Human Resource Management

St. Mary’s University

School of Graduate Studies
MBA Program

By: Dr. Tewodros Mekonnen

January, 2022
Addis Ababa, Ethiopia
 Course Objectives
1. Understand and describe the major human resource management
theories and concepts
2. Identify the major environmental factors under which human resource
management operates
3. Understand how to analyze jobs and plan human resource requirement
4. Understand human resourcing methods (recruitment, selection and
placement, training and development)
5. Understand how to manage and evaluate performance, reward system
6. Understand how to manage health and safety
7. Understand how to deal with labor union, diversity management and
harassment in the work place
8. Understand how to manage discipline and termination

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Chapter Contents

One Nature and Background of HRM

Two Job Analysis and Design

Three Human Resource Planning (HRP)

Four Recruitment and Selection

Five Training and Development

Six Performance Management

Seven Compensation and Benefit Management

Eight Employee Management Relations

Nine Workforce Diversity

 Assessment Modalities
1. Individual Work……. Article Review……………...10%
2. Team Work…… …Project Work and Presentation....20%
3. Mid Exam…………..Ch 1 and 2…………………20%
4. Final Exam……….. All Chapters………………50%
Final Grade……………………………………….. 100%
 Group Work Assignment Topics

1. Managing Reward & Compensation (Focus on One Organization)

2. Designing Employee Benefits and Services(Focus on One Organization)

3. Managing Employee Health and safety(Focus on One Organization)

4. Managing Employee and Labor Relations(Focus on One Organization)

5. Diversity Management and Harassment(Focus on One Organization)

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6. Managing Employee Discipline & Separation (Focus on One Organization)

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 Reference Books
Text Book
 Nambudri, R. & Cascio, WF. (2010). Managing Human Resources. 8th ed.
India: McGraw Hill.
Reference books
1. Entrekin, L. & scott-Ladd, BD. (2015). Human Resource Management and Change.
India: Routledge.
2. Pinnington, AH. & Harzing, AW. (2011). International Human Resource
Management. 3rd ed. UK: SAGE Pub. Ltd.
3. Rue, LW. & Byars, LL. (2006). Human resource Management. 8th ed. USA: McGraw
Hill.
4. Wagar, das & Schwind. (2005). Human Resource Management: A strategic Approach.
7th ed. Canada: McGraw Hill Ryerson.
5. Decenzo, DA. & Robbins, SP. (2002). Human Resource Management. 7th ed. USA:
Wiley.
6. Dessler, G. (1997). Human Resource Management. 7th ed. USA: Printice Hall.
7. Stewart, GL. & Brown, KG. Human Resource Management. 2nd ed. USA: Wiley.
 Chapter one
Human Resource Management: An Overview

Introduction
 HRM is the management of one of the most important
resources of organizations: people.

Human Resource + Management

•Plan Direct
People •Organize Control
•Staff

Organization
 Intro. Cont’d
 Organizations are human associations for achieving goals.

 Organizational effectiveness depends on the performance of

people working in organizations.

 Organizations depend on performance of people for achieving

its mission and goals
Intr. Cont’d

 Organizations are directed by decisions of one or more people

 In this regard, organizations with quality HR perform efficient

as better people achieve better results

 Here comes Human Resource Management: the Science and

art of Managing People in an organization

 What is it??
 1.1. Defining HRM
 Human Resource Management can be defined in many ways:
1. HRM is a series of integrated decisions that govern
employer-employee relations.

2. HRM deals with the human element in the organization,

people as individual and groups, their recruitment,
selection, assignment, motivation, empowerment,
compensation, utilization, training and development,
promotion, retirement….
 Defn. Cont’d
3. HRM refers to the management of the abilities, knowledge,
skills, attitudes of employees to the best use of
organizational objectives.

4. Human Resource Management is the process of

 planning,
 organizing,
 directing and
 controlling of

 the acquisition, utilization and maintenance (preservation)

of human (people) resource in organizations in order to
achieve objectives.
 Cont’d
5. HRM is the process of achieving organizational
objectives by acquiring, developing, retaining, and
properly using the HRs in an Organization.
 This definition recognizes a process consisting off our
functions. These are:
a) Acquisition/getting employees/
- Demand for and supply of labor – HRP
- Recruiting -
- Selecting
- Placing
- Socialization
Cont’d
b) Development/preparing employees/
 Employee training: Skill development and changing attitudes
among workers.
 Management development:
- Knowledge acquisition
- Enhancement of managers abilities.
 Career development:
Effort to match long term individual and
organizational needs
c) Motivation/activating / stimulating employees/
- Job satisfaction
- Linking rewards to performance
- Performance evaluation
- Compensation and benefits
d) Maintenance/Keeping/ retaining employees/
- Working conditions
- Employee relations
Summary about Hrm Definitions
1. HRM is inherent in all organizations

2. HRM is pervasive/fundamental: All levels of management

carry out HRM functions.

3. HRM is a continuous activity in an organization.

4. HRM as a dynamic functions affected by the changes both

inside and outside the organization‟s environment.

5. HRM is a system of interrelated and interdependent

 acquisition,
 development,
 motivation and
 maintenance subsystems.
1.2. why of HRM
 One of the definition of Management is the definition of HRM.
“Getting things done through people.” In this context,
 Human resource management is the way of managing the key
resource of an organization. This implies that:

1. Human resource is a capital or asset which is a major competitive

tool.

 People at work provide pool of knowledge, skills, creative,

abilities, talents, and attitudes .

2. Compared with other resources of organizations, human resource is the

most challenging and unpredictable, and the largest ongoing cost
factor in any organization.
Why Cont’d
 In simple term, the rationales of having efficient and
effective HRM system is to use people to the best
interest of the organizational objectives. As it is
1. People who design, operate and repair technology,
2. People control the finance,
3. People use the material,
4. People mange information etc.
1.3. Scope and Functions of HRM
Cont’d
1. Human Resource Planning/HRP/: The process of
reviewing human resource requirements;
2. Recruitment: The process of attracting people and
encouraging them to apply for vacant jobs;
3. Selection: The process of choosing and hiring from a
group of applicants the individuals best suited for the
vacant job.
4. Orientation: The process of familiarizing new employees
with the organization
5. Training & Development :The process of improving the
performance of employees and management development
Cont’d
6. Compensation: the management of every type of reward
that employees receive in return for their services.
7. Performance Evaluation: A formal system of periodic
review and evaluation of employees job performance
8. Safety and Health Safety: Protecting employees from
injuries caused by work related accident
9. Promotion, transfer, demotion,& separation
10. Human Resource Research
 1.4. HRM History: Evolution & Development

• The origins of managing people can be traced back to

the existence of man as a social animal.

• HRM as a practice is as old as the human society itself.

• Think of the Egyptian pyramid, the Wall of China, the
Obelisk of Axum and the church of Lalibela

• The most documented beginnings were as a result of the

Industrial Revolution, where the mass production of
goods had significant implications for the „employees‟
operating this machinery.
History…cont’d
 Modern HRM can be traced to England, where craft
people organized guilds
 They used unity to improve working conditions
 The Industrial Revolution in the 18th century laid the
basis for a new, complex industrial society
 Changing work conditions, social patterns, and labour created
a gap between workers and owners
 During the world wars era, scientific management,
welfare work, and industrial psychology merged
History…cont‟d

1. Managing People at the beginning of Industrial Revolution

At the beginning of the Industrial Revolution factories in order to maximize
profit they were using :
• Long hours of work
• Minimum pay
• Poor working condition (often overcrowded, little or no sanitation
and clean water, disease, accidents and death were common place as a
result of the poor sanitary conditions)
• Unsafe working conditions and hazards.
• Women and children were often ‗employed‘ in these factories, often
receiving no wage but received shelter and food in return for their
labor.
This time marked the beginning of trade unions, and the concept of
Marxism and Leninism.
History…cont‘d
2. Robert Owen (1771-1855) and Human Resource Management
Robert Owen an owner of a textile mill in Scotland made an attempt to improve
the relationship between workers and owners. He tried to improve the relationship
in his own factory by undertaking the following:
• Improved working conditions
• Reduced hours of work
• Allowed workers to buy the product of the factory at cost
• Opened school for the children of the factory
• Played workers even when work interrupted
• Provided meal
• Provided bathroom facilitates
For the contribution he has made to HRM he is referred to as the father of modern
personnel management
 3. Management Theories and Influences on HRM
A range of management theories have had direct application to the
development of human resource practices. These include:
• Classical Management theory: Scientific Management (Taylor)
• Classical Organizational Theory (Fayol, Weber
• Behavioral School (industrial Psychology)
• Management Science (Quantitative)
• Integrative Approaches: Systems theory
• Contingency Approach
Classical Management theory (Scientific management Frederick
Winslow Taylor)
• Analyze jobs scientifically, find one best way of
doing a job,
• Select employees scientifically
• Training ensures employee and job fit
• Use accounting and control
• Provide Incentives
Taylor‘s work has been developed by: Frank and Lillian
Gilbreth who have included productivity, time and
motion study and scheduling
 Classical Organizational Theory
Henry Fayol identified:
• Major management functions planning,
organizing, commanding, coordinating and
controlling and fourteen principles

Max Weber (Bureaucracy) suggested:

• Bureaucracy as rational, legal, ideal method of
administration with its characteristics (Division of
labor, rules, impersonality, subordination of
individual interest, merit)
 Behavioral School (industrial Psychology)
Applied psychological research. Elton Mayo initiated the
human relations from Hawthorne studies. It identified that
employees react positively to management concern,
communication and participation
Subsequent studies of Abraham Maslow, Frederic Herzberg
supplement his findings
Management Science (The quantitative School)
Focus on measuring the outcome of jobs and work systems.
Applications include production schedule, productivity
strategies and consequent management planning and control
mechanism.
 Integrative Approaches: Systems theory
Systems approach sees organizations as unified systems with specific
inputs, process and outputs. Important features include interaction's
between jobs, technology, environment (Internal and external) and
control mechanisms. HR aspect include communication between the
various subsystems, the coordination of inputs and outputs, and effective
interaction between employees and technological systems.
Contingency Approach
Contingency approach contends that every organization and environment
is different and therefore requires a different approach. Scientific
management , organization theory, behavioral science or management
science may or may not apply, according to business circumstances. Victor
Vroom and Fiedler among others have successfully applied this theory to
leadership and management of behavior.
Which Theory and Principles to use in Human Resource
Management?

Application of human resources management theory differ from the view

of scientific management of ‗ one best way‘ hard model of practice to
organic soft model of self control practice.
Diverse national and industrial relations environmental demand different
HRM applications.
Thus , an HRM theory derived from one country such as the United
States experience may not be suitable for Ethiopia or other countries or
Japan
Application of Human Resource Management need to be contingent on
specific situations
1.5. Environment of hrm
 HRM processes are influenced by both the internal and external
environments
1. External Influences include:
Government laws and regulations
Labour Union procedures and requirements
Economic conditions
The labour force and labour Market (Composition and diversity)
Competitors
2. Internal Factors HRM programs are influenced by:
Strategy
Goals
Organizational culture
Nature of the task
Work groups
The leader‘s style and experience
 The Environment of HRM

TECHNOLOGICAL
FORCES

INTERNAL
ENVIRONMENT
MISSION
STRUCTURE
CULTURE ECONOMIC
SOCIETAL
RESOURCES FORCES
FORCES
OTHERS

POLITICAL - LEGAL
FORCES

31 SJ-HRM
 The Environment---Cont’d

1. Internal Environment: Forces in the internal

environment are controllable by management.
Major internal environment
 Organizational goals: Desired outcomes which provide
frame of reference for conducting HRM.
 HRM Policies: Provide guidelines for making HRM
decisions.
 Structure: Organization structure provides boundary for
HRM.
 Reward system: Ensures attraction and retention of
quality human resources.
 Organization climate: Promotes or hinders mutuality of
32 interests between management and employees SJ-HRM
 The Environment---Cont’d

2. External Environment: Forces in the external environment

are non-controllable by management
 Major external environment
 Technology: Level of technology and pace of technological
change impact HRM.
 Laws: Restrain or encourage HRM activities. HRM must
conform to laws.
 Labor unions: Mainly affect processing component of HRM
system through collective bargaining; strikes etc.
 Economic forces: Affect job market and reward system of
employees.
 Socio-cultural forces: Provide status and value to jobs. They
also affect the practice and ways of doing jobs.

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1.6. Strategic Importance of HRM
1. HRM contributions to organizational effectiveness:
 Helping the organization reach its goals
 Efficient use of workforce skills and abilities
 Increasing job satisfaction, self-actualization, and quality of work life
 Communicating HRM policies to all employees
 Maintaining ethical policies and socially responsible behaviour
 Managing change to the mutual advantage of individuals, groups,
enterprise, and public
2. Increasing employees‟ job satisfaction and self-actualization
 Employees must feel that the job is right for their abilities and that they are
being treated equitably
 Satisfied employees are not automatically more productive
 Both satisfied and dissatisfied employees can perform equally in quantitative
terms
Cont’d
3. Quality of work life (QWL) is a general concept that refers to
several aspects of the job, including:
 Management and supervisory style
 Freedom and autonomy to make decisions on the job
 Satisfactory physical surroundings
 Job safety
 Satisfactory working hours
 Meaningful tasks
4. Communicating HRM policies to all employees:
 HRM policies, programs, and procedures must be communicated fully
and effectively
 They must be represented to outsiders
 Top-level managers must understand what HRM can offer
Cont’d
5. Maintaining ethical policies and socially responsible behaviour:
 HRM managers must show by example that HRM activities are fair, truthful, and
honourable
 People must not be discriminated against
 Their basic rights must be protected
6. Trends that strain employer-employee relationships:
 Telecommuting
 Outsourcing HRM
 Family medical leave
 Child care
 Spouse-relocation assistance
 Pay for skills
 Benefit cost-sharing
 Union-management negotiation
7. Managing increased urgency and faster cycle times:
 Firms are placing a growing emphasis on:
 Increasing customer service
 Developing new products and services
 Training and educating technicians, managers, and decision makers
Cont’d
 Shorter cycle times mean less time to:
 Train, educate, and assign managers
 Solve sexual harassment complaints
 Recruit and select talented people
 Improve the firm‘s image

 Learning provides a framework for decreasing cycle time

 Faster, more urgent management behaviours have been caused

by:
 Foreign and domestic competition
 Technological changes
 The emergence of new opportunities

 Pressure to increase learning and reduce cycle time, while also

reducing cost, is a competitive reality
 HRM activities must be in sync with the firm‘s environment
1.7. HRM: A Profession

• HRM as a profession developed itself through research and

experimentation as an organized body of knowledge.
• The knowledge of HRM is usually exchange through conferences,
seminars, and workshops sponsored by professional associations
• The latest information in the field of HRM is communicated
through the literature published by professional associations,
industry, organizations and educational institutions
• HRM profession has also a code of conduct or ethics and
accreditation requirement for its members
What skills do HRM Professionals Need?

Change agent
Strategic partner
• Transform Change
• Negotiations
• Aligning HRM with
• Conflict Management Strategy
• Communications • Decision- making
• Overcoming resistance • Data-base
• to change

Administrative Expert
• HRM Policies & Employee Advocate
functions • Employee welfare
• Legal compliance • Quality work life
• Contract • Win commitment
• Admin. HRM & • Counseling
• HR info. systems • Developing Teams
Competencies of Professionals
Business capabilities: Human resource professionals will need to know the
business of their organizations thoroughly. This requires an understanding of its
economic and financial capabilities
Management of change: HR professionals will have to be able to manage
change process so that HR activities are effectively merged with the business needs
of the organization. This require skills such as environmental analysis, conflict
management, communication etc.
State of the Art HRM Practice: HRM practitioners are organizations‘
behavioral science experts, in areas such as staffing, developing, appraisal
organizational design and communication. They need to strive to keep abreast of
contemporary issues and practices related to this areas.
1. 8. HRM Models

There are models of human resource management. Two

of the several models are:
1. General systems model of HRM with environment,
inputs, transformation process and outputs.
2. The Harvard HRM model

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 1. Gel Systems HRM Model

Environment

Satisfaction
• Knowledge • Organizational
• Skills Objectives
Human Resource • Employee Objectives
• Attitudes Management Activities
• Talents • Societies
• Information (Stakeholders
Objectives)

Feedback

42
2. The Harvard Model of Human Resource Management
 1.9. HRM Activities
Several activities in HRM that professionals need to
learn.

However, many do not feel that HRM is a profession

one need to be trained in order to manage people.

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44
1. Job Analysis (Job 7. Encouraging
Description, Specification) teamwork
2. Human Resource 8. Rewarding employees
Planning (Compensation)
3. Recruitment and 9. Benefits and Services
Selection
10. Counseling employees
4. Orientation
11. Labor Relations
5. Training and
12. Discipline and
Development (Coaching)
Termination
6. Performance Appraisal
45
(Feedback) 45
45
 Points for Discussion
1. What is human resource management (HRM)?
2. "HRM is a pervasive activity". Explain
3. Human resources are said to be the most important element in organizations.
Why?
4. Define the following terms:
a) Human resource planning
b) Recruitment
c) Selection
d) Orientation
e) Training and development
f) Compensation administration
g) Performance evaluation
5. Define "Scientific Management". Who played the dominant role in
formulating this theory?
6. What are the basic principles of Scientific Management?
7. What is "Human Relations Movement"?
8. Describe the major conclusions drawn from the Hawthorne Experiment.
9. How do you compare " Scientific Management" and "Human Relations
Movement"?
 Chapter Two
Job Analysis and Design
After completing this part, participants will
be able to understand:
 Job analysis definition
 Who is involved in Job analysis
 Components of Job analysis
 Job analysis Steps
 Job analysis Potential Problem
 2.1. Job Analysis Definition
 The reason why people are required in an organization is to fill
job vacancies and to do the job. This requires human resource
management to understand the nature of the job and the nature
of the person required for the job.
 Job analysis is a systematic process of collecting and making
judgment about all of the important information related to the
nature of the job.
 It is the basis of all human resource management activities
Cont’d
 Job analysis objectives are to achieve information on the following job and
person aspects.
• What a worker does- workers function
• How a worker does- methods and techniques used
• What aid is necessary- machines tools, experts etc.
• What qualifications are necessary -knowledge, skills, abilities,
experience
• The output of job analysis are job description and job analysis
 2.2. The Multifaceted Nature of the Job Analysis

Labor Relations Recruiting

Selection

Safety and Health Strategic HR

Planning

Job Analysis
Employee Training
Compensate

Performance Appraisal Career Development Employee Development

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 2.3. Components of Job Analysis
Job Analysis has two components-job description
and job specification Job Description—a listing of the
job‘s duties; its working
conditions; and the tools,
Job materials, and equipment used
Description
to perform the job. It identifies
the picture of the job

Job Analysis

Job Specification—a listing of the

skills, abilities, and other
Job credentials the incumbent
Specification
jobholder will need to do a job. It
identifies the picture of the
person.
 2.4. Steps in Job Analysis
1. Determine the purpose of the JA
2. Gather Information about jobs to be analyzed
3. Write the job Analysis
4. Obtain Approval
5. Job description
6. Job specification
Details of Steps in Job Analysis
 Steps ….cont‟d
1. Determine the Purpose of Job Analysis
Job analysis serves several purpose of HRM
• How do you want to use the JA?
 Legal requirement
 Manpower Planning
 Recruiting
 Selection
 Performance appraisal
 Training
 Compensation and others
 Steps ….cont‟d
2. Gather Information about Jobs
 Decide which jobs to include in the job analysis project
 For similar jobs select representative jobs
 Different methods of gathering data include:

i. Interviews
ii. Questionnaire
iii. Observation
iv. Diary/Logs
v. Critical Incident Technique (CIT)
Steps ….cont‟d
 Methods of Gathering information
i. Interview Method
– Individual
Several workers are interviewed individually
The answers are consolidated into a single job analysis
– Group
Employees are interviewed simultaneously
Group conflict may cause this method to be ineffective
The interview method requires that all employees are asked the same
questions in the same order.
Consider the advantages and disadvantages of interview method.
Steps ….cont‟d
ii. Questionnaires
Employees answer questions about the job‘s tasks and
responsibilities
Each question is answered using a scale that rates the
importance of each task
Not all jobs are the same, so questionnaires may overlook
certain aspects of the job.
Also, follow-up methods are not usually organized to
gather extra information.
Computerized versions of questionnaires is expensive.
Consider the advantages and disadvantages of
questionnaire.
Steps ….cont‟d
iii. Diary Method
 Incumbent Employees record information into
diaries of their daily tasks
 Record the time it takes to complete tasks
 Must be over a period of several weeks or
months
This method can be very expensive because of the
time it takes to complete it.
 Steps… cont‟d
iv. Observation Method
 Analyst observes incumbent
Directly
Videotape
Useful when job is fairly routine
Workers may not perform to expectations

59
 Steps… cont‟d
v. Critical Incident Technique (CIT)
Takes past incidents of good and bad behavior
Organizes incidents into categories that match the
job they are related to
The CIT is helpful in illustrating to an employee
what kind of behavior is required for the job.

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 2.5 Write the Job Analysis
Many organizations write as job description combining both job
description and specification. However it can also presented in
two parts as job description and specification.

The following Items are common to both job description and

specifications
1. Job Identification (Title, Date, Approvals, Supervisor‘s title
,Salary, Grade level)
2. Job Summary (General nature, Major functions or
activities, Includes general statements)
3. Relationships (works with who)

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 Job Description
1. Job Identification (Title, Date, Approvals,
Supervisor‘s title ,Salary, Grade level)
2. Job Summary (General nature, Major functions or
activities, Includes general statements)
3. Relationships (works with who)
4. Responsibilities and Duties (Limits of authority, what is
done-such as sales, lifts, drives etc.)
5. Standards of Performance (Quality, quantity etc.
6. Working Conditions and Physical
Environment

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 Job Specification
1.Job Identification (Title, Date, Approvals,
Supervisor‘s title ,Salary, Grade level)
2.Job Summary (General nature, Major functions or
activities, Includes general statements)
3.Relationships (works with who)
4.Qualifications
5.Experiences
6.Behaviors

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 2.6. Potential Problems of Job Analysis

Employees may resist JA because

1. Resistance to change
2. Possible changes to job duties
3. Changes to pay
4. Lack of trust of consequences
Who is involved in the job analysis?
 Management
 Supervisors
 Job analysts
 Job incumbent
 Unions
 Consultants
 2.7. Job Design
Job Design
 Jobs are the foundation of organizational productivity and employee
satisfaction.
 How well jobs are designed will play an important role in the
realization of organizational objectives.
 Well-designed jobs, therefore, enable to attract and retain motivated
employees capable of discharging their work responsibilities.
 It specifies the contents, methods and relationships of jobs in order
to satisfy work requirements and increase levels of employee
engagement in an organization.
 It concentrates on the work to be done, not the worker; with high
degree of task specialization.
 Job design has to start from work requirements, that is, why the job
exists.
 Job Design…… cont’d

 Job descriptions and specifications can be used for

designing or redesigning jobs
 There is no one best way to design a job
 Different situations call for different arrangements of job
characteristics
 Different emphasis may be placed on performance and
satisfaction as desired outcomes
 A single approach is unlikely to satisfy all a manager‘s goals
The choice of job design involves trade-offs based on
the critical needs of the organization
Job Design…… cont’d

Job Design Principles are

i. Form a coherent whole.
ii. Provide some variety of method, location
and skill
iii. Provide feedback of performance
iv. Allow for some discretion for employees
v. Include responsibility for outcome
vi. Be seen as leading towards some sort of
desirable future
 Job Design…… cont’d

Job Design Techniques

1) Job Rotation: is a movement of employee from job to
another job.
 In this case, employee perform different jobs, but, more or
less, jobs of the same nature.
2) Job Enlargement: broadening scope of a job by expanding
the number of different tasks to be performed.
 This is done to increase their motivation and satisfaction.
Job Design …Cont’d
3) Job Enrichment: is combining of several activities of the
organization in to one job.
 Giving the employee an entire job rather than just a piece of the work.
 It is also about increasing the depth of a job by adding responsibility
for planning, organizing, controlling, or evaluating the job. job
enrichment efforts should be based on the following principles:
i. Increase job demands: Changing the increase the levels of difficulty and
responsibility of the job.
ii. Increase Worker's accountability: Allowing more worker control and authority over
the work, while retaining the manager's ultimate accountability.
iii. Providing Work Scheduling freedom: Within limits, allowing workers to schedule
their own work.
iv. Providing feedback: making timely periodic reports on performance directly to
the worker.
v. Providing New Learning experience: Creating opportunities for new personal
experiences and growth.

.
Job Design …Cont’d

 As discussed above, job redesign options includes job rotation

and job enlargement. The major differences between these
two techniques and job enrichment are:
 Job enlargement and job rotation are horizontal expansions
while job enrichment is a vertical expansion.
 Job enlargement and job rotation increase job scope while
job enrichment increases job depth. Job depth is the degree
of control or autonomy and individual has over his/her own
work
Job Design …Cont’d

4) High Performance Work Design: developing an approach, which

enables groups to work effectively together in situation where the
rate of innovation is high, through operation flexibilities
Job Design …Cont’d
5) Work Simplification: is broking down a Job in to small
sub-parts and each part, is assigned to one individual.
6) Job sharing: is an approach in which two employees
perform the work of one full-time job.
 For instance, a hospital allows two radiological technicians to fill
one job, and each individual works every other week.
 Such arrangements are beneficial for employees who may not
want or be able to work full-time because of family, school, or
other problems.
 Job Design…… cont’d

Workers and Job Design

1. Person-Job Fit: matching characteristics of people with
characteristics of jobs.
 For example, bank tellers talk to people all day; an individual
who would rather not talk to others all day may do better in a
job that does not require so much interaction with customers.
 Different people will consider some jobs “good” and
others “bad.”
 As a result, people will fit different kinds of work.

73
Job Design…Cont’d
2. Job-Person Match: is matching people with jobs they
like- it can have positive consequences.
 Then, once individuals have been placed in jobs, other
job/work factors affect retention, i.e., modern
equipment, technology, and good working conditions,
safe work environment, etc.

74
Points for Discussion
1. What is job analysis? Why is it conducted?
2. What is the difference between a job and a position?
3. State the different conditions that initiate the performance of job
analysis.
4. Name and describe the components of job analysis.
5. Describe the various techniques of collecting job analysis information.
6. What are the major issues to consider when a job description is
prepared?
7. What is job design? Name and describe the important elements of job
design.
8. What are the different methods of job design and what are the
advantages of each method?
9. What are the items included in job specification?
10. Job enrichment is a means of expanding jobs vertically. Discuss.
 Chapter Three
Human Resource Planning (HRP)

After completing this part, participants will be able

to understand:
1. HRP Meaning (Definition)
2. HRP Importance
3. HRP Steps
4. Succession Planning

76
76
 3.1. Introduction

The acquisition of people to perform each job within the

organization is the role of the staffing function.

This function is interrelated closely with planning,

because human resource needs must be forecasted
sufficiently in advance to enable qualified individuals to be
available for job openings as they occur.

The organizational strategy of the firm as whole becomes

the basis for human resource planning
3.2. HRP: What is it?
 Human resource planning (HRP) is the process of analyzing and
identifying the need for and availability of human
resources so that the organization can meet its objectives.

 Human resource planning, therefore, is the process of

systematically reviewing human resource requirements to ensure
that the required number of employees, with the required skills,
are available when they are needed.
 HRP…… Cont’d

 It is a means of deciding the number and type of personnel that

organization needs now and in the future.
 Then, translates the organization's objectives into the number of
employees required to meet those objectives.
 Without clear-cut planning estimation of human resource need is
reduced to mere guesswork.
 HRP…… Cont’d
 To ensure that people are available to provide the continued smooth
development, organizations engage in human resource planning.
 The purpose of developing human resource planning is to asses where
the organization is, where it is going, and what implications these
assessments have on future supplies of and demands of human resource.
 Attempts must then be made to match supplies and demands,
making them compatible with the achievement of the organization's
future needs.
Summary of HRP… Cont’d
Systematic process of matching internal and external
supply of people with job openings anticipated in the
organization over a specified period of time.
 Involves estimating the size and composition of future
work force to ensure survival and growth of an
organization.
Systematically forecasts an organization's future supply
of, and demand for, employees
HRP… Cont’d

Human resource planning is a process by which an

organization ensures that
it has the right number and kinds of people
at the right place
at the right time
capable of effectively and efficiently completing
those tasks that will help the organization achieve its
overall strategic objectives
 HRP….. Cont’d
STRATEGIC DIRECTION HR LINKAGE

mission Determining organization‟s

business

Goals and Setting goals and

objectives objectives

strategy Determining how to attain

goals and objectives

Determining what jobs need to be

structure done and by whom

Matching skills, knowledge,

People
and abilities to required jobs

83 HRM-SJ
 3.3. Importance of Human Resource Planning
 Organizations are composed of financial, material and human
resources.
 Of these human resource represents one of the organization's most
valuable assets.
 However, because the organization does not own people, as it does
physical and capital assets, this resource is seldom given proper
attention.
 Its supply of personnel must be sufficient to ensure the healthy
operation of the organization.
 Toward this objective of continuing healthy operations, the
organization needs to be undertaken human resource planning.
Importance….. Cont’d
 Major importance of HRP are, therefore,
1. Future Human Resource Requirements: Planning is vital for determining the
human resource needs for the future.
2. Cope With Change: Human resource planning enable the management to cope
with changes in technology, competitive forces, markets, government
regulations, etc. Such changes often generate changes in job content, skill
demands, number and types of personnel.
3. Decreasing or Increasing Growth of Organizations: The manner, the pace
and the direction in which an organization is growing dictates the need for a
human resource plan. Years of comfortable growth may give rise to slower
growth prospects or even reduced growth prospect.
4. Foundation for Human Resource Functions: The plan provides essential
information for designing and implementing human resource functions such as
recruitment, selection, employee mobility (transfers, promotions, lay-off, etc.)
and training and development.
5. Foundation for personnel functions
6. Provides information on the status of the human resource
7. Reduces cost and budget of human resource management
 Importance…. Cont’d
 Holistic of HRP
1. Should be planning - something done in advance rather than
just as a spur-of-the-moment reaction to immediate pressure.
2. Should guide and coordinate all personnel activities so that
they work together to support the overall strategy rather than
operate independently of one another.
3. Should be responsive to both the external and the
organization environment.
4. Should be strategic - linked with high level planning rather than
performed in isolation.
3.4. Human Resource Planning Process
 Planning for human resource should be tied in with overall long-term
organizational plan.
 In other words, after organizational strategic plans have been
formulated, human resource planning can be undertaken.
 Strategic plans are reduced to specific quantitative and qualitative
human resource plans
 Many organizations carry out systematic planning only for those
categories of personnel, which have been in short supply or for those
types of skills which require a long development time within the
organization.
 This being as it is, most organizations identify short term and long-
term human resource needs by examining their strategic plan.
 HRP Process:

 As can be seen in the figure next page, below, the human resource
planning has two components.
 These are requirements and availability.
 Forecasting human resource requirements involves determining
the type and number of people needed in an organization.
 Human Resource Planning Process
External Environment
Internal Environment

Strategic Planning

Human Resource Planning

Forecasting Comparing Forecasting

Human Requirements Human
Resource and Availability Resource
Requirements Availability

Demand = Surplus of Shortage of

Supply Workers Workers

No Action Restricted Hiring, Recruitment

Reduced Hours, Early
Retirement, Layoffs, Selection
Downsizing
89
Process….Cont’d
 The four phases or stages of HR planning:
1. Situation analysis or environmental scanning
2. Forecasting demand
s
3. Analysis of the supply
4. Development of action plan
 Process…. Cont’d
1. Situation Analysis & Environmental Scanning
 The first stage of HR planning is the point at which HRM
and strategic planning first interact
 The strategic plan must adapt to environmental circumstances
 HRM is one of the primary mechanisms an organization can use during
the adaptation process

 Without a plan to support recruitment and selection, it is

impossible to stay competitive
 The problems associated with changing environments are greater today
than ever before
 Success now depends on being a ―global scanner‖
 Process…. Cont’d
2. Forecasting Demand for Employees
 This phase of the process involves estimating:
 How many employees will be needed
 What kinds of employees will be needed

 Quantitative tools can help with forecasting, but it involves

a great deal of human judgment
 The demand for employees is closely tied to the strategic direction that
the organization has chosen
 Growth
 Reengineering
 Reorganization
Process… Cont’d
 Techniques to help reduce the uncertainty inherent in
HR planning:
 Expert estimates
 Trend projections
 Statistical modeling
 Unit-demand forecasting

 Key to effective planning is accurately and freely sharing

information
Process… Cont’d
I. The Expert Estimate
 One or more “experts” provide the organization with
demand estimates based on:
 Experience
 Guesses
 Intuition
 Subjective assessments of available economic and
labor force indicators. This is the least mathematically sophisticated
approach
Process… Cont’d
1) The Delphi technique elicits expert estimates from a number of individuals in an iterative
manner
 Estimates are revised by each individual based on knowledge of the other individuals‘ estimates

2) With the nominal group technique (NGT), individual estimates are followed by group
brainstorming
 The goal is to generate a group decision that is preferred over any individual decision
3) Trend Projection: This top-down technique:
 Develops a forecast based on a past relationship between a factor related to employment and employment
itself
 Example: Sales levels are related to employment needs
4) Modeling & Multiple-Predictive Techniques: This top-down approach uses the most
sophisticated forecasting and modeling techniques
 Trend projections relate a single factor, such as sales, to employment
 Environmental factors could be gross national product or discretionary income
 Or, the organization may be mathematically modeled so that simulations can be run
5) Unit Demand Forecasting: This is a bottom-up approach
 Unit managers analyze current and future needs person-by-person and job-by-job
 Headquarters totals the unit forecasts
 The sum is the corporate employment forecast
 If both bottom-up and top-down approaches are used, the forecasts may conflict
 This can be resolved by averaging the variances
 The Delphi technique or NGT could also be used
Process… Cont’d
3. Analyzing the Current Supply of Employees
 This phase of HR planning should answer the question:
 ―How many and what kinds of employees do I currently have, in terms of the skills
and training necessary for the future?‖

 This involves more than simply counting current employees

 The smaller and more centralized the organization, the easier it is to conduct a skills
inventory
 Both a skills inventory and a management inventory:
 Identify the skills, abilities, experiences, and training employees currently have
 Are useful for career planning, management development, and related activities

 In its simplest form, a skills inventory is a list of:

 Names
 Characteristics
 Skills
Process… Cont’d
Contents of the Skills Inventory
 The only data available to the organization for later use is
what was designed into the system
Name Employee number
Present location Date of birth
Date of employment Job classification
Skills, knowledge, education Foreign language skill
Professional qualifications Publications
Licenses and patents Hobbies
Supervisory evaluations Salary range
Process… Cont’d
 Often omitted, but increasingly important, are:
 Employees‘ stated career goals
 Geographical preferences
 Intended retirement date

 The main categories within a skills inventory:

 Data summarizing the employee‘s past
 Data summarizing present skills
 Data that focus on the future

 Today, many skills inventories are more complex

Process… Cont’d
Maintaining the Skills Inventory
 The two principal methods for gathering data:
the interview and the questionnaire
 The questionnaire is faster and cheaper, but can be inaccurate
 Some contend that a trained interviewer can complete questionnaires
more quickly and accurately

 Plans for keeping files updated must be made

 The more often changes are made and the data is used, the more often
updates should be performed
Process… Cont’d
 Should data be stored in a manual system or
on a computer?
 How much does the computer system cost?
 How frequently the data will be used?
 A computer allows comparative analysis over time

 Skills inventories are useful only if management

uses the data to make significant decisions
 Before accessing the data, managers must be trained to avoid abuse of
the system
Process… Cont’d
4. Action Decisions in HR
 After the supply of and demand for workers has been
analyzed, the two forecasts must be compared
 Whenever there is a gap between the two estimates, a course of
action must be chosen
Process… Cont’d
 If the supply of workers is less than the demand:
 It can be filled with present employees who are willing to work
overtime

 If there is a shortage of skilled employees:

 Train and/or promote present employees
 Recruit less-skilled employees
 Recall employees who were previously laid off
Process… Cont’d
 Organizations are using more:
 Part-time workers
 Subcontractors
 Independent professionals

 This is in response to:

 Intense global competition
 Rapid technological change
 Fears caused by recent workforce reductions
Process… Cont’d
 Possible solutions to an employee surplus:
 Early retirements
 Demotions
 Layoffs
 Terminations

 Employees who are considered surplus are seldom

responsible for the conditions leading to the surplus
Process… Cont’d
 If voluntary reductions don‟t eliminate the gap between
supply and demand, layoffs may be necessary
 Corporations too frequently and quickly turn to layoffs
 They fail to consider the consequences
 About one-third lay off too many workers
 Poorly designed workforce reductions can kill morale
3.5. Human Resource Information Systems
 Information is the key to successful HR planning
 A human resource information system (HRIS) is an integrated way to
acquire, store, analyze, and control information flow through an
organization

 A highly developed HRIS can increase the efficiency and

response times of:
 Tracking applicants
 Skills inventory
 Career planning
 Employee service programs
 Points for Discussion
1. Human resource represents one of the organization's most valuable assets-
Discuss.
2. Describe the major importance of human resource planning.
3. Briefly describe the human resource planning process.
4. In what way human resource planning interact with the organizational strategic
plan?
5. Suppose you as administrative head of X organization, HR department head
estimated that because of several technological innovations, you region will
need 25 percent fewer employees in the coming three years. What actions
should you recommend to be taken today?
6. What are the purposes of inventory or employee information system?
7. What is the distinction between supply and demand forecast?
8. Identify and discuss the commonly used methods of forecasting future
employment requirements.
9. Describe the implementation phase of human resource planning.
10. Explain the main uses of performance appraisal, promotion, transfer, layoff,
and retirement in human resource planning.
 Chapter Four
Recruitment and Selection
4.1. Introduction
 Recruitment is one of the core activities underlying human
resource management: namely, the acquisition, development and
reward of workers.

 It frequently forms an important part of the work of human

resource managers – or designated specialists within work
organizations.
Cont’d
 It can play a pivotally important role in shaping an
organization's effectiveness and performance, if organizations
are able to acquire workers who already possess relevant
knowledge,
skills and
aptitudes and
are also able to make an accurate prediction
regarding their future abilities.
 Cont’d
 In seeking to get the most from organization‘s employees, a key
factor is to ensure that the organization are recruiting those who
have the potential to make the greatest contribution.

 This may sound like such as obvious requirement but, even today, so
many organizations continue to adopt unstructured approaches
to recruitment with the result that the challenge to get the most
from employees is immediately magnified.
Cont’d
 At the most basic level the focus is on people management
within the employment relationship.

 Those charged with recruiting people to posts in

organizations take a crucial „gatekeeper‟ role;

 Only those people selected for employment can be led,

managed and developed.
 So in the most fundamental sense the decision to employ (or
not) underpins the whole area of managing people.
4.2. Recruitment
4.2.1. Definition
 There are various definitions of the concept of recruitment. To
see some;

 The ordinary dictionary for instance, defines it as ―… the act or

process of selecting candidates for an organization or persuading
them to join.‖

 On the other hands, Gary and Ray define recruitment as a

process of generating a pool of capable people to apply for
employment to an organization.
Cont’d
 Similarly, Edward Freeman define the term as ―the
development of a pool of job candidates in accordance with a
human resource plan of the organization.‖

 It is also defined as those set of activities an organization uses

to attract job candidates possessing the appropriate
characteristics to help the organization reach its objectives
 Cont’d
 In aggregate, the purpose of recruitment is to provide a group of
candidates large enough for the organization to select the
qualified employees it need among them.

 The magnitude of an organization recruiting efforts and the

methods to be used in that recruiting effort are determined from
the human resource planning process and the recruitment
of specific jobs that are to be filled. This is illustrated as;
 Cont’d

 The recruitment process of an organization aims at

organizing recruitment activities in terms of
 who does the recruiting,
 how they do it, and
 where they seek recruits.
 Cont’d
 This is illustrated as;
Human
Resource Job Analysis
Planning

Number of Nature and

Specific Jobs to requirement of
be filed specific job
Recruitment specification

Pool of qualified
applicants
 Recruitment… Cont’d
4.2.2. Process of Recruitment
 Recruitment process passes through the following Five Stages:
1. Recruitment Planning
2. Strategy development
3. Searching
4. Screening
5. Evaluation Programs
 Cont’d
1. Recruitment Planning involves recruitment policy development:
 It specifies the objectives of recruitment and provides a
framework for the implementation of the recruitment
program.
 It also involves the employer‟s commitment to some
principles as to find and employ the best qualified persons
for each job, to retain the most promising of those hired, etc.
 It should be based on the goals, needs and environment of
the organization.
 Specifically, recruitment plan will cover:
i. the number and types of employees required to cater for expansion
or new developments and make up for any deficits;
ii. the likely sources of candidates;
iii. plans for tapping alternative sources;
iv. how the recruitment program will be conducted.
Cont’d
2. : Recruitment Strategy involves recruitment Organization:
 The recruitment may be centralized like public sector banks or
decentralized.
 Both practices have their own merits.
 The choice between the two will depend on the managerial
philosophy and the particular needs of the organization.

3. Searching involves determining the sources of

Recruitment:
 Various sources of recruitment may be classified as internal and
external.
 These have their own merits and demerits.
Cont’d
4. Screening: involves methods of Recruitment:
 Recruitment techniques are the means to make contact with potential
candidates, to provide them necessary information and to encourage
them to apply for jobs.
I. Direct Methods: These include sending recruiters to educational
and professional institutions, employees, contacts with public, and
manned exhibits.
II. Indirect Methods: The most frequently used indirect method of
recruitment is advertisement in newspapers, journals, and on the radio
and television.
III. Third-Party Methods: The most frequently used third-party
methods are public and private employment agencies. Public
employment exchanges have been largely concerned with factory
workers and clerical jobs. They also provide help in recruiting
professional employees. Private agencies provide consultancy services
and charge a fee.
Cont’d
5. Evaluation of Recruitment Program:
 The recruitment process must be evaluated periodically.
 The criteria for evaluation may consist of
 Cost per applicant,
 The hiring ratio,
 Performance appraisal,
 Tenure of stay, etc.
 After evaluation, necessary improvements should be made in the
recruitment program.
 Recruitment…. Cont’d
4.2.3. Importance of Recruitment
 The followings are the major importance of Recruitment
1. Provides organization with a pool of qualified candidates
2. The more qualified the pool the better the success rate in
selection
3. Can help the organization meet affirmative action goals
4. Can increase organizational effectiveness
 Recruitment … Cont’d
4.2.4. Recruitment Techniques

 Recruitment techniques are the means or media by which

management contacts prospective employees or provides necessary
information or exchanges ideas or stimulates them to apply for jobs.
 Human Resource Management uses different types of techniques to
stimulate internal and external candidates.
 Techniques useful to stimulate internal candidates are;
1. Promotions: Internal candidates express their willingness to be
engaged in the higher level job, if management gives them the
assurance that they will be promoted to the next higher level..
2. Transfer : Employees will be stimulated to work in the new
sections/ places, if management wishes to transfer them to the
places of their choice.
 Cont’d
 Techniques useful to stimulate external candidates
1. Recommendations of the present employees:
Management can contact, persuade the outsiders to apply for
jobs in the organization through the recommendations by the
present employees, trade union leaders.
2. Advertising –Widely accepted technique, one-way
communication. It includes advertising through different
media, like newspapers, magazines of all kinds, radio,
television, etc.
 Recruitment…. Cont’d
4.2.5. Sources of Recruitment
 After the finalization of recruitment plan indicating
 the number and
 type of prospective candidates,
 they must be attracted to offer themselves for consideration to
their employment.

 This necessitates the identification of sources from which

these candidates can be attracted.

 Some companies try to develop new sources, while most only try
to tackle the existing sources they have
Recruitment…. Cont’d
 The objective of recruitment is to provide a sufficient group of
qualified candidates for employment.
 In order to realize this recruitment objective, organizations make
use two sources of recruitment.
 These sources, accordingly, may be termed as internal and
external
Recruitment… Cont’d
1. Internal Sources
 It would be desirable to utilize the internal sources before going
outside to attract the candidates.
 Two categories of internal sources are suggested
1. A review of the present employees and
2. Nomination of candidates by employees.

 Effective utilization of internal sources necessitates an

understanding of their skills and information regarding
relationships of jobs.
 Recruitment… cont’d
 Utilization of internal Sources :
 Involve recruiting within the organization.

 Qualified candidates are found within the organization to

fill up job vacancies above the entry level

 Many organizations follow the deliberate practice of

recruiting from internal sources.
 Methods for Internal Recruitment
The most common methods used for internal recruiting are:
i. Job posting
ii. Employee referrals
iii. Human Resource Inventory (Skills inventory)
Recruitment…. Cont’d
 Occasionally, it may be necessary to bring in some ‗new blood‘ to
broaden the present ideas, knowledge, and enthusiasm.
 Thus, all organizations have to depend on external sources of
recruitment. Among these sources are included:
 Advertising
 Employment exchanges
 Educational institution placement
 Employee referrals
 Walk-ins/write-ins/electronic search
 The following circumstances require external recruitment:
 to fill entry- level jobs;
 to acquire skills not possessed by current employees,
and
 to obtain employees with different backgrounds to
provide new ideas
Recruitment…. Cont’d
4.2.6. Factor Affecting Recruitment
 The factors affecting recruitment can be classified as internal and
external factors.
1. The internal factors are:
 Wage and salary policies;
 The age composition of existing working force;
 Promotion and retirement policies;
 Turnover rates;
 The nature of operations involved the kind of personnel required;
 The level and seasonality of operations in question;
Recruitment… Cont’d
Internal factors …. Cont‟d
 Future expansion and reduction programs;
 Recruiting policy of the organization;
 Human resource planning strategy of the company;
 Size of the organization and the number of employees
employed;
 Cost involved in recruiting employees, and finally;
 Growth and expansion plans of the organization.
Factors…Cont’d
2. The external factors are:
 Supply and demand of specific skills in the labor market;
 Company‟s image perception of the job seekers about the
company.
 External cultural factors: Obviously, the culture may exert
considerable check on recruitment. For example, women may not
be recruited in certain jobs in industry.
Recruitment… Cont’d
External Factors
 Economic factors: such as a tight or loose labor market, the
reputation of the enterprise in the community as a good pay
master or otherwise and such allied issues which determine the
quality and quantity of manpower submitting itself for
recruitment.
 Political and legal factors also exert restraints in respect of
nature and hours of work for women and children, and
allied employment practices in the enterprise, reservation of Job
for SC, ST and so on
4.3. What is Selection?
 Selection is the process by which an organization chooses the
person(s) who best meets the selection criteria for the position
available
 Decisions must be made efficiently and within the boundaries of
government laws
 Selection programs try to identify applicants with the best chance of
meeting or exceeding the organization‟s standards of
performance
 Performance refers to more than quantity of output
 It can also mean quality of output, good attendance, and honesty
 Definition…. Cont’d
 In this definition, selection requires
 Understanding of the characteristics essential for high
performance
 The characteristics are identified during job analysis
 They must be reflected in the job specification

 It is also defined as the process of choosing from a group of

applicants the individual best suited for a particular position.
Definition…. Cont’d
Selection is the process of choosing from a group of
applicants the individual best suited for a particular
position.
 Selection is the process of choosing from a group of applicants the
individual best suited for a particular position.
 The purpose of selection is to identify the recruits that most likely help
the organization in achieving its objectives.

It identifies and hires that most likely help the

organization in achieving its objectives.
 Definition…. Cont’d
 Successful selection doesn‟t always mean finding someone
with the most of a given quality
 The goal is an optimal match between the job and the
characteristics an applicant possesses
 Identify which characteristics are the most important for the circumstances

 The goal of any selection system is to:

 Determine which applicants possess the Knowledge Skills, Attitudes,
experiences dictated by the job

 The selection system must distinguish between characteristics that are:

 Needed at the time of hiring, acquired during training, and
developed on the job
Definition…. Cont’d
 In Ethiopia, according to the Federal Civil Servants Proclamation
of Ethiopia No. 1064/2017 and Ethiopian labor Proclamation No.
1156/2019 declares the importance of merit based recruitment
and selection process. For instance, the civil Service Proclamation
Article 13, sub article 2 states
 ― A vacant position shall be filled only by a person who meets the
qualification required for the position and scores higher than
other candidates.‖
Definition…. Cont’d
 In addition, Article 13 sub article 3 pronounced that, in
recruitment, promotion and deployment, preference shall be
given to:
a. Female candidates;
b. Candidates with disabilities; and
c. Members of nationalities comparatively less represented in
the government office
 Cont’d
 4.3.2. Relation with other HRM functions
 Selection is affected by, and also affects other human resource
management activities. For instance:
1. Job analysis identifies the personal attributes to seek out among job
candidates.
2. Human resource planning can play a role in employee selection by
providing a forecast of position openings.
3. Recruiting is related to selection in that a high selective selection
procedure requires the recruitment program to generate a larger or
more qualified candidate pool.
4. Training is, in one sense, a substitute for selection: if selection
neither does nor results in hiring employees with the necessary skills,
training might be used to impart those skills.
 Relation… Cont’d
5. Career management focuses on internal selection.
 If a career management system is in operation, the selection
system should identify employees with the aptitude to benefit
from the career sequence that is planned.

 If there is no formal career planning system, then the selection

system should focus more on identifying candidates who already
have the skills that would be developed through a well-planned
career in the organization.
Relation… Cont’d
6. Compensation is critical aid in selection because if pay is not high
enough, the organization will not attract enough candidates who can
pass the selection requirements.

7. Labor relations are important in selection because an effective

selection process can contribute of a positive union-management
relationship.
 Although union contracts often specify promotion based on
seniority, if the organization does a better job of selection in its
initial hiring, it is less likely to have to promote less-qualified people
later on.
3.4. Selection Process
The selection process is a series of specific
steps through which job candidates pass.

Although the sequence of steps may differ

from one organization to another, the
process ends in acquiring the right person
for the right job.
 Process….. Cont’d
1 • Preliminary Reception of Applications

2 • Selection Tests

3 • Selection Interview

4 • References and Background Checks

5 • Hiring Decision

6 • Medical Examination
 Selection… Cont’d
4.3.3. Factors Affecting the Selection Process
• Various factors affect the selection process.
• The following some of the environmental factors
(Mondy & Noe, 1990) can affect the selection
process.
1. Legal Considerations
2. Speed of Decision Making
3. Organizational Hierarchy
4. Application Pool
5. Type of Organization
Points for Discussion
Review and Discussion Questions
1. What background information should an organization have before starting to recruit job seekers?
2. Describe the basic components of: ** recruitment process ** selection process
3. What is internal recruitment? Describe its advantages and disadvantages.
4. Describe the various methods used in: **Internal recruitment **External recruitment
5. Identify the major sources for external recruitment's and discuss the reasons for external
recruitment.
6. In small administrative zones, administrators usually handle their own recruiting. What techniques
would you as an administrator use for the following conditions? Why? The regular secretary is going
on annual leave for twenty-six days. The head of finance is steering and must be replaced with
qualified individual. The cashier has the flu. Two more tax collectors are required: one to help the tax
collector in the zone and one to open a tax office in another district within the zone.
7. List and discuss the various human resource management activities that may affect recruitment and
selection.
8. What is selection test? Identify and discuses the major types of tests. Identify the characteristics of
selection tests. Briefly explain each.
9. What is a selection interview? What are the major things an interviewer needs to identify during the
interview? Describe the types of interview commonly used in the selection.
10.What is main purpose of references and background checks?
 Chapter Five
Training and Development
5.1. Introduction
 Orientation ,Training and Development are processes
that provide employees with:
 Information
 Skills
 An understanding of the organization and its goals
 The ability to make positive contributions in the form of good
performance
5.2. Orientation
 Orientation is designed to start the employee in a
direction that is compatible with the firm‟s:
 Mission
 Goals
 Culture

 Orientation is also used to:

 Explain what the organization stands for
 Explain the type of work that will be performed
 Introduce employees to managers and work groups
Orientation ... Cont’d
 Any orientation is designed to make the person:
 More comfortable
 More knowledgeable
 Ready to work within the firm‟s culture, structures, and
employee mix
Orientation ... Cont’d
Goals of Orientation
 Clear messages that are understood and accepted can
achieve a number of orientation goals, including:
 Reducing anxiety
 Reducing turnover
 Saving time
 Developing realistic expectations
Orientation ... Cont’d
Who Orients New Employees?
 In smaller organizations, operating managers usually do
the orienting
 In unionized organizations, union officials are involved
 HRM helps train the operating manager for more effective
orientation
 5.3. Training
 Training is the systematic process of altering employee
behaviour in a way that will achieve organizational goals
 It should be related to present job skills and abilities
 It has a current orientation
 It helps employees master the specific skills and abilities needed to be
successful
Training.... Cont’d
 A training program is an opportunity for employees to
acquire skills, attitudes, and knowledge
 Learning is the act by which an individual acquires skills, knowledge,
and abilities that result in a relatively permanent change in behaviour
 Any behaviour that has been learned is a skill
 Motor, cognitive, and interpersonal skills are training targets
Training …. Cont’d
Reasons for Employee Training
Organizations pursue strategic planning on training and development of
their employees.
Among these reasons the followings are core;
1. When performance appraisal indicates performance improvement is
needed;
2. As part of an overall professional development program of the
organization;
3. As part of succession planning to help an employee be eligible for a
planned change in role in the organization
4. To have pilot test the operation of a new performance management
system; and
5. To train about a specific topic including communications, computer skills,
customer service, diversity, ethics, human relations, quality initiatives, safety,
sexual harassment
Training …. Cont’d
Importance of Employees Training
 Major importance: Assists employees and their organization in
becoming more effective and efficient.
 Additional benefits:
1. Increase self confidence of employees;
2. Enables to provide qualified higher standards of services;
3. Improve individual performance;
4. Enables work to be programmed better;
5. Improve moral and job satisfaction;
6. Allow organization to grow;
7. Increases productivity and minimizes operational errors;
8. It develops healthy and constructive attitudes;
9. It upgrades skills and prevent obsolescence and many others
Training …. Cont’d

 The process of training and development involves the

following five logically inter-related steps;
Identify training and development needs ( Need Assessment”) )

. Establishing training and development objectives

Selecting training and development methods

Implementing training and development program

Conducting Evaluation and follow – up

Training….. Cont’d
1. Determine training and development needs
Needs assessment diagnoses current problems and future
challenges of employees and the organization depends on the
following methods;
 Identification of Plan and Organizational priorities;
 Discussion and observation;
 Auditing procedures;
 Performance appraisal;
 Supervisory recommendations;
 Self-nomination and others.
 Training….. Cont’d

 When organizations conduct need assessment, they should conduct

it at three level.
i. Need assessment at the organizational level
ii. Need assessment at occupational level and
iii. Need assessment at individual level
Training….. Cont’d
2. Establish Specific Objectives
 Once training and development needs are clearly identified, the
next process is to establish objectives. An objective is a specific
outcome that the training and development program is intended
to achieve.
Training….. Cont’d
 Objectives should answer the following questions
i. What should the trainees be able to do after training?
ii. Under what conditions should the trainee be able to
perform the trained behavior?
iii. How well should the trainee perform the trained behavior?
iv. Training and development objectives must be SMART
Training….. Cont’d
3. Selecting Training Methods
 After establishing the objectives, next step is to identify
the methods relevant for the provision of training and
development which helps to achieve the objectives.
 However, in selecting method/s there is no best technique
exist. The best method/s depends;
 on cost effectiveness,
 desired program content,
 learning principles,
 appropriateness of facilities, and
 trainees and trainers preferences and capabilities.
Training….. Cont’d
 The methods includes; on the job training methods and off-
the job training methods;
A. On the job-training methods: this type of training is
also known as job instruction training. Under this method;
the individual is placed on a regular job and thought the
skills necessary to perform that job. The trainee learns
under the supervision and guidance of a qualified worker or
instructor.
 It includes;
Job rotation
Coaching and apprenticeships
Job instruction/Training through step by step
Group assignment/works
Training….. Cont’d
B. Off- The- Job Training Methods: this method of
training involves the separation of trainee from the job
situation and his/her attention is focused up on learning the
material related to his/her future job performance.
 Off the job training methods includes:
Lecture and Video Presentation
Vestibule Training/training on separate areas
Role Playing and behavioral modeling
Case study
Simulation
Laboratory trainings/demonstrations
Conference or group discussion
Training….. Cont’d
4. Implementing Training and Development Programs
 Involves bringing the programs of training and development
designed into action through defined methods of training.
In the implementation phase there are common problems
encountered and any program must consider and try to solve
them before the implementation starts.
Training….. Cont’d
These common problems are,
 Lack of awareness: Lack of awareness on the side of senior officers
about the needs and requirements for training.
 Shortage of raining facilities: When the number of training
institutions and their capacities are limited or inadequate.
 Shortage of trainers: Trainers who are expert in their required area
and of requisite caliber may not be available.
 Shortage of training materials: training consists of several
materials as input like audio-visual equipment's and other items for
case studies. Non availability of these tools and items can cripple even
the best institutions and trainers.
 Training….. Cont’d
5. Evaluating Training and Development Programs
 The evaluation program begins by establishing evaluation criteria
before training begins and the success of implementation of
programs should be tested against the evaluation criteria.
 The implementation of programs is often evaluated through;
 Participants‘ observation
 Extent of learning
 Behavioral changes
 Accomplishments of objectives and others
Training….. Cont’d
Criteria for Evaluation
 Three types of criteria for evaluating training:
 Internal
 External
 Participants‘ reaction
 Internal criteria are directly associated with the content of the
program, such as whether the employee learned the facts covered
 External criteria are related to the ultimate purpose of the
program, such as improving the effectiveness of the employee
Training….. Cont’d
 A proponent of a multiple-criterion evaluation system, Kirkpatrick
suggests measuring:
 Participants‘ reaction (like and dislike of the program)
 Learning(assimilation of knowledge and skills offered
during training)
 Behavior ( comparison of before and after training)
 Results(employee turn over, productivity, volume of sales
,error free letter typed)
 Many firms currently assess reactions, but few measure
behavioral results
 5.4. Management Development
 Management development is designed to improve the overall
effectiveness of managers in their present positions and to prepare
them for greater responsibility when they are promoted
 Management development is the process by which managers gain
the experience, skills, and attitudes to become or remain
successful leader in their enterprises.
 Making the organization a better environment to work is the
responsibility of a manager.
 To effectively discharge this and other managerial responsibilities
organizations must provide an opportunity for managers to improve
their knowledge and skills through management development
program.
 Management…. Cont’d

 Effective management development program helps managers at all

levels to learn to perform their jobs better.
 Major Reasons for management development
 To stimulate a more creative and innovative approach to problem
solving and decision making
 To provide the manager with the latest information on theory and
practice of management.
 To broaden the manager's vision and understanding in
preparation for additional responsibility.
Management…Cont’d
 To give the managers the opportunity to discuss ideas and problems
with other people.
 To teach managers how to determine the consequences of various
specific managerial actions and behaviors (leadership, planning,
controlling…..
 To reduce or prevent managerial obsolescence. Obsolescence can occur
unless managers are kept up with the changing methods of doing their
managerial jobs.
 Comparing Training and Development
BASIS TRAINING DEVELOPMENT
Meaning is a learning process in is an educational process
which employees get an which is concerned with the
opportunity to develop skill, overall growth of the
competency and knowledge employees.
as per the job requirement.
Term Short Term Long Term
Focus on Present Future
Orientation Job oriented Career oriented
Motivation Trainer Self
Objective To improve the work To prepare employees for
performances of the future challenges.
employees.
Number of Individuals Many Only one
5.5. Conditions for Effective Training and Development

 The effectiveness of training depends up on the following points:

1) Training Programs Relevance: Training should be relevant to
the need of the organization and also conducive to the realization of
personal goals and aspiration of the employees.
2) Training Capacity Fitness: Training has to suit the capacity of
the organization and trainee.
3) Need Based Training: The process or content of training has to
be according to the needs to be serviced by the training program.
4) Environmental conduciveness: The training environment must
be supportive the training and development programs
5.6. Mistakes in Employees Training
i. Over-training
ii. Use of poor instructors/trainers
iii. Too much training on skills not needed on the job/
mismatch of training programs and needs
iv. Imitation of other company training programs
v. Misuse of testing techniques e.g. in simulation process
vi. Inadequate tools and equipment for required training
and development
vii. Over reliance on theories and not enough on practice
 Points for Reflection
1. Identify and describe the three ways of conducting human resource
development need analysis.
2. Discuss the importance of human resource training and development
both from organizational and employees perspective.
3. Describe the major conditions that management needs to consider in
the implementation of human resource development programs.
4. What methods are used in management development?
5. Discuss the measurement criteria used in evaluating training and
development programs effectiveness.
6. Distinguish between on-the-job training and off-the-job training.
7. Briefly discuss the various types management development program.
8. What are the general purposes of job rotation, job enrichment and,
job enlargement?
 Chapter 6
Performance Management
6.1. Performance Management
 Performance management is:
 The process by which executives, managers, and supervisors
work to align employee performance with the firm‟s goals

 An effective performance management process:

Has a precise definition of excellent performance
Uses measurements of performance
Provides feedback to employees
 Performance…Cont’d
 For improving a performance management program:
 Eliminate unwanted intervention by HR
 Set appropriate goals
 Make the difficult decisions
 Develop a performance culture
 Not all measures are easy to develop
 Measurement of tangible outcomes (television sets) can be done with
precision
 Intangible outcomes (teaching and learning) are difficult to measure

 Performance evaluation determines the extent to which an

employee performs work efficiently
 Performance…Cont’d
 Other terms for performance evaluation:
Performance review
Personnel rating
Merit rating
Performance appraisal
Employee appraisal
Employee evaluation
Performance... Cont’d
 Many organizations have two evaluation systems: formal
and informal
 Thinking about how well employees are doing is an informal system
 A formal system is set up by the organization to regularly and
systematically evaluate employee performance

 Political and interpersonal processes influence the

informal system
 Employees who are liked better have an advantage
6.2. Formal Performance Evaluation

 Purposes of a well-designed formal evaluation system:

 Development
 Motivation
 Human resource and employment planning
 Communication
 Legal compliance
 HRM research
Formal Cont’d
 Employees should consider an evaluation meaningful, helpful,
fair, and honest
 This is difficult to attain because of a number of factors, including:
 Unfairness
 Negative practices
 A short-term focus
6.3. Standard Performance Evaluation

 Most performance evaluation procedures rely on

supervisors‟ judgments
 Once work-related behaviour has been judged, the supervisors‘ ratings
are used as input for human resource decisions
 These decisions affect promotions, pay, transfers,
and so on
 These subjective judgments can introduce bias into the system
Standard.... Cont’d
 Example:
 In Brito v. Zia Company, the company‘s performance evaluation
instrument was invalid because it did not relate to important elements
in the jobs for which employees were being evaluated
 Other performance evaluation lawsuits have dealt with sex, race, and
age discrimination in terminations, promotions, and layoffs

 It is thus, the Management‟s responsibility to develop

and use a performance evaluation system in a legally
defensible way
Standard.... Cont’d
 Recommendations for a legally defensible appraisal
system:
1. Procedures must not differ because of race, sex, national origin,
religion, or age
2. Use objective, non-rated, uncontaminated data
3. A formal system of review or appeal should be available for
disagreement over appraisals
4. Use more than one independent evaluator
5. Use a formal, standardized system for evaluation
6. Avoid ratings on traits, such as dependability, drive, aptitude, and
attitude
Standard.... Cont’d
7. Performance data should be empirically validated
8. Communicate specific performance standards
9. Provide raters with written instructions
10. Evaluate employees on specific work dimensions rather than an
overall or global measure
11. Require behavioural documentation for extreme ratings
12. Allow employees to review their appraisals
6.4. Format of Evaluation
 The ability to provide accurate, reliable performance
data is enhanced if a systematic process is followed:
1. Step 1: Establish performance standards for each position and
the criteria for evaluation (job analysis)
2. Step 2: Establish performance evaluation policies on when to
rate, how often to rate, and who should rate
3. Step 3: Have raters gather data on employees‘ performance
4. Step 4: Have raters (and employees in some systems) evaluate
employees’ performance
5. Step 5: Discuss the evaluation with the employee
6. Step 6: Make decisions and file the evaluation
6.5. Establish Criteria
 The dimensions of performance upon which an
employee is evaluated are called the criteria of evaluation
 Examples: quality, quantity, and cost of work

 A major problem with many evaluation systems:

 They require supervisors to make person evaluations rather than
performance evaluations
Establish Criteria
 An effective criterion should possess the following
characteristics:
 Reliability
 Relevance
 Sensitivity
 Practicality

 Multiple criteria are necessary to measure performance

completely
 One must evaluate both activities and results
 Management must weigh these criteria
6.6. Who Evaluates, When, and How Often
 In the U.S., most organizations evaluate on an annual
basis
 Performance evaluations are often scheduled for arbitrary dates, such
as the date of hire
 Alternatively, all employees may be evaluated on or near a single
calendar date

 It makes more sense to schedule the evaluation after a

task cycle
 For those without a task cycle based on dates, goals should be
established that allow a beginning and end
 The evaluation can be at the end of the task cycle
Who... Cont’d
 The immediate supervisor conducts most appraisals
 Other options:
 Rating by a committee of several supervisors
 Rating by the employee‘s peers (co-workers)
 Rating by the employee‘s subordinates
 Rating by someone outside the immediate work situation
 Self-evaluation
 Rating by a combination of approaches
6.7. 360-degree Feedback
 Many organizations now use some form of
360-degree feedback program
 Upward and peer feedback can have positive effects on behavior
 These effects are sustainable over time
 Almost 90 percent of companies using 360-degree programs use the
information for such decisions as pay increases and promotions
 Introducing a 360-degree system into a culture not prepared for it can
have disastrous effects
360....Cont’d
 Positive features of a 360-degree system:
 Multiple perspectives of a person‘s performance
 Raters base evaluations on contact and observation
 Feedback is provided from multiple directions… above, below, peer
 Anonymous upward feedback, which results in full participation
 Learning about weaknesses and strengths is motivational
360....Cont’d
 Negative features of a 360-degree system:
 Feedback from all sources can be overwhelming
 Rater can hide in a group of raters and provide harsh evaluations
 Conflicting ratings can be confusing and frustrating
 Providing feedback that is constructive requires a plan and well-
trained raters
6.7. Selected Evaluation Techniques

 Ways of evaluating employees can generally be divided

into two categories:
1. Traditional performance appraisal methods and
2. Modern appraisal methods
 In other way, performance measurement techniques can measure
performance of employees either individually or through multiple
comparison.
 While individual measurement techniques measure each employee
against set standards,
 In a multiple-person evaluation, the supervisor directly and
intentionally compares the performance of one employee to that of
others
Cont’d
Cont’d
Cont’d
Cont’d
Traditional Performance Appraisal Techniques
Graphic rating  The rater is presented with a set of traits
scale  The employee is rated on the traits
 Ratings are assigned points, which are then computed
 Raters are often asked to explain each rating with a sentence or two
Forced choice:  The rater must choose from a set of descriptive statements about employee
 Supervisors check the statements that describe the employee, or they rank the
statements from most to least descriptive
 Forced choice can be used by superiors, peers, subordinates, or a combination of these
Essay Evaluation  The rater is asked to describe the strong and weak aspects of the employee’s behaviour
 It can be used by superiors, peers, or subordinates
 Essay evaluations are flexible; an evaluator can specifically address the ratee’s skill in
any area
Critical Incident  Raters maintain a log of behavioural incidents that represent effective and ineffective
Technique performance for each employee
 Two factors determine the success of this technique:
 The supervisor must have enough time to observe subordinates during the
evaluation period
 The supervisor must record incidents as they are seen
Checklists  In its simplest form, the checklist is a set of objectives or descriptive statements
 If the rater believes that the employee possesses a listed trait, the item is checked
 A rating score equals the number of checks
Which Technique to Use
 The most commonly used evaluation techniques:
 The graphic rating scale
 The essay method
 Checklists

 Used by about 5 percent of firms:

 Forced choice, critical incident, BARS, BOS, field review, MBO

 Used by 10 to 13 percent of firms:

 Ranking, paired comparison
Which Technique to Use
 MBO is most likely to be used for:
 Managerial, professional, and technical employees

 Each technique is sometimes good and sometimes poor

 The problem lies with how the techniques are used, and by whom
 The rater is more critical than the technique
Performance Evaluation Problems

No technique is perfect;
they all have limitations
Rater Problems
 Even if a system is well designed, problems can arise if
raters are not cooperative and well trained
 Supervisors may not be comfortable ―playing God‖

 Inadequate training can lead to:

 Problems with standards of evaluation
 Halo effect
 Leniency or harshness
 Central tendency error
 ―Recency of events‖ error
 Contracts effects
 Personal bias (stereotyping, similar to me)
Eliminating Rater Errors
 Behavior-based rating scales were created to help
eliminate the kinds of ratings errors just described
 Such scales didn‘t demonstrate consistent superiority over other rating
formats
 Researchers now concentrated on the rating process
 More effort is now placed on
helping raters accurately observe,
recall, and report behavior
Avoiding Problems with Employees
 For an evaluation system to work well, employees must:
 Understand it
 Feel that it is fair
 Believe it is used correctly

 The system should be:

 As simple as possible
 Implemented in a way that fully informs employees about how it will
be used
The Feedback Interview
 An effective performance interview involves two-way
communication
 Evaluation should be a continuing process

 Supervisors should hold evaluation interviews in order

to:
 Discuss the appraisal
 Set objectives for the upcoming appraisal period

 The employee‟s development or salary should not

be discussed during this interview
The Feedback Interview
 Suggestions for effective interviews:
 Prepare for the meeting
 Put the employee at ease
 Split the budgeted time with the employee
 Present facts, not opinions
 Be specific
 Discuss performance, not personal criticisms
 Include positive comments
 Don‘t overwhelm the ratee with information
 Encourage the ratee‘s involvement
 Focus on the future
The Feedback Interview
 With good interviewing skills, many problems related to
discussing performance can be overcome
 Speak clearly
 Listen carefully
 Gather and analyze information thoroughly
 Negotiate the amount and use of resources

 A poor feedback interview is due to:

 Poor preparation
 Miscalculation about the purpose of the session
 Failure of the rater and ratee to understand each other
The Feedback Interview
 Sometimes there is no choice but to give negative
feedback
 It is easier to accept criticism if the discussion is part of the larger
topic: ways to improve future performance

 The goal of the feedback interview is to:

 Recognize and encourage superior performance
 Sustain acceptable behaviors
 Change the behavior of ratees whose performance is not meeting
organizational standards
Points for Discussion
Review and Discursion
1. Briefly describe the purposes of performance appraisal.
2. What are the importance of performance appraisal programs to
the organization and employees?
3. Discuss the steps in the performance appraisal process.
4. Identify the major methods of performance appraisal.
5. Briefly describe who should conduct performance appraisal.
Chapter 7 Compensation and Benefit Management

7.1 Concept of Compensation

Employees are the backbone of the organization.
The attainment of organizational objectives largely depends
when employees are motivated to work.
Among other things, employees are motivated to work when
they are provided
a fair financial and
non-financial compensation for work rendered to the
organization
CONT’D

 Compensation is reward employees receive in exchange for their

performance.
 It is concerned with wages and salaries, pay raises, and similar
monetary exchange for employees‘ performance (Holt, 1993).
 Well-designed pay or compensation system enables the organization:
To attract qualified employees required
To retain and motivate the existing workforce toward its goal achievement.
 On the contrary, if compensation is not tied to work, employees are
likely to look for a better paying job.
Cont’d
 In organization where employees are dissatisfied with the types of
compensations,
 their contribution toward goal achievement tend to be lower.
 In severe cases, pay dissatisfaction may
 lower performance,
 cause strikes increase grievances, and
 lead to forms of physical or psychological withdrawal ranging
from absenteeism and turnover to increased visits to the
dispensary and poor mental health
 7.2 Objectives of Compensation
 The objective of a compensation administration is to establish fair and equitable rewards to the
employees, so that they are motivated to do the job in a better way for the organization. Moreover,
the following objectives, which are sought through effective compensation management.
1. Acquire qualified personnel
2. Retain current employees
3. Ensure equity: Compensation management strives for internal and external equity.
Internal equity requires that pay be related to the relative worth of a job so those similar jobs get
similar pay. External equity means paying employees what comparable employees are paid by
other organizations in the labor market.
4. Reward desired behavior: Effective compensation plans reward performance,
loyalty, experience, responsibility, and other related behaviors.
5. Control costs: A rational compensation system helps the organization obtain and retain
employees at a reasonable cost. Without effective compensation management, employees could be
overpaid or underpaid.
6. Comply with legal regulations
7. Facilitate understanding: employees should easily understand the compensation
management system.
8. Further administrative efficiency: making optimal use of the organization‘s human
resource.
 7.3 Types of Compensation
Types of Compensation
In general, there are two types of compensation. These are:
1. Financial
2. Non financial
1. Financial Compensation: includes
A. Direct financial compensation: wage, salary, commission,
bonus etc
B. Indirect financial compensation: insurance plans, life
health, social assistance, retirement, educational assistant,
employee services, paid absences for vacations, holidays and sick
leaves
 Cont’d
2. Non-Financial Compensation: includes
A. Job satisfaction: Interesting duties, challenging
responsibilities, opportunity for recognition, feeling of
achievement, advancement opportunities
B. Environment: Sound policies, competent supervision,
congenial co-workers, appropriate status, comfortable working
condition, job sharing
 7.4 Determinants of Financial Compensation

PARTIES MAIN ISSUES OF CONCERN

Government Ensure that financial compensation
supports the social and economic interests
of the broader society.
Occupational groups Protect members‟ human capital
investment
Unions Protect, maintain, and increase the
welfare of the worker.
Individual Ensure that a balance is maintained
between contributions to work and the
outcomes received from work.
Organization Within budget constraints, attract
individuals into the organization, retain
employees, and motivate behavior toward
achievement of organizational goals.
 Cont’d
 Organizations has compensation policies. There are three
alternative strategies, this might be chosen by organizations.
1. The high-pay-level strategy: the organization chooses to pay higher
than the average pay levels.The assumption is that paying a higher salary
or wage will enable organizations attract and retain competent employees
and this, in turn enhance employees' productivity.
2. The low-pay-level strategy: the organizations pay a minimum
salary or wage to employees.This may be because of poor financial
condition or the work does not require highly qualified personnel.The low
compensation policy is quite expensive, leads to high turn over, low
morale, and unproductive
3. The comparable-pay-level strategy: organizations follow “equal
pay for equal work”. Here employees are paid based on comparable value
of jobs they are performing.
 7.5 Benefits (Indirect Compensation)
 In addition to financial compensation, employees aspire various
benefits because of their membership in the organization.
 What then are benefits? Employee benefits are the indirect form
of the total compensation; they include paid time away from
work, insurance and health protection, employee services, and
retirement income.
 Recall that direct compensation such as salaries, wages or bonuses
are based on the nature of the jobs and employees
performance.
 Benefits, however, are indirect compensation that
organizations provide to their employees and are not
directly related to performance.
 Cont’d
Objectives of Benefits
 What do organizations gain from benefits? Benefits enable
organizations to retain and attract qualified personnel. Moreover,
employee benefits policies of an organization are to:
1. Reduce fatigue
2. Discourage labor unrest
3. Satisfy employee objectives
4. Aid recruitment
5. Reduce turnover
6. Minimize overtime costs (Werther & Davis, 1996).
Cont’d
 Major Categories of Benefits
1. Insurance Benefits: The financial risks encountered by employees
and their families can be spread by insurance.
2. Security Benefits: These are non-insurance benefits that provide
income protection to employees before and after retirement.
3. Time-off Benefits: In this type of benefit employees are paid for
time not involved in performance.
4. Employee Services: These services include educational assistance,
subsidized food services, financial and social services and the like.
 Points for Discussion
Review and Discussion Questions:
1. Define *Compensation *Direct financial compensation * Indirect
financial compensation *Non-financial compensation
2. How does effective compensation administration helps an
organization accomplish its objectives?
3. How does Pay dissatisfaction affect work performance in an
organization?
4. Distinguish between internal equity and external equity.
5. Identify and briefly describe the major determinants of financial
compensation.
6. What are the major purposes of benefits?
7. Distinguish between security and time-off benefits.
8. What are the major categories of non-financial compensation? Give
examples.
9. Why does employee has time-off benefits?
 Chapter 8
Employee Management Relations
8.1 Employee Relations and Collective Bargaining
What is Employee Relations?
 Management of all organizations is mainly concerned with what should
be done to enhance the contributions of its employees to achieve
objectives.
 This means maintaining good employee relations through
creating good working atmosphere,
providing attractive rewards,
having good leadership, and
assigning employees to interesting and challenging jobs.
 Cont’d
 Employee relations is the interactions between the employer
(represented by management) and the work-force
(represented by trade unions).
 Here, interactions imply that management must support and
address issues of employee job satisfaction and employees must
show commitment towards the success of the organization.
 Moreover, according to Armstrong (1996) employee relations is
concerned with:
 Managing and maintaining formal and informal relationships with
trade unions and their members.
 Sharing information with employees and involving them in decision
making on matters of mutual interest
 Creating and transmitting information of interest to employees.
 Cont’d
Employee Relations Objectives
 Employee relations activities are those, whose objective is to
create an atmosphere of trust, respect, and Cooperation.
 Further more, employee relations:
Provide a conducive work environment in which employees
can do their jobs better
Help management to mutually solve employees problems
which otherwise might affect performance
Helps employee to control over important aspects of work
life.
 Cont’d
Labor Unions and Collective Bargaining
 Labor union is an organization of workers whose purpose is to
protect and maintain the interests of union members.
 As workers representative, trade unions "provide workers with a
'collective voice' to make their wishes known to management and thus
bring actual and desired conditions closer together.
 This worker organization is established to bargain with management
about
pay,
working hours,
conditions of employment and
to make joint decisions with management on matters affecting
their members' well being.
 Cont’d
 Furthermore, the following broad objectives characterize the
trade unions as a whole.
1. To secure and, if possible, improve the living standards and economic
status of its members.
2. To enhance and, if possible, guarantee individual security against
threats and contingencies that might result from market fluctuations,
technological change, or management decisions.
3. To create mechanisms to guard against the use of arbitrary and
capricious policies and practices in the workplace
Cont’d
Collective bargaining is basic to labor- management relations.
 It is a joint process of job regulation undertaken by management and
trade unions that negotiate to establish pay and conditions of
employment.
 This contractual agreement is hoped to give workers and management
an identity of purpose and provide an atmosphere in which both focus
their attentions towards the achievement of organizational objectives.
 For the bargaining to take place, the following conditions must exist:
1. Employees are prepared to act collectively and recognize their common
interests.
2. Management must recognize trade unions and their representatives as
legitimate bargaining agents for labor,
3. Trade unions must be free to organize employee without pressure from state or
employer control.
 Cont’d
Employee Relations Practices
 In many organizations, the immediate bosses are responsible for
assigning tasks, counseling and providing information to
employees.
 This being the case, concerning issues related to the entire
organization managers and human resources departments directly
affect employee relations through
 communication,
 counseling and
 discipline practice.
 In-addition, employee participation can also affect employee
relations
8.2. Employee Safety and Health

Safety involves protecting employees from injuries caused by

work-related accidents.
Health refers to the employee‘s freedom from physical or
emotional illness.
Safety, in simple terms, means freedom from the occurrence
or risk of injury or loss.
Industrial safety or employee safety refers to the protection of
workers from the danger of industrial accidents.
 Cont’d
An accident, then, is an unplanned and uncontrolled even in
which an action or reaction of an object, a substance, a
person, or a radiation results in personal injury. It includes
1. Temporary disablement
2. Permanent disablement: permanent partial disablement
and permanent total disablement
3. Death
Cont’d
 To protect employees and organizations against the hazards that
raise‘s from their employment and their links with the company.
 The Protective program for employment accident is safety
program whereas the protective program for occupational disease
is occupational health.
1. Safety program deals with prevention of accidents or minimizing
loss and damage to persons and properties.
2. Occupational health deals with reaction of workers to their
working environment and prevention of ill health arising from
working conditions and circumstances.
 Cont’d
One approach to safety programs is to create a psychology of
promoting safety.
Another approach is to develop and maintain a safe working
environment.
Evaluation of safety programs involves measuring both the
frequency and severity of accidents.
 8.3 Grievance Handling
 Grievance – occurs where employees complain or appeal when they
believe that they are disciplined or treated unlawfully.
 A compliant , is merely an employee dissatisfaction which has not taken
formal grievance settlement route
 Management should be concerned with both grievance and complaints
because many complaints can become grievances and are good indicators
of potential problems with the workforce
 Cont’d
Grievance handling Under a Collective bargaining Agreement
 If employees in an organization are represented by a union, workers
who believe they have been disciplined or dealt with unjustly can
appeal through the grievance and arbitration procedures of the
collective bargaining agreement.
 The grievance system encourages and facilitates the settlement of
disputes between labor and management.
 A grievance procedure permits employee to express complaints
without jeopardizing their jobs.
 It also assists management in seeking out the underlying causes and
solutions to grievances.
 Cont’d
Causes of Grievance
 It is usually restricted to violations of the terms and conditions of
the agreement.
 There are, however, other conditions that may give rise to
grievance:
1. A violation of law
2. A violation of the intent of the parties as stipulated during
contract negotiations
3. A violation of company rules
4. A change in working conditions or past company practices
5. A violation of heath and/or safety stands
 Cont’d
Grievance Procedures
 Grievance procedures have many common features.
 However, variations may reflect differences in organizational or
decision making structures or the size of a plant or company.
 Some general principles based on widespread practice can serve as
useful guidelines for effective grievance administration:
1. Grievances should be adjusted promptly.
2. Procedures and forms used for airing grievances must be easy to
utilize and well understood by employees and their supervisors.
3. Direct and timely avenues of appeal from rulings of line
supervision must exist
8.4 Disciplinary Action
What is discipline?

 The organizational rules and regulations are intended to direct

and control the effective functions of employees.
 Discipline indicates: the state of employee self-control and orderly
conduct and indicates the extent of genuine teamwork within an
organization.
Cont’d
 Handling Disciplinary Cases
1. Preventive discipline is an action taken to encourage employees to
follow standards and rules so that infractions (when someone breaks a
rule or law) prevented. Its basic objective is to encourage self-discipline.
2. Corrective discipline is an action that follows a rule
infraction/violation. It seeks discourage further infractions and ensure
future compliance with standards and rules.
Cont’d
Approaches to Disciplinary Action
 Several concepts regarding the administration of disciplinary
action have been developed. Three of the most important
concepts are the
1. hot stove rule,
2. progressive disciplinary action, and
3. disciplinary action without punishment.
 Cont’d
Reasons for Avoiding Disciplinary Actions
 The reasons for managers wanting to avoid taking disciplinary action include the
following:
1. Lack of training. The supervisor may not have the knowledge and skill necessary
to handle disciplinary problems.
2. Fear. The supervisor may be concerned that top management will not support a
disciplinary action.
3. The only one. The supervisor may think, no one else is disciplining employees, so
why should I?
4. Guilt. The supervisor may think how can I discipline someone if I‘ve done the same
thing?
5. Loss of friendship. The supervisor may believe that disciplinary action will
damage friendship with an employee or the employee‘s associates.
6. Time loss. The supervisor may begrudge the valuable the valuable time that is
required to administer and explain disciplinary action.
7. Loss of temper. The supervisor may be afraid of losing his or her temper when
talking to an employee about a rule violation.
8. Rationalization. The supervisor may think, the employee knows it was a wrong
thing to do, so why do we need to talk about it?
Cont’d
Steps of Disciplinary Actions
1. Informal talk or counseling is used for minor first-time infractions.
2. Oral reprimand or warning is used for second offenses or more severe first-
time rule violations.
3. Written reprimand or warning is a letter written to the employee
listing prior accidents, specifies on what behavior is expected, what will
happen if the behavior is not corrected, and period of time for correcting the
behavior
4. Suspension or disciplinary layoff occurs if the behavior is not
corrected.The employee is suspended or laid off for one to thirty day(s).This
is the final step that attempts to correct behavior before discharge.
5. Discharge is the most drastic form of disciplinary action as it separates
the employee from the job. It is reserved for the most severe offenses and is
taken after other corrective efforts have failed.
 8.5 Employment Law
 Employee Rights under the Law: Employment legislation and contracts of employment
provide rights for both employees and employers. Broadly, the laws governing
employment have set up a number of „protections
1. Recruitment
2. Redundancy or dismissal
3. Retirement
4. All the periods in between recruitment and retirement, such as sick-leave, maternity leave, holiday
entitlement.
5. The rights these laws give employers and employees are outlined below:
6. The right not to be discriminated against in recruitment or employment on the grounds of religion or
gender.
7. The right to a written statement covering the main terms and conditions of employment;
8. The right to work in safe working conditions which comply at least to national minimum standards;
9. The right not to be discriminated against on the grounds of trade union membership and union
activities;
10.The right to full payment as agreed;
11.In the case of women, the right not to be dismissed for reasons of pregnancy, and to have time off for
antenatal care.
12.The right to return to work following illness;
13.The right not to be unfairly dismissed;
14.The right to written explanation if dismissed;
15.On being made redundant any employee with one year service has the right to a lump sum of money.
 Cont’d
Management Rights
1. Management rights generally involved three areas:
2. Freedom to select the business objectives of the company.
3. Freedom to determine the uses to which the material asses of the enterprise
will be devoted.
4. Power to discipline for cause.
 You should remember that management has all such rights except those restricted
by law or by contract with the union. Some examples of these decisions and
actions are:
1. To determine what work is to be done and where, when, and how it is to be
done.
2. To determine the number of employees who will do the work.
3. To supervise and instruct employees in doing the work.
4. To correct employees whose work performance or personal conduct fails to
meet reasonable standards. This includes administering discipline.
5. To recommend hiring, dismissing, upgrading, or downgrading of employees.
6. To recommend employees for promotion to management.
Points for Discussion
1. What are the primary reasons for employees joining the
labor unions?
2. In what way dose unionization of the public sector differ
from Unionization of the private sector?
3. What is the human resource manager‘s role in the
collective bargaining process?
4. Define Safety and health.
5. What effect dose workplace violence has on an
organization?
6. What are the purposes of health and wellness programs?
 Chapter 9
Workforce Diversity
9.1. Introduction
 The labor force is a pool of individuals external to the firm from which the
organization obtains its workers.
 The capabilities of a firm‘s employees determine to a large extent how well
the organization can perform its missions.
 Since new employees are hired from outside the firm, the labor force is
considered an external environmental factor.
 The labor force is always changing, and this inevitably causes changes in the
workforce of the organization.
 In turn, changes in individuals within the organization affect the way
management must deal with its work force.
 In short, changes in the country‘s labor force create dynamic situations
within organizations.
 Cont’d
 The major changes in the composition of the workforce is made in
terms of racial, gender, and educational etc
 Changes in the composition of the workforce combine with the
use of contingent workers, alternative work schedules, and
family/work balancing to create a very different workplace than
that of a generation ago.
 HR planners need up-to –date information on these changes.
 Such information is available in libraries through sources such as
Monthly Labor Review, a publication put out by government
Bureau of Labor Statistics.
 Cont’d
 Diversity exists in a group or organization
when its members differ from one another along one or more important
dimensions.
 Diversity Management Versus Equal Employment Opportunity
 Equal employment opportunity means treating people
fairly and equitably and taking actions that do not discriminate
against people in protected classes on the basis of some illegal
criterion.
 Diversity management places a much heavier emphasis on
recognizing and appreciating differences among people at work
and attempting to provide accommodations for those
differences to the extent that is feasible and possible
9.2 Workforce Diversity
 Workforce diversity means similarities and differences
among employees in terms of age, cultural background,
physical abilities and disabilities, race, religion, gender, and
sexual orientation.
 No two humans are alike.
 People are different in not only gender, culture, race, social and
psychological characteristics but also in their perspectives and
prejudices.
 Society had discriminated on these aspects for centuries. Diversity
makes the work force heterogeneous.
 In current scenario, employing diversified workforce is a necessity
for every organization but to manage such diversified workforce is
also a big challenge for management.
Cont’d
 Employing diversified workforce is a very essence for every
organization.
 In the current scenario the organizations that employ quality
and competitive workforce regardless of their age, attitude,
language, gender, religion, caste can only compete at the
marketplace.
 Human resource is an important asset for any organization.
Capital and physical resources, by themselves, cannotimprove
efficiency or contribute to an increased rate of return on
investment.
 9.3 Diversity and Social Change

Diversity in organizations both facilitates and is facilitated by

social change in the environment.
Another way that organizations affect social change is through
the images they use to promote themselves and their
products.
Organizations that use diverse groups as representatives
convey a message of their sensitivity toward diversity
9.4. Diversity and Competitiveness
1. Cost
2. Resource acquisition
3. Marketing
4. Creativity
5. Problem solving
6. Systems flexibility
 Cont’d
 Studies indicate:
 Diversity leads to positive outcomes such as better firm performance.
 The key is that when a firm reaches true diversity, subgroup conflict
dynamics disappear as everyone begins to view themselves as members
of the same organization.
Individual Strategies for Dealing with Diversity
 Understanding: one must be clear on the nature and meaning
of diversity.
 Empathy: in an organization, one should try to understand the
perspectives of others.
 Tolerance: in an organization, one should
be willing to tolerate cultural differences.
 Communication: it can only work if it is two-way
Cont’d
 Basic Characteristics multicultural organization
1. Pluralism
2. Full structural integration
3. Full integration of the informal network
4. Absence of prejudice and discrimination
5. No gap in organizational identification

6. Low levels of intergroup conflict

Points for Discussion
1. Discuss the nature of diversity and distinguish between
diversity management and equal employment opportunity.
2. Identify and describe the major dimensions of workforce
diversity in organizations.
3. Discuss the primary impact of diversity on organizations.
4. Describe individual and organizational strategies and
approaches to coping with diversity and discuss the
multicultural organization.
5. Discuss the basic issues in managing the knowledge
function in organizations.
6. Relate human resource management and social issues.
The End!!!