CHAPTER 1
THE HUMAN RESOURCE
MANAGEMENT FUNCTIONS
1
WHAT IS HRM?
• Activities and practices to plan for, attract,
select, develop and retain human
resources, to achieve the organization’s
goals
• The objective is to determine the best use
of the talent and skills available to
accomplish the organizational goals
2
GROWTH OF HR FUNCTION
• Industrial Revolution
• Human Relations Approach
• Recent Development
3
HRM FUNCTIONS
•
•
•
•
•
•
•
•
Human resource planning
Recruitment
Selection
Compensation & benefits
Performance appraisal
Training and development
Employee relations
Safety & health
4
CHANGING TRENDS IN HRM
• Technological changes
• Globalization and increase competition
• Employee education and expectation
• Workforce diversity
• Useful statistics
5
HR DEPARTMENT
• To support managers’ HR responsibilities
• Help the organization to meet
objectives by designing HR programs
its
• Managers and the HR Department need to
work together
6
FUNCTIONS OF HR DEPT.
•
•
•
•
•
•
•
Employment
Training and Development
Payment / Reward Systems
Health and Safety
Employee Services / Welfare
Productivity Improvement Schemes
Industrial Relations
7
FACTORS INFLUENCE HR DEPT.
• Size of organization
• Unionization of the workplace
• Ownership of the company
• Philosophy of top management
8
CHALLENGES IN HRM
• Environmental challenges
• Organizational challenges
• Individual challenges
9
ENVIRONMENTAL CHALLENGES
•
•
•
•
•
•
Rapid change
Work force diversity
Globalization
Legislation
Evolving Work and Family Roles
Skills shortages and the Rise of the
Service Sector
10
ORGANIZATIONAL CHALLENGES
• Competitive
position: cost,
distinctive capabilities
• Decentralization
• Downsizing
• Organizational restructuring
• Self-managed work teams
• Growth of small businesses
• Organizational culture
• Technology
• Outsourcing
quality,
11
INDIVIDUAL CHALLENGES
•
•
•
•
•
•
Matching people and organization
Ethical dilemmas and social responsibility
Productivity
Empowerment
Brain drain
Job insecurity
12
LABOUR LAWS
AND ENFORCEMENT
•
•
•
•
•
•
•
The Employment Act 1955
The Sabah Labour Ordinance
The Sarawak Labour Ordinance
The Wages Councils Act 1947
The Employees Provident Fund Act 1991
The Workman’s Compensation Act 1952
The Employees Social Security Act 1969
13
LABOUR LAWS
AND ENFORCEMENT
•
•
•
•
•
•
•
•
•
The Occupational Safety and Health Act 94
The Factories and Machinery Act 1967
The Children and Young Persons Act 1966
The Employment (Restriction) Act 1968
The Trade Unions Act 1959
The Industrial Relations Act 1967
Pembangunan Sumber Manusia Bhd. Act 01
The Skills Development Fund Act 2004
The National Skills Development Act 2006 14
CHAPTER 2
PLANNING THE ORGANIZATION’S
HUMAN RESOURCES
15
HR PLANNING PROCESS
• Process of reviewing and identifying future
human resource needs of an organization
• HR planning helps managers reduce
uncertainty about future
• To ensure that the required number of
qualified employees is available at the
right time
16
HR PLANNING PROCESS
• Labour demand
– Product demand
– Labour productivity
• Labour supply
– Internal labour market
– External labour market
17
HR PLANNING PROCESS
• Labour demand exceeds labour supply
• Labour supply exceeds labour demand
• Labour demand equals labour supply
18
HR FORECASTING TECHNIQUES
• Quantitative techniques
– Trend analysis
• Qualitative techniques
– Management forecast
19
HR INFORMATION SYSTEM
• Systems used to collect, record, store,
analyze and retrieve data concerning an
organization’s human resources
• Contains computer hardware and software
applications that work together to help
managers make HR decisions
20
HR INFORMATION SYSTEM
• Employees
• Applicant tracking
• Skills inventory
• Payroll
• Benefits administration
21
HRIS SECURITY AND PRIVACY
• Limit access to HRIS by controlling access
to the computer and its data files
• Use passwords and special codes
• Grant permission to access employees
information only on a need-to-know basis
• Develop polices and guidelines
• Allow employees to examine their
personal records
22
RECRUITMENT PROCESS
• Recruitment is the process of attracting
suitable people to apply for job vacancies
• Attracting applicants
– Internal
• Employee audit or inventory
• Job posting and bidding
23
RECRUITMENT PROCESS
• Attracting applicants
– External
•
•
•
•
•
•
Employment agencies and consultants
Campus recruitment exercise
Employee referrals
Unsolicited applicant files
Advertising in the mass media
Recruitment through the internet
24
INTERNAL RECRUITMENT
• Advantages:
– Employment record of applicant available
– No induction needed
– Little or no cost involved
– Employees’ morale and motivation increased
• Disadvantages:
– Filling a vacancy may lead to a more gap
– No suitable candidates
– Supervisors may be reluctant to release key
employees
25
EXTERNAL RECRUITMENT
• Advantages:
– Avoid inbreeding
– Possible to widen choice of applicants by
having a pool of candidates
• Disadvantages:
– High costs of recruitment process
– Frustration amongst existing employees
26
SELECTION PROCESS
• The process of choosing the most suitable
applicant from a group of applicants, for an
available vacancy
• Collect information of applicants
• Each applicant will be assessed
27
TECHNIQUES FOR COLLECTING
INFORMATION ON APPLICANTS
• Applicants form and CV
• Reference check
• Selection tests
– Performance tests
– Aptitude tests
– Personality tests
– Intelligence tests
– Medical tests
28
TECHNIQUES FOR COLLECTING
INFORMATION ON APPLICANTS
• Selection interviews
– Planning the interview
– Conducting the interview
– After the interview
• Assessment Centre Activities
– Exercises
– Social events
29
MAKING A JOB OFFER
• Contract of employment
– Implied terms of a contract of employment
– Express terms in a contract of employment
– Changing the terms in a contract of
employment
– Types of employment contract
30
INDUCTION
•
•
•
•
•
•
Purpose of induction
Contents of a formal induction programme
Organizing the induction programme
Scheduling of induction
Duration of an induction programme
Ensuring the effectiveness of an induction
programme
• Potential problems relating to induction
programme
31
RECRUITMENT AND SELECTION
PROCESS
•
•
•
•
•
•
•
Make decision to recruit new employee
Conduct job analysis
Source for applicants
Collect information on applicants
Select most suitable applicant
Offer employment to successful applicant
Hold induction once employee reports for
duty
32
ISSUES AND PROBLEMS RELATING
TO RECRUITMENT AND SELECTION
• Nepotism
• Employment of children
• Hiring older workers
• Discrimination in recruitment and selection
• Employment of foreigners
33
CHAPTER 3
JOB ANALYSIS
34
JOB ANALYSIS
• Technique of studying a job to identify the
skills, knowledge, experience and other
requirements necessary to perform the job
• Identifies
the
tasks,
duties
responsibilities of a particular job
and
• Should be re-analyzed on a regular basis
35
CONDUCTING JOB ANALYSIS
• Determine the desired applications of the
job analysis
• Select the jobs to be analyzed
• Gather the job information
• Verify the accuracy of the job information
• Document the job analysis by writing a job
description
36
TYPES OF JOB ANALYSIS
INFORMATION
• Interview
• Observation
• Diaries
• Questionnaires
37
JOB ANALYSIS METHOD
• Task Inventory Analysis
• Critical Incident Technique
• Position Analysis Questionnaire
• Functional Job Analysis
38
JOB DESCRIPTION
• A written profile of a job
• The process of preparing job descriptions
helps to identify unnecessary tasks,
overlapping responsibilities and even the
existence of functions for which no one
has responsibility
39
JOB DESCRIPTION
•
•
•
•
•
Job title, location and grading
Relationships
Brief statement on the purpose of the job
List of duties and responsibilities
Terms and conditions of employment to be
given to the job-holder
• Negative aspects of the job
40
JOB SPECIFICATION
• Also known as person specification or
worker characteristics
• Describe the profile of a person who
should be able to succeed in the job and
will guide the recruitment officer to the
best candidate
41
JOB SPECIFICATION
• Knowledge, skills and abilities required to
do the job
• Educational qualifications and work
experience required
• Physical requirements of the job
• Personality requirements
• Career path
42
CHAPTER 4
COMPENSATION AND BENEFITS
43
WHAT IS COMPENSATION?
• Total
compensation
components:
has
three
– Base compensation
– Pay incentives
– Indirect compensation benefits
44
DESIGNING A COMPENSATION SYSTEM
•
•
•
•
•
•
•
•
•
Internal vs External Equity
Fixed vs Variable Pay
Performance vs Membership
Job vs Individual Pay
Egalitarianism vs Elitism
Below-market vs Above-market Compensation
Monetary vs Nonmonetary Awards
Open vs Secret Pay
Centralization vs Decentralization of Pay
45
Decision
COMPENSATION TOOLS
• Job-based compensation plans
• Skill-based compensation plans
46
WAGE SYSTEMS
• Time-related systems
• Piece-rated systems
47
FACTORS AFFECTING LEVELS OF PAY
• Legislation and government policy
• Unions
• Selection policy
• Employment conditions
• Company profitability
48
FACTORS AFFECTING
INDIVIDUAL LEVELS OF PAY
• Seniority
• Increase in the cost of living
• Performance
• Degree of skill
49
CONDITIONS OF EMPLOYMENT
• Working hours
• Rest days
• Public holidays
50
WORKING HOURS SYSTEM
• Normal working hours
• Overtime working
• Shift work systems
• Alternative working hours scheduling
• Teleworking and homeworking
51
EMPLOYEE BENEFITS
• Group membership rewards that provide
security for employees and their family
members
• Sometimes called indirect compensation
• Protect employees from risks that could
jeopardize their health and financial
security
52
WHY PROVIDE BENEFITS?
• Statutory required
• Attract staff to join the organization
• Retain existing employees
• Increase morale of employees
53
CLASSIFICATION OF BENEFITS
• Protection programmes
• Paid time-off
• Accommodation
benefits
and
enhancement
54
DESIGNING A BENEFIT SCHEME
•
•
•
•
•
•
Eligibility and waiting periods
Kinds of benefits
Level of benefits
Financing of the benefits
Fixed package or employee choice
Communication
55
STATUTORY BENEFITS
• Maternity protection
• Time-off payments
– A weekly rest day
– Public holidays
– Annual leave
• EPF Act
• Employees Social Security Act
56
NON-STATUTORY BENEFITS
•
•
•
•
•
•
•
•
Time-off payments
Health care
Insurance
Financial services
Subsidies and service
Retirement benefits
Allowances
Educational fee assistance
57
TRENDS IN BENEFIT PACKAGES
• Awareness and desirability of benefits
• Align benefits to strategic objectives
• Cafeteria benefit schemes
• Issues related to benefits
58
REWARD SYSTEMS
• Non-financial rewards
– Performance awards
– Letters of appreciation
– Sponsorship to seminars,
overseas tours
– Rewards for long service
conferences
and
• Financial rewards
– Salary increases
– Bonus and profit sharing
– Rewards for salespeople (commissions)
59
CHAPTER 5
PERFORMANCE APPRAISAL
60
DEFINITION
• Performance appraisal involves:
– Identification
• Determining what areas of work the manager should
be examining when measuring performance
– Measurement
• Making managerial judgements of how ‘good’ or ‘bad’
employee performance
– Management
• The overriding goal of any appraisal system.
61
USES OF
PERFORMANCE APPRAISAL
• Administrative process
• Developmental process
62
FACTORS INFLUENCE
EMPLOYEE’S PERFORMANCE
• Knowledge and skills
• Motivation
• Work environment
63
SOURCES OF INFORMATION
IN APPRAISAL
• The employee
• Employee’s manager
• Employee’s co-workers
• Employee’s subordinates
• Customers / Clients
64
EMPLOYEE PERFORMANCE
MANAGEMENT SYSTEM
• Objective setting
• Implementation of work and monitoring
• Appraisal of the individual workers
• Follow-up action
65
PERFORMANCE APPRAISAL
PROCESS
• Interview
– Opening
– Begin discussion
• Counselling
– Non-directive counselling
– Advice giving
– Information giving
– Teaching and coaching
66
BENEFITS OF
PERFORMANCE APPRAISAL
• Employer perspective
– Individual differences in performance can
make a difference to company performance
– May be needed for legal defense
– Provides a rational basis for constructing
bonus
– Can help to implement strategic goals
– Providing individual feedback
– Can include teamwork and teams
67
BENEFITS OF
PERFORMANCE APPRAISAL
• Employee perspective
– Performance feedback is needed and desired
– Improvement
in
performance
requires
assessment
– Differences in performance levels across
workers be measured and have an effect on
outcomes
– Can
motivate
workers
to
improve
performance
68
PROBLEMS IN
PERFORMANCE APPRAISAL
• Rater errors and bias
• Influence of liking
• Organizational politics
• Individual or group focus
• Legal issues
69
PROBLEMS IN
PERFORMANCE APPRAISAL
• Recent effect
• Halo effect
• Central tendency
• Prejudice and stereotype
• Fatigue
70
EFFECTIVE
PERFORMANCE APPRAISAL
• Conduct appraisal in private
• Allow enough time for employee to discuss
issue
• Refer to performance not individual
• Provide specific not general behaviour
• Give feedback in a good manner
• Avoid loaded terms which produce
emotional reactions
71
CHAPTER 6
TRAINING AND DEVELOPMENT
72
DEFINITION OF TRAINING
• Organizational activity which aims to
improve
an
employee’s
current
performance
• The attempt by an organization to change
employees through the learning process
• Training programmes are designed to
change attitudes, develop skills or impart
knowledge
73
WHAT WILL HAPPEN IF NO
FORMAL TRAINING?
• Learning on the job will take longer
• Costs of wasted materials, sales and
customers lost
• Management time cost taken
• Lowered morale, demotivated
• Accident-related costs
• High turnover
74
BENEFITS OF TRAINING
• Increase worker’s productivity
• Increase worker’s job satisfaction
• Keeps worker’s skills and knowledge upto-date
• Helps to motivate workers
75
SYSTEMATIC TRAINING
• Identify training needs
• Set training objectives
• Design training programme
• Implement training programme
• Evaluate training programme
76
TRAINING NEEDS AND
TRAINING PLANS
• Individual workers face difficulties in
performing job satisfactorily
• New workers are recruited
• New technology and procedures are
introduced
• Individuals are transferred or promoted
• Major change in the organization
77
DESIGNING TRAINING PLANS
• Identify a performance problem
• Decide whether the problem is serious
enough
• Identify the cause of the problem
• Generate alternative solutions to the
problem
• Choose the best solution and implement
78
SET TRAINING OBJECTIVES
• Purpose of training is to improve
employee’s abilities and performance on
the job
• Consists of three parts:
– Terminal behaviour
– Standards to be achieved
– Conditions of performance
79
DESIGN TRAINING PROGRAMME
•
•
•
•
•
•
•
Facilitators
Venue
Duration and scheduling of programme
Number of participants
Training methods
Logistics
Budget
80
EVALUATING TRAINING AND
DEVELOPMENT
• Trainees’ responses
• Trainee learning
• Application of new skill and knowledge
• Assessing the results
81
LEARNING PRINCIPLES
• The learner must want to learn
• Active or passive learning
• Feedback or knowledge of results
• Learning is faster in teams
82
CHAPTER 7
EMPLOYEE RELATIONS
83
UNDERSTANDING
EMPLOYEE RELATIONS
• Good employee relations involve providing
fair and consistent treatment to all
employees
• To foster good employee relations,
managers must listen to and understand
what employees
are
saying
and
experiencing
84
UNDERSTANDING
EMPLOYEE RELATIONS
• Effective employee relations require
cooperation between managers and
employee relations representatives
• ERR will try to ensure that company
policies and procedures are followed and
advise both supervisors and employees on
specific employee relations problems
85
TRADE UNIONS
• A group of seven or more workers can
form a trade union
• Application for registration with DG of
Trade Unions
• The application form must be signed by all
members
• Send together with the union’s constitution
• The important criterion for a union to be
registered is its intended member
86
TRADE UNIONS
• All workers above 16 years have the right
to join an appropriate union
• Workers between 16 and 21 have lesser
rights to participate in union activities
• Specified groups of workers are restricted
from joining trade unions
87
TYPES OF UNIONS
• National and regional unions
• In-house unions
• Employer’s associations
88
ROLE OF TRADE UNIONS
•
•
•
•
•
•
Protect their members’ right
Will take action to stop such unfair practices
Advise members on their right
Encouraging government to pass legislation
Introduce policies
Three-pronged approach:
– Individual employers
– National issues
– Individual members
89
COLLECTIVE BARGAINING
• The process whereby employers and
employees negotiate over the terms and
conditions on employment
• Union is required by law to gain formal
recognition from the employer before any
negotiation can be made
90
COLLECTIVE BARGAINING
• One of the main functions of trade unions
• The best method of regulating the terms
and conditions of employment
• Once an agreement is reached between
the two parties, there will be no
discrimination between them
91
COLLECTIVE BARGAINING
• May be carried out between an individual
employer and a trade union of employees
• Or between the union of employees and
the union of employers
• This process is regulated by the Industrial
Relation Act
92
COLLECTIVE AGREEMENTS
• Written agreement between an employer
and a trade union relating to terms and
conditions of employment
• Agreement must specify their duration, not
less than three years
• Must be deposited with Industrial Court
• Most agreements include clauses on
wages, working hours and other benefits
to be given to the workers
93
INDUSTRIAL ACTION
• Picket
• Strike
• Lockout
94
SETTLEMENT OF
INDUSTRIAL DISPUTES
• Conciliation
• Arbitration
95
EMPLOYMENT LAWS
• Employment Act
• Industrial Relations Act
96
DISCIPLINE
• Penalties in a disciplinary system
– Oral warning
– First written warning
– Final written warning
– Suspension without pay
– Suspension of increment
– Demotion or downgrading
– Dismissal
97
EMPLOYEE PROBLEMS
• Transfer
• Promotion of employees
• Grievance handling
• Absenteeism of workers
98
TERMINATION OF EMPLOYEE’S
CONTRACT OF EMPLOYMENT
• Role of Industrial Court
• Resignation
• Expiry of fixed-term contract
• Retirement
• Redundancy and retrenchment
99
TERMINATION OF EMPLOYEE’S
CONTRACT OF EMPLOYMENT
• Dismissal of misconduct
• Dismissal for poor performance
• Frustration of contract
• Termination of probationers
• Constructive dismissal
100
CHAPTER 8
SAFETY AND HEALTH
101
ACCIDENTS AT WORK
• Financial costs
• Losses of output
• Lowered morale
• Negative publicity
102
TYPES OF ACCIDENTS
• Near miss
• Non-fatal
• Fatal
103
CAUSES OF ACCIDENTS
• Technical causes
• Human causes
• Environmental causes
104
ENSURING A SAFE WORKPLACE
• Safety policies
– A statement of organization’s commitment
– An explanation of who’s responsible
– A description of procedures
• Safety programmes
– Commitment from all employees
– Officer in-charge of safety
105
ENSURING A SAFE WORKPLACE
• Safety programmes
– Record keeping
– Safety training
– Safety and healthy living campaigns
– Incentive and reward schemes
– Provision of personal protective equipment
– Disciplinary system
106
OCCUPATIONAL
SAFETY AND HEALTH ACT
• Ensure the safety of all employees and
any other person at the workplace
• Draft and disseminate a safety policy
• Appoint a safety committee
• Appoint a dedicated, qualified safety and
health officer
• Provide appropriate training, supervision
and information
107
• Report serious accidents to DOSH
SEXUAL HARASSMENT
• An unwanted conduct of a sexual nature
having the effect of verbal, non-verbal,
visual,
psychological
or
physical
harassment
• Not acceptable behaviour and any
employee found guilty of such conduct will
be punished
108
IMPROVING EMPLOYEES’ HEALTH
• Wellness programmes
• Stress management
• Reducing
problems
drug
and
alcohol
related
109
EMPLOYEE ASSISTANCE
PROGRAMS
• Programs designed to help employees
whose job performance is suffering
because of physical, mental or emotional
problems
• Four steps involve:
– Identify troubled employee
– EAP counseling
– Solve the problem
– Depend on the outcome of the treatment
110
CHAPTER 9
INTERNATIONAL
HUMAN RESOURCE MANAGEMENT
111
GLOBALIZATION
• Stage 1:
Domestic Operations
• Stage 2:
Export Operations
• Stage 3:
Subsidiaries or Joint Ventures
• Stage 4:
Multinational Operations
• Stage 5:
Transnational Operations
112
DIVERSITY OF WORK FORCE
• Demographic trends
• Diversity as an asset
– Greater creativity
– Better problem solving
– Greater system flexibility
113
INTERNATIONAL HRM ISSUES
•
•
•
•
•
•
Career blockage
Culture shock
Lack of pre-departure cross-cultural training
Overemphasis on technical qualification
Getting rid of a troublesome employee
Family problems
114
IMPROVING THE DIVERSITY
• Commitment of top management
• Diversity training programs
• Support groups
• Accommodation of family needs
– Day care
– Alternative work patterns
115
IMPROVING THE DIVERSITY
• Senior mentoring programs
• Apprenticeships
• Communication standards
• Organized activities
116