Introduction to HRM

Overview

• HR Planning

• Recruiting

• Selecting Compensation

• Training & Development• Training & Development

• Evaluating employee performance

• Actions due to performance evaluations

Personnel Vs Human ResourcePersonnel Management Human Resource Management

In the past, HRM was considered an administrative function.

In modern organisations, HRM is now considered as an important strategic function.

It was not aligned with strategicorganisational objectives.

It is aligned with corporate organisationalgoals.organisational objectives. goals.

The person handling the employee related issues was known as the Personnel Manager.

This is known as Strategic Human Resource Management.

The person handling the employee related issues is known as the HRM Manager.

Traditional Contemporary

Value of HRM in an Organisation• Right recruitment decisions have to be made

They affect the number of qualified candidates that the firm has.

• Compensation decisions are important

They affect the expenses; thus the profit of the organisation.

• Evaluation decisions are important• Evaluation decisions are important

They determine which employees will be promoted and will go on to be key decision makers.

• Training decisions are important

They ensure that employees have the right skills to be productive, effective and efficient.

Human Resource Planning

Job Analysis

HR Planning

RecruitmentForecasting staff needs

Forecasting Staff Needs

When to Forecast Staff Needs?

• Retirement of employees- Can be forecasted as there is a general retirement age.

• When employees resign- Difficult to be forecasted as employees generally give 3 months notice before resignation.

• When the firm expands- Can be forecasted by assessing the • When the firm expands- Can be forecasted by assessing the firm’s growth trends.

• Once new positions are created- Whenever new positions are created, the staff requirement should be assessed to fill those positions.

Forecasting Staff Needs

Temporary

Overtime

Expansion

Temporary

Part-time or seasonal workers

PermanentHire new

employees

When to avoid new recruitments• When production capacity is increased temporarily.

E.g. A firm manufacturing winter clothes may have a high production during winter season (seasonal production increase)

• New workers should not be hired to fulfil temporary production needs, because they may be laid off when the production gets back to normal.

• Employee layoff will affect the laid off as well as the occupied • Employee layoff will affect the laid off as well as the occupied workers.

• Firms may face difficulties in recruiting new employees in the future due to the bad image created by laying off employees.

• Temporary production capacities can be reached by offering over-time payments for existing workers or by hiring part time workers on contract basis.

Job Analysis

Job Analysis

• The analysis used to determine the tasks and responsibilities to be performed under a job position and the necessary credentials for that particular position.

• Inputs for job analysis is provided by the supervisor of the • Inputs for job analysis is provided by the supervisor of the particular position.

• The supervisor provides a Job Specification and a Job Description.

Credentials

• A credential is an attestation of qualification, competence, or authority issued to an individual by a third party with a relevant authority or assumed competence to do so.

E.g. Academic Diplomas, Academic Degrees, Certifications, Badges, Passwords, etc.

Job Specification & Job Description• Job Specification: States the credentials necessary to

qualify for the job position.

• Job Description: States the tasks and responsibilities of the job position.the job position.

Sample JD for a Marketing Assistant

Recruitment

Recruitment• Definition - The process of finding and hiring the best-qualified candidate (from within

or outside of an organisation) for a job opening, in a timely and cost effective manner.

• The recruitment process includes analyzing the requirements of a job, attracting employees to that job, screening and selecting applicants, hiring, and integrating the new employee to the organisation.

• Recruiting ensures the adequate supply of qualified candidates.• Recruiting ensures the adequate supply of qualified candidates.

• The Human Resource Manager helps each department recruit candidates for open positions.

• Suitable applicants can be chosen from:

• From the pool of applicants

• CV databases

• Advertising vacancies in Newspapers

• Advertising vacancies in the Company Website

• Advertising vacancies on Online Recruiting Websites & Job Agencies

Corporate Websites

• http://www.unilever.com.lk/careers-jobs/

• http://www.masholdings.com/people/careers.php

• http://www.dialog.lk/careers/• http://www.dialog.lk/careers/

Online Recruiting Websites• http://www.topjobs.lk/

• http://www.monster.co.uk/

Online Recruitment Advantages Disadvantages

Cost Effective Should be computer literate

Efficient & Convenient Too many applicants

Higher Reach Higher Reach

Job postings are available at all times

Job Listings can be updated

Updates through e-mail or mobile

Apply Online

Internal Vs External Recruitment

Sources of Recruitment

ExternalInternal

Involves recruiting candidates from external sources

Recruiting candidates within the organisation

to fill the vacancy

Internal Recruitment

• Filling opening job positions with persons already employed by the firm.

• Firms post job openings, so that existing employees are informed.

• Firms that provide equal opportunity: publicly advertise • Firms that provide equal opportunity: publicly advertise vacancies via notice boards or e-mails for the existing employees.

• Existing employees who find the vacancy more desirable than their current position would apply for it.

Advantages of Internal Recruitment • Skills and personalities of existing employees are already

proven.

• Thus, their potential capabilities and limitations can be thoroughly assessed against the job opening.

• Thus, the quality of hire will be high.• Thus, the quality of hire will be high.

• Provides potential for existing employees towards career advancements through promotions.

• Provides motivation for employees to perform better, which increases employee retention, thus reducing hiring & training costs of new employees.

• Quick recruitment procedure.

• Easily fitting to organisation culture.

Disadvantages of Internal Recruitment • Limits the number of potential applicants.

• Fresh and creative ideas cannot be introduced from outside.

• May cause resentment among candidates not appointed.

• Another vacancy is created, which has to be filled as well.

• May cause internal organisational politics for promotions.• May cause internal organisational politics for promotions.

External Recruitment

• Filling open job positions with applicants from outside the firm.

• In external recruiting, the HR manager does not have as much information as of an internal candidate.

• The key ways to asses a candidate’s suitability for the job is • The key ways to asses a candidate’s suitability for the job is through a Curriculum Vitae (CV) or a resume.

• External recruiting can be useful when hiring specialized people for newly created job positions.

Advantages of External Recruitment • Outsiders bring in fresh ideas and perspectives.

• A larger pool of candidates, where the best could be selected.

• Helps organisation get its needed competencies.

• Provides cross-industry insights.

• May reduce training costs (if experienced candidates are • May reduce training costs (if experienced candidates are recruited).

• Helps organisation meet the equal employment opportunity/ affirmative action goals.

Disadvantages of External Recruitment • Longer process.

• More expensive due to advertising costs and interviews held.

• Selection process may not be effective enough to reveal the best candidate.

• May cause morale problems for the internal candidates.• May cause morale problems for the internal candidates.

• Cultural shock.

Selection and Assessment

• Selecting candidates involves the two main processes of shortlisting and assessing applicants to decide who should receive a job offer.

• Includes selection methods, selection interviews, interviewing • Includes selection methods, selection interviews, interviewing skills, structured and behavioural interviews, references, psychometric tests, psychological testing, online testing, assessment centres and development centres and validity.

(CIPD, 2014)

Screening ApplicantsScreen out unqualified applicants

Screen based on initial interview

Screen based on second or third interviews

Screen based on calls to applicant’s references

Screen based on employment tests

Screen based on physical examination / Drug test

Make hiring decision

Stages in the screening process

Description Examples

Screen out unqualified applicants

• Applicants without even the minimum background, education and experience to qualify for the exam are screened out by looking at the application.

• Application database is maintained through recruitment software programmes.

• To be a Lecturer, a first class honoursdegree is needed. Any applicant without that qualification is screened out at the initial screening process.

Initial Interview • Additional information which was not in the • Unilever and MAS Initial Interview • Additional information which was not in the application are derived at the interview.

• Applicant’s personality, attitude, punctuality, and communication skills are identified at the interview.

• Also the level of confidence & the applicant’s reactions to sudden unexpected scenarios are assessed at interviews.

• Detailed explanations about candidates past experience are obtained at the interview.

• Firms conduct initial interviews at universities as placement centres or in their own locations.

• Unilever and MAS holdings conduct their initial interviews for college students. (E.g. Career Days)

Stages in the screening process

Description Examples

Second/ Third Interviews

• Further screening is done through further interviews for selected candidates.

• Interview board may contain employees of the firm who have knowledge in the open job, their opinions matter for the hiring decision.

• There are 6 interviews for the post of Management trainee at Aitken Spence.

Contactingapplicants references

• Less effective as most applicant provide referees who are likely to give strong recommendations.references recommendations.

Employment tests and assessment centers

• Tests are conducted to assess applicants’ attitude or special skills- Numerical, logical reasoning, computer skills.

• Assessment centers consist of individual and team activities to assess candidates’ personality, team work, leadership skills, decision making skills, and communication skills.

• Aptitude test are given to test numerical, logical, reasoning skills of candidates. (Unilever and MAS conduct these)

• Assessment centers are conducted by Aitken Spence for their Trainees.

Stages in the screening process

Description Examples

Medical Check-up • Finds out whether the candidate is physically fit enough for the job.

• Protects firm from accusations of employees being sick due to unhealthy working conditions.

• Some companies specify the medical practitioner to increase the accuracy.

• Medichecks does all the tests for the applicants of Brown & Company PLC.

Drug Test • Cuts cost on healthcare and counselling for employees addicted to drugs.

• Avoids hiring employees with low • Avoids hiring employees with low performance due to drug addiction.

Outsource Screening

• Some companies outsource the entire screening process to a job agency.

• The screening process of Unilever is done by MafoiRandstad.

Hiring • After massive screening, the right candidate is hired.

Hiring Process at Google

Hiring Decision • Once the screening is completed, the most qualified candidate

is hired.

• The remaining candidates will be hired contacted if the top candidate does not accept the job offer.

• The profiles of the remaining candidates are stored in the database for any future job openings.

• A realistic job preview is also done for the top candidate before • A realistic job preview is also done for the top candidate before hiring.

• Other benefits like health and insurance plans and bonuses are informed once the top candidate is hired.

• Careful screening enables firms to hire people who become excellent employees.

• Careful recruiting results in low labour turnover.

• Recruiting the most suitable candidate is important , as the firm’s future performance is strictly dependent on the quality of the workforce.

Summary of Human Resource Planning

Fore

cast

ing

Staf

f N

eed

s • Forecast employee replacement

Job

An

alys

is • Develop a job specification

Rec

ruit

men

t • Asses internal candidates

Fore

cast

ing

Staf

f N

eed

s

replacement

• Forecast employee expansion Jo

b A

nal

ysis

specification

• Develop a job description R

ecru

itm

ent

candidates

• Interview external candidates

• Hire the top candidate

Providing Equal Opportunity• Discriminating employees based on factors which are

unrelated to job performance is illegal.

• Discrimination is unsuitable due to two reasons:

It is Illegal

It reduces the efficiency of the employees. It reduces the efficiency of the employees.

What types of discrimination should be avoided?

• Gender discrimination.

• Discrimination based on race, religion, and national origin.

• Discrimination based on age.

• Discrimination based on disability.

• Sexual harassment in workplace.

Employee Compensation

Compensation Package=

Monetary Compensation + Other Benefits

• Salary• Stock Options• Stock Options• Commissions• Bonuses• Profit Sharing• Employee

Benefits• Perquisites

Developing Employee Skills

• Firms that hire employees have to provide a training for them after employing them, in order to develop various employee skills.

• It is found that firms which invest in training programmesgenerate more profits than others.

• Firms aim to develop employee skills based on the nature of work the employees are involved with.

Technical Skills

Decision-making Skills

Customer service Skills

Safety Skills

Human Relations Skills

Employee Performance Evaluation

• Evaluation is a method of allocating raises.

• Provides feedback and direction to employees.

• Indicates employees’ strengths and weaknesses.

• Influences employee’s chances of getting promoted.

How to do a Good Performance Evaluation?• Supervisor should communicate the job responsibilities

properly to an employee.

• Supervisors should inform employees about their deficiencies and give time for employees to correct those deficiencies. and give time for employees to correct those deficiencies.

• Supervisors should be consistent when conducting performance evaluation.

Actions due to Performance Appraisals

Appreciate Good Appreciate Good Performance Take Actions to

Correct Unfavorable Performance

Upward Appraisal

• Evaluation of the supervisors by employees.