills audit is therefore
a vital step in the process of developing a workplace skills plan (Meyer et.al., 2012)

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Human Resource Development

 The needs-analysis process

A generic process approach to needs analysis, as developed by Meyer et.al. (2012), can be used to ensure that
needs are identified and correctly analysed. It consists of a series of steps as depicted in Figure 2.5.

Collect information on an ongoing basis to identify potential issues or problems

If an issue or performance problem is identified, consult with management to

agree whether it is related to training

If it is training-related, identify relevant criteria (norms, benchmarks, work

standards and desired current or future performance levels)

Select a data collection method and procedures appropriate to the issue or

problem being analysed

Collect data and analyse results; compare information with relevant criteria to
determine the gap; draw conclusions

Report results and recommendations to the client for inclusion in the workplace
skills plan if it is considered a strategic priority

If the recommendations are accepted, use identified needs for selecting or

designing the intervention

0-5Figure 2.5 Key steps in conducting training-needs analysis (Meyer et.al. 2012)

ACTIVITY 2.2
1. Describe how you would apply these key steps in the identification of the
training priorities in the organisation at which you are employed

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 Human Resource Development

 Skills Audit
A “skills audit” is a process where skills held by employees are identified and compared with skills required now
and in the future so that the skill shortfall or surplus can be determined. The skill shortfall forms thebasis of a
Training-Needs Analysis (TNA) so that the company can reach the desired skill base amongst its employees.
With the advent of skills development legislation and the requirement for organisations to develop an annual
workplace skills plan, many organisations have responded by performing regular skills audits (Meyer et.al, 2012).

 The Skills Audit Process (Meyer et.al, 2012)

The First stage of the process is to ascertain what skill sets the organisation will require in order for business
strategies to be realised

The Second stage requires the organisation to establish what skills are required per role, per job, per task or per
organisational process.

When combined into a matrix, these two sets of skill for the “desired skills” set for the organisation

The Third stage of the skills audit process is where the “desired skills” are compared to the “current skills” which
are ascertained through the assessment of employee skills.

Once the organisation has a skills matrix of required skills and a profile of the skills of each individual, the Fourth
stage of the process is to compare the two results to identify where the skills deficit exists.

Finally, in the Fifth stage the organisation prioritises skills deficits and develops a training plan to ensure that the
gap between skills required and actual skills is closed over time.

In order to ensure that skills audit information is usable for translation into workplace skills plans, skills audits
usually report on skills requirements per role, per position of role in an organisational structure and per employee
profile (this includes race, gender, and disability status)

ACTIVITY 2.3

1. Develop a framework that could be used to conduct a skills audit in your

organisation.

Proper training-needs analysis provides the basis for the development and implementation of workplace skills
plans, the planning and organising of training programmes and the design of HRD interventions which is dealt with
in Part 2 of this study guide.

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Readings

Have You Completed the ‘Essential Reading’ for this Unit?

Now that you have been introduced to this unit on, source and work through the textbook
parts and journal articles listed in the “Essential Reading” list at the beginning of this unit it
is essential that you read all of the textbook parts and journal articles listed

Revision Questions
After completing your study of this unit
reflect on the following questions. (To adequately address these questions you will need to
have completed all the ‘essential reading’ listed at the beginning of this part.)
QUESTION 1.
1.1 Consider the organisation at which you are currently employed and compile a
recruitment policy for your organisation.
1.2 Think back to the recruitment methods/sources that your organisation used that
attracted you to apply for your job. Suggest improvements for your HR department to
implement in making the recruitment process more effective.

QUESTION 2
2.1 Do you agree that all new employees, whether permanent or part-time as well as
longer serving employees should attend an induction programme?
2.2 Discuss benefits the organisation and the employee would gain from an induction
programme.
2.3 Discuss the importance of follow-up and evaluation of the induction programme.
2.4 Did your organisation follow the typical Steps in the selection process?

QUESTION 3
3.1 Identify the most important reasons for conducting training-needs analysis in your
organisation.
3.2 Highlight the key steps in conducting training-needs analysis and describe how you
can apply these steps in the identification of education and training priorities.
3.3 Develop and conduct a needs analysis in the organisation at which you are currently
employed.

QUESTION 4.
4.1 Suggest ways for your organisation to improve their approach to recruitment, selection
and induction.

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Unit
3: Performance Management

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

3.1. Introduction to performance  Understand and explain performance management

management

3.2. Overview of Performance  Discuss the purpose of performance management for an

management organisation

3.3 Performance Feedback  Justify the rationale of providing a constructive performance

feedbacks

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 Human Resource Development

Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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3.1 Introduction to Performance Management

According to Noe et.al. (2015) Performance management consists of three major parts to its process, which
includes;
 Defining performance – specifies which aspects of performance are relevant to the organisation
 Measuring performance – measures those aspects of performance through performance appraisal, which is
only one method for managing employee performance.
 Performance feedback - provides feedback to employees through performance feedback sessions so they
can adjust their performance to the organisations goals

Performance appraisal may be viewed as only one part of the broader process of performance management.
Performance management then is the process through which managers ensure employees’ activities and outputs
are congruent with the organisation’s goals and is central to gaining a competitive advantage.

3.2 Overview of Performance Management

Performance management may be defined as a process of creating a work environment or setting in which people
are enabled to perform to the best of their abilities for the achievement of shared goals. (Nel and Werner, 2015).

3.2.1 Purposes of Performance Management

 It is a process for strategy implementation
 Provides input to other HR systems such as development and remuneration
 It is a vehicle for culture change (Nel and Werner, 2014)
 Serves as an Administrative purpose (Noe et.al., 2015)

3.2.2 The Process of Performance Management

Step 1
Understanding and identifying important performance outcomes or results.
Divisions, departments, teams and employees must align their goals and behaviours and choose to engage in
activities that help achieve the organisation’s strategy and goals.

Step 2
Understanding the process (or how) to achieve the goals established in the first step. This includes identifying
measurable goals, behaviours and activities that will help the employee achieve the performance results.

Step 3
Organisational support – involves providing employees with training, necessary resources and tools, and frequent
feedback communication between the employee and manager focusing on accomplishments as well as issues and
challenges influencing performance.

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For effective performance management managers and employees have to value feedback and regularly exchange
it.
Step 4
Involves performance evaluation, that is, when the manager and employee discuss and compare the targeted
performance goal and supporting behaviours with the actual results.
This typically involves the annual or biannual formal performance review. One way to make the formal evaluation
more effective is for managers to engage in frequent performance conversations with employees rather than wait
for the formal annual review.

Step 5
Involves the employee and manager identifying what the employee (with the help from the manager) can do to
capitalise on performance strengths and address weaknesses.

Step 6
Providing consequences for achieving (or failing to achieve) performance outcomes.
This includes identifying training needs, adjusting the type or frequency of feedback the manager provides to the
employee, clarifying, adjusting, or modifying performance outcomes, and discussions of behaviours or activities
that need improvement or relate to new priorities based on changes or new areas of emphasis in organisational or
department goals
(Noe et. al, 2015)

3.2.3 Approaches to Performance Management

There are different ways to evaluate performance. These include according to Noe et.al., 2015):
 The Comparative Approach
 The Attribute Approach
 The Behavioural Approach
 The Results Approach
 The Quality Approach

ACTIVITY 3.1
1. Refer to the text (Human Resource Management. Noe et.al 2105) and discuss:

2. The nature of each of these performance management approaches

3. The strengths and weaknesses of each of these approaches

4. Identify the approach that is implemented in your organisation

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5. What are the strengths and weaknesses of the performance management

system in your organisation

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3.2.4 The 360-degree Feedback system

According to Noe et.al, (2015), a recent trend in performance appraisals for management development is the use
of upward feedback and 360-degree feedback.

Upward feedback refers to appraisal that involves collecting subordinates’ evaluations of managers’ behaviours or
skills.

The 360-degree feedback process is a special case of upward feedback.

In 360-degree feedback systems, employees’ behaviours or skills are evaluated not only by subordinates but by
peers, customers, their bosses and themselves. The raters complete a questionnaire asking them to rate the
person on a number of different dimensions.

The results of a 360-degree feedback system show how the manager was rated on each item. The results also
show how self-evaluations differ from evaluations from the other raters. Typically, managers review their results,
seek clarification from the raters, and set specific development goals based on the strengths and weaknesses
identified.

ACTIVITY 3.2
1. Highlight the benefits and potential limitations of the 360-degree approach

Case Study

Case Study Example

Capitol One, a consumer credit company, has developed an effective 360-degree

feedback system. Capitol One has included a number of features in its 360-degree
feedback system to minimise the chance that the ratings will be used as ways to get
back at an employee or turned into a popularity contest. The 360-degree assessments
are based on the company’s competency model, so raters are asked for specific
feedback on a competency area. Rather than a lengthy form that places a large burden
on raters to assess many different competencies, Capitol One’s assessment asks the
raters to concentrate on three or four strengths, or development opportunities. It also
seeks comments rather than limiting raters to merely circling numbers corresponding
to how much of each competency the employee has demonstrated. These comments
often provide specific information about what aspect of a competency needs to be

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improved. This comment system helps tailor development activities to fit competency
development. To increase the chances that the assessment will result in change, the
feedback from the 360-degree assessment is linked to development plans, and the
company offers coaching and training to help employees strengthen their
competencies. Employees are encouraged to share feedback with their co-workers.
This creates a work environment based in honest and open feedback that helps
employees personally grow.

(Noe et. al., 2015)

3.3 Performance Feedback

If employees are not made aware of how their performance is not meeting expectations, their performance will
almost certainly not improve. Effective managers provide specific performance feedback to employees in a way
that elicits positive behavioural responses (Noe et.al.,2015).

The appraisal interview should be both evaluative and developmental. Goals that have been met do not warrant
long discussion except for the praise that must accompany these achievements ( Nel and Werner, 2014).
According to Noe et.al. (2015), to provide effective performance feedback managers should consider the following
recommendations:
 Feedback should be given frequently, not once a year.
 Create the right context for the discussion
 Ask the employee to rate his or her performance before the session
 Encourage the employee to participate in the session
 Recognise effective performance through praise
 Focus on solving problems
 Focus feedback on behaviour or results not on the person
 Minimise criticism
 Agree to specific goals and set a date to review progress.

HR practitioners and senior managers are beginning to realise that the management of employee performance
must take place within the pursuit of strategic business goals. This is one of the major reasons why many
organisations are starting to favour a multi-rater, or 360-degree approach to performance evaluation (Nel and
Werner, 2015).

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Readings
Have You Completed the ‘Essential Reading’ for this Unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this part. It is essential that you read all of the textbook parts and
journal articles listed.

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this part.

1. Consider the performance management system implemented by the

organisation for which you work. To what extent does this performance
management system support your organisation’s achievement of a
competitive advantage

2. In his journal article “Is Performance Management Applicable in Developing

Countries?” De Waal (2007) identifies factors impacting on performance
management in organisations operating in Africa

2.1 To what extent are these factors evident in your organisation’s approach to
performance management?

2.2 What would you say are other emerging market related factors that impact
on performance management within your organisation?

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Unit
4: Compensation

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

4.1 Introduction  Discuss the introduction to compensation

4.2 Overview of Compensation  Discuss the objectives and design of compensation

systems

4.3 Purpose of compensation  Discuss the purpose of compensation

4.4 Model for designing and implementing  Discuss the model for designing and implementing
compensation compensation

4.5 Emerging Pay Systems  Debate the various emerging pay systems

4.6 Employee benefits  Explain when mandatory and voluntary benefits are
used

 Compile a flexible benefits plan

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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 Human Resource Development

4.1 Introduction
In the modern organisation, with a variety of costly employee benefit programmes, wage incentive programmes
and structured pay scales, the compensation task is even more difficult and challenging for an HR specialist.
Employees’ compensation affects their productivity and tendency to stay with the organisation.

Employees’ need for income and their desire to be fairly treated by the organisation make developing the
compensation programme very important for the HR department (Wärnich et.al, 2015).

4.2 Overview of Compensation

From the employers ‘point of view, pay is a powerful tool for furthering the organisations strategic goals.

First, pay has a large impact on employee attitudes and behaviours. It influences the kind of employees who are
attracted to and remain with the organisation, and it can be a powerful tool for aligning current employees’ interests
with those of the broader organisation.

Second, employee compensation is typically a significant organisational cost and thus requires close scrutiny.
Companies often look for ways to reduce labour costs without jeopardising their relationships with their workforces.
From the employees’ point of view, policies having to do with wages, salaries and other earnings, affect their overall
income and thus their standard of living. Both the level of pay and its seeming fairness compared with others’ pay
are important (Noe et.al, 2015).

4.2.1 Objectives of a Compensation System

Every company must be aware that the design of its rewards system rests largely on the objectives of its
compensation management so there has to be a clear link between compensation and performance.
It is clear that both employer and employee have to be satisfied in the employment relationship. The basis of
employee pay satisfaction can be grouped according to Nel and Werner (2014) into four categories:
 External equity – how the pay relates to other companies in the industry
 Internal equity – how fair the pay is compared to the size and profitability of the company
 Individual equity – measures the fairness of the pay based on the performance of individuals working the
same job
 Procedural equity – measures the fairness of the decision-making process of pay distribution

4.2.2 The design of a Compensation System

The modern view is that employees who work in a rewarding environment often tend to produce high degrees of
performance output. The reward environment is the starting point for adding value to the organisation (Nel and
Werner, 2014).

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 Value-added compensation
Is a compensation system in which components of the compensation package (benefits, base pay, incentives and
so on), both separately and in combination, create value for the organisation and its employees?

 Total Compensation
Includes monetary and non-monetary rewards as well as direct and indirect rewards. This means that there are
three components of total compensation; direct pay, performance-based pay and indirect pay. The elements of
total compensation are depicted in the Table below:

Table 0:1Table 4.1 The elements of total compensation(Nel and Werner 2014)
Direct compensation Other direct compensation

 cash compensation  share options

 basic salary  share ownership
 deferred cash  restricted shares

Employee Benefits Perquisites/fringe benefits

 Retirement benefits  Cars
 Death benefits  Holidays
 Disability benefits  Loans
 Medical benefits  Other
 Other Incentives
 Bonuses
 Profit sharing
 Recognition

 Variable Pay
Variable pay plans are compensation systems that pay cash bonuses to a defined group of employees based on
predetermined measures of group or organisational performance. Variable pay is attractive because it does not
compound from year to year and the unspent funds can be reused each year, or can be returned to the budget
cycle.
There are four basic variable pay approaches based on the type of formula used:
 Profit sharing
 Gain sharing
 Goal sharing
 Combination plans

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4.3 Purpose and Importance of Total Compensation

 To attract potential job applicants
 To motivate employees
 To retain good employees
 To administer pay within legal constraints

4.4 A model for Designing and Implementing a New Compensation System

Analyse present compensation structure

Formulate salary policies

Select compensation system

Develop implementation plan

Evaluate and monitor

0-1Figure 4.1 A model for a new compensation system (Nel and Werner, 2014)

4.5 Emerging Pay Systems

 Pay for Knowledge and skills
 Pay for competencies
 Performance-based pay
 Incentive pay systems (Nel and Werner 2014)

4.6 Employee benefits

Mandatory Benefits - Benefits that must be provided by law in South Africa:
 Unemployment insurance
 Compensation for injuries and diseases

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Voluntary Benefits – employees can rely on a number of benefits which are non-mandatory or voluntary benefits
on the part of the employer. It should be noted that a number of the benefits discussed do have certain legislated
minimums such as the number of days’ vacation leave, the number of paid public holidays, the number of days’
sick leave, and maternity leave benefits. In South Africa these minimums are legislated in the Basic Conditions of
Employment Act (No.75 of 1997):
o Vacation leave
o Paid public holidays
o Time for personal matters
o Sick leave
o Maternity leave
o Health and life insurance
o Medical aid schemes
o Pension funds
o Employee services
(Nel and Werner 2014)

4.6.1 Benefit planning and flexible benefit plans

Today, although the tendency in bureaucratic –style organisations is still to dictate the terms of benefit packages,
employers are starting to realise that the new deal in employer-employee relationship demands much more
flexibility (Nel and Werner 2014).
According to (Nel and Werner 2014) the terms ‘flexible benefits plan’ and ‘Cafeteria benefits plan’ are generally
used synonymously. The idea of cafeteria benefits allows the employee to put together his or her own benefits
package, subject to two constraints:
 the employers must limit the total cost for each total benefits package, and;
 each benefit plan must include certain non-optional items, such as the mandatory benefits.

The philosophy behind flexible benefit plans is that no one knows the employees’ needs better than the employees
themselves and their needs change through the years, so they can alter their benefits.

ACTIVITY 4.1
1. Despite the attractiveness of cafeteria benefits, what do you think are some of the
limitations of cafeteria benefits plans

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Revision Questions

After completing your study of this part reflect on the following questions. (To adequately
address these questions you will need to have completed all the ‘essential reading’ lsted at
the beginning of this part.)

1. Consider the compensation and benefits practices of the company for which you are
currently employed at. To what extent do the compensation and benefits practices
facilitate the attraction and retention of talent?

2. At the organisation in which you are employed, what component of the total
compensation system is perceived to be most valuable to employees? Why do you think
so?

3. To what extent are flexible benefit plans implemented within South African companies
or the country you currently reside in

4. Discuss the benefits and potential limitations of flexible benefit plans

Readings

Have You Completed the ‘Essential Reading’ for this unit?

Now that you have been introduced to this unit, source and work through the textbook parts
and journal articles listed in the “Essential Reading” list at the beginning of this part. It is
essential that you read all of the textbook parts and journal articles listed.

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Unit
5: Employee Relations
and Legislation

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

5.1 Introduction to Employee Relations  Understand Employee Relations as a function in HR

5.2 Overview of Employee Relations (ER)  Understand the ER in South Africa

in South Africa

5.3 Sources of employment related law in  Discuss and apply the purpose, role and function of the
South Africa various employee relations related legislation in South
Africa

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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5.1 Introduction
Labour law governing employment relations derive its force and effect from a plethora of sources. With that being
said, it would be almost impossible to set upon the task of understanding the multi-faceted content of this subject
without first engaging in the hierarchy of law governing South Africa.

In terms of the Constitution ‘fair labour practice’ has been recognised as a fundamental right and as such must be
treated with the necessary attention and reverence. In line with the overall spirit of the Constitution, Part 1 sets out
the manner in which this right must be interpreted.

In looking at employee relations through the prism of various legislation, one must be sure to take in account the
underlying values of the Constitution when interpreting such legislation. Thus in looking at any labour legislation,
be it statute or precedent, it is mandatory to also consider,

International Law as well as foreign law; it is also a Constitutional imperative that South African common law, which
includes labour law, be developed to bring it in line with the ethos of our Constitution, to the extent that it is
inconsistent.

It thus becomes clear, that when engaging in employee relations whereby the rights and regulations are governed
predominantly by legislation, one needs to continuously question the validation of such provisions.

However, to be in a position to evaluate the law, one is required to not only understand the hierarchy of labour law
in South Africa but also keep abreast with international labour standards and developments in foreign countries.
This part aims to provide a ‘catch all reference’ in terms of relevant governing legislation, as well as the parameters
in which such legislation operates, in dealing with employee relations on a day to day basis

5.2 Overview of Employee Relations in South Africa

Without sound labour relations or work employment relations South African organisations can forget about
becoming more competitive. Whether you are self-employed, work for a company or are employed by the
government, you will be working with people, and good relationships between people in the workplace are a key
requirement for sound labour relations. It is important to note that the employment relationship is essentially a
relationship between the employer (employers and employers’ organisations) and employee (labour and trade
unions), as well as between employer/employee and the state, thus making it a tripartite relationship (Wärnich
et.al., 2015).

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5.3 Sources of employment related law in South Africa

Levels of Employment Law in South Africa

The Constitution

Labour Relations Act

(and agreements and determinations controlled by the Act)

Basic Conditions of Employment Act Employment Equity Act

Occupational Health & Safety Act Skills Development Act

Contracts of Employment

Common Law

0-1Figure 5.1 Levels of employment Law in South Africa(Nelet.al, 2011)

5.3.1 The Common Law and the Employment Contract

The common law rules relating to labour law are not found in legislation but rather are derived from custom and
practice.

The employment contract may be defined as a contract between two persons, namely the employer and the
employee, for the letting and hiring of the employee’s services. In this type of contract, the employer has an
obligation and duty to supervise and control the employee’s work (Nel and Werner, 2014).

5.3.2 The Basic Conditions of Employment Act (BCEA) (No. 75 of 1997)

The BCEA is a vital component of South Africa’s protective labour law framework.
The primary objective of the Act is to:
 Stipulate and regulate relevant conditions of employment and the variation of such conditions
 Contribute to the creation of a secure, equitable, non-exploitative and harmonious work climate
 Give effect to and regulate fair labour practices as advocated in the Constitution (Nel and Werner, 2014)

5.3.3 The Employment Equity Act (No.55 of 1998) (EEA)

The EEA has two main elements:
 The prohibition of discrimination by all employers
 The duty placed on designated employers to implement affirmative action measures by means of employment
equity plans (Nel and Werner, 2014).

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5.3.4 Labour Relations Act (No.66 of 1995) (LRA)

The Act seeks to advance economic development, social justice, labour peace and the participation of employees,
as worthy stakeholders, in the workplace. Its primary objectives are the following:
 To give effect to the rights and obligations of employees and their unions as well as employers and their
organisations in accordance with the fundamental rights of the Constitution and international labour
conventions,
 To promote collective bargaining at sectoral level,
 To promote employee participation at the workplace, and
 To promote dispute resolution and labour peace

The Act is relevant to and has a considerable impact on a number of HRM key functions such as:
 Performance appraisal and management
 Training and development
 Discipline management
 Retrenchments
 Collective bargaining and employee participation
 Strike handling and dispute resolution (Nel and Werner, 2014)

5.3.4.1 Collective Bargaining

Collective Bargaining is a process in which representatives of employees and representatives of the employer
(management) negotiate and otherwise interact in an attempt to reach agreements and to uphold these
agreements regarding matters that relate to or may impact on the employment relationship.

In terms of the LRA, employers are not compelled to enter into collective bargaining with employees. The Act does,
however, strongly promote good faith collective bargaining – especially at a centralised level. For this reason, it
provides for bargaining and statutory councils and the conclusion of collective agreements on various matters of
mutual interest between employers and employees.

Collective bargaining takes place between employers (who may be represented by employers’ organisations) and
employees (usually represented by trade unions). It may take place at various levels and different approaches to
bargaining or bargaining styles can be used (Wärnich et.al, 2015).

5.3.5 The Skills Development Act (No. 97 of 1998) (SDA)

The South African economy faces several challenges and skills development is one of those challenges. The Skills
Development Act (No.97 of 1998), promulgated in 1999, makes provision for a new approach to skills development
that compliments the formal education, to ensure that the country develops a strategic human development
approach to improve its human capital (Nel and Werner et.al, 2014). It links skill formation to the requirements of
a growing economy and extends education and training to people both within and outside formal employment. In

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tandem with the Skills Development Levies Act (No. 9 of 1999), the Skills Development Act places a legal obligation
on all employers to improve the competency levels of their workforce.

The Skills Development Levies Act (No. 9 of 1999) imposes a skills development levy on most employers, and
imposes government departments to allocate a percentage of their budget to skills development (Meyer et.al.,
2012).

As part of South Africa’s national skills development strategy, the Skills Development Act (No.97 of 1998) was
enactedNel and Werner (2014).

The Purposes of the Act are:

 To develop the skills of the South African workforce
 To increase the levels of investment in education and training in the labour market and to improve the return
on that investment
 To encourage employers to:
- Use the workplace as an active learning environment
- Provide employees with the opportunities to acquire new skills
- Provide opportunities for new entrants to the labour market to gain work experience and
- Employ persons who find it difficult to be employed
 To encourage workers to participate in learnership and other training programmes
 To improve the employment prospects of persons who were previously disadvantaged by unfair
discrimination and to redress those advantages through training and education
 To ensure the quality of education and training in and for the workplace
 To assist:
- Work-seekers in finding work
- Retrenched workers in re-entering the labour market and
- Employers in finding qualified employees and
 To provide and regulate employment services

The Skills Development Strategy is based on the National Qualifications Framework Act (No. 67 of 2008), which
makes provision for the National Qualifications Framework (NQF), established by the South African Qualifications
Authority (SAQA) (Meyer et.al, 2012).

This body of skills development legislation has fundamentally changed the face of education and training in South
Africa. The implications of these Acts for Human Resource Development (HRD) is important to provide guidelines
for designing and implementing relevant organisational strategies (Meyer et.al, 2012).

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 Sector Education and Training Authorities (SETAs)

There are various SETAs that have been established to cater for each national economy sector and these
institutional bodies are expected to perform the following functions:
o Strategic functions
o Implementation functions
o Communication and reporting functions
o Quality assurance functions (Meyer et.al, 2012).

 Learnerships and Skills programmes

A substantial amount of the SETAs time is spent in handling matters relating to learnerships. (Nel and Werner ,
2014).
A learnership is a mechanism to link structured learning with work experience, leading to a qualification registered
on the NQF as a reliable indicator of work readiness. (Meyer et.al, 2012).
The structured learning part of a learnership has to include the unit standard categories required to make up a
qualification:
o Fundamental learning
o Core learning
o Specialisation

Skills programmes are another form of learning intervention to achieve the objectives of the Act, and is described
as unit standard-based programmes that are occupationally based and presented by an accredited provider, and
when completed, constitute a credit towards a qualification registered on the NQF (Meyer et.al, 2012).

 Workplace Skills Plan (WSP)

A WSP is a strategic plan, approved by the SETA, which outlines the training and development requirements for
an organisation for a minimum period of one year. The HR department needs to follow certain steps when
developing and implementing a WSP (Nel and Werner, 2014).
Guidelines for developing a WSP:
o Step 1: Proper workplace planning
o Step 2: Analysing jobs as an input to the workplace planning process
o Step 3: identifying and defining the organisation’s skills requirements
o Step 4: conducting a skills audit to determine the organisation’s current skills profile
o Step 5: defining the organisation’s skills training priorities
o Step 6: Identifying the appropriate skills programmes to address the organisation’s identified training
needs
o Step 7: Implementing the WSP
o Step 8: Monitoring, evaluating and reporting on the WSP

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o Step 9: Establishing a quality assurance system to ensure effective and value-added skills training and
development (Nel and Werner, 2014)

5.3.6 Occupational Health and Safety Act (No.85 of 1993) (OHSA)

The aim of the OHSA is to establish institutions such as health and safety committees and the appointment of
safety representatives at the workplace to promote and monitor health and safety in all areas where work is done.
The Act introduces rules and standards by which organisations will be judged and the sanctions that they can
expect when standards are breached (Nel and Werner, 2014)

5.3.7 Unemployment Insurance Act (No. 63 of 2001) (UIA)

The Act was promulgated to establish the Unemployment Insurance Fund (UIF) which is entrusted to provide
unemployment benefits, maternity and adoption benefits and dependent’s benefits related to the unemployment of
such employees.
Employees contribute the equivalent of 1 per cent of their remuneration which is matched by the employer in equal
measures.

The protective labour laws outlined provide the legal framework that underpins labour legislation in South Africa
and guidelines for HRM and HRD practitioners.

Readings
Have You Completed the ‘Essential Reading’ for this Unit?
Now that you have been introduced to this unit. source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this part. It is essential that you read all of the textbook parts and
journal articles listed.

Revision Questions
After completing your study of this unitt reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this part.)
1. Provide a summary of the main provisions and purposes of the various
labour laws that underpin labour legislation in South Africa.
2. Outline and apply the practical steps that should be applied in your workplace
to ensure that HRD strategies are aligned with the skills development
legislation.
3. Provide an analysis of your organisation’s business objectives and skills
profile to identify strategic priorities for education and training.

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4. Identify the steps in a project plan to develop a workplace skills plan (WSP)
that would comply with the requirements of the Skills Development Act and
its regulations and those set by your organisation’s SETA.

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Unit
6: HR Risk Management

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

6.1 Introduction  Understand the concept of risk management

6.2 Risk Management  Discuss the role of risk management in organisations

6.3 Overview of HR Risk Management  Understand the concept HR Risk management

6.4 The role of HR in risk management  Understand the role of HR in risk management

6.5 Types of Human Resources Risks  Identify the various types of HR risks

6.6 Skills for effective integration of risk  Discuss skills required for effective integration of risk
management and HRM management and HRM

6.7 Strategies for managing risks  Identify key strategies for managing risks

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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6.1 Introduction
Business leaders are starting to make strategic HR risk management a core part of their talent management
agendas, from daily hiring activities to managing critical business events. Historically HR Risk Management has
largely been a defensive and tactical domain, mostly centred on compliance-related activities, programmes and
accountabilities (Goldberg and Dyer, 2012).

According to the National HR standard launched in 2013 HR Risk Management is a systematic approach of
identifying and addressing people risks (uncertainties and opportunities) that can either have a positive or negative
effect on the realisation of the objectives of an organisation (SABPP, 2015) and an HR risk is any people, culture
or governance factor that causes uncertainty in the business environment that could adversely affect the
company’s operations (Meyer, Roodt and Robbins, 2011).

6.2 Risk Management

Businesses invest money to yield returns on the risks they take. Risks are ‘uncertain future events which, left
unchecked, could adversely influence the achievement of a company’s objectives.’

Risk is a normal and unavoidable element in any business and entrepreneurs and investors pursue business
opportunities despite the risks. Not dealing with risks can lead to business failure and even the collapse of the
company.

In essence the challenge is to identify the specific risks and to plan for any deviation from the expected.

A business needs a risk management framework to provide assurance about the effectiveness of its operations
and the validity of the findings of its risk management reporting. The framework should have a clear focus on the
cost implications and effects of these factors on the business.

The purpose of managing risk is to ensure the effectiveness and efficiency of operation

6.3 Overview of HR Risk Management

Human resources have two roles in risk management.
 First, people are a source of risk, e.g., shortage of employees, people doing sloppy work, an employee refusing
to take on additional responsibility, or a key employee leaving two months after completion of a one-year
training program.

 Second, people are important in handling risk, e.g., people using their ingenuity to solve unexpected problems,
employees going the extra mile for the good of the organisation, a key employee redesigning her own job to
avoid unnecessary delays in getting work done, or an employee persuading a talented friend to apply for a
position in the business.

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Like risk, human resources are pervasive in the business. Human resource management is most effective when
integrated with decision making throughout the business. This leads to recognition that each production, financial
and marketing decision has a human component or influence. Which choice is made, how the decision is carried
out, the follow-up and monitoring depend on people. Isolating management team and employee issues from
production, financial, and marketing management frustrates people and creates unnecessary risk in a business
enterprise (Ervan, 2012).

6.3.1 King III Report on Governance

At a local level, the King III Code on Governance in South Africa has been in effect from 01 March 2010. Given the
important role of HR Directors in supporting King III, and the sound governance of South African organisations in
particular, the Human Resource Research Initiative of SABPP identified the management of HR risk as one of the
most important opportunities that HR practitioners have for adding value to the new governance dispensation in
the country. Significantly the King III Report specifically mentions HR as an important area for identifying and
reducing risk.

6.3.2 Interface between Human Resource Management and Risk Management

According to (Meyer, Roodt and Robbins, 2011) sometimes managers see training as a waste of time. This
perception is a main source of HR’s credibility crisis: what is the contribution of HR directors to the success of a
business? In order to meet this challenge, HR directors need to, amongst other things, identify and manage its
risks effectively.

To understand fully how human resource management and risk management are interrelated, one must
understand human resource management. It is the staffing, training, development, motivation, and maintenance
of employees to help accomplish organisational goals. Effective human resource management also helps
employees accomplish their career goals.Human resource management is a process that can be broken down into
specific activities and understanding these activities helps explain the relationship between human resources and
risk. Failure to successfully carry out these activities increases risk and penalizes the business by not taking
advantage of what its people could be contributing (Ervan, 2012).

Managing risk should therefore form part of the strategic plan of the organisation where businesses take a more
integrated and proactive approach to ensure that they become resilient and develop capacity to handle risks and
disasters (Meyer, Roodt and Robbins, 2011).

6.4 The Role of HRM in Risk Management

South African organisations need a more integrated approach to managing HR risks. HR risks need to be
considered in every major business decision like opening a branch in a different province or country. Research

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has clearly shown that so-called ‘soft’ issues, like cultural incompatibility, have led to more major business failures
during mergers, acquisitions and international joint ventures.

Managing HR risk is a key element of HR governance. Proper HR risk management gives HR executives an
opportunity to fulfil their fiduciary duties of care and sound financial management.

HR risk management flows directly from external and internal stakeholder engagement. HR risk management
addresses key HR risk issues like reducing risk, HR due diligence, the role of HR committees, implementing codes
of ethics and fair labour practices.

Companies should identify HR risks in different sites or countries and develop proactive risk-reducing plans to deal
effectively with these risks. Consulting with different stakeholders is an important element of sound HR governance.
The purpose of the seamless interfaces between the different stakeholders is to reduce the different risks and
uncertainties that arise because of the interaction between them.

Inevitably, the HR practitioner needs to work closely with the risk manager and risk committee to ensure that the
overall risk management plan of the company includes HR risks (Meyer, Roodt and Robbins, 2011).

6.4.1 Table 6.1 Applying risk management to HR

HR ACTIVITY POTENTIAL RISK POTENTIAL CONSIDERATIONS

Compensation and Financial abuse  Who has signing authority?

benefits
 How many signatures are required?

 Are there checks and balances?

Hiring Discriminatory  Was a complete screening completed on potential

practices applicants?

Hiring unsuitable or  Were provincial human rights laws observed?

unsafe candidates
 Is there a set probationary period?
"Wrongful" hiring
 Were promises made to the candidate that cannot be
honoured?

 Did the employee sign off on the policies and contract of

employment before being hired?

Occupational Health and Environmental,  Do we provide safe working conditions and do we

Safety conduct safety checks regularly?
Personal injury or
death  Do we provide adequate training for staff?

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 Do we ensure the use of appropriate clothing and safety

equipment?

 Do we have adequate policies, procedures, and

committee in place?

Employee supervision Abuse  Do we provide sufficient orientation and training?

Reputation in the  Do we provide adequate supervision (especially for

community activities that occur off-site or after hours)?

Release of personal  Do we have a performance management system in

information place?

 Are personal information protection guidelines followed?

Employee conduct Abuse  Do we have clearly written position descriptions for all
positions?
Reputation in the
community  Do we follow up when the parameters of the job
description are not respected?

 Do we provide thorough orientation and training?

 Do we provide an employee handbook?

 Do we have comprehensive policies and procedures?

 Do we provide ongoing training about our policies and

procedures?

 Do we retain written records of performance issues?

 Do we ensure that organisational valuables are secure?

 Do we have cash management procedures?

 Do we have adequate harassment policies and

procedures?

Exiting employee Property  Do we retrieve organisational information and equipment

that a dismissed employee used (especially from
Reputation in the
home)?
community

Compensation  Do we ensure that all access codes, passwords, etc are

de-activated?

 Do we conduct an exit interview?

 Do we record lieu time and vacation balances?

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6.5 Types of Human Resources Risks

 Compliance with relevant legislation
The typical HR risk here is non-compliance.
HR managers should have a clear understanding of what each piece of legislation requires for compliance.
 Understanding trends in the business environment and being able to convert them into business and HR
strategies and policies.
The typical HR risks here are the inability of senior managers, including HR managers, to analyse the
internal and external business environment and understand what the key drivers of change are and the
inability to convert them into business strategies.
 People and corporate culture drive the implementation of the business’ strategies
Typical HR risks here are:
- Not having the right talent in the right places
- Not attracting and retaining key talent
- Performance that does not meet predetermined standards
- Training and development interventions that do not improve performance
- Absence of a constructive company climate.
 Implementing business strategy
Typical HR risks here are that the business does not have a strategic or business plan that converts into
different strategic objectives or projects and that the business has not spelt out the demands on, or
implications for HR practitioners in terms of talent, policies, practices and procedures.
 Carrying out operations – converting business or project plans into executable operations or tasks.
Typical HR risks here are not having clearly defined operations and tasks or the right staff to execute them.
(Meyer, Roodt and Robbins, 2011)

ACTIVITY 6.1
Assume you are an HR Director at the organisation in which you are currently
employed at;

1. Firstly, identify some of the HR risks evident and discuss whether you would
take a proactive and aggressive approach to address the HR risks in your
organisation or would you adopt a ‘wait and see’ attitude

2. Secondly , depending on your approach to risk management, discuss possible

ways to respond to and address the risks with HR implications in your
organisation applying the managers skills discussed below

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6.6 Skills for Effective Integration of Risk Management and HRM

 Leadership responsibility

Every human resource manager has leadership responsibility. Even though delegation of authority and
responsibility and other tools for empowering employees decrease the need for leadership, some leadership
is necessary.

No group of people comes close to its potential without effective leadership

 Communication

Communication is an essential skill for effective human resource management. Sending clear messages,
listening and use if feedback are essentially important

 Training
Training is helping people learn and effective training requires teaching skills, an understanding of how adults
prefer to learn, patience, communication, a systematic approach, and evaluation of whether the training has
been effective

 Motivation
Motivation of employees challenges every manager. Employee motivation helps the organisation accomplish
its goals while also helping workers accomplish their career goals.

 Conflict
Conflict is inevitable among employees, between employees and the management team, and among the
management team. Managers must learn to deal with conflict rather than avoid it.

 Evaluation.
Employees have a fervent desire for evaluation i.e., information about their performance and managers find it
extremely difficult to share performance evaluations in an honest and helpful manner. Both supervisors and
employees need training in evaluation for it to be useful and pleasant for both parties (Ervan, 2012).

6.7 Strategies for Managing Risks

Managers must consider the most appropriate risk management strategies for each identified risk.
The HR Council of Canada identified the following strategies for managing risks:
 Avoidance - Stop providing the service or doing the activity because it is too risky.
 Acceptance - Some risky activities are central to the mission of an organisation and an organisation
will choose to accept the risks.

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 Modification - Change the activity to reduce the likelihood of the risk occurring or reduce the severity
of the consequences. Policies and procedures are an important part of this risk management strategy
because they communicate expectations and define boundaries.
 Transfer or sharing - Purchase insurance or transfer the risk to another organisation through signing
a contractual agreement with other organisations to share the risk (for example, having a contractual
agreement with a bus company to transport clients rather than staff driving clients).
 Additional options for dealing with risks as described by Meyer, Roodt and Robbins (2011) include the
following:
 Treat - introduce preventative actions to reduce the probability or effect if the risk occurs and maximise
the potential for success.
 Transfer - share the exposure, totally or in part, with a partner or contractor, or with an insurer. Monitor
any partnership carefully, as it may not be possible to transfer all risks.
 Tolerate – the ability of an effective action against some risks may be limited or the cost of taking the
action may be disproportionate to its potential benefits.
 Eliminate – decide not to undertake the activity that is likely to trigger the risk. Where the risk outweighs
the possible benefits, eliminate the risk by doing things differently and removing the risk

Revision Questions
After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this part.)

1. Discuss the significance of business leaders starting to make HR risk

management a core part of their strategic management process

2. Evaluate the role of human resources and human resource management in

risk management

3. Identify the key drivers of change in your organisation and discuss the HR
risk of the inability of HR managers to foresee their strategic implications

4. Discuss how you would attempt to create a “risk culture” in your organisation
in order to be able to manage risk more effectively

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Readings
Have You Completed the ‘Essential Reading’ for this unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this partit is essential that you read all of the textbook parts and
journal articles listed.

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Part 2:
Introduction to Human Resource
Development

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Unit
7: Introduction to Human
Resource Development

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

7.1 Introduction  Understand the concept Human resource development

7.2 Overview of Human Resource  Understand how Human Resource Development integrates with
Development the business strategy

7.3 International Trends in South  Understand the international trends and best practice in HRD
African

7.4 Local trends in HRD  Understand the national trends and best practice in HRD

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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7.1 Introduction
The field of human resource development (HRD) in South Africa and abroad has evolved so rapidly over the past
ten years that traditional training is under threat. Traditionally training has been seen as a tool to give employees
knowledge and skills to perform their work more effectively. Today this view is changing. An increasing number of
company’s view HRD as an important business imperative to enhance competitiveness and overall business
performance. South African companies that use HRD as a strategic business strategy are likely to outperform their
competitors who fail to do so (Meyer et.al, 2012).

The role of HRD has broadened beyond training programme design. Effective instructional design remains
important, but HRD practitioners are increasingly asked to create innovative systems and mechanisms to ensure
performance improvement in the workplace. The HRD practitioner is no longer only a trainer, but becomes a
consultant to the rest of the organisation in providing the support that enables the achievement of business
objectives (Meyer et.al, 2012).

Video link:

This video illustrates the link between HRD strategy and organisational needs as it supports the
development of efficient and effective HRD program design and implementation. Ideas for video content
related to organisational strategy and core competencies were drawn from Mathis and Jackson (2011);
while content about HRD strategy and HRD programs were drawn from Werner and DeSimone (2012)

https://www.youtube.com/watch?v=eHWDm0hgPPI

7.2 Overview of Human Resource Development

More recently the term training and development has been replaced by human resource development (HRD).
Whereas training and development is normally driven by top-down, planned interventions, HRD incorporates, in
addition, a greater focus on individual and organisational learning that can give rise to accidental as well as planned
changes to the skill, knowledge and attitude base of employees (Millmore, Lewis, Saunders, Thornhill and Morrow;
2007).

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From a South African perspective HRD is increasingly influenced by the new skills development system based on
skills development within occupations which is to be driven by the quality councils and in particular the Quality
Council for Trades and Occupations (QCTO). In this new paradigm, the emphasis is on what the learner must be
able to apply in the workplace as a result of learning. HRD is also a key element of the National Skills Development
Strategy and other supporting government initiatives aimed at alleviating poverty and improving our
competitiveness as a nation (Meyer et.al, 2012).

7.3 International Trends in HRD

A global revolution is taking place in the field of workplace learning driven by the requirements of the information
explosion, increased globalisation, the changing nature of work and business, as well as changing learner needs
and aspirations. The following international trends and developments in the field of HRD have evolved and should
be internalised by South African organisations if they want to become competitive in the global world:
7.3.1 Globalisation
7.3.2 Strategic HRD and talent management
7.3.3 Electronic learning
7.3.4 Management development
7.3.5 Performance consulting
7.3.6 Career and performance management
7.3.7 Proactive needs identification
7.3.8 Training design
7.3.9 Evaluation of training
7.3.10 Employment equity and diversity training
7.3.11 Learning organisation (Meyer et.al,2012)

7.4 Local Trends in HRD

Local trends in HRD are driven by training legislation and national HRD needs. For the first time in history we have
a national HRD strategy driven by government. Although South African organisations should implement the
international HRD trends as referred to above, the underdeveloped nature of our human resources requires
additional interventions. Most of these interventions, such as the Skills Development Act and Skills Development
Levies Act, necessitate a broader approach to HRD.

From an HRD perspective two important phases have emerged:

 Training legislation – training legislation in South Africa regulates the training that takes place in
organisations.
The three main laws are the National Qualifications Framework (NQF), the Skills Development Act (No.97
of 1998) and Skills Development Levies Act (No. 9 of 1999).
Companies and providers can no longer do what they want to do.

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Revision Questions

After completing your study of this unit” reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this unit.)

1. Provide an analysis of the readiness of South African organisations to

adapt to recent trends and developments in the field of HRD

2. To what extent would you say, the organisation at which you are
employed in, is in a position to adapt to these recent trends of HRD

Readings

Have You Completed the ‘Essential Reading’ for this Unit?

Now that you have been introduced to this part, source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this unit. It is essential that you read all of the textbook partsand
journal articles listed.

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Unit
8: A Strategic Approach to
Human Resource Development
(HRD)

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

8.1 Introduction  Understand HRD is vertically integrated into the HR

Strategy to support the business strategy

8.2 Overview of Strategic HRD  Describe the strategic context, role and responsibilities of
HRD

8.3 A Strategically Oriented Cycle of HRD  Describe the strategically oriented cycle of HRD activities.
activities
 Develop a strategic HRD plan for an organisation

8.4 Characteristics of SHRD  Understand the characteristics of Strategic HRD

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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8.1 Introduction
In order to ensure their survival, organisations need to create a strategic architecture, support processes and
learning mechanisms that facilitate continued learning and strategic renewal (Meyer et.al. 2012). Arguably SHRD
represents the latest extension of the training and development lineage where training and learning are strategically
integrated, vertically to an organisation’s strategic goals and horizontally to other HR activities. This moves training
and development from a process that is largely directed at solving specific gaps in HR competences as they are
identified to a potentially proactive activity directed at improving corporate effectiveness (Millmore et.al. 2007).
In light of the above, HRD managers are challenged to internalise the seventh critical outcome of the NQF which
states that the learner must be able to demonstrate an understanding of the world as a set of inter-related systems
by recognising that problem-solving contexts do not exist in isolation. This is essentially what SHRD is all about
(Meyer et.al. 2012).

8.2 Overview of Strategic Human Resource Development

HRD needs to be viewed not only from a reactive provision of training perspective but also to be perceptually
repositioned within the organisation which should result in HRD being considered a strategic-partner entrusted
with the joint responsibility of improving organisational performance as well as organisational effectiveness. This
would result in HRD extending and having a broader influence as well as a renewed sense of purpose.
For HRD and its practitioners to be both successful as well as effective in transitioning to a strategic partner, HRD
needs to:
 Interpret and understand the trends and commensurate practices in corporate strategy formulation
 Align and link HRD processes and practices to the external, competitive marketplace
 Adopt a high value-added agenda, which creates and ensures a competitive customer focused culture
 Design and develop a range of deliverables which contribute to improving the organisation’s capability not to
just respond to discontinuous change but to innovate strategically
 Focus on organisational performance issues
 Strategically integrate HRD through ensuring that both strategies and interventions are designed to fit
internally with the organisation’s mission, vision, values, structures, procedures and management systems
as well as leadership policies and practices.
 Develop the commensurate individual level competencies within the organisation’s staff which will ensure
that the staff are not only equipped to perform but to excel
 Define and create learning systems which encourage and sustain change, and which enhance personal as
well as organisational learning and growth
 Provide for the development, deployment and leveraging of business unit level capabilities, enabling the
business unit to distinguish itself within the marketplace
 Contribute significantly towards the galvanisation of organisational culture in order to provide legendary high
performance

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Achieving all the aforementioned through a high degree of collaboration with all relevant stakeholders will
ensure that the HRD architecture is so well established as to literally enable the organisation to execute and
accomplish its strategy (Meyer et.al. 2012).

Case Study
Case study Example
The Use of SHRD to support a hotel’s customer service strategy
René Angoujard, general manager of the Novotel London West Hotel, challenges
the
commonly held view that training is a waste of time and money because it leads
to staff leaving once trained. He presents a stark alternative: ‘What if you don’t
train them and they stay?’ For him, training was at the heart of a culture change
programme prompted by: client dissatisfaction; poor staff morale; a staff turnover
rate of 78 percent; and the need to profit from a major refurbishment programme
and market repositioning of the hotel from a tourist to business customer base.
The hotel had, in his opinion, lost sight of its service ethic and a ‘comprehensive
customer service strategy’ was used to forge a service culture.
HRD interventions included formal training around a set of core service
behaviours and the use of selected staff drawn from all levels of the hotel’s
hierarchy to act as on-the-job exemplars and coaches. Initial returns on HRD
investment include: a 92 percent drop in customer complaints; a 10 percent
increase in sales; achievement of a repeat booking level of 70 percent; winning a
number of training and customer service awards; and reducing staff turnover by
over half to 34 percent (Millmore et.al. 2007).

8.3 A Strategically Oriented Cycle of HRD Activities

Muhlemeyer and Clarke (1997) (cited in Millmore et al., 2007:364) hold that their interpretation of the training cycle
(Figure 10.2) encapsulates a strategic orientation.

This can be found particularly in their emphasis on the whole cycle being driven by organisational needs and
securing knowledge transfer, and its exploitation, throughout the whole organisation. Their emphasis on knowledge
transfer prevents HRD outputs being simply locked up in the heads of those directly involved in the training
intervention and makes them available for others to utilise.

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0-1 Figure 8.1 A strategically-oriented cycle of HRD activities (Millmore et.al, 2007)

8.3.1 Strategy Formulation

McCracken and Wallace (2000) (cited in Millmore et al., 2007:355) develop Garavan’s nine characteristics of
strategic HRD to arrive at a revised definition and model of SHRD. They present their construct of SHRD as being
very strategically mature and compare and contrast this with HRD and training where, in their view, strategic
maturity progressively decreases. In this sense their ideas on the development of SHRD can be presented as a
continuum, working through training and HRD to the fullest expression of strategic maturity represented by SHRD
as depicted in Figure 8.2

0-2 Figure: 8.2 A Continuum of Strategic Maturity (Millmore et.al, 2007)

8.4 Characteristics of Strategically Mature HRD

McCracken and Wallace (inMillmore et.al., 2007) argue that:
1. True strategic integration arises only when SHRD shapes and influences an organisation’s missions and
goals as well as supporting their effective implementation
2. Top management support is too passive to fully enact SHRD and that what is required is top management
leadership

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3. Consistent with this leadership role and as part of its environmental scanning responsibilities, senior
management should assume responsibility for analysing the HRD implications of external and internal
environment changes and take over this role from HRD specialists
4. The formulation of HRD plans and policies, although strategically oriented, reflects an operational
emphasis. To achieve a more strategic focus requires the development of HRD strategies from which the
policies and plans would flow
5. Line manager commitment and involvement, while necessary, is insufficient to achieve true integration of
HRD into their broader managerial responsibilities. To achieve this integration requires closer
collaboration with HRD specialists and the development of strategic partnerships between them
6. Similarly, the existence of complementary HRM activities is insufficient in that it downplays the need for
their close integration under the SHRM umbrella. This makes more explicit the necessity to ally vertical
integration with horizontal integration and anticipates the development of strategic partnerships between
HRD specialists and their other SHRM colleagues
7. The expanded role for HRD specialists needs to be further extended to elevate their facilitation of
organisational change function to a leadership of change role
8. Similarly, the HRD function needs to extend its recognition of organisational culture, where training
activities are shaped, in part, by an awareness of the current cultural context, to a position where it actively
influences culture and, when necessary, plays a central role in culture change
9. That the emphasis on evaluation needs to be interpreted more rigorously to include a harder, quantifiable
edge, where HRD activities are evaluated in terms of their cost-effectiveness

ACTIVITY 8.1
1. Develop a comprehensive definition of Strategic Human Resource Development
(SHRD)

Revision Questions
After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the ‘essential
reading’ listed at the beginning of this part.)
1. Consider the Human Resource Development function implemented by the
organisation for which you work.

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Would it be justifiable to position the HRD function implemented by the

organisation for which you work at the SHRD end of the HRD strategic maturity
continuum?
2. Suppose you have been appointed as a group HRD manager at the organisation
which you work for. Develop a strategic HRD plan for the company.
3. Then develop a plan to measure the effectiveness of the strategic HRD plan once
it has been implemented

Readings
Have You Completed the ‘Essential Reading’ for this Unit?

Now that you have been introduced to this unit, source and work through the textbook
parts and journal articles listed in the “Essential Reading” list at the beginning of this
part.It is essential that you read all of the textbook parts and journal articles listed.

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Unit
9: Talent Management Strategy

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

9.1 Introduction to talent management  Understand the concept of talent management

9.2 Overview of Talent Management  Describe a managers’ talent management perspective

9.3 Approach to talent management  Understand the approach to talent management

9.4 Talent Management: The strategic  Understand talent management as a strategic context for
context for career development career development and the link between HRD and talent
management

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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9.1 Introduction
The importance of managing HRD from a strategic point of view has evolved rapidly over the past five years. It is
now more difficult than ever to strategically plan HRD over the long term. The changes in the business environment
are so rapid and unpredictable that strategic HRD must be aligned on a more regular basis. This means that
strategic HRD plans must be flexible enough to accommodate changes in the environment. In addition, major
strategic decisions, such as whether to outsource the organisation’s training activities wholly or partially, have to
take costs savings and business improvements into consideration. Moreover, the worldwide skills gaps have forced
companies to institute aggressive talent management strategies to attract, develop and optimise the available
talent in both the broader marketplace and specific industries (Meyer et.al.; 2012).

Video link :

https://www.youtube.com/watch?v=VfgmIEBZG3A

https://www.youtube.com/watch?v=vxuxmUZfmpI

9.2 Overview of Talent Management

When a manager takes a talent management perspective, he or she:
1. Understands that the talent management tasks (such as recruiting, training, and paying employees) are parts
of a single interrelated talent management process. For example, having employees with the right skills
depends as much on recruiting, training and compensation as it does on applicant testing.
2. Makes sure talent management decisions such as staffing, training, and pay are goal-directed. Managers
should always be asking, “What recruiting, testing, or other actions should I take to produce the employee
competencies we need to achieve our strategic goals?”
3. Consistently uses the same “profile” of competencies, traits, knowledge, and experience for formulating
recruitment plans for a job as for making selection, training, appraisal, and payment decisions for it.
For example, ask selection interview questions to determine if the candidate has the knowledge and skills to
do the job, and then train and appraise the employee based on whether he or she shows mastery of that
knowledge and skills.
4. Actively segments and proactively manages employees. Taking a talent management approach requires that
employers proactively manage their employees’ recruitment, selection, development and rewards. As one
example, many employers pinpoint their “mission-critical” employees, and manage their development and
rewards separately from the firms’ other employees.
5. Integrates/coordinates all the talent management functions. Finally, an effective talent management process
integrates the underlying talent management activities such as recruiting, developing and compensating
employees. For example, performance appraisals should trigger the required employee training.

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Case Study
Case study Example
Talent management at Qualcomm
At Qualcomm, a San Diego company, talent management is organised around core
values that emphasise recruiting smart, motivated employees and creating a work
environment that allow them to innovate, execute, partner and lead. When
Qualcomm wanted to introduce technology for its performance management process
human resources generalists worked together with organisational development and
information technology specialists to ensure that what employees were being
evaluated on (performance management) and what employees were paid and
rewarded for (compensation and rewards) were aligned. HR trained managers to use
the performance management system and now focus on identifying employee skills
gaps to identify opportunities to improve performance (Noe et. al., 2015).
The case study above recognises that all HR practices are inter-related, aligned with
business needs, and help the organisation manage talent to meet business goals..

9.3 Approach to Talent Management

Building information-rich HR practices such as succession planning and creating talent grids is important in the
challenging times South African organisations are facing at present. A focused approach to talent management
implies taking control by, amongst others, asking “what we can do with what we have?”

Empowering employees through effective talent management means entrusting to them the accountability and
ownership of individual and team achievements, which is a step in the right direction to also apply talent branding
appropriately.

Because of the skills shortages that exist in South Africa it is crucial for organisations’ HR practitioners to be aware
of this within the context of Talent Management (TM) in order to attract and retain talent in order to contribute to
an organisation’s bottom line (Nel and Werner, 2104).

9.4 Talent Management: The strategic context for career development

Talent management can be broadly defined as the implementation of integrated strategies or systems designed to
increase workplace productivity by developing improved processes for attracting, developing and utilising people
with the required skills and aptitude to meet current and future business needs. (Meyer et.al. 2012)
Four diverse talent management activities emerge from the above definition
 Recruitment
 Performance management
 Leadership development

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 Organisational strategy;
with the following roles to be performed by HR
 Focusing on scarce skills and fitting talented people to required roles or positions
 Safeguarding key business capabilities
 Accelerating leadership development
 Providing full business exposure to rising stars in the organisation
 Avoiding loss of key talent
 Selecting successors with leadership abilities
 Focusing on senior managements’ commitment to development and performance standards

The aim of career management within a talent management perspective is thus to plan and shape the progression
of the employee within the organisation in accordance with, firstly, the organisational needs and goals and
secondly, the employee’s performance potential and personal preferences and aspirations.

Revision Questions

After completing your study of this unit, reflect on the following questions. (To adequately
address these questions you will need to have completed all the ‘essential reading’ listed at
the beginning of this part.)

1. Discuss why it is important for managers to view recruiting, training, appraising and
paying employees as a talent management process.

2. Explain to the head of the HR department in your organisation how he/she could use the
talent management approach to improve the organisation’s performance.

3. Describe the link and the role of Human Resource Development (HRD) in career
management.

4. Provide a discussion on the aim of career management within a talent management

perspective.

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Unit
10: The Learning Organisation

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

10.1 Introduction  Introduce topic areas for the unit

10.2 Overview of the  Discuss the differences between traditional training and the learning
Learning organisation
Organisation

10.3 Characteristics of  Describe and apply the characteristics of organisational learning within an
the Learning organisation
Organisation

10.4 Learning  Develop a plan to transform an organisation to a learning organisation

Organisation
Implementation
Plan

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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10.1 Introduction
Learning occurs at individual, work group and organisational levels and a key focus of SHRD is the creation of a
learning environment and structural design, which promotes learning and development for performance
improvement and competitiveness. This positions learning as an organisational capability such that those
organisatios that are able to learn more quickly than their rivals secure significant competitive advantage. It is this
premise that has led to interest in the concept of the ‘learning organisation’ (Millmore et.al, 2007).

10.2 Overview of the Learning Organisation

The recent elevation in the status of learning can be attributed to a least two particular lines of argument.
First is the notion that, to maintain a competitive advantage, organisations through collective interactions of their
employees need to learn faster than the rate of change and faster than their competitors.

Second is the notion that learning itself is one of the main sources, if not the main source of competitive
advantage (Millmore et.al, 2007).

The learning organisation learns from the environment, but actively encourages learning within the work
environment. The learning environment encompasses the culture of the organisation. Learning occurs in all
activities of the members of the organisation. From this perspective it is evident that the learning organisation
represents major challenges for HRD in organisations (Meyer et.al, 2012).

It is important then to consider those organisational practices and support mechanisms that help build towards a
learning organisation.
These frequently collate around:
 The creation of a learning culture where learning and experimentation are actively promoted, as evidenced
through such things as the resources allocated to learning and development activities.
 Structural mechanisms to support organisational learning, such as routines for collecting, analysing,
disseminating and applying information, and identifying and addressing learning and development needs as
well as the organisation structure itself
 The importance of evaluation as a continuous process that not only underpins the principle of the learning
organisation and knowledge managementbut informs organisational investment in HRD/SHRD; and
 The psychological maturity of an organisation’s human resources such that, for example, employees at all
levels are receptive to the greater levels of accountability, autonomy and responsibility that underpin the
construct of the learning organisation (Millmore et.al, 2007).

While a learning organisation cannot exist in its idealised form, and is better viewed as an aspirational vision than
can at best be pursued as a never-ending journey, some organisations will exhibit some of the characteristics of
learning organisations (Millmore et.al, 2007).

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10.3 Characteristics of the Learning Organisation

A learning organisation is different from the traditional organisation in that the culture is dynamic and requires
that certain elements be entrenched in the culture.
These characteristics according to Meyer et.al (2007) are as follows:
Flat organisational structure
 Open communication
 Teamwork
 Empowerment
 Inspired leadership
 Innovation and change
 Shared vision of quality
 Systems approach
 Job satisfaction and commitment
 People –oriented and talent focus
 External focus
 Technology –driven
 Learning opportunities
 Action and results focus
 Customer-orientated

ACTIVITY 10.1
1. .Research the characteristics of learning organisations, and then determine
whether you would consider the organisation in which you are employed a
‘learning organisation’ or one that is aspiring towards a ‘learning
organisation’

10.4 Learning Organisation Implementation Plan

The learning organisation is an ideal organisation which means that no pure learning organisation exists. If a
company actively encourages the characteristics of the learning organisation, such a company may be termed a
learning organisation. Organisations must discover their own situations and decide which strategies and plans can
be used in becoming a learning organisation.

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The generic model of the phases in creating a learning organisation depicted in Figure 10.1 can be adapted by
organisations
Assess learning culture

Analyse results

Communicate and disseminate results

Present results to top management

Create a knowledge management system

Develop learning strategies

Market and communicate learning

Implementation

Evaluation

0-1Figure 10.1 Generic model of learning organisation Implementation (Meyer et.al; 2012)

The concept of the learning organisation constitutes a new approach to learning and workplace performance that
requires a new way of managing organisations. Not only does it necessitate changes to education, training and
development interventions, but it also encompasses a totally new way of managing people, processes and systems
in the modern organisation. A change in organisational culture is therefore needed in order to effect the change
from a traditional organisation to a learning organisation.

Learning is no longer restricted to an individual experience. Learning becomes a team and organisational process
which requires new and innovative ways of learning and managing performance improvement. Learning becomes
part of a continuous process of sharing information with people and the environment. To be of value to
organisations, organisational learning must be encouraged, nurtured and managed for the improvement of
performance.

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ACTIVITY 10.2
The management team of the organisation at which you are employed have realised the need
to become a learning organisation in order to keep abreast of technological developments.

1. Using the generic model of learning organisation implementation, develop a plan to

transform your organisation into a learning organisation.

Revision Questions
After completing your study of this unit, reflect on the following questions. (To adequately
address these questions you will need to have completed all the ‘essential reading’ listed at
the beginning of this part.)

Read the case study below taken from Meyer et.al. (2012) and answer the questions that
follow:
Martex is an oil refinery with several plants throughout South Africa. The East London plant
had found a new way of processing waste material. This processing is more efficient than
what other refineries are using. Moreover, the process meets all environmental regulations.
The parent company situated in Richards Bay saw the obvious benefits of getting the other
refineries in Cape Town, Saldanha, Port

Elizabeth, George and Durban to adopt this new process. If used in all refineries, it could
save approximately R65 million a year.

The operations director, ZodwaDlamini, gathered all the plant managers and chief engineers
together to share information about how the new process works. All members agreed that it
was a breakthrough, but only the Saldanha plant managed to follow the example set by the
East London refinery. This was due to regular contact between these two refineries on the
implementation of the new system.

After a year Zodwa realised that only two plants were productive as a result of implementing
the new system. After an investigation, she realised that most people, had more
disincentives than incentives for adopting new processes. Each refinery had plenty of other
things on its plate. This new procedure required installing some new equipment, and it meant
changing some things that had been in place or a long time. Most supervisors and
employees resisted any change to new procedures and technology.
1. Which characteristics of the learning organisation are evident at the East London
plant?

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2. Which characteristics of the learning organisation are absent at Martex?

3. How can resistance to the new procedures and technology be broken down?
4. Develop a management plan to move Martex from a traditional organisation to a
learning organisation.

Readings

Have You Completed the ‘Essential Reading’ for this unit?

Now that you have been introduced to this unit, source and work through the textbook parts
and journal articles listed in the “Essential Reading” list at the beginning of this part, it is
essential that you read all of the textbook parts and journal articles listed.

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Unit
11: Organisational Development

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

11.1 Introduction  Understand the concept of OD

11.2 Overview of Organisation  Understand how OD is used to support the business

Development strategy

11.3 The Characteristics of OD  Describe the major characteristics of OD

11.4 Managing organisational change  Understand the management of organisational change

programmes programmes

11.5 OD, Strategy And Change  Discuss the link between OD, Strategy and Change

11.6 Change management models  Understand the change management models

11.7 Leading organisational change  Understand the need to manage and lead change

11.8 A Model For Organisational  Apply the model of the total organisation development
Development process within an organisation

11.9 Integrating HRD And OD Activities  Critically discuss the integration between HRD and OD
activities

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM in Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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11.1 Introduction
Organisational Development (OD) is an effort planned, organisation-wide, and managed from the top, to increase
organisation effectiveness and health through planned interventions in the organisation’s ‘processes’, using
behavioural science knowledge. Organisational development or renewal is a series of techniques and methods
that managers can use in their action research to increase the adaptability of the organisation (Nel et.al,2014).

11.2 Overview of Organisation Development

Change becomes necessary when there is a noticeable gap between what an organisation is trying to do, and
what it is actually accomplishing. It occurs when positive steps are taken to reduce this disparity. Change, and
therefore renewal, is any alteration in the status quo. Without renewal efforts an organisation is often threatened
by short-term shifts in market demands (Nel et.al, 2014).

Organisational development is a change process through which employees formulate the change that’s required
and implement it, often with the assistance of trained consultants. OD has several distinguishing characteristics:
1. It usually involves action research, which means collecting data about a group, department, or organisation,
and feeding the information back to the employees so they can analyse it and develop hypotheses about what
the problems might be.
2. It applies behavioural science knowledge to improve the organisation’s effectiveness.
3. It changes the organisation in particular direction – toward empowerment, improved problem solving,
responsiveness, quality of work, and effectiveness (Dessler, 2013).

Organisation development is an emerging discipline aimed at improving the effectiveness of the organisation and
its members by means of a systematic change programme. A truly effective organisation is one in which both the
organisation and the individual can grow and develop. An organisation with such an environment is a “healthy”
organisation. The goal of organisation development is to make organisations healthier and more effective (Brown,
2014).

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11.3 The Characteristics of OD

Table 0:1Table 12.1 Major Characteristics (Brown, 2014)

Characteristics Focal Areas

1. Change  OD is a planned strategy to bring about organisational change.

 Change effort aims at specific objectives and planned by managers

to achieve goals

2. Collaborative approach  Involves a collaborative approach to change

 Includes involvement and participation of the organisation

members most affected by the changes

3. Performance orientation  OD programmes include an emphasis on ways to improve and

enhance performance and quality

4. Humanistic Orientation  OD relies on a set of humanistic values about people and

organisations

 Emphasis on increased opportunity and use of human potential

5. Systems approach  OD represents a systems approach concerned with the

interrelationship of divisions, departments, groups and individuals
as interdependent subsystems of the total organisation

6. Scientific method  OD is based upon scientific approaches to increase organisation

effectiveness

 Scientific approaches supplement practical experience

11.4 Managing Organisational Change Programmes

The planning and implementation of strategy involves change – both in the way the organisation interacts with its
external environment, and in how it manages its internal operation. OD deals with creating and implementing
planned change. Thus, strategic planning and OD should go hand in hand (Blanchard and Thacker, 2014).

11.5 OD, Strategy and Change

Organisational change is an inherent part of the process of developing and implementing strategy (Blanchard and
Thacker, 2014).

Organisational turnarounds often start with a change in the firm’s strategy, mission and vision – with strategic
change (Dessler, 2014)

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The field of OD can help organisations manage change effectively. OD techniques provide methods for change to
occur in an objective, goal-directed manner that addresses the needs of both the organisation and the employees
affected by the change (Blanchard and Thacker; 2014).

The strategic planning process, if done properly, is an OD approach to change.

The first step, establishing a compelling need for change, occurs in strategic planning during the environmental
scanning phase.

The need for change is made apparent when the strategic planners identify the threats and opportunities in the
external environment and compare that information with what the organisation is currently doing.
A need for change is established when a gap exists between what the organisation is doing and what the external
environment requires (or will require).

Next, the company’s business objectives are set.

The company’s current strengths and weaknesses are analysed to determine what internal changes are necessary.
This information provides the compelling need for internal change, and internal strategic objectives are developed
for these areas.

The rest of the steps in the change model concern the development of tactical activities to achieve the strategic
objectives(Blanchard and Thacker, 2014).

11.6 Change Management Models

11.6.1 Lewins Change Process
Psychologist Kurt Lewin formulated a model to summarise what he believed was the basic process for
implementing change with minimal resistance. To Lewin, all behaviour in organisations was a product of two kinds
of forces: those striving to maintain the status quo and those pushing for change. Implementing change thus means
reducing the forces for the status quo or building up the forces for change.
Lewin’s process consisted of three steps:
1. Unfreezing means reducing the forces that are striving to maintain the status quo, usually by presenting a
provocative problem or event to get people to recognise the need for change and to search for new solutions
2. Moving means developing new behaviours, values and attitudes. The manager may accomplish this through
organisational structure changes, through conventional training and development activities, and sometimes
through the other organisational development techniques (such as team building)
3. Refreezing means building in the reinforcement to make sure the organisation doesn’t slide back into its former
ways of doing things. (Dessler, 2014).

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11.6.2 An 8-step process for leading organisational change

1. Establish a sense of urgency.
This often requires creativity.
2. Mobilise commitment through joint diagnosis of problems.
Having established a sense of urgency the leader may then create one or more task forces to diagnose the
problems facing the company. Such teams can produce a shared understanding of what they can and must
improve and thereby mobilise commitment.
3. Create a guiding coalition.
Most CEO’s create a guiding coalition of influential people. They work together as a team to act as
missionaries and implementers
4. Develop and communicate a shared vision.
For example, in the case of Nokia’s CEO at the time, Stephen Elop’s vision was of a streamlined Nokia
moving fast to build advanced smartphones based on Microsoft’s operating system, using multiple forums
such as emails, formal and informal interaction.
5. Help employees make the change.
Help employees address any impediments to change if any. For example, Elop quickly replaced many of
Nokia’s top and middle-level managers.
6. Consolidate gains and produce more change.
Aim for attainable short-term accomplishments. Use the credibility from these to change the remaining
systems, structures, and policies that don’t fit well with the company’s new vision.
7. Reinforce the new ways of doing things with changes to the company’s systems and procedures. For
example, use new appraisal systems and incentives to reinforce the desired behaviours.
Reinforce the new culture by ensuring that the firm’s managers role-model the company’s new values.
8. Finally, the leader must monitor and assess progress.
This involves comparing where the company is today with where it should be based on measurable
milestones.
At Nokia for instance, “How many new products has the company introduced?” What is our smartphone and
handset market shares?”
(Dessler, 2014)

11.7 Leading Organisational Change

Managing change is important in today’s challenging environment. Professor Edward Lawler says that as more
employers face rapid competitive change, “focusing on strategy, organisation development, and organisational
change is a high payoff activity for the HR organisation. (Dessler, 2014).

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The case of Nokia below illustrates an organisation faced with the decision about what to change.

Case Study - Example: NOKIA

A few years ago, Nokia was the worldwide leader in handsets and smartphones. Then Apple introduced its first
iPhone. Within a year, Nokia’s smartphone market share plummeted, and its sales increasingly relied on low-price
handsets. By 2010, Nokia’s board knew something had to be done. It appointed a new CEO with Silicon Valley
experience, Stephen Elop. He knew Nokia faced pressing problems. Its smartphone share was down, and it was
losing low-cost handset business to Asian competitors. Nokia’s R&D was behind the times. Its Symbian mobile
operating system couldn’t handle many of the leading applications that Apple’s and Microsoft’s systems could.
Stephen Elop had to jumpstart Nokia.

Faced with situations like these managers like Stephen Elop can change one or more of five aspects of their
companies – their strategy, culture, structure, technologies, or the attitudes and skills of the employees.

Elop embarked on a strategy to renew Nokia by streamlining Nokia’s product development process and by entering
into a partnership with Microsoft with the aim of introducing a new Microsoft-based smartphone within a year.

In terms of structure Nokia split responsibility for its smartphones and handsets into two new units. He replaced
managers in Nokia’s mobile phones unit and markets unit. In technology, Elop reduced the Symbian operating
system’s central role in its smartphones replacing it with Microsoft’s mobile operating system.With its culture, Elop
had his new management team change the firm’s culture, for instance, by impressing on Nokia’s employees the
need to eradicate bureaucratic decision making and to execute on Nokia’s new strategy.(Dessler, 2014)

ACTIVITY 11.1
1. Assume that the organisation at which you are currently employed is affected
by rapid technological, social, economic or some sort of organisational
change.
2. Using the 8-step process for leading change, discuss how you as an HRD
manager would lead the organisational change process at your organisation.

11.8 A Model for Organisational Development

OD programmes are based upon a systematic analysis of problems and a top management actively committed to
the change effort. The purpose of such a programme is to increase organisational effectiveness by the application
of OD values and techniques. Many Organisational Development programmes use the action research model.
Action research involves collecting information about the organisation, feeding it back to the client system, and
developing and implementing action programmes to improve system performance. The manager also needs to be
aware of the processes that should be considered when one is attempting to create change (Brown, 2014).

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Figure 11.1 depicts a five-stage model of the total organisation development process.

0- 0-1Figure 11.1 Organisation Development’s Five Stages (Brown, 2014)

Each stage of the process is dependent on the preceding one, and successful change is more probable when each
of these stages is considered in a logical sequence.

ACTIVITY 11. 2
1. Refer to the text, Brown (2014) Experiential Approach to Organisation
Development. 8th edition. Pearson
2. Research the VW scandal dubbed the “diesel dupe” and the resignation of
Martin Winterkorn, the CEO, at the time of the scandal and discuss, using
the organisation development model in the text stated above, how VW would
apply an organisation-wide approach to the structural changes they faced

11.9 Integrating HRD and OD Activities

The most effective way to ensure the seamless implementation of performance improvement plans is to integrate
HRD and OD. Trainers and OD professionals’ interests are intimately connected. Each provide a valuable service
to the other.

Trainers and OD professionals have differences in the nature of the change they are responsible for.
One reason for the division between them is that companies typically organise around their different functional
activities, and OD and HRD departments are often separated.

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This separation increases the differences in perspective, role, value of service, clients, etc.
A solution would be to house them together in the form of a performance improvement department within HR. This
would be an example of a structural change to align the organisation’s internal structure with its strategic direction
(Blanchard and Thacker, 2014).

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this part.)
1. Discuss the link between OD, strategy and change and then discuss how
HRD may be integrated into OD activities.
2. Analyse the HRD environment at which you are currently employed at and
discuss whether there exists a distinct link between HRD and OD activities
or whether these departments operate separately
3. Assume you are the HRD manager at the organisation at which you are
employed.
4. Consider the competitive strategy of your organisation and provide

Revision Questions
Have You Completed the ‘Essential Reading’ for this Unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this part. It is essential that you read all of the textbook parts and
journal articles listed.

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Unit
12: Human Resource Technology

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

12.1 Introduction  Understand the concept HR Technology

12.2 Overview of HRIS, E-HRM and E-  Understand how HR technology (HRIS, E-HRM & E-
Learning learning) makes HR processes more efficient and effective

12.3 Distinction between E-HRM and HRIS  Understand the distinction between HRIS and E-HRM

12.4 Electronic Learning (E-Learning)  Understand the concept e-learning

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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12.1 Introduction
HR is increasingly playing a strategic role as business partner in the organisation and as such, adds value through
making high impact decisions. HR stays the custodian of HRM functions, policies, systems and processes, but it
also acknowledges the role others play in the collaborative effort of attaining strategic goals.

It provides HR executives, line managers, and employees with HR information and knowledge that enable them to
make sound decisions. The devolution of the HR function and dissemination of HR knowledge throughout the
organisation with complete online support for improved decision-making is labelled E-HRM (Nelet. al, 2014).

12.2 Overview of HRIS, E-HRM and E-Learning

One of the most significant issues faced by modern organisations is the use of technology to streamline activities,
cut costs, improve connectivity and efficiency and increase business effectiveness, thus moving from labour
intensive to technology-intensive activities. Coupled to this are the ever-changing environment and a workforce
who have different expectations and needs; in this era where they are more connected via social media than ever
before (Warnichet.al., 2015).

Greater use of technology has led to the use of human resource management systems (HRMS), also called human
resource information systems (HRIS), which are integrated systems providing information used by HR managers
in decision-making.

Sophisticated HRIS keep track of employee information, such as who’s doing what jobs and where, what are they
paid and what training they have already had.

The delivery of some HR services online through Web-based HR home pages has led to the development of
what may be termed E-HR (or E-HRM) (Warnich et.al, 2015).

12.3 Distinction between E-HRM and HRIS

Confusion can arise concerning the distinction between E-HRM and HRIS.
Warnich et.al, (2015) defines HRIS as an electronic system used to acquire, store, manipulate, analyse, retrieve
and distribute information regarding an organisation’s human resources.

Electronic human resource management, or E-HRM reflects a philosophy for the delivery of HR; it uses information
technology, particularly the Web, as the central component of delivering efficient and effective HR services.

Organisations embracing E-HRM do not simply use technology to support HR, rather they see technology as an
enabler for things to be done differently in the HR function by changing the manner in which information flows and
how social interaction and communication take place.

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12.4 Electronic Learning (E-Learning)

Technological applications have become a necessity in society and the modern business environment. All jobs
and functions are affected by information technology. How does technology affect training in the workplace and
are HRD practitioners equipped to deal with the technology revolution (Meyer et.al, 2012).

In response to the technology challenge, some companies have started to make use of technology-based training
or electronic learning (e-learning), the application of electronic technological systems to support the learning
process (Meyer et.al, 2012).

E-learning, commonly used interchangeably with computer-based training (CBT), online learning, and web-based
training refers to instruction and delivery of training by computer through the Internet or Web. To enhance learning
all of these training methods can include and integrate into instruction text, interaction using simulations and
games, video, collaboration using blogs, wikis, and social networks, and hyperlinks to additional resources.

The training programme can be accessed using a password through the public Internet or the company’s private
intranet (Noe et.al, 2015).

There are many potential features that can be included in online learning to help trainees learn and transfer training
to their jobs.

For example, online programmes that use video may make it an interactive experience for trainees. That is, trainees
watch the video and have the opportunity to use the keyboard or touch the screen to answer questions, provide
responses to how they would act in certain situations, or identify the steps they would take to solve a problem.
Interactive video is especially valuable for helping trainees learn technical or interpersonal skills. (Noe et.al, 2015)

Case Study - example

Sanofi-Aventis U.S. was behind its competition in product knowledge within the diabetes sales force. The company
needed a training solution that the sales force could complete in the field or while traveling. As a result, the company
developed a self-paced e-learning solution – a virtual campus called Diabetes University- where learners can be
guided through the campus by a “professor” and participate in different types of learning activities including games,
videos, and narrated text.

12.4.1 Benefits of E- Learning

 Course administration
 Financial management
 Management reports

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 Resource management
 Cost savings
 Learner needs
 Effective learning
 Evaluation

12.4.2 Types of e-learning methods

 Interactive multimedia
 Web-based training
 Video conferencing
 Internet
 Intranet
 EPSS
 Social learning

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12.4.3 E-Learning Implementation process

1 2

E-learning needs analysis E-learning platform and design

 Select analysis methods  Assign project team

 Assess training needs  Review needs analysis report

 Assess learner profile  Design a project team

 Conduct cost-benefit analysis  Acquire e-learning resources

 Obtain management support  Develop e-learning system and

platform

 Train e-learning staff

 Market e-learning system

5 3

E-learning improvement E-learning delivery

 Review evaluation reports  Revise project plan

 Compile improvement plans  Assign responsibility

 Communicate to whole organisation  Present programme

Evaluation

 Reaction

 Learning

 Behaviour

 Results

0-1Figure 12.1 E-Learning implementation Process (Meyer et.al, 2012)

The implementation of e-learning should be carefully planned and managed to ensure effective training and
transfer of skills. When making decisions regarding e-learning, the phases and sub-steps indicated in Figure 12.1
should be used.

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By implementing e-learning and accelerating learning in and outside the workplace by means of m-learning, and
s-learning, progressive South African organisations can gain a competitive edge if they deliver to their customer’s
quality products and services better than those of and more quickly than their competitors.

Revision Questions
After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
‘essential reading’ listed at the beginning of this part.)

1. Prepare a presentation for the top management at your organisation to

convince them about the benefits of E-learning for your organisation

2. Include in your presentation the various types of e-learning methods and

highlight the method/s that would be most suitable to your organisation

3. Suppose you were tasked to implement e-learning in the organisation at which

you are currently employed. Discuss the process you would follow and the
factors you would consider when planning and designing e-learning
implementation.

4. Consider the benefits of e-learning for your organisation.

Readings

Have You Completed the ‘Essential Reading’ for this unit?

Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the “Essential Reading” list at the
beginning of this part, it is essential that you read all of the textbook parts and
journal articles listed.

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Unit
13: Human Resource Measurement

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

13.1 Introduction  Introduce topic areas for the unit

13.2 Overview of HR Measurement  Understand HR measurement

13.3 HR Metrics  Apply HR metrics in the correct context

13.4 Types of HR metrics used to drive  Discuss and apply and calculate the various types of HR
organisational strategy metrics

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Prescribed / Recommended Readings

 Nel, P.S., Werner, A., Botha, C., du Plessis, A., Mey, M., Ngalo, O., Poisat, P., van
Hoek, L. (2014) Human Resource Management. 9th Edition. Cape Town: Oxford
University Press Southern Africa.
 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2015) Human Resource
Management: Gaining a Competitive Advantage 9th Ed. McGraw-Hill.
 Bourne, A. and Haddon, D. (2010) "An evidence-based approach to developing HR
strategy: transformation in Royal Mail". Strategic HR Review, Vol. 9, No.1, pp.10 – 16
 Jana, F. and Jan, R. (2015) “Get strategic Human Resource Management Really
Strategic: Strategic HRM In Practice.” International Journal of Management Cases. 17
(4) pp148-155 (available from Ebsco).
 Kramer, R. (2014) “Beyond Strategic human resource management:is sustainable
human resource management the next approach?” International Journal of Human
Resource Management. 25(8) pp1069-1089 (available from Ebsco).
 Marler, J.H. (2012) “Strategic Human Resource Management in Context: A Historical
and Global Perspective.” Academy of Management Perspectives. 26(2) pp6-11
(available from ebsco).
 Othman, A.E.A (2009) “Strategic Integration of Human Resource Management
Practices: Perspectives of Two Major Japanese Electrical and Electronics Companies
in Malaysia.” Cross Cultural Management: An International Journal. 16 (2), pp 197 –
214. (available from Emerald).
 Ulrich, D., Brockbank, W. & Johnson, D. (2009) “The Role of Strategy Architect in the
Strategic HR Organisation.” People & Strategy. 32 (1), pp 24 – 31. (available from
EBSCO).

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13.1 Introduction
HR departments are continually under pressure to illustrate the financial value that they add to the organisation
which is expressed as ROI (return on investment). The HRIS enables the HR department to determine the baseline
and cost of many activities, behaviours and programmes in the organisation, such as labour turnover, absenteeism
or training interventions. This constitutes HR metrics, which is information expressed in quantities, such as
percentages, ratios or rand value, used to highlight HR trends and measure the impact of HR processes and
interventions.

An example of a HR metric is the percentage of newly appointed employees who leave the company within six
months due to performance (Nel and Werner, 2014).

13.2 Overview of HR Measurement

Being able to measure what you are doing is a big part of human resource management today and being able to
measure what you are doing is an integral part of the HR strategy process.

First, management translates its strategic plan into workforce requirements, in terms of measurable worker
competencies and behaviours (such as outstanding service). Given these workforce requirements, the human
resource manager then formulates supportive HR strategies, policies, and practices (such as new training
programmes), intended to produce these workforce competencies.

Finally, the HR manager picks measures by which to gauge whether his or her new policies and practices are
producing the required employee competencies and behaviours.

The measures (or “metrics”) you use may be broad organisational measures such as ROI and profit margins or
they may focus narrowly on specific human resource management and activities (such as “hours of training per
employee”)

The bottom line is that measuring “how we’re doing, and why” is important for managing one’s human resources
(Dessler, 2014).

13.3 HR Metrics
It is important that we measure the impact of HR initiatives and projects in terms of the cost and the impact they
have on the company. This should be done using different types of measurements known as HR metrics and may
include:
 Diagnostic measures
 Evaluative measures and
 Human capital measures

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Each of these are used for different purposes.

Diagnostic measures can be used for simple calculations of employee turnover and the number of applications
received for each vacancy, among other things.

Diagnostic measures can also be used for compensation-related measurements such as the calculation of
overtime costs or for training and development for the calculation of the total cost per employee for training.

In general, diagnostics measures are used to generate regular reports that management can use to measure a
variety of HR initiatives.

Evaluative measures mainly focus on the measurement of effectiveness. This is usually done by means of
quantitative data, for example when companies determine the reduction in recruitment costs for jobs vacated by
retirees to measure the effectiveness of the use of internal staffing and succession planning, or qualitative data,
for example the measurement of the impact of good communication in an organisation on the level of employee
engagement.

Human Capital metrics includes looking at the metrics of the business that have an impact on the whole business,
for example the impact of management practices on the workforce. Human capital metrics measure value more
than cost whilst HR metrics focus more on costs

The important aspect is that the correct measures are used for the particular aspect that you want to measure
(Wärnich et.al, 2015).

13.4 Types of HR Metrics Used to Drive Organisational Strategy

13.4.1 HR Metrics in Staff Acquisition
During HR planning, previous levels of supply and demand are used to estimate future talent requirements.
In recruitment, different supply channels are compared.

For example, how many applicants applied via the graduate recruitment programme and how many via the Internet
recruitment programme?

What percentage of those who applied was short-listed, what percentage of those short-listed was selected and
how many of those selected accepted the offer?

The cost of recruitment can be determined by taking overall recruitment costs and dividing it by the number of
people recruited.
The yield: cost ratio shows the most effective and efficient recruitment method. The average time taken to fill
positions can also be determined by dividing the number hired into the total days taken to fill a job.

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During selection, psychometrics, which is just another form of HR metrics, gives a quantitative indication of an
applicant’s abilities and aptitude.

Each selection criteria, such as experience and presentation skill, can be given a weight in terms of importance
and each applicant can be rated on each criteria and a final score determined (Nel and Werner, 2014).

13.4.2 HR Metrics in Employment Equity

The Employment Equity Act requires that employers prepare and implement an employment equity plan that
complies with the new regulations published by the Department of Labour in 1999. These regulations stipulate the
exact manner in which designated employers must analyse their workforce and the relevant information that must
appear in their equity reports. The online Employment Equity Report is available on the Department of Labour
website (labour.gov.za). The report is divided into sections that allow reporting on the organisation’s progress
regarding its business’ goals when it comes to recruitment, promotion, skills development and other elements of
the organisation’s Employment Equity Plan. (Nel and Werner, 2014)

13.4.3 HR Metrics in Absenteeism Management

Absenteeism is defined as the non-attendance of an employee when scheduled to work (Nel and Werner, 2014).
Whatever the reason for absence there is no doubt that it impacts on the organisation’s ability to meet its objectives
and puts pressure on those who have to cover the extra workload. The costs of unacceptably high levels of absence
are normally expressed financially, and are based on calculating the value of lost production and sick payments.
These financial measures also include:
 The costs of additional staffing levels and overtime working to cover anticipated absences;
 The cost of replacement labour;
 Costs associated with delayed production and disruptions to planning schedules;
 Costs associated with loss of quality or service levels;
 Costs resulting from low morale and dissatisfaction (Banfield and Kay, 2008).

Monitoring absence rates forms a key element of absence management and most organisations track absenteeism
on a weekly, or monthly basis to monitor the effectiveness of absence management strategies. This often involves
calculating absence using a formula and comparing the resultant figure with an internal or external benchmark
standard (Banfield and Kay, 2008).

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Two sets of HR metrics are generally used to measure absenteeism:

 The total time lost or gross absence rate (GAR) gives the percentage of work time lost owing to
absenteeism (Nel and Werner, 2014).
 It is calculated as follows:

total number of days lost owing to absence over

the period

Total time lost = _____________________________________ X 100 %

Average number of employees x total workdays

over the period

Example:

A team of five people who each work five days a week, less bank holidays, can work a total of (365 – 104 –
8) 253 days each, making a team total of 1265 potential working days. If 50 days were to be lost through
absence, the team’s absence rate would be:

50

Total time lost = _________ X 100

5 x 253

= 3.95%

 The international benchmark for absenteeism is three percent. It is unlikely that an organisation can drive
absenteeism down to 0 percent as people do get sick. However, competitive organisations strive to bring the
absenteeism rate down to less than three percent. (Nel and Werner, 2014).

One of the limitations of the lost time rate calculation is that it cannot distinguish the pattern of absence in terms of
whether few employees are taking long periods of absence or whether many employees have infrequent bouts of
absence. (Banfield and Kay, 2008).

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Consequently, the calculation of Absence frequency gives an indication of the number of absence incidents per
employee.
An incident is one spell of absence, irrespective of the number of days involved.
A high absence frequency rate suggests that absence incidents are of a shorter duration, and thus more disruptive
to the organisation.
It is easier and less costly to make contingency plans when it is known that an employee will be absent for a longer
period than for short, unexpected absence incidents.
The absence frequency rate is calculated as follows and expressed as a ratio:

Number of absence incidents over the period

Absence frequency Rate (AFR) = _____________________________________

X 100

Average number of employees employed over the

period

13.4.4 HR Metrics in Labour Turnover and Retention

Labour turnover is considered as the permanent withdrawal from the work situation and can be disruptive and
costly to an organisation. Therefore, the retention of key talent in organisations has become a major challenge for
many organisations, especially with regards to valued employees with scarce skills. (Nel and Werner, 2014).
It is inevitable, that, from time to time, employees will choose to leave and either pursue careers elsewhere, retire,
take a career break or return to education (Banfield and Kay, 2008)

It is important that employers find out what the reasons are why employees are leaving so that effective strategies
can be implemented to retain them. A certain amount of labour turnover can be beneficial, as long as it provides
the organisation with new, enthusiastic employees who bring creative ideas with them (Banfield and Kay, 2008).
However, high turnover rates create particular pressures for the HR department, which is primarily responsible for
replacing those who leave, but also for line managers who face disruption to production and service standards
(Banfield and Kay, 2008).

Labour turnover, according to (Nel and Werner, 2014) is divided into controllable and uncontrollable labour
turnover, depending on management’s ability to prevent it or not.

 Controllable labour turnover:

Voluntary resignations – can be controlled if management provides better leadership, wages, opportunities,
working conditions, and so on.
Dismissals – can be prevented through proper employment, training, policies, and procedures.
Only controllable labour turnover is included in the measurement of labour turnover

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 Uncontrollable labour turnover:

Includes death, permanent illness, pregnancy, retirement and retrenchment.
These are recorded, but not included, in the measurement of labour turnover, as no reasonable action from
management can reduce or prevent them.

HR metrics for labour turnover:

Labour turnover is usually measured over a 12month period to smooth out seasonal differences to make
comparison possible (Nel and Werner, 2014), but can be tracked weekly or monthly to provide a more detailed and
contemporary understanding of labour turnover (Banfield and Kay, 2008).
Labour turnover (LTO) may be calculated as follows:

V + D (voluntary resignations and dismissals)

LTO = _____________________________________
X 100 %

Average number of employees over a period

Example: (Banfield and Kay, 2008)

If 25 people left over the last 12 months and the current number of employees is 275, then turnover would
be calculated as:

25)

LTO = __________
X 100 %

275

= 9.09 %

The above analysis provides an indication of the course of action that should be taken in order to reduce labour
turnover.

If a high percentage of employees leave the organisation voluntarily soon after employment, the employment,
induction, and placement practices should be re-evaluated.

If many employees are dismissed, employment practices as well as training should be reconsidered.

Employees who leave after reasonable time periods often feel that they have started to stagnate and leave for
better opportunities or more challenges.

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If many employees leave after a long service with the company, it will be an indication that changes have taken
place that they found difficult to cope with. Resistance to change should be managed by informing and involving
employees in advance of changes (Nel and Werner, 2014).

The measures or “metrics” you use may be broad organisational measures (such as return on investment, and
profit margins. Or they may focus narrowly on specific human resource management and activities (such as “hours
of training per employee”). In any case, the bottom line is that measuring “how we’re doing, and why” is important
for managing one’s human resources (Dessler, 2014).

Case Study

After completing your study of this unit, reflect on the following questions. (To adequately
address these questions you will need to have completed all the ‘essential reading’ listed at
the beginning of this part.)

Read the case study below taken from Nel and Werner (2014) and answer the questions
that follow:

Revision Questions

QUESTIONS FOR REFLECTION

HR problems at Petal Engineering
Petal Engineering, an established engineering and construction company, has recently
won a tender to build a primary health care clinic, library and nursery school in a local
community. A few project teams were put together to do the planning:
Environmental studies were required, building plans had to be drawn up, extensive
quantitative surveying was required, community leaders had to be involved and
construction had to be organised. After a few months, the following problems surfaced:
 The company struggled to attract and retain employees with scarce skills
 Recruitment and selection was slow and ineffective
 Many engineers threatened to resign
 Absenteeism levels in the company increased rapidly
 The skill levels of construction workers proved to be inadequate

The company contracted an HR consultant to assist them with addressing these problems.
The HR consultant introduced the management of Petal Engineers to the use of metrics
as a diagnostic tool and assisted them in collecting information about their HR processes.
The analysis revealed that it took approximately three months to fill an engineering position

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in comparison to eight weeks’ average for project leaders. Of the engineers recruited
through employment agencies, only 40 per cent stayed in the company. Exit interviews
with engineers who resigned and a focus group discussion with existing engineers
revealed that they were mostly dissatisfied with their remuneration. The HR consultant
also assisted the company in determining the number of construction workers and the level
of skill required for specific projects and a gap analysis was done. A link between skill
levels and lost time injuries were also established. The cost of training employees in the
company versus sending employees to an external training provider was determined.

The GAR for the company as well as for different groupings of employees was calculated.
It was found that absenteeism was exceptionally high (13 percent) among construction
employees belonging to Project team 3. This was also the team experiencing the highest
turnover among engineers.

Once all the figures were presented to senior management, they understood their HR
problems better and were better able to decide what interventions to take, and how their
decisions would affect the long-term direction of the company,

1. Discuss how Petal Engineering can use HR Metrics to address the attraction and
retention of employees.
2. Discuss how HR metrics in absenteeism management may be used to assist Petal
Engineering to address their absenteeism levels in the company.
3. Analyse the labour turnover at Petal Engineering and discuss the use and significance
of HR metrics as applied to this situation.
4. Discuss the overall contribution that the HR department can make, by use of HR
metrics, to the overall attainment of organisational goals.

Readings

Have You Completed the ‘Essential Reading’ for this unit?

Now that you have been introduced to this unit, source and work through the textbook
parts and journal articles listed in the “Essential Reading” list at the beginning of this part,
it is essential that you read all of the textbook parts and journal articles listed.

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Resource Management. 9th Edition. Cape Town: Oxford University Press Southern Africa.
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Competitive Advantage 9th Ed. McGraw-Hill
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APPENDIX A:
CASE STUDY 1: PART 1 – HRM
RECRUITMENT – A SPECIALIST RECRUITER’S PERSPECTIVE

Recruitment agencies/firms could broadly be categorised into three categories – general recruiters, specialist
recruiters and search firm’s/head hunters.

I founded of the most specialised investment banking and investment management recruitment firms in South
Africa and what differentiates us from other agencies is the fact that we exclusively recruit within the fields of
investment banking and investment management, whereas the vast majority of financial services recruiters cover
the financial services sector as a whole. Our clients include some of the top investment banks and investment
managers in SA.

My definition of a specialist recruiter is someone who has the appropriate theoretical foundation / qualifications
coupled with the practical experience to enable him or her to accurately interpret job descriptions and CVs of
candidates operating with its chosen field/industry of specialisation. In my case I have six years’ front-office
financial markets experience (excluding recruitment experience) coupled with a post-graduate commerce degree
and professional qualification in investments

Our recruitment approach is a sharp shooter approach, as opposed to a shot-gun approach used by many
recruiters, so for most vacancies we rarely introduce more than three candidates and in many cases we only
introduce one candidate.

Normally the recruitment process kicks off with the receipt of a job description of a new vacancy from a client, but
it should be noted that we are also expected by our clients to introduce top talent on an unsolicited basis, as and
when we come across these top candidates in the market place.

On receipt of a job description form the HR department, I normally ask for additional information pertaining to the
remuneration range offered for this role; information pertaining to particular team’s make-up; whether it is a newly
created vacancy or resignation and whether the role is earmarked for Employment Equity candidates only. From
time to time I may also request a telephonic /in-person discussion with the line manager, should the job description
be unclear.
Once I have a proper grasp of the role, I draft a much shorter, more generic job description, which I use to advertise
the vacancy. The reasons for not just using the official job description are mainly to disguise who the employer is,
so that candidates do not contact the employer directly, and also to better explain the job functions requirements.

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I then follow a two-pronged approach: a more passive recruitment approach where I load the vacancy on the job
portals I use and then review applications; and a more active approach where I literally search various databases,
including social media platforms (such as LinkedIn) for suitable candidates. As social media platforms and direct
employer recruitment websites became more prominent over the last decade, the recruitment landscape changed
significantly with a strong move towards active recruitment, as opposed to the traditional passive approach.

For the vast majority of vacancies, we work on, there are only a small number of suitable candidates available in
SA mainly as a result of the pressures to employ Employment Equity candidates, but because all the vacancies
we work on are highly specialised.

Once a potentially suitable candidate has been identified, I make contact with the candidate and either meet him
or her in person (where possible), or conduct a telephonic interview. Before the interview, the candidate is provided
with the official job description, as well as a link to the employer’s website and other pertinent information I may
deem important. Given the seniority and specialist nature of candidates, the interview is generally a frank, to-the-
point discussion about the candidate’s reasons for seeking alternative employment, how well the candidate’s profile
fits the technical requirements of the role, how well the candidate fits the ‘softer requirements’, such as corporate
culture and also how well this role fits within the candidate’s long-term career plans. I also check that the
candidate’s current remuneration package, as well as remuneration expectations is in-line with the indicative range
provided by the employer, but I would normally not divulge the clients range to candidates, so as not to create
expectations. If I pick up on something of concern, or an area in which the candidate falls severely short from the
requirements, I hone in on that area and the conversation could at times become highly technical so as to ensure
that I accurately understand the candidate’s technical expertise and ultimately to enable me to make a decision
whether to introduce the candidate to the employer or not.

It is important to note that a candidate’s profile will only be discussed, or formally introduced to the client, once the
candidate has given his or her explicit consent to proceed with the process.

Introducing the candidate’s profile to the client normally entails (a) converting the candidate’s CV into my standard
format and while doing so, ensuring that it ‘speaks’ to the particular vacancy and that it is an accurate reflection of
the candidate’s profile. (b) I then draft a short motivation (normally about two to three paragraphs) which will be in
the body of the email accompanying the candidate’s CV - the objective with the motivation is to explain to the
employer why I believe the candidate to be a suitable candidate for this role. I will also use the motivation to explain
my thinking in those cases where candidates are not an exact fit, but in my opinion they have the right potential to
grow into this role.

Once the candidate is introduced to the client, I provide the client with any additional information/documentation
they may require and also arrange all interview/meetings. I am also responsible for following up on references and

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verifying the candidate’s credit record, criminal record, and academic qualifications. I do this by means of a third
party verification service such as MIE.Once the candidate has been interviewed and the client decides to extend
an offer to the candidate, I am usually consulted first to ensure the remuneration offered falls within the candidate’s
expected remuneration range. Once the formal offer letter or Letter of Employment is received, I present the offer
to the candidate and facilitate any questions / concerns the candidate may have and if all goes well return the
signed contract to the client. In cases where candidates have to decide between two or more offers, I play a
significant role in promoting my client’s offer and convincing the candidate to accept my client’s offer. Once the
candidate accepts the offer, he or she is, for all practical purposes now, an employee of my client and as such the
client and candidate communicate directly from here on forward.

The most common problems experienced are:

 A lack of knowledge/understanding by clients and HR practitioners:
In most cases direct contact with the line manager would be a much more effective means of contact for both
myself and the manager, as generally HR practitioners just do not have a strong enough technical
understanding of investment management to be in a position to accurately assess a candidate’s level/degree
of fit. I have experienced many instances where I introduce a candidate to the HR person, who then through
a lack of understanding deems the candidate unsuitable. When I then get an opportunity to speak to the line
manager and provide an overview of the rejected candidate’s profile, he or she shows a keen interest and in
the very least asks to see the candidates CV.
 Unethical behaviour by other recruiters:
Some recruiters will introduce the candidates to employers without the candidate’s consent, or without
providing the candidate with sufficient information about the employer and vacancy to enable the candidate
to make an informed decision. In such cases it becomes a significant problem when I then follow all the
necessary steps, obtain the candidate’s consent and introduce the candidate, only to be informed that the
client has already received the candidate’s application through another agency.
 Unethical behaviour by candidates:
Candidates will at times act unethically by overstating their technical expertise, over-stating their current
remuneration package and trying to apply for a vacancy for which they have been turned down via another
agency.in most cases these candidates are identified before submission to the client and a note is made in
our internal database warning us not to have contact with this candidate in future. As a specialist recruiter I
have accurately identified numerous candidates over the years who have overstated their technical expertise
and by doing so saved my client valuable time. (Nel and Werner, 2014)

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CASE STUDY 1:
PART 1 – HRM
RECRUITMENT - A SPECIALIST RECRUITER’S PERSPECTIVE

Instructions to Learners
This case study is to be analysed and prepared in your Study Groups. Your Study Group is required to present
the analysis of this case study at Workshop 2. Your presentation should not be longer than 15 minutes.

The questions that you are required to address in analysing the case study are:
1. Based on the given perspective of the recruiter’s viewpoint, compile a recruitment policy for this
organisation
2. Provide recommendations to the recruiter on some of the current and future trends in recruitment.
3. Considering the common problems that are experienced, provide suggestions and recommendations to
how this recruiter can improve the way he addresses these problems
4. Discuss the nature of an induction and socialisation programme that would be beneficial should a
candidate from the case described above be appointed in an organisation

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APPENDIX B
CASE STUDY 2: PART 2 - HRD
INA BEARING COMPANY
INA Bearing Company is a medium-sized manufacturer of high-precision engine components for the automotive
industry. Based in Llanelli, South Wales, it is one of a number of manufacturing companies across Europe owned
by the multi-national Schaefler Group.

In 2001 the company was facing a crisis. Its market position had been declining rapidly since the late 1990s as a
result of orders being switched to low-cost producers in eastern Europe. This period resulted in successive
reductions in the workforce from around 860 to 360 jobs. In 2001 prospects looked bleak. INA’s German parent
had plans to switch even more production capacity to units in eastern Europe which, if implemented would have
resulted in the loss of a contract accounting for around half the plant’s output and further job losses of 120.

Faced with this bleak scenario, the personnel manager led a strategy workshop to reformulate the best way
forward. It was accepted that competing with its European counterparts on the basis of cost was not a viable option.
Instead INA decided to compete on the basis of quality with a vision to become the group’s preferred location for
high-tech production work. At the same time, it was recognised that this transformation in production orientation
could not be achieved without radical realignment of the company’s skill base. This led INA to a commitment to
compete on the basis of workforce capability. Investment in machinery was to be switched to investment in human
capital with the clear intent of building an employee skills base, developing a continuous improvement culture and
building towards a learning in order to realise the company’s vision.

In effecting this transformation, INA had to confront a number of potential obstacles. The demands of continuous
production severely limited the time available for staff development. The failure of previous turnaround initiatives
had left the workforce cynical about management’s intentions. Over time, the demands of production had resulted
in the HR roles of managers, supervisors, and team leaders becoming diluted. Team leaders spent too much time
helping out with production, meaning that the management hierarchy was becoming distorted as supervisors
operated as team leaders and managers as supervisors. The grape vine was rife and the works council operated
more as a forum for discussing housekeeping issues.

Previous attempts to build skills through NVQ (National Vocational Qualifications) programmes had foundered
because of lack of time and commitment among supervisors to undertake the necessary assessments of employee
competences. The workforce was characterised by long-serving employees who had received little task-based
HRD. Lastly employee relations had deteriorated to the point that some unresolved issues had prompted strike
ballots.

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In addressing these potential obstacles, INA took two early important steps towards facilitating the desired learning
culture where survival was seen to depend on learning faster than the rate of change.

First, one-to-one meetings were held with every employee to explain the company’s vision, and signal
management’s commitment to that vision. The emphasis was on communicating the company’s position honestly,
whereby if the company failed to achieve its vision, its decision to base its strategy around HRD investment would
have at least resulted in employees having been equipped with high-level, portable skills that would significantly
enhance their employability. The second was to forge a partnership agreement with the trade union Amicus. This
resulted in the union signing up to the change programme and securing funding for significant investment in the
company’s learning centre.

These two interventions have changed the employee relations climate and opened up a genuine two-way dialogue.
The individual meetings allowed employees to share their perceptions on obstacles to the development of a
learning culture. They particularly stressed the importance of a unified team. This resulted in the harmonisation of
terms and conditions, the introduction of an inflation-linked pay system and the re-alignment of the works council.
Shop stewards now report that collaboration has replaced confrontation, evidenced by the way that the works
council now plays a key role in developing strategy. Also the council’s sub-committees have been charged with
leading important initiatives. These include a review of internal communications and the development of systems
to support company financed individual learning plans (similar to EDAPs)

The platform for skills development was the relaunch of the NVQ programme. This time around, the roles of
managers, supervisors, and team leaders, have been redefined to enable them to commit to their HRD
responsibilities. This surfaced a number of management skills gaps among these groups, such as communication,
and led to the introduction, of an NVQ level 3 in business improvement techniques for supervisors and an NVQ
level 3 in management for team leaders. To reinforce their commitment to HRD, senior managers assist in
customising training to meet INA’s context and participate in its delivery to those with leadership roles.an NVQ
level 2 programme in performing manufacturing operations is being delivered in collaboration with a local college.
This is being taken by all the company’s production operators, some of who are now progressing through levels 3
and 4 of the programme.

For some operators, gaining the NVQ award represents the first ever external qualification. However, NVQ’s while
addressing identified skills gaps, represent only one step in the direction of forging a learning culture. The
development of the learning centre represents a significant milestone in this journey. Computerised learning
facilities provide a network of HRD possibilities for all staff and so far, for example, 100 employees have signed up
for the government-initiated Learn direct courses. In-house continuous improvement courses further reinforce the
focus on learning which is increasingly being supported by those already trained becoming involved as coaches,
mentors, and NVQ assessors in order to help cascade the outputs of the various training programmes throughout

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the organisation. As roles are redefined, HRD support is offered to help facilitate changes. For example,
programmes to develop meeting skills have supported the now active engagement of employees in the works
council and its sub-committees. The trade union, Amicus, appoints and sponsors four learning representatives and
uses TUC courses to support their role development. The company’s investment in individual learning plans is yet
another step along INA’s journey towards internalising a learning culture throughout the company. Although some
of the HRD outcomes of these plans involve employees attending non-work related study in their own time, the
message the company wishes to communicate is that learning is valuable for its own sake.

This process of transformation has already yielded substantial benefits. The works council has reported that the
grapevine is now regarded as the least reliable information source by employees. Labour turnover has fallen form
an alreadymlow8.1 percent in 2001 to 2.5 percent and absence rates have been reduced by 50 percent. Cost-
reduction projects have produced savings in excess of £324,000, alongside improvements in productivity and the
company’s health and safety record. The company’s efforts have also received external recognition, including a
number of HR accolades. The company was named ‘Welsh people development company of the year’ in 2003 and
shortlisted for CIPD’s annual People Management Award in both 2003 and 2004.

Despite this progress, and representations made by employees to the German parent, by the end of 2003 INA did
not know whether all of this would turn around its fortunes within the Schaeffler Group. However, the vision of
becoming the Group’s production location of choice’ took a large step towards becoming reality when in 2004 it
was announced that Llanelli plant would not only retain production of the ‘at risk’ component but would also be
commissioned to produce a new high-tech engine component for a prestigious car manufacturer.
Source: (Millmore et.al. 2007)

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CASE STUDY 2: PART 2 - HRD

Instructions to Learners
This case study is to be analysed and prepared in your Study Groups. Your Study Group is required to present
the analysis of this case study at Workshop 3. Your presentation should not be longer than 15 minutes.

The questions that you are required to address in analysing the case study are:
1. Discuss whether INA has been successful in their attempt to create a learning culture towards building a
learning organisation
2. Despite the important roles employees, line managers and senior managers have in contributing to
SHRD, analyse the extent to which these stakeholders represent obstacles to the development of SHRD
at INA and discuss how these obstacles may be addressed
3. In terms of INA’s HRD activities, justify the position of INA on the strategic maturity continuum and provide
recommendations to help INA move further towards HRD strategic maturity on the continuum

145 MANCOSA
 Human Resource Development

MANCOSA 146